Washington Law Review

Comment

To Withdraw or Not to Withdraw: Reviewability of an Agency’s Withdrawn Proposed Rule

December 01, 2018 | 93 Wash. L. Rev. 2107

Abstract:  Federal agencies propose thousands of regulations in any given year. The Administrative Procedure Act requires such agencies to follow certain procedures when enacting rules and regulations. However, when an agency proposes a new rule that is purely discretionary—not mandated by Congress—it may withdraw the proposed rule at any point before the rule is finalized. In October 2017, the Centers of Medicare and Medicaid (CMS) withdrew a proposed rule that, if enacted, would have required long-term care facilities to recognize out of state same-sex marriages as a condition of Medicare and Medicaid participation. In its formal withdrawal published in the Federal Register, CMS reasoned that the proposed rule was no longer necessary due to the U.S. Supreme Court decision in Obergefell v. Hodges

This Comment examines the circumstances under which a district court can review an agency’s withdrawal of a discretionary proposed rule. For nearly forty years, the D.C. Circuit has held that withdrawn discretionary rules may be ripe for judicial review if two requirements are met: (1) the withdrawal signals final agency action and (2) the agency created an adequate and precise record pursuant to informal notice-and-comment rulemaking. However, some commentators, notably former Ninth Circuit Judge Alex Kozinski, argue that an agency’s decision to withdraw a proposed rule is wholly discretionary and thus unreviewable in light of the U.S. Supreme Court decision Heckler v. Chaney

This Comment concludes by arguing that judicial review of withdrawn discretionary proposed rules is necessary to prevent arbitrary and capricious agency action. Moreover, despite Judge Kozinski’s concerns, arbitrary and capricious review supplies a reviewing court with the critical tools to review withdrawn discretionary rules.

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