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22 Admin. & Reg. L. News 1 (1996-1997)

handle is hein.journals/admreln22 and id is 1 raw text is: Published by the Section of Administrative Law and Regulatory Practice o American Bar Association Fall 1996 ° Vol. 22, No. 1 First Judicial Review of Reg Neg a Disappointment by Phi/ipJ. Harter* N egotiated rulemaking, or reg-neg for short (based on an earlier name that did not last), has been around for at least fifteen years. The Administrative Conference recommended its use in 1982, and almost immediately agencies began using it to address some of their most intractable problems. Congress codified the procedures in the Negotiated Rulemaking Act of 1990 (5 U.S.C. §§ 581-90); it was used to implement a number of major, complex environmental issues in the Reagan and Bush admin- istrations; and the Clinton administration has sup- ported its use through Executive Orders and direct encouragement to agencies. Given this history, it has been rather remarkable that until this spring not a single court discussed the process in the review of a rule developed by reg-neg. The first case to do so came in an opinion by Judge Richard Posner S rC-t on Cal-ndarl- in USA Group Loan Services, Inc. v. Riley, Midyear Section Meeting 82 F.3d 708 (7th Cir. La Mansion del Rio 1996). While the San Antonio, TX court reaches what is January 31 -February 2, 1997 probably the right Spring Section Meeting conclusion, it displays Hotel Washingtonremarkable igno- Washington, DC rance of the process April 18-20, 1997 and provides only a superficial analysis. ABA Annual Meeting Although negotiat- Hyatt on Union Square ed rulemaking is fully San Francisco, CA legal and feasible with- July 3 1-August 3, 1997 out specific legislation, Fall Section Meeting Congress enacted the Fasetinon Meetint Negotiated Rulemak- Washington Marriott ing Act in part to pro- Washington, DC vide explicit general October 17-18, 1997 authorization to use the process so that *Last Retiring Chair of Section. Mr. Harter is in private practice in Washington, D.C., specializing in mediation of complicated policy disputes and a sometime facilitator of negotiated rulemaking. Congress itself would be less tempted to write in direc- tives to use it to develop rules when enacting substan- tive requirements. That goal notwithstanding, the 1992 Amendments to the Higher Education Act requires the Department of Education to hold a series of regional meetings to obtain public involvement in the development of the proposed regulations and, before publishing proposed regulations in the Federal Register, to submit such regulations to a negotiated rulemaking process. 20 U.S.C. § 1098a. Although one section of the statute calls for selecting a committee that reflects the diversity in the industry, another calls for the participation of the full range of interests, including students, schools, financial institutions, guar- antors, lenders, and secondary markets. The committees that were established reflected the broader scope. The Department then held a whole series of reg- negs to develop the rules under the Act. As called for by the Act, the agency held public meetings at which the issues were discussed, then In This Issue empaneled a number Chairs Message of reg neg committees 2 to address the individ- ual rules. One of them Supreme Court News focused on rules for 3 the servicers of stu- News from the Circuits dent loans. They are 6 the middlemen among the students, News from the States banks, and the guar- 8 antors of the student Recent Articles of Intere loans. The issue in contention centered on the Department's rule that imposed strict liability on the servicers for violation of a statute, regulation, or contract - that is, liability would accrue for an innocent mistake in the processing of a loan if the Department is unable to collect from the Continued on page 12 st

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