The Regulatory Loophole that Can Shut the Public Out

President Donald Trump has issued a series of executive orders advising agencies to rapidly repeal regulations and bypass rulemaking requirements. The progression of his orders is a test of how far he can expand his executive authority by reshaping the rulemaking process. One way he’s attempting to do this is through the heavy use of what’s known as the “good cause” exception under the Administrative Procedure Act, a key administrative law that has long guided the rulemaking process to protect the public’s ability to weigh in on government policies and challenge agency actions. The law established procedures that agencies generally must follow in order to propose, amend, implement, or repeal certain regulations. From his actions so far, we can expect Trump to push the deregulatory boundaries even further compared to his first term. 

In February, Trump issued an executive order instructing the heads of federal agencies to work with the Department of Government Efficiency (DOGE) and the Office of Management and Budget to screen regulations that were deemed “burdensome” or “unlawful.” Then in April, he released a memo directing agencies to review regulations to determine whether they still comply with recent legal precedents under certain Supreme Court decisions. The memo asserts that agencies can cite the “good cause” exception, where applicable, to immediately repeal such regulations without notifying the public about it or allowing them to submit feedback. 

This is worth noting because federal rulemaking affects many aspects of our lives and was designed to include opportunities for the public to help shape regulations. Agencies must follow the notice and comment process, which requires them to publish legislative rules (rules that implement laws Congress has passed) in the Federal Register for public inspection and to allow the public to comment on those rules. However, the Administrative Procedure Act includes exceptions where agencies can bypass this process under certain circumstances. The Trump administration’s February executive order and April memo appear to make heavy use of one such exception, the “good cause” exception. 

“Good cause” is a legal standard under the act that allows agencies to forego the notice and comment requirement if they find it would be “impracticable, unnecessary, or contrary to the public interest.” Agencies must demonstrate that their use of the exception is not just a matter of convenience. That simply won’t cut it. The use of the exception must be justifiable; a president can’t just encourage agencies to find good cause without proving proper justification. And in order to protect the public interest and ensure accountability, proving justification is difficult by design. 

When an agency’s change to a regulation using the good cause exception is challenged in the courts, they have to give compelling and sufficient reasons. The exception is not explicitly defined in the statute, and judges do not always agree on the standards of reviewing good cause. Courts are cognizant of the potential misuse and abuse of the exception by agencies, so they have often applied a narrow interpretation to what constitutes good cause. 

Nevertheless, this type of exception has been an attractive tool for administrations of both parties because the executive branch can create legally binding policies with little oversight. This has invited significant public scrutiny, including from POGO. We have criticized the misuse of the exception in the past because it created a less transparent government and encouraged agencies to circumvent the usual rulemaking process without proper justification. We remain critical today. Now in his second term, Trump is attempting to remake the administrative state in unprecedented ways, such as his 10-to-1 deregulation initiative that seeks to exert more executive power and control over agencies. 

Congress and the courts understood the vulnerability in the good cause exception, so they have consistently maintained that this exception should be narrowly applied. Trump’s public directive for agencies to use the exception reflects an extreme deviation from that principle. 

This is not the administration’s first time. 

During Trump’s first term, the administration frequently lost challenges related to the Administrative Procedure Act in the courts: Agencies repeatedly failed to correctly interpret the statute, to act within the bounds of its authorities, and to meet the standard for bypassing notice and comment in good faith. They consistently neglected the basic administrative principles that ensure transparency in the rulemaking process and other actions. 

Now in his second term, Trump is initiating a sweeping deregulatory effort, which is progressing at a rapid pace and with significant breadth. His April memo impacts regulations stemming from Supreme Court decisions involving the Environmental Protection Agency, Department of Education, and the Securities and Exchange Commission. His “review-and-repeal effort” mandates that every agency determine whether those rules can be repealed under the good cause exception, so it wouldn’t need to go through notice and comment. 

The impact of these repeals could be far-reaching: They may alter how we test air quality and regulate hazardous air pollutants, shift the allocation of federal funding for public schools, weaken labor union protections, and more — ultimately touching many aspects of daily life. If the good cause exception is applied to these repeals, making them exempt from the public notice and comment process, Americans would not be able to weigh in on the massive impacts.

Trump is overstepping the bounds of his executive power and cutting the American people out of the rulemaking process by encouraging agencies to repeal regulations “immediately” using the good cause exception. 

History has shown that the administration’s efforts to discourage and undermine public participation were often groundless. Repealing a regulation is often a lengthy process that can take years because of the many steps to conduct careful regulatory analysis (including public participation). The hasty and overbroad use of the good cause exception to circumvent notice and comment could have myriad consequences, such as agencies rushing important regulations at the expense of producing thoughtful ones, halting nearly complete projects that would have provided valuable community resources to the public, or erasing helpful regulations that have worked for years. Because it could cause significant instability, agencies should be wary of a presidential directive to make rules by exception.   

Just like every administration, the Trump administration has a duty to follow the Administrative Procedure Act. The executive branch does not have unilateral authority to decide whether they are allowed to consolidate power at the expense of the public. Ultimately, if challenged, agencies will need to defend their use of this exception, and it will be up to the courts to decide on its legality.