Gorsuch Claims in Bittner Oral Argument that "nobody promulgates regulations anymore": True or False? (11/4/22)

This post discusses a claim that Justice Gorsuch made in oral argument in Bittner v. United States (No. 20-40597), SC docket here and SCOTUSblog docket here (I offer SCOTUSblog link because the Supreme Court link does not seem to work.) The link for the typed transcript is here; the link for the audio is here.

The issue in Bittner is whether the FBAR nonwillful penalty of up to $10,000 applies per form (regardless of the number of foreign accounts not reported) or per account (for each account that should have been but was not reported on an FBAR for the year).

In the context of discussing guidance documents, Justice Gorsuch said (Tr. p. 64): "[N]obody promulgates regulations anymore. It's too troublesome."

That claim is demonstrably false. He may have meant that agencies disfavor and mostly do not use formal rulemaking (which does not require promulgation of regulations), although agencies regularly use informal rulemaking requiring promulgating notice and comment regulations. Here is the difference between the two as I explain Federal Tax Procedure (2022 Practitioner Ed.), SSRN here, at p. 57 n. 256.

   n256 The informal rulemaking process is described in 5 U.S.C. § 553, whereas the formal rulemaking process is described in § 556. David L. Franklin, Legislative Rules, Nonlegislative Rules, and the Perils of the Short Cut, 120 Yale L.J. 276, 282 (2010) ("The first technique, so-called 'formal' rulemaking, involves onerous trial-type hearings and is rarely required unless a specific statute calls for rules to be 'made on the record after opportunity for an agency hearing.' Far more common is the second technique, variously known as 'informal,’ 'notice-and-comment,' or 'section 553' rulemaking.").  The formal rulemaking process is rarely used in agencies generally.  See Perez v. Mortgage Bankers Assn., 575 U. S. 92, 128 n5 (2015) (Thomas, concurring) (noting that (i) "almost all rulemaking is today accomplished through informal notice and comment," in contrast to the formal rulemaking process requiring "elaborate trial-like hearings in which proponents of particular rules would introduce evidence and bear the burden of proof in support of those proposed rules," citing 5 U. S. C. §556; and (ii) "formal rulemaking is the Yeti of administrative law" with "isolated sightings of it in the ratemaking context, but elsewhere it proves elusive.”). Informal rulemaking is permitted unless the authorizing statute mandates formal rulemaking.  United States v. Florida East Coast R. Co., 410 US 224, 236-238 (1973). 

I am not trying to pick on Justice Gorsuch, but he is an administrative law wannabe expert as shown by his ranting about Chevron and related confusion I address in my article The Report of the Death of the Interpretive Regulation Is an Exaggeration  (SSRN December 14, 2021), here, at pp.  110-116 under the caption "b. Gorsuch's Imagined Elephant in the Room.").

Added 11/7/22 3:30 JAT Comment:

1. Justice Gorsuch continues his ranting against Chevron and the administrative state in a dissent today from a denial of a petition for certiorari.  Buffington v. McDonough (Sup. Ct. Case No. 21–972 11/7/22), SC here and GS here.  As with his concurring opinion in Gutierrez-Brizuela v. Lynch, 834 F.3d 1142. 1153 (10th Cir. 2016), GS here, Justice Gorsuch could not get any other Judge (this time 8 others rather than 2) to agree with what he has to say. (Of course, any of the other Justices could have not joined his opinions for a host of reasons rather than his over the topic rhetoric and questionable claims about the history of deference.  I will post a separate blog entry on his dissent in Buffington.