Rao's Record as Regulatory Czar Raises Red Flags

Tomorrow morning, Neomi Rao, the current administrator of the White House Office of Information and Regulatory Affairs (OIRA), is set to appear before the Senate Judiciary Committee for a hearing on her nomination to the U.S. Court of Appeals for the D.C. Circuit. If confirmed, she would fill the open seat once occupied by Supreme Court Justice Brett Kavanaugh.

Administrator Rao's nomination has prompted intense media and public scrutiny of her background, and appropriately so, given the high stakes involved. Her long history of controversial writings, combined with a troubling record as President Donald Trump's "regulatory czar" (or de-regulatory czar, in this case) will give the committee's members much to ponder when deciding whether to promote her to what is widely regarded as the second-most powerful court in the United States.

Rao, as it turns out, has long been a lightning rod of controversy, and the extreme positions she has taken in her past writings will no doubt dominate much of tomorrow's proceedings. As an undergraduate student, Rao authored several disturbing op-eds on subjects as varied as date rape, LGBTQ rights, and racial equality. In one, for example, she appears to suggest that women are at least partially responsible if they are sexually assaulted while intoxicated. From there, it was only a small leap to the equally disturbing positions she staked out as a legal academic, including her bizarre and gratuitous defense of dwarf tossing.

At least with respect to her college writings, Rao's conservative defenders would have us casually dismiss them as the kind of inartful but harmless ideas that are typical of a passionate young person working to make sense of the world. As such, they are supposedly not to be treated as a meaningful barometer of her ethical fitness as an adult and as a member of the legal profession.

The implication, then, is that we should judge her by her more recent academic and professional record. So be it.

Rao's record as OIRA Administrator over the last 18 months demonstrates a troubling pattern of disregarding the law in ways that contravene the clear ethical standards that guide the legal profession. Indeed, Rao has presided over actions that, if undertaken in the context of litigation, could conceivably be eligible for a wide range of professional sanctions.

As followers of this blog know, OIRA serves as the official clearinghouse of the most important federal regulations under development. No rule that might raise the hackles of the politically powerful can be proposed or finalized without official signoff from OIRA. As Trump's OIRA Administrator, Rao has been the one doing that signing.

The problem is that Rao has been routinely signing off on anti-safeguard rulemakings that have had a historically abysmal record in the courts. The Institute for Policy Integrity finds that currently, Trump's rulemakings have survived judicial challenges roughly seven percent of the time (2 out of 28). To put that record into context, several studies have found that previous administrations have won around 69 percent of the time when their rulemakings have been challenged in court.

And nor were these court losses "close calls." After surveying the Trump administration's early deregulatory actions, CPR Member Scholar Lisa Heinzerling characterized the Trump administration's aversion to the rule of law in the following terms: "The administration has put on a display of autocracy, impulsivity, and jerry-rigged reasoning. Within the constraints of administrative law that apply to such regulatory decisions, however, autocracy, impulsivity, and jerry-rigging are the very kinds of urges that get agencies into legal trouble."

Time after time, reviewing courts have reaffirmed this assessment. For instance, in rejecting the EPA's attempt to indefinitely delay implementation of the Obama-era chemical facility safety rule, the judges minced no words. They found that the rollback lacked a "textual basis" in the Clean Air Act and that the EPA's asserted legal justification "makes a mockery of the statute."

To be sure, while the responsibility for writing these failed rules rests with the individual agencies, ultimately the buck stops with Administrator Rao. And no one has been clearer about that than Rao herself, who has repeatedly emphasized in her public remarks that one of the crucial functions of OIRA during her tenure has been to ensure the legal soundness of the rules that it reviews.

A 2017 CPR report previewing Rao's tenure as OIRA administrator predicted as much. There, my co-authors and I anticipated that Rao's role would differ from that of previous administrators in that she would not have to be as active in blocking or weakening new rules, since the people Trump chose to run his agencies had little interest in issuing new rules anyway. Instead, we explained, Rao's job would likely be to "reorient how OIRA conducts its gatekeeping role for . . . deregulatory rulemakings so that it provides a 'quality control check' on the legal and economic rationales that agencies have devised to support the actions." This "quality control check" has proved woefully ineffective, to say the least.

Significantly, the bulk of the rulemakings that the Trump administration has finalized so far have been focused on delaying implementation of Obama-era rules that corporate special interests oppose, rather than changing the substance of those rules. These delays in turn spare those corporate interests of the costs of compliance (which ensures that the public keeps "paying" in terms of dirty air, dangerous products, and hazardous workplaces) while Trump administration agencies undertake the more complex task of completing weaker, more industry-friendly replacements.

The name of the game then is delay for delay's sake, even if those rulemakings lack a colorable legal argument to support them. Predictably, these rulemakings are subject to legal challenge, which means the federal courts are being dragooned into aiding and abetting these illegal delays.

Not surprisingly, the code of ethics for the legal profession takes a dim view of tactics that seek to misuse courts and litigation for the purposes of delay and wasting resources. Attorneys who engage in these tactics can find themselves on the receiving end of various forms of professional sanctions:

• Sanctions under Federal Rule of Civil Procedure 11. Whenever an attorney signs or files a pleading or motion, he or she must certify that the document in question is not being presented for an improper purpose and that a reasonable inquiry was made to verify any legal or factual assertions contained in the document. The rule authorizes the presiding judge to sanction any attorney who violates the certification requirement.  
• Attorney's fees for violations of 28 U.S.C. Section 1927. This provision broadly targets any litigation activities that are aimed at intentionally prolonging a case, resulting in needless expense and delay. Specifically, it seeks to hold accountable any attorney that "multiplies the proceedings in any case unreasonably and vexatiously." When an attorney successfully claims that an opposing counsel has violated this provision, he or she is entitled to any attorney's fees that were incurred in responding to the improper litigation activity.  
• State bar sanctions. For particularly egregious offenses, an aggrieved party can file a complaint against the offending attorney with the relevant state bar association. If the administrative body responsible for overseeing disciplinary matters finds that an attorney's conduct has violated applicable state rules of professional conduct, then the body can pursue various kinds of sanctions, ranging from simple reprimands to suspension or even disbarment.

To this point, it looks like Administrator Rao, as head of OIRA, has participated in a coordinated effort to misuse the rulemaking process – including judicial review of finalized rulemakings – for the purposes of delay and to waste the resources of public interest groups working to ensure that our health, safety, and environmental laws are properly implemented. If true, this would constitute a gross violation of professional ethical standards, and analogous conduct in the context of litigation would surely warrant some form of sanctions.

It is no defense for Rao to say that she was merely carrying out the policy agenda of her boss. As a legal professional, she had the duty to object to any actions that she determined in her legal opinion were illegal or lacked a colorable legal justification, particularly if she knew that those actions would be challenged in court. And if her objections did not prevail, Rao always had the option of resigning. She has not done so.

At tomorrow's hearing, Rao owes the committee an explanation for what appears to be a troubling record of violations of professional ethics as the OIRA Administrator. Someone with such a record would arguably be unfit to continue practicing law. If that's the case, then someone with that record would also be unfit to serve on the U.S. Court of Appeals for the D.C. Circuit.

Image at top by Wikimedia Commons user AgnosticPreachersKid, used under Creative Commons license CC BY-SA 3.0.