There are three main ways in which agencies regulate: rulemaking; adjudication; and informal tools of guidance, also called nonlegislative or interpretative rules. Over the last two decades, agencies have increasingly favored the use of the last of these three, which can include statements of best practices, interpretative guides, private warning letters, and press releases.
Scholars are hardly unaware of this trend. In a series of papers, writers have explored the use of informal regulation as it affects the relationship between agencies and the federal courts, asking when nonlegislative rules can be challenged as unenforceable for want of process. This Essay concerns a different question, centered on the rlationship between the agency and the regulated industry: when might the use of such informal tools, in the form of "regulatory threats," be desirable?
Most legal writers are implicitly or explicitly critical of the use of threats as an alternative to rulemaking or adjudication. The general presumption is that the use of threats is a kind of symptom of an underlying malady – a broken rulemaking or adjudication process. For example, Professor Lars Noah describes the use of threats as an "intractable problem," given the difficulty of "controlling the exercise of such wide-ranging discretionary power."4 In this brief Essay, I write in defense of regulatory threats in particular contexts.
Duke L. J.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/840