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July 20, 2019

6/6/2019 7:26:00 AM
State lays down the law with 200,000 'guidance documents'
Friendly help from the government, or a sledgehammer?

Richard Moore
Investigative Reporter


News analysis



At stake in the state Supreme Court case over so-called lame-duck laws passed by the Legislature after last year's gubernatorial election but before Gov. Tony Evers took office is not just the constitutionality of the Legislature's Extraordinary Session last December, and what that means for previous and future sessions, but the practical impact the decision will have as a result of enacting or voiding the laws themselves.

In a case before the high court now awaiting a decision, League of Women Voters et al. v Tony Evers and the Wisconsin Legislature, that impact could be huge. Indeed, while the governor's and attorney general's powers could be affected - and those possibilities have received the most media attention - so could the daily lives of millions of Wisconsinites.

That's because one of the laws, Act 369, targeted the use by state agencies of guidance documents, which instruct individuals and businesses on how to comply with state agency administrative rules, which in turn lay out standards for implementing state statutes.

By one estimate from the administration of Gov. Tony Evers, more than 200,000 guidance documents are in play across all state agencies.

Under the law passed in December, every guidance document would have to receive a public hearing and receive certification by the head of the department. The Legislative Reference Bureau would also have to review the documents, and they would have to be posted in the Administrative Register.

It's a political battle royale. Republicans claim the guidance documents are nowhere close to guidance, but instead are often ironclad rules which must be followed and are used by bureaucrats to thwart the Legislature's intent.

That's the same argument the GOP used against administrative rules, which do have the force and effect of law, in the days before former Gov. Scott Walker was first elected. But with Walker as governor and the GOP controlling the Legislature, the state enacted the REINS Act, which curbed agencies' ability to implement rules the Legislature did not intend or approve of.

The REINS Act requires the Legislature to approve any administrative rule with compliance and implementation costs of $10 million or more over a two-year period and further allows the Joint Committee for the Review of Administrative Rules to indefinitely suspend promulgation of a proposed rule.

When the REINS Act passed, state agencies increased their use of guidance documents to end run the law, the GOP contends.

Democrats disagree, saying the guidance documents make sure laws and rules are administered consistently. They provide certainty, which provides for efficiency, Democrats say.

Whatever the merits of each argument, there's no questioning the importance of the terrain as a battleground issue, with at least 200,000 guidance documents in circulation.

That figure comes from Evers's chief legal counsel, Ryan Nilsestuen, in an affidavit originally filed in another of the lame-duck lawsuits, Service Employees International Union (SEIU), Local 1, et al, v. Robin Vos, et a1.

"I conservatively estimate that the definition of a guidance document covers more than 200,000 existing documents across state agencies," Nilsestuen stated in the affidavit. "This estimate does not include an agency's email correspondence or webpages that meet the definition of a guidance document."

The Department of Corrections identified approximately 450 guidance documents which would need to be processed, that agency's affidavit stated, and the agency estimated approximately 360 new documents annually would be created.

The Department of Veterans Affairs identified approximately 806 existing guidance documents and estimated it creates between 100 and 200 such documents each year.

Over at the Department of Health Services, the agency estimated initial implementation of guidance documents would require analysis of about 29,105 documents and communications, adoption of at least 12,357 existing guidance documents, and ongoing review, revision, and adoption of approximately 2,595 new guidance documents each year.



The arguments

In the case filed by The League of Women Voters, Disability Rights of Wisconsin, Inc., and Black Leaders Organizing for Communities, the groups contend the Legislature violated the state constitution by convening the Extraordinary Session.

But a number of nonparty briefs to the case on both sides of the issue have focused on the guidance documents. One such brief supporting the League's claim of unconstitutionality was filed by Sustain Rural Wisconsin Network, River Alliance of Wisconsin, Friends of the Lower Wisconsin Riverway, and Milwaukee Riverkeeper.

In their brief, the groups argued that guidance documents streamline administrative processes, create regulatory certainty, reduce costs, and even ensure the consistent application of the law throughout the state.

"(The December law) threatens the effective and efficient administration of law in Wisconsin because it leads to the rescission of thousands of existing guidance documents and obscures the distinction between guidance documents and administrative rules," the brief stated. "These adverse impacts will make it more difficult for Amici to engage administrative agencies on behalf of their constituents, and the decrease in effective advocacy will result in a corresponding increase in litigation."

And because the law is retroactive, meaning all guidance documents would be subject to its provisions, the law is impractical and costly, will decrease efficiency, and will create regulatory uncertainty, the groups argued.

"On the surface, (the December law's) new procedural requirements (for public comment and review) for agency guidance documents promote transparency while ensuring that agencies do not encroach upon the Legislature's constitutional lawmaking authority," the brief stated. "However, the retroactive application of these requirements to hundreds of thousands of existing guidance documents is impractical and costly. This will overburden the executive branch, decrease efficiency, create regulatory uncertainty, and fail to achieve the desired transparency."

Extrapolated across all state agencies, the groups asserted, the new guidance document requirements would cost taxpayers millions of dollars.

"Agencies simply do not have the resources to meet these requirements before the July 1 deadline," the brief stated. "As a result, agencies are faced with a difficult decision: either divert resources and staff to save a fraction of their existing guidance documents or allow all of their existing guidance documents to be rescinded. Regardless, thousands of important documents will be invalidated, which will adversely impact agencies' ability to fulfill their responsibilities."

The LRB will shoulder a similar burden, the groups contended.

"Processing thousands of guidance documents for publication in the Administrative Register is a daunting task," the brief stated. "Furthermore, guidance documents often come in forms other than writing, such as instructional or training videos, and it is not readily apparent how the LRB will accomplish the publication of atypical media in the Administrative Register."

Complying with the new guidance document requirements will also interfere with agencies' ability to fulfill their missions and serve the public, the brief contended.

"This will have an especially detrimental effect on agencies that are already underfunded and understaffed, like the Department of Natural Resources," the brief stated. "In 2016, the Legislative Audit Bureau's report on DNR permitting and oversight of its wastewater program demonstrated how understaffing can lead to inefficiencies, such as delays in permit re-issuance, inadequate reviews of annual reports, low inspection rates, and inconsistent enforcement."

To prevent the rescission of existing guidance documents, the DNR will have to divert an already shorthanded staff from a program that is vital to the protection of Wisconsin's waterways and public health, the groups argued.

The wholesale rescission of established guidance documents would lead to inefficiencies and regulatory uncertainty, the groups claimed - the DNR would be unable to provide permit applicants with instructions on how to fill out complex applications, for example.



The force of law

Perhaps the most important bone of contention about guidance documents is whether they carry the force of law. To the environmental groups, the law would obscure the distinction between guidance documents and rules, promote the use of guidance in place of rules, and encourage litigation.

Before the law, the groups observe, no statutory or common law definition of guidance documents existed, allowing agencies to issue documents setting forth agency policies which did not meet the definition of a rule and that were considered guidance.

"Now there is substantial overlap between the definitions of guidance documents and administrative rules, obscuring the distinction between the two and creating a gray area in the law," the brief stated. "This lack of clarity may allow agencies to adopt guidance documents instead of going through the rule-making process, resulting in less legislative and public oversight of changes to agency policies."

The new law effectively allows state agencies to endow guidance documents with legal authority, the groups argued.

"Perhaps the most apparent distinction - whether a policy has the 'force of law' - may be a distinction in name only," the brief stated. "While the Legislature declares in [the December law] that a 'guidance document does not have the force of law,' (the December law) also gives such documents a legal significance that is difficult to differentiate from case law explaining what the 'force of law' means."

Under the December law, the groups contend, once an agency adopts a guidance document explaining how it is likely to apply a statute or rule, the agency's discretion to vary from that policy is significantly limited, and agencies cannot deviate in any proceeding from a policy set forth in a guidance document except for when agencies provide a reasonable justification for doing so and that justification outweighs an affected person's reliance interest.

"Therefore, guidance documents have a legal significance akin to the force of law not only because they can affect the interests of individuals of a class, but also because agency staff may be bound to the positions set forth in those documents ..." the brief stated. "The overlapping definitions of guidance documents and rules may now allow agencies to adopt guidance documents instead of going through the rule-making process, limiting legislative and public oversight of changes to agency policies."



WMC: Use of guidance documents abused

But those supporting the December law's restrictions on guidance documents believe state agencies already wield them as if they have the force of law. Wisconsin Manufacturers & Commerce, for instance, filed a brief arguing that the December law is necessary to control the administrative state.

"The court's decision will have significant impacts far beyond the constitutional authority of the Legislature," the WMC brief stated. "It will directly impact main street Wisconsin businesses."

While scholars and political prognosticators may debate the resulting impact of the court's decision for years to come,WMC argued, there will be little debate in the business community.

"If these laws are stricken down by a novel legal theory, then the administrative state will be less transparent, government officials less accountable, and Wisconsin's law less clear," the brief stated.

The law that the League of Women Voters and other plaintiffs are seeking to have overturned necessarily reins in the potential for abuses by the administrative state, WMC argued.

"The act provides predictability and meaningful opportunity for participation by the regulated community in the development of regulation," the brief stated. "Most importantly, (the law) requires more transparency from the administrative state as it acts outside of the rule-making process."

While Wisconsin has long been a leader in ensuring that the administrative state is transparent, accountable to the people, and open to stakeholders in the rule-making process, those same principles have not applied to the more widely used 'guidance documents,' WMC contended.

"In theory, guidance documents explain the law - statutes and administrative rules - to the regulated community in an easily understandable way," the brief stated. "While increased regulation in most contexts gives the regulated community pause, more troubling to them is not new administrative rules promulgated in the normal course, but rather those 'rules' implemented through the issuance of agency guidance."

Guidance does not, and should not, have the force of law, and to the extent that it places new requirements or restrictions on the regulated community, they are invalid and unenforceable, WMC observed.

"However, in practice, guidance often becomes the law because small business owners cannot hire lawyers or experts to identify the underlying law that guidance purportedly 'explains,'" the brief stated. "Prior to (the December law), administrative agencies were not required to even acknowledge the creation or alteration of guidance documents."

Guidance often sat in desk drawers until they were retrieved by a regulator and handed to a business along with a notice of violation, the WMC contended.

"Agency reliance on unpromulgated 'rules' to the detriment of the regulated community through guidance is not only illegal, but poor public policy," the brief stated. "(The new law) does the following to remedy this: it (1) defines 'guidance,' (2) requires agencies to cite statutory or administrative code provisions in guidance, (3) requires that documents are made public so the regulated community may comment, and (4) requires the agency head to certify that the guidance is not an improperly promulgated rule."



More legislative oversight

Beyond guidance documents - though related because it puts more power back in the hands of the Legislature -WMC said Act 369 provides for needed legislative oversight of the attorney general's settlement activity.

"(The December law) simply allows the client - the state of Wisconsin -- to have a say when the attorney general settles or discontinues a case on behalf of the state," the brief stated. "The Act allows the Legislature - the branch most directly accountable to the people of Wisconsin - to have a role in settlements concerning the validity of a statute. It provides additional client oversight of the lawyer, in this case the attorney general."

Such oversight protects against a lawyer acting solely on political interests and not what is best for the people, WMC asserted.

"Every other attorney in the state has an ethical duty to gain approval from their client when settling or discontinuing a case," the brief stated. "Since the role of the attorney general is prescribed entirely by the Legislature, it should be uncontroversial that the Legislature retains oversight of settlement agreements entered into by the attorney general."

The inability of the Legislature to have oversight on settlements and other actions taken by the attorney general has already negatively impacted the business community, WMC argued.

"Recently, attorney general Josh Kaul discontinued his defense of a portion of Wisconsin's right-to-work law, which through (the statutes) bans the use of dues-checkoff provisions that are used to narrow when a worker may 'opt-out' of supporting a union," the brief stated.

The previous attorney general had defended the statute, WMC observed, taking the case to the U.S. Supreme Court.

"The case was ripe for Supreme Court review, however, at the 11th hour, only one day before the court was set to vote on the petition for review, attorney general Kaul quietly dropped the appeal, effectively forcing certain Wisconsin workers to financially support a union against their will," the brief stated. "If the circuit court in this case, in conjunction with a related case, had not enjoined the enforcement of the relevant provision in [the December law], the Legislature could have had a seat at the table when this decision was made."

Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story" and can be reached at richardmoorebooks.com.





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