Historically, as administrations change at the safety agencies, new priorities and shifting judgments on risk-based hazard assessment drive regulatory burdens up or down. The effect of President Trump’s executive order requiring the repeal of two rules for every one promulgated is yet to be seen when it comes to rulemaking at consumer facing safety agencies such as the National Highway Traffic Safety Administration, Food and Drug Administration, and Consumer Product Safety Commission.
The CPSC, as an independent agency, could take the position that the E.O. simply does not apply to them. The White House agrees. But the reality is that very few $100 million rules have been issued by the CPSC over the entire life of the agency. That is because its enabling statute favors voluntary industry standards over mandatory rules. Indeed, many of the CPSC rules affecting product performance have been mandated by Congress and could not be repealed by the agency absent an act of Congress. Still others may require some APA process before they can be legally repealed or changed.
Real regulatory burdens often come not from official rulemaking, with its due process protections and cost benefit analysis, but from guidance, best practices and even agency FAQs that lack those same checks and balances. Those types of guidances may be included in the broad definition of regulation encompassed by the 2 for 1 E.O., but it is yet to be seen exactly how it will be interpreted. For a variety of reasons, the safety agencies have favored guidance over regulation. While guidances may not be technically enforceable, they can have significant regulatory consequences.
By way of example, NHTSA has issued autonomous vehicle performance guidelines outlining 15 best practices for manufacturers regarding the safe pre-deployment design and development and testing of automated vehicles prior to commercial sale or use on public roads. Those performance guidelines were not issued by APA rulemaking but unquestionably involved significant stakeholder input through public meetings and notice and comment. Avoiding any discussion of the legal enforcement of its guidance document, NHTSA made clear it has ample enforcement authority to address safety risks in automated cars under its existing statutory authorities. The agency guidance document states, “Where a fully automated (selfdriving) vehicle or other automated safety technology causes crashes or injuries, or poses other safety risks, the Agency will evaluate such technology through its investigative authority to determine whether the technology presents an unreasonable risk to safety.” It doesn’t take too much reading between the lines to understand the need to follow the guidance documents, regardless of the costs those testing and design requirements impose, in developing new technology vehicles.
FDA is similarly practiced at making policy through guidance. Last year it issued draft guidance setting forth its expectations for pre-market submissions for interoperable medical devices. Those included specific design concerns FDA wants manufacturers to evaluate and test during product development. In pre-market submissions, FDA then wants to see validated solutions to problems like managing corrupted data, responding to unexpected instructions from other devices, and establishing fail safe states for critical functions. Presumably future approvals and clearances will depend on successful responses to these elements.
The E.O. defines regulation as “an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency.” Should that definition extend to guidances and best practices, the E.O. could have a dramatic effect at the safety agencies. Guidance on emerging technologies may slow or stop entirely at both FDA and NHTSA, single administrator agencies directly impacted by the E.O.