Why It Matters
Whether an executive branch action qualifies as final can determine whether it is subject to judicial review or congressional oversight. A Congressional Research Service report published Aug. 25 examines how the Administrative Procedure Act (APA) and Congressional Review Act (CRA) apply to final actions taken by federal agencies. The APA generally provides a mechanism for courts to review final agency actions, while the CRA provides Congress with a mechanism to review agency rules.
The distinction matters because actions that remain preliminary or tentative may not yet qualify as final. Under the APA, an action generally must mark the consummation of an agency's decision-making process and determine rights or obligations or produce legal consequences before courts can review it. Under the CRA, the Government Accountability Office has similarly concluded that proposed rules are not final rules subject to the law.
The Big Picture
The APA generally allows injured parties to challenge final agency actions, including rules, in federal court. The CRA operates differently. It requires agencies to submit covered rules to Congress and GAO and establishes expedited procedures for Congress to pass a joint resolution of disapproval. Such a resolution must pass both chambers and be signed by the president, or enacted over a presidential veto, to nullify a rule. Unlike the APA, the CRA expressly bars judicial review, and GAO has in practice addressed certain legal questions about the law's application.
Both statutes apply to actions taken by "agencies," a term defined broadly under 5 U.S.C. § 551. The definition excludes Congress, courts and, for most purposes, certain military authorities. The Supreme Court has also held that the APA does not apply to the president, and GAO has concluded that presidential actions such as executive orders are not covered by the CRA. Agency actions implementing presidential directives, however, can sometimes fall within the CRA.
Determining whether other executive branch entities qualify as agencies can be more complicated. Courts have examined whether an entity exercises "substantial independent authority," considering both whether it exercises governmental authority and how independent it is from the president. Courts may consider an entity's proximity to the president, the nature of authority delegated to it and whether it has a self-contained structure.
The Supreme Court has established a two-part test for determining whether an agency action is final under the APA. First, the action must mark the consummation of the agency's decision-making process rather than be tentative or interlocutory. Second, it must determine rights or obligations or produce legal consequences. A document's label is not controlling because courts examine the substance of the action.
GAO has said that this two-part judicial test does not necessarily govern the CRA because congressional oversight differs from judicial review. GAO nevertheless recognizes a finality requirement under the CRA and considers whether an agency must take additional steps before its action becomes final. Proposed rules therefore generally do not qualify because they do not impose final requirements before issuance of a final rule.
Finality becomes less clear outside traditional notice-and-comment rulemaking. An agency recommendation that is merely advisory or preliminary generally is not final. However, the possibility that an agency could later revise a decision does not necessarily make the action nonfinal. Courts have therefore held that an interim final rule can qualify as final even when the agency continues accepting comments and could later amend it.
The Bottom Line
The APA and CRA can treat agency guidance differently. Under the APA, courts may find that guidance is not a final agency action when regulated parties can disregard it without legal consequences. But courts may also consider an action's practical effects, and an agency interpretation can sometimes qualify as final when the agency effectively treats it as binding or it otherwise creates sufficient legal consequences.
The CRA can reach further. GAO has concluded that nonbinding guidance documents and general policy statements can qualify as rules subject to congressional review because the CRA's definition of a rule encompasses both substantive rules and guidance. GAO has specifically concluded that the CRA can cover "coercive" guidance that induces regulated entities to exercise their rights or obligations in a particular way.
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