Negotiated Rulemaking and New Risks: A Rail Safety Case Study
7 Wake Forest Journal of Law & Policy __ (invited symposium contribution), 2017, Forthcoming
65 Pages Posted: 18 Jun 2016 Last revised: 3 Dec 2016
Date Written: June 16, 2016
Modern legal scholarship tends to ignore a regulatory technique called “negotiated governance,” “negotiated rulemaking,” or “regulatory negotiation” (“reg-neg”), which is a process through which agencies work closely with affected stakeholders in drafting a rule. This process was popular in the 1990s and received much scholarly attention around that time, but it has since faded from view. However, several agencies still regularly use negotiated rulemaking, and two of these agencies have recently had to address changing risks in rail transport, thus drawing negotiated rulemaking back into the spotlight. Specifically, a growing volume of ethanol and crude oil is now transported by train due to a recent U.S. energy boom, and our gridlocked Congress did not substantially revise statutes to address rail safety risks until years after these risks were identified and more than six months after agencies had issued a final rail safety rule. Thus, the Federal Railroad Administration (“FRA”) and Pipeline and Hazardous Materials Safety Administration (“PHMSA”) took on the important, initial responsibilities for updating the law within this area by issuing new advisories and writing new regulations to address accidents involving trains carrying crude oil and ethanol. Although FRA and PHMSA did not use negotiated rulemaking to write all of these rules, this Article examines how these agencies’ semi-regular use of negotiated rulemaking over time, and thus their repeat interactions with rail industry actors, likely influenced their approach to these risks in positive and negative ways.
The Article suggests that industry actors — in part due to their long interaction with FRA and PHMSA through negotiated rulemaking — likely cooperated more with agencies’ voluntary rail safety directives than they otherwise might have, and, also due to this interaction, that the agencies had more baseline technical knowledge when writing rules to address new risks. However, this longstanding industry-agency relationship might also have caused the agencies to drag their feet in issuing certain important rules if not for the intervention of the independent National Transportation Safety Board (“NTSB”), the sole function of which is to examine the cause of rail accidents and to suggest and advocate for needed regulatory reforms. Further, the failure of the agencies to include many public interest groups in negotiated rulemaking over time (a failure that is not necessarily the fault of the agencies, as it appears that these groups have not strongly pushed to be part of reg-neg) might have left certain problematic gaps in the rail safety rules written by these agencies. On the other hand, in some cases FRA, through the reg-neg process, supported and defended public interest concerns over the objections of the rail industry — in part due to labor group members’ focus on public interest concerns — thus demonstrating that a lack of direct, robust interest group representation in the reg-neg process did not consistently translate to agency capture. This Article draws lessons from this case study to suggest how negotiated rulemaking strategies could generally be beneficial in agency processes that address new and changing risks, and how the negative aspects of negotiated rulemaking could best be avoided within these processes.
Keywords: crude oil, ethanol, rail, rail transport, oil spills, rail safety, Lac-Megantic, Federal Railroad Administration, Pipeline and Hazardous Materials Safety Administration, negotiated rulemaking, reg-neg, capture, political economy, agency expertise, administrative law
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