What's Left but Enforcement Actions?

Abstract

With recent opinions, the Supreme Court has made legislative rules--rules that carry the force of law and frequently are promulgated pursuant to notice and comment--less valuable, more onerous to enact, and more likely to be overturned by the courts than in years prior. And because other ways for agencies to make policy exist-primarily, by bringing targeted enforcement actions and developing the law piecemeal in case-by-case adjudications-why would they write rules that are difficult to promulgate and will not receive deference unless absolutely necessary?

This essay argues that the Court's recent administrative law jurisprudence incentivizes agencies to forego creating legislative rules and simply bring enforcement actions, and explains how such a result is detrimental to the public interest. It concludes by using the example of the federal securities laws application to crypto assets-and the Securities and Exchange Commission's inability to promulgated regulations defining the laws' scope-to demonstrate the effects that agencies' inability to enact regulations places on regulated industries.