Jean Monnet Center at NYU School of Law


VIII. Proposal for Notice and Comment in the Community

A. Case for a Modified Version of Notice and Comment

Notice and comment would improve accountability and public participation in Community rulemaking. The combination of information, interest participation, and judicial review would guarantee greater accountability to Parliament, which currently has inadequate control instruments, as well as the Council, which notwithstanding its comitology veto has very little effective power over the tightly knit network of national experts and Commission civil servants.Further, notice and comment would guarantee broad interest group participation in rulemaking. In the Community's pluralist order, notice and comment would ensure that the wide spectrum of interests involved in policy formulation would also have a say in policy implementation. In other words, the Commission and national experts (and sometimes the Council when charged with passing implementing rules) would no longer have the power to shut out interests downstream in the policymaking process.

Moderation, however, should be cornerstone of any eventual reform. Both Americans and European may want public accountability, fairness, expertise, and speed in administration. Yet how to design bureaucracies to achieve these ends is a complicated task. Because of the impossibility of perfect information under such conditions, decisions about institutional design tend to be largely based upon beliefs about human nature and society, beliefs which in turn are heavily influenced by historical experience.160 And because institutions are run by individuals who subscribe to such beliefs, they can turn out to be, within limits, self-fulfilling. What is socially and politically acceptable in one community might not be in another and, when it is impossible to prove one right and the other wrong, there is no reason to uproot the institutions and belief systems that enable communities to obtain underlying values.

One cost of reform will be a slower, more cumbersome rulemaking process. This flaw is to a certain extent unavoidable in a separation of powers system that generates the information and contains the institutional mechanisms needed for lawmakers to monitor and control policy implementation. Americans, however, tolerate more than the inevitable because of their distrust of experts and respect for courts. Although it is even more difficult to generalize about "European" beliefs than about American ones, experts appear to command more prestige in Europe. Regulators unfettered by politicians is perceived by many as the best means of enforcing antitrust law, deregulating telecommunications, protecting privacy, and achieving a host of other objectives. As part of the market liberalization efforts of the past two decades, much of which has been prompted by the Community, a host of agencies (called independent agencies but very different from the American variety) that escape the normal chain of command from party to cabinet, minister, and bureaucrat have been established in the member states.161 At least European politicians, therefore, seem to believe that expertise alone or with minimum room for politics can best solve regulatory problems. Furthermore, several academic works on legitimacy in Community government argue that regulation should be left almost entirely to the experts. Giandomenico Majone, a prominent scholar in the field, characterizes regulation as a purely technical question of correcting market failure and maximizing wealth and recommends that it be left to technocrats, with public involvement to occur only when it comes time to decide on wealth distribution.162 Christian Joerges and Jürgen Neyer, who have conducted extensive research on comitology and standard-setting, argue that networks of national civil servants, free of direct political control, can accomplish the dual Community objectives of expertise and regulation sensitive to national concerns.163 In light of these views, any eventual reform should be careful to retain a greater role for expertise than is the case in the United States.

Furthermore, courts in Europe are not perceived and accepted as quasi-political, policymaking institutions as in the United States. In the member states, judges other than constitutional judges are thought to be skilled professionals who scientifically apply codes and statutes and, to the extent they must engage in gap-filling, do so using accepted canons of construction that leave little room for discretion and value judgments. Constitutional review is mostly a post-World War II innovation and, with the exception of Scandinavia and Greece, it comes within the jurisdiction of special constitutional courts.164 Constitutional judges do not follow the civil service career track like the rest of the judiciary but rather have distinguished themselves in politics or academics and therefore are considered to be quite different from other judges.

The European Court of Justice, the only directly relevant court for the purpose of our discussion because of its jurisdiction over Community acts, is recognized as a powerful constitutional court: it has transformed the Treaties into a constitution that directly confers rights upon individuals. The Court has its limits as policymaker though. Its role rests on enforcement of the Treaties and Community law against non-complying member states and not so much against the Community institutions themselves. It is therefore unclear whether tough review of Community implementing measures of the sort that it applies to member state laws would be considered legitimate. In the absence of a strong tradition of quasi-political judicial action in the member states and in the Community, institutional reform must take pains to define a restrained role for courts. Otherwise, the Community bureaucracy might come to be perceived as accountable to fifteen unelected judges in Luxembourg, not the European public.

Another disadvantage of American rulemaking, special interest influence, might also be a cost of reform. A secretive, closed process like the one currently in place in the Community allows a certain degree of freedom from interest group pressure for the simple reason that lobbying groups do not know when their national representatives fail to act in their interests. Once policymaking is opened to public participation, it becomes vulnerable to special interest influence.

In Brussels, the imbalance between multinationals on the one hand and small business associations, national employers' organizations, trade unions, consumers, and environmentalist on the other hand, is striking. A number of studies have shown that even though groups such as consumers are becoming better organized, multinationals, acting in clusters of two or three are the most skilled at influencing policymaking.165 This is linked to a number of features of the Community system. The organizational hurdles that large groups face grow in proportion to the number of people or firms they must represent. Running an employers' association in a country of eight million is very different from running a confederation of national organizations drawn from a geographic area of over 360 million people. Very possibly, the difficulties may be overcome through experience, but not enough time has passed to build up such experience. Further, one distinctive characteristic of Community policymaking is the plethora of political actors involved and the need for interest groups, at great cost, to put pressure on legislators at every stage in the adoption of a Community measure: they must lobby governments in national capitals, their governments' permanent representations to the Community in Brussels, members of Parliament, and different divisions in the Commission. As a result, the threshold in financial and other resources for interest group success is higher and the advantage that small groups naturally have over large ones is heightened. Before these imbalances in interest representation in Brussels are remedied, therefore, a more modest version of notice and comment is in order. The combination of information, formal interest participation, and courts should be tempered to avoid excessive manipulation of the system by a few small but powerful interests.

B. Reform Proposal

A Community rulemaking process combining the basic elements of the American system with some of the reform ideas advanced to curb litigation and special interest excesses would take the following form. The Commission would issue notice of a proposed implementing rule in the Official Journal, solicit comments, and where appropriate hold a public meeting. At this first stage, the Commission might very well be required to disclose opinions expressed by national representatives on the comitology committee (it regularly consults the committees before submitting proposals for a formal vote) to justify its policy choices. The Commission would then issue a revised proposal, explaining why it did or did not choose to adopt the suggestions made by the participating individuals and organizations. Although the scientific studies and other evidence relied upon by the Commission could not, for obvious practical reasons, be published along with the proposed rule, such studies and evidence would be made available to members of the public through other means. The measure would then be submitted to the comitology committee for its opinion. If positive, the final implementing rule would be published in the Official Journal and would contain a statement of basis and purpose essentially replicating the explanation and justification set forth in the Commission's revised proposal. If the opinion were negative (or in the case of a regulatory committee, not forthcoming), the Commission proposal would be sent on to the Council, which would be obliged to give a detailed statement of reasons only if it decided to modify the Commission measure. Again, the final implementing rule published in the Official Journal would contain a statement of basis and purpose reproducing either the Commission's or the Council's rationale.

This procedure would overlap nicely with Parliament's role under the Comitology Decision of 1999.166 Currently, the Commission must transmit draft measures to Parliament and respond to parliamentary resolutions opposing draft measures. Under the proposed reform, the Commission would be required to give the same information to the general public and respond to criticism from interested parties.

Individuals or firms would be able to challenge implementing rules but only after enforcement at the national level. Domestic courts would ensure that requests for preliminary references are well-founded by examining the statement of basis and purpose published with the final rule or requesting that parts of the record be sent from Brussels. The Court would review statutory interpretation claims based on text and canons of construction and fact-based claims for manifest error of appraisal, a standard of review with considerable Court precedent. These old judicial review tools, however, would have more bite because of the extensive record at the Court's disposal. (As a result of the Comitology Decision of 1999, as well as recent Community information disclosure legislation, this record is already available.) The parties would be limited to the arguments contained in the record or, in other words, to the claims and evidence already advanced in the rulemaking proceeding. Lastly, the Court would either uphold the implementing rule, annul or declare invalid the measure, or, in what would constitute a novel remedial power, remand the measure to the responsible Community institution for further explanation or development of the factual record.

C. Dissecting the Proposal

This rulemaking proposal contains three basic elements: Commission (and very rarely Council) procedure, locus standi rules, and review in the Court of Justice. The first, administrative procedure, is a straightforward application of American rulemaking. This part of the reform would require a Community legislative act, most likely a decision. The act could essentially replicate the notice and comment provisions in the Administrative Procedure Act although those provisions would have to be revised slightly to reflect current agency practice and the Community context. The evidence and justifications put forward by the rulemaking institutions and the comments submitted by members of the public would constitute the record susceptible to judicial review.

The part of the proposal concerning locus standi rules departs fairly radically from the American system. Here I incorporate Mashaw's suggestion on limiting the availability of review by requiring parties to challenge rules post-enforcement, that is after the lead time built into a rules has expired and litigation entails the costs of both lawyers and non-compliance penalties. Post-enforcement review would discourage firms from turning to courts in the absence of strong claims against the Commission, limiting the quantity of litigation and consequently judicial interference with bureaucratic expertise. To accomplish this part of the reform, nothing in the current system of locus standi and preliminary references would have to change. As explained earlier, Community implementing rules can only be challenged by individuals and firms through national court systems. Although national locus standi rules vary tremendously, a firm would generally have to wait until sued by its member state for non-compliance and then defend on the grounds that the Community act was illegal, requesting the domestic court to refer the question to the Court of Justice. (National courts serve as gatekeepers to the Community legal system and are obliged to make preliminary references only if persuaded that the Community measure is illegal.) To form an opinion on this issue, the national court could rely exclusively upon the arguments and evidence published with the proposed and final rules or could request that the entire record be sent.

Leaving locus standi as is would not only reduce incentives to resort to litigation but might also ameliorate the current imbalance in Community interest representation. National courts would serve as the point of access to the judicial review component of rulemaking and therefore interest groups would not need to be well-organized in Brussels with the resources to employ lawyers abroad but could rely on local counsel in their national courts and even in the European Court.167

Undoubtedly, there are drawbacks to conducting rulemaking review through the preliminary reference system. The most serious is that groups not called upon to comply with rules but that nevertheless suffer their consequences might be denied access to national courts. Recently, locus standi rules have harmonized for public interest groups that seek to enforce Community consumer protection legislation, an innovation that holds promise for equity in rulemaking review.168 A second problem with access to the Court through the preliminary reference system is the legal uncertainty that would very likely result. Unlike direct review, litigants are not bound by strict time limits when they challenge Community acts through preliminary references. They must raise the issue during national enforcement proceedings, which in some countries will be initiated much later than in others, thus creating the danger that a Court decision declaring an implementing rule illegal will be handed down after widespread application in other member states. One possible solution would be to write Community implementing rules to include a time limit applicable to legal challenges through preliminary references. This would put pressure on groups that wish to exercise this legal right to coordinate Community-wide their opposition and litigate the issue when the rule is first enforced at the national level, wherever that happens to be. A last disadvantage to the preliminary reference system in this context is that conceptually it is slightly messy. On direct review, the Court is authorized to annul Community acts, whereas when ruling on a preliminary reference, it may only declare a Community act invalid and therefore inapplicable to the case at hand. This, however, is a minor obstacle since preliminary reference cases serve as precedent in the rest of the Community and therefore, in practice, the measure no longer has effect. Notwithstanding all the possible flaws, rulemaking review through national courts is still the best course because it would reduce the risk of unwieldy, cumbersome litigation of the sort that frustrates American administrative action. If access to the Court should prove unsatisfactory, Community locus standi rules can always be liberalized, after the basics of a notice and comment system are already in place.

The last element of my reform proposal, judicial review, would involve a mix of old and new. First is the standard of review issue. The Court would handle claims that an implementing rule rests upon a flawed interpretation of the Treaty or basic measure as it always has, using text and canons of construction. It would also entertain more fact-based, policy-oriented challenges to implementing rules. The standard of review for fact-based claims, however, should be written, in the Community act setting down notice and comment, to suggest a deferential attitude toward Commission policy calls. This standard, quite simply, could be "manifest error of appraisal," one of the headings under which such challenges may be brought currently and which suggest unintrusive judicial review.169

The second issue that arises is a procedural one concerning the arguments the parties are permitted to raise. In American rulemaking review, under what is known as the Chenery rule,170 the parties are normally only permitted to raise arguments and evidentiary claims that were raised before the agency. This makes the process more efficient by requiring litigants to express their views at the first opportunity possible and therefore, with any luck, settling the dispute without any need for a court. The Chenery rule also ensures that the agency, the institutional actor responsible for rulemaking and best-suited to assess the scientific evidence and make the policy choices, has had an opportunity to consider all of the parties' objections and suggestions. Such a principle in the Community context would improve the quality of the debate before the Commission as well as lighten the Court's case load.

The last issue that crops up in judicial review is remedies. The Court currently has two alternatives when it finds an implementing rule illegal: it may annul or declare invalid the rule, depending on whether the case involves a direct challenge under Article 230 or a preliminary reference under Article 234, or it may annul or declare invalid selected parts of the rule. My proposal would give it the third alternative, again taken from American administrative law, of sending the implementing rule back to the responsible Community institution for further explanation or development of the evidentiary record. This is a question of expediency and good judicial practice more than anything else. A remand is far less time-consuming and disruptive for an agency than a judgment striking the rule and forcing an agency to start the proceeding from scratch. Ironically, this might be the most radical feature of my proposal, for the Treaty does not contemplate this form of judicial remedy and therefore might require an amendment.

160 See generally Jon Elster, Nuts and Bolts For the Social Sciences (1989) (describing the role of beliefs in rational human action); Ernest R. May, Lessons of the Past: The Use and Misuse of History in American Foreign Policy (1973) (describing the influence of historical experience in political decisionmaking under uncertainty).

161 See generally Sabino Cassese, La nuova costituzione economica (1995); Giuliano Amato, "Autorità semi-independenti ed autorità di garanzia," 47 Rivista Trimestrale di Diritto Pubblico 645, 647-48 (1997); Rita Arrigon, "Regolazione e Gestione nelle Public Utilities," 45 Rivista Trimestrale di Diritto Pubblico 87 (1995); Sabino Cassese, "Stato e Mercato," 41 Rivista Trimestrale di Diritto Pubblico 379, 384-85 (1991).

162 See Giandomenico Majone, "Regulatory Legitimacy," in Giandomenico Majone, Regulating Europe 284 (1996); Giandomenico Majone, Temporal Consistency and Policy Credibility: Why Democracies Need Non-Majoritarian Institutions, EUI Working Paper RSC No. 96/57 (1996).

163 See Christian Joerges & Jürgen Neyer, "From Intergovernmental Bargaining to Deliberative Political Processes: The Constitutionalisation of Comitology," 3 European L.J. 271 (1997).

164 See Allan R. Brewer-Carías, Judicial Review in Comparative Law 168 (1989); Constitutional Review and Legislation (Christine Landfried ed., 1988); Mauro Cappelletti, Judicial Review in the Contemporary World 45-68 (1971).

165 See Alan Cawson, "Big Firms as Political Actors: Corporate Power and the Governance of the European Consumer Electronics Industry," in Participation and Policy-Making in the European Union 185 (Helen Wallace & Alasdair R. Young eds., 1997) (arguing that small clusters of multinationals are more powerful than employers' associations); Alisdair R. Young, "Consumption Without Representation? Consumer in the Single Market," in Participation and Policy-Making in the European Union 206 (Helen Wallace & Alasdair R. Young eds., 1997) (describing organizational difficulties of European consumer movement).

166 The recommended reform, however, should, unlike the Comitology Decision of 1999, apply to all implementing measures, not only those passed pursuant to co-decision legislation.

167 In a system that limits parties to the record developed before the agency, the success of such a challenge rests on the comments submitted during the rulemaking proceeding and therefore interest groups, to stand a chance in court, would nevertheless need the resources to track Community proposed rules, analyze them, and submit comments.

168 See Directive 98/27/EC of the European Parliament and of the Council of 19 May 1998 on injunctions for the protection of consumers' interests, 1998 O.J. (L 166) 51.

169 As was explained earlier, challenges to Community acts may be brought under two other headings, proportionality and misuse of powers. Proportionality, however, as spelled out, although not as applied in cases involving Community acts, is a fairly tough standard and would best be dropped. According to the legal commentary, the doctrine of misuse of powers is wrongly employed in reasonableness cases, for it is designed to catch administrators that act with one (impermissible) purpose in mind but state another (permissible) one, not to question policy choices.

170 SEC v. Chenery Corp., 318 U.S. 80, 94 (1943).