agencies who are trying to implement laws and protect public health, safety, and the environment with limited resources. Even if an agency has acted in good faith, litigation can cause delays and drain scarce resources. To avoid such excessive litigation, the administration feels that S. 1214 should include a statutory bar to judicial review of agency compliance with its provisions.

There are practical implications in this regard. Currently, agencies reach out to State, local, and tribal governments and their representatives on a regular basis to hear their concerns and discuss important rulemakings. These discussions typically proceed in a spirit of intergovernmental partnership, often informally, after reasonable efforts to reach those most likely to be interested. Thus, as a general matter, we believe agencies already carry out consultations as envisioned in Section 7 and do so in a meaningful way.

Our concern here revolves around increasing the potential for litigation. If we make these collegial, informal discussions subject to the possibility of judicial review, it would change the whole dynamic. Rather than discussing matters openly in a spirit of partnership, some agencies could resort to checklists-building up a record that proves that each step has been carried out. Instead of working to improve their rules, agencies might shift their focus to improving their litigation position.

This will divert scarce resources. Agencies would feel compelled to prove that each step has been carried out fully. They would create a prerulemaking record as formal and objectively documented as their counsel deems necessary to withstand a court challenge. It is not at all clear that this will lead to better rules, despite the good intentions embodied in Section 7.

How might this play out? Here is an example: Section 7 directs each agency to "provide an opportunity for meaningful participation by public officials of governments that may potentially be affected." We agree that agencies should do that. But allowing judicial review of agency compliance with this provision would permit potential litigants to ask a Federal judge to decide a wide variety of new issues. How much notice is legally adequate to "provide an opportunity"? How much outreach efforts does an agency have to make to seek "meaningful participation"? If an agency conducts extensive consultations with some of the Big 7, can others of the Big 7 litigate their failure to be included? What about individual State or local governments that do not agree with positions taken by the Big 7? Do they each need to be invited to participate?

The agencies would have to consider, plan for, and determine how to resolve questions like these. This would take time. It also might keep them from other important tasks, like paperwork reduction initiatives, the review and revision of outdated and burdensome existing rules, and the conversion of rules into plain language.

For that matter, each agency would have to do more than just ensure that all of those who were supposed to be notified and consulted were satisfied with the agency's compliance with Section 7. Others with an interest in the rulemaking-including various special interests-could potentially challenge the rulemaking because they were not satisfied with that compliance. They might even do

forts. Agencies would have an even broader group to consider when designing a consultation effort.

We all know what road is paved with good intentions. While we respect the careful thought and sincere concern underlying S. 1214, we believe that it requires some changes to avoid unintended, adverse consequences. We would be pleased to work with you and your staff on these issues.

Thank you for the opportunity to appear before you today, and I would be happy to answer any questions you may have. Chairman THOMPSON. Thank you very much. Mr. Moss.

TESTIMONY OF RANDOLPH D. MOSS,1 ACTING ASSISTANT ATTORNEY GENERAL, OFFICE OF LEGAL COUNSEL, U.S. DEPARTMENT OF JUSTICE

Mr. Moss. Mr. Chairman, Members of the Committee, I am honored to be here today to testify regarding S. 1214, the Federalism Accountability Act of 1999. As Mr. Spotila has indicated, my remarks will focus on Section 6, which would establish rules of construction relating to statutory and regulatory preemption of State law and, more broadly, rules of construction relating to any Federal law touching upon the authority of the States.

Section 6(a) and 6(b) would significantly alter the rules under which courts determine the preemptive effect of Federal statutes and regulations. In our view, sweeping reform of this nature would be warranted only if Congress were convinced that existing preemption doctrine systematically operates to frustrate congressional intent and that the new rules of construction would produce better results.

Section 6(c) would operate even more broadly than Section 6(a) and 6(b). It would require that any ambiguity in any Federal law, whether pertaining to preemption or to any other subject, be construed in favor of preserving the authority of the States and the people. Section 6(c) threatens to frustrate congressional intent wherever Federal law implicates the allocation of power between Federal and State governments.

First, I would like to explain our view that Section 6(a) and 6(b) would fundamentally alter long-established preemption doctrine in ways that may create significant new problems. It should only be adopted if necessary to correct equally fundamental misinterpretations of congressional intent by courts and administrative agencies. Federal statutes may preempt State law in either express terms or implicitly. In either case, congressional intent is, of course, the touchstone of preemption analysis. Thus, implied preemption requires clear evidence of congressional intent to preempt, such as the establishment of Federal requirements that conflict with State law or that occupy an entire field.

Further, the courts require a heightened showing of intent to preempt in areas of traditional State primacy. The Supreme Court has stated that, "[w]hen Congress legislates in a field traditionally occupied by the States, 'we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Con

1 The prepared statement of Mr. Moss appears in the Appendix on page 296.

the pudding here in terms of these statistics. It just gets back to how much importance you place on this.

Now, when you were over at the SBA, the matter of the Regulatory Flexibility Act came up, and that requires agencies to determine if there is a significant impact on certain small entities, and if there is, they are supposed to do an analysis and take steps to alleviate all of that. And when you were at SBA, you supported, along with the Vice President, giving judicial review.

Now, is the impact on these small entities or these small businesses important, more important than impacts on States? Mr. SPOTILA. I was a supporter and am a supporterChairman THOMPSON. Of local governments?

Mr. SPOTILA. Of judicial review in the context of the Regulatory Flexibility Act. Candidly, I think that it has been constructive to have it. The agencies take their requirements more seriously because of it.

Having said that, a lot of attention was given to how to focus that judicial review provision narrowly to accomplish better compliance without opening up an enormous amount of excessive litigation. And those are some of the same concerns that I am referring to today. I think that we need

Chairman THOMPSON. So you think we could focus ours in a way that would serve the same salutary purposes that

Mr. SPOTILA. Well, the short answer to that is yes. As a little longer answer, the President has already signed the Unfunded Mandates Reform Act, which has a judicial review provision. He has indicated he would sign S. 746, which also has a targeted approach. So I think it would be a fair assumption to say that a targeted approach would be something we could-we ought to be able to agree on.

But if we are too indiscriminate, then there is a real risk of excessive litigation, and I do not think that serves the public interest. Chairman THOMPSON. Mr. Moss, moving to Section 6, the rule of construction, you talk about the fact that this alters long-established doctrines. But the long-established doctrines that it alters are judicial doctrines which are trying to interpret our intent. Right?

Mr. Moss. Correct.

Chairman THOMPSON. Don't you think we have a dog in that fight? I mean, we ought to be able to state what our intent is. We should be willing to do that, shouldn't we?

Mr. Moss. I absolutely believe that you have a very big dog in that.

Chairman THOMPSON. We won't say what kind, but just[Laughter.]

Mr. Moss. A very positive dog in that.

What I would say, though, is that it is unclear to me whether moving to a system in which you have what I would call a framework rule that applies to future enactments, which provides only for express preemption or direct conflict preemption, is one that, in fact, in the long run will best capture congressional intent. Some of the most contested, difficult cases in the Supreme Court-you mentioned the increase in cases dealing with preemption. Some of

been figuring out what express preemption provisions mean. The Cippolone case dealing with the cigarette warnings, the Medtronics case dealing with the medical device amendments, some of the most contested issues have dealt with that.

In addition, some of the most heated, I think, attacks on preemption have been in the area of express preemption, attacks on the broad express preemption provision in ERISA.

Chairman THOMPSON. But those are policy debates.

Mr. Moss. They are policy debates, but I think that there are still questions that go to whether

Chairman THOMPSON. So you are basically saying it is impossible for us to express our intent.

Mr. Moss. No, not at all. I believe

Chairman THOMPSON. That it is very difficult.

Mr. Moss. I believe that Congress should do so. I suspect that, although perhaps more difficult in the long run, it may be best done on a case-by-case basis rather than in a piece of framework legislation like that. I can give you an example of what I mean by that.

Chairman THOMPSON. Well, you can still-you can do it on a case-by-case basis the other way. If we are concerned and some of the witnesses that come after you will have some instances, and which I believe to be the case, where there are more and more cases where you have these confusing doctrines butting heads with each other and inconsistencies and courts coming up with these interpretations that are inconsistent with one another. So if we conclude that and we decide that we want to lay down a framework and say unless we say otherwise, here is the rule.

Mr. Moss. Right.

Chairman THOMPSON. That doesn't keep us from saying otherwise. In a given case, we can wipe the whole thing out if we choose to in a given case. The question is: What is the general rule going to be when we are silent on the issue? That is the issue here, isn't it?

Mr. Moss. I believe that is correct, although I think that it is even the case that where you are silent on the issue in the subsequent enactment, there are going to be debates, and the courts in the end are going to have to figure out what congressional intent is.

To give you an example, another type of framework-there is not a great deal of framework legislation of this type, but another piece of framework legislation of this type dates back, I believe, to 1871, and it is the Dictionary Act. And it says unless Congress says otherwise, this is what these terms are going to mean.

In a case called Monel, Justice Brennan writing for the Supreme Court looked to the definition of the word "person" in the Dictionary Act. He said the word "person" in the Dictionary Act includes a body politic, and, therefore, it must include municipalities. And, therefore, one can bring an action against a municipality under Section 1983.

In a subsequent case called Quern v. Jordan, Justice Rehnquist was writing for the majority, and the question was whether that same analysis would apply to States. And Justice Rehnquist said the Dictionary Act is just too thin a reed to rely upon, to rely on

that definition in an 1871 statute to decide whether States should be subject to an action under Section 1983. There was nothing in the 1983 statute itself which addressed that. But the Court still had to wrestle with the question of what congressional intent was and whether implicitly Congress reached a different conclusion. Chairman THOMPSON. That wasn't a preemption case, was it? Mr. Moss. It was not a preemption case.

Chairman THOMPSON. There can always be an issue as to what a particular word means, especially over a long period of time. It sounds like a significant length of time past that. I am not saying that it would never produce any litigation, but this litigation you are concerned about needs to be juxtaposed to the litigation that we have. I mean, we are just replete with litigation now, taking wild guesses as to what congressional intent is. This isn't a panacea that is going to foreclose every possible issue. And we will, if we decide to preempt, state so in clear, explicit language, hopefully. But I don't think we ought to get too hung up on throwing our hands up and saying, we are unable to express our intent. If that is the case, then we are in worse shape than I thought.

Mr. Moss. I entirely agree that Congress should as clearly as possible express its intent. But let me just mention two other cases that come to mind in defense of implied preemption. Few people realize that perhaps one of the great decisions ever decided was an implied preemption case, and that is Gibbons v. Ogden. That is the case decided by Chief Justice Marshall in 1824 that opened up our markets to interstate commerce. And I think people generally studied the case in law school and think of the case in law school as a case which establishes the broad power of Congress to regulate interstate commerce. But the ultimate holding in the case, Chief Justice Marshall comes down and says I don't need to decide in this case whether the power to regulate interstate commerce is exclusively for the Federal Government and whether the States have a role here.

The State of New York imposed a monopoly on steamboat traffic between New York and New Jersey, and Chief Justice Marshall said there is a Federal statute that provides for licensing of ships that are involved in the coastal trade. And I think an implication of that must be that Congress would have intended not to allow States to impose these sorts of monopolies and limitations. And, therefore, as a matter of implied preemption, Chief Justice Marshall concluded that the markets had to be opened up and economic development began in earnest, and the case was widely received as one of the great decisions at the time it came down, even by those who were strong supporters of States' rights.

Chairman THOMPSON. So what is your point?

Mr. Moss. That implied preemption at times is extremely important and has a long history dating back to the early

Chairman THOMPSON. It is important-I mean, if it carries out the intent of Congress, it is important.

Mr. Moss. Yes.

Chairman THOMPSON. And if it doesn't, it is important, too. But, I mean, that is the issue. Is a decision such as that carrying out the intent of Congress? And what you have there is a judge having