Stanford Law Review
Regulatory diffusion occurs when an agency adopts a substantially similar rule to that of another agency. Indeed, regulatory texts proliferate just like other forms of law do. While this insight has been explored across countries, this dynamic also occurs closer to home: American administrative agencies regularly borrow language from one another. Our research shows that, in recent years, agencies reused one out of every ten paragraphs of the Code of Federal Regulations. These findings are timely given the Supreme Court’s call for judges to be less deferential to agency regulatory interpretation. There is thus newfound significance to understanding how legislative rules are written and why.
This Article explores the descriptive and normative implications of regulatory diffusion. The empirical analysis reveals a fairly steady rate of text reuse, with a notable increase during the Trump Administration—perhaps the result of well-documented staffing problems and vacancies. More generally, the number of both borrowing and lending agencies has increased, with a relatively small number of agencies borrowing text from an increasingly larger group. In other words, regulatory text has diffused from more agencies. This behavior appears to vary by whether the agency is executive or independent in nature.
These findings raise important questions about whether such diffusion is desirable, as well as how to interpret the regulations that result. To assess the relevant tradeoffs, we propose that agencies should be required to explain why they are emulating other regulatory texts to allow executive-branch oversight over the practice. We also argue in favor of the in pari materia canon—the idea that similar regulations should be interpreted similarly by judges—and propose ways for judges to determine when and how to apply it.
Jennifer Nou & Julian Nyarko, "Regulatory Diffusion," 74 Stanford Law Review 897 (2022).