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From its early days, the Trump administration has professed a desire to deregulate, targeting in particular the body of regulations promulgated by executive branch agencies.

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In February, for example, the president issued Executive Order No. 14219, specifying deregulation as a top administration priority. That executive order directed all executive departments and agencies to identify, for "consistency with law and administration policy," regulations falling within certain enumerated categories.

The deregulation executive order specifically tasked the agencies with identifying "unlawful regulations and regulations that undermine the national interest."

More recently, on April 9, the president <a href="https://www.law360.com/articles/2323548/trump-instructs-agencies-to-quietly-repeal-regs-if-possible">issued a memorandum</a> providing further direction to executive departments and agencies regarding implementation of the deregulation executive order. This memorandum addresses how the president envisions that executive branch agencies will go about rescinding regulations. And — spoiler alert — the vision for rescinding regulations is a departure from the typical notice-and-comment process.

Coupled together, the executive order and memorandum present both risks and opportunities for regulated industries.

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The memorandum emphasizes an adherence to recent <a href="https://www.law360.com/agencies/u-s-supreme-court">U.S. Supreme Court</a> decisions and the use of the "good cause" exception in the Administrative Procedure Act for expedited rulemaking — that is, rulemaking and recission without the constraints of notice and comment.

It instructs agencies, as part of the review-and-repeal efforts required by the deregulation executive order, to first assess each existing regulation's lawfulness under the following Supreme Court decisions:

Loper Bright Enterprises v. Raimondo (2024),[4] <a href="https://www.law360.com/articles/1796324">overturning</a> <a href="https://www.law360.com/companies/chevron-corp">Chevron</a> deference;

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West Virginia v. <a href="https://www.law360.com/agencies/u-s-environmental-protection-agency">U.S. Environmental Protection Agency</a>(2022),[5] <a href="https://www.law360.com/articles/1486055">limiting</a> the EPA's authority to regulate emissions;

<a href="https://www.law360.com/agencies/u-s-securities-and-exchange-commission">U.S. Securities and Exchange Commission</a> v. Jarkesy (2024),[6] <a href="https://www.law360.com/articles/1803073">preventing</a> the SEC from seeking civil monetary penalties for securities fraud before its own in-house tribunals;

Michigan v. EPA (2015),[7] <a href="https://www.law360.com/articles/659522">holding</a> that the EPA must consider costs when determining whether regulations are "appropriate and necessary" under the Clean Air Act;

Sackett v. EPA (2023),[8] <a href="https://www.law360.com/articles/1568214">narrowing</a> the scope of federal jurisdiction under the Clean Water Act by rejecting the "significant nexus" test that the EPA had previously used to determine which wetlands were protected under the CWA, such that many previously protected wetlands are no longer subject to federal regulation;

Ohio v. EPA (2024),[9] <a href="https://www.law360.com/articles/1812331/supreme-court-freezes-epa-s-good-neighbor-rule">staying</a> the EPA's "Good Neighbor" rule — which had required 23 states to reduce air pollution that crossed state lines — as arbitrary and capricious;

Cedar Point Nursery v. Hassid (2021),[10] <a href="https://www.law360.com/articles/1383781">holding</a> that a California labor regulation that allowed union representatives to visit private farmland constituted a per se violation of the Fifth Amendment's takings clause;

Students for Fair Admissions Inc. v. President and Fellows of Harvard (2023),[11] <a href="https://www.law360.com/articles/1683614">holding</a> that considering race in college admissions is unconstitutional, essentially striking down affirmative action in higher education;

Carson v. Makin (2022),[12] <a href="https://www.law360.com/articles/1493268">holding</a> that Maine's tuition assistance program violated the free exercise clause of the First Amendment by excluding religious schools from participating and denying them equal access to education based on religious affiliation; and

Roman Catholic Diocese of Brooklyn v. Cuomo (2020),[13] holding that former New York Gov. Andrew Cuomo's pandemic-related restrictions on religious service attendance, which limited attendance based on geographical "red" or "orange" zones, violated the First Amendment's guarantee of free exercise of religion.

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Second, most significantly, the memorandum instructs agencies to then begin the recission of any regulations they identify as unlawful under Step 1,&nbsp;without undertaking public notice and comment.

The memorandum instead directs agencies to rely on the APA's good-cause exception. That exception allows agencies to bypass the notice-and-comment process when notice and comment is "impracticable, unnecessary, or contrary to the public interest."

The memorandum asserts that leveraging the good-cause exception is appropriate because "[r]etaining and enforcing facially unlawful regulations is ... contrary to the public interest," such that "notice-and-comment proceedings are 'unnecessary' where repeal [of a regulation] is required as a matter of law to ensure consistency with" Supreme Court rulings.

The memorandum directs agencies to begin the repeal process immediately following the 60-day review period specified in the Feb. 19 deregulation executive order, i.e., April 20.

It further directs agencies, within 30 days of the review period's expiration — i.e., May 20&nbsp;— to "submit to the Office of Information and Regulatory Affairs a one-page summary of each regulation that [the agency] initially identified as falling within one of the categories specified in [the deregulation] Executive Order, but which has not being targeted for repeal, explaining the basis for the decision not to repeal that regulation."

Most agency actions are challenged under the APA, absent displacement by a more specific statute.[14] While the APA itself does not specify a forum for challenging agency action — like a rulemaking — the default rule under federal jurisdiction statutes is that district courts hear challenges to agency action in the first instance, unless Congress specifies otherwise.

But Congress has provided for direct review in the federal courts of appeals on innumerable occasions. These statutes, known as "direct review statutes," vest jurisdiction to review agency action directly in the courts of appeals, and frequently also include venue provisions specifying the geographic location of the appellate court where review can be sought.

Although it is too soon to tell the full impact of the deregulation executive order and memorandum on the courts' dockets, it is safe to surmise that a good number of challenges to rule rescissions effectuated under the executive order and memorandum might find their way to the courts of appeals on direct review.

In light of the memorandum, industries should brace for potentially significant regulatory changes as agencies undertake the mandated review and repeal process. Chief among the concerns we anticipate from this memorandum is uncertainty. In the first place, the plan for such large-scale use of the good-cause exception will likely draw legal challenges. Regulations promulgated with notice-and-comment procedures typically require notice and comment for their rescission. Legal challenges bring uncertainty as cases wind their way through the courts. Affected businesses could also face uncertainty with respect to their regulatory compliance costs. For example, if a business spent significant sums to comply with a regulation that is now targeted for recission, it will experience a period of budgetary uncertainty until it knows whether that particular regulation will, in fact, be rescinded. Notwithstanding this uncertainty, it is unlikely that businesses will slash their compliance costs unless and until regulations that had been onerous are fully and finally rescinded — even if less enforcement is expected. Companies invest in their compliance programs, and they are unlikely to defund them on a whim. Some companies may seek specific guidance from their regulators, but during this period of upheaval, clear answers probably will not be forthcoming. In our experience, companies are hesitant to make change in times of flux because there is not yet clarity as to what the end state will look like. Thus, the uncertainty brought by the deregulation executive order and memorandum is more likely to lead to a time of monitoring before companies make moves to adapt to whatever new reality emerges. Conversely, industries that benefit from certain regulations or have invested significantly in compliance may want to proactively engage with relevant agencies to ensure these regulatory schemes are preserved. Affected businesses should look for ways to participate with agencies in identifying regulations for either rescission or retention, even though the deregulation executive order did not provide a direct pathway for such engagement. In the weeks since its issuance, both the <a href="https://www.law360.com/agencies/us-office-of-management-and-budget">Office of Management and Budget</a> and the <a href="https://www.law360.com/agencies/federal-communications-commission">Federal Communications Commission</a> have opened specific dockets <a href="https://www.law360.com/articles/2309763/-delete-delete-delete-doge-linked-effort-launched-at-fcc">requesting</a> the public's comment on regulations that might be targeted. Interested industries should take advantage of these opportunities to engage with the administration about the regulations that affect them. That said, even assuming any industry engagement with the administration, we expect to see litigation. According to Reuters, some environmental groups, for instance, are already planning litigation to challenge the rescission of regulations without notice and comment, and are reportedly simply waiting for the right time to file their lawsuits. These legal challenges will shed light on the extent of the government's power to achieve its expedited deregulation agenda in a manner that bypasses ordinary APA procedures. We expect that courts will not be swayed by the administration's desire to deregulate on an expedited basis. Courts will instead look to applicable statutory authorities, which, in most instances, are unlikely to support a departure from the typical notice-and-comment procedures. In short, this process is more likely to involve protracted litigation, as opposed to quick deregulation — which, for industry, means prolonged uncertainty about the regulatory landscape.

That said, during this period of uncertainty, staying proactive and informed about the regulatory landscape is crucial for businesses to navigate the potential opportunities and risks presented by this new directive.

"Deregulation Memo Presents Risks, Opportunities For Cos.," by Dominique L. Casimir and Christina Manfredi McKinley, was published in <a href="https://www.law360.com/articles/2337695" target="_blank" rel="noreferrer noopener">Law360</a> on May 14, 2025.

Deregulation Memo Presents Risks, Opportunities for Cos.

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