Adoption of Recommendations and Statement Regarding Administrative Practice and Procedure

ADMINISTRATIVE CONFERENCE OF THE UNITED STATES

Adoption of Recommendations and Statement Regarding

Administrative Practice and Procedure

AGENCY: Administrative Conference of the United States.

ACTION: Notice.

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SUMMARY: The Administrative Conference of the United States (ACUS)

adopted two recommendations its Forty-Ninth Plenary Session. The

recommendations concerning improving the environment for agency

rulemaking and procedures for regulation of pesticides. The Conference

also adopted one formal statement at the Plenary Session on the right

of persons to consult with counsel in agency investigations.

FOR FURTHER INFORMATION: Renee Barnow, 202-254-7020.

SUPPLEMENTARY INFORMATION: The Administrative Conference of the United

States was established by the Administrative Conference Act, 5 U.S.C.

591-596. The Conference studies the efficiency, adequacy, and fairness

of the administrative procedures used by federal agencies in carrying

out administrative programs, and makes recommendations for improvements

to the agencies, collectively or individually, and to the President,

Congress, and the Judicial Conference of the United States (5 U.S.C.

594(1)). At its Forty-Ninth Plenary Session, held December 9-10, 1993,

the Assembly of the Administrative Conference of the United States

adopted two recommendations and one formal statement.

Recommendation 93-4, Improving the Environment for Agency

Rulemaking, concerns the federal agency rulemaking process, which has

become both increasingly less effective and more time-consuming. To

improve the environment for agency rulemaking, the Conference

recommends specific steps that the President, Congress, and the courts

should take to eliminate undue burdens on agency legislative

rulemaking.

With regard to presidential oversight, ACUS recommends that

presidential oversight and review be reserved for the most important

rules and that the agencies be given clear policy guidance in a

directive, approved by the President, specifying what is required. In

addition, the reviewing or oversight entity should avoid, to the extent

possible, extensive delays in the rulemaking process. The review

process itself should be open to public scrutiny, following guidelines

previously developed by the Administrative Conference. With regard to

legislatively-imposed constraints, ACUS recommends that Congress should

review and rationalize legislatively-mandated rulemaking procedures,

and specific proposals are offered for Congress' consideration. ACUS

recommends that courts should be sensitive not to require greater

justification for rules than necessary. It also advises that a

``reasoned statement'' that explains the basis and purpose of the rule

and addresses significant issues raised in public comments should be

adequate for review. Finally, recognizing that rulemaking is not just a

product of external constraints, ACUS recommends a number of steps

agency managers can take to improve their internal processes.

Recommendation 93-5, Procedures for Regulation of Pesticides, calls

for the adoption of a more coordinated and strategic procedural

framework for the Federal Insecticide, Fungicide, and Rodenticide Act

(``FIFRA'') involving the creation of multiple and reinforcing

incentives for regulatory compliance by registrants, for timely and

accurate decisionmaking by EPA, and for effective public participation.

The Conference recommends that EPA promulgate and communicate clear

data standards and guidance on the data expected from registrants. ACUS

also recommends that Congress authorize EPA to levy administrative

civil money penalties upon registrants submitting data that fail to

meet previously announced, clear standards. With regard to suspension

and cancellation proceedings, which involve scientific data concerning

risks and benefits, ACUS recommends use of informal procedures by which

EPA gives registrants detailed reasons for the agency's actions and

then provides registrants with sufficient time to file responsive

written comments and supporting documentation. However, an opportunity

should be provided to allow affected parties to show cause why oral

testimony or cross-examination is justified. Among other specific

recommendations, ACUS urges Congress to consider giving EPA the

authority to use informal procedures to order the phase-down of

existing pesticides when there are safer, effective products or

practices available.

Statement No. 16, Right to Consult with Counsel in Agency

Investigations, addresses the procedures that govern the relationship

between a federal agency and persons compelled to appear before the

agency in investigations that may lead to civil or criminal

prosecution. While addressing certain issues raised in these

investigations, the Conference concluded that a uniform set of

recommendations concerning agency procedures was not appropriate given

the differences among federal agencies in the roles of investigators

and the methods by which witnesses or parties appear before agencies.

The full texts of the recommendations and statement are set out in

the Appendix below. The recommendations will be transmitted to the

affected agencies and, if so directed, to the Congress of the United

States. The Administrative Conference has advisory powers only, and the

decision on whether to implement the recommendations must be made by

each body to which the various recommendations are directed.

Recommendations and statements of the Administrative Conference are

published in full text in the Federal Register. In past years

Conference recommendations and statements of continuing interest were

also published in full text in the Code of Federal Regulations (1 CFR

parts 305 and 310). Budget constraints have required a suspension of

this practice in 1994. However, a complete listing of past

recommendations and statements are published in the Code of Federal

Regulations. Copies of all past Conference recommendations and

statements, and the research reports on which they are based, may be

obtained from the Office of the Chairman of the Administrative

Conference. As explained at 1 CFR 304.2, requests for single copies of

such documents will be filed at no charge to the extent that supplies

on hand permit.

The transcript of the Plenary Session is available for public

inspection at the Conference's offices at Suite 500, 2120 L Street NW.,

Washington, DC.

Dated: January 25, 1994.

Jeffrey S. Lubbers,

Research Director.

Appendix--Recommendations of the Administrative Conference of the

United States

The following recommendations were adopted by the Assembly of the

Administrative Conference on December 9 and 10, 1993, respectively:

Recommendation 93-4 Improving the Environment for Agency

Rulemaking

Informed observers generally agree that the rulemaking process has

become both increasingly less effective and more time-consuming. The

Administrative Procedure Act does not reflect many of the current

realities of rulemaking. The APA's cumbersome ``formal rulemaking''

procedures are rarely used except in some adjudicative-type rate

proceedings. Meanwhile, the APA's simple ``informal rulemaking''

procedures (set forth in 5 U.S.C. Sec. 553) have been overlain with an

increasing number of constraints: Outside constraints imposed by

Congress, the President, and the courts, and internal constraints

arising from increasingly complex agency management of the rulemaking

process.1 As a result, many federal agencies, faced with

unsatisfactory rulemaking accomplishments in recent years, have turned

to alternatives such as less formal policy statements or adjudicative

orders to achieve regulatory compliance.2

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\1\ See generally McGarity, Some Thoughts on ``Deossifying'' the

Rulemaking Process, 41 Duke L. J. 1385 (1991).

\2\See Conference Recommendation 92-2, ``Agency Policy

Statements,'' 1 CFR 305.92-2 (1993), which distinguished

``legislative'' rules, normally promulgated through notice-and-

comment procedures, from interpretive rules and policy statements,

which are exempt from such procedures. The present recommendation

addresses legislative rulemaking.

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The Conference believes that the environment for agency legislative

rulemaking can be improved. This recommendation sets out a coordinated

framework of proposals aimed at promoting efficient and effective

rulemaking by addressing constraints on the current process that derive

from a variety of sources. We present an integrated approach for

improving the rulemaking environment in order to relieve agencies of

unnecessary pressures and disincentives relating to rulemaking. We also

identify desirable revisions of section 553 relating to legislative

rulemaking. In doing so, this recommendation both presents new

proposals and incorporates previous Conference recommendations.

Presidential Constraints

We continue to support presidential coordination of agency

policymaking as beneficial and necessary.3 We are concerned,

however, that, unless properly focused, this additional review may

impose unnecessary costs. All recent presidents have undertaken some

level of review and coordination of agency rulemaking. Presidential

review of rules, as undertaken under various executive orders applied

by the Office of Management and Budget and other White House entities,

has often required agencies to submit nearly all proposed and final

rules to a review process in which the rules are screened and analyzed

for consistency with presidential objectives. Some of these objectives

have been incorporated into analytical requirements found in separate

executive orders.4 This screening process can unduly slow the

entire system of rulemaking; it can inhibit the growth of the promising

consensus-based alternative of negotiated rulemaking;5 and it can

create undesirable tensions between the reviewing entities and agency

policymakers. While these analytical emphases can be rationalized

individually, in the aggregate, they can result in redundant

requirements, boilerplate-laden documents, circumvention, delays, and

clutter in the Federal Register. Although specific presidential review

policies have varied among Administrations, these recommendations set

forth principles that the Conference believes generally should govern

presidential review of rules.

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\3\See Conference Recommendation 88-9, ``Presidential Review of

Agency Rulemaking'' 1 CFR 305.88-9 (1993) (applying Presidential

oversight to both executive branch and independent agencies).

\4\Among the mandates reflected in these executive orders are

requirements that agency rulemakers include cost-benefit estimates

and analyses of the proposed and final rule's impact on federalism,

family values, and future litigation, of whether it effects a

``regulatory taking,'' and of other matters. The Conference of

course takes no position on the merits of the values underlying

these executive orders.

\5\See Conference Recommendations 82-4 and 85-5, ``Procedures

for Negotiating Proposed Regulations,'' 1 CFR 305.82-4, 305.85-5

(1993);'' Negotiated Rulemaking Act of 1990, 5 U.S.C. 561-69.

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We therefore recommend that presidential oversight and review be

reserved for the most important rules and that the agencies be given

clear policy guidance in a directive, approved by the President,

specifying what is required. In addition, the reviewing or oversight

entity should avoid, to the extent possible, extensive delays in the

rulemaking process. The review process itself should be open to public

scrutiny--following guidelines previously developed by the

Administrative Conference.6 The President's policy should

encourage planning and coordination of regulatory initiatives, and

early dialogue between agencies and the reviewing entity. To this end,

the concept of a unified agenda of regulations is a useful tool and

should be preserved. We also believe that additional non-APA analytical

requirements should be kept to a minimum. The cumulative impact of such

requirements on the rulemaking process should be considered before

existing requirements are continued or additional ones imposed. We also

believe it is useful to periodically reassess the continued viability

and relevance of the various presidential directives.7

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\6\See Conference Recommendation 88-9, ``Presidential Review of

Agency Rulemaking,'' 1 CFR 305.88-9 (1993) at 4.

\7\While the most recent executive order of presidential review

of rules generally reflects the views set forth in this

recommendation, see Executive Order 12866, 58 Fed. Reg. 51735

(1993), the Conference takes no position on the specifics of that

order.

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Legislative Constraints

Congress should similarly review and rationalize legislatively-

mandated rulemaking procedures. Specifically, we recommend that it

refrain, as it generally has done since the 1970s, from imposing

program-specific rulemaking requirements that go beyond the APA's basic

notice-and-comment procedures.8 Statutory ``on-the-record'' and

``hybrid'' rulemaking provisions that require adjudicative fact-finding

techniques such as cross-examination, or more stringent provisions for

judicial review (in particular, use of the ``substantial evidence''

test instead of the normal ``arbitrary and capricious'' test), can be

unnecessarily burdensome or confusing and should be repealed.9

Although additional procedures can sometimes be beneficial--see, e.g.,

Section 307 of the Clean Air Act (providing additional safeguards for

rulemaking with significant economic and competitive effects)10--

they should be imposed only after careful review and attention by

Congress to possible unintended consequences. Otherwise, such additions

generally should be left to the discretion of individual

agencies.11

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\8\See Conference Recommendation 76-3, ``Procedures in Addition

to Notice and the Opportunity to Comment in Informal Rulemaking,'' 1

CFR 305.76-3 (1993).

\9\See Conference Recommendation 80-1, ``Trade Regulation

Rulemaking Under the Magnuson-Moss Warranty--Federal Trade

Commission Improvement Act,'' 1 CFR 305.80-1 (1993).

\1\042 U.S.C. 7607.

\1\1See Conference Recommendation 76-3, ``Procedures in Addition

to Notice and the Opportunity for Comment in Informal Rulemaking,''

1 CFR 305.76-3 (1993).

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Similarly, legislatively-imposed time limits on rulemaking, while

understandable, can be unrealistic, resulting in either hastily-imposed

rules or missed deadlines that undermine respect for the rulemaking

process.12 Legislative deadlines backed by statutory or regulatory

``hammers'' (mandating, for example, that the proposed rule or some

other policy change13 automatically take effect upon expiration of

the deadline) are particularly undesirable and often counter-

productive;14 they are generally less desirable than the

alternative of judicial enforcement of deadlines.15

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\1\2See Conference Recommendation 78-3, ``Time Limits on Agency

Action,'' 1 CFR 305.78-3 (1993).

\1\3See, e.g., Conference Recommendation 90-8, ``Rulemaking and

Policymaking in the Medicaid Program,'' 1 CFR 305.90-8 (1993).

\1\4Where the ``hammer'' applied because of a failure to meet a

deadline is that a proposed rule becomes effective, the anomalous

result is that a policy that has withstood no public airing will be

implemented.

\1\5Courts should continue, where appropriate, to consider

whether agency action in a rulemaking is ``unreasonably delayed.''

See 5 U.S.C. 706(1); Telecommunications Research and Action Center

v. FCC, 750 F.2d 70, 80 (D.C. Cir. 1984).

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Finally, legislation ancillary to the APA that creates additional

rulemaking impediments should be reconsidered. Statutes such as the

Regulatory Flexibility Act, which requires a special analysis of

virtually all rules' effects on small business, may have laudable

intentions, but their requirements are often both too broadly

applicable and not sufficiently effective in achieving their goals. If

such requirements are imposed, Congress should focus them more

narrowly, by, for example, confining their application to significant

rules or particular categories of rules.

Judicial Constraints

Other constraints on rulemaking that warrant similar

reconsideration have been imposed through judicial review. The APA, in

section 706, provides that agency rules may be set aside if they are

``arbitrary or capricious,'' represent an ``abuse of discretion,'' or

are ``otherwise not in accordance with law.'' The evolving scope of

judicial review of agency rules, along with the timing of much such

review at the preenforcement stage, has contributed to what is

sometimes an overly intrusive inquiry. This, in turn, has led agencies

to take defensive measures against such review. While some tension is

an inevitable adjunct of the process of judicial review, we believe

that steps can be taken to lessen some of the burdens without loss of

effective outside scrutiny of agency rules.

The tendency of some courts to require extra-APA procedures in

rulemaking was arrested by the Supreme Court's Vermont Yankee decision

in 1978.16 Nevertheless, while the prevailing judicial

interpretation of the arbitrary-and-capricious standard of review

(which became known as the ``hard look doctrine'') has promoted

reasoned decisionmaking, courts have not infrequently remanded rules on

the basis of an agency's failure to respond adequately to comments,

consider relevant factors, or explain fully the bases for its rule.

Courts should be sensitive not to require greater justification for

rules than necessary; a reasoned statement that explains the basis and

purpose of the rule and addresses significant issues raised in public

comments should be adequate.

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\1\6Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519

(1978).

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Preenforcement review, expanded by the Supreme Court in the 1967

Abbott Laboratories cases,17 endorsed by the Conference in various

recommendations,18 and codified in numerous rulemaking programs,

has the virtue of settling legal issues early and definitively. When

overused, however, preenforcement review can have the negative effect

of inducing precautionary challenges to most rules and the raising of

as many objections to a rule as possible, including somewhat

speculative challenges pertaining to the rule's potential application.

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\1\7Abbott Laboratories v. Gardner, 387 U.S. 136 (1967); Toilet

Goods Ass'n v. Gardner, 387 U.S. 158 (1967).

\1\8See Conference Recommendation 74-4, ``Preenforcement

Judicial Review of Rules of General Applicability,'' 1 CFR 305.74-4

(1993); Conference Recommendation 91-5, ``Facilitating the Use of

Rulemaking by the National Labor Relations Board,'' 1 CFR 305.91-5

(1993).

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Under the Abbott Laboratories standard, challenges to a rule are

permitted where issues are appropriate for judicial review and where

the impact on a challenger is direct and immediate. The Conference

believes that the Abbott Laboratories standard strikes a sensible

balance, and that preenforcement challenges generally are appropriate

where the administrative record provides a sufficient basis for the

court to resolve the issues before it. Thus, a preenforcement challenge

to a rule based on the procedures used in the rulemaking should

normally be permitted. Preenforcement review that involves a facial

challenge to a rule's substantive validity (whether because of a

conflict with a statute or the Constitution, or because of the

inadequacy of the facts or reasoning on which it is based) should also

generally be heard.19 In contrast, challenges to a rule because it

might be applied in a particular way should normally be deferred until

the rule has actually been applied.

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\1\9A challenge based on the facial invalidity of the rule, in

this context, would normally be directed at a requirement or course

of action to which the agency has clearly committed itself.

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Although prompt resolution of legal issues is to be encouraged,

Congress should be cautious in coupling mandated time-limited

preenforcement review with preclusion of review at the enforcement

stage. Such time-limited review should be provided for only in the

situations and conditions specified in Recommendation 82-7.20

Where Congress does set time limits for preenforcement review, it

should, in the interests of consistency, generally specify that

preenforcement review should occur within 90 days of a rule's issuance.

Current statutory specifications vary. There does not seem to be any

reason for variation that outweighs the benefits of uniformity in this

context.

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\2\0Recommendation 82-7, ``Judicial Review of Rules in

Enforcement Proceedings,'' 1 CFR 305.82-7 (1993), sets out criteria

for when judicial review should be limited at the enforcement stage,

and what kinds of issues should remain reviewable at that stage.

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Congress should also amend any existing statutes that mandate use

of the ``substantial evidence'' test for reviewing legislative rules,

by replacing it with the ``arbitrary and capricious'' test. The

occasional introduction of the substantial evidence test in the

rulemaking context has created unnecessary confusion; some courts apply

it in a manner identical to that of the ``arbitrary and capricious''

test; others believe that it sets a higher standard. The Conference

believes that the arbitrary and capricious test provides sufficient

review in the informal rulemaking context.

The intensity of judicial review directly affects the rulemaking

process. For example, the scope of review of agency statutory

interpretations is governed by the deferential Chevron test, which

requires affirmance if the agency's interpretation of an ambiguous

statute is permissible.21 On the other hand, when reviewing the

reasonableness of an agency's policy and factual justifications for its

rules, courts apply the stricter ``hard look'' doctrine.22

Deferential review of the legal issue of statutory interpretation,

coupled with the rigorous review of a rule's factual and policy

underpinnings that the ``hard look'' doctrine specifies, has been

criticized as anomalous. The Conference believes, however, that the

review standards can be harmonized by looking beyond the labels. That

is, under both of these doctrines, courts are required to determine

independently the limits of the agency's statutory authority and

whether the factors the agency took into account in formulating the

rule were permissible. Following that determination, courts properly

defer to an agency's permissible reading of its statute and to its

choice of inferences from the facts in making policy decisions. Courts

would help make their review more consistent and predictable if they

articulated more clearly this two-step approach. Both the Chevron and

``hard look'' doctrines would then be understood as including a

searching review of the range of an agency's legally permissible

choices (statutory, policy, and factual), combined with, in each

instance, deference to the agency's reasonable selection among such

choices, once the alternatives are determined to be within the

permissible range.

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\2\1Chevron USA Inc. v. NRDC, 467 U.S. 837 (1984).

\2\2Motor Vehicle Manufacturers Ass'n v. State Farm Mutual

Automobile Insurance Co., 463 U.S. 29 (1983) (State Farm).

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Finally, in order to prevent additional litigation, courts should

be encouraged to address certain issues that arise in many if not most

reviews of rules. Reviewing courts should, for example, specify, to the

extent feasible, which portions of the rule, if any, are to be set

aside, vacated, stayed or otherwise affected by the decision in the

case. They should seek to ensure that portions of a rule unaffected by

a finding of illegality remain in effect, unless the rule expressly or

impliedly indicates that the rule is inseverable. A reviewing court

should also consider the extent to which its mandate will apply

retroactively. In considering the effect to be given to its decision,

the court should weigh the impact of the decision on parties not before

the court, and recognize their interest in being heard or adequately

represented prior to any ruling that adversely affects them.

Amendment of the APA

As we approach the fiftieth anniversary of the APA, some of its

rulemaking provisions need to be updated. Section 553(c), which does

not now state a length of time for the comment period, should be

amended to specify that a comment period of ``no fewer than least 30

days'' be provided (although a good cause exception for shorter periods

should be incorporated). This would relieve agencies of the need to

justify comment periods that were 30 days or longer. The thirty-day

period is intended as a minimum, not a maximum; agencies would still be

encouraged to allow longer comment periods and to leave the record open

for the receipt of late comments.23 Section 553 should also

specify that a second round of notice and comment is not required where

the final rule is the ``logical outgrowth'' of the proposed rule, thus

codifying generally accepted doctrine.24 A provision requiring

maintenance of a public rulemaking file should be incorporated into

section 553, so that those who seek access to the file are not forced

to rely on the Freedom of Information Act to obtain it.25 (The

content of such a file is discussed further below in connection with

internal agency management initiatives.)

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\2\3See Conference Statement #7, ``Views of the Administrative

Conference on Proposals Pending in Congress to Amend the Informal

Rulemaking Provisions of the Administrative Procedure Act,'' 1 CFR

310.7 (para. 2).

\2\4See South Terminal Corp. v. EPA, 504 F.2d 646, 659 (1st Cir.

1974), in which the 1st Circuit originated the ``logical outgrowth''

test. It was subsequently embraced by other circuits, particularly

the D.C. Circuit. See Shell Oil Co. v. EPA, 950 F.2d 741 (D.C. Cir.

1991); International Union, United Auto, Aerospace and Agr.

Implement Workers of America v. OSHA, 938 F.2d 1310 (D.C. Cir.

1991); American Medical Association, 887 F.2d 760 (7th Cir. 1989);

NRDC v. USEPA, 824 F.2d 1258 (1st Cir. 1987); United Steelworkers v.

Schuykill Metal Corp., 828 F.2d 314 (5th Cir. 1987); National Black

Media Coalition v. FCC, 791 F.2d 1016 (2nd Cir. 1986); Chocolate

Mfrs. Ass'n v. Block, 755 F.2d 1098 (4th Cir. 1985).

\2\5Statement #7, supra n. 23, at 4.

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In addition, the requirement in section 553(c) of a statement of

basis and purpose for the rule should be revised to require a

``reasoned statement''26 (deleting the ``conciseness'' provision),

which includes a response to significant issues raised in the public

comments.27 These changes are designed to codify the salutary

aspects of the caselaw on rulemaking, discourage insubstantial

arguments and objections on review, and stem the tendency to require

additional, more burdensome justifications.

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\2\6State Farm, supra n. 22, 463 U.S. at 57 (quoting Greater

Boston Television Corp. v, FCC, 444 F.2d 841, 852 (D.C. Cir. 1970)).

\2\7Conference Statement #7, supra n. 23, at 5.

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Another long-overdue change in the Act is elimination of section

553(a)(2)'s exemption from notice-and-comment procedures for matters

relating to ``public property, loans, grants, benefits, or contracts.''

As the Conference recognized as early as 1969, this ``proprietary

exemption'' is an anachronism.28 The exemption for ``military or

foreign affairs function[s]'' in section 553(a)(1) should be narrowed

so that all but secret aspects of those functions are open to public

comment.29

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\2\8See Conference Recommendation 69-8, ``Elimination of Certain

Exemptions From the APA Rulemaking Requirements,'' 1 CFR 305.69-8

(1993).

\2\9See Conference Recommendation 73-5, ``Elimination of the

`Military or Foreign Affairs Function' Exemption from APA Rulemaking

Requirements,'' 1 CFR 305.73-5 (1993).

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Internal Agency Management Initiatives

Rulemaking is not just a product of external constraints. The

agency's own processes for developing rules and reviewing them

internally affect the rulemaking environment. Thus, agency management

initiatives can have a significant impact on the effectiveness and

efficiency of rulemaking. The Conference recommends a number of steps

agency managers can take to improve their internal processes.

Senior agency staff should develop management strategies to set

priorities and track agency rulemaking initiatives.30 Agencies

should seek to involve the presidential oversight entity in the

rulemaking process as early as feasible, in order to reach agreement on

the significance of rules in the developmental stage, to provide

greater coordination, and to speed final oversight review. Agencies

should also review their existing systems for developing and reviewing

regulations, to determine where problems and bottlenecks are occurring.

They should seek to achieve more rapid internal clearances of proposed

and final rules, and to develop reasoned analyses31 and responses

to significant issues raised in public comments. They should also take

steps to manage the rulemaking file (and associated requests for access

to it).32 The file should, to the extent feasible, contain notices

of the rulemaking, all written33 comments submitted to the agency,

and copies or an index of all written factual material, studies, or

reports substantially relied on or seriously considered by the agency

in formulating its proposed and final rule (except insofar as

disclosure is prohibited by law). Materials substantially relied on or

seriously considered need not encompass every study, report, or other

document that the agency may have in its files or has otherwise used,

but they should include those that exerted a significant impact on the

agency's thinking, even if they represent an approach that the agency

ultimately did not accept.

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\3\0See Conference Recommendation 87-1, ``Priority Setting and

Management of Rulemaking by the Occupational Safety and Health

Administration,'' 1 CFR 305.87-1 (1993).

\3\1See Conference Recommendation 85-2, ``Agency Procedures for

Performing Regulatory Analysis of Rules, 1 CFR 305.85-2 (1993);

Conference Recommendation 88-7, ``Valuation of Human Life in

Regulatory Decisionmaking,'' 1 CFR 305.88-7 (1993).

\3\2Computerized access should be made available, preferably in

a uniform system government-wide. See Conference Recommendation 88-

10, ``Federal Agency Use of Computers in Acquiring and Releasing

Information,'' 1 CFR 305.88-5 (1993).

\3\3''Written'' includes documents in electronic form.

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Agencies should also consider innovative methods for developing and

getting public input on rules. Agencies should use advisory or

negotiated rulemaking committees where appropriate to improve the

quality and acceptability of rules.34 They should also consider

the use of ``direct final'' rulemaking where appropriate to eliminate

double review of noncontroversial rules. Direct final rulemaking

involves issuing a rule for notice and comment, with an accompanying

explanation that if the agency receives no notice during the comment

period that any person intends to file an adverse comment, the rule

will become effective 30 days (or some longer period) after the comment

period closes.

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\3\4Any government-wide policy concerning the use of advisory

committees should be consistent with their use as part of the

process of negotiated rulemaking.

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Recommendation

To improve the environment for agency legislative rulemaking, the

President, Congress, and the courts should take steps to eliminate

undue burdens on agency legislative rulemaking; Congress should update

the Administrative Procedure Act's rulemaking provisions; and agencies

should review their internal rulemaking environment and, where

appropriate, implement internal management initiatives aimed at

improving the effectiveness and efficiency of their efforts.

I. Presidential Oversight\35\ of Rulemaking

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\35\The recommendations contained in this section apply to

oversight of both executive and independent agencies. The Conference

has previously recommended that presidential review of rulemaking

apply to the independent agencies to the same extent it applies to

the rulemaking of the Executive Branch departments and agencies. See

Conference Recommendation 88-9, ``Presidential Review of Agency

Rulemaking,'' 1 CFR 305.88-9 (1993).

The term ``presidential oversight entity,'' as used herein, is

that part of the Executive Office of the President delegated

responsibility for review and oversight of agency rulemaking.

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A. The President's program for coordination and review of agency

rules should be set forth in a directive that is reviewed periodically.

The program should be sensitive to the burdens being imposed on the

rulemaking process, and implementation of the program should ensure

that it does not unduly delay or constrain rulemaking. The President

should consider the cumulative impact of existing analytical

requirements on the rulemaking process before continuing these

requirements or imposing new ones.36

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\3\6In recommending review of analytical requirements beyond

those contained in the APA, we express no position on the

substantive policies being mandated.

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B. The President's directive, as well as the explanations provided

and the procedures followed by the presidential oversight entity,

should, insofar as practicable:

1. Promote dialogue and coordination between the oversight entity

and rulemaking agencies in the early identification and selection of

rules warranting application of the review process;

2. Set forth the relevant analytical requirements that the

oversight entity should apply to agency rulemaking, and provide

interpretive guidance to assist agencies in complying with these

requirements;

3. Ensure appropriate expedition and openness in the process, in

accordance with Conference Recommendation 88-9;

4. Support a process for planning regulatory initiatives and

tracking rule development; and

5. Encourage and support agency efforts to use consensual processes

such as negotiated rulemaking.

II. Congressional Structuring of Rulemaking

A. Section 553 of title 5, United States Code, which established

the framework for legislative rulemaking, has operated most efficiently

when not encumbered by additional procedural requirements. Congress

generally should refrain from creating program-specific rulemaking

procedures or analytical requirements beyond those required by the APA.

When Congress determines that additional procedures beyond those

required by section 553 are justified by the nature of a particular

program, such procedures should be focused on identified problems and,

where possible, adopted incrementally or after experimentation.37

In addition, Congress should repeal formal (``on-the-record'') or other

adjudicative fact-finding procedures in rulemaking in any existing

statutes mandating such procedures.38

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\3\7See, for example, the development of more specific, but not

necessarily more burdensome, procedures for EPA rulemaking that has

significant economic and competitive effects. See 42 U.S.C.

Sec. 7607 (Sec. 307 of the Clean Air Act). See also Conference

Recommendation 76-3, ``Procedures in Addition to Notice and the

Opportunity for Comment in Informal Rulemaking,'' 1 CFR 305.76-3

(1993), which encourages agency experimentation with use of oral

procedures beyond simple notice and comment in some circumstances.

\3\8Conference has recommended against the mandated use of

cross-examination and other ``adjudicative'' procedures for agency

fact-finding in rulemaking. See, e.g., Conference Recommendation 79-

1, ``Hybrid Rulemaking Procedures of the Federal Trade Commission,''

1 CFR 305.79-1 (1993). The Conference recognizes, however, that more

formal procedures may be appropriate for ratemaking based on party-

related facts. See United States v. Florida East Coast RR, 410 U.S.

224 (1973). Congress may also wish to consider whether less formal

hybrid processes may be useful in contexts currently requiring

formal rulemaking.

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B. In general, Congress should not legislate time limits on

rulemaking, but should instead rely on judicial enforcement of prompt

agency action under Sec. 706(1) of the APA.39 However, if Congress

determines that a deadline is appropriate, it also should ensure that

the agency has sufficient resources to support the required rulemaking

effort without distorting the agency's other regulatory functions. If

Congress further determines that a default rule is necessary where an

agency does not meet a deadline, it should specify the terms of that

rule and, in particular, should not impose ``regulatory hammers'' that

would cause the agency's proposed rules to take effect automatically.

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\3\9This is not a comment on the legitimacy of congressional

directives in this regard, but on their impracticality. On the other

hand, agency self-imposed deadlines are encouraged, see V(D), below.

For more detailed advice on time limits, see paragraph 5 of

Conference Recommendation 78-3, ``Time Limits on Agency Action,'' 1

CFR 305.78-3 (1993).

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C. Congress should reconsider the need for continuing statutory

analytical requirements that necessitate broadly applicable analyses or

action to address narrowly-focused issues.40 If Congress

nonetheless determines that such analytical requirements are necessary,

Congress should structure its requirements more narrowly (e.g., by

confining their application to the most significant rules or to rules

likely to be affected by the stated concern).

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\4\0See, e.g., the Regulatory Flexibility Act of 1980. The

Conference takes no position on the substantive issues the Act seeks

to address. Insofar as possible, however, such concerns are more

appropriately included in the President's oversight guidelines. See

I(B)(2) above.

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III. Timing and Scope of Judicial Review

Congress and the courts generally should be sensitive to the impact

of judicial review on agency rulemaking and should seek to simplify,

clarify, and harmonize provisions for judicial review of rules.

A. Congress and the Courts

In determining whether preenforcement challenges to rules are

appropriate, courts have traditionally evaluated ``both the fitness of

the issues for judicial decision and the hardship to the parties of

withholding its consideration.''41 Adherence to this standard

benefits both agencies and those affected by agency rules. Congress

generally should authorize and courts should allow preenforcement

challenges where the administrative record is a sufficient basis for

resolving the issues. Thus, preenforcement challenges to a rule based

on the procedures used in the rulemaking or on the asserted substantive

invalidity of the rule, however it would be applied, should normally be

permitted. Claims of substantive invalidity would include facial

challenges based on statutory or constitutional grounds, or asserting

the inadequacy of the facts or reasoning underlying the rule.

Challenges to a rule on the basis that the rule might be applied in a

particular way should normally be deferred until the application seems

likely or has occurred.

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\4\1Abbott Laboratories v. Gardner, supra n. 17, 387 U.S. at

149.

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B. Congress

1. Congress should be cautious in mandating time-limited

preenforcement review coupled with preclusion of review at the

enforcement stage, and should rely on time limits only in the

situations and conditions specified in Recommendation 82-7.42

Congressional time limits on preenforcement review should be understood

to bar later challenges in the enforcement context only to the extent

specified by Congress. Where Congress mandates a time limit on

preenforcement review, it generally should specify that such review be

requested within 90 days of the issuance of the rule.43 It should

also provide that preenforcement review cases be directly reviewable in

the courts of appeals, and that a stay or partial stay of the rule's

effectiveness ordinarily be issued only on the demonstration of

likelihood of success on the merits and the prospect of significant

private harm if the rule is permitted to take effect.

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\4\2See Conference Recommendation 82-7, ``Judicial Review of

Rules in Enforcement Proceedings,'' 1 CFR 305.82-7 (1993).

\4\3Congress should likewise reevaluate existing statutes for

conformity with this approach.

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2. The standards set out in Sec. 706(2)(A) of the APA's judicial

review provisions should apply in all cases involving review of rules.

Specifically, Congress should not provide for the use of the

``substantial evidence'' test for agency rules. It should conform

existing statutes to this standard by deleting the use of the

``substantial evidence'' test for review of agency rules.

C. Courts

1. In articulating the doctrines used in the judicial review of

rulemaking, reviewing courts should more clearly harmonize the

deferential Chevron doctrine, applied in reviewing agency

interpretation of its statutory authority, with the ``hard look''

doctrine, used in examining an agency's justification for its rule.

Courts, in applying these doctrines, should recognize that both the

Chevron and ``hard look'' tests call for a searching review of the

range of factors or permissible choices that may be considered by the

agency, and require deference to agency application of those factors

once they are shown to be legally appropriate.

2. When reviewing an agency's explanation for its rule, courts

should consider the context of the entire proceeding and concern

themselves principally with whether the agency's overall explanation

and analysis is reasonable, including its response to the significant

issues raised in public comments.

3. In reviewing challenges to agency rules, courts should, to the

extent feasible and after taking into account the effect of the

decision on affected persons not before the court, consider: (a)

Whether any portion of a rule unaffected by a finding of illegality

should remain in full force and effect; (b) which portions of the

challenged rule, if any, are to be set aside, vacated, stayed, or

otherwise affected by the court's decision in a case; and (c) the

extent to which the court's mandate should apply retroactively.

4. Courts should continue, where appropriate, to consider whether

agency action in a rulemaking is ``unreasonably delayed.''44

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\4\4See n. 15, 39, supra.

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IV. Amendments to the APA's Legislative Rulemaking Provisions

Congress should update the APA and eliminate outmoded provisions.

It should codify court decisions that have increased the effectiveness

of public participation in the rulemaking process. In particular,

Congress should consider amending section 553 of the APA to:

A. Eliminate the exemption (Sec. 553(a)(2)) for rules relating to

public property, loans, grants, benefits or contracts, and delete the

exemption (Sec. 553(a)(1)) of military and foreign affairs matters,

except for secret matters;45

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\4\5See Conference Recommendation 69-8, ``Elimination of Certain

Exemptions From the APA Rulemaking Requirements,'' 1 CFR 305.69-8

(1993), and Conference Recommendation 73-5, ``Elimination of the

`Military or Foreign Affairs Function' Exemption from APA Rulemaking

Requirements,'' 1 CFR 305.73-5 (1993). The latter recommendation

urged eliminating the APA's categorical exemption for matters

pertaining to the military or foreign affairs function. It does

recognize, however, that a modified exemption may be appropriate for

matters ``specifically required by executive order to be kept secret

in the interest of national defense or foreign policy.''

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B. Specify a comment period of ``no fewer than 30 days''

(Sec. 553(c)),46 provided that a good cause provision allowing

shorter comment periods or no comment period is incorporated, and

codify the doctrine holding that a second round of notice and comment

is not required if the final rule is a ``logical outgrowth'' of the

noticed proposed rule;

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\4\6The 30-day period is intended as a minimum, not a maximum.

Agencies are encouraged to use longer periods for public comment.

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C. Require establishment of a public rulemaking file beginning no

later than the date on which an agency publishes an advance notice of

proposed rulemaking or notice of proposed rulemaking, whichever is

earlier.

D. Restate the ``concise'' statement of basis and purpose

requirement (Sec. 553(c)) by codifying existing doctrine that a rule

must be supported by a ``reasoned statement,'' and that such statement

respond to the significant issues raised in public comments.

To the extent permitted by law, agencies should adopt these

proposed policies pending Congressional action.

V. Agency Management Initiatives

In order to improve their internal rulemaking environments,

agencies should develop management techniques to ensure efficient and

effective administration of rulemaking. Such techniques should include:

A. Systematically setting priorities at the highest agency levels

and tracking rulemaking initiatives, including identifying clearly who

has the authority to ensure that agency schedules and policies are

followed;

B. Coordinating with the presidential oversight entity on the

identification of rules warranting review as early in the process as is

feasible, and establishing internal review procedures at the highest

levels to ensure compliance with presidential analytical requirements;

C. Reviewing the agency's existing system for developing and

reviewing regulations, to determine where problems and bottlenecks are

occurring, and to improve and streamline the process;

D. Achieving timely internal clearances of proposed and final

rules, using, where feasible, publicly announced schedules for

particular rulemaking proceedings;

E. Managing rulemaking files, so that maximum disclosure to the

public is achieved during the comment period and so that a usable and

reliable file is available for purposes of judicial review. The

rulemaking file should, insofar as feasible, include (1) all notices

pertaining to the rulemaking, (2) copies or an index of all

written47 factual material, studies, and reports substantially

relied on or seriously considered by agency personnel in formulating

the proposed or final rule (except insofar as disclosure is prohibited

by law), (3) all written comments submitted to the agency, and (4) any

other material required by statute, executive order, or agency rule to

be made public in connection with the rulemaking.48

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\4\7``Written'' includes documents in electronic form.

\4\8See Conference Statement #7, 1 CFR 310.7 (1993), ``Views of

the Administrative Conference on Proposals Pending in Congress to

Amend the Informal Rulemaking Provisions of the Administrative

Procedure Act.''

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F. Making use, where appropriate, of negotiated rulemaking and

advisory committees;

G. Considering innovative methods for reducing the time required to

develop final rules without eliminating the opportunity for

consideration and comment;

H. Taking steps to ensure that proposed rules are acted on in a

reasonably timely manner or withdrawn; and

I. Evaluating and reconsidering existing rules and initiating

amendments and repeals where appropriate.

Recommendation 93-5 Procedures for Regulation of Pesticides.

The Environmental Protection Agency cannot accomplish its

substantive mission in regulating pesticides without change and

improvement in the Agency's regulatory procedures. The Conference

recommends the adoption of a more coordinated and strategic procedural

framework for the Federal Insecticide, Fungicide, and Rodenticide Act

(``FIFRA''). EPA needs procedures that create multiple and reinforcing

incentives for regulatory compliance by registrants, for timely and

accurate decisionmaking by EPA, and for effective public participation.

The Reregistration Process

The reregistration of existing pesticides under contemporary risk

assessment standards, and the removal of unacceptable pesticides from

the marketplace, are examples where procedures can hinder the agency's

prospects for success in its substantive mission. Reregistration of

existing pesticides, which Congress originally directed to be completed

by 1976, became sufficiently delayed so that Congress in 1988 amended

FIFRA specifically to force the completion of reregistration by 1998.

Yet subsequent delays in the reregistration process may cause EPA to

miss this congressional deadline. To some extent, the delay may reflect

the underlying difficulty and resource-intensiveness of the risk

assessment enterprise with which EPA has been charged. There are some

50,000 pesticide products that are separately formulated from 642

identified active ingredients. Although EPA has tried to expedite its

task by focusing reregistration on some 402 ``cases'' (composed of

single or related active ingredients), each case can require evaluation

of 100-150 separate studies, every one of which may pose further

questions of scientific protocol and interpretation. It may be that

EPA's Office of Pesticide Programs needs more personnel to match its

regulatory task.

Whatever the case for additional resources (a question not

addressed by the Conference), there is a more basic need for timely and

adequate data from registrants--all else in the reregistration process

depends on this. Yet the reregistration process does not now provide

sufficient procedural incentives to encourage submission of timely and

adequate data. In general, because registrants continue to market their

products during reregistration, they have little to lose by regulatory

decisions that are reached later rather than sooner. Although the 1988

FIFRA Amendments require registrants to identify data gaps, and commit

to fill them, the 1988 Amendments do not provide the agency with

sufficient tools to police tardy or inadequate data submissions.

As to tardiness, the 1988 Amendments authorized the agency to

suspend registrations of those registrants that fail to submit data.

But EPA must first provide nonsubmitters with 30-days' notice in

response to which registrants can demand a limited hearing (which must

be held within 75 days); the 1988 Amendments further provide that

registrants suspended for not submitting data can have their

registrations ``reinstated'' upon submission of the data. Some

registrants, ironically, have used these suspension procedures as a

means of obtaining penalty-free and self-awarded extensions of time. In

the 7 months between August 1991 and February 1992, for example, EPA

found it necessary to issue 70 Notices of Intent to Suspend for

nonsubmittal of data, yet in the majority of these instances (53) the

registrants merely submitted their data prior to exhausting their

procedural rights and were no worse off for having missed their

deadlines. To create an additional disincentive for untimely data

submissions it is necessary to make lateness costly to the registrant.

To this end, the Conference recommends that Congress authorize EPA to

impose civil money penalties for untimely data.

As to the adequacy of data, EPA may now have the theoretical (but

untested in court) capacity to suspend or cancel the registration of

those pesticides for which inadequate data have been submitted.

However, the more common response to inadequate data is a ``data call-

in,'' through which the agency demands that studies be redone--a source

of additional delay that the agency has identified as significant. Even

with respect to its highest priority pesticides, EPA has in the recent

past found 50 percent of studies to be either inadequate,

``upgradable'' or otherwise requiring supplementation. Although the

cost of redoing studies should provide some incentive for registrants

to ensure that their studies meet EPA's quality criteria, it does not

seem to provide a sufficient incentive. In fairness to some

registrants, there is evidence that EPA itself may be partially to

blame for the high rates of data rejection. In 1992, an internal agency

review found that misinterpretation of data requirements and poor

guidance from EPA case managers were in part responsible for the

inadequacy of data submissions. The Conference therefore recommends

that EPA promulgate and communicate clear data standards and guidance

on the data expected from registrants. To help prevent the submission

of inadequate data even after sufficiently clear agency guidance has

been given, the Conference recommends that Congress authorize EPA to

levy administrative civil money penalties upon registrants submitting

data that fail to meet previously announced standards. This will not

only create incentives for registrants to take the extra steps

necessary to ensure the adequacy of their submittals, but it will also

create incentives for the agency to make clear its expectations.

Whatever the additional tactical advantages that the agency may

gain by improving its own ability to enforce data timeliness and

adequacy, the sheer number of studies and the innumerable decisions

requiring agency discretion suggest that more global incentives are

needed to ensure that registrants themselves have a stake in timely and

adequate data. The danger is that the reregistration process now has

become, even with the best of intentions, an analytical treadmill

powered by the rhythms of data call-ins, subsequent requests for data

waivers and time extensions, submission of data that do not always meet

EPA's standards for adequacy, and further data call-ins that restart

the sequence. The Conference believes that the unique demands of the

reregistration process justify congressional consideration of a

``hammer'' provision that would legislatively impose an automatic

suspension of all ``List A'' pesticides (those high-priority pesticides

to which there is greatest human exposure) for which there are still

significant data gaps within the registrant's control, and of which the

registrant is aware--subject to a provision for a registrant to

petition for reinstatement. Such a provision would not only provide an

overarching incentive for registrants to favor the completion rather

than postponement of their data obligations, but it would also better

align the reregistration process with FIFRA's central procedural

presumption--that, in the face of uncertainty, applicants (especially

those seeking to reregister pesticides with extensive human exposure)

should bear the burden of proof in establishing that their pesticides

do not pose unreasonable risks.

Suspension and Cancellation Hearings

Apart from improvements in the reregistration process, the

Conference urges Congress to substitute a relatively informal

decisionmaking process for the formal adjudicatory hearings that

registrants can now demand in cancellation and suspension matters. In

the past, formal hearings under FIFRA have averaged 1,000 days to

complete. These hearings can directly impose on EPA significant

resource costs and can also indirectly discourage the agency from

aggressive prehearing negotiations with registrants (lest the

registrant ``take EPA to hearing''). It is not surprising that EPA has

long sought alternatives to cancellation hearings. For years, it sought

to identify problem pesticides for heightened regulatory attention in a

``Special Review'' process. There is little need for procedural

formality in these types of decisions. At issue in most cancellation

and suspension proceedings are scientific data concerning risks and

benefits, disputes over which can generally be well-ventilated when EPA

gives registrants detailed reasons for the agency's actions and then

provides registrants with sufficient time to file responsive written

comments and supporting documentation. For those cases where oral

testimony or cross-examination is justified, the benefits of more

formal procedures can be preserved by providing registrants an

opportunity to show cause why such procedures are warranted.

Accordingly, the Conference recommends that Congress pattern

cancellation and suspension proceedings on a basic notice-and-comment

model, with more formal procedures available only if a party will be

demonstrably prejudiced by the informal procedure.

Labeling and Phase-down Procedures

Although the reregistration process and adjudicatory hearings are

the most visible aspects of pesticide regulation in need of procedural

improvement, they are not the only places where procedural reform is

important. Since the late 1980's, EPA has in fact sought to reduce the

risks of pesticides through private negotiations with registrants over

label changes that impose restrictions on use. Such regulatory action

has the potential to attain interim risk-reduction quickly when

warranted by available data, without going through the cumbersome

Special Review and cancellation procedures, even when complete

reregistration may still be years away. But there are also

disadvantages to relying so heavily on private negotiations with

registrants--chief among them the lack of participation among the

various interested publics in crafting label changes. In the early

1980's, similar concern about privately negotiated Special Review and

pre-Special-Review decisions seriously undermined the agency's

credibility and slowed regulatory progress. In 1985, EPA adopted

procedures to open the door for information from, and participation by,

the public in those processes.1 The Conference recommends that EPA

adopt analogous procedures to regularize and open the agency's

negotiated label program. In addition, because label changes are

effective in reducing risk only if they are actually implemented in the

field, the Conference recommends procedures to facilitate feedback from

registrants, pesticide users, and all other interested persons on the

effectiveness or ineffectiveness of the interim risk-reduction measures

EPA has adopted. Moreover, the Conference recommends that EPA's Office

Of Pesticide Programs (OPP) establish regular channels of communication

with EPA's Office of Enforcement and Compliance Assurance to inform

that office of all label changes and of any material information

received by OPP on noncompliance with such changes.

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\1\40 CFR Part 154, Subpart B.

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The Conference also urges Congress to consider providing EPA with a

new procedural device designed to accommodate a safer pesticides

policy: The ability by informal procedures to order the phase-down of

existing pesticides when there are available for use safer, effective

pest management products or practices.2 Empowering the agency to

develop an informal phase-down mechanism would have several procedural

advantages. First, ordering the phase down of an existing pesticide on

relative risk grounds will cause less stigmatization of an existing

product than would a cancellation proceeding based on the traditional,

more absolutist ``unreasonable risk'' judgment. Second, phase-down

procedures provide for an incremental style of decisionmaking in which

EPA's reasoned judgments about comparative risk can be tested and

reevaluated without making irreversible decisions about existing

pesticides in cancellation proceedings. Finally, phase-down procedures

based on relative risk can reinforce and integrate EPA's pesticide

programs under FIFRA with other federal environmental programs.

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\2\Without taking any position on the substantive questions

involved in determining the relative safety and effectiveness of

pest control measures, the Conference notes EPA's interest in both

the present and prior presidential administrations in developing

such a substantive capability.

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Recommendation

I. Adequacy and Timeliness of Data

A. EPA should adopt, whenever possible, rules setting clear

standards for pesticide reregistration data and should communicate

those standards to registrants.

B. Congress should authorize EPA to impose administrative civil

money penalties on registrants for the failure to submit data by any

applicable deadline, or for submitting data (even if timely) that do

not comply with the data standards adopted by EPA.3

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\3\Imposition of penalties should be through formal

adjudication. See Conference Recommendation 93-1 ``Use of APA Formal

Procedures in Civil Money Penalty Proceedings,'' 58 FR 45409 (Aug.

30, 1993).

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C. Congress should consider imposing an automatic suspension of

``List A'' (high priority) pesticides for which there still remain, by

a date to be set by Congress, previously identified and significant

gaps in data within the registrant's control, and of which the

registrant is on notice. Once suspended, pesticides could be reinstated

through a petition process.

II. Informal Procedures

A. Congress should eliminate the provisions in FIFRA allowing for

formal adjudicatory hearings in proposed suspension or cancellation

actions and should provide instead an informal procedure, including

notice in the Federal Register, that informs registrants and others of

the specific grounds on which EPA bases its proposed action and that

provides a reasonable opportunity to file written comments and data.

Only if a party will be demonstrably prejudiced by the written notice-

and-comment process should the agency be required to grant the right to

introduce oral testimony or to subpoena and cross-examine witnesses.

B. Congress should consider providing EPA the authority to order a

phase down in the use of any registered pesticide through an informal

notice-and-comment procedure in which EPA considers such factors as the

relative risks and benefits of the pesticide at issue when compared

with alternative pest management products and practices.

III. Public Participation

A. EPA should regularize and open for broader public participation

its informal procedures for achieving interim risk reduction through

pesticide label changes. EPA should inform the public, through a

Federal Register notice, when it commences private label negotiations

with registrants. EPA should simultaneously open a public ``negotiation

docket'' into which interested persons may submit comments they believe

might be relevant, for consideration by EPA and the registrants during

their negotiations. If, after negotiations with registrants, EPA

proposes a label change, it should publish a notice of the proposed

change in the Federal Register and provide the public an opportunity to

file written comments. The notice should include a concise, general

statement of the proposed label's basis and purpose, including a

summary of the material aspects of the agency's negotiations with

registrants.

B. After requiring a label change, EPA should establish and

publicize the availability of a ``compliance docket,'' for any input

about the effectiveness or ineffectiveness of interim risk-reduction

measures. In addition, EPA's Office of Pesticide Programs (OPP) should

communicate to EPA's Office of Enforcement and Compliance Assurance the

adoption by OPP of label changes and any material information received

by OPP in its compliance docket.

STATEMENT OF THE ADMINISTRATIVE CONFERENCE OF THE UNITED STATES

The following formal statement was adopted by the Assembly of the

Administrative Conference on December 9, 1993:

Statement No. 16 Right to Consult With Counsel in Agency

Investigations

In recent years, Congress has attached sanctions to an increasingly

wide range of regulatory violations, causing federal administrative

agencies to become involved more routinely in investigations that lead

to civil or criminal prosecution. The Administrative Conference has

completed a study that explores the procedures that govern the

relationship between the agency and a person compelled to appear before

the agency in such investigations.

The Administrative Procedure Act at section 555(b) provides that

``[a] person compelled to appear in person before an agency or

representative thereof is entitled to be accompanied, represented, and

advised by counsel or, if permitted by the agency, by other qualified

representative. A party is entitled to appear in person or by or with

counsel or other duly qualified representative in an agency

proceeding.'' This brief reference to counsel in the APA leaves a

number of questions open. The Act, for example, does not specify the

types of actions attorneys may take in representing their clients

during agency investigative proceedings. It also does not indicate

precisely which persons coming in contact with an agency may invoke the

right to counsel.1

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\1\The 1941 Attorney General's Report on Administrative

Procedure in Government Agencies is strangely taciturn on the

subject of legal representation. Sen. Doc. No. 8, 77th Cong., 1st

Sess. (1941). The report throughout refers to the presentations and

contentions of ``parties,'' without any indication whether parties

would or would not have the benefit of legal counsel. Statements in

both House and Senate committee reports regarding this provision of

the APA state simply that it is ``designed to confirm and make

effective'' the ``statutory and mandatory right'' of interested

persons to appear personally or with counsel before the agency. Sen.

Doc. No. 248, 79th Cong., 2d Sess. 205, 263 (1946).

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Because the roles of investigators in federal agencies, and the

methods by which witnesses or parties appear before agencies vary

considerably, the Administrative Conference does not believe it can

develop a uniform set of recommendations concerning these procedures.

However, the Conference believes it would be valuable to provide a

statement on some of the issues raised in such investigations

concerning the role of counsel so that those government officials

involved can be made aware of the issues and seek additional guidance

where warranted.

I. Agency Exclusion of Counsel

Although courts construing the APA's right-to-counsel provision

have held that the right includes the power to retain counsel of one's

own choosing, some federal agencies have, by rule or order, reserved

the power to exclude counsel who represents a person compelled to

appear before an agency representative during an investigation. They

have done so out of a concern that the particular attorney may impair

the effectiveness of the investigation, especially where the attorney

represents either multiple witnesses, or a witness and his or her

employer.

Agencies should consider whether, in most situations, a person

compelled to appear in agency investigative proceedings ought to have

the discretion to choose his or her own counsel, even where counsel

represents multiple witnesses or parties in the matter. As courts have

held, an agency must have ``concrete evidence'' that an investigation

will be impaired before it may exclude counsel.2 Thus, the mere

fact of multiple representation, an employment relationship between the

witness and some other party involved in the investigation, or past

dealings between the agency and a particular attorney should not be

considered, in and of themselves, a sufficient basis for excluding the

counsel of a witness.

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\2\See SEC v. Csapo, 533 F.2d 7 (D.C. Cir. 1976); Professional

Reactor Operator Society v. NRC, 939 F.2d 1047 (D.C. Cir. 1991).

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Regardless of an agency's decision on the above matter, it has the

power to exclude counsel for disruptive or obstructionist behavior

during the proceedings, and to take action in situations where the

attorney is suspected of personal involvement in the potential

violations or matters under investigation.

II. Consultation With Auxiliary Experts

Because of the highly technical nature of many regulatory fields,

attorneys who advise witnesses or parties in some agency investigations

must consult with accountants, engineers, economists, or other experts

in order to provide effective legal assistance. The prevailing practice

among federal agencies is to allow such consultation with auxiliary

personnel, either by allowing the expert to attend the proceedings or

by allowing the attorney a reasonable opportunity during the proceeding

to consult with the expert about the substance of the investigation.

Agencies that do not currently provide this opportunity should consider

whether to allow counsel representing a person compelled to appear

before the agency reasonable access to auxiliary experts, regardless of

whether the investigation involves civil or criminal sanctions.

III. Informing Persons of Their Right to Counsel

Agencies should be sensitive to the right to counsel that persons

compelled to appear before it are granted under the APA and other

statutes, and should consider when it is appropriate to advise such an

individual of this right. Where necessary, agencies should consider

providing training on this subject to field investigators. In the

interest of maintaining an effective working relationship between

federal regulatory agencies and regulated parties, agencies should

consider whether it is appropriate to conduct a compelled investigative

proceeding in the absence of legal counsel when it is apparent that a

person is unaware of his or her right to counsel.

[FR Doc. 94-2225 Filed 1-31-94; 8:45 am]

BILLING CODE 6110-01-W