Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication

[Federal Register Volume 84, Number 199 (Tuesday, October 15, 2019)]

[Presidential Documents]

[Pages 55239-55243]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2019-22624]

Presidential Documents

Federal Register / Vol. 84 , No. 199 / Tuesday, October 15, 2019 /

Presidential Documents

[[Page 55239]]

Executive Order 13892 of October 9, 2019

Promoting the Rule of Law Through Transparency

and Fairness in Civil Administrative Enforcement and

Adjudication

By the authority vested in me as President by the

Constitution and the laws of the United States of

America, it is hereby ordered as follows:

Section 1. Policy. The rule of law requires

transparency. Regulated parties must know in advance

the rules by which the Federal Government will judge

their actions. The Administrative Procedure Act (APA),

5 U.S.C. 551 et seq., was enacted to provide that

``administrative policies affecting individual rights

and obligations be promulgated pursuant to certain

stated procedures so as to avoid the inherently

arbitrary nature of unpublished ad hoc

determinations.'' Morton v. Ruiz, 415 U.S. 199, 232

A),

5 U.S.C. 551 et seq., was enacted to provide that

``administrative policies affecting individual rights

and obligations be promulgated pursuant to certain

stated procedures so as to avoid the inherently

arbitrary nature of unpublished ad hoc

determinations.'' Morton v. Ruiz, 415 U.S. 199, 232

(1974). The Freedom of Information Act, America's

landmark transparency law, amended the APA to further

advance this goal. The Freedom of Information Act, as

amended, now generally requires that agencies publish

in the Federal Register their substantive rules of

general applicability, statements of general policy,

and interpretations of law that are generally

applicable and both formulated and adopted by the

agency (5 U.S.C. 552(a)(1)(D)). The Freedom of

Information Act also generally prohibits an agency from

adversely affecting a person with a rule or policy that

is not so published, except to the extent that the

person has actual and timely notice of the terms of the

rule or policy (5 U.S.C. 552(a)(1)).

Unfortunately, departments and agencies (agencies) in

the executive branch have not always complied with

these requirements. In addition, some agency practices

with respect to enforcement actions and adjudications

undermine the APA's goals of promoting accountability

and ensuring fairness.

a)(1)).

Unfortunately, departments and agencies (agencies) in

the executive branch have not always complied with

these requirements. In addition, some agency practices

with respect to enforcement actions and adjudications

undermine the APA's goals of promoting accountability

and ensuring fairness.

Agencies shall act transparently and fairly with

respect to all affected parties, as outlined in this

order, when engaged in civil administrative enforcement

or adjudication. No person should be subjected to a

civil administrative enforcement action or adjudication

absent prior public notice of both the enforcing

agency's jurisdiction over particular conduct and the

legal standards applicable to that conduct. Moreover,

the Federal Government should, where feasible, foster

greater private-sector cooperation in enforcement,

promote information sharing with the private sector,

and establish predictable outcomes for private conduct.

Agencies shall afford regulated parties the safeguards

described in this order, above and beyond those that

the courts have interpreted the Due Process Clause of

the Fifth Amendment to the Constitution to impose.

Sec. 2. Definitions. For the purposes of this order:

(a) ``Agency'' has the meaning given to ``Executive

agency'' in section 105 of title 5, United States Code,

but excludes the Government Accountability Office.

ourts have interpreted the Due Process Clause of

the Fifth Amendment to the Constitution to impose.

Sec. 2. Definitions. For the purposes of this order:

(a) ``Agency'' has the meaning given to ``Executive

agency'' in section 105 of title 5, United States Code,

but excludes the Government Accountability Office.

(b) ``Collection of information'' includes any

conduct that would qualify as a ``collection of

information'' as defined in section 3502(3)(A) of title

44, United States Code, or section 1320.3(c) of title

5, Code of Federal Regulations, and also includes any

request for information, regardless of the number of

persons to whom it is addressed, that is:

(i) addressed to all or a substantial majority of an industry; or

(ii) designed to obtain information from a representative sample of

individual persons in an industry.

[[Page 55240]]

(c) ``Guidance document'' means an agency statement

of general applicability, intended to have future

effect on the behavior of regulated parties, that sets

forth a policy on a statutory, regulatory, or technical

issue, or an interpretation of a statute or regulation,

but does not include the following:

(i) rules promulgated pursuant to notice and comment under section 553 of

title 5, United States Code, or similar statutory provisions;

(ii) rules exempt from rulemaking requirements under section 553(a) of

title 5, United States Code;

(iii) rules of agency organization, procedure, or practice;

(iv) decisions of agency adjudications under section 554 of title 5, United

States Code, or similar statutory provisions;

ursuant to notice and comment under section 553 of

title 5, United States Code, or similar statutory provisions;

(ii) rules exempt from rulemaking requirements under section 553(a) of

title 5, United States Code;

(iii) rules of agency organization, procedure, or practice;

(iv) decisions of agency adjudications under section 554 of title 5, United

States Code, or similar statutory provisions;

(v) internal guidance directed to the issuing agency or other agencies that

is not intended to have substantial future effect on the behavior of

regulated parties; or

(vi) internal executive branch legal advice or legal opinions addressed to

executive branch officials.

(d) ``Legal consequence'' means the result of an

action that directly or indirectly affects substantive

legal rights or obligations. The meaning of this term

should be informed by the Supreme Court's discussion in

U.S. Army Corps of Engineers v. Hawkes Co., 136 S. Ct.

1807, 1813-16 (2016), and includes, for example, agency

orders specifying which commodities are subject to or

exempt from regulation under a statute, Frozen Food

Express v. United States, 351 U.S. 40, 44-45 (1956), as

well as agency letters or orders establishing greater

liability for regulated parties in a subsequent

enforcement action, Rhea Lana, Inc. v. Dep't of Labor,

824 F.3d 1023, 1030 (DC Cir. 2016). In particular,

``legal consequence'' includes subjecting a regulated

party to potential liability.

6), as

well as agency letters or orders establishing greater

liability for regulated parties in a subsequent

enforcement action, Rhea Lana, Inc. v. Dep't of Labor,

824 F.3d 1023, 1030 (DC Cir. 2016). In particular,

``legal consequence'' includes subjecting a regulated

party to potential liability.

(e) ``Unfair surprise'' means a lack of reasonable

certainty or fair warning of what a legal standard

administered by an agency requires. The meaning of this

term should be informed by the examples of lack of fair

notice discussed by the Supreme Court in Christopher v.

SmithKline Beecham Corp., 567 U.S. 142, 156 & n.15

(2012).

(f) ``Pre-enforcement ruling'' means a formal

written communication from an agency in response to an

inquiry from a person concerning compliance with legal

requirements that interprets the law or applies the law

to a specific set of facts supplied by the person. The

term includes informal guidance under section 213 of

the Small Business Regulatory Enforcement Fairness Act

of 1996, Public Law 104-121 (Title II), as amended

(SBREFA), letter rulings, advisory opinions, and no-

action letters.

applies the law

to a specific set of facts supplied by the person. The

term includes informal guidance under section 213 of

the Small Business Regulatory Enforcement Fairness Act

of 1996, Public Law 104-121 (Title II), as amended

(SBREFA), letter rulings, advisory opinions, and no-

action letters.

(g) ``Regulation'' means a legislative rule

promulgated pursuant to section 553 of title 5, United

States Code, or similar statutory provisions.

Sec. 3. Proper Reliance on Guidance Documents. Guidance

documents may not be used to impose new standards of

conduct on persons outside the executive branch except

as expressly authorized by law or as expressly

incorporated into a contract. When an agency takes an

administrative enforcement action, engages in

adjudication, or otherwise makes a determination that

has legal consequence for a person, it must establish a

violation of law by applying statutes or regulations.

The agency may not treat noncompliance with a standard

of conduct announced solely in a guidance document as

itself a violation of applicable statutes or

regulations. When an agency uses a guidance document to

state the legal applicability of a statute or

regulation, that document can do no more, with respect

to prohibition of conduct, than articulate the agency's

understanding of how a statute or regulation applies to

particular circumstances

s or

regulations. When an agency uses a guidance document to

state the legal applicability of a statute or

regulation, that document can do no more, with respect

to prohibition of conduct, than articulate the agency's

understanding of how a statute or regulation applies to

particular circumstances. An agency may cite a guidance

document to convey that understanding in an

administrative enforcement action or adjudication only

if it has notified the public of such document in

advance through publication, either in full or by

citation if publicly available, in the Federal Register

(or on the portion of the agency's website

[[Page 55241]]

that contains a single, searchable, indexed database of

all guidance documents in effect).

Sec. 4. Fairness and Notice in Administrative

Enforcement Actions and Adjudications. When an agency

takes an administrative enforcement action, engages in

adjudication, or otherwise makes a determination that

has legal consequence for a person, it may apply only

standards of conduct that have been publicly stated in

a manner that would not cause unfair surprise. An

agency must avoid unfair surprise not only when it

imposes penalties but also whenever it adjudges past

conduct to have violated the law.

t

has legal consequence for a person, it may apply only

standards of conduct that have been publicly stated in

a manner that would not cause unfair surprise. An

agency must avoid unfair surprise not only when it

imposes penalties but also whenever it adjudges past

conduct to have violated the law.

Sec. 5. Fairness and Notice in Jurisdictional

Determinations. Any decision in an agency adjudication,

administrative order, or agency document on which an

agency relies to assert a new or expanded claim of

jurisdiction--such as a claim to regulate a new subject

matter or an explanation of a new basis for liability--

must be published, either in full or by citation if

publicly available, in the Federal Register (or on the

portion of the agency's website that contains a single,

searchable, indexed database of all guidance documents

in effect) before the conduct over which jurisdiction

is sought occurs. If an agency intends to rely on a

document arising out of litigation (other than a

published opinion of an adjudicator), such as a brief,

a consent decree, or a settlement agreement, to

establish jurisdiction in future administrative

enforcement actions or adjudications involving persons

who were not parties to the litigation, it must publish

that document, either in full or by citation if

publicly available, in the Federal Register (or on the

portion of the agency's website that contains a single,

searchable, indexed database of all guidance documents

in effect) and provide an explanation of its

jurisdictional implications.

st publish

that document, either in full or by citation if

publicly available, in the Federal Register (or on the

portion of the agency's website that contains a single,

searchable, indexed database of all guidance documents

in effect) and provide an explanation of its

jurisdictional implications. An agency may not seek

judicial deference to its interpretation of a document

arising out of litigation (other than a published

opinion of an adjudicator) in order to establish a new

or expanded claim or jurisdiction unless it has

published the document or a notice of availability in

the Federal Register (or on the portion of the agency's

website that contains a single, searchable, indexed

database of all guidance documents in effect).

Sec. 6. Opportunity to Contest Agency Determination.

(a) Except as provided in subsections (b) and (c) of

this section, before an agency takes any action with

respect to a particular person that has legal

consequence for that person, including by issuing to

such a person a no-action letter, notice of

noncompliance, or other similar notice, the agency must

afford that person an opportunity to be heard, in

person or in writing, regarding the agency's proposed

legal and factual determinations. The agency must

respond in writing and articulate the basis for its

action.

(b) Subsection (a) of this section shall not apply

to settlement negotiations between agencies and

regulated parties, to notices of a prospective legal

action, or to litigation before courts.

nd factual determinations. The agency must

respond in writing and articulate the basis for its

action.

(b) Subsection (a) of this section shall not apply

to settlement negotiations between agencies and

regulated parties, to notices of a prospective legal

action, or to litigation before courts.

(c) An agency may proceed without regard to

subsection (a) of this section where necessary because

of a serious threat to health, safety, or other

emergency or where a statute specifically authorizes

proceeding without a prior opportunity to be heard.

Where an agency proceeds under this subsection, it

nevertheless must afford any person an opportunity to

be heard, in person or in writing, regarding the

agency's legal determinations and respond in writing as

soon as practicable.

Sec. 7. Ensuring Reasonable Administrative Inspections.

Within 120 days of the date of this order, each agency

that conducts civil administrative inspections shall

publish a rule of agency procedure governing such

inspections, if such a rule does not already exist.

Once published, an agency must conduct inspections of

regulated parties in compliance with the rule.

Within 120 days of the date of this order, each agency

that conducts civil administrative inspections shall

publish a rule of agency procedure governing such

inspections, if such a rule does not already exist.

Once published, an agency must conduct inspections of

regulated parties in compliance with the rule.

Sec. 8. Appropriate Procedures for Information

Collections. (a) Any agency seeking to collect

information from a person about the compliance of that

person or of any other person with legal requirements

must ensure that such collections of information comply

with the provisions of the Paperwork Reduction Act,

section 3512 of title 44, United States Code, and

section

[[Page 55242]]

1320.6(a) of title 5, Code of Federal Regulations,

applicable to collections of information (other than

those excepted under section 3518 of title 44, United

States Code).

(b) To advance the purposes of subsection (a) of

this section, any collection of information during the

conduct of an investigation (other than those

investigations excepted under section 3518 of title 44,

United States Code, and section 1320.4 of title 5, Code

of Federal Regulations, or civil investigative demands

under 18 U.S.C. 1968) must either:

this section, any collection of information during the

conduct of an investigation (other than those

investigations excepted under section 3518 of title 44,

United States Code, and section 1320.4 of title 5, Code

of Federal Regulations, or civil investigative demands

under 18 U.S.C. 1968) must either:

(i) display a valid control number assigned by the Director of the Office

of Management and Budget; or

(ii) inform the recipient through prominently displayed plain language that

no response is legally required.

Sec. 9. Cooperative Information Sharing and

Enforcement. (a) Within 270 days of the date of this

order, each agency, as appropriate, shall, to the

extent practicable and permitted by law, propose

procedures:

(i) to encourage voluntary self-reporting of regulatory violations by

regulated parties in exchange for reductions or waivers of civil penalties;

(ii) to encourage voluntary information sharing by regulated parties; and

(iii) to provide pre-enforcement rulings to regulated parties.

(b) Any agency that believes additional procedures

are not practicable--because, for example, the agency

believes it already has adequate procedures in place or

because it believes it lacks the resources to institute

additional procedures--shall, within 270 days of the

date of this order, submit a report to the President

describing, as appropriate, its existing procedures,

its need for more resources, or any other basis for its

conclusion.

res in place or

because it believes it lacks the resources to institute

additional procedures--shall, within 270 days of the

date of this order, submit a report to the President

describing, as appropriate, its existing procedures,

its need for more resources, or any other basis for its

conclusion.

Sec. 10. SBREFA Compliance. Within 180 days of the date

of this order, each agency shall submit a report to the

President demonstrating that its civil administrative

enforcement activities, investigations, and other

actions comply with SBREFA, including section 223 of

that Act. A copy of this report, subject to redactions

for any applicable privileges, shall be posted on the

agency's website.

Sec. 11. General Provisions. (a) Nothing in this order

shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or

the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget

relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented in a manner

consistent with applicable law and subject to the

availability of appropriations.

(c) This order is not intended to, and does not,

create any right or benefit, substantive or procedural,

enforceable at law or in equity by any party against

the United States, its departments, agencies, or

entities, its officers, employees, or agents, or any

other person.

(d) Notwithstanding any other provision in this

order, nothing in this order shall apply:

benefit, substantive or procedural,

enforceable at law or in equity by any party against

the United States, its departments, agencies, or

entities, its officers, employees, or agents, or any

other person.

(d) Notwithstanding any other provision in this

order, nothing in this order shall apply:

(i) to any action that pertains to foreign or military affairs, or to a

national security or homeland security function of the United States (other

than procurement actions and actions involving the import or export of non-

defense articles and services);

(ii) to any action related to a criminal investigation or prosecution,

including undercover operations, or any civil enforcement action or related

investigation by the Department of Justice, including any action related to

a civil investigative demand under 18 U.S.C. 1968;

(iii) to any action related to detention, seizure, or destruction of

counterfeit goods, pirated goods, or other goods that infringe intellectual

property rights;

[[Page 55243]]

(iv) to any investigation of misconduct by an agency employee or any

disciplinary, corrective, or employment action taken against an agency

employee; or

(v) in any other circumstance or proceeding to which application of this

order, or any part of this order, would, in the judgment of the head of the

agency, undermine the national security.

(Presidential Sig.)

THE WHITE HOUSE,

October 9, 2019.

[FR Doc. 2019-22624

Filed 10-11-19; 11:15 am]

Billing code 3295-F0-P