Regulations Prohibiting Issuance, Reliance, or Defense of Improper Agency Guidance, Notice of Petition for Rulemaking, 50791-50800 [2019-20540]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 84, Number 187 (Thursday, September 26, 2019)]
[Proposed Rules]
[Pages 50791-50800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20540]


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DEPARTMENT OF ENERGY

10 CFR Chapters I, II, III, X, XIII, XVII and XVIII


Regulations Prohibiting Issuance, Reliance, or Defense of 
Improper Agency Guidance, Notice of Petition for Rulemaking

AGENCY: Office of the General Counsel, Department of Energy.

[[Page 50792]]


ACTION: Notice of petition for rulemaking; request for comment.

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SUMMARY: On August 2, 2019, the Department of Energy (DOE) received a 
petition from the New Civil Liberties Alliance (NCLA) asking DOE to 
initiate a rulemaking to prohibit any DOE component from issuing, 
relying on, or defending improper agency guidance. Through this 
document, DOE seeks comment on the petition, as well as any data or 
information that could be used in DOE's determination whether to 
proceed with the petition.

DATES: Written comments and information are requested on or before 
December 26, 2019.

ADDRESSES: Interested persons are encouraged to submit comments, 
identified by ``Proposed Agency Guidance Rulemaking,'' by any of the 
following methods:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for submitting comments.
    Email: [email protected].
    Postal Mail: U.S. Department of Energy, Office of the General 
Counsel (GC-33), 6A-179, 1000 Independence Avenue SW, Washington, DC 
20585. If possible, please submit all items on a compact disc (CD), in 
which case it is not necessary to include printed copies.
    Hand Delivery/Courier: U.S. Department of Energy, 6A-179, 1000 
Independence Avenue SW, Washington, DC 20585. If possible, please 
submit all items on a CD, in which case it is not necessary to include 
printed copies.
    Docket: For access to the docket to read background documents, or 
comments received, go to the Federal eRulemaking Portal at: https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer Tiedeman, U.S. Department 
of Energy, Office of the General Counsel, 1000 Independence Avenue SW, 
Washington, DC 20585. Telephone: (202) 287-6111. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: The Administrative Procedure Act (APA), 5 
U.S.C. 551 et seq., provides among other things, that ``[e]ach agency 
shall give an interested person the right to petition for the issuance, 
amendment, or repeal of a rule.'' (5 U.S.C. 553(e)). DOE received a 
petition from NCLA, as described in this document and set forth 
verbatim below, requesting that DOE initiate a rulemaking to prohibit 
any DOE component from issuing, relying on, or defending improper 
agency guidance. In publishing this petition for public comment, DOE is 
seeking views on whether it should grant the petition and undertake a 
rulemaking. By seeking comment on whether to grant this petition, DOE 
takes no position at this time regarding the merits of the suggested 
rulemaking or the assertions made by NCLA.
    In its petition, NCLA argues that federal agencies often issue 
informal interpretations, advice, statements of policy, and other forms 
of guidance that make law by declaring views about what the public 
should do even though the Constitution and APA prohibit doing so. NCLA 
asserts that such practice evades legal requirements and is used for 
the purpose of coercing persons or entities outside the federal 
government into taking or not taking action beyond what is required by 
an applicable statute or regulation. NCLA further states that despite 
being prohibited by law, improper guidance is typically outside of 
judicial review because of procedural limits. NCLA discusses a number 
of authorities in favor of its petition, including the U.S. 
Constitution, the APA, an OMB Bulletin (Final Bulletin for Agency Good 
Guidance Practices, issued in 2007), and an OMB Memorandum (OMB 
Memorandum M-19-14, issued in 2019). It concludes that to solve 
underlying problems completely, DOE should issue a binding and final 
rule prohibiting any DOE component from issuing, relying on, or 
defending improper agency guidance, and that only a new rule binding 
DOE can assure regulated parties that DOE will refrain from future 
improper use of guidance. The NCLA petition also presents text for a 
proposed rule.
    DOE welcomes comments and views of interested parties on any aspect 
of the petition for rulemaking.

Submission of Comments

    DOE invites all interested parties to submit in writing by December 
26, 2019 comments and information regarding this petition.
    Submitting comments via https://www.regulations.gov. The https://www.regulations.gov web page will require you to provide your name and 
contact information prior to submitting comments. Your contact 
information will be viewable to the DOE Office of the General Counsel 
staff only. Your contact information will not be publicly viewable 
except for your first and last names, organization name (if any), and 
submitter representative name (if any). If your comment is not 
processed properly because of technical difficulties, DOE will use this 
information to contact you. If DOE cannot read your comment due to 
technical difficulties and cannot contact you for clarification, DOE 
may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment or in any documents attached to your comment. 
Any information that you do not want to be publicly viewable should not 
be included in your comment, nor in any document attached to your 
comment. Persons viewing comments will see only first and last names, 
organization names, correspondence containing comments, and any 
documents submitted with the comments.
    Do not submit to https://www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (CBI)). Comments submitted through 
https://www.regulations.gov cannot be claimed as CBI. Comments received 
through the website will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through https://www.regulations.gov 
before posting. Normally, comments will be posted within a few days of 
being submitted. However, if large volumes of comments are being 
processed simultaneously, your comment may not be viewable for up to 
several weeks. Please keep the comment tracking number that https://www.regulations.gov provides after you have successfully uploaded your 
comment.
    Submitting comments via email, hand delivery, or postal mail. 
Comments and documents via email, hand delivery, or postal mail will 
also be posted to https://www.regulations.gov. If you do not want your 
personal contact information to be publicly viewable, do not include it 
in your comment or any accompanying documents. Instead, provide your 
contact information on a cover letter. Include your first and last 
names, email address, telephone number, and optional mailing address. 
The cover letter will not be publicly viewable as long as it does not 
include any comments.
    Include contact information in your cover letter each time you 
submit comments, data, documents, and other information to DOE. If you 
submit via postal mail or hand delivery, please provide all items on a 
CD, if feasible, in which case it is not necessary to submit printed 
copies. No telefacsimiles (faxes) will be accepted.

[[Page 50793]]

    Comments, data, and other information submitted electronically 
should be provided in PDF (preferred), Microsoft Word or Excel, 
WordPerfect, or text (ASCII) file format. Provide documents that are 
not secured, written in English, and free of any defects or viruses. 
Documents should not include any special characters or any form of 
encryption, and, if possible, they should carry the electronic 
signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery two well-marked copies: One copy 
of the document marked ``Confidential'' including all the information 
believed to be confidential, and one copy of the document marked ``Non-
confidential'' with the information believed to be confidential 
deleted. Submit these documents via email or on a CD, if feasible. DOE 
will make its own determination about the confidential status of the 
information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time, and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).
    DOE considers public participation to be a very important part of 
its process for considering rulemaking petitions. DOE actively 
encourages the participation and interaction of the public during the 
comment period. Interactions with and between members of the public 
provide a balanced discussion of the issues and assist DOE in 
determining how to proceed with a petition.

Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
petition for rulemaking.

    Signed in Washington, DC, on September 16, 2019.
William S. Cooper, III,
General Counsel.

PETITION FOR RULEMAKING TO PROMULGATE REGULATIONS PROHIBITING THE 
ISSUANCE, RELIANCE ON OR DEFENSE OF IMPROPER AGENCY GUIDANCE

SUBMITTED TO

THE UNITED STATES DEPARTMENT OF ENERGY

August 2, 2019

 
 
 
Rick Perry                                               Bill Cooper
Secretary of Energy                                      General Counsel
U.S. Department of Energy                                U.S. Department of Energy
1000 Independence Ave. SW                                1000 Independence Ave. SW
Washington, DC 20585                                     Washington, DC 20585
(202) 586-5000                                           (202) 586-5000
 
Dan Brouillette                                          Eric J. Fygi
Deputy Secretary of Energy                               Deputy General Counsel
U.S. Department of Energy                                U.S. Department of Energy
1000 Independence Ave., SW                               1000 Independence Ave., SW
Washington, DC 20585                                     Washington, DC 20585
(202) 586-5000                                           (202) 586-5000
 

    Submitted by:
    [GRAPHIC] [TIFF OMITTED] TP26SE19.089
    
1225 19th Street NW, Suite 450
Washington, DC 20036
tel.: (202) 869-5210
www.nclalegal.org

I. Statement of the Petitioner

    Pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 
553(e), the New Civil Liberties Alliance (hereinafter ``NCLA'') 
hereby petitions the United States Department of Energy (hereinafter 
``DOE'' or the ``Department'') to initiate a rulemaking proceeding 
to promulgate regulations prohibiting any DOE component from 
issuing, relying on, or defending improper agency guidance. The 
proposed rule will formalize and make more permanent policies and 
best practices from other agencies concerning agency guidance that 
improperly attempts to create rights or obligations binding on 
persons or entities outside DOE. The proposed rule will also provide 
affected parties with a means of redress for improper agency action.

II. Summary of the Petition

    Even though both the Constitution and the Administrative 
Procedure Act prohibit the practice, federal agencies often engage 
in the ``commonplace and dangerous'' acts of issuing informal 
interpretations, advice, statements of policy, and other forms of 
``guidance'' that ``make law simply by declaring their views about 
what the public should do.'' Philip Hamburger, Is Administrative Law 
Unlawful? 260, 114 (2014). This practice evades legal requirements 
and often is ``used for the purpose of coercing persons or entities 
outside the federal government into taking any action or refraining 
from taking any action beyond what is required by the terms of the 
applicable statute or regulation.'' Office of the Att'y Gen., 
Prohibition on Improper Guidance Documents at 2 (Nov. 16, 2017), 
available at https://www.justice.gov/opa/press-release/file/1012271/download. Despite being prohibited by law, improper guidance is 
typically ``immuniz[ed]'' from judicial review by procedural limits. 
Appalachian Power Co. v. Envtl. Prot.

[[Page 50794]]

Agency, 208 F.3d 1015, 1020 (D.C. Cir. 2000). This conduct results 
in a form of illegal and unconstitutional ``extortion'' where 
agencies obtain compliance through ``extralegal lawmaking.'' 
Hamburger, supra, at 115, 260.
    To rein in these abuses, NCLA proposes that DOE issue a formal 
rule prohibiting the Department and each of its subordinate offices 
from issuing, relying on, or defending the validity of improper 
guidance that has been issued by any federal entity. The proposed 
rule not only adopts existing legal limitations on such improper 
agency action, but also creates a permanent and binding set of 
limits on departmental practice. The proposed rule also provides 
means to enforce these limitations by empowering regulated parties 
to petition DOE to rescind improper guidance and to seek judicial 
review of improper agency actions.

III. Statement of Interest

    NCLA is a nonprofit civil rights organization founded to defend 
constitutional rights through original litigation, amicus curiae 
briefs, and other means, including participating in the regulatory 
process in federal agencies. The ``civil liberties'' of the 
organization's name include rights at least as old as the U.S. 
Constitution itself, such as jury trial, due process of law, the 
right to live under laws made by the nation's elected lawmakers 
rather than by prosecutors or bureaucrats, and the right to be tried 
in front of an impartial and independent judge whenever the 
government brings cases against private parties.
    NCLA defends civil liberties by asserting constitutional 
constraints on the administrative state. Although Americans still 
enjoy the shell of their Republic, a very different form of 
government has developed within it--a type that our Constitution was 
framed to prevent. Since this unconstitutional administrative state 
violates more rights of more Americans than any other aspect of 
American law, it is the focus of NCLA's efforts.
    Even when NCLA has not yet sued to challenge an agency's 
unconstitutional exercise of administrative power, it encourages the 
agencies themselves to curb the unlawful exercise of power by 
respecting constitutional limits on administrative rulemaking, 
guidance, adjudication, and enforcement. The courts are not the only 
government bodies with the duty to attend to the law. More 
immediately, agencies and their leadership have a duty to follow the 
law, not least by avoiding unlawful modes of governance. 
Accordingly, a major part of NCLA's mission and duty is to advise 
and, if necessary, compel agencies and their leaders to examine 
whether their modes of rulemaking, guidance, adjudication, and 
enforcement comply with the APA and with the Constitution. NCLA is 
therefore an ``interested'' party concerning the proposed rule set 
forth in this document. See 5 U.S.C. 553(e).

IV. Legal Authority To Promulgate the Rule

    This petition for rulemaking is submitted pursuant to 5 U.S.C. 
553(e), which provides any ``interested person the right to petition 
[an agency] for the issuance . . . of a rule.'' Section 301 of the 
APA provides that the ``head of an Executive department or military 
department may prescribe regulations for the government of his 
department, the conduct of its employees, and the custody, use, and 
preservation of its records, papers and property.'' Id. Sec.  301. 
The Department of Energy is one such Executive department. Id. Sec.  
101. Accordingly, the Secretary of Energy may ``formulate and 
publish'' regulations binding DOE in the exercise of its lawful 
authority. See Georgia v. United States, 411 U.S. 526, 536 (1973), 
abrogated on other grounds, Shelby Cty., Ala. v. Holder, 570 U.S. 
529 (2013). In addition, 42 U.S.C. 7254 authorizes the Secretary of 
Energy to ``prescribe such procedural and administrative rules and 
regulations as he may deem necessary or appropriate to administer 
and manage the functions now or hereafter vested in him.''
    When an agency engages in rulemaking procedures it must abide by 
the requirements set out in 5 U.S.C. 553.

V. Reasons for Creating the Rule

A. Legal Background

    No agency has any inherent power to make law. Article I, Sec.  1 
of the U.S. Constitution vests ``[a]ll legislative powers'' in 
Congress, and ``the lawmaking function belongs to Congress . . . and 
may not be conveyed to another branch or entity.'' Loving v. United 
States, 517 U.S. 748, 758 (1996). This is a constitutional barrier 
to an exercise of legislative power by an agency. Further, ``an 
agency literally has no power to act . . . unless and until Congress 
confers power upon it.'' Louisiana Pub. Serv. Comm'n v. FCC, 476 
U.S. 355, 374 (1986). Thus, even if an agency could constitutionally 
exercise legislative power, it lacks the authority to bind anyone 
without congressional authorization.
    Significantly, Congress has categorically prohibited the 
issuance of binding guidance. The Administrative Procedure Act was 
passed in 1946 in order ``to introduce greater uniformity of 
procedure and standardization of administrative practice among the 
diverse agencies whose customs had departed widely from each 
other.'' Wong Yang Sung v. McGrath, 339 U.S. 33, 41, modified on 
other grounds by 339 U.S. 908 (1950). As a result, it sets out a 
comprehensive set of rules governing administrative action. Id.
    Consistent with this design, the APA established a process by 
which agencies could engage in ``rule making.'' 5 U.S.C. 553. The 
APA explains that a ``rule'' ``means the whole or a part of an 
agency statement of general or particular applicability and future 
effect designed to implement, interpret, or prescribe law or policy 
or describing the organization, procedure, or practice requirements 
of an agency.'' Id. Sec.  551(4).
    Rules generally may be promulgated by agencies only following 
notice-and-comment procedures. First, an agency must post a 
``general notice'' of the proposed rulemaking in a prominent place 
and seek commentary from private parties. Id. Sec.  553(b). This 
notice must set out ``the time, place and nature'' of the proposed 
``public rule making proceedings,'' ``the legal authority under 
which the rule is proposed,'' and ``either the terms or substance of 
the proposed rule or a description of the subjects and issues 
involved.'' Id. Sec. Sec.  553(b)(1)-(3).
    After the notice has been posted, the agency must ``give 
interested persons an opportunity to participate in the rule making 
through submission of written data, views, or arguments.'' Id. Sec.  
553(c). ``An agency must consider and respond to significant 
comments received during the period for public comment.'' Perez v. 
Mortgage Bankers Ass'n, 135 S. Ct. 1199, 1203 (2015). In response to 
submitted comments, a ``general statement'' of the purpose of the 
rules must also be ``incorporate[d] in the rules adopted.'' 5 U.S.C. 
553(c).
    The APA's notice-and-comment period ``does not apply . . . to 
interpretive rules, general statements of policy, or rules of agency 
organization procedure, or practice.'' Id. Sec.  553(b). Instead, 
this requirement applies only to ``substantive rules,'' which are 
sometimes referred to as ``legislative rules.'' Mendoza v. Perez, 
754 F.3d 1002, 1021 (D.C. Cir. 2014); see also 5 U.S.C. Sec.  553(d) 
(distinguishing between ``substantive'' and ``interpretive'' rules 
for publication and service).
    A ``substantive'' or ``legislative'' rule is any ``agency action 
that purports to impose legally binding obligations or prohibitions 
on regulated parties.'' Nat'l Mining Ass'n v. McCarthy, 758 F.3d 
243, 251 (D.C. Cir. 2014). Stated differently: ``A rule is 
legislative if it supplements a statute, adopts a new position 
inconsistent with existing regulations, or otherwise effects a 
substantive change in existing law or policy.'' Mendoza, 754 F.3d at 
1021. Such ``legislative rules'' have the ``force and effect of 
law.'' Chrysler Corp. v. Brown, 441 U.S. 281, 302-03 (1979). 
Legislative rules are also accorded deference from courts. United 
States v. Mead Corp., 533 U.S. 218, 230 (2001).
    In contrast, ``interpretive rules'' are not subject to notice-
and-comment requirements. Mendoza, 754 F.3d at 1021. Interpretive 
rules ``do not have the force and effect of law and are not accorded 
that weight in the adjudicatory process.'' Shalala v. Guernsey Mem'l 
Hosp., 514 U.S. 87, 99 (1995). An interpretive rule is any ``agency 
action that merely interprets a prior statute or regulation and does 
not itself purport to impose new obligations or prohibitions or 
requirements on regulated parties.'' Nat'l Mining Ass'n, 758 F.3d at 
252. ``[I]nterpretive rules . . . are issued by an agency to advise 
the public of the agency's construction of the statutes and rules 
which it administers.'' Perez, 135 S. Ct. at 1204 (internal citation 
and quotation marks omitted). Such a rule simply ``describes the 
agency's view of the meaning of an existing statute or regulation.'' 
Batterton v. Marshall, 648 F.2d 694, 702 n. 34 (D.C. Cir. 1980).
    The notice-and-comment process is not merely a technical 
requirement under the APA. The process serves important purposes. As 
the Supreme Court has explained, ``Congress contemplates 
administrative action with the effect of law when it provides for a 
relatively formal administrative procedure tending to foster the 
fairness and deliberation that should underlie a

[[Page 50795]]

pronouncement of such force.'' Mead Corp., 533 U.S. at 230. ``APA 
notice and comment'' is one such formal procedure, ``designed to 
assure due deliberation.'' Id. (quoting Smiley v. Citibank (South 
Dakota) N.A., 517 U.S. 735, 741 (1996)).
    By contrast, informal interpretations, such as policy 
statements, agency manuals, enforcement guidelines and opinion 
letters, ``lack the force of law'' and warrant, at best, only 
limited ``respect'' from courts concerning matters of 
interpretation. Christensen v. Harris County, 529 U.S. 576, 587 
(2000). Further, to the extent that a court grants any respect to 
these interpretations, the strength of such respect varies widely 
depending on the degree of formality employed by the agency. See 
Mead Corp., 533 U.S. at 228 (discussing the deference owed to agency 
decisions). It depends in many instances on an agency's use of 
``notice-and-comment rulemaking or formal adjudication.'' Id. at 
228-30 (internal citation and quotation marks omitted). A court 
gives the least amount of respect to an ``agency practice [that 
lacks] any indication [the agency] set out with a lawmaking pretense 
in mind'' when it acted. Id. at 233.
    Despite the relatively straightforward legal distinction, it is 
not always easy for courts or regulators to draw practical 
distinctions between ``legislative'' and ``interpretive'' rules. 
Because each agency action is unique, determining whether a given 
agency action is a legislative rule or interpretive rule ``is an 
extraordinarily case-specific endeavor.'' Am. Hosp. Ass'n v. Bowen, 
834 F.2d 1037, 1045 (D.C. Cir. 1987).
    Perhaps because of this difficulty, or perhaps for more 
invidious reasons, agencies often promulgate legislative rules under 
the guise of mere guidance, without following the notice-and-comment 
requirements of the APA. And courts, in turn, have often struck down 
such rules. See, e.g., Mendoza, 754 F.3d at 1025 (vacating guidance 
documents as legislative rules that failed to comply with APA 
notice-and-comment requirements); Elec. Privacy Info. Ctr. v. U.S. 
Dep't of Homeland Sec., 653 F.3d 1, 8 (D.C. Cir. 2011) (same); Hemp 
Indus. Ass'n v. Drug Enforcement Admin., 333 F.3d 1082, 1091 (9th 
Cir. 2003) (same); Nat'l Family Planning & Reprod. Health Ass'n, 
Inc. v. Sullivan, 979 F.2d 227, 231 (D.C. Cir. 1992) (same); Texas 
v. United States, 201 F. Supp. 3d 810, 825 (N.D. Tex. 2016) (same), 
appeal dismissed, 2017 WL 7000562 (5th Cir. Mar. 3, 2017).
    But the prevalence of court invalidation of improper guidance 
vastly understates the problem, because ``extralegal'' agency action 
``usually occurs out of view.'' Hamburger, supra, at 260. ``To 
escape even the notice-and-comment requirement for lawmaking 
interpretation, agencies increasingly make law simply by declaring 
their views about what the public should do.'' Id. at 114. Such 
improper guidance statements are often deliberate ``evasions'' of 
legal requirements, and ``an end run around [an agency's] other 
modes of lawmaking.'' Id. (internal citation and quotation marks 
omitted). In many instances, an agency's ``guidance'' is actually a 
means of ``extralegal lawmaking.'' Id. at 115.
    Agencies have strong incentives to resort to this kind of 
extralegal lawmaking. The ``absence of a notice-and-comment 
obligation makes the process of issuing interpretive rules 
comparatively easier for agencies than issuing legislative rules.'' 
Perez, 135 S. Ct. at 1204. An agency operating in this fashion can 
issue rules ``quickly and inexpensively without following any 
statutorily prescribed procedures.'' Appalachian Power Co., 208 F.3d 
at 1020. When this happens, ``[l]aw is made, without notice and 
comment, without public participation, and without publication in 
the Federal Register or the Code of Federal Regulations.'' Id.
    More troubling, ``[w]hen agencies want to impose restrictions 
they cannot openly adopt as administrative rules, and that they 
cannot plausibly call `interpretation,' they typically place the 
restrictions in guidance, advice, or other informal directives.'' 
Hamburger, supra, at 260. This is ``a sort of extortion,'' because 
an agency can secure compliance by ``threatening'' enforcement or 
other regulatory action, even if the agency has no genuine authority 
to act in the first place. Id. at 260-61. An agency's informal 
``views about what the public should do,'' almost always comes 
``with the unmistakable hint that it is advisable to comply.'' Id. 
at 114-15.
    This extortion is primarily enabled by the judiciary's inability 
to review improper guidance. Indeed, an agency often realizes that 
``another advantage'' to issuing guidance documents, is ``immunizing 
its lawmaking from judicial review.'' Appalachian Power Co., 208 
F.3d at 1020. As discussed above, legislative rules will only be 
invalidated for failure to conform to the notice-and-comment process 
after they have been determined to be legislative in the first 
place. This is neither a simple nor quick task.
    Simultaneously, even invalid, binding, legislative rules may 
escape judicial review. The APA typically allows review only of 
``final agency action.'' 5 U.S.C. 704. ``[T]wo conditions must be 
satisfied for agency action to be `final': First, the action must 
mark the consummation of the agency's decision-making process. And 
second, the action must be one by which rights or obligations have 
been determined, or from which legal consequences will flow.'' 
Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (internal citations 
and quotation marks omitted).
    But ``an agency's action is not necessarily final merely because 
it is binding.'' Appalachian Power Co., 208 F.3d at 1022. An initial 
or interim ruling, even one that binds, ``does not mark the 
consummation of agency decision-making'' and thus might not 
constitute final agency action. Soundboard Ass'n v. Fed. Trade 
Comm'n, 888 F.3d 1261, 1271 (D.C. Cir. 2018); see also Ctr. for Food 
Safety v. Burwell, 126 F. Supp. 3d 114, 118 (D.D.C. 2015) 
(Contreras, J.) (discussing binding ``Interim Policy'' of agency 
that was in effect for 17 years but evaded judicial review as non-
final action).
    As a result, courts rarely consider the genuinely coercive 
effects of guidance documents as sufficiently binding to permit 
review. For example, even a warning letter from an agency alleging a 
violation of a regulation and threatening an enforcement action does 
not establish sufficiently concrete ``legal consequences'' to be 
considered ``final agency action'' that a court may review. Holistic 
Candlers & Consumers Ass'n v. Food & Drug Admin., 664 F.3d 940, 944 
(D.C. Cir. 2012). Indeed, ``practical consequences, such as the 
threat of having to defend itself in an administrative hearing 
should the agency actually decide to pursue enforcement, are 
insufficient to bring an agency's conduct under [a court's] 
purview.'' Indep. Equip. Dealers Ass'n v. Envtl. Prot. Agency, 372 
F.3d 420, 428 (D.C. Cir. 2004) (internal citation and quotation 
marks omitted). Even to the extent that such action coerces 
compliance from a regulated entity, and even to the extent this 
might result in ``a dramatic impact on the [affected] industry,'' it 
still may not be considered final action subject to review. 
Soundboard Ass'n, 888 F.3d at 1272; see also Nat'l Mining Ass'n, 758 
F.3d at 253 (agency action is not final even if a regulated entity 
``really has no choice when faced with `recommendations' except to 
fold,'' and might ``feel pressure to voluntarily conform their 
behavior because the writing is on the wall'').
    This use of guidance results in ``commonplace and dangerous'' 
abuses of administrative power and ``often leaves Americans at the 
mercy of administrative agencies.'' Hamburger, supra, at 260, 335. 
``It allows agencies to exercise a profound under-the-table power, 
far greater than the above-board government powers, even greater 
than the above-board administrative powers, and agencies thuggishly 
use it to secure what they euphemistically call `cooperation.''' Id. 
at 335. This results in an ``evasion'' of the Constitution and an 
affront to the basic premise that laws can only be made by the 
Congress. Id. at 113-14; see also La. Pub. Serv. Comm'n, 476 U.S. at 
374. It is also statutorily forbidden. Mendoza, 754 F.3d at 1021. 
And it often results in violations of the due process of law. 
Hamburger, supra, at 241, 353. But, perhaps by design, such improper 
agency conduct routinely occurs with little hope of judicial 
intervention. See Appalachian Power Co., 208 F.3d at 1020.

B. Prior Responses to These Problems

1. The 2007 Bulletin for Agency Good Guidance Practices

    On January 18, 2007, the Office of Management and Budget for the 
Executive Office of the President, addressed the ongoing problem 
caused by the issuance of ``poorly designed or improperly 
implemented'' ``guidance documents'' from administrative entities. 
Office of Mgmt. & Budget, Executive Office of the President, Final 
Bulletin for Agency Good Guidance Practices, 72 FR 3432, 3432 (Jan. 
18, 2007) (OMB Bulletin). OMB explained that many stakeholders had 
ongoing ``[c]oncern about whether agencies'' had been improperly 
issuing guidance documents that actually ``establish new policy 
positions that the agency treats as binding,'' without following the 
notice-and-comment requirements of the APA. Id. at 3433. In addition 
to promulgating formal rules with the effect of law, many ``agencies 
increasingly have relied on guidance documents to inform the public 
and to provide direction to their staffs.'' Id. at 3432.
    While the bulletin characterized this practice as generally 
positive, it noted that

[[Page 50796]]

many guidance documents do ``not receive the benefit of careful 
consideration accorded under the procedures for regulatory 
development and review.'' Id. Even worse, ``[b]ecause it is 
procedurally easier to issue guidance documents, there also may be 
an incentive for regulators to issue guidance documents in lieu of 
regulations.'' Id. Some of these guidance documents also improperly 
``establish new policy positions that the agency treats as 
binding,'' despite failing to comply with the APA's notice-and-
comment and judicial review provisions. Id. at 3433. To combat this 
problem, OMB issued its Final Bulletin to help ensure that guidance 
documents issued by Executive Branch departments and agencies under 
the OMB's management would not improperly issue ``legally binding 
requirements.'' Id.
    First, the OMB Bulletin directed each agency to ``develop or 
have written procedures for the approval of significant guidance 
documents,'' in order to ``ensure that the issuance of significant 
guidance documents is approved by appropriate senior agency 
officials.'' Id. at 3436, 3440. The OMB Bulletin also suggested that 
each significant guidance document adhere to the following:
    a. Include the term ``guidance'' or its functional equivalent;
    b. Identify the agenc(ies) or office(s) issuing the document;
    c. Identify the activity to which and the persons to whom the 
significant guidance document applies;
    d. Include the date of issuance;
    e. Note if it is a revision to a previously issued guidance 
document and, if so, identify the document that it replaces;
    f. Provide the title of the document, and any document 
identification number, if one exists;
    g. Include the citation to the statutory provision or regulation 
(in Code of Federal Regulations format) which it applies to or 
interprets; and
    h. Not include mandatory language such as ``shall,'' ``must,'' 
``required'' or ``requirement,'' unless the agency is using these 
words to describe a statutory or regulatory requirement, or the 
language is addressed to agency staff and will not foreclose agency 
consideration of positions advanced by affected private parties.

Id. at 3440.
    Finally, the OMB Bulletin suggested that each agency establish 
procedures for improving public access and feedback for significant 
guidance documents. In the case of ``economically significant 
guidance documents,'' these suggestions included following notice-
and-comment procedures in certain cases. Id. at 3438.
    The OMB Bulletin was limited in two important ways. First, it 
only applied to the issuance of ``significant guidance documents'' 
by Executive Branch agencies. Id. at 3432. This was defined as a 
``document disseminated to regulated entities or the general public 
that may reasonably be anticipated to: (i) Lead to an annual effect 
on the economy of $100 million or more or adversely affect in a 
material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or 
State, local, or tribal governments or communities; (ii) create a 
serious inconsistency or otherwise interfere with an action taken or 
planned by another agency; (iii) materially alter the budgetary 
impact of entitlements, grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (iv) raise novel 
legal or policy issues arising out of legal mandates[.]'' Id. at 
3439.
    Second, the OMB Bulletin did not create any means of review or 
redress should agencies choose to disregard it. Id. at 3439. Under a 
heading entitled ``Judicial Review,'' the Bulletin provided that it 
was meant only ``to improve the internal management of the Executive 
Branch and is not intended to, and does not, create any right or 
benefit, substantive or procedural, enforceable at law or in equity, 
against the United States, its agencies or other entities, its 
officers or employees, or any other person.'' Id. Although DOE 
identifies guidance documents on its website,\1\ it has not taken 
any steps toward forswearing the issuance of guidance documents that 
support new or amended rights or obligations created outside of the 
rulemaking process.
---------------------------------------------------------------------------

    \1\ See https://www.directives.doe.gov/guidance#b_start=0.
---------------------------------------------------------------------------

2. The Justice Department's 2017 and 2018 Policy Memoranda

    Following the OMB Bulletin's lead more than a decade later, on 
November 16, 2017, Attorney General Jeff Sessions issued a 
memorandum for all Justice Department components entitled 
Prohibition on Improper Guidance Documents (Sessions Memo). This 
memo immediately prohibited all Department of Justice components 
from issuing agency guidance documents that ``purport to create 
rights or obligations binding on persons or entities outside the 
Executive Branch.'' Id. at 1, available at https://www.justice.gov/opa/press-release/file/1012271/download.
    The Sessions Memo explained that ``the Department has in the 
past published guidance documents--or similar instruments of future 
effect by other names, such as letters to regulated entities--that 
effectively bind private parties without undergoing the rulemaking 
process.'' It also explained that guidance documents might 
improperly ``be used for the purpose of coercing persons or entities 
outside the federal government into taking any action or refraining 
from taking any action beyond what is required by the terms of the 
applicable statute or regulation.'' This practice often evaded 
``notice-and-comment'' rules ``required by law,'' and deprived the 
agencies ``of more complete information about a proposed rule's 
effects than the agency could ascertain on its own.'' Id.
    The new policy prohibited any agency operating within the 
Department of Justice from using regulatory guidance ``as a 
substitute for rulemaking.'' As such, guidance documents would no 
longer be promulgated that either ``impose new requirements on 
entities outside the Executive Branch,'' or ``create binding 
standards by which the Department will determine compliance with 
existing regulatory or statutory requirements.'' Future guidance 
documents would only be issued to ``educate regulated parties 
through plain-language restatements of existing legal requirements 
or provide non-binding advice on technical issues through examples 
or practices to guide the application or interpretation of statutes 
and regulations.'' Id.
    To support these goals, Attorney General Sessions set out the 
following five ``principles'' to which all components ``should 
adhere'' ``when issuing guidelines'':
    [1] Guidance documents should identify themselves as guidance, 
disclaim any force or effect of law, and avoid language suggesting 
that the public has obligations that go beyond those set forth in 
the applicable statutes or legislative rules.
    [2] Guidance documents should clearly state that they are not 
final agency actions, have no legally binding effect on persons or 
entities outside the federal government, and may be rescinded or 
modified in the Department's complete discretion.
    [3] Guidance documents should not be used to for the purpose of 
coercing persons or entities outside the federal government into 
taking any action or refraining from taking any action beyond what 
is required by the terms of the applicable statute or regulation.
    [4] Guidance documents should not use mandatory language such as 
``shall,'' ``must,'' ``required,'' or ``requirement'' to direct 
parties outside the federal government to take or refrain from 
taking action, except when restating--with citations to statutes, 
regulations, or binding judicial precedent--clear mandates contained 
in a statute or regulation. In all cases, guidance documents should 
clearly identify the underlying law that they are explaining.
    [5] To the extent guidance documents set out voluntary standards 
(e.g., recommended practices), they should clearly state that 
compliance with those standards is voluntary and that noncompliance 
will not, in itself, result in any enforcement action.

Id. at 2.
    The memo also defined ``guidance documents'' to include ``any 
Department statements of general applicability and future effect, 
whether styled as guidance or otherwise that are designed to advise 
parties outside the federal Executive Branch about legal rights and 
obligations falling within the Department's regulatory or 
enforcement authority.'' Id. Notably, this definition excluded 
``internal directives [and] memoranda.'' Id. at 2-3. In accordance 
with this new policy, the Attorney General also directed the Justice 
Department's Regulatory Reform Task Force ``to work with components 
to identify existing guidance documents that should be repealed, 
replaced, or modified in light of these principles.'' Id. at 2.
    Finally, the memo made clear that it ``is an internal Department 
of Justice policy directed at Department components and employees. 
As such, it is not intended to, does not, and may not be relied upon 
to, create any rights, substantive or procedural, enforceable at law 
by any party in any matter civil or criminal.'' Id. at 3.
    Just over a month later, the Attorney General announced that he 
was applying his

[[Page 50797]]

November memo and ``rescinding 25 [guidance] documents that were 
unnecessary, inconsistent with existing law, or otherwise 
improper.'' Press Release, Attorney General Jeff Sessions Rescinds 
25 Guidance Documents, Department of Justice, Office of Public 
Affairs, Press Release No. 17-1469 (Dec. 21, 2017) available at 
https://www.justice.gov/opa/pr/attorney-general-jeff-sessions-rescinds-25-guidance-documents. Then on July 3, 2018, the Attorney 
General rescinded 24 more improper guidance documents. Press 
Release, Attorney General Jeff Sessions Rescinds 24 Guidance 
Documents, Department of Justice, Office of Public Affairs, Press 
Release No. 18-883 (July 3, 2018) available at https://www.justice.gov/opa/pr/attorney-general-jeff-sessions-rescinds-24-guidance-documents. The Attorney General also said that the 
Department would ``continu[e] its review of existing guidance 
documents to repeal, replace, or modify.'' Id.
    On January 25, 2018, then Associate Attorney General Rachel 
Brand, who was the chair of the Department's Regulatory Reform Task 
Force, issued a memorandum entitled Limiting Use of Agency Guidance 
Documents in Affirmative Civil Enforcement Cases (Brand Memo), for 
all Justice Department litigators. This memo echoed the Sessions 
Memo's concerns that Justice Department agencies had previously 
issued ``guidance documents that purport to create rights or 
obligations binding on persons or entities outside the Executive 
Branch.'' Id. at 1, available at https://www.justice.gov/file/1028756/download.
    AAG Brand therefore directed that for all affirmative civil 
enforcement (ACE) cases, ``the Department may not use its 
enforcement authority to effectively convert agency guidance 
documents into binding rules.'' Id. at 2. To accomplish this goal, 
the Brand Memo went farther than the Sessions Memo and applied to 
``guide Department litigators in determining the legal relevance of 
other agencies' guidance documents,'' including the Department of 
Energy. Id. at 1 (emphasis added). Further, ACE litigators were also 
prohibited from ``us[ing] noncompliance with guidance documents as a 
basis for proving violations of applicable law.'' Id. at 2. ``That a 
party fails to comply with agency guidance expanding upon statutory 
or regulatory requirements does not mean that the party violated 
those underlying legal requirements; agency guidance documents 
cannot create any additional legal obligations.'' Id.
    As with the Sessions Memo, the Brand Memo contained an elaborate 
disclaimer carefully setting out that it had no binding effect on 
any party outside the Department of Justice. ``As such, it is not 
intended to, does not, and may not be relied upon to, create any 
rights, substantive or procedural, enforceable at law by any party 
in any matter civil or criminal.'' Id.

3. The 2019 Guidance on Compliance With the Congressional Review Act 
Memorandum

    On April 11, 2019, OMB issued a memorandum to all heads of 
executive departments and agencies, directing them to abide by their 
Congressional Review Act (CRA) obligations. Office of Mgmt. & 
Budget, Executive Office of the President, Guidance on Compliance 
with the Congressional Review Act, No. M-19-14, at 1 (Apr. 11, 2019) 
(OMB Memo). Among other things, the CRA establishes a process by 
which Congress, typically through notification by the Office of 
Information and Regulatory Affairs (OIRA) and the Government 
Accountability Office (GAO), may exercise direct oversight of 
agencies by resolving to disapprove of agencies' proposed major 
rulemaking. See 5 U.S.C. 801(b). At first glance, it may seem 
peculiar that OMB would have to ``reinforce[] the obligations of 
Federal agencies[,]'' but agencies have been disregarding their 
statutory rulemaking obligations with impunity for years. See OMB 
Memo at 1, 2 (emphasis added). In fact,
    OIRA does not consistently receive from agencies the information 
necessary to determine whether a rule is major, in part because some 
regulatory actions are rules under the CRA are not submitted to OIRA 
through the centralized review process of Executive Order 12866.

Id. at 4.
    The OMB Memo reaffirmed ``the broad applicability of the CRA to 
all Federal agencies and a wide range of rules[.]'' Id. at 2. It 
also noted that the CRA adopts the APA's ``expansive definition of 
`rule.''' Id. Thus, the OMB Memo concluded that
    [t]he CRA applies to more than just notice-and-comment rules; it 
also encompasses a wide range of other regulatory actions, 
including, inter alia, guidance documents, general statements of 
policy, and interpretive rules.

Id. at 3 (citing 5 U.S.C. 551(4)). Effective May 11, 2019, all 
proposed rules--whether the agency believes a rule to be major or 
minor or legislative or interpretive--must be submitted to OIRA for 
review. See id. at 5. This mandatory reporting requirement 
encompasses all guidance--including DOE guidance--that alters the 
legal duties of private parties.

4. The 2019 Kisor v. Wilkie, Secretary of Veterans Affairs Decision

    On June 26, 2019, the Supreme Court decided Kisor v. Wilkie, 
Secretary of Veterans Affairs. Announcing the judgment of the Court, 
Justice Kagan's plurality opinion reiterated the Court's long-
standing view that rulemaking under APA Section 553 ``mandates that 
an agency use notice-and-comment procedures before issuing 
legislative rules.'' Kisor v. Wilkie, No. 18-15, 588 U.S. ____, slip 
op. at 22 (2019). An agency may avoid notice-and-comment procedures 
only where a proposed rule is interpretive and ``not supposed to 
`have the force and effect of law'--or, otherwise said, to bind 
private parties.'' Id. ``[I]nterpretive rules are meant only to 
`advise the public' of how the agency understands, and is likely to 
apply, its binding statutes and legislative rules.'' Id. Since 
interpretive rules ``never'' form the basis of enforcement actions, 
courts cannot--and will not--attribute the force of law to 
interpretive rules. See id. at 23. Thus, when reviewing agency 
action, courts ``must heed the same procedural values as [APA] 
Section 553 reflects[,]'' when considering whether the agency has 
issued ``authoritative and considered judgments.'' See id. These 
principles are part of the foundation of administrative law. See, 
e.g., Perez, 135 S.Ct. at 12003-04.

5. Current Status of Guidance and the Department of Energy

    The Sessions and Brand Memoranda are unequivocal--Executive 
Branch departments and agencies must cease the unconstitutional 
practice of issuing guidance as a means of avoiding notice-and-
comment procedures when promulgating substantive rules. Indeed, as 
the Kisor plurality stated, ``[n]o binding of anyone occurs merely 
by [an] agency's say-so.'' Kisor, 139 S. Ct. at 2420. Despite this 
admonishment and current Justice Department directives, DOE's 
pending notices of rulemaking do not include a proposed rule that 
would unequivocally and permanently bind the Department in a manner 
consistent with the Justice Department Memoranda.
    The DOE's dilatory approach to cementing the Justice 
Department's directive is puzzling given DOE's commitment to 
regulatory reform, as evidenced by the Department's request for 
public comment on implementing Executive Order 13771, its final 
report on Executive Order 13783, and Secretary Perry's December 7, 
2017 directive to each Departmental element to identify areas for 
regulatory reform. While regulatory redesign is laudable, these 
actions do not address the Department's past, present, or future use 
of guidance. Indeed, the Department's regulatory reform and 
deregulatory initiatives, while important, are only one component of 
the Administration's larger strategy to reform the regulatory 
landscape and the relationship between the regulators and the 
regulated. The other co-equal regulatory reform component is 
transparent, open, and accountable notice-and-comment rulemaking 
where agencies seek to create, define, and regulate the rights, 
duties, and powers of private parties. In fact, to call this 
regulatory ``reform'' may be a bit of a misnomer, as the Supreme 
Court has long held that agencies cannot avoid notice-and-comment 
procedures when promulgating substantive rules because such 
procedures ``were designed to assure fairness and mature 
consideration of rules of general application.'' See NLRB v. Wyman-
Gordon Co., 394 U.S. 759, 764 (1969).

C. The Rule Is Necessary Because Meta-Guidance Is Insufficient

    Given the legal background just discussed, the various reform 
efforts outlined above are extremely important measures to rein in 
the improper use of guidance documents. The 2007 OMB Bulletin and 
2019 Memo, in conjunction with the Sessions and Brand Memos, clearly 
identify some of the worst features of the guidance problem and 
provide a good start for the broader regulatory reform effort. 
Unfortunately, even these documents do not go far enough to combat 
the pernicious harms caused by binding guidance, primarily because 
they constitute, at most, mere ``guidance on guidance.''
    While these meta-guidance documents advance essential points, 
and identify regulatory pathologies, they ultimately constitute 
nothing more than temporary

[[Page 50798]]

policy announcements within their supervised agencies. Hence, they 
should not be the sole model for DOE's reform efforts. To solve the 
underlying problems completely, DOE should issue binding and final 
rules prohibiting any Department component from issuing, relying on, 
or defending improper agency guidance.\2\
---------------------------------------------------------------------------

    \2\ The proposed internal rule would be controlling only within 
DOE and is not strictly a ``substantive'' or ``legislative'' rule as 
that term is otherwise used in this document. NCLA invokes the 
Secretary's authority ``to prescribe regulations for the government 
of his department, the conduct of its employees, the distribution 
and performance of its business, and the custody, use, and 
preservation of its records, papers, and property.'' 5 U.S.C. 301. 
Such rules should be considered ``housekeeping'' rules that have a 
controlling effect within DOE but cannot bind parties outside DOE 
without an additional grant of rulemaking authority. See Chrysler 
Corp. v. Brown, 441 U.S.281, 283, 309 (1979) (describing section 301 
as a ``housekeeping statute'' and ``simply a grant of authority to 
the agency to regulate its own affairs.'').
---------------------------------------------------------------------------

    The first and most significant problem with the previously-
issued meta-guidance documents is that they lack any permanent or 
binding effect. Even though the 2007 OMB Bulletin was issued 
following notice-and-comment proceedings, it nevertheless serves 
only as a guide for good agency practice in future contexts. It 
provides non-binding suggestions for good practice, and specifically 
disclaims the creation of ``any right or benefit, substantive or 
procedural, enforceable at law or in equity, against the United 
States, its agencies or other entities, its officers or employees, 
or any other person.'' OMB Bulletin, 72 FR at 3439. In other words, 
to the extent that the OMB Bulletin might be ignored, an affected 
party has no means of redress.
    Notably, since the OMB Bulletin was issued, Executive Branch 
agency action has been promulgated in apparent defiance of the 
Bulletin. See, e.g., Elec. Privacy Info. Ctr., 653 F.3d at 8 
(invalidating Department of Homeland Security rule as legislative 
rule that failed to comply with APA notice-and-comment 
requirements); Hemp Indus. Ass'n, 333 F.3d at 1091 (same for DEA 
rule); Texas v. United States, 201 F. Supp. 3d at 825 (N.D. Tex. 
2016) (same for Department of Education rule). Further, to the 
extent that improper guidance may escape judicial review for other 
reasons, one may only guess how many other improper guidance 
documents have been issued notwithstanding the Bulletin. See, e.g., 
Soundboard Ass'n, 888 F.3d at 1271-73 (agency documents issued in 
2009 and 2016 could not be reviewed even if ``regulated entities 
could assert a dramatic impact on their industry'' resulting from 
the documents).
    The Sessions and Brand Memos suffer from this same defect. In 
fact, both disclaim that those documents even rise to the level of 
``guidance'' and insist instead that they are mere ``internal 
directives [and] memoranda.'' Sessions Memo at 2-3; Brand Memo at 1. 
Thus, to the extent offices or individuals within the Department of 
Justice ignore these guidelines, they could ``not be relied upon to 
create any rights, substantive or procedural, enforceable at law by 
any party in any matter civil or criminal.'' Sessions Memo at 3; 
Brand Memo at 2.
    Although these memos constitute noble policy goals, they could 
also be immediately rescinded at any time--without seeking any input 
from affected entities. While the OMB Bulletin followed notice-and-
comment procedures, it was not required to do so because it was not 
a binding legislative rule. See 5 U.S.C. 553(b). If a new 
administration wants to rescind it, it can do so without any formal 
procedures. See Perez, 135 S. Ct. at 1203 (agency action not subject 
to mandatory notice-and-comment procedures may be altered or 
rescinded at will). The Sessions and Brand Memos could also be 
rescinded with little notice or fanfare.
    Moreover, none of these efforts solved the underlying problem. 
Even when improperly issued, defective guidance documents evaded 
judicial review--and continue to do so. Even where ``regulated 
entities could assert a dramatic impact on their industry,'' and 
even when such agency guidance is improper legislative rulemaking, 
it may nevertheless escape judicial review as non-final action. See 
Soundboard Ass'n, 888 F.3d at 1272. If an agency action also 
violates the OMB Bulletin, the result remains the same. The 
inability to subject such actions to judicial review can have 
momentous, and even disastrous, consequences for regulated 
industries that might ``feel pressure to voluntarily conform their 
behavior because the writing is on the wall.'' Nat'l Mining Ass'n, 
758 F.3d at 253.
    Finally, even to the extent that the documents genuinely confine 
improper rulemaking, each contains significant limitations to its 
scope. The OMB Bulletin only applies to ``significant guidance'' 
documents issued by the limited number of ``Executive Branch 
departments and agencies,'' not to independent agencies. OMB 
Bulletin, 72 FR at 3433, 3436. Similarly, the Sessions Memo only 
applies to a subset of Department of Justice actions. Sessions Memo 
at 1. And while the Brand Memo has some effect when external agency 
guidance documents are relevant to DOJ action, it is still confined 
to an extremely narrow class of future ``affirmative civil 
enforcement'' cases. Brand Memo at 1.
    The 2019 OMB Memo, however, is much broader in scope--it seeks 
to stop unlawful agency rulemaking Executive Department-wide. As 
such, it could rectify the shortcomings of the Sessions and Brand 
Memos, but it is not clear what enforcement mechanisms will be in 
place, if any, to ensure that departments and agencies comply. 
Moreover, DOE does not have a policy or rule in place that 
contemplates OIRA's review of all proposed departmental action, as 
mandated by the 2019 OMB Memo. Only a new rule binding DOE and its 
various components can assure regulated parties that the Department 
will refrain from the improper use of guidance in the future. For 
that reason, Petitioner has provided the text for an adequate and 
effective rule below.

D. Text of the Proposed Rule

    While the most effective, efficient, and logical way to promote 
the following rule would be to do so at the departmental level, the 
following text could readily be adapted by individual Department 
offices and administrations wishing to pursue reform on their own, 
if necessary.

Section 1: Congressional Review Act Compliance

    a. The Department of Energy and its offices and administrations 
(``DOE'' or ``Department'') will comply with all Congressional 
Review Act, 5 U.S.C. 801-808, requirements for review of all 
proposed regulatory actions, including, but not limited to, 
legislative rules, regulations, guidance documents, general 
statements of policy, and interpretive rules.
    b. All proposed regulatory actions that DOE submits to the 
Office of Information and Regulatory Affairs (``OIRA'') pursuant to 
Executive Order 12866, will include:
    i. A DOE-proposed significance determination; and
    ii. a DOE-proposed determination as to whether the regulatory 
action meets the definition of a ``major rule'' under 5 U.S.C. 
804(2).
    c. Where proposed regulatory actions would not meet Executive 
Order 12866's OIRA review requirement, and where the category of 
regulatory action had not been previously designated as 
presumptively not-major by OIRA, the Department will notify OIRA of 
the proposed regulatory action in writing. The written notification 
to OIRA will include:
    i. DOE's summary of the proposed regulatory action;
    ii. DOE's assessment as to the nature of the proposed regulatory 
action, including, but not limited to, whether the action is 
legislative or interpretive and whether it is applicable to the 
Department or to private parties outside the Department; and
    iii. DOE's recommended designation of the regulatory action as a 
major rule or not, as defined by 5 U.S.C. 804(2).
    d. If OIRA designates DOE's proposed regulatory action as a 
possible major rule, the Department will:
    i. Submit the proposed regulatory action to OIRA for CRA review 
at least 30 days before the Department publishes the proposed rule 
in the Federal Register or otherwise publicly releases the rule;
    ii. submit an analysis sufficient to allow OIRA to make its 
major rule determination. This analysis should include, but not be 
limited to, information regarding the degree of uncertainty 
concerning the regulatory action's impacts; and
    iii. provide all required information, analysis, and 
documentation to OIRA in a manner consistent with the principles and 
metrics enunciated in OMB Circular A-4 (Sept. 17, 2003) and Part IV 
of OMB Memorandum M-19-14 (Apr. 11, 2019).
    e. If OIRA designates the proposed regulatory action not-major, 
the Department may proceed with its rulemaking procedures without 
submitting a CRA report to Congress.
    f. If OIRA designates the proposed regulatory action a major 
rule, the Department will:
    i. Submit a CRA report to Congress and the Comptroller in 
accordance with the provisions of 5 U.S.C. 801(a);
    ii. publish the major rule in the Federal Register; and

[[Page 50799]]

    iii. delay the effective date of the major rule for 60 days 
after the later of the major rule's submission to Congress or its 
Federal Register publication date.
    g. All DOE rules will include the following statement: 
``Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this 
rule as [a `major rule' or not a `major rule'], as defined by 5 
U.S.C. 804(2).''

Section 2: Requirements for Issuance of Legislative Rules

    a. Neither the Department of Energy nor any office operating 
within the Department may issue any ``legislative rule'' without 
complying with all requirements set out in 5 U.S.C. 553.
    b. Any pronouncement from the Department or any office operating 
within DOE that is not a ``legislative rule'' must:
    i. Identify itself as ``guidance'' or its functional non-
legislative equivalent, or as an internal DOE regulation as 
authorized by applicable enabling legislation;
    ii. Disclaim any force or effect of law;
    iii. Prominently state that it has no legally binding effect on 
persons or entities outside DOE;
    iv. Not be used for purposes of coercing persons or entities 
outside the Department or office itself into taking any action or 
refraining from taking any action beyond what is already required by 
the terms of the applicable statute; and
    v. Not use mandatory language such as ``shall,'' ``must,'' 
``required,'' or ``requirement'' to direct parties outside the 
federal government to take or refrain from taking action, except 
when restating--with citations to statutes or binding judicial 
precedent--clear mandates contained in a statute.
    c. A regulated entity's noncompliance with any agency 
pronouncement other than a ``legislative rule,'' issued from any 
agency (whether or not the agency or office is operating within the 
Department), may not be considered by any entity within DOE in 
determining whether to institute an enforcement action or as a basis 
for proving or adjudicating any violation of applicable law.
    d. No office operating within the Department may apply any 
``legislative rule,'' as defined by this rule, issued by DOE or any 
other agency, no matter how styled, which has not complied with all 
requirements set out in 5 U.S.C. 553.
    e. No office operating within the Department may defend the 
validity of any ``legislative rule,'' as defined by this rule, 
issued by DOE or any other agency, no matter how styled, which has 
not complied with all requirements set out in 5 U.S.C. 553, in any 
court or administrative proceeding.

Section 3: Judicial Review

    a. Any ``interested party'' may petition any office operating 
within the Department to determine whether a prior agency 
pronouncement, no matter how styled, is a ``legislative rule'' as 
defined by this rule.
    b. Such a petition for review shall be filed in writing with the 
agency or office, pursuant to the procedures set out in compliance 
with 5 U.S.C. 553(e).
    c. Any office operating within the Department must respond to 
such a petition for review within 60 calendar days of receipt of the 
petition.
    d. The office operating within the Department must respond by 
either:
    vi. Rescinding the prior Department pronouncement; or
    vii. Denying the petition for review on the basis that the 
Department pronouncement under review did not constitute a 
``legislative rule,'' or on the basis that the Department 
pronouncement was adopted in compliance with the requirements set 
out in 5 U.S.C. 553.
    e. Any agency determination under section (d) must be made in 
writing and must be promptly made publicly available and must 
include a formal statement of reasons for determining that the 
pronouncement under review does or does not constitute a 
``legislative rule,'' or does or does not comply with 5 U.S.C. 553.
    f. If the office fails to respond to a petition for review 
within the 60-day period, such an action shall constitute a denial 
of the petition on the basis that the Department pronouncement under 
review did not constitute a ``legislative rule.''
    g. If any Department or office pronouncement is determined to 
not be a ``legislative rule'' under parts (d), (e) or (f), DOE shall 
promptly announce that the pronouncement has no binding force.
    h. Any DOE pronouncement, action or inaction set out in parts 
(d), (e), (f) or (g), shall constitute final agency action under 5 
U.S.C. 704, and shall be subject to review pursuant to 5 U.S.C. 702.
    i. For purposes of this rule, no matter how styled or when 
issued and irrespective of any other Department determination, the 
issuance of any ``legislative rule'' by any office operating within 
the Department shall be deemed final agency action under 5 U.S.C. 
704.

Section 4: Definitions

    a. For purposes of this rule, the term ``legislative rule'' 
means any pronouncement or action from any DOE office that purports 
to:
    i. Impose legally binding duties on entities outside the DOE;
    ii. Impose new requirements on entities outside DOE;
    iii. Create binding standards by which DOE will determine 
compliance with existing statutory or regulatory requirements; or
    iv. Adopt a position on the binding duties of entities outside 
DOE that is new, that is inconsistent with existing regulations, or 
that otherwise effects a substantive change in existing law;
    b. For purposes of this rule, the term ``interested person'' has 
the same meaning used in 5 U.S.C. 553, 555; provided that a person 
may be ``interested'' regardless of whether they would otherwise 
have standing under Article III of the United States Constitution to 
challenge an agency action.\3\
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    \3\ See Animal Legal Def. Fund, Inc. v. Vilsack, 237 F. Supp. 3d 
15, 21 (D.D.C. 2017) (Cooper, J.) (a party may be an ``interested 
person'' under the APA even without Article III standing).
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E. Benefits of the Rule

    The proposed rule furthers the policy objectives of the OMB 
Bulletin and Memo, the Sessions and Brand Memos, and the 
Department's own regulatory reform efforts, but it also addresses 
the significant limitations of those reforms. The proposed rule will 
establish DOE's position that all binding guidance is unlawful, and 
where DOE must act at the behest of Congress to promulgate rules 
that will have the force of law, it may only do so through APA 
notice-and-comment procedures.
    Substantively, many of the proposed rule's edicts are found 
either in existing law or the OMB Bulletin, the OMB Memo, and 
Sessions and Brand Memos. Consistent with these sources, Section 
4(a) adopts a comprehensive definition of the term ``legislative 
rule,'' which accurately encompasses the binding and coercive nature 
of such agency action, regardless of how it might be styled. Section 
2(b) also adopts clear rules for how DOE actions must be undertaken 
and prohibits improper attempts at evading more formal rulemaking 
procedures.
    The proposed rule also fixes the gaps in those other policy 
statements. First, and most significantly, as a final rule, the 
proposed rule is binding and may not be rescinded at will. Section 
2(a) directs that DOE may not bypass formal procedures when issuing 
legislative rules. Section 2(b) further sets out mandatory 
requirements for informal Department action. Section 2(c) also 
forbids improper coercive action. To that end, this section 
prohibits the Department from considering a party's decision to 
abstain from non-binding suggestions in guidance as somehow 
constituting evidence of a violation of an actual legal obligation, 
or as a basis for instituting an enforcement action. Section 2(d) 
prohibits the Department from applying any agency's legislative 
rules that do not conform to 5 U.S.C. 553. Finally, Section 2(e) 
prohibits the Department from defending the validity of improper 
agency guidance, whether or not it was promulgated within DOE. These 
requirements are binding on the covered entities.
    Critically, this proposed rule also creates a means to enforce 
these requirements, which applies to both new rules and those 
already in existence. Section 3 empowers interested parties to alert 
DOE to improper guidance, whenever issued, and it allows DOE or 
office to rescind such action without complication. This provision 
efficiently allows those most affected by agency action to share 
their institutional knowledge with DOE, and it also allows the DOE 
to correct improper actions efficiently.
    But if this voluntary process falls short, Section 3 also allows 
an interested person the opportunity to petition for judicial 
review. If DOE believes that its action is appropriate under this 
rule, it need only say so pursuant to Section 3(d) and explain why 
its action does not constitute improper legislative rulemaking. 
Sections 3(d), (e), (f) and (h) set out a process by which a court 
may decide this legal issue on the merits. Sections 3(g) and (h) 
also resolve the difficult finality question that commonly allows 
improper legislative rulemaking to evade judicial oversight. Section 
3(g) designates DOE's

[[Page 50800]]

decision on a petition for review as final, thus establishing a 
concrete cause of action. Section 3(h), meanwhile, resolves the 
problem that may exist when agency action is improperly binding, but 
nevertheless evades review because it is not yet final, by deeming 
any binding action necessarily one that is also final.\*\
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    \*\ NCLA gratefully acknowledges the contribution of former 
Senior Litigation Counsel Rick Faulk to this petition.
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VI. Conclusion

    Americans should never be ``at the mercy'' of the whims of 
administrative agencies, set out in extralegal and extortionate 
``guidance'' for approved behavior. Hamburger, supra, at 260. 
Purportedly binding rules masquerading as guidance are unlawful and 
unconstitutional and are among the very worst threats to liberty 
perpetrated by the administrative state. The Department of Energy 
should enact clear rules that respect the limits set by the 
Constitution, the APA, and all other statutes applicable to DOE 
regarding procedures for promulgating substantive, legislative 
rules. The Department should therefore prohibit the issuance, 
reliance on, or defense of improper agency guidance, and promulgate 
the proposed rule set out in this Petition.


Sincerely,

Steven M. Simpson, Senior Litigation Counsel.

Mark Chenoweth,
General Counsel.

New Civil Liberties Alliance, 1225 19th Street NW, Suite 450, 
Washington, DC 20036, [email protected], (202) 869-5210.

[FR Doc. 2019-20540 Filed 9-25-19; 8:45 am]
 BILLING CODE 6450-01-P