Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication, 55239-55243 [2019-22624]

Agencies

• Executive Office of the President

[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                arbitrary nature of unpublished ad hoc 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 
                (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.

                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.
                    (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;

(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.
                    (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.
                    (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. 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.

                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. 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.
                    (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.

                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:

(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.

                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:

(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