Executive Order No. 13892. Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication

• Citation: 84 FR 55239
• Published date: 15 October 2019
• FR Document: 2019-22624
• Pages: 55239-55243
• Executive Order No.: 13892
• Date: 09 October 2019
• Issuer: Executive Office of the President
• Section: Presidential Documents

Federal Register, Volume 84 Issue 199 (Tuesday, October 15, 2019)

[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                 arbitrary nature of unpublished ad hoc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