Ever since the Supreme Court announced the Chevron doctrine (that agency interpretations would prevail unless contradicted by statute) regulatory agencies have demanded court deference not only for their regulations and formal regulatory guidance documents, but also for internal agency memos, letters, and even emails among staff. Last week the Trump administration took steps to curtail agency overreach by issuing two Presidential Executive Orders that will bar use of documents not issued through the formal notice-and-comment rule making process.
Scores of federal court decisions, from the Supreme Court on down, have tried to sort out agency interpretations, which have the force of law, from mere opinions or musings of government employees (which do not). And, in its zeal to enforce federal regulatory requirements, both civil and criminal, the Justice Department has often put before the court or jury official-looking documents on agency letterhead that have never been publicized or scrutinized through any notice-and-comment process. Regulated companies and individuals have thus been held liable for violating standards they, and the public, never knew about and had no access to.
Consider two examples: The EPA allows each of its nine regional offices to interpret the environmental statutes, sometimes differently, meaning that compliance with requirements in one part of the country is a violation of the Clean Air Act or hazardous waste statutes in another part. Or consider that the Clean Water Act prohibits the filling of wetlands, but the definition of what is a wetland—and thus may not be disturbed without an EPA permit—is found in a manual that takes no notice of the many court interpretations of “waters of the United States,” (which includes wetlands).
Two New Executive Orders Issued
On October 9, 2019, President Trump issued two critically important Executive orders “to ensure that Americans are subject to only those binding rules imposed through duly enacted statutes or through regulations lawfully promulgated under them.” These stated, because “the rule of law requires transparency,” then “regulated parties must know in advance the rules by which the Federal Government will judge their actions.”
The first of the two orders, Executive Order 13891 titled “Executive Order on Promoting the Rule of Law Through Improved Agency Guidance Documents,” requires:
• Each federal agency or component “maintain on its website a single, searchable, indexed database that contains or links to all guidance documents in effect from such agency.”
• The website note that “guidance documents lack the force and effect of law, except as authorized by law or as incorporated into a contract.”
• Agencies must rescind those guidance documents that it determines should no longer be in effect.
• Agencies promulgate regulations for providing public notice of guidance documents, and allow the public to petition the agency to rescind improper guidance.
The second, Executive Order 13892 titled “Executive Order on Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication,” puts an end to an agency using “guidance” documents to impose new standards of conduct through judicial or regulatory enforcement actions:
• Guidance documents may not be used to impose new standards of conduct on persons outside the executive branch except as authorized by law or as incorporated into a contract.
• Agencies must establish a violation of law by applying statutes or regulations, when an agency takes an administrative enforcement action, engages in adjudication, or otherwise makes a determination with legal consequence for a person. 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.
• Agencies using a guidance document to state the legal applicability of a statute or regulation can do no more with that document, regarding prohibition of conduct, than articulate their 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 that contains a single, searchable, indexed database of all guidance documents in effect).
Together, these two new executive orders will help provide badly needed due process so often lacking of late in regulatory enforcement cases and better inform the regulated companies and individuals what is expected of them.