Seyfarth Synopsis: The regulated community had a pleasant surprise from President Trump this week. The President issued two executive orders that have the stated intent to make closeted or last minute agency guidance and interpretations of federal rules a thing of the past. The orders require notice and publication of the guidance and interpretations along with the creation of comprehensive online databases where they may be easily searched out and found.
President Trump, in another business friendly action, issued two executive orders this week. They were the Executive Order on Promoting the Rule of Law Through Improved Agency Guidance Documents (Executive Order on Guidance Documents), and the Executive Order on Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication (Executive Order on Transparency). In the President’s Remarks, he noted that “today, we take bold, new action to protect Americans from out-of-control bureaucracy and stop regulators from imposing secret rules and hidden penalties on the American people.”
Many agencies, including the U.S. Environmental Protection Agency, the Occupational Safety and Health Administration, and the Department of Labor utilize guidance documents to provide the public, as well as agency enforcement and litigation personnel, with the agency’s interpretation of a policy, procedure or regulation.
The President indicated that the Orders were intended to improve public access to internal agency guidance documents and to protect the public from previously-undisclosed interpretations of regulations. While Courts have been clear that agency guidance documents do not carry the force of law, the U.S. Supreme Court recently upheld judicial use of so-called Auer and Seminole Rock deference – a topic which we have blogged about extensively. While a guidance document itself cannot be legally binding, it could potentially provide an agency an avenue to argue that its interpretation should be accorded judicial deference. This potential argument is addressed in the Executive Order on Transparency, which prevents an agency for arguing that an unpublished guidance document should be accorded deference.
Major changes that the regulated community may look forward to include, from the Executive Order on Guidance Documents, Section 3, Ensuring Transparent Use of Guidance Documents:
(a) Within 120 days of the date on which the Office of Management and Budget (OMB) issues an implementing memorandum under section 6 of this order, each agency or agency component, as appropriate, shall establish or maintain on its website a single, searchable, indexed database that contains or links to all guidance documents in effect from such agency or component. The website shall note that guidance documents lack the force and effect of law, except as authorized by law or as incorporated into a contract.
In Section 5 of the Executive Order on Transparency:
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).