[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: http://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: http://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 http://www.regulations.gov. The http://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 http://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
http://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 http://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 http://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 http://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