President Trump recently signed two executive orders relating to Agency Guidance Documents: Promoting the Rule of Law Through Improved Agency Guidance Documents (“Guidance EO”) and Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication (“Enforcement and Adjudication EO”).  In complementary ways, these two executive orders seek to clarify and limit the role of non-binding agency guidance documents.

Agencies in the executive branch adopt regulations through a formal process known as notice-and-comment rulemaking.  The procedures for notice-and-comment rulemaking are spelled out in the Administrative Procedures Act.  Broadly speaking, the APA requires that agencies provide public notice of proposed regulations, allow for a period of comment, consider and respond to comments, and publish final regulations in the Federal Register.  Notice-and-comment rulemaking is typically a lengthy process and can take several months to years to complete. 

Often agencies will attempt to clarify existing obligations through non-binding guidance documents which are exempt from APA procedures.  While agencies utilizing these documents are typically attempting to clarify existing regulations, the Guidance EO notes that agencies occasionally use this authority to create new obligations on the public, or to create an “implicit threat” for a legal basis for adjudication and enforcement. 

The Guidance EO introduces the following requirements to prevent such inappropriate use of guidance documents:

·        For existing guidance documents, each agency shall build “a single, searchable, indexed database that contains or links to all guidance documents in effect.”  The database shall note that guidance documents lack the “force and effect of law.”  Furthermore, any guidance document not in the database is presumed to be no longer in effect.

·        For new guidance documents, the Guidance EO imposes several new requirements including disclosures that the guidance document is not binding, procedures for the public to petition for withdrawal of a guidance document, and a requirement for public notice and comment for ‘significant guidance’ documents (to be further specified by OMB’s Office of Information and Regulatory Affairs).

The Enforcement and Adjudication EO clarifies the use of guidance documents when private actors are accused of violating regulations:

·        Agencies must only rely on existing statues and regulations to establish a violation of law and cannot rely on guidance documents beyond articulating the agency’s understanding of “how a statute or regulation applied to particular circumstances.”  Furthermore, all relied-upon guidance documents must be published in the Federal Register or in the above noted database.

·        Administrative enforcement actions and adjudications must rely on “standards of conduct that have been publicly stated in a manner that would not cause unfair surprise” (emphasis added).

·        Agencies cannot rely on interpretations put forth in briefs, consent decrees or settlement agreements to establish authority to pursue a new claim or jurisdiction, unless the agency publishes that document in the Federal Register or in the above noted database. 

·        Any person facing an adverse agency determination should have (with select exceptions) “the opportunity to be heard, in person or in writing, regarding the agency’s proposed legal and factual determinations.”

It remains to be seen whether this new framework helps or hinders businesses.  On one hand, regulatory text is often ambiguous and guidance documents can provide much needed clarity.  These EOs could introduce some uncertainty into that process.  For example, if any single private party petitions for withdrawal of a guidance document, the industry will be on hold pending resolution by the agency.  On the other hand, the EOs are clearly responding to concerns that agencies can sometimes create new law through interpretive documents and are putting in place important guardrails (e.g., database) to help further predictable standards.  The EOs also could further murky the waters regarding when a court will defer to an agency under the Chevron doctrine.  These and other questions undoubtedly will need to be resolved over time on a case by case basis.  Stay tuned.

Garris Horn frequently defends clients in federal and state government enforcement actions and interprets regulations and guidance from federal and state agencies.  For more information on this announcement, or to discuss related matters, contact Troy Garris directly at 301-461-8952 or troy@garrishorn.com.