EXECUTIVE ORDERS

Executive Order on Promoting the Rule

of Law Through Transparency and
Fairness in Civil Administrative
Enforcement and Adjudication
Issued on: October 9, 2019

 SHARE:

ALL NEWS
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arbitrary nature of unpublished ad hoc determinations.”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.

(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
(D.C. 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 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 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;

(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.