Government procedural reform might not sound the most riveting, but it touches more people’s lives than you might imagine. When it comes to the processes federal agencies use to issue their regulations, it can have big impacts on ranchers.
As covered in last week’s paper, President Donald Trump signed a pair of executive orders on Wednesday, Oct. 9 aimed at reining in the federal agencies’ regulatory abilities and make the process clearer and fairer.
The two executive orders—one focused on transparency and fairness, and the other focused on guidance documents—effectively provide the White House and the Office of Management and Budget (OMB) with a process to more closely oversee regulatory efforts by federal agencies.
The executive order focused on guidance documents especially laid out a new regulatory process.
“It doesn’t limit their power to issue rules or guidances, but it changes the process in important ways,” explained Jonathan Wood, senior attorney with the Pacific Legal Foundation and an adjunct fellow with the Property and Environment Research Center. WLJ reached out to Wood as a topic expert regarding agency-related lawsuits and related legal processes.
“They can still [issue guidances], but this is trying to make it a little bit fairer process,” he went on.
“They can’t do it in secret. It has to be a public process. People have to be able to have a say. And ultimately, someone at the White House has to review the most significant guidance documents.”
For those guidance documents determined by OMB to be “significant,” a comment period of at least 30 days will be required under most circumstances. A significant guidance document is defined as one that “may reasonably be anticipated” to:
• Impact the economy by $100 million or more;
• Materially and adversely affect the economy, the environment, or public health or safety;
• “Create a serious inconsistency or otherwise interfere” with the actions of another agency;
• “Materially alter” budgetary items related to grants, fees, loans, and similar monetary issues; or
• Create “novel legal or policy issues” for individuals or the government.
Wood described the OMB oversight requirement as “sort of an extra check by someone who is more directly accountable to the president, who is accountable to the people” to make the process fairer.
Both significant and non-significant guidance documents will have to be published somewhere public—such as the issuing agency’s website or the Federal Register—and easily searchable.
Tanner Beymer, manager of government affairs for the Public Lands Council, summarized the executive orders as a “clarification to the agencies” to improve transparency to the public.
“Essentially, the crux of this is it reiterates what already should be on the books, that is, you cannot establish new agency policy or new standards for compliance within a guidance document. That has to be done through the federal rule-making process.”
Beymer opined that, had the executive orders been in place a few years ago, the on-going fight over fake meat regulatory jurisdiction might have gone differently.
“FDA asserted their authority,” he observed. “Had they done that through a similar process with a guidance document, then that would have gone to OMB. More likely than not, OMB would have ruled that substantive and opened up a comment period and that would have allowed us to get our voice on the record much earlier.
No “unfair surprises”
In addition to putting a process in place to check the regulatory efforts of the agencies, the executive order focused on transparency and fairness requires the agencies take new considerations to avoid “unfair surprises.”
“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,” read the executive order.
“An agency must avoid unfair surprise not only when it imposes penalties but also whenever it adjudges past conduct to have violated the law.”
Later the same order stated: “[B]efore 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.”
“It requires an agency that wants to bring enforcement action or threaten fines to give people notice of what the rules are, what the evidence is, why they’re accusing them of a violation, and allow an opportunity to respond,” summarized Wood.
He gave the example of a past client, Andy Johnson. Johnson and his wife had built a stock pond on his Wyoming property after getting all necessary permits from the state. Well after the pond was built, the Environmental Protection Agency claimed he had violated the Clean Water Act and threatened the Johnsons with fines of up to $37,500 a day for every day the property was not returned to its pre-pond state. By the time the issue went to court, the Johnsons faced millions in potential fines.
“[Andy Johnson] and his family were put through two-and-a-half years of sleepless nights of worry as these fines mounted,” Wood continued, calling those ever-growing fines “tremendous leverage” agencies can wield over individuals.
Woods said that, once the EPA was forced to turn over evidence supporting their claim the Johnsons had violated the Clean Water Act in the lawsuit, they were quickly able to show that was not the case.
“I don’t think his situation would have happened if this executive order were in place and followed,” Woods opined.
“The overall goal is more transparency about what the rules are and if the government should, instead of treating everyone that it’s regulating like the enemy, look to resolve things quickly and early by going to people they think have violated a regulation or guidance and say, ‘Here’s what we think you did, here’s why we think it’s illegal; what do you have to say?’”
Technicals going forward
Wood explained that while executive orders can theoretically be litigated, it is very difficult to the point of being practically unrealistic. Potential plaintiffs would have to show an executive order either violates a statute or the Constitution, or prove they were harmed. That would be very difficult with these process-focused executive orders.
Wood also explained that agencies can refuse to comply with an executive order but, since agency lawyers are part of the Department of Justice and answerable to the president, that is also unlikely. He pointed out that procedural executive orders like these provide tools that any administration can use, but does not have to.
“It is enforceable so long as there is a will to enforce it in the administration,” he said. “So if the White House has absolutely no interest in enforcing it, then, in practice, there will be little check on the agencies.”
Woods noted an unusual thing about procedural executive orders; they tend to be comparatively uncontroversial and stick around across different administrations.
“If a Democratic administration comes in, this might give them better tools to supervise the agencies if they like, so they might keep it around or strengthen it.” — Kerry Halladay, WLJ editor
