Regulated Entities: It’s Time to Speak Up if You Don’t Like How Federal Agents Come Knocking
Federal officials often conduct unannounced, sometimes intrusive inspections of regulated entities, which can be a major disruption to companies’ operations and has historically left them with little to do about it but wait for the interruption to pass – until now. The Office of Management and Budget (OMB) and the U.S. Environmental Protection Agency (EPA) recently issued two documents aimed at improving the efficiency and normalizing the process of conducting environmental inspections and investigations.
Building on Executive Order 13892, the OMB recently published a request for information to “identify additional reforms that will ensure adequate due process in regulatory enforcement and adjudication.” Additionally, the federal EPA proposed a rule on “On-Site Civil Inspection Procedures” applicable to the federal-EPA credentialed personnel and contractors who conduct site inspections.
In the OMB request for information, the OMB seeks feedback on topics such as how to speed up regulatory investigations; how to coordinate investigations on related conduct between agencies; whether the legal principle of res judicata should apply in the regulatory context; whether administrative adjudications are separate enough from administrative enforcement personnel to protect due process; and whether agency adjudicatory personnel are viewed as politically accountable.
In the EPA informal rule scheduled to be published on March 2, 2020, the EPA seeks to provide direction to agency personnel on how to conduct on-site civil administrative inspections. In general, the informal rule calls for inspections to be conducted during a facility’s normal work hours; for inspectors to have appropriate credentials; and for conferences to be held with on-site personnel to better plan the visit at the beginning and end of any inspection. Similarly, the EPA’s proposed rule seeks to define what records can be requested and how samples can be collected.
As further background, most of the major environmental statutes explicitly grant broad investigatory authority. In the environmental context, requests for information and site inspections can be used to assess both past conduct and ongoing compliance with laws, regulations, and permits. As an example, under CERCLA, requests for information can be voluminous and require collection, review, and production of information dating back more than a century in volumes mirroring large-scale civil litigation. Under other environmental statutes, EPA inspectors or contractors can show up unannounced at operating facilities and potentially disrupt operations.
Broad regulatory reform has been a major focus in the past few years. Last year, the President issued Executive Order 13892, Promulgating the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication. The purposes of this order were expressed as follows:
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.
Regulated entities have until March 16 to share responses to the OMB request. Because the EPA rule is informal, the EPA is not soliciting comments at this time.