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Trump Signs Order Easing Regulatory Enforcement on Businesses

May 19, 2020, 11:18 PM

President Donald Trump signed an executive order Tuesday directing federal agencies to ease up on businesses that make good-faith attempts to follow agency guidance and regulations during the coronavirus pandemic.

The move is the latest effort by the administration to ease the pain on American businesses following an unprecedented downturn that has seen more than 36 million people file for unemployment. It addresses one of the leading demands of the business community, but leaves to congressional Republicans the more complicated task of negotiating greater liability protections for businesses as Congress considers another big-ticket virus-relief bill.

Trump’s order would hold back agencies like the Occupational Safety and Health Administration from bringing enforcement actions against businesses that try to keep up with evolving guidance documents. The extent to which the order would provide protection for businesses against pandemic-related liability would be limited—legislation would be needed to guard against lawsuits—but supporters say it would shield companies from fines for civil regulatory violations.

The order is likely to draw sharp criticism from Democrats and worker advocates who have accused the Trump administration of prioritizing business protections over public safety. They’ll point out that the order limits federal agencies’ enforcement of various laws and regulations, but doesn’t shield companies from being hauled into court by workers, advocacy groups, and others alleging violations of some of those same laws.

The order, for example, anticipates that the Centers for Disease Control and Prevention is likely to issue more guidance to stem the transmission of the novel coronavirus, and directs agencies to consider whether a business has made a “reasonable attempt” to comply before bringing an enforcement action.

The order also would require agencies to review the hundreds of regulations the administration has suspended in response to the public health crisis to see which could be made permanent, according to a statement by the White House Office of Management and Budget. Agencies must use any emergency and good-cause authorities they have to speed up pending rulemakings that could spur economic growth.

“And the potential is that you’re going to find regulations that nobody has ever thought of before because you’re going to be doing it yourselves,” Trump told his Cabinet during a meeting Tuesday. “And this gives you great authority to cut regulations.”

More Red-Tape Cutting

The executive order “will ask agencies to make permanent any deregulation possible, and asks them to look for more ways to deregulate to get the economy going,” acting OMB Director Russell Vought said in a statement.

That won’t be quick or easy, according to administrative law scholars. “You basically can’t do any serious deregulation except through the notice-and-comment process,” said Richard Pierce, law professor at the George Washington University Law School.

Permanently eliminating any significant regulation requires a lengthy rulemaking process, where agencies must develop a regulatory impact analysis and legal justification, and submit the rule to a public comment period and review by OMB’s Office of Information and Regulatory Affairs.

In terms of enforcement, an agency cannot simply disregard a regulation, but the courts have long recognized some measure of discretion in enforcement priorities, legal experts said. Agencies previously have issued written policies of non-enforcement or intentions not to enforce certain requirements.

The Environmental Protection Agency, for example, issued a memo on March 26 announcing certain enforcement discretion for noncompliance, saying it would relax its oversight of civil violations such as compliance monitoring and reporting during the public health emergency.

“Many of these have been very good, but a presidential call for a wide-scale policy of non-enforcement would send a very strong signal to businesses that the government is not going to come down hard on them as they try to get back up and running,” said a May 5 report coordinated by the conservative Heritage Foundation.

The Supreme Court’s 1985 decision in Heckler v. Chaney basically gave a green light to agencies to exercise enforcement discretion, said Cary Coglianese, professor of law and political science at the University of Pennsylvania Law School.

“If an agency wants to just de-prioritize enforcement actions against small businesses in the coming months, that would be a pretty straightforward and legally clear path for the administration to take,” Coglianese said.

Yet agencies will have to be careful that they don’t require businesses to do something to qualify for that enforcement relief, Coglianese said. One of the issues with the Obama-era Deferred Action for Childhood Arrivals program, now under consideration by the Supreme Court, was telling people they had to apply and meet certain criteria to get enforcement relief.

“And that does really begin to look a lot less like just exercising enforcement discretion and more like creating a structured rule,” Coglianese said. “That would be much more vulnerable to challenge.”

To contact the reporter on this story: Cheryl Bolen in Washington at cbolen@bgov.com

To contact the editor responsible for this story: John Lauinger at jlauinger@bloomberglaw.com

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