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REGULATION BY INFORMATION

Regulation by Information is one of three types of Off-Register Regulation identified by the CRE. In Regulation by Information, the CRE addresses agencies' use of the internet as a powerful new regulatory tool, prompting a call for an amendment to Paperwork Reduction Act and the implementation of a Federal Data Quality Program. CRE examines important litigation that demonstrates need for Congressional revision to public oversight mechanisms.

Leave a Comment As part of the Regulation by Information initiative, the CRE will be highlighting and taking comment on developing areas of the federal regulation of information privacy. Key regulatory areas of CRE interest include:

  • Financial information;
  • Right-to-Know; and
  • Medical information.

Law Review Article Advocates More Effective EPA Regulation by Information
An article in the Harvard Environmental Law Review, by William F. Pedersen, advocates "social cost disclosure programs" as a means of regulating by information disclosure. The article defines this type of program as one that requires regulated entities to disclose information (e.g., pollutant emissions) that will urge non-federal governments to consider regulation to reduce the social cost being addressed, and will pressure the creators of that cost to consider voluntary action to reduce it. This, in other words, is regulation by information. The article, entitled "Regulation and Information Disclosure: Parallel Universes and Beyond", focuses on EPA's TRI program as an inefficient example of such a program, and provides suggestions as to how this program could be improved. The overall recommendation of the article is best summarized in its last paragraph: "Publicizing the sources of a socially undesirable activity can reduce its extent faster and less intrusively then reliance on a regulatory approach." This statement is accurate; and it emphasizes the importance of the Data Quality Act, which imposes new standards on the quality of information disseminated by federal agencies.

  • Click to read the article (2.66MB)
  • CRE Regulatory Services
  • FuelEconomyIn.US: America's Automotive Voice
    Federal regulation of SUVs and other light trucks affects virtually all Americans. However, until now, it was difficult or impossible for most citizens to effectively participate in the government's decision-making process. FuelEconomyIn.US was launched by the CRE to help grassroots stakeholders ensure that proposed new federal regulations don't strip Americans of their ability to choose, or afford, the vehicles that best meet their needs. To this end, FuelEconomyIn.US will be providing stakeholders with the information they need to make a difference in regulatory process. FuelEconomyIn.US will also be directly contacting diverse stakeholders to support their participation in the regulatory process. Please read FuelEconomyIn.US to learn more about this important project.

  • Click for FuelEconomyIn.US
  • Click to read about FuelEconomyIn.US
  • CRE Regulatory Services
  • Inaugural Edition of Atrazine.US
    Under the Data Quality Act, CRE and several agricultural groups filed a Request for Correction of certain statements in EPA's FIFRA/FQPA environmental risk assessment for atrazine. As the result of widespread interest in the Request for Correction on the part of stakeholders, CRE placed on its website a new subsite entitled Atrazine.US. The Site will serve as a central repository of views of interested stakeholders. CRE welcomes the views of the public and all stakeholders on this important issue. The Atrazine.US site will be updated continually for use by the public, stakeholders, Congress and the media.

  • Click for Atrazine.US
  • Click to read about Atrazine.US
  • CRE Petitions CIO on NIOSH Biosolids Hazard ID Document
    After receiving an unsatisfactory response to an earlier CRE letter raising data quality issues regarding HID 10 from NIOSH, CRE submitted a petition directly to the CDC and HHS Chief Information Officers alleging specific failures to comply with OMB Circular A-130 and invoking the "ombudsman" responsibilities of the CIOs under the Circular. CRE believes that this will be a useful test case for identifying specific requirements that should be included in the new rules being developed by OMB and individual agencies under the new data quality legislation.

  • Read CRE petition letter.
  • Comment on Item
  • View past CRE Regulatory Action of the Week items

    CRE Data Quality Petition to EPA on Global Climate Change
    CRE is concerned that EPA disseminates public documents (such as Federal Register notices and Internet Website pages) that lead readers to believe that we know as scientific fact that: (1) global climate change is occurring because of anthropogenic emissions of greenhouse gases; and (2) the effects will include numerous specific adverse effects on human health and the environment. CRE petitioned EPA to correct a recent Federal Register notice, by publishing a notice alerting readers about the considerable scientific uncertainties surrounding the issue of global climate change. CRE also petitioned EPA to assure that all future EPA public documents that describe potential global climate change include a statement about scientific uncertainties.

  • Read CRE's petition to EPA.
  • Read EPA's Federal Register notice.
  • Comment on Item
  • View past CRE Regulatory Action of the Week items

    CRE Seeks Public Disclosure of EPA's Multi-Pollutant Air Emission Model
    EPA is using an ICF Model to predict the economic effects of multi-pollutant air emission legislation being considered by Congress and the Administration. These modeling results could have a major impact on both the legislation and the economy. Their accuracy and reproducibility are critically important. Yet EPA has not allowed public review of and comment on the Model. Given the importance of this issue, CRE has sent EPA's Chief Information Officer a letter urging her to disclose the Model to the public. CRE has also filed a Freedom of Information Act request for the Model and related documents.

  • Click for CRE's letter to EPA's Chief Information Officer
  • Click for CRE's FOIA request
  • Comment on Item

    U.S. Chamber Supports CRE Petitions to OMB to Assert Control Over Federal Agency Abuse of Enforcement-Related "Information Demand" Letters

       EPA, the Labor Department's Office of Federal Contract Compliance Programs, the Equal Employment Opportunity Commission, and other Federal agencies have issued, or tried to issue, thousands of quasi-enforcement letters to regulated entities (and to non-regulated entities such as suppliers of equipment to EPA-regulated entities), demanding that those entities reply to numerous questions that concern compliance with legal requirements.

       CRE is concerned that agencies may be improperly invoking the Paperwork Reduction Act's statutory "enforcement exemption" to avoid prior OMB review and approval for those agency information demands. CRE believes OMB needs to clarify what evidence of a violation an agency must have before the agency properly may invoke the PRA "enforcement exemption".

       On October 16, 2000, CRE filed two petitions with the Office of Management and Budget:

    1. CRE petitioned OMB to review approximately 400 Clean Air Act (CAA) 114 information demand letters, which EPA Region V sent to industrial facilities, asking questions concerning the facilities' compliance with the "Risk Management Plan" requirements of 112(r) of the CAA. CRE asked OMB to determine whether those 114 letters are properly within the "enforcement exemption" in the PRA and whether EPA must seek OMB's prior review and clearance. The CRE petition includes a legal memorandum by Multinational Legal Services, counsel to the CRE, suggesting a specific evidentiary standard that is derived from OMB's Guidance implementing the PRA.

    2. CRE petitioned OMB to conduct a rulemaking pursuant to the Administrative Procedure Act and the PRA, to define the term "case file" as used in OMB's regulation implementing the PRA "enforcement exemption", to establish a specific evidentiary standard for when an agency may assert the PRA exemption and avoid prior OMB review and clearance.

       On December 5, 2000, the U.S. Chamber of Commerce wrote to OMB in support of both CRE petitions. The Chamber is the Nation's and the world's largest business federation and represents over 3 million businesses. 

    Click here to view the U.S. Chamber of Commerce's letter to OMB.
    Click here to view the CRE petitions and the MLS legal memorandum.


    CRE Appeals EPA's Denial of FOIA Request for Names of Facilities EPA May Be Targeting for Clean Air Act Enforcement Action
    In July 2000, CRE wrote to EPA Region V and requested, pursuant to the Freedom of Information Act, the names, addresses, and related contact information for approximately 400 industrial facilities to which EPA sent Clean Air Act 114 letters demanding the facilities submit detailed information relating to the facilities' compliance with the Risk Management Plan provisions of the Clean Air Act (CAA 112(r)). EPA Region V denied the CRE's FOIA request. On September 28, CRE filed an appeal with EPA Headquarters. CRE believes the requested information is public information under FOIA.

    Federal Regulation of Privacy
    Accessibility of non-public personal and corporate information is an area of growing federal regulatory activity. The proposed regulations governing allowable use of personal financial information by banks and affiliated institutions is only one example of the federal role in determining both the amount of privacy enjoyed by US citizens and businesses as well as the costs incurred as the result of privacy protection.

    "Regulation by Information" Prompts Call For Amendment to Paperwork Reduction Act and the Implementation of a Federal Data Quality Program
    A powerful form of regulation that has emerged during the last 15-20 years involves the government's practice of collecting and making public various types of information on private business activities. This "Regulation by Information" often puts the private entities in an unfavorable light in pursuit of a particular government policy, with the express intent that resulting public and political pressures will force desired changes in private sector behavior.

    The Regulation by Information approach has been applauded in some circles as a means of obtaining policy objectives without the need for "costly" and "time consuming" public rulemaking. Supporters of the practice often cite as a successful example of this "sunshine" regulatory practice the reported reductions in toxic emissions levels following introduction of the Toxics Release Inventory ("TRI") in 1988. See 42 U.S.C. 11023.

    Regulation by Information has taken on an entirely new dimension, however, with the emergence of the Internet. Now corporate reporting data are instantly made available worldwide once posted on any of dozens of huge government websites, postings which can happen only days after the information is conveyed to state or federal authorities. Often the company has absolutely no control over how that information is presented to the public or even whether the data are being accurately reproduced. In addition, government agencies are increasingly posting on their websites the results of scientific studies performed by various non-governmental bodies, many of which receive little independent scrutiny before being posted.

    The pace with which this new information is being submitted to and disseminated by federal agencies is outstripping existing administrative mechanisms that Congress has created to allow the public and interested stakeholders to comment on federal data collection and use. Under the Paperwork Reduction Act, for example, the public is granted two opportunities (60 days and 30 days) to review and comment on an agency's proposed "collection of information." See 44 U.S.C. 3506(c)(2), 3507(b). As discussed below, however, at least one court has ruled that these comment provisions do not apply to certain key aspects of federal agency data dissemination.

    Tozzi v. EPA: The SFIP Litigation

    One classic example of Regulation by Information was challenged in federal court in 1998. In the case of Tozzi v. EPA, (D.D.C. No. 98 CV-00169), CRE Advisory Board Member Jim Tozzi brought suit to prevent EPA's publication of certain data to the public, including publication on the Internet. EPA had assembled the data as part of a new "pilot data integration and dissemination" program called the Sector Facility Indexing Project, or "SFIP". EPA had compiled the proposed SFIP data set from previously collected TRI filings, as well as from other publicly available data that EPA had gathered through OMB-approved "collections of information."

    Mr. Tozzi and the other plaintiffs claimed that one aspect of SFIP in particular should not be published. Using a much contested logarithmic calculation -- over which EPA's own Science Advisory Board had expressed grave concerns -- EPA had proposed to publish a series of "toxicity weighting factors" as a means by which data users ostensibly could compare the relative toxicity of different reported toxic releases.

    Following briefing by the parties on plaintiffs' motion for a preliminary injunction, and just three days before the case was to be argued, EPA dropped its plan to include the controversial toxicity weighting factors in the SFIP. The Tozzi plaintiffs were therefore successful in this one key respect.

    As the principal basis for his legal challenge, Tozzi alleged that EPA had failed to obtain necessary OMB clearance to use the TRI data for SFIP, as mandated under the Paperwork Reduction Act, 44 U.S.C. 3501, et seq. The Paperwork Reduction Act requires that, in order to obtain OMB approval, an agency wishing to perform a "collection of information" must submit to OMB a "clearance package" that contains, among other things, a description of the "practical utility" of the data the agency seeks. The package that EPA submitted to OMB for the renewed clearance of the TRI data collection, however, made no mention of the agency's plan to use the data for the SFIP program.

    The Tozzi plaintiffs argued that OMB guidance on the Paperwork Act makes clear that an agency cannot modify its uses of previously approved information collections. That OMB guidance states:

    An agency may not substantially or materially modify a collection of information previously approved by OMB without OMB approval of the modification. A substantive or material modification is any revision to the collection of information that . . . significantly changes the uses of the information or otherwise meaningfully alters any aspect of the collection of information from that previously approved by OMB.

    OMB Implementing Guidance (Preliminary Draft, Feb. 3, 1997) at 21-22 (emphasis added).

    OMB General Counsel filed a lengthy and pointed declaration in the Tozzi case, however, essentially disavowing OMB's Draft Guidance and, consequently, any intent by OMB to limit an agency's use of the information once it is collected. According the OMB General Counsel:

    [W]hile OMB's analysis includes and assessment of how the information is expected to be used, the object of OMB's review and approval under the PRA remains the "collection of information" itself. In other words, it is the agency's collection of information, not the agency's subsequent use of the information, that requires OMB's approval. . . . Accordingly, contrary to Plaintiff's argument, the PRA does not require an agency to obtain OMB approval in order for the agency to use information that it collects in additional ("new") ways.

    Tozzi v. EPA, Mem. Op. at 7-8 (quoting Decl. of Robert G. Damus (Feb. 12, 1998) at 8).

    CLICK HERE FOR FULL TEXT OF DAMUS DECLARATION

    Judge Thomas Hogan denied plaintiffs' motion for a preliminary injunction, holding that -- in light of EPA's withdrawal of the proposed toxicity weighting factors -- plaintiffs were unlikely to succeed on the merits of their statutory claim. The court noted that, unlike the proposed toxicity weighting factors, the balance of SFIP did not "change the self-reported numbers drawn from the independent databases." Tozzi v. EPA, Mem. Op. at 4 & n. 1.

    The court also quoted at length from the declaration of OMB General Counsel in which OMB's chief attorney disputed the meaning of the above draft guidance. Citing Chevron, USA v. Natural Resources Defense Council, 467 U.S. 837, 844, reh'g denied, 468 U.S. 1227 (1984), the court deferred to the General Counsel's interpretation that OMB was not required to approve all modifications to the use of previously collected data. Tozzi v. EPA, Mem. Op. at 7-8.

    Importantly, however, Judge Hogan's opinion acknowledged, but left unanswered, plaintiff's objection that:

    if an agency is able to change the data's use after it has been already been approved it would be able to subvert the PRA by seeking OMB approvals of proposed data collections for noncontroversial purposes and then use the data, once collected, for other, more questionable purposes never disclosed to OMB or the affected public.

    Tozzi v. EPA, Mem. Op. at 7 n. 3.

    CLICK HERE FOR PLAINTIFFS' BRIEFING ON MOTION FOR PRELIMINARY INJUNCTION.

    CLICK HERE FOR DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION.]

    After Tozzi v. EPA

    One of the government's principal arguments in the Tozzi v. EPA case had been that private parties do not have a "private right of action" to bring suit for an agency's failure to comply with the Paperwork Reduction Act. In his ruling on the motion for preliminary injunction, Judge Hogan did not reach the private right of action question, however, or the other jurisdictional defenses the government had raised (sovereign immunity and standing). Tozzi v. EPA, Mem. Op. at 5 n. 2.

    CLICK HERE TO LINK TO JUDGE HOGAN'S OPINION.

    Thus, while the Tozzi v. EPA litigation, as a practical matter, was successful in preventing one unauthorized agency Internet publication -- the SFIP toxicity weighting factors -- it failed to establish two key favorable legal precedents:

    • That the Paperwork Reduction Act provides a private right of action to challenge an agency's misuse of data; and
    • That agencies are required to seek and obtain renewed OMB approval -- after public notice and comment -- before engaging in substantially modified uses of data previously gathered for a different purpose.

    Proposed Amendment to Paperwork Reduction Act

    One solution to the above two shortfalls of the Tozzi v. EPA litigation is therefore to amend the Paperwork Reduction Act to provide for (1) a private right of action, and (2) an express requirement that agencies seek renewed OMB approval of previously authorized "collections of information" before the agency embarks on new and different uses of the data . The attached proposed statutory revision would do exactly that.

    CLICK HERE TO REVIEW PROPOSED AMENDMENT.

    Another Solution: Data Quality Initiative

    Another possible solution to the concern that the public lacks sufficient checks on government information dissemination lies in recent actions of Congress. In conjunction with passage of the budget for FY 1999, Congress urged the Office of Management and Budget to:

    develop, with public and Federal agency involvement, rules providing policy and procedural guidance to Federal agencies for ensuring and maximizing the quality, objectivity, utility, and integrity of information (including statistical information) disseminated by Federal agencies, and information disseminated by non-Federal entities with financial support from the Federal government, in fulfillment of the purposes and provisions of the Paperwork Reduction Act of 1995.

    * * *

    The OMB and agency rules shall contain administrative mechanisms allowing affected persons to petition for correction of information which does not comply with such rules.

    H. Rep. 105-592 at 49-50.

    Congress has therefore indicated its desire that OMB issue rules to ensure that information disseminated by the government satisfy certain minimal standards with respect to the following four key elements:

    • Quality
    • Objectivity
    • Utility
    • Integrity

    Significantly, Congress also indicated that OMB and the separate agencies should establish petition processes whereby individuals affected by agency dissemination that arguably did not satisfy the above criteria could seek and obtain administrative relief.

    CRE has developed a detailed strategy for implementing these congressional objectives. That strategy and related documents are set out in the "Data Quality" section of this website.