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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.
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.
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CRE Seeks Public Disclosure of EPA's Multi-Pollutant Air Emission Model
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.
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.
CRE Appeals EPA's Denial of FOIA Request for Names of Facilities EPA May Be Targeting for Clean Air Act Enforcement Action
Federal Regulation of Privacy
"Regulation by Information" Prompts Call For Amendment to Paperwork Reduction Act and the Implementation of a Federal Data Quality Program
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:
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:
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:
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:
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:
* * *
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:
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.
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