Rule2022-10036
Guidelines and Limitations for Settlement Agreements Involving Payments to Non-Governmental Third Parties
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 10, 2022
Effective
May 10, 2022
Issuing agencies
Justice Department
Abstract
This interim final rule ("rule") revokes regulations of the Department of Justice ("Department") that codified a prohibition, subject to limited exceptions, on the inclusion of provisions in settlement agreements directing or providing for a payment or loan, in cash or in kind, to any non-governmental person or entity that is not a party to the dispute. For further information on how the Department intends to approach such settlements going forward, interested parties should consult an Attorney General Memorandum that the Department is issuing on its website in conjunction with this rule. Comments are requested both as to this rule and as to that Memorandum.
Full Text
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<title>Federal Register, Volume 87 Issue 90 (Tuesday, May 10, 2022)</title>
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[Federal Register Volume 87, Number 90 (Tuesday, May 10, 2022)]
[Rules and Regulations]
[Pages 27936-27938]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-10036]
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DEPARTMENT OF JUSTICE
Office of the Attorney General
28 CFR Part 50
[Docket No. OAG 177; AG Order No. 5384-2022]
RIN 1105-AB62
Guidelines and Limitations for Settlement Agreements Involving
Payments to Non-Governmental Third Parties
AGENCY: Department of Justice.
ACTION: Interim final rule; request for comments.
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SUMMARY: This interim final rule (``rule'') revokes regulations of the
Department of Justice (``Department'') that codified a prohibition,
subject to limited exceptions, on the inclusion of provisions in
settlement agreements directing or providing for a payment or loan, in
cash or in kind, to any non-governmental person or entity that is not a
party to the dispute. For further information on how the Department
intends to approach such settlements going forward, interested parties
should consult an Attorney General Memorandum that the Department is
issuing on its website in conjunction with this rule. Comments are
requested both as to this rule and as to that Memorandum.
DATES:
Effective date: This rule is effective May 10, 2022.
Applicability date: May 5, 2022.
Comments: Comments are due on or before July 11, 2022.
ADDRESSES: To ensure proper handling of comments, please reference
Docket No. OAG 177 on all electronic and written correspondence. The
Department encourages the electronic submission of all comments through
<a href="https://www.regulations.gov">https://www.regulations.gov</a> using the electronic comment form provided
on that site. For ease of reference, an electronic copy of this
document is also available at that website. It is not necessary to
submit paper comments that duplicate the electronic submission, as
comments submitted to <a href="https://www.regulations.gov">https://www.regulations.gov</a> will be posted for
public review and are part of the official docket record. However,
should you wish to submit written comments through regular or express
mail, they should be sent to Robert Hinchman, Senior Counsel, Office of
Legal Policy, U.S. Department of Justice, Room 4252 RFK Building, 950
Pennsylvania Avenue NW, Washington, DC 20530. Comments received by mail
will be considered timely if they are postmarked on or before July 11,
2022. The electronic Federal eRulemaking portal will accept comments
until Midnight Eastern Time at the end of that day.
FOR FURTHER INFORMATION CONTACT: Robert Hinchman, Senior Counsel,
Office of Legal Policy, U.S. Department of Justice, telephone (202)
514-8059 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Posting of Public Comments
Please note that all comments received are considered part of the
public record and made available for public inspection online at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. Information made available for public
inspection includes personal identifying information (such as your
name, address, etc.) voluntarily submitted by the commenter.
You are not required to submit personal identifying information in
order to comment on this rule. Nevertheless, if you want to submit
personal identifying information (such as your name, address, etc.) as
part of your comment, but do not want it to be posted online, you must
include the phrase ``PERSONAL IDENTIFYING INFORMATION'' in the first
paragraph of your comment. You must also locate all the personal
identifying information that you do not want posted online in the first
paragraph of your comment and identify what information you want the
agency to redact. Personal identifying information identified and
located as set forth above will be placed in the agency's public docket
file, but not posted online.
If you want to submit confidential business information as part of
your comment but do not want it to be posted online, you must include
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph
of your comment. You must also prominently identify the confidential
business information to be redacted within the comment. If a comment
has so much confidential business information that it cannot be
effectively redacted, the agency may choose not to post that comment
(or to post that comment only partially) on <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Confidential business information identified and
located as set forth above will not be placed in the public docket
file, nor will it be posted online.
If you want to inspect the agency's public docket file in person by
appointment, please see the FOR FURTHER INFORMATION CONTACT section.
II. Discussion
A. Overview
This rule revokes the Department's regulations at 28 CFR 50.28.
Going forward, the Department's approach to settlement agreements that
direct or provide for a payment or a loan, in cash or in kind, to a
non-governmental person or entity that is not a party to the dispute
will be governed by a new Attorney General Memorandum being issued on
the Department's website concurrently with this rule.
B. Background
For decades prior to 2017, Department components had entered into
settlement agreements that involved payments to certain third parties
as a means of addressing harms arising from violations of Federal law,
particularly in the environmental context but in other contexts as
well. In 2017, the Attorney General issued a memorandum prohibiting
Department attorneys from ``enter[ing] into any agreement on behalf of
the United States in settlement of federal claims or charges, including
agreements settling civil litigation, accepting plea agreements, or
deferring or declining prosecution in a criminal
[[Page 27937]]
matter, that directs or provides for a payment or loan to any non-
governmental person or entity that is not a party to the dispute,''
subject only to certain specified exceptions. Memorandum from the
Attorney General, ``Prohibition on Settlement Payments to Third
Parties'' at 1 (June 5, 2017) (the ``2017 Memorandum''). Provisions
reflecting the 2017 Memorandum were added to the Justice Manual
(<a href="https://www.justice.gov/jm/justice-manual">https://www.justice.gov/jm/justice-manual</a>) at sections 1-17.000, 5-
11.105, 9-16.325.
In December 2020, the Department amended its regulations to add a
new 28 CFR 50.28, reflecting the prohibition set forth in the 2017
Memorandum ``with certain changes . . . to clarify the scope of the
exceptions.'' 85 FR 81409. The Department specified that the
prohibition ``applies to all civil and criminal cases litigated under
the direction of the Attorney General and includes civil settlement
agreements, cy pres agreements or provisions, plea agreements, non-
prosecution agreements, and deferred prosecution agreements.'' 85 FR
81410.
C. Revocation of 28 CFR 50.28
After having considered the views of the Department's components
and their experience with the regulations at 28 CFR 50.28, the Attorney
General has concluded that the regulations at 28 CFR 50.28 are more
restrictive and less tailored than necessary and should therefore be
revoked.
When used appropriately, agreements providing for payments to third
parties are lawful and allow the United States to more fully accomplish
the primary goals of civil and criminal enforcement: Compensating
victims, remedying harm, and punishing and deterring unlawful conduct.
For example, the harms caused by violations of Federal
environmental statutes, including harms to communities affected by
environmental crime, can be difficult to redress directly in particular
cases. In such circumstances, the Environment and Natural Resources
Division has previously relied upon supplemental environmental projects
to help achieve an enforcement action's goals. Such projects further
the aims of Federal environmental laws the Justice Department is
responsible for enforcing by remedying the harms to the communities
most directly impacted by violations of those laws. For this reason,
they are particularly powerful tools for advancing environmental
justice.
In revoking 28 CFR 50.28, the Department is not departing from the
principle that the goals of settlements include compensating victims,
redressing harms, and punishing and deterring unlawful conduct. 85 FR
81409. But policies in service of this principle have traditionally
been addressed through memoranda from Department leadership rather than
through regulations. The Department is therefore revoking 28 CFR 50.28
in its entirety, and the Attorney General is concurrently issuing a new
Memorandum setting forth the Department's policy going forward. That
Memorandum also directs that the current provisions of the Justice
Manual at sections 1-17.000, 5-11.105, and 9-16.325 be revised to
conform to the new policy.
Regulatory Certifications
A. Administrative Procedure Act
This rule relates to a matter of agency management or personnel and
is a rule of agency organization, procedure, or practice. As such, this
rule is exempt from the usual requirements of prior notice and comment
and a 30-day delay in effective date. See 5 U.S.C. 553(a)(2), (b), and
(d). The rule is effective upon signature. In its discretion, the
Department is seeking post-promulgation public comment on this
rulemaking.
B. Regulatory Flexibility Act
An analysis under the Regulatory Flexibility Act was not required
for this rule because the Department was not required to publish a
general notice of proposed rulemaking for this matter. See 5 U.S.C.
601(2), 604(a).
C. Executive Orders 12866 and 13563--Regulatory Review
This rule has been drafted and reviewed in accordance with section
1(b) of Executive Order 12866, ``Regulatory Planning and Review,'' and
section 1(b) of Executive Order 13563, ``Improving Regulation and
Regulatory Review.''
This rule is ``limited to agency organization, management, or
personnel matters'' and thus is not a ``rule'' for purposes of review
by the Office of Management and Budget under section 3(d)(3) of
Executive Order 12866. Accordingly, this rule has not been reviewed by
the Office of Management and Budget.
D. Executive Order 12988--Civil Justice Reform
This regulation meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988, ``Civil Justice
Reform.''
E. Executive Order 13132--Federalism
This rule will not have substantial direct effects on the States,
on the relationship between the National Government and the States, or
on the distribution of power and responsibilities among the various
levels of government. It is a rule of internal agency practice and
procedure. Therefore, in accordance with Executive Order 13132,
``Federalism,'' the Department has determined that this rule does not
have sufficient federalism implications to warrant the preparation of a
federalism summary impact statement.
F. Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more (adjusted annually for inflation) in any one year, and
it will not significantly or uniquely affect small governments.
Therefore, no actions are necessary under the provisions of the
Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501 et seq.
G. Congressional Review Act
This rule is not a major rule as defined by the Congressional
Review Act, 5 U.S.C. 804. This action pertains to agency management,
personnel, and organization and does not substantially affect the
rights or obligations of non-agency parties. Accordingly, it is not a
``rule'' as that term is used in the Congressional Review Act, 5 U.S.C.
804(3)(B), (C), and the reporting requirements of 5 U.S.C. 801 do not
apply.
H. Paperwork Reduction Act of 1995
This final rule does not impose any new reporting or recordkeeping
requirements under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-
3521.
List of Subjects in 28 CFR Part 50
Administrative practice and procedure.
Accordingly, for the reasons set forth in the preamble, and by
virtue of the authority vested in me as Attorney General, including 5
U.S.C. 301 and 28 U.S.C. 509, 510, part 50 of title 28 of the Code of
Federal Regulations is amended as follows:
PART 50--STATEMENTS OF POLICY
0
1. The authority citation for part 50 continues to read as follows:
Authority: 5 U.S.C. 301; 18 U.S.C. 1162; 28 U.S.C. 509, 510,
516, and 519; 42 U.S.C.
[[Page 27938]]
1921 et seq., 1973c; and Pub. L. 107-273, 116 Stat. 1758, 1824.
Sec. 50.28 [Removed and Reserved]
0
2. Section 50.28 is removed and reserved.
Dated: May 5, 2022.
Merrick B. Garland,
Attorney General.
[FR Doc. 2022-10036 Filed 5-5-22; 4:15 pm]
BILLING CODE 4410-BB-P
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</html>Indexed from Federal Register on May 10, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.