3010 Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 

described in paragraph (a)(1) of this 

section. 

(b) End of the period. The MCIT 

pathway for a breakthrough device ends 

as follows: 

(1) No later than 4 years from the date 

the breakthrough device received FDA 

market authorization. 

(2) Prior to 4 years if a manufacturer 

withdraws the breakthrough device 

from the MCIT pathway. 

(3) Prior to 4 years if the breakthrough 

device becomes the subject of a national 

coverage determination or otherwise 

becomes noncovered through law, 

regulation, or at the discretion of the 

Secretary subsequent to an FDA medical 

device safety communication or 

Warning Letter. 

(4) Prior to 4 years if the FDA removes 

authorization of a device, the 

breakthrough device is removed from 

the MCIT pathway. 

Dated: December 31, 2020. 

Seema Verma, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Dated: January 5, 2021. 

Alex M. Azar II, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2021–00707 Filed 1–12–21; 4:15 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Part 1 

[HHS–OS–2021–0001] 

RIN 0991–AC18 

Department of Health and Human 

Services Transparency and Fairness in 

Civil Administrative Enforcement 

Actions 

AGENCY: Office of the Secretary, 

Department of Health and Human 

Services. 

ACTION: Final rule. 

SUMMARY: The Department of Health and 

Human Services is issuing regulations 

promoting transparency and fairness in 

civil enforcement actions. These 

regulations will help to ensure that 

regulated parties receive fair notice of 

laws and regulations they are subject to, 

and have an opportunity to contest an 

agency determination prior to the 

agency taking an action that has a legal 

consequence. 

DATES: Effective January 12, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Brenna Jenny, Department of Health and 

Human Services, 200 Independence 

Avenue SW, Room 713F, Washington, 

DC 20201. Email: Good.Guidance@

hhs.gov. Telephone: (202) 690–7741. 

I. Statutory and Regulatory Background 

The primary legal authority 

supporting this rulemaking is 5 U.S.C. 

301. That provision provides that the 

‘‘head of an Executive department or 

military department may prescribe 

regulations for the government of his 

department, the conduct of its 

employees, the distribution and 

performance of its business, and the 

custody, use, and preservation of its 

records, papers, and property.’’ This 

statute authorizes an ‘‘agency to regulate 

its own affairs,’’ and issue rules, such as 

this one, that are ‘‘rules of agency 

organization[,] procedure or practice.’’ 

Chrysler Corp. v. Brown, 441 U.S. 281, 

309–10 (1979). Similarly, 42 U.S.C. 1302 

provides that the Secretary ‘‘shall make 

and publish such rules and regulations, 

not inconsistent with this chapter, as 

may be necessary to the efficient 

administration of the functions with 

which [he] is charged’’ under Chapter 7 

of the Social Security Act. Chapter 7 

contains, among other things, statutory 

provisions governing Medicare, 

Medicaid, and the Health Insurance 

Portability and Accountability Act 

(HIPAA). 

The Administrative Procedure Act 

(‘‘APA’’), 5 U.S.C. 551 et seq., specifies 

the process by which such regulations 

are promulgated. Department heads 

generally must prescribe regulations 

through notice-and-comment 

rulemaking, but there is an exception for 

‘‘rules of agency organization, 

procedure, or practice.’’ The 

requirements for notice and comment 

prior to finalization also do not apply to 

regulations that involve ‘‘a matter 

relating to agency management or 

personnel.’’ 5 U.S.C. 553(a)(2). 

Because this final rule only specifies 

procedures that agency personnel must 

follow or that will govern civil 

enforcement actions, it is exempt from 

the requirement for notice and comment 

prior to finalization. In determining 

whether notice-and-comment 

rulemaking is required, the ‘‘critical 

feature is that [the rule] covers agency 

actions that do not themselves alter the 

rights or interests of the parties, 

although it may alter the manner in 

which the parties present themselves or 

their viewpoints to the agency.’’ Nat’l 

Sec. Counselors v. CIA, 931 F. Supp. 2d 

77, 106–07 (D.D.C. 2013) (quoting 

Batterton v. Marshall, 648 F.2d 694, 707 

(D.C. Cir. 1980)). This rule is exempt 

from notice and comment because it 

does not ‘‘put[ ] a stamp of approval or 

disapproval on a given type of 

behavior.’’ Am. Hosp. Assoc. v. Bowen, 

834 F.2d 1037, 1047 (D.C. Cir. 1987). 

What had been a regulatory violation 

prior to finalization of this rule still is; 

the Department of Health and Human 

Services (‘‘HHS’’ or ‘‘the Department’’) 

is only modifying the procedures 

governing civil enforcement actions and 

the Department’s civil enforcement 

action practices. To be sure, these 

procedural modifications, like most 

rules of agency procedure or personnel, 

might have some impact on the public. 

But agency rules that impose 

‘‘derivative,’’ ‘‘incidental,’’ or 

‘‘mechanical’’ burdens upon regulated 

individuals are considered procedural, 

rather than substantive, and are 

therefore exempt from the notice-andcomment requirement. Id. at 1051. 

Moreover, to the extent this rule has 

effects on the public, it only provides 

additional protections to the public, 

rather than depriving the public of any 

rights or interests it previously had. 

The APA requires that 

‘‘administrative policies affecting 

individual rights and obligations be 

promulgated pursuant to certain stated 

procedures so as to avoid the inherently 

arbitrary nature of unpublished ad hoc 

determinations.’’ Morton v. Ruiz, 415 

U.S. 199, 232 (1974). The Freedom of 

Information Act amended the APA to 

advance this goal, and generally 

requires that agencies publish in the 

Federal Register their substantive rules 

of general applicability, statements of 

general policy, and interpretations of 

law that are generally applicable. 5 

U.S.C. 552(a)(1)(D). Unless a party has 

actual and timely notice of the terms of 

a rule or policy, the Freedom of 

Information Act generally provides that 

a party may not be adversely affected by 

a rule or policy required to be published 

in the Federal Register that is not so 

published. 5 U.S.C. 552(a)(1)(flush 

language). This rule of agency procedure 

ensures that HHS actions comport with 

these requirements. 

II. Summary of Transparency and 

Fairness Regulations 

To provide regulated parties with 

greater transparency and fairness in 

administrative actions, and consistent 

with the requirements of Executive 

Order 13892 of October 9, 2019, 

‘‘Promoting the Rule of Law Through 

Transparency and Fairness in Civil 

Administrative Enforcement and 

Adjudication,’’ 84 FR 55239 (Oct. 15, 

2019), HHS is setting forth policies that 

promote transparency and fairness in 

civil enforcement actions that will apply 

to all divisions of HHS. The 

requirements in this rule amend 45 CFR 

part 1. 


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This rule is one component of the 

Department’s broader regulatory reform 

initiative. The rule is designed to ensure 

accountability, fairness of how the 

Department uses guidance, proper use 

of guidance documents, and 

opportunities for third parties to be 

heard, and to safeguard the important 

principles underlying the United States 

administrative law system. 

A. Scope (45 CFR 1.1) 

The requirements established 

pursuant to this rule in §§ 1.2(b) and 1.6 

through 1.9 apply to civil enforcement 

actions by any component of the 

Department. Sections 1.3 through 1.5 (as 

well as the definitions in § 1.2 that were 

added through the Good Guidance 

Practices final rule at 85 FR 78770 (Dec. 

7, 2020), and that we will recodify in 

this rule at § 1.2(a)) will continue to 

apply to all guidance documents until 

FDA amends its good guidance practices 

regulation to be consistent with the HHS 

Good Guidance Practices rule, at which 

point §§ 1.2(a) and 1.3 through 1.5 shall 

apply to all divisions of HHS except 

FDA. 

Nothing in this rule shall apply: 

• To any action that pertains to 

foreign or military affairs, or to a 

national security or homeland security 

function of the United States (other than 

procurement actions and actions 

involving the import or export of 

nondefense articles and services); 

• To any action related to a criminal 

investigation or prosecution, including 

undercover operations, or any civil 

enforcement action or related 

investigation by the Department of 

Justice, including any action related to 

a civil investigative demand under 18 

U.S.C. 1968; 

• To any action related to detention, 

seizure, or destruction of counterfeit 

goods, pirated goods, or other goods that 

infringe intellectual property rights; 

• To any investigation of misconduct 

by an agency employee or any 

disciplinary, corrective, or employment 

action taken against an agency 

employee; or 

• In any other circumstance or 

proceeding to which application of this 

order, or any part of this order, would, 

in the judgment of the Secretary of HHS, 

undermine the national security. 

B. Definitions (45 CFR 1.2) 

The definitions section at 45 CFR 1.2 

is amended to include the following 

definitions at paragraph (b). 

Civil Enforcement Action 

HHS defines ‘‘civil enforcement 

action’’ to mean an action with legal 

consequence taken by the Department 

based on an alleged violation of the law. 

Such actions include administrative 

enforcement proceedings and 

enforcement adjudication (which is the 

administrative process undertaken by 

any component of the Department to 

resolve the legal rights and obligations 

of specific parties with regard to a 

particular enforcement issue pending 

before it) but do not include actions 

taken in the normal course of the 

Department’s regulatory 

communications or decision-making, for 

example, decisions on product 

applications (such as approvals or 

denials/withdrawals of approval), 

claims authorizations, responses to 

citizen petitions, food or color additive 

petitions, or public health notifications. 

Legal Consequence 

HHS defines ‘‘legal consequence’’ as 

the result of an action that directly or 

indirectly affects substantive legal rights 

or obligations including by subjecting a 

regulated party to potential liability in 

an enforcement action. The meaning of 

this term is informed by the Supreme 

Court’s discussion in U.S. Army Corps 

of Engineers v. Hawkes Co., 136 S. Ct. 

1807, 1813–16 (2016), and includes, for 

example, agency letters or orders 

establishing or increasing the 

probability of liability for regulated 

parties in a subsequent enforcement 

action, Ipsen Biopharmaceuticals, Inc. 

v. Azar, 943 F.3d 953, 956 (D.C. Cir. 

2019); Rhea Lana, Inc. v. Dep’t of Labor, 

824 F.3d 1023, 1030 (D.C. Cir. 2016). It 

does not include a warning letter or 

other communication, such as one 

describing inspectional observations, 

that pursuant to agency policy is 

intended to provide notice to a 

regulated party and elicit voluntary 

compliance. Such warning letters and 

inspectional observations have no 

immediate regulatory implications for 

the entity, are an interim step in the 

agency’s compliance communications 

with an entity, and are not final agency 

action that has legal consequences for a 

party. See Orton Motor, Inc. v. HHS, 884 

F.3d 1205, 1215 (D.C. Cir. 2018); 

Holistic Candlers & Consumers Ass’n v. 

FDA, 664 F.3d 940 (D.C. Cir. 2012); see 

also Hi-Tech Pharm., Inc. v. Hahn, Civ. 

No. 19–1268(RBW), 2020 WL 3498588, 

*5 (D.D.C. June 29, 2020); Lystn, LLC v. 

FDA, No. 19–cv–1943–PAB–KLM, 2020 

WL 248962, *5 (D. Colo. Jan. 16, 2020); 

Cody Labs., Inc. v. Sebelius, No. 10–CV– 

00147–ABJ, 2010 WL 3119279, *11 (D. 

Wyo. July 26, 2010), aff’d, 446 F. App’x 

964, 969 (10th Cir. 2011); Gomperts v. 

Azar, No. 1:19–cv–00345–DCN, 2020 

WL 3963864, *4–5 (D. Idaho July 13, 

2020). 

Unfair Surprise 

HHS defines ‘‘unfair surprise’’ to 

mean a lack of reasonable certainty or 

fair warning, from the perspective of a 

reasonably prudent member of regulated 

industry, of what a legal standard 

administered by an agency requires, or 

the initiation of litigation by HHS 

following ‘‘a very lengthy period of 

conspicuous inaction,’’ in other words 

deliberate inaction, suggesting the 

agency previously had a different 

interpretation. Christopher v. 

SmithKline Beecham Corp., 567 U.S. 

142, 156 (2012). However, an agency 

does not create unfair surprise when it 

proceeds with a new interpretation that 

it established in notice-and-comment 

rulemaking. See Martin v. Occupational 

Safety & Health Review Comm’n, 499 

U.S. 144, 158 (1991) (identifying 

‘‘adequacy of notice to regulated 

parties’’ as one factor relevant to the 

reasonableness of the agency’s 

interpretation). 

The definitions currently at 45 CFR 

1.2 will be moved into a new paragraph 

(a). All definitions at paragraph (a) 

apply to all components of HHS until 

FDA amends its good guidance practices 

regulation, at which point the 

definitions at 45 CFR 1.2(a) shall apply 

to all divisions of HHS except FDA. The 

definitions at § 1.2(b) will apply to all 

components of the Department, 

including FDA. 

C. Proper Department Reliance on 

Guidance Documents (45 CFR 1.6) 

This rule reiterates the application of 

certain existing legal principles to 

HHS’s use of guidance documents: 

When the Department takes a civil 

enforcement action or otherwise makes 

a determination based on an alleged 

violation of law that has legal 

consequence for a person or state, it 

must allege or establish the violation of 

law by applying statutes or regulations. 

HHS may not use guidance documents 

to impose binding requirements or 

prohibitions on persons outside of the 

executive branch except as authorized 

by law or expressly incorporated into a 

contract. Noncompliance with a 

standard or practice that is not in a 

statute or regulation and announced 

solely in a guidance document may not 

be treated as itself a violation of 

applicable statutes or regulations, unless 

expressly authorized by statute. 

This rule also explains the 

appropriate circumstances when the 

Department may use a guidance 

document in civil enforcement actions. 

The Department may use a guidance 

document to explain the legal 

applicability of a statute or regulation 


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with regard to prohibition of conduct, 

but when it does so, HHS may only use 

the guidance document to articulate the 

Department’s understanding of how a 

statute or regulation applies to 

particular circumstances. Except when 

referring to a guidance document for 

historical facts, the Department may 

reference a guidance document in a civil 

enforcement action only if it has 

notified the public of such document to 

convey that understanding in advance. 

The Department must notify the public 

in advance of a guidance document 

through publication in the Department’s 

guidance repository (as described in 

§ 1.4 and available at hhs.gov/guidance). 

D. Fairness and Notice in Civil 

Enforcement Actions and 

Administrative Inspections (45 CFR 1.7) 

This rule would require the 

Department to only apply standards or 

practices that have been publicly stated 

in a manner that would not cause unfair 

surprise when HHS takes a civil 

enforcement action or otherwise makes 

a determination based on an alleged 

violation of law that has legal 

consequence for a person or state, 

unless a statutory exception applies. 

See, e.g., 42 U.S.C. 1395hh(e). For 

purposes of this regulation, the 

Department would consider standards 

or practices to be publicly stated if 

available in paper publications or on the 

internet. 

HHS avoids unfair surprise not only 

when it imposes penalties but also 

whenever it adjudges past conduct to 

have violated the law. For example, the 

Department generally cannot 

retroactively impose liability on a party 

for conduct that violates a new agency 

interpretation. But see 42 U.S.C. 

1395hh(e). The Department also may 

not alter its interpretation during an 

adjudicative proceeding if doing so 

would impose new liability on parties 

who have acted in good faith on the 

prior interpretation. SmithKline 

Beecham, 567 U.S. at 156 & n.15. 

Section 7 of Executive Order 13892 

requires that each agency that conducts 

civil administrative inspections must 

publish a rule of agency procedure 

governing such inspections, if such a 

rule does not already exist. The 

Department is adding a requirement at 

45 CFR 1.7 that HHS shall only conduct 

civil administrative inspections 

according to published rules of agency 

procedure. While the Administrative 

Procedure Act exempts these 

subsequently issued rules of agency 

procedure themselves from notice-andcomment rulemaking, see 5 U.S.C. 

553(b)(3)(A), each agency must make the 

rules governing its civil administrative 

inspections, including audits, publicly 

available and readily accessible, such as 

by posting them on a website. 

E. Fairness and Notice in Jurisdictional 

Determinations (45 CFR 1.8) 

The requirement for fairness and 

notice also extends to jurisdictional 

determinations. If the Department relies 

on a decision previously issued by an 

agency within the Department in an 

agency adjudication (i.e., proceedings 

before and decided by the agency), 

administrative order, or agency 

document to assert a new or expanded 

claim of jurisdiction (e.g., a claim to 

regulate a new subject matter or a new 

basis for liability, or a relinquishment of 

a claim of jurisdiction), the Department 

must give fair notice by publishing the 

initial decision in the Federal Register 

or the Department’s guidance 

repository. See 45 CFR 1.4. The 

Department should not rely on the new 

claim of jurisdiction to take a civil 

enforcement action regarding conduct 

that occurred before such publication. A 

claim of jurisdiction is not ‘‘new or 

expanded’’ simply because it involves a 

new or novel set of facts so long as it 

is based on an established principle of 

general applicability. 

If the Department intends to rely on 

a document arising out of litigation 

(other than a publicly published 

opinion of an adjudicator) such as a 

brief, a consent decree, or a settlement 

agreement, to establish jurisdiction in 

future civil enforcement actions 

involving persons who were not parties 

to the litigation, the Department must 

also publish that document in the 

Federal Register or on the Department’s 

guidance repository. Alongside 

publication of the document, the 

Department must also provide an 

explanation of the document’s 

jurisdictional implications. Publication 

of a document discussed in this 

paragraph may either be in full or by 

citation, if the document is publicly 

available. 

HHS is also proposing that if the 

Department seeks judicial deference to 

its interpretation of a document arising 

out of litigation (other than a publicly 

published opinion of an adjudicator) in 

order to establish a new or expanded 

claim of jurisdiction, HHS must, before 

seeking judicial deference, publish the 

document or a notice of availability in 

the Federal Register or on the 

Department’s guidance repository, along 

with an explanation of the document’s 

jurisdictional implications. 

F. Opportunity To Contest Agency 

Determinations (45 CFR 1.9) 

Providing regulated parties with the 

opportunity to be heard, including 

through informal oral or written 

communications, prior to the 

Department taking any civil 

enforcement action that has legal 

consequence is critical to ensuring that 

the Department operates with 

transparency and fairness. This rule will 

require that, before any component of 

the Department takes any civil 

enforcement action with respect to a 

particular entity that has legal 

consequence for that entity—including 

by issuing to such a person a notice of 

noncompliance or other similar notice 

that has immediate regulatory 

consequence or the immediate effect of 

subjecting the person to potential 

liability—the Department must afford 

that person an opportunity to be heard, 

either orally or in writing, as deemed 

appropriate at the Department’s 

election. The rule will require HHS to 

provide the person with its proposed 

legal and factual determinations and 

then give the person a reasonable 

amount of time to respond to those 

determinations. The specific timeframe 

shall be in the discretion of the agency 

but must be long enough to provide a 

meaningful opportunity to be heard. 

Certain circumstances may warrant a 

time period of 30 days, while other 

circumstances may warrant a shorter 

period, such as 15 days or fewer, 

particularly where existing agency 

procedures already offer a shorter 

period in which to respond. Unless the 

Department withdraws the action, the 

Department must then respond in 

writing to the regulated party and 

articulate the final basis for the 

Department’s action. This written 

response may be issued 

contemporaneous to the Department 

taking the action with legal 

consequence. We anticipate that 

generally, existing HHS procedures will 

already satisfy these standards, and 

where they do, those existing 

procedures will continue in effect 

unchanged. This rulemaking is not 

intended to preempt existing rules of 

agency procedure that are already 

consistent with this rule. Furthermore, 

where the Department takes an action 

based on a predicate finding that was 

reached following notice, an 

opportunity to be heard, and a written 

response, for example, where the 

Department revokes Medicare 

enrollment based on a prior exclusion or 

felony conviction, these procedural 

requirements are considered to have 

already been satisfied. 


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These procedures regarding fair notice 

and an opportunity to respond would 

not apply where the agency, in its 

discretion, determines there is a serious 

threat to health, safety, or similar 

emergency, or where a statute 

specifically authorizes proceedings that 

are inconsistent with this section, 

including proceedings without a prior 

opportunity to be heard. Where such a 

threat arises and a statute does not 

specifically authorize proceedings 

without a prior opportunity to be heard, 

HHS would still provide an affected 

entity with an opportunity to be heard 

and a written response as soon as 

practicable. In this context, a serious 

threat means that, as reasonably 

determined by the Department, there is 

a non-negligible likelihood of the threat 

materializing. 

We anticipate that the exception from 

§ 1.9 for actions taken in the context of 

threats to health, safety, or similar 

emergencies will apply broadly to 

public health agencies acting in 

furtherance of their missions. Actions 

will be considered to fall into this 

exception regardless of whether there is 

a showing of actual, imminent risk or 

harm, either to persons or animals. The 

agency has sole discretion to determine 

when an action falls into this exception. 

An agency may invoke this exception 

regardless of whether agency action is 

taken reactively (e.g., to address an 

unsafe item currently on the market) or 

proactively (e.g., to enforce regulations 

needed to protect public health prior to 

actual exposure by the public to unsafe 

items). Actions that fall into this 

exception include, for example, 

enforcing age restrictions or other 

controls around access to certain 

regulated products, enforcing 

manufacturer recordkeeping or 

reporting requirements, enforcing 

premarket requirements where there is 

an absence of or insufficient data 

concerning the product, protecting 

beneficiary data privacy or a federal 

healthcare program beneficiary from 

harm, and taking action to remove 

unapproved, misbranded, or adulterated 

human or animal products from the 

market. 

Because of this exception, the 

procedures in § 1.9 generally will not 

impact, for example, the administrative 

detention process for foods, drugs, 

devices, and tobacco products (21 

U.S.C. 334(g), (h)), the detention, 

refusal, and where authorized, 

destruction of imported products 

regulated by FDA (21 U.S.C. 381), 

disqualification (21 CFR parts 56, 58, 

312, 511, 812), administrative detention, 

recall requests, import alerts, or other 

public notifications about food, drug, 

device, or tobacco products, or other 

actions related to investigating 

adulterated or misbranded products. 

These procedures would also not 

apply to settlement negotiations 

between agencies and regulated parties, 

to notices of a prospective legal action, 

where a statute specifically precludes 

review of agency action, or to litigation 

before courts. Examples of situations 

where statutes specifically authorize 

differently structured proceedings 

include, but are not limited to, the 

hospital cost report appeals process (42 

U.S.C. 1395oo), the individual benefit 

claims appeals process (42 U.S.C. 

1395ff), and the process for the review 

of disallowances of Medicaid 

expenditures by the Secretary (42 U.S.C. 

1316(e)). In such circumstances, the 

process and substantive standards 

governing review of claims arising 

under a relevant statute or regulation 

remain governed by those more specific 

procedures. The procedures would also 

not apply to any action related to a 

criminal investigation or prosecution, 

including undercover operations that 

may be used in a criminal investigation 

or prosecution, or any civil enforcement 

action either related to an investigation 

by the Department of Justice, or referred 

to the Department of Justice. 

III. Rulemaking Analyses and Notices 

A. Executive Orders 12866 and 13563 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review,’’ direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

the regulation is necessary, to select 

regulatory approaches that maximize 

net benefits. The Department does not 

believe that this rulemaking is a 

significant regulatory action under these 

Executive Orders. This rule describes an 

update to the Department’s current 

processes to ensure that it operates with 

transparency and fairness. The 

requirements in 45 CFR 1.6 through 1.9 

relating to the proper use of guidance 

documents and fairness and notice in 

enforcement actions generally already 

exist in law. The requirements set forth 

in Section 6 of Executive Order 13892 

and codified at 45 CFR 1.6 may exceed 

the requirements imposed by the Due 

Process clause of the Constitution and 

may impose a burden by delaying the 

time until HHS can take actions with 

legal consequence. However, this 

process will also offer important 

procedural safeguards and potentially 

reduce economic costs borne by 

regulated entities, which will have an 

opportunity to respond in writing before 

the Department takes an action that has 

(potentially costly) legal consequence. 

The Department anticipates that the 

public, and, in particular, regulated 

parties, would benefit from greater 

efficiencies and more transparency in 

how the Department regulates, 

including facilitating smoother 

operations within HHS by clearly 

defining how guidance can be used. 

B. Executive Order 13771 

This final rule is neither a regulatory 

nor a deregulatory action under 

Executive Order 13771, ‘‘Reducing 

Regulation and Controlling Regulatory 

Costs,’’ 82 FR 9339 (Feb. 3, 2017), 

because this rule is estimated to impose 

no more than de minimis costs on 

regulated entities. 

C. Regulatory Flexibility Act 

The Department has examined the 

economic implications of this rule as 

required by the Regulatory Flexibility 

Act (RFA), 5 U.S.C. 601 et seq. The RFA 

requires an agency to describe the 

impact of a rulemaking on small entities 

by providing an initial regulatory 

flexibility analysis, unless the agency 

expects that the rule will not have a 

significant impact on a substantial 

number of small entities, provides a 

factual basis for this determination, and 

proposes to certify the statement. 5 

U.S.C. 603(a), 605(b). The Department 

considers a proposed or final rule to 

have a significant impact on a 

substantial number of small entities if it 

has at least a three percent impact on 

revenue on at least five percent of small 

entities. The Department anticipates 

that this rule will allow small entities to 

operate more efficiently, by increasing 

the transparency of government 

regulation. As a result, the Department 

has determined, and the Secretary 

certifies, that this final rule would not 

have a significant impact on the 

operations of a substantial number of 

small entities. 

D. Executive Order 13132 (Federalism) 

Executive Order 13132, ‘‘Federalism,’’ 

establishes certain requirements that an 

agency must meet when it promulgates 

a rule that imposes substantial direct 

requirement costs on State and local 

governments or has Federalism 

implications. The Department has 

determined that this final rule will not 

impose such costs or have any 

federalism implications. 

E. Paperwork Reduction Act of 1995 

In accordance with the Paperwork 

Reduction Act of 1995 and its 

implementing regulations, 44 U.S.C. 

3501–3521; 5 CFR part 1320, the 


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Department has reviewed this rule and 

has determined that it imposes no new 

collections of information. 

List of Subjects in 45 CFR Part 1 

Guidance, Government employess. 

For the reasons set forth in the 

preamble, the Department of Health and 

Human Services amends 45 CFR Part I 

as set forth below: 

PART 1—TRANSPARENCY AND 

FAIRNESS IN CIVIL ADMINISTRATIVE 

ENFORCEMENT AND ADJUDICATION 

■ 1. The authority citation for part 1 

continues to read as follows: 

Authority: 42 U.S.C. 1302, 5 U.S.C. 301, 

551 et seq. 

■ 2. Section 1.1 is revised to read as 

follows: 

§ 1.1 Scope. 

Sections 1.2(a) and 1.3 through 1.5 of 

this part shall apply to guidance 

documents issued by all components of 

the Department, until the Secretary 

amends the Food and Drug 

Administration’s good guidance 

regulations at 21 CFR 10.115 to bring 

them into conformance with the 

requirements of this part, at which 

point, such amended regulations shall 

apply to the Food and Drug 

Administration, and §§ 1.2(a) and 1.3 

through 1.5 shall apply to all divisions 

of the Department except the Food and 

Drug Administration. Sections 1.2(b) 

and 1.6 through 1.9 of this part shall 

apply to all components of the 

Department. 

■ 3. Section 1.2 is amended by 

designating the existing text as 

paragraph (a) followed by the 

alphabetical ordered definitions, 

revising newly designated paragraph (a) 

introductory text, and adding paragraph 

(b). 

The revision and addition read as 

follows: 

§ 1.2 Definitions. 

(a) The following definitions apply to 

all components of the Department until 

the Secretary amends the Food and Drug 

Administration’s good guidance 

regulations at 21 CFR 10.115 to bring 

them into conformance with the 

requirements of §§ 1.3 through 1.5 of 

this part: 

* * * * * 

(b) The following definitions apply to 

all components of the Department: 

Civil enforcement action means an 

action with legal consequence taken by 

the Department based on an alleged 

violation of the law. Such actions 

include administrative enforcement 

proceedings and enforcement 

adjudication (which is the 

administrative process undertaken by 

any component of the Department to 

resolve the legal rights and obligations 

of specific parties with regard to a 

particular enforcement issue pending 

before it) but do not include actions 

taken in the normal course of the 

Department’s regulatory 

communications or decision-making, for 

example, decisions on product 

applications (such as approvals, denials, 

or withdrawals of approval), claims 

authorizations, citizen petitions, food or 

color additive petitions, or public health 

notifications. 

Legal consequence means the result of 

an action that directly or indirectly 

affects substantive legal rights or 

obligations, including by subjecting a 

regulated party to potential liability in 

an enforcement action. This includes 

agency letters or orders establishing 

greater liability for regulated parties in 

a subsequent enforcement action, but 

excludes communications that have no 

immediate regulatory implications for a 

person or entity, such as letters (e.g., 

warning letters) or inspectional 

observations that serve as an interim 

step in the agency’s compliance 

communications with a person or entity 

or that are intended to encourage 

voluntary compliance. 

Unfair surprise means a lack of 

reasonable certainty or fair warning, 

from the perspective of a reasonably 

prudent member of regulated industry, 

of what a legal standard administered by 

an agency requires. 

■ 4. Section 1.6 is added to read as 

follows: 

§ 1.6 Proper Department reliance on 

guidance documents. 

(a) Overview. A civil enforcement 

action must have an appropriate legal 

basis. When the Department takes a civil 

enforcement action or makes a 

determination based on an alleged 

violation of law that has legal 

consequence for a person or state, it 

must allege or establish the violation of 

law by applying statutes or regulations. 

(b) Limitations on the use of guidance 

documents. (1) The Department may not 

use guidance documents to impose 

binding requirements or prohibitions on 

persons outside the executive branch 

except as expressly authorized by law or 

as expressly incorporated into a 

contract. 

(2) The Department may not treat 

noncompliance with a standard or 

practice announced solely in a guidance 

document as itself a violation of 

applicable statutes or regulations except 

as expressly authorized by law. 

(3) If the Department uses a guidance 

document to explain the legal 

applicability of a statute or regulation, 

that document can do no more, with 

respect to prohibition of conduct, than 

articulate the Department’s 

understanding of how a statute or 

regulation applies to particular 

circumstances. 

(4) The Department may cite to a 

guidance document in a civil 

enforcement action only if it has 

notified the public of such document in 

advance through publication, in the 

Department’s guidance repository, as 

described in § 1.4. 

■ 5. Section 1.7 is added to read as 

follows: 

§ 1.7 Fairness and notice in civil 

enforcement actions and administrative 

inspections. 

(a) When the Department takes a civil 

enforcement action, the Department 

may only apply standards or practices 

that have been publicly stated in a 

manner that would not cause unfair 

surprise. 

(b) The Department must avoid unfair 

surprise when it imposes penalties and 

whenever it adjudges past conduct to 

have violated the law. 

(c) The Department shall only 

conduct civil administrative inspections 

according to published rules of agency 

procedure. 

■ 6. Section 1.8 is added to read as 

follows: 

§ 1.8 Fairness and notice in jurisdictional 

determinations. 

(a) If the Department relies on a 

decision in an agency adjudication, 

administrative order, or agency 

document to assert a new or expanded 

claim of jurisdiction (e.g., a claim to 

regulate a new subject matter or a new 

basis for liability, or a relinquishment of 

a claim of jurisdiction), the Department 

must give fair notice by publishing the 

initial decision before the conduct over 

which jurisdiction is sought occurs. It 

must publish the initial decision in full 

or by citation, if publicly available, in 

the Federal Register or the Department’s 

guidance repository described in § 1.4. 

A claim of jurisdiction is not ‘‘new or 

expanded’’ simply because it involves a 

new or novel set of facts so long as it 

is based on an established principle of 

general applicability. 

(b) If the Department intends to rely 

on a document arising out of litigation 

(other than a publicly published 

opinion of an adjudicator), such as a 

brief, a consent decree, or a settlement 

agreement, to establish jurisdiction in 

future civil enforcement actions 


khammond on DSKJM1Z7X2PROD with RULES
Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations 3015 

involving persons who were not parties 

to the litigation, the Department must— 

(1) Publish that document, either in 

full or by citation if publicly available, 

in the Federal Register or on the 

Department’s guidance repository 

described in § 1.4, and 

(2) Publish an explanation of the 

document’s jurisdictional implications. 

(c) Before seeking judicial deference 

to the Department’s interpretation of a 

document arising out of litigation (other 

than a publicly published opinion of an 

adjudicator) in order to establish a new 

or expanded claim of jurisdiction in a 

different case, the Department must— 

(1) Publish the document or a notice 

of availability in the Federal Register or 

on the Department’s guidance repository 

described in § 1.4, and 

(2) Publish an explanation of the 

document’s jurisdictional implications. 

■ 7. Section 1.9 is added to read as 

follows: 

§ 1.9 Opportunity to contest agency 

determination. 

(a) Departmental overview. Except as 

provided in paragraph (c) of this 

section, prior to the Department taking 

any civil enforcement action with 

respect to a particular entity that has 

legal consequence for that entity, 

including by issuing to such a person a 

notice of noncompliance, or other 

similar notice that has immediate 

regulatory consequence, but excluding 

communications that have no 

immediate regulatory implications for 

the entity, such as those that serve as an 

interim step in the agency’s compliance 

communications with the entity or that 

are intended to encourage voluntary 

compliance, the Department shall 

provide— 

(1) Written notice to the affected 

entity of the initial legal and factual 

determinations underpinning the initial 

adverse determination; 

(2) An opportunity for the affected 

entity to respond in writing and, if 

determined appropriate by the 

Department, orally; and 

(3) A written response from the 

Department to the affected entity after 

receiving a timely request from the 

affected entity under paragraph (a)(2) of 

this section. 

(b) Timing and content of written 

responses. (1) The Department will 

select a meaningful amount of time in 

which the affected entity must submit a 

written response to the Department. 

This writing must be submitted within 

the time period specified by the 

Department, unless the Department 

concludes an extension is warranted, 

and state the reasons for the entity’s 

disagreement with the Department’s 

proposed action for purposes of 

requiring a response in accordance with 

paragraph (a)(3) of this section. 

(2) The Department’s written response 

must respond to the affected entity and 

articulate the basis for its final decision. 

This written response may be issued 

contemporaneous to the Department 

taking the action with legal 

consequence. 

(c) Exceptions. The procedures in 

paragraphs (a) and (b) of this section do 

not apply where the Department, in its 

discretion, determines there is a serious 

threat to health, safety, or similar 

emergency, or where a statute 

specifically authorizes proceeding 

without a prior opportunity to be heard. 

In such event, HHS would still provide 

an affected entity with an opportunity to 

be heard and a written response as soon 

as practicable. The procedures in 

paragraphs (a) and (b) do not apply to 

settlement negotiations between 

agencies and regulated parties, to 

notices of a prospective legal action, to 

litigation before courts, or any action 

related to a criminal investigation or 

prosecution, including undercover 

operations that may be used in a 

criminal investigation or prosecution, or 

any civil enforcement action either 

related to an investigation by the 

Department of Justice, or referred to the 

Department of Justice. 

Dated: January 7, 2021. 

Alex M. Azar II, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2021–00592 Filed 1–12–21; 4:15 pm] 

BILLING CODE 4150–26–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[MB Docket No. 20–340; RM–11865; DA 20– 

1425; FRS 17287] 

Television Broadcasting Services; 

Minneapolis, Minnesota. 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: The Media Bureau, Video 

Division (Bureau) has before it a Notice 

of Proposed Rulemaking issued in 

response to a petition for rulemaking 

filed by Multimedia Holdings 

Corporation (Multimedia), licensee of 

KARE, channel 11, Minneapolis, 

Minnesota, requesting the substitution 

of channel 31 for channel 11 at 

Minneapolis in the DTV Table of 

Allotments. The Bureau had instituted a 

freeze on the acceptance of rulemaking 

petitions by full power television 

stations requesting channel 

substitutions in May 2011 and waived 

the freeze to consider Multimedia’s 

proposal to substitute channel 31 at 

Minneapolis. TEGNA, Inc., filed 

comments in support of the petition 

reaffirming its commitment to applying 

for channel 31. The Bureau believes the 

public interest would be served by the 

substitution and will permit the station 

to better serve its viewers, who have 

experienced reception problems with 

VHF channel 11. 

DATES: Effective January 14, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Joyce Bernstein, Media Bureau, at 

Joyce.Bernstein@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Report 

and Order, MB Docket No. 20–340; RM– 

11865; DA 20–1425, adopted December 

2, 2020, and released December 2, 2020. 

The full text of this document is 

available for download at https://

www.fcc.gov/edocs. To request materials 

in accessible formats for people with 

disabilities (braille, large print, 

electronic files, audio format), send an 

email to fcc504@fcc.gov or call the 

Consumer & Governmental Affairs 

Bureau at 202–418–0530 (voice), 202– 

418–0432 (tty). 

This document does not contain 

information collection requirements 

subject to the Paperwork Reduction Act 

of 1995, Public Law 104–13. In addition, 

therefore, it does not contain any 

proposed information collection burden 

‘‘for small business concerns with fewer 

than 25 employees,’’ pursuant to the 

Small Business Paperwork Relief Act of 

2002, Public Law 107–198, see 44 U.S.C. 

3506(c)(4). Provisions of the Regulatory 

Flexibility Act of 1980, 5 U.S.C. 601– 

612, do not apply to this proceeding. 

The Commission will send a copy of 

this Report and Order in a report to be 

sent to Congress and the Government 

Accountability Office pursuant to the 

Congressional review Act, see 5 U.S.C. 

801(a)(1)(A). 

List of Subjects in 47 CFR Part 73 

Television. 

Federal Communications Commission. 

Thomas Horan, 

Chief of Staff, Media Bureau. 

Final Rule 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR part 73 as 

follows: 


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