[Federal Register Volume 62, Number 27 (Monday, February 10, 1997)]
[Rules and Regulations]
[Pages 6096-6097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3241]



[[Page 6095]]

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Part V





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Part 18



Indemnification of Department of Housing and Urban Development 
Employees; Final Rule

Federal Register / Vol. 62, No. 27 / Monday, February 10, 1997 / 
Rules and Regulations

[[Page 6096]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 18

[Docket No. FR-4143-F-01]
RIN 2501-AC34


Indemnification of Department of Housing and Urban Development 
Employees

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This final rule adds a new part 18 to title 24 of the Code of 
Federal Regulations. The provisions of this rule parallel provisions 
adopted by other departments and agencies, including the Departments of 
Justice (28 CFR part 50), Treasury (31 CFR part 3), Interior (43 CFR 
part 22), Education (34 CFR part 60), and Health and Human Services (45 
CFR part 36). The rule permits indemnification of HUD employees in 
appropriate circumstances, as determined by the Secretary.

EFFECTIVE DATE: March 12, 1997.

FOR FURTHER INFORMATION CONTACT: Sam E. Hutchinson, Associate General 
Counsel for Human Resources, Department of Housing and Urban 
Development, 451 Seventh Street, S.W., Washington, D.C., 20410, (202) 
708-0888. (This is not a toll-free number.) Hearing-impaired or speech-
impaired individuals may access the voice telephone listed in this rule 
by calling the Federal Information Relay Service during working hours 
at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: HUD does not at present have a published 
policy regarding indemnification of Department employees who are sued 
in their individual capacities as a result of conduct taken within the 
scope of their employment. Lawsuits against Federal employees in their 
individual capacities have occurred since the Supreme Court decision in 
Bivins v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 
403 U.S. 388 (1971).
    The potential for adverse judgments against a Federal employee for 
actions taken within the scope of employment is detrimental to both the 
individual employee and the Federal government. The prospect of 
personal liability and the uncertainty as to what conduct may result in 
a lawsuit against the employee personally tend to intimidate all 
employees, to impede creativity, and to stifle initiative and decisive 
action. Employees' fears of personal liability affect government 
operations, decisionmaking, and policy determinations.
    The Department believes that lawsuits against federal employees in 
their individual capacities seriously hinder the effective functioning 
of the Department. A published statement of HUD policy regarding 
indemnification of its employees will help alleviate this problem.
    HUD policy permits, but does not require, the Department to 
indemnify a Department employee who suffers an adverse judgment, or 
other monetary award, provided that the conduct giving rise to the 
award was taken within the scope of employment and indemnification is 
in the interest of the United States, as determined by the Secretary or 
designee, in his or her discretion. The policy also permits the 
Department to settle a personal damage claim against a Department 
employee. Absent exceptional circumstances, the Department will not 
settle a personal damage claim before entry of an adverse judgment. A 
notification procedure which should be followed by an employee sued in 
his or her individual capacity is provided. Questions regarding 
representation of the employee will be determined by the Department of 
Justice. Any payment, either to indemnify or settle, is contingent upon 
the availability of appropriated funds of the Department.
    These regulations apply to actions pending against Department 
employees as of the effective date of the regulations and to actions 
commenced after that date.

Other Matters

Justification for Final Rule

    In general, the Department publishes a rule for public comment 
before issuing a rule for effect, in accordance with its own 
regulations on rulemaking, 24 CFR part 10. However, part 10 does 
provide for exceptions from that general rule where the Department 
finds good cause to omit advance notice and public participation. The 
good cause requirement is satisfied when prior public procedure is 
``impracticable, unnecessary, or contrary to the public interest.'' (24 
CFR 10.1) The Department finds that good cause exists to publish this 
rule for effect without first soliciting public comment, in that public 
procedure is impracticable, unnecessary, and contrary to the public 
interest. This rule makes clear the Department's policy that, at its 
discretion, the Department may indemnify a Department employee who 
suffers an adverse judgment, or other monetary award, provided that the 
conduct giving rise to the award was taken within the scope of 
employment, and indemnification is in the interest of the United 
States, as determined by the Secretary or designee.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
set forth in this final rule do not have Federalism implications and, 
thus, are not subject to review under the Order. Nothing in the rule 
implies any preemption of State or local law, nor does any provision of 
the rule disturb the existing relationship between the Federal 
Government and State and local governments.

Executive Order 12606, The Family

    The General Counsel, as the designated Official under Executive 
Order 12606, The Family, has determined that this final rule does not 
have significant impact on family formation, maintenance, and general 
well-being, and, thus, is not subject to review under the Order. This 
rule applies to actions pending against Department employees only.

Environmental Finding

    This notice is categorically excluded from the requirements of 24 
CFR part 50, the HUD regulations which implement section 102(2)(C) of 
the National Environmental Policy Act of 1969 (NEPA). [See 24 CFR 
50.19(b)(3).] This notice does not require environmental review because 
it does not alter physical conditions in a manner or to an extent that 
would require review under NEPA or the other laws and authorities cited 
at Sec. 50.4.

Regulatory Flexibility

    Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the 
Secretary by his approval of publication of this final rule hereby 
certifies that this final rule does not have a significant economic 
impact on a substantial number of small entities. This rule applies to 
actions pending against Department employees only.

List of Subjects in 24 CFR Part 18

    Civil proceedings, Claims, Congressional proceedings, Criminal 
proceedings, Federal employees, Indemnification, Judgments, Litigation, 
Subpoenas, Verdicts.

    Accordingly, 24 CFR subtitle A is amended by adding a new part 18 
to read as follows:

PART 18--INDEMNIFICATION OF HUD EMPLOYEES

    Authority: 5 U.S.C. 301; 42 U.S.C. 3535(d).

[[Page 6097]]

Sec. 18.1  Policy.

    (a) The Department of Housing and Urban Development may indemnify, 
in whole or in part, a Department employee (which for the purpose of 
this part includes a former Department employee) for any verdict, 
judgment or other monetary award which is rendered against any such 
employee, provided the Secretary or his or her designee determines 
that:
    (1) The conduct giving rise to the verdict, judgment or award was 
taken within the scope of his or her employment with the Department; 
and
    (2) Such indemnification is in the interest of the United States.
    (b) The Department of Housing and Urban Development may settle or 
compromise a personal damage claim against a Department employee by the 
payment of available funds, at any time, provided the Secretary or his 
or her designee determines that:
    (1) The alleged conduct giving rise to the personal damage claim 
was taken within the scope of employment; and
    (2) That such settlement or compromise is in the interest of the 
United States.
    (c) Absent exceptional circumstances, as determined by the 
Secretary or his or her designee, the Department will not entertain a 
request either to agree to indemnify or to settle a personal damage 
claim before entry of an adverse verdict, judgment or monetary award.
    (d) When an employee of the Department becomes aware that an action 
has been filed against the employee in his or her individual capacity 
as a result of conduct taken within the scope of his or her employment, 
the employee should immediately notify his or her supervisor that such 
an action is pending. The supervisor shall promptly notify the head of 
his or her operating component and the Associate General Counsel for 
Litigation and Fair Housing Enforcement, if the supervisor is located 
at headquarters, or Field Assistant General Counsel--who shall promptly 
notify the Associate General Counsel for Litigation and Fair Housing 
Enforcement--if the supervisor is located in the field. As used in this 
section, the term ``principal operating component'' means an office in 
the Department headed by an Assistant Secretary, the General Counsel, 
the Inspector General, or an equivalent departmental officer who 
reports directly to the Secretary. Questions regarding representation 
of the employee will be determined by the Department of Justice 
pursuant to 28 CFR 50.15 (Representation of Federal officials and 
employees by Department of Justice attorneys or by private counsel 
furnished by the Department in civil, criminal, and congressional 
proceedings in which Federal employees are sued, subpoenaed, or charged 
in their individual capacities).
    (e) The employee may, thereafter, request indemnification to 
satisfy a verdict, judgment or monetary award entered against the 
employee or to compromise a claim pending against the employee. The 
employee shall submit a written request, with appropriate documentation 
including a copy of the verdict, judgment, award or other order or 
settlement proposal, in a timely manner to the head of the employee's 
principal operating component. The head of the employee's principal 
operating component shall submit the written request and accompanying 
documentation, together with a recommended disposition of the request, 
in a timely manner to the General Counsel.
    (f) The General Counsel shall seek the views of the Department of 
Justice on the request. Where the Department of Justice has rendered a 
decision denying representation of the employee pursuant to 28 CFR 
50.15, the General Counsel shall seek the concurrence of the Department 
of Justice on the request. If the Department of Justice does not concur 
in the request, the General Counsel shall so advise the employee and no 
further action on the employee's request shall be taken.
    (g) In all instances except those where the Department of Justice 
has non-concurred in the request, the General Counsel shall forward for 
decision to the Secretary or his or her designee the employee's 
request, the recommendation of the head of the employee's principal 
operating component, the views of the Department of Justice, and the 
General Counsel's recommendation.
    (h) Any payment under this part, either to indemnify a Department 
employee or to settle a personal damage claim, is contingent upon the 
availability of appropriated funds of the Department that are permitted 
by law to be utilized for this purpose.

    Dated: January 28, 1997.
Dwight P. Robinson,
Acting Secretary.
[FR Doc. 97-3241 Filed 2-7-97; 8:45 am]
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