6096 Federal Register / Vol. 62, No. 27 / Monday, February 10, 1997 / Rules and Regulations

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.

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 § 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).
Federal Register / Vol. 62, No. 27 / Monday, February 10, 1997 / Rules and Regulations 6097

§ 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 nonconcurred 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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