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SANJOUR v. UNITED STATES EPA

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


February 19, 1992

WILLIAM SANJOUR, et al., Plaintiffs,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al., Defendants.

The opinion of the court was delivered by: STANLEY S. HARRIS

OPINION

 Before the Court are defendants' motion to dismiss, plaintiffs' motion for summary judgment, and the oppositions and replies thereto. *fn1" Because the Court considers evidence besides the pleadings, the Court treats the defendants' motion as a motion for summary judgment. See Fed. R. Civ. P. 12(b). For the reasons stated below, the Court denies the plaintiffs' motion for summary judgment and grants the defendants' motion for summary judgment.

 Background

 Plaintiff William Sanjour filed his original complaint on October 28, 1991, seeking injunctive and declaratory relief against the Environmental Protection Agency (EPA) and several of its officials. *fn2" Plaintiff sought a temporary restraining order and/or a preliminary injunction to enjoin defendants from enforcing "all restrictions placed on his reimbursement for reasonable travel expenses as prohibited on page 3 of EPA Ethics Advisory 91-1." (Plaintiff's Complaint, at 9.) He also sought a declaration that certain "regulations, policies, memoranda and directives" relating to reimbursement of travel expenses are void as not supported by existing law and regulation, including the Ethics Reform Act of 1989, and violate the First Amendment. (Plaintiff's Complaint, at 9.) Following a hearing on October 30, 1991, and by Order dated October 31, 1991, the Court denied plaintiff Sanjour's motion for a temporary restraining order. Order (Oct. 31, 1991).

 Following the denial of the temporary restraining order, defendants filed a motion to dismiss. Plaintiff then filed a motion to amend his complaint to add both new plaintiffs and new defendants, which was granted. See Order (Jan. 21, 1991). However, the Court also granted the defendants' motion to dismiss certain individual defendants named in the amended complaint. See id. The Court then denied plaintiffs' subsequent motion for a preliminary injunction, noting it would treat the motion as one for a permanent injunction. See Order (Jan. 22, 1992). Therefore, now before the Court are defendants' motion for summary judgment and plaintiffs' motion for summary judgment based on the amended complaint. *fn3"

 Facts

 The Court takes the following facts from plaintiffs' amended complaint. Plaintiffs William Sanjour and Hugh B. Kaufman are employees of the EPA and have been since 1972. Plaintiff North Carolina Waste Awareness and Reduction Network (NC WARN) is a non-profit environmental coalition of over 50 North Carolina environmental and community organizations. Defendants are EPA, EPA Administrator William Reilly, the Office of Government Ethics (OGE), and Stephen D. Potts, the Director of the OGE.

 Both Sanjour and Kaufman describe themselves as "well-known 'whistleblowers'" at the EPA. (Amended Complaint, at 5, 6.1 Sanjour and Kaufman regularly travel "throughout the United States in a non-official capacity, and meet[] with local environmental organizations and/or municipal authorities to discuss matters within the EPA's scope of responsibility and matters related with EPA policies and programs." (Amended Complaint, at 5, 6.) These speeches are often critical of EPA policies. Organizations which invite Sanjour and Kaufman to speak regularly reimburse them for their actual travel expenses.

 In or about October of 1991, the EPA "instructed Mr. Kaufman not to accept travel reimbursement in the future for speeches in which EPA related matters were the focus of the speech." (Amended Complaint, at 6.) EPA officials also gave Sanjour an April 8, 1991, Memorandum (April 8th Memorandum) which stated that EPA policy prohibited employees from accepting non-official travel expenses for speeches or public appearances relating to EPA responsibilities, policies, and programs. Sanjour and Kaufman allege that without reimbursement, they are unable to engage in non-official speeches outside the Washington, D.C., area.

 Sanjour and Kaufman further allege that they have been forced to cancel several invitations to speak as a result of the prohibition on the acceptance of travel expenses. Plaintiff NC WARN invited both Kaufman and Sanjour to speak at a public meeting in Jackson, N.C., on January 23, 1992. Both declined, citing the inability to accept travel expenses as preventing them from accepting. (Amended Complaint, at 10.)

 Plaintiffs contend that the restriction on the acceptance of travel expenses violates the First Amendment, the Ethics Reform Act (ERA), is selectively enforced, and was promulgated in violation of the Administrative Procedure Act (APA). They seek an injunction against the OGE's interim regulation set forth at 56 Fed. Reg. 1724 (to be codified at 5 C.F.R. § 2636.202(b)), page three of the EPA Ethics Advisory 91-1, and paragraph three of the April 8th Memorandum.

 Discussion

 The Challenged Regulations

 The challenged OGE interim regulation is one part of an interim rule promulgated by the OGE after the passage of the ERA. Section 2636.202, with the sub-heading "Relationship to other laws and regulations," states that the honorarium and other prohibitions of the ERA are "in addition to any restriction on appearances, speaking or writing . . . to which an employee is subject under applicable standards of conduct." Limitations on Outside Employment and Prohibition of Honoraria; Confidential Reporting of Payment to Charities in Lieu of Honoraria, 56 Fed. Reg. 1721, 1724 (1991) (to be codified at 5 C.F.R. § 2636.202(b)). The regulation further states:

 An employee should accept compensation, including travel expenses . . . only after determining that it is not prohibited by the following: . . . (b) An employee is prohibited by the standards of conduct from receiving compensation, including travel expenses, for speaking or writing on subject matter that focuses specifically on his official duties or on the responsibilities, policies and programs of his employing agency. Id. at 1724 - 25.

 The OGE interim rule, encompassing the above regulation, was circulated to deputy ethics officials within the EPA as an attachment to EPA Ethics Advisory 91-1 (Ethics Advisory), also at issue here. See EPA Ethics Advisory 91-1, Defendants' Motion To Dismiss, Ex. 3. The Ethics Advisory merely "highlight[s] some key points of the new OGE rule." Id. at 1. The challenged portion of the Ethics Advisory notes that "employees may not accept non-official travel expenses when the subject of an appearance or speech focuses specifically on the employee's official duties or on EPA's responsibilities, policies and programs." Id. at 3. *fn4"

 The final document in question is the April 8th Memorandum circulated to EPA officials as a cover memorandum to the Ethics Advisory. The challenged paragraph of the memorandum asks the officials to note the above-quoted language of the Ethics Advisory relating to the ban on the acceptance of travel expenses. See April 8th Memorandum, at Defendants' Motion To Dismiss, Ex. 4.

 First Amendment Claim

 Plaintiffs claim that the rationale of the Supreme Court decision invalidating the "Son of Sam" law requires this Court to conclude that the ethics regulations unconstitutionally abridge their rights under the First Amendment. See Simon & Schuster, Inc. v. New York State Crime Victims Bd., No. 90-1059, 116 L. Ed. 2d 476, 1991 U.S. LEXIS 7172, 112 S. Ct. 501 (Dec. 10, 1991). Plaintiffs reason that the ethics regulation, like the Son of Sam law, creates a content-based financial burden on speech which must be justified by "a compelling state interest and [be] narrowly drawn to achieve that end." See id. at *20 (citing Arkansas Writers' Project, Inc. v. Ragland, 481 U.S. 221, 231, 95 L. Ed. 2d 209, 107 S. Ct. 1722 (1987)). While this Court believes that the challenged regulations would survive the Simon & Schuster test, the applicable test here is the one originally enunciated in Pickering v. Board of Educ., 391 U.S. 563, 88 S. Ct. 1731, 20 L. Ed. 2d 811 (1968).

 In Pickering the Supreme Court established a balancing test between the interests of the public employee in speaking on issues of public concern and the interests of the government as employer in regulating its employees. See Pickering, 391 U.S. at 568. The Court noted that the interests the government has in regulating its employees "differ significantly from those it possesses in connection with regulation of the speech of the citizenry in general." Id.

  The first prong of the Pickering analysis requires the Court to consider whether the regulated speech involves matters of public concern. See Connick v. Myers, 461 U.S. 138, 146, 75 L. Ed. 2d 708, 103 S. Ct. 1684 (1983). Plaintiffs Sanjour and Kaufman seek to speak to groups, such as plaintiff NC WARN, regarding policies and practices of the EPA. Both are self-described critics of the EPA and lecture in many states. Plaintiff NC WARN asserts that it desires Sanjour and Kaufman to speak because "of their well known status of 'EPA whistleblowers,' i.e. people willing to speak the truth about EPA policies and how they will effect (sic) the citizens of Northampton County, should the state approve the [hazardous waste] incinerator in the county." (First Affidavit of Billie L. Elmore, Executive Director of NC WARN, at para. 6, at 2.) Given the affidavits of plaintiffs, the Court has little trouble concluding that the regulated speech touches on matters of public concern. See, e.g., Rankin v. McPherson, 483 U.S. 378, 387-88, 97 L. Ed. 2d 315, 107 S. Ct. 2891, reh'g denied, 483 U.S. 1056, 97 L. Ed. 2d 819, 108 S. Ct. 31 (1987) (finding remark involving the attempted assassination of Ronald Reagan involved a matter of public concern) Connick, 461 U.S. at 149 (finding issue of whether district attorneys feel pressured to work on political campaigns a matter of public concern); Pickering, 391 U.S. at 571 (finding that whether school system needs additional funds is a matter of public concern).

 Although the affected speech here involves a subject of interest to the public, the regulation is constitutional if the defendants can meet the second prong of the Pickering analysis. The government may regulate speech on matters of public concern "where government regulations are aimed to address legitimate concerns and not designed to control or limit the exercise of first amendment freedoms." Williams v. Internal Revenue Serv., 919 F.2d 745, 746 (D.C. Cir. 1990) (per curiam) (citation omitted); see Rankin v. McPherson, 483 U.S. 378, 388, 97 L. Ed. 2d 315, 107 S. Ct. 2891 (1987) (citing Pickering and and Connick). *fn5" Here, the Court finds that both the OGE and the EPA have a legitimate interest in ensuring against the appearance of impropriety in the actions of their employees. *fn6" The government's ability to provide services is affected by the public's confidence in the integrity of public servants. The acceptance of money, even in the form of reimbursement for actual travel expenses, in return for discussing matters relating to EPA's policies, programs, and responsibilities creates the appearance of impropriety, if not amounting to actual impropriety.

 In addition, the prohibition on travel expenses is not designed to inhibit the exercise of employees' First Amendment rights. The defendants have not prohibited Sanjour and Kaufman from making non-official public appearances, nor from giving speeches regarding the EPA's policies. Although the restriction is content-based in the sense that it affects only those who speak on matters directly related to the EPA's responsibilities, it is content-neutral in that the regulation is "not aimed at the content" of the speech "but rather at the secondary effects" of having a government employee receiving money to travel for such speeches. Renton v. Playtime Theatres, Inc., 475 U.S. 41, 47, 89 L. Ed. 2d 29, 106 S. Ct. 925 (1986). It is applied to any employee who intends to discuss the policies and programs of the EPA in his or her non-official capacity, regardless of whether the speech praises, criticizes, or merely explains EPA policies. Although in practice it may affect more frequently employees speaking critically of the agency because other types of speeches may be made in an official capacity, this is an indirect effect unrelated to the purpose of the regulation. The restriction, by prohibiting a financial windfall to individuals who desire to make such speeches, does not impermissibly infringe upon First Amendment freedoms. *fn7" Because plaintiffs Sanjour and Kaufman are not prohibited from speaking to community groups, the First Amendment rights of NC WARN to hear their message is not impernissibly burdened.

 The Court thus finds that the challenged regulation withstands constitutional attack. The content-neutral restriction does not violate the plaintiffs' First Amendment rights. Although it regulates matters which affect speech on issues of public concern, it is narrowly tailored to meet a legitimate government objective and is not designed to limit First Amendment freedoms.

 Statutory Challenges

 Even though the regulations pass constitutional muster, to be upheld they also must survive the statutory challenge. Plaintiffs make two statutory arguments: (1) the regulations violate the ERA, and (2) the OGE and the EPA improperly promulgated the regulations under the APA.

 Ethics Reform Act

 Plaintiffs claim that the restriction on the acceptance of travel expenses is inherently in conflict with the ERA, which plaintiffs read as expressly permitting the acceptance of such expenses. *fn8" The ERA, and the OGE regulations pertaining to it, do exclude "actual and necessary travel expenses" from the definition of honorarium. 56 Fed. Reg. at 1725 (to be codified at 5 C.F.R. § 2636.203(a)(4)). The ERA and the OGE make clear that receipt of an honorarium by Sanjour and Kaufman for their speeches is prohibited. This is undisputed. The fact that the ERA's definition of honorarium specifically excludes travel expenses does not imply that the reimbursement of travel expenses is always permitted. The circumstances to which the prohibition on the receipt of honorarium applies are much broader than the situation presented here. By excluding travel expenses from the definition of honorarium, the ERA's language merely supports the proposition that Congress did not want to ban travel expenses in every situation in which it wanted to ban other forms of compensation. *fn9" Therefore, the Court finds neither the OGE regulation nor the EPA Advisory nor the April 8th Memorandum violates the ERA.

 Administrative Procedure Act Claims

 Under the APA, an agency must follow certain notice and comment procedures prior to implementing a rule. These requirements include providing notice of a proposed rule at least 30 days prior to its taking effect and citing to the legal authority under which the rule is promulgated. See 5 U.S.C.A. § 553(b)(2), 553(d). Plaintiffs claim that the OGE regulation here did not meet these two requirements. Defendants assert that the legal authority was sufficiently stated and that the rule was properly promulgated under an exception to the 30-day notice requirement. The Court concludes that the OGE followed the necessary rulemaking procedures and therefore upholds the regulations.

 A. Lack of Legal Authority Claim

 The APA requires that notice of a proposed rule include "reference to the legal authority under which the rule is proposed." 5 U.S.C.A. § 553(b)(2). The interim rule states the following:

 Authority: 5 U.S.C.A. appendix 102(a)(1)(A), appendix IV and appendix 501-505; E.O. 12674, 54 FR 15159, 3 C.F.R. 1969 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547. 56 Fed. Reg. at 1723. *fn10"

 In addition, under the heading "Purpose" the interim rule states that it is issued under authority of titles II and VI of the ERA and notes the particular provisions of the Act which it implements. See 56 Fed. Reg. at 1723. The supplementary information provided at the beginning of the interim rule also cites the authority under which it is promulgated. See 56 Fed. Reg. at 1721.

 Therefore, the Court finds that the agency made reference to the legal authority. The question then is whether the stated authorities support the issuance of the challenged regulation. The Court finds that they do. Executive Order 12674 sets out general principles of ethical conduct and gives the OGE the responsibility for "promulgating . . . regulations that establish a single, comprehensive, and clear set of executive-branch standards of conduct." Exec. Order No. 12674, 3 C.F.R. 215, 216 (1989 Comp.). One of the principles enunciated by that Executive Order is that "employees shall not use public office for private gain." Id. at 215. Although none of the points in the Executive Order explicitly mentions travel expenses, the broad principles outlined, and the grant of authority given the OGE, encompass the content of § 2636.202(b) challenged here.

 B. Lack of Notice Claim

 Plaintiffs' second APA claim involves the APA's requirement that "publication or service of a substantive rule shall be made not less than 30 days before its effective date." 5 U.S.C.A. § 553(d). Here, the challenged section of the rule took effect January 1, 1991, despite its not being published until January 17, 1991. See 56 Fed. Reg. at 1721. Clearly, the 30-day notice requirement was not met. Nevertheless, the APA excepts certain rules and situations from the 30-day requirement. These include

 interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice; or . . . when the agency for good cause finds . . . that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. [ 5 U.S.C.A. § 553(b)(3)(A), (B).]

 In addition, the rulemaking requirements do not apply to matters "relating to agency management or personnel." 5 U.S.C.A. § 553(a)(2). Defendants claim that at least one of these exemptions applies here. However, these exceptions are to be "' . . . narrowly construed and only reluctantly countenanced.'" See American Fed'n of Gov't Employees v. Block, 210 App. D.C. 336, 655 F.2d 1153, 1156 (D.C. Cir. 1981) (quoting Department of Envtl. Protection v. EPA, 626 F.2d 1038, 1045 (D.C. Cir. 1980)). Nevertheless, the Court finds that the good cause exception applies. *fn11"

  At the time the OGE promulgated the interim rule, it relied on the good cause exception to waive the 30-day requirement for the majority of the interim rule, including the challenged section. The OGE supported this decision because of the penalties to which employees potentially were subject should they violate provisions of the ERA, which took effect on January 1, 1991. See 56 Fed. Reg. at 1722. *fn12" Although the challenged section of the interim rule does not involve provisions of the ERA but rather its relationship to other ethical regulations and standards, the Court finds that this provision also meets the "good cause" exception. If the interim rule had been promulgated without § 2636.202, the rule would have given the impression that acceptance of travel expenses is permitted in all circumstances. To dispel this conclusion, the OGE incorporated provisions, including the one at issue here, relating to other ethical obligations as a part of the interim rule.

 The Court finds that the prohibition on the acceptance of compensation was longstanding OGE policy. OGE Memorandum 85 x 18 (Oct. 28, 1985), at Defendant's Motion To Dismiss, Ex. 2. OGE Memorandum 85 x 18 (Memorandum) creates standards to enforce Executive Order 11122 which, like its successor Executive Order 12674, forbids "using public office for private gain." See 30 Fed. Reg. 6469 (1965). The Memorandum states that "employees are prohibited from receiving compensation for lectures or articles when the activity focuses specifically on the employing agency's responsibilities, policies, and programs." OGE Memorandum 85 x 18, at 2. *fn13" Although not specifically defined in the Memorandum, the word "compensation" is general enough to include travel expenses. EPA acknowledges that prior to the interim rule it had interpreted "compensation" to exclude reimbursement for travel expenses. This misinterpretation, however, supports the need for OGE to clarify its policy in the interim rule. Therefore, in order not to mislead employees and to make the ethical obligations clear to federal employees and their supervisors, OGE had good cause to exempt § 2636.202(b) from the 30-day notice and comment requirement. *fn14"

 Having found that the OGE properly promulgated § 2636.202(b), the Court also upholds both the EPA's Ethics Advisory and the April 8th Memorandum. Both of these documents merely summarized the contents of the OGE interim rule.

 Conclusion

 Therefore, for the reasons stated above, this Court upholds the prohibition on the reimbursement of actual and necessary travel expenses to executive branch employees for speaking or writing on subjects directly relating to the policies, programs, or responsibilities of their agencies. Accordingly, the Court grants the defendants' motion for summary judgment and dismisses Counts I, II, III, IV, V, and VII, and denies plaintiffs' request for a permanent injunction. *fn15" An appropriate Order accompanies this Opinion.

 Stanley S. Harris

 United States District Judge

 EDITOR'S NOTE: The following court-provided text does not appear at this cite in 780 F. Supp. 1033.

 Date: FEB 19 1992

 ORDER - February 19, 1992, Filed

 For the reasons stated in the Court's accompanying Opinion, it hereby is

 ORDERED, that judgment shall be entered in favor of the defendants as to Counts I, II, III, IV, V, and VII. It hereby further is

 ORDERED, that within 14 days of the date of this Order, the parties shall notify the Court in writing as to how they wish to proceed as to Count VI.

 SO ORDERED.

 Stanley S. Harris

 United States District Judge

 Date: FEB 19 1992


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