Authority of the Environmental Protection Agency to Indemnify Its Employees ( 1989 )

Authority of the Environmental Protection
Agency to Indemnify Its Employees
The Environmental Protection Agency may use funds appropriated to the agency for
“Salaries and Expenses" to indemnify its employees for personal liability arising from
actions taken within the scope of their official duties.
February 1, 1989
M emorandum O pin io n for t h e G eneral C ounsel
E nvironmental P rotection A gency
This responds to your request for the opinion of this Office concerning
the authority of the Environmental Protection Agency (“EPA”) to indem­
nify its employees for personal liability arising from actions taken within
the scope of their official duties.1 The memorandum accompanying the
request concludes that the EPA may indemnify its employees with funds
appropriated to the agency for “Salaries and Expenses.”2 For the reasons
stated below, we agree that the EPA may use these appropriated funds to
indemnify its employees for judgments and other liability incurred as a
result of official actions.
Analysis
As a general rule, an agency may spend a general appropriation to pay any
expense that is necessary or incident to the achievement of the underlying
objectives for which the appropriation was made.3 Principles of Federal
1 Letter for Charles J. Cooper, Assistant Attorney General, Office of Legal Counsel, from Francis S.
Blake, General Counsel, Environmental Protection Agency (Mar. 16, 1988).
2 Memorandum for Andrew Moran, Assistant General Counsel, General Law and Claims Branch, from
Ray E. Spears, Claims Officer, General Law and Claims Branch (Mar. 12, 1988) (“EPA Memorandum”).
3There are two exceptions to this general rule — that an agency may not use generally appropriated
funds if there is a specific appropriation for that purpose or if the use of appropriated funds for that pur­
pose is prohibited by law. Principles o f Federal Appropriations Law 3-12 (GAO 1st ed 1982), see also 3
Op. O.L C. 9 (1979) In this instance, neither exception applies There is no specific appropriation to the
EPA to be used for the indemnification o f its employees See EPA Memorandum at 2 (laws EPA enforces),
Department of Housing and Urban Development — Independent Agencies Appropriations Act, 1989,
Pub L No 100-404, 102 Stat. 1014, 1022 (1988) (“1989 Appropriations Act”) (EPA’s current appropria­
tion). Nor is there any express statutory prohibition on the use of appropriated funds for the indemnifi­
cation of EPA employees
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Appropriations Law 3-12 (GAO 1st ed. 1982).4 The EPA, therefore, may use
a general appropriation to indemnify its employees if the Administrator or
another responsible official determines that such an expense is necessary
to achieve the mission of the agency. The nature of an agency’s responsibil­
ities and the provisions of the law appropriating funds to an agency must be
considered together in determining whether it is permissible to use appro­
priated funds to indemnify employees for personal liability incurred as a
result of actions within the scope of an employee’s official duties. For exam­
ple, the special law enforcement duties of the Department of Justice sup­
port the use of funds appropriated to the Department for the indemnifica­
tion of its employees.5 Likewise, it has long been the policy of the federal
government to defend employees who are sued in their individual capacity
for actions taken within their official responsibilities.6
The EPA Memorandum states that it is necessary for the EPA to indem­
nify its employees because of the chilling effect the possibility of person­
al liability has on employees:
EPA employees are required in their official capacities and as
part of their official duties to take actions in many areas where
there is uncertainty concerning the hazards posed by a partic­
ular situation or where the risks among various remedial
options is unclear. In this regard, EPA employees have been
sued in their individual capacities for such diverse actions as
gasoline lead inspections and enforcement of pollution dis­
charged standards. EPAs ability to effectively ensure the pro­
tection of the environment depends upon the willingness of its
employees to take all required actions. The threat of personal
liability against an employee for a decision made or action
taken as part of official duties can adversely affect EPAs
achievement of its statutory purposes. The threat of personal
liability would have a chilling effect on performance of official
duties and would serve as a substantial impediment to EPAs
successful accomplishment of its mission.
EPA Memorandum at 4-5. Therefore, you conclude that “EPA’s ability to
indemnify its employees where it determines that the employee was act­
4The Comptroller General is an officer of the legislative branch, see Bowsher v Synar, 478 U.S. 714,
727-32 (1986), and, historically, the executive branch has not considered itself bound by the Comptroller
General’s legal opinions if they conflict with the legal opinions of the Attorney General or the Office of
Legal Counsel. Nonetheless, the Comptroller General’s opinions can provide guidance on certain techni­
cal matters, usually in the budget area. In this instance, the Comptroller General’s construction of appro­
priations law is consistent with our reading of the law.
5 See Statement of Policy Concerning Indemnification of Department of Justice Employees, 51 Fed.
Reg. 27,021 (1986) (“DOJ Indemnification Policy”).
GSee, e.g , Case o f Captain Wilkes, 9 Op Att’y Gen. 51, 52 (1857); Costs o f Suits Against Officers o f the
Navy, 5 Op. Att’y Gen. 397 (1851)
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ing within the scope of official duties and consistent with statute, regula­
tion and policy, directly contributes to EPA’s ability to carry out effec­
tively its varied responsibilities. As such, payment of such judgments is a
necessary expense of EPA operations.” Id. at 8. Therefore, where the
Administrator or another responsible official has determined that indem­
nification is necessary, you believe that funds in EPA’s annual general
appropriation for “Salaries and Expenses” may be used by the agency to
indemnify its employees.
We agree that it would be lawful for the Administrator or another respon­
sible official of EPA to determine that the threat of personal liability stands
as a mzgor impediment to the effective enforcement of federal environ­
mental law by EPA employees. “The prospect of personal liability, and even
the uncertainty as to what conduct may result in a lawsuit against the
employee personally, tend to intimidate all employees, impede creativity
and stifle initiative and decisive action.” DOJ Indemnification Policy, 51
Fed. Reg. at 27,022. It would be reasonable to determine that an EPA
employee might protect his own interest, rather than serving the public
interest, because of his concern with the threat of personal liability. This
would clearly hinder the EPA in its mission to safeguard the nation’s envi­
ronment. The inhibition of creativity and initiative is especially trouble­
some in the context of environmental issues, whose resolution depends in
significant part on innovative solutions to complicated problems in an area
of rapidly increasing scientific knowledge and ever-changing technology.
These factors support your judgment that it is necessary for the EPA to be
able to protect its employees from the threat of personal liability.
The Comptroller General, as you noted, has agreed with our conclusion
that general agency funds may appropriately be used to indemnify agency
employees for liability arising out of their official duties in certain
instances. For example, the Comptroller General concluded that it was
permissible for the FBI to use appropriated funds to indemnify an
employee for a contempt fine imposed when the employee, at the direc­
tion of the Attorney General, refused to answer questions, 44 Comp. Gen.
312 (1964), and to indemnify three agents and an informant for attorneys’
fees assessed in a civil proceeding arising out of a search for illegal
weapons which resulted in the shooting of two suspects, 59 Comp. Gen.
489 (1980). Similarly, the General Counsel to the Comptroller General
concluded that the Department of the Interior could indemnify three
employees who were found personally liable for trespassing because
they were acting in the course of official responsibilities which were con­
sistent with agency policy and had been approved by the United States
Attorney. B-168571-O.M. (Jan. 27, 1970).7 Not surprisingly, the Comp­
troller General recently stated, “It has long been our view that the United
1See Alien v. Merovka, 382 F.2d 589 (10th Cir. 1967), Meivvka v AUen , 410 F2d 1307 (10th Cir. 1969)
(describing the events resulting in the liability).
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States may bear expenses, including court-imposed sanctions, which a
Government employee incurs because of an act done in the discharge of
his official duties.” 59 Comp. Gen. at 493.
We agree that the EPA may, if such a determination is made, use its gen­
eral appropriation for “Salaries and Expenses” to indemnify an employee.
That appropriation is for “necessary expenses, not otherwise provided
for.” 1989 Appropriations Act, 102 Stat. at 1022. Once the Administrator
or other responsible official has determined that the indemnification of
an employee for personal liability arising from an official action is a nec­
essary expense, we believe that the “Salaries and Expenses” appropria­
tion is a lawful source of funds for that purpose. Indeed, the Comptroller
General has approved the use of a similar general appropriation for
“Salaries and Expenses” to indemnify an employee for a contempt fine.
44 Comp. Gen. at 314 (FBI).
Of course, the EPA may indemnify an employee only for actions that
are within the scope of his or her official responsibilities. The determina­
tion of whether an expense is necessary to accomplish the purposes of an
agency must be made by the agency itself. We can, of course, express no
opinion at this point on whether any particular employee actions result­
ing in personal liability may be indemnified by the EPA.
Conclusion
We believe that you are correct in concluding that the role of the EPA
in enforcing federal environmental laws requires agency employees to
have the latitude to perform their responsibilities without the fear of per­
sonal liability for actions that Eire found to be within the scope of their
employment. Thus, the indemnification of its employees is a necessary
expense which the EPA may, in the absence of a specific appropriation
for that purpose, fund through its general appropriations. We therefore
concur that the annual appropriation to the agency for “Salaries and
Expenses” is a lawful source of funds for the indemnification of employ­
ees by the EPA.
As the original letter from your Office noted, the next step will be for
EPA to promulgate regulations that are consistent with EPA’s statutory
authority. Perhaps the Department of Justice regulations may serve as a
model. It is important to do this in a timely fashion so that EPA’s stan­
dards are in place before any indemnification is granted. Clear standards
that are applied in a consistent fashion will ensure that indemnification is
provided in as fair a manner as possible.
D ouglas W. Kmiec
Assistant Attorney General
Office of Legal Counsel
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