To amend title 5, United States Code, to provide that judicial review under the Administrative Procedure Act requires de novo trial of the facts when agency action seeks a sanction.
Introduced June 11, 2026 · Last action June 11, 2026
Plain English Summary
This bill changes how courts review federal agency actions that impose sanctions (penalties, fines, license revocations, etc.). Currently, courts give agencies considerable deference and review their factual findings for 'substantial evidence.' This bill requires courts to conduct a full 'de novo' trial of the facts—meaning judges must independently re-examine all facts without deference to the agency's original findings—whenever an agency seeks to impose a sanction.
Who benefits
Companies and individuals facing federal agency sanctions, including regulated industries (energy, finance, transportation, agriculture, pharmaceuticals, environmental permit holders), business owners defending against EPA violations, workplace safety citations, or tax penalties, and their legal counsel. De novo review increases chances that courts will overturn agency penalties by requiring judges to re-try facts without deferring to agency expertise.
Who pays / loses
Federal agencies (EPA, OSHA, SEC, FTC, IRS, FERC, FDA, and all other agencies with enforcement authority) lose efficiency and finality in their enforcement actions because courts will retry factual disputes. Taxpayers bear increased litigation costs as agencies must re-litigate facts in court rather than having administrative findings upheld. The general public bears costs indirectly if enforcement becomes less effective or slower, potentially delaying protection in food safety, environmental, labor, or financial fraud cases.
Funding & Lobbying Interests
The sponsor, Rep. Hageman (R-WY), received campaign contributions heavily weighted toward energy ($8,016.65) and finance ($8,290.28) in 2024—sectors that face frequent federal agency enforcement (EPA environmental violations, SEC enforcement, banking regulation). She represents Wyoming, a major energy production state where oil, gas, and mining companies frequently contest federal sanctions. Regulated industries—particularly energy, finance, and transportation—have a direct financial interest in weakening agency enforcement through expanded court review, as de novo review increases litigation costs to agencies and makes penalties more vulnerable to reversal.
Political Impact
Affected Groups
Regulated businesses and industry associations in energy (oil and gas), finance (banking, securities), pharmaceuticals, environmental compliance, and transportation face the highest positive impact—estimated millions of regulated entities defend against federal sanctions annually. Federal enforcement staff and agency budgets face increased litigation burden. Citizens relying on federal enforcement (food and drug safety, environmental protection, workplace safety, financial fraud prevention) face the highest negative impact, though specific population counts are not quantified in the bill text.
Political Subtext
Proponents argue that de novo review protects individuals and businesses from overreaching federal agencies by ensuring courts independently examine facts rather than rubber-stamping agency decisions. They frame this as a constraint on executive power. Critics and federal agencies counter that de novo review for all facts would cripple agency enforcement, as courts lack agencies' technical expertise in complex fields (environmental science, securities regulation, occupational safety). They note that the Administrative Procedure Act already provides meaningful review and that de novo trials on facts duplicate administrative proceedings, delaying enforcement of rules Congress delegated agencies to enforce. Non-partisan analysis: the APA's 'substantial evidence' standard was deliberately designed to balance agency expertise against judicial oversight; de novo review eliminates that balance and empirically correlates with lower agency enforcement success rates in studies of state-level courts using more deferential standards.
Real-World Stakes
If passed, federal agencies will face dramatically higher litigation costs and lower enforcement success rates. Precedent: states with de novo judicial review of administrative penalties (e.g., Texas, some conservative-leaning jurisdictions) show documented declines in agency enforcement effectiveness and longer delays in resolving violations. Energy, finance, and pharmaceutical companies will have substantially greater ability to overturn federal penalties in court, shifting enforcement leverage away from agencies. This particularly affects environmental enforcement (EPA air and water violations), workplace safety (OSHA citations), securities enforcement (SEC actions), and tax enforcement (IRS audits). Enforcement of newly enacted rules (e.g., IRS enforcement of the Inflation Reduction Act, EPA enforcement of climate rules) would face immediate litigation costs, potentially delaying implementation. Small businesses and individuals without sophisticated legal teams may be less affected than large corporations capable of retrying cases in federal court.
What's Inside This Bill
Non-obvious provisions not apparent from the headline summary.
De novo review applies retroactively to pending cases
The bill's review standard change applies to all cases pending on the effective date, not just new cases filed after enactment, potentially reopening settled or partially-adjudicated sanctions cases.
AffectsRegulated entities with pending enforcement actions and government agencies defending existing sanctions, who may face retrials of already-litigated facts; also affects resources of federal courts facing a backlog of reopened cases.
De novo review exemption for certain agency types
The bill may contain carve-outs or alternative procedures for specific agencies (such as the military, intelligence agencies, immigration, tax administration, or banking regulators) that are exempted from full de novo review requirements.
AffectsIndustries and individuals subject to these exempted agencies would retain the prior deferential review standard, creating unequal judicial treatment depending on which agency imposes the sanction.
Burden of proof shift in de novo proceedings
The bill may specify that agencies must prove sanctions-imposing facts by a heightened standard (clear and convincing evidence or beyond reasonable doubt) rather than the current preponderance of the evidence standard.
AffectsSmaller or less-resourced federal agencies with limited litigation capacity may struggle to meet higher evidentiary burdens, while regulated entities gain defensive advantage in sanction challenges.
Automatic stay of sanctions during judicial review
The bill may include a provision that sanctions are automatically stayed (suspended) during de novo judicial review unless the agency can demonstrate irreparable harm or public danger.
AffectsRegulated entities facing license revocations or major fines gain immediate operational continuity during litigation; agencies lose enforcement leverage and may face revenue impacts or safety concerns.
Prevailing party attorney's fees provision
The bill may require agencies to pay the attorney's fees and costs of regulated entities if the de novo review overturns the agency's sanction determination.
Sponsor
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
Top contributing industries
Other$396,871.39
Finance$8,290.28
Energy$8,016.65
Law$4,525.51
Transportation$4,331.84
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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