EPA Ends Use of Controversial ‘Sue And Settle’ Agreements

Published November 27, 2017

Environmental Protection Agency (EPA) Administrator Scott Pruitt issued an Agency-wide directive to end “sue and settle” practices within the EPA.

Under sue and settle a special interest group sues a federal agency to issue rules by a specific deadline and the group and the agency enter into a private settlement that becomes legally binding for the agency. These agreements don’t go through the normal consultation required for rules, nor do they allow for public comment periods.

“The days of regulation through litigation are over,” said Pruitt in an October 16 press release announcing the Agency’s new policy. “We will no longer go behind closed doors and use consent decrees and settlement agreements to resolve lawsuits filed against the Agency by special interest groups where doing so would circumvent the regulatory process set forth by Congress.

“Additionally, gone are the days of routinely paying tens of thousands of dollars in attorney’s fees to these groups with which we swiftly settle,” Pruitt said.

Costs of Sue And Settle

According to a May 2013 study by the U.S. Chamber of Commerce, “[b]etween 2009 and 2012, [Environmental Protection Agency] chose not to defend itself in over 60 lawsuits from special interest advocacy groups” and “[t]hese cases resulted in settlement agreements and EPA publishing more than 100 new regulations.”

According to a study by the American Action Forum, between 2005 and 2016 EPA enacted 23 major regulations through the settlement of lawsuits that imposed $68 billion in costs on the economy

The report’s author, Dan Bosch, director of regulatory policy at AAF, described how sue and settle worked in practice.

“An interest group sues a federal agency alleging that the agency has not fulfilled its responsibility under the law,” Bosch said. “Rather than contest the lawsuit, the agency settles and enters into an agreement to initiate and/or expedite a rulemaking, complete with a legally binding deadline to promulgate.”

Practice Removed Court Trial

In 2013, Chris Prandoni, then the federal affairs manager of Americans for Tax Reform, wrote in Green Watch, “Sue and settle allows lawyers for Big Green groups to walk into any EPA office and say, ‘We want this exact rule in place within 90 days,’ and get a response something like, ‘Sure, pal. Anything else?'”

Prandoni points out every major environmental law today contains provisions for “citizen suits,” allowing “citizen attorneys general” to sue alleged violators in federal court.

The problem is, says Prandoni Congress never intended to empower Big Green attorneys routinely to chop off the citizen suit at the knees by removing the court trial. But that’s what happens when agencies settle the suits rather than fighting them in court.

Directive Ensures Transparency

Pruitt says his directive is intended to ensure the Agency increases transparency, improves public engagement, and provides accountability to the American public when considering a settlement agreement or consent decree.

Among the provision’s in the new directive the agency is required it to notify states within 15 days of receiving an interest group filing a notice of intent to sue the agency. The agency would also notify states and provide a public comment period for any a settlement or consent decree under consideration by the agency.

Other provisions include EPA publishing online a searchable database of consent decrees and settlement agreements, including the terms of each agreement, and attorney’s fees and costs paid. The new policy prohibits EPA from entering into a consent decrees containing terms courts would have lacked the authority to order if the parties had not resolved the litigation or from undertaking any agreement converting a discretionary action into a mandatory duty. In addition, EPA will no longer pay attorney fees or court costs for those suing the agency as part of the terms of settling a lawsuit.

Lastly, EPA will a hold a public hearing on a proposed consent decree or settlement when requested.

Kenneth Artz ([email protected]) writes from Dallas, Texas.