U.S. 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. These agreements don’t go through the normal consultation required for rules, and they bypass legal requirements for public comment periods.
“The days of regulation through litigation are over,” said Pruitt in an October 16 press release announcing the 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 attorneys’ fees to these groups with which we swiftly settle,” Pruitt said.
Transparency, Engagement, Accountability
Pruitt says his directive is intended to ensure EPA increases transparency, improves public engagement, and provides accountability to the public when considering a settlement agreement or consent decree.
The new directive requires EPA to notify any state potentially affected within 15 days of receiving an interest group’s filing of a notice of intent to sue the agency. The agency will also notify any state affected and provide a public comment period for any settlement or consent decree under consideration by the agency.
Other provisions include EPA publishing an online, searchable database of consent decrees and settlement agreements, including the terms of each agreement, attorney’s fees, and costs paid. The new policy prohibits EPA from entering into consent decrees containing terms courts would have lacked the authority to order if the parties had not resolved the litigation, and 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.
The directive also requires EPA to hold a public hearing on any proposed consent decree or settlement when requested.
Calls for Expansion
Dan Bosch, director of regulatory policy for the American Action Forum, says EPA enacted 23 major regulations through the settlement of lawsuits between 2005 and 2016, imposing $68 billion in costs on the economy.
Bosch says Pruitt’s directive is a model for the rest of the government.
“EPA’s directive should improve transparency and provide an example that could lead to limits on sue and settle actions across the federal government,” said Bosch. “If EPA’s directive proves effective at improving rules initiated through lawsuits, it should provide momentum to expand the practice beyond the EPA.
“With billions of dollars in economic costs at stake, it makes sense to more thoroughly scrutinize sue and settle rules to ensure they meet the basic rigors of the Administrative Procedure Act and sound cost-benefit principles,” Bosch said.
‘Obscene’ Regulatory Costs
Regulatory costs in the United States amount to approximately $2 trillion annually, which breaks down to nearly $15,000 per household per year. Tim Benson, a policy analyst with The Heartland Institute, which publishes Environment & Climate News, says that number is appalling.
“The costs of regulations are so high it’s offensive,” said Benson. “The ‘sue and settle’ footsie EPA and other federal agencies have been playing with hardcore environmental extremists during the Obama years is a part of the reason these regulatory costs are so obscene.
“I’m heartened Scott Pruitt has decided to end the practice at EPA, and I hope the heads of other agencies will follow his example,” Benson said. “If so, it would provide a brake on these skyrocketing regulatory costs.”
Kenneth Artz ([email protected]) writes from Dallas, Texas.
Clyde Wayne Crews, “Ten Thousand Commandments, 2017 Edition,” The Competitive Enterprise Institute, May 31, 2017: https://heartland.org/publications-resources/publications/ten-thousand-commandments-2017