EPA Eschews Transparency With 'Sue and Settle' Tactics

January 2009 had the potential to be the dawn of a new era in Washington. The newly-elected President Obama promised that his administration would be “committed to creating an unprecedented level of openness in government” and that it would “work together to ensure the public trust and establish a system of transparency, public participation and collaboration.”[1] Four years later, however, Obama’s Environmental Protection Agency (EPA) seems to be doing just the opposite by entering into agreements behind closed doors with environmental litigants.

One of the tactics environmental activists groups use to promote greater regulatory control over the economy is lawsuits. This is an especially effective tactic if environmental groups sue a sympathetic administration with the hopes of settling the lawsuit without the need for the administration to go through the regular regulatory process. This is dubbed “Sue and Settle.”

One of the most effective ways for these lawsuits to proceed is for the environmental litigant to sue the EPA, for example, for a missed deadline, and then enter into a settlement that allows the EPA to quickly enact new regulations while claiming that it was forced to do so by the terms of the lawsuit. In nearly 60 of these lawsuits,[2] EPA chose not to defend itself. EPA simply agreed with the terms set forth by the environmentalist groups. In nearly all of these proceedings, EPA also did not disclose to Congress, stakeholders or the Office of Management and Budget that it was even being sued until the consent decree had already been agreed to.[3]

“Sue and Settle” has several negative impacts, according to a recent report released by the Chamber of Commerce:

1. It sidesteps typical rulemaking processes in order to regulate behind closed doors. Under the Administrative Procedures Act, the EPA’s rules require review by the public and stakeholders, by the Office of Management and Budget, and by several executive orders. Sue and Settle, however, allows the administration and litigants to come to a fully-negotiated deal before the public or other branches of the government have the chance to see it. With no public participation, it is much easier for EPA, for example, to bind itself to the wishes of the environmental litigants.

Sidestepping rulemaking procedures seriously harms transparency. The EPA and the group are less likely to make sound environmental policy without the input of stakeholders and the public because they are not accountable to the public. This, in turn, creates one-sided policies.

2. It intensifies inter-branch conflict. The executive branch can widen the authority of regulatory agencies at the expense of Congressional oversight. Once the court rubber-stamps the consent decree, the EPA can then tell Congress that it “had no choice” and that “its hands were tied,” skirting agency accountability to elected representatives. This, too, is a recipe for ill-informed policymaking.

3. It allows private parties to exercise disproportionate control over the priorities of federal agencies. Sue and Settle can allow an agency to relinquish its authority in order to meet the demands of the private party suing it. This could easily spill over to areas other than environmental policy, creating agencies whose interests are beholden to outside entities.

Supporters of the practice argue Sue and Settle is necessary to fight undue industry influence. John Walke, the clean air and climate change director for the Natural Resources Defense Council, recently wrote that restricting Sue and Settle is “designed to obstruct enforcement of federal health, safety, environmental, financial and consumer protection laws.” The balance, however, is already firmly tipped to the side of the environmental groups rather than industry. Sue and Settle has been used 60 times between 2009 and 2012 (34 times for the Sierra Club alone) to advance the regulatory interests of environmentalists. Allowing Congress more oversight and knowledge of the process is more likely to balance the scales rather than tip them too far into industry pockets.

The recently introduced “Sunshine for Regulatory Decrees and Settlements Act” would force agencies to publish their proposed consent decrees for public comment prior to filing them with the court. The Judiciary Committee hearing will be held on Wednesday, June 5. The bill is would ensure more public participation in rulemaking and also ensure that EPA and special interest groups do not simply have carte blanche over regulatory policy.

Any policy change impacts a diverse array of parties. It positively impacts some entities and negatively impacts others. Sue and Settle allows only those who are positively impacted by the proposed policy any voice in the decisionmaking process. Yet, decisionmaking cannot be truly effective without considering the needs of the parties who are negatively affected. The act of quickly forcing through regulation is antithetical to thoughtful, objective policy analysis that considers both sides of an issue. Without thoughtful analysis, we are doomed to make less effective policies.

IER Policy Intern Kaavya Ramesh contributed to this post.