Sue and settle

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Sue and settle (sometimes hyphenated as sue-and-settle) is a term used to describe cases in which a federal agency is sued by an interested party, declines to defend itself in court, and negotiates a settlement with the plaintiff in a non-adversarial process. Through sue and settle, outside groups sue an agency in order to reach a settlement on terms favorable to the regulatory goals of both. These settlements may require the agency to issue a rule on a particular subject or within a certain timeline.

Sue and settle practices have most often occurred in response to environmental lawsuits involving the Environmental Protection Agency (EPA) and the U.S. Fish and Wildlife Service (FWS).[1]

Background

Certain federal laws—primarily environmental laws administered by the EPA—include citizen suit provisions that allow citizens to sue the administering agency when the agency fails to perform a statutorily required act. When administrative agencies are sued for failing to meet a statutory requirement, such as a deadline for regulatory action, they may decline to litigate the claim. Instead, agencies may attempt to negotiate a settlement with the plaintiff in a process known as sue and settle. The process culminates with a settlement agreement or a consent decree—a negotiated agreement between the parties to a lawsuit that settles the suit prior to a trial or hearing and in a non-adversarial manner.[1][2][3]

Sue and settle agreements may require the agency to issue a rule on a particular subject or within a certain timeline. The settlements may also determine certain aspects of the rule, such as specifying the entities that will be covered under the rule.[1][2][4][5]

Citizen suit provisions

Certain federal statutes include citizen suit provisions, which allow private citizens to file lawsuits in order to enforce statutes. The majority of these citizen suit provisions are found in environmental laws administered by the Environmental Protection Agency (EPA). Examples of non-environmental statutes that feature citizen suit provisions include the Americans with Disabilities Act and the Fair Housing Amendments Act.[6][7][8]

Citizen suit provisions in environmental statutes "allow citizens to sue EPA when EPA fails to perform an act or duty required by the statute," according to the agency. The EPA identified the following laws containing citizen suit provisions administered by the agency as of January 2019:[6]

The Endangered Species Act also contains a citizen suit provision applicable to the U.S. Fish and Wildlife Service (FWS), a division of the U.S. Department of the Interior.[9]

Increase in sue and settle as rulemaking

See also: Rulemaking

Sue and settle practices increased at the Environmental Protection Agency (EPA) over the course of the Obama administration. Studies performed in 2013 by the American Legislative Exchange Council (ALEC) and the U.S. Chamber of Commerce estimated that the agency engaged in between 48 and 60 sue and settle cases from 2009 to 2012—resulting in more than 100 new regulations with more than $100 million in associated compliance costs. The Chamber observed in its report that both advocacy organizations and industry groups had sued the EPA and agreed to settlements or consent decrees with the agency.[9][10]

"Our research found that business groups have also taken advantage of the sue and settle approach to influence the outcome of EPA action," stated the Chamber in its report. "While advocacy groups have used sue and settle much more often in recent years, both interest groups and industry have taken advantage of the tactic."[9]

A report from the U.S. Government Accountability Office (GAO) found that the EPA issued nine major rules—regulations that may create significant economic impacts—pursuant to seven settled lawsuits brought by environmental nonprofit organizations between May 2008 and June 2013. The EPA also issued five major rules during that period pursuant to court orders stemming from lawsuits that the agency attempted but failed to settle with the plaintiff. The GAO report indicates that deadline lawsuits brought by environmental policy groups "drove 41% of the 32 major rules issued by the EPA over those five years," according to a 2015 article by regulatory lawyer Jamie Conrad.[5]

Sue and settle by the numbers

The American Legislative Exchange Council (ALEC) and the U.S. Chamber of Commerce issued separate reports analyzing sue and settle practices in environmental litigation. The reports spanned the presidential administrations of Bill Clinton (D), George W. Bush (R), and Barack Obama (D). Both studies excluded settlement agreements that resulted from enforcement actions, permitting cases, and other cases not involving rules of general applicability.[11][9]

ALEC report

ALEC claimed that the following numbers of lawsuits brought by environmental policy groups against the EPA under the Clean Air Act were settled by the agency during each of the four presidential terms from 1997 to 2013:[11]

  • Bill Clinton: 15 EPA sue and settle agreements during his second term in office.
  • George W. Bush: 7 EPA sue and settle agreements during his first term in office; 8 EPA sue and settle agreements during his second term in office.
  • Barack Obama: 48 EPA sue and settle agreements during his first term in office.

ALEC obtained its data through a database search of the Federal Register for settlement agreements and consent decrees published by the EPA under the Clean Air Act.[11]

U.S. Chamber of Commerce reports

The U.S. Chamber of Commerce's 2017 report on sue and settle practices found that the EPA had entered into 77 consent decrees during President Barack Obama's second term in office from January 2013 to January 2017.[12]

The group's 2013 report found that the EPA settled the following lawsuits brought against the agency under the Clean Air Act during each of the four presidential terms from 1997 to 2012:[9]

  • Bill Clinton: 27 EPA sue and settle agreements during his second term in office
  • George W. Bush: 38 EPA sue and settle agreements during his first term in office
  • George W. Bush: 28 EPA sue and settle agreements during his second term in office
  • Barack Obama: 60 EPA sue and settle agreements during his first term in office

The Chamber obtained its data through public notices of draft consent decrees published by the EPA in the Federal Register, pursuant to the Clean Air Act.[9]

Support and opposition to sue and settle in environmental litigation

Support

In a 2015 article published in the Harvard Environmental Law Review, attorney Courtney R. McVean and law professor Justin R. Pidot argued that sue and settle practices do not usually violate standard rulemaking procedures. The authors also claimed that sue and settle allows administrative agencies to achieve regulatory goals in spite of bureaucratic stagnation while maintaining control over their litigation risk:[4][13]

“ Environmental settlements have distinct advantages because they provide federal agencies with the opportunity to control litigation risk and overcome bureaucratic inertia. In the absence of a compelling justification for limiting the discretion of agencies to enter into settlements, Congress and the public should allow environmental settlement practices to persist.[4][14] ”


Daniel E. Walters, a fellow at the University of Pennsylvania Penn Program on Regulation, published a 2015 article in The Regulatory Review arguing that sue and settle rarely occurs in practice. When sue and settle does occur, Walters claimed that the practice serves to promote democratic engagement in the regulatory process:[15]

“ The first reason ... is that the available empirical evidence suggests that the practice—at least in its worst possible form—almost never occurs. ... sue-and-settle is nothing new. In fact, it is probably exactly what Congress hoped would happen when it loaded environmental statutes with both deadlines and citizen suit provisions. The second reason that sue-and-settle is much ado about nothing has so far been largely missing from the debate. ... if anything, settlements 'add' to the democratic character of what is otherwise a very shadowy forum. After all, settlements arising from citizen suits are often required by statute to withstand an initial public comment period. Also, agencies often must clear settlements or consent decrees with the Department of Justice, the courts, or both.[15][14] ”

Opposition

Regulatory lawyer Jamie Conrad argued that sue and settle practices have too much influence on the creation and enforcement of environmental policies in a 2015 article published by The Regulatory Review:[5]

“ Deadline lawsuits have policed essentially all of the EPA’s air program in recent decades, just as the Environmental Defense Fund 'mega-deadline' lawsuit governed much of the Resource Conservation and Recovery Act (RCRA) program throughout the period before. ... Obviously, these suits are enforcing congressional deadlines that the EPA has missed. But the EPA has missed a lot of deadlines, and so the EPA is negotiating much of its workload with ENGOs. ... Congress intends the EPA to issue rules when it subjects the EPA to deadlines, but currently, those deadlines end up being recrafted by the EPA, ENGOs, and judges. ... Most problematic is the EPA’s tendency ... to agree in settlements to propose one or more very specific regulatory options in proposed rules.[5][14] ”


Andrew Grossman, a former visiting fellow at the Heritage Foundation, argued in a 2014 article published by the foundation that sue and settle practices have been used to remove the influence of elected representatives from the policymaking process by empowering outside groups to sway an agency's regulatory priorities through litigation and reducing elected officials' responsibility for agency actions:[1]

“ At the most basic level, sue and settle compromises public officials’ duty to serve the public interest. Outside groups, rather than officials, are empowered to further their own interests by using litigation to set agency priorities. ... At the same time, consent-decree settlements allow political actors to disclaim responsibility for agency actions that are unpopular, thereby evading accountability. Consent decrees also diminish the influence of other executive branch actors, such as the President and the Office of Management and Budget, and of Congress, which may use oversight and the power of the purse to promote its view of the public interest. By entering into consent-decree settlements, an Administration may also bind its successors to its regulatory program far into the future, raising serious policy and constitutional concerns.[14] ”

Sue and settle in the states

Wisconsin Legislature codifies end to judicial deference and approves changes to state administrative processes (2018-2020)

See also: Wisconsin Legislature codifies end to judicial deference and approves changes to state administrative processes (2018-2020)

The Wisconsin Legislature approved several major changes to administrative processes in the state during an extraordinary legislative session on December 5, 2018. These changes included codifying the end of judicial deference to state agencies, abolishing sue-and-settle practices, and setting new standards for agencies’ regulatory guidance documents. Governor Scott Walker (R) signed the legislation on December 14, 2018. Click here to read more.

Noteworthy events

House advances settlement agreement transparency bill (2023)

The U.S House of Representatives on January 24, 2023, unanimously approved the Settlement Agreement Information Database (SAID) Act (H.R. 300)—legislation that would make all agency settlement agreements, such as those issued in a process known as sue and settle, publicly available. ​​Rep. Jamie Raskin (D-Md.) told Government Executive that the bill would help prevent agencies from entering into "secret sweetheart settlements with certain litigants."[16]

EPA reinstates sue and settle (2022)

EPA Administrator Michael Regan on March 18, 2022, issued a memorandum revoking former EPA Administrator Scott Pruitt's 2017 directive that ended sue and settle practices at the agency. Regan's memorandum effectively reinstated sue and settle practices at the EPA.[17][18]

Regan wrote, "Settlements can preserve resources of the parties and the courts; in many instances they can be the most practical, economical and efficient path forward while also serving the public interest. Appropriate settlement of environmental claims against the EPA preserves agency resources to focus on the vital work the agency carries out under the environmental statutes."[17]

EPA ends sue and settle (2017)

EPA Administrator Scott Pruitt issued a directive in October 2017 that ended the practice of sue and settle at the EPA. The directive aimed to increase public transparency with respect to agency litigation and end what Pruitt referred to as the practice of "regulation through litigation" brought about by sue and settle agreements.[19]

"The days of regulation through litigation are over," said Pruitt in a press release. "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."[20]

The directive required the EPA to implement the following procedures:[20]

  • Publish notices of intent to sue the agency within 15 days of receiving the notice.
  • Publish complaints or petitions for review regarding environmental laws or regulations in which the EPA is a defendant or respondent in federal court within 15 days of receiving the complaint or petition.
  • Communicate with any states or entities affected by potential settlements or consent decrees.
  • Publish a list of consent decrees and settlement agreements (with associated attorney fees) that require agency action within 30 days. Update the publication within 15 days in the event of a new consent decree or settlement agreement.
  • Prohibit consent decrees that exceed the authority of the courts.
  • Exclude attorney’s fees and litigation costs from settlements.
  • Allow sufficient time to propose or modify regulations through the rulemaking process.
  • Publish proposed or modified consent decrees and settlements for a 30-day public comment period and hold public hearings when requested.

See also

External links

Footnotes

  1. ↑ 1.0 1.1 1.2 1.3 Heritage Foundation, "Regulation Through Sham Litigation: The Sue and Settle Phenomenon," February 25, 2014
  2. ↑ FindLaw Legal Dictionary, "Citizen Suit," accessed July 27, 2018
  3. ↑ 4.0 4.1 4.2 Harvard Environmental Law Review, "Environmental Settlements and Administrative Law," 2015
  4. ↑ 5.0 5.1 5.2 5.3 The Regulatory Review, "We Shouldn't Dismiss 'Sue and Settle' - or Other Regulatory Problems," May 18, 2015
  5. ↑ 6.0 6.1 U.S. Environmental Protection Agency, "Notices of Intent to Sue the U.S. Environmental Protection Agency (EPA)," accessed July 24, 2018
  6. ↑ Hastings Women's Law Journal, "Private Enforcement of the Americans With Disabilities Act via Serial Litigation: Abusive or Commendable?" 2006
  7. ↑ Missouri Law Review, "Standing Alone: Standing under the Fair Housing Act," 1995
  8. ↑ 9.0 9.1 9.2 9.3 9.4 9.5 U.S. Chamber of Commerce, "Sue and Settle: Regulating Behind Closed Doors," May 2013
  9. ↑ The Heritage Foundation, "Burying 'Sue And Settle,'" October 21, 2017
  10. ↑ 11.0 11.1 11.2 American Legislative Exchange Council, "The U.S. Environmental Protection Agency's Assault on State Sovereignty," 2013
  11. ↑ U.S. Chamber of COmmerce, "Sue and Settle Updated: Damage Done 2013-2016," May 2017
  12. ↑ SSRN, "Environmental Settlements and Administrative Law," April 19, 2014
  13. ↑ 14.0 14.1 14.2 14.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
  14. ↑ 15.0 15.1 The Regulatory Review, "New 'Sue-And-Settle' Bill is Much Ado About Nothing," March 24, 2015
  15. ↑ Government Executive, "The House Wants Agencies to Reveal the Deals They Cut to Avoid Lengthy Legal Battles," January 24, 2023
  16. ↑ 17.0 17.1 Environmental Protection Agency, "Memorandum from Michael S. Regan," March 18, 2022
  17. ↑ National Law Review, "EPA Issues New Policy on Its Use of Consent Decrees and Settlements," April 5, 2022
  18. ↑ Forbes, "Pruitt's EPA Directive Sends The 'Sue And Settle' Racket Into Its Death Rattle," October 19, 2017
  19. ↑ 20.0 20.1 Environmental Protection Agency, "Administrator Pruitt Issues Directive to End EPA 'Sue & Settle,'" October 16, 2017
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