The House is expected to begin considering the Sunshine for Regulatory Decrees and Settlements Act (H.R. 712), which would address a legal tactic often referred to as sue and settle.

Given that interest groups (and arguably agencies) are able to circumvent the rule-making process through sue and settle, congressional efforts for reform should be not a matter of controversy, but rather a given for good government.

That is why addressing the sue and settle problem should be a no-brainer for Congress.

What Is Sue and Settle?

While there is no formal definition, sue and settle generally refers to the practice of outside groups (usually environmental) suing federal agencies for not meeting an allegedly mandatory deadline or duty.

The agency will then settle the lawsuit with the outside group and enter into a consent decree or settlement agreement, which is often enforceable by a court.

Sue and settle essentially is a run around the normal regulatory process, as deadlines and sometimes even the details of the agreement are worked on behind closed doors, with only the special interests and agency present.

This severely limits any meaningful participation by the public or affected communities and industries, who often don’t even know that the agency has been sued and are excluded from the judicial proceedings.

In some situations, an agency may accept public comments on an agreement, but often not until late in the process, after the details have already been worked out between special interests and the agency. The result is that there is little chance for the comments to make much difference.

The sue and settle tactic empowers environmental groups to dictate the regulatory agenda of agencies, potentially beyond the term of a presidential administration.

These agreements also often demand unrealistic deadlines that lead to poorly considered policy. Americans are left with ill-conceived regulations, which often end up themselves being challenged in court.

An Example of Sue and Settle

This is exactly what happened with the Environmental Protection Agency’s Utility MACT rule, which the Supreme Court struck down last June. In Dec. 2008, several environmental groups sued the EPA for allegedly failing to regulate certain air pollutants from power plants. Without any participation from industry or the public, a judicially enforceable consent decree required the EPA to write and finalize a new rule by Nov. 2011.

The EPA then rushed out an expansive and costly final rule, despite thin technical support that was apparent in its proposed rule. As could have been expected, given all the errors and vagueness, businesses and utilities essentially had no choice but to challenge the rule in court.

The rule had projected annual costs of $9.6 billion and meager benefits of $4 million to $6 million. The Supreme Court struck the rule in June 2015 because the EPA shortcut the regulatory process and did not consider costs in determining whether the regulation was “appropriate and necessary.”

Letting Some Sunshine into the Sue and Settle Process

H.R. 712, to be considered by the House, would address many of these problems by:

• Increasing transparency by requiring agencies to post online, in a timely manner, an organization’s declared intent to sue the government, along with the complaint.
• Creating a legal pathway for affected parties to intervene and participate in lawsuits.
• Addressing the public participation problem by requiring an agency to hold a public comment period on a proposed agreement before seeking to enter an agreement (consent decree or settlement agreement).
• Helping to ensure that deadlines are realistic and process requirements are met.

Sue and settle is a serious problem that undermines the transparency and public participation that are supposed to exist in our regulatory system.

This tactic allows special interests to effectively get preferred treatment in shaping regulations and the regulatory agenda. This act would help curb the special interest favoritism that the process currently allows and provide greater opportunity for all affected parties to provide input into the regulatory process.