Mandate Madness: When Sue and Settle Just Isn’t Enough

Hearing Date: June 28, 2012 12:00 am

9:00am in 2203 Rayburn House Office Building

The Oversight and Government Reform Committee has focused a significant amount of attention this Congress on the red tape that is strangling economic growth and holding us back from prosperity.

At today’s hearing, we will continue this inquiry by examining the highly questionable practice perfected by the Environmental Protection Agency – known as “Sue and Settle,” which has emboldened the Administration to pursue an aggressive green agenda while escaping political accountability for the cost and burdens these regulations impose on job creators.

The process is rather simple: environmental groups will sue the EPA, demanding the agency issue a regulation on an accelerated timeframe.  Rather than fighting the lawsuit, EPA quickly agrees to the special interest demands. 

These settlement agreements are reached after closed-door negotiations between EPA and environmental groups where other interested parties are excluded. 

Once the settlement is approved by a federal court in a consent decree, the EPA is legally bound to engage in the rulemaking. 

It is important to note that when a court approves a consent decree, it does not consider the merits – the court is merely accepting and ratifying what the parties agreed to.

In the past 3 years, the Administration has concluded approximately 60 settlements with special interest – 29 of these agreements bound EPA to make major policy changes.  The plaintiffs in these cases are often the very same reoccurring players – the Sierra Club, NRDC, Defenders of Wildlife, Wild Earth Guardians, and Center for Biological Diversity.  

These special interest groups not only hold a special seat at the table with Obama’s EPA – EPA effectively pays them to sue the agency!  In 2011 alone, taxpayers reimbursed these groups millions to participate in cozy sue and settle arrangements. 

In addition to examining this outrageous practice, we will hear today about two particularly egregious cases where EPA defied all norms of transparency, sidelined interested parties, and is now in the process of imposing extraordinarily burdensome regulations. 

These two case studies are EPA’s Regional Haze Regulations and its’ Greenhouse Gas Standards for Power Plants.

In the case of Regional Haze – Congress was crystal clear that this purely aesthetic visibility program is to be administered by the states and not by EPA.  Through Sue and Settle, EPA is attempting to federalize the program; and imposing costs well beyond what the state had determined was necessary or justified.  Ultimately, EPA’s proposal will costs billions of dollars for visibility improvements that are undetectable to the human eye.   

In the second case study – New Source Performance Standards (NSPS) for Electric Utilities, EPA concluded settlement negotiations on December 23, 2010, and agreed to promulgate NSPS for greenhouse gases for BOTH new and existing electric generating units under Sections 111(a) and 111(d) of the Clean Air Act. 

At the time the settlement was reached, EPA was not in violation of any mandatory duty and as such, the litigants didn’t have a legal leg to stand on.  And yet the agency settled, committing the agency to make major policy changes, without interested parties at the table, and rewarding litigants with a cash prize they never were entitled to.

These two case studies are but two examples of the dozens of policy changes EPA has committed to in sweetheart sue and settle arrangements with special interests.  Time and again, when EPA is criticized for the excessive burden imposed by their agency – whether it be Utility MACT, Boiler MACT, Florida Water Quality Standards, Regional Haze, NAAQS or NSPS – EPA’s response is suspiciously similar – The agency has no discretion to extend the timeline to hear additional points of view – it is under court order to finalize the regulations by a date certain.

But let us be clear – What EPA claims the law requires them to do is nothing more than what EPA has agreed to do in a collusive arrangement with special interest allies.  These arrangements are fundamentally unfair, lack transparency, are designed to circumvent other regulatory checks Congress has put in place.  Environmental regulations only work when they are made in an open process that involves all stakeholders.  Sue-and-settle rulemaking is an affront to that process.

Finally, I want to note that I very much wanted a representative from the EPA to be here today to respond to the concerns that our panelists will be raising.  However, despite adequate notice, EPA has refused to provide a witness for today’s proceedings.  I am hopeful that we can find a date in the near future when they can make an appropriate witness available to respond and add detail.

Witnesses and testimonies

Name Title Organization Panel Document
The Honorable E. Scott Pruitt Attorney General for the State of Oklahoma Document
Mr. Roger Martella Partner Sidley Austin LLP Document
Mr. William Kovacs Senior Vice President U.S. Chamber of Commerce Document
Mr. William Yeatman Assistant Director of the Center for Energy and Environment Competitive Enterprise Institute Document
Professor Robert Percival Robert F. Stanton Professor of Law; Director, Environmental Law Program University of Maryland Francis King Carey School of Law Document