Tuesday, October 24, 2017

Sue and Settle: Why Regulation by Litigation Must Stop

Last Monday, October 16, the Environmental Protection Agency announced its intention to put an end to “Sue and Settle” practices which undermine the regulatory process put in place by the US Congress.

“Sue and Settle” is a little known, but disproportionally impactive practice that happens in federal bureaucracies. It skirts the normal regulatory process and shuts out the voices of millions of people with legitimate interests and useful contributions.

Since Wyoming’s economy relies so much on the energy industry and agriculture, EPA rules impact us more than a little. So, Secretary Pruitt’s announcement is welcome news for all Wyomingites. To understand its implications, we need to understand, first, how the EPA was designed to work.

The federal code that currently governs the regulatory process spells out in detail an orderly and reasonable way for citizens to have their say.

Through Congress, we, the people, have told agencies how to notify us of the proposed changes. We have told them how long they should give us to send them our comments. We dictate how seriously they must take our comments, and many other details of the process.

When any agency is making policy for more than 300 million Americans, it is a real challenge to reach a reasonable consensus on compromises needed to live together. That’s representative democracy.

But suppose some subsection of the EPA, or even its appointed secretary, wanted to skip all those rules and simply impose his will on the American people without following the law and doing the hard work of compromise and consensus.

Enter “Sue and Settle.” Here’s how it works. Some agency bureaucrat goes to have a lunch meeting with a special interest group that agrees with the regulations they want to impose. He simply tells them to file a lawsuit against the EPA. Shoot, he might even tell them exactly how to word the lawsuit.

Once the suit is filed, the lawyers of the special interest group sit down with the EPA bureaucrats, who agreed with them in the first place, and together they draw up a settlement for the lawsuit which spells out the desired regulations. They include in this settlement an accelerated timetable for implementing rules which skips over the time mandated by law.

They may even put in a clause that reimburses the environmental group for their attorney fees, or pays them directly for damages of some sort. Finally, they make it so that the regulations can’t be altered by future EPA actions, thus insulating their rule-making from future attempts to modify it.

After they have drawn all this up behind closed doors, they simply file a motion with the judge saying, “we’ve settled out of court.” The judge doesn’t have to ask if other interested parties have had their say, or have been accommodated. He doesn’t have to ask whether these regulations are the best compromise possible, or whether they express the consensus of the American people.

The judge simply declares, “by entering this consent decree the Court is only accepting the parties’ agreement to settle, not adjudicating whether EPA’s legal position is correct.” And violá, the final rule is written without all that cumbersome time and trouble to work out the details with other Americans who also have legitimate claims and valuable viewpoints.

If you don’t like the final rule, you have to sue the EPA. The lengthy process of arguing through the details happened while you were excluded from the table. Now your only remedy is to go back to the same court that rubber-stamped the settlement. Not a very promising option.

If you sometimes feel that your voice is no longer heard in Washington, there’s a good chance that it’s because of some “Sue and Settle” deal that you never heard about. In fact, the scenario I just described, is not merely hypothetical. It is roughly what happened in the EPA’s Maximum Achievable Control Technology (MACT) Rule.

The MACT rule bypassed the most significant controls which congress has placed on the EPA because it was the result of a lawsuit known as American Nurses Association v. Jackson. It went into effect in December of 2011 at an estimated cost of $9.6 billion per year.

Is the MACT Rule the best and most efficient way of achieving environmental quality while balancing our interests in jobs, energy, national security and a thousand other considerations? Who knows? We skipped all that part.

A February 25, 2014 document from the Heritage Foundation gives a sampling of ten rule changes that happened through “Sue and Settle.” Together they cost upwards of $125 billion dollars annually, and they’re only the tip of the iceberg.

The negative effects of “Sue and Settle” practices are much more than economic. There are several negative consequences which should concern all citizens no matter who is in power.

First, these practices put special interest groups in the driver’s seat. They undermine presidential control of the executive branch of government and empower activists and unelected appointees to set government priorities.

When unaccountable bureaucrats are colluding with courts and special interest groups, they are not working with you. That means your vote counts for less and less. It’s no wonder that a large segment of voters feel powerless and angry in the face of an unresponsive government.

Second, when rulemaking is rushed, laws which require public notice and a fair opportunity to comment are bypassed. This doesn’t streamline the process of taking every factor into account. It simply excludes the valuable wisdom and expertise of the people who are most knowledgeable about the day-to-day realities of the issue.

As a result, agency regulations fall prey to the most stupid and easily foreseen problems. The Soviet Politburo added arrogance to ignorance and caused unnecessary shortages and hardships throughout the USSR. Our system is designed to avoid that. Ivy-league lawyers negotiating a settlement behind closed doors simply do not have the detailed knowledge and experience necessary to avoid mistakes.

Third, when negotiations are bypassing the legal requirements, it is impossible for the people being regulated to know the rules well enough to comply. This is what happened in our own state. As the MACT rules were going into effect in early 2012, the industry leaders themselves had a whale of a time just finding anybody who knew the rules.

Fourth, when the power to make regulations is taken from the executive agency and transferred to a judge, the flexibility of that agency to respond to ever-changing realities is severely hampered.

Legally, for the EPA, or any agency, to change their policy, all they need to do is to adopt a new policy. But when the judicial branch is involved through “Sue and Settle” policy is frozen in place. Suddenly, the executive branch is barred from changing its own policy by an unelected judge. The separation of the branches is compromised.

Scott Pruitt’s move to end regulation by litigation at the EPA is a commendable goal. Let us hope that other agencies make the same commitment. As citizens in a representative democracy, we should insist on our rights to have a seat at the table. Bureaucrats in collusion with special interest groups are a threat to all Americans.


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