Cross-posted at WLF’s Forbes.com contributor page
Complying with notice-and-comment and other due process requirements is expensive and time-consuming for federal agencies. Those procedural duties also make agencies accountable to the public and regulated entities. So it’s no surprise that regulators avoid formal rulemaking like the plague. As we’ve spotlighted at The Legal Pulse, agencies instead issue “guidance” documents or utilize even more perversely creative tactics, such as setting new standards by replying to a U.S. Senator’s inquiry letter. Another evasive maneuver which has drawn the ire of not only affected businesses, but also state attorneys general and Members of Congress, is “sue-and-settle.”
Please Sue Us. Special interest groups, especially those with environmental-oriented missions, routinely sue federal agencies to compel actions, especially in situations where the regulators have missed deadlines, or, for political or other reasons, have stopped short of the most rigorous approach. The agencies are presented with an offer they can’t (and often don’t want to) resist: settle the citizen’s suit in a way that implements new mandates (and expands agency authority) without public input.
Judicial Rejection: Conservation Northwest v. Sherman. As noted above, elected officials are expressing their concern with this and seeking remedies (a bit on that below). In the meantime, however, an April 25 U.S. Court of Appeals for the Ninth Circuit decision reflects that judges can and should very closely scrutinize any friendly settlements between federal agencies and activists. In 2007, a throng of environmental groups sued the Bureau of Land Management (BLM) for attempting to eliminate a costly and complex surveying mandate from the management of the Northwest Forest Plan (a land use agreement arising from the 1990s’ spotted owl litigation wars).
After the plaintiffs prevailed in the trial court, BLM decided to settle with the activists and the federal judge entered a consent decree which maintained the surveying mandate. An intervening lumber company challenged the consent because it altered existing regulations without public participation. The trial judge refused the challenge, ruling that the consent decree was a “judicial act” that wasn’t governed by agency procedural requirements.
On appeal, the Ninth Circuit unanimously rejected the District Court’s reasoning and result. The appeals court wrote that
where a consent decree does promulgate a new substantive rule, or where the changes wrought by the decree are permanent rather than temporary, the decree may run afoul of statutory rulemaking procedures.
The Ninth Circuit went on to find that the consent decree which ended the citizen’s suit permanently and substantively changed the Northwest Forest Plan requirement, and thus it threw out the agreement.
Congress and State AGs. For the second consecutive congressional session, bills have been introduced in the House and Senate to introduce transparency into sue-and-settle situations and facilitate impacted third parties’ involvement. Also, a group of state attorneys general, led by Oklahoma’s E. Scott Pruitt, have been pushing back against the Environmental Protection Agency and what the AGs argue is EPA’s practice of settling activists’ lawsuits in ways that negatively impact the states. Thirteen AGs signed an August 10, 2012 Freedom of Information Act request demanding information on such settlements from EPA. The request attached a list of 45 instances of sue-and-settle. According to a recent analysis of sue-and-settle, EPA has yet to fulfill the AGs’ request.
General Pruitt and twelve other AGs recently wrote EPA again expressing concern over a notice of intent to sue sent to the agency by seven other state AGs regarding EPA’s regulation of methane emissions from natural gas fracturing. EPA has yet to take regulatory action on such emissions, and the thirteen AGs are clearly (and justifiably) concerned that EPA will compliantly cry uncle when sued, settle, and move forward with controversial hydraulic fracturing rules.