EPA Uses “Sue and Settle” to Impose Regulations on Unsuspecting Industries

EPA-LogoIn recent years, EPA and other federal agencies have sought ways to circumvent the strictures of notice-and-comment rulemaking. One popular method became known as “sue and settle.”

Here’s how it works: An advocacy group files suit demanding that a federal agency impose new or stricter regulatory standards on a business or even an entire industry. Instead of defending, the agency accedes to the activist group’s demands, negotiates a private agreement, and then seeks court approval through the consent-decree process. Some consent decrees have arisen from lawsuits that demand an agency perform a nondiscretionary statutory mandate that it has failed to implement, while others call for entirely new uses of regulators’ discretionary authority. Sue-and-settle agreements frequently shorten the amount of time for public comment on the agency action arising from the settlement or curtail the time an agency has to review public comments before finalizing a rule.

The most recent example of EPA utilizing the sue-and-settle device came just two weeks prior to the inauguration of President Trump. This “midnight” sue-and-settle agreement resulted in a proposal to add natural gas processing (NGP) facilities to the list of industrial organizations that are subject to the reporting requirements of the Emergency Planning and Community Right-to-Know Act (EPCRA). The January 6, 2017 proposal arose from a 2012 petition filed by the Environmental Integrity Project along with 16 other environmental groups. The petition sought to subject the entire oil and gas extraction industry to the reporting requirements set out in EPCRA. The organizations filed suit in January 2015 to compel EPA action on the petition.

EPA responded on October 22, 2015 that it would add just NGPs to the list of industries covered by EPCRA. EPA has estimated that at least 282 NGP facilities will be subject to these reporting requirements once this rule is finalized.

The proposal issued in January allowed only 60 days for public comment. After the demand for new regulations languished for nearly five years, foisting this requirement on affected businesses with such little notice does not give them sufficient time to respond. NGP facilities themselves are not the only stakeholders prejudiced by such a truncated public participation schedule. Local and state governments where gas-processing facilities are located should also be given a full opportunity to address the new rules, as should facility employees as well as other companies that conduct business with the facilities.

With new leadership taking over the federal agencies where sue-and-settle practices have proliferated, we may have seen the last of these incestuous deals for the time being. A return to ordinary notice-and-comment rulemaking may frustrate the agencies’ rank and file, whose jobs are easier (and likely more satisfying) when their ideological brethren in activist groups get to dictate what rules they write. But sue and settle’s demise is undoubtedly the best outcome for democracy, which flourishes with transparency and accountability.

One thought on “EPA Uses “Sue and Settle” to Impose Regulations on Unsuspecting Industries

  1. Pingback: Environment roundup - Overlawyered

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