Pruitt: No More Regulation By Settlement at the EPA

Welcome news from the Environmental Protection Agency: Administrator Scott Pruitt is curbing often-collusive deals (“sue and settle”) by which the agency, sued by outside groups, agrees to adopt new policies or enact new regulations. (It also usually agrees to pay the outside groups handsomely in legal fees.)  As The Hill puts it, the new policy (full EPA release here) focuses especially on transparency:

“We will no longer go behind closed doors and use consent decrees and settlement agreements to resolve lawsuits filed against the agency by special interest groups where doing so would circumvent the regulatory process set forth by Congress,” Pruitt said, adding that he is also cracking down on attorneys’ fees paid to litigants.

Under Pruitt’s new directive, the agency will post all lawsuits online, reach out to affected states and industries and seek their input on any potential settlements.

The EPA is pledging to avoid settlements that would make for a rushed regulatory process, or that obligate the agency to take actions that the federal courts do not have the authority to force.

Cato adjunct scholar Andrew Grossman discussed the issue in 2015 Senate and 2017 House testimony, noting that “The EPA alone entered into more than sixty such settlements between 2009 and 2012, committing it to publish more than one hundred new regulations, at a cost to the economy of tens of billions of dollars.”  He observed that judicially enforceable consent decrees create “artificial urgency” for bulldozing through new regulations quickly, give favored outside organizations an added channel of influence not available to many of those directly regulated, and tie the hands of later administrations. And as I pointed out in this space a few years back, the issue is by no means confined to the EPA or environmental regulation, but serves as a way to expand government agency power while seeming to constrain it in education, social services, and many other areas.

But the next administration’s EPA chief could reverse Pruitt’s directive with the stroke of a pen. That’s one reason the U.S. Department of Justice – which has been doing its own welcome housecleaning of settlement practices lately – should continue to monitor and regularize litigation practices of this sort, and why Congress should proceed to consider legislation to curb sweetheart pacts on a more lasting basis.