By Owen Voutsinas-Klose
Owen Voutsinas-Klose is a freshman at the University of Pennsylvania studying Politics, Philosophy and Economics minoring in Legal Studies and History in the College of Arts and Sciences.
On October 16th 2017, EPA Administrator Scott Pruitt announced a directive implementing restrictions on the EPA - affecting its settlements with outside groups. These regulations include requiring proposed changes to regulations resulting from a settlement to be published prior to the settlement and prohibiting the payment of attorneys’ fees as a part of a settlement. The directive aims to end the EPA’s notorious “sue and settle” scheme, which was used by past administrations (notably the Obama administration) to enact major environmental policy changes on a quicker timeframe than typically statutorily allowed . But what is “sue and settle”, and why was this directive considered a major change by regulatory law experts?
“Sue and settle” refers to an important tool of environmental policymaking that was used during the Obama administration. The Endangered Species Act and The Clean Air Act, for instance, both give citizens and groups latitude to sue the government to compel timely enforcement. Critics alleged that the Obama EPA would welcome lawsuits from environmental special interest groups, often claiming that the EPA had failed to respond to a petition or address an issue in a timely manner. The EPA would then refuse to defend itself and quickly settle with the outside group by agreeing to a timeframe or plan of action. This process occurred behind closed doors, resulting in millions of dollars being funnelled to allied environmental groups with state and industry leaders shut out of the decision-making process. This process allowed the EPA to bypass the Administrative Procedure Act (APA), a law that governs rulemaking processes and requires often lengthy public comment periods that delay the final issuance of rules. Supporters of the system under Obama argue that Pruitt’s current directive misunderstands and intentionally complicates routine legal proceedings involving the EPA.
“It became fairly common for the agency to wait until they were sued to start working on the rules,” said Patrice Simms, a former EPA lawyer who is now vice president of litigation for Earthjustice (an environmental law group) to the Wall Street Journal. “They’ve always settled, because it’s the only rational thing to do. These are cases where the agency is plainly in violation of the law.”  Congress intended for citizen litigation to compel the EPA to update standards and keep environmental enforcement consistent with the times. According to experts, often agency rulemaking is delayed by intense lobbying, a lack of resources, and a general meticulousness needed to protect from potential legal challenges down the line. Agencies will often only begin to evaluate rules when faced with a legal challenge, and the settlement process allows for them to quickly resolve disputes because environmental groups seek quicker action.
Because the EPA must contend with so many different statutory deadlines for updating and reviewing environmental issues, EPA lawyers and environmental advocates worry the current Pruitt directive will make simply routine litigation more expensive and lengthy. Of particular note is Pruitt’s directive banning the EPA from paying the opposing side’s attorneys’ fees. In Pruitt’s order, he notes that the opposing side in a settlement is not a “prevailing party” and therefore lacks a claim to attorneys’ fees. However, this directly contradicts a 1980 Supreme Court decision that makes parties in settlements eligible for attorneys’ fees. Environmental groups worry this will simply mean they are forced to go to court to recover the fees, frustrating judges and impeding settlement .
It may be that both sides are correct, and that reform is needed without a wholesale elimination of the “sue and settle” policy government wide (although the EPA is of particular note). In most situations, “sue and settle” cases are in areas where the agency is clearly at fault for having delayed implementing a rule or action and a settlement is a mutually beneficial way to efficiently implement policy. However, a review of the lawsuits that have been brought shows that they have been disproportionately used by only a handful of groups (particularly with Endangered Species Act (ESA) cases, which are out of the EPA’s jurisdiction). A Governmental Accountability Office (GAO) report found that of 161 ESA suits reviewed, a mere 10 groups were responsible for 80% of settlements. Additionally, settlement rates reached an astounding 81% and 92%, respectively for just two groups (the “Center for Biological Diversity” and “Wild Earth Guardians”).
This is dangerous because it outsources rulemaking to the two parties involved, instead of the normal APA process that accounts for input from industry, local stakeholders and citizens through the public comment period . Also, the Federal Government has an obligation to protect itself and the integrity of its rulemaking process in court, instead of simply acceding to special interest litigation if it aligns with administration policy. The impact of Administrator Pruitt’s decision remains to be seen, and a future Democratic administration would likely seek to reverse his directive. Legislation passed by the House last year would codify much of Pruitt’s order into federal law, and apply it to all agencies. This legislation, while having little chance of passing the Senate, would have the potential to alter rulemaking permanently and bring routine environmental policy changes to a standstill.
 "Administrator Pruitt Issues Directive to End EPA "Sue & Settle"." EPA. October 16, 2017. Accessed March 01, 2018. https://www.epa.gov/newsreleases/administrator-pruitt-issues-directive-end-epa-sue-settle.
Palazzolo, Joe. "New EPA Settlements Policy Has Lawyers Bracing for Long Disputes." The Wall Street Journal. October 30, 2017. Accessed March 01, 2018. https://www.wsj.com/articles/new-epa-settlements-policy-has-lawyers-bracing-for-long-disputes-1509355805?mod=searchresults&page=1&pos=7.
 "Sue and Settle: Regulating Behind Closed Doors." U.S. Chamber of Commerce. Accessed March 01, 2018. https://www.uschamber.com/report/sue-and-settle-regulating-behind-closed-doors.
 Gordon, Rob. "Scott Pruitt Ends an Obama Administration Abuse of Power." National Review. October 21, 2017. Accessed March 01, 2018. https://www.nationalreview.com/2017/10/scott-pruitt-ends-epa-sue-settle-scheme-obama-administration-abuse-power/.
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