Do ‘Sue and Settle’ Policies Work Against Industry? EPA Chief Pruitt Thinks So

Environmental Protection Administrator Scott Pruitt says that he is ending the practice of regulation through litigation, which he describes as “sue and settle” — or policies that are brought about because of lawsuits that may fall outside the parameters of the intended laws.

Whether they be environmental organizations or business groups, special interests often try to compel EPA to act by filing lawsuits, which will then settle with the parties and often outside the purview of the businesses most impacted. While Pruitt maintains that this is a tactic the Obama administration had used to satisfy the demands of environmental groups, Pruitt too has sued the agency on multiple occasions — not to compel regulations but to block them, all on behalf of oil and gas interests in his home state of Oklahoma.

The directive seeks to provide more transparency into such legal settlements by the EPA. To that end, it is either speeding up or slowing down deadlines or it is imposing a mandate that is not part of the original requirement, the EPA chief said.

“The days of regulation through litigation are over,” said EPA Administrator Scott Pruitt, in a statement.  “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.

“Additionally, gone are the days of routinely paying tens of thousands of dollars in attorney’s fees to these groups with which we swiftly settle,” he added.

“Sue and settle” cases sidestep the intent of the law not just by imposing new requirements but also by foreclosing meaningful public discourse at both the state and community levels, Pruitt noted. Through his directive issued this week, the EPA chief says that he hopes to improve public engagement and provide more accountability by forcing the parties to discuss matters with the states, by forbidding consent decrees that exceed the authority of the courts and by allowing more time for public comment.

In essence, all lawsuits will be posted online and give all parties time to weigh in on any potential settlement. That includes industry, environmentalists and state and local governments. The implications?

Many business groups favor the policy change, saying that it leads more thoughtful discussion of the issues and it avoids rushed decisions — especially those that fall outside the intent of the law. Environmental organizations, however, say that delaying tough actions is not just costly to the ecology but also to the companies that must pay fines for each day that they are out-of-compliance.

Reuters references Daren Bakst, is a research fellow in agricultural policy at the Heritage Foundation think tank, who says that “sue and settle” has “effectively handed over the setting of agency priorities to environmental pressure groups,” and has led to rushed rulemaking by the agency. The US Chamber of Commerce supports this position.

But the same story also elicits the view of Pat Parenteau, an environmental law professor at the Vermont Law School, who said that Pruitt’ “can fight it if he wants as long as he wants, and spend as much money as he wants. But in the end if you’ve missed a statutory deadline, you are going to be ordered (by a court) to comply and then you are going to be ordered to pay fees.”

Notably, a story in the The Hill said that a 2014 Government Accountability Office study on the issue of settlements found that they had a limited impact on policy and even then, it was largely confined to the timing of the rules to go into effect.