In late March, the House Judiciary Committee passed H.R. 3862, the Sunshine for Regulatory Decrees and Settlements Act of 2012, by a 20-10 vote. If enacted, the bill would make it more difficult for the Environmental Protection Agency to negotiate “sue and settle” agreements that effectively exclude States from environmental policymaking, in seeming contravention of the Clean Air Act. By making these “sue and settle” agreements more transparent, H.R. 3862 would spur a welcome rebalancing of American environmental federalism.
Federal environmental regulations pursuant to the Clean Air Act are prescribed or approved by EPA, but they are implemented by the States. This relationship is necessary because, as the law recognizes, “air pollution prevention…at its source is the primary responsibility of States and local governments.” Accordingly, the Act “establishes a partnership between EPA and the States for the attainment and maintenance of national air quality goals,” thereby reflecting the Congress’s intent to “carefully [balance] State and national interests by providing for a fair and open process in which State and local governments, and the people they represent, will be free to carry out the reasoned weighing of environmental and economic goals and needs.” Natural Res. Def. Council, Inc. v. Browner (D.C. Cir. 1995).
It is beyond dispute that the Congress wanted States and EPA to work together to improve air quality. Recently, however, EPA has found a way to ditch the States, and instead render environmental policy with environmentalist litigation groups.
Here’s how it works. An environmentalist litigation outfit like the Center for Biological Diversity sues EPA for missing a deadline to implement a regulation pursuant to the Clean Air Act. Due to the almost absolute discretion that courts give federal agencies to implement laws, EPA could squash this suit in court with ease. All EPA would have to do (and what it has done many times before*) is argue that it possesses limited resources, and, as such, the Agency must be afforded the discretion to dictate how these limited resources are used. Indeed, EPA has nowhere near the manpower nor the budget to comply with all the statutory deadlines established by the Clean Air Act; virtually no regulations are implemented on time. However, instead of challenging the lawsuit (and winning), EPA agrees to settle. Then, EPA and the environmentalist litigant negotiate a settlement (i.e., environmental policy). The resultant consent decree is then approved by a judge, lending it the force of law.
There are several troubling implications of these “sue and settle” consent decrees. For starters, they allow unelected environmentalist lawyers to create policy. Moreover, consent decrees are difficult to reverse, which means that a sitting President can use them to bind the discretion of his or her successor. (This point was aptly explained to the Judiciary Committee by New York Law School Professors David Schoenbrod and Ross Sandler. Their testimony is available here).
Even more alarming, these consent decrees deprive States of due process. As I note above, EPA has limited resources. In practice, “sue and settle” agreements effect a reworking of the priorities that determine how EPA uses its scarce resources. In this fashion, the Agency is negotiating Clean Air Act policy. But it is doing so without allowing the States to have a voice, despite the fact that the Clean Air Act stipulates that States are EPA’s partner on environmental policymaking. In written testimony about the H.R. 3862, Roger Martella of Sidley Austin LLP explains how EPA used a consent decree to circumvent the States’ right to have input on a controversial greenhouse gas performance standard:
On December 23, 2010, EPA announced a consent decree with several NGOs committing the agency to propose and finalize the first ever New Source Performance Standards for greenhouse gases. EPA agreed to promulgate such standards for utilities and refineries without any prior input from stakeholders in those industries. Specifically, EPA committed to propose the first-ever GHG NSPS for these sectors in July and December of 2011, which is an unprecedented quick schedule. In fact, the schedule was so ambitious that six months after the July deadline, the Agency has yet to propose the standards for either sector. Beyond the mere commitment of schedules and timelines, EPA also made various substantive commitments in the agreement that would ordinarily be open for public comment in a rulemaking process, such as a decision to regulate both new and existing sources in these categories, without prior industry input on the feasibility of such controls, the ability to implement in a timely manner, and the lack of adequate data to create such standards. Although the Agency ultimately held listening sessions and took comment on the agreements after finalizing them, the agreements did not materially change before being lodged with the Court.
In the passage above, Mr. Martella identifies how “sue and settle” agreements can deprive States of a meaningful voice in the policymaking process. In extreme cases, EPA has used “sue and settle” agreements to seize the States’ rightful authority.
In late 2010, for example, EPA and New Mexico officials disagreed over what controls are necessary to comply with Regional Haze, an aesthetic regulation required by the Clean Air Act. The State wanted controls that cost about $30 million, while EPA wanted controls that cost more than $700 million. At the time, New Mexico seemed to have all the leverage, because the Clean Air Act gives States the lead authority on Regional Haze decision making. EPA usurped New Mexico’s prerogatives by modifying a consent decree with WildEarth Guardians such that the Agency committed itself to a deadline that took place before the State submitted its Regional Haze plan. Thus, EPA claimed that it had no choice but to ignore the State’s plan, and impose the Agency’s preferred controls. In a recent study, I explained this matter in detail.
Simply put, “sue and settle” agreements are an affront to transparent government. H.R. 3862, the Sunshine for Regulatory Decrees and Settlements Act of 2012, would curb the worst abuses, by forcing EPA to ensure that affected States have a seat at the table when environmental policy is made.
*In 2011, for example, the Center for Biological Diversity sued the Environmental Protection Agency to compel it to decide whether to regulate greenhouse gases from the aviation sector. On March 14, EPA argued (and won) that it had the discretion to decide how to time greenhouse gas regulations.