Primary Document Dump Fridays: Anatomy of an Ongoing Sue & Settle Scandal

by William Yeatman on June 13, 2014

in Blog, Features

[Editor’s Note“Primary Document Dump Fridays” is a new weekly feature at Every Friday, we’ll post all the primary documents relevant to a major issue]

For this week’s Primary Document Dump, we’ve chosen to highlight an ongoing “sue and settle” outrage that demonstrates everything insidious about this practice that has proliferated in the Obama Age.

Sue and settle refers to sweetheart lawsuits between EPA and environmental groups. The victims are States, which get left out of negotiations with a material impact on policy-making, despite the fact that they—the States—are EPA’s rightful partners (rather than green groups).

How Sue & Settle Works

In fact, the opportunity for such sue and settle shenanigans is created by the Congress’s overreliance on deadlines in environmental statutes. The Clean Air Act, in particular, contains far many more date-certain duties than the agency has proven capable of performing. Since 1993, of 200 date-certain duties pursuant to three core Clean Air Act programs, only 2% were completed on time, and the agency was, on average, late by almost 6 years.

Missed deadlines, per se, wouldn’t be problematic. However, they have become a policy problem because the Clean Air Act empowers environmental special interests to sue in order to compel the agency to perform any nondiscretionary duty. In the case of a “sue and settle,” an environmental group sues over a missed deadline, and, instead of litigating (and thereby defending its prerogative to set its own priorities), the agency immediately agrees to settle.

If the EPA is out of compliance with virtually all its Clean Air Act deadlines, as is demonstrated by the data above, then clearly the agency has limited resources relative to its responsibilities. As a result, establishing any deadline determines how the EPA deploys its limited resources, which is no different than rendering policy. Of course, if the EPA wants to give priority to its many outstanding responsibilities, it should do so in cooperation with the states, which have to actually implement these regulations, rather than the likes of environmental special interests like the Sierra Club and NRDC.

For more on sue and settle in general, see these studies:

Today’s Case Study—Sierra Club, et al. v. McCarthy—Is Especially Bad

The lawsuit we highlight today is unusually harmful to States. It’s one thing to establish the agency’s priorities, in the fashion described above. It’s a whole different matter to actually negotiate substantive policy behind closed doors under the auspices of consent decree discussions, to the exclusion of affected parties. Yet this is precisely what happened in Sierra Club et al. v. McCarthy, Civil Action No. 3:13-cv-3953. Below, I describe the case, in the course of presenting every primary document of import that is related to the case.

1. The Missed Deadline: SO2 Area Designations

Under the Clean Air Act, any given area of the country fits one of three descriptions with respect to a national ambient air standard: “attainment” (i.e., in compliance with the standard), “nonattainment” (i.e., out of compliance), and “unclassifiable” (i.e., there’s not enough data to know whether the area is in attainment or nonattainment).

On June 22, 2010, EPA promulgated a revised National Ambient Air Quality Standard for sulfur dioxide (SO2).  This promulgation triggered EPA’s nondiscretionary duty to promulgate designations of nonattainment, attainment or unclassifiable for the revised SO2 NAAQS, for all areas, by no later than June 2, 2012. On August 3, 2012, EPA granted itself a one year extension to meet its responsibility to promulgate area designations for the revised SO NAAQS. So the deadline for designations was June 3, 2013.

On August 5, 2013, EPA published in the Federal Register area designations for the revised SO2 NAAQS for only 29 areas, encompassing parts of only 16 States. EPA only promulgated designations only for those areas for which air quality monitors had demonstrated non-attainment. EPA did not promulgate designations for areas in which air quality modeling had demonstrated attainment, despite requests by States to do so.

2. A Sue & Settle First: States and Environmental Groups Race to File Deadline Suits in Multiple Jurisdictions

On August 26, 2013, Sierra Club and NRDC filed a complaint in the federal district court for Northern California, alleging that EPA had missed a non-discretionary duty to promulgate area designations for the revised SO2 NAAQS. It is notable that the suit, which had a national scope, was filed in a Bay area court in northern California; in fact, data indicates environmental groups file a disproportionate number of citizen suits in this particular court.

However, in a sue-and-settle first (at least that I’m aware of), a number of States that had been burned by sue and settle in the past, decided to fight back in other jurisdictions.

On September 12, 2013, North Dakota, Arizona, Louisiana, South Dakota, Nevada, and Texas filed a complaint over the same allegations in the federal district court for North Dakota, southwest district. And on October 9, 2013, North Carolina filed a complaint in the federal district court for North Carolina, eastern district.

3. EPA Whittles Multiple Litigation Tracks to One

So, there were three parallel tracks of litigation over the same deadline. Unfortunately, Clean Air Act citizen suits operate on a first come, best served basis.

On January 7, 2014, North Carolina filed an unopposed motion to stay the proceedings in the federal district court for North Carolina, Eastern District. This was granted in a court order the following day.

In the North Dakota court, EPA responded to the States’ complaint with a motion to stay filed on February 2, 2014. EPA argued that the matter was being addressed in a northern California court, and, therefore, it would be wasteful to pursue duplicative litigation. The States responded to EPA’s motion on March 21, 2014, and EPA replied on April 4. On May 13, the court granted EPA’s motion to stay.

Thus, the three cases were whittled to one, although the other two cases remain dormant.

4. Meanwhile, in the Northern California Court, EPA Ignores States to Collude with Special Interests…

In the case before the federal district court for California, northern district, States sought intervention of right. North Carolina filed its motion to intervene on September 24, 2013; North Dakota et al. did so two days later.

While it should come as no surprise that Sierra Club and NRDC opposed the States’ motion to intervene, it is nothing less than shocking that EPA would do so (filed on October 28, 2013). After all, the Congress established a cooperative federalism framework in the Clean Air Act. States and EPA are partners. Why is EPA litigating to block participation by the States, so that the agency can negotiate with environmental special interests? (Unfortunately, this is the third such instance that I’ve come across, whereby the agency actually litigated to prevent participation by States in a Clean Air Act settlement discussion over the agency’s non-performance of a non-discretionary duty).

Most damning of all was the EPA’s frank assertion at the end of its brief, in which the agency reminds the court that even were it to grant the motion to intervene, “intervention would not guarantee Proposed Intervenors’ participation in any potential settlement negotiations.” EPA’s basically saying that its going to ignore the States, no matter what. Indeed that’s what happened.

North Carolina replied to EPA’s response on the motion to intervene on November 18, 2013. North Dakota et al. also replied that day.

On December 6, 2013, Judge Susan Illston issued an order denying the States intervention of right, but allowing them permissive intervention. In the same order, Judge Illston granted the plaintiffs’ October 19 motion for summary judgment. She ordered the plaintiffs, EPA, and the intervenor States “to meet and confer about the remedy.” If no agreement could be reached in 21 days, then parties were to proceed to briefing on remedy.

5. EPA Conducts Sham Negotiations with States

Starting in December 2013, the parties engaged in remedy negotiations, as required by the court. On April 15, the intervenor States confirmed in writing their desire to continue discussions. EPA waited until April 30 to respond. The following day, the parties convened a conference call. No agreement was reached on the May 1 call, but parties agreed to continue to negotiate in good faith.

The actions of EPA and the plaintiffs soon belied their promises to remain open to group discussions. Less than a week later, on May 6 2014, counsel for Sierra Club and NRDC informed the Intervenor States that they (the plaintiffs) were close to finalizing an agreement with the EPA. This was the first that the intervenor States had heard of these side negotiations that had led to an imminent agreement. The intervenor States requested a copy of the settlement, but EPA and the plaintiffs did not send one until ten days later, on May 16. Three days later (and only one business day later), EPA and the plaintiffs filed a second motion for summary judgment, requesting to hold the case in abeyance while it took public comment on a proposed consent decree (Attachment 1 to the motion) that had been lodged with the court.

On May 22, North Carolina and North Dakota, et al., responded to the other parties’ 2nd Motion for Summary Judgment, to which the other parties did not reply. On May 27, 2014, Judge Susan Illston granted the second motion to stay the proceedings.

On June 2, EPA proposed the consent decree in the federal register. The agency is taking comment on the decree through July 2, 2014.

6. How Does the Consent Decree Effectuate Policy?

To recap: the issue at hand is the EPA’s nondiscretionary duty to issue area designations for a revised SO2 NAAQS. EPA was supposed to have completed this task by June 3, 2013, at the latest.

To date, such designations have been based primarily on air quality monitoring. However, environmental special interests, including Sierra Club and NRDC (the plaintiffs in the above “sue and settle”), have been pushing for the agency to abandon a reliance on air quality monitoring for SO2 NAAQS area designations in favor of using air quality modeling. They prefer modeling to monitoring because it affords more opportunities for nonattainment designations (and, therefore, more stringent controls). Under a modeling-based system, an area could be out of compliance even if air quality monitors demonstrate they are in compliance, because modeling allows for forecasting of future noncompliance.. To this end, EPA published a proposed rule for data collection as it pertains to NAAQS area designations in the May 13, 2014 Federal Register, one that advances a model-based approach to area designations. Notably, many States don’t believe it’s a good idea to favor air quality modeling, in lieu of monitoring, for establishing area designations

So, we’ve got an active, controversial policy. This policy, moreover, directly relates to the subject of the sue and settle litigation that is the subject of this post—namely, area designations for the June 2010 revised SO NAAQS.

With this in mind, consider the requirements of EPA, Sierra Club, & NRDC’s proposed consent decree:

  • Within 16 months, EPA must designate any area that, based on the three most recent years of air quality monitoring data, shows a violation of the SO2 NAAQS, or for any area that “emitted more than 16,000 tons of SO2 in 2012, or emitted more than 2,600 tons of SO2 and have an annual average emission rate of .45 lbs SO2/Mmbtu or higher in 2012”
  • By December 31, 2017, designate all areas that do not meet the EPA’s specifications referenced in the agency’s PROPOSED (!) data collection rule.
  • By December 31, 2020, designate all remaining areas.

It’s hard not to notice how the substantive requirements of a PROPOSED rule, no less, have been incorporated into the terms of the proposed consent decree. At face value, this is absurd, and I’m confused as to why Judge Illston would permit this agreement to proceed, regardless its opaque, non-participatory origins.

It is further disconcerting that this proposed consent decree, if approved by the court, could bind the hands of a subsequent administration, which may or may not agree with this administration’s area designation policy, as articulated in EPA’s May 13 proposed rule.

Finally, it must be said that the Clean Air Act (in §107(D)) requires EPA to designate areas as “unclassifiable” if the agency doesn’t have sufficient information to know whether the area is in NAAQS attainment or nonattainment. EPA is already a year past its June 3, 2013 deadline for designations. the agency, moreover, has repeatedly conceded it doesn’t currently have sufficient data to render attainment/attainment designation for the revised SO2 NAAQS. It follows that the only remedy available to the agency is to issue an “unclassifiable” designation for those areas for which the agency has insufficient information. Obviously, the agency doesn’t want to do this. This is why it is trying to effectuate national policy in closed door negotiations in a northern California court.

7. What’s Next?

Look for North Dakota, Arizona, Louisiana, Nevada, Texas, and South Dakota to try to revive their litigation in the federal district court for North Dakota, southwest district. Likewise for North Carolina, in the federal district court of North Carolina, eastern district.

Meanwhile, EPA is taking comment on the proposed consent decree. I urge interested parties to comment. Directions are available on the FR notice.

Also, stay tuned for next week’s Primary Document Dump Fridays. We’re going to post evidence of another insidious “sue & settle” consent decree, featuring inappropriate behavior by former EPA Region 6 Administrator Al “Crucify Them” Armandariz.

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