This Month in Sue and Settle

A Lively Debate, The Peril of Rushed Regulations, and a Classic Example of the Practice

• Last Friday, I participated in a Federalist Society Teleforum on “’Sue and Settle’ and the Endangered Species Act,” with Assistant Professor Justin Pidot of the University of Denver Sturm College of Law and Susan Combs, former Texas Comptroller of Public Accounts. It was a lively discussion, and I think all parties acquitted themselves well. Listen here.
• An adverse policy outcome often attendant to “sue and settle” agreements are low quality rulemakings due to impossibly tight deadlines. For example, consider EPA’s absurd Utility MACT, which threatens to shut down 25% of the nation’s coal-fired power capacity in order to achieve illusory benefits. EPA agreed in an October 2009 consent agreement to issue a final Utility MACT rule by November 16, 2011. Thanks to this too-ambitious schedule, EPA was forced to rush to complete the rule (which ultimately was finalized in February 2012). It is news to no one that rushed work is careless work; accordingly, the final Utility MACT was rife with errors. As a result, EPA constantly has been amending the rule. In the 3 years since the rule went final, EPA has: finalized a round of major corrections (4/19/2012); formally reconsidered the rule three times (11/30/2012; 4/24/2013; 11/19/2014); and partially stayed it once (8/2/2012). On Tuesday EPA proposed yet another round of significant corrections for the rule. Of course, this is terrible for regulatory certainty. Because the agency committed itself to an impossible deadline, it promulgated a highly flawed rule. As a result, about twice a year on average since the rule went final, utilities have had to deal with substantive changes to this hugely consequential rule.
• On February 11, EPA proposed in the Federal Register a classic example of a sue and settle consent decree. In late December, Sierra Club filed a complaint in a northern California federal court (Sierra Club v. McCarthy, Civil Action No. 3:12–cv–6472–CRB (N.D. Cal.)) alleging that the agency missed deadlines for promulgating federal implementation plans (i.e., regulatory takeovers) for 20 States. The agency immediately moved to settle; and, finally, the two parties (EPA & Sierra Club) negotiated how the agency would employ its limited resources in order to impose regulatory takeovers of 20 States—none of which were California. Thus—behind closed doors in a northern California court—did the agency and the Sierra Club hash out environmental policy affecting a number of States to the east.