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Federal Legislation Would Curb "Sue and Settle" Litigation

Contact: Alison Keane Tuesday, June 11, 2013

On June 5, the U.S. House Committee on the Judiciary’s Subcommittee on Regulatory Reform, Commercial, and Antitrust Law held a hearing on the "sue-and-settle” legal tactic. In April, Sen. Chuck Grassley (R-IA) and Rep. Doug Collins (R-GA) introduced, in their respective chambers, the Sunshine for Regulatory Decrees and Settlements Act of 2013 (H.R. 1493, S. 714), which aims to end the routine of federal agencies advancing regulations through "sue and settle" litigation.

ACA, along with 53 other organizations, sent a letter to the bills' sponsors supporting the legislation and noting that under the legislation "agencies would continue to be free to enter into settlement agreements and consent decrees that result in regulations; however, the public and regulated parties would no longer be excluded from participating in our regulatory system because of this 'sue and settle' tactic."

“Sue and settle" occurs when a private party — usually an activist group — sues a federal agency to initiate a rulemaking, alleging that the agency has failed to meet a certain requirement, such as missing a deadline for promulgating a rule, and the agency agrees to settle with the party by entering into a consent decree that requires the issuance of the regulation. The agency then starts a rulemaking process and issues the rule. The Sunshine for Regulatory Decrees and Settlements Act of 2013 would require agencies to provide timely notice of lawsuits and give regulated entities a sufficient opportunity to intervene in cases.

In the last several years, there have been many "sue and settle" actions covering some of the most controversial rulemakings ever initiated. These include the New Source Performance Standards for greenhouse gas emissions from utilities and refineries, numeric nutrient criteria for the state of Florida, revisions to the definition of solid waste, revised hazardous air pollutant standards for cement kilns, Clean Water Act guidance for mountaintop removal, multi-industry section 112 air toxic rules, and dozens of other economically significant rules.

Sen. Grassley, ranking member on the Senate Judiciary Committee, has stated that "sue and settle litigation damages the transparency, public participation, and judicial review protections Congress has guaranteed for all of our citizens in the rulemaking process."

Of note, the same bill was introduced in the House and Senate during the last Congress. The legislation passed the full House as part of a larger bill — the Red Tape Reduction and Small Business Job Creation Act. However, the Democratic-controlled Senate did not take up the measure.

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