    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

          SUNSHINE FOR REGULATORY DECREES AND SETTLEMENTS ACT OF 2013

    =======================================================================

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                               REGULATORY REFORM,
                          COMMERCIAL AND ANTITRUST LAW

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                   H.R. 1493

                                   __________

                                  JUNE 5, 2013

                                   __________

                               Serial No. 113-28

                                   __________

             Printed for the use of the Committee on the Judiciary

          Available via the World Wide Web: http://judiciary.house.gov

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                           COMMITTEE ON THE JUDICIARY

                       BOB GOODLATTE, Virginia, Chairman
    F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
        Wisconsin                        JERROLD NADLER, New York
    HOWARD COBLE, North Carolina         ROBERT C. ``BOBBY'' SCOTT,
    LAMAR SMITH, Texas                       Virginia
    STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
    SPENCER BACHUS, Alabama              ZOE LOFGREN, California
    DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
    J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
    STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
    TRENT FRANKS, Arizona                  Georgia
    LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
    JIM JORDAN, Ohio                     JUDY CHU, California
    TED POE, Texas                       TED DEUTCH, Florida
    JASON CHAFFETZ, Utah                 LUIS V. GUTIERREZ, Illinois
    TOM MARINO, Pennsylvania             KAREN BASS, California
    TREY GOWDY, South Carolina           CEDRIC RICHMOND, Louisiana
    MARK AMODEI, Nevada                  SUZAN DelBENE, Washington
    RAUL LABRADOR, Idaho                 JOE GARCIA, Florida
    BLAKE FARENTHOLD, Texas              HAKEEM JEFFRIES, New York
    GEORGE HOLDING, North Carolina
    DOUG COLLINS, Georgia
    RON DeSANTIS, FLORIDA
    [Vacant]

               Shelley Husband, Chief of Staff & General Counsel
            Perry Apelbaum, Minority Staff Director & Chief Counsel
                                     ------

        Subcommittee on Regulatory Reform, Commercial and Antitrust Law

                       SPENCER BACHUS, Alabama, Chairman

                     BLAKE FARENTHOLD, Texas, Vice-Chairman

    DARRELL E. ISSA, California          STEVE COHEN, Tennessee
    TOM MARINO, Pennsylvania             HENRY C. ``HANK'' JOHNSON, Jr.,
    GEORGE HOLDING, North Carolina         Georgia
    DOUG COLLINS, Georgia                SUZAN DelBENE, Washington
    [Vacant]                             JOE GARCIA, Florida
                                         HAKEEM JEFFRIES, New York

                          Daniel Flores, Chief Counsel

                          James Park, Minority Counsel

                                C O N T E N T S

                                  ----------

                                  JUNE 5, 2013

                                                                       Page

                                    THE BILL

    H.R. 1493, the ``Sunshine for Regulatory Decrees and Settlements
      Act of 2013''..................................................     3

                               OPENING STATEMENTS

    The Honorable Spencer Bachus, a Representative in Congress from
      the State of Alabama, and Chairman, Subcommittee on Regulatory
      Reform, Commercial and Antitrust Law...........................     1
    The Honorable John Conyers, Jr., a Representative in Congress
      from the State of Michigan, Ranking Member, Committee on the
      Judiciary, and Member, Subcommittee on Regulatory Reform,
      Commercial and Antitrust Law...................................    18
    The Honorable Doug Collins, a Representative in Congress from the
      State of Georgia, and Member, Subcommittee on Regulatory
      Reform, Commercial and Antitrust Law...........................    20
    The Honorable Steve Cohen, a Representative in Congress from the
      State of Tennessee, and Ranking Member, Subcommittee on
      Regulatory Reform, Commercial and Antitrust Law................    27
    The Honorable Bob Goodlatte, a Representative in Congress from
      the State of Virginia, and Chairman, Committee on the Judiciary    29

                                   WITNESSES

    William L. Kovacs, Senior Vice President, Environment, Technology
      & Regulatory Affairs, U.S. Chamber of Commerce
      Oral Testimony.................................................    86
      Prepared Statement.............................................    88
    Allen Puckett, III, President, Columbus Brick Company
      Oral Testimony.................................................   101
      Prepared Statement.............................................   104
    John D. Walke, Clean Air Director and Senior Attorney, Natural
      Resources Defense Council
      Oral Testimony.................................................   110
      Prepared Statement.............................................   112
    Thomas Easterly, Commissioner, Indiana Department of
      Environmental Management
      Oral Testimony.................................................   136
      Prepared Statement.............................................   138

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Prepared Statement of the Honorable John Conyers, Jr., a
      Representative in Congress from the State of Michigan, Ranking
      Member, Committee on the Judiciary, and Member, Subcommittee on
      Regulatory Reform, Commercial and Antitrust Law................    19
    Material submitted by the Honorable Doug Collins, a
      Representative in Congress from the State of Georgia, and
      Member, Subcommittee on Regulatory Reform, Commercial and
      Antitrust Law..................................................    21
    Material submitted by the Honorable Spencer Bachus, a
      Representative in Congress from the State of Alabama, and
      Chairman, Subcommittee on Regulatory Reform, Commercial and
      Antitrust Law..................................................    31
    Material submitted by the Honorable Doug Collins, a
      Representative in Congress from the State of Georgia, and
      Member, Subcommittee on Regulatory Reform, Commercial and
      Antitrust Law..................................................   157
    Material submitted by the Honorable Spencer Bachus, a
      Representative in Congress from the State of Alabama, and
      Chairman, Subcommittee on Regulatory Reform, Commercial and
      Antitrust Law..................................................   177

                                    APPENDIX
                   Material Submitted for the Hearing Record

    Letter from Associated Builders and Contractors, Inc. (ABC)......   218
    Letter from the Public Lands Council, the National Cattlemen's
      Beef Association, American Sheep Industry Association, and the
      Association of National Grasslands.............................   219
    Resolution 13-2 from ECOS........................................   220
    Wall Street Journal Article......................................   222
    Response to Questions for the Record from John D. Walke, Clean
      Air Director and Senior Attorney, Natural Resources Defense
      Council........................................................   224

          SUNSHINE FOR REGULATORY DECREES AND SETTLEMENTS ACT OF 2013

                                  ----------

                            WEDNESDAY, JUNE 5, 2013

                           House of Representatives,

                      Subcommittee on Regulatory Reform,
                          Commercial and Antitrust Law

                          Committee on the Judiciary,

                                Washington, DC.

        The Subcommittee met, pursuant to call, at 10:04 a.m., in
    room 2141, Rayburn Office Building, the Honorable Spencer
    Bachus (Chairman of the Subcommittee) presiding.
        Present: Representatives Bachus, Goodlatte, Holding,
    Collins, Cohen, Conyers, Johnson, DelBene, Garcia, and
    Jeffries.
        Staff present: (Majority) Daniel Flores, Chief Counsel;
    Ashley Lewis, Clerk; and James Park, Minority Counsel.
        Mr. Bachus. Well, I am told by the minority staff to go
    ahead and proceed. So we will do that.
        The Subcommittee on Regulatory Reform, Commercial and
    Antitrust Law hearing will come to order.
        Without objection, the Chair is authorized to declare
    recesses of the Committee at any time.
        We welcome all our witnesses today. And after an opening
    statement, I will do a more thorough introduction of each of
    our witnesses.
        One of our witnesses is going to testify from a remote
    location, and we are having a little technical difficulty with
    that right now also.
        And now we will go to opening statements.
        Today the Subcommittee is holding a hearing on H.R. 1493,
    the ``Sunshine for Regulatory Decrees and Settlements Act of
    2013,'' which is designed to address a problem commonly known
    as ``sue and settle.'' Some folks refer to it as ``settle and
    sue.'' So I think either one would probably be descriptive.
        Let me thank Subcommittee Member, Representative Doug
    Collins of Georgia, for introducing this bill, and I am pleased
    to be an original cosponsor.
        We have been reminded recently it is essential that
    Government agencies perform their duties with full transparency
    and accountability. This includes allowing all members of the
    public a proper opportunity to provide comment and input during
    an open regulatory process.
        In recent years particularly, we have seen an increase in
    the use of consent decrees and settlement agreements in Federal
    litigation. These settlements can circumvent the normal
    regulatory process and at times run contrary to legislative
    intent of the elected Representatives of Congress. They are
    often the product of litigation between a Federal or a State
    agency and a pro-regulatory outside group. The parties then
    come to an agreement or a consent decree that has binding
    effect and that, in essence, sets new policy without allowing
    outside parties any input on the final terms.
        As the Chairman of the Regulatory Reform Subcommittee, I am
    particularly concerned that the practice of sue and settle can
    allow agencies to do an end run around the public participation
    and thorough analysis required by the Administrative Practice
    Act, the Regulatory Reform Flexibility Act, and other statutory
    requirements for rulemaking. Consent decrees should not be
    entered into lightly. They have the force of law and are
    difficult to overturn, and they offer the public no opportunity
    for comment. They can have long-lasting consequences and tie
    the hands of future Administrations, preventing them from
    establishing policies based on new facts or data. This is a
    problem that needs to be dealt with.
        According to the Chamber of Commerce study, the current
    Administration has entered into more than 70 sue-and-settle
    agreements which have led to the issuance of hundreds of new
    regulations. One entity alone was responsible for nearly half
    of these new agreements.
        The Sunshine for Regulatory Decrees and Settlements Act
    will provide much needed transparency and notice to allow input
    from all stakeholders and provide a better process for Federal
    decision-making.
        With that, let me say that I look forward to the testimony
    of our witnesses on this legislation.
        And I now recognize the Ranking Member of the full
    Committee, Mr. Conyers, for any opening statement that he might
    have.
        [The bill, H.R. 1493, follows:]

                                   __________
        Mr. Conyers. Thank you, Chairman Bachus.
        I too join in greeting our witnesses.
        But there are some problems here. Our research on this so-
    called sunshine in regulatory decrees and settlements has a
    simple goal, and that is to discourage the use of settlement
    agreements and consent decrees. I think that is very, very
    serious.
        And I am joined in this analysis, which is an attempt to
    delay regulatory protections, to slow it down. The result is,
    unfortunately, it jeopardizes not only public health, but
    safety, and it explains why the American Civil Liberties Union
    is opposed to this measure. The Natural Resources Defense
    Council is opposed to this measure. The National Association
    for the Advancement of Colored People is opposed to this
    measure. The Sierra Club is opposed to this measure. Earth
    Justice, all in strenuous opposition.
        The bill's provisions, in effect, are being used to prevent
    Federal regulatory actions from being implemented, and it does
    not take a legal scholar to figure out what the purpose of the
    legislation is. It is pretty patent. It gives opponents of
    regulation additional opportunities to stifle rulemaking by
    allowing essentially any third party who is affected by the
    regulatory action at issue to intervene, to participate in
    settlement negotiations, to submit public comments. And so this
    is all going in the wrong direction for all the wrong reasons.
        So H.R. 1493--this measure would needlessly slow down the
    process by imposing an extensive series of burdensome
    requirements on agencies that seek to enter into consent
    decrees or settlement agreements. It mandates that agencies
    provide for public comment on a proposed consent decree and
    requires agencies to respond to all such comments before a
    consent decree can be entered. It is a slow-down operation.
        And then there would be not one but two public comment
    periods, one for the consent decree and one for the rulemaking
    that results from the consent decree, doubling the agency's
    effort.
        Moreover, the bill would allow an unlimited number of third
    parties to intervene in the consent decree, furthering the
    delay of an entry of such decree.
        Now, I mean, there are so many things wrong with this bill
    that I am going to submit the rest of my statement. But just
    let me conclude on this note.
        The bill addresses a nonexistent problem. There is no
    evidence of collusion between agencies and private entities
    with respect to consent decrees and settlements, and there has
    been no convincing explanation as to why the current law is
    insufficient. The bill codifies certain Justice Department
    guidelines issued 30 years ago by then Attorney General Ed
    Meese and have since been codified in the Code of Federal
    Regulations. These regulations set forth in detail the criteria
    that the Department of Justice attorneys must follow when
    determining whether or not to enter into consent decrees or
    settlement agreements. So why do we need to codify them? Is
    there any evidence that these guidelines are not already being
    followed?
        So I am disappointed at the subject matter of this hearing.
    I am saddened to think of all the things that we need to be
    doing in the Judiciary Committee that deal with far more
    pressing issues.
        And so I will submit the rest of my statement and thank the
    Subcommittee Chair for permitting me to make these opening
    remarks.
        [The prepared staement of Mr. Conyers follows:]

    Prepared Statement of the Honorable John Conyers, Jr., a Representative
     in Congress from the State of Michigan, Ranking Member, Committee on
         the Judiciary, and Member, Subcommittee on Regulatory Reform,
                          Commercial and Antitrust Law

        H.R. 1493, the ``Sunshine in Regulatory Decrees and Settlements Act
    of 2013,'' has a simple goal: to discourage the use of settlement
    agreements and consent decrees.
        Why is this problematic? Here are just a few reasons.
        To begin with, this bill, by delaying regulatory protections,
    jeopardizes public health and safety, which explains why the National
    Resources Defense Council, the American Civil Liberties Union, the
    NAACP, the Sierra Club, and EarthJustice among other groups,
    strenuously opposed a very similar version of this bill in the last
    Congress.
        This bill's provisions, in effect, could be used to prevent federal
    regulatory actions from being implemented.
        For example, the bill gives opponents of regulation multiple
    opportunities to stifle rulemaking by allowing essentially any third
    party who is affected by the regulatory action at issue in a covered
    civil action to:

              intervene in that civil action, subject to rebuttal;

              participate in settlement negotiations; and

              submit public comments about a proposed consent
            decree or settlement agreement that agencies would be required
            to respond to.

        Often a federal agency defendant is sued because of its failure to
    take regulatory action or because it has missed statutory deadlines for
    taking such action, often by years.
        Consent decrees and settlement agreements can help assure that the
    agency takes such action by a date certain.
        H.R. 1493, however, would needlessly slow down this process by
    imposing an extensive series of burdensome requirements on agencies
    that seek to enter into consent decrees or settlement agreements.
        For instance, it mandates that agencies provide for public comment
    on a proposed consent decree and requires agencies to respond to all
    such comments before the consent decree can be entered in court.
        In the case of consent decrees concerning a rulemaking, an agency
    would be forced to go through two public comment periods: one for the
    consent decree and one for the rulemaking that results from the consent
    decree, doubling the agency's effort.
        Moreover, the bill would allow an unlimited number of third parties
    to intervene in the consent decree process, further delaying the entry
    of a consent decree.
        Like nearly all of the anti-regulatory bills we have considered to
    date since the last Congress, H.R. 1493 piles on procedural
    requirements for agencies and courts.
        Also, like these other bills, this measure encourages dilatory
    litigation by interests that are hostile towards regulatory
    protections.
        Another concern is that this bill threatens to undermine a critical
    tool that Americans use to guarantee their Congressionally-mandated
    protections, including civil rights laws and environmental protections.
        By reducing costly and time-consuming litigation, consent decrees
    and settlement agreements benefit both plaintiffs and defendants.
        They help to ensure that federal protections are enforced while
    leaving flexibility for state and local governments as to how they will
    carry out their federal obligations.
        Take, for example, a consent decree resolving a dispute under the
    Clean Air Act.
        In light of the fact that the bill would allow any private party
    whose rights are affected by such decree a right to intervene, that
    could potentially include anyone who breathes air as well as any
    industry or special interest group.
        So H.R. 1493 could have a chilling effect on the use of consent
    decrees and settlement agreements, and the inevitable result will be
    more litigation that will result in millions of dollars of additional
    transaction costs.
        And, guess who is going to bear the expense of these litigation
    costs? Of course it will be the American taxpayer.
        It is not surprising that the Congressional Budget Office in its
    analysis of a similar bill considered in the last Congress stated that
    the measure would impose millions of dollars in costs ``primarily
    because litigation involving consent decrees and settlement agreements
    would probably take longer under the bill as agencies would face new
    requirements to report more information to the public and other
    additional administrative costs.''
        Finally, this bill addresses a non-existent problem. There simply
    is no evidence of collusion between agencies and private entities with
    respect to consent decrees and settlements.
        Other than unsupported allegations, H.R. 1493's proponents have
    failed to offer a convincing explanation as to why current law is
    insufficient.
        For instance, the bill codifies certain Justice Department
    guidelines, first issued by Attorney General Edwin Meese nearly 30
    years ago, that have since been codified in the Code of Federal
    Regulations.
        These regulations set forth detailed criteria that Justice
    Department attorneys must follow when determining whether or not to
    enter into consent decrees and settlement agreements.
        So I must ask: why do we need to codify them? Is there any evidence
    that these guidelines are not already being followed?
        There simply is no need for this legislation.
        I thank the witnesses for joining us today and I look forward to
    your testimony.
                                   __________

        Mr. Bachus. I thank the full Committee Ranking Member, Mr.
    John Conyers, Jr. of Michigan, for that opening statement.
        And I would also like to say that I enjoyed my time as a
    Member under your chairmanship and have the deepest respect for
    you as an individual and also as a legislator.
        Mr. Conyers. Thank you.
        Mr. Bachus. At this time, I would like to recognize the
    sponsor of this legislation, the gentleman from Georgia, Mr.
    Doug Collins, for an opening statement.
        Mr. Collins. Thank you, Mr. Chairman.
        I appreciate you holding this hearing today and I look
    forward to hearing from our witnesses. And as much respect as I
    have for our distinguished Ranking Member, I believe this is
    exactly why we need to be here. I believe in talking about jobs
    and the economy. I would disagree with the wrong direction. I
    believe this is the right direction and moving in the right way
    in what we are dealing with here today as we look forward to
    hearing from witnesses who I believe will outline the problem
    and will outline the issues that we are talking about.
        Mr. Chairman, I ask unanimous consent to enter in the
    record a written statement from the Attorney General of the
    State of Georgia, Sam Olens. Mr. Olens was unable to be here
    today, but he is a tireless leader on this issue and I
    appreciate his----
        Mr. Bachus. Without objection.
        [The information referred to follows:]

                                   __________

        Mr. Collins. In 2004, Frew v. Hawkins, a decision in the
    U.S. Supreme Court, expressed its concern that consent decrees
    may improperly deprive future officials of their designated
    legislative and executive powers. This potential for abuse and
    the lack of transparency in the status quo is why I believe so
    strongly in the need for this legislation. H.R. 1493 addresses
    weaknesses in the current system while preserving consent
    decrees as an important mechanism for settling legal disputes.
    Any argument as to the benefits of a statutory deadline
    enforcement has no place in this policy discussion. As a
    sponsor of this legislation, I believe that the ability of
    citizens to hold Government accountable is an important part of
    administrative law, but it must be appropriately carried out
    with transparency and full public participation. This
    legislation restores the balance and the intent of the APA and
    ensures that those who wish to subvert the rulemaking
    requirements in current law are unable to do so.
        I am proud to represent the thriving agricultural community
    in northeast Georgia and across the State. Farmers and ranchers
    back home are concerned by a recent settlement that has the
    potential to severely impact their livelihood. In 2011,
    WildEarth Guardians and the Center for Biological Diversity
    entered into an agreement binding Fish and Wildlife Services to
    deadlines for decisions on over 1,000 species under the
    Endangered Species Act. Even though the agriculture community
    will be significantly impacted by this agreement, they were not
    allowed to participate in its development.
        In addition, due to the fee-shifting statutes that provide
    attorney's fees to special interest groups, WildEarth Guardians
    and the Center for Biological Diversity together received
    almost $300,000 in taxpayer dollars. American families across
    the Nation are tightening their belt. It is absolutely
    unacceptable that their hard-earned taxpayer dollars go to fund
    back room deals that subvert the rulemaking process.
        I want to thank the witnesses for being here and especially
    Mr. Puckett for being here today, and I look forward to hearing
    from them and from all our witnesses on what I believe is an
    important subject and I believe a right direction for this
    Committee to be heading. And I thank you, Mr. Chairman, for
    your leadership in bringing this today.
        Mr. Bachus. Thank you. Thank you.
        And I now recognize our Ranking Member, Steve Cohen of
    Tennessee, for his opening statement.
        Mr. Cohen. Thank you, Mr. Bachus. I appreciate the
    opportunity to speak, and it is particularly relevant here
    today in the Antitrust Committee where Delta Airlines struck
    again in my community. Even though they made testimony here
    that the merger would not affect hubs, they have taken the hub
    status away from Memphis and took our flights down to 60 from
    what were 243. I wish that we were concentrating on antitrust
    and airlines and what they are doing to the American consumer
    and employee in this country.
        But we are here today with another Groundhog Day. H.R.
    1493, the ``Sunshine for Regulatory Decrees and Settlements Act
    of 2013,'' is clearly designed to impede Federal rulemaking and
    other regulatory action, is like legislation we have considered
    in the past. It does this by imposing numerous constraints and
    disincentives to the entry of consent decrees and settlement
    agreements in civil actions that seek to compel agencies to
    comply with their statutory rulemaking requirements. H.R. 1493
    threatens to undermine rulemaking by tilting this playing field
    in favor of anti-regulatory forces at taxpayers' expense. It
    does so by taking several broad approaches.
        First, it provides numerous opportunities for dilatory
    tactics by industry and other anti-regulatory interests. The
    bill makes it easier for any affected third party--any affected
    third party--to intervene in the underlying litigation and the
    settlement negotiations by requiring a court to presume--
    subject to rebuttal, yes--but presume that any third party
    affected by the agency action or dispute will not be adequately
    represented by the parties to the litigation. This intervention
    right is drafted so broadly that if the regulatory action at
    issue involved the Clean Water Act, theoretically any person
    who uses water would have a right to intervene in the
    negotiations on a potential consent decree or settlement
    agreement. Any industry interests out there would certainly not
    hesitate to intervene.
        Second, many of the terms of 1493, its key terms, are
    ambiguous, opening the door to confusion, litigation, and delay
    in resolving disputes. For example, the threshold question of
    what is a covered civil action under the bill, such civil
    action includes, one, alleging that an agency is ``unlawfully
    withholding or unreasonably delaying action.'' As a lawyer, I
    know that the interpretations of words like ``unreasonably''
    simply open the door to litigation that may go on ad infinitum,
    ad nauseam, particularly when, as here, they appear in the
    threshold question of when the bill is supposed to apply.
        Third, the bill imposes numerous procedural requirements on
    agencies and courts that threaten to take away their already
    limited resources from issuing rules to protect public health
    and safety. For instance, the bill requires agencies to accept
    public comments on a proposed consent decree or settlement
    agreement and to respond to such comments. This provision alone
    would add considerable delay in resolving litigation meant to
    force an agency to meet its rulemaking and other statutory
    obligations.
        Finally, the effect of the bill's various provisions would
    be to dissuade agencies from ever agreeing to enter into
    consent decrees or settlement agreements, making it more likely
    they would simply proceed with potentially expensive and time
    consuming litigation. That is why the Congressional Budget
    Office found that last year's drafting of a bill, similar to
    H.R. 1493, which was last year's bill, would cost taxpayers
    millions of dollars.
        In addition to being harmful, H.R. 1493 is simply
    unnecessary as its proponents offer no evidence of the problem
    that it purports to address. H.R. 1493's proponents argue this
    bill is needed because Federal agencies collude with pro-
    regulatory plaintiffs to advance a mutually agreed upon
    regulatory agenda through the use of consent decrees and
    settlement agreements. Yet, when this Subcommittee considered a
    substantially similar bill in the last Congress, we were given
    no data or study indicating that such collusive consent decrees
    or settlement agreements were in fact a real problem. All we
    heard were the repeated assertions of the witnesses of the
    majority that such collusion was taking place.
        More credible was the testimony of John C. Cruden, a senior
    nonpartisan career official at the Justice Department's
    Environment and Natural Resources Division for over 2 decades,
    who testified he was, ``not aware of any instance of a
    settlement and certainly none he personally approved that would
    remotely be described as collusive.''
        In the absence of actual evidence of rampant collusion
    between Federal agencies and plaintiffs, H.R. 1493 simply
    addresses a nonexistent problem.
        H.R. 1493 would needlessly slow down an agency action and
    open the door widely to almost anyone who wants to impede
    agency action, including the promulgation of important public
    health and safety rules.
        The bill is unnecessary. The bill is harmful. The bill is
    not going to go anywhere in the Senate. I urge my colleagues to
    oppose it.
        Mr. Conyers. Would the gentleman from Tennessee yield?
        Mr. Cohen. I will yield.
        Mr. Conyers. Thank you.
        I just had research on--this is the third hearing on
    regulatory activity in this Congress, but there were 16 other
    hearings during the 112th. I am writing an article on this
    because this is unbelievable.
        And I thank the gentleman for yielding.
        Mr. Cohen. You are welcome.
        I yield back the balance of my time which does not exist.
        Mr. Bachus. Thank you, Mr. Cohen.
        I would now like to recognize the full Committee Chairman,
    Mr. Bob Goodlatte of Virginia, for his opening statement.
        Mr. Goodlatte. Thank you, Mr. Chairman. I appreciate your
    holding this hearing. And I want to thank Mr. Collins for his
    introduction of the bill and Chairman Bachus and the
    Subcommittee for their prompt and careful consideration of it.
        America's small businesses and job creators need relief
    from the flood of new regulations and red tape made in
    Washington. Small business owners cite Government regulations
    as one of the most important problems they face today. And
    while the flow of new regulations from Washington grinds on, so
    does America's dismal unemployment situation. Make no mistake.
    The untimely drag of new regulations, too often issued without
    sufficient consideration of their costs, benefits, and impacts
    on jobs, remains a significant part of our virtual jobs
    depression.
        The Judiciary Committee is considering a strong set of
    regulatory reform bills to solve this problem while preserving
    important regulatory protections for the American people. The
    Sunshine for Regulatory Decrees and Settlements Act of 2013 is
    an important part of this initiative. Far too often, costly new
    regulations are issued directly under the authority of consent
    decrees and settlement agreements to force Federal agencies to
    issue new rules. Regulators often cooperate with pro-regulatory
    organizations to advance their mutual agendas in this way.
        The technique used is simple: an organization that wants
    new regulations alleges that an agency has violated a duty to
    declare new rules. The agency and the plaintiff work out a deal
    under the cover of litigation. The deal puts the agency under
    judicially backed deadlines to issue the rules. These deadlines
    often give the public and even States that co-administer
    regulations little opportunity to comment on proposed rules.
    Deals can go so far as to require agencies to propose specific
    regulatory language negotiated by the agency and the
    regulation-seeking plaintiff. Those to be regulated frequently
    do not know about these deals until the plaintiff's complaints
    and the proposed decrees or settlements are filed in court. By
    then, it is too late. Regulated businesses, State regulators,
    and other interested entities are unlikely to be able to
    intervene in the litigation. The court can approve the deals
    before regulated parties have an opportunity to determine
    whether new regulatory costs will be imposed on them.
        The Obama administration has entered into a high number of
    consent decrees and settlement agreements just like I just
    described. Examples include a consent decree to require new
    performance standards for greenhouse gas emissions under the
    Clean Air Act. They also include settlement agreements to
    require EPA to issue Chesapeake Bay TMDL's that trigger
    billions of dollars in costs and the Fish and Wildlife Service
    to take actions involving hundreds of species under the
    Endangered Species Act. Deadlines set in these and other
    decrees and settlements can even be used to bind the hands of
    future Administrations.
        The Sunshine for Regulatory Consent Decrees and Settlements
    Act of 2012 puts an end to the abuse of this practice. It
    assures that those to be regulated have a fair opportunity to
    participate in the resolution of litigation that affects them.
    It ensures that courts have all the information they need
    before they approve proposed decrees and settlements, and it
    provides needed transparency on the ways agencies conduct their
    business.
        The bill also respects the basic rights of plaintiffs and
    defendants to manage litigation between them.
        As a result, the bill offers an effective and balanced
    remedy and it is a timely solution to a real and important
    problem. And I commend the gentleman from Georgia, Mr. Collins,
    for his efforts on this bill, and I strongly support them and
    yield back the balance of my time.
        Mr. Bachus. Thank you.
        Without objection, other Members' opening statements will
    be made a part of the record.
        Since the full Committee Ranking Member introduced
    something, I would like unanimous consent to offer a response
    to his submittal, which is ``Sue and Settle: Regulating Behind
    Closed Doors,'' authored by the U.S. Chamber of Commerce, in
    rebuttal and ask that it be entered into the record.
        [The information referred to follows:]

                                   __________

        Mr. Bachus. Thank you.
        We have a distinguished panel today, and I will first begin
    by introducing our witnesses.
        Mr. Bill Kovacs provides the overall direction, strategy,
    and management for the Environment, Technology & Regulatory
    Affairs Division of the U.S. Chamber of Commerce. Since he
    joined the Chamber in March 1998, he has transformed a small
    division concentrating on a handful of issues and committee
    meetings into one of the most significant in the organization.
    His division initiates and leads national issue campaigns on
    energy legislation, complex environmental rulemaking,
    telecommunications reform, emerging technologies, and applying
    sound science to the Federal regulatory process.
        Mr. Kovacs previously served as Chief Counsel and Staff
    Director for the House Subcommittee on Transportation and
    Commerce. He earned a J.D. from Ohio State University College
    of Law and a bachelor of science degree from the University of
    Scranton, magna cum laude.
        I welcome you, Mr. Kovacs.
        Mr. Allen Puckett III is the owner of Columbus Brick
    Company. Columbus Brick was founded in 1890 by Mr. Puckett's
    great grandfather, W.N. Puckett, and his friend W.S. Lindamood.
    Mr. Puckett represents the fourth generation of Pucketts to
    operate Columbus Brick, which is now the only brick
    manufacturer in the State of Mississippi. The company is the
    distributor for many other brick companies based in
    Mississippi, Alabama, Georgia, North Carolina, South Carolina,
    and Virginia. Columbus Brick ships over 140 million bricks each
    year throughout the Midwest and southern United States. And his
    story I think is quite dramatic and telling, similar to other
    stories I have heard from his colleagues in the industry, and I
    am very much looking forward to hearing your firsthand account
    of your experience.
        Mr. John D. Walke is Senior Attorney for Clean Air and
    Clean Air Director for the Natural Resources Defense Council in
    Washington, D.C. As Mr. Conyers mentioned, you all are opposing
    this legislation. And you are responsible, as I understand it,
    for the National Resources Defense Council's National Clean Air
    Advocacy before Congress, the courts, and the U.S.
    Environmental Protection Agency.
        Prior to joining NRDC, Mr. Walke worked for the EPA in the
    Air and Radiation Law Office of the Office of General Counsel.
    At EPA, he worked on permitting air toxics, monitoring, and
    enforcement issues under the Clean Air Act.
        Prior to working for the EPA, Mr. Walke was an associate at
    Beveridge & Diamond here in Washington, D.C.
        He graduated from Duke University with a B.A. in English
    and earned his J.D. from Harvard Law School.
        Joining us by teleconference is Mr. Tom Easterly. He has
    been the Commissioner of the Indiana Department of
    Environmental Management since 2005. After obtaining his M.S.
    in urban and environmental studies from Rensselaer Polytechnic
    Institute in Troy, New York, Mr. Easterly joined the New York
    State Department of Environmental Conservation where he held
    various engineering positions in the Air and Solid and
    Hazardous Waste Divisions. He has also worked for Bethlehem
    Steel Corporation as their corporate air pollution expert and
    as superintendent of environmental sciences for Bethlehem
    Steel's Burns Harbor Division. He also served as President of
    Environmental Business Strategies, an environmental consulting
    firm he started in 2002. He is a board certified environmental
    engineer and a qualified environmental professional.
        As I said, we have very distinguished panel today, and with
    that, Mr. Kovacs, you are recognized for your opening
    statement.

        TESTIMONY OF WILLIAM L. KOVACS, SENIOR VICE PRESIDENT,
     ENVIRONMENT, TECHNOLOGY & REGULATORY AFFAIRS, U.S. CHAMBER OF
                                COMMERCE

        Mr. Kovacs. Thank you, Chairman Bachus and Ranking Member
    Cohen and Members of the Committee, for letting me come here
    today to testify in support of H.R. 1493, the ``Sunshine for
    Regulatory Decrees and Settlements Act of 2013'' and to discuss
    the Chamber's recent report, ``Sue-and-Settle: Regulating
    Behind Closed Doors.''
        H.R. 1493 is a balanced approach to inject more
    transparency and public participation into the rulemaking
    process, which has been the overriding goal of Congress since
    1946.
        If enacted, 1493 would do three simple things, and I think
    we need to keep in mind how simple this bill is.
        First, it would require agencies to publish on their Web
    site and in the Federal Register notices of intent to sue and
    complaints filed against agencies so the public knows when the
    agency is being sued.
        It would require agencies to post on their Web site and on
    the Federal Register the filings of consent decrees before they
    are actually presented to the court so that the public can
    comment on the consent decree before it is presented to the
    court.
        And finally, it would allow impacted parties, those who
    have standing--not anyone--those who the courts have--allow--
    recognized constitutional standing to--to intervene in the
    court case if they can establish that their rights are not
    being adequately represented by the parties before the court.
        The Chamber's involvement in this issue started when we
    started getting a number of growing complaints not only from
    the business community but from States talking about the fact
    that they were shut out of major regulatory decisions by
    Federal agencies. We decided to investigate the matter, and it
    became clear that EPA and other agencies were not in any
    manner--all we are asking for is that they publish it on their
    Web site. They were not in any manner informing the public of
    the notices of the lawsuits or of the lawsuits brought against
    the agencies or of the consent decrees.
        Because of this, we saw more and more regulatory activity
    and we asked--and I believe it was--one of the Members
    referenced last year's hearing where what is the problem, there
    are not many cases. We decided that what we would do is we
    would literally sit down and try to figure what it is out
    because when EPA was asked the questions, they were saying
    there is no centralized database. So we cannot give not the
    industry, not the environmental group, but the Congress even
    the information on the lawsuits.
        So what we did is for an 18-month period, we used several
    databases containing court documents, and from these databases,
    we identified 71 separate lawsuits from 2009 to 2012 and the
    agencies that entered into these environmental suits, as well
    as the environmental groups that were party to the case.
        On May 20, 2013, we published our list of cases which
    impact virtually every industry in the United States, and we
    have put all the supporting materials from the complaint, the
    consent decree, the court order, everything on our Web site. So
    there is total transparency here because since the agencies
    have not been willing to provide a database, we decided we
    would. And that is really the essence of what the report says.
    It is a database. And we are not saying it is 100 percent
    accurate. What we are saying is this is what we could find over
    18 months.
        But each case we found followed the same pattern: the NGO
    and the agency negotiated in private a deadline for the
    proposal of new regulation. When they come to an agreement,
    they prepare, sign, and present the decree to the court, and
    this is before they put it out for public comment. In some
    instances, the court asks the agencies to submit the proposed
    consent decree for public comment, but that very rarely leads
    to any changes in the consent decree as drafted.
        Once a consent decree becomes an order of the court, public
    policy is forever changed. And that is really the key point
    because once the consent decree is issued by the court, the
    court retains jurisdiction over the agency and the
    implementation of the order, while in most instances the only
    group that can enforce the order during this time period is the
    environmental group.
        Agency priorities and the use of its resources are
    irrevocably changed by the consent decree. While a few consent
    decrees might not change agency priorities, when you have 71
    consent decrees ordering the issuance of more than 100
    regulations, it impacts the management of the agency.
        Since the deadlines agreed to by the NGO and by the agency
    do not include industry, what usually happens is in the setting
    of the deadlines with no industry input to the agency, the
    agency is operating in a fundamental disagreement with the APA
    because it is not gathering the information it needs as to what
    is to be done. So what happens is you get poorly drafted
    regulations that lead to more litigation while all along during
    this time period of litigation, the regulated entity has to try
    to comply with a poorly drafted regulation.
        And finally, the sue-and-settle process does a lot more.
    There are a lot more compromises than just simply the
    procedural safeguards that might be in any consent decree. The
    fact that the system is rushed by itself, it literally
    disallows the ability to go through the other regulatory
    statutes that Congress has imposed on agencies, such as the
    Regulatory Flexibility Act, the Informational Quality Act,
    Unfunded Mandates, several executive orders, and OIRA review,
    all of which we think are important and are in place and are
    statutes now. And one of the things that is mostly ignored are
    the small business panels, and you end up ignoring 26 million
    businesses in the country and how they impact.
        My time is up. And thank you very much, and I would be
    pleased to answer questions at the appropriate time.
        [The prepared statement of Mr. Kovacs follows:]

                                   __________

        Mr. Bachus. Thank you.
        Mr. Puckett, you are recognized.

              TESTIMONY OF ALLEN PUCKETT, III, PRESIDENT,
                         COLUMBUS BRICK COMPANY

        Mr. Puckett. Chairman Bachus, Ranking Member Cohen, and
    Members of the Subcommittee, good morning.
        I am President of Columbus Brick Company, a small business
    in Columbus, Mississippi. I am a member of the fourth
    generation of Pucketts to own and operate this company. Our
    fifth generation is also working in the company. Our family has
    been making fired clay brick in Mississippi since before the
    1890's.
        I am here today as a small business owner. I do not profess
    to be an expert on the Clean Air Act or on this bill you are
    considering today. We are an industry of mostly small
    companies, and we look to our trade associations and industry
    task forces for this kind of information.
        I do, however, know how to run a business, and what I have
    seen happening in the past several years makes me extremely
    concerned about my ability to keep our business viable for the
    future.
        I am also here today on behalf of our industry, our
    company, and the families we employ.
        Over the past 10 years, our industry has been directly
    impacted by two sue-and-settle cases involving air toxic
    standards being developed by the U.S. Environmental Protection
    Agency.
        Our first experience with sue-and-settle was a rule that
    was vacated after we had spent considerable money for
    compliance with the rule. I believe we were harmed by this
    first sue-and-settle.
        We are understandably concerned about the second round of
    sue-and-settle rulemaking we are now facing. The rules I am
    referring to are the National Emission Standards for Hazardous
    Air Pollutants, or NESHAP's, commonly referred to as MACT
    standards. It is my understanding that virtually all original
    MACT standards were completed under either a sue-and-settle
    court order or the threat of a court order. I also understand
    that most of these rules were later subject to litigation by
    the same environmental groups who forced a short schedule, this
    time complaining that the EPA did not properly develop the
    rule. It appears there may be an obvious correlation between
    these two facts.
        Recently the EPA restarted the MACT development process for
    our industry and has once again entered into a sue-and-settle
    consent decree with the Sierra Club for our rulemaking
    schedule. We asked to be included in the discussions of the
    settlement but were again excluded from the negotiations until
    a draft settlement was published in the Federal Register. I do
    not think anyone could possibly fault our industry for being
    extremely concerned.
        If the EPA uses the same approach they have followed on
    recent rules as a default to lower litigation potential,
    Columbus Brick may cease to exist after almost 125 years of
    operation. Based on EPA's numbers I have seen for my company, I
    expect at minimum to have to permanently shut down two of our
    three kilns. That will mean a permanent job loss for 45 to 50
    families in our small rural community.
        Unfortunately, my story is not unique in our industry.
        If this burden resulted in some great benefit to the
    environment, it might be worth it. However, the EPA has the
    data in house that demonstrates that there is no great benefit
    to the environment, that our industry's operations are already
    within safe levels in many, many cases. If there were no other
    options available under the Clean Air Act, it might be
    unavoidable. However, the EPA has the authority under the Clean
    Air Act to avoid disastrous impacts that provide no benefit.
    The EPA needs to take the time to develop the rule correctly.
    They need to avoid sue-and-settle agreements that remove that
    time.
        We actually have a great deal of faith in the EPA to do the
    right thing if they are allowed to do so, to look at the data
    and the requirements of the Clean Air Act, and then come to a
    decision that meets the requirements of the Clean Air Act,
    protects human health and the environment, and still allows our
    industry to continue to operate.
        We are not asking for the rule to go away. We are asking
    that the practice of establishing unreasonable deadlines
    without input from the impacted industry go away. We are asking
    for the opportunity to be an integral part of a rulemaking
    process that could make or break our industry. We are asking
    that the time be taken to ensure that the public health and
    welfare is maintained but also allow the brick industry to
    continue to exist. I believe you can ensure that these
    decisions are made that allow my company to continue and our
    employees to remain gainfully employed. I would hate to see
    Columbus Brick put out of business because of a rule the EPA
    made it was forced to develop too quickly, especially a rule
    that does not benefit anyone.
        Thank you.
        [The prepared statement of Mr. Puckett follows:]

                                   __________
        Mr. Bachus. Thank you.
        Mr. Walke?

       TESTIMONY OF JOHN D. WALKE, CLEAN AIR DIRECTOR AND SENIOR
              ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL

        Mr. Walke. Thank you, Chairman Bachus and Ranking Member
    Cohen, and Members of the Subcommittee. My name is John Walke
    and I am clean air director and senior attorney for the Natural
    Resources Defense Council. NRDC is a nonprofit organization of
    scientists, lawyers, and environmental specialists dedicated to
    protecting public health and the environment.
        My testimony today will focus on three main points.
        First, allegations that Federal agencies collude with
    nongovernmental organizations in the filing and settling of
    lawsuits are entirely unsubstantiated.
        Second, H.R. 1493's solutions to this unsubstantiated
    problem would prevent the enforcement of laws that establish
    critical health safeguards.
        Third, this bill ignores the existing administrative and
    judicial safeguards that prevent litigation abuses.
        First, the witnesses at today's hearing, like their
    counterparts at last year's, have provided no evidence of
    Government attorneys seeking to limit agency discretion by
    colluding with plaintiffs to settle cases. The U.S. Chamber of
    Commerce recently issued an entire report on this subject and
    was unable to identify any evidence of collusion, conspiracy,
    or agencies manipulating settlements or laws to carry out
    improper exercises of authority.
        Instead, critics such as the Chamber have resorted to
    redefining what the term ``sue-and-settle'' means. The Chamber
    chose a methodology that focused on all EPA settlements with
    environmental groups but only during this Administration. Now
    why? First, because this allowed the Chamber to quietly
    dispense with any need to prove collusion or impropriety. Next,
    because a fuller picture that included EPA settlements with
    industry and Bush administration settlements with environmental
    groups would have destroyed the Chambers' mythical story.
        What the Chamber and this bill truly target is the legal
    rights of citizens to hold government accountable by enforcing
    laws designed to protect public health, safety, and the
    environment. Settlements have led to EPA having to fulfill
    clear statutory obligations that the Chamber would prefer to
    remain unenforced.
        Second, under H.R. 1493, third party intervenors would be
    given the unprecedented ability to obstruct settlement talks.
    The result would waste taxpayer money as agencies would be
    forced to take more time settling or even litigating cases in
    which they know they have broken the law. H.R. 1493 would give
    intervenors opportunities to disrupt and obstruct the
    settlement of lawsuits in ways that courts have rejected. In
    fact, this bill would overturn a Supreme Court precedent that
    made clear that intervenors cannot prevent parties from
    resolving their disputes in settling a case.
        The legal obligations in settlements overwhelming entail
    requiring agencies to comply with nondiscretionary duties that
    are clearly mandated by law such as statutory deadlines. These
    laws protect Americans' health, safety, environment, food
    supply, investor confidence, and other values. For example,
    just two overdue clean air standards that followed consent
    decrees attacked by the Chamber are projected to save over
    10,000 lives annually. If Congress does not like the deadlines
    or safeguards, it is free to amend them. It should not be
    creating end runs around the law.
        Third, H.R. 1493 ignores the legal mechanisms already in
    place to ensure transparency, public participation, and an
    agency's maintenance of its discretionary powers and legal
    responsibilities. Notably, no witness at last year's hearing or
    in written testimony today has identified a single rule that
    followed a settlement that did not go through public notice and
    comment. The settlements cited did not mandate a result but
    merely a timetable for rulemaking, meeting all administrative
    laws.
        Some of today's testimony conflates and confuses the terms
    of settlements which do not establish regulatory deadlines or
    mandates with subsequent rulemakings that do establish
    deadlines and mandates but only pursuant to call and comment
    rulemakings. Again, no regulatory outcomes were fixed by any
    settlements discussed in the witnesses' testimony, and any
    criticisms of the regulatory deadlines and measures could have
    been and in many cases were raised during public comment
    opportunities during these rulemakings.
        Settlements include specific language barring modifications
    of agency authority, and deadlines and settlements can be
    extended by agreement of the parties or unilaterally by the
    agency with court approval. But agency critics ignore these
    safeguards. Instead, the critics have offered H.R. 1493 which
    would hinder all plaintiffs seeking to uphold the law,
    including States, corporations, and individuals. It is hard to
    understand why even conservatives would back legislation that
    hinders enforcement of the law, requires agencies to waste
    money in court on cases they believe they cannot win, and would
    stymie industry and State settlements along with all others.
        I urge the Subcommittee to reject this harmful legislation.
    Thank you.
        [The prepared statement of Mr. Walke follows:]

                                   __________

        Mr. Bachus. Thank you.
        Next testifying by video conference is Commissioner Thomas
    Easterly, Indiana Department of Environmental Management. At
    this time, Commissioner, we welcome you to our hearing and look
    forward to hearing your opening statement.

              TESTIMONY OF THOMAS EASTERLY, COMMISSIONER,
             INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT

        Mr. Easterly. Well, thank you, Chairman Bachus and Ranking
    Member Cohen, for inviting me. I would also like to thank
    Congressman Clay for letting me use his office here in St.
    Louis.
        I am representing both the Environmental Council of the
    States, which is a nonpartisan, nonprofit organization of State
    and territorial environmental agencies and their leaders, and
    the State of Indiana in this testimony. The Environmental
    Council of the States--I refer to them as ECOS. They represent
    the States and together the States and the EPA implement the
    national environmental statutes. And we have a partnership to
    do that, and the partnership works because we communicate with
    each other. EPA's primary role is to provide national
    standards, conduct research on issues, and then based on their
    statutory authority and that research, implement regulations
    that we do on the ground, and then of course, conduct oversight
    of our activities to make sure that they meet the requirements
    and see that the environment is improved. And we both work
    together to have discussions on deploying the amount of
    resources that actually exist to make sure that the environment
    is protected.
        As the States are the boots on the ground--and just to give
    you an indication of how much we do, we do--96.5 percent of the
    Federal environmental programs are actually implemented by the
    States, and that means that EPA does the rest. And EPA does
    some pieces of the programs that are delegated to the States
    because they just want to make sure there is good quality and
    things. But still, the States do over 90 percent of the work,
    whether it is inspections, enforcement, data collection, and
    other things.
        Also, the States fund most of the work. Over 80 percent of
    the actual cost of delivering environmental protection in the
    United States is paid for by the various States and the rest
    comes from the Federal Government.
        So we have a constant dialogue on how to do this best, and
    the dialogue breaks down when these consent decree activities
    happen because we are not at the table. So it is sort of like a
    marriage. So you need to work with your spouse and you have
    discussions and you come to conclusions. In this case, our
    partner, EPA, is having discussions with other people we are
    not a party to. They come to these agreements and we have to do
    the work even though we may not be capable. And at the very
    minimum, it requires us to divert resources from things that
    may be more important.
        So I will give you a couple examples of Indiana, actually
    probably one now because I am talking too long. I am sorry.
        There was Federal litigation over the deadlines in what is
    called the Visibility SIP's, and it is to make sure that the
    air--you can see through it and it does not obscure your views.
    And this is an important thing. It is a long-term action. And
    the reason that the States did not have--including Indiana--
    turn in their plans by the dates required in the original
    regulations is because there has been incredible uncertainty
    due to litigation over what the regulations for power plant
    emissions are. And these same controls on power plant emissions
    are the things we need to protect the visibility. So there was
    the Clean Air Interstate rule which was first overturned by the
    courts--or vacated they call it--and then it was temporarily
    put back in place for EPA to do the other rulemaking for a
    better rule. That resulted in the Cross-State Air Pollution
    Rule, or CSAPR, which has been overturned by the courts. So the
    right answer for what is called best available retrofit
    technology, which we need to have in these plans, is that it
    equals these power plant controls. But we have to not do that
    because we do not have the answer. Those regulations continue
    to be overturned by the court, and they are saying we do not
    have an adequate plan. So you would say, well, that seems like
    sort of a tale of woe, but the challenge is we are diverting
    resources from protecting human health and the environment to
    deal with these legal issues that are not done.
        So since I have used up most of my time, I will tell you
    two things. The Environmental Council of the States has
    reviewed this proposed bill, and it is consistent with the
    resolution we passed on this issue because this issue is
    important to all States. But they do not support general bills,
    but the State of Indiana believes this is an excellent bill.
        And thank you for your indulgence.
        [The prepared statement of Mr. Easterly follows:]

                                   __________

        Mr. Bachus. Thank you. We look forward to you being with us
    for questions too.
        The first question is to Mr. Kovacs. Mr. Kovacs, listening
    to Mr. Walke, his view of sue-and-settlement litigation, it
    seems to be that it is really as simple as that an agency's--if
    there is a broken deadline, then a court needs to fix that as
    soon as possible and can do that. What is your response to that
    view or that the agency will extend the deadline?
        Mr. Kovacs. Well, you know, Congress establishes the
    deadline. We are not here to talk about the deadlines at all.
    That is something you have decided to put in the statutes.
        What we are here to talk about is the fact that we do not
    know about any of the sue-and-settle agreements or the notices
    of intent to sue. So our concern is, one, there needs to be
    some very simple transparency. For example, let me show you how
    easy it is.
        We had been complaining for years on the fact that we had
    no notice of intent to sue. We do not even know how many
    lawsuits are brought against our Government. I think you ought
    to know that as just Members of Congress. But during the Gina
    McCarthy hearings, for example, one of the commitments that was
    made was that they would begin to finally post the notice of
    intent to sue, which is only one of the points. But it was up
    on the Web site in literally a week or so. So it can be done
    quickly. And the fact is that the notices of intent to sue and
    the lawsuits and the consent decrees are really something the
    American public are entitled to know because they are going to
    result in regulation.
        And some of the regulations that are moving forward--all we
    are asking is that the affected parties, those who have
    constitutional standing, should have an ability to try to
    intervene if none of their interests are being protected. And
    there are some issues, especially on the MACT standards, for
    example, where had EPA been able to get the additional time,
    you would not have been in an additional 10 years of
    litigation. Really, it is about transparency and the right to
    intervene if we are not being represented and provided we have
    constitutional standing.
        Mr. Bachus. You know, at our last hearing--I know Ranking
    Member Conyers mentioned we have had other hearings on this
    matter, and I know today and earlier he and my other colleagues
    claimed that there was not really any evidence or sufficient
    evidence that sue-and-settle litigation practices were a
    problem. You know, they were not a major concern.
        What are some of the important findings revealed in your
    new study of sue-and-settlement cases regarding whether this
    is--I think one of my colleagues referred to it as a fictional
    problem.
        Mr. Kovacs. Well, the first thing I want to say because the
    term--I am not going to use the ``C'' word, the word
    ``collusion.'' There is absolutely no allegations anywhere in
    our report on that.
        What this is about is at the last hearing, my recollection
    was--actually there have been two hearings, one last year and
    this year. My recollection was that the sue-and-settle was not
    a big issue. They were only a few of the cases. And what we
    were hearing from the brick manufacturers, the cement
    manufacturers, the boiler manufacturers, virtually every
    industry in the country is how did this process get started so
    quickly and we were not involved in the process. We thought,
    under the Administrative Procedure Act, we were supposed to be
    involved and get notice and comment. And the deadlines are very
    important because the deadline is how you bring technology into
    the system.
        That is what started the report. And we did not know if we
    were going to find five cases or if we were going to find 100.
    What we found is between 2009 and 2012 that there were 71 cases
    resulting in 112 rules. And in some of the cases, for example,
    the States like North Dakota and New Mexico--they were sued.
    Just to give you an idea on notice, they were sued without
    notice in Oakland, California. And the order that impacted
    those western States--so you may all think that notice is
    really not a big deal, but when you are being a regulated
    industry and you do not have notice of where your Government is
    going, it is a big deal. So it may be a simple concept, but to
    us it is a very important concept and that is why we did the
    report.
        Mr. Bachus. All right.
        Mr. Walke, Mr. Kovacs identifies sue-and-settlement
    rulemakings that would impose mandates that are expensive on
    many regulatory--I mean, many regulated industries and
    entities. How can you assert that these industries should be
    ignored? Does your organization and a regulatory agency ask a
    court to order the rules and timetables under which such
    regulations will be imposed?
        Mr. Walke. Thank you, Chairman Bachus.
        It is important to be very precise about what is happening
    here. The statutes passed by Congress established these
    obligations in the form of deadlines and mandates. The consent
    decrees merely enforce overdue, nondiscretionary duties that
    Congress has imposed. The consent decrees do not create any
    requirements. Those were done by Congress. What then happens is
    the consent decrees or settlement agreements merely provide for
    schedules for rulemakings which then happen with notice and
    comment involving the public and establish the actual
    regulatory obligations and deadlines and requirements of law.
    Consent decrees do not impose requirements of law upon third
    parties. They merely facilitate the enforcement of statutes
    passed by this body.
        And so it is very important to understand what the Chamber
    report said and what it did not say. It did not say that there
    were settlement agreements or consent decrees improperly
    creating legal requirements by skirting rulemakings or public
    participation opportunities.
        Mr. Bachus. Mr. Cohen is recognized for 5 minutes.
        Mr. Cohen. Thank you, Mr. Bachus.
        Mr.--is it Walke or Walke?
        Mr. Walke. It is Walke.
        Mr. Cohen. How many sue-and-settle collusive settlements
    that have been sanctioned by the Government are you aware of?
        Mr. Walke. None.
        Mr. Cohen. None? I am shocked.
        Mr. Kovacs, how many are you aware of?
        Mr. Kovacs. Well, based on what we said in the report, we
    put the number at 71 where there was no transparency and no
    notice.
        And second, just to correct the record, all the sue-and-
    settle arrangements are not necessarily deadline cases. For
    example, the Chesapeake Bay----
        Mr. Cohen. Let me stop you for a minute because your answer
    was 71 and that was my question.
        Mr. Walke, are you familiar with these 71 situations the
    Chamber cites?
        Mr. Walke. Yes, sir. What the Chamber did was Internet
    searches to find all settlements between EPA and environmental
    groups. They did not look at industry settlements because there
    were plenty of them. They did not look at the Bush
    administration.
        Settlements are a natural and long-accepted area of the
    law. They happen across all of our different statutes involving
    agencies. They happen in enforcement cases. They happen between
    municipalities and Federal agencies. If one is to take the
    rather astounding position that all settlements involving the
    Federal Government are evidence of sue-and-settle, then the
    world has been turned up side down because every Administration
    in the modern administrative era has been entering into
    settlements with parties under Republican and Democratic
    administrations, and never has that been deemed improper per
    se.
        Mr. Cohen. Let me ask you. You worked at the EPA during the
    Clinton administration. Is that right?
        Mr. Walke. That is correct, sir.
        Mr. Cohen. And you have been at the NRDC. Tell us about
    some of the settlements that you are aware of in those areas
    and time periods and in the areas of your expertise that have
    benefitted the public and how.
        Mr. Walke. Absolutely. Let me just mention two that were in
    my testimony because they are under the clean air laws, and
    both of them share some very interesting features, which are
    actually true in explaining a phenomenon that has been
    discussed here today.
        The Bush administration EPA had issued unlawful rules that
    defied the plain language of the Clean Air Act, one to regulate
    soot pollution and one to regulate mercury and toxic pollution
    from power plants. Courts found those rules to be squarely
    unlawful. As a result, the Obama administration inherited the
    legal obligation to follow the law.
        Now, when the Obama administration took office, the duty to
    follow those laws were 5 years and 10 years overdue. So they
    had a nondiscretionary statutory deadline they had to meet. My
    organization brought a lawsuit in one of the cases but not the
    other, and we negotiated a consent decree to meet those overdue
    statutory deadlines exceeding 10 years in one case, and
    consistent with the Clean Air Act, those consent decrees were
    noticed for public comment. Some of the witnesses at last
    year's hearing for the minority opposed not just the consent
    decree but the rule in question to clean up mercury and toxic
    pollution from power plants. The judge rejected that opposition
    out of hand and entered the consent decree because it was
    appropriate.
        EPA then went through notice and comment rulemaking. No one
    was prevented from submitting comments. No outcome was dictated
    by either consent decree. The proposed rules were offered.
    People weighed in. Now they have been finalized, and in just
    those two examples, EPA has projected that over 11,000 lives
    will be saved, hundreds of thousands of asthma attacks will be
    avoided, especially among children, and heart attacks among
    adults will be avoided.
        Mr. Cohen. Those are all pretty commendable things.
        Mr. Kovacs, how would you suggest that we should deal with
    the asthma attacks that children have and the other health
    problems that would have occurred but for this particular
    settlement?
        Mr. Kovacs. Well, first of all, I just want to clear up a
    few statements. One is----
        Mr. Cohen. I only have about 30 seconds. Would you answer
    my question please?
        Mr. Kovacs. Well, we think that there should be
    regulations. We have never opposed regulations. What we are
    saying is that as you do the regulation, there needs to be----
        Mr. Cohen. What is the Chamber's position on climate
    change?
        Mr. Kovacs. The Chamber has specifically said that on the
    climate change issue, we have not opposed--we opposed Waxman-
    Markey because it was an unworkable bill that cost an enormous
    amount of money. But we do not have a line in the sand on the
    climate change issue.
        Mr. Cohen. Do you have a line anywhere? Has the Chamber
    come out in any ways to resolve the problem that the earth
    faces with climate change?
        Mr. Kovacs. Well, first of all, if the regulatory process
    were working in the way the Administrative Procedure Act would
    like it to work and was intended to work and there was public
    participation and there was transparency in the system, we
    would not be here having these kinds of discussions.
        Mr. Cohen. But the issue is has the Chamber done anything
    to address what is the world's number one issue, climate
    change?
        Mr. Kovacs. Absolutely. We have been--years before any of
    the environmental groups were in there, we were in there with
    the Bush administration pushing and pushing and pushing on the
    development of new and energy efficient technologies and
    alternative technologies for the Bush administration. We put
    out----
        Mr. Cohen. Which Bush administration?
        Mr. Kovacs. The second one. We put out our----
        Mr. Bachus. The gentleman's time has expired.
        Mr. Kovacs [continuing]. Five-year energy impact analysis
    and we pushed DOT. We went to the Administration about energy
    savings performance contracts. So we have pushed and pushed and
    pushed on that issue.
        Mr. Cohen. Thank you. That is commendable.
        I yield back the balance of my time.
        Mr. Bachus. The time is already gone. [Laughter.]
        All right. Thank you.
        Mr. Collins is recognized for 5 minutes.
        Mr. Collins. Thank you, Mr. Chairman. I appreciate it.
        And moving back to the actual legislation and the
    discussion here, Mr. Puckett, I have a question. In your
    comments and in your testimony, you have talked about how you
    work with this now just having input and how it has affected
    business. I want to get back to how this actually affecting
    companies.
        In your company, if you were able to intervene in a case
    such as the brick litigation, would you bring valid concerns to
    the table, a constructive effort? Because there has been a
    discussion here today that all you wanted to do is obstruct.
    All you wanted to do is put off or in some cases has been
    accused of killing kids in a sense by being obstructive. What
    was your ultimate goal to be in wanting to be a part of this
    transparency?
        Mr. Puckett. Well, I think, one--and we have already done
    this--is provide accurate data of what our stack emissions are
    and what we are doing as an industry. The main thing is just to
    have a place at the table so we know what is going on, but I
    think we can provide--instead of modeling and guessing at the
    data, we have already done this accurate stack testing on just
    about every facility that is in our industry.
        Mr. Collins. And so you are currently looking out for what
    you are doing and being a responsible citizen is what I am
    hearing you say.
        Mr. Puckett. Yes, sir. You know, under the first EPA
    mandate, the industry came into compliance. We were in
    compliance before the rule was vacated, and we are still
    operating those control devices. We cannot get rid of them
    because they are in our air operating permits. So we are still
    incurring the cost of operating those. And I think our industry
    is operating at pretty safe levels.
        Mr. Collins. Well, from your perspective--and you had
    mentioned this in your testimony, that given some of the
    impacts--the practices being discussed here--elaborate a little
    bit further. You know, you talked about closing a kiln and you
    talked about the impact financially. What is it not only
    financially to the people who work in your facilities and the
    economic impact of the jobs that we are talking about today,
    which I think is a matter that Congress needs to address
    because everyone is talking about jobs and these kind of
    issues. Tell me more. Explain more to the Committee about that.
        Mr. Puckett. From what I understand the new proposed rule
    requires--and the EPA sent numbers on my facility through our
    association to me. They asked to come into compliance would
    cost $8 million, a capital expenditure, and close to $2 million
    a year to operate these. Now, they also suggested that we go
    borrow this money to put in the control devices. Now, most of
    our industry, anyone connected with the construction industry,
    is out of favor with lenders, and if I walked into any bank and
    said loan me $8 million on a project with no payback and really
    creates a negative cash drain, we will get laughed out of
    there.
        So in two of our kilns, we could not support the
    expenditure. It would put the operation in a negative position.
    And that is the plants that we have most of our employees in.
    So just to get to where we could make it, we would have to
    eliminate 50 jobs. You know, these are real people. They are
    families. In a small southern rural town, the last thing we
    need, especially in Mississippi, is unemployed people. I do not
    think that is what the Congress wants either.
        Mr. Collins. Thank you.
        Mr. Easterly, can you hear my question?
        Mr. Easterly. Yes.
        Mr. Collins. I know this has been discussed and our friends
    from across the aisle talked about this is another hearing that
    we are having on this. But do you see right now, especially in
    light of even what was in The Washington Post just in the last
    couple days, the rise of the fourth branch of Government which,
    by the way, Mr. Chairman, I would ask that it be submitted for
    the record for that.
        Mr. Bachus. Without objection.
        [The information referred to follows:]

                                   __________

        Mr. Collins. Thank you, Mr. Chair.
        Is there a more compelling reason today to pass this
    legislation than what we have seen maybe even in the past?
        Mr. Easterly. The issue is coming up more often. Let us put
    it that way.
        I think part of the problem is that you are dealing with
    acts that are 20, 40 years old, and the deadlines in those acts
    have passed. And so this allows outside groups to set the
    priorities for action, and I do not think they are the
    priorities that will result in the best protection of human
    health and the environment. But once the court speaks, we have
    to follow the dictates of the court and use our resources for
    those things until the next lawsuit comes and moves it around
    again.
        Thank you.
        Mr. Collins. Thank you.
        Very quickly because my time is coming up. Mr. Kovacs, does
    H.R. 1493 limit in any way the ability of citizens to hold the
    Government accountable?
        Mr. Kovacs. No.
        Mr. Collins. Mr. Walke, do you agree with that?
        Mr. Walke. No, sir, I do not as detailed in my testimony.
        Mr. Collins. Can you explain why? Is there anything here
    that stops your organization or any from doing anything that
    you have currently done?
        Mr. Walke. Sure, it does.
        Mr. Collins. How?
        Mr. Walke. Absolutely it does.
        Mr. Bachus. The gentleman's time has expired.
        Mr. Walke. It prevents us from having private talks with
    the Government to resolve a case where they have broken the
    law.
        Mr. Collins. Thank you, Mr. Chairman. I will hold back, but
    I think the evidence is profoundly that this does in no way
    stop the citizen from holding the Government accountable to
    deadlines or other things. It just goes back to an issue of
    transparency and openness.
        Mr. Bachus. Thank you.
        Mr. Conyers is recognized for 5 minutes.
        Mr. Conyers. Thank you, Mr. Chairman.
        Can we not just let the witness finish his--he was asked a
    question. Our colleague ran out of time, and I am going to give
    up some of my time to get the fuller response from Mr. Walke.
        Mr. Walke. Thank you, Ranking Member Conyers.
        As I said, the bill requires that really an unlimited
    number of outside parties be allowed to join settlement talks
    in contravention of governing Supreme Court law and provides
    them with an opportunity through open-ended mediation that the
    bill very carefully has no deadlines to govern, no timetables,
    allows them to draw out the settlement discussions indefinitely
    that under current law occur exclusively between the parties to
    litigation, whether that is industry, States, or environmental
    groups, and the Federal agency on the other hand. That is a
    very clear and harmful change to not only governing judicial
    case law but legislation and consistent practice under
    administrative law for 4 decades.
        Mr. Conyers. Thanks, Attorney Walke.
        How do consent decree practices that have resulted in
    beneficial settlements for all parties, including corporations,
    and have produced good environmental outcomes--is that a fair
    conclusion to draw?
        Mr. Walke. That is absolutely fair. Taking just the Clean
    Air Act as an example, Congress expected Americans to be
    safeguarded against hazardous air pollution, including
    carcinogens, from all responsible industry sectors by the year
    2000. That has not happened and the only reason it has happened
    faster, reducing hundreds of thousands of tons of pollution and
    saving tens of thousands of lives, is because, first, citizen
    lawsuits that overturned unlawful rules by the Bush
    administration and, I would add, the Clinton administration, as
    well as consent decrees that accelerated the obligation to meet
    these overdue laws and to safeguard Americans.
        Mr. Conyers. Now, we cannot have a hearing like this
    without mentioning the Koch brothers and their roles in
    contributing to the Competitive Enterprise Institute which
    received $700,000 to come up with the Chamber of Commerce
    report. What is the problem here?
        The Chamber of Commerce report, as I have been advised, is
    a pretty flawed study. Is that too critical of them?
        Mr. Walke. That is my respectful view, Mr. Conyers, and I
    detail it extensively in my testimony. I cannot and will not
    speak to any funding or motivations behind the report, but what
    I do know is that there has been a really concerted ideological
    campaign with op eds timed in the paper this morning, in fact,
    to correspond to a story line which has also been picked up to
    block the nomination for the head of EPA by Republican Senators
    that has seized upon this just factually and legally false
    story line about so-called sue-and-settlement practices that,
    when you get down and read the Chamber report, are just broad
    side attacks on settlements in general and the right of
    citizens to hold Government accountable for violating the law.
        Mr. Conyers. Well, like you, I was not reading any
    implications in by the Koch brothers' contribution to the
    study, but you can draw your own suspicions, if you want.
        Why does our legislature, the Congress, allow citizens to
    file suits against other agencies?
        Mr. Walke. Congress recognized that there was a very
    powerful incentivizing role to ensure enforcement of the law
    and safeguards by giving the public the right to hold
    Government accountable. And this is an evenhanded right for all
    citizens of this country. It has been praised by admirers
    across the globe. Corporations may do so. States and
    municipalities and public health groups. The Government, for
    whatever reason, does not always comply with the law and it is
    a laudatory feature of our democracy that we allow citizens to
    hold the Government accountable when they do not follow the
    law.
        Mr. Conyers. Thank you, Chairman Bachus, for this
    opportunity.
        Mr. Bachus. Thank you.
        Mr. Holding?
        Mr. Holding. Mr. Chairman, I am going to yield a minute to
    my colleague, Mr. Collins, so he can attempt one more attempt
    to get a direct answer from Mr. Walke.
        Mr. Collins. Mr. Walke, I appreciate it and I appreciate
    your last comment because it basically answered the question.
    And sometimes we ask inartful questions. I will ask it a little
    more directly.
        What my question was a moment ago--and I appreciate the
    Ranking Member giving you a chance to elaborate. But my
    question was very simple. It was does it stop the ability to
    bring the initial lawsuit.
        Mr. Walke. No, sir.
        Mr. Collins. Thank you.
        And it also does not affect the informal discussions before
    a lawsuit is brought.
        Mr. Walke. No, sir, that is incorrect. That is what I
    disagreed with in my earlier answer and my response to Mr.
    Conyers.
        Mr. Collins. It does, and before the lawsuit is brought,
    you can still brought, you can still have conversations. This
    legislation does nothing to affect that.
        Mr. Walke. What it does is it prevents the entry of the
    consent decree into all manner of parties that have the ability
    to obstruct the settlement of the lawsuit over a plain and
    indefensible violation of law. And so----
        Mr. Collins. I think we are talking about two different--if
    you could answer my direct question, I would appreciate it. I
    yield back to Mr. Holding.
        Mr. Holding. I will reclaim my time.
        This question is for Mr. Easterly. Mr. Easterly--is he
    still on the line?
        Mr. Easterly. Yes.
        Mr. Holding. There he is. All right.
        Mr. Easterly, it must take a lot for an organization of 48
    States, the District of Columbia, and Puerto Rico to agree on a
    specific set of reforms as the Environmental Council of the
    States has regarding the sue-and-settle reforms. I would like
    to ask you just how serious and deep are the States' concerns
    about how much the States and the regulatory systems' needs and
    effectiveness are being compromised by the current sue-and-
    settle practices.
        Mr. Easterly. I think we are all concerned that--you are
    right. It takes a long time. It took about 2 years of
    understanding the problem and talking about what possible
    solutions to the problem are because we agree people need to
    hold their Government accountable, but we believe we also need
    a seat at the table for things that impact us. And this passed
    at our last meeting this spring and it passed unanimously. So
    all the States believe this is an issue, believe that it needs
    to be addressed, and we appreciate that the Congress is trying
    to do that.
        Mr. Holding. Now, a follow-up, Mr. Easterly. In your view
    in the long run, can optimal environmental benefits be achieved
    if the expertise and views of the State co-regulators are not
    heard and accounted for when consent decrees and settlement
    agreements to establish new regulations are framed?
        Mr. Easterly. I am sorry. I missed the first half of the
    question. There was not any audio.
        Mr. Holding. Certainly. In the long run, if you are trying
    to achieve optimal environmental benefits from regulations and
    you do not consult with State co-regulators, if they are shut
    out of the process, just how successful are these regulations
    going to be at achieving optimal results for the environment?
        Mr. Easterly. Well, we do not think very much because if
    you impose a requirement that we are not capable of doing,
    well, okay, then my friend, John Walke, comes and institutes
    litigation. But you need to be able to actually do the things.
    You need to have the proper science. You need to have the
    proper guidance, which is a Federal EPA responsibility usually,
    because we all want to improve the environment. We all want
    clean air, clean land, and clean water, and the science is one
    of the issues. The science and law are not always completely in
    alignment. When you have discussions with EPA, you can usually
    get them to do the science until they are sued, and then they
    have to fall back on what the law says, whether it actually
    makes sense today or not.
        Mr. Holding. And science and law, whether they are aligned
    or not--it is certainly the case that when you are dealing with
    49 different States and two territories, you know, the
    situation in each of those places is not uniformly the same. So
    a one-size-fits-all piece of regulation coming out of the EPA
    might not work well all across the country. Would that be
    correct?
        Mr. Easterly. Yes, that is correct. One of the benefits of
    there being 10 EPA regions and each region knowing more about
    the States that are in their region--and then you do have
    discussions on how best to meet the environment requirements.
        Mr. Holding. Thank you very much.
        Mr. Chairman, I will yield back.
        Mr. Bachus. Thank you.
        Ms. DelBene?
        Ms. DelBene. I just want to thank all the witnesses for
    being here and taking the time to be with us today.
        Mr. Walke, you talked about three things in terms of the
    issues, no substantiation in terms of the cases, the third
    party intervention in terms of the number of folks who could
    comment and that being unlimited, but you also talked about the
    bill ignoring existing safeguards, and I wanted you to
    elaborate on what those safeguards are.
        Mr. Walke. Thank you very much.
        Well, first of all, under a longstanding Department of
    Justice policy, agencies are permitted from entering into
    settlements or consent decrees that negotiate away authorities
    reserved to them by Congress. This so-called ``Meese memo'' is
    discussed in my testimony, and it is a safeguard against abuse
    of consent decrees. And Mr. Cruden at last year's hearing
    discussed this at length as well.
        The product of settlement agreements and consent decrees is
    simply the initiation of a process that is not closed. It is a
    rulemaking process involving notice and comment opportunities
    for the public, public hearings, the submission of comments,
    the obligation of the agencies to respond to comments, all
    consistent with the Administrative Procedure Act.
        So the obligations under law that bind third parties and do
    the things that we are hearing complaints about here are fixed
    like bookends by the statute passed by Congress and the
    regulations issued by agencies. The latter go through a full
    panoply of procedural opportunities consistent with the law. It
    is the middle of the bookcase, the consent decree, that
    concerns just the failure to meet a mandatory statutory duty
    and that does not fix any obligations upon third parties that
    are not open for reconsideration by the agency during the
    subsequent rulemaking process.
        Ms. DelBene. And so feedback, for example, from industry,
    et cetera would come as part of the rulemaking process.
        Mr. Walke. Absolutely. And in these very rulemakings and
    consent decrees that we are hearing complaints about, industry
    participated fully. Industry filed lawsuits, all things that
    they are allowed to do under the law.
        I just want to note one thing. I wish my friend Tom were
    here so I could shake his hand. But the ECOS resolution is very
    instructive because it is equally unanimous in not supporting
    industry intervention in agency settlement talks. It does not
    support that, and yet that is what this bill does. It also does
    not support, as he noted, the codification of legal obligations
    for States to join settlements. I know that the organization
    does not support--endorse legislation, but I just wanted to get
    into the record that there is zero support and, in fact,
    implied opposition to my mind to allowing industry intervenors
    to join and obstruct settlement talks from ECOS.
        Ms. DelBene. Thank you very much.
        Mr. Easterly, given Mr. Walke's comment and the fact that
    the definition right now in bill, an intervenor merely needs to
    be a private person who is affected by the regulatory action
    that is the subject of the lawsuit, so as this is written, it
    would allow someone who breathes air to intervene in a case
    that has the Clean Air Act rule at issue. Mr. Easterly, I was
    wondering do you think that is a good thing. Are you
    comfortable with the nearly unlimited intervention right?
        Mr. Easterly. As John said, the Environmental Council of
    the States does not do specific legislation. We are very
    concerned about our ability--we are self-interested just like
    everybody else--to be at the table when the settlement is going
    to impose responsibilities on us or affect our existing
    responsibilities. We did not take a position on any other part
    of your question. I would say that 50 States would have at
    least three different views on that.
        Ms. DelBene. Thank you very much.
        I yield back.
        Mr. Bachus. Thank you.
        Let me just clarify something. You are saying that the
    employers, the people that hire American workers--your position
    is they should not have a seat at the table?
        Mr. Walke. They fully have a seat at the table when rules
    that affect their business interests are being discussed. Mr.
    Puckett's testimony was extremely sympathetic, and I really
    feel for the situation with----
        Mr. Bachus. But I am talking about in consent settlements.
    I am just asking. Is it your position from responding to Ms.
    DelBene that the employers, you know, the people that represent
    the employees, you know, who hire the people in those
    industries, that they should not have a seat at the table in
    these consent settlements?
        Mr. Walke. That is correct. They are not parties to the
    lawsuit, and even as intervenors, consistent with longstanding
    Supreme Court case law----
        Mr. Bachus. Well, yes.
        Mr. Walke [continuing]. Given that right.
        Mr. Bachus. So, I mean, but yes, the Supreme Court. But I
    am talking about your position clearly is that the folks who
    hire American workers in these industries--they should not have
    a seat at the table for these consent settlements.
        Mr. Walke. Mr. Bachus, I will tell you that in my
    experience it has really been the Washington trade associations
    that are the most active----
        Mr. Bachus. Well, yes, but I am not talking about them.
        Mr. Walke. And I frankly do not think they always represent
    the interests of the businesses----
        Mr. Bachus. Yes, but those businesses, you know, do hire
    people out there.
        Mr. Walke. Well, sure they do.
        Mr. Bachus. Do you think they ought to have a seat at the
    table for these consent settlements? I mean, I am just trying
    to get some--I think I heard you said no, you do not----
        Mr. Walke. My answer was no.
        Mr. Bachus. Okay, thank you.
        Mr. Johnson, you have seniority, and I think on your side
    you all go by seniority and not who comes first. So you are
    recognized for 5 minutes, although Mr. Jeffries has been here
    forever. [Laughter.]
        All right, thank you, Mr. Chairman.
        Now, this bill is The Sunshine for Regulatory Decrees and
    Settlements Act of 2013. I think it is misnamed, Mr. Chairman.
    It should be the ``Sunset for Regulatory Decrees and
    Settlements Act of 2013.'' This bill has the Koch brothers'
    fingerprints all on it. And passage of this bill would have a
    dramatic and dastardly impact on air and water quality. This is
    an anti-regulatory bill drafted by the American Legislative
    Exchange Council, also known as ALEC. The purpose of the bill
    is to paralyze the enforcement of clean air and clean water
    legislation and rules and regulations.
        Now, for those of you who do not know ALEC, ALEC, as
    revealed by Lisa Graves of The Nation--Ms. Graves wrote as
    follows: ALEC gave the Kochs its Adam Smith Free Enterprise
    Award and Koch Industries has been one of the select members of
    ALEC's corporate board for almost 20 years. She wrote that the
    company's top lobbyist was once ALEC's chairman. And she also
    wrote that as a result, the Kochs have shaped legislation
    touching every State in the country. Charles Koch fellows and
    interns stock ALEC and have gone on to direct ALEC task forces.
        Mr. Collins. Would the gentleman from Georgia yield?
        Mr. Johnson. No, I will not, not now.
        Like ideological venture capitalists, the Kochs----
        Mr. Collins. Would you yield later?
        Mr. Johnson. Perhaps if I have time.
        Like ideological venture capitalists, the Kochs have used
    ALEC as a way to invest in radical ideas and fertilize them
    with tons of cash.
        Now, ALEC is an organization that is composed of corporate
    members and State and Federal legislative members from across
    the country, I think every State in the Union, many of which--
    the majority of those Members on the Republican side of the
    aisle are members of ALEC. And I dare say that perhaps some of
    those who sit on the other side of this dais today are or have
    been ALEC members.
        And what ALEC does is puts the legislators and the business
    community together. The business community supplies the
    legislation. The legislators then go back and introduce the
    legislation either in their State legislatures or in some cases
    here in the Federal legislature.
        Now, I would like to ask Mr. Easterly. Are you familiar
    with the American Legislative Exchange Council, sir.
        Mr. Easterly. I know that there is such a place, yes.
        Mr. Johnson. And you have attended meetings affiliated with
    ALEC or sponsored by members of the coal industry. Have you
    not?
        Mr. Easterly. I have been invited to speak at one meeting
    that I am aware of, yes. I speak to everybody. I speak to
    environmental groups. I speak to business groups.
        Mr. Johnson. Well, you spoke also to an ALEC conference on
    November the 18th of 2012. Did you not?
        Mr. Easterly. Yes, I did.
        Mr. Johnson. And the title of your comments were
    ``America's Clean Air Success Story and the Implications of
    Over-Regulation.'' Is that not a fact?
        Mr. Easterly. That is correct.
        Mr. Johnson. And that conference was sponsored by members
    of the coal industry. Is that not correct?
        Mr. Easterly. I do not know that.
        Mr. Johnson. You would not be surprised if it were, though,
    would you?
        Mr. Easterly. I do not know. I was invited to come by one
    of the members of the Indiana legislature, and I try and do
    what they ask me to do.
        Mr. Johnson. Did they pay you for your comments?
        Mr. Collins. Would the gentleman yield from Georgia?
        Mr. Johnson. No, I will not.
        Did they pay you for your comments, sir?
        Mr. Easterly. No.
        Mr. Johnson. I thank you. I will yield to the gentleman.
        Mr. Collins. I thank my friend from Georgia.
        Mr. Johnson. For a quick question.
        Mr. Collins. For a quick question.
        Well, the quick question that I have at this point in time
    is again with the questions and the way it was designed with
    some of us being members. There are also--it was named earlier
    by, I believe, the Ranking Member--organizations that probably
    you have been affiliated or others. I am trying to get
    legislation----
        Mr. Johnson. I have never been associated with an
    organization like ALEC.
        Mr. Collins. The NAACP?
        Mr. Johnson. No way that it is like ALEC.
        Mr. Collins. No. I am just asking. What I am saying is
    organizations on both sides of all issues. The question I have
    here is coming back to my reason----
        Mr. Johnson. Well, at this point, ALEC is an organization
    that specifically puts legislators together with corporate
    interests and then takes them off to exotic locations for
    seminars and training, if you will, and indoctrination. And
    then it supplies the legislators with legislation which they
    then come back and introduce. And thereafter, they are able to
    get campaign contributions from those interests that they have
    duly represented. And I believe that this----
        Mr. Collins. At this point in time----
        Mr. Johnson. Excuse me, sir. I am going to reclaim my time.
        Mr. Bachus. Yes, and the time has expired.
        Mr. Johnson. I believe that this legislation is a clear
    example of the influence of the Koch brothers and the American
    Legislative Exchange Council on the work that this body is
    doing through this Committee.
        And I will yield back.
        Mr. Bachus. Thank you.
        I think the Bill of Rights gives everyone the right to have
    their political views known. I may want to get that out and
    review it.
        Mr. Johnson. May I respond?
        Mr. Bachus. You have heard some of the back and forth. Do
    you have any comments? You are the only representative at the
    table who actually employs large numbers of individuals and
    provides them, as I noticed your testimony, with profit
    sharing, with at one time--I do not know. Do you still have a
    free health clinic? You used to have a free health clinic and
    health benefits and insurance. Do you have any comments?
        Mr. Puckett. Well, it has been eye-opening listening to all
    of this. And respectfully to both sides, I hear what you are
    saying, but there is a problem. There is a problem. And I am
    not sure how to fix it, but I know for our industry, the
    previous process has not worked. If it had worked like it had
    claimed, the first rule would have been fine. We did not have
    access to any of that, and it came down to because of time.
    Now, regardless of what caused that, these 50 folks I may have
    to lay off do not care. You know, they just want a way to make
    a living. So something needs a fix. And I have heard a lot of
    comments that have credibility from both sides. But it is just
    very difficult when it continues to mount on a small business
    owner to try to just keep it afloat.
        Mr. Bachus. I understand. I think every Member of Congress
    has heard that a thousand times from small businesses and large
    businesses in their district. I know, Mr. Walke, I think
    whatever the cause, there is a problem.
        Let me ask you this, Mr. Puckett. From what you know of Mr.
    Collins' legislation, do you think--it may not prevent the
    problems that we have, but do you think going forward it could
    have a positive effect or will have a positive effect?
        Mr. Puckett. Yes, sir, I do think so.
        Mr. Bachus. Thank you.
        Mr. Easterly, the Chamber of Commerce's study says that
    sue-and-settle cases are funneled heavily into just two courts,
    and that is the District of Columbia court here in Washington
    and the Northern District of California. Does that give you any
    unease? Do you think those courts, as opposed to, say, a
    Federal district court in Indiana or Illinois would be better
    positioned or be able to grasp or account for the needs of,
    say, the State of Indiana, its employers, its employees, even
    from a health standpoint? You testified earlier you did not
    think optimal environmental benefits to the citizens can be
    achieved without the participation of State environmental
    regulators. But does that give you some unease, the fact that
    you were shut out of these decisions and the settlement
    negotiations that go into these consent settlements?
        Mr. Johnson. Mr. Chairman, a parliamentary inquiry please.
        Mr. Bachus. Okay, go ahead. The gentleman is recognized.
        Mr. Johnson. Thank you. My question is when a Chair of this
    Committee who has been asked to take the Chair by the Chairman
    who then departed and the current Chair, having already
    received 5 minutes for questions, then----
        Mr. Bachus. The gentleman is right. The gentleman is
    absolutely right, in fact, and I apologize. The proper
    procedure is to recognize Mr. Jeffries and then to go a second
    round of questioning. So I apologize. I will cease my
    questioning. The gentleman has a valid point.
        Mr. Jeffries is recognized.
        Mr. Johnson. Thank you.
        Mr. Bachus. I think that is what you were gong to ask.
        Mr. Johnson. Yes.
        Mr. Jeffries. Thank you, Mr. Chair, and thank you,
    Representative Johnson.
        Mr. Kovacs, with respect to your testimony and your
    presence here today, it is my recollection that the Chairman of
    the Judiciary Committee in his opening statements characterized
    consent decrees as a deal under the cover of litigation. Do you
    recall that statement?
        Mr. Kovacs. I think you should just have the record read
    back, but I do not recall that.
        Mr. Jeffries. Do you think that the consent decree
    phenomenon, as you understand it, is properly characterized as
    deals under the cover of litigation?
        Mr. Kovacs. In our report, we did not make any accusations
    at all about anyone. We did not call it collusion. What we said
    was that you have a process which eliminates----
        Mr. Jeffries. Okay, reclaiming my time. Notice and
    transparency.
        Mr. Kovacs [continuing]. Eliminates----
        Mr. Jeffries. Reclaiming my time.
        With respect to the allegation that what the consent decree
    explosion represents is collusion between regulated Federal
    agencies and plaintiffs who sue those agencies, is collusion a
    fair characterization of what is going on?
        Mr. Kovacs. We have never characterized this as collusion.
    The first time I heard of the word ``collusion'' was when I
    read some testimony that was submitted by Mr. Walke. Prior to
    that time, we had not used the word and it is not in the
    report. And so that should be made very clear.
        What we are talking about is a hole in the process whereby
    the----
        Mr. Jeffries. Okay, reclaiming my time.
        With respect to your report, now this legislation is
    designed to cover consent decrees in multiple areas. Is that
    correct?
        Mr. Kovacs. It covers agencies, yes.
        Mr. Jeffries. Right. There is no limitation on the
    Environmental Protection Agency. Correct?
        Mr. Kovacs. It covers Federal agencies.
        Mr. Jeffries. Okay. Now, does your report provide evidence
    of issues with consent decrees in any other area than in the
    area related to environmental regulations? It is a yes or no
    question.
        Mr. Kovacs. Yes.
        Mr. Jeffries. It does provide evidence.
        Mr. Kovacs. Yes.
        Mr. Jeffries. Beyond the environmental area.
        Mr. Kovacs. Well, the first case that moved out of the
    environmental area was a consumer case on the Food Safety
    Modernization Act and rather than being pivoted--resting on a
    citizen suit in an environmental statute, it rested on section
    706 of the----
        Mr. Jeffries. The 71 cases that you document where there
    were consent decrees, those 71 cases were in what area?
        Mr. Kovacs. Fish and wildlife, forests, land management,
    air, water, Chesapeake Bay, food safety. So it was a broader
    group than just----
        Mr. Jeffries. So essentially it was in the environmental
    area plus one food safety case that you mentioned.
        Now, let me ask you this. Do you think that in the absence
    of any evidence in other areas, is it prudent for this
    Committee to move forward with legislation that would cover
    consent decrees, for instance, in the area of antitrust?
        Mr. Kovacs. Congressman, we have a right to transparency as
    American citizens. We have a right to know when our Government
    is not obeying the law. We have a right to----
        Mr. Jeffries. Okay, reclaiming my time.
        You have got no evidence of consent decree problems in the
    antitrust area. Correct?
        Mr. Kovacs. We did not do the report--we did the report for
    the consent decrees that we found where there was no
    transparency, and every one we found was put in the report.
    There was reference that we somehow----
        Mr. Jeffries. Reclaiming my time.
        No evidence----
        Mr. Kovacs. We did not----
        Mr. Jeffries. Reclaiming my time.
        No evidence of consent decree problems in the area of civil
    rights, even though this legislation would affect it. Correct?
        Mr. Kovacs. That was not the purpose of the study. The
    terms of the study were specifically put in the cover of the
    study and what it was that we covered.
        Mr. Jeffries. Reclaiming my time.
        No evidence of consent decree problems in the area of
    voting rights, even though voting rights consent decrees would
    be covered by this legislation. Correct?
        Mr. Kovacs. We did not look at voting rights. When you have
    private parties versus private parties, they would not have
    been covered by the report under any circumstances.
        Mr. Jeffries. Right, but it will be covered by this
    legislation. Correct?
        Mr. Kovacs. If large segments of the country that had
    standing to sue and were injured, it would cover them, yes.
    What we are talking about is giving some notice to people who
    have constitutional standing and have been harmed. If they have
    been harmed, they should have notice, and if they have been
    given notice, then they should have a right not to intervene
    but at least to have the court hear why they have been injured.
    This is about transparency and it is about the right to
    intervene if you are injured.
        Mr. Jeffries. One last question.
        Mr. Bachus. And your time has expired, but I am going to
    let you go on.
        Mr. Jeffries. Okay, thank you, Mr. Chair.
        One last question. Even though this legislation will cover
    the consent decrees in the area of disability or employment
    discrimination or voting rights, which I believe I mentioned,
    your study is narrowly focused on 71 particular instances, but
    is being presented today as evidence to support legislation
    that would cover a wide range of areas under Federal
    jurisdiction with respect to agencies. Is that right?
        Mr. Kovacs. There is so much secrecy in Government in how
    it handles lawsuits, whether it be these cases or the judgment
    fund or anything else, that spending 18 months to try to find
    out when our Government was sued and when they went into a
    settlement without public notice is a very difficult process.
    That is something the agencies should be doing. That is
    something we have asked for, and there is no reason why a
    Federal agency should not inform the Congress that they have
    been sued X number of times and that they have paid attorney's
    fees and that they were in the wrong and that they agreed to do
    something. The American public have a right to know. All we are
    talking about is a right to know that they are being sued, a
    right to know that they are going to go into a consent decree
    and change the rights of the American people, and a right, if
    we are one of the injured parties, to intervene in that case.
        I do not think asking for those basic rights is something
    that should be so debated in this Committee. This is a basic
    right to know what our Government is doing, and this is all we
    are asking. I do not know why this is such a debate.
        Mr. Jeffries. Thank you very much for that extended
    statement.
        Mr. Bachus. Thank you.
        At this point, we will go into a second round of
    questioning, and I actually had started out and had consumed 2
    minutes of time. So we have the clock. We will put 3 minutes
    on. I would like to continue with my line of questioning and
    then other Members are going to be offered a second round of
    questioning.
        I think Mr. Jeffries brought up the Chairman of the full
    Committee's remark where what he said was: far too often costly
    new regulations are issued directly under the authority of
    consent decrees and settlement agreements to force Federal
    agencies to issue new rules. Regulators often cooperate with
    pro-regulatory organizations to advance their mutual agendas in
    this way. The technique used is simple: an organization that
    wants new regulations alleges that an agency has violated a
    duty to declare new rules. The agency and the plaintiff work
    out a deal under the cover of litigation. The deal puts the
    agency under judicially backed deadlines to issue the rule.
    These deadlines often give the public and even States that co-
    administer regulations little opportunity comment on proposed
    rules.
        So with that having been said--and it said those to be
    regulated frequently do not know about these deals until the
    plaintiff's complaints and proposed decrees or settlements are
    filed in court.
        Mr. Easterly, let me ask you this question. Chairman
    Goodlatte said: these deadlines often give the public and even
    States that co-administer regulations little opportunity to
    comment on proposed rules. Do you find that to be true?
        Mr. Easterly. Yes, we do. The amount of time it takes to
    prepare competent technical comments is not small. In many
    cases--if I had more time, I would get my notes out and tell
    you, but we wind up with abbreviated public comment periods and
    neither can we get in all the information we would like to get
    in and then EPA does not have, because they have an abbreviated
    schedule to issue the final rule, time to properly consider and
    respond to those comments.
        Mr. Bachus. Thank you.
        And I would say to my colleagues you have talked about
    people that have no interest being able to intervene. Mr.
    Collins drafted this legislation to say if they have
    constitutional standing, which means they have to prove to the
    court that under the Constitution they have the right to be
    informed of the negotiations. And we do not do away with the
    constitutional--they still have to meet the dictates of the
    Constitution.
        Mr. Easterly, I was talking about that most of these cases
    or a heavy number of them go into the District of Columbia or
    the Northern District of California. Do you think those courts
    are well positioned to grasp and account for the needs of State
    co-regulators all across the country if the States are shut out
    of the litigation and consent decrees or settlement
    negotiations in those courts?
        Mr. Easterly. I am not a lawyer. I am an engineer.
        We are used to dealing with the D.C. Circuit because the
    Clean Air Act requires most, but not all, Clean Air Act suits
    to be filed in the D.C. Circuit. We were absolutely caught
    flat-footed when a case out of California--and it probably was
    the Northern District. I told you I am not a lawyer--required
    EPA to act on our Visibility SIP's and the fact that they were
    not done because we were waiting for other things. We did not
    see that coming and we were not there.
        Mr. Bachus. All right. Thank you.
        I am going to yield to Mr. Collins the balance of my time.
    He has been, I think, quite effective. My time has expired, but
    I will yield every bit of that expired time to you.
        Mr. Johnson?
        Mr. Johnson. Thank you.
        Mr. Kovacs, have you ever heard of the Competitive
    Enterprise Institute?
        Mr. Kovacs. Certainly.
        Mr. Johnson. And you make reference to the Competitive
    Enterprise Institute in your written statement to this
    Committee. Is that correct?
        Mr. Kovacs. Could you tell me what page?
        Mr. Johnson. Page 1.
        Mr. Kovacs. Oh, okay. We recognized they had done some
    research for us.
        Mr. Johnson. Okay. And are you familiar with Koch
    Industries and the Koch Foundations?
        Mr. Kovacs. Actually I have heard of them, but I have very
    little knowledge of them.
        Mr. Johnson. Are you aware that the Competitive Enterprise
    Institute received more than $700,000 from various Koch
    brothers affiliated organizations?
        Mr. Kovacs. I have no knowledge of that.
        Mr. Johnson. If that were true, do you think that such
    contributions could influence the policies of the Competitive
    Enterprise Institute?
        Mr. Kovacs. Well, first of all, even you do not know--I do
    not know. Maybe you know it. So I do not know that it is true,
    and I am not going to guess about something I do not know.
        Mr. Johnson. Well, I am just asking you assuming that the
    Koch brothers have contributed more than $700,000 to the
    Competitive Enterprise Institute, is it not logical to think
    that they would have some influence on the results of the
    research that that entity produced, which you are relying upon
    today?
        Mr. Kovacs. Well, first of all, Congressman, with----
        Mr. Johnson. Is that a--if you could answer yes or no, and
    then I will allow you to explain.
        Mr. Kovacs. No. They would have no influence on this.
        Mr. Johnson. The $700,000 would not matter?
        Mr. Kovacs. They would have no influence. We hired one
    specific person who was able to do--let me just be really
    clear. This one person did a word search of the Federal
    Register to pick up certain pieces of litigation as a means of
    checking what we found in our legal search. So the search went
    on two ways. One was we produced it from LexisNexus, Westlaw,
    PACER, and we assembled it, and then we asked one simple thing.
    We knew that there were some reports out----
        Mr. Johnson. So you are going far afield of my question.
        Mr. Kovacs. No. I am telling you how the report was done--
    --
        Mr. Johnson. I am just asking whether or not you think that
    the $700,000 from the Koch brothers had any influence.
        Mr. Kovacs. I know in this instance in this report, it had
    none. I personally supervised this report.
        Mr. Johnson. Thank you, thank you, thank you.
        What is your stance? Let us see. You are the Senior Vice
    President for Environmental, Technical & Regulatory Affairs at
    the U.S. Chamber of Commerce. What is your view on the issue of
    global warming?
        Mr. Kovacs. I think I spent a long time with Mr. Cohen on
    that issue. And we have been, over the years, very active in
    promoting alternative technologies, energy----
        Mr. Johnson. Well, do you believe that climate change
    actually exists?
        Mr. Kovacs. We have pushed as many forms of technology,
    energy efficiency, and other ways in which to minimize electric
    use as any institution in this city. Years before the
    environmentalists picked up energy efficiency or alternative
    technologies, we were lobbying the Bush administration to move
    in that direction. We were the organization that pushed the
    energy savings performance contracts literally from an
    inception into being one of the smartest ways in which to
    reduce energy. So I will put on the record against anyone's
    record on that issue.
        Mr. Johnson. Okay. All right. Thank you, sir.
        Mr. Walke, is it not a fact that this legislation would
    give the Koch brothers and their industries a right to
    intervene in any regulatory action that could be brought, given
    their interest in the energy field? Is that not correct?
        Mr. Walke. Yes, Congressman, I believe it is. The breadth
    of the language in the bill is astonishing and would allow a
    really unlimited array of business interests, whether they be
    the Koch brothers or others, to intervene. It is clear that the
    Koch brothers systematic anti-regulatory agenda is evidenced by
    the very interesting structure of this bill and also evidenced
    by really kind of the open admission to how the Chamber went
    about doing its report. It was not looking for impropriety. It
    was looking for Internet searches of settlements in one
    particular area of the law where the Chamber has historically
    been highly opposed in court and in Congress and that is
    environmental protection. So that speaks for itself that this
    has been driven by an anti-enforcement agenda which we see the
    Koch brothers devoted to with very high dollar support for
    groups that share its ideological agenda.
        Mr. Johnson. Thank you.
        Mr. Bachus. Wow. Before I recognize Mr. Collins, you know,
    I think it is very important for Members not to impugn the
    honesty or the character of other Members or witnesses. And I
    am not saying that anyone did that.
        I will say that Mr. Easterly referred to that he was
    entertained in an exotic location with ALEC, which kind of
    brought my antenna up. And for the record, we are all enjoying
    the exotic location of where that hearing was located. It was
    Washington, D.C. So I am so glad that I get to work in an
    exotic location.
        Mr. Johnson. We do have some exotic locations in
    Washington, D.C.
        Mr. Bachus. Truly, the beach, the sun, the lack of
    humidity.
        Mr. Johnson. The beautiful Chesapeake Bay is a great spot
    to go and fish.
        Mr. Bachus. We have got to work even though we are in the
    midst of a resort.
        Mr. Collins?
        Mr. Collins. Thank you, Mr. Chairman.
        I just want to follow up briefly on that last question.
    This provides an ability for those who have constitutional
    standing to come forward and be a part of this, and it also has
    to prove that it has standing with the court. It also has to
    prove the Government was not representing its interest. So that
    would affect anyone, including the aforementioned Koch brothers
    to be a part if they meet constitutional guidelines. Is that
    not true, Mr. Walke? You said yes just a second ago. I just
    want to confirm it.
        Mr. Walke. That is true.
        Mr. Collins. Thank you.
        I yield back, Mr. Chairman.
        Mr. Bachus. Actually you have been recognized for your 5
    minutes. Oh, you are through? Okay.
        Mr. Jeffries, you will have the last opportunity for
    questions.
        Mr. Jeffries. Thank you, Mr. Chair.
        Mr. Kovacs, am I correct that it is your testimony that
    there is no evidence of collusion between plaintiffs initiating
    these litigations that result in consent decrees and Federal
    regulatory agencies?
        Mr. Kovacs. We did not even look for collusion. The first
    time that word was ever brought up was today. The purpose of
    the study was to literally do a search, a legal search, to find
    out how many of these cases existed, and that search got
    started by the very simple fact that at a prior hearing, one of
    the other sides said, well, there are very few of these. There
    are only a handful. And we asked the very simple question, how
    many. And then we started hearing----
        Mr. Jeffries. Thank you. No. I asked the question simply
    because in public comments that have been made by Members of
    this body not necessarily present here today in support of this
    legislation, the allegation has been made that the problem the
    legislation seeks to address relates to back room deals or
    collusion or conspiracy that has taken place to undermine the
    capacity of American citizens or others to be involved in the
    rulemaking that takes place at these Federal agencies. But I am
    thankful that you are saying that that is not a position that
    you agree with.
        Now, would you take the position that under the Obama
    administration there has been an explosion of consent decrees,
    unlike in previous Administrations?
        Mr. Kovacs. Well, look, consent decrees have been going
    on--these types of agreements. And we would argue that when the
    business community does it--they should not do it any more than
    the environmental community. We have a problem with the process
    because we think that transparency should be in the process.
        During the Reagan administration, Attorney General Meese
    outlawed the process with a very strong memorandum which has
    later been morphed into some administrative language in the
    CFR, but it really does not do anything. The old Meese one is
    gone.
        The records only go back, just so you know, only to 1995.
    So that was the best we could do. And using computers to find
    them what we were able to do using just the Clean Air act, is
    it seemed that it was around 20 to 30 bopping around Bush,
    Clinton, then----
        Mr. Jeffries. Well, thank you. I am familiar with the
    process.
        Mr. Kovacs. Then in Obama it went up to around 60. So it
    doubled or tripled.
        Mr. Jeffries. Now, let me ask a question about consent
    decrees just so that we have it in the record. Consent decrees
    are essentially settlement agreements backed by a judgment.
    Correct?
        Mr. Kovacs. That is correct.
        Mr. Jeffries. In other words, those consent decrees are
    judicially approved. Is that correct?
        Mr. Kovacs. That is correct.
        Mr. Jeffries. So there really is no back room deal. This is
    a courtroom agreement. Correct?
        Mr. Kovacs. Well, that is exactly where the problem comes
    in, and this is why we are so concerned because in so many of
    these what we would call ``deadline cases,'' the real concern
    is how you set the schedule. It is not really an administrative
    decision there. It is really a discretionary decision because
    that is how the rule is going to be put into effect and that is
    how they are going to determine what they are going to do.
        Mr. Jeffries. Now, there has been some reference to our
    constitutional fabric, including in testimony that you
    previously gave as it relates to what our citizens should be
    legitimately demanding from the Federal Government. Now,
    consistent with that constitutional fabric, am I correct that
    under Article 3 of the Constitution, the Federal courts have
    the authority to interpret the law? Is that a fair statement?
        Mr. Kovacs. Actually if you are talking about the Federal
    courts and you are talking about how we are structuring it
    here, the Federal courts are courts of limited jurisdiction,
    and the jurisdiction that they have comes from Congress. Right
    now--and this is----
        Mr. Jeffries. So you do not believe that the Federal courts
    have jurisdiction as it relates to Federal agency regulation?
        Mr. Kovacs. Pardon?
        Mr. Jeffries. You do not believe that Federal courts have
    jurisdiction as it relates to how to interpret regulations that
    Federal agencies have issued or should issue pursuant to
    congressional statute?
        Mr. Kovacs. When a case is before the Federal court, they
    certainly have the constitutional authority to interpret the
    law and to interpret the regulations. The difficulty that you
    have with these consent decrees is the court is treating these
    the same as it would treat a private party. For example, if you
    and I had a contractual dispute and we came to a settlement
    agreement, we would just file that with the court, get a
    consent decree, and it would be enforceable by the both of us.
        Mr. Jeffries. Let me reclaim the balance----
        Mr. Kovacs. Because I think this----
        Mr. Jeffries. Let me just reclaim the balance of my time. I
    want to give Mr. Walke an opportunity to respond to that
    statement that was made.
        Mr. Walke. Sure. I direct your attention to page 17 of my
    written testimony. You know, the Chamber report resorted to
    some eyebrow raising language for me impugning the Federal
    courts, accusing them of ``rubber stamping agreements between
    Federal agencies and outside plaintiffs.'' And I just think it
    is unsubstantiated in the report, first of all, but it is kind
    of of the same flavor that permeates their indictment of
    Congress for passing these laws that give citizens the right to
    hold Government accountable and courts rubber stamping them.
        You know, everyone seems to bear a lot of fault except for
    the industry parties that want to get into these settlements
    and prevent the law from being enforced. I mean, this is what
    this is about. It is not about transparency. EPA has started
    putting up their notices of lawsuits on the Web. I think they
    were late coming to that. I actually agree with Mr. Kovacs
    about that. We should have transparency. We should not have
    obstruction of law enforcement, and that is what this bill
    does.
        Mr. Jeffries. Thank you, Mr. Chair. I know my time has
    expired.
        Mr. Bachus. Thank you. We appreciate our witnesses'
    testimony today.
        Members now have the right to introduce into the record any
    matter they would like to. And I have dusted off an old Law
    Review article that I am familiar with since I wrote it. It is
    called ``Federal Policy Responses to the Predicament of
    Municipal Finance.'' And it was again published recently in the
    Cumberland Law Review under the title of the ``Jefferson County
    Sewer Debacle: A Case Study in Law, Public Policy, Municipal
    Finance.''
        Now, there were many reasons for the largest municipal
    bankruptcy in the history of this country since Orange County,
    California. One of the contributors to that was a consent
    settlement that pretty universally went beyond EPA dictates and
    environmental dictates. It was made between the county and
    environmental groups and resulted in about a $4 billion
    expenditure and what would have complied would have been about
    a $2.5 billion expenditure and resulted in bondholders, some of
    which were--California held some of those bonds. Teacher
    retirement boards in 20 different States lost their money.
        And I am certainly not saying that that was the sole cause.
    There were numerous causes including dishonesty, waste,
    incompetence, structure of the government, but the consent
    settlement certainly played a major role in it. There were a
    lot of people that were not at the table that got hurt as a
    result of that.
        So without objection, I would like to introduce that Law
    Review article.
        [The information referred to follows:]

                                   __________

        Mr. Bachus. But I do want to say I am not trying to
    simplify it. I am not trying to say that that was the sole
    reason, but it obviously was a contributing factor. But the
    county had failed to properly clean up their waste, and so I am
    not accusing those who brought the suit of any animus. But
    there were some unintended consequences of consent settlement.
        And I am not saying this legislation would have solved
    that, but I am saying that if more people had been at the table
    and more time and thought had been taken, we could have avoided
    what was a debacle.
        This concludes today's hearing. Thanks to all of our
    witnesses for attending.
        Without objection, all Members will have 5 legislative days
    to submit additional written questions for the witnesses or
    additional materials for the record.
        We now have a whole lot cleaner rivers and streams in
    Birmingham, Alabama too.
        This hearing is adjourned.
        [Whereupon, at 12:11 p.m., the Subcommittee was adjourned.]

                                A P P E N D I X

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                   Material Submitted for the Hearing Record