[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



                  U.S. GOVERNMENT PRINTING OFFICE
81-345                    WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  


                       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

                              ----------                              


               Material Submitted for the Hearing Record





                                





                                







                                







                                
























                                 
