[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


             EXAMINING `SUE AND SETTLE' AGREEMENTS: PART I

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

                              JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                 THE INTERIOR, ENERGY, AND ENVIRONMENT

                                AND THE

                            SUBCOMMITTEE ON
                       INTERGOVERNMENTAL AFFAIRS

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 24, 2017

                               __________

                           Serial No. 115-26

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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              Committee on Oversight and Government Reform

                     Jason Chaffetz, Utah, Chairman
John J. Duncan, Jr., Tennessee       Elijah E. Cummings, Maryland, 
Darrell E. Issa, California              Ranking Minority Member
Jim Jordan, Ohio                     Carolyn B. Maloney, New York
Mark Sanford, South Carolina         Eleanor Holmes Norton, District of 
Justin Amash, Michigan                   Columbia
Paul A. Gosar, Arizona               Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee          Stephen F. Lynch, Massachusetts
Trey Gowdy, South Carolina           Jim Cooper, Tennessee
Blake Farenthold, Texas              Gerald E. Connolly, Virginia
Virginia Foxx, North Carolina        Robin L. Kelly, Illinois
Thomas Massie, Kentucky              Brenda L. Lawrence, Michigan
Mark Meadows, North Carolina         Bonnie Watson Coleman, New Jersey
Ron DeSantis, Florida                Stacey E. Plaskett, Virgin Islands
Dennis A. Ross, Florida              Val Butler Demings, Florida
Mark Walker, North Carolina          Raja Krishnamoorthi, Illinois
Rod Blum, Iowa                       Jamie Raskin, Maryland
Jody B. Hice, Georgia                Peter Welch, Vermont
Steve Russell, Oklahoma              Matthew Cartwright, Pennsylvania
Glenn Grothman, Wisconsin            Mark DeSaulnier, California
Will Hurd, Texas                     John Sarbanes, Maryland
Gary J. Palmer, Alabama
James Comer, Kentucky
Paul Mitchell, Michigan

                   Jonathan Skladany, Staff Director
                  Rebecca Edgar, Deputy Staff Director
                    William McKenna General Counsel
                          Drew Feeley, Counsel
                         Kiley Bidelman, Clerk
                 David Rapallo, Minority Staff Director
          Subcommittee on the Interior, Energy and Environment

                   Blake Farenthold, Texas, Chairman
Paul A. Gosar, Arizona, Vice Chair   Stacey E. Plaskett, Virgin Islands 
Dennis A Ross, Florida                   Ranking Minority Member
Gary J. Palmer, Alabama              Jamie Raskin, Maryland
James Comer, Kentucky                (Vacancy)
                                     (Vacancy)
                                 ------                                

               Subcommittee on Intergovernmental Affairs

                     Gary Palmer, Alabama, Chairman
Glenn Grothman, Wisconsin, Vice      Val Butler Demings, Florida, 
    Chair                                Ranking Minority Member
John J. Duncan, Jr., Tennessee       Mark DeSaulnier, California
Trey Gowdy, South Carolina           (Vacancy)
Virginia Foxx, North Carolina        (Vacancy)
Thomas Massie, Kentucky
Mark Walker, North Carolina
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 24, 2017.....................................     1

                               WITNESSES

Mr. William Kovacs, Senior Vice President, Environment, 
  Technology and Regulatory Affairs, U.S. Chamber of Commerce, 
  Washington, D.C.
    Oral Statement...............................................     7
    Written Statement............................................     9
Ms. Darcy Helmick, Simplot Livestock Co., Grand View, Idaho
    Oral Statement...............................................    25
    Written Statement............................................    27
Mr. Justin Pidot, Associate Professor, University of Denver Sturm 
  College of Law
    Oral Statement...............................................    34
    Written Statement............................................    36
Mr. Kent Holsinger, Holsinger Law, LLC, Denver, Colorado
    Oral Statement...............................................    55
    Written Statement............................................    57

                                APPENDIX

Opening Statement of Chairman Blake Farenthold...................    78

 
             EXAMINING `SUE AND SETTLE' AGREEMENTS: PART I

                              ----------                              


                        Wednesday, May 24, 2017

                  House of Representatives,
         Subcommittee on the Interior, Energy, and 
        Environment Joint with the Subcommittee on 
                          Intergovernmental Affairs
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittees met, pursuant to call, at 2:08 p.m., in 
Room 2154, Rayburn Office Building, Hon. Hon. Blake Farenthold 
[chairman of the Subcommittee on Interior, Energy, and 
Environment], presiding.
    Present from the Subcommittee on Interior, Energy and 
Environment: Representatives Farenthold, Plaskett.
    Present from the Subcommittee on Intergovernmental Affairs: 
Representatives Palmer, Grothman, Demings, DeSaulnier.
    Also Present: Representative Smith
    Mr. Farenthold. The Subcommittee on the Interior, Energy, 
and the Environment and the Subcommittee on Intergovernmental 
Affairs will come to order.
    Without objection, the chair is authorized to declare a 
recess at any time.
    You all will have to excuse me. I am a little hoarse today.
    Voice. [Off audio.]
    Mr. Farenthold. Oh, I am good. Thank you.
    Today our subcommittee will begin to examine the 
consequences of sue and settle agreements, which have become 
increasingly common in recent years. Sue and settle agreements 
occur behind closed doors, outside the regulatory framework set 
out by the Administrative Procedures Act, a/k/a, the APA, with 
very little transparency, and often appear to thwart 
congressional intent and review.
    Today, we will begin the discussion on sue and settle 
agreements, their impact, and potential solutions to what I 
consider to be an unacceptable and possibly unconstitutional 
expansion of both judicial and executive regulatory power. We 
need a solution that returns legislative authority to Congress, 
and, equally importantly, lets the American people see and have 
input into the process.
    Specifically, today we will examine sue and settle 
agreements that impact environmental policy through the 
Endangered Species Act, the Clean Air Act, and the Clean Water 
Act.
    The APA has long ensured transparency and public engagement 
in the Federal rulemaking process. Federal agencies have 
enacted countless environmental rules and regulations using 
this framework. However, the sue and settle process short 
circuits this long-used and congressionally-created rulemaking 
process.
    Many of our Nation's most famous environmental statutes, 
such as the Clean Air Act or the Endangered Species Act, allow 
for citizen suits, which ensure that the government is held 
accountable to these laws. However, through sue and settle, 
citizens and environmental interest groups have found a way to 
exploit these provisions by suing Federal agencies for failing 
to complete specific actions by a certain date and time, and 
then coming to a favorable friendly settlement with the 
government regulators. These agreements are quietly negotiated 
away from the public eye and finalized by the court.
    While one may argue the merits of the system, it 
unfortunately is susceptible to manipulation and abuse. This 
tactic results in the agency agreeing to prioritize the 
plaintiff's agenda, not Congress' or the American people's. In 
an effort to comply, the agency can inadvertently be forced to 
divert large quantities of their time, money, and other 
resources to filling just one of these consent decrees.
    A prime example of this kind of manipulation was when 
WildEarth Guardians and the Center for Biological Diversity 
proposed that the U.S. Fish and Wildlife Service, or the FWS, 
expand the Endangered Species Act to include more than 720 
additional species. When FWS failed to accomplish this daunting 
task during the necessary time, the two groups sued. The 
negotiated agreement allowed WildEarth Guardians and the Center 
for Biological Diversity to virtually dictate the Agency's 
priorities moving forward, which ultimately cost 75 percent of 
FWS' funds that were allocated to the Endangered Species 
Listing and Critical Habitat designation.
    The sue and settle process creates an unfair system. The 
winners are the small few who manage to manipulate the Federal 
government into doing their bidding. The losers are the 
taxpayers whose hard-earned money goes to pay for attorneys for 
both sides of the case, and focuses agency resources on the 
plaintiff's priority for listing and enforcement, as opposed to 
the other responsibilities of the agency, Congress, and the 
American people.
    Recently, Congressman Doug Collins introduced the Sunshine 
for Regulation and Regulatory Decrees and Settlement Act of 
2017 to increase transparency and public engagement by ensuring 
there is notice and input for public comment. I think this is a 
good first step, and I thank Congressman Collins for 
introducing this bill, and I look forward to exploring 
additional suggestions, solutions, and issues with our panel 
today.
    I would now like to recognize our ranking member, Ms. 
Plaskett, for her opening statement.
    Ms. Plaskett. Thank you, Mr. Chairman, and thank our other 
committee members for being here. And, Chairman Palmer, thank 
you for your work as well.
    Thank you for calling today's hearing and bringing 
attention to the issues regarding sue and settle practices. As 
members of Congress, it is our duty to ensure the safety and 
rights of the American people. It is important that our 
citizens are able to bring suit against the government. It is 
one of the essential factors in our rulemaking process. We must 
hold our government agencies accountable, and this is exactly 
what this committee and citizen suits are designed to do.
    The concept of sue and settle in environmental litigation 
to bypass requirements and normal statutory process is simply 
not as stated by many here in this hearing. Agencies must 
comply with the law as written by Congress, including the 
requirements for notice and comment provided in the 
Administrative Procedures Act. While agencies can commit to a 
schedule for performing their mandatory duties, agencies cannot 
settle litigation by making commitments concerning the 
substance of final regulations they will issue.
    There already are long-established procedures that prevent 
Federal agencies from entering into consent decrees and 
settlement agreements that circumvent these rulemaking 
procedures. These safeguards include standing requirements that 
require concrete adverseness among litigants, the need to 
obtain judicial approval of settlements, and requirements of 
the Administrative Procedure Act that preclude agencies from 
making commitments concerning the substance of future rules.
    The GAO report on the so-called sue and settle phenomenon 
in 2014 largely put to rest many of the claims of impropriety 
in the process. Under President Trump's Administration, private 
companies will benefit substantially if there is, in fact, a 
concept of sue and settle. Private companies will be able to 
use the concept of sue and settle in order to roll back agency 
regulations protecting our environment. However, we do not 
believe that sue and settle, in fact, occurs, and that the 
rulemaking process must, in fact, be there.
    President Trump and his Administration has made it clear 
with his budget proposal that protecting our environment is not 
a priority. President Trump proposed to cut EPA by 31.4 
percent, the main focus of taking care of the oil and chemical 
industries. We should not further burden Federal courts and 
agencies with new obstacles to settlements that will result in 
more protracted litigation.
    I look forward to discussing this topic in more depth, and 
thank you again, Mr. Chairman, for bringing this subject to our 
attention.
    Mr. Farenthold. Thank you. I will now recognize Mr. Palmer, 
the chairman of the Subcommittee on Intergovernmental Affairs, 
for his opening statement.
    Mr. Palmer. Thank you, Mr. Chairman. As noted, today we are 
examining sue and settle agreements between environmental 
advocacy groups and Federal agencies. And I would first like to 
thank our witnesses for appearing, and look forward to your 
testimony and your answers to our questions.
    The sue and settle phenomenon refers to a process where 
outside activist groups will sue the Federal agency for 
violating a provision of Federal law. It is not just Federal 
agencies. It is State and local governments as well. It has 
been going on for quite a while. It first came to my attention 
around 2004 when Senator Lamar Alexander of Tennessee 
introduced the Federal Consent Decree Fairness Act.
    What happens in these lawsuits I think the witnesses will 
know, but I will go ahead and explain that. The parties will 
often choose to settle by entering into a consent decree rather 
than facing a trial. In many of these cases, it is apparent 
that the agencies collaborate beforehand with the groups to set 
up the terms of the decree without public notice or third-party 
input. These are legally binding agreements that are approved 
by a judge, and they are enforceable by contempt, and can only 
be modified by court order, which takes them completely outside 
of the legislative process and the administrative process.
    These agreements can last for decades and end up costing 
more than if the parties had gone to trial. There are numerous 
examples of this, and they are broad in their application, 
whether it is education consent decrees, consent decrees 
involving environmental issues. We have had them in Alabama. As 
a matter of fact, the largest bankruptcy in the history of 
North America is Jefferson County in Alabama that all started 
with a consent decree involving our storm sewer system.
    These agreements have consent provisions that extend beyond 
the scope of the original law violated, and I want to emphasize 
that. Because it is a consent decree, and whether or not the 
defendant is ever in compliance is controlled by a control 
group or a special master, these things can extend beyond the 
original complaint. They are an effective tool for advocacy 
groups to unilaterally dictate the priorities of an agency's 
agenda or a local county commission, or city council, or a 
State for that matter.
    They are also done outside the Administrative Procedures 
Act. In a February 2017 report, the GAO, the Government 
Accountability Office, found that two environmental groups, the 
Center for Biological Diversity and WildEarth Guardians, filed 
more than half of the Endangered Species Act deadline suits 
between 2005 and 2015. According to GAO, these suits resulted 
in more than 1,600 actions affecting 1,441 species in just a 
10-year period.
    Comparatively, the GAO found that only 76 species have been 
delisted since the enactment of the Endangered Species Act. 
Even in these cases, 19 of these species were delisted because 
of data errors in the original listing, and only 47 occurred as 
a result of recovery efforts. This indicates that the structure 
of the Endangered Species Act is not conducive to its purported 
goal.
    These actions place an enormous burden on States, local 
governments, industry stakeholders, and taxpayers who are shut 
out of the negotiations, but are left to foot the bill. 
Moreover, interest groups can petition the government to cover 
their attorney's fees through the Department of Treasury's 
Judgment Fund, which is a permanent, indefinite appropriation 
of taxpayer money for payments of certain final judgments. 
Consequently, American taxpayers are paying the legal costs for 
groups that are suing them.
    This does not even account for the funds that are expended 
by the Department of Justice to provide representation for 
Federal agencies entering into these lawsuits. The public is 
kept largely in the dark throughout the process, and few 
resources are available to inform them of what is happening and 
who is responsible. I daresay the vast majority of the 
residents of Jefferson County had no idea that this all began 
with a consent decree.
    Because of the incomplete data and lack of proper 
categorization, we are unable to fully evaluate the total 
amount taxpayers pay out as a result of settlement agreements. 
For example, in my previous experience, you know, leading an 
Alabama think tank, I was unable to obtain a complete list of 
all Federal consent decrees that apply to the State from the 
Department of Justice because of inadequate record keeping. 
This lack of transparency limits our constitutional duty to 
conduct oversight of management of taxpayer resources.
    I have heard too many stories from State and local 
officials where special interest attorneys dictated critical 
actions ranging from pipe sizes to bridge infrastructure 
instead of engineers and administrators with specific expertise 
or private citizens whose homes and livelihoods were 
compromised. I have heard too many stories where State and 
local governments and their citizens were forced to 
reprioritize billions of dollars in resources by those in 
Washington who claim to be serving the public's greater 
interest. In cases where settlement agreements failed to 
accomplish their stated goal but their terms remain in effect, 
there is absolutely no accountability.
    It is time for the Federal government to move away from 
emphasizing its role as prosecutor or political monitor and 
return to serving as the American people's partner in setting 
priorities that best represent their interests. I am encouraged 
that the committee is highlighting the important aspect of sue 
and settle.
    I look forward to today's hearing as an important first 
step in examining these practices, and I yield back.
    Mr. Farenthold. Thank you very much. I will now recognize 
Ms. Demings, ranking member of the Subcommittee on 
Intergovernmental Affairs, for her opening statement.
    Ms. Demings. Thank you so much, Mr. Chairman, and thank you 
so much to our witnesses for joining us today.
    While this is the first hearing on sue and settle 
agreements in the 115th Congress, it is the fourth hearing that 
departs from the false premise that Federal regulations only 
harm economic development and America's spirit of enterprise. 
If you begin with that false premise, every environmental 
protection regulation is harmful.
    The chemical industry would have us believe that the Obama 
Administration and EPA scientists colluded--colluded-- with 
environmental groups to issue regulations intended to harm 
industry. This is a notion that the Government Accountability 
Office has rejected time and again.
    In the last hearing the committee held on legal settlements 
of environmental lawsuits, a 2011 Government Accountability 
Office report found no discernible trend that would indicate 
collaboration or collusion in lawsuits against the EPA. A 
December 2014 GAO report confirmed this assessment, and found 
that from May 2008 to June 2013, EPA only issued nine rules 
resulting from settlements for rules that were between 10 
months and 23 years delinquent under the mandatory statute 
deadlines. Each of these was subject to robust public comment 
before the final rule was issued.
    Let me be clear. Congress passes a law, and Federal 
agencies issue a rule or regulation. If the EPA or any other 
Federal agency fails to perform a mandatory duty under that 
law, they are susceptible to a legal challenge for violating 
the law that Congress passed. The 2014 GAO report found that 
the majority, if not all, EPA settlements were under the 
decades-old law, the Clean Air Act.
    Another false premise is the inaccurate notion that 
environmental groups are behind most of the litigation against 
the government. In fact, industry trade associations and 
private companies initiated nearly half of all cases filed 
against the EPA between 1995 and 2010. I have not heard my 
Republican colleagues demonstrate equal concern about these 
industry lawsuits.
    For a successful vibrant and modern economy, economic 
development must go hand-in-hand with environmental protection 
and conservation. We certainly know that in Florida, my State, 
where more than 70 percent of the 75 million foreign and 
domestic visitors enjoy Florida's natural resources, including 
the beaches, springs, and hiking trails while in the Sunshine 
State. When the government is in violation of the law, 
settlement agreements can prevent prolonged trials and 
staggering legal expenses, particularly at agencies already 
struggling to carry out their mission.
    I thank you today, witnesses, for sharing your testimony, 
and I look forward to continuing this very important 
discussion.
    Thank you, Mr. Chairman, and I yield back.
    Mr. Farenthold. Thank you. I will hold the record open for 
5 legislative days for members who would like to submit a 
written opening statement.
    Mr. Farenthold. I would also now like to recognize our 
panel of witnesses. I am pleased to welcome Mr. William Kovacs, 
senior vice president of environment, technology, and 
regulatory affairs with the U.S. Chamber of Commerce. We have 
also got Ms. Darcy Helmick. She is with Simplot Livestock 
Company in Grand View, Idaho. Mr. Kent Holsinger. Is that how 
you say it?
    Mr. Holsinger. Holsinger.
    Mr. Farenthold. Holsinger Law Firm, LLC in Denver, 
Colorado. And we have Mr. Justin Pidot. Is that correct? He is 
the associate professor of law at the Denver Sturm College of 
Law in Denver, Colorado.
    Welcome to all of you.
    Pursuant to committee rules, all witnesses will be sworn 
before they testify. Would you please rise and raise your right 
hands?
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Chorus of ayes.]
    Mr. Farenthold. Let the record reflect that all witnesses 
answered in the affirmative. You may be seated.
    In order to allow time for discussion, we would appreciate 
it if you would limit your oral testimony to 5 minutes. Your 
entire written statement will be made part of the record.
    You will find in front of you you have a timer that will 
count down. As you are getting near the end, the light will go 
from green to yellow and then eventually to red. If you would 
wrap it up then, we would appreciate it. I am sure all the 
members of the panel would definitely like to ask you guys some 
questions.
    So, we will start with Mr. Kovacs. You are recognized for 5 
minutes. Sir, bring the microphone nice and close. We are 
budget conscious here, so we bought the inexpensive mics that 
you got to get real close to your mouth.

                       WITNESS STATEMENTS

                  STATEMENT OF WILLIAM KOVACS

    Mr. Kovacs. Thank you, Chairman Farenthold, and Chairman 
Palmer, Ranking Members Plaskett and Demings, for inviting me 
to discuss examining the sue and settle agreements.
    As many of you have said, sue and settle occurs when an 
agency agrees to the demands of an interest group by 
voluntarily entering into an approved consent decree. And it's 
the consent decree that really changes a little bit of what is 
going on because it's not a settlement agreement. We can get 
into that later. But it binds the agency to future actions, and 
sometimes it binds future Administrations.
    Here's how the problem starts. An Agency like EPA, and 
we'll just start with that, they miss somewhere between 84 
percent and 96 percent of its deadlines, and once a deadline is 
missed, the interest group can sue the Agency. And since EPA 
misses virtually all of its deadlines, the interest group can 
go in and select which rules out of hundreds of rules it wants 
to advance. It's through this selection process that the 
interest groups establish the priorities of the Agency. 
Moreover, by using a consent decree, the only parties that can 
enforce the consent decree is the interest group, the agency, 
or the court. The public is completely out of the process.
    Democrat and Republican Administrations have for years used 
the sue and settle process. At times it may be needed as a 
tool. We're not against the entire process. However, its use in 
the last several years has dramatically increased, both in the 
number of consent decrees filed, but also in the types of 
actions covered. For example, by using sue and settle tactics, 
groups have been able to expand their influence over agency 
priorities from prioritizing the issuance of regulations to the 
imposition of Federal implementation plans instead of State 
plans, and to the imposition of permanent conditions on private 
parties.
    When the Chamber first looked at the sue and settle process 
and these consent decrees, we were told by EPA and Justice that 
they did not maintain a unified database for such lawsuits, and 
we were assured that there were very few. We undertook 
research, which culminated in the first report, Sue and Settle: 
Regulating Behind Closed Doors, which lists well over a hundred 
new regulations from these consent decrees between the years 
2009 and 2012. Our most recent report, Damage Done 2013 to 
2016, found that there were actually more Clean Air Act sue and 
settle agreements filed between 2013 and 2016 than between 2009 
and 2012. It's about 77 to 60.
    We recognize that Administrator Pruitt has stated he's 
going to end the process of sue and settle. However, it's still 
a very important issue, and legislation is needed because the 
practice is something that can be repetitive in the future.
    While there are several ways to address this issue, the 
simplest approach is found in H.R. 469, the Sunshine for 
Regulations and Regulatory Decrees Settlement Act, which 
focuses on transparency and public participation. This is 
really crucial. We are not trying to change any of the law in 
terms of how the process goes or the discretion of the 
agencies. What we're trying to do under 469 is to bring 
transparency to the process.
    And H.R. 469 does three things. One, it provides a 60-day 
notice to the public so that the public can provide comments to 
the agency on the consent decree. Second, it's requiring the 
agency to provide a summary of the public's comments to the 
court so the court can review the comments before it signs off 
on the consent decree. And finally, it allows interested 
parties the right to intervene if they can establish that their 
rights are not being adequately protected by the defending 
party.
    The bottom line is that transparency and public 
participation should apply when agencies are making public 
policy decisions, regardless of who is in the White House or 
who controls the agencies.
    Thank you very much, and I look forward to answering 
questions.
    [Prepared statement of Mr. Kovacs follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Farenthold. Thank you very much.
    Ms. Helmick, you are up next for 5 minutes.

                   STATEMENT OF DARCY HELMICK

    Ms. Helmick. Chairman Farenthold, Chairman Palmer, Ranking 
Member Plaskett, Ranking Member Demings, and members of the 
subcommittees, thank you for inviting me to appear before you 
today.
    My name is Darcy Helmick. I'm a 4th generation rancher from 
Idaho. I ranch with my parents and my brother, and my 
grandparents and extended family also ranch in Idaho where they 
have done so for more than a hundred years. I'm following along 
in those footsteps. I recently bought 30 of my own cows, and 
I'm working with my brother on transitioning into more 
responsibility on my family's operation.
    Professionally, I'm the land manager for Simplot Land & 
Livestock based in Grand View, Idaho. In that capacity, I 
oversee grazing permits in four States: Idaho, Oregon, Nevada, 
and Utah. In my experience dealing with the Federal grazing 
system and western land use in general, offensive litigation 
tactics by outside activist groups have served to totally 
derail business operations.
    The legal process is a crucially important part of owning a 
Federal lands grazing permit. While it is critical that we 
maintain the right of citizens to litigate when necessary, 
reform is needed to prevent that right from being abused or 
exploited. Federal agencies must be able to perform job 
activities that maintain protection of multiple use, and ensure 
the intent of Congress during and in the wake of offensive 
litigation. It is also critical that permitted public land 
users have a role in any settlement agreements, and that 
Federal employees at a local level have input.
    Unreasonable timelines have become the norm, and, once 
imposed during settlement, are rarely reached. The 
repercussions of those missed timelines heavily impact 
permitted public land users, and result in a level of 
uncertainty that is prohibitive in any business environment. 
Ultimately, this is often the goal of these litigants.
    I have two brief examples of this. The first one is the 
Jarbidge litigation case based just outside of Twin Falls, 
Idaho. There was a permit renewal process where a special 
interest group litigated over the permit renewals. That 
resulted in an injunction against livestock grazing on 28 
grazing allotments. We were able to enter into a stipulated 
settlement agreement with all parties, requiring the Agency to 
complete some tasks before a deadline of February 28th, 2011.
    Subsequent litigation from the same environmental group as 
well as some wildfires prevented the BLM from completing that 
task, which resulted in the injunction coming back, and 
livestock having to be removed from all 28 of all those 
allotments while further litigation was completed, which 
allowed us to return to the grazing allotments just over 80 
days later.
    A second example is with the Endangered Species Act, which 
was mentioned earlier, that had to do with bull trout habitat 
on grazing allotments. Although the Forest Service was already 
in the process of re-initiating informal consultation, an 
outside interest group litigated against it. We as the permit 
holders joined with the Forest Service and were successful in 
the litigation.
    However, because of the time that was obligated to 
litigation, the Forest Service and Fish and Wildlife Service 
were not able to complete informal consultation before the 
existing consultation expired. Therefore, before our turnout 
date in 2017, which was May 8th, the Forest Service called me 
and told me I wasn't authorized to turn cattle out until that 
consultation was completed. Those cows are still at the gate 
waiting to be turned out as we sit here today.
    The chilling effects of these sue and settle tactics are 
felt throughout our communities. Not only is litigation 
expensive, the cost to the communities go far beyond legal 
costs. While litigation directly or indirectly forces a removal 
or reduction of cattle, families are forced to make decisions 
that impact their bottom line and potential ability to continue 
operations.
    These tactics also serve to limit young producers from 
entering the industry, which will inevitably lead to further 
erosion of the footprint of ranching in the West as well as 
open space. As a 4th generation cattle producer, it is in my 
blood to continue with my family business. My experience 
dealing with litigation and public lands gives me pause when 
considering these options.
    It is critical that we as Americans maintain the ability to 
sue our government agencies when warranted, and it is also 
critical that impacted stakeholders have a seat at the table 
when other parties litigate to ensure our investments are 
protected and we have some kind of certainty moving forward. 
But above all, we must ensure the integrity of the entire 
system by preventing abuse and manipulation by motivated 
activist groups.
    The issue of sue and settle litigation abuse is one that 
simply must be addressed if family ranching operations and 
rural economies are going to survive another generation. Thank 
you.
    [Prepared statement of Ms. Helmick follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Farenthold. Thank you.
    Mr. Pidot, you are up for 5.

                   STATEMENT OF JUSTIN PIDOT

    Mr. Pidot. Thank you, Mr. Chairman.
    Mr. Farenthold. We can barely hear you there. Bring that 
microphone in real close.
    Mr. Pidot. Thank you, Mr. Chairman, Chairman Palmer, 
Ranking Member Plaskett, Ranking Member Demings. I appreciate 
the time to talk with you today.
    My name is Justin Pidot. I'm an associate professor at the 
University of Denver Sturm College of Law, where I teach and 
write about issues of environmental law, natural resources, and 
administrative law. I also served as a deputy solicitor at the 
Department of Interior during the Obama Administration, and was 
an appellate lawyer at the Environment and Natural Resources 
Division of DOJ at the Bush Administration and beginning of the 
Obama Administration.
    The subject of this hearing today, the so-called sue and 
settle phenomenon, to my mind, respectfully to my colleagues on 
the panel, isn't really a phenomenon at all. I'm not denying 
that the United States enters into settlements. Of course the 
United States enters into settlements. It enters into lots of 
settlements, and it enters into settlements across all 
contexts.
    Settlements have become a core component of the American 
justice system. All we need to do is look at the docket of the 
Federal courts to see one reason this is so. They have a 
backlog of historic proportions when it comes to civil 
litigation. So, in all contexts, parties look for other means 
of resolving disputes. And every lawyer knows that our clients' 
best interests often lie with negotiating rather than 
litigating.
    Now, I say that there's no sue and settle phenomenon also 
because environmental settlements are simply the result of 
hardworking civil servants at the Department of Justice and at 
the client agencies whom they represent, doing their best to 
advance the interests of the United States. There's nothing 
nefarious, inappropriate, or even surprising about 
environmental settlements.
    In fact, in my experience, lawyers for the United States, 
both at the Department of Justice and at the Department of 
Interior, consider precisely the same factors when they think 
about settlements that private lawyers think about. They think 
about litigation risk. They think about the cost that 
continuing to litigate will impose. And they think about 
whether or not that risk and those costs justify making a 
particular concession to the party that has brought the suit.
    Now, in some ways government lawyers are different because 
government lawyers also think long and hard about whether the 
terms in a settlement circumvent administrative law constraints 
or public participation requirements. This is the result of 
both the institutional role that the Department of Justice 
plays. Every settlement, every consent decree is signed off on 
at the Department of Justice by a lawyer who is not sitting in 
the client agency by a lawyer who's thinking about the rule of 
law, who's thinking about the long-term institutional 
credibility of the United States. And indeed, settlements and 
consent decrees must be signed off on at a relatively high 
level at the Department of Justice.
    The Department of Justice also has specific policies that 
constrain the kinds of settlements and consent decrees that the 
government can enter into, and specifically disallows 
settlements that would make substantive commitments that should 
occur through notice and comment rulemaking. And despite what 
Administrator Pruitt says, I can't imagine the new 
Administration will do anything different. When a lawyer is 
faced with a case where the risk of success is very low, where 
the cost of litigation is very high, and where you can make a 
deal that is workable for your agency, there really is no other 
path to pursue to provide competent representation.
    Now instead, most of the concerns that we've heard today, 
to my ears at least, sound less like concerns about settlements 
and more like concerns about environmental law broadly. For 
example, in the written testimony, concerns were raised about 
the requirement that Fish and Wildlife Service respond to 
petitions asking it to list species on the Endangered Species 
List. The Section 4 process is not an issue of settlement. It's 
an issue of what substantive law enacted by Congress requires.
    The same thing in the Clean Air Act. The Clean Air Act 
creates a particular relationship between Federal agencies and 
State agencies where the Federal government has oversight over 
State agencies. And so, there, too, once again, we had the pure 
application of the Clean Air Act.
    Now, impeding these efforts, impeding the Federal 
government from doing its job as a matter of satisfying its 
substantive obligations in the guise of attacking process and 
litigation tactics upsets out Nation's commitment to the rule 
of law, because when citizen groups or other groups bring a 
lawsuit and they are going to succeed, that means the Federal 
government is acting illegally. And in that circumstance, 
preventing that lawsuit from occurring suggests that the 
government does not need to be held accountable.
    And if Congress wants to debate those substantive 
environmental law issues, then that's the debate that we should 
be having, not sort of a debate about whether or not a 
particular settlement was somehow collusive in a way that has 
never been evidenced.
    Thank you.
    [Prepared statement of Mr. Pidot follows:]
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    Mr. Farenthold. Thank you.
    Mr. Holsinger, you are recognized for 5 minutes, sir.

                  STATEMENT OF KENT HOLSINGER

    Mr. Holsinger. Thank you, Mr. Chairman, Mr. Chairman, 
Ranking Members, members of the subcommittees. My name is Kent 
Holsinger. I'm the managing partner of Holsinger Law, LLC. 
We're a small natural resources law firm based in Denver, 
Colorado. We represent clients on matters related to lands, 
wildlife, and water law, and in that capacity, we've seen 
firsthand the effectS of sue and settle.
    It's an honor to testify on this important matter.
    I think one of the most significant challenges in this 
regard is that we have a small number of radical environmental 
groups that are gaming the system at the taxpayers' expense. 
And as a result, we're wasting our scarce resources that could 
be spent on real on-the-ground conservation efforts, and that 
needs to change.
    Ironically, many of these groups are creating their own 
problems. As an example, the Center for Biological Diversity 
and WildEarth Guardians have been very adept at using Section 4 
under the Endangered Species Act. It provides that any person 
can petition to list a species. But these groups and others 
over the past 10 years or so have started to petition to list 
hundreds of species at a time, and that's just not possible for 
the agencies to handle, the Fish and Wildlife Service, NOAA 
Fisheries.
    As a result, they miss deadlines, and these same 
environmental groups that petition then sue over the logjam 
that they've created. They settle often over a deadline, rinse 
and repeat again and again and again. I'll spend a lot of my 
remarks on statistics from groups like these.
    As an example, 2000 to 2009, CBD, 409 lawsuits. WildEarth 
Guardians, 180. 2009 to 2012, the same groups, CBD, 117 
lawsuits, WildEarth Guardians, 55. From mid-March of 2017, the 
Center for Biological Diversity has been a party to, filed, or 
co-filed over 16 lawsuits. Now, that number might be wrong. I 
didn't look Monday, or Tuesday, or today. It could be higher.
    We've reviewed Federal court records for these groups 
specifically since electronic records were first kept beginning 
back in 1990. These two groups--now WildEarth Guardians used to 
be Forest Guardians Incentive Group--have been party to over 
1,500 lawsuits, most of which against the Departments of 
Interior and Agriculture, most of which citing the Endangered 
Species Act as a claim.
    Ironically, these groups are also collecting grants from 
the government. WildEarth Guardians in 2016, $800,000 in 
Federal grants. 2015, $500,000 in Federal grants. NRDC, another 
litigious group, collected $6.5 million from EPA over the past 
several years.
    According to the GAO, some three organizations are getting 
about 40 percent, 41 percent of all the attorney fees on sue 
and settle agreements. In one particularly egregious case, NRDC 
spent about 6 years litigating in its case against the Interior 
Department, winning a pyrrhic victory and remand of a 
biological opinion and collecting nearly $2 million in 
taxpayer-funded attorney fees.
    The regulatory costs, as other witnesses have mentioned, 
are astronomic. We don't know for certain what they might be 
because no one keeps those records. That's one of the reasons 
that the Sunshine Act that other folks have talked about I urge 
the subcommittees to support. But these regulatory costs are 
enormous as a result of the litigation, and reforms are long 
overdue.
    Transparency is sorely needed. There need to be records 
kept about who's filing suit, what sort of settlements they're 
collecting, who's earning fees and how. These groups are also 
abusing the opportunity to earn fees under the Equal Access to 
Justice Act with hourly rates that I've personally seen over 
$500 per hour. And these groups, many of them, their budgets 
dwarf those of the clients that we typically represent, even 
those in the oil and gas trade associations.
    So, I again appreciate very much the opportunity to testify 
today. I urge support to remove the perverse incentives for 
litigation in environmental laws, the Equal Access to Justice, 
the Endangered Species Act, and other Federal laws.
    Thank you.
    [Prepared statement of Mr. Holsinger follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Farenthold. Thank you, and I will recognize myself now 
for 5 minutes of questioning.
    First of all, Ms. Helmick, I got to know what happens to 
the cattle that are sitting out at the gate waiting to get in 
to graze. My understanding is, you know, once you have grazed a 
pasture to a certain level, it is time to move the cattle on or 
start feeding. What do you end up doing with these cattle that 
you cannot get on to fresh pasture?
    Ms. Helmick. Correct, thank you for the question. The first 
example that I mentioned is a very unique example because the 
deadline expired at the end of the grazing year, which is 
February 28th. What we have going on on February 28th is that 
is when baby calves are being born. It is also a time of year 
when usually the weather is not the best.
    We were able to get a small extension until May 1 to allow 
those baby calves to get a little bigger, but then what we had 
to do was find property elsewhere to take those cattle, take 
trucks out to the location, gather the cattle, which incurs 
additional stress and health issues to the cattle, and then 
hauled them to some private lands.
    Now, we feel blessed that we are large enough that we had 
enough private property, and the injunction only lasted 80 
days, which allowed us to have adequate excess feed to provide 
for them. But in other cases, you are absolutely right. They 
would have to be moved to a location where they would be fed 
hay or some other means of forage.
    Mr. Farenthold. All right. Thank you. Mr. Pidot, you 
testified that you felt like this was a perfectly legitimate 
way to do this because the agencies were not getting the job 
done in a timely fashion following the statute. That is kind of 
my summary of it. But does not defending these lawsuits and 
focusing the resources, as the consent decrees and settlement 
agreements dictate, actually make it more difficult for them to 
go on about business as usual that they should be doing under 
the statute as opposed to having to deal with all the 
litigation and results of that litigation?
    Mr. Pidot. Thank you for the question, Mr. Chairman. 
Respectfully, I do not think so. Once an agency has been sued, 
if it is facing, as is often the case, an almost sure loss. I 
mean, in these deadlines lawsuits, any litigator will tell you 
the United States is going to lose the lawsuit. What is going 
to happen if they lose the lawsuit? The district court judge is 
going to enter an injunction, and that injunction is going to 
impose deadlines and procedures on the agency for reaching a 
decision on the timeline that the district court judge wants. 
If ----
    Mr. Farenthold. All right. So, they have already missed the 
deadline Congress has put on them.
    Mr. Pidot. Yep, and a district court judge will look at 
that and be, let us say, displeased that the agency has missed 
the congressional deadline, and may well impose a very short 
deadline.
    Mr. Farenthold. And you say the agencies, you know, let me 
back up. I am a lawyer, and when you go to court, you 
traditionally have sides with very adverse interests. I mean, 
to the point, you know, you sometimes have to hold them off 
from getting into fisticuffs on the courthouse steps. But both 
these activist groups and whatever agency, how are their 
interests dissimilar enough that you have a true case or 
conflict there?
    This is what concerns me is they both want to get the job 
done with protecting the environment, let us say, since we are 
focusing on environment, though this goes for a variety of 
issues. Where is the conflict?
    Mr. Pidot. Well, Mr. Chairman, I think if you represent the 
United States, you might personally feel like you would like to 
protect the environment. But concretely in your job, your job 
is to take the obligations that Congress has imposed on the 
agency through various statutes, and to the best of your 
ability ensure that the agency is pursuing those objectives in 
a way that is legally sound.
    Now, outside groups, and that is true whether or not you 
have an oil and gas company coming and seeking a permit or CBD 
coming and making a petition. So, the adversity is that in both 
cases you have an outside group, oil and gas companies seeking 
a permit, CBD seeking a listing, which simply want the 
substantive end result.
    Mr. Farenthold. I am running out of time. I would like to 
get Mr. Holsinger's take on that. Do you think there is enough 
there? I noticed, Ms. Helmick, when that litigation came, she 
joined the suit, her company probably at her expense. But I 
would be interested in your take on whether there is a true 
controversy there and enough difference of opinion that you end 
up with an arm's length settlement.
    Mr. Holsinger. Mr. Chairman, one of the things that has 
boggled my mind for some time goes to the example you cited in 
your opening statement, the 2011 settlement agreement between 
WildEarth Guardians and Center for Biological Diversity. 
Section 4 of the ESA governs listing and delisting. It provides 
that you can petition to list a species. Why the Agency did not 
say that is it, that is all you get, WildEarth Guardians, 
Center for Biological Diversity, has always been beyond me.
    So, I have long wondered if that is a circumstance where 
maybe the Agency folks, some of the Agency folks, did not like 
the idea of having to commit to list an additional 700 and some 
species where there is only 1,600 or so to start with.
    Mr. Farenthold. All right. Well, I see I am out of time. If 
we have time to do a second round, I will ask some more 
questions. We will go to Ms. Plaskett now for her 5 minutes.
    Ms. Plaskett. Thank you, Mr. Chairman. And I just wanted to 
take that discussion a little further that the chairman brought 
up in this notion of an arm's length litigation. You know, the 
purpose of the EPA is to make our environment cleaner, protect 
human health, and protect wildlife, we are automatically 
assuming that that is very much squarely within radical 
environmental groups. I do not know if that is necessarily the 
case.
    I live in a jurisdiction which has had major friction with 
EPA, particularly over listings of wildlife because it in some 
way impedes our development when they have listings of coral 
that allow us not to do dredging or to create hotels or resorts 
in the area. And we are competing with the rest of the 
Caribbean, which does not have EPA and does not have the 
restrictions that we have. That creates conflict.
    But I want to know in a new Administration, such as the new 
EPA director, Director Pruitt, if an oil or chemical company 
were to bring a suit against EPA, are we saying now because of 
the teachings or the philosophy of President Trump to restrict 
environmental, you know, Mr. Pidot, would you say that that was 
an arm's length lawsuit if they were to bring a lawsuit in that 
matter, or Mr. Holsinger, would you say that that would be then 
an inappropriate person, or would that be for a judge to 
determine if they were proper litigants in a matter?
    Mr. Pidot. Well, if you do not mind me answering the first 
quickly. I think that the history of the Department of Justice 
has been one of incredible integrity, committed civil servants 
who keep their eye on the rule of law to my mind. And I would 
expect that people at the Department of Justice would maintain 
that tradition moving forward, and that settlement practices 
would continue to be the kind of practices that civil servants 
can be proud of when the interests of the United States are 
being represented zealously by lawyers.
    Now, I guess that could change, but I would need to see a 
pretty robust factual record to suggest that something 
fundamental had changed about the way the Federal government 
went about its business. And I have not seen evidence of that 
to date.
    Mr. Holsinger. Madam Ranking Member, what we have not seen, 
what I have not seen, is a history of the abuse of these 
provisions of the environmental laws on the side of industry as 
we have on the side of these environmental groups. And I named 
two in particular that over 1,500 times have litigated these 
issues. I know of no corollary anywhere, so clearly this is an 
example of these folks, a very small number of folks, that are 
simply gaming the system.
    Ms. Plaskett. By that, we are making the assumption that 
the lawsuits can actually change policy of the EPA. Are we 
saying that in the lawsuits that the settlements allow EPA to 
actually change the policy, or is it related simply to what you 
have stated, which was, in fact, the timing by which they make 
the reviews?
    Mr. Holsinger. Well, in these cases that I cited, it is 
mostly against the Departments of Agriculture and Interior, and 
many of them on deadline issues.
    Ms. Plaskett. So, those cases were not EPA specifically.
    Mr. Holsinger. That is correct.
    Ms. Plaskett. Okay.
    Mr. Holsinger. Most of them were not.
    Ms. Plaskett. All right. So, GAO rejects the notion of sue 
and settle, and has stated time and time again, and here is a 
quote, a 2011 GAO report regarding an environmental case's 
status, ``No trend was discernible in the number of 
environmental cases brought by EPA as the number of cases filed 
in Federal court varied over time.'' The Government 
Accountability Office even confirms that these settlements 
almost never impact the ultimate outcome of how an agency acts. 
In a December 2014 report, GAO stated, ``EPA issued 32 major 
rules from May 2008 through June of 2013. According to EPA 
officials, the agency issued nine of these rules following 
settlements in deadline suits.''
    Mr. Pidot--``T'' is silent, right? Very French. Were you 
aware that GAO concluded that settlements almost never impact 
the final rule in agency issues?
    Mr. Pidot. I was aware, Madam Ranking Member, and it does 
comport with my experience while working for the Federal 
government.
    Ms. Plaskett. And were you aware that the GAO concluded 
that the effect of these settlements is to require an agency to 
make a decision, yes or no, up or down?
    Mr. Pidot. Yes, that was my experience as well, and I was 
aware that GAO had made that conclusion.
    Ms. Plaskett. You know, and one of the things we have not 
discussed in the sue and settle, the supposed phenomenon, and 
the issue of these deadlines and EPA not meeting it, is it true 
that EPA is unable to complete these reviews on time, and that 
they are consistently underfunded and under resourced? I do not 
know if any of you have a question with regard to that or a 
response.
    Mr. Pidot. Well, if the question for me, I mean, I think, 
Madam Ranking Member, you are correct that one of the 
challenges facing EPA and the Fish and Wildlife Service is 
consistent underfunding, such that the enormous number of 
obligations that have been imposed on the agencies by Congress 
often are not met. But that to me has nothing to do with 
lawsuits or settlements. It is about congressional objectives 
established in statutes, and in agencies that have not been 
given enough capacity to meet those objectives.
    Ms. Plaskett. Thank you very much. Mr. Chairman, thank you 
for your indulgence.
    Mr. Farenthold. No problem. Mr. Palmer, you are now 
recognized for 5 minutes.
    Mr. Palmer. Thank you, Mr. Chairman. Mr. Holsinger, 
listening to the testimony and listening to the questions and 
responses, I want to get this back what I think is the real 
problem. I understand there is a legitimate role for consent 
decrees and private suits, you know, outside the public realm, 
and I understand there is at times a legitimate role, forum 
involving government. But I think we are currently in a 
situation where we are outside what would be acceptable.
    So, my question is do you believe that consent decrees that 
impose rules or do lawmaking and appropriate taxpayer funds 
outside of the elected government--Congress, State 
legislatures, county commissions, city councils--bless you.
    Ms. Plaskett. Thank you.
    Mr. Palmer. We will strike that from the record.
    Ms. Plaskett. Do not strike that. I need that blessing.
    Mr. Palmer. Okay. Reclaiming my time. Let me restate this, 
that where lawmaking and appropriating is taking place outside 
of elected government, whether that is Congress, State 
legislatures, county commissions, city councils, that it could 
deny people their right to representative government.
    Mr. Holsinger. Yes. Thank you, Mr. Chairman. I agree 
wholeheartedly, and, in fact, a couple of examples come to 
mind. We have been in the natural resources field in the West 
for a little over a decade now, and in that time we have been 
involved in about a dozen Federal court cases, give or take. 
Several of those were cases brought by environmental groups in 
which we intervened to try to have a seat at the table in 
litigation.
    And in many of those instances, the Administration, in 
settlement negotiations with the plaintiff only, cut a deal to 
do something as a result of the litigation, which even we as 
litigants in the case had no knowledge of, no opportunity to 
participate in, let alone the public. And back to the example 
of the 2011 settlement with U.S. Fish and Wildlife Service. 
That completely changed the direction of the Agency, their 
priorities, and what they spent a huge amount of their time and 
resources on.
    So, those are great examples of instances where sue and 
settle led to real regulatory impacts that the rest of had no 
opportunity to participate in.
    Mr. Palmer. So, the bottom line is, and I have seen this 
played out numerous times, is that you have got government 
agencies, whether at the Federal, State, or local level, that 
are being run by attorneys and judges rather than mayors, and 
governors, and elected representatives. And, you know, I have a 
high regard for the folks that work at the Department of 
Justice, but with all due respect, Mr. Pidot, they do not have 
legislative appropriated power. That is reserved to the elected 
representatives of the people.
    That is the big issue here. It is really not about 
regulations and environmental law. It is about who makes the 
law. It is about who enforces the law, who appropriates the 
money. The Department of Justice's responsibility is to enforce 
the law. It is not to make law. It is not to enter into a 
private agreement with outside groups outside the legislative 
process.
    And I think what we are really focused on here is how do we 
restore representative government to the people at every level. 
That is a huge problem because, as I say, you have got these 
lawyers and judges, and some of these decrees have gone on for 
decades. And most of the people, they have gone on so long that 
the voters do not even know they exist.
    So, I would like to ask you, Mr. Pidot, would you support 
date certain sunset dates for consent decrees?
    Mr. Pidot. Would you repeat the question? I am sorry, 
Chairman Palmer.
    Mr. Palmer. Do you support date certain sunset dates for 
consent decrees? That is a yes or no. Okay.
    Mr. Pidot. Yes, in some circumstances. I mean, I think it 
really depends on ----
    Mr. Palmer. Well, why would you not in any circumstance? If 
there is a specific remedy to achieve the objectives of the 
litigation, why could we not have a date certain? I mean, why 
would we, for instance, in a State have a governor get elected 
to office that inherits a consent decree with on opportunity 
whatsoever to get a remedy to that so they get out from under 
that?
    Mr. Pidot. Well, Mr. Chairman, can I give you an example of 
where I would uncomfortable with a date certain? I think maybe 
in contrast it will illuminate my thoughts.
    Mr. Palmer. May I extend my time, Mr. Chairman?
    Mr. Farenthold. Without objection.
    Mr. Palmer. Go ahead.
    Mr. Farenthold. I will give you another minute.
    Mr. Pidot. So, for example, there was a consent decree 
entered against Reserve Mining Company in Minnesota dealing 
with a discharge of asbestos into the waters of Lake Michigan, 
I believe. It was not a date certain consent decree because 
what was agreed to in the consent decree is that the company 
going into the future would never discharge asbestos in this 
particular way again. And so, in a circumstance like that, how 
do ----
    Mr. Palmer. But that does not mitigate against having a 
date certain for this because the issue here is whether or they 
are not they are in compliance. If they are not in compliance, 
they are still outside the law, and our agencies have the 
ability to enforce that law. Let me ask you this. Do you 
support defining compliance language so specifically that it is 
clear that a decree requirement has been fulfilled, because 
that would apply to your example.
    Mr. Pidot. I have not seen compliance language that is so 
specific in any settlement with the United States ----
    Mr. Palmer. That is the problem. You do not define it, and 
it goes on and on and on, and the taxpayers are on the hook for 
it and do not even know it. I thank you for your indulgence, 
Mr. Chairman.
    Mr. Farenthold. Thank you. We will now recognize Ms. 
Demings for her 5 minutes of questioning.
    Ms. Demings. Thank you so much, Mr. Chairman. Mr. 
Holsinger, in your testimony here today, I believe that you 
said that many of the advocacy groups that bring suits against 
the Federal government also collect hundreds of thousands of 
dollars in grants. Do you believe that groups who bring suits 
because they feel the Federal government has violated the law 
in some way should not be entitled to receive Federal grants?
    Mr. Holsinger. Not necessarily, Ranking Member. But what I 
do believe is we have certain groups that are absolutely ----
    Ms. Demings. I just want to understand your reason for 
making that statement today in this hearing.
    Mr. Holsinger. Right. So, these two particular groups that 
I mentioned, Center for Biological Diversity and WildEarth 
Guardians, are the most litigious environmental groups that I 
have ever seen in any context whatsoever with 1,500 lawsuits 
over the past few decades. I have a hard time grappling with 
the notion that they should be receiving government grants 
while they are in an endless cycle of litigation against the 
Federal government.
    Ms. Demings. You also said that 41 percent of all attorney 
fees are collected, about 41 percent, in the cases. As a 
practicing attorney, have you ever claimed or recovered 
attorney fees under a Federal statute that provides for a 
market-based recovery of reasonable attorney fees?
    Mr. Holsinger. Ranking Member, the statistic was that 41 
percent of all the attorney fees collected under the Equal 
Access to Justice Act were to select, I think, three 
environmental groups. So, again, these are folks that are suing 
over and over again.
    Ms. Demings. As a practicing attorney, have you ever 
claimed or recovered attorney fees under a Federal statute that 
provides for market-based recovery of reasonable attorney fees?
    Mr. Holsinger. Yes, we have. We filed suit under the 
Freedom of Information Act when agencies failed to divulge 
information that they were already required to make public. And 
we did have settlements agreements in regards to two of those 
cases.
    Ms. Demings. Are your attorney rates above or under the 
attorney cap or fee cap you are advocating for today?
    Mr. Holsinger. My rates are far below what I have seen 
environmental groups collect, but they are above the fee cap, 
and we did not use the Equal Access to Justice Act.
    Ms. Demings. Please give your answer again.
    Mr. Holsinger. Yes, our rates are far below what I have 
seen environmental groups collect under the Equal Access for 
Justice Act, and in our particular circumstance, we negotiated 
agreements over fees. I cannot talk about the terms pursuant to 
the court orders, but I can tell you that they were for a 
fraction of the time and expense that we spent on the cases.
    Ms. Demings. Mr. Pidot, is it not a fact that most 
litigation today is brought by corporations and not 
environmental groups?
    Mr. Pidot. The evidence that I am aware of supports that, 
Ranking Member.
    Ms. Demings. Mr. Holsinger, when private companies sue the 
EPA, will you maintain that the EPA should not settle these 
cases?
    Mr. Holsinger. No, not necessarily. What I have an issue 
with is groups that are suing thousands of times over 
meaningless deadlines.
    Ms. Demings. Mr. Pidot, litigants often settle their 
disputes out of court rather than engage in litigation. Is that 
correct?
    Mr. Pidot. Yes, ma'am.
    Ms. Demings. They do this to save time and money in 
addition to avoiding, I believe, avoiding the risk of adverse 
rulings. Would you say that is probably correct as well?
    Mr. Pidot. Yes.
    Ms. Demings. For example, in the context of the ESA, 
settlements have allowed the Fish and Wildlife Service to focus 
on species recovery work as opposed to spending time in court.
    Mr. Pidot. I think that is exactly right and exactly the 
purpose of the settlements that have been discussed.
    Ms. Demings. Do you think that this is a good practice for 
the Federal government to save taxpayers money by settling 
cases that would otherwise result in additional litigation 
costs?
    Mr. Pidot. Absolutely, and furthermore, the Endangered 
Species Act is concerned with every species. And the fact that 
there are thousands of species that need protection under the 
Endangered Species Act is not an indicator that is what is 
broken is the fact that people are filing suit. What is broken 
is that we have not been able to adequately conserve these 
species such that they do not need listing.
    So, I see the problem, I think, backwards from my 
colleague, and see this as really a failure on the part of the 
Federal government. And these are interest groups trying to 
hold the agency accountable to what Congress directed it to do.
    Ms. Demings. Thank you so much, Mr. Chairman. I yield back.
    Mr. Farenthold. Thank you, and I will recognize the 
gentleman from Wisconsin from 5 minutes.
    Mr. Grothman. Yeah, could either Mr. Kovacs or Mr. 
Holsinger give me examples of some of these suits, how they 
affected a private property owner, like Ms. Helmick? Give me a 
couple of examples.
    Mr. Holsinger. Yes, as an example, the 2011 settlement 
agreement with the Fish and Wildlife Service that radically 
altered the Agency's priorities, its budgets, its listing 
program, led to decisions and very short timelines to list or 
not list species, one of which was the Gunnison sage grouse 
that was listed in Colorado on this incredibly abbreviated 
timeline dictated by the settlement agreement itself, which I 
think is absolutely contrary to the statutory mandate that 
these decisions be made by the best available science.
    As a result, private landowners in the range of Gunnison 
sage grouse now have cuts in how they can graze, when they can 
graze, where they can graze. There are restrictions on where 
people can travel, and how they can travel, and at what time of 
year. So, there are drastic impacts on the ground as a direct 
result from this excessive litigation.
    Mr. Grothman. I would think our forefathers would wonder if 
the result of that lawsuit, which unquestionably reduces the 
value of somebody's property, would be considered a taking. Do 
you want to comment on that? Should it be?
    Mr. Holsinger. Well, there is no question that it increases 
the burdens both from a regulatory standpoint and an economic 
standpoint. It is making harder to make a living. And let us 
face it, one of the overriding concerns that we have these days 
is that the regulatory red tape is just strangling our country, 
and really impeding us from not only good things economically, 
but doing good conservation work. We even get tied up in 
litigation and process and red tape when we are trying to do 
good things on the ground, and that is just ----
    Mr. Grothman. Do you think maybe whenever, and I am not 
sure which organization there Mr. Pidot worked for, or did you 
just work for Justice I guess?
    Mr. Pidot. And the Department of Interior.
    Mr. Grothman. Oh, and Department of Interior. Do you think 
if there was some requirement, let us say, on this endangered 
species stuff, and I dealt with some of it in Wisconsin with a 
complete lack of common sense with our local Department of 
Natural Resources. If the Federal government had to pay out, if 
it affected what you could on your property, do you think that 
would maybe cause a little bit of cost benefit analysis to go 
on? I am asking Mr. Holsinger. I will come to you again, Mr. 
Pidot, in a second, or Mr. Kovacs for that matter.
    Mr. Holsinger. You know, it is a complicated area of the 
law, but I do not think there is any question that the extent 
of the regulations, many of which result from these sue and 
settle agreements, are harming people and that they should have 
some recourse.
    Mr. Grothman. Do the private property owners become a party 
to those sort of things?
    Mr. Holsinger. It is very difficult for them to do so. 
First of all, they are busy. They are trying to earn a living. 
They are grazing cattle. They are irrigating. They are ----
    Mr. Grothman. Under normal circumstances on one of these 
sue and settle agreements, do the property owners who maybe 
have a huge financial loss because of the actions of Interior 
or whatever, do they get involved legally, or do they just have 
to watch the world go by and their property value dissipate?
    Mr. Holsinger. We have represented property owners in some 
cases just like this. And even when they can come together and 
participate in the litigation, as I mentioned, the plaintiffs 
and the Federal defendants cut a deal, and they have no say in 
it.
    Mr. Grothman. They do not have to sign off. In other words, 
the government can just ----
    Mr. Holsinger. Exactly.
    Mr. Grothman.--sign them down the river, take away their 
property, and there is nothing they can do. Okay. Do you want 
to comment on that, too, Mr. Kovacs?
    Mr. Kovacs. Sure. I think one of the issues here is, no, 
they do not participate. Even when they have been granted 
intervention, the court will not recognize them if there is a 
consent decree. So, of the several hundred cases that we looked 
at, there were only two in which they were allowed to 
participate. In both instances, the court decided not to allow 
them into the discussions and, therefore, just signed the 
consent decree.
    One other point I have got if I can take 20 seconds?
    Mr. Grothman. Sure, take 20 seconds.
    Mr. Kovacs. If you are looking for a large impact on 
landowners, look at the Chesapeake Bay, which takes several 
States into account. There was a question as to whether or not 
the EPA even had authority to regulate what goes into the water 
along certain banks. In other words, the TMDLs, what is the 
quality of the water. In that particular instance, there was 
not even legal authority, but there was a lawsuit and there was 
a sue and settle. And now you have all of the States that 
border the Bay are now regulated.
    Mr. Grothman. Okay. Mr. Farenthold, I have one more 
question.
    Mr. Farenthold. Without objection, we will extend your time 
another 90 seconds.
    Mr. Grothman. Okay, thanks. First of all, I want you to all 
know you are doing a great job, and as soon as Mr. Palmer, Mr. 
Farenthold, and I get back on the floor in about an hour, we 
are really going to rub it in on these congressmen who did not 
show up because they missed a great show.
    I guess that is it. I will not ask the other questions. 
Well, I will ask for Mr. Pidot because it is something we 
wonder about. We had another hearing, another subcommittee 
before, and we feel one of the problems with the government is 
they only see things from the perspective of the government, 
not the huge burdens that the government can place on the 
private property owner.
    I was noticing right now you are a professor, but for a 
while you did work for Interior, and you worked for Justice I 
think. Did you ever, prior to being hired on at Interior, 
Justice, work for somebody or represent somebody where you had 
to be on the other end of government, in other words, the 
private property owner, that sort of thing, or when you got 
hired at Justice or Interior, did you solely come from a 
background of kind of government background?
    Mr. Pidot. Thank you for the question. During law school, I 
worked at a legal aid clinic where I was working with and 
pursuing wage and hour claims on behalf of indigent 
individuals. Beyond that, my work has primarily been either pro 
bono work. I am currently representing some tribes in some pro 
bono matters, environmental groups, or the government.
    Mr. Grothman. Okay. Ms. Helmick, I am sorry for what you 
have to put up with from the government.
    Mr. Farenthold. Thank you very much. The chair notes the 
presence today of Congressman Jason Smith of Missouri. We 
appreciate your interest in this topic, and welcome your 
participation, and ask unanimous consent that Congressman Smith 
be permitted to fully participate in today's hearing.
    Without objection, so ordered.
    And your timing is perfect because you are up for 5 minutes 
of questioning, sir.
    Mr. Smith. Thank you, Mr. Chairman, for allowing me to 
enjoy and participate in your wonderful committee hearing 
today. This is an important issue to me, so I am grateful to be 
here to ask a few questions.
    I have numerous pieces of different legislation discussing 
the topics of today. I also have legislation addressing this 
issue called the Stop Taxpayer Funded Settlement Act. My bill 
is very simple. It removes a key incentive for environmental 
groups to sue Federal agencies by preventing those agencies 
from paying the environmental groups' attorney's fees. This 
would apply to any settlement under the Clean Air and Clean 
Water Act and the Endangered Species Act. These are taxpayer 
dollars paying for outcomes in which the public have little to 
no opportunity to participate.
    On that topic, I have a couple of questions. Mr. Kovacs, 
are these groups basically receiving their attorney's fees from 
the taxpayers?
    Mr. Kovacs. Yes.
    Mr. Smith. Also, is it easy to track the taxpayer expense 
for sue and settle legislation?
    Mr. Kovacs. It is getting easier, but 6 years ago when we 
started, it was virtually impossible. We were told both by 
Justice as well as EPA that they did not keep unified records.
    Mr. Smith. Is it common for a lot of these environmental 
groups to receive thousands, sometimes hundreds of thousands of 
dollars, in attorney's fees?
    Mr. Kovacs. Yes.
    Mr. Smith. Mr. Holsinger, is it not true that some of the 
groups that regularly sue EPA and other agencies and receive 
large taxpayer attorney's fees actually have large financial 
resources?
    Mr. Holsinger. Yes. In fact, I recall one case were 
involved in we were shocked to compare an oil and gas trade 
association's annual budget to that of WildEarth Guardians, and 
WildEarth Guardians absolutely dwarfed its budget.
    Mr. Smith. Do you believe that the provisions allowing 
recovery of attorney's fees for sue and settle cases are being 
abused by environmental groups?
    Mr. Holsinger. Absolutely by some.
    Mr. Smith. Mr. Pidot?
    Mr. Pidot. It is Pidot.
    Mr. Smith. Pidot. Do you believe it is right for 
environmental groups with large budgets and millions in assets 
to collect six-figure attorney's fees off of sue and settle, 
especially when the lawsuits are non-adversarial?
    Mr. Pidot. My apologies. I am sure I can accept all the 
premises of the question, Congressman. I think that the 
proceedings are adversarial, and I do think it is right for 
settlements where a plaintiff is going to recover anyway for 
those to include attorney's fees because the alternative is for 
them to continue litigating and to receive more attorney's 
fees. So, the settlement saves taxpayer dollars. It does not 
consume extra taxpayer dollars to my thinking.
    Mr. Smith. So, let get this right. Any lawsuit where there 
has been a settlement, you would consider that adversarial.
    Mr. Pidot. As I mentioned earlier, I am aware of no 
evidence that there is collusion that goes on between the 
Department of Justice lawyers and the agency lawyers and people 
who have sued them. So ----
    Mr. Smith. Yes or no, is there any settlement case that 
would be in your eyes considered not adversarial?
    Mr. Pidot. In my eyes, no. Every case that is brought is an 
adversarial case.
    Mr. Smith. Okay. That is plain enough. Mr. Kovacs, do you 
believe it would harm the mission of agencies, such as the EPA 
and Fish and Wildlife, if they were to no longer be obligated 
to pay out these attorney's fees?
    Mr. Kovacs. I do not believe it would harm the mission of 
the agency, no.
    Mr. Smith. Nor do I. Thank you, Mr. Chairman. It is a 
pleasure to be in your committee.
    Mr. Farenthold. Thank you. We appreciate your 
participation. I do have a couple more questions. Do you have 
more questions?
    Ms. Plaskett. Go right ahead.
    Mr. Farenthold. Do you mind if I just ask a couple more? I 
will do one quick round of questions to follow up.
    Mr. Kovacs, I just want to make sure we have laid the 
groundwork here. Who establishes the laws and deadlines being 
enforced through these sue and settlement agreements? It is 
Congress, right?
    Mr. Kovacs. It is Congress.
    Mr. Farenthold. We set up the laws. Now, in your opinion, 
how does the practice of sue and settle bypass the laws that 
promote transparency, public input, and other safeguards such 
as notice and comment under the Administrative Procedures Act 
or review at OIRA?
    Mr. Kovacs. See, I think that is the crux of the issue. 
What happens when you have an agency like EPA where they miss 
all of the deadlines, you have the ability to go in and pick 
and choose what issues are going to be the priority for the 
Agency. And then when you pick that particular issue, let us 
say the utility mac has to be on the list, then all of a sudden 
the Agency, because it is under a court order, has to put that 
to the top of the pile. And once it is at the top of the pile, 
it is gone.
    And to give you an idea of how big of a disparity, there 
are about 8,000 regulations from EPA over the last 9 years, and 
you have roughly about 150 ----
    Mr. Farenthold. Correct.
    Mr. Kovacs.--sue and settle cases. It gives you an idea of 
where their priority is and where their money goes.
    Mr. Farenthold. All right. And I am going to go out on a 
limb and ask this question to Mr. Pidot. Do you agree that 
Congress anticipates that agencies will normally comply with 
the laws that we enact, like the Administrative Procedures Act, 
the Regulatory Flexibility Act, Paperwork Reduction Act, and 
all these other laws, as well as meet the deadlines that 
Congress sets? Do you believe that they are trying to do that?
    Mr. Pidot. Yes, I believe that is what Congress expects, 
and I also believe that is what the agencies attempt to do.
    Mr. Farenthold. All right. So, what is the necessity of 
these suits then if you believe that the agencies are doing the 
best they can? How do they improve the situation and not make 
it worse by taking away time and resources that could be done 
going through the prescribed methodology Congress put in place?
    Mr. Pidot. Two parts to my answer, Chairman. First, the 
fact that I ordinarily believe the agencies do the right thing 
does not mean agencies always get it right. Agencies are 
sometimes wrong about the law. They can be wrong about the 
facts. And ----
    Mr. Farenthold. But most of these suits are about 
deadlines.
    Mr. Pidot. And they also can fail to meet their obligations 
that Congress imposed. Now, the reason I said there are two 
parts to my answer, if you will bear with me, is that the 
decision whether or not to initiate a rulemaking is not itself 
a decision subject to the EPA. Under these settlements, all 
that happens is the agency now commences its public process.
    So, all of the EPA provisions that apply to the Agency's 
decision-making process are met. OIRA review is met. All of 
those boxes are checked. The Agency has followed their legal 
obligation. This is a prior question of do we initiate a 
rulemaking or not.
    And with respect to that question, there are no EPA 
constraints. OIRA is not involved. And indeed, the only person 
who is involved is Congress, and Congress has told the Agency 
do it and do it now. So, when someone holds them to account for 
that legislative command, to my mind that advances the rule of 
law.
    Mr. Farenthold. Mr. Holsinger, do you agree that the sue 
and settle practice helps and is a positive, or do you think it 
is a negative and interferes with the intent of Congress?
    Mr. Holsinger. I think ----
    Mr. Farenthold. Microphone, please.
    Mr. Holsinger. Mr. Chairman, there is great abuse of the 
process that has mired the agencies in needless litigation. 
There is no question about that.
    Mr. Farenthold. All right. And I want to go back to a 
couple of questions for Mr. Kovacs as we round this out. Are 
environmental groups using sue and settle tactics to overturn 
State policy at the Federal level as well?
    Mr. Kovacs. Well, they certainly have in all of the 
regional haze SIPs and FIPs that they have put in.
    Mr. Farenthold. And what impact do these sue and settle 
agreements ----
    Mr. Kovacs. Mr. Chairman, could I just add one point?
    Mr. Farenthold. Sure.
    Mr. Kovacs. I do not want to correct the professor, but 
when you have a sue and settle agreement, OIRA is not involved 
at that point in time because what happens is the deadlines get 
crunched. And when the deadlines are crunched, it is a court 
order that they have to meet, not an OIRA review. And that is a 
major event because then there is no real review over what the 
agency procedure is going to be and what the rule might be. It 
is a timing problem.
    Mr. Farenthold. All right. And I just want to get back to 
the States for a second. What impact do these sue and 
settlement agreements, Mr. Kovacs, have against State policies 
in terms of labor and budget? What are the burdens on the 
State?
    Mr. Kovacs. Sure. Once the sue and settle is imposed upon 
the State and they have to do a FIP, they literally have to go 
back and change all of their administrative code. That is the 
first thing. They then have to shuffle resources. So, when you 
have two or three of these hitting a State at a time, whatever 
the State is doing at that time, it has to now move those 
resources to apply to what EPA has just settled.
    Mr. Farenthold. All right. Thank you very much. I 
appreciate you folks' input, and hopefully it will go to 
working towards making this situation better and making more 
folks aware of what is going on.
    Ms. Plaskett, I appreciate your and Ms. Demings' 
participation in this hearing, as well as the members on my 
side.
    So, there being no further questioning going on, I am going 
to thank our witnesses for their testimony and their 
appearances.
    And without objection, the subcommittee is adjourned.
    [Whereupon, at 3:28 p.m., the subcommittees were 
adjourned.]


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