[Congressional Record Volume 158, Number 104 (Thursday, July 12, 2012)]
[Senate]
[Pages S4958-S4960]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Kyl, Mr. Cornyn, Mr. Lee, Mr. 
        Paul, and Mr. Coburn):
  S. 3382. A bill to impose certain limitations on consent decrees and 
settlement agreements by agencies that require the agencies to take 
regulatory action in accordance with the terms thereof, and for other 
purposes; to the Committee on the Judiciary.
  Mr. GRASSLEY. Mr. President, I rise today to introduce important 
regulatory reform legislation.
  Recently, when describing the state of our economy, President Obama 
said that the private sector was ``doing fine.''
  I disagree. I think that the American people disagree with the 
President's statement.
  There are 12.7 million Americans unemployed and another 8.2 million 
underemployed. 5.4 million Americans have been unemployed for 27 weeks 
or more.
  That's not ``doing fine.''
  The Federal Government needs to do everything possible to create an 
environment that will allow private sector employers to create jobs. To 
accomplish that, common sense would tell us that the government needs 
to remove barriers to job creation rather than erect new ones. The 
Federal Government needs to listen to employers so it can learn from 
them exactly what it can do to help.
  Unfortunately, the Obama administration hasn't listened. In fact, 
unbelievably it is actually doing the opposite of what employers are 
saying they need.
  Employers are saying that they need relief from job killing 
regulations.
  For example, according to a Gallup survey, small-business owners in 
the United States are most likely to say that complying with government 
regulations is the biggest problem facing them today.
  Indeed, the burden of regulations is overwhelming. Recently, the 
Small Business Administration estimated that the Federal regulatory 
burden has reached $1.75 trillion per year.
  So what has the Obama administration's response been?
  It is planning to increase the number of regulations.
  The Obama administration's regulatory agenda has thousands of 
regulations in its production line, more than a hundred of which will 
have a major impact on the economy. Those are on top of more than one 
thousand regulations already completed.
  I am sorry to say that the news gets even worse. On top of the 
thousands of new regulations it to impose, it appears that the 
administration is trying to get around the procedures governing how 
regulations are enacted.
  In recent years, consent decrees and settlement agreements have been 
used to circumvent the laws and procedures that govern how regulations 
are enacted and to speed up the process in ways that limit the public's 
ability to fully participate and to exercise the rights guaranteed by 
our laws.
  These consent decrees or settlement agreements may come as a surprise 
to the regulated industry and the public. They usually establish 
truncated deadlines for the agency to promulgate a regulation.
  The lack of advance notice and the expedited schedule for the 
proposal and promulgation of regulations allows an agency to avoid the 
input that comes with meaningful public participation. It may also 
allow agencies to short-circuit the analytical requirements of 
regulatory process statutes, such as the Administrative Procedure Act. 
Expedited deadlines further allow agencies to undercut the review of 
proposed regulations by the Office of Management and Budget's Office of 
Information and Regulatory Affairs OIRA.
  The practice of using consent decrees and settlement agreements to 
enact regulations has become known as ``sue-and-settle'' litigation.
  The dangers of sue-and-settle litigation and of government by consent 
decree are not a new problem.
  Nearly 30 years ago, Judge Malcom Wilkey of the D.C. Circuit warned 
about the dangers of collusive consent decrees. In his dissenting 
opinion in Citizens for a Better Environment v. Gorsuch, Judge Wilkey 
explained:

       Government by consent decree enshrines at its very center 
     those special interest groups who are party to the decree. 
     They stand in a strong tactical position to oppose changing 
     the decree, and so likely will enjoy material influence on 
     proposed changes in agency policy.
       As a policy device, then, government by consent decree 
     serves no necessary end. It opens the door to unforeseeable 
     mischief; it degrades the institutions of representative 
     democracy and augments the power of special interest groups. 
     It does all of this in a society that hardly needs new 
     devices that emasculate representative democracy and 
     strengthen the power of special interests.

  Because the Obama administration is trying to dramatically increase 
the number of regulations, we must make sure that the laws and 
procedures governing rulemaking are followed and followed in a 
meaningful way.
  The debate about sue-and-settle litigation is important because it 
raises questions about fairness, transparency and public participation 
in administrative rulemaking. It also raises the issue of whether 
meaningful judicial review is taking place.
  Under the Administrative Procedure Act and other laws, the public and 
affected persons, in particular, have a right to adequate notice and an 
opportunity to comment on a proposed regulation. They also have a right 
to have their comments fully considered.
  However, when sue-and-settle litigation is used real, public 
participation is effectively eliminated.
  Generally speaking, the agreement on how to regulate is reached 
without the full input of the people and businesses that are affected. 
Discussions are held and agreements may be reached between government 
officials and special interest groups outside the public process. This 
is particularly true where career employees and political appointees at 
agencies share the agenda of the special interest group suing the 
agency and use the lawsuit as an opportunity to implement their common 
goals.
  Also, the negotiated deadlines for creating the new regulation can be 
so accelerated that the public's comments might receive little or no 
true consideration.
  Keep in mind that these regulations often involve complex scientific 
and

[[Page S4959]]

economic issues. Those issues cannot generally be fully and properly 
considered under a truncated time frame.
  Another fundamental aspect of rulemaking is the opportunity to 
challenge a decision by participating as an intervenor. However, with 
sue-and-settle litigation, special interest groups and the government 
may reach an agreement before a lawsuit is even filed. This eliminates 
the opportunity for members of the public to intervene in the case to 
protect their interests.
  Even where a settlement occurs after affected parties may have been 
granted intervention, these parties have little or no chance to 
participate in settlement discussions because they are not invited by 
the government and the special interest groups.
  Moreover, when an agency creates a regulation through sue-and-settle 
litigation, it reorganizes its work by promising to take specific 
actions at specific times, before or instead of other projects that may 
be of greater benefit to the public.
  Also, sue-and-settle litigation helps officials and administrations 
to avoid accountability. Instead of having to answer to the public for 
controversial regulations and policy decisions, officials are able to 
point to a court order and maintain that they were required or forced 
to promulgate a controversial regulation.
  The case of American Nurses Association v. Jackson is an example of 
the sue-and-settle phenomenon.
  In that case, a group of environmental organizations sued the 
Environmental Protection Agency, EPA, in December 2008, challenging the 
agency's failure to create emissions standards for pollutants from 
power plants under the Clean Air Act. Subsequently, the Utility Air 
Regulatory Group, UARG, representing the utility industry, intervened 
as a defendant in the case.
  On October 22, 2009, the plaintiffs and the EPA filed a proposed 
consent decree. It was the result of a deal struck exclusively between 
them. They did not include the UARG in their discussions. Although the 
judge expressed concerns about the exclusion of the UARG from the 
settlement discussions, she was satisfied when the plaintiffs and the 
EPA informed her that this practice was the ``norm.''
  Under the consent decree, the EPA conceded that it had failed to 
perform a mandatory duty under the Clean Air Act by failing to issue a 
``maximum achievable control technology'', MACT, regulation for power 
plants. The EPA pledged that it would issue a proposed regulation by 
March 16, 2011 and a final regulation by November 16, 2011.
  The UARG objected to the consent decree. It argued that the proposed 
decree improperly limited the government's discretion because it 
required the EPA to find that standards under 112(d) of the Clean Air 
Act were required. Consequently, the decree prevented the agency from 
either declining to issue standards or adopting other standards instead 
of the more burdensome MACT standard.
  Although acknowledging the significance of the UARG's arguments, the 
judge nevertheless rejected them in its short opinion approving the 
consent decree.
  As to the language limiting the EPA's discretion in the rulemaking, 
the judge stated that the EPA believed itself to be obligated to 
promulgate 112(d) standards and, ``and by entering this consent decree 
the Court [wa]s only accepting the parties' agreement to settle, not 
adjudicating whether EPA's legal position [wa]s correct.'' The judge 
simply believed that ``[i]f necessary, [the] UARG c[ould] challenge 
[the] EPA's final rule and its legal position.''
  With regard to the UARG's argument that the time frame within which 
the EPA proposed to carry out the rulemaking was insufficient, the 
judge noted that she ``appreciate[d]'' the concern that the schedule 
was too short for the critical and expensive regulatory decisions that 
would be made. Nevertheless, she held that it was enough that the 
proposed consent decree allowed for a change of the schedule if needed.
  The judge's reasoning on this point was interesting given that she 
acknowledged in a footnote that under the consent decree, the UARG 
could not petition for an extension of the deadlines.
  In the end, the judge acknowledged that the concerns raised by the 
UARG were not insubstantial. However, she did not believe that she 
could gauge the adequacy, or lack thereof, of the schedule. 
Consequently, in a somewhat cavalier manner the judge concluded that: 
``[s]hould haste make waste, the resulting regulations will be subject 
to successful challenge''. . . . If EPA needs more time to get it 
right, it can seek more time.''
  Unfortunately, it appears that the EPA's proposed regulation 
contained significant errors. Indeed, the EPA did not analyze the 
impact of its regulation on electric reliability or provide sufficient 
time for industry to do so.
  In November of 2011, the UARG brought its concerns to the judge, 
asking for relief from the consent decree.
  In particular, it argued that more time was needed to respond to the 
voluminous comments submitted during the rulemaking process, to fix the 
serious flaws, and to then more carefully consider the promulgation of 
a rule with such serious and far-reaching consequences. For example, 
the schedule under the consent decree only allowed 104 days for the EPA 
to consider and respond to 20,000 unique, public comments received 
before it published the final rule. In total, there were 960,000 
comments submitted.
  The UARG's motion was supported by twenty-four states and Governor 
Terry Branstad on behalf of the people of Iowa. As part of their amicus 
brief, they pointed out that the American Coalition for Clean Coal 
Electricity, ACCCE, had estimated that the rule promulgated under the 
consent decree would result in the loss of 1.44 million jobs in the 
United States between 2013 and 2020. Because of the rule, the ACCCE 
also predicts national electricity price increases in 2016 to average 
11.5 percent, with an increase of 23.5 percent in some regions.
  The EPA issued a final rule on December 21, 2011, and has argued that 
the UARG's motion is moot.
  As it stands, the rule is among the most costly of rules ever 
promulgated by the EPA with the agency estimating that the annualized 
cost at $9.6 billion in 2015. Industry estimates are even higher. 
Petitions for reconsideration of the rule are pending and more lawsuits 
are likely.
  The EPA could have done it right the first time by crafting a 
sensible, workable rule that both protects the environment and can be 
implemented without causing unnecessary job losses or higher 
electricity prices for hard-working families. Instead, we have flawed, 
controversial regulation that may have to be rewritten.
  Although we don't know how this will all turn out, we have to 
remember that the process by which this rule was created was the 
product of a consent decree.
  In sum, when special interest groups and agencies engage in sue-and-
settle litigation, the end product is a regulation that implements the 
priorities of the special interest groups. Moreover, these regulations 
are created under schedules that render notice-and-comment rights a 
mere formality, eliminating the opportunities for regulated entities, 
the public and the OIRA to have any input on the content of final 
regulations.
  That is why I'm introducing the Sunshine for Regulatory Decrees and 
Settlements Act of 2012. Senators Kyl, Cornyn, Coburn, Lee and Paul are 
cosponsors of the bill.
  Representative Benjamin Quayle of Arizona has introduced a companion 
bill in the House.
  The Sunshine bill endeavors to solve the problems I have outlined. It 
does this by enacting reasonable pro-transparency measures. I'll just 
outline a few of those measures.
  First, the Sunshine bill provides for greater transparency, requiring 
agencies publicly to post and report to Congress information on sue-
and-settle complaints, decrees and settlements.
  Second, the bill prohibits same-day filing of complaints and pre-
negotiated consent decrees and settlement agreements in cases seeking 
to compel agency action. Instead, it requires that consent decrees and 
settlement agreements be filed only after interested parties have been 
able to intervene in the litigation and join settlement negotiations 
and only after any proposed decree or settlement has been published for 
notice and comment.

[[Page S4960]]

  Third, the Sunshine bill requires courts considering whether to 
approve proposed consent decrees and settlement agreements to account 
for public comments and compliance with regulatory process statutes and 
executive orders. This bill would facilitate public participation by 
allowing comment on any issue related to the matters alleged in the 
complaint or addressed in the proposed agreement. Government agencies 
would be required to respond to comments, and the court would assess 
whether the proposed schedule allows sufficient time for real and 
meaningful, public comment on the regulation.
  Fourth, the bill requires the Attorney General or, where appropriate, 
the defendant agency's head, to certify to the court that he or she has 
approved any proposed consent decree or settlement agreement that 
includes terms that: convert into a duty a discretionary authority of 
an agency to propose, promulgate, revise, or amend regulations, commit 
an agency to expend funds that have not been appropriated and budgeted, 
commit an agency to seek a particular appropriation or budget 
authorization, divest an agency of discretion committed to it by 
statute or the Constitution, or otherwise afford any relief that the 
court could not enter under its own authority.
  Finally, the Sunshine bill makes it easier for succeeding 
administrations to successfully move the courts for modifications of a 
prior administration's consent decrees by providing for de novo review 
of motions to modify if the circumstances have changed.
  Sue-and-settle litigation damages the transparency, public 
participation and judicial review protections Congress has guaranteed 
for all of our citizens in the rulemaking process.
  Regulations are laws. The procedure and process used to create them 
are important. They are part of our system. The American system of 
lawmaking and judicial review is a model for the world. Our system 
should not be distorted or manipulated.
  Regulations must be made in the open, through the procedures and 
processes established under our laws.
  The Sunshine for Regulatory Decrees and Settlements Act will help to 
ensure that established and well-grounded protections remain in place, 
while maintaining the government's ability to enter into consent 
decrees and settlement agreements, when appropriate.
  I urge all of my colleagues to work with me and to support this 
legislation.

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