[Congressional Record Volume 161, Number 19 (Wednesday, February 4, 2015)]
[Senate]
[Pages S777-S779]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Blunt, Mr. Cruz, Mr. Hatch, Mr. 
        Paul, Mr. Cornyn, Mr. Rubio, Mr. Inhofe, Mrs. Fischer, Mr. 
        Flake, Mr. Lee, Mrs. Capito, and Mr. Gardner):
  S. 378. 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 an important 
piece of regulatory reform legislation.
  A study released this past fall by the National Association of 
Manufacturers estimates that U.S. Federal Government regulations 
imposed over $2 trillion in compliance costs on American businesses in 
2012. This is an amount equal to 12 percent of our Nation's GDP.
  The study also demonstrated--and this should come as no surprise--
that the cost of complying with all those regulations falls 
disproportionately on small businesses. Small manufacturing firms, in 
particular, grapple with regulatory compliance costs that are more than 
three times those felt by the average company in the United States.
  It is no wonder why many American businesses are shuttering or moving 
their entire operation overseas. And how many folks dreamed of starting 
a small business but ultimately decided against taking the risk because 
of the overwhelming burden and uncertainty of our regulatory state?
  We have to do better.
  Small businesses are fed up with excessive Federal regulation, and 
they are making sure we know about it. A November 2014 survey conducted 
by the National Federation of Independent Business asked small business 
owners across the country to rank the ten most pressing problems they 
face. Overwhelmingly, the top two answers from small business owners 
were taxes and complying with government red tape. I am happy to say 
that this Congress intends to confront these issues head-on.
  The Federal Government needs to do everything possible to promote 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 put up new ones.
  Unfortunately, the Obama administration has proven time and again 
that it would rather push forward with its interest-driven regulatory 
agenda than ease the heavy burden upon our economy and our 
entrepreneurs.
  To make matters worse, this administration is pursuing new 
regulations through litigation tactics that take an end-run around the 
laws enacted by Congress to ensure transparency and accountability in 
the regulatory process. This strategy has come to be known as sue-and-
settle, and regulators have been using it to speed up rulemaking and to 
keep the public, industries, and even the States away from the table 
when regulatory decisions are negotiated behind closed doors.
  Sue-and-settle cases typically follow a similar pattern. First, an 
interest group files a lawsuit against a Federal agency, claiming that 
the agency has failed to take a certain regulatory action by a 
statutory deadline. Through the complaint, the interest group seeks to 
compel the agency to take action by a new, often-rushed deadline. The 
plaintiff-interest group frequently will be one that shares a common 
regulatory and policy agenda with the agency that it sues, such as when 
an environmental group sues the Environmental Protection Agency, EPA.
  Next, the agency and interest group enter into friendly negotiations 
to produce either a settlement agreement or consent decree behind 
closed doors that commits the agency to satisfying the interest group's 
demands. The agreement is then entered by a court, binding executive 
discretion to undertake a regulatory action. And noticeably absent from 
these negotiations are the very parties who will likely be most 
impacted by the new regulation.
  Sue-and-settle tactics by advocacy groups and complicit government 
agencies have severe consequences on transparency, public 
accountability, and ultimately on the quality of the resulting public 
policy.
  Such tactics undermine congressional intent by shutting out affected 
parties, such as industries and even the States that are charged with 
implementing new regulations.
  The Administrative Procedure Act, APA, which has been characterized 
as the citizens' ``regulatory bill of rights,'' was enacted to ensure 
transparency and public accountability in our Federal rulemaking 
process. A central aspect of the APA is the notice-and-comment process, 
which requires agencies to notify the public of proposed regulations 
and to respond to comments submitted by interested parties.
  Rulemaking driven by sue-and-settle tactics, however, frequently 
results in reprioritized agency agendas and truncated deadlines for 
regulatory action. This renders the notice-and-comment requirements of 
the APA a mere formality, depriving regulated entities, the States and 
the public of sufficient time to have any meaningful input on the final 
rules. The resulting regulatory action is driven not by the public 
interest, but by special interest priorities, and often comes as a 
complete surprise to those most affected by it.
  Sue-and-settle litigation also helps agencies avoid accountability. 
Instead of having to answer to the public for controversial regulations 
and policy decisions, agency officials are able to simply point to a 
court order entering the agreement and maintain that they were required 
to take action under its terms.
  Further, the abuse of consent decrees as a method for taking 
regulatory action can have lasting negative impact on the ability of 
future administrations to adapt the Federal regulatory scheme to 
changing circumstances. Not only does this raise serious concerns about 
bad public policy; it also puts into question the constitutional impact 
of one administration's actions binding the hands of its successors.
  Sue-and-settle, and the consequences that come with such tactics, is 
not a new phenomenon. Evidence of sue-and-settle tactics and closed-
door rulemaking can be found in nearly every administration over the 
previous few decades.
  But there has been an alarming increase in sue-and-settle tactics 
under the Obama administration. A study by the U.S. Chamber of Commerce 
shows that just during President Obama's first term, 60 Clean Air Act 
lawsuits against the EPA were resolved through consent decrees or 
settlement agreements, an increase from 28 during President George W. 
Bush's second term.
  Since 2009, sue-and-settle cases against the EPA have imposed at 
least $13 billion in annual regulatory costs.
  In November 2010, environmental advocacy groups filed a complaint 
against the EPA under the Clean Water Act to compel the agency to 
revise wastewater regulations. Interestingly, the same day that the 
complaint was filed, the plaintiff-advocacy groups filed a proposed 
consent decree already signed by the EPA and requiring prompt 
regulatory action. As is characteristic of sue-and-settle cases, 
potentially affected parties were kept out of the lawsuit and 
negotiations. Such a scenario should raise serious concerns over how 
truly adversarial these lawsuits really are.
  In another case, environmental advocacy groups filed suit against the 
EPA to compel the agency to issue new air quality standards for 
pollutants from coal and oil-fired power plants. The plaintiff-advocacy 
groups alleged that the EPA had violated its statutory duty to issue 
new standards.
  An industry group intervened in the case to represent utility 
companies but was ultimately left out of subsequent negotiations 
between the plaintiffs and the EPA, which resulted in a consent decree. 
The industry group challenged the consent decree on numerous grounds, 
including the rulemaking timeframe established under the decree

[[Page S778]]

which was arguably too short to allow the public to participate fully 
in the rulemaking process.
  Nevertheless, the court approved and entered the consent decree, with 
the judge concluding 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.''
  The resulting rule, despite its opaque promulgation, was estimated by 
the EPA to cost $9.6 billion annually by 2015. And according to 
estimates by the American Coalition for Clean Coal Electricity, the 
rule promulgated under the consent decree would contribute to a loss of 
1.44 million jobs in the U.S. between 2013 and 2020.
  The EPA could have done things right the first time by crafting a 
sensible, workable rule that protects the environment without causing 
unnecessary job losses or higher electricity prices for hard-working 
American families. But as a result of backroom, sue-and-settle tactics, 
we were left with a controversial regulation that fails to properly 
take into account the impact on affected parties and that remains the 
subject of litigation to this day.
  The EPA, it seems, has turned a blind eye to the calls for more 
transparency and public accountability in our Federal rulemaking 
process. In February 2014, EPA's General Counsel issued a statement 
declaring:

       The sue and settle rhetoric, strategically mislabeled by 
     its proponents, is an often-repeated but a wholly invented 
     accusation that gets no more true with frequent retelling.

  I think many would take issue with that assessment. In fact, the 
Environmental Council of the States, or ECOS--a national non-profit, 
non-partisan association made up of State and territorial environmental 
agency leaders--adopted a resolution entitled ``The Need for Reform and 
State Participation in EPA's Consent Decrees which Settle Citizen 
Suits,'' stating, among other things:

       [S]tate environmental agencies are not always notified of 
     citizen suits that allege U.S. EPA's failure to perform its 
     nondiscretionary duties, are often not parties to these 
     citizen suits, and are usually not provided with an 
     opportunity to participate in the negotiation of agreements 
     to settle citizen suits[.]

  ECOS further resolved that:

       [G]reater transparency of citizen suit settlement 
     agreements is needed for the public to understand the impact 
     of these agreements on the administration of environmental 
     programs[.]

  I agree.
  Clearly, the EPA has no intention of acknowledging the use or 
consequences of sue-and-settle tactics. And unfortunately, I think this 
sentiment is shared by other executive branch agencies today.
  That is why today I am introducing the Sunshine for Regulatory 
Decrees and Settlements Act of 2015. Senators Blunt, Hatch, Cruz, Paul, 
Cornyn, Rubio, Inhofe, Fischer, Flake, Lee, Capito and Gardner are 
cosponsors of this important bill, and I thank them for their support.
  In the House, Representative Doug Collins of Georgia is introducing a 
companion bill.
  By enacting reasonable, pro-accountability measures, the Sunshine 
bill aims to address many of the problems I have outlined so far.
  This bill provides for greater transparency by shedding light on sue-
and-settle tactics. It requires agencies to publish sue-and-settle 
complaints and notices of intent-to-sue in a readily accessible manner.
  The bill requires agencies to publish proposed consent decrees and 
settlement agreements at least 60 days before they can be filed with a 
court. This provides a valuable opportunity for affected parties to 
weigh-in, which will increase public accountability in the rulemaking 
process. It will also prevent those scenarios where lawsuits are filed 
on the same day as previously negotiated agreements, a practice that 
effectively blocks any meaningful participation by affected parties.
  The bill also makes it easier for affected parties such as States and 
business owners to take part in both the lawsuit and settlement 
negotiations to ensure that their interests are properly represented. 
It requires the Attorney General or, if appropriate, the head of the 
defendant-agency, to certify to the court that he or she has personally 
approved certain proposed consent decrees or settlement agreements 
that, for example, convert a discretionary authority of an agency into 
a non-discretionary duty to act. It requires that courts consider 
whether the terms of a proposed agreement are contrary to the public 
interest.
  The bill promotes greater transparency by requiring agencies to 
publicly post and report to Congress information on sue-and-settle 
complaints, consent decrees and settlement agreements.
  Finally, the bill resolves key constitutional concerns by making it 
easier for succeeding administrations to modify the effect of a prior 
administration's consent decrees. It does so by providing for de novo 
review of motions to modify existing consent decrees due to changed 
circumstances.
  The Sunshine for Regulatory Decrees and Settlements Act will shed 
light on the problem. It will help rein in backroom rulemaking, 
encourage the appropriate use of consent decrees and settlements, and 
reinforce the procedures laid out decades ago to ensure a transparent 
and accountable regulatory process.
  I urge my colleagues to work with me and support this important 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 378

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Sunshine for Regulatory 
     Decrees and Settlements Act of 2015''.

     SEC. 2. DEFINITIONS.

       In this Act--
       (1) the terms ``agency'' and ``agency action'' have the 
     meanings given those terms under section 551 of title 5, 
     United States Code;
       (2) the term ``covered civil action'' means a civil 
     action--
       (A) seeking to compel agency action;
       (B) alleging that the agency is unlawfully withholding or 
     unreasonably delaying an agency action relating to a 
     regulatory action that would affect the rights of--
       (i) private persons other than the person bringing the 
     action; or
       (ii) a State, local, or tribal government; and
       (C) brought under--
       (i) chapter 7 of title 5, United States Code; or
       (ii) any other statute authorizing such an action;
       (3) the term ``covered consent decree'' means--
       (A) a consent decree entered into in a covered civil 
     action; and
       (B) any other consent decree that requires agency action 
     relating to a regulatory action that affects the rights of--
       (i) private persons other than the person bringing the 
     action; or
       (ii) a State, local, or tribal government;
       (4) the term ``covered consent decree or settlement 
     agreement'' means a covered consent decree and a covered 
     settlement agreement; and
       (5) the term ``covered settlement agreement'' means--
       (A) a settlement agreement entered into in a covered civil 
     action; and
       (B) any other settlement agreement that requires agency 
     action relating to a regulatory action that affects the 
     rights of--
       (i) private persons other than the person bringing the 
     action; or
       (ii) a State, local, or tribal government.

     SEC. 3. CONSENT DECREE AND SETTLEMENT REFORM.

       (a) Pleadings and Preliminary Matters.--
       (1) In general.--In any covered civil action, the agency 
     against which the covered civil action is brought shall 
     publish the notice of intent to sue and the complaint in a 
     readily accessible manner, including by making the notice of 
     intent to sue and the complaint available online not later 
     than 15 days after receiving service of the notice of intent 
     to sue or complaint, respectively.
       (2) Entry of a covered consent decree or settlement 
     agreement.--A party may not make a motion for entry of a 
     covered consent decree or to dismiss a civil action pursuant 
     to a covered settlement agreement until after the end of 
     proceedings in accordance with paragraph (1) and 
     subparagraphs (A) and (B) of paragraph (2) of subsection (d) 
     or subsection (d)(3)(A), whichever is later.
       (b) Intervention.--
       (1) Rebuttable presumption.--In considering a motion to 
     intervene in a covered civil action or a civil action in 
     which a covered consent decree or settlement agreement has 
     been proposed that is filed by a person who alleges that the 
     agency action in dispute would affect the person, the court 
     shall presume, subject to rebuttal, that the interests of the 
     person would not be represented adequately by the existing 
     parties to the action.

[[Page S779]]

       (2) State, local, and tribal governments.--In considering a 
     motion to intervene in a covered civil action or a civil 
     action in which a covered consent decree or settlement 
     agreement has been proposed that is filed by a State, local, 
     or tribal government, the court shall take due account of 
     whether the movant--
       (A) administers jointly with an agency that is a defendant 
     in the action the statutory provisions that give rise to the 
     regulatory action to which the action relates; or
       (B) administers an authority under State, local, or tribal 
     law that would be preempted by the regulatory action to which 
     the action relates.
       (c) Settlement Negotiations.--Efforts to settle a covered 
     civil action or otherwise reach an agreement on a covered 
     consent decree or settlement agreement shall--
       (1) be conducted pursuant to the mediation or alternative 
     dispute resolution program of the court or by a district 
     judge other than the presiding judge, magistrate judge, or 
     special master, as determined appropriate by the presiding 
     judge; and
       (2) include any party that intervenes in the action.
       (d) Publication of and Comment on Covered Consent Decrees 
     or Settlement Agreements.--
       (1) In general.--Not later than 60 days before the date on 
     which a covered consent decree or settlement agreement is 
     filed with a court, the agency seeking to enter the covered 
     consent decree or settlement agreement shall publish in the 
     Federal Register and online--
       (A) the proposed covered consent decree or settlement 
     agreement; and
       (B) a statement providing--
       (i) the statutory basis for the covered consent decree or 
     settlement agreement; and
       (ii) a description of the terms of the covered consent 
     decree or settlement agreement, including whether it provides 
     for the award of attorneys' fees or costs and, if so, the 
     basis for including the award.
       (2) Public comment.--
       (A) In general.--An agency seeking to enter a covered 
     consent decree or settlement agreement shall accept public 
     comment during the period described in paragraph (1) on any 
     issue relating to the matters alleged in the complaint in the 
     applicable civil action or addressed or affected by the 
     proposed covered consent decree or settlement agreement.
       (B) Response to comments.--An agency shall respond to any 
     comment received under subparagraph (A).
       (C) Submissions to court.--When moving that the court enter 
     a proposed covered consent decree or settlement agreement or 
     for dismissal pursuant to a proposed covered consent decree 
     or settlement agreement, an agency shall--
       (i) inform the court of the statutory basis for the 
     proposed covered consent decree or settlement agreement and 
     its terms;
       (ii) submit to the court a summary of the comments received 
     under subparagraph (A) and the response of the agency to the 
     comments;
       (iii) submit to the court a certified index of the 
     administrative record of the notice and comment proceeding; 
     and
       (iv) make the administrative record described in clause 
     (iii) fully accessible to the court.
       (D) Inclusion in record.--The court shall include in the 
     court record for a civil action the certified index of the 
     administrative record submitted by an agency under 
     subparagraph (C)(iii) and any documents listed in the index 
     which any party or amicus curiae appearing before the court 
     in the action submits to the court.
       (3) Public hearings permitted.--
       (A) In general.--After providing notice in the Federal 
     Register and online, an agency may hold a public hearing 
     regarding whether to enter into a proposed covered consent 
     decree or settlement agreement.
       (B) Record.--If an agency holds a public hearing under 
     subparagraph (A)--
       (i) the agency shall--

       (I) submit to the court a summary of the proceedings;
       (II) submit to the court a certified index of the hearing 
     record; and
       (III) provide access to the hearing record to the court; 
     and

       (ii) the full hearing record shall be included in the court 
     record.
       (4) Mandatory deadlines.--If a proposed covered consent 
     decree or settlement agreement requires an agency action by a 
     date certain, the agency shall, when moving for entry of the 
     covered consent decree or settlement agreement or dismissal 
     based on the covered consent decree or settlement agreement, 
     inform the court of--
       (A) any required regulatory action the agency has not taken 
     that the covered consent decree or settlement agreement does 
     not address;
       (B) how the covered consent decree or settlement agreement, 
     if approved, would affect the discharge of the duties 
     described in subparagraph (A); and
       (C) why the effects of the covered consent decree or 
     settlement agreement on the manner in which the agency 
     discharges its duties is in the public interest.
       (e) Submission by the Government.--
       (1) In general.--For any proposed covered consent decree or 
     settlement agreement that contains a term described in 
     paragraph (2), the Attorney General or, if the matter is 
     being litigated independently by an agency, the head of the 
     agency shall submit to the court a certification that the 
     Attorney General or head of the agency approves the proposed 
     covered consent decree or settlement agreement. The Attorney 
     General or head of the agency shall personally sign any 
     certification submitted under this paragraph.
       (2) Terms.--A term described in this paragraph is--
       (A) in the case of a covered consent decree, a term that--
       (i) converts into a nondiscretionary duty a discretionary 
     authority of an agency to propose, promulgate, revise, or 
     amend regulations;
       (ii) commits an agency to expend funds that have not been 
     appropriated and that have not been budgeted for the 
     regulatory action in question;
       (iii) commits an agency to seek a particular appropriation 
     or budget authorization;
       (iv) divests an agency of discretion committed to the 
     agency by statute or the Constitution of the United States, 
     without regard to whether the discretion was granted to 
     respond to changing circumstances, to make policy or 
     managerial choices, or to protect the rights of third 
     parties; or
       (v) otherwise affords relief that the court could not enter 
     under its own authority upon a final judgment in the civil 
     action; or
       (B) in the case of a covered settlement agreement, a term--
       (i) that provides a remedy for a failure by the agency to 
     comply with the terms of the covered settlement agreement 
     other than the revival of the civil action resolved by the 
     covered settlement agreement; and
       (ii) that--

       (I) interferes with the authority of an agency to revise, 
     amend, or issue rules under the procedures set forth in 
     chapter 5 of title 5, United States Code, or any other 
     statute or Executive order prescribing rulemaking procedures 
     for a rulemaking that is the subject of the covered 
     settlement agreement;
       (II) commits the agency to expend funds that have not been 
     appropriated and that have not been budgeted for the 
     regulatory action in question; or
       (III) for such a covered settlement agreement that commits 
     the agency to exercise in a particular way discretion which 
     was committed to the agency by statute or the Constitution of 
     the United States to respond to changing circumstances, to 
     make policy or managerial choices, or to protect the rights 
     of third parties.

       (f) Review by Court.--
       (1) Amicus.--A court considering a proposed covered consent 
     decree or settlement agreement shall presume, subject to 
     rebuttal, that it is proper to allow amicus participation 
     relating to the covered consent decree or settlement 
     agreement by any person who filed public comments or 
     participated in a public hearing on the covered consent 
     decree or settlement agreement under paragraph (2) or (3) of 
     subsection (d).
       (2) Review of deadlines.--
       (A) Proposed covered consent decrees.--For a proposed 
     covered consent decree, a court shall not approve the covered 
     consent decree unless the proposed covered consent decree 
     allows sufficient time and incorporates adequate procedures 
     for the agency to comply with chapter 5 of title 5, United 
     States Code, and other applicable statutes that govern 
     rulemaking and, unless contrary to the public interest, the 
     provisions of any Executive order that governs rulemaking.
       (B) Proposed covered settlement agreements.--For a proposed 
     covered settlement agreement, a court shall ensure that the 
     covered settlement agreement allows sufficient time and 
     incorporates adequate procedures for the agency to comply 
     with chapter 5 of title 5, United States Code, and other 
     applicable statutes that govern rulemaking and, unless 
     contrary to the public interest, the provisions of any 
     Executive order that governs rulemaking.
       (g) Annual Reports.--Each agency shall submit to Congress 
     an annual report that, for the year covered by the report, 
     includes--
       (1) the number, identity, and content of covered civil 
     actions brought against and covered consent decree or 
     settlement agreements entered against or into by the agency; 
     and
       (2) a description of the statutory basis for--
       (A) each covered consent decree or settlement agreement 
     entered against or into by the agency; and
       (B) any award of attorneys fees or costs in a civil action 
     resolved by a covered consent decree or settlement agreement 
     entered against or into by the agency.

     SEC. 4. MOTIONS TO MODIFY CONSENT DECREES.

       If an agency moves a court to modify a covered consent 
     decree or settlement agreement and the basis of the motion is 
     that the terms of the covered consent decree or settlement 
     agreement are no longer fully in the public interest due to 
     the obligations of the agency to fulfill other duties or due 
     to changed facts and circumstances, the court shall review 
     the motion and the covered consent decree or settlement 
     agreement de novo.

     SEC. 5. EFFECTIVE DATE.

       This Act shall apply to--
       (1) any covered civil action filed on or after the date of 
     enactment of this Act; and
       (2) any covered consent decree or settlement agreement 
     proposed to a court on or after the date of enactment of this 
     Act.
                                 ______