[House Report 112-593]
[From the U.S. Government Publishing Office]


112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-593

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



 
      SUNSHINE FOR REGULATORY DECREES AND SETTLEMENTS ACT OF 2012

                                _______
                                

 July 11, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Smith of Texas, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3862]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 3862) 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, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2

Purpose and Summary..............................................     4

Background and Need for the Legislation..........................     4

Hearings.........................................................     9

Committee Consideration..........................................     9

Committee Votes..................................................     9

Committee Oversight Findings.....................................    17

New Budget Authority and Tax Expenditures........................    17

Congressional Budget Office Cost Estimate........................    17

Performance Goals and Objectives.................................    19

Advisory on Earmarks.............................................    19

Section-by-Section Analysis......................................    19

Dissenting Views.................................................    21

                             The Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Sunshine for Regulatory Decrees and 
Settlements Act of 2012''.

SEC. 2. CONSENT DECREE AND SETTLEMENT REFORM.

  (a) Application.--The provisions of this section apply in the case 
of--
          (1) a consent decree or settlement agreement in an action to 
        compel agency action alleged to be unlawfully withheld or 
        unreasonably delayed that pertains to a regulatory action that 
        affects the rights of private parties other than the plaintiff 
        or the rights of State, local or Tribal government entities--
                  (A) brought under chapter 7 of title 5, United States 
                Code; or
                  (B) brought under any other statute authorizing such 
                an action; and
          (2) any other consent decree or settlement agreement that 
        requires agency action that pertains to a regulatory action 
        that affects the rights of private parties other than the 
        plaintiff or the rights of State, local or Tribal government 
        entities.
  (b) In General.--In the case of an action to be resolved by a consent 
decree or a settlement agreement described in paragraph (1), the 
following shall apply:
          (1) The complaint in the action, the consent decree or 
        settlement agreement, the statutory basis for the consent 
        decree or settlement agreement and its terms, and any award of 
        attorneys' fees or costs shall be published, including 
        electronically, in a readily accessible manner.
          (2) Until the conclusion of an opportunity for affected 
        parties to intervene in the action, a party may not file with 
        the court a motion for a consent decree or to dismiss the case 
        pursuant to a settlement agreement.
          (3) In considering a motion to intervene by any party that 
        would be affected by the agency action in dispute, the court 
        shall presume, subject to rebuttal, that the interests of that 
        party would not be represented adequately by the current 
        parties to the action. In considering a motion to intervene 
        filed by a State, local or Tribal government entity, the court 
        shall take due account of whether the movant--
                  (A) administers jointly with the defendant agency the 
                statutory provisions that give rise to the regulatory 
                duty alleged in the complaint; or
                  (B) administers State, local or Tribal regulatory 
                authority that would be preempted by the defendant 
                agency's discharge of the regulatory duty alleged in 
                the complaint.
          (4) If the court grants a motion to intervene in the action, 
        the court shall include the plaintiff, the defendant agency, 
        and the intervenors in settlement discussions. Settlement 
        efforts conducted shall be pursuant to a court's mediation or 
        alternative dispute resolution program, or by a district judge, 
        magistrate judge, or special master, as determined by the 
        assigned judge.
          (5) The defendant agency shall publish in the Federal 
        Register and by electronic means any proposed consent decree or 
        settlement agreement for no fewer than 60 days of public 
        comment before filing it with the court, including a statement 
        of the statutory basis for the proposed consent decree or 
        settlement agreement and its terms, allowing comment on any 
        issue related to the matters alleged in the complaint or 
        addressed or affected by the consent decree or settlement 
        agreement.
          (6) The defendant agency shall--
                  (A) respond to public comments received under 
                paragraph (5); and
                  (B) when moving that the court enter the consent 
                decree or for dismissal pursuant to the settlement 
                agreement--
                          (i) inform the court of the statutory basis 
                        for the proposed consent decree or settlement 
                        agreement and its terms;
                          (ii) submit to the court a summary of the 
                        public comments and agency responses;
                          (iii) certify the administrative record of 
                        the notice and comment proceeding to the court; 
                        and
                          (iv) make that record fully accessible to the 
                        court.
          (7) The court shall include in the judicial record the 
        administrative record certified by the agency under paragraph 
        (6).
          (8) If the consent decree or settlement agreement requires an 
        agency action by a date certain, the agency shall, when moving 
        for entry of the consent decree or dismissal based on the 
        settlement agreement--
                  (A) inform the court of any uncompleted mandatory 
                duties to take regulatory action that the decree or 
                agreement does not address;
                  (B) how the decree or agreement, if approved, would 
                affect the discharge of those duties; and
                  (C) why the decree's or agreement's effects on the 
                order in which the agency discharges its mandatory 
                duties is in the public interest.
          (9) The court shall presume, subject to rebuttal, that it is 
        proper to allow amicus participation by any party who filed 
        public comments on the consent decree or settlement agreement 
        during the court's consideration of a motion to enter the 
        decree or dismiss the case on the basis of the agreement.
          (10) The court shall ensure that the proposed consent decree 
        or settlement agreement allows sufficient time and procedure 
        for the agency to comply with chapter 5 of title 5, United 
        States Code, and other applicable statutes that govern rule 
        making and, unless contrary to the public interest, the 
        provisions of any executive orders that govern rule making.
          (11) The defendant agency may, at its discretion, hold a 
        public hearing pursuant to notice in the Federal Register and 
        by electronic means, on whether to enter into the consent 
        decree or settlement agreement. If such a hearing is held, 
        then, in accordance with paragraph (6), a summary of the 
        proceedings and certification of the hearing record shall be 
        provided to the court, access to the hearing record shall be 
        given to the court, and the full hearing record shall be 
        included in the judicial record.
          (12) The Attorney General, in cases litigated by the 
        Department of Justice, or the head of the defendant Federal 
        agency, in cases litigated independently by that agency, shall 
        certify to the court his or her approval of any proposed 
        consent decree or settlement agreement that contains any of the 
        following terms--
                  (A) in the case of a consent decree, terms that--
                          (i) convert into mandatory duties the 
                        otherwise discretionary authorities of an 
                        agency to propose, promulgate, revise or amend 
                        regulations;
                          (ii) commit the agency to expend funds that 
                        Congress has not appropriated and that have not 
                        been budgeted for the action in question, or 
                        commit an agency to seek a particular 
                        appropriation or budget authorization;
                          (iii) divest the agency of discretion 
                        committed to it by Congress or the 
                        Constitution, whether such discretionary power 
                        was granted to respond to changing 
                        circumstances, to make policy or managerial 
                        choices, or to protect the rights of third 
                        parties; or
                          (iv) otherwise afford relief that the court 
                        could not enter on its own authority upon a 
                        final judgment in the litigation; or
                  (B) in the case of a settlement agreement, terms 
                that--
                          (i) interfere with the agency's authority to 
                        revise, amend, or issue rules through the 
                        procedures set forth in chapter 5 of title 5, 
                        United States Code, or any other statute or 
                        executive order prescribing rule making 
                        procedures for rule makings that are the 
                        subject of the settlement agreement;
                          (ii) commit the agency to expend funds that 
                        Congress has not appropriated and that have not 
                        been budgeted for the action in question; or
                          (iii) provide a remedy for the agency's 
                        failure to comply with the terms of the 
                        settlement agreement other than the revival of 
                        the action resolved by the settlement 
                        agreement, if the agreement commits the agency 
                        to exercise its discretion in a particular way 
                        and such discretionary power was committed to 
                        the agency by Congress or the Constitution to 
                        respond to changing circumstances, to make 
                        policy or managerial choices, or to protect the 
                        rights of third parties.
  (c) Annual Reports.--Each agency shall submit an annual report to 
Congress on the number, identity, and content of complaints, consent 
decrees, and settlement agreements described in paragraph (1) for that 
year, the statutory basis for each consent decree or settlement 
agreement and its terms, and any awards of attorneys fees or costs in 
actions resolved by such decrees or agreements.

SEC. 3. MOTIONS TO MODIFY CONSENT DECREES.

  When a defendant agency moves the court to modify a previously 
entered consent decree described under section 2 and the basis of the 
motion is that the terms of the decree are no longer fully in the 
public interest due to the agency's obligations to fulfill other duties 
or due to changed facts and circumstances, the court shall review the 
motion and the consent decree de novo.

SEC. 4. EFFECTIVE DATE.

  The provisions of this Act apply to any covered consent decree or 
settlement agreement proposed to a court after the date of enactment of 
this Act.

                          Purpose and Summary

    H.R. 3862, the ``Sunshine for Regulatory Decrees and 
Settlements Act of 2012,'' responds to a growing problem in 
regulatory litigation known as the ``sue-and-settle'' 
phenomenon. In sue-and-settle cases, pro-regulatory plaintiffs 
sue agencies that may be disposed to regulate but have delayed 
in doing so. The litigation typically is resolved by a consent 
decree or settlement agreement that is negotiated behind closed 
doors and sets accelerated deadlines for proposal and final 
issuance of new regulatory actions. These deadlines can reorder 
agency regulatory agendas, provide limited time for public 
notice and comment, and afford little or no opportunity for 
ordinarily required review of new proposed or final regulations 
by the White House's Office of Information and Regulatory 
Affairs (OIRA). As a result, under the cover of judicial 
decrees and settlement agreements that forcibly reorder their 
priorities, agencies can establish new regulations with less 
than usual scrutiny and even bind the regulatory discretion of 
succeeding administrations. H.R. 3862 addresses this problem 
with a number of common-sense measures, including provisions to 
increase transparency and judicial scrutiny of sue-and-settle 
decrees and settlements, improve fairness to the public and 
those affected by regulations, and assure that sue-and-settle 
rulemakings observe proper rulemaking procedure.

                Background and Need for the Legislation

    In litigation against Federal agencies, consent decrees and 
settlement agreements can be used to force agency action and 
bind executive discretion, including over successive 
administrations. This tendency has been concentrated in 
litigation against regulatory agencies over allegations that 
agency action has been unlawfully withheld or unreasonably 
delayed.
    Over time, a cluster of tactics frequently used to obtain 
such decrees and settlements have evolved into an established 
litigation practice, known as ``sue-and-settle'' litigation. In 
sue-and-settle cases, defendant regulatory agencies, such as 
the U.S. Environmental Protection Agency, typically have failed 
to meet mandatory statutory deadlines for new regulations or 
are alleged to have unreasonably delayed discretionary action. 
Plaintiffs may have strong cases on liability in these matters, 
giving them substantial leverage over the defendant agencies. 
In addition, the agency actions at issue can be controversial, 
as is often the case with new, major regulations that impose 
high costs on regulated entities. The existence of controversy 
can give rise to a perverse agency incentive to cooperate with 
the litigation and negotiate a consent decree or settlement 
agreement. Once a decree or agreement is in place, the agency 
has a judicially-backed, litigation-based reason to expedite 
action in the face of controversy that otherwise would make 
action more difficult.\1\
---------------------------------------------------------------------------
    \1\See, e.g., Federal Consent Decree Fairness Act, and Sunshine for 
Regulatory Decrees and Settlements Act, Serial No. 112-83, at 61 (Feb. 
3, 2012) (``Hearing Transcript'') (written statement of Andrew Grossman 
at 15 (``Grossman Statement'')).
---------------------------------------------------------------------------
    As a result of these factors, it is common in sue-and-
settle cases for pro-regulatory plaintiffs to approach agencies 
with the threat of a lawsuit, and then negotiate consent 
decrees or settlement agreements in secret in advance of 
suit.\2\ The decrees or settlements can be filed for the 
courts' consideration soon after or even contemporaneously with 
the filing of the plaintiffs' complaints.\3\ The resulting 
decrees and settlements can come as a surprise to the regulated 
community and the general public and provide short timelines 
for agency action.\4\ Inadequate advance notice and limited 
time for the proposal and promulgation of regulations can 
undercut the public participation and analytical requirements 
of the Administrative Procedure Act (APA),\5\ the Regulatory 
Flexibility Act (RFA),\6\ the Unfunded Mandates Reform Act 
(UMRA),\7\ and other regulatory process statutes.\8\ Similarly, 
accelerated timeframes for proposal and promulgation can short-
circuit review of new regulations by the Office of Management 
and Budget's Office of Information and Regulatory Affairs under 
executive orders applicable to the rulemaking process, such as 
Executive Orders 12866 and 13563. The parties' incentives to 
avoid these requirements can be strong when the plaintiff and 
the agency agree on what the content of proposed and final 
agency action should be and prefer to effectuate that agreement 
with less opportunity for the public, regulated entities or 
OIRA to affect the regulatory process.
---------------------------------------------------------------------------
    \2\See, e.g., Hearing Transcript at 24-31 (Statement of Roger R. 
Martella, Jr. (``Martella Statement'')).
    \3\See, e.g., Defenders of Wildlife, et al. v. Jackson, No. 10-
01915 (D.D.C.) (complaint and consent decree filed Nov. 8, 2010); 
Environmental Geo-Technologies, LLC, et al. v. EPA, No. 10-12641 (E.D. 
Mich.) (complaint and settlement agreement filed July 2, 2010).
    \4\See, e.g., Hearing Transcript at 27 (Martella Statement at 4).
    \5\5 U.S.C. secs. 551, et seq.
    \6\5 U.S.C. secs. 601, et seq.
    \7\2 U.S.C. secs. 1501, et seq.
    \8\See, e.g., Hearing Transcript at 26-27, 61-62 (Martella 
Statement at 3-4; Grossman Statement at 15-16).
---------------------------------------------------------------------------
    In addition, agencies in many cases may not be able to 
conclude controversial rulemakings before a succeeding 
administration--with potentially different views and 
priorities--takes office. That inability gives agencies a 
powerful incentive effectively to set the incoming 
administration's regulatory agenda through consent decrees and 
settlement agreements finalized before the new administration 
can assume its duties.\9\ This is particularly true when 
agencies have failed to meet a number of mandatory rulemaking 
deadlines under a given statute. A current example of that 
phenomenon is the set of rulemakings required under the Dodd-
Frank Wall Street Reform and Consumer Protection Act, Pub. L. 
No. 111-203, 124 Stat. 1376 (2010). As of April 2012, it is 
estimated that agencies already have missed more than two-
thirds (69.8%) of the Dodd-Frank legislation's rulemaking 
deadlines, and more than one-third of the rules required by the 
Act have not even been proposed yet.\10\
---------------------------------------------------------------------------
    \9\See, e.g., Hearing Transcript at 49 (Grossman Statement at 3).
    \10\Davis Polk LLP, ``Dodd-Frank Progress Report,'' Apr. 2012, 
available at http://www.davispolk.com/Dodd-Frank-Rulemaking-Progress-
Report/(last accessed Apr. 24, 2012).
---------------------------------------------------------------------------
    When pro-regulatory interest groups and regulatory agencies 
engage in sue-and-settle practices, the end result is 
rulemaking that can elevate the single-interest priorities of a 
given pro-regulatory advocate over the broader public interest, 
limit the discretion of succeeding administrations, and impose 
schedules that render required rulemaking procedures a 
formality, depriving regulated entities, the public and OIRA of 
sufficient opportunities to have a meaningful impact on the 
consideration of final rules.\11\
---------------------------------------------------------------------------
    \11\For example, the effectiveness of the public's rights to 
comment on proposed rules and challenge final rules in court can be 
undermined by sue-and-settle consent decrees and settlement agreements 
that prescribe the contents of proposed rules. This is because, under 
longstanding case law, final rules must represent ``logical 
outgrowths'' of proposed rules. See, e.g., Small Refiner Lead Phase-
Down Task Force v. EPA, 705 F.2d 506 (D.C. Cir. 1983). When proposed 
rules are foreordained by decrees and settlement agreements to include 
or follow certain terms, that can effectively limit the range of final 
options agencies can adopt--excluding options advocated by the public 
or regulated entities that cannot be considered to be logical 
outgrowths of the predetermined proposed rules.
---------------------------------------------------------------------------
    Under the Obama Administration, this phenomenon may be on 
the rise. Not only has the Administration generally increased 
the number of major rulemakings, but it has engaged in a flurry 
of sue-and-settle cases. For example, just two agencies, the 
Environmental Protection Agency (EPA) and the Department of the 
Interior, have been able to institute or pursue the following 
major policy changes in conjunction with sue-and-settle 
litigation:

         Lthe Utility Maximum Achievable Control 
        Technology rule on coal-fired electric utilities 
        (American Nurses Ass'n v. Jackson, No. 1:08-cv-02198-
        RMC (D.D.C.) (filed Dec. 8, 2008; consent decree 
        entered April 5, 2010));

         Lthe Cement Maximum Achievable Control 
        Technology rule on cement manufacturing (Portland 
        Cement Ass'n v. EPA, No. 07-1046 (D.C. Cir.) (filed 
        Feb. 16, 2007; consent decree entered April 22, 2009));

         Lthe Stream Buffer Zone rule on coal mining 
        (National Parks Conservation Ass'n v. Kempthorne, No. 
        1:09-cv-00115-HHK (D.D.C.) (filed Jan. 16, 2009; 
        consent decree entered March 19, 2010));

         Lthe Cooling Water Intake Structure 
        regulations on electric utilities (Riverkeeper v. EPA, 
        No. 1:06-cv-12987 (S.D.N.Y.) (filed Nov. 7, 2006; 
        consent decree entered Nov. 22, 2010));

         Lrevisions to the definition of solid waste 
        under the Resource Conservation and Recovery Act 
        (Sierra Club v. Jackson, No. 09-1041 (D.C. Cir.) (filed 
        Jan. 28, 2009; settlement agreement entered into Sept. 
        10, 2010));

         Lnumeric nutrient criteria for the State of 
        Florida under the Clean Water Act (Florida Wildlife 
        Federation v. Jackson, No. 4:08-cv-00324-RH-WCS (N.D. 
        Fla.) (filed July 17, 2008; consent decree entered 
        August 25, 2009));

         LFederal implementation plans for regional 
        haze in North Dakota and Oklahoma under the Clean Air 
        Act (WildEarth Guardians v. Jackson, No. 4:09-CV-02453 
        (N.D. Cal.) (filed June 2, 2009; consent decree entered 
        Feb. 23, 2010));

         LNew Source Performance, Maximum Achievable 
        Control Technology and residual risk standards for oil 
        and gas drilling operations (WildEarth Guardians v. 
        Jackson, No.:09-cv-00089-CKK (D.D.C.) (filed Jan. 14, 
        2009; consent decree entered Dec. 3, 2009));

         Lfirst-ever greenhouse gas New Source 
        Performance Standards for coal- and oil-fired electric 
        utilities (Coke Oven Environmental Task Force v. EPA, 
        consolidated into New York v. EPA, No. 06-1322 (D.C. 
        Cir.) (filed Sept. 13, 2006; consent decree entered 
        Dec. 23, 2010));

         Lfirst-ever greenhouse gas New Source 
        Performance Standards for oil refiners (Environmental 
        Integrity Project v. EPA, consolidated into American 
        Petroleum Institute v. EPA, No. 08-1277 (D.C. Cir.) 
        (filed Aug. 28, 2008; consent decree entered Dec. 23, 
        2010)); and

         La commitment to move forward with Endangered 
        Species Act protections for over 250 candidate species 
        (In re Endangered Species Act Section 4 Deadline 
        Litigation, Misc. Action No. 10-377 (EGS), MDL Docket 
        No. 2165 (D.D.C.) (filed Dec. 23, 2009; settlement 
        agreement entered into May 10, 2011)).

    During the Reagan and George H.W. Bush administrations, 
sue-and-settle problems were alleviated under policy set by 
Attorney General Edwin Meese III in 1986. Under this policy, 
set forth in a memorandum commonly known as the ``Meese Memo,'' 
the Department of Justice generally refused to enter into 
consent decrees that:

         Lconverted into mandatory duties the otherwise 
        discretionary authorities of agencies to propose, 
        promulgate, revise or amend regulations;

         Lcommitted agencies to expend funds that 
        Congress had not appropriated and that had not been 
        budgeted for the actions in question, or committed 
        agencies to seek particular appropriations or budget 
        authorizations;

         Ldivested agencies of discretion committed to 
        them by Congress or the Constitution when such 
        discretionary power was granted to respond to changing 
        circumstances, to make policy or managerial choices, or 
        to protect the rights of third parties; or

         Lotherwise afforded relief that courts could 
        not enter on their own authority upon final judgment in 
        litigation.\12\
---------------------------------------------------------------------------
    \12\Memorandum from Attorney General Edwin Meese III to all 
Assistant Attorneys General and United States Attorneys, Department 
Policy regarding Consent Decrees and Settlement Agreements at 3 (Mar. 
13, 1986).

    The Meese Memo also generally prevented the Department from 
---------------------------------------------------------------------------
entering into settlement agreements that:

         Linterfered with agencies' authorities to 
        revise, amend or promulgate regulations through the 
        procedures set forth in the Administrative Procedure 
        Act or other statutes prescribing rulemaking procedures 
        for rulemakings that were the subject of settlement 
        agreements;

         Lcommitted agencies to expend funds that 
        Congress had not appropriated and that had not been 
        budgeted for the actions in question; or

         Lprovided a remedy for agencies' failures to 
        comply with the terms of settlement agreements other 
        than the revival of the suits resolved by the 
        agreements, if the agreements committed the agencies to 
        exercise their discretion in particular ways and such 
        discretionary power was committed to the agencies by 
        Congress or the Constitution to respond to changing 
        circumstances, to make policy or managerial choices, or 
        to protect the rights of third parties.\13\
---------------------------------------------------------------------------
    \13\Id. at 3-4.

    The Meese Memo was grounded in separation-of-powers 
concerns.\14\ The Clinton Administration reviewed the questions 
addressed by the Memo and found that these policy concerns were 
sound. It did not, however, conclude that the Department was 
legally bound to respect the lines drawn in the Memo, and it 
relaxed the Department's policy in 1999.\15\
---------------------------------------------------------------------------
    \14\Id. at 1.
    \15\Memorandum from Randolph D. Moss, Acting Assistant Attorney 
General for Office of Legal Policy, to Associate Attorney General 
Raymond C. Fisher, Authority of the United State to Enter Settlements 
Limiting the Future Exercise of Executive Branch Discretion (June 15, 
1999).
---------------------------------------------------------------------------
    H.R. 3862 endeavors to solve these problems through several 
measures. First, it provides for greater transparency, 
requiring agencies publicly to post and report to Congress 
information on sue-and-settle complaints, decrees, settlements, 
and fee awards. Second, it provides that consent decrees and 
settlement agreements in sue-and-settle cases may be filed only 
after parties that will be affected by the disputed agency 
actions and relevant States, localities and Tribes have been 
able to intervene in the litigation and join settlement 
negotiations, and any proposed decrees or settlements have been 
published for public notice and comment. Third, it requires 
courts considering approval of decrees and settlements to 
account for public comments and compliance with the APA, RFA 
and other relevant administrative procedure statutes or 
executive orders, as well as needs to accommodate competing 
mandatory duties not within the litigation. Fourth, it requires 
the Attorney General or, where appropriate, the defendant 
agency's head, to certify to the court that he or she has 
approved of any proposed decree or settlement agreement that 
does not fully meet the Meese Memo's standards. Lastly, the 
bill prescribes a de novo standard of review for consideration 
of motions to modify consent decrees in light of changed facts 
or circumstances or competing duties.
    H.R. 3862's provisions strike a balance that respects the 
rights and interests of plaintiffs and agency defendants to 
seek efficient consent decrees and settlement agreements, while 
also respecting the rights and interests of the public and 
entities that will be affected by regulatory actions. In 
addition, by improving the ability of all regulatory 
stakeholders to help shape decrees and settlements, and for 
courts to better consider them, the bill improves the 
likelihood that decrees and settlements in regulatory cases 
will produce longer lasting, more effective regulatory 
solutions, rather than regulations likely to be bogged down in 
lengthy judicial challenges after promulgation. The bill does 
not remove incentives to settle, but simply fosters greater use 
of good government practices of transparency, fairness and 
public participation by impacted stakeholders. In that respect, 
this legislation is consistent with the principles of public 
participation and accountability that underlie the regulatory 
process put in place by the Administrative Procedure Act. In so 
doing, the bill merely restores the balance that has existed in 
the regulatory process for decades.

                                Hearings

    The Committee's Subcommittee on Courts, Commercial and 
Administrative Law held 1 day of hearings on H.R. 3862 and H.R. 
3041, a separate bill addressing consent decree reform in 
institutional reform cases involving State and local 
defendants, on February 3, 2012. Testimony was received from 
Roger R. Martella, Jr., Sidley Austin LLP, former general 
counsel of the U.S. Environmental Protection Agency; Professor 
David Schoenbrod, New York Law School; Andrew M. Grossman, the 
Heritage Foundation; and John C. Cruden, president of the 
Environmental Law Institute and former Deputy Assistant 
Attorney General for the Department of Justice's Environment 
and Natural Resources Division, with additional material 
submitted by the Natural Resources Defense Council, the 
American Bar Association, and Kenny, Kenneth and Paula Cieplik.

                        Committee Consideration

    On March 27, 2012, the Committee met in open session and 
ordered the bill H.R. 3862 favorably reported with an amendment 
in the nature of a substitute, by a rollcall vote of 20 to 10, 
a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.R.3862.
    1. Amendment #1, offered by Mr. Conyers, to exempt from the 
provisions of the bill a consent decree or settlement agreement 
pertaining to the protection of privacy. Defeated 12 to 16.

                             ROLLCALL NO. 1
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................                X
Mr. Sensenbrenner, Jr........................
Mr. Coble....................................                X
Mr. Gallegly.................................                X
Mr. Goodlatte................................
Mr. Lungren..................................                X
Mr. Chabot...................................                X
Mr. Issa.....................................
Mr. Pence....................................
Mr. Forbes...................................                X
Mr. King.....................................                X
Mr. Franks...................................                X
Mr. Gohmert..................................                X
Mr. Jordan...................................
Mr. Poe......................................
Mr. Chaffetz.................................                X
Mr. Griffin..................................                X
Mr. Marino...................................
Mr. Gowdy....................................                X
Mr. Ross.....................................                X
Ms. Adams....................................                X
Mr. Quayle...................................                X
Mr. Amodei...................................                X

Mr. Conyers, Jr., Ranking Member.............       X
Mr. Berman...................................
Mr. Nadler...................................       X
Mr. Scott....................................       X
Mr. Watt.....................................       X
Ms. Lofgren..................................       X
Ms. Jackson Lee..............................
Ms. Waters...................................       X
Mr. Cohen....................................
Mr. Johnson, Jr..............................       X
Mr. Pierluisi................................       X
Mr. Quigley..................................       X
Ms. Chu......................................
Mr. Deutch...................................       X
Ms. Sanchez..................................       X
Mr. Polis....................................       X
                                              --------------------------
    Total....................................      12       16
------------------------------------------------------------------------


    2. Amendment #2, offered by Mr. Nadler, to exempt from the 
provisions of the bill a consent decree or settlement agreement 
pertaining to nuclear reactor safety. Defeated 13 to 18.

                             ROLLCALL NO. 2
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................                X
Mr. Sensenbrenner, Jr........................
Mr. Coble....................................                X
Mr. Gallegly.................................                X
Mr. Goodlatte................................
Mr. Lungren..................................                X
Mr. Chabot...................................                X
Mr. Issa.....................................
Mr. Pence....................................
Mr. Forbes...................................                X
Mr. King.....................................                X
Mr. Franks...................................                X
Mr. Gohmert..................................                X
Mr. Jordan...................................                X
Mr. Poe......................................                X
Mr. Chaffetz.................................                X
Mr. Griffin..................................                X
Mr. Marino...................................
Mr. Gowdy....................................                X
Mr. Ross.....................................                X
Ms. Adams....................................                X
Mr. Quayle...................................                X
Mr. Amodei...................................                X

Mr. Conyers, Jr., Ranking Member.............       X
Mr. Berman...................................
Mr. Nadler...................................       X
Mr. Scott....................................       X
Mr. Watt.....................................       X
Ms. Lofgren..................................       X
Ms. Jackson Lee..............................
Ms. Waters...................................       X
Mr. Cohen....................................
Mr. Johnson, Jr..............................       X
Mr. Pierluisi................................       X
Mr. Quigley..................................       X
Ms. Chu......................................       X
Mr. Deutch...................................       X
Ms. Sanchez..................................       X
Mr. Polis....................................       X
                                              --------------------------
    Total....................................      13       18
------------------------------------------------------------------------


    3. Amendment #5, offered by Ms Waters, to exempt from the 
provisions of the bill a consent decree or settlement agreement 
pertaining to reduction of illness or death from exposure to 
toxic substances or hazardous waste in communities that are 
protected by Executive Order 12898. Defeated 13 to 15.

                             ROLLCALL NO. 3
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................                X
Mr. Sensenbrenner, Jr........................
Mr. Coble....................................                X
Mr. Gallegly.................................                X
Mr. Goodlatte................................
Mr. Lungren..................................                X
Mr. Chabot...................................                X
Mr. Issa.....................................
Mr. Pence....................................
Mr. Forbes...................................
Mr. King.....................................                X
Mr. Franks...................................                X
Mr. Gohmert..................................                X
Mr. Jordan...................................
Mr. Poe......................................                X
Mr. Chaffetz.................................
Mr. Griffin..................................                X
Mr. Marino...................................
Mr. Gowdy....................................                X
Mr. Ross.....................................                X
Ms. Adams....................................                X
Mr. Quayle...................................                X
Mr. Amodei...................................                X

Mr. Conyers, Jr., Ranking Member.............       X
Mr. Berman...................................
Mr. Nadler...................................       X
Mr. Scott....................................       X
Mr. Watt.....................................       X
Ms. Lofgren..................................       X
Ms. Jackson Lee..............................       X
Ms. Waters...................................       X
Mr. Cohen....................................
Mr. Johnson, Jr..............................
Mr. Pierluisi................................       X
Mr. Quigley..................................       X
Ms. Chu......................................       X
Mr. Deutch...................................       X
Ms. Sanchez..................................       X
Mr. Polis....................................       X
                                              --------------------------
    Total....................................      13       15
------------------------------------------------------------------------


    4. Amendment #3, offered by Ms. Jackson Lee, to exempt from 
the provisions of the bill a consent decree or settlement 
agreement intended to prevent birth defects in infants. 
Defeated 14 to 16.

                             ROLLCALL NO. 4
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................                X
Mr. Sensenbrenner, Jr........................
Mr. Coble....................................                X
Mr. Gallegly.................................                X
Mr. Goodlatte................................
Mr. Lungren..................................                X
Mr. Chabot...................................                X
Mr. Issa.....................................
Mr. Pence....................................
Mr. Forbes...................................
Mr. King.....................................                X
Mr. Franks...................................                X
Mr. Gohmert..................................                X
Mr. Jordan...................................                X
Mr. Poe......................................                X
Mr. Chaffetz.................................                X
Mr. Griffin..................................                X
Mr. Marino...................................
Mr. Gowdy....................................                X
Mr. Ross.....................................                X
Ms. Adams....................................                X
Mr. Quayle...................................                X
Mr. Amodei...................................

Mr. Conyers, Jr., Ranking Member.............       X
Mr. Berman...................................
Mr. Nadler...................................       X
Mr. Scott....................................       X
Mr. Watt.....................................       X
Ms. Lofgren..................................       X
Ms. Jackson Lee..............................       X
Ms. Waters...................................       X
Mr. Cohen....................................
Mr. Johnson, Jr..............................       X
Mr. Pierluisi................................       X
Mr. Quigley..................................       X
Ms. Chu......................................       X
Mr. Deutch...................................       X
Ms. Sanchez..................................       X
Mr. Polis....................................       X
                                              --------------------------
    Total....................................      14       16
------------------------------------------------------------------------


    5. Amendment #7, offered by Mr. Johnson, to exempt from the 
provisions of the bill a consent decree or settlement agreement 
that would create jobs. Defeated 7 to 11.

                             ROLLCALL NO. 5
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................                X
Mr. Sensenbrenner, Jr........................
Mr. Coble....................................                X
Mr. Gallegly.................................                X
Mr. Goodlatte................................
Mr. Lungren..................................                X
Mr. Chabot...................................
Mr. Issa.....................................
Mr. Pence....................................
Mr. Forbes...................................                X
Mr. King.....................................                X
Mr. Franks...................................                X
Mr. Gohmert..................................
Mr. Jordan...................................
Mr. Poe......................................                X
Mr. Chaffetz.................................
Mr. Griffin..................................                X
Mr. Marino...................................
Mr. Gowdy....................................
Mr. Ross.....................................
Ms. Adams....................................                X
Mr. Quayle...................................                X
Mr. Amodei...................................

Mr. Conyers, Jr., Ranking Member.............
Mr. Berman...................................
Mr. Nadler...................................
Mr. Scott....................................       X
Mr. Watt.....................................       X
Ms. Lofgren..................................       X
Ms. Jackson Lee..............................
Ms. Waters...................................
Mr. Cohen....................................
Mr. Johnson, Jr..............................       X
Mr. Pierluisi................................       X
Mr. Quigley..................................
Ms. Chu......................................       X
Mr. Deutch...................................
Ms. Sanchez..................................       X
Mr. Polis....................................
                                              --------------------------
    Total....................................       7       11
------------------------------------------------------------------------


    6. Amendment #8, offered by Mr. Johnson, to exempt from the 
provisions of the bill a consent decree or settlement agreement 
that prevents or is intended to prevent discrimination based on 
race, religion, national origin, or any other protected 
category. Defeated 9 to 10.

                             ROLLCALL NO. 6
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................                X
Mr. Sensenbrenner, Jr........................
Mr. Coble....................................                X
Mr. Gallegly.................................
Mr. Goodlatte................................                X
Mr. Lungren..................................                X
Mr. Chabot...................................
Mr. Issa.....................................
Mr. Pence....................................
Mr. Forbes...................................
Mr. King.....................................
Mr. Franks...................................
Mr. Gohmert..................................                X
Mr. Jordan...................................
Mr. Poe......................................                X
Mr. Chaffetz.................................
Mr. Griffin..................................                X
Mr. Marino...................................
Mr. Gowdy....................................
Mr. Ross.....................................                X
Ms. Adams....................................                X
Mr. Quayle...................................                X
Mr. Amodei...................................

Mr. Conyers, Jr., Ranking Member.............       X
Mr. Berman...................................
Mr. Nadler...................................
Mr. Scott....................................       X
Mr. Watt.....................................       X
Ms. Lofgren..................................       X
Ms. Jackson Lee..............................
Ms. Waters...................................
Mr. Cohen....................................
Mr. Johnson, Jr..............................       X
Mr. Pierluisi................................       X
Mr. Quigley..................................
Ms. Chu......................................       X
Mr. Deutch...................................       X
Ms. Sanchez..................................       X
Mr. Polis....................................
                                              --------------------------
    Total....................................       9       10
------------------------------------------------------------------------


    7. Amendment #9, offered by Mr. Johnson, to exempt from the 
provisions of the bill a consent decree or settlement agreement 
that protects minors from dangerous or defective products. 
Defeated 10 to 14.

                             ROLLCALL NO. 7
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................                X
Mr. Sensenbrenner, Jr........................
Mr. Coble....................................                X
Mr. Gallegly.................................                X
Mr. Goodlatte................................                X
Mr. Lungren..................................                X
Mr. Chabot...................................
Mr. Issa.....................................                X
Mr. Pence....................................
Mr. Forbes...................................                X
Mr. King.....................................                X
Mr. Franks...................................
Mr. Gohmert..................................                X
Mr. Jordan...................................
Mr. Poe......................................                X
Mr. Chaffetz.................................
Mr. Griffin..................................                X
Mr. Marino...................................
Mr. Gowdy....................................
Mr. Ross.....................................                X
Ms. Adams....................................                X
Mr. Quayle...................................                X
Mr. Amodei...................................

Mr. Conyers, Jr., Ranking Member.............       X
Mr. Berman...................................
Mr. Nadler...................................
Mr. Scott....................................       X
Mr. Watt.....................................       X
Ms. Lofgren..................................       X
Ms. Jackson Lee..............................       X
Ms. Waters...................................
Mr. Cohen....................................
Mr. Johnson, Jr..............................       X
Mr. Pierluisi................................       X
Mr. Quigley..................................
Ms. Chu......................................       X
Mr. Deutch...................................       X
Ms. Sanchez..................................       X
Mr. Polis....................................
                                              --------------------------
    Total....................................      10       14
------------------------------------------------------------------------


    8. Motion to report H.R. 3862, as amended, favorably to the 
House. Approved 20 to 10.

                             ROLLCALL NO. 8
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................       X
Mr. Sensenbrenner, Jr........................       X
Mr. Coble....................................       X
Mr. Gallegly.................................       X
Mr. Goodlatte................................       X
Mr. Lungren..................................       X
Mr. Chabot...................................       X
Mr. Issa.....................................
Mr. Pence....................................
Mr. Forbes...................................       X
Mr. King.....................................       X
Mr. Franks...................................       X
Mr. Gohmert..................................       X
Mr. Jordan...................................       X
Mr. Poe......................................       X
Mr. Chaffetz.................................       X
Mr. Griffin..................................       X
Mr. Marino...................................       X
Mr. Gowdy....................................       X
Mr. Ross.....................................       X
Ms. Adams....................................
Mr. Quayle...................................       X
Mr. Amodei...................................       X

Mr. Conyers, Jr., Ranking Member.............
Mr. Berman...................................
Mr. Nadler...................................                X
Mr. Scott....................................                X
Mr. Watt.....................................                X
Ms. Lofgren..................................                X
Ms. Jackson Lee..............................
Ms. Waters...................................                X
Mr. Cohen....................................
Mr. Johnson, Jr..............................                X
Mr. Pierluisi................................                X
Mr. Quigley..................................                X
Ms. Chu......................................
Mr. Deutch...................................                X
Ms. Sanchez..................................                X
Mr. Polis....................................
                                              --------------------------
    Total....................................      20       10
------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 3862, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 25, 2012.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3862, the 
``Sunshine for Regulatory Decrees and Settlements Act of 
2012.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Martin von 
Gnechten, who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member




H.R. 3862--Sunshine for Regulatory Decrees and Settlements Act 
                            of 2012.

  As ordered reported by the House Committee on the Judiciary 
                       on March 27, 2012.




    H.R. 3862 would modify the process of developing consent 
decrees and settlement agreements that require Federal agencies 
to take specified regulatory actions. Under the bill, 
complaints against Federal agencies, the terms of the consent 
decrees or settlement agreements, and the award of attorneys' 
fees would need to be published in an accessible manner, 
including electronically. The legislation would require that 
any proposed consent decree or settlement agreement be 
published in the Federal Register for 60 days of public comment 
prior to filing with the court.
    H.R. 3862 also would require that other affected parties be 
afforded an opportunity to intervene prior to the filing of the 
consent decree or settlement agreement with the court. After a 
motion to intervene has been granted, the parties would be 
referred to a mediation program or magistrate judge.
    Under the bill, agencies that submit certain consent 
decrees or settlement agreements to the court would be required 
to inform the court of the agency's other outstanding mandatory 
duties under current law and explain how the proposed consent 
decree or settlement agreement would further the public 
interest. The legislation would require the Attorney General 
(for cases litigated by the Department of Justice), or the head 
of any agency that independently litigates a case, to certify 
to the court his or her approval of certain types of settlement 
agreements and consent decrees. H.R. 3862 also would require 
courts to more closely review consent decrees when agencies 
seek to modify them.
    Based on information provided by Department of Justice and 
assuming the appropriation of the necessary funds, CBO 
estimates that implementing H.R. 3862 would cost $7 million 
over the 2013-2017 period, primarily because litigation 
involving consent decrees and settlement agreements would 
probably take longer under the bill as agencies would face new 
requirements to report more information to the public and other 
additional administrative costs.
    Enacting H.R. 3862 could affect direct spending; therefore, 
pay-as-you-go procedures apply. Enacting the bill would not 
affect revenues. Under the Clean Air Act, the Clean Water Act, 
and other statutes, successful plaintiffs are entitled to 
repayment of attorneys' fees through the Treasury's Judgment 
Fund. Such payments have averaged about $2 million annually in 
recent years. By lengthening the process of developing consent 
decrees, H.R. 3862 could increase the amount of reimbursable 
attorneys' fees, thus increasing the payments from the Judgment 
Fund. However, the increased length of the process could deter 
future lawsuits and decrease the number of cases. On net, CBO 
estimates that enacting the legislation would increase direct 
spending by an insignificant amount in each year and over the 
2013-2022 period.
    H.R. 3862 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on State, local, or tribal governments.
    The CBO staff contact for this estimate is Martin von 
Gnechten. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                    Performance Goals and Objectives

    The Committee states, pursuant to clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives, that H.R. 
3862 improves the transparency and judicial scrutiny of consent 
decrees and settlement agreements in litigation brought to 
force new agency regulatory action; increases procedural and 
substantive fairness to the public, affected entities and 
relevant States, localities and Tribes in that litigation and 
administrative proceedings carried out pursuant to those 
consent decrees and settlement agreements; assures compliance 
with requirements of administrative procedure during the course 
of those administrative proceedings; and enhances flexibility 
for judicial modification of such consent decrees to account 
for changing facts and circumstances and competing agency 
duties.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 3862 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
    Sec. 1. Short Title. Section 1 sets forth the short title 
of the bill as the ``Sunshine for Regulatory Decrees and 
Settlements Act of 2012.''
    Sec. 2. Consent Decree and Settlement Agreement Reform. 
Section 2(a) applies the bill to specific classes of consent 
decrees and settlements, as follows:
    Sec. 2(a)(1)--consent decrees and settlement agreements in 
lawsuits under chapter 7 of title 5, United States Code, or any 
other statute authorizing suit against the United States, to 
compel agency action alleged to be unlawfully withheld or 
unreasonably delayed that pertains to a regulatory action that 
affects the rights of private parties other than the plaintiff 
or the rights of State, local or tribal governments; and
    Sec. 2(a)(2)--any other consent decree or settlement 
agreement that requires agency action that pertains to a 
regulatory action that affects the rights of private parties 
other than the plaintiff or the rights of State, local or 
tribal governments.
    Section 2(b) of the bill sets forth the following 
requirements applicable to consent decrees and settlement 
agreements covered by the bill:
    Sec. 2(b)(1)--consent decrees, settlement agreements, and 
their related complaints, legal bases and attorneys' fee awards 
must be made publicly available through readily accessible 
means, including electronic means;
    Sec. 2(b)(2)--the opportunity for affected parties to 
intervene in the litigation must conclude before consent 
decrees and settlement agreements may be proposed to the court;
    Sec. 2(b)(3)--in considering motions to intervene, the 
court must adopt a rebuttable presumption that an intervenor-
movant's rights are not adequately represented by the plaintiff 
or defendant agency, and must take due account of whether the 
movant is a State, local or Tribal government that 
coadministers with the Federal Government the statutory 
provisions at issue in the litigation or administers State, 
local or Tribal regulatory authority that would be preempted by 
the defendant agency's discharge of the regulatory duty alleged 
in the complaint;
    Sec. 2(b)(4)--if the court grants intervention rights, the 
court is to include the plaintiff, defendant agency and 
intervenors in court-administered settlement talks;
    Sec. 2(b)(5)--the defendant agency must publish any 
proposed consent decree or settlement agreement for no fewer 
than 60 days of public comment before filing it with the court, 
allowing public comment on any issue related to the matters 
alleged in the complaint or addressed or affected by the 
consent decree or settlement agreement and specifying the 
statutory basis for the decree or settlement;
    Sec. 2(b)(6)--the defendant agency must respond to public 
comments received, submit to the court a summary of the public 
comments and agency responses when it moves for entry of the 
consent decree or dismissal of the case based on the settlement 
agreement, inform the court of the statutory basis for the 
decree or settlement, certify the administrative record for the 
notice and comment proceeding to the court for inclusion in the 
judicial record, and make the administrative record fully 
accessible to the court;
    Sec. 2(b)(7)--the court must include in the judicial record 
the administrative record certified by the agency under 
subparagraph (6);
    Sec. 2(b)(8)--if a consent decree or settlement agreement 
requires agency action by a date-certain, the defendant agency 
must inform the court of any uncompleted mandatory agency 
duties the decree or agreement does not address, how the decree 
or agreement would affect the discharge of those duties, and 
why the decree's or agreement's effects on the order in which 
the agency discharges its mandatory duties is in the public 
interest;
    Sec. 2(b)(9)--when it considers motions to participate as 
amicus curiae in briefing over whether it should enter or 
approve a consent decree or settlement, the court must adopt a 
rebuttable presumption that favors amicus participation by 
those who filed public comments on the decree or settlement 
during the agency's notice and comment process;
    Sec. 2(b)(10)--the court must ensure that a proposed 
consent decree or settlement agreement allows sufficient time 
and procedure for the agency to comply with the APA and other 
applicable statutes that govern rulemaking, and, unless 
contrary to the public interest, any executive orders that 
govern rulemaking;
    Sec. 2(b)(11)--the defendant agency may, at its discretion, 
hold a public agency hearing on whether to enter into the 
consent decree or settlement agreement. If such a hearing is 
held, then a summary of the proceedings must be made available 
to the court, the hearing record must be certified to the court 
as part of the administrative record and included in the 
judicial record, and full access to the hearing record must be 
given to the court;
    Sec. 2(b)(12)--the Attorney General or, in cases litigated 
by agencies with independent litigating authority, the 
defendant agency head, must certify to the court that he or she 
approves of a proposed consent decree or settlement agreement 
that does not conform to Meese Memo standards.
    Sec. 2(c) requires agencies to submit annual reports to 
Congress on the number, identity, and content of consent 
decrees and settlement agreements, including the statutory 
bases of the decrees and settlements, and the decrees' and 
settlements' related complaints and attorneys' fee awards.
    Sec. 3. Motions to Modify Consent Decrees. The bill 
establishes a de novo standard of review for the courts' 
consideration of motions to modify covered consent decrees due 
to agency obligations to fulfill other duties or changed facts 
and circumstances.
    Sec. 4. Effective Date. The bill becomes effective upon 
enactment and applies to any covered consent decree or 
settlement agreement proposed to a court after that date.

                            Dissenting Views

                              INTRODUCTION

    As with most of the anti-regulatory bills that the 
Committee has considered this Congress, H.R. 3862, the 
``Sunshine for Regulatory Decrees and Settlements Act of 
2012,'' is yet another solution in search of a problem. This 
ill-conceived bill imposes numerous new procedural burdens on 
agencies and courts with respect to consent decrees and 
settlement agreements in lawsuits to compel agency action that 
involve regulatory power, which affects the rights of non-
parties to such lawsuits. Without any evidence, proponents of 
this legislation allege that it is needed to restrain agencies 
and interest groups from colluding to ``sue and settle,'' 
whereby sympathetic Federal agencies enter into consent decrees 
or settlement agreements with public interest groups as a form 
of informal rulemaking that avoids compliance with the 
rulemaking procedures outlined in the Administrative Procedure 
Act\1\ (APA) and other statutes. Procedures have long been in 
place to address this problem that circumscribe the ability of 
agencies to enter consent decrees and settlement agreements so 
as to avoid any potential ``sue and settle'' situations. By 
discouraging the use of consent decrees and settlement 
agreements, encouraging costly and protracted litigation over 
ambiguous and ill-defined terms, imposing unduly burdensome 
procedural requirements on agencies and courts, and providing 
increased opportunities for dilatory tactics by those opposed 
to the agency action at issue in the underlying litigation, 
H.R. 3862 will exponentially increase costs for American 
taxpayers. Finally, this bill improperly circumvents the rules 
enabling process with respect to third-party interveners and 
modifications of consent decrees and, more broadly, undermines 
the judiciary's traditional role in resolving disputes 
equitably and efficiently.
---------------------------------------------------------------------------
    \1\5 U.S.C. Sec. Sec. 551-59, 701-06, 1305, 3105, 3344, 5372, 7521 
(2012).
---------------------------------------------------------------------------
    A broad coalition of 41 civil rights, environmental, 
consumer protection, and other public interest groups oppose 
H.R. 3862, including the Alliance for Justice, the American 
Association for Justice, the Center for Food Safety, the Center 
for Science in the Public Interest, Defenders of Wildlife, 
Earthjustice, the Natural Resources Defense Council, OMB Watch, 
Public Citizen, and the Sierra Club.\2\
---------------------------------------------------------------------------
    \2\Letter to Rep. John Conyers, Jr. (D-MI), Ranking Member, H. 
Comm. on the Judiciary from 41 public interest groups (Mar. 19, 2012) 
(on file with the H. Comm. on the Judiciary, Democratic Staff).
---------------------------------------------------------------------------
    We likewise strongly oppose H.R. 3862 and respectfully 
dissent from the Committee views on this legislation.

                       DESCRIPTION AND BACKGROUND

    Representative Ben Quayle (R-AZ), together with 
Representatives Howard Coble (R-NC) and Dennis Ross (R-FL), 
introduced H.R. 3862 on February 1, 2012. A mere 2 days later, 
the Subcommittee on Courts, Commercial and Administrative Law 
(CCAL or Subcommittee) held a hearing on the bill.\3\ The 
Majority witnesses were: Roger Martella, Sidley & Austin LLP; 
Andrew Grossman, Heritage Foundation; and David Schoenbrod, New 
York Law School. The Minority witness was John Cruden, 
President, Environmental Law Institute.
---------------------------------------------------------------------------
    \3\The Federal Consent Decree Fairness Act and the Sunshine for 
Regulatory Decrees and Settlements Act: Hearing on H.R. 3041 and H.R. 
3862 Before the Subcomm. on Courts, Commercial and Administrative Law 
of the H. Comm. on the Judiciary, 112th Cong. (2012) [hereinafter 
``Subcommittee Hearing'']. We note that the Minority witness for this 
hearing did not comment on H.R. 3862 in his written testimony because 
he felt uncomfortable discussing a yet-to-be-introduced bill while 
preparing his written testimony, which had to be submitted to the 
Committee before introduction of H.R. 3862. We also note that while the 
Majority shared a draft of this bill with Minority staff about a week 
prior to the hearing, a draft bill is, by definition, always subject to 
change prior to introduction (as proved to be the case in this 
instance) and cannot be relied on by staff or witnesses when preparing 
for a hearing on that bill.
---------------------------------------------------------------------------
    A description of the bill's substantive provisions follows. 
Section 2(a) of the bill specifies that the legislation applies 
to a consent decree or settlement agreement in a lawsuit to 
compel agency action alleged to have been ``unlawfully withheld 
or unreasonably delayed'' that pertains to a regulatory action 
affecting ``the rights of private parties other than the 
plaintiff'' or the authority of state or local governments that 
was brought under: (1) the judicial review provisions of the 
APA; or (2) any other statute authorizing such action. The bill 
also applies to any other consent decree or settlement 
agreement that requires agency action pertaining to a 
regulatory action affecting private third party rights or the 
authority of a state or local government. It should be noted 
that H.R. 3862 fails to define the key terms ``private 
parties'' and ``rights.'' As a result, the bill opens the door 
to litigation over the meaning of these threshold terms.
    Section 2(b) imposes numerous new requirements on agencies 
and courts with respect to a consent decree or settlement 
agreement described in section 2(a) of the bill. First, it 
requires publication of the complaint, consent decree or 
settlement agreement, and any award of attorneys fees or costs, 
in a readily accessible manner. Second, a party may not file a 
motion for a consent decree or to dismiss the case pursuant to 
a settlement agreement until the ``conclusion of an opportunity 
for affected parties to intervene in the action.'' H.R. 3862, 
however, does not define when an affected party's opportunity 
to intervene will have concluded, nor does it define what would 
constitute an ``opportunity to intervene,'' thereby opening the 
door to litigation over the meaning of these critical terms. 
This provision could be read to prohibit early settlement of 
disputes in light of the ambiguity over when an ``opportunity'' 
to intervene has ``concluded.''
    Third, where a third party moves to intervene on the basis 
that such party would be affected by the regulatory action 
alleged to be unlawfully withheld or unreasonably delayed, the 
court must presume (subject to rebuttal) that the interests of 
such party would not be adequately represented by the current 
parties to the action. This provision upends current law 
regarding the adequacy of legal representation under Federal 
Rule of Civil Procedure 24 by shifting the burden to establish 
adequacy of representation to the non-movants.
    Fourth, if the court grants the motion to intervene, the 
court must refer the action to its mediation or alternative 
dispute resolution program or a district judge, magistrate 
judge, or special master to facilitate settlement discussions 
that must include the plaintiff, the defendant agency and the 
intervenors. This provision, combined with the rebuttable 
presumption that a third party's interest would not be 
represented adequately by the current parties to the action, 
allows third parties that oppose enforcement of the regulation 
at issue to obstruct and delay regulations. This provision also 
imposes unwanted mediation and other alternative dispute 
resolution costs on plaintiffs and defendant government 
agencies.
    Fifth, the defendant agency must publish any proposed 
consent decree or settlement agreement in the Federal Register 
and make it available electronically for public comment for at 
least 60 days before filing it with the court. The agency must 
allow public comment on any issue related to the matters 
alleged in the complaint or addressed or affected by the 
consent decree or settlement agreement.
    Sixth, the defendant agency must respond to any such public 
comments. In addition, such agency, when moving that the court 
enter the consent decree or dismiss the action pursuant to a 
settlement agreement, must: (1) inform the court of the 
statutory basis for the consent decree or settlement agreement 
and its terms; (2) submit to the court a summary of the public 
comments and agency responses; (3) certify the administrative 
record of notice and comment proceeding to the court; and (4) 
make that record fully accessible to the court.
    Seventh, the court must include in the judicial record the 
administrative record certified by the agency, including its 
responses to public comments.
    Eighth, if the consent decree or settlement agreement 
requires an agency action by a certain date, the agency must do 
the following when moving for the entry of such decree or 
dismissal based on such agreement: (1) inform the court of any 
uncompleted mandatory duties to take regulatory action that the 
decree or agreement does not address; (2) explain how the 
decree or agreement, if approved, would affect the discharge of 
those duties; and (3) explain why the decree's or agreement's 
effects on the order in which the agency discharges its 
mandatory duties is in the public interest. This requirement 
will be burdensome and time-consuming for agencies, with no 
clear limit on its vague requirements. For example, the meaning 
of the phrase ``would affect the discharge of those duties'' 
could be contested. As with other aspects of H.R. 3862, this 
provision opens the door to protracted litigation.
    Ninth, the court must presume (subject to rebuttal) that it 
is proper to allow amicus participation by any party who filed 
public comments on the consent decree or settlement agreement 
during the court's consideration of a motion to enter such 
decree or dismiss the case on the basis of the agreement.
    Tenth, the court must ensure that the proposed consent 
decree or settlement agreement allows sufficient time and 
procedure for the agency to comply with the APA's requirements 
and other applicable statutes that govern rulemaking as well as 
executive orders governing rulemaking, unless contrary to the 
public interest.
    Eleventh, the defendant agency, at its discretion, may hold 
a public hearing on whether to enter into the consent decree or 
settlement agreement. If such hearing is held, then a summary 
of the proceedings and certification of hearing record must be 
provided to the court. The court must be given access to the 
hearing record and the full hearing record must be included in 
the judicial record.
    H.R. 3862 incorporates the so-called ``Meese Memo'' 
beginning in section 2(b)(12). It is unclear why the Meese Memo 
needs to be codified in statute, as it is already codified in 
the Code of Federal Regulations\4\ and H.R. 3862's proponents 
do not claim that the Meese Memo's requirements are not being 
followed. Section 2(b)(12) provides that the Attorney General, 
in cases litigated by the Department of Justice, or the head of 
the defendant Federal agency, in cases litigated independently 
by that agency, must certify to the court that his or her 
approval of any proposed consent decree or settlement agreement 
that does not contain certain specified terms. For consent 
decrees, these terms are that those that: (1) convert into 
mandatory duties otherwise discretionary duties of an agency to 
propose, promulgate, revise or amend regulations; (2) commit 
the agency to expend funds that Congress has not appropriated 
and that have not been budgeted for the action or commit an 
agency to seek a particular appropriation or budget 
authorization; (3) divest the agency of discretion committed to 
it by Congress or the Constitution, whether such discretionary 
power was granted to respond to changing circumstances, to make 
policy or managerial choices, or to protect the rights of third 
parties; or (4) otherwise afford relief that the court could 
not enter on its own authority upon a final judgment in the 
litigation.
---------------------------------------------------------------------------
    \4\28 C.F.R. Sec. Sec. 0.160-0.163 (2012).
---------------------------------------------------------------------------
    With respect to a settlement agreement, the terms are those 
that: (1) interfere with the agency's authority to revise, 
amend or issue rules pursuant to the APA or any other statute 
or executive order that prescribe rulemaking procedures; (2) 
commit the agency to expend funds that Congress has not 
appropriated and that have not been budgeted; or (3) provide a 
remedy for the agency's failure to comply with the settlement 
agreement other than the revival of the action resolved by such 
agreement, if the agreement commits the agency to exercise its 
discretion in a particular way and such discretionary power was 
committed to the agency by Congress or the Constitution to 
respond to changing circumstances to make policy or managerial 
choices, or to protect the rights of third parties.
    Section 2(c) requires each agency to submit an annual 
report to Congress on the number, identity, and content of 
complaints, consent decrees and settlement agreements described 
in this section for that year and any awards of attorneys fees 
or costs in actions resolved by such decrees or agreements.
    When a defendant agency moves that the court modify a 
previously entered consent decree described in section 2 and 
the basis of such request is that the terms of the decree are 
no longer fully in the public interest as a result of the 
agency's obligations to fulfill other duties or because of 
changed facts and circumstances, section 3 of the bill requires 
the court to review the motion and the consent decree de novo. 
This provision modifies the existing procedure for modification 
of consent decrees that is outlined in Federal Rule of Civil 
Procedure 60 and in Supreme Court precedent.\5\
---------------------------------------------------------------------------
    \5\See Frew v. Hawkins, 540 U.S. 431 (2004) (holding unanimously 
that Rule 60(b)(5)'s procedure for modifying consent decrees does not 
offend state sovereignty).
---------------------------------------------------------------------------

                        CONCERNS WITH H.R. 3862

           I. H.R. 3862 IS A SOLUTION IN SEARCH OF A PROBLEM

    The purported justification for H.R. 3862--namely, that 
Federal agencies intentionally collude with public interest 
organizations and other similar types of plaintiffs in entering 
into consent decrees or settlements as a way of circumventing 
proper rulemaking procedures--is unsupported by any evidence 
other than the bald assertions of the Majority's witnesses at 
the Subcommittee hearing on this bill. In stark contrast, the 
Minority witness, John Cruden, a senior career official in the 
Justice Department's Environment and Natural Resources Division 
(ENRD) for more than two decades during two Republican and two 
Democratic Administrations, testified that he was unaware of 
any instance of this so-called collusive ``sue and settle'' 
activity occurring during his tenure.
    Consent decrees and settlements generate many benefits by 
facilitating the enforcement of laws, ensuring judicial 
efficiency, and protecting the public fisc. Nevertheless, 
proponents of H.R. 3862 find much to be troubling about their 
use by Federal agencies. For example, Roger Martella testified 
before the CCAL Subcommittee that ``certain groups increasingly 
are employing a `sue and settle' approach to interactions with 
the government on regulatory issues.''\6\ According to Mr. 
Martella, under such arrangements, non-governmental 
organizations use consent decrees and settlements with agencies 
to dictate agency priorities and set timelines for rulemakings 
without transparency, opportunity for input from the to-be-
regulated entities, or opportunity for judicial review of such 
agreements.\7\
---------------------------------------------------------------------------
    \6\Subcommittee Hearing at 26 (written statement of Roger R. 
Martella, Jr.).
    \7\Id. at 26-28 (written statement of Roger R. Martella, Jr.).
---------------------------------------------------------------------------
    There is, however, no evidence of so-called ``sue and 
settle'' collusion. As a Sierra Club representative noted, this 
theory is a ``sad attempt to create a boogie man out of vital 
and broadly supported protections that have improved and saved 
millions of Americans' lives.''\8\ Likewise, David Goldston, on 
behalf of the Natural Resources Defense Council (NRDC), 
testified last year at a House Energy and Commerce subcommittee 
hearing that the ``whole 'sue and settle' narrative is 
faulty.''\9\ In a letter to CCAL Subcommittee Chairman Howard 
Coble and Subcommittee Ranking Member Steve Cohen, three NRDC 
attorneys further elaborated on this point.
---------------------------------------------------------------------------
    \8\John McCardle, House Republicans Accuse EPA, Enviros of 
Collusion, N.Y. Times, July 15, 2011, available at http://
www.nytimes.com/gwire/2011/07/15/15greenwire-house-republicans-accuse-
epa-enviros-of-collus-69925.html
    \9\Id

          The premise of [H.R. 3862] is unfounded and indeed 
        unsubstantiated. The ``sue and settle'' allegations 
        implicit in [the bill] and reflected in the [CCAL] 
        hearing testimony on February 3rd amount to serious 
        charges of intentional wrongdoing--that Federal 
        agencies and third parties conspire to settle 
        litigation to advance untoward policy and legal 
        objectives. Yet the written and oral testimony on these 
        bills is devoid of any evidence whatsoever of 
        intentionality. For example, majority witness Andrew 
        Grossman of The Heritage Foundation asserts in his 
        written testimony that ``[i]n some cases, these 
        [consent] decrees appear to be the result of collusion, 
        where an agency shares the goals of those suing it and 
        takes advantage of litigation to achieve those shared 
        goals.'' Nowhere in his written testimony, however, 
        does Mr. Grossman furnish evidence backing this claim; 
        the most he can muster is the weak statement that this 
        ``appear[s]'' to be the case to him. Similarly, no 
        other witnesses or members at the hearing offered proof 
        that rose above their subjective interpretation or 
        speculation. Unsubstantiated charges from those with an 
        anti-regulatory political agenda should not form the 
        basis for legislation.\10\
---------------------------------------------------------------------------
    \10\Subcommittee Hearing at 118-119 (Letter to Rep. Howard Coble 
(R-NC), Chairman, Rep. Trey Gowdy (R-SC), Vice-Chairman, and Rep. Steve 
Cohen (D-TN), Ranking Member,, Subcomm. on Courts, Commercial and 
Administrative Law of the H. Comm. on the Judiciary from Jon P. Devine, 
Jr., et al. attorneys with the Natural Resources Defense Council (Feb. 
14, 2012).

    Finally, John Cruden, who served as Deputy Assistant 
Attorney General and in other senior career positions for over 
20 years at ENRD, stated in response to his fellow witness' 
``sue and settle'' allegations as follows, emphasizing that 
agencies enter settlements only when they have failed to meet 
---------------------------------------------------------------------------
mandatory rulemaking obligations:

        In my long experience with the types of cases covered 
        by H.R. 3862, [the Environmental Protection Agency or 
        EPA] only agreed to settle when the agency had a 
        mandatory duty to take an action, or to prepare a rule, 
        based on specific legislation enacted by Congress. The 
        settlement in those cases was straightforward: setting 
        a date by which the agency would propose a draft rule 
        and, quite often, a date for final action. Had there 
        not been such a settlement, a Federal court would have 
        issued an injunction setting the date for EPA to take 
        action, since the agency's legal responsibility was 
        quite clear.

        Because a proposed rule emerging from a settlement 
        would provide the same notice-and-comment opportunities 
        as any other rulemaking, and because the final rules 
        still would be subject to challenge under the 
        Administrative Procedure Act, this existing process 
        obviously does not avoid public comment, and already 
        allows interested parties their full range of 
        substantive and procedural rights.

                              .    .    .

        I am not aware of any instance of a settlement, and 
        certainly none I personally approved, that could 
        remotely be described as ``collusive.'' Quite the 
        opposite: in every case of which I am aware, the 
        Department of Justice vigorously represented the 
        Federal agency, defending the agency's legal position 
        and obtaining in any settlement the best possible terms 
        that were consistent with the controlling law.\11\
---------------------------------------------------------------------------
    \11\Subcommittee Hearing at 106-107 (Response to Post-Hearing 
Questions from John C. Cruden).

In the absence of actual evidence that Federal agencies collude 
with plaintiffs to circumvent proper rulemaking procedures by 
use of consent decrees and settlement agreements, H.R. 3862 
simply addresses a phantom menace.

   II. H.R. 3862 IS UNNECESSARY IN LIGHT OF THE JUSTICE DEPARTMENT'S 
           ``MEESE MEMO'' AND OTHER EXISTING LEGAL MECHANISMS

    H.R. 3862's proponents have never explained why, to the 
extent that ``sue and settle'' is an actual problem, the so-
called ``Meese Memo'' is insufficient to address such a 
problem, nor have they offered evidence that the Department of 
Justice and Federal agencies are not complying with its 
requirements. The Meese Memo, codified in the Code of Federal 
Regulations,\12\ specifies a process that already addresses the 
purported problem sought to be addressed by H.R. 3862's 
proponents. Moreover, H.R. 3862's proponents offer no rationale 
as to why the Meese Memo needs to be codified in statute, as 
this bill does. Finally, other legal mechanisms already exist 
for addressing the proponents' purported concerns about 
transparency and public input in consent decree and settlement 
negotiations.
---------------------------------------------------------------------------
    \12\28 C.F.R. Sec. Sec. 0.160-0.163 (2012).
---------------------------------------------------------------------------
    In 1986, then-United States Attorney General Edwin Meese 
issued a set of guidelines for Department of Justice (DOJ) and 
other government attorneys in entering into consent decrees and 
settlement agreements in response to the following concerns:

        In the past . . . executive departments and agencies 
        have, on occasion, misused [consent decrees] and 
        forfeited the prerogatives of the Executive in order to 
        preempt the exercise of those prerogatives by a 
        subsequent Administration. These errors sometimes have 
        resulted in an unwarranted expansion of the powers of 
        [sic] judiciary--often with the consent of government 
        parties--at the expense of the executive and 
        legislative branches.\13\
---------------------------------------------------------------------------
    \13\Memorandum from Edwin Meese III, Attorney General, to All 
Assistant Attorneys General and All United States Attorneys Regarding 
Department Policy Regarding Consent Decrees and Settlement Agreements 
(Mar. 13, 1986), available at http://www.archives.gov/news/samuel-
alito/accession-060-89-1/Acc060-89-1-box9-memoAyer-LSWG-1986.pdf

The Meese Memo identified three types of potentially 
problematic provisions in consent decrees: (1) a department or 
agency agreed to promulgate regulations and may have 
relinquished its power to amend those regulations or promulgate 
new ones without court participation; (2) a consent decree may 
divest a department or agency of discretion committed to it by 
the Constitution or a statute where exercise of discretion is 
ultimately subject to court approval; and (3) a department or 
agency has agreed to use its best efforts to obtain funding 
from Congress in order to enforce the decree.\14\
---------------------------------------------------------------------------
    \14\Id.
---------------------------------------------------------------------------
    As a result, the Meese Memo states that departments and 
agencies should not enter into a consent decree that: (1) 
``converts into a mandatory duty the otherwise discretionary 
authority of the Secretary or agency administrator to revise, 
amend, or promulgate regulations''; (2) ``commits the 
department or agency to expend funds that Congress has not 
appropriated and that have not been budgeted for the action in 
question, or commits a department or agency to seek a 
particular appropriation or budget authorization''; or (3) 
``divests the Secretary or agency administrator, or his 
successors, of discretion committed to him by Congress, or the 
Constitution where such discretionary power was granted to 
respond to changing circumstances, to make policy or managerial 
choices, or to protect the rights of third parties.''\15\ The 
policy outlines similar restrictions on settlement 
agreements.\16\ If special circumstances require departure from 
these guidelines, the Attorney General, the Deputy Attorney 
General, or the Associate Attorney General must authorize such 
a departure.\17\ The Meese Memo ultimately was incorporated 
into the Code of Federal Regulations.\18\
---------------------------------------------------------------------------
    \15\Id.
    \16\Id.
    \17\Id.
    \18\28 C.F.R. Sec. Sec. 0.160-0.163 (2012).
---------------------------------------------------------------------------
    H.R. 3862's proponents offer no evidence that DOJ and 
agencies are not complying with the Meese Memo. As Mr. Cruden 
noted, ``I am personally unaware of any examples of the 
Department failing to comply with the existing C.F.R. provision 
[codifying the Meese Memo]; nor did the other witnesses present 
any such examples at the hearing.''\19\ Moreover, the 
Majority's witnesses at the legislative hearing on H.R. 3862 
specifically praised the Meese Memo and offered no argument as 
to why it was insufficient to address the alleged ``sue and 
settle'' problem.\20\
---------------------------------------------------------------------------
    \19\Subcommittee Hearing at 111 (Response to Post-Hearing Questions 
from John C. Cruden).
    \20\See id. at 60 (Written Statement of Andrew M. Grossman) (``The 
Meese Policy was, and remains, notable for its identification of a 
serious breach of separation of powers, with serious consequences, and 
its straightforward approach to resolving that problem. By reducing the 
issue, and its remedy, to their essentials, the Meese Policy identifies 
and protects the core principles at stake. This explains its continued 
relevance.'').
---------------------------------------------------------------------------
    In addition to the Meese Memo, there are other mechanisms 
available that already address the concerns of H.R. 3862's 
proponents. For example, parties whose interests may be 
affected by a consent decree or settlement may move to 
intervene in the case pursuant to Federal Rule of Civil 
Procedure 24, with the moving party bearing the burden of 
demonstrating that the parties to the case do not adequately 
represent the movant's interest.\21\ Similarly, any rulemaking 
that is required pursuant to a consent decree or settlement 
agreement would still be subject to the APA's notice and 
comment procedures, and affected parties who are not parties to 
the consent decree or settlement agreement would still have the 
opportunity to weigh in on any negative impacts of a proposed 
rule.\22\
---------------------------------------------------------------------------
    \21\Fed. R. Civ. P. 24(a)(2).
    \22\5 U.S.C. Sec. 553 (2012).
---------------------------------------------------------------------------
    In sum, to the extent that the Federal Government is, in 
fact, tempted to use consent decrees and settlement agreements 
to do an end-run around the rulemaking procedures of the APA 
and other statutes, the Meese Memo already addresses such 
concerns, making H.R. 3862 unnecessary.

            III. H.R. 3862 WILL FAVOR INDUSTRY INTERESTS AT 
                           TAXPAYERS' EXPENSE

    In addition to being unnecessary, H.R. 3862 threatens to 
impose tremendous financial costs on taxpayers. It would do so 
in several ways. First, it provides numerous new opportunities 
for opponents of regulation to engage in dilatory tactics to 
delay resolution of pending litigation, further increasing 
costs for agencies and courts and, ultimately, taxpayers. 
Second, many of its key terms are ambiguous, which will lead to 
confusion, litigation, and delay in any proposed consent decree 
or settlement negotiation. Third, it imposes numerous 
burdensome procedural requirements on agencies and courts when 
they are considering consent decrees and settlements concerning 
regulatory action, which will further add to the costs borne by 
those entities. Fourth, the bill's cumulative effect would be 
to discourage agencies from entering into consent decrees and 
settlement agreements when they might otherwise have done so, 
leading to unnecessarily protracted and costly litigation.
A. H.R. 3862 opens the door to dilatory tactics by industry and other 
        opponents of agency action.
    Various provisions of H.R. 3862 would give opponents of 
regulations opportunities to effectively stifle rulemaking by 
allowing them to slow down one of the processes by which 
agencies agree to abide by their legal obligations. As Mr. 
Cruden noted in his testimony, agencies enter into consent 
decrees and settlement agreements when they have a mandatory 
duty to act, including the requirement to promulgate a new 
rule.\23\ By opening opportunities for industry to slow down 
this process, H.R. 3862 effectively makes it more expensive for 
agencies to do what Congress has mandated it to do.
---------------------------------------------------------------------------
    \23\See Subcommittee Hearing at 106-107 (Response to Post-Hearing 
Questions from John C. Cruden) (discussing EPA's settlements).
---------------------------------------------------------------------------
    Section 2(b)(3) of the bill, for example, mandates that a 
court presume, subject to rebuttal, that the interests of any 
third party affected by the agency action in dispute in the 
underlying litigation will not be represented by the parties to 
that litigation. This presumption upends current law, which 
places the burden of proving that the interests of a putative 
intervenor in a case are not represented by the parties in the 
case on the third party seeking to intervene in that case, not 
on the parties to the litigation.\24\ Effectively, this shift 
in the burden of proof on the question of the representation of 
third-party interests is a way to make it much easier for any 
party not a party to the case to intervene in a case involving 
a consent decree or settlement agreement that seeks to compel 
agency action.
---------------------------------------------------------------------------
    \24\Fed. R. Civ. P. 24.
---------------------------------------------------------------------------
    Hypothetically, under H.R. 3862, if the regulatory action 
at issue involved the Clean Air Act, a person who breathes air 
would have the right to intervene in a consent decree or 
settlement agreement, as would any affected industry entity, or 
anyone else in the United States, subject to a refutable 
presumption that the parties to the litigation do not 
adequately represent the third party's interest. If a court 
were to read section 2(b)(3) broadly, this provision could open 
the door to almost anyone intervening in such a case.
    Section 2(b)(4) of H.R. 3862 also tilts the playing field 
sharply in favor of industry interests by giving them an 
opportunity to slow down agency compliance with Federal law. 
Under this provision, courts must delay entry of a consent 
decree or settlement agreement by referring settlement 
discussions to the court's mediation or alternative dispute 
resolution program, or to a district judge, magistrate judge, 
or special master. Such discussions must include the plaintiff, 
defendant agency, and any third party intervenors. In addition 
to delaying the settlement process, this provision would impose 
costs on plaintiffs and defendant agencies alike by forcing 
them to pay mediation and other dispute resolution costs beyond 
what they may have had to pay in the absence of this process.
    H.R. 3862 provides other opportunities for industry to 
engage in dilatory tactics in sections 2(b)(5) and 2(b)(6), 
which require an agency to publish any proposed consent decree 
or settlement agreement and to allow at least 60 days for 
public comments. The agency must then respond to every comment. 
Pursuant to these provisions, any industry would be able to 
flood an agency with comments in an effort to stall resolution 
of the underlying dispute, which, as noted, is usually about 
enforcing rulemaking deadlines.
    As if forcing an agency to respond to public comments on a 
consent decree or settlement proposal was not enough, section 
2(b)(9) requires a court to presume amicus status for any 
member of the public that submits comments on a proposed 
consent decree or settlement agreement, subject to rebuttal, in 
any proceeding on a motion to enter such consent decree or 
settlement agreement. This provision would further allow 
industry and other regulatory opponents to delay resolution of 
the underlying dispute between the plaintiff and the defendant 
agency.
B. H.R. 3862 uses ambiguous language in many key provisions, opening 
        the door to confusion, litigation, and delay in resolving 
        disputes.
    Many of H.R. 3862's key provisions are written in 
ambiguous, ill-defined language, which will foster costly 
litigation over their meaning and cause delay in resolving the 
underlying lawsuit against the Federal agency. For example, 
section 2(a) states that the bill applies to consent decrees 
and settlement agreements in an action to compel ``agency 
action alleged to be unlawfully withheld or unreasonably 
delayed that pertains to a regulatory action.''\25\ It is 
unclear what the distinction is between ``agency action'' and 
``regulatory action,'' what the scope of the phrase ``pertain 
to'' is, or what ``unlawfully withheld'' and ``unreasonably 
delayed'' mean, opening the door to litigation over the meaning 
of these threshold terms.
---------------------------------------------------------------------------
    \25\H.R. 3862, 112th Cong. Sec. Sec. 2(a)(1), 2(a)(2) (2012).
---------------------------------------------------------------------------
    Additionally, section 2(a) refers to ``private parties'' 
whose ``rights'' are affected by the regulatory action, but the 
bill fails to define what ``private parties'' or ``rights'' 
means.\26\ As noted above, without a definition, almost any 
third party could, in theory, intervene in a consent decree or 
settlement discussion under this bill. As with other ambiguous 
language in this bill, confusion and a lack of clarity over the 
meaning of these terms will lead to litigation.
---------------------------------------------------------------------------
    \26\Id.
---------------------------------------------------------------------------
    Section 2(b)(2), which prevents entry of a consent decree 
or dismissal order pursuant to a settlement agreement until 
``the conclusion of an opportunity for affected parties to 
intervene in the action,''\27\ is inherently vague and thus 
will prompt extensive litigation. H.R. 3862 provides no clue as 
to what constitutes a ``conclusion of an opportunity'' for a 
party to intervene.
---------------------------------------------------------------------------
    \27\Id. at Sec. 2(b)(2).
---------------------------------------------------------------------------
    Finally, H.R. 3862's requirement that, under certain 
circumstances, agencies must create a catalog of all mandatory 
rulemaking duties and describe how a consent decree or 
settlement agreement ``would affect the discharge of those 
duties,'' in addition to being burdensome, time-consuming, and 
a drain on limited agency resources, is also full of 
ambiguity.\28\ The requirement, outlined in section 2(b)(8), 
does not define what ``affect the discharge of those duties'' 
means.
---------------------------------------------------------------------------
    \28\Id. at Sec. 2(b)(6).
---------------------------------------------------------------------------
C. H.R. 3862 imposes several burdensome procedural requirements on 
        agencies and courts with respect to entering into consent 
        decrees and settlement agreements.
    H.R. 3862 imposes several new procedural requirements on 
agencies and courts that are designed to slow down the 
resolution of litigation over an agency's failure to meet a 
statutory deadline or other regulatory obligation. These 
requirements include: (1) a limitation on when a party may file 
a motion for a consent decree or to dismiss the case pursuant 
to a settlement agreement, (2) a mandate requiring the court to 
presume that the interests of a third party seeking to 
intervene in settlement discussions is not adequately 
represented, (3) a requirement that the court refer consent 
decree or settlement discussions to mediation or another 
alternative dispute resolution mechanism, (4) a requirement 
that the defendant agency publish a proposed consent decree or 
settlement agreement, (5) allowing public comments to which the 
agency must respond, (6) a requirement that an agency submit to 
a court explanations of vaguely defined factors underlying a 
proposed consent decree or settlement agreement whenever such 
decree or agreement requires agency action by a date certain, 
and (7) a requirement that a court to allow amicus 
participation in any motion to enter a consent decree or 
settlement agreement by any party that submitted public 
comments on such decree or agreement.
    Implementing any one of these new requirements, much less 
all of them, drains agency and judicial time and resources 
without adding to the fairness of any consent decree or 
settlement agreement. In times such as now when Federal 
agencies and the court system are facing budgetary shortfalls, 
we should be crafting legislation to streamline and improve 
efficiencies for all. Unfortunately, H.R. 3862 will have the 
opposite result.
D. The cumulative effect of H.R. 3862's provisions will be to 
        discourage the use of consent decrees and settlement 
        agreements, forcing expensive and time-consuming litigation.
    By facilitating dilatory conduct by anti-regulatory forces, 
using vague language in key provisions, and imposing numerous 
and burdensome procedural requirements on agencies and courts 
with respect to consideration of consent decrees and settlement 
agreements, H.R. 3862's cumulative effect will be to discourage 
the use of consent decrees and settlement agreements and 
thereby delay or eliminate early resolution of litigation 
against the government. This legislation will ultimately 
increase costs for taxpayers, who must pay for the protracted 
litigation associated with fewer consent decrees and settlement 
agreements. Indeed, the Congressional Budget Office notes in 
its analysis of H.R. 3862 that the bill would impose millions 
of dollars in costs, ``primarily because litigation involving 
consent decrees and settlement agreements would probably take 
longer under the bill as agencies would face new requirements 
to report more information to the public and other additional 
administrative costs.''\29\
---------------------------------------------------------------------------
    \29\Congressional Budget Office, Cost Estimate for H.R. 3862, the 
Sunshine for Regulatory Decrees and Settlements Act of 2012, June 25, 
2012, available at http://cbo.gov/publication/43351.
---------------------------------------------------------------------------
    Consent decrees benefit both plaintiffs and defendants. For 
plaintiffs, consent decrees allow for meaningful and timely 
relief without the risks and costs associated with prolonged 
litigation. Governmental and other defendants can also avoid 
the burdens and costs of protracted litigation and the 
particular risk that a costly or cumbersome solution simply 
will be imposed on them should they lose the suit. 
Additionally, defendants can avoid judicial determination of 
liability and obtain flexibility in terms of how they implement 
needed reforms. This is why the use of consent decrees in 
Federal court litigation is a longstanding part of the judicial 
and Congressional policy of encouraging alternative dispute 
resolution.\30\ H.R. 3862 flies in the face of this policy and 
will ultimately cost plaintiffs and governmental defendants 
more in litigation costs by making consent decrees and 
settlements more difficult to obtain. As Minority witness John 
Cruden explained:
---------------------------------------------------------------------------
    \30\See Timothy Stoltzfus Jost, Breaking the Deal: Proposed Limits 
on Federal Consent Decrees Would Let States Abandon Commitments, Legal 
Times, Apr. 25, 2005, at 59 (``Yet the Supreme Court has long 
articulated a policy encouraging settlement of cases, as has 
Congress.'').

        The judicially approved consent decree is a valuable 
        settlement tool that promotes expeditious resolution of 
        cases, saves transaction costs for all parties and for 
        the judicial system, and achieves finality while 
        protecting the parties to the agreement.

                              .    .    .

        As compared to full-blown litigation, consent decrees 
        allow for a faster and less expensive, but still 
        comprehensive resolution of a dispute. Congress' 
        underlying statutory objectives are satisfied, while at 
        the same time, the [defendant] is able to exercise its 
        sovereignty through the negotiation of binding 
        contracts and the resolution of potentially onerous 
        pending litigation. Indeed, the finality and certainty 
        afforded by the consent decree makes it far easier for 
        a [defendant] to follow through on its commitments. . . 
        .\31\
---------------------------------------------------------------------------
    \31\Subcommittee Hearing at 108 (Response to Post-Hearing Questions 
from John C. Cruden).

By making consent decrees and settlement agreements more 
difficult and costly to enter into, H.R. 3862 will ultimately 
cost the taxpayer more in litigation costs and, possibly, 
expensive judgments.

    IV. H.R. 3862 SUBVERTS THE FEDERAL RULES OF CIVIL PROCEDURE AND 
                          JUDICIAL DISCRETION

    H.R. 3862 overrides the Federal Rules of Civil Procedure, 
the courts' power to manage litigation in several respects, and 
their authority to consider equities in their decisionmaking. 
First, it undermines Federal Rule of Civil Procedure 24, which 
sets forth the process for determining when a third party can 
intervene in a pending case, placing the burden on the third 
party to show that its interests are not adequately represented 
by the plaintiff and the defendant. As already discussed, H.R. 
3862 overrides this rule by requiring courts to presume the 
opposite, namely that the parties in the litigation do not 
adequately represent the interests of the third party.
    Second, H.R. 3862 tampers with the process for modifying 
consent decrees under Federal Rule of Civil Procedure 60(b)(5). 
Under that provision, a court can modify a consent decree when 
``the judgment has been satisfied, released, or discharged; it 
is based on an earlier judgment that has been reversed or 
vacated; or applying it prospectively is no longer 
equitable.''\32\ Section 3(b) of H.R. 3862 attempts to skew the 
result of such a motion to modify by specifying that when a 
defendant agency moves to modify a previously entered consent 
decree, the court ``shall'' review the motion and consent 
decree de novo whenever the motion to modify is based on the 
grounds that the decree is ``no longer fully in the public 
interest due to the agency's obligations to fulfill other 
duties or due to changed facts and circumstances.'' This 
provision clearly is intended to result in modification or 
revocation of an existing consent decree when a government 
agency moves to do so, regardless of the equities involved, 
which Rule 60 permits a court to consider.
---------------------------------------------------------------------------
    \32\Fed. R. Civ. P. 60(b)(5).
---------------------------------------------------------------------------
    Beyond overriding the civil procedure rules at issue, the 
bill hamstrings judicial discretion in matters concerning the 
management of litigation before a court. In addition to 
questions about intervention or modification of consent 
decrees, H.R. 3862 repeatedly requires courts to make certain 
presumptions (subject to rebuttal) on other similar litigation 
management issues such as when to permit amicus participation 
by third parties, when to enter a consent decree or settlement 
agreement, and when to refer matters to mediation, other 
alternative dispute resolution, a special master, or another 
judge. In short, H.R. 3862 seeks to dictate courtroom 
management issues that have traditionally been left to judges 
to decide. Such a lack of deference to courts is a troubling 
result for this Committee, in particular, to embrace.\33\
---------------------------------------------------------------------------
    \33\Congress long ago recognized the need to defer to courts on 
such questions of litigation and courtroom management when it enacted 
the Rules Enabling Act, 28 U.S.C. Sec. Sec. 2071-2077 (2012), which 
instituted an extensive process whereby the courts themselves drafted 
rule amendments, subject to Congress's approval. That process involves 
participation by court experts, the public, and Congress and the 
Executive Branch, and has worked well for nearly 80 years. H.R. 3862 
simply runs roughshod over that process.
---------------------------------------------------------------------------

                             V. AMENDMENTS

    To highlight the foregoing concerns with the bill, several 
Members offered a series of amendments illustrating the effect 
it would have on rules to protect public health and safety. All 
of these amendments exempted from H.R. 3862 consent decrees and 
settlement agreements concerning certain categories of 
potential rules.
    For example, Representative John Conyers, Jr. (D-MI), the 
Committee's Ranking Member, offered an amendment that would 
have exempted from the bill any consent decree or settlement 
agreement concerning privacy protection. This amendment was 
defeated by a 12 to16 vote.
    Similarly, Representative Jerrold Nadler (D-NY) offered an 
amendment that would have exempted from the bill any consent 
decree or settlement agreement concerning a potential rule 
regarding nuclear reactor safety. His amendment was defeated by 
a 13 to18 vote.
    An amendment that would have exempted from the bill any 
consent decree or settlement agreement concerning a potential 
rule regarding environmental justice in low-income minority 
communities as defined by Executive Order 12898 was offered by 
Representative Maxine Waters (D-CA). This amendment was 
defeated by a 13 to 15 vote.
    Representative Sheila Jackson Lee (D-TX) offered an 
amendment that would have exempted from the bill any consent 
decree or settlement agreement concerning a potential rule 
regarding the prevention of birth defects. Her amendment was 
defeated by a 14 to 16 vote.
    Representative Hank Johnson (D-GA) offered four amendments. 
First, he offered an amendment that would have exempted from 
the bill any consent decree or settlement agreement concerning 
a potential rule regarding implementation of the Patient 
Protection and Affordable Care Act of 2010. This amendment was 
defeated by a 7 to 11 vote. Second, he offered an amendment 
that would have exempted from the bill any consent decree or 
settlement agreement concerning a potential rule that the 
Office of Management and Budget determines would result in net 
job creation. This amendment was defeated by voice vote. Third, 
he offered an amendment that would have exempted from the bill 
any consent decree or settlement agreement concerning a 
potential rule protecting against discrimination on the basis 
of race, sex, national origin, or other protected 
characteristic. This amendment was defeated by a 9 to 10 vote. 
Fourth, he offered an amendment that would have exempted from 
the bill any consent decree or settlement agreement concerning 
a potential rule regarding the protection of children from 
dangerous or defective products. This amendment was defeated by 
a 10 to 14 vote.

                               CONCLUSION

    H.R. 3862 is deeply flawed for many reasons. This bill is 
truly a solution in search of a problem, as no evidence exists 
to support the claim that agencies ``collude'' with plaintiffs 
to enter consent decrees or settlement agreements. Procedures, 
originally implemented during the Reagan Administration and 
carried forward to this day, along with other existing legal 
mechanisms, have been more than adequate to deal with any such 
problem. Other than unsupported allegations, H.R. 3862's 
proponents have failed to offer a convincing explanation as to 
why current law is insufficient in that regard. The legislation 
would also increase costs for taxpayers in multiple ways and 
give the private sector numerous opportunities to delay 
resolution of litigation intended to force agencies to meet 
their legal obligations. Whether purposely or as a result of 
sloppy drafting, the bill employs ambiguous terms in key 
provisions that will generate much litigation over their 
meaning. In addition, H.R. 3862 imposes numerous burdensome 
procedural requirements on agencies and courts, and, 
ultimately, will make it much harder for these entities to use 
a time-honored tool that helps to resolve litigation quickly 
and cost-effectively. Finally, H.R. 3862 undermines existing 
civil procedure rules and evinces disrespect for courts' 
authority.
    For these reasons, we respectfully dissent and urge our 
colleagues to oppose this bill.

                                   John Conyers, Jr.
                                   Robert C. ``Bobby'' Scott.
                                   Melvin L. Watt.
                                   Zoe Lofgren.
                                   Sheila Jackson Lee.
                                   Steve Cohen.
                                   Henry C. ``Hank'' Johnson, Jr.
                                   Mike Quigley.
                                   Judy Chu.
                                   Ted Deutch.
                                   Jared Polis.

                                 
