[House Report 115-347]
[From the U.S. Government Publishing Office]
115th Congress } { REPORT
HOUSE OF REPRESENTATIVES
1st Session } { 115-347
======================================================================
SUNSHINE FOR REGULATIONS AND REGULATORY DECREES AND SETTLEMENTS ACT OF
2017
_______
October 16, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Goodlatte, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 469]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 469) 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 without amendment and recommend that
the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Hearings......................................................... 8
Committee Consideration.......................................... 9
Committee Votes.................................................. 9
Committee Oversight Findings..................................... 13
New Budget Authority and Tax Expenditures........................ 13
Congressional Budget Office Cost Estimate........................ 13
Duplication of Federal Programs.................................. 15
Disclosure of Directed Rule Makings.............................. 15
Performance Goals and Objectives................................. 15
Advisory on Earmarks............................................. 16
Section-by-Section Analysis...................................... 16
Dissenting Views................................................. 19
Purpose and Summary
H.R. 469, the ``Sunshine for Regulatory Decrees and
Settlements Act of 2017,'' limits the ability of defendant
federal regulators and pro-regulatory plaintiffs to abuse
federal consent decrees and settlement agreements to require
new regulations, reorder regulatory priorities, bind the
discretion of future administrations, and limit the rights of
regulated entities and State, local and Tribal co-regulators
affected by actions taken under such decrees and settlements.
The bill accomplishes this by improving transparency,
increasing participation by affected regulated entities and co-
regulators in the negotiation and consideration of decrees and
settlements, strengthening public comment on and judicial
review of proposed decrees and settlements, and assuring review
by the Attorney General and agency heads of the types of
proposed decrees and settlements that would most intrusively
involve the Judiciary in the administration of agencies'
regulatory duties.
Background and Need for the Legislation
I. GENERAL BACKGROUND
A. Abuse of Regulatory Consent Decrees and Settlement Agreements and
the Rise of ``Sue-and-Settle'' Litigation
Since the 1960s and 1970s, consent decrees and settlement
agreements increasingly have been used in federal litigation to
bind executive discretion under judicial authority, including
to bind executive discretion over successive administrations.
This trend has arisen in litigation against both federal
defendants and State and local defendants. In litigation
against federal defendants, the problem has been concentrated
in litigation against regulatory agencies over allegations that
agency action has been unlawfully withheld or unreasonably
delayed at the federal level.
In such cases, the tactical use of consent decrees and
settlement agreements has, over the decades, essentially been
refined into an art form, commonly known as ``sue-and-settle''
litigation. In sue-and-settle litigation, defendant regulatory
agencies, such as the U.S. Environmental Protection Agency,
typically have failed to meet mandatory statutory deadlines for
new regulations or allegedly have unreasonably delayed
discretionary action. Plaintiffs in such matters often have
strong cases on liability, giving them substantial leverage
over the defending agencies. That leverage is heightened when,
as often is the case, the agency actions at issue are
politically sensitive, such as major, new anti-pollution
regulations to impose high costs on a regulated industry.
Political and practical concerns in sue-and-settle cases
frequently give rise to perverse agency incentives to cooperate
with actual or threatened litigation and negotiate a consent
decree or settlement agreement to resolve it. This is because,
once a decree or agreement is in place, the defendant agency
has a litigation-based excuse to expedite action that helps to
diminish political costs, reorder agency funding priorities, or
serve other pro-regulatory ends.
As a result of these factors, it has become common in these
cases for pro-regulatory plaintiffs to approach vulnerable
federal agencies with threats of lawsuits, negotiate consent
decrees or settlement agreements in secret in advance of suit,
and propose the decrees or settlements to the courts
contemporaneously with the filing of the plaintiffs'
complaints. The resulting decrees and settlement agreements
often come as surprises to the regulated community, State,
local, and Tribal regulators who share responsibility for
regulatory programs at issue, and the general public. Further,
these decrees and settlements often provide short timelines for
agency action, particularly the proposal and promulgation of
new regulations. The lack of advance notice and judicially-
backed, minimal timeframes for proposal and promulgation allow
defendant agencies to undercut the public participation and
analytical requirements of the Administrative Procedure Act,
the Regulatory Flexibility Act, the Unfunded Mandates Reform
Act, and other regulatory process statutes. Similarly,
accelerated timeframes for proposal and promulgation allow
agencies to short-circuit review of new regulations by Office
of Information and Regulatory Affairs (OIRA) under executive
orders applicable to the rulemaking process. Incentives for
agencies to pursue these ends--which leave the agencies freer
to frame new regulations to fit pre-conceived agency
preferences, rather than public preferences, sound policy, and
the facts--is particularly strong when plaintiffs and defendant
agencies agree on what the content of proposed and final agency
action should be and seek to effectuate that agreement without
interference by other interested parties and OIRA.
In many cases, agencies also may not be able to conclude
desired but controversial rulemakings before a succeeding
administration--with potentially different views and
priorities--takes office. The approaching expiration of an
administration's term in office gives agency officials a
powerful incentive to control the incoming administration's
regulatory agenda through consent decrees and settlement
agreements finalized before the new administration can assume
its duties. That is particularly true when agencies have failed
to meet a number of mandatory rulemaking deadlines under one
statute. A relatively recent example of that potential was
offered by the set of rulemakings required under the Dodd-Frank
Wall Street Reform and Consumer Protection Act. Estimates in
2012 were that relevant agencies had missed three-quarters of
the pre-2012 rulemaking deadlines in that legislation.\1\ Had
the Obama Administration been voted out of office in November
2012, a high potential for Dodd-Frank sue-and-settle decrees
and settlements would have existed.
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\1\Reuters, ``Regulators Inching Forward on Dodd-Frank Rules''
(Jan. 3, 2012) (available at http://news.yahoo.com/regulators-inching-
forward-dodd-frank-rules-210003595.html).
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When pro-regulatory interest groups and regulatory agencies
engage in sue-and-settle practices, the end result is
rulemaking that implements the priorities of pro-regulatory
advocates, limits the discretion of succeeding administrations,
and takes place under schedules that render notice-and-comment
rulemaking a formality, depriving regulated entities, the
public, and OIRA of sufficient opportunities to influence the
content of final rules.
B. Sue-and-Settle Trends Under the Obama Administration
Under the Obama Administration, this phenomenon became
particularly troubling. Not only did that administration
generally increase the number of major rulemakings, but it also
engaged in a flurry of sue-and-settle cases. According to a
2013 study of Clean Air Act (CAA) and Clean Water Act (CWA)
sue-and-settle cases, the U.S. Chamber of Commerce found that:
The sue-and-settle process was increasingly
being used as a technique to shape agencies' regulatory
agendas, without input from the public or the regulated
community.
The Obama administration had already
entered into more than 70 sue-and-settle agreements,
which had led to the issuance of at least 100
regulations, including the Utility MACT rule, the
Chesapeake Bay Clean Water Act rules, and various
regional haze implementation rules.
The Sierra Club was responsible for 34 of
the 71 lawsuits, with WildEarth Guardians coming in
second with 20 suits.
Six of the Obama Administration's sue-and-
settle regulations alone reportedly would impose $101
billion in estimated annual costs, while another four
would impose compliance costs of as much as $23.66
billion.
In fiscal year 2011, Congress appropriated
$20.9 million to the U.S. Fish and Wildlife Service for
endangered species listing and critical habitat
designation. That year, the agency spent $15.8 million
in response to court orders or settlement
agreements.\2\
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\2\U.S. Chamber of Commerce, ``Sue-and-Settle--Regulating Behind
Closed Doors'' (May 20, 2013) (available at http://www.uschamber.com/
sites/default/files/reports/SUEANDSETTLEREPORT-Final.pdf).
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To provide further examples of sue-and-settle trends, two
agencies alone, EPA and the Department of the Interior, were
able to institute the following major policy changes under sue-
and-settle rulemakings during the Obama Administration:
the Utility Maximum Achievable Control
Technology rule on coal-fired electric utilities;
the Cement Maximum Achievable Control
Technology rule on cement manufacturing;
the Stream Buffer Zone rule on coal mining;
the Cooling Water Intake Structure
regulations on electric utilities;
revisions to the definition of solid waste
under the Resource Conservation and Recovery Act;
regulation of greenhouse gases under the
Clean Air Act;
numeric nutrient criteria for the State of
Florida under the Clean Water Act;
federal implementation plans for regional
haze in North Dakota and Oklahoma under the Clean Air
Act;
reconsideration of National Ambient Air
Quality Standards for ozone;
New Source Performance, Maximum Achievable
Control Technology, and residual risk standards for oil
and gas drilling operations;
first-ever greenhouse gas New Source
Performance Standards for coal- and oil-fired electric
utilities;
first-ever greenhouse gas New Source
Performance Standards for oil refiners; and
a commitment to move forward with
Endangered Species Act protections for over 250
candidate species.
Notably, between January 2013 and January 2017, EPA entered
into an additional 77 consent decrees under the Clean Air Act
alone, compared with the 60 CAA agreements the agency made
between 2009 and 2012.\3\ Collectively, during its eight years
in charge of EPA, the Obama Administration welcomed far more
Clean Air Act settlements (139) than previous administrations
did over a 12-year period (93).\4\ Further, the later years of
the Obama Administration saw an increase in the use of sue-and-
settle agreements to harness the federal government to assert
federal control over state and local decision making,
including, for example, through the agency's Chesapeake Bay
Program and a surge in the imposition of Clean Air Act Federal
Implementation Plans via sue-and-settle agreements.\5\
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\3\See U.S. Chamber of Commerce, ``Sue and Settle Updated: Damage
Done 2013-2016'' at 3 (May 17, 2016) (available at https://
www.uschamber.com/sites/default/files/
u.s._chamber_sue_and_settle_2017_updated_report.pdf).
\4\Id.
\5\Testimony of William L. Kovacs, ``Hearing on Examining `Sue and
Settle' Agreements: Part I,'' Committee on Oversight and Government
Reform, U.S. House of Representatives at 4-9 (May 24, 2017) (available
at https://oversight.house.gov/wp-content/uploads/2017/05/
Kovacs_Testimony_Sue-and-Settle_05242017.pdf).
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In short, the problem of sue-and-settle decrees,
settlements and rulemakings, while not a problem that began
during the Obama Administration, is clearly a problem that
reached new highs during the Obama years. The costs of sue-and-
settle regulations under the Obama Administration, moreover,
were extraordinarily high, as displayed by the following
table:\6\
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\6\See id.
C. History of Administrative Reforms in Past Administrations
During the Reagan and George H.W. Bush administrations,
sue-and-settle problems were alleviated under policy set by
Attorney General Meese 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:
converted into a mandatory duty the
otherwise discretionary authority of an agency to
propose, promulgate, revise or amend regulations;
committed the agency to expend funds that
Congress had not appropriated and that had not been
budgeted for the action in question, or committed an
agency to seek a particular appropriation or budget
authorization;
divested 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
otherwise afforded relief that the court
could not enter on its own authority upon a final
judgment in the litigation.
The Meese Memo also generally prevented the Department from
entering into settlement agreements that:
interfered with the agency's authority 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 the settlement
agreement;
committed the agency to expend funds that
Congress had not appropriated and that had not been
budgeted for the action in question; or
provided a remedy for the agency's failure
to comply with the terms of the settlement agreement
other than the revival of the suit resolved by the
agreement, if the agreement committed 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.\7\
---------------------------------------------------------------------------
\7\Memorandum from Attorney General Edwin Meese III to all
Assistant Attorneys General and United States Attorneys, ``Department
Policy regarding Consent Decrees and Settlement Agreements'' (Mar. 13,
1986).
---------------------------------------------------------------------------
The Meese Memo was grounded in separation-of-powers
concerns. 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
substantially relaxed the Department's policy in 1999.\8\
---------------------------------------------------------------------------
\8\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).
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D. Resolution of the Environmental Council of the States on Sue-and-
Settle Practices
In light of the impacts that sue-and-settle consent decrees
and settlement agreements often have on State agencies that co-
regulate with the federal government (e.g., under the Clean Air
Act), the Environmental Council for the States (ECOS) undertook
a review of the concerns raised by sue-and-settle practices.\9\
That review culminated in ECOS Resolution 13-2, effective March
6, 2013. The resolution emphasized that States may be adversely
affected by consent decrees or settlement agreements in sue-
and-settle cases, may have information that would help the
federal government defend or settle sue-and-settle cases, and
may have interests that should be accounted for in the
consideration of settlements in these cases. It also stressed
that States are not always given notice of such suits, are
often not parties to them, and are typically not afforded an
opportunity to assist in the negotiation of relevant
settlements. In light of these concerns, in Resolution 13-2,
ECOS stated that it:
---------------------------------------------------------------------------
\9\As described on its website, ``[t]he Environmental Council of
the States (ECOS) is the national non-profit, non-partisan association
of state and territorial environmental agency leaders. ECOS was
established in December 1993 at a meeting of approximately 20 states in
Phoenix, Arizona and is a 501(c)(6) non-profit organization.'' See
http://www.ecos.org/section/_aboutecos. ``The purpose of ECOS is to
improve the capability of state environmental agencies and their
leaders to protect and improve human health and the environment of the
United States of America.'' Id. ECOS' membership currently includes all
50 States, plus the District of Columbia and Commonwealth of Puerto
Rico.
---------------------------------------------------------------------------
``Affirms that states have stand alone
rights and responsibilities under federal environmental
laws, and that the state environmental agencies are co-
regulators, co-funders and partners with U.S. EPA;''
``Urges the U.S. EPA to devote the resources
necessary to perform its nondiscretionary duties within
the timeframes specified under federal law, especially
when required to take action on a state submission made
under an independent right or responsibility (e.g.,
State Implementation Plans under the Clean Air Act).''
``Specifically calls on U.S. EPA to notify
all affected state environmental agencies of citizen
suits filed against U.S. EPA that allege a failure of
the federal agency to perform its nondiscretionary
duties;''
``Believes that providing an opportunity for
state environmental agencies to participate in the
negotiation of citizen suit settlement agreements will
often be necessary to protect the states' role in
implementing federal environmental programs and for the
administration of authorized or delegated environmental
programs in the most effective and efficient manner;''
``Specifically calls on U.S. EPA to support
the intervention of state environmental agencies in
citizen suits and meaningful participation in the
negotiation of citizen suit settlement agreements when
the state agency has either made a submission to EPA
related to the citizen suit or when the state agency
either implements, or is likely to implement, the
authorized or delegated environmental program at
issue;''
``Believes that no settlement agreement
should extend any power to U.S. EPA that it does not
have in current law;''
``Believes that greater transparency of
citizen suit settlement agreements is needed for the
public to understand the impact of these agreements on
the administration of environmental programs;''
``Affirms the need for the federal
government to publish for public review all settlement
agreements and consider public comments on any proposed
settlement agreements;'' and,
``Encourages EPA to respond in writing to
all public comments received on proposed citizen suit
settlement agreements, including consent decrees.''\10\
---------------------------------------------------------------------------
\10\The full, official text of Resolution 13-2 is available at
http://www.ecos.org/section/policy/resolution.
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E. Reforms Embodied in the Sunshine for Regulatory Decrees and
Settlements Act
Consistent with the record compiled by the Committee, the
measures in H.R. 469 include provisions that: (1) require
notices of intent to sue, complaints, consent decrees and
settlement agreements, and attorneys' fee agreements in
lawsuits attempting to force regulatory action be more
transparent to the public and regulated entities; (2) give to
regulated entities, State, local and Tribal co-regulators, and
the public more rights to participate in the shaping or
judicial evaluation of sue-and-settle consent decrees and
settlement agreements, whether through notice-and-comment
procedures or rights to participate in litigation as
intervenors or amici curiae; (3) provide courts with more
complete records and tools to review proposed sue-and-settle
consent decrees and settlement agreements; and, (4) codify key
Meese Memo restrictions to constrain the authority of the
Department of Justice and defendant agencies to agree to sue-
and-settle consent decrees and settlements that present
separation-of-powers concerns.
II. PRIOR LEGISLATIVE HISTORY
The Sunshine for Regulatory Decrees and Settlements Act was
first introduced as H.R. 3862 in the 112th Congress. H.R. 3862
was reported favorably by the Committee and passed the House on
July 26, 2012, as title III of H.R. 4078, the ``Red Tape
Reduction and Small Business Job Creation Act of 2012,'' with a
bipartisan vote (245-172). The bill was reintroduced in the
113th Congress as H.R. 1493 by Rep. Collins, who has sponsored
the legislation in each succeeding Congress. H.R. 1493 was
reported favorably by the Committee and passed the House twice
with bipartisan support, first, on February 27, 2014, as title
IV of H.R. 2804, the ``Achieving Less Excess in Regulation and
Requiring Transparency Act of 2014'' (236-179), and, second, on
September 18, 2014, as title IV of Subdivision B of Division
III of H.R. 4 on September 18, 2014 (253-163). During the 114th
Congress, the bill was reintroduced as H.R. 712, which the
Committee similarly reported favorably and the House similarly
passed on a bipartisan basis, on January 7, 2016 (244-173).
Hearings
The Committee's Subcommittee on Regulatory Reform,
Commercial and Antitrust Law held one day of hearings on the
Sunshine for Regulatory Decrees and Settlements Act in its
embodiment as H.R. 712 on March 2, 2015. Witnesses at the
hearing included: William L. Kovacs, Senior Vice President for
Environment, Technology & Regulatory Affairs, the U.S. Chamber
of Commerce; Patrick A. McLaughlin, Senior Research Fellow,
Mercatus Center, George Mason University; Sam Batkins, Director
of Regulatory Policy, American Action Forum; and, Amit Narang,
Regulatory Policy Advocate, Public Citizen. The Subcommittee
also held one day of hearings on the legislation during the
113th Congress (H.R. 1493), and the Committee's Subcommittee on
Courts, Commercial and Administrative Law held one day of
hearings on the legislation during the 112th Congress (H.R.
3862).\11\
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\11\See Sunshine for Regulatory Decrees and Settlements Act of
2013: Hearing before the Subcomm. on Regulatory Reform, Commercial and
Antitrust of the H. Comm. on the Judiciary, Serial No. 113-28, 113th
Cong. (June 5, 2013) (``Sunshine Hearing II''); Federal Consent Decree
Fairness Act, and the Sunshine for Regulatory Decrees and Settlements
Act of 2012: Hearing before the Subcomm. on Courts, Commercial and
Administrative Law of the H. Comm. on the Judiciary, Serial No. 112-83,
112th Cong. (Feb. 3, 2012) (``Sunshine Hearing I'').
---------------------------------------------------------------------------
During this term of Congress, the Committee held no
hearings on H.R. 469. The Committee urges Members to consider
the records of the aforementioned prior hearings and also to
consider the record of the Committee on Oversight and
Government Reform's related May 24 and July 25, 2017, hearings
entitled ``Hearing on Examining `Sue and Settle' Agreements:
Part I'' and ``Hearing on Examining `Sue and Settle'
Agreements: Part II.''
Committee Consideration
On July 12, 2017, the Committee met in open session and
ordered the bill, H.R. 469, favorably reported, without
amendment, by a roll call vote of 15 to 8, 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 roll call votes occurred during the Committee's
consideration of H.R. 469.
1. An Amendment, offered by Mr. Conyers to exempt from the
requirements of H.R. 469 any consent decree or settlement
agreement that ``prevents or is intended to prevent
discrimination based on race, religion, national origin, or any
other protected category.'' The amendment was defeated by a
rollcall vote of 6 to 14.
ROLLCALL NO. 1
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Smith (TX).................................
Mr. Chabot (OH)................................ X
Mr. Issa (CA).................................. X
Mr. King (IA).................................. X
Mr. Franks (AZ)................................ X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Marino (PA)................................ X
Mr. Gowdy (SC).................................
Mr. Labrador (ID).............................. X
Mr. Farenthold (TX)............................ X
Mr. Collins (GA)............................... X
Mr. DeSantis (FL)..............................
Mr. Buck (CO).................................. X
Mr. Ratcliffe (TX)............................. X
Ms. Roby (AL)..................................
Mr. Gaetz (FL).................................
Mr. Johnson (LA)............................... X
Mr. Biggs (AZ).................................
Mr. Rutherford (FL)............................ X
Ms. Handel (GA)................................ X
Mr. Conyers, Jr. (MI), Ranking Member.......... X
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)........................... X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI)............................. X
Mr. Swalwell (CA)..............................
Mr. Lieu (CA)..................................
Mr. Raskin (MD)................................ X
Ms. Jayapal (WA)............................... X
Mr. Schneider (IL)............................. X
------------------------
Total...................................... 6 14
------------------------------------------------------------------------
2. An Amendment offered by Ms. Jackson Lee to exempt from
the requirements of H.R. 469 any consent decree or settlement
agreement that ``pertains to a reduction in illness or death
from exposure to toxic substances or hazardous waste in
communities that are protected by Executive Order 12898[.]''
The amendment was defeated by a rollcall vote of 7 to 15.
ROLLCALL NO. 2
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Smith (TX).................................
Mr. Chabot (OH)................................ X
Mr. Issa (CA).................................. X
Mr. King (IA).................................. X
Mr. Franks (AZ)................................ X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Marino (PA)................................ X
Mr. Gowdy (SC).................................
Mr. Labrador (ID).............................. X
Mr. Farenthold (TX)............................ X
Mr. Collins (GA)............................... X
Mr. DeSantis (FL)..............................
Mr. Buck (CO).................................. X
Mr. Ratcliffe (TX)............................. X
Ms. Roby (AL)..................................
Mr. Gaetz (FL)................................. X
Mr. Johnson (LA)............................... X
Mr. Biggs (AZ).................................
Mr. Rutherford (FL)............................ X
Ms. Handel (GA)................................ X
Mr. Conyers, Jr. (MI), Ranking Member.......... X
Mr. Nadler (NY)................................ X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)........................... X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI)............................. X
Mr. Swalwell (CA)..............................
Mr. Lieu (CA)..................................
Mr. Raskin (MD)................................ X
Ms. Jayapal (WA)............................... X
Mr. Schneider (IL)............................. X
------------------------
Total...................................... 7 15
------------------------------------------------------------------------
3. An Amendment, offered by Mr. Cicilline to exempt from
the requirements of H.R. 469 any consent decree or settlement
agreement ``pertaining to a deadline established by Congress
through the enactment of a Federal statute to address the
misuse of prescription painkillers, including the Comprehensive
Addition and Recovery Act of 2016.'' The amendment was defeated
by a rollcall vote of 8 to 15.
ROLLCALL NO. 3
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Smith (TX).................................
Mr. Chabot (OH)................................ X
Mr. Issa (CA)..................................
Mr. King (IA).................................. X
Mr. Franks (AZ)................................ X
Mr. Gohmert (TX)............................... X
Mr. Jordan (OH)................................
Mr. Poe (TX)................................... X
Mr. Marino (PA)................................ X
Mr. Gowdy (SC).................................
Mr. Labrador (ID).............................. X
Mr. Farenthold (TX)............................
Mr. Collins (GA)............................... X
Mr. DeSantis (FL)..............................
Mr. Buck (CO).................................. X
Mr. Ratcliffe (TX)............................. X
Ms. Roby (AL)..................................
Mr. Gaetz (FL)................................. X
Mr. Johnson (LA)............................... X
Mr. Biggs (AZ).................................
Mr. Rutherford (FL)............................ X
Ms. Handel (GA)................................ X
Mr. Conyers, Jr. (MI), Ranking Member.......... X
Mr. Nadler (NY)................................ X
Ms. Lofgren (CA)............................... X
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN)................................. X
Mr. Johnson (GA)...............................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI)............................. X
Mr. Swalwell (CA)..............................
Mr. Lieu (CA)..................................
Mr. Raskin (MD)................................ X
Ms. Jayapal (WA)............................... X
Mr. Schneider (IL)............................. X
------------------------
Total...................................... 8 15
------------------------------------------------------------------------
4. Motion to report H.R. 469 Favorably to the House.
Approved by a rollcall vote of 15 to 8.
ROLLCALL NO. 4
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Smith (TX).................................
Mr. Chabot (OH)................................ X
Mr. Issa (CA)..................................
Mr. King (IA).................................. X
Mr. Franks (AZ)................................ X
Mr. Gohmert (TX)............................... X
Mr. Jordan (OH)................................
Mr. Poe (TX)................................... X
Mr. Marino (PA)................................ X
Mr. Gowdy (SC).................................
Mr. Labrador (ID).............................. X
Mr. Farenthold (TX)............................ X
Mr. Collins (GA)............................... X
Mr. DeSantis (FL)..............................
Mr. Buck (CO).................................. X
Mr. Ratcliffe (TX)............................. X
Ms. Roby (AL)..................................
Mr. Gaetz (FL).................................
Mr. Johnson (LA)............................... X
Mr. Biggs (AZ).................................
Mr. Rutherford (FL)............................ X
Ms. Handel (GA)................................ X
Mr. Conyers, Jr. (MI), Ranking Member.......... X
Mr. Nadler (NY)................................ X
Ms. Lofgren (CA)............................... X
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN)................................. X
Mr. Johnson (GA)...............................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI)............................. X
Mr. Swalwell (CA)..............................
Mr. Lieu (CA)..................................
Mr. Raskin (MD)................................ X
Ms. Jayapal (WA)............................... X
Mr. Schneider (IL)............................. X
------------------------
Total...................................... 15 8
------------------------------------------------------------------------
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 H.R. 469, 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, September 19, 2017.
Hon. Bob Goodlatte, 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. 469, the Sunshine
for Regulations and Regulatory Decrees and Settlements Act of
2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Janani
Shankaran who can be reached at 226-2860.
Sincerely,
Keith Hall.
Enclosure.
cc: Honorable John Conyers, Jr.
Ranking Member
H.R. 469--Sunshine for Regulations and Regulatory Decrees and
Settlements Act of 2017.
As ordered reported by the House Committee on the Judiciary on July 12,
2017.
H.R. 469 would modify the process used to develop consent
decrees and settlement agreements that require federal agencies
to take specified regulatory actions. When citizens or
organizations file a lawsuit against a government agency, both
parties can negotiate a consent decree or settlement agreement
as an alternative to a trial. In certain cases, the terms of
the consent decree or settlement agreement may require an
agency to undertake a regulatory action before a specified
deadline. H.R. 469 would apply to such cases.
Under the bill, federal agencies would be required to
publish proposed consent decrees and settlement agreements in
the Federal Register for public comment 60 days prior to filing
with the court and to respond to all public comments. The bill
also would prohibit a court from approving a consent decree or
settlement agreement unless any such agreement incorporates
adequate time and procedures for agencies to comply with
statutes that govern rulemaking. The legislation would require
the Attorney General (for cases litigated by the Department of
Justice) or the head of the relevant federal agency to certify
approval of certain types of settlement agreements and consent
decrees to the court. Finally, H.R. 469 would require courts to
more closely review consent decrees and settlement agreements
when agencies seek to modify them.
Based on an analysis of preliminary information provided by
the Department of Justice, the Administrative Office of the
U.S. Courts, and other agencies that are frequently involved in
consent decrees--the Environmental Protection Agency, the
Forest Service, and the Department of the Interior--CBO
estimates that implementing H.R. 469 would cost $9 million over
the 2018-2022 period; any such spending would be subject to the
availability of appropriated funds. Most of those additional
costs would be incurred to hire additional staff because
litigation involving consent decrees and settlement agreements
would probably take longer under the bill. Federal agencies and
courts would face additional administrative requirements,
including the requirement to make more information available to
the public.
Enacting H.R. 469 would affect direct spending; therefore,
pay-as-you-go procedures apply. Under several statutes,
plaintiffs who successfully challenge the federal government
are entitled to repayment of attorneys' fees through the
Department of the Treasury's Judgment Fund (a permanent
appropriation available to pay claims against the government).
The annual total of all such payments has averaged about $2
million in recent years. By lengthening the process of
developing consent decrees and settlement agreements, H.R. 469
would lead to an increase in the amount of reimbursable
attorneys' fees, thus increasing the amount of such payments
from the Judgment Fund. Based on average hourly attorney fees
and the number of covered civil actions in recent years, CBO
estimates that the small additional workload would increase
reimbursable attorney's costs and direct spending by about $1
million over the 2018-2027 period. Enacting the bill would not
affect revenues.
CBO estimates that enacting H.R. 469 would not
significantly increase net direct spending or on-budget
deficits in any of the four consecutive 10-year periods
beginning in 2028.
H.R. 469 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 Janani
Shankaran. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
Duplication of Federal Programs
No provision of H.R. 469 establishes or reauthorizes a
program of the Federal government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee finds that H.R. 469 contains no directed rule
makings within the meaning of 5 U.S.C. Sec. 551.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 469
limits the ability of defendant federal regulators and pro-
regulatory plaintiffs to abuse federal consent decrees and
settlement agreements to require new regulations, reorder
regulatory priorities, bind the discretion of future
administrations, or limit the rights of regulated entities and
State, local, and Tribal co-regulators affected by actions
taken under such decrees and settlements.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 469 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
2017.''
Sec. 2. Definitions
Under the definitions in Section 2, the bill applies to
specific classes of consent decrees and settlements, as
follows:
Subsec. 2(1): ``Agency'' and ``Agency action'' have
the meanings given those terms under 5 U.S.C. Sec. 551.
Subsec. 2(2): ``Covered civil action'' means a civil
action brought 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.
Subsec. 2(3): ``Covered consent decree'' means any
consent decree entered in a covered civil action and
any consent decree 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.
Subsec. 2(4): ``Covered consent decree or settlement
agreement'' means a covered consent decree and a
covered settlement agreement.
Subsec. 2(5): ``Covered settlement agreement'' means
any settlement agreement entered in a covered civil
action and any 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.
Sec. 3. Consent decree and settlement reform
Section 3 of the bill sets forth the following requirements
applicable to consent decrees and settlement agreements covered
by the bill:
Subsec. 3(a)(1)--notice of intent to sue and
complaints in covered civil actions must be made
publicly available, within 15 days after receipt of
service of the notice of intent to sue or the
complaint, respectively, through readily accessible
means, including electronic means by the agency against
which the action is filed.
Subsec. 3(a)(2)--the opportunity for affected parties
to intervene in the litigation must conclude before
covered consent decrees and settlement agreements may
be proposed to the court.
Subsec. 3(b)(1)--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.
Subsec. 3(b)(2)--in considering motions to intervene,
the court must take due account of whether the movant
is a state, local, or tribal government that co-
administers 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.
Subsec. 3(c)(1)-(2)--if the court grants
intervention, it must include the plaintiff, defendant
agency, and intervenor(s) in court-supervised
settlement talks. Settlement negotiations are to occur
in the court's mediation or ADR program or to be
presided over by a district judge other than the
presiding judge, a magistrate judge, or a special
master, as determined appropriate by the presiding
judge.
Subsec. 3(d)(1)--the defendant agency must publish in
the Federal Register and online any proposed consent
decree or settlement agreement for no fewer than 60
days of public comment before filing it with the court
and must specify the statutory basis for the covered
consent decree or settlement. The agency must also
publish a description of the covered consent decree or
settlement, including whether it provides for an award
of attorney's fees.
Subsec. 3(d)(2)(A)--during the 60-day period, the
defendant agency must allow public comment on any issue
related to the matters alleged in the complaint in the
applicable civil action or addressed or affected by the
covered consent decree or settlement agreement.
Subsec. 3(d)(2)(B)--the defendant agency must respond
to any public comments received.
Subsec. 3(d)(2)(C)--the defendant agency must submit
to the court a summary of the public comments and
agency responses when it moves for entry of the covered
consent decree or dismissal of the case based on the
settlement agreement, inform the court of the statutory
basis for the proposed covered consent decree or
settlement, certify an index of the administrative
record for the notice and comment proceeding to the
court, and make the administrative record fully
accessible to the court.
Subsec. 3(d)(2)(D)--the court must include in the
record the index of the administrative record certified
by the agency under subparagraph (C) and any documents
listed in the index that any party or amicus curiae
appearing before the court in the action submits to the
court.
Subsec. 3(d)(3)(A)--the defendant agency may, at its
discretion, hold a public agency hearing on whether to
enter into the proposed consent decree or settlement
agreement.
Subsec. 3(d)(3)(B)--If such a hearing is held, then a
summary of the proceedings must be filed with the
court, the hearing record must be certified to the
court and included in the judicial record, and full
access to the hearing record must be given to the
court.
Subsec. 3(d)(4)--if a proposed 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 covered
consent decree or settlement agreement does not
address, how the covered consent decree or settlement
agreement would affect the discharge of those duties,
and why the covered consent decree's or settlement
agreement's effects on the order in which the agency
discharges its mandatory duties is in the public
interest.
Subsec. 3(e)(1)-(2)--in the case of a covered consent
decree, 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 covered consent decree
that includes terms that: (i) convert into a non-
discretionary duty a discretionary authority of an
agency to propose, promulgate, revise, or amend
regulations; (ii) commit an agency to expend funds that
have not been appropriated and that have not been
budgeted for the regulatory action in question; (iii)
commit an agency to seek a particular appropriation or
budget authorization; (iv) divest an agency of
discretion committed to the agency by statute or the
Constitution of the United States, without regard to
whether the discretion was granted to respond to
changing circumstances, to make policy or managerial
choices, or to protect the rights of third parties; or
(v) otherwise affords relief that the court could not
enter under its own authority upon a final judgment in
the civil action.
In the case of a covered settlement agreement, 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 covered settlement agreement
that provides a remedy for failure by the agency to
comply with the terms of the covered settlement
agreement other than the revival of the civil action
resolved by the covered settlement agreement and that:
(i) interferes with the authority of an agency to
revise, amend, or issue rules under the procedures set
forth in chapter 5 of title 5, United States Code, or
any other statute or executive order prescribing
rulemaking procedures for a rulemaking that is the
subject of the covered settlement agreement; (ii)
commits the agency to expend funds that have not been
appropriated and that have not been budgeted for the
regulatory action in question; or (iii) for a covered
settlement agreement that commits the agency to
exercise in a particular way discretion which was
committed to the agency by statute or the Constitution
of the United States to respond to changing
circumstances, to make policy or managerial choices, or
to protect the rights of third parties.
Subsec. 3(f)(1)--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 covered consent decree
or settlement agreement during the agency's notice and
comment process.
Subsec. 3(f)(2)(A)-(B)--the court must ensure that a
proposed consent decree or settlement agreement allows
sufficient time and procedure for the agency to comply
with the Administrative Procedure Act and other
applicable statutes that govern rulemaking, and, unless
contrary to the public interest, any executive orders
that govern rulemaking;
Subsec. 3(g)--requires agencies to submit annual
reports to Congress on the number, identity, and
content of covered civil actions brought against and
covered consent decrees and settlement agreements,
including the statutory bases of the covered consent
decrees and settlement agreements, and the decrees' and
settlements' related complaints and attorneys' fee
awards.
Sec. 4. 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 and settlement agreements due to agency obligations to
fulfill other duties or changed facts and circumstances.
Sec. 5. Effective date
The bill becomes effective upon enactment and applies to
any covered civil action filed or covered consent decree or
settlement agreement proposed to a court on or after that date.
Dissenting Views
H.R. 469, the ``Sunshine for Regulations and Regulatory
Decrees and Settlements Act of 2017,'' threatens to undermine
the ability of federal regulators to protect the health and
safety of Americans. This ill-conceived bill imposes numerous
new procedural burdens on agencies and courts intended to
dissuade them from using consent decrees and settlement
agreements to resolve enforcement actions filed to address
agency noncompliance with the law. Among these burdens are the
requirements that agencies solicit public comments on such
proposed consent decrees and settlement agreements and that
they respond to each public comment before submitting them to
the court. The bill would also require courts to presume,
subject to rebuttal, that almost any private third party is
entitled to intervene in litigation concerning a regulatory
action and would require that such third party be permitted to
participate in settlement negotiations between the litigants.
Although proponents of this legislation argue that agencies
and interest groups collude to ``sue and settle'' in order to
avoid compliance with the rulemaking procedures set forth in
the Administrative Procedure Act (APA),\1\ as well as other
statutes, these unsubstantiated allegations ignore long-
established procedures that regulate agencies' use of consent
decrees and settlement agreements. H.R. 469 will effectively
delay and possibly derail efforts by agencies to implement
congressionally-mandated public health and environmental
safeguards. In addition, the bill will encourage costly and
wasteful litigation, the expense of which will be borne by
American taxpayers.
---------------------------------------------------------------------------
\1\5 U.S.C. Sec. Sec. 551-59, 701-06, 1305, 3105, 3344, 5372, 7521
(2017).
---------------------------------------------------------------------------
In recognition of H.R. 469's many serious flaws, the
Coalition for Sensible Safeguards--an alliance of more than 150
consumer, labor, research, faith, and other public-interest
groups--strongly opposes this legislation, stating that it
``would create a gauntlet of duplicative, burdensome, and time-
consuming procedures that apply to settlements and decrees,
once again slowing down the rulemaking process and preventing
federal law from being effectively implemented.''\2\ A
coalition of twenty-nine environmental groups--including the
Center for Biological Diversity, Earthjustice, Environmental
Defense Fund, and Sierra Club--similarly oppose the bill
because it would ``undermine the enforcement of federal laws
and impede the resolution of various consumer protection, anti-
discrimination, environmental, and public health cases before
our federal courts.\3\ Last Congress, the Obama Administration
issued a veto threat to substantively identical legislation,
stating that it ``would impose additional, unnecessary
procedural requirements that would seriously undermine the
ability of agencies to execute their statutory mandates,''
while addressing a ``nonexistent problem that is already
prohibited by Federal regulations: collusion between agencies,
interest groups, and the courts to avoid compliance with the
rulemaking procedures.''\4\
---------------------------------------------------------------------------
\2\Letter to Rep. Bob Goodlatte (R-VA), Chair, and Rep. John
Conyers, Jr. (D-MI), Ranking Member, H. Comm. on the Judiciary, from
the Coalition for Sensible Safeguards (July 11, 2017) (on file with the
H. Comm. on the Judiciary, Democratic Staff); Coalition for Sensible
Safeguards, Members, http://sensiblesafeguards.org/about-us/members/
(last visited on Oct. 6, 2017).
\3\Letter to Rep. Bob Goodlatte (R-VA), Chair, & Rep. John Conyers,
Jr. (D-MI), Ranking Member, H. Comm. on the Judiciary, from 29 public-
interest organizations (July 11, 2017) (on file with the H. Committee
on the Judiciary, Democratic Staff).
\4\Executive Office of the President, Office of Management and
Budget, Statement of Administration Policy on H.R. 712, the ``Sunshine
for Regulatory Decrees and Settlements Act of 2015'' (2016), http://
www.presidency.ucsb.edu/ws/?pid=111576.
---------------------------------------------------------------------------
For these reasons and others discussed below, we strongly
oppose H.R. 469 and respectfully dissent.
DESCRIPTION AND BACKGROUND
H.R. 469, the ``Sunshine for Regulatory Decrees and
Settlements Act of 2017,'' is intended to address the perceived
problem of collusion between public-interest plaintiffs and
sympathetic federal agencies in entering into consent decrees
or settlement agreements that oblige the agency to take a
particular action regarding a regulatory action, such as a
rulemaking, often under a certain timeline. Proponents of the
bill call this alleged phenomenon ``sue and settle.''
A description of the bill's substantive provisions follows.
Section 2 defines various terms. Of significance, section 2(1)
imports the definitions of ``agency'' and ``agency action''
from the APA. As a result, H.R. 469 would apply to executive
branch as well as independent agencies.\5\
---------------------------------------------------------------------------
\5\Independent regulatory agencies, as opposed to executive branch
agencies, are considered ``independent'' because the President has
limited authority to remove their leaders, who can only be removed for
cause, rather than simply serving at the President's pleasure. Such
agencies are usually styled ``commissions'' or ``boards'' (e.g.,
National Labor Relations Board, Securities and Exchange Commission).
Stephen G. Breyer et al., Administrative Law and Regulatory Policy 100
(4th ed. 1999).
---------------------------------------------------------------------------
Section 2(2) defines ``covered civil action'' as meaning a
civil action that: (1) seeks to compel agency action; (2)
alleges that an agency is unlawfully withholding or
unreasonably delaying ``agency action relating to a regulatory
action'' that affects the rights of private third parties or
state, local, or tribal governments; and (3) is brought
pursuant to the judicial review provisions of the APA or any
other statute authorizing judicial review of agency action. The
scope of and distinction between ``agency action'' and
``regulatory action'' are not entirely clear, nor is the
meaning of ``rights'' or ``private persons.'' Given that these
are threshold terms, their vagueness is likely to lead to
litigation over whether H.R. 469's provisions apply to a given
proposed consent decree or settlement agreement.
Section 2(3) defines ``covered consent decree'' as a
consent decree in a covered civil action and any other consent
decree requiring agency action concerning a rulemaking or other
regulatory action that affects private third parties or state,
local, or tribal governments. Thus, H.R. 469 would apply not
just to consent decrees in covered civil actions, but to
matters that are not ``covered civil actions.''
Section 2(4) defines ``covered consent decree or settlement
agreement'' as a covered consent decree and a covered
settlement agreement. This definition's purpose is unclear.
Section 2(5) defines ``covered settlement agreement'' in a
manner similar to the definition for ``covered consent
decree,'' except that it applies to settlement agreements
rather than consent decrees. As with ``covered consent
decrees,'' this means that H.R. 469 could apply to settlement
agreements in cases that are not ``covered civil actions''
under the bill.
Section 3 of the bill sets forth several new procedures
that agencies and parties in litigation must follow before a
court may enter a consent decree or settlement agreement, as
well as certain rebuttable presumptions that courts must make.
Section 3(a)(1) requires a defendant agency in a covered
civil action to post online a copy of the notice of intent to
sue and the complaint in the covered civil action not later
than 15 days after receiving service of each. Section 3(a)(2)
prohibits a party to a civil action from moving to enter a
covered consent decree or to dismiss a civil action pursuant to
a covered settlement agreement until after compliance with the
bill's notice-and-comment requirements or after a public
hearing allowed under the bill, whichever is later.
Section 3(b)(1) applies a unique standard for third-party
intervention in covered civil actions. Specifically, it
requires a court, when considering a motion to intervene in a
covered civil action or in a civil action in which a covered
consent decree or settlement agreement is proposed, to presume
that the interests of ``a person who alleges that the agency
action in dispute would affect the person'' would not be
adequately represented by the parties to the action. This
places the burden on the non-moving parties to show that they
can adequately represent the putative intervenor's interests,
in contrast to current law, which places the burden on the
party seeking intervention to demonstrate that its interests
are not adequately represented by the parties per Federal Rule
of Civil Procedure 24.
With respect to motions to intervene by state, local, and
tribal governments, section 3(b)(2) requires a court to ``take
due account of whether the movant'' jointly administers with a
defendant agency the statutory provisions giving rise to the
underlying lawsuit or administers under state, local, or tribal
law an authority that would be preempted by the regulatory
action at issue in the underlying lawsuit.
Section 3(c) outlines certain requirements regarding the
negotiation to settle a covered civil action or to reach an
agreement on a covered consent decree or settlement agreement.
Section 3(c)(1) requires that such negotiation be conducted
pursuant to the court's alternative dispute resolution program
or by a judge other than the presiding judge, a magistrate, or
a special master, as the presiding judge may determine. Such
settlement negotiations must also include any intervening
party.
Section 3(d) imposes a series of notice-and-comment
procedures on agencies before they can file a consent decree or
settlement agreement with a court. Section 3(d)(1) requires an
agency to publish in the Federal Register and post online a
proposed covered consent decree or settlement agreement and a
description of its terms (including whether it provides for
attorneys' fees or costs and a basis for such award) at least
60 days before such consent decree or settlement agreement is
filed with a court.
Section 3(d)(2)(A) requires the agency to accept public
comment on any issue in the underlying civil action or
regarding the proposed consent decree or settlement agreement
during that minimum 60-day period provided for in section
3(d)(1). Section 3(d)(2)(B) requires the agency to respond to
any public comments. Section 3(d)(2)(C) requires an agency to:
(1) inform the court of the statutory basis for the proposed
consent decree or settlement agreement and a summary of public
comments that it has received; (2) submit to the court a
certified index of the administrative record of the notice and
comment proceeding; and (3) make the administrative record
available to the court. Finally, section 3(d)(2)(D) requires
the court to include in the record of the underlying civil
action the administrative record submitted by an agency, as
well as any documents listed in the index that any party or
amicus curiae appearing before the court submits.
Section 3(d)(3) allows an agency to hold a public hearing
on whether to enter into a proposed covered consent decree or
settlement agreement and outlines the procedures for holding
such a hearing.
Section 3(d)(4) requires an agency to present to the court
certain explanations before moving to enter a covered consent
decree or settlement agreement, or to dismiss the civil action
based on the covered consent decree or settlement agreement,
when the agency is required to take an action by a date certain
pursuant to such decree or settlement. The required
explanations must describe: (1) any required regulatory action
that the agency has not taken and that the decree or settlement
does not address; (2) a description of how the decree or
settlement would affect the discharge of such required
regulatory action; and (3) why the effects of the decree or
settlement on the discharge of required regulatory action would
be in the public interest.
Section 3(e) codifies long-standing guidelines, known as
the Meese Memo, which Justice Department and other agency
attorneys follow to ensure that consent decrees or settlement
agreements are not used by them to circumvent the normal
rulemaking process. These guidelines are already codified in
the Code of Federal Regulations.\6\ Section 3(e)(1) provides
that if a covered consent decree or settlement agreement
contains certain terms as set forth in section 3(e)(2), the
Attorney General or the head of an independent agency
(depending on which agency is the litigating party) must submit
to the court a signed certification that he or she approves the
proposed consent decree or settlement agreement. Section
3(e)(2) sets forth the terms that would subject a proposed
covered decree or settlement to the certification requirement.
For covered consent decrees, these terms are those that: (1)
convert an agency's discretionary rulemaking authority into a
nondiscretionary rulemaking obligation; (2) commit an agency to
expend funds for the regulatory action at issue that have not
been appropriated and budgeted; (3) commit an agency to seek a
particular appropriation or budget authorization; (4) divest an
agency of discretion committed to it by statute or the
Constitution; or (5) affords relief that the court otherwise
would not have authority to grant. For covered settlement
agreements, the terms triggering the certification requirement
are those that: (1) remedy the agency's failure to comply with
the covered settlement agreement, other than a revival of the
underlying civil action; and (2) interfere with agency
rulemaking procedures under the APA, another statute, or
executive order; commit the agency to expend non-appropriated
and non-budgeted funds for the regulatory action at issue; or
commit the agency to exercise discretion in a particular way
when the discretion was committed to it by statute or the
Constitution to respond to changing circumstances, to make
policy or managerial choices, or to protect the rights of third
parties.
---------------------------------------------------------------------------
\6\28 C.F.R. Sec. Sec. 0.160-0.163 (2017).
---------------------------------------------------------------------------
Section 3(f) imposes certain requirements on courts with
respect to proposed covered consent decrees and settlement
agreements. Section 3(f)(1) requires a court reviewing a
proposed covered consent decree or settlement agreement to
presumptively allow amicus participation by any party who filed
public comments or participated in a public hearing regarding
such proposed decree or settlement. Section 3(f)(2) prohibits a
court from entering a consent decree unless an agency has
sufficient time or procedures for the agency to comply with the
APA's rulemaking procedures or other statutes and executive
orders that govern rulemaking. The court must also ``ensure''
that such provisions are included in the proposed settlement
agreement.
Section 3(g) requires agencies to submit annual reports to
Congress that include the number, ``identity,'' and content of
covered civil actions brought against the agency as well as
covered consent decrees or settlement agreements that the
agency has entered into. Additionally, the report must describe
the statutory basis for each covered consent decree or
settlement agreement entered into by the agency and for any
award of attorneys' fees or costs in the underlying civil
action.
Section 4 of the bill specifies that when an agency moves
to modify a covered consent decree or settlement agreement
because it is no longer ``fully in the public interest due to
the obligations of the agency to fulfill other duties or due to
changed facts and circumstances,'' the court must review the
decree or settlement de novo.
Section 5 states that the bill's provisions apply to
covered civil actions filed on or after the bill's enactment
date. It further provides that the bill's provisions apply to
all covered consent decrees and covered settlement agreements
proposed on or after the bill's enactment date.
CONCERNS WITH H.R. 469
I. H.R. 469 Is a Solution in Search of a Problem
Proponents of H.R. 469 contend this legislation is
necessary to address alleged collusion among federal agencies,
public-interest organizations, and other private-citizen
plaintiffs that enter into consent decrees or settlements as a
way of circumventing rulemaking procedures. Tellingly, however,
these proponents offer debunked evidence to support their
contention. For example, at the hearing on substantively
similar legislation last Congress, William Kovacs, a Senior
Vice President at the U.S. Chamber of Commerce, testified that
as ``a result of the sue and settle process, the agency
intentionally transforms itself from an independent actor that
has discretion to perform its duties in a manner best serving
the public interest, into an actor subservient to the binding
terms of settlement agreements, including using its
congressionally-appropriated funds to achieve the demands of
specific outside groups.''\7\ In support of his statement, he
cited a 2013 U.S. Chamber of Commerce study.\8\
---------------------------------------------------------------------------
\7\The Responsibly And Professionally Invigorating Development Act
of 2015 (RAPID Act), the Sunshine for Regulatory Decrees and
Settlements Act of 2015, and the Searching for and Cutting Regulations
that are Unnecessarily Burdensome Act of 2015 (SCRUB Act): Hearing on
H.R. 348, H.R. 712 & H.R. 1155 Before the Subcomm. on Regulatory
Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary,
114th Cong. 15-16 (2015), (statement of William Kovacs, Senior Vice
President at the U.S. Chamber of Commerce) [hereinafter 2015 Hearing];
The Sunshine for Regulatory Decrees and Settlements Act of 2013:
Hearing on H.R. 1493 Before the Subcomm. on Regulatory Reform,
Commercial and Antitrust Law of the H. Comm. on the Judiciary, 113th
Cong. 86 (2013) [hereinafter 2013 Hearing]; 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 2012 Hearing] (statement of Roger R.
Martella, Jr., Partner, Sidley Austin LLP) (``[C]ertain groups
increasingly are employing a `sue and settle' approach to interactions
with the government on regulatory issues.'').
\8\U.S. Chamber of Commerce, Sue and Settle: Regulating Behind
Closed Doors (May 2013), https://www.uschamber.com/sites/default/files/
documents/files/SUEANDSETTLEREPORT-Final.pdf.
---------------------------------------------------------------------------
But the independent and non-partisan Government
Accountability Office (GAO) has subsequently issued a report in
December 2014 that made several findings that refute the claims
of H.R. 469's supporters. The report, which focused on lawsuits
involving environmental litigation, found that ``the effect of
settlements in deadline suits on EPA's rulemaking priorities is
limited.''\9\ The GAO referred to so-called ``sue and settle''
litigation as ``deadline suits'' because they involve an
agency's non-performance of a nondiscretionary act, which is
required by law, by a deadline also imposed by law. The GAO
noted that certain laws allow for any party to compel the
Environmental Protection Agency (EPA) through lawsuits to
``take statutorily required actions'' within a designated time
frame if it has not done so already.\10\ As the GAO also
observed, deadline suits typically involve a person suing the
EPA because it ``missed a recurring deadline to review and
revise'' an existing rule.\11\ And, as Robert Weissman, the
President of Public Citizen, explained during a hearing in June
2017, these lawsuits are some of the ``simplest to understand''
because they only allege that agencies ``broke the law by
failing to commit a congressionally mandated action by a date
established in statute.''\12\ Mr. Weissman further noted that
enforcing these laws through deadline litigation is important
to ``holding federal agencies accountable when they ignore
Congress.''\13\ Furthermore, as the GAO found, it is ``very
unlikely that the government will win'' these lawsuits.\14\
---------------------------------------------------------------------------
\9\U.S. Gov't Accountability Office, GAO-15-34, Environmental
Litigation: Impact of Deadline Suits on EPA's Rulemaking is Limited
(2014), http://www.gao.gov/assets/670/667533.pdf.
\10\Id. at 3.
\11\Id.
\12\A Time to Reform: Oversight of the Activities of the Justice
Department's Civil, Tax and Environment and Natural Resources Divisions
and the U.S.: Hearing Before the Subcomm. on Regulatory Reform,
Commercial and Antitrust Law of the H. Comm. on the Judiciary, 115th
Cong. 17 (2017), http://docs.house.gov/meetings/JU/JU05/20170608/
106076/HHRG-115-JU05-Wstate-WeissmanR-20170608.pdf.
\13\Id.
\14\U.S. Gov't Accountability Office, GAO-15-34, Environmental
Litigation: Impact of Deadline Suits on EPA's Rulemaking is Limited 7
(2014), http://www.gao.gov/assets/670/667533.pdf.
---------------------------------------------------------------------------
The GAO has also determined that there is little evidence
that deadline suits determine the substantive outcome of agency
action, as alleged by proponents of H.R. 469.\15\ According to
the GAO, ``EPA officials stated that they have not, and would
not agree to, settlements in a deadline suit that finalize the
substantive outcome of the rulemaking or declare the substance
of the final rule.''\16\ The GAO found little evidence that
deadline suits determine the substantive outcome of agency
action, as alleged by proponents of H.R. 469.\17\ A subsequent
GAO report issued in February 2017 bolsters this conclusion. In
a study of 141 lawsuits against the U.S. Fish and Wildlife
Service (FWS) and National Marine Fisheries Service (NMFS), GAO
found no evidence that either agency circumvented the
rulemaking system through deadline litigation:
The majority of deadline suits filed during fiscal
years 2005 through 2015 were resolved through
negotiated settlement agreements that established
schedules for the agencies to complete the actions
involved in the suits. Agency officials said that most
deadline suits are resolved through settlement because
it is undisputed that a statutory deadline was missed.
Other than setting schedules for completing Section 4
actions, the settlement agreements did not affect the
substantive basis or procedural rule-making
requirements the Services were to follow in completing
the actions, such as providing opportunities for public
notice and comment on proposed listing rules he U.S.
Fish and Wildlife Service (FWS) and National Marine
Fisheries Service (NMFS).\18\
---------------------------------------------------------------------------
\15\2015 Hearing, supra note 7, at 16 (statement of William Kovacs,
Senior Vice President, Chamber of Commerce) (``These agreements often
go beyond simply enforcing statutory deadlines and themselves become
the legal authority for expansive regulatory action with no meaningful
participation by affected parties or the public.'').
\16\U.S. Gov't Accountability Office, GAO-15-34, Environmental
Litigation: Impact of Deadline Suits on EPA's Rulemaking is limited 8
(2014), http://www.gao.gov/assets/670/667533.pdf.
\17\2015 Hearing, supra note 7, at 16.
\18\U.S. Gov't Accountability Office, GAO-17-304, Environmental
Litigation: Information on Endangered Species Act Deadline Suits
(2017), https://www.gao.gov/assets/690/683058.pdf.
These findings confirm that there is little support for the
proposition that federal agencies engage in ``back-room deals''
with pro-regulatory groups to circumvent federal laws or
substantively bind the agency in a subsequent rulemaking.\19\
In fact, as Policy Advocate for Public Citizen Amit Narang
clarified during the hearing on substantively identical
legislation last Congress, ``All of the settlements scrutinized
by GAO pursuant to the EPA's remaking authority under the Clean
Air Act went through the public notice and comment process
allowing all members of the public an opportunity to comment on
the rule before it is finalized.''\20\
---------------------------------------------------------------------------
\19\Id. at 8, 12.
\20\2015 Hearing, supra note 7, at 6-7.
---------------------------------------------------------------------------
John Walke, Clean Air Director and Senior Counsel with the
Natural Resources Defense Council, likewise identified serious
flaws with the Chamber's study. During a hearing before the
Judiciary Committee's Subcommittee on Courts, Commercial and
Administrative Law in the 113th Congress on substantively
similar legislation, Mr. Walke testified that the Chamber's
methodology relied on ``Internet searches identifying all cases
in which the EPA and an environmental group entered into a
consent decree or settlement agreement between 2009 and
2012.''\21\ In doing so, Mr. Walke explained that the report
ignored EPA settlements with industry parties or conservative
groups and did not examine any EPA settlements under the Bush
administration, during which the EPA also entered into
settlements and consent decrees, noting:
---------------------------------------------------------------------------
\21\2013 Hearing, supra note 7, at 115.
Most striking of all is that by merely compiling EPA
settlements (with just environmental groups, under just
[the Obama] administration), the report's methodology
quietly dispenses with any need for proof of collusion
or impropriety in consent decrees or settlement
agreements. The Chamber cannot remotely back up the
charge that collusion was involved in all of these
settlements, or even in any of them, so the report does
not even try.\22\
---------------------------------------------------------------------------
\22\Id. at 116.
Mr. Walke also observed that the Chamber report simply sought
to transform evidence of the use of a ``common and long-
accepted form of resolving litigation over clear legal
violations under any administration'' into evidence of
inappropriate collusion.\23\ It is also critical to note that,
while proponents of H.R. 469--including the Chamber of
Commerce--have focused their arguments in favor of the
legislation on consent decrees and settlements involving the
EPA, the bill would apply to consent decrees and settlement
agreements involving all federal agencies, not just the EPA.
---------------------------------------------------------------------------
\23\Id.
---------------------------------------------------------------------------
Likewise, John Cruden, a former senior career official with
the Justice Department's Environment and Natural Resources
Division (ENRD) for more than two decades during two Republican
and two Democratic Administrations, testified that the ``sue
and settle'' allegations were unfounded. In fact, he stated
that he was ``not aware of any instance of a settlement'' that
could remotely be described as ``collusive'' that occurred
during his long tenure as a senior ENRD official and that the
Justice Department ``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.''\24\ He also emphasized that agencies
enter settlements only when they have failed to meet mandatory
rulemaking obligations:
---------------------------------------------------------------------------
\24\2012 Hearing, supra note 7, at 106-107.
In my long experience with the types of cases covered
by [this legislation], 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.\25\
---------------------------------------------------------------------------
\25\Id. at 66, 106.
In addition, he explained that a proposed rule emerging from a
settlement would provide the same notice-and-comment
opportunities as any other rulemaking, and the final rule still
would be subject to challenge under the APA. Thus, this process
does not avoid public comment, and already allows interested
parties their full range of substantive and procedural
rights.\26\
---------------------------------------------------------------------------
\26\Id.
---------------------------------------------------------------------------
Mr. Walke also noted in his Subcommittee testimony that the
Chamber report ultimately identifies as its culprit the
citizen-suits that Congress has authorized under various
environmental statutes.\27\ The entire ``sue and settle''
allegation that undergirds H.R. 469, therefore, is really aimed
at congressionally-authorized provisions that permit citizens
to sue agencies to enforce statutory requirements. If these
citizen-suit provisions are the true cause for concern, then it
is for H.R. 469's proponents to push for their repeal by
Congress, rather than seek to disrupt the use of longstanding
and uncontroversial mechanisms for resolving litigation.
---------------------------------------------------------------------------
\27\2013 Hearing, supra note 7, at 154.
---------------------------------------------------------------------------
Other observers have also refuted the ``sue and settle''
allegation. As a Sierra Club representative observed, 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.''\28\ Likewise, David Goldston of
the Natural Resources Defense Council testified in 2011 at a
House Energy and Commerce subcommittee hearing that the ``whole
`sue and settle' narrative is faulty.''\29\
---------------------------------------------------------------------------
\28\John McCardle, House Republicans Accuse EPA, Enviros of
Collusion, N.Y. Times (July 15, 2011), http://www.nytimes.com/gwire/
2011/07/15/15greenwire-house-republicans-accuse-epa-enviros-of-collus-
69925.html.
\29\Id.
---------------------------------------------------------------------------
In the absence of any credible evidence that federal
agencies collude with plaintiffs to circumvent proper
rulemaking procedures by use of consent decrees and settlement
agreements, H.R. 469 simply addresses a non-existent problem.
II. By Undermining Enforcement of Mandatory Rulemaking Duties, H.R. 469
Threatens Public Health and Safety
H.R. 469, by undermining the ability of agencies to enforce
statutory mandates, jeopardizes public health and safety. As
noted, most consent decrees and settlement agreements arise
from civil actions where a citizen lawsuit has been filed
against an agency for its failure to meet a statutory
rulemaking deadline or other rulemaking duty. Congress imposes
these mandatory duties on agencies--many of which concern
public health and safety--so that they will be executed. In
fact, Congress authorizes citizen-lawsuit provisions in these
statutes to ensure agency compliance with these statutory
mandates. Therefore, when agencies fail to meet such mandatory
duties, the harm that they were supposed to respond to remains
unaddressed.
Given the fact that many of these statutory mandates
concern public health and safety, H.R. 469, by making it harder
for citizens to compel agencies to meet their duties, puts
public health and safety at risk. Health and safety concerns
are not a mere abstraction. Regarding the issue of workplace
safety alone, the Bureau of Labor Statistics reported that in
2013, ``Slightly more than 3.0 million nonfatal workplace
injuries and illnesses were reported by private industry
employers.''\30\ Additionally, an analysis by the National
Institute for Occupational Safety and Health, the American
Cancer Society, and Emory University's School of Public Health
estimates that after factoring in disease and injury data
``there are a total of 55,200 US deaths annually resulting from
occupational disease or injury (range 32,200-78,200).''\31\ To
the degree that H.R. 469 makes it harder for citizens to force
agencies to address these kinds of concerns, it unnecessarily
endangers the American people.
---------------------------------------------------------------------------
\30\U.S. Dep't of Labor Bureau of Labor Statistics, Employer-
Reported Workplace Injury and Illness Summary (Dec. 4, 2014), http://
www.bls.gov/news.release/osh.nr0.htm.
\31\Kyle Steenland et al., Dying for Work: The Magnitude of US
Mortality from Selected Cases of Death Associated with Occupation, 43
Am. J. Industrial Medicine 461 (2003).
---------------------------------------------------------------------------
In response to these concerns presented by the bill,
several Democratic Members offered amendments exempting certain
categories of rules from H.R. 469. For example, 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 environmental
justice in low-income minority communities as defined by
Executive Order 12898.\32\ This amendment failed by a vote of 7
to 15.
---------------------------------------------------------------------------
\32\Tr. of Markup of H.R. 469, ``The Sunshine for Regulations and
Regulatory Decrees and Settlements Act of 2017,'' by the H. Comm. on
the Judiciary, 115th Cong. 73 (July 12, 2017) [hereinafter H.R. 469
Markup Tr.].
---------------------------------------------------------------------------
Subcommittee Ranking Member David N. Cicilline (D-RI)
offered an amendment that would have exempted from the bill any
consent decree or settlement agreement concerning a deadline
established by the Comprehensive Addiction and Recovery Act of
2016 (CARA)\33\ to address the misuse of prescription pain
killers.\34\ Recognizing that many laws passed by Congress
include deadlines for agency action, Representative Cicilline
stated in support of his amendment that CARA requires certain
regulatory actions within 18 months of the bill's enactment,
including forming best practices for the research and treatment
of opioid use disorder. Should the Department of Health and
Human Services not perform this mandatory duty by the statute's
deadline, any party with standing could enforce the
requirement. Nevertheless, as Representative Cicilline noted,
H.R. 469 ``would paralyze this process by requiring notice and
comment prior to the settlement of deadline suits and allowing
practically unlimited intervention in these cases.''\35\ This
amendment failed by a vote of 8 to 15.
---------------------------------------------------------------------------
\33\Pub. L. No. 114-198 (2016).
\34\H.R. 469 Markup Tr., supra note 32, at 93.
\35\Id. at 94.
---------------------------------------------------------------------------
III. H.R. 469 Is Unnecessary in Light of the Justice Department's
``Meese Memo'' and Other Existing Legal Mechanisms
H.R. 469's proponents offer no evidence substantiating the
existence of the so-called sue-and-settle problem. The likely
reason is that the Meese Memo, codified in the Code of Federal
Regulations,\36\ has for more than 30 years specified a
detailed process intended to address the potential abuse of
consent decrees and settlement agreements used by federal
agencies. In 1986, then-United States Attorney General Edwin
Meese issued a set of guidelines for the Justice Department and
other government attorneys in entering into consent decrees and
settlement agreements in response to the following concerns:
---------------------------------------------------------------------------
\36\28 C.F.R. Sec. Sec. 0.160-0.163 (2017).
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.\37\
---------------------------------------------------------------------------
\37\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), 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. It directed departments and agencies to
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.''\38\ The policy
outlines similar restrictions on settlement agreements.\39\ 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.\40\
The Meese Memo ultimately was codified into the Code of Federal
Regulations.\41\
---------------------------------------------------------------------------
\38\Id.
\39\Id.
\40\Id.
\41\28 C.F.R. Sec. Sec. 0.160-0.163 (2017).
---------------------------------------------------------------------------
H.R. 469's proponents also fail to provide any proof that
the Justice Department 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.''\42\ Moreover, the Majority's witnesses at a hearing
on H.R. 469's predecessor in the 112th Congress specifically
praised the Meese Memo and offered no argument as to why it was
insufficient to address the alleged ``sue and settle''
problem.\43\
---------------------------------------------------------------------------
\42\2012 Hearing, supra note 7, at 111.
\43\See Id. at 60 (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.'').
---------------------------------------------------------------------------
A recent report by the GAO confirms that agencies continue
to follow the Meese Memo.\44\ In February 2017, GAO determined
that Department officials are guided by the Meese Memo when
negotiating settlement terms and may only commit agencies to
perform actions that are mandated by statute:
---------------------------------------------------------------------------
\44\U.S. Gov't Accountability Office, GAO-17304, Environmental
Litigation: Information on Endangered Species Act Deadline Suits
(2017), https://www.gao.gov/assets/690/683058.pdf.
According to officials from DOJ and the Services, the
agencies coordinate in deciding how to respond to a
deadline suit, including whether or not to negotiate a
settlement with the plaintiff or proceed with
litigation. In reaching its decision, DOJ considers
several factors, including whether there may be a legal
defense to the suit--such as providing information
establishing that the agency took action on the finding
at issue or that the plaintiff lacked standing--and the
likelihood that the government could obtain a favorable
outcome. The officials said that most deadline suits
are resolved through a negotiated settlement agreement
because in the majority of them, it is undisputed that
a statutory deadline was missed. . . . DOJ officials
said they are guided by a 1986 DOJ memorandum--referred
to as the Meese Memorandum--in negotiating settlement
terms. Accordingly, officials from DOJ and the Services
stated that any agreement to settle a deadline suit
would only include a commitment to perform a mandatory
Section 4 action by an agreed-upon schedule and would
not otherwise predetermine or prescribe a specific
substantive outcome for the actions to be completed by
the Services. Similarly, for those suits resolved by a
court order, DOJ officials said they present what they
believe is a reasonable timeframe for the court to
consider in establishing a schedule for the Services to
complete the action.\45\
---------------------------------------------------------------------------
\45\Id. at 20-21.
In addition to the Meese Memo, there are other mechanisms
that address the purported concerns of H.R. 469's proponents.
For example, parties whose interests may be affected by a
consent decree or settlement agreement may move to intervene in
the case pursuant to Federal Rule of Civil Procedure 24, under
which the moving party bears the burden of demonstrating that
the parties to the case do not adequately represent the
movant's interest.\46\ Similarly, any rulemaking that is
required as a result of a consent decree or settlement
agreement would still be subject to the APA's notice-and-
comment procedures, whereby affected parties who are not
parties to the consent decree or settlement agreement have the
opportunity to weigh in on any negative impacts of a proposed
rule.\47\
---------------------------------------------------------------------------
\46\Fed. R. Civ. P. 24(a)(2).
\47\5 U.S.C. Sec. 553 (2017).
---------------------------------------------------------------------------
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 effectively prevents the
government from doing so thereby making H.R. 469 unnecessary.
IV. H.R. 469 Opens the Door to Dilatory Tactics by Well-Financed
Opponents of Agency Action
In addition to being unnecessary, H.R. 469 threatens to
impose significant financial costs on taxpayers. Various
provisions of H.R. 469 would give opponents of regulations
opportunities to effectively stifle rulemaking by allowing them
to slowdown one of the processes by which agencies agree to
abide by their congressionally-assigned duty to regulate. As
Minority witnesses Messrs. Narang, Walke, and Cruden testified,
agencies enter into consent decrees and settlement agreements
when they have a mandatory duty to act, including the
requirement to promulgate a new rule.\48\ By opening
opportunities for industry to slow down this process, H.R. 469
effectively makes it more expensive for agencies to do what
Congress has mandated it to do.
---------------------------------------------------------------------------
\48\2015 Hearing, supra note 15; 2013 Hearing, supra note 7, at
117-118; 2012 Hearing, supra note 7, at 106-107.
---------------------------------------------------------------------------
Section 3(b)(1) of the bill, for example, contains a nearly
open-ended intervention right by mandating that a court
presume, subject to rebuttal, that the interests of any private
third party affected by the agency action in dispute in the
underlying litigation will not be represented by the parties to
that litigation.\49\ This presumption upends current law, which
places the burden of proof on a third party to show that its
interests are not represented by the parties in the case.\50\
Effectively, this shift in the burden of proof on the issue of
the representation of third-party interests will make it much
easier for any entity not a party to the case to intervene in a
case involving a consent decree or settlement agreement that
seeks to compel agency action.
---------------------------------------------------------------------------
\49\H.R. 469, 115th Cong. Sec. 3(b)(1) (2017).
\50\Fed. R. Civ. P. 24.
---------------------------------------------------------------------------
Hypothetically, under H.R. 469, 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,
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 construe section 3(b)(1) broadly,
this provision could allow virtually anyone to intervene in a
covered civil action.
Section 3(c) of H.R. 469 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.\51\ Such discussions must include the
plaintiff, defendant agency, and any third party
intervenors.\52\ 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.
---------------------------------------------------------------------------
\51\H.R. 469, 115th Cong., Sec. 3(c) (2017).
\52\Id.
---------------------------------------------------------------------------
H.R. 469 provides other opportunities for industry to
engage in dilatory tactics by virtue of sections 3(d)(1) and
3(d)(2)(A), which require an agency to publish any proposed
consent decree or settlement agreement and to allow at least 60
days for public comments.\53\ The agency must then respond to
every comment pursuant to section 3(d)(2)(B).\54\ Under these
provisions, industry interests could potentially overwhelm an
agency by flooding it with comments in an effort to stall
resolution of the underlying dispute, which, as noted, usually
concern enforcement of rulemaking deadlines.
---------------------------------------------------------------------------
\53\Id. at Sec. 3(d)(1), 3(d)(2)(A) (2017).
\54\Id. at Sec. 3(d)(2)(B).
---------------------------------------------------------------------------
As if forcing an agency to respond to potentially numerous
public comments on a proposed consent decree or settlement
agreement was not enough, section 3(f)(1) 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.\55\ This provision
would further allow industry and other regulatory opponents to
delay resolution of the underlying dispute between the
plaintiff and the defendant agency.
---------------------------------------------------------------------------
\55\Id. at Sec. 3(f)(1).
---------------------------------------------------------------------------
V. H.R. 469 Uses Ambiguous Language in Many Key Provisions That Will
Create Confusion, Litigation, and Delay in Resolving Disputes
Many of H.R. 469'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(2)
states that the bill applies to consent decrees and settlement
agreements in an action seeking to compel agency action and
alleging that the agency is ``unlawfully withholding or
unreasonably delaying agency action relating to a regulatory
action.''\56\ It is unclear what the distinction is between
``agency action'' and ``regulatory action,'' what the scope of
the phrase ``relating to'' is, or what ``unlawfully
withholding'' and ``unreasonably delaying'' mean, opening the
door to litigation over the meaning of these threshold terms.
---------------------------------------------------------------------------
\56\Id. at Sec. 2(2).
---------------------------------------------------------------------------
Additionally, section 2(2) refers to ``private persons''
whose ``rights'' are affected by the regulatory action, but the
bill fails to define what ``private parties'' or ``rights''
means.\57\ 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
text in H.R. 469, confusion and a lack of clarity over the
meaning of these terms will lead to litigation. H.R. 469's
requirement that, under certain circumstances, agencies must
inform the court of all mandatory rulemaking deadlines and
describe how a consent decree or settlement agreement ``would
affect the discharge of those duties,'' is thoroughly
ambiguous.\58\ The requirement, outlined in section 3(d)(4),
has no definition or clarification of what ``affect the
discharge of those duties'' would mean.
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\57\Id.
\58\Id. at Sec. 3(d)(4).
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H.R. 469 also imposes several new procedural requirements
on agencies and courts that are designed to slowdown the
resolution of litigation over an agency's failure to meet a
statutory deadline or other regulatory obligation. These
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) a requirement that agencies accept
public comments on proposed consent decrees or settlements 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 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. 469 will have the opposite result.
VI. The Cumulative Effect of H.R. 469'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. 469'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 (CBO) noted
that a previous version of H.R. 469 would impose millions of
dollars in costs ``primarily because litigation involving
consent decrees and settlement agreements would probably take
longer under the bill and agencies would face additional
administrative, including new requirements to report more
information to the public.''\59\
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\59\Congressional Budget Office, Cost Estimate for H.R. 712, The
Sunshine for Regulatory Decrees and Settlements Act of 2015 (2015),
https://www.cbo.gov/sites/default/files/hr7120.pdf.
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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 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.\60\ H.R. 469 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
John Cruden explained:
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\60\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.'').
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.\61\
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\61\2012 Hearing, supra note 7, at 108.
By making consent decrees and settlement agreements more
difficult and costly to enter into, H.R. 469 will generate
increased litigation costs and expensive judgments, which will
ultimately be passed along to the taxpayer.
VII. H.R. 469 Subverts the Federal Rules of Civil Procedure and
Judicial Discretion
H.R. 469 overrides the Federal Rules of Civil Procedure,
the courts' power to manage litigation in several respects, and
their authority to consider equities in their decision making.
First, it undermines Federal Rule of Civil Procedure 24, which
sets forth the process for determining when a third party may
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. H.R. 469 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. 469 tampers with the process for modifying
consent decrees under Federal Rule of Civil Procedure 60(b)(5).
Under that Rule, a court may 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.''\62\
Section 4 of H.R. 469 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.
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\62\Fed. R. Civ. P. 60(b)(5).
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Beyond the specific changes that H.R. 469 makes to 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. 469 repeatedly requires
courts to make certain presumptions (subject to rebuttal) on
other 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. 469 seeks to dictate
courtroom management issues that have traditionally been left
to judges to decide.
VIII. The Bill's Open-Ended Intervention Provision Could Undo Critical
Civil Rights Protections
Section 3(b)(1) of the bill would create a rebuttable
presumption that the interests of ``a person who alleges that
the agency action in dispute would affect the person . . .
would not be represented adequately by the existing parties to
the action,'' and then require that such party be included in
``[e]fforts to settle a covered civil action or otherwise reach
an agreement on a covered consent decrees or settlement
agreement.'' In effect, this rebuttable presumption would
reverse the burden for intervention currently in Federal Rule
of Civil Procedure 24 from the party seeking to intervene in
the case to the parties themselves.\63\
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\63\Fed. R. Civ. P. 24. 64H.R. 469 Markup Tr., supra note 32, at
50.
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In response to this concern, Ranking Member John Conyers,
Jr. (D-MI) offered an amendment that would have excluded from
the coverage of the bill a covered consent decree or settlement
agreement that prevents or is intended to prevent
discrimination based on race, religion, national origin, or any
other protected category.\64\ The amendment failed along a
party-line vote of 6-14.
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\64\H.R. 469 Markup Tr., supra note 32, at 50.
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CONCLUSION
As with all the anti-regulatory proposals this Committee
has considered in this Congress, H.R. 469 is a solution in
search of a problem. Notwithstanding a lack of credible
evidence that agencies ``collude'' with plaintiffs to enter
consent decrees or settlement agreements, this legislation will
impose new burdensome procedural requirements on agencies and
courts. As a result, well-funded third-party interests will
have further opportunities to delay the resolution of
litigation intended to force agencies to meet their legal
obligations. And, the bill will make it harder to resolve such
litigation quickly and cost-effectively. The cumulative effect
of H.R. 469 will be to derail a time-honored tool that has
helped protect the health and safety of Americans from a vast
array of life-threatening harms, including polluted air and
water, unsafe products, contaminated food, and adulterated
medicines.
There are already procedures in place that address any
purported collusion or lack of transparency. These procedures,
originally implemented during the Reagan Administration,
effectively deal with any such problem. Other than unsupported
allegations, however, proponents of H.R. 469 offer no
explanation as to why current law is insufficient. Instead, the
bill employs ambiguous terms in key provisions that will
actually generate additional litigation over their meaning.
Finally, H.R. 469 undermines existing civil procedure rules and
undermines judicial discretion.
For these reasons, we respectfully dissent and urge our
colleagues to oppose H.R. 469.
Mr. Conyers, Jr.
Mr. Nadler.
Ms. Lofgren.
Ms. Jackson Lee.
Mr. Cohen.
Mr. Johnson, Jr.
Mr. Deutch.
Mr. Gutierrez.
Ms. Bass.
Mr. Richmond.
Mr. Jeffries.
Mr. Cicilline.
Mr. Swalwell.
Mr. Lieu.
Ms. Jayapal.
Mr. Raskin.
[all]