Regulation Through Litigation Bad for the Environment

Source: NCPA

Interest groups have bypassed proper procedures and forced the Environmental Protection Agency (EPA) to issue new, deficient regulations through their use of sue and settle litigation, according to a new report by National Center for Policy Analysis Senior Research Fellow Ann Norman.

According to the report, twenty U.S. statutes contain “citizen suit” provisions, which allow citizens to sue a federal agency when the agency fails to carry out nondiscretionary duties by its prescribed deadlines. Once a suit has been filed, the parties work out a settlement or consent decree among themselves, allowing regulation-friendly parties to craft rulemaking plans with a federal agency and block out third parties.

“Until there is reform, interest groups will continue using litigation as a tactic to direct agency action and circumvent standard rulemaking procedures,” says Norman. “It is disingenuous to suggest, as some in the EPA have, that sue and settle does not actually interfere with required rulemaking procedures.”

Plaintiffs have used sue and settle with great success. However, the agreements are often procedurally deficient, and the deadlines to which the litigants agree often leave interested parties with insufficient time to comment effectively on the proposed rules.

  • From 2009 to 2012, the U.S. Chamber of Commerce puts the number of sue and settle lawsuits at 71, with the Sierra Club and WildEarth Guardians leading the way as plaintiffs in 34 and 20 cases, respectively.  The EPA was a defendant in 60 of these cases.
  • After a lawsuit by groups including the Environmental Defense Fund and the Sierra Club, the EPA issued its Utility MACT rule, which regulates mercury emissions for power plants. The strict deadlines constricted the ability of the EPA to issue an effective final rule. Currently, the regulation carries an annual cost of $9.6 billion. At year-end 2012, 9.5 percent of coal-fired generation capacity had announced plans to retire due to the rule.
  • Environmental groups used sue and settle in five separate lawsuits to force EPA action on states’ Regional Haze plans. The Regional Haze program is intended to be a state program, but consent decrees from sue and settle suits have forced the EPA to impose its own federal plans on states, causing statewide electricity costs to skyrocket.

Sue and settle is an attractive vehicle for regulation, because it is very difficult for states and industries to intervene in these lawsuits. Moreover, plaintiffs are often compensated for their attorneys’ fees, incentivizing litigation.

“Public oversight and participation is critically important to the regulatory process,” emphasizes Norman. “Tactics such as sue and settle that circumvent those procedures deserve the strictest scrutiny.”

Environmental Regulation Through Litigation: