Previously in this space, The Washington Examiner described an important new report compiled by an 11-person research team from the U.S. Chamber of Commerce entitled "Sue and Settle: Regulating Behind Closed Doors." The chamber's report identified at least 71 federal court cases since 2009 in which federal agencies -- most often, the Environmental Protection Agency -- made back-room deals with Big Green environmental activist groups like the Sierra Club and WildEarth Guardians. The activist groups then sued the agency asking the court to order the agency to do what it already agreed to do in the backroom. The group and the agency then told the court that they had settled their "issues" and the court issued a consent decree ratifying the whole rotten procedure.
Sue and settle is anti-democratic because it cuts out of the regulatory process everybody not present in the back-room dickering. Sue and settle is also unconstitutional -- at least in spirit if not fact -- since it supplants elected representatives making law in public with unelected bureaucrats making law behind closed doors. By denying an opportunity for public comment, the process also violates the Administrative Procedures Act that Congress approved in 1946 to insure transparency and accountability in the federal regulatory process. Finally, sue and settle is extraordinarily expensive because agencies typically use it to impose costly regulatory regimens without consideration of less expensive options typically proposed during the preliminary phase of rule-making under the APA.
Last year, the House approved the Sunshine for Regulatory Decrees and Settlements Act of 2012 that took vital first steps toward making sue and settle conform to the APA. The Senate, however, did nothing. As the chamber report explained, the act required that "before the agency and outside groups can file a proposed consent decree or settlement agreement with a court, the proposed consent decree or settlement has to be published in the Federal Register for 60 days to allow for public comment. Also, affected parties would be afforded an opportunity to intervene prior to the filing of the consent decree or settlement." The act has been reintroduced in the House this year as H.R. 1493 and in the Senate as S. 714.
But additional reforms are also essential to scour sue and settle of its intrinsically anti-democratic, anti-transparency characteristics. First, to ensure accountability, Congress should mandate that agencies and private parties to any proposed sue-and-settle deal must make public a comprehensive timeline of all participants and all contacts between them, with strong penalties attached for violations. Second, the agencies and private parties to any proposed sue-and-settle deal must, in conjunction with the Department of Justice, make public a full accounting of all tax dollars paid for any attorney fees or related costs, as well as the identities of the recipients of such payments.
Finally, there are at least 71 sue-and-settle deals now in the books as federal regulatory policy. For all the reasons made clear here and in the chamber's report, these deals are of doubtful legitimacy and should be suspended pending further congressional action on the issues raised by sue and settle. To do anything less would validate a process that is alien to the Constitution.