[House Report 114-184]
[From the U.S. Government Publishing Office]
114th Congress { } Report
1st Session { HOUSE OF REPRESENTATIVES } 114-184
======================================================================
SUNSHINE FOR REGULATORY DECREES AND SETTLEMENTS ACT OF 2015
_______
June 25, 2015.--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. 712]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 712) 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,
reports favorably thereon without amendment and recommends that
the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Hearings......................................................... 8
Committee Consideration.......................................... 8
Committee Votes.................................................. 8
Committee Oversight Findings..................................... 12
New Budget Authority and Tax Expenditures........................ 13
Congressional Budget Office Cost Estimate........................ 13
Duplication of Federal Programs.................................. 14
Disclosure of Directed Rule Makings.............................. 14
Performance Goals and Objectives................................. 14
Advisory on Earmarks............................................. 15
Section-by-Section Analysis...................................... 15
Dissenting Views................................................. 18
Purpose and Summary
H.R. 712, the ``Sunshine for Regulatory Decrees and
Settlements Act of 2015,'' 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
settlement, 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
1. LAbuse of Regulatory Consent Decrees and Settlement Agreements and
the Rise of ``Sue-and-Settle'' Litigation
Since the 1960's and 1970's, 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 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 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 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.
2. LSue-and-Settle Trends under the Obama Administration
Under the Obama administration, this phenomenon has become
particularly troubling. Not only has the Administration
generally increased the number of major rulemakings, but it has
engaged in a flurry of sue-and-settle cases. According to a
recent study of Clean Air Act and Clean Water Act sue-and-
settle cases, the U.S. Chamber of Commerce found that:
LThe sue-and-settle process is increasingly
being used as a technique to shape agencies' regulatory
agendas, without input from the public or the regulated
community.
LThe 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.
LThe Sierra Club was responsible for 34 of the
71 lawsuits, with WildEarth Guardians coming in second
with 20 suits.
LSix 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.
LIn 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/SUEANDSETTLE
REPORT-Final.pdf).
To provide further examples of sue-and-settle trends, just
two agencies, EPA and the Department of the Interior, have been
able to institute the following major policy changes under sue-
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and-settle rulemakings during the Obama administration:
Lthe Utility Maximum Achievable Control
Technology rule on coal-fired electric utilities;
Lthe Cement Maximum Achievable Control
Technology rule on cement manufacturing;
Lthe Stream Buffer Zone rule on coal mining;
Lthe Cooling Water Intake Structure
regulations on electric utilities;
Lrevisions to the definition of solid waste
under the Resource Conservation and Recovery Act;
Lregulation of greenhouse gases under the
Clean Water Act;
Lnumeric nutrient criteria for the State of
Florida under the Clean Water Act;
LFederal implementation plans for regional
haze in North Dakota and Oklahoma under the Clean Air
Act;
Lreconsideration of National Ambient Air
Quality Standards for ozone;
LNew Source Performance, Maximum Achievable
Control Technology and residual risk standards for oil
and gas drilling operations;
Lfirst-ever greenhouse gas New Source
Performance Standards for coal- and oil-fired electric
utilities;
Lfirst-ever greenhouse gas New Source
Performance Standards for oil refiners; and
La commitment to move forward with Endangered
Species Act protections for over 250 candidate species.
3. LHistory 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:
Lconverted into a mandatory duty the otherwise
discretionary authority of an agency to propose,
promulgate, revise or amend regulations;
Lcommitted 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;
Ldivested 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
Lotherwise 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:
Linterfered 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;
Lcommitted the agency to expend funds that
Congress had not appropriated and that had not been
budgeted for the action in question; or
Lprovided 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.\3\
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\3\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. \4\
---------------------------------------------------------------------------
\4\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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4. LResolution 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.\5\
This 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:
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\5\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 48
States, plus the District of Columbia and Commonwealth of Puerto Rico.
L``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;''
L``Urges 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).''
L``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;''
L``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;''
L``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;''
L``Believes that no settlement agreement
should extend any power to U.S. EPA that it does not
have in current law;''
L``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;''
L``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,
L``Encourages EPA to respond in writing to all
public comments received on proposed citizen suit
settlement agreements, including consent decrees.''\6\
---------------------------------------------------------------------------
\6\The full, official text of Resolution 13-2 is available at
http://www.ecos.org/section/policy/resolution and http://
dl.dropboxusercontent.com/u/8005220/Resolutions/Resolution%2013-2%20
Consent%20Decrees.pdf.
5. LReforms Embodied in the Sunshine for Regulatory Decrees and
Settlements Act
Consistent with the record compiled by the Committee, the
measures in H.R. 712 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's 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,'' on a
bipartisan vote (245-172). The bill was reintroduced in the
113th Congress as H.R. 1493. H.R. 1493 was likewise reported
favorably by the Committee. It 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, the ``Jobs for America Act'' (253-163).
Hearings
The Subcommittee on Regulatory Reform, Commercial and
Antitrust Law held a hearing on 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. Additional material was submitted by
the Hon. Samuel Olens, Georgia Attorney General.
The Subcommittee also held a hearing on the legislation
during the 113th Congress (H.R. 1493),\7\ and the Subcommittee
on Courts, Commercial and Administrative Law held a hearing on
the legislation during the 112th Congress (H.R. 3862).\8\
---------------------------------------------------------------------------
\7\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), (hereinafter ``Sunshine Hearing II'').
\8\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),
(hereinafter ``Sunshine Hearing I'').
---------------------------------------------------------------------------
Committee Consideration
On March 24, 2015, the Committee met in open session and
ordered the bill H.R. 712 favorably reported without amendment,
by a rollcall vote of 20 to 11, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following rollcall votes occurred during the Committee's
consideration of H.R. 712.
1. Amendment #1, offered by Mr. Conyers. The Amendment
exempts from requirements of H.R. 712 consent decrees and
settlement agreements that pertain ``to the protection of the
privacy of Americans.'' The amendment was defeated by a
rollcall vote of 8 to 16.
ROLLCALL NO. 1
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X
Mr. Sensenbrenner, Jr. (WI).................... X
Mr. Smith (TX)................................. X
Mr. Chabot (OH)................................ X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................
Mr. King (IA).................................. X
Mr. Franks (AZ)................................ X
Mr. Gohmert (TX)............................... X
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT).............................. X
Mr. Marino (PA)................................ X
Mr. Gowdy (SC)................................. X
Mr. Labrador (ID).............................. X
Mr. Farenthold (TX)............................
Mr. Collins (GA)............................... X
Mr. DeSantis (FL)..............................
Ms. Walters (CA)...............................
Mr. Buck (CO).................................. X
Mr. Ratcliffe (TX)............................. X
Mr. Trott (MI)................................. X
Mr. Bishop (MI)................................ X
Mr. Conyers, Jr. (MI), Ranking Member.......... X
Mr. Nadler (NY)................................ X
Ms. Lofgren (CA)............................... X
Ms. Jackson Lee (TX)........................... X
Mr. Cohen (TN)................................. X
Mr. Johnson (GA)............................... X
Mr. Pierluisi (PR)............................. X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)............................... X
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI).............................
Mr. Peters (CA)................................
------------------------
Total...................................... 8 16
------------------------------------------------------------------------
2. Amendment #2, offered by Ms. Jackson Lee. The Amendment
exempts from requirements of H.R. 712 consent decrees and
settlement agreements that pertain ``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 9 to 17.
ROLLCALL NO. 2
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X
Mr. Sensenbrenner, Jr. (WI).................... X
Mr. Smith (TX)................................. X
Mr. Chabot (OH)................................ X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................
Mr. King (IA).................................. X
Mr. Franks (AZ)................................
Mr. Gohmert (TX)............................... X
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT).............................. X
Mr. Marino (PA)................................ X
Mr. Gowdy (SC)................................. X
Mr. Labrador (ID).............................. X
Mr. Farenthold (TX)............................
Mr. Collins (GA)............................... X
Mr. DeSantis (FL).............................. X
Ms. Walters (CA)............................... X
Mr. Buck (CO).................................. X
Mr. Ratcliffe (TX)............................. X
Mr. Trott (MI)................................. X
Mr. Bishop (MI)................................ X
Mr. Conyers, Jr. (MI), Ranking Member.......... X
Mr. Nadler (NY)................................ X
Ms. Lofgren (CA)............................... X
Ms. Jackson Lee (TX)........................... X
Mr. Cohen (TN)................................. X
Mr. Johnson (GA)............................... X
Mr. Pierluisi (PR)............................. X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)............................... X
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI).............................
Mr. Peters (CA)................................ X
------------------------
Total...................................... 9 17
------------------------------------------------------------------------
3. Amendment #4, offered by Mr. Hank Johnson. The Amendment
exempts from requirements of H.R. 712 consent decrees and
settlement agreements ``that the Director of the Office of
Management and Budget determines would result in net job
creation.'' The amendment was defeated by a rollcall vote of 10
to 20.
ROLLCALL NO. 3
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X
Mr. Sensenbrenner, Jr. (WI).................... X
Mr. Smith (TX)................................. X
Mr. Chabot (OH)................................ X
Mr. Issa (CA).................................. X
Mr. Forbes (VA)................................
Mr. King (IA).................................. X
Mr. Franks (AZ)................................ X
Mr. Gohmert (TX)............................... X
Mr. Jordan (OH)................................ X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT).............................. X
Mr. Marino (PA)................................ X
Mr. Gowdy (SC)................................. X
Mr. Labrador (ID).............................. X
Mr. Farenthold (TX)............................
Mr. Collins (GA)............................... X
Mr. DeSantis (FL).............................. X
Ms. Walters (CA)............................... X
Mr. Buck (CO).................................. X
Mr. Ratcliffe (TX)............................. X
Mr. Trott (MI)................................. X
Mr. Bishop (MI)................................ X
Mr. Conyers, Jr. (MI), Ranking Member.......... X
Mr. Nadler (NY)................................ X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)........................... X
Mr. Cohen (TN)................................. X
Mr. Johnson (GA)............................... X
Mr. Pierluisi (PR)............................. X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................ X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)............................... X
Mr. Jeffries (NY).............................. X
Mr. Cicilline (RI).............................
Mr. Peters (CA)................................ X
------------------------
Total...................................... 10 20
------------------------------------------------------------------------
4. Reporting H.R. 712. The bill 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.
Reported by a rollcall vote of 20 to 11.
ROLLCALL NO. 4
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman................... X
Mr. Sensenbrenner, Jr. (WI).................... X
Mr. Smith (TX)................................. X
Mr. Chabot (OH)................................ X
Mr. Issa (CA).................................. X
Mr. Forbes (VA)................................
Mr. King (IA).................................. X
Mr. Franks (AZ)................................ X
Mr. Gohmert (TX)............................... X
Mr. Jordan (OH)................................ X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT).............................. X
Mr. Marino (PA)................................ X
Mr. Gowdy (SC)................................. X
Mr. Labrador (ID).............................. X
Mr. Farenthold (TX)............................
Mr. Collins (GA)............................... X
Mr. DeSantis (FL).............................. X
Mr. Walters (CA)............................... X
Mr. Buck (CO).................................. X
Mr. Ratcliffe (TX)............................. X
Mr. Trott (MI)................................. X
Mr. Bishop (MI)................................ X
Mr. Conyers, Jr. (MI), Ranking Member.......... X
Mr. Nadler (NY)................................ X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)........................... X
Mr. Cohen (TN)................................. X
Mr. Johnson (GA)............................... X
Mr. Pierluisi (PR)............................. X
Ms. Chu (CA)................................... X
Mr. Deutch (FL)................................ X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)............................... X
Mr. Jeffries (NY).............................. X
Mr. Cicilline (RI).............................
Mr. Peters (CA)................................ X
------------------------
Total...................................... 20 11
------------------------------------------------------------------------
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 712, 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, April 16, 2015.
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. 712, the
``Sunshine for Regulatory Decrees and Settlements Act of
2015.''
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Marin
Burnett, who can be reached at 226-2860.
Sincerely,
Keith Hall,
Director.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 712--Sunshine for Regulatory Decrees and Settlements Act of 2015.
As ordered reported by the House Committee on the Judiciary
on March 24, 2015.
H.R. 712 would modify the process used to develop consent
decrees and settlement agreements that require ederal agencies
to take specified regulatory actions. Under the bill, a summary
of all such complaints against Federal agencies, the terms of
consent decrees or settlement agreements, and the awards of
attorneys' fees would need to be published and accessible to
the public in an electronic format. Under, the legislation any
proposed consent decree or settlement agreement involving a
Federal agency would be published in the Federal Register for
60 days for public comment prior to filing with the court. H.R.
712 also would require that settlement negotiations be
conducted through mediation or alternative dispute resolution
programs.
Under the bill, agencies that submit certain consent
decrees or settlement agreements to a court would be required
to inform the court of the agency's other outstanding mandatory
duties under current law and explain how the proposed consent
decree or settlement agreement would further the public
interest. The legislation would require the Attorney General
(for cases litigated by the Department of Justice) or the head
of a Federal agency that independently litigates a case to
certify to the court his or her approval of certain types of
settlement agreements and consent decrees. Finally, H.R. 712
also would require courts to more closely review consent
decrees when agencies seek to modify them.
Based on information provided by the Department of Justice
and assuming the appropriation of the necessary funds, CBO
estimates that implementing H.R. 712 would cost $7 million over
the 2016-2020 period. Most of those additional costs would be
incurred because litigation involving consent decrees and
settlement agreements would probably take longer under the bill
and agencies would face additional administrative requirements,
including the requirement to make more information available to
the public.
Enacting H.R. 712 could affect direct spending; therefore,
pay-as-you-go procedures apply. Under several statutes,
successful plaintiffs are entitled to repayment of attorneys'
fees through the Treasury's Judgment Fund. Such payments have
averaged about $2 million in recent years. By lengthening the
process of developing consent decrees, H.R. 712 could lead to
an increase in the amount of reimbursable attorneys' fees, thus
increasing the amount of such payments from the Judgment Fund.
However, the increased length of the process to finalize
consent decrees and settlement agreements might deter some
future lawsuits and decrease the number of future cases. On
net, CBO estimates that enacting the legislation would increase
annual direct spending by an insignificant amount. Enacting the
bill would not affect revenues.
H.R. 712 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 Marin Burnett.
The estimate was approved by Theresa Gullo, Assistant Director
of Budget Analysis.
Duplication of Federal Programs
No provision of H.R. 712 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 estimates that H.R. 712 specifically directs
to be completed no specific rule makings within the meaning of
5 U.S.C. 551.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
712, 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.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 712 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
2015.''
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
which 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
INTRODUCTION
H.R. 712, the ``Sunshine for Regulatory Decrees and
Settlements Act of 2015,'' is yet another attempt 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.
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, however, ignore
long-established procedures that prevent Federal agencies from
entering into consent decrees and settlement agreements that
circumscribe these rulemaking procedures. H.R. 712 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. Another concern presented by H.R.
712 is that it overrides the judiciary's traditional role in
managing litigation and resolving disputes equitably and
efficiently.
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\1\5 U.S.C. Sec. Sec. 551-59, 701-06, 1305, 3105, 3344, 5372, 7521
(2015).
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In recognition of H.R. 712'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\ The
Administration, in the context of its veto threat regarding a
substantially identical version of H.R. 712 considered in the
112th Congress, stated that the measure would ``spawn excessive
regulatory litigation, and introduce redundant processes for
litigation settlements.''\3\
---------------------------------------------------------------------------
\2\Letter to Rep. Bob Goodlatte (R-VA), Chair, & Rep. John Conyers,
Jr. (D-MI), Ranking Member, H. Committee on the Judiciary from the
Coalition for Sensible Safeguards (Mar. 20, 2015) (on file with the H.
Committee on the Judiciary, Democratic Staff). Current members of the
Coalition include: AFL-CIO; Alliance for Justice; American Association
of University Professors; American Federation of State, County and
Municipal Employees; American Federation of Teachers Americans for
Financial Reform; American Lung Association; American Rivers; American
Values Campaign; American Sustainable Business Council; BlueGreen
Alliance; Campaign for Contract Agriculture Reform; Center for
Effective Government; Center for Digital Democracy; Center for Food
Safety; Center for Foodborne Illness Research & Prevention; Center for
Independent Living; Center for Science in the Public Interest; Citizens
for Sludge-Free Land; Clean Air Watch; Clean Water Network; Consortium
for Citizens with Disabilities; Consumer Federation of America;
Consumers Union; CounterCorp; Cumberland Countians for Peace & Justice;
Demos; Economic Policy Institute; Edmonds Institute; Environment
America; Farmworker Justice; Free Press; Friends of the Earth; Green
for All; Health Care for America Now; In the Public Interest;
International Brotherhood of Teamsters; International Center for
Technology Assessment; International Union, United Automobile,
Aerospace & Agricultural Implement Workers of America (UAW); League of
Conservation Voters; Los Angeles Alliance for a New Economy; Main
Street Alliance; National Association of Consumer Advocates; National
Center for Healthy Housing; National Consumers League; National Council
for Occupational Safety and Health; National Employment Law Project;
National Lawyers Guild, Louisville Chapter; National Women's Health
Network; National Women's Law Center; Natural Resources Defense
Council; Network for Environmental & Economic Responsibility of United
Church of Christ; New Jersey Work Environment Council; New York
Committee for Occupational Safety and Health; Oregon PeaceWorks; People
for the American Way; Protect All Children's Environment; Public
Citizen; Reproductive Health Technologies Project; Safe Tables Our
Priority; Sierra Club; Service Employees International Union; Southern
Illinois Committee for Occupational Safety and Health; The Arc of the
United States; The Partnership for Working Families; Trust for
America's Health; U.S. Chamber Watch; U.S. PIRG; Union of Concerned
Scientists; Union Plus; United Food and Commercial Workers Union;
United Steelworkers; Waterkeeper Alliance; and Worksafe. Coalition for
Sensible Safeguards--Our Members, http://sensiblesafeguards.org/our-
members.
\3\Executive Office of the President, Office of Management and
Budget, Statement of Administration Policy on H.R. 4078--the Regulatory
Freeze for Jobs Act of 2012 (July 23, 2012), http://www.whitehouse.gov/
sites/default/files/omb/legislative/sap/112/saphr4078r_20120723.pdf.
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Accordingly, we strongly oppose H.R. 712 and respectfully
dissent from the Committee's views on this legislation.
DESCRIPTION AND BACKGROUND
H.R. 712, the ``Sunshine for Regulatory Decrees and
Settlements Act of 2015,'' 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 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. 712 would apply to executive
branch as well as independent agencies.\4\
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\4\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. 712'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. 712 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. 712 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 negotiations 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 number 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
that an agency 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 that the agency 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
regarding 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) 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, that Justice Department and other agency
attorneys follow to ensure that their use of consent decrees or
settlement agreements are not used to circumvent the normal
rulemaking process. These guidelines are already codified in
the Code of Federal Regulations.\5\ Section 3(e)(1) provides
that if a covered consent decree or settlement agreement
containing 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) interferes with agency
rulemaking procedures under the APA, another statute, or
executive order; (3) commits the agency to expend non-
appropriated and non-budgeted funds for the regulatory action
at issue; or (4) commits 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.
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\5\28 C.F.R. Sec. Sec. 0.160-0.163 (2015).
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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. Section 5 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. 712
I. H.R. 712 IS A SOLUTION IN SEARCH OF A PROBLEM
Proponents of H.R. 712 contend that this legislation is
needed because Federal agencies intentionally collude with
public interest organizations and other private-citizen
plaintiffs in entering into consent decrees or settlements as a
way of circumventing proper rulemaking procedures. Tellingly,
however, these proponents offer no proof in support of their
contention. For example, at the hearing on H.R. 712, 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.''\6\ In support
of his statement, he cited a 2013 U.S. Chamber of Commerce
study.\7\
---------------------------------------------------------------------------
\6\Hearing on H.R. 348, the ``Responsibly And Professionally
Invigorating Development Act of 2015'' (RAPID Act); H.R. 712, the
``Sunshine for Regulatory Decrees and Settlements Act of 2015''; and,
H.R. 1155, the ``Searching for and Cutting Regulations that are
Unnecessarily Burdensome Act of 2015'' (SCRUB Act) 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]; Hearing on H.R. 1493, ``The Sunshine for Regulatory
Decrees and Settlements Act of 2013,'' 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: Hearings 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.'').
\7\U.S. Chamber of Commerce, Sue and Settle: Regulating Behind
Closed Doors (May 2013), http://www.uschamber.com/reports/sue-and-
settle-regulating-behind-closed-doors.
---------------------------------------------------------------------------
Nevertheless, the independent and non-partisan Government
Accountability Office (GAO) issued a report in December 2014
finding that ``the effect of settlements in deadline suits on
EPA's rulemaking priorities is limited.''\8\ This report, which
focused on lawsuits involving environmental litigation, made
several findings that refute the claims of H.R 712's
supporters. 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 required 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.\9\ 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.\10\ And, as Amit Narang, a
Regulatory Policy Advocate at Public Citizen, explained during
the hearing on H.R. 712, 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.''\11\ Mr. Narang further noted that by settling these
suits, which merely enforce congressionally-mandated deadlines,
agencies avoid wasting ``agency, and by extension taxpayer,
resources to defend against claims that the [agency] didn't
perform a legal requirement by a congressionally-imposed
deadline when the parties who are bringing the suit only have
to point to the calendar in order to prove their case.''\12\
Indeed, as the GAO found, it is ``very unlikely that the
government will win'' these lawsuits.\13\
---------------------------------------------------------------------------
\8\U.S. Gov't Accountability Office, GAO-15-34, Environmental
Litigation: Impact of Deadline Suits on EPA's Rulemaking is Limited
(Dec. 2014), http://www.gao.gov/assets/670/667533.pdf [hereinafter GAO
Report].
\9\Id. at 3.
\10\Id.
\11\2015 Hearing, supra note 6, at 5 (statement of Amit Narang,
Regulatory Policy Advocate, Public Citizen).
\12\Id. at 5-6.
\13\GAO Report, supra note 8, at 7.
---------------------------------------------------------------------------
Furthermore, the GAO found little evidence that deadline
suits determine the substantive outcome of agency action, as
alleged by proponents of H.R. 712.\14\ 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.''\15\ This finding confirms 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.\16\ In fact, as Mr. Narang clarified during the
hearing on H.R. 712, ``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.''\17\
---------------------------------------------------------------------------
\14\2015 Hearing, supra note 6, 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.'').
\15\GAO Report, supra note 8, at 8.
\16\Id. at 8, 12.
\17\2015 Hearing, supra note 6, 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.''\18\ 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 during the Bush
administration, during which the EPA also entered into
settlements and consent decrees. He noted:
---------------------------------------------------------------------------
\18\2013 Hearing, supra note 6, 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.\19\
---------------------------------------------------------------------------
\19\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.\20\ It is also critical to note that,
while proponents of H.R. 712--including the Chamber of
Commerce--have focused their arguments in favor of the
legislation on consent decrees and settlements involving the
EPA, the bill itself is drafted in general language and would
apply to consent decrees and settlement agreements involving
all Federal agencies, not just the EPA.
---------------------------------------------------------------------------
\20\Id.
---------------------------------------------------------------------------
The testimony of John Cruden, a senior career official with
the Justice Department's Environment and Natural Resources
Division (ENRD) for more than 2 decades during two Republican
and two Democratic administrations, on a substantially
identical bill from the 112th Congress further shows that the
allegations ``sue and settle'' are unfounded. Mr. Cruden
testified 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. In fact, he
said 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.''\21\ He also emphasized
that agencies enter settlements only when they have failed to
meet mandatory rulemaking obligations:
---------------------------------------------------------------------------
\21\2012 Hearing, supra note 6, 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.\22\
---------------------------------------------------------------------------
\22\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.\23\
---------------------------------------------------------------------------
\23\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.\24\ The entire ``sue and settle''
allegation that undergirds H.R. 712, therefore, is really aimed
at congressionally-authorized provisions that permit citizens
to sue agencies so as to enforce statutory requirements. If
these citizen-suit provisions are the true cause for concern,
then it is for H.R. 712's proponents to push for their repeal
by Congress, rather than seek to disrupt the use of
longstanding and uncontroversial mechanisms for resolving
litigation.
---------------------------------------------------------------------------
\24\2013 Hearing, supra note 6, 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.''\25\ 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.''\26\
---------------------------------------------------------------------------
\25\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
\26\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. 712 simply addresses a non-existent problem.
II. BY UNDERMINING ENFORCEMENT OF MANDATORY RULEMAKING DUTIES, H.R. 712
THREATENS PUBLIC HEALTH AND SAFETY
H.R. 712, 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 assigns
these mandatory duties to agencies so that they will be, in
fact, 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. 712, 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.''\27\ 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).''\28\ To
the degree that H.R. 712 makes it harder for citizens to force
agencies to address these kinds of concerns, it endangers the
American people.
---------------------------------------------------------------------------
\27\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.
\28\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. 712. For example, Ranking Member
John Conyers, Jr. (D-MI) offered an amendment that would have
exempted from the bill any consent decree or settlement
agreement concerning privacy protection.\29\ Notwithstanding
the numerous privacy concerns expressed by Members of Congress
on both sides of the aisle in connection with recent
revelations of government surveillance activities and massive
data-breaches, the amendment was defeated by a 8 to16 vote.\30\
---------------------------------------------------------------------------
\29\Tr. of Markup of H.R. 712, ``The Sunshine for Regulatory
Decrees and Settlements Act of
2015,'' by the H. Comm. on the Judiciary, 114th Cong. 199 (Mar. 24,
2015), http://
judiciary.house.gov/_cache/files/26476c04-a8fb-48a1-96cc-914ea82f001c/
03.24.15-markup-
transcript.pdf [hereinafter Markup Tr.]
\30\Id. at 207.
---------------------------------------------------------------------------
Representative Sheila Jackson Lee (D-TX) offered an
amendment that would have exempted from the bill any consent
decree or settlement agreement concerning a proposed rule
regarding environmental justice in low-income minority
communities as defined by Executive Order 12898.\31\ This
amendment failed by a vote of 9 to 17 vote.\32\
---------------------------------------------------------------------------
\31\Id. at 209.
\32\Id. at 220.
---------------------------------------------------------------------------
Representative Henry C. ``Hank'' Johnson, Jr. (D-GA)
offered an amendment that would have exempted from the bill any
consent decree or settlement agreement concerning a proposed
rule that the Office of Management and Budget determines would
result in net job creation.\33\ Belying the repeated assertion
by the Majority that regulations undermine job creation, this
amendment failed by a vote of 11 to 20.\34\
---------------------------------------------------------------------------
\33\Id. at 229.
\34\Id. at 251.
---------------------------------------------------------------------------
III. H.R. 712 IS UNNECESSARY IN LIGHT OF THE JUSTICE DEPARTMENT'S
``MEESE MEMO'' AND OTHER EXISTING LEGAL MECHANISMS
H.R. 712'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,\35\ has for nearly 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:
---------------------------------------------------------------------------
\35\28 C.F.R. Sec. Sec. 0.160-0.163 (2015).
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.\36\
---------------------------------------------------------------------------
\36\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.''\37\ The policy
outlines similar restrictions on settlement agreements.\38\ 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.\39\
The Meese Memo ultimately was codified into the Code of Federal
Regulations.\40\
---------------------------------------------------------------------------
\37\Id.
\38\Id.
\39\Id.
\40\28 C.F.R. Sec. Sec. 0.160-0.163 (2015).
---------------------------------------------------------------------------
H.R. 712's proponents offer no evidence 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.\41\
Moreover, the Majority's witnesses at a hearing on H.R. 712'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.\42\
---------------------------------------------------------------------------
\41\2012 Hearing, supra note 6, at 111.
\42\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.'').
---------------------------------------------------------------------------
In addition to the Meese Memo, there are other mechanisms
that also address the purported concerns of H.R. 712's
proponents. For example, parties whose interests may be
affected by a consent decree or settlement may move to
intervene in the case pursuant to Federal Rule of Civil
Procedure 24, with the moving party bearing the burden of
demonstrating that the parties to the case do not adequately
represent the movant's interest.\43\ Similarly, any rulemaking
that is required pursuant to a consent decree or settlement
agreement would still be subject to the APA's notice and
comment procedures, and affected parties who are not parties to
the consent decree or settlement agreement would have the
opportunity to weigh in on any negative impacts of a proposed
rule.\44\
---------------------------------------------------------------------------
\43\Fed. R. Civ. P. 24(a)(2).
\44\5 U.S.C. Sec. 553 (2015).
---------------------------------------------------------------------------
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. 712 unnecessary.
IV. H.R. 712 WILL FAVOR INDUSTRY INTERESTS AT
TAXPAYERS' EXPENSE
In addition to being unnecessary, H.R. 712 threatens to
impose significant financial costs on taxpayers in several
ways. First, it provides numerous new opportunities for
opponents of regulation to engage in dilatory tactics to delay
resolution of pending litigation, further increasing costs for
agencies and courts and, ultimately, taxpayers. Second, as many
of the bill's key terms are ambiguous, this will lead to
confusion, litigation, and delay in any proposed consent decree
or settlement negotiation. Third, H.R. 712 imposes numerous
burdensome procedural requirements on agencies and courts
regarding the use of consent decrees and settlements concerning
regulatory action, which will further add to the costs borne by
those entities. Fourth, the bill's cumulative effect will be to
discourage agencies from entering into consent decrees and
settlement agreements when they might otherwise have done so,
leading to unnecessarily protracted and costly litigation.
A. LH.R. 712 Opens the Door to Dilatory Tactics by Industry and Other
Opponents of Agency Action
Various provisions of H.R. 712 would give opponents of
regulations opportunities to effectively stifle rulemaking by
allowing them to slow down one of the processes by which
agencies agree to abide by their 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.\45\ By
opening opportunities for industry to slow down this process,
H.R. 712 effectively makes it more expensive for agencies to do
what Congress has mandated it to do.
---------------------------------------------------------------------------
\45\2015 Hearing, supra note 11; 2013 Hearing, supra note 6, at
117-118; 2012 Hearing, supra note 6, 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.\46\ 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.\47\
Effectively, this shift in the burden of proof on the question
of the representation of third-party interests is a way to make
it much easier for any 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.
---------------------------------------------------------------------------
\46\H.R. 712, 114th Cong. Sec. 3(b)(1) (2015).
\47\Fed. R. Civ. P. 24.
---------------------------------------------------------------------------
Hypothetically, under H.R. 712, if the regulatory action at
issue involved the Clean Air Act, a person who breathes air
would have the right to intervene in a consent decree or
settlement agreement, as would any affected industry entity, or
anyone else in the United States, subject to a refutable
presumption that the parties to the litigation do not
adequately represent the third party's interest. If a court
were to read section 3(b)(1) broadly, this provision could open
the door to almost anyone intervening in a covered civil action
under the bill.
Section 3(c) of H.R. 712 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.\48\ Such discussions must include the
plaintiff, defendant agency, and any third party
intervenors.\49\ 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.
---------------------------------------------------------------------------
\48\H.R. 712, 114th Cong., Sec. 3(c) (2015).
\49\Id.
---------------------------------------------------------------------------
H.R. 712 provides other opportunities for industry to
engage in dilatory tactics in 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.\50\ The agency must then respond to every
comment pursuant to section 3(d)(2)(B).\51\ Under these
provisions, any industry could potentially overwhelm an agency
with comments in an effort to stall resolution of the
underlying dispute, which, as noted, usually concern
enforcement of rulemaking deadlines.
---------------------------------------------------------------------------
\50\Id. at Sec. Sec. 3(d)(1), 3(d)(2)(A).
\51\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.\52\ This provision
would further allow industry and other regulatory opponents to
delay resolution of the underlying dispute between the
plaintiff and the defendant agency.
---------------------------------------------------------------------------
\52\Id. at Sec. 3(f)(1).
---------------------------------------------------------------------------
B. LH.R. 712 Uses Ambiguous Language in Many Key Provisions, Opening
the Door to Confusion, Litigation, and Delay in Resolving
Disputes
Many of H.R. 712'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.''\53\ 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.
---------------------------------------------------------------------------
\53\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.\54\ As noted above, without a definition, almost any
third party could, in theory, intervene in a consent decree or
settlement discussion under this bill. As with other ambiguous
language in H.R. 712, confusion and a lack of clarity over the
meaning of these terms will lead to litigation.
---------------------------------------------------------------------------
\54\Id.
---------------------------------------------------------------------------
Finally, H.R. 712'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.\55\ The requirement,
outlined in section 3(d)(4), has no definition or clarification
of what ``affect the discharge of those duties'' would mean.
---------------------------------------------------------------------------
\55\Id. at Sec. 3(d)(4).
---------------------------------------------------------------------------
C. LH.R. 712 Imposes Several Burdensome Procedural Requirements on
Agencies and Courts
H.R. 712 imposes several new procedural requirements on
agencies and courts that are designed to slow down the
resolution of litigation over an agency's failure to meet a
statutory deadline or other regulatory obligation. These
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. 712 will have the opposite result.
D. LThe Cumulative Effect of H.R. 712'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. 712'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 noted that
a previous version of H.R. 712 would impose millions of dollars
in costs, ``[p]rimarily 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.''\56\
---------------------------------------------------------------------------
\56\Congressional Budget Office, Cost Estimate for H.R. 1493, the
Sunshine for Regulatory Decrees and Settlements Act of 2013, at 1
(Sept. 20, 2013), available at http://cbo.gov/publication/44606.
---------------------------------------------------------------------------
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.\57\ H.R. 712 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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\57\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.\58\
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\58\2012 Hearing, supra note 6, at 108.
By making consent decrees and settlement agreements more
difficult and costly to enter into, H.R. 712 will generate
increased litigation costs and expensive judgments, which will
ultimately be passed along to the taxpayer.
V. LH.R. 712 Subverts the Federal Rules of Civil Procedure and Judicial
Discretion
H.R. 712 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 can
intervene in a pending case, placing the burden on the third
party to show that its interests are not adequately represented
by the plaintiff and the defendant. H.R. 712 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. 712 tampers with the process for modifying
consent decrees under Federal Rule of Civil Procedure 60(b)(5).
Under that provision, a court can modify a consent decree when
``the judgment has been satisfied, released, or discharged; it
is based on an earlier judgment that has been reversed or
vacated; or applying it prospectively is no longer
equitable.''\59\ Section 4 of H.R. 712 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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\59\Fed. R. Civ. P. 60(b)(5).
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Beyond the specific changes that H.R. 712 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. 712 requires courts to
make certain presumptions (subject to rebuttal) on other
similar litigation management issues such as when to permit
amicus participation by third parties, when to enter a consent
decree or settlement agreement, and when to refer matters to
mediation, other alternative dispute resolution, a special
master, or another judge. In short, H.R. 712 seeks to dictate
courtroom management issues that have traditionally been left
to judges to decide.
VI. LThe 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 must 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 Rule 24 of the
Federal Rules of Civil Procedure from the party seeking to
intervene in the case to the parties themselves.\60\
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\60\Rule 24 of the Federal Rules of Civil Procedure states, in its
pertinent part,
(a) Intervention of Right. On timely motion, the court must permit
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anyone to intervene who:
(1) is given an unconditional right to intervene by a
Federal statute; or
G(2) claims an interest relating to the property or
transaction that is the subject of the action, and is so
situated that disposing of the action may as a practical
matter impair or impede the movant's ability to protect its
interest, unless existing parties adequately represent that
interest.
(b) Permissive Intervention.
G(1) In General. On timely motion, the court may permit
anyone to intervene who:
G(A) is given a conditional right to intervene by a Federal
statute; or
G(B) has a claim or defense that shares with the main
action a common question of law or fact.
In response to this concern, Representative Steve Cohen (D-
TN) 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.''\61\ Speaking in support of his
amendment, Representative Cohen noted that H.R. 712 would
``take out consent decrees that are settlements meant to cover
discrimination or intended to prevent discrimination based on
race, religion, national origin, or any other protected
category.''\62\
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\61\Markup Tr., supra note 28, at 222.
\62\Id.
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Urging his colleagues to reject this amendment,
Representative Doug Collins (R-GA) contended that current
standing requirements would continue to act as a limit on
intervention.\63\ Standing, however, affords weak limits on the
bill's intervention right. The U.S. Supreme Court's guidance on
this issue has evolved over the years and one that it has
revisited on numerous occasions.\64\ The Court itself has
acknowledged that the ``concept of `Art. III standing' has not
been defined with complete consistency in all of the various
cases decided by this Court . . . [and] this very fact is
probably proof that the concept cannot be reduced to a one-
sentence or one-paragraph definition.''\65\ Similarly, the
Court in another case observed that ``[g]eneralizations about
standing to sue are largely worthless as such.''\66\
---------------------------------------------------------------------------
\63\Id. at 46.
\64\See, e.g., Monsanto Co. v. Geerston Seed Farms, 130 S.Ct. 2743
(2010); Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992); Allen v.
Wright, 468 U.S. 737 (1984); Valley Forge Christian College v.
Americans United, 454 U.S. 464 (1982); Ass'n of Data Processing Service
Org. v. Camp, 397 U.S. 150 (1970); Barlow v. Collins, 397 U.S. 159
(1970).
\65\Valley Forge Christian College v. Americans United, 454 U.S.
464, 475 (1982).
\66\Association of Data Processing Service Orgs. v. Camp, 397 U.S.
150, 151 (1970).
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Standing doctrines do not offer bright-line rules regarding
when a party may intervene in a pending case. Resolving
questions about a party's standing will result in extensive
litigation. To the extent that H.R. 712 further opens the door
for any private party to claim the right to intervene, it would
have the effect of delaying any settlement for years even if
the party claiming intervenor status ultimately is unable to
establish proper standing.
CONCLUSION
Like all the anti-regulatory proposals this Committee has
considered in this Congress, H.R. 712 is yet another solution
in search of a problem. Proponents have failed to present any
evidence to support their claim that agencies ``collude'' with
plaintiffs to enter consent decrees or settlement agreements.
Nevertheless, this legislation will impose burdensome
procedural requirements on agencies and courts that will
hamstring, or outright discourage, the use of consent decrees
and settlements. 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. 712 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. 712 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. 712 undermines existing civil procedure rules and
overrides judicial discretion.
For these reasons, we respectfully dissent and urge our
colleagues to oppose H.R. 712.
Mr. Conyers, Jr.
Mr. Nadler.
Ms. Jackson Lee.
Mr. Cohen.
Mr. Johnson, Jr.
Ms. Chu.
Mr. Deutch.
Mr. Gutierrez.
Ms. Bass.
Mr. Richmond.
Ms. DelBene.
Mr. Jeffries.
Mr. Cicilline.