Opinion

Ending 'Sue-and -Settle' Extortion

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Posted: Nov 02, 2017 12:01 AM
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Ending 'Sue-and -Settle' Extortion

Last week, federal Environmental Protection Agency Administrator Scott Pruitt issued a directive aimed at reducing “sue-and-settle” lawsuits. For those who like voters to have input in the creation of environmental regulation, this is a great move.

For decades, environmental advocacy groups have exerted outsized influence—and profited financially—from “friendly” lawsuits against the EPA. These lawsuits have been a conduit for activists inside and outside the EPA to get new regulations in place over the protests of state governments, businesses, and consumers that must bear the costs.

Starting about 1970, Congress began writing clauses into certain environmental statutes allowing “any person” to file suit alleging that the EPA had insufficiently enforced the law, whether or not the plaintiff was personally harmed by the violation. These “citizen suit” provisions in environmental legislation opened the courtroom door to environmental organizations, which quickly discovered the money-making potential of these lawsuits.

Some settlements involve a “mitigation project” that often benefits environmental groups, and in addition, the groups often received above-cost reimbursements of attorneys’ fees and litigation expenses. The revenues became so substantial that environmental law attorney Michael Greve referred to citizen suits as “an off-budget entitlement program for the environmental movement.”

Environmental organizations also discovered that citizen suit-based “sue-and-settle” tactics could be used to obtain regulatory changes without legislative action. Green groups could accomplish their goals without Congress and without much worry much about objections raised during the “public comment” period following a consent decree or agreement. By the time public comments are made, it’s pretty much a done deal.

Green groups weren’t the only ones to profit from sue-and-settle. As the lawsuits expand the federal EPA’s power and reach, the agency benefits at the expense of state and local governments. When state governments come up with intelligent solutions to reduce emissions under existing regulatory mandates, lawsuits by environmental organizations concluded with settlements result in the EPA imposing Federal Implementation Plans (FIPs) on the state government.

Regulation represents job security and promotion opportunity for agency bureaucrats, and thus it’s no surprise that environmental organizations and EPA functionaries would essentially collude in lawsuits that resulted in “wins” for both plaintiff and defendant. And collude a lot.

An October 18 Wall Street Journal editorial pointed out that under Obama, the EPA “imposed a record-breaking 55 federal implementation plans under the Clean Air Act” (for comparison, the George H.W. Bush, Clinton, and George W. Bush administrations imposed a total of five), and settlements since 2009 resulted in “137 new Clean Air Act regulations, including some of the most expensive ever written.”

Pruitt’s directive limits the EPA to agreeing to review a rule (rather than committing to specific policies), expands the influence of public commentary, and should result in more meaningful input from states and industries. Much more needs to be done to bring regulatory costs under control, apart from addressing the underhanded “sue-and-settle” tactics of the past. But Pruitt’s action represents a welcome reining in of this abusive and costly use of courtrooms.