Environmental Regulation through Litigation

Through sue and settle litigation, interest groups have forced the Environmental Protection Agency (EPA) to issue new regulations, often bypassing proper procedures.

How does this happen? Twenty U.S. statutes contain what are known as “citizen suit” provisions, allowing citizens to file suit against a federal agency when that agency has failed to carry out a nondiscretionary duty by its prescribed deadline. The Clean Air Act, the Clean Water Act and the Endangered Species Act, for example, allow for citizen suits. And because federal agency rulemaking is notoriously behind schedule, every missed deadline provides an opportunity for litigation. The EPA has been a party to a number of these lawsuits.

  • After environmental groups file a complaint against the EPA based on these missed deadlines, the parties work out a settlement or consent decree between themselves. This process allows regulation-friendly plaintiffs to work out a rulemaking plan with a federal agency without involving third parties.
  • Intervening in these cases is difficult, and affected parties are frequently unaware that a lawsuit has even been filed until an agreement has already been worked out.
  • From 2009 to 2012, the U.S. Chamber of Commerce puts the number of sue and settle lawsuits at 71, with the Sierra Club and WildEarth Guardians leading the way as plaintiffs in 34 and 20 cases, respectively. The EPA was a defendant in 60 of these cases.

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

  • After a lawsuit by the Environmental Defense Fund and the Sierra Club, among others, the EPA issued its Utility MACT rule, which regulates mercury emissions for power plants. The strict deadlines in the consent decree gave the EPA a very short period of time to assess public comments and issue a final rule, despite the complexity of the rulemaking. The regulation carries an annual cost of $9.6 billion, and it has forced many coal plants to shut down. At the end of 2012, 9.5 percent of coal-fired generation capacity had decided to retire due to Utility MACT, and 20.4 percent were undecided about whether to retire.
  • Environmental groups used sue and settle in five separate lawsuits to force EPA action on states’ Regional Haze plans. The Regional Haze program is intended to be a state program. But in multiple instances, the EPA imposed its own federal plan on states, rather than allowing the states time to correct and develop their own plans, because of the deadlines to which the agency had agreed in the consent decrees. Ratepayers in these states are facing extraordinarily high electricity costs as a result of these lawsuits.

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

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