Special Topics in Environmental Management

Pruitt’s Sue-and-Settle Directive Slammed by Ex-EPA Lawyers

In an unusual development, 60 former EPA attorneys have written to EPA Administrator Scott Pruitt criticizing Pruitt’s October 16, 2017, directive and memo about the Agency’s past approach to settling lawsuits.

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Directive Called Unfounded, Biased, Unworkable

In the directive, Pruitt said many of these settlements appeared to be the result of backdoor collusion between the EPA and environmental groups and deprived the public, states, and industry stakeholders of participation. When such settlements—commonly described as “sue and settle”—are approved by a court, Pruitt continued, the judiciary is effectively usurping Congress and the executive branch. The directive and memo set new ground rules for future settlements involving the EPA and include orders to Agency attorneys to seek the concurrence of affected states and regulated entities before entering into a consent decree or settlement agreement.

The message in the attorneys’ letter is unambiguous:

“Your recent pronouncements make unfounded and unsupported accusations about EPA’s longstanding and non-partisan approach to defending the agency’s actions in lawsuits that Congress empowered members of the public to bring when the Agency allegedly fails to follow the law. Your misrepresentations do the public a great disservice by sowing confusion about the important role the public plays in ensuring that EPA complies with and enforces public health and environmental protection laws. Your Directive compounds that disservice by attempting to give regulated parties a special and powerful seat at the table with no corresponding role for other members of the public. Your explanation for the Directive does EPA and the Department of Justice (DOJ), which represents EPA in lawsuits, a grave injustice by alleging, without evidence, collusion with outside groups.”

The attorneys also contend that the approach ordered by Pruitt will cause the EPA to expend more resources and create more complicated settlement processes by involving many more states (arguably, in some cases, all the states) and parties in the negotiations. Furthermore, by choosing to litigate issues that cannot be settled, the Agency will put itself in a more difficult position. In such cases, the courts—not the suing parties, the EPA, or Congress—will dictate the terms of the settlement, which are almost always deadlines by which the Agency must take a specific action. Historically, the attorneys add, the courts have shown little patience when the EPA fails to meet statutory deadlines. In other words, if it loses in litigation, the Agency will likely face more demanding deadlines than it would if it settled.

Below, we provide more details on the arguments made in the letter.

Flawed Premise

Pruitt contends that sue and settle forces the EPA to relinquish some discretion over its policies, priorities, and duties to special interests and the courts. The consequence, says Pruitt, is that the EPA bypasses the transparency and due-process safeguards contained in the Administrative Procedure Act and other statutes. Some stakeholders, generally industry, have been excluded from meaningful involvement in settlements, Pruitt continued; also, the settlements reduce Congress’s ability to influence policy, and past settlements suggest that the EPA has failed to zealously defend its actions.

“Sue and settle disrespects the rule of law and improperly elevates the powers of the federal judiciary to the detriment of the executive and legislative branches,” Pruitt stated.

The attorneys write that Pruitt provides no evidence to substantiate any of these claims, and “there is none.” Given that sue and settle almost always involves deadlines dictated by law, the letter states that there is no attempt to influence policy—that is, the content of a rule. Pruitt refers to alleged transgressions that “have been reported,” but does not identify those reports. Also, say the attorneys, Pruitt does not acknowledge a Government Accountability Office (GAO) report that found that schedule suits affect only the timing and order of agency action, not the substance.

“There is, in fact, no foundation for your claims,” the attorneys tell Pruitt, and point specifically to arguments that sue and settle bypasses the notice-and-comment rulemaking process.

“EPA has settled well-founded suits against it by agreeing to act according to a schedule that allows time for required procedural steps that ensure public involvement in the formulation of agency actions,” the attorneys write. “As the GAO report makes clear, EPA settlements have not preordained the outcome of that action.” The letter gives the following example:

“EPA often negotiates a settlement in cases brought to enforce a statute that sets a deadline for EPA to set or review a pollution control standard, where the agency has missed the deadline. In settling those cases, EPA has agreed on a schedule to make a decision on setting or revising the standard, but it has not agreed on how to set or revise the standard, or to set or revise it in a certain way or to a certain level. EPA settlements, in short, set a timeline for the agency to take an action required by Congress, but the settlements do not determine the outcome of that action.”

The letter also notes a 1986 DOJ memorandum (Meese Memorandum) that precludes agency settlements from including terms that require the agency to take an otherwise discretionary action or prescribe a specific substantive outcome.

EPA’s Discretion

The attorneys assert that the EPA does not relinquish its discretion when it agrees to settle suits because the Agency does not have the discretion to miss statutory deadlines.

“The sad fact is that when EPA misses statutory deadlines or drags its feet in taking legally required action, it has failed to exercise the discretion Congress has afforded it,” the attorneys write. “EPA may set priorities among its duties and other responsibilities so long as it honors the priorities that Congress has set. If it fails to do so, courts may enforce Congress’ priorities. If EPA disagrees or has concerns with those priorities, it may raise its concerns to Congress.”

According to Pruitt, the authority Congress granted to the EPA is the Agency’s only authority. “EPA must respect the rule of law,” he says. “The Agency must strive to meet the directives and deadlines that Congress set forth in our governing environmental statutes. But we must not surrender the powers that we receive from Congress to another branch of government lest we risk upsetting the balance of powers that our founders enshrined in the Constitution.”

The letter responds that the courts are not forcing the EPA to surrender its powers when the courts order the EPA to act or approve a settlement agreement requiring the EPA to take an action by a certain date after the Agency has failed to act in the time frame required by law. “The court is not telling EPA what decision to make; instead it sets the time frame in which EPA must make a decision or take an action.” This is clearly in line with what Congress intended, the attorneys state, adding:

“For decades, courts have exercised the authority Congress gave them in environmental laws to compel EPA to take statutorily required actions, and to our knowledge, no significant constitutional objections have been raised or pursued by Congress or the Executive. Far from maintaining the balance of powers enshrined in the Constitution, your conception upsets them. You appear to believe that the Executive Branch has discretion to decide whether and when to fulfill statutory directives set by Congress, and that Congress may not authorize the courts to enforce the requirements it sets in law.”

Stakeholders

A required procedure in Pruitt’s directive is that the EPA will “directly notify any affected states and/or regulated entities of a complaint or petition for review within 15 days of receiving service of the complaint or petition for review. It shall be the policy of the Agency to take any and all appropriate steps to achieve the participation of affected states and/or regulated entities in the consent decree and settlement agreement negotiation process. Accordingly, EPA shall seek to receive the concurrence of any affected states and/or regulated entities before entering into a consent decree or settlement agreement.”

The attorneys find this procedure “patently biased” because it seeks to give regulated parties, but not other members of the public, a seat at the settlement table. Furthermore, the fact that the EPA will seek the “concurrence” of states and regulated entities in settlements dooms the chances of many settlements because they will be skewed toward the states and industry stakeholders.

Moreover, achieving the sought-after concurrence is unworkable, the letter continues, because no settlement will be reached without the complainants agreeing to discussions. The attorneys state:

“A party open to settlement discussions with EPA is very likely to reject a negotiation process that could include representatives of as many as 50 states and potentially large numbers of regulated entities. This is not a far-fetched scenario. National Ambient Air Quality Standards (NAAQS) under the Clean Air Act are subject to recurring statutory deadlines for review that EPA often misses. NAAQS affect all states (as well as territories and tribes), and, in the case of some NAAQS, affect many industries with many members. Even in situations involving fewer affected states and regulated entities, there is no reason to expect the parties suing EPA will allow the negotiation process to be expanded and delayed as envisioned in your Directive.”

Lengthy Process

As the attorneys read it, the directive will discourage settlements because of required additional steps that will delay a conclusion. For example, the directive insists on White House and interagency reviews. These steps appear to overlook refusal by the courts to factor in such reviews because they are not required by statute and undermine the objective of settlements, which is to get the Agency to complete required actions more expeditiously. It will not be lost on a party bringing suit to enforce a missed statutory deadline that these provisions will slow, not expedite, agency action.

“In the unlikely event that a party bringing suit remains open to settlement, EPA faces the potentially large task of notifying all affected regulated entities and states, and organizing and leading settlement negotiations among many participants,” state the attorneys. “Given the Directive’s call for concurrence of ‘any affected regulated entities,’ negotiations could be long and open-ended as each participant wields what appears to be veto power over any agreement. Under these circumstances, the chances for reaching agreement are likely to be vanishingly small, and the time and expense devoted to settlement negotiations wasted. Given these risks, there is no reason to think that the party bringing suit will agree to negotiate a settlement.”

Minor Exceptions

The attorneys grudgingly approve of several points advanced in the directive, including measures to regularize and extend steps the EPA already takes to notify the public of suits and draft settlements and to embody the substance of the 1986 Meese Memorandum that “the GAO confirms EPA and DOJ already follow.”
But in the end, the attorneys tell Pruitt his assertion that the “days of regulation through litigation and sue-and-settle are over” is “wishful thinking at best.”

“The only way to avoid litigation over requirements that Congress has established for EPA in environmental laws is for EPA to meet its statutory deadlines and fulfill its other duties on a timely basis,” the attorneys conclude.

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