WASHINGTON – Working to create an environment for private-sector employers to create jobs and to increase transparency, Senator Chuck Grassley and Representative Doug Collins are introducing legislation that would end the practice of enacting federal regulations through sue-and-settle litigation. Grassley is Ranking Member of the Senate Judiciary Committee and Collins is a member of the House Judiciary Committee and leads the Freshman Regulatory Reform Working Group.
The Sunshine for Regulatory Decrees and Settlements Act responds to the use of consent decrees and settlement agreements in lawsuits against federal agencies to bind executive discretion. The end result is rulemaking that implements the priorities of pro-regulatory special interest groups and limits the discretion of succeeding administrations.
“Sue-and-settle litigation damages the transparency, public participation and judicial review protections Congress has guaranteed for all of our citizens in the rulemaking process. And, it’s a tremendous burden on job-creating businesses, especially small businesses,” Grassley said. “This kind of regulatory litigation also adversely affects the ability of the executive branch to engage in sound and principled decision-making. The goal of this bill is to make sure all citizens, especially those directly impacted by a proposed regulation, have a meaningful opportunity to participate in the rulemaking process and help ensure the procedure and process used to create these regulations are made in the open. America’s system of lawmaking and judicial review shouldn’t be distorted or manipulated.”
“The Obama Administration has empowered agencies to subvert the legislative process and manipulate the rulemaking system to achieve their pro-regulation agenda. Strong reforms are needed to protect communities and businesses against burdensome regulations that circumvent the rulemaking process. This legislation sheds light on the regulation through litigation that is crippling small businesses in my district and across the nation. Improving the public participation and transparency protections of the Administrative Procedure Act is vital to preserving the integrity of the rulemaking process,” Collins said.
Sue-and-settle driven rulemaking takes place under schedules that render notice-and-comment requirements a mere formality, depriving regulated entities, the public and the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) of sufficient time to have any meaningful input on the content of final rules.
The sue-and-settle problem has occurred primarily in litigation against regulatory agencies over allegations that agency action has been unlawfully withheld or unreasonably delayed. Typically, the defendant agency has failed to meet a mandatory statutory deadline for a new regulation or is alleged to have unreasonably delayed discretionary action. In addition, agency actions are often politically sensitive, especially when the proposed regulation imposes high costs on the regulated businesses.
With sue-and-settle cases, the resulting consent decree or settlement agreement comes as a surprise to the regulated community and the general public and often provides a short timeline for agency action. The lack of advance notice and minimal time allowed for the proposal and promulgation of regulations allows agencies to undercut the public participation and analytical requirements of regulatory process statutes. Accelerated timeframes for proposal and promulgation allow agencies to short-circuit review of new regulations by the OIRA. The incentive to do this is particularly strong when the plaintiff and the agency agree on what the content of the regulation should be, and seek to effectuate that agreement without input from interested parties and the OIRA.
Senators Tom Coburn, Mike Lee, Marco Rubio, John Cornyn, Deb Fischer and Ted Cruz are original cosponsors of the reform proposal in the Senate. Spencer Bachus, Chairman of the Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law, and Howard Coble, Chairman of the Judiciary Subcommittee on Courts, Intellectual Property and the Internet are co-sponsoring in the House.
The Sunshine for Regulatory Decrees and Settlements Act would require:
• Greater transparency. Agencies must publish sue-and-settle notices of intent to sue, complaints, decrees, settlements, and attorneys’ fee awards and report on them to Congress.
• Greater rights for regulated entities and the public. Agencies cannot propose sue-and-settle decrees and settlements to the courts until parties affected by the proposed regulations can intervene and participate in settlement negotiations and the proposed decrees and settlements are published for public notice and comment.
• Greater judicial scrutiny. Courts weighing proposed decrees and settlements must assure compliance with normal rulemaking procedures and account for agencies’ competing mandatory duties not within the litigation.
• Greater accountability. The Attorney General must certify to the court his or her approval of proposed decrees that convert discretionary authorities into mandatory duties.
• Greater flexibility for new administrations. Courts are allowed to review de novo any new administration’s motion to modify a consent decree in light of changed facts and circumstances or competing duties.