Sunshine for Regulations and Regulatory Decrees and Settlements Act - H.R. 469

H.R. 469, the ‘‘Sunshine for Regulatory Decrees and Settlements Act of 2017,’’ 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. 

COLLINS AND GRASSLEY INTRODUCE SUNSHINE ACT TO CURB BACKDOOR RULEMAKING

WASHINGTON—Congressman Doug Collins (R- Ga.) introduced H.R. 469, the Sunshine for Regulatory Decrees and Settlements Act while Senator Chuck Grassley of Iowa introduced a companion bill, S. 119, in the Senate. The Sunshine Act inhibits the ability of federal agencies to participate in back-door sue-and-settle arrangements with special interest groups, which circumvent established regulatory processes.

Federal agencies like the Environmental Protection Agency (EPA) have increasingly turned to consent decrees as a means of realigning regulatory priorities and establishing new rules that affect American workers and families. Agencies can carry out sue-and-settle litigation without public notice or comment, and over 100 such regulations have been handed down during the current administration, at an estimated annual cost of more than $100 billion.

The MACT Utility Rule, for example, costs American industry over $9 billion each year as the result of a consent decree with the EPA that enacted emissions regulations outside of the purview of the Clean Air Act, which was the foundation of the initial lawsuit. Maneuvers like the MACT case indicate that unelected bureaucrats at federal agencies have become more sympathetic to environmental activist groups than to the Americans they are meant to serve.

“The Sunshine Act represents a commitment I made to regulatory reform in my first term in office. Consent decrees weren’t designed as tools for back-room deals without the input of the people they impact most.

“I’m proud to have worked with Senator Grassley to curb this mischief by bringing transparency and accountability to the federal rulemaking process. This legislation lessens the power of bureaucrats to burden hardworking Americans with rules that bog down our economy and erode Americans’ right to know about and respond to federal rulemaking,” said Collins.

“Sue-and-settle tactics are used solely to hide an agency’s regulatory ambitions from the American people until it is too late. This practice hurts families, businesses and even entire states through burdensome red tape, and it makes a mockery of the public accountability and transparency protections established by the Administrative Procedure Act. This bill restores the American people’s seat at the table when agencies debate imposing new federal regulations,” Grassley said.

Specifically, the Sunshine Act checks federal runs around the regulatory process by:

• Providing for greater transparency by requiring agencies to publicly post and report to Congress information on sue-and-settle complaints, consent decrees and settlement agreements;
• Prohibiting the same-day filing of complaints and pre-negotiated consent decrees and settlement agreements in cases seeking to compel agency action;
• Requiring that consent decrees and settlement agreements be filed only after interested parties have had the opportunity to intervene in the litigation and join settlement negotiations, and only after any proposed consent decree or settlement has been published for at least 60 days to provide for notice and comment;
• Requiring courts considering approval of consent decrees and settlement agreements to account for public comments and compliance with regulatory process statutes and executive orders;
• Making it easier for succeeding administrations to petition a court for modification of a prior administration’s consent decrees by providing for de novo review of motions to modify, if the circumstances have changed; and
• Requiring the Attorney General or, where appropriate, the defendant agency’s head, to certify to the court that he or she has approved any proposed consent decree that includes terms  that:
  • Convert into a duty an otherwise discretionary authority of an agency to take regulatory action;
  • Commit an agency to expend funds that have not been appropriated and budgeted for the action in question;
  • Commit an agency to seek a particular appropriation or budget authorization;
  • Divest an agency of discretion committed to the agency by statute or the Constitution; or
  • Otherwise affords relief that the court could not enter under its own authority.

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House Democratic Whip Steny Hoyer:

This bill would undermine the ability of federal regulators to protect the health and safety of Americans by imposing 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 an agency’s 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.

Contrary to the claims of the bill’s proponents 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 as well as other statutes, there exist long-established and effective procedures that regulate agencies' use of consent decrees and settlement agreements.

If enacted, H.R. 469 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. H.R. 469 is yet another Republican solution in search of a problem and another attack on the Federal government.  It will use taxpayer dollars to essentially put people at risk by subjecting agencies to cumbersome, complex, arbitrary mandates in an effort to create inaction.  

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Summary

H.R. 469 increases accountability and transparency in the federal regulatory process by providing more scrutiny of sue-and-settle rulemaking cases, mandating increased transparency of reporting requirements for payments made from the Judgment Fund, and strengthening the rights of Congress to intervene or participate as an amicus in litigation, particularly litigation regarding the constitutionality of Congress’ statutes.

Title I—The Sunshine for Regulatory Decrees and Settlements Act (H.R. 469)

The bill would increase transparency and judicial scrutiny of sue-and-settle consent decrees and settlements, and ensure that sue-and-settle rulemakings observe proper rulemaking procedure. Provisions in title I include:

Improved Transparency and Accountability—The bill requires that any proposed consent decree or settlement agreement requiring a federal agency to undertake new rulemaking be published in the Federal Register for 60 days for public comment prior to filing with the court. The bill also requires agencies to publish intent-to-sue notices within 15 days after receipt and instructs courts to assure that proposed decrees and settlements provide adequate time for compliance with the Administrative Procedure Act and other statutory and executive-order requirements governing the rulemaking process.

Motions to Intervene—The bill enhances the ability of affected parties to file motions to intervene in an action and participate in settlement negotiations prior to the entry of a consent decree or settlement agreement that requires new rulemaking.

Senior Level Official Approval—The bill requires 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.

Greater Flexibility for Modifications—The bill allows courts more flexibility to review consent decrees when agencies seek to modify them due to changed circumstances.

Title II—The Judgment Fund Transparency Act of 2017 (H.R. 1096)

The bill requires the Department of Treasury to disclose details after payments are made from the Judgement Fund. The fund is a permanent and indefinite appropriation to pay judgements against the United States.

Specifically, the Treasury must disclose to the public on a website: the agency or entity whose actions gave rise to the claim or judgement, the plaintiff or claimant, the counsel for the plaintiff or claimant, the amount paid, a description of the facts that gave rise to the claim, and any information available on reports generated by the Judgement Fund Payment Search administered by Treasury.

If a payment is made to a foreign state, Treasury must also include: the method of payment; the currency denomination used for the payment; and the name and location of each financial institution owned or controlled by a foreign state or an agent of a foreign state through which the payment passed, form which the payment was withdrawn, or that is holding the payment.

The bill will also make public the total annual amount paid for attorneys’ fees, interest, and all other amounts for all payments made from the Judgment Fund. In addition to the transparency requirements, this bill prohibits Judgment Fund payments to a state sponsor of terrorism or to a foreign terrorist organization.

Title III—The Article I Amicus and Intervention Act of 2017 (H.R. 4070)

The bill ensures Congress has sufficient time to review and intervene in any civil action in which the Attorney General has determined DOJ will not defend the constitutionality of any provision of federal law. Specifically, the bill puts in place a formal timeline as to when DOJ must report to Congress if the department has decided not to defend the constitutionality of a provision of law.

Additionally, the bill provides the House of Representatives the same right as the Senate to intervene or file an amicus brief in any legal action or proceeding pending any court in the United States.

Background

Title I Background

In recent years, federal regulatory agencies have commonly used judicial consent decrees or settlement agreements to issue new regulations, while claiming that they were forced into it by the courts. This tactic, commonly referred to as “sue-and-settle,” occurs when a federal agency agrees to a consent decree or settlement agreement, in a lawsuit generally filed by pro-regulation special interest groups, to create rules outside of the normal rulemaking process. Under the Obama Administration, federal agencies issued more than 100 new regulations using this process with over $100 billion in estimated annual costs.

According to the Committee, “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 […] 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 the other regulatory process statues.”

According to the bill’s sponsor, “Consent decrees weren’t designed as tools for back-room deals without the input of the people they impact most[…] This legislation lessens the power of bureaucrats to burden hardworking Americans with rules that bog down our economy and erode Americans’ right to know about and respond to federal rulemaking.”

In the 114th Congress, similar legislation, H.R. 712, passed the House of Representatives by a vote of 244-173.

Title II Background

The Judgement Fund is currently managed by the Treasury Department, and used to pay for court expenses and settlements against the federal government. In recent years, “the fund is not subject to the annual appropriations process, has lax reporting requirements, and any available information is offered only at the discretion of the President.”[4]  Examples of recent misuse of the fund include the Obama Administration’s $1.7 billion payment to Iran in 2016 and the Centers for Medicaid and Medicare Services’ attempt to use the fund to bailout Obamacare insurance companies.

According to the bill’s sponsor, “The federal government should always be transparent about how it uses tax dollars. This bill is a critical fix that will show us who the government is paying and how much when it settles or loses lawsuits, and it will prevent the fund from being used as a slush fund for political purposes.”

Title III Background

Under current law, the Attorney General is simply required to report to Congress any time the Justice Department has decided not to defend the constitutionality of a provision of federal law. Title III would create a formalized timeline for the reporting process, ensuring Congress has sufficient time to review and intervene if necessary.

Additionally, the Senate currently has the right to intervene or file an amicus brief in any legal action or proceeding pending in any court in the United States. This provision would extend this authority to the House of Representatives as well.

Cost

The Congressional Budget Office (CBO) estimates that implementing H.R. 469 would cost $9 million over the 2018-2022 period.

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