Fed up with USEPA’s “sue and settle” rulemaking tactics, the regulated community’s complaints have resulted in increased scrutiny of the practice by members of Congress and state officials and has even resulted in recent litigation.  Our prior article details the specifics of USEPA’s “sue and settle” rulemaking practices, but in essence, it is where USEPA has been sued (or threatened with suit) by environmental groups and negotiates a closed-door settlement agreement under which USEPA will agree to deadlines for rulemaking and the agreement is only available for public review once executed and lodged with a court.

In April, the US Chamber of Commerce wrote an open letter to members of the US House of Representatives lobbying against USEPA’s “sue and settle” rulemaking tactics.  Members of Congress responded, requesting that the Government Accountability Office (GAO) investigate the practice.  In another statement, other members expressed concern that USEPA was “undertak[ing] significant new rulemakings subject to specific timelines or schedules, including rulemakings that may result in substantial new compliance costs” without giving states an opportunity to provide input.

State attorneys generals have also critized the practice and urged USEPA to comply with regulatory procedural requirements when faced with litigation threats from other states and environmental groups.  In a June 2013 letter to acting USEPA Administrator Bob Perciasepe, 21 states took the position that “[a]ppropriate process should not be subjugated, and effective policymaking cannot be forced to fruition, by threatening litigation.”

In addition, twelve states took further action in response to the practice by filing suit in the US District Court for the Western District of Oklahoma in July to challenge USEPA’s denial of Freedom of Information Act (FOIA) requests for records related to the Agency’s negotiations with environmental groups which evolved into settlements and consent decrees.  The states allege that USEPA unlawfully withheld letters, e-mails, and other forms of correspondence related to negotiations with environmental groups over Regional Haze state implementation programs.

Today, companies subject to USEPA regulation may find they have little time and information available to them before commenting on a proposed rule born out of this “sue and settle” process.  Retaining legal counsel to assist in tracking “sue and settle” lawsuits, seeking intervenor status to the extent allowed by courts, and commenting on proposed settlements are effective ways to protect business and regulatory interests.  Legal counsel can advocate for provisions in settlements that ensure adequate time to develop an administrative record and, if necessary, challenge USEPA.