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Charles G.
Republican IA

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  • Statements on Introduced Bills and Joint Resolutions

    by Senator Chuck Grassley

    Posted on 2015-02-04

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    GRASSLEY (for himself, Mr. Blunt, Mr. Cruz, Mr. Hatch, Mr. Paul, Mr. Cornyn, Mr. Rubio, Mr. Inhofe, Mrs. Fischer, Mr. Flake, Mr. Lee, Mrs. Capito, and Mr. Gardner): S. 378. A bill to impose certain limitations on consent decrees and settlement agreements by agencies that require the agencies to take regulatory action in accordance with the terms thereof, and for other purposes; to the Committee on the Judiciary.



    Mr. GRASSLEY. Mr. President, I rise today to introduce an important piece of regulatory reform legislation.

    A study released this past fall by the National Association of Manufacturers estimates that U.S. Federal Government regulations imposed over $2 trillion in compliance costs on American businesses in 2012. This is an amount equal to 12 percent of our Nation's GDP.

    The study also demonstrated--and this should come as no surprise-- that the cost of complying with all those regulations falls disproportionately on small businesses. Small manufacturing firms, in particular, grapple with regulatory compliance costs that are more than three times those felt by the average company in the United States.

    It is no wonder why many American businesses are shuttering or moving their entire operation overseas. And how many folks dreamed of starting a small business but ultimately decided against taking the risk because of the overwhelming burden and uncertainty of our regulatory state? We have to do better.

    Small businesses are fed up with excessive Federal regulation, and they are making sure we know about it. A November 2014 survey conducted by the National Federation of Independent Business asked small business owners across the country to rank the ten most pressing problems they face. Overwhelmingly, the top two answers from small business owners were taxes and complying with government red tape. I am happy to say that this Congress intends to confront these issues head-on.

    The Federal Government needs to do everything possible to promote an environment that will allow private sector employers to create jobs. To accomplish that, common sense would tell us that the government needs to remove barriers to job creation rather than put up new ones.

    Unfortunately, the Obama administration has proven time and again that it would rather push forward with its interest-driven regulatory agenda than ease the heavy burden upon our economy and our entrepreneurs.

    To make matters worse, this administration is pursuing new regulations through litigation tactics that take an end-run around the laws enacted by Congress to ensure transparency and accountability in the regulatory process. This strategy has come to be known as sue-and- settle, and regulators have been using it to speed up rulemaking and to keep the public, industries, and even the States away from the table when regulatory decisions are negotiated behind closed doors.

    Sue-and-settle cases typically follow a similar pattern. First, an interest group files a lawsuit against a Federal agency, claiming that the agency has failed to take a certain regulatory action by a statutory deadline. Through the complaint, the interest group seeks to compel the agency to take action by a new, often-rushed deadline. The plaintiff-interest group frequently will be one that shares a common regulatory and policy agenda with the agency that it sues, such as when an environmental group sues the Environmental Protection Agency, EPA.

    Next, the agency and interest group enter into friendly negotiations to produce either a settlement agreement or consent decree behind closed doors that commits the agency to satisfying the interest group's demands. The agreement is then entered by a court, binding executive discretion to undertake a regulatory action. And noticeably absent from these negotiations are the very parties who will likely be most impacted by the new regulation.

    Sue-and-settle tactics by advocacy groups and complicit government agencies have severe consequences on transparency, public accountability, and ultimately on the quality of the resulting public policy.

    Such tactics undermine congressional intent by shutting out affected parties, such as industries and even the States that are charged with implementing new regulations.

    The Administrative Procedure Act, APA, which has been characterized as the citizens' ``regulatory bill of rights,'' was enacted to ensure transparency and public accountability in our Federal rulemaking process. A central aspect of the APA is the notice-and-comment process, which requires agencies to notify the public of proposed regulations and to respond to comments submitted by interested parties.

    Rulemaking driven by sue-and-settle tactics, however, frequently results in reprioritized agency agendas and truncated deadlines for regulatory action. This renders the notice-and-comment requirements of the APA a mere formality, depriving regulated entities, the States and the public of sufficient time to have any meaningful input on the final rules. The resulting regulatory action is driven not by the public interest, but by special interest priorities, and often comes as a complete surprise to those most affected by it.

    Sue-and-settle litigation also helps agencies avoid accountability. Instead of having to answer to the public for controversial regulations and policy decisions, agency officials are able to simply point to a court order entering the agreement and maintain that they were required to take action under its terms.

    Further, the abuse of consent decrees as a method for taking regulatory action can have lasting negative impact on the ability of future administrations to adapt the Federal regulatory scheme to changing circumstances. Not only does this raise serious concerns about bad public policy; it also puts into question the constitutional impact of one administration's actions binding the hands of its successors.

    Sue-and-settle, and the consequences that come with such tactics, is not a new phenomenon. Evidence of sue-and-settle tactics and closed- door rulemaking can be found in nearly every administration over the previous few decades.

    But there has been an alarming increase in sue-and-settle tactics under the Obama administration. A study by the U.S. Chamber of Commerce shows that just during President Obama's first term, 60 Clean Air Act lawsuits against the EPA were resolved through consent decrees or settlement agreements, an increase from 28 during President George W. Bush's second term.

    Since 2009, sue-and-settle cases against the EPA have imposed at least $13 billion in annual regulatory costs.

    In November 2010, environmental advocacy groups filed a complaint against the EPA under the Clean Water Act to compel the agency to revise wastewater regulations. Interestingly, the same day that the complaint was filed, the plaintiff-advocacy groups filed a proposed consent decree already signed by the EPA and requiring prompt regulatory action. As is characteristic of sue-and-settle cases, potentially affected parties were kept out of the lawsuit and negotiations. Such a scenario should raise serious concerns over how truly adversarial these lawsuits really are.

    In another case, environmental advocacy groups filed suit against the EPA to compel the agency to issue new air quality standards for pollutants from coal and oil-fired power plants. The plaintiff-advocacy groups alleged that the EPA had violated its statutory duty to issue new standards.

    An industry group intervened in the case to represent utility companies but was ultimately left out of subsequent negotiations between the plaintiffs and the EPA, which resulted in a consent decree. The industry group challenged the consent decree on numerous grounds, including the rulemaking timeframe established under the decree [[Page S778]] which was arguably too short to allow the public to participate fully in the rulemaking process.

    Nevertheless, the court approved and entered the consent decree, with the judge concluding that ``[s]hould haste make waste, the resulting regulations will be subject to successful challenge. . . If EPA needs more time to get it right, it can seek more time.'' The resulting rule, despite its opaque promulgation, was estimated by the EPA to cost $9.6 billion annually by 2015. And according to estimates by the American Coalition for Clean Coal Electricity, the rule promulgated under the consent decree would contribute to a loss of 1.44 million jobs in the U.S. between 2013 and 2020.

    The EPA could have done things right the first time by crafting a sensible, workable rule that protects the environment without causing unnecessary job losses or higher electricity prices for hard-working American families. But as a result of backroom, sue-and-settle tactics, we were left with a controversial regulation that fails to properly take into account the impact on affected parties and that remains the subject of litigation to this day.

    The EPA, it seems, has turned a blind eye to the calls for more transparency and public accountability in our Federal rulemaking process. In February 2014, EPA's General Counsel issued a statement declaring: The sue and settle rhetoric, strategically mislabeled by its proponents, is an often-repeated but a wholly invented accusation that gets no more true with frequent retelling.

    I think many would take issue with that assessment. In fact, the Environmental Council of the States, or ECOS--a national non-profit, non-partisan association made up of State and territorial environmental agency leaders--adopted a resolution entitled ``The Need for Reform and State Participation in EPA's Consent Decrees which Settle Citizen Suits,'' stating, among other things: [S]tate environmental agencies are not always notified of citizen suits that allege U.S. EPA's failure to perform its nondiscretionary duties, are often not parties to these citizen suits, and are usually not provided with an opportunity to participate in the negotiation of agreements to settle citizen suits[.] ECOS further resolved that: [G]reater transparency of citizen suit settlement agreements is needed for the public to understand the impact of these agreements on the administration of environmental programs[.] I agree.

    Clearly, the EPA has no intention of acknowledging the use or consequences of sue-and-settle tactics. And unfortunately, I think this sentiment is shared by other executive branch agencies today.

    That is why today I am introducing the Sunshine for Regulatory Decrees and Settlements Act of 2015. Senators Blunt, Hatch, Cruz, Paul, Cornyn, Rubio, Inhofe, Fischer, Flake, Lee, Capito and Gardner are cosponsors of this important bill, and I thank them for their support.

    In the House, Representative Doug Collins of Georgia is introducing a companion bill.

    By enacting reasonable, pro-accountability measures, the Sunshine bill aims to address many of the problems I have outlined so far.

    This bill provides for greater transparency by shedding light on sue- and-settle tactics. It requires agencies to publish sue-and-settle complaints and notices of intent-to-sue in a readily accessible manner.

    The bill requires agencies to publish proposed consent decrees and settlement agreements at least 60 days before they can be filed with a court. This provides a valuable opportunity for affected parties to weigh-in, which will increase public accountability in the rulemaking process. It will also prevent those scenarios where lawsuits are filed on the same day as previously negotiated agreements, a practice that effectively blocks any meaningful participation by affected parties.

    The bill also makes it easier for affected parties such as States and business owners to take part in both the lawsuit and settlement negotiations to ensure that their interests are properly represented. It requires the Attorney General or, if appropriate, the head of the defendant-agency, to certify to the court that he or she has personally approved certain proposed consent decrees or settlement agreements that, for example, convert a discretionary authority of an agency into a non-discretionary duty to act. It requires that courts consider whether the terms of a proposed agreement are contrary to the public interest.

    The bill promotes greater transparency by requiring agencies to publicly post and report to Congress information on sue-and-settle complaints, consent decrees and settlement agreements.

    Finally, the bill resolves key constitutional concerns by making it easier for succeeding administrations to modify the effect of a prior administration's consent decrees. It does so by providing for de novo review of motions to modify existing consent decrees due to changed circumstances.

    The Sunshine for Regulatory Decrees and Settlements Act will shed light on the problem. It will help rein in backroom rulemaking, encourage the appropriate use of consent decrees and settlements, and reinforce the procedures laid out decades ago to ensure a transparent and accountable regulatory process.

    I urge my colleagues to work with me and support this important legislation.

    Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

    There being no objection, the text of the bill was ordered to be printed in the Record, as follows: S. 378 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Sunshine for Regulatory Decrees and Settlements Act of 2015''.

    SEC. 2. DEFINITIONS.

    In this Act-- (1) the terms ``agency'' and ``agency action'' have the meanings given those terms under section 551 of title 5, United States Code; (2) the term ``covered civil action'' means a civil action-- (A) seeking to compel agency action; (B) alleging that the agency is unlawfully withholding or unreasonably delaying an agency action relating to a regulatory action that would affect the rights of-- (i) private persons other than the person bringing the action; or (ii) a State, local, or tribal government; and (C) brought under-- (i) chapter 7 of title 5, United States Code; or (ii) any other statute authorizing such an action; (3) the term ``covered consent decree'' means-- (A) a consent decree entered into in a covered civil action; and (B) any other consent decree that requires agency action relating to a regulatory action that affects the rights of-- (i) private persons other than the person bringing the action; or (ii) a State, local, or tribal government; (4) the term ``covered consent decree or settlement agreement'' means a covered consent decree and a covered settlement agreement; and (5) the term ``covered settlement agreement'' means-- (A) a settlement agreement entered into in a covered civil action; and (B) any other settlement agreement that requires agency action relating to a regulatory action that affects the rights of-- (i) private persons other than the person bringing the action; or (ii) a State, local, or tribal government.

    SEC. 3. CONSENT DECREE AND SETTLEMENT REFORM.

    (a) Pleadings and Preliminary Matters.-- (1) In general.--In any covered civil action, the agency against which the covered civil action is brought shall publish the notice of intent to sue and the complaint in a readily accessible manner, including by making the notice of intent to sue and the complaint available online not later than 15 days after receiving service of the notice of intent to sue or complaint, respectively.

    (2) Entry of a covered consent decree or settlement agreement.--A party may not make a motion for entry of a covered consent decree or to dismiss a civil action pursuant to a covered settlement agreement until after the end of proceedings in accordance with paragraph (1) and subparagraphs (A) and (B) of paragraph (2) of subsection (d) or subsection (d)(3)(A), whichever is later.

    (b) Intervention.-- (1) Rebuttable presumption.--In considering a motion to intervene in a covered civil action or a civil action in which a covered consent decree or settlement agreement has been proposed that is filed by a person who alleges that the agency action in dispute would affect the person, the court shall presume, subject to rebuttal, that the interests of the person would not be represented adequately by the existing parties to the action.

    [[Page S779]] (2) State, local, and tribal governments.--In considering a motion to intervene in a covered civil action or a civil action in which a covered consent decree or settlement agreement has been proposed that is filed by a State, local, or tribal government, the court shall take due account of whether the movant-- (A) administers jointly with an agency that is a defendant in the action the statutory provisions that give rise to the regulatory action to which the action relates; or (B) administers an authority under State, local, or tribal law that would be preempted by the regulatory action to which the action relates.

    (c) Settlement Negotiations.--Efforts to settle a covered civil action or otherwise reach an agreement on a covered consent decree or settlement agreement shall-- (1) be conducted pursuant to the mediation or alternative dispute resolution program of the court or by a district judge other than the presiding judge, magistrate judge, or special master, as determined appropriate by the presiding judge; and (2) include any party that intervenes in the action.

    (d) Publication of and Comment on Covered Consent Decrees or Settlement Agreements.-- (1) In general.--Not later than 60 days before the date on which a covered consent decree or settlement agreement is filed with a court, the agency seeking to enter the covered consent decree or settlement agreement shall publish in the Federal Register and online-- (A) the proposed covered consent decree or settlement agreement; and (B) a statement providing-- (i) the statutory basis for the covered consent decree or settlement agreement; and (ii) a description of the terms of the covered consent decree or settlement agreement, including whether it provides for the award of attorneys' fees or costs and, if so, the basis for including the award.

    (2) Public comment.-- (A) In general.--An agency seeking to enter a covered consent decree or settlement agreement shall accept public comment during the period described in paragraph (1) on any issue relating to the matters alleged in the complaint in the applicable civil action or addressed or affected by the proposed covered consent decree or settlement agreement.

    (B) Response to comments.--An agency shall respond to any comment received under subparagraph (A).

    (C) Submissions to court.--When moving that the court enter a proposed covered consent decree or settlement agreement or for dismissal pursuant to a proposed covered consent decree or settlement agreement, an agency shall-- (i) inform the court of the statutory basis for the proposed covered consent decree or settlement agreement and its terms; (ii) submit to the court a summary of the comments received under subparagraph (A) and the response of the agency to the comments; (iii) submit to the court a certified index of the administrative record of the notice and comment proceeding; and (iv) make the administrative record described in clause (iii) fully accessible to the court.

    (D) Inclusion in record.--The court shall include in the court record for a civil action the certified index of the administrative record submitted by an agency under subparagraph (C)(iii) and any documents listed in the index which any party or amicus curiae appearing before the court in the action submits to the court.

    (3) Public hearings permitted.-- (A) In general.--After providing notice in the Federal Register and online, an agency may hold a public hearing regarding whether to enter into a proposed covered consent decree or settlement agreement.

    (B) Record.--If an agency holds a public hearing under subparagraph (A)-- (i) the agency shall-- (I) submit to the court a summary of the proceedings; (II) submit to the court a certified index of the hearing record; and (III) provide access to the hearing record to the court; and (ii) the full hearing record shall be included in the court record.

    (4) Mandatory deadlines.--If a proposed covered consent decree or settlement agreement requires an agency action by a date certain, the agency shall, when moving for entry of the covered consent decree or settlement agreement or dismissal based on the covered consent decree or settlement agreement, inform the court of-- (A) any required regulatory action the agency has not taken that the covered consent decree or settlement agreement does not address; (B) how the covered consent decree or settlement agreement, if approved, would affect the discharge of the duties described in subparagraph (A); and (C) why the effects of the covered consent decree or settlement agreement on the manner in which the agency discharges its duties is in the public interest.

    (e) Submission by the Government.-- (1) In general.--For any proposed covered consent decree or settlement agreement that contains a term described in paragraph (2), the Attorney General or, if the matter is being litigated independently by an agency, the head of the agency shall submit to the court a certification that the Attorney General or head of the agency approves the proposed covered consent decree or settlement agreement. The Attorney General or head of the agency shall personally sign any certification submitted under this paragraph.

    (2) Terms.--A term described in this paragraph is-- (A) in the case of a covered consent decree, a term that-- (i) converts into a nondiscretionary duty a discretionary authority of an agency to propose, promulgate, revise, or amend regulations; (ii) commits an agency to expend funds that have not been appropriated and that have not been budgeted for the regulatory action in question; (iii) commits an agency to seek a particular appropriation or budget authorization; (iv) divests an agency of discretion committed to the agency by statute or the Constitution of the United States, without regard to whether the discretion was granted to respond to changing circumstances, to make policy or managerial choices, or to protect the rights of third parties; or (v) otherwise affords relief that the court could not enter under its own authority upon a final judgment in the civil action; or (B) in the case of a covered settlement agreement, a term-- (i) that provides a remedy for a failure by the agency to comply with the terms of the covered settlement agreement other than the revival of the civil action resolved by the covered settlement agreement; and (ii) that-- (I) interferes with the authority of an agency to revise, amend, or issue rules under the procedures set forth in chapter 5 of title 5, United States Code, or any other statute or Executive order prescribing rulemaking procedures for a rulemaking that is the subject of the covered settlement agreement; (II) commits the agency to expend funds that have not been appropriated and that have not been budgeted for the regulatory action in question; or (III) for such a covered settlement agreement that commits the agency to exercise in a particular way discretion which was committed to the agency by statute or the Constitution of the United States to respond to changing circumstances, to make policy or managerial choices, or to protect the rights of third parties.

    (f) Review by Court.-- (1) Amicus.--A court considering a proposed covered consent decree or settlement agreement shall presume, subject to rebuttal, that it is proper to allow amicus participation relating to the covered consent decree or settlement agreement by any person who filed public comments or participated in a public hearing on the covered consent decree or settlement agreement under paragraph (2) or (3) of subsection (d).

    (2) Review of deadlines.-- (A) Proposed covered consent decrees.--For a proposed covered consent decree, a court shall not approve the covered consent decree unless the proposed covered consent decree allows sufficient time and incorporates adequate procedures for the agency to comply with chapter 5 of title 5, United States Code, and other applicable statutes that govern rulemaking and, unless contrary to the public interest, the provisions of any Executive order that governs rulemaking.

    (B) Proposed covered settlement agreements.--For a proposed covered settlement agreement, a court shall ensure that the covered settlement agreement allows sufficient time and incorporates adequate procedures for the agency to comply with chapter 5 of title 5, United States Code, and other applicable statutes that govern rulemaking and, unless contrary to the public interest, the provisions of any Executive order that governs rulemaking.

    (g) Annual Reports.--Each agency shall submit to Congress an annual report that, for the year covered by the report, includes-- (1) the number, identity, and content of covered civil actions brought against and covered consent decree or settlement agreements entered against or into by the agency; and (2) a description of the statutory basis for-- (A) each covered consent decree or settlement agreement entered against or into by the agency; and (B) any award of attorneys fees or costs in a civil action resolved by a covered consent decree or settlement agreement entered against or into by the agency.

    SEC. 4. MOTIONS TO MODIFY CONSENT DECREES.

    If an agency moves a court to modify a covered consent decree or settlement agreement and the basis of the motion is that the terms of the covered consent decree or settlement agreement are no longer fully in the public interest due to the obligations of the agency to fulfill other duties or due to changed facts and circumstances, the court shall review the motion and the covered consent decree or settlement agreement de novo.

    SEC. 5. EFFECTIVE DATE.

    This Act shall apply to-- (1) any covered civil action filed on or after the date of enactment of this Act; and (2) any covered consent decree or settlement agreement proposed to a court on or after the date of enactment of this Act.

    ______ By Mr. HATCH (for himself, Mr. Cornyn, Mr. Lee, Mr. McCain, [[Page S780]] Mr. Enzi, Mr. Scott, Mr. Johnson, Mr. Inhofe, Mr. Blunt, Mr. Moran, Mr. Isakson, Mr. Gardner, Mr. Hoeven, Mr. Barrasso, Mr. Crapo, Mr. Wicker, Mr. Vitter, Mr. Heller, Mr. Alexander, Mr. Toomey, Mr. Boozman, Ms. Ayotte, Mr. Thune, Mr. Kirk, Mr. Roberts, Mr. Portman, Mr. Cruz, Mr. Graham, Mr. Cassidy, Mr. Rubio, Ms. Murkowski, Mrs. Fischer, Mr. Flake, Mr. Risch, Mr. Perdue, Mr. Cochran, Mr. Lankford, Mr. Burr, Mrs. Capito, Mr. Sullivan, Mr. Daines, Mr. Rounds, Mr. McConnell, Mr. Grassley, Mr. Coats, Mrs. Ernst, Mr. Tillis, Mr. Cotton, Ms. Collins, Mr. Shelby, Mr. Corker, Mr. Paul, Mr. Sessions, and Mr. Sasse): S.J. Res. 6. A joint resolution proposing an amendment to the Constitution of the United States relative to balancing the budget; to the Committee on the Judiciary.

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