EPA Issues New Policy on Its Use of Consent Decrees and Settlements
Tuesday, April 5, 2022

The US Environmental Protection Agency (EPA) recently updated its guidance on “sue-and-settle” situations – a contentious approach to resolving claims alleging that the agency has failed to perform a required duty. Successive presidential administrations have diverged on the safeguards required to ensure settlements are fairly negotiated.

EPA’s new guidance both rolls back certain barriers to the agency engaging in “sue-and-settle” but also retains or augments some of the public access procedures created by the Trump Administration. Takeaways for the regulated community are:

  • EPA Listserv. EPA is creating a listserv to alert interested persons when documents related to litigation against the agency (including Notices of Intent to sue, petitions for review, complaints, and proposed settlements/consent decrees) are posted to the agency’s website. It is reasonable to expect that a fair volume of materials will be posted through this listserv. The listserv sign-up is available here.

  • Online Posting of Settlements and Consent Decrees. EPA has retained the existing practice of posting proposed consent decrees or settlements to EPA’s website and making them available for public review and comment for at least 30 days, unless another period of time is required by law.

EPA’s new process is designed to balance the need for transparency against its desire to return to pre-Trump Administration practice of settling certain cases.

Where do “sue-and-settle” situations arise?

Federal environmental laws authorize citizen lawsuits to enforce EPA’s performance of a non-discretionary duty, such as meeting a statutory deadline. Additionally, the federal Administrative Procedure Act (APA) authorizes legal challenges to “final agency actions.” (We previously wrote about cases involving APA treatment of “final agency actions” here.) A “sue-and-settle” issue may arise when EPA negotiates a settlement with a citizen plaintiff over a missed statutory deadline to promulgate a rule, and EPA commits to a compliance schedule setting forth a timeframe in which it will issue a final rule. The timeframe agreed to by EPA and the parties may limit or otherwise truncate notice and comment opportunities for stakeholders. A citizen plaintiff’s settlement with EPA can therefore result in what seems like a headlong rush to new policy but without opportunities for stakeholders to provide comment, such as would be provided under the APA.

How do EPA’s actions now differ from its actions under the Trump Administration?

EPA’s new policy modestly changes public notice requirements but eliminates procedural impediments to expeditiously settling claims against it. Using these changes, EPA is likely to return to its pre-Trump Administration practice of settling claims against it.

Why this change? EPA Administrator Michael Regan characterized the Trump Administration’s settlement prerequisites as “inappropriately favoring certain stakeholders.” Among now-eliminated procedures, EPA was required to notify all affected states or regulated entities about a complaint or petition for review against the agency and to take all appropriate steps to achieve state or regulated entity participation in settlement negotiations and concurrence in the settlement outcome. Beyond notice targeted to those particular stakeholders, though, the previous policy also committed EPA to placing notice in the Federal Register of all proposed settlements and consent decrees, not just those where Federal Register notice is statutorily required. 

The former policy also included multiple different timelines—some explicit and others undefined and implied. For example, EPA was required to post Notices of Intent to sue, petitions for review, and complaints within 15 days of receipt, but required that all settlements that included deadlines for issuance of a final rule would ensure “sufficient time” for the agency to engage in the notice and comment process. The former policy also stated that as a matter of course EPA would seek to exclude plaintiff or petitioner attorneys’ fees and categorically prohibited EPA from making settlements that would convert a discretionary duty into a mandatory duty.

When announcing this change in policy, Administrator Regan noted that there are procedural safeguards in place to prevent litigation from being used as a runaround for notice and comment rulemaking, including the Department of Justice’s longstanding policy disfavoring settlements that convert discretionary agency duties into mandatory ones, as well as associate or deputy attorney general approval for those settlements in which EPA does commit to performing an otherwise discretionary duty.

Regulated entities are responsible to stay informed about how they may be affected by litigation against EPA in which they may not directly be involved. EPA has already set up the listserv for alerts on litigation, and interested persons can add themselves to customizable distribution lists.


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