EPA’s recently announced directive ending “regulation through litigation,” otherwise known in many circles as “sue and settle,” aimed most of its ire at actions allegedly taken outside the typical administrative process “through backroom deals.”  Indeed, the “sue and settle” phenomenon has long been the bugaboo of many national advocacy groups.  The thought has been that the agency actually welcomed litigation brought by public interest groups with which the agency sympathized, only then to settle on extremely favorable terms, committing the government to policies that never would have been implemented, and paying the plaintiffs handsome attorneys’ fees to boot.

The reality of these cases is somewhat less conspiratorial.

Let’s start with a basic truth:  90+ percent of all civil cases settle.  Parties genuinely may be unable to resolve their dispute without a court telling them who wins or loses, but with rare exception, parties dislike having a judge (who may or may not have pertinent expertise) dictate what actions they have to take.  The same holds true for the government.  Any regulatory agency prefers creating its own rulemaking plan over having a court tell it how quickly it needs to act.

Another truth:  federal government agencies do not settle cases independently.  They all have strict oversight from their skilled counsel at the U.S. Department of Justice.  DOJ attorneys carefully review any proposed agreement to ensure that the settlement terms do not bind the agency to actions it otherwise would not have been compelled to take.  Theoretically, even if an agency “plotted” with an outside organization to have a case filed against it so that a favorable deal could be struck, DOJ is a vigilant steward of the government’s resources and will simply not permit the ink to dry on an over-reaching settlement.

More reality?  The rules concerning attorneys’ fees awards following settlements have been sealed largely by case law interpreting various statutory provisions making the payment of attorneys’ fees available in the first place.  Common law says that if a plaintiff successfully settles a case and obtains relief through the filing of its lawsuit, it is a “prevailing party” and eligible for fees.  It’s just a matter of how much.  Again, here’s where DOJ plays an important role.  The government’s lawyers hate seeing Uncle Sam pay huge fee awards.  Sure, the Judgment Fund represents a large available pot of money to pay fees outside an individual agency’s budget, but as a former DOJ lawyer, I can tell you we took pride in paying the absolute minimum.

One last painful truth: the vast majority of cases brought in the context of what could be called “sue and settle” are open and shut, no-doubt-about-it losers for the government.  They are largely brought because the agency has missed a deadline to issue a regulation or take a specific administrative action mandated by the legislature.  The deadline passes without the requisite action in place, and the agency is vulnerable to litigation without any real credible defense.  The agency could litigate to defeat and allow a court to tell it what to do and when, or it could figure out what it could reasonably accomplish on what schedule and settle.  Practical as salt.

Administrator Pruitt’s recent directive properly makes transparency through public disclosure a requirement of any future settlement or proposed consent decree.  Publishing notice of all proposed settlements and allowing a comment period is good government, pure and simple.  The new EPA policy is really no different from the procedure by which the agency publishes its regulatory agenda through the Office of Management and Budget.  The public deserves to know what an agency is planning to do with respect to its regulations and to have some idea about the schedule by which regulatory actions will be taken.

So why the hubbub? It’s probably because stakeholders on all sides of the controversy seem intent on ascribing bad motives to the entire litigation enterprise.  Plaintiff thinks (twirling his evil, curly moustache): “Aha!  I know how to get that agency to do what I want!  I’ll bring litigation reminding it of a deadline it already knows about, and can’t possibly meet!”  Agency responds (winking with both eyes so quickly, it could be mistaken for blinking): “Thanks, evil Plaintiff!  Without your complaint, I surely would have ignored the will of Congress indefinitely!”  Of course, no public interest or industry stakeholders behave this way.

Parties upset with the reality of litigation dictating administrative action should focus their attention squarely on Congress.  It is the legislature, after all, that routinely sets unrealistic regulatory deadlines, or passes mandates that in any reasonable world would take years of analysis, but must be done “12 months from the effective date of this statute.”  The result is inevitable.  Agencies miss deadlines (even with the best of intentions) and aggrieved parties sue.

EPA’s new policy most likely will not alter the trajectory of “sue and settle.”  It may, however, shed more light on the regulatory process.  In that way it could force Congress to consider more carefully its role in the seemingly never-ending cycle of legislate/litigate/regulate that is all too pervasive in the world of environmental law.