Dive Brief:

• U.S. Environmental Protection Agency Administrator Scott Pruitt yesterday issued a directive to end “sue and settle” practices that have often resulted in wins for environmental groups.
• According to the Pruitt, "the days of regulation through litigation are over." The agency believes the new policy will provide for public participation and transparency in EPA consent decrees and settlement agreements.
• When outside parties sue the EPA to compel the agency to take certain steps, resolution in the past has sometimes come through consent decrees or settlement agreements negotiated privately. President Obama's Clean Power Plan was developed following a legal settlement.

Dive Insight:

Industry groups have long complained that EPA settlements with environmental organizations have resulted in costly rules that otherwise may not have been promulgated. 

The Obama-era Mercury and Air Toxins Standards, developed after a legal agreement, cost the American public almost $10 billion, according to the U.S. Chamber of Commerce. Boiler rules could cost $3 billion and 2008 ozone standards could cost up to $90 billion, the group says. 

Pruitt has long been an ally of energy companies and has made a number of industry-friendly decisions shortly after meeting with their representatives as EPA administrator. On Monday, he moved again in their favor, ending what he calls the "sue and settle" practice at the EPA.

Specifically, Pruitt's directive means the agency will publish a notice within 15 days saying it is being sued. It will reach out to and include states or regulated entities affected by potential settlements or consent decrees, will "expressly" forbid the practice of entering into any consent decrees that exceed the authority of the courts, and will publish proposed or modified consent decrees and settlements for 30-day public comment period.

“The days of regulation through litigation are over,” Pruitt said in a statement. “We will no longer go behind closed doors and use consent decrees and settlement agreements to resolve lawsuits filed against the agency by special interest groups where doing so would circumvent the regulatory process set forth by Congress."

He added that "gone are the days of routinely paying tens of thousands of dollars in attorney’s fees to these groups with which we swiftly settle.” The new directive will exclude attorney’s fees and litigation costs when the EPA is settling with parties.

According to Pruitt, the changes will increase transparency and provide accountability, but it remains to be seen how far-reaching the directive will be. Outside groups will still be able to sue the EPA when it does not meet its statutory obligations, said Krista McIntyre, partner and practice group leader for Stoel Rives' environment, natural resources, and land use practices.

Pruitt's opposition to "sue and settle" does not make it less likely that these cases will be initiated in the future, McIntyre wrote in an email, and when that happens "EPA will have to litigate or settle the claims." 

"In any case, expect that resolution of these lawsuits will certainly take longer under the new transparency and public process procedures, increasing uncertainty and unpredictability for the regulated community," she wrote.