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from Inside EPA
Friday, March 19, 2004

Industry Mounts Campaign To Challenge 'Regulation By Litigation'

Industry-backed groups are organizing a campaign to show that environmentalists' lawsuits are creating de facto regulatory policy without the notice-and-comment process required by federal law. The lawsuits' critics say environmentalists are attempting to establish "regulation by litigation" without proper input from the public or industry and often in violation of the government's statutory authority.

Officials hope the campaign will raise pressure on the Bush administration to increase White House oversight and public involvement in the legal settlements resulting from the lawsuits, which industry groups say impose heavy burdens on industry but are not subject to normal administrative processes that federal agencies must follow in establishing regulatory policy. In particular, the groups are pointing to settlements EPA negotiated with environmental groups over pesticide spraying and risk assessments as prime examples of "regulation by litigation."

The Center for Regulatory Effectiveness, an industry-funded public policy group, and the U.S. Chamber of Commerce are planning to document what they say are environmental groups' efforts to establish regulatory policy through litigation. The chamber has submitted Freedom of Information Act requests to roughly 30 federal agencies on how they use consent decrees, which are enforceable settlements between the government and private parties, and whether these agreements have been subject to public comment. "They're building the record that many of these settlements are going out without public comment," according to an industry consultant.

CRE plans to track all future instances when the government enters into a settlement after being sued by environmental groups, the consultant says. The group will analyze the settlements, post the analyses on the CRE website and then seek comment from the government and private sector on the group's findings regarding the settlements. The source says the chamber will focus on the effects of past settlements on government policy, while CRE will focus on future efforts.

But an environmentalist disputes whether the settlements make new policy without public input. "If they wanted to really look at 'regulation by litigation,' they would include all the industry cases to repeal environmental protections in which the Bush administration negotiated collusive settlements with industry," the environmentalists says.

The industry groups plan to document these settlements in the hopes of getting President Bush to sign an executive order CRE drafted that would require the White House Office of Management & Budget to become involved in negotiations in cases that could require agencies to take regulatory or enforcement action beyond their statutory authority. The draft order defines these cases as any court action not intended to ensure compliance with "specific requirements" in federal statues or regulations, which primarily involves the rights of private third parties under common law, or that "seeks to establish or implement public policy objectives through legal action not expressly or impliedly authorized in Federal statutes or regulations."

"The government would not be as congenial to these settlements," says an industry source. "There would be a presumption against settling."

The groups would also want the Justice Department (DOJ) to issue a policy statement saying DOJ plans to solicit public comment on settlements it negotiates when it is sued by third parties, the consultant says. The consultant says legislation may be necessary to make the changes the groups are seeking.

The pro-industry groups point to lawsuits environmentalists and labor unions filed against EPA in four cases, all of which involve pesticides. "Nothing is more intrusive than what's happened in pesticides," the consultant says.

The groups have challenged EPA's process for assessing the risks that pesticides pose to human health and threatened and endangered species. Three of the cases involve the agency's endangered species risk assessments -- including one crucial case the Washington Toxics Coalition brought in which a Northwestern federal judge imposed "buffers" on spraying certain pesticides near rivers containing endangered salmon until EPA completed its endangered species risk assessment for the pesticides. Industry officials say the judge improperly intruded on the agency's regulatory authority to set risk levels for pesticides and require mitigation practices where necessary.

Industry groups have previously protested settlements EPA entered into with environmentalists, in particular in a suit the Natural Resources Defense Coucil (NRDC) brought that subjected the agency to a strict schedule for setting food tolerances for pesticides.

from Inside EPA
Friday, September 06, 2002

Industry-Funded Group Proposes Executive Order To Overhaul Regulatory Settlements

An industry-backed group has drafted an executive order that if adopted by the Bush administration would overhaul the process for reviewing legal settlements to regulatory disputes. The draft order would dramatically expand the role of industry and the general public in reviewing consent decrees and settlements resolving lawsuits against EPA and other federal agencies, which can often involve revised regulatory policies.

The proposal follows industry frustration with a legal settlement between EPA and environmentalists that set strict new deadlines for reviewing the risks from thousands of currently used pesticides.

The Center For Regulatory Effectiveness (CRE) sent the draft executive order, along with a letter, on Sept. 4 to the White House's Office of Management & Budget (OMB), arguing that settlements negotiated between government agencies and outside groups often affect the general public in ways that government agencies fail to take into account. “These judgments and agreements,” the order says, “can result in regulatory action or inaction that substantially affects many people who are not parties in the litigation. Non-parties often have no opportunity to participate in or comment on the consent judgment or settlement agreement even though their rights and duties may be determined by the judgment or settlement.”

The order would require federal agencies for the first time to publish a notice in the Federal Register of an initial agreement reached in a court case where the government is the defendant. Current federal procedures allow for public comment on consent decrees involving enforcement actions against industry by EPA and other agencies, but excludes industry and public input on the resolution of lawsuits brought by environmentalists against EPA and the federal government that may involve changes in regulatory policies.

CRE describes itself as a regulatory watchdog that offers industry groups guidance on navigating the federal regulatory process.

Under the draft CRE order, agencies would be required to accept comments from the public and OMB, revise the settlement if the agency determines that the comments reveal any inadequacy in the settlement, and then publish a final version of the settlement in the Federal Register.

CRE's draft order says that federal regulations currently require government agencies to accept public comment for all regulatory settlements in certain specific contexts, such as in anti-trust litigation, and the proposed order would expand these requirements.

The order also exempts agencies from accepting public comment in cases where the head of an agency determines that there is a national security interest at stake, where current federal law prohibits public comment on government settlements, when the settlements only require the parties involved to pay money for relief, and in criminal cases.

The CRE proposal would require EPA to accept industry comments on settlements the agency negotiates with environmentalists who have sued the agency seeking more stringent regulatory controls on industry. Current Justice Department regulations require EPA to accept public comment on consent decrees in cases where the agency has sued industry for non-compliance with EPA regulations, but the regulations do not require EPA to accept public comment on settlements of cases where environmentalists have sued EPA seeking stricter enforcement of environmental laws.

CRE's request comes in response to industry outrage over a consent decree that the National Resources Defense Council (NRDC) negotiated with EPA, requiring that EPA adhere to strict timetables in assessing the health and environmental impacts of thousands of registered pesticides. Though the court did require EPA to accept public comment on the settlement, sources at CRE say that the consent decree could have been significantly different if EPA had accepted public comment earlier on in the process of negotiating with NRDC. Industry had argued that the deadlines agreed to by EPA and NRDC for EPA to assess pesticide risks would leave the agency with too little time to conduct adequate scientific reviews.

Date: September 6, 2002

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