Statements on Introduced Bills and Joint Resolutions

Floor Speech

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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
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.

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