May 27, 2013

Ninth Circuit not razzle-dazzled by "sue and settle"

By Jonathan Wood Attorney

Last month, the Ninth Circuit declared invalid a settlement between environmental groups and federal agencies that would have altered regulatory requirements without going through the formal, and public, rule-making process. This is one of the few cases where a court has intervened to prevent the widely-reported “sue and settle” phenomenon. According to this practice, a friendly organization will sue an administrative agency seeking to compel it to regulate someone else. The organization, standing to gain more power, puts up little if any fight and settles the case by agreeing to regulate people who know nothing about the suit. Then the agency begins the rule-making process—a supposedly deliberative process—with the outcome predetermined. Only at this point is the public allowed to participate, having been reduced to mere play-actors.

The Ninth Circuit recognized this for what it is: an attempt to circumvent the public—and mandatory—rule-making process:

[W]here a consent decree does promulgate a new substantive rule, or where the changes wrought by the decree are permanent rather than temporary, the decree may run afoul of statutory rulemaking procedures even though it is in form a “judicial act.”

Our friends at Washington Legal Foundation have more about the case and the “sue and settle” practice here.

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