WASHINGTON (DC) – Congressman Ben Quayle issued the following statement after his bill, the Sunshine for Regulatory Decrees and Settlements Act of 2012 (H.R. 3862) passed out of the House Judiciary Committee. H.R. 3862 would increase the transparency and fairness of federal rulemaking by allowing public input and requiring notice when activist groups seek to impose new rules and regulations on the public through lawsuit settlements with regulatory agencies–a process known as sue-and-settle regulation.

“The Obama Administration’s regulatory onslaught has done more than saddle America’s small businesses with thousands of new rules and regulations. It has also opened the door to pro-regulation environmental and other interest groups to use sue-and-settle agreements to impose even more, and harsher rules. To make matters worse, this is being done behind closed doors with little or no public input. 

“I’m grateful that the House Judiciary Committee has taken action on this bill and passed it on for a vote of the full House. The real world consequences of backroom regulation are great. Arizonans’ electricity costs may soon increase by 20% as a result of a regulation created through the “sue and settle” process. It’s time to restore transparency and fairness to federal rulemaking, and slow the onslaught of sue-and-settle regulation.” 

Judiciary Committee Chairman Lamar Smith praised Rep. Quayle’s work on the bill and congratulated him on committee passage:

“I thank Mr. Quayle for his introduction of H.R. 3862 and congratulate him on its passage by the House Judiciary Committee. America’s small businesses and job creators need relief from the flood of new regulations and red tape made in Washington. A heavy contributor to the burden of new regulation is the use of consent decrees and settlement agreements to force federal agencies to issue new rules. This bill makes sure that those to be regulated have a fair opportunity to participate in the resolution of litigation over the regulatory process. And it provides needed transparency on the ways agencies conduct their business.”

BACKGROUND ON HR 3862

An avalanche of federal regulations is burying America’s job creators. The Small Business Administration recently estimated the annual federal regulatory burden to reach $1.75 trillion—equal to $15,586 per year for each U.S. household. According to a recent Gallup survey, “small-business owners in the United States are most likely to say complying with government regulations . . . is the most important problem facing them today.” Yet the Obama Administration’s current regulatory agenda has 3,118 regulations in the pipeline, 167 of which will have a major impact on the economy—on top of 1,010 regulations already completed, including 45 with major impacts.

A critical, growing driver of the regulatory onslaught—particularly environmental regulation like EPA’s Utility MACT and Greenhouse Gas rules—lies in consent decrees and settlement agreements that force new regulations to be promulgated. In what is known as “sue-and-settle” regulation, pro-regulatory interest groups often sue agencies that have not yet promulgated rules authorized or required by statute. In these cases, plaintiffs and the agencies agree behind closed doors to fast-moving deadlines for new rules, then propose consent decrees and settlement agreements that back the deadlines with judicial authority. These decrees and settlements often blindside states and regulated entities that will be affected by the new regulations, provide little time for public notice and comment or assessment of small business impacts, and short-circuit White House review of costs and benefits. Even the text of proposed rules is sometimes pre-negotiated by the sue-and-settle parties—foreordaining the regulations under which everyone else will have to live.

H.R. 3862, the “Sunshine for Regulatory Decrees and Settlements Act of 2012,” introduced by Rep. Ben Quayle (R-AZ), contains strong reforms against collusive sue-and-settle regulation, including terms that:

• force agencies to inform the public and Congress of all sue-and-settle consent decrees, settlement agreements, judicial complaints, and attorneys’ fee awards;
• prohibit sue-and-settle parties from proposing consent decrees and settlement agreements until intervenors have had a chance to enter the case and participate in settlement negotiations;
• require decrees and settlements to go through public notice and comment before they can be filed with the court;
• allow public commentors presumptive amicus curiae status when the parties move the court to approve the decrees and settlements;
• require the court to consider the agency’s competing mandatory duties before approving a decree or settlement;
• assure that the decree or settlement allow sufficient time and procedure for the agency to comply with the Administrative Procedure Act and other applicable statutes and executive orders that govern rulemaking; and
• make it easier for subsequent administrations to seek modification of sue-and-settle consent decrees due to obligations to fulfill other duties or changed facts and circumstances.

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