REPORT: Common Obama-Era Legal Tactic Resulted In At Least $70 Billion In New Regulations

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Michael Bastasch DCNF Managing Editor
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Environmental Protection Agency (EPA) Administrator Scott Pruitt’s decision to curb a common Obama-era legal practice could keep billions of dollars worth of regulations off the books, according to a new report.

The right-leaning American Action Forum found 23 regulations stemming from “sure and settle” lawsuits “resulted in a total cost burden of $67.9 billion, with $26.5 billion in annual costs.”

AAF looked at 23 major regulations imposed by EPA from 2005 to 2016, and found they resulted in hefty economic price tags. Settlements reached during the Bush and Obama administrations resulted in some of the costliest rules on the books.

“With billions of dollars in economic costs at stake, it makes sense to more thoroughly scrutinize sue and settle rules to ensure they meet the basic rigors of the Administrative Procedure Act and sound cost-benefit principles,” AAF’s Dan Bosch wrote in a new report.

“Administrator Pruitt’s directive offers the opportunity to see if the regulatory outcomes of such rulemakings can be improved,” Bosch wrote.

AAF’s estimate may be the low end of the price tag. A 2013 study by the U.S. Chamber of Commerce found 71 “sue and settle” lawsuits between 2009 and 2012  that resulted in more than 100 new regulations — many of which cost more than $100 million a year.

Pruitt issued a directive in mid-October to curb the number of consent decrees it enters into with outside groups, mostly environmental groups. In past administrations, EPA would often settled with activists suing the agency for missing a statutory deadline.

Conservatives have long charged the resulting settlements force EPA to write new regulations without any input from states or regulated industries. The backroom settlements essentially give environmentalists control of EPA’s agenda.

“The days of regulation through litigation are over,” Pruitt said.

“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,” Pruitt said.

Pruitt will require EPA to publish all citizen suits and settlements online for the public to see. EPA will also be limited in what kinds of settlements it can make with activists, and officials must reach out to states and other third parties.

Environmentalists weren’t very happy with Pruitt’s directive. Activists argued they sue the EPA for not updating public health regulations that result in billions of dollars in benefits.

Activists also argue EPA is saving taxpayers money by settling in court, thereby avoiding a drawn out and costly litigation process on cases they are bound to lose anyways.

“Pruitt’s doing nothing more than posturing about a non-existent problem and political fiction,” John Walke, an attorney with the Natural Resources Defense Council, said of the directive.

“His targeting of legal settlements, especially where EPA has no defense to breaking the law, will just allow violations to persist, along with harms to Americans,” Walke said.

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