Attorneys’ fees paid to litigants under the Clean Air Act, Clean Water Act, and Endangered Species Act from 2013-2022. Figures not adjusted for inflation.

 

By Adam Andrzejewski, OpenTheBooks CEO/Founder | Published at Substack

Topline

The House Committee on Oversight and Accountability opened an investigation into “sue and settle” practices at the Environmental Protection Agency in November 2023. 

 

The investigation puts a white-hot spotlight on a practice that had largely gone ignored until new data from our organization at OpenTheBooks.com showed millions of dollars in spending on attorneys’ fees to environmental activist groups since Biden took office.

 

We found the Biden Administration has already spent more taxpayer money on sue and settle than any other recent president.

 

Fast Facts

• The last time the government audited EPA litigation was a 2011 GAO report: https://www.gao.gov/assets/gao-11-650.pdf

• The EPA does not litigate; the DOJ does on EPA’s behalf, typically via the DOJ’s Environment and Natural Resources Division. EPA provides technical expertise to the DOJ.

Key Background

"Sue and settle” describes cases wherein a party (often an environmental nonprofit or other advocacy group) sues a federal agency, and instead of litigating the lawsuit in court, both parties come to terms via negotiation. Such settlements—or “consent decrees”—may include issuing or determining aspects of a rule or meeting a specific deadline.

 

While settlements are an important tool for administrators to avoid lengthy and expensive litigation, critics say the practice can create new regulations without a public policy debate and increases federal influence over state laws.

 

Sue and settle cases soared during the Obama Administration. The EPA entered 77 consent decrees regarding the Clean Air Act during Obama’s second term, compared to 28 during the second term of George W. Bush, according to the Chamber of Commerce.

 

In 2017 then-EPA Administrator Scott Pruitt published a directive ending the use of consent decrees and settlement agreements as a means to “circumvent the regulatory process set forth by Congress.” Most of the provisions outlined by Pruitt’s directive were later rescinded by Biden EPA Administrator Michael Regan in 2022.

 

 

Attorney Fees

Pruitt’s now-rescinded memo also made awarding attorneys’ fees more difficult. These fees are paid out to litigants during settlements through the Department of Treasury’s Judgment Fund and agency appropriations. The practice of paying for attorneys’ fees was authorized by Congress in 1980 through the Equal Access to Justice Act and was intended to assure litigants would not be overburdened by attorneys’ fees if they prevailed in court against the federal government.

 

Attorney fee payments were drastically reduced during the Trump Administration, along with settlements and pre-litigation notifications (called “notices of intent to sue”).

 

From 2013-2022 $16,352,195 (not inflation-adjusted) was spent on attorney fees for 219 settlements under the Clean Air Act, Clean Water Act, and Endangered Species Act. Plaintiffs were largely environment-focused nonprofits, but also included some trade associations, state governments, and individuals.

 

Top five primary litigants and the amount of attorneys’ fees awarded/number of cases settled from 2013-2022.

 

 

• Obama’s second term saw $5,769,989 in attorney fee pay-outs

• Trump’s term saw $3,629,026. The lowest year for pay-outs in our timeline occurred during the Trump administration—$530,280 in 2017. Biden’s Administration spent six times that amount in his first year. 

• Just two years into Biden’s Administration has seen attorney’s fees nearly double over Trump’s four years: $6,953,179, paying well over $3 million each year.

Payouts generally track with total number of settlements, which also saw sharp declines under the Trump Administration.

 

 

Quote It

One problem with attorney fee payouts is that without oversight, policymakers and taxpayers cannot know if fees are artificially inflated or otherwise overly generous. 

OpenTheBooks.com spoke with Walter Olson, a legal scholar at Cato Institute, who explained:

“One of the questions that comes up all the time with these situations is, was the agency itself giving the litigants too much money when the agency could have gone to the judge and said, ‘Look, they didn't have to spend this many hours,’ or, ‘they shouldn't have to take this many airline flights?’ Or did the agency just say, ‘Oh, sure. Let's cut you a check next week.’”

Another issue is the possibility of “sweetheart deals” between federal and supposedly oppositional attorneys. Because staff can move between agencies and nonprofit or private sector firms which may sue an agency, lawyers at the agency may be less inclined to vigorously defend the agency’s interests, and more inclined to reach a settlement that favors the litigants.

 

“The people who staff regulatory agencies very often come from the same communities that litigate against agencies. In a Republican administration, this might include some regulated businesses, or law firms representing regulated businesses. 

In a Democratic administration, it might mean some of the environmental groups. But these are the people who tend to know all about the ins and outs of the agencies, law, and they are often people who run the agency. Sometimes the person who filed the lawsuit or with one of the organizations, by the time they want to settle, is working for the agency.”

Congressional Impact

On November 14, 2023, the House Oversight and Accountability Committee sent a letter to EPA Administrator Regan demanding oversight into the agency’s sue and settle practices since Regan rescinded Pruitt’s memo. The letter states in part:

 

“Because of your action, sue-and-settle abuses appear to have proliferated at the Biden Administration EPA. We request documents and information to examine how the Biden Administration is using sue-and-settle practices to skirt congressional oversight and promulgate burdensome regulations at the bidding of special interests.”

The committee requested extensive documentation surrounding sue and settle during the Biden Administration, including all communications and documents regarding EPA’s attorneys’ fees payments. 

Such documentation could shed light on whether attorneys’ fees were being fairly negotiated by federal lawyers.

 

Conclusion

As the nation goes into another election year and a potential new administration, it is crucial to review and revise policies that give undue influence to outside groups and cost American taxpayers more of their hard-earned money. 

 

Sue and settle is a policy that happens to do both of those things, and we commend the actions of the House Oversight and Accountability Committee for reviewing the actions taken by the EPA considering escalating settlements and attorneys’ fees paid out in lawsuits against the federal government.

 

Additional Reading

U.S. Environmental Protection Agency: Quantifying Agency Operations During Fiscal Years 2018-2022 | OpenTheBooks.com | July 2023

Biden EPA taxpayer settlement payouts quietly soar to left-wing climate activists | Washington Examiner | August 10, 2023

'Sue and Settle' Business Is Booming at Biden’s EPA | Washington Examiner | August 13, 2023

Directive Promoting Transparency and Public Participation in Consent Decrees and Settlement Agreements | E. Scott Pruitt, Administrator, EPA | October 16, 2017

Adhering to the Fundamental Principles of Due Process, Rule of Law, and Cooperative Federalism in Consent Decrees and Settlement Agreements |Memo from E. Scott Pruitt, Administrator, EPA, to Staff | October 16, 2017

Memorandum from Michael Regan, Administrator, EPA, to Staff, Consent Decrees and Settlement Agreements to Resolve Environmental Claims Against the Agency | March 18, 2022

EPA, Programs and Projects of the Office of General Counsel (OGC), Proposed Consent Decrees and Draft Settlement Agreements

Letter from Ali Nouri, Assistant Secretary, Congressional and Intergovernmental Affairs, U.S. Dep’t of Energy to Hon. Pat Fallon, Chairman, Subcommittee. on Economic Growth, Energy Policy, and Regulatory Affairs, House Comm. on Oversight and Accountability | May 18, 2023

Sue and Settle Updated: Damage Done 2013-2016 | U.S. Chamber of Commerce | May 2017