Multi-Industry Letter Regarding H.R. 3862, the "Sunshine for Regulatory Decrees and Settlements Act of 2012"

The Honorable Lamar Smith
Chairman
Committee on the Judiciary
U.S. House of Representatives
Washington, DC 20515

The Honorable John Conyers, Jr.
Ranking Member
Committee on the Judiciary
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Smith and Ranking Member Conyers:

The undersigned organizations strongly support H.R. 3862, the “Sunshine for Regulatory Decrees and Settlements Act of 2012.” H.R. 3862 would promote openness and transparency in the regulatory process by requiring early disclosure of proposed agency settlement agreements and consent decrees, through which the agency often agrees to undertake a rulemaking. We urge you to move H.R. 3862 through the Committee as soon as possible.

With increasing regularity, an organization will sue a federal agency to initiate a rulemaking, and then the agency will settle the lawsuit behind closed doors, with no notice to, or input from, parties affected by the ensuing rulemaking. The only recourse for those affected is via public comment or legal challenge after the settlement has been agreed to by the agency—in essence, after the damage has been done. When questioned about the scope or rationale for the rulemaking by Congress, the agency simply explains that it is bound by a court order to move forward with the regulation. What is missing from the story, however, is the fact that the agency voluntarily agreed to the court order.

This bizarre settlement process has been responsible for many of the controversial, economically significant regulations Congress has focused on for the past two years. By initiating rulemakings in this manner, agencies can circumvent requirements and safeguards built into the regulatory process to protect the public. For instance, statutes will often require the agency to make a scientific judgment before entering into a rulemaking; by agreeing to issue the regulation in a consent decree, the agency essentially prejudges the outcome of that scientific judgment. In many instances, the agency then pays the organization’s attorney’s fees and costs from the taxpayer-funded Judgment Fund and Equal Access to Justice Act. Worst of all, most agencies have no idea how many lawsuits have been brought against them or the number of consent decrees and settlements they have entered into.

Agencies should be free to enter into settlement agreements and consent decrees, but the practice of regulation by litigation must be stopped. H.R. 3862 would achieve this balance by injecting openness and transparency into the process. H.R. 3862 would require early disclosure of proposed consent decrees and regulatory settlements, would require agencies to take public comment prior to entry of the consent decree with the court, would provide affected parties proper notice of proposed regulatory settlements and would make it possible for affected industries to participate in the settlement negotiations. Furthermore, agencies would continue to be free to enter into settlement agreements and consent decrees that result in regulations when necessary; however, they would be required to allow the public a meaningful opportunity to participate.

The undersigned organizations respectfully request the Committee to approve H.R. 3862 and report the bill favorably for consideration by the full House.

Sincerely,

[List of signatories can be viewed on PDF version of letter below]

cc: Members of the House Committee on the Judiciary

Read the Letter: 

120319_MultiIndustry_HR3862_SunshineforRegulatoryDecreesandSettlementsAct2012_Smith_Conyers.pdf