Sue-and-Settle Bill Threatens a Delicate Equilibrium

Font Size:

Deadline suits may offer key opportunity to even the playing field in regulatory agenda-setting.

Font Size:

In response to my recent essay on the sue-and-settle controversy and the proposed legislation to address it, Jamie Conrad argues that, in fact, concerns about collusive deadline litigation are valid, and that my essay feeds a kind of polarization that impedes progress on improving the regulatory process.

I have enormous respect for the kind of experiential wisdom that Conrad displays in his essay, and, indeed, I agree with much of what he has to say about the frequency of deadline litigation. As I stated in my original essay, “the available empirical evidence suggests that the practice—at least in its worst possible form—almost never occurs.” That is not to say that the practice in its most benign and unobjectionable form is not common. Ordinary deadline litigation—under which a consent decree merely imposes a timeline for the issuance of a proposed rule of some kind under tight, statutorily-imposed targets—is undoubtedly pervasive. But the point I wished to make in my essay was simply that the use of deadline suits to lock in the substance of proposed regulations appears to be relatively rare and is against long-standing Department of Justice policy. Conrad misconstrues that point in his focus on the noncontroversial position that deadline litigation is important in regulatory agenda-setting.

Conrad points to an experience he had—a case where the waste treatment industry appeared to use exclusive settlement talks to push its preferred policy option—to argue that deadline suits can additionally lead to substantive quickening. I have no reason to dispute Conrad on that claim, but the empirical academic literature exhaustively examining just this kind of phenomenon suggests that Conrad’s experience is rare. And, even if Conrad presented a half a dozen or a dozen examples, one would still have to ask how representative they are in a regulatory system that produces thousands of rules each year. I certainly share Conrad’s hope that the regulatory process (and, in particular, the “shadowy forum” of agency priority setting) might be reformed to be as effective and democratically responsive as possible, but I would simply note that ignoring systematic evidence when it conflicts with one’s personal impressions will generally lead to a lot of wasted effort in any reform enterprise. I suspect that Conrad and I share more common ground than his response would suggest on just this point: as he points out, and as I would agree, there are “much more important opportunities” to improve the regulatory process than addressing sue-and-settle, none of which I addressed or disparaged in my original essay.

Thus far, the disagreement between Conrad and me runs relatively shallow. What constitutes a “substantive” consent decree versus a procedural deadline consent decree might lie in the eye of the beholder, and indeed I acknowledge that the empirical research that has failed to find much evidence of the former could and should be built on by other, more rigorous, studies.

But there is a point of more fundamental disagreement between Conrad’s perspective and mine. Conrad asserts, with virtually no supporting evidence, that settlement “negotiations, not the normal pre-proposal process going on outside the courthouse, are the more influential and ‘shadowy forum.’”

Conrad’s claim has some superficial attractiveness to it. After all, by the “normal pre-proposal process,” Conrad means to refer to a whole host of informal methods—e.g., calling up regulators on the phone, writing strongly worded emails or letters, marching straight into the Environmental Protection Agency’s headquarters and demanding attention to Joe Citizen’s concerns, etc.—that in theory are unlimited and widely accessible to any concerned party. These informal methods have a veneer of democratic credibility when compared to the litigation that is hardly a staple of the average American’s day-to-day life.

There’s just one problem: informal contacts of the kind that Conrad apparently prefers are practically accessible only to the most elite, sophisticated actors in Washington. It is no easy matter to informally convince a regulator to act, and it is certainly not simply a matter of cold calling bureaucrats and requesting action. To the extent that informal contacts are effective, it is typically because of the relationships behind them—relationships that can only be built over time and with a tremendous expenditure of resources.

Contrast that reality with the practice of deadline litigation. It is surely the case that “repeat players,” as Marc Galanter famously referred to them, engage in deadline litigation as well, but such suits are a relatively low-cost avenue to power for interests that might find it difficult to develop and leverage informal relationships. After all, to get a suit off the ground, such interests need only pay a small filing fee and point out the statutory deadline and the current date. There’s no need for extensive (and expensive) record review and little that an agency can do to justify a refusal to meet the petitioners at least half way. The proliferation in the last several decades of interest groups representing diffuse public interests ensures substantial pluralistic competition over regulatory agendas, and deadline litigation provides one of the plausible means for all of these demands to be vocalized and heard.

Only if one is thoroughly convinced that the healthy competition that exists in today’s regulatory ecosystem is somehow less optimal than an ostensibly open but in fact business-dominated informal pre-proposal process could one maintain that deadline litigation is a net loss for society. I do not disagree with Conrad to the extent that he is saying that a regulatory agenda set entirely by litigation might be suboptimal, irrational, or something else. From my perspective, litigation is useful because it provides a counterbalance to the emergent bias that has been well documented in more informal processes. I did not mean to suggest that experimenting with other less legalized methods of public engagement at the agenda-setting stage would be a bad idea.

In the end, there is considerable advantage to having a highly permeable priority-setting process with ample and diverse opportunities for different kinds of groups and individuals to access the process. Deadline litigation is a part of the current equilibrium of interest groups in the regulatory process, and I wrote to expose the sue-and-settle controversy as a more or less conscious effort to manipulate that balance in a manner less favorable to voices that are already underrepresented.

This essay is part three of a three-part series on The Debate Over “Sue-and-Settle” Legislation

Daniel E. Walters

Daniel E. Walters is the Regulation Fellow at the Penn Program on Regulation at the University of Pennsylvania.