WASHINGTON – Sen. Chuck Grassley (R-Iowa) reintroduced legislation to end the practice of creating new federal red tape outside of the public rulemaking process. The tactic, known as sue-and-settle litigation, is used by federal agencies and like-minded special interest groups to impose new and burdensome regulations on businesses and communities without sufficient public notice or participation. The Sunshine for Regulatory Decrees and Settlements Act of 2023 shines a light on sue-and-settle litigation and restores the transparency, public scrutiny and judicial review protections of the rulemaking process. An identical bill was introduced in the House of Representatives by Congresswoman Victoria Spartz (R-Ind.).

“Sue-and-settle tactics are used solely to hide an agency’s regulatory ambitions from the American people until it is too late. This practice hurts families, businesses and even entire states through burdensome red tape, and it makes a mockery of the public accountability and transparency protections established by the Administrative Procedure Act. This bill restores the American people’s seat at the table when agencies debate imposing new federal regulations,” Grassley said.

“Our Founding Fathers understood the importance of checks and balances and the dangers of abuse of power. Unfortunately, the executive branch has been taking advantage of the ineffective legislative branch,” Spartz said. “The Sunshine for Regulatory Decrees and Settlements Act brings transparency to sue-and-settle techniques employed by activist federal agencies.” 

Sue-and-settle litigation involves closed-door negotiations between pro-regulatory special interest groups and complicit federal agencies, resulting in consent decrees or settlement agreements that bind executive discretion. Unlike the normal rulemaking process, potentially affected parties – such as businesses and state governments – are often kept completely in the dark about the negotiations. The resulting regulations can come as a complete surprise to those who it directly affects.  Even once the privately negotiated consent decrees or settlement agreements are disclosed, their terms often require federal agencies to fulfill new regulatory mandates under accelerated timeframes, preventing any meaningful scrutiny or review.  Consent decrees can bind federal agencies in succeeding administrations, limiting future executive discretion such as de-regulatory efforts.

To push back against the growing use of sue-and-settle litigation, the Sunshine for Regulatory Decrees and Settlements Act reinforces the transparency and accountability protections built into the normal rulemaking process by federal laws and executive orders. Specifically, the bill:

  • Provides for greater transparency by requiring agencies to publicly post and report to Congress information on sue-and-settle complaints, consent decrees and settlement agreements;
  • Prohibits the same-day filing of complaints and pre-negotiated consent decrees and settlement agreements in cases seeking to compel agency action;
  • Requires that consent decrees and settlement agreements be filed only after interested parties have had the opportunity to intervene in the litigation and join settlement negotiations, and only after any proposed consent decree or settlement has been published for at least 60 days to provide for notice and comment;
  • Requires courts considering approval of consent decrees and settlement agreements to account for public comments and compliance with regulatory process statutes and executive orders;
  • Requires the Attorney General or, where appropriate, the defendant agency’s head, to certify to the court that he or she has approved any proposed consent decree that includes terms that:
    • Convert into a duty an otherwise discretionary authority of an agency to take regulatory action;
    • Commit an agency to expend funds that have not been appropriated and budgeted for the action in question;
    • Commit an agency to seek a particular appropriation or budget authorization;
    • Divest an agency of discretion committed to the agency by statute or the Constitution; or
    • Otherwise affords relief that the court could not enter under its own authority; and
  • Makes it easier for succeeding administrations to petition a court for modification of a prior administration’s consent decrees by providing for de novo review of motions to modify, if the circumstances have changed.

The Senate bill is cosponsored by Marsha Blackburn (R-Tenn.), Thom Tillis (R-N.C.), Marco Rubio (R-Fla.), John Cornyn (R-Texas), Josh Hawley (R-Mo.) and Ted Cruz (R-Texas).

Text of the Sunshine for Regulatory Decrees and Settlements Act of 2023 is available HERE.

The bill is supported by the U.S. Chamber of Commerce.  In 2021, Grassley and Spartz called on the Biden administration to put an end to opaque sue-and-settle arrangements.

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