On October 16, 2017, EPA Administrator Pruitt issued the “Directive Promoting Transparency and Public Participation in Consent Decrees and Settlement Agreements.” At the same time, Pruitt issued a memorandum to EPA assistant administrators, regional administrators and the office of general counsel explaining the rejection of “sue and settle” tactics by his administration. The memorandum cites the following main reasons for rejection of such tactics: (1) the risk that procedural safeguards will be bypassed or marginalized, (2) the tactics lead EPA to cede its statutory responsibilities to the courts, and (3) the approach is inconsistent with the concept of cooperative federalism found in many environmental statutes EPA administers.

In order to address these concerns, the directive focuses on two key concepts: (1) ensuring the public and potentially impacted parties are informed about lawsuits and potential settlements and have an opportunity to comment and (2) refusing to commit to requirements in a consent decree or settlement agreement that a court could not otherwise impose and are not consistent with the rule of law.

The directive requires the Office of General Counsel to publish online notices of intent to sue EPA within 15 days of receipt. Complaints and petitions regarding an environmental law, regulation or rule where EPA is a defendant or respondent in federal court are to be published online within 15 days of receipt as well. EPA will directly notify states and regulated entities of complaints or petitions and will seek “concurrence” of affected states and/or regulated entities before entering into a consent decree or settlement agreement. EPA is also going to publish online consent decrees and settlement agreements that still affect agency actions and will add new agreements or decrees after entry. Proposed decrees and draft settlement agreements will be published and comments sought.

In addition, the directive addresses the substance of settlements. EPA will not agree to terms that go beyond what a court would have had authority to impose. EPA will not agree to terms that would convert a discretionary obligation into a mandatory one. Deadlines in consent decrees and settlement agreements that concern agency issuance of final rules as part of the resolution must allow time for modification of the proposed rule, meaningful consideration of comments and possible additional public comment on changes. Finally, if litigation is resolved by agreement, the plaintiff or petitioner should not be considered a “prevailing party” eligible for recovery of attorney’s fees and costs. EPA must seek to exclude such payments and not resolve such claims informally. Importantly, however, Pruitt retains the ability to depart from the directive. Item nine of the 10-point directive states: “Where appropriate, I reserve the right to exercise my discretion and permit EPA to deviate from the procedures set forth in this directive.”

The directive is prospective only and so has not affected EPA’s position in pending matters. An example of this is the Environmental Integrity Project v. Pruitt case. There, EPA opposed North Dakota’s motion to intervene in the proceeding initiated by environmental groups to force EPA to review certain solid waste regulations related to oil and gas operations under the Resource Conservation and Recovery Act. On November 28, 2017, the D.C. Circuit upheld the lower court decision that North Dakota did not have standing to intervene since the issue was establishment of a deadline for EPA to decide whether to act.

One of the concerns expressed since the directive was issued is whether it will create more problems for the agency. EPA has frequently been sued for failing to meet statutory deadlines for action. If the agency is unable to negotiate reasonable timelines for implementation, the risk is that a court will set a tougher schedule. There will shortly be opportunities to assess the significance of that risk. For example, pursuant to the Clean Air Act, EPA was to promulgate designations of attainment or nonattainment with respect to the 2015 National Ambient Air Quality Standard (NAAQS) for ozone by October 1, 2017. EPA did not meet that deadline, although on November 1 the agency published designations of attainment/unclassifiable areas. Public interest groups, 14 states and the District of Columbia filed Notices of Intent to Sue in October. Two complaints for declaratory and injunctive relief were filed in the U.S. District Court for the Northern District of California on December 4 and 5 respectively. Both complaints ask the court to declare EPA has violated a mandatory duty and to issue an injunction mandating the agency to act.