Bill Kovacs, Senior Vice President for Environment, Technology and Regulatory Affairs at the U.S. Chamber of Commerce, testified before a House of Representatives Oversight and Government Reform Subcommittee on “Sue and Settle, ” a legal tactic that causes new rules and regulations to be written behind closed doors and away from public scrutiny.

Kovacs described how this is done:

Sue and settle refers to a process whereby friendly advocacy groups sue federal agencies and the agencies settle the cases behind closed doors. Only after a settlement has been agreed to does the public have a chance to provide any comments. Often this is a pointless exercise because the meaningful decisions have already been made.

Agencies develop major public policy by entering into consent decrees and settlement agreements without the public having any means to voice whether such actions are appropriate. Often agencies will agree to issue regulations on a fast-track schedule as part of the settlement agreement.

Once the consent decrees and settlements from these lawsuits are released for public comment they’re unlikely to be altered because “agencies are unlikely to change the regulations in a manner that could threaten the consent decree that has been entered into.” The settlement, negotiated in secret, has more pull than the public’s reaction.

These settlements either allow or force agencies to write rules that go beyond what current law requires, and in some cases Kovacs noted, “The agencies may even welcome such lawsuits.” Yes, sometimes a sympathic agency doesn't mind being sued by an activist group so more regulations can be imposed on an already-burdened economy.

These include some very expensive regulations on the economy:

• Reconsideration of the 2008 ozone standard that EPA estimated would cost $90 billion yearly. EPA eventually withdrew this standard.
• EPA’s regional haze program that has cost eight states $642 million.
• Utility MACT (aka the “Blackout Rule”), that have cost power plant workers their jobs and is estimated to cost energy businesses $32 billion.

Congress and the public are in the dark about how many regulations burden the economy through the sue and settle process. “[F]ederal agencies do not even maintain organized records of the number and types of lawsuits brought against them. And until this Congress, there has not been any oversight of the issue,” said Kovacs.

Some of Kovacs’ recommendations to curb the use of this tactic include Congress passing the Sunshine for Regulatory Decrees and Settlements Act of 2012 (H.R. 3862) which would make agency consent degrees and settlements more transparent, and Congress improving its oversight over citizen suits.

Overregulation from the sue and settle process continues to hurt businesses. Shining more light on this process will ensure existing law works as intended and allow businesses to grow and create jobs instead of worrying about excess regulations.