- SUNSHINE FOR REGULATORY DECREES AND SETTLEMENTS ACT OF 2013

[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]

SUNSHINE FOR REGULATORY DECREES AND SETTLEMENTS ACT OF 2013

=======================================================================

HEARING

BEFORE THE

SUBCOMMITTEE ON
REGULATORY REFORM,
COMMERCIAL AND ANTITRUST LAW

OF THE

COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

FIRST SESSION

H.R. 1493

__________

JUNE 5, 2013

__________

Serial No. 113-28

__________

Printed for the use of the Committee on the Judiciary

Available via the World Wide Web: http://judiciary.house.gov

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COMMITTEE ON THE JUDICIARY

BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin JERROLD NADLER, New York
HOWARD COBLE, North Carolina ROBERT C. ``BOBBY'' SCOTT,
LAMAR SMITH, Texas Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
SPENCER BACHUS, Alabama ZOE LOFGREN, California
DARRELL E. ISSA, California SHEILA JACKSON LEE, Texas
J. RANDY FORBES, Virginia STEVE COHEN, Tennessee
STEVE KING, Iowa HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona Georgia
LOUIE GOHMERT, Texas PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio JUDY CHU, California
TED POE, Texas TED DEUTCH, Florida
JASON CHAFFETZ, Utah LUIS V. GUTIERREZ, Illinois
TOM MARINO, Pennsylvania KAREN BASS, California
TREY GOWDY, South Carolina CEDRIC RICHMOND, Louisiana
MARK AMODEI, Nevada SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho JOE GARCIA, Florida
BLAKE FARENTHOLD, Texas HAKEEM JEFFRIES, New York
GEORGE HOLDING, North Carolina
DOUG COLLINS, Georgia
RON DeSANTIS, FLORIDA
[Vacant]

Shelley Husband, Chief of Staff & General Counsel
Perry Apelbaum, Minority Staff Director & Chief Counsel
------

Subcommittee on Regulatory Reform, Commercial and Antitrust Law

SPENCER BACHUS, Alabama, Chairman

BLAKE FARENTHOLD, Texas, Vice-Chairman

DARRELL E. ISSA, California STEVE COHEN, Tennessee
TOM MARINO, Pennsylvania HENRY C. ``HANK'' JOHNSON, Jr.,
GEORGE HOLDING, North Carolina Georgia
DOUG COLLINS, Georgia SUZAN DelBENE, Washington
[Vacant] JOE GARCIA, Florida
HAKEEM JEFFRIES, New York

Daniel Flores, Chief Counsel

James Park, Minority Counsel

C O N T E N T S

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JUNE 5, 2013

Page

THE BILL

H.R. 1493, the ``Sunshine for Regulatory Decrees and Settlements
Act of 2013''.................................................. 3

OPENING STATEMENTS

The Honorable Spencer Bachus, a Representative in Congress from
the State of Alabama, and Chairman, Subcommittee on Regulatory
Reform, Commercial and Antitrust Law........................... 1
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, Ranking Member, Committee on the
Judiciary, and Member, Subcommittee on Regulatory Reform,
Commercial and Antitrust Law................................... 18
The Honorable Doug Collins, a Representative in Congress from the
State of Georgia, and Member, Subcommittee on Regulatory
Reform, Commercial and Antitrust Law........................... 20
The Honorable Steve Cohen, a Representative in Congress from the
State of Tennessee, and Ranking Member, Subcommittee on
Regulatory Reform, Commercial and Antitrust Law................ 27
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Chairman, Committee on the Judiciary 29

WITNESSES

William L. Kovacs, Senior Vice President, Environment, Technology
& Regulatory Affairs, U.S. Chamber of Commerce
Oral Testimony................................................. 86
Prepared Statement............................................. 88
Allen Puckett, III, President, Columbus Brick Company
Oral Testimony................................................. 101
Prepared Statement............................................. 104
John D. Walke, Clean Air Director and Senior Attorney, Natural
Resources Defense Council
Oral Testimony................................................. 110
Prepared Statement............................................. 112
Thomas Easterly, Commissioner, Indiana Department of
Environmental Management
Oral Testimony................................................. 136
Prepared Statement............................................. 138

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable John Conyers, Jr., a
Representative in Congress from the State of Michigan, Ranking
Member, Committee on the Judiciary, and Member, Subcommittee on
Regulatory Reform, Commercial and Antitrust Law................ 19
Material submitted by the Honorable Doug Collins, a
Representative in Congress from the State of Georgia, and
Member, Subcommittee on Regulatory Reform, Commercial and
Antitrust Law.................................................. 21
Material submitted by the Honorable Spencer Bachus, a
Representative in Congress from the State of Alabama, and
Chairman, Subcommittee on Regulatory Reform, Commercial and
Antitrust Law.................................................. 31
Material submitted by the Honorable Doug Collins, a
Representative in Congress from the State of Georgia, and
Member, Subcommittee on Regulatory Reform, Commercial and
Antitrust Law.................................................. 157
Material submitted by the Honorable Spencer Bachus, a
Representative in Congress from the State of Alabama, and
Chairman, Subcommittee on Regulatory Reform, Commercial and
Antitrust Law.................................................. 177

APPENDIX
Material Submitted for the Hearing Record

Letter from Associated Builders and Contractors, Inc. (ABC)...... 218
Letter from the Public Lands Council, the National Cattlemen's
Beef Association, American Sheep Industry Association, and the
Association of National Grasslands............................. 219
Resolution 13-2 from ECOS........................................ 220
Wall Street Journal Article...................................... 222
Response to Questions for the Record from John D. Walke, Clean
Air Director and Senior Attorney, Natural Resources Defense
Council........................................................ 224

SUNSHINE FOR REGULATORY DECREES AND SETTLEMENTS ACT OF 2013

----------

WEDNESDAY, JUNE 5, 2013

House of Representatives,

Subcommittee on Regulatory Reform,
Commercial and Antitrust Law

Committee on the Judiciary,

Washington, DC.

The Subcommittee met, pursuant to call, at 10:04 a.m., in
room 2141, Rayburn Office Building, the Honorable Spencer
Bachus (Chairman of the Subcommittee) presiding.
Present: Representatives Bachus, Goodlatte, Holding,
Collins, Cohen, Conyers, Johnson, DelBene, Garcia, and
Jeffries.
Staff present: (Majority) Daniel Flores, Chief Counsel;
Ashley Lewis, Clerk; and James Park, Minority Counsel.
Mr. Bachus. Well, I am told by the minority staff to go
ahead and proceed. So we will do that.
The Subcommittee on Regulatory Reform, Commercial and
Antitrust Law hearing will come to order.
Without objection, the Chair is authorized to declare
recesses of the Committee at any time.
We welcome all our witnesses today. And after an opening
statement, I will do a more thorough introduction of each of
our witnesses.
One of our witnesses is going to testify from a remote
location, and we are having a little technical difficulty with
that right now also.
And now we will go to opening statements.
Today the Subcommittee is holding a hearing on H.R. 1493,
the ``Sunshine for Regulatory Decrees and Settlements Act of
2013,'' which is designed to address a problem commonly known
as ``sue and settle.'' Some folks refer to it as ``settle and
sue.'' So I think either one would probably be descriptive.
Let me thank Subcommittee Member, Representative Doug
Collins of Georgia, for introducing this bill, and I am pleased
to be an original cosponsor.
We have been reminded recently it is essential that
Government agencies perform their duties with full transparency
and accountability. This includes allowing all members of the
public a proper opportunity to provide comment and input during
an open regulatory process.
In recent years particularly, we have seen an increase in
the use of consent decrees and settlement agreements in Federal
litigation. These settlements can circumvent the normal
regulatory process and at times run contrary to legislative
intent of the elected Representatives of Congress. They are
often the product of litigation between a Federal or a State
agency and a pro-regulatory outside group. The parties then
come to an agreement or a consent decree that has binding
effect and that, in essence, sets new policy without allowing
outside parties any input on the final terms.
As the Chairman of the Regulatory Reform Subcommittee, I am
particularly concerned that the practice of sue and settle can
allow agencies to do an end run around the public participation
and thorough analysis required by the Administrative Practice
Act, the Regulatory Reform Flexibility Act, and other statutory
requirements for rulemaking. Consent decrees should not be
entered into lightly. They have the force of law and are
difficult to overturn, and they offer the public no opportunity
for comment. They can have long-lasting consequences and tie
the hands of future Administrations, preventing them from
establishing policies based on new facts or data. This is a
problem that needs to be dealt with.
According to the Chamber of Commerce study, the current
Administration has entered into more than 70 sue-and-settle
agreements which have led to the issuance of hundreds of new
regulations. One entity alone was responsible for nearly half
of these new agreements.
The Sunshine for Regulatory Decrees and Settlements Act
will provide much needed transparency and notice to allow input
from all stakeholders and provide a better process for Federal
decision-making.
With that, let me say that I look forward to the testimony
of our witnesses on this legislation.
And I now recognize the Ranking Member of the full
Committee, Mr. Conyers, for any opening statement that he might
have.
[The bill, H.R. 1493, follows:]

__________
Mr. Conyers. Thank you, Chairman Bachus.
I too join in greeting our witnesses.
But there are some problems here. Our research on this so-
called sunshine in regulatory decrees and settlements has a
simple goal, and that is to discourage the use of settlement
agreements and consent decrees. I think that is very, very
serious.
And I am joined in this analysis, which is an attempt to
delay regulatory protections, to slow it down. The result is,
unfortunately, it jeopardizes not only public health, but
safety, and it explains why the American Civil Liberties Union
is opposed to this measure. The Natural Resources Defense
Council is opposed to this measure. The National Association
for the Advancement of Colored People is opposed to this
measure. The Sierra Club is opposed to this measure. Earth
Justice, all in strenuous opposition.
The bill's provisions, in effect, are being used to prevent
Federal regulatory actions from being implemented, and it does
not take a legal scholar to figure out what the purpose of the
legislation is. It is pretty patent. It gives opponents of
regulation additional opportunities to stifle rulemaking by
allowing essentially any third party who is affected by the
regulatory action at issue to intervene, to participate in
settlement negotiations, to submit public comments. And so this
is all going in the wrong direction for all the wrong reasons.
So H.R. 1493--this measure would needlessly slow down the
process by imposing an extensive series of burdensome
requirements on agencies that seek to enter into consent
decrees or settlement agreements. It mandates that agencies
provide for public comment on a proposed consent decree and
requires agencies to respond to all such comments before a
consent decree can be entered. It is a slow-down operation.
And then there would be not one but two public comment
periods, one for the consent decree and one for the rulemaking
that results from the consent decree, doubling the agency's
effort.
Moreover, the bill would allow an unlimited number of third
parties to intervene in the consent decree, furthering the
delay of an entry of such decree.
Now, I mean, there are so many things wrong with this bill
that I am going to submit the rest of my statement. But just
let me conclude on this note.
The bill addresses a nonexistent problem. There is no
evidence of collusion between agencies and private entities
with respect to consent decrees and settlements, and there has
been no convincing explanation as to why the current law is
insufficient. The bill codifies certain Justice Department
guidelines issued 30 years ago by then Attorney General Ed
Meese and have since been codified in the Code of Federal
Regulations. These regulations set forth in detail the criteria
that the Department of Justice attorneys must follow when
determining whether or not to enter into consent decrees or
settlement agreements. So why do we need to codify them? Is
there any evidence that these guidelines are not already being
followed?
So I am disappointed at the subject matter of this hearing.
I am saddened to think of all the things that we need to be
doing in the Judiciary Committee that deal with far more
pressing issues.
And so I will submit the rest of my statement and thank the
Subcommittee Chair for permitting me to make these opening
remarks.
[The prepared staement of Mr. Conyers follows:]

H.R. 1493, the ``Sunshine in Regulatory Decrees and Settlements Act
of 2013,'' has a simple goal: to discourage the use of settlement
agreements and consent decrees.
Why is this problematic? Here are just a few reasons.
To begin with, this bill, by delaying regulatory protections,
jeopardizes public health and safety, which explains why the National
Resources Defense Council, the American Civil Liberties Union, the
NAACP, the Sierra Club, and EarthJustice among other groups,
strenuously opposed a very similar version of this bill in the last
Congress.
This bill's provisions, in effect, could be used to prevent federal
regulatory actions from being implemented.
For example, the bill gives opponents of regulation multiple
opportunities to stifle rulemaking by allowing essentially any third
party who is affected by the regulatory action at issue in a covered
civil action to:

intervene in that civil action, subject to rebuttal;

participate in settlement negotiations; and

submit public comments about a proposed consent
decree or settlement agreement that agencies would be required
to respond to.

Often a federal agency defendant is sued because of its failure to
take regulatory action or because it has missed statutory deadlines for
taking such action, often by years.
Consent decrees and settlement agreements can help assure that the
agency takes such action by a date certain.
H.R. 1493, however, would needlessly slow down this process by
imposing an extensive series of burdensome requirements on agencies
that seek to enter into consent decrees or settlement agreements.
For instance, it mandates that agencies provide for public comment
on a proposed consent decree and requires agencies to respond to all
such comments before the consent decree can be entered in court.
In the case of consent decrees concerning a rulemaking, an agency
would be forced to go through two public comment periods: one for the
consent decree and one for the rulemaking that results from the consent
decree, doubling the agency's effort.
Moreover, the bill would allow an unlimited number of third parties
to intervene in the consent decree process, further delaying the entry
of a consent decree.
Like nearly all of the anti-regulatory bills we have considered to
date since the last Congress, H.R. 1493 piles on procedural
requirements for agencies and courts.
Also, like these other bills, this measure encourages dilatory
litigation by interests that are hostile towards regulatory
protections.
Another concern is that this bill threatens to undermine a critical
tool that Americans use to guarantee their Congressionally-mandated
protections, including civil rights laws and environmental protections.
By reducing costly and time-consuming litigation, consent decrees
and settlement agreements benefit both plaintiffs and defendants.
They help to ensure that federal protections are enforced while
leaving flexibility for state and local governments as to how they will
carry out their federal obligations.
Take, for example, a consent decree resolving a dispute under the
Clean Air Act.
In light of the fact that the bill would allow any private party
whose rights are affected by such decree a right to intervene, that
could potentially include anyone who breathes air as well as any
industry or special interest group.
So H.R. 1493 could have a chilling effect on the use of consent
decrees and settlement agreements, and the inevitable result will be
more litigation that will result in millions of dollars of additional
transaction costs.
And, guess who is going to bear the expense of these litigation
costs? Of course it will be the American taxpayer.
It is not surprising that the Congressional Budget Office in its
analysis of a similar bill considered in the last Congress stated that
the measure would impose millions of dollars in costs ``primarily
because litigation involving consent decrees and settlement agreements
would probably take longer under the bill as agencies would face new
requirements to report more information to the public and other
additional administrative costs.''
Finally, this bill addresses a non-existent problem. There simply
is no evidence of collusion between agencies and private entities with
respect to consent decrees and settlements.
Other than unsupported allegations, H.R. 1493's proponents have
failed to offer a convincing explanation as to why current law is
insufficient.
For instance, the bill codifies certain Justice Department
guidelines, first issued by Attorney General Edwin Meese nearly 30
years ago, that have since been codified in the Code of Federal
Regulations.
These regulations set forth detailed criteria that Justice
Department attorneys must follow when determining whether or not to
enter into consent decrees and settlement agreements.
So I must ask: why do we need to codify them? Is there any evidence
that these guidelines are not already being followed?
There simply is no need for this legislation.
I thank the witnesses for joining us today and I look forward to
your testimony.
__________

Mr. Bachus. I thank the full Committee Ranking Member, Mr.
John Conyers, Jr. of Michigan, for that opening statement.
And I would also like to say that I enjoyed my time as a
Member under your chairmanship and have the deepest respect for
you as an individual and also as a legislator.
Mr. Conyers. Thank you.
Mr. Bachus. At this time, I would like to recognize the
sponsor of this legislation, the gentleman from Georgia, Mr.
Doug Collins, for an opening statement.
Mr. Collins. Thank you, Mr. Chairman.
I appreciate you holding this hearing today and I look
forward to hearing from our witnesses. And as much respect as I
have for our distinguished Ranking Member, I believe this is
exactly why we need to be here. I believe in talking about jobs
and the economy. I would disagree with the wrong direction. I
believe this is the right direction and moving in the right way
in what we are dealing with here today as we look forward to
hearing from witnesses who I believe will outline the problem
and will outline the issues that we are talking about.
Mr. Chairman, I ask unanimous consent to enter in the
record a written statement from the Attorney General of the
State of Georgia, Sam Olens. Mr. Olens was unable to be here
today, but he is a tireless leader on this issue and I
appreciate his----
Mr. Bachus. Without objection.
[The information referred to follows:]

__________

Mr. Collins. In 2004, Frew v. Hawkins, a decision in the
U.S. Supreme Court, expressed its concern that consent decrees
may improperly deprive future officials of their designated
legislative and executive powers. This potential for abuse and
the lack of transparency in the status quo is why I believe so
strongly in the need for this legislation. H.R. 1493 addresses
weaknesses in the current system while preserving consent
decrees as an important mechanism for settling legal disputes.
Any argument as to the benefits of a statutory deadline
enforcement has no place in this policy discussion. As a
sponsor of this legislation, I believe that the ability of
citizens to hold Government accountable is an important part of
administrative law, but it must be appropriately carried out
with transparency and full public participation. This
legislation restores the balance and the intent of the APA and
ensures that those who wish to subvert the rulemaking
requirements in current law are unable to do so.
I am proud to represent the thriving agricultural community
in northeast Georgia and across the State. Farmers and ranchers
back home are concerned by a recent settlement that has the
potential to severely impact their livelihood. In 2011,
WildEarth Guardians and the Center for Biological Diversity
entered into an agreement binding Fish and Wildlife Services to
deadlines for decisions on over 1,000 species under the
Endangered Species Act. Even though the agriculture community
will be significantly impacted by this agreement, they were not
allowed to participate in its development.
In addition, due to the fee-shifting statutes that provide
attorney's fees to special interest groups, WildEarth Guardians
and the Center for Biological Diversity together received
almost $300,000 in taxpayer dollars. American families across
the Nation are tightening their belt. It is absolutely
unacceptable that their hard-earned taxpayer dollars go to fund
back room deals that subvert the rulemaking process.
I want to thank the witnesses for being here and especially
Mr. Puckett for being here today, and I look forward to hearing
from them and from all our witnesses on what I believe is an
important subject and I believe a right direction for this
Committee to be heading. And I thank you, Mr. Chairman, for
your leadership in bringing this today.
Mr. Bachus. Thank you. Thank you.
And I now recognize our Ranking Member, Steve Cohen of
Tennessee, for his opening statement.
Mr. Cohen. Thank you, Mr. Bachus. I appreciate the
opportunity to speak, and it is particularly relevant here
today in the Antitrust Committee where Delta Airlines struck
again in my community. Even though they made testimony here
that the merger would not affect hubs, they have taken the hub
status away from Memphis and took our flights down to 60 from
what were 243. I wish that we were concentrating on antitrust
and airlines and what they are doing to the American consumer
and employee in this country.
But we are here today with another Groundhog Day. H.R.
1493, the ``Sunshine for Regulatory Decrees and Settlements Act
of 2013,'' is clearly designed to impede Federal rulemaking and
other regulatory action, is like legislation we have considered
in the past. It does this by imposing numerous constraints and
disincentives to the entry of consent decrees and settlement
agreements in civil actions that seek to compel agencies to
comply with their statutory rulemaking requirements. H.R. 1493
threatens to undermine rulemaking by tilting this playing field
in favor of anti-regulatory forces at taxpayers' expense. It
does so by taking several broad approaches.
First, it provides numerous opportunities for dilatory
tactics by industry and other anti-regulatory interests. The
bill makes it easier for any affected third party--any affected
third party--to intervene in the underlying litigation and the
settlement negotiations by requiring a court to presume--
subject to rebuttal, yes--but presume that any third party
affected by the agency action or dispute will not be adequately
represented by the parties to the litigation. This intervention
right is drafted so broadly that if the regulatory action at
issue involved the Clean Water Act, theoretically any person
who uses water would have a right to intervene in the
negotiations on a potential consent decree or settlement
agreement. Any industry interests out there would certainly not
hesitate to intervene.
Second, many of the terms of 1493, its key terms, are
ambiguous, opening the door to confusion, litigation, and delay
in resolving disputes. For example, the threshold question of
what is a covered civil action under the bill, such civil
action includes, one, alleging that an agency is ``unlawfully
withholding or unreasonably delaying action.'' As a lawyer, I
know that the interpretations of words like ``unreasonably''
simply open the door to litigation that may go on ad infinitum,
ad nauseam, particularly when, as here, they appear in the
threshold question of when the bill is supposed to apply.
Third, the bill imposes numerous procedural requirements on
agencies and courts that threaten to take away their already
limited resources from issuing rules to protect public health
and safety. For instance, the bill requires agencies to accept
public comments on a proposed consent decree or settlement
agreement and to respond to such comments. This provision alone
would add considerable delay in resolving litigation meant to
force an agency to meet its rulemaking and other statutory
obligations.
Finally, the effect of the bill's various provisions would
be to dissuade agencies from ever agreeing to enter into
consent decrees or settlement agreements, making it more likely
they would simply proceed with potentially expensive and time
consuming litigation. That is why the Congressional Budget
Office found that last year's drafting of a bill, similar to
H.R. 1493, which was last year's bill, would cost taxpayers
millions of dollars.
In addition to being harmful, H.R. 1493 is simply
unnecessary as its proponents offer no evidence of the problem
that it purports to address. H.R. 1493's proponents argue this
bill is needed because Federal agencies collude with pro-
regulatory plaintiffs to advance a mutually agreed upon
regulatory agenda through the use of consent decrees and
settlement agreements. Yet, when this Subcommittee considered a
substantially similar bill in the last Congress, we were given
no data or study indicating that such collusive consent decrees
or settlement agreements were in fact a real problem. All we
heard were the repeated assertions of the witnesses of the
majority that such collusion was taking place.
More credible was the testimony of John C. Cruden, a senior
nonpartisan career official at the Justice Department's
Environment and Natural Resources Division for over 2 decades,
who testified he was, ``not aware of any instance of a
settlement and certainly none he personally approved that would
remotely be described as collusive.''
In the absence of actual evidence of rampant collusion
between Federal agencies and plaintiffs, H.R. 1493 simply
addresses a nonexistent problem.
H.R. 1493 would needlessly slow down an agency action and
open the door widely to almost anyone who wants to impede
agency action, including the promulgation of important public
health and safety rules.
The bill is unnecessary. The bill is harmful. The bill is
not going to go anywhere in the Senate. I urge my colleagues to
oppose it.
Mr. Conyers. Would the gentleman from Tennessee yield?
Mr. Cohen. I will yield.
Mr. Conyers. Thank you.
I just had research on--this is the third hearing on
regulatory activity in this Congress, but there were 16 other
hearings during the 112th. I am writing an article on this
because this is unbelievable.
And I thank the gentleman for yielding.
Mr. Cohen. You are welcome.
I yield back the balance of my time which does not exist.
Mr. Bachus. Thank you, Mr. Cohen.
I would now like to recognize the full Committee Chairman,
Mr. Bob Goodlatte of Virginia, for his opening statement.
Mr. Goodlatte. Thank you, Mr. Chairman. I appreciate your
holding this hearing. And I want to thank Mr. Collins for his
introduction of the bill and Chairman Bachus and the
Subcommittee for their prompt and careful consideration of it.
America's small businesses and job creators need relief
from the flood of new regulations and red tape made in
Washington. Small business owners cite Government regulations
as one of the most important problems they face today. And
while the flow of new regulations from Washington grinds on, so
does America's dismal unemployment situation. Make no mistake.
The untimely drag of new regulations, too often issued without
sufficient consideration of their costs, benefits, and impacts
on jobs, remains a significant part of our virtual jobs
depression.
The Judiciary Committee is considering a strong set of
regulatory reform bills to solve this problem while preserving
important regulatory protections for the American people. The
Sunshine for Regulatory Decrees and Settlements Act of 2013 is
an important part of this initiative. Far too often, costly new
regulations are issued directly under the authority of consent
decrees and settlement agreements to force Federal agencies to
issue new rules. Regulators often cooperate with pro-regulatory
organizations to advance their mutual agendas in this way.
The technique used is simple: an organization that wants
new regulations alleges that an agency has violated a duty to
declare new rules. The agency and the plaintiff work out a deal
under the cover of litigation. The deal puts the agency under
judicially backed deadlines to issue the rules. These deadlines
often give the public and even States that co-administer
regulations little opportunity to comment on proposed rules.
Deals can go so far as to require agencies to propose specific
regulatory language negotiated by the agency and the
regulation-seeking plaintiff. Those to be regulated frequently
do not know about these deals until the plaintiff's complaints
and the proposed decrees or settlements are filed in court. By
then, it is too late. Regulated businesses, State regulators,
and other interested entities are unlikely to be able to
intervene in the litigation. The court can approve the deals
before regulated parties have an opportunity to determine
whether new regulatory costs will be imposed on them.
The Obama administration has entered into a high number of
consent decrees and settlement agreements just like I just
described. Examples include a consent decree to require new
performance standards for greenhouse gas emissions under the
Clean Air Act. They also include settlement agreements to
require EPA to issue Chesapeake Bay TMDL's that trigger
billions of dollars in costs and the Fish and Wildlife Service
to take actions involving hundreds of species under the
Endangered Species Act. Deadlines set in these and other
decrees and settlements can even be used to bind the hands of
future Administrations.
The Sunshine for Regulatory Consent Decrees and Settlements
Act of 2012 puts an end to the abuse of this practice. It
assures that those to be regulated have a fair opportunity to
participate in the resolution of litigation that affects them.
It ensures that courts have all the information they need
before they approve proposed decrees and settlements, and it
provides needed transparency on the ways agencies conduct their
business.
The bill also respects the basic rights of plaintiffs and
defendants to manage litigation between them.
As a result, the bill offers an effective and balanced
remedy and it is a timely solution to a real and important
problem. And I commend the gentleman from Georgia, Mr. Collins,
for his efforts on this bill, and I strongly support them and
yield back the balance of my time.
Mr. Bachus. Thank you.
Without objection, other Members' opening statements will
be made a part of the record.
Since the full Committee Ranking Member introduced
something, I would like unanimous consent to offer a response
to his submittal, which is ``Sue and Settle: Regulating Behind
Closed Doors,'' authored by the U.S. Chamber of Commerce, in
rebuttal and ask that it be entered into the record.
[The information referred to follows:]

__________

Mr. Bachus. Thank you.
We have a distinguished panel today, and I will first begin
by introducing our witnesses.
Mr. Bill Kovacs provides the overall direction, strategy,
and management for the Environment, Technology & Regulatory
Affairs Division of the U.S. Chamber of Commerce. Since he
joined the Chamber in March 1998, he has transformed a small
division concentrating on a handful of issues and committee
meetings into one of the most significant in the organization.
His division initiates and leads national issue campaigns on
energy legislation, complex environmental rulemaking,
telecommunications reform, emerging technologies, and applying
sound science to the Federal regulatory process.
Mr. Kovacs previously served as Chief Counsel and Staff
Director for the House Subcommittee on Transportation and
Commerce. He earned a J.D. from Ohio State University College
of Law and a bachelor of science degree from the University of
Scranton, magna cum laude.
I welcome you, Mr. Kovacs.
Mr. Allen Puckett III is the owner of Columbus Brick
Company. Columbus Brick was founded in 1890 by Mr. Puckett's
great grandfather, W.N. Puckett, and his friend W.S. Lindamood.
Mr. Puckett represents the fourth generation of Pucketts to
operate Columbus Brick, which is now the only brick
manufacturer in the State of Mississippi. The company is the
distributor for many other brick companies based in
Mississippi, Alabama, Georgia, North Carolina, South Carolina,
and Virginia. Columbus Brick ships over 140 million bricks each
year throughout the Midwest and southern United States. And his
story I think is quite dramatic and telling, similar to other
stories I have heard from his colleagues in the industry, and I
am very much looking forward to hearing your firsthand account
of your experience.
Mr. John D. Walke is Senior Attorney for Clean Air and
Clean Air Director for the Natural Resources Defense Council in
Washington, D.C. As Mr. Conyers mentioned, you all are opposing
this legislation. And you are responsible, as I understand it,
for the National Resources Defense Council's National Clean Air
Advocacy before Congress, the courts, and the U.S.
Environmental Protection Agency.
Prior to joining NRDC, Mr. Walke worked for the EPA in the
Air and Radiation Law Office of the Office of General Counsel.
At EPA, he worked on permitting air toxics, monitoring, and
enforcement issues under the Clean Air Act.
Prior to working for the EPA, Mr. Walke was an associate at
Beveridge & Diamond here in Washington, D.C.
He graduated from Duke University with a B.A. in English
and earned his J.D. from Harvard Law School.
Joining us by teleconference is Mr. Tom Easterly. He has
been the Commissioner of the Indiana Department of
Environmental Management since 2005. After obtaining his M.S.
in urban and environmental studies from Rensselaer Polytechnic
Institute in Troy, New York, Mr. Easterly joined the New York
State Department of Environmental Conservation where he held
various engineering positions in the Air and Solid and
Hazardous Waste Divisions. He has also worked for Bethlehem
Steel Corporation as their corporate air pollution expert and
as superintendent of environmental sciences for Bethlehem
Steel's Burns Harbor Division. He also served as President of
Environmental Business Strategies, an environmental consulting
firm he started in 2002. He is a board certified environmental
engineer and a qualified environmental professional.
As I said, we have very distinguished panel today, and with
that, Mr. Kovacs, you are recognized for your opening
statement.

TESTIMONY OF WILLIAM L. KOVACS, SENIOR VICE PRESIDENT,
ENVIRONMENT, TECHNOLOGY & REGULATORY AFFAIRS, U.S. CHAMBER OF
COMMERCE

Mr. Kovacs. Thank you, Chairman Bachus and Ranking Member
Cohen and Members of the Committee, for letting me come here
today to testify in support of H.R. 1493, the ``Sunshine for
Regulatory Decrees and Settlements Act of 2013'' and to discuss
the Chamber's recent report, ``Sue-and-Settle: Regulating
Behind Closed Doors.''
H.R. 1493 is a balanced approach to inject more
transparency and public participation into the rulemaking
process, which has been the overriding goal of Congress since
1946.
If enacted, 1493 would do three simple things, and I think
we need to keep in mind how simple this bill is.
First, it would require agencies to publish on their Web
site and in the Federal Register notices of intent to sue and
complaints filed against agencies so the public knows when the
agency is being sued.
It would require agencies to post on their Web site and on
the Federal Register the filings of consent decrees before they
are actually presented to the court so that the public can
comment on the consent decree before it is presented to the
court.
And finally, it would allow impacted parties, those who
have standing--not anyone--those who the courts have--allow--
recognized constitutional standing to--to intervene in the
court case if they can establish that their rights are not
being adequately represented by the parties before the court.
The Chamber's involvement in this issue started when we
started getting a number of growing complaints not only from
the business community but from States talking about the fact
that they were shut out of major regulatory decisions by
Federal agencies. We decided to investigate the matter, and it
became clear that EPA and other agencies were not in any
manner--all we are asking for is that they publish it on their
Web site. They were not in any manner informing the public of
the notices of the lawsuits or of the lawsuits brought against
the agencies or of the consent decrees.
Because of this, we saw more and more regulatory activity
and we asked--and I believe it was--one of the Members
referenced last year's hearing where what is the problem, there
are not many cases. We decided that what we would do is we
would literally sit down and try to figure what it is out
because when EPA was asked the questions, they were saying
there is no centralized database. So we cannot give not the
industry, not the environmental group, but the Congress even
the information on the lawsuits.
So what we did is for an 18-month period, we used several
databases containing court documents, and from these databases,
we identified 71 separate lawsuits from 2009 to 2012 and the
agencies that entered into these environmental suits, as well
as the environmental groups that were party to the case.
On May 20, 2013, we published our list of cases which
impact virtually every industry in the United States, and we
have put all the supporting materials from the complaint, the
consent decree, the court order, everything on our Web site. So
there is total transparency here because since the agencies
have not been willing to provide a database, we decided we
would. And that is really the essence of what the report says.
It is a database. And we are not saying it is 100 percent
accurate. What we are saying is this is what we could find over
18 months.
But each case we found followed the same pattern: the NGO
and the agency negotiated in private a deadline for the
proposal of new regulation. When they come to an agreement,
they prepare, sign, and present the decree to the court, and
this is before they put it out for public comment. In some
instances, the court asks the agencies to submit the proposed
consent decree for public comment, but that very rarely leads
to any changes in the consent decree as drafted.
Once a consent decree becomes an order of the court, public
policy is forever changed. And that is really the key point
because once the consent decree is issued by the court, the
court retains jurisdiction over the agency and the
implementation of the order, while in most instances the only
group that can enforce the order during this time period is the
environmental group.
Agency priorities and the use of its resources are
irrevocably changed by the consent decree. While a few consent
decrees might not change agency priorities, when you have 71
consent decrees ordering the issuance of more than 100
regulations, it impacts the management of the agency.
Since the deadlines agreed to by the NGO and by the agency
do not include industry, what usually happens is in the setting
of the deadlines with no industry input to the agency, the
agency is operating in a fundamental disagreement with the APA
because it is not gathering the information it needs as to what
is to be done. So what happens is you get poorly drafted
regulations that lead to more litigation while all along during
this time period of litigation, the regulated entity has to try
to comply with a poorly drafted regulation.
And finally, the sue-and-settle process does a lot more.
There are a lot more compromises than just simply the
procedural safeguards that might be in any consent decree. The
fact that the system is rushed by itself, it literally
disallows the ability to go through the other regulatory
statutes that Congress has imposed on agencies, such as the
Regulatory Flexibility Act, the Informational Quality Act,
Unfunded Mandates, several executive orders, and OIRA review,
all of which we think are important and are in place and are
statutes now. And one of the things that is mostly ignored are
the small business panels, and you end up ignoring 26 million
businesses in the country and how they impact.
My time is up. And thank you very much, and I would be
pleased to answer questions at the appropriate time.
[The prepared statement of Mr. Kovacs follows:]

__________

Mr. Bachus. Thank you.
Mr. Puckett, you are recognized.

TESTIMONY OF ALLEN PUCKETT, III, PRESIDENT,
COLUMBUS BRICK COMPANY

Mr. Puckett. Chairman Bachus, Ranking Member Cohen, and
Members of the Subcommittee, good morning.
I am President of Columbus Brick Company, a small business
in Columbus, Mississippi. I am a member of the fourth
generation of Pucketts to own and operate this company. Our
fifth generation is also working in the company. Our family has
been making fired clay brick in Mississippi since before the
1890's.
I am here today as a small business owner. I do not profess
to be an expert on the Clean Air Act or on this bill you are
considering today. We are an industry of mostly small
companies, and we look to our trade associations and industry
task forces for this kind of information.
I do, however, know how to run a business, and what I have
seen happening in the past several years makes me extremely
concerned about my ability to keep our business viable for the
future.
I am also here today on behalf of our industry, our
company, and the families we employ.
Over the past 10 years, our industry has been directly
impacted by two sue-and-settle cases involving air toxic
standards being developed by the U.S. Environmental Protection
Agency.
Our first experience with sue-and-settle was a rule that
was vacated after we had spent considerable money for
compliance with the rule. I believe we were harmed by this
first sue-and-settle.
We are understandably concerned about the second round of
sue-and-settle rulemaking we are now facing. The rules I am
referring to are the National Emission Standards for Hazardous
Air Pollutants, or NESHAP's, commonly referred to as MACT
standards. It is my understanding that virtually all original
MACT standards were completed under either a sue-and-settle
court order or the threat of a court order. I also understand
that most of these rules were later subject to litigation by
the same environmental groups who forced a short schedule, this
time complaining that the EPA did not properly develop the
rule. It appears there may be an obvious correlation between
these two facts.
Recently the EPA restarted the MACT development process for
our industry and has once again entered into a sue-and-settle
consent decree with the Sierra Club for our rulemaking
schedule. We asked to be included in the discussions of the
settlement but were again excluded from the negotiations until
a draft settlement was published in the Federal Register. I do
not think anyone could possibly fault our industry for being
extremely concerned.
If the EPA uses the same approach they have followed on
recent rules as a default to lower litigation potential,
Columbus Brick may cease to exist after almost 125 years of
operation. Based on EPA's numbers I have seen for my company, I
expect at minimum to have to permanently shut down two of our
three kilns. That will mean a permanent job loss for 45 to 50
families in our small rural community.
Unfortunately, my story is not unique in our industry.
If this burden resulted in some great benefit to the
environment, it might be worth it. However, the EPA has the
data in house that demonstrates that there is no great benefit
to the environment, that our industry's operations are already
within safe levels in many, many cases. If there were no other
options available under the Clean Air Act, it might be
unavoidable. However, the EPA has the authority under the Clean
Air Act to avoid disastrous impacts that provide no benefit.
The EPA needs to take the time to develop the rule correctly.
They need to avoid sue-and-settle agreements that remove that
time.
We actually have a great deal of faith in the EPA to do the
right thing if they are allowed to do so, to look at the data
and the requirements of the Clean Air Act, and then come to a
decision that meets the requirements of the Clean Air Act,
protects human health and the environment, and still allows our
industry to continue to operate.
We are not asking for the rule to go away. We are asking
that the practice of establishing unreasonable deadlines
without input from the impacted industry go away. We are asking
for the opportunity to be an integral part of a rulemaking
process that could make or break our industry. We are asking
that the time be taken to ensure that the public health and
welfare is maintained but also allow the brick industry to
continue to exist. I believe you can ensure that these
decisions are made that allow my company to continue and our
employees to remain gainfully employed. I would hate to see
Columbus Brick put out of business because of a rule the EPA
made it was forced to develop too quickly, especially a rule
that does not benefit anyone.
Thank you.
[The prepared statement of Mr. Puckett follows:]

__________
Mr. Bachus. Thank you.
Mr. Walke?

TESTIMONY OF JOHN D. WALKE, CLEAN AIR DIRECTOR AND SENIOR
ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL

Mr. Walke. Thank you, Chairman Bachus and Ranking Member
Cohen, and Members of the Subcommittee. My name is John Walke
and I am clean air director and senior attorney for the Natural
Resources Defense Council. NRDC is a nonprofit organization of
scientists, lawyers, and environmental specialists dedicated to
protecting public health and the environment.
My testimony today will focus on three main points.
First, allegations that Federal agencies collude with
nongovernmental organizations in the filing and settling of
lawsuits are entirely unsubstantiated.
Second, H.R. 1493's solutions to this unsubstantiated
problem would prevent the enforcement of laws that establish
critical health safeguards.
Third, this bill ignores the existing administrative and
judicial safeguards that prevent litigation abuses.
First, the witnesses at today's hearing, like their
counterparts at last year's, have provided no evidence of
Government attorneys seeking to limit agency discretion by
colluding with plaintiffs to settle cases. The U.S. Chamber of
Commerce recently issued an entire report on this subject and
was unable to identify any evidence of collusion, conspiracy,
or agencies manipulating settlements or laws to carry out
improper exercises of authority.
Instead, critics such as the Chamber have resorted to
redefining what the term ``sue-and-settle'' means. The Chamber
chose a methodology that focused on all EPA settlements with
environmental groups but only during this Administration. Now
why? First, because this allowed the Chamber to quietly
dispense with any need to prove collusion or impropriety. Next,
because a fuller picture that included EPA settlements with
industry and Bush administration settlements with environmental
groups would have destroyed the Chambers' mythical story.
What the Chamber and this bill truly target is the legal
rights of citizens to hold government accountable by enforcing
laws designed to protect public health, safety, and the
environment. Settlements have led to EPA having to fulfill
clear statutory obligations that the Chamber would prefer to
remain unenforced.
Second, under H.R. 1493, third party intervenors would be
given the unprecedented ability to obstruct settlement talks.
The result would waste taxpayer money as agencies would be
forced to take more time settling or even litigating cases in
which they know they have broken the law. H.R. 1493 would give
intervenors opportunities to disrupt and obstruct the
settlement of lawsuits in ways that courts have rejected. In
fact, this bill would overturn a Supreme Court precedent that
made clear that intervenors cannot prevent parties from
resolving their disputes in settling a case.
The legal obligations in settlements overwhelming entail
requiring agencies to comply with nondiscretionary duties that
are clearly mandated by law such as statutory deadlines. These
laws protect Americans' health, safety, environment, food
supply, investor confidence, and other values. For example,
just two overdue clean air standards that followed consent
decrees attacked by the Chamber are projected to save over
10,000 lives annually. If Congress does not like the deadlines
or safeguards, it is free to amend them. It should not be
creating end runs around the law.
Third, H.R. 1493 ignores the legal mechanisms already in
place to ensure transparency, public participation, and an
agency's maintenance of its discretionary powers and legal
responsibilities. Notably, no witness at last year's hearing or
in written testimony today has identified a single rule that
followed a settlement that did not go through public notice and
comment. The settlements cited did not mandate a result but
merely a timetable for rulemaking, meeting all administrative
laws.
Some of today's testimony conflates and confuses the terms
of settlements which do not establish regulatory deadlines or
mandates with subsequent rulemakings that do establish
deadlines and mandates but only pursuant to call and comment
rulemakings. Again, no regulatory outcomes were fixed by any
settlements discussed in the witnesses' testimony, and any
criticisms of the regulatory deadlines and measures could have
been and in many cases were raised during public comment
opportunities during these rulemakings.
Settlements include specific language barring modifications
of agency authority, and deadlines and settlements can be
extended by agreement of the parties or unilaterally by the
agency with court approval. But agency critics ignore these
safeguards. Instead, the critics have offered H.R. 1493 which
would hinder all plaintiffs seeking to uphold the law,
including States, corporations, and individuals. It is hard to
understand why even conservatives would back legislation that
hinders enforcement of the law, requires agencies to waste
money in court on cases they believe they cannot win, and would
stymie industry and State settlements along with all others.
I urge the Subcommittee to reject this harmful legislation.
Thank you.
[The prepared statement of Mr. Walke follows:]

__________

Mr. Bachus. Thank you.
Next testifying by video conference is Commissioner Thomas
Easterly, Indiana Department of Environmental Management. At
this time, Commissioner, we welcome you to our hearing and look
forward to hearing your opening statement.

TESTIMONY OF THOMAS EASTERLY, COMMISSIONER,
INDIANA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT

Mr. Easterly. Well, thank you, Chairman Bachus and Ranking
Member Cohen, for inviting me. I would also like to thank
Congressman Clay for letting me use his office here in St.
Louis.
I am representing both the Environmental Council of the
States, which is a nonpartisan, nonprofit organization of State
and territorial environmental agencies and their leaders, and
the State of Indiana in this testimony. The Environmental
Council of the States--I refer to them as ECOS. They represent
the States and together the States and the EPA implement the
national environmental statutes. And we have a partnership to
do that, and the partnership works because we communicate with
each other. EPA's primary role is to provide national
standards, conduct research on issues, and then based on their
statutory authority and that research, implement regulations
that we do on the ground, and then of course, conduct oversight
of our activities to make sure that they meet the requirements
and see that the environment is improved. And we both work
together to have discussions on deploying the amount of
resources that actually exist to make sure that the environment
is protected.
As the States are the boots on the ground--and just to give
you an indication of how much we do, we do--96.5 percent of the
Federal environmental programs are actually implemented by the
States, and that means that EPA does the rest. And EPA does
some pieces of the programs that are delegated to the States
because they just want to make sure there is good quality and
things. But still, the States do over 90 percent of the work,
whether it is inspections, enforcement, data collection, and
other things.
Also, the States fund most of the work. Over 80 percent of
the actual cost of delivering environmental protection in the
United States is paid for by the various States and the rest
comes from the Federal Government.
So we have a constant dialogue on how to do this best, and
the dialogue breaks down when these consent decree activities
happen because we are not at the table. So it is sort of like a
marriage. So you need to work with your spouse and you have
discussions and you come to conclusions. In this case, our
partner, EPA, is having discussions with other people we are
not a party to. They come to these agreements and we have to do
the work even though we may not be capable. And at the very
minimum, it requires us to divert resources from things that
may be more important.
So I will give you a couple examples of Indiana, actually
probably one now because I am talking too long. I am sorry.
There was Federal litigation over the deadlines in what is
called the Visibility SIP's, and it is to make sure that the
air--you can see through it and it does not obscure your views.
And this is an important thing. It is a long-term action. And
the reason that the States did not have--including Indiana--
turn in their plans by the dates required in the original
regulations is because there has been incredible uncertainty
due to litigation over what the regulations for power plant
emissions are. And these same controls on power plant emissions
are the things we need to protect the visibility. So there was
the Clean Air Interstate rule which was first overturned by the
courts--or vacated they call it--and then it was temporarily
put back in place for EPA to do the other rulemaking for a
better rule. That resulted in the Cross-State Air Pollution
Rule, or CSAPR, which has been overturned by the courts. So the
right answer for what is called best available retrofit
technology, which we need to have in these plans, is that it
equals these power plant controls. But we have to not do that
because we do not have the answer. Those regulations continue
to be overturned by the court, and they are saying we do not
have an adequate plan. So you would say, well, that seems like
sort of a tale of woe, but the challenge is we are diverting
resources from protecting human health and the environment to
deal with these legal issues that are not done.
So since I have used up most of my time, I will tell you
two things. The Environmental Council of the States has
reviewed this proposed bill, and it is consistent with the
resolution we passed on this issue because this issue is
important to all States. But they do not support general bills,
but the State of Indiana believes this is an excellent bill.
And thank you for your indulgence.
[The prepared statement of Mr. Easterly follows:]

__________

Mr. Bachus. Thank you. We look forward to you being with us
for questions too.
The first question is to Mr. Kovacs. Mr. Kovacs, listening
to Mr. Walke, his view of sue-and-settlement litigation, it
seems to be that it is really as simple as that an agency's--if
there is a broken deadline, then a court needs to fix that as
soon as possible and can do that. What is your response to that
view or that the agency will extend the deadline?
Mr. Kovacs. Well, you know, Congress establishes the
deadline. We are not here to talk about the deadlines at all.
That is something you have decided to put in the statutes.
What we are here to talk about is the fact that we do not
know about any of the sue-and-settle agreements or the notices
of intent to sue. So our concern is, one, there needs to be
some very simple transparency. For example, let me show you how
easy it is.
We had been complaining for years on the fact that we had
no notice of intent to sue. We do not even know how many
lawsuits are brought against our Government. I think you ought
to know that as just Members of Congress. But during the Gina
McCarthy hearings, for example, one of the commitments that was
made was that they would begin to finally post the notice of
intent to sue, which is only one of the points. But it was up
on the Web site in literally a week or so. So it can be done
quickly. And the fact is that the notices of intent to sue and
the lawsuits and the consent decrees are really something the
American public are entitled to know because they are going to
result in regulation.
And some of the regulations that are moving forward--all we
are asking is that the affected parties, those who have
constitutional standing, should have an ability to try to
intervene if none of their interests are being protected. And
there are some issues, especially on the MACT standards, for
example, where had EPA been able to get the additional time,
you would not have been in an additional 10 years of
litigation. Really, it is about transparency and the right to
intervene if we are not being represented and provided we have
constitutional standing.
Mr. Bachus. You know, at our last hearing--I know Ranking
Member Conyers mentioned we have had other hearings on this
matter, and I know today and earlier he and my other colleagues
claimed that there was not really any evidence or sufficient
evidence that sue-and-settle litigation practices were a
problem. You know, they were not a major concern.
What are some of the important findings revealed in your
new study of sue-and-settlement cases regarding whether this
is--I think one of my colleagues referred to it as a fictional
problem.
Mr. Kovacs. Well, the first thing I want to say because the
term--I am not going to use the ``C'' word, the word
``collusion.'' There is absolutely no allegations anywhere in
our report on that.
What this is about is at the last hearing, my recollection
was--actually there have been two hearings, one last year and
this year. My recollection was that the sue-and-settle was not
a big issue. They were only a few of the cases. And what we
were hearing from the brick manufacturers, the cement
manufacturers, the boiler manufacturers, virtually every
industry in the country is how did this process get started so
quickly and we were not involved in the process. We thought,
under the Administrative Procedure Act, we were supposed to be
involved and get notice and comment. And the deadlines are very
important because the deadline is how you bring technology into
the system.
That is what started the report. And we did not know if we
were going to find five cases or if we were going to find 100.
What we found is between 2009 and 2012 that there were 71 cases
resulting in 112 rules. And in some of the cases, for example,
the States like North Dakota and New Mexico--they were sued.
Just to give you an idea on notice, they were sued without
notice in Oakland, California. And the order that impacted
those western States--so you may all think that notice is
really not a big deal, but when you are being a regulated
industry and you do not have notice of where your Government is
going, it is a big deal. So it may be a simple concept, but to
us it is a very important concept and that is why we did the
report.
Mr. Bachus. All right.
Mr. Walke, Mr. Kovacs identifies sue-and-settlement
rulemakings that would impose mandates that are expensive on
many regulatory--I mean, many regulated industries and
entities. How can you assert that these industries should be
ignored? Does your organization and a regulatory agency ask a
court to order the rules and timetables under which such
regulations will be imposed?
Mr. Walke. Thank you, Chairman Bachus.
It is important to be very precise about what is happening
here. The statutes passed by Congress established these
obligations in the form of deadlines and mandates. The consent
decrees merely enforce overdue, nondiscretionary duties that
Congress has imposed. The consent decrees do not create any
requirements. Those were done by Congress. What then happens is
the consent decrees or settlement agreements merely provide for
schedules for rulemakings which then happen with notice and
comment involving the public and establish the actual
regulatory obligations and deadlines and requirements of law.
Consent decrees do not impose requirements of law upon third
parties. They merely facilitate the enforcement of statutes
passed by this body.
And so it is very important to understand what the Chamber
report said and what it did not say. It did not say that there
were settlement agreements or consent decrees improperly
creating legal requirements by skirting rulemakings or public
participation opportunities.
Mr. Bachus. Mr. Cohen is recognized for 5 minutes.
Mr. Cohen. Thank you, Mr. Bachus.
Mr.--is it Walke or Walke?
Mr. Walke. It is Walke.
Mr. Cohen. How many sue-and-settle collusive settlements
that have been sanctioned by the Government are you aware of?
Mr. Walke. None.
Mr. Cohen. None? I am shocked.
Mr. Kovacs, how many are you aware of?
Mr. Kovacs. Well, based on what we said in the report, we
put the number at 71 where there was no transparency and no
notice.
And second, just to correct the record, all the sue-and-
settle arrangements are not necessarily deadline cases. For
example, the Chesapeake Bay----
Mr. Cohen. Let me stop you for a minute because your answer
was 71 and that was my question.
Mr. Walke, are you familiar with these 71 situations the
Chamber cites?
Mr. Walke. Yes, sir. What the Chamber did was Internet
searches to find all settlements between EPA and environmental
groups. They did not look at industry settlements because there
were plenty of them. They did not look at the Bush
administration.
Settlements are a natural and long-accepted area of the
law. They happen across all of our different statutes involving
agencies. They happen in enforcement cases. They happen between
municipalities and Federal agencies. If one is to take the
rather astounding position that all settlements involving the
Federal Government are evidence of sue-and-settle, then the
world has been turned up side down because every Administration
in the modern administrative era has been entering into
settlements with parties under Republican and Democratic
administrations, and never has that been deemed improper per
se.
Mr. Cohen. Let me ask you. You worked at the EPA during the
Clinton administration. Is that right?
Mr. Walke. That is correct, sir.
Mr. Cohen. And you have been at the NRDC. Tell us about
some of the settlements that you are aware of in those areas
and time periods and in the areas of your expertise that have
benefitted the public and how.
Mr. Walke. Absolutely. Let me just mention two that were in
my testimony because they are under the clean air laws, and
both of them share some very interesting features, which are
actually true in explaining a phenomenon that has been
discussed here today.
The Bush administration EPA had issued unlawful rules that
defied the plain language of the Clean Air Act, one to regulate
soot pollution and one to regulate mercury and toxic pollution
from power plants. Courts found those rules to be squarely
unlawful. As a result, the Obama administration inherited the
legal obligation to follow the law.
Now, when the Obama administration took office, the duty to
follow those laws were 5 years and 10 years overdue. So they
had a nondiscretionary statutory deadline they had to meet. My
organization brought a lawsuit in one of the cases but not the
other, and we negotiated a consent decree to meet those overdue
statutory deadlines exceeding 10 years in one case, and
consistent with the Clean Air Act, those consent decrees were
noticed for public comment. Some of the witnesses at last
year's hearing for the minority opposed not just the consent
decree but the rule in question to clean up mercury and toxic
pollution from power plants. The judge rejected that opposition
out of hand and entered the consent decree because it was
appropriate.
EPA then went through notice and comment rulemaking. No one
was prevented from submitting comments. No outcome was dictated
by either consent decree. The proposed rules were offered.
People weighed in. Now they have been finalized, and in just
those two examples, EPA has projected that over 11,000 lives
will be saved, hundreds of thousands of asthma attacks will be
avoided, especially among children, and heart attacks among
adults will be avoided.
Mr. Cohen. Those are all pretty commendable things.
Mr. Kovacs, how would you suggest that we should deal with
the asthma attacks that children have and the other health
problems that would have occurred but for this particular
settlement?
Mr. Kovacs. Well, first of all, I just want to clear up a
few statements. One is----
Mr. Cohen. I only have about 30 seconds. Would you answer
my question please?
Mr. Kovacs. Well, we think that there should be
regulations. We have never opposed regulations. What we are
saying is that as you do the regulation, there needs to be----
Mr. Cohen. What is the Chamber's position on climate
change?
Mr. Kovacs. The Chamber has specifically said that on the
climate change issue, we have not opposed--we opposed Waxman-
Markey because it was an unworkable bill that cost an enormous
amount of money. But we do not have a line in the sand on the
climate change issue.
Mr. Cohen. Do you have a line anywhere? Has the Chamber
come out in any ways to resolve the problem that the earth
faces with climate change?
Mr. Kovacs. Well, first of all, if the regulatory process
were working in the way the Administrative Procedure Act would
like it to work and was intended to work and there was public
participation and there was transparency in the system, we
would not be here having these kinds of discussions.
Mr. Cohen. But the issue is has the Chamber done anything
to address what is the world's number one issue, climate
change?
Mr. Kovacs. Absolutely. We have been--years before any of
the environmental groups were in there, we were in there with
the Bush administration pushing and pushing and pushing on the
development of new and energy efficient technologies and
alternative technologies for the Bush administration. We put
out----
Mr. Cohen. Which Bush administration?
Mr. Kovacs. The second one. We put out our----
Mr. Bachus. The gentleman's time has expired.
Mr. Kovacs [continuing]. Five-year energy impact analysis
and we pushed DOT. We went to the Administration about energy
savings performance contracts. So we have pushed and pushed and
pushed on that issue.
Mr. Cohen. Thank you. That is commendable.
I yield back the balance of my time.
Mr. Bachus. The time is already gone. [Laughter.]
All right. Thank you.
Mr. Collins is recognized for 5 minutes.
Mr. Collins. Thank you, Mr. Chairman. I appreciate it.
And moving back to the actual legislation and the
discussion here, Mr. Puckett, I have a question. In your
comments and in your testimony, you have talked about how you
work with this now just having input and how it has affected
business. I want to get back to how this actually affecting
companies.
In your company, if you were able to intervene in a case
such as the brick litigation, would you bring valid concerns to
the table, a constructive effort? Because there has been a
discussion here today that all you wanted to do is obstruct.
All you wanted to do is put off or in some cases has been
accused of killing kids in a sense by being obstructive. What
was your ultimate goal to be in wanting to be a part of this
transparency?
Mr. Puckett. Well, I think, one--and we have already done
this--is provide accurate data of what our stack emissions are
and what we are doing as an industry. The main thing is just to
have a place at the table so we know what is going on, but I
think we can provide--instead of modeling and guessing at the
data, we have already done this accurate stack testing on just
about every facility that is in our industry.
Mr. Collins. And so you are currently looking out for what
you are doing and being a responsible citizen is what I am
hearing you say.
Mr. Puckett. Yes, sir. You know, under the first EPA
mandate, the industry came into compliance. We were in
compliance before the rule was vacated, and we are still
operating those control devices. We cannot get rid of them
because they are in our air operating permits. So we are still
incurring the cost of operating those. And I think our industry
is operating at pretty safe levels.
Mr. Collins. Well, from your perspective--and you had
mentioned this in your testimony, that given some of the
impacts--the practices being discussed here--elaborate a little
bit further. You know, you talked about closing a kiln and you
talked about the impact financially. What is it not only
financially to the people who work in your facilities and the
economic impact of the jobs that we are talking about today,
which I think is a matter that Congress needs to address
because everyone is talking about jobs and these kind of
issues. Tell me more. Explain more to the Committee about that.
Mr. Puckett. From what I understand the new proposed rule
requires--and the EPA sent numbers on my facility through our
association to me. They asked to come into compliance would
cost $8 million, a capital expenditure, and close to $2 million
a year to operate these. Now, they also suggested that we go
borrow this money to put in the control devices. Now, most of
our industry, anyone connected with the construction industry,
is out of favor with lenders, and if I walked into any bank and
said loan me $8 million on a project with no payback and really
creates a negative cash drain, we will get laughed out of
there.
So in two of our kilns, we could not support the
expenditure. It would put the operation in a negative position.
And that is the plants that we have most of our employees in.
So just to get to where we could make it, we would have to
eliminate 50 jobs. You know, these are real people. They are
families. In a small southern rural town, the last thing we
need, especially in Mississippi, is unemployed people. I do not
think that is what the Congress wants either.
Mr. Collins. Thank you.
Mr. Easterly, can you hear my question?
Mr. Easterly. Yes.
Mr. Collins. I know this has been discussed and our friends
from across the aisle talked about this is another hearing that
we are having on this. But do you see right now, especially in
light of even what was in The Washington Post just in the last
couple days, the rise of the fourth branch of Government which,
by the way, Mr. Chairman, I would ask that it be submitted for
the record for that.
Mr. Bachus. Without objection.
[The information referred to follows:]

__________

Mr. Collins. Thank you, Mr. Chair.
Is there a more compelling reason today to pass this
legislation than what we have seen maybe even in the past?
Mr. Easterly. The issue is coming up more often. Let us put
it that way.
I think part of the problem is that you are dealing with
acts that are 20, 40 years old, and the deadlines in those acts
have passed. And so this allows outside groups to set the
priorities for action, and I do not think they are the
priorities that will result in the best protection of human
health and the environment. But once the court speaks, we have
to follow the dictates of the court and use our resources for
those things until the next lawsuit comes and moves it around
again.
Thank you.
Mr. Collins. Thank you.
Very quickly because my time is coming up. Mr. Kovacs, does
H.R. 1493 limit in any way the ability of citizens to hold the
Government accountable?
Mr. Kovacs. No.
Mr. Collins. Mr. Walke, do you agree with that?
Mr. Walke. No, sir, I do not as detailed in my testimony.
Mr. Collins. Can you explain why? Is there anything here
that stops your organization or any from doing anything that
you have currently done?
Mr. Walke. Sure, it does.
Mr. Collins. How?
Mr. Walke. Absolutely it does.
Mr. Bachus. The gentleman's time has expired.
Mr. Walke. It prevents us from having private talks with
the Government to resolve a case where they have broken the
law.
Mr. Collins. Thank you, Mr. Chairman. I will hold back, but
I think the evidence is profoundly that this does in no way
stop the citizen from holding the Government accountable to
deadlines or other things. It just goes back to an issue of
transparency and openness.
Mr. Bachus. Thank you.
Mr. Conyers is recognized for 5 minutes.
Mr. Conyers. Thank you, Mr. Chairman.
Can we not just let the witness finish his--he was asked a
question. Our colleague ran out of time, and I am going to give
up some of my time to get the fuller response from Mr. Walke.
Mr. Walke. Thank you, Ranking Member Conyers.
As I said, the bill requires that really an unlimited
number of outside parties be allowed to join settlement talks
in contravention of governing Supreme Court law and provides
them with an opportunity through open-ended mediation that the
bill very carefully has no deadlines to govern, no timetables,
allows them to draw out the settlement discussions indefinitely
that under current law occur exclusively between the parties to
litigation, whether that is industry, States, or environmental
groups, and the Federal agency on the other hand. That is a
very clear and harmful change to not only governing judicial
case law but legislation and consistent practice under
administrative law for 4 decades.
Mr. Conyers. Thanks, Attorney Walke.
How do consent decree practices that have resulted in
beneficial settlements for all parties, including corporations,
and have produced good environmental outcomes--is that a fair
conclusion to draw?
Mr. Walke. That is absolutely fair. Taking just the Clean
Air Act as an example, Congress expected Americans to be
safeguarded against hazardous air pollution, including
carcinogens, from all responsible industry sectors by the year
2000. That has not happened and the only reason it has happened
faster, reducing hundreds of thousands of tons of pollution and
saving tens of thousands of lives, is because, first, citizen
lawsuits that overturned unlawful rules by the Bush
administration and, I would add, the Clinton administration, as
well as consent decrees that accelerated the obligation to meet
these overdue laws and to safeguard Americans.
Mr. Conyers. Now, we cannot have a hearing like this
without mentioning the Koch brothers and their roles in
contributing to the Competitive Enterprise Institute which
received $700,000 to come up with the Chamber of Commerce
report. What is the problem here?
The Chamber of Commerce report, as I have been advised, is
a pretty flawed study. Is that too critical of them?
Mr. Walke. That is my respectful view, Mr. Conyers, and I
detail it extensively in my testimony. I cannot and will not
speak to any funding or motivations behind the report, but what
I do know is that there has been a really concerted ideological
campaign with op eds timed in the paper this morning, in fact,
to correspond to a story line which has also been picked up to
block the nomination for the head of EPA by Republican Senators
that has seized upon this just factually and legally false
story line about so-called sue-and-settlement practices that,
when you get down and read the Chamber report, are just broad
side attacks on settlements in general and the right of
citizens to hold Government accountable for violating the law.
Mr. Conyers. Well, like you, I was not reading any
implications in by the Koch brothers' contribution to the
study, but you can draw your own suspicions, if you want.
Why does our legislature, the Congress, allow citizens to
file suits against other agencies?
Mr. Walke. Congress recognized that there was a very
powerful incentivizing role to ensure enforcement of the law
and safeguards by giving the public the right to hold
Government accountable. And this is an evenhanded right for all
citizens of this country. It has been praised by admirers
across the globe. Corporations may do so. States and
municipalities and public health groups. The Government, for
whatever reason, does not always comply with the law and it is
a laudatory feature of our democracy that we allow citizens to
hold the Government accountable when they do not follow the
law.
Mr. Conyers. Thank you, Chairman Bachus, for this
opportunity.
Mr. Bachus. Thank you.
Mr. Holding?
Mr. Holding. Mr. Chairman, I am going to yield a minute to
my colleague, Mr. Collins, so he can attempt one more attempt
to get a direct answer from Mr. Walke.
Mr. Collins. Mr. Walke, I appreciate it and I appreciate
your last comment because it basically answered the question.
And sometimes we ask inartful questions. I will ask it a little
more directly.
What my question was a moment ago--and I appreciate the
Ranking Member giving you a chance to elaborate. But my
question was very simple. It was does it stop the ability to
bring the initial lawsuit.
Mr. Walke. No, sir.
Mr. Collins. Thank you.
And it also does not affect the informal discussions before
a lawsuit is brought.
Mr. Walke. No, sir, that is incorrect. That is what I
disagreed with in my earlier answer and my response to Mr.
Conyers.
Mr. Collins. It does, and before the lawsuit is brought,
you can still brought, you can still have conversations. This
legislation does nothing to affect that.
Mr. Walke. What it does is it prevents the entry of the
consent decree into all manner of parties that have the ability
to obstruct the settlement of the lawsuit over a plain and
indefensible violation of law. And so----
Mr. Collins. I think we are talking about two different--if
you could answer my direct question, I would appreciate it. I
yield back to Mr. Holding.
Mr. Holding. I will reclaim my time.
This question is for Mr. Easterly. Mr. Easterly--is he
still on the line?
Mr. Easterly. Yes.
Mr. Holding. There he is. All right.
Mr. Easterly, it must take a lot for an organization of 48
States, the District of Columbia, and Puerto Rico to agree on a
specific set of reforms as the Environmental Council of the
States has regarding the sue-and-settle reforms. I would like
to ask you just how serious and deep are the States' concerns
about how much the States and the regulatory systems' needs and
effectiveness are being compromised by the current sue-and-
settle practices.
Mr. Easterly. I think we are all concerned that--you are
right. It takes a long time. It took about 2 years of
understanding the problem and talking about what possible
solutions to the problem are because we agree people need to
hold their Government accountable, but we believe we also need
a seat at the table for things that impact us. And this passed
at our last meeting this spring and it passed unanimously. So
all the States believe this is an issue, believe that it needs
to be addressed, and we appreciate that the Congress is trying
to do that.
Mr. Holding. Now, a follow-up, Mr. Easterly. In your view
in the long run, can optimal environmental benefits be achieved
if the expertise and views of the State co-regulators are not
heard and accounted for when consent decrees and settlement
agreements to establish new regulations are framed?
Mr. Easterly. I am sorry. I missed the first half of the
question. There was not any audio.
Mr. Holding. Certainly. In the long run, if you are trying
to achieve optimal environmental benefits from regulations and
you do not consult with State co-regulators, if they are shut
out of the process, just how successful are these regulations
going to be at achieving optimal results for the environment?
Mr. Easterly. Well, we do not think very much because if
you impose a requirement that we are not capable of doing,
well, okay, then my friend, John Walke, comes and institutes
litigation. But you need to be able to actually do the things.
You need to have the proper science. You need to have the
proper guidance, which is a Federal EPA responsibility usually,
because we all want to improve the environment. We all want
clean air, clean land, and clean water, and the science is one
of the issues. The science and law are not always completely in
alignment. When you have discussions with EPA, you can usually
get them to do the science until they are sued, and then they
have to fall back on what the law says, whether it actually
makes sense today or not.
Mr. Holding. And science and law, whether they are aligned
or not--it is certainly the case that when you are dealing with
49 different States and two territories, you know, the
situation in each of those places is not uniformly the same. So
a one-size-fits-all piece of regulation coming out of the EPA
might not work well all across the country. Would that be
correct?
Mr. Easterly. Yes, that is correct. One of the benefits of
there being 10 EPA regions and each region knowing more about
the States that are in their region--and then you do have
discussions on how best to meet the environment requirements.
Mr. Holding. Thank you very much.
Mr. Chairman, I will yield back.
Mr. Bachus. Thank you.
Ms. DelBene?
Ms. DelBene. I just want to thank all the witnesses for
being here and taking the time to be with us today.
Mr. Walke, you talked about three things in terms of the
issues, no substantiation in terms of the cases, the third
party intervention in terms of the number of folks who could
comment and that being unlimited, but you also talked about the
bill ignoring existing safeguards, and I wanted you to
elaborate on what those safeguards are.
Mr. Walke. Thank you very much.
Well, first of all, under a longstanding Department of
Justice policy, agencies are permitted from entering into
settlements or consent decrees that negotiate away authorities
reserved to them by Congress. This so-called ``Meese memo'' is
discussed in my testimony, and it is a safeguard against abuse
of consent decrees. And Mr. Cruden at last year's hearing
discussed this at length as well.
The product of settlement agreements and consent decrees is
simply the initiation of a process that is not closed. It is a
rulemaking process involving notice and comment opportunities
for the public, public hearings, the submission of comments,
the obligation of the agencies to respond to comments, all
consistent with the Administrative Procedure Act.
So the obligations under law that bind third parties and do
the things that we are hearing complaints about here are fixed
like bookends by the statute passed by Congress and the
regulations issued by agencies. The latter go through a full
panoply of procedural opportunities consistent with the law. It
is the middle of the bookcase, the consent decree, that
concerns just the failure to meet a mandatory statutory duty
and that does not fix any obligations upon third parties that
are not open for reconsideration by the agency during the
subsequent rulemaking process.
Ms. DelBene. And so feedback, for example, from industry,
et cetera would come as part of the rulemaking process.
Mr. Walke. Absolutely. And in these very rulemakings and
consent decrees that we are hearing complaints about, industry
participated fully. Industry filed lawsuits, all things that
they are allowed to do under the law.
I just want to note one thing. I wish my friend Tom were
here so I could shake his hand. But the ECOS resolution is very
instructive because it is equally unanimous in not supporting
industry intervention in agency settlement talks. It does not
support that, and yet that is what this bill does. It also does
not support, as he noted, the codification of legal obligations
for States to join settlements. I know that the organization
does not support--endorse legislation, but I just wanted to get
into the record that there is zero support and, in fact,
implied opposition to my mind to allowing industry intervenors
to join and obstruct settlement talks from ECOS.
Ms. DelBene. Thank you very much.
Mr. Easterly, given Mr. Walke's comment and the fact that
the definition right now in bill, an intervenor merely needs to
be a private person who is affected by the regulatory action
that is the subject of the lawsuit, so as this is written, it
would allow someone who breathes air to intervene in a case
that has the Clean Air Act rule at issue. Mr. Easterly, I was
wondering do you think that is a good thing. Are you
comfortable with the nearly unlimited intervention right?
Mr. Easterly. As John said, the Environmental Council of
the States does not do specific legislation. We are very
concerned about our ability--we are self-interested just like
everybody else--to be at the table when the settlement is going
to impose responsibilities on us or affect our existing
responsibilities. We did not take a position on any other part
of your question. I would say that 50 States would have at
least three different views on that.
Ms. DelBene. Thank you very much.
I yield back.
Mr. Bachus. Thank you.
Let me just clarify something. You are saying that the
employers, the people that hire American workers--your position
is they should not have a seat at the table?
Mr. Walke. They fully have a seat at the table when rules
that affect their business interests are being discussed. Mr.
Puckett's testimony was extremely sympathetic, and I really
feel for the situation with----
Mr. Bachus. But I am talking about in consent settlements.
I am just asking. Is it your position from responding to Ms.
DelBene that the employers, you know, the people that represent
the employees, you know, who hire the people in those
industries, that they should not have a seat at the table in
these consent settlements?
Mr. Walke. That is correct. They are not parties to the
lawsuit, and even as intervenors, consistent with longstanding
Supreme Court case law----
Mr. Bachus. Well, yes.
Mr. Walke [continuing]. Given that right.
Mr. Bachus. So, I mean, but yes, the Supreme Court. But I
am talking about your position clearly is that the folks who
hire American workers in these industries--they should not have
a seat at the table for these consent settlements.
Mr. Walke. Mr. Bachus, I will tell you that in my
experience it has really been the Washington trade associations
that are the most active----
Mr. Bachus. Well, yes, but I am not talking about them.
Mr. Walke. And I frankly do not think they always represent
the interests of the businesses----
Mr. Bachus. Yes, but those businesses, you know, do hire
people out there.
Mr. Walke. Well, sure they do.
Mr. Bachus. Do you think they ought to have a seat at the
table for these consent settlements? I mean, I am just trying
to get some--I think I heard you said no, you do not----
Mr. Walke. My answer was no.
Mr. Bachus. Okay, thank you.
Mr. Johnson, you have seniority, and I think on your side
you all go by seniority and not who comes first. So you are
recognized for 5 minutes, although Mr. Jeffries has been here
forever. [Laughter.]
All right, thank you, Mr. Chairman.
Now, this bill is The Sunshine for Regulatory Decrees and
Settlements Act of 2013. I think it is misnamed, Mr. Chairman.
It should be the ``Sunset for Regulatory Decrees and
Settlements Act of 2013.'' This bill has the Koch brothers'
fingerprints all on it. And passage of this bill would have a
dramatic and dastardly impact on air and water quality. This is
an anti-regulatory bill drafted by the American Legislative
Exchange Council, also known as ALEC. The purpose of the bill
is to paralyze the enforcement of clean air and clean water
legislation and rules and regulations.
Now, for those of you who do not know ALEC, ALEC, as
revealed by Lisa Graves of The Nation--Ms. Graves wrote as
follows: ALEC gave the Kochs its Adam Smith Free Enterprise
Award and Koch Industries has been one of the select members of
ALEC's corporate board for almost 20 years. She wrote that the
company's top lobbyist was once ALEC's chairman. And she also
wrote that as a result, the Kochs have shaped legislation
touching every State in the country. Charles Koch fellows and
interns stock ALEC and have gone on to direct ALEC task forces.
Mr. Collins. Would the gentleman from Georgia yield?
Mr. Johnson. No, I will not, not now.
Like ideological venture capitalists, the Kochs----
Mr. Collins. Would you yield later?
Mr. Johnson. Perhaps if I have time.
Like ideological venture capitalists, the Kochs have used
ALEC as a way to invest in radical ideas and fertilize them
with tons of cash.
Now, ALEC is an organization that is composed of corporate
members and State and Federal legislative members from across
the country, I think every State in the Union, many of which--
the majority of those Members on the Republican side of the
aisle are members of ALEC. And I dare say that perhaps some of
those who sit on the other side of this dais today are or have
been ALEC members.
And what ALEC does is puts the legislators and the business
community together. The business community supplies the
legislation. The legislators then go back and introduce the
legislation either in their State legislatures or in some cases
here in the Federal legislature.
Now, I would like to ask Mr. Easterly. Are you familiar
with the American Legislative Exchange Council, sir.
Mr. Easterly. I know that there is such a place, yes.
Mr. Johnson. And you have attended meetings affiliated with
ALEC or sponsored by members of the coal industry. Have you
not?
Mr. Easterly. I have been invited to speak at one meeting
that I am aware of, yes. I speak to everybody. I speak to
environmental groups. I speak to business groups.
Mr. Johnson. Well, you spoke also to an ALEC conference on
November the 18th of 2012. Did you not?
Mr. Easterly. Yes, I did.
Mr. Johnson. And the title of your comments were
``America's Clean Air Success Story and the Implications of
Over-Regulation.'' Is that not a fact?
Mr. Easterly. That is correct.
Mr. Johnson. And that conference was sponsored by members
of the coal industry. Is that not correct?
Mr. Easterly. I do not know that.
Mr. Johnson. You would not be surprised if it were, though,
would you?
Mr. Easterly. I do not know. I was invited to come by one
of the members of the Indiana legislature, and I try and do
what they ask me to do.
Mr. Johnson. Did they pay you for your comments?
Mr. Collins. Would the gentleman yield from Georgia?
Mr. Johnson. No, I will not.
Did they pay you for your comments, sir?
Mr. Easterly. No.
Mr. Johnson. I thank you. I will yield to the gentleman.
Mr. Collins. I thank my friend from Georgia.
Mr. Johnson. For a quick question.
Mr. Collins. For a quick question.
Well, the quick question that I have at this point in time
is again with the questions and the way it was designed with
some of us being members. There are also--it was named earlier
by, I believe, the Ranking Member--organizations that probably
you have been affiliated or others. I am trying to get
legislation----
Mr. Johnson. I have never been associated with an
organization like ALEC.
Mr. Collins. The NAACP?
Mr. Johnson. No way that it is like ALEC.
Mr. Collins. No. I am just asking. What I am saying is
organizations on both sides of all issues. The question I have
here is coming back to my reason----
Mr. Johnson. Well, at this point, ALEC is an organization
that specifically puts legislators together with corporate
interests and then takes them off to exotic locations for
seminars and training, if you will, and indoctrination. And
then it supplies the legislators with legislation which they
then come back and introduce. And thereafter, they are able to
get campaign contributions from those interests that they have
duly represented. And I believe that this----
Mr. Collins. At this point in time----
Mr. Johnson. Excuse me, sir. I am going to reclaim my time.
Mr. Bachus. Yes, and the time has expired.
Mr. Johnson. I believe that this legislation is a clear
example of the influence of the Koch brothers and the American
Legislative Exchange Council on the work that this body is
doing through this Committee.
And I will yield back.
Mr. Bachus. Thank you.
I think the Bill of Rights gives everyone the right to have
their political views known. I may want to get that out and
review it.
Mr. Johnson. May I respond?
Mr. Bachus. You have heard some of the back and forth. Do
you have any comments? You are the only representative at the
table who actually employs large numbers of individuals and
provides them, as I noticed your testimony, with profit
sharing, with at one time--I do not know. Do you still have a
free health clinic? You used to have a free health clinic and
health benefits and insurance. Do you have any comments?
Mr. Puckett. Well, it has been eye-opening listening to all
of this. And respectfully to both sides, I hear what you are
saying, but there is a problem. There is a problem. And I am
not sure how to fix it, but I know for our industry, the
previous process has not worked. If it had worked like it had
claimed, the first rule would have been fine. We did not have
access to any of that, and it came down to because of time.
Now, regardless of what caused that, these 50 folks I may have
to lay off do not care. You know, they just want a way to make
a living. So something needs a fix. And I have heard a lot of
comments that have credibility from both sides. But it is just
very difficult when it continues to mount on a small business
owner to try to just keep it afloat.
Mr. Bachus. I understand. I think every Member of Congress
has heard that a thousand times from small businesses and large
businesses in their district. I know, Mr. Walke, I think
whatever the cause, there is a problem.
Let me ask you this, Mr. Puckett. From what you know of Mr.
Collins' legislation, do you think--it may not prevent the
problems that we have, but do you think going forward it could
have a positive effect or will have a positive effect?
Mr. Puckett. Yes, sir, I do think so.
Mr. Bachus. Thank you.
Mr. Easterly, the Chamber of Commerce's study says that
sue-and-settle cases are funneled heavily into just two courts,
and that is the District of Columbia court here in Washington
and the Northern District of California. Does that give you any
unease? Do you think those courts, as opposed to, say, a
Federal district court in Indiana or Illinois would be better
positioned or be able to grasp or account for the needs of,
say, the State of Indiana, its employers, its employees, even
from a health standpoint? You testified earlier you did not
think optimal environmental benefits to the citizens can be
achieved without the participation of State environmental
regulators. But does that give you some unease, the fact that
you were shut out of these decisions and the settlement
negotiations that go into these consent settlements?
Mr. Johnson. Mr. Chairman, a parliamentary inquiry please.
Mr. Bachus. Okay, go ahead. The gentleman is recognized.
Mr. Johnson. Thank you. My question is when a Chair of this
Committee who has been asked to take the Chair by the Chairman
who then departed and the current Chair, having already
received 5 minutes for questions, then----
Mr. Bachus. The gentleman is right. The gentleman is
absolutely right, in fact, and I apologize. The proper
procedure is to recognize Mr. Jeffries and then to go a second
round of questioning. So I apologize. I will cease my
questioning. The gentleman has a valid point.
Mr. Jeffries is recognized.
Mr. Johnson. Thank you.
Mr. Bachus. I think that is what you were gong to ask.
Mr. Johnson. Yes.
Mr. Jeffries. Thank you, Mr. Chair, and thank you,
Representative Johnson.
Mr. Kovacs, with respect to your testimony and your
presence here today, it is my recollection that the Chairman of
the Judiciary Committee in his opening statements characterized
consent decrees as a deal under the cover of litigation. Do you
recall that statement?
Mr. Kovacs. I think you should just have the record read
back, but I do not recall that.
Mr. Jeffries. Do you think that the consent decree
phenomenon, as you understand it, is properly characterized as
deals under the cover of litigation?
Mr. Kovacs. In our report, we did not make any accusations
at all about anyone. We did not call it collusion. What we said
was that you have a process which eliminates----
Mr. Jeffries. Okay, reclaiming my time. Notice and
transparency.
Mr. Kovacs [continuing]. Eliminates----
Mr. Jeffries. Reclaiming my time.
With respect to the allegation that what the consent decree
explosion represents is collusion between regulated Federal
agencies and plaintiffs who sue those agencies, is collusion a
fair characterization of what is going on?
Mr. Kovacs. We have never characterized this as collusion.
The first time I heard of the word ``collusion'' was when I
read some testimony that was submitted by Mr. Walke. Prior to
that time, we had not used the word and it is not in the
report. And so that should be made very clear.
What we are talking about is a hole in the process whereby
the----
Mr. Jeffries. Okay, reclaiming my time.
With respect to your report, now this legislation is
designed to cover consent decrees in multiple areas. Is that
correct?
Mr. Kovacs. It covers agencies, yes.
Mr. Jeffries. Right. There is no limitation on the
Environmental Protection Agency. Correct?
Mr. Kovacs. It covers Federal agencies.
Mr. Jeffries. Okay. Now, does your report provide evidence
of issues with consent decrees in any other area than in the
area related to environmental regulations? It is a yes or no
question.
Mr. Kovacs. Yes.
Mr. Jeffries. It does provide evidence.
Mr. Kovacs. Yes.
Mr. Jeffries. Beyond the environmental area.
Mr. Kovacs. Well, the first case that moved out of the
environmental area was a consumer case on the Food Safety
Modernization Act and rather than being pivoted--resting on a
citizen suit in an environmental statute, it rested on section
706 of the----
Mr. Jeffries. The 71 cases that you document where there
were consent decrees, those 71 cases were in what area?
Mr. Kovacs. Fish and wildlife, forests, land management,
air, water, Chesapeake Bay, food safety. So it was a broader
group than just----
Mr. Jeffries. So essentially it was in the environmental
area plus one food safety case that you mentioned.
Now, let me ask you this. Do you think that in the absence
of any evidence in other areas, is it prudent for this
Committee to move forward with legislation that would cover
consent decrees, for instance, in the area of antitrust?
Mr. Kovacs. Congressman, we have a right to transparency as
American citizens. We have a right to know when our Government
is not obeying the law. We have a right to----
Mr. Jeffries. Okay, reclaiming my time.
You have got no evidence of consent decree problems in the
antitrust area. Correct?
Mr. Kovacs. We did not do the report--we did the report for
the consent decrees that we found where there was no
transparency, and every one we found was put in the report.
There was reference that we somehow----
Mr. Jeffries. Reclaiming my time.
No evidence----
Mr. Kovacs. We did not----
Mr. Jeffries. Reclaiming my time.
No evidence of consent decree problems in the area of civil
rights, even though this legislation would affect it. Correct?
Mr. Kovacs. That was not the purpose of the study. The
terms of the study were specifically put in the cover of the
study and what it was that we covered.
Mr. Jeffries. Reclaiming my time.
No evidence of consent decree problems in the area of
voting rights, even though voting rights consent decrees would
be covered by this legislation. Correct?
Mr. Kovacs. We did not look at voting rights. When you have
private parties versus private parties, they would not have
been covered by the report under any circumstances.
Mr. Jeffries. Right, but it will be covered by this
legislation. Correct?
Mr. Kovacs. If large segments of the country that had
standing to sue and were injured, it would cover them, yes.
What we are talking about is giving some notice to people who
have constitutional standing and have been harmed. If they have
been harmed, they should have notice, and if they have been
given notice, then they should have a right not to intervene
but at least to have the court hear why they have been injured.
This is about transparency and it is about the right to
intervene if you are injured.
Mr. Jeffries. One last question.
Mr. Bachus. And your time has expired, but I am going to
let you go on.
Mr. Jeffries. Okay, thank you, Mr. Chair.
One last question. Even though this legislation will cover
the consent decrees in the area of disability or employment
discrimination or voting rights, which I believe I mentioned,
your study is narrowly focused on 71 particular instances, but
is being presented today as evidence to support legislation
that would cover a wide range of areas under Federal
jurisdiction with respect to agencies. Is that right?
Mr. Kovacs. There is so much secrecy in Government in how
it handles lawsuits, whether it be these cases or the judgment
fund or anything else, that spending 18 months to try to find
out when our Government was sued and when they went into a
settlement without public notice is a very difficult process.
That is something the agencies should be doing. That is
something we have asked for, and there is no reason why a
Federal agency should not inform the Congress that they have
been sued X number of times and that they have paid attorney's
fees and that they were in the wrong and that they agreed to do
something. The American public have a right to know. All we are
talking about is a right to know that they are being sued, a
right to know that they are going to go into a consent decree
and change the rights of the American people, and a right, if
we are one of the injured parties, to intervene in that case.
I do not think asking for those basic rights is something
that should be so debated in this Committee. This is a basic
right to know what our Government is doing, and this is all we
are asking. I do not know why this is such a debate.
Mr. Jeffries. Thank you very much for that extended
statement.
Mr. Bachus. Thank you.
At this point, we will go into a second round of
questioning, and I actually had started out and had consumed 2
minutes of time. So we have the clock. We will put 3 minutes
on. I would like to continue with my line of questioning and
then other Members are going to be offered a second round of
questioning.
I think Mr. Jeffries brought up the Chairman of the full
Committee's remark where what he said was: far too often costly
new regulations are issued directly under the authority of
consent decrees and settlement agreements to force Federal
agencies to issue new rules. Regulators often cooperate with
pro-regulatory organizations to advance their mutual agendas in
this way. The technique used is simple: an organization that
wants new regulations alleges that an agency has violated a
duty to declare new rules. The agency and the plaintiff work
out a deal under the cover of litigation. The deal puts the
agency under judicially backed deadlines to issue the rule.
These deadlines often give the public and even States that co-
administer regulations little opportunity comment on proposed
rules.
So with that having been said--and it said those to be
regulated frequently do not know about these deals until the
plaintiff's complaints and proposed decrees or settlements are
filed in court.
Mr. Easterly, let me ask you this question. Chairman
Goodlatte said: these deadlines often give the public and even
States that co-administer regulations little opportunity to
comment on proposed rules. Do you find that to be true?
Mr. Easterly. Yes, we do. The amount of time it takes to
prepare competent technical comments is not small. In many
cases--if I had more time, I would get my notes out and tell
you, but we wind up with abbreviated public comment periods and
neither can we get in all the information we would like to get
in and then EPA does not have, because they have an abbreviated
schedule to issue the final rule, time to properly consider and
respond to those comments.
Mr. Bachus. Thank you.
And I would say to my colleagues you have talked about
people that have no interest being able to intervene. Mr.
Collins drafted this legislation to say if they have
constitutional standing, which means they have to prove to the
court that under the Constitution they have the right to be
informed of the negotiations. And we do not do away with the
constitutional--they still have to meet the dictates of the
Constitution.
Mr. Easterly, I was talking about that most of these cases
or a heavy number of them go into the District of Columbia or
the Northern District of California. Do you think those courts
are well positioned to grasp and account for the needs of State
co-regulators all across the country if the States are shut out
of the litigation and consent decrees or settlement
negotiations in those courts?
Mr. Easterly. I am not a lawyer. I am an engineer.
We are used to dealing with the D.C. Circuit because the
Clean Air Act requires most, but not all, Clean Air Act suits
to be filed in the D.C. Circuit. We were absolutely caught
flat-footed when a case out of California--and it probably was
the Northern District. I told you I am not a lawyer--required
EPA to act on our Visibility SIP's and the fact that they were
not done because we were waiting for other things. We did not
see that coming and we were not there.
Mr. Bachus. All right. Thank you.
I am going to yield to Mr. Collins the balance of my time.
He has been, I think, quite effective. My time has expired, but
I will yield every bit of that expired time to you.
Mr. Johnson?
Mr. Johnson. Thank you.
Mr. Kovacs, have you ever heard of the Competitive
Enterprise Institute?
Mr. Kovacs. Certainly.
Mr. Johnson. And you make reference to the Competitive
Enterprise Institute in your written statement to this
Committee. Is that correct?
Mr. Kovacs. Could you tell me what page?
Mr. Johnson. Page 1.
Mr. Kovacs. Oh, okay. We recognized they had done some
research for us.
Mr. Johnson. Okay. And are you familiar with Koch
Industries and the Koch Foundations?
Mr. Kovacs. Actually I have heard of them, but I have very
little knowledge of them.
Mr. Johnson. Are you aware that the Competitive Enterprise
Institute received more than $700,000 from various Koch
brothers affiliated organizations?
Mr. Kovacs. I have no knowledge of that.
Mr. Johnson. If that were true, do you think that such
contributions could influence the policies of the Competitive
Enterprise Institute?
Mr. Kovacs. Well, first of all, even you do not know--I do
not know. Maybe you know it. So I do not know that it is true,
and I am not going to guess about something I do not know.
Mr. Johnson. Well, I am just asking you assuming that the
Koch brothers have contributed more than $700,000 to the
Competitive Enterprise Institute, is it not logical to think
that they would have some influence on the results of the
research that that entity produced, which you are relying upon
today?
Mr. Kovacs. Well, first of all, Congressman, with----
Mr. Johnson. Is that a--if you could answer yes or no, and
then I will allow you to explain.
Mr. Kovacs. No. They would have no influence on this.
Mr. Johnson. The $700,000 would not matter?
Mr. Kovacs. They would have no influence. We hired one
specific person who was able to do--let me just be really
clear. This one person did a word search of the Federal
Register to pick up certain pieces of litigation as a means of
checking what we found in our legal search. So the search went
on two ways. One was we produced it from LexisNexus, Westlaw,
PACER, and we assembled it, and then we asked one simple thing.
We knew that there were some reports out----
Mr. Johnson. So you are going far afield of my question.
Mr. Kovacs. No. I am telling you how the report was done--
--
Mr. Johnson. I am just asking whether or not you think that
the $700,000 from the Koch brothers had any influence.
Mr. Kovacs. I know in this instance in this report, it had
none. I personally supervised this report.
Mr. Johnson. Thank you, thank you, thank you.
What is your stance? Let us see. You are the Senior Vice
President for Environmental, Technical & Regulatory Affairs at
the U.S. Chamber of Commerce. What is your view on the issue of
global warming?
Mr. Kovacs. I think I spent a long time with Mr. Cohen on
that issue. And we have been, over the years, very active in
promoting alternative technologies, energy----
Mr. Johnson. Well, do you believe that climate change
actually exists?
Mr. Kovacs. We have pushed as many forms of technology,
energy efficiency, and other ways in which to minimize electric
use as any institution in this city. Years before the
environmentalists picked up energy efficiency or alternative
technologies, we were lobbying the Bush administration to move
in that direction. We were the organization that pushed the
energy savings performance contracts literally from an
inception into being one of the smartest ways in which to
reduce energy. So I will put on the record against anyone's
record on that issue.
Mr. Johnson. Okay. All right. Thank you, sir.
Mr. Walke, is it not a fact that this legislation would
give the Koch brothers and their industries a right to
intervene in any regulatory action that could be brought, given
their interest in the energy field? Is that not correct?
Mr. Walke. Yes, Congressman, I believe it is. The breadth
of the language in the bill is astonishing and would allow a
really unlimited array of business interests, whether they be
the Koch brothers or others, to intervene. It is clear that the
Koch brothers systematic anti-regulatory agenda is evidenced by
the very interesting structure of this bill and also evidenced
by really kind of the open admission to how the Chamber went
about doing its report. It was not looking for impropriety. It
was looking for Internet searches of settlements in one
particular area of the law where the Chamber has historically
been highly opposed in court and in Congress and that is
environmental protection. So that speaks for itself that this
has been driven by an anti-enforcement agenda which we see the
Koch brothers devoted to with very high dollar support for
groups that share its ideological agenda.
Mr. Johnson. Thank you.
Mr. Bachus. Wow. Before I recognize Mr. Collins, you know,
I think it is very important for Members not to impugn the
honesty or the character of other Members or witnesses. And I
am not saying that anyone did that.
I will say that Mr. Easterly referred to that he was
entertained in an exotic location with ALEC, which kind of
brought my antenna up. And for the record, we are all enjoying
the exotic location of where that hearing was located. It was
Washington, D.C. So I am so glad that I get to work in an
exotic location.
Mr. Johnson. We do have some exotic locations in
Washington, D.C.
Mr. Bachus. Truly, the beach, the sun, the lack of
humidity.
Mr. Johnson. The beautiful Chesapeake Bay is a great spot
to go and fish.
Mr. Bachus. We have got to work even though we are in the
midst of a resort.
Mr. Collins?
Mr. Collins. Thank you, Mr. Chairman.
I just want to follow up briefly on that last question.
This provides an ability for those who have constitutional
standing to come forward and be a part of this, and it also has
to prove that it has standing with the court. It also has to
prove the Government was not representing its interest. So that
would affect anyone, including the aforementioned Koch brothers
to be a part if they meet constitutional guidelines. Is that
not true, Mr. Walke? You said yes just a second ago. I just
want to confirm it.
Mr. Walke. That is true.
Mr. Collins. Thank you.
I yield back, Mr. Chairman.
Mr. Bachus. Actually you have been recognized for your 5
minutes. Oh, you are through? Okay.
Mr. Jeffries, you will have the last opportunity for
questions.
Mr. Jeffries. Thank you, Mr. Chair.
Mr. Kovacs, am I correct that it is your testimony that
there is no evidence of collusion between plaintiffs initiating
these litigations that result in consent decrees and Federal
regulatory agencies?
Mr. Kovacs. We did not even look for collusion. The first
time that word was ever brought up was today. The purpose of
the study was to literally do a search, a legal search, to find
out how many of these cases existed, and that search got
started by the very simple fact that at a prior hearing, one of
the other sides said, well, there are very few of these. There
are only a handful. And we asked the very simple question, how
many. And then we started hearing----
Mr. Jeffries. Thank you. No. I asked the question simply
because in public comments that have been made by Members of
this body not necessarily present here today in support of this
legislation, the allegation has been made that the problem the
legislation seeks to address relates to back room deals or
collusion or conspiracy that has taken place to undermine the
capacity of American citizens or others to be involved in the
rulemaking that takes place at these Federal agencies. But I am
thankful that you are saying that that is not a position that
you agree with.
Now, would you take the position that under the Obama
administration there has been an explosion of consent decrees,
unlike in previous Administrations?
Mr. Kovacs. Well, look, consent decrees have been going
on--these types of agreements. And we would argue that when the
business community does it--they should not do it any more than
the environmental community. We have a problem with the process
because we think that transparency should be in the process.
During the Reagan administration, Attorney General Meese
outlawed the process with a very strong memorandum which has
later been morphed into some administrative language in the
CFR, but it really does not do anything. The old Meese one is
gone.
The records only go back, just so you know, only to 1995.
So that was the best we could do. And using computers to find
them what we were able to do using just the Clean Air act, is
it seemed that it was around 20 to 30 bopping around Bush,
Clinton, then----
Mr. Jeffries. Well, thank you. I am familiar with the
process.
Mr. Kovacs. Then in Obama it went up to around 60. So it
doubled or tripled.
Mr. Jeffries. Now, let me ask a question about consent
decrees just so that we have it in the record. Consent decrees
are essentially settlement agreements backed by a judgment.
Correct?
Mr. Kovacs. That is correct.
Mr. Jeffries. In other words, those consent decrees are
judicially approved. Is that correct?
Mr. Kovacs. That is correct.
Mr. Jeffries. So there really is no back room deal. This is
a courtroom agreement. Correct?
Mr. Kovacs. Well, that is exactly where the problem comes
in, and this is why we are so concerned because in so many of
these what we would call ``deadline cases,'' the real concern
is how you set the schedule. It is not really an administrative
decision there. It is really a discretionary decision because
that is how the rule is going to be put into effect and that is
how they are going to determine what they are going to do.
Mr. Jeffries. Now, there has been some reference to our
constitutional fabric, including in testimony that you
previously gave as it relates to what our citizens should be
legitimately demanding from the Federal Government. Now,
consistent with that constitutional fabric, am I correct that
under Article 3 of the Constitution, the Federal courts have
the authority to interpret the law? Is that a fair statement?
Mr. Kovacs. Actually if you are talking about the Federal
courts and you are talking about how we are structuring it
here, the Federal courts are courts of limited jurisdiction,
and the jurisdiction that they have comes from Congress. Right
now--and this is----
Mr. Jeffries. So you do not believe that the Federal courts
have jurisdiction as it relates to Federal agency regulation?
Mr. Kovacs. Pardon?
Mr. Jeffries. You do not believe that Federal courts have
jurisdiction as it relates to how to interpret regulations that
Federal agencies have issued or should issue pursuant to
congressional statute?
Mr. Kovacs. When a case is before the Federal court, they
certainly have the constitutional authority to interpret the
law and to interpret the regulations. The difficulty that you
have with these consent decrees is the court is treating these
the same as it would treat a private party. For example, if you
and I had a contractual dispute and we came to a settlement
agreement, we would just file that with the court, get a
consent decree, and it would be enforceable by the both of us.
Mr. Jeffries. Let me reclaim the balance----
Mr. Kovacs. Because I think this----
Mr. Jeffries. Let me just reclaim the balance of my time. I
want to give Mr. Walke an opportunity to respond to that
statement that was made.
Mr. Walke. Sure. I direct your attention to page 17 of my
written testimony. You know, the Chamber report resorted to
some eyebrow raising language for me impugning the Federal
courts, accusing them of ``rubber stamping agreements between
Federal agencies and outside plaintiffs.'' And I just think it
is unsubstantiated in the report, first of all, but it is kind
of of the same flavor that permeates their indictment of
Congress for passing these laws that give citizens the right to
hold Government accountable and courts rubber stamping them.
You know, everyone seems to bear a lot of fault except for
the industry parties that want to get into these settlements
and prevent the law from being enforced. I mean, this is what
this is about. It is not about transparency. EPA has started
putting up their notices of lawsuits on the Web. I think they
were late coming to that. I actually agree with Mr. Kovacs
about that. We should have transparency. We should not have
obstruction of law enforcement, and that is what this bill
does.
Mr. Jeffries. Thank you, Mr. Chair. I know my time has
expired.
Mr. Bachus. Thank you. We appreciate our witnesses'
testimony today.
Members now have the right to introduce into the record any
matter they would like to. And I have dusted off an old Law
Review article that I am familiar with since I wrote it. It is
called ``Federal Policy Responses to the Predicament of
Municipal Finance.'' And it was again published recently in the
Cumberland Law Review under the title of the ``Jefferson County
Sewer Debacle: A Case Study in Law, Public Policy, Municipal
Finance.''
Now, there were many reasons for the largest municipal
bankruptcy in the history of this country since Orange County,
California. One of the contributors to that was a consent
settlement that pretty universally went beyond EPA dictates and
environmental dictates. It was made between the county and
environmental groups and resulted in about a $4 billion
expenditure and what would have complied would have been about
a $2.5 billion expenditure and resulted in bondholders, some of
which were--California held some of those bonds. Teacher
retirement boards in 20 different States lost their money.
And I am certainly not saying that that was the sole cause.
There were numerous causes including dishonesty, waste,
incompetence, structure of the government, but the consent
settlement certainly played a major role in it. There were a
lot of people that were not at the table that got hurt as a
result of that.
So without objection, I would like to introduce that Law
Review article.
[The information referred to follows:]

__________

Mr. Bachus. But I do want to say I am not trying to
simplify it. I am not trying to say that that was the sole
reason, but it obviously was a contributing factor. But the
county had failed to properly clean up their waste, and so I am
not accusing those who brought the suit of any animus. But
there were some unintended consequences of consent settlement.
And I am not saying this legislation would have solved
that, but I am saying that if more people had been at the table
and more time and thought had been taken, we could have avoided
what was a debacle.
This concludes today's hearing. Thanks to all of our
witnesses for attending.
Without objection, all Members will have 5 legislative days
to submit additional written questions for the witnesses or
additional materials for the record.
We now have a whole lot cleaner rivers and streams in
Birmingham, Alabama too.
This hearing is adjourned.
[Whereupon, at 12:11 p.m., the Subcommittee was adjourned.]

A P P E N D I X

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Material Submitted for the Hearing Record