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January 11, 2016

Sue, Settle And The Scrub Act: U.S. House Passes MSCI-Supported Bill To Improve Transparency In Federal Regulatory System

On a 244 to 173 vote last Thursday, the U.S. House passed H.R. 712, the Sunshine for Regulatory Decrees and Settlements Act of 2015, which would crack down on a process called “sue and settle.” 

Using the “sue and settle” tactic, pro-regulatory interest groups sue various federal agencies, most frequently the Environmental Protection Agency, claiming regulatory inaction. The agency then settles with the group, signing a consent degree that requires the agency to issue a new rule. 

The Metals Service Center Institute opposed the “sue and settle” process because it erodes the public’s participation in the rulemaking process. According to Law360, “The settlement agreements often give only short timelines for agency action, cutting off the usual public notice and comment requirements for new rulemakings …” Rep. Doug Collins (R-GA), H.R. 712’s sponsor explained in “sue and settle” cases there is often “no participation by affected parties like states and local governments, small businesses, or farmers – everyday Americans just trying to make a living or go about their daily business” and the parties affected by the regulations “are often kept completely in the dark about the new rules, the details of which can come as a complete surprise.” 

If enacted, H.R. 712 would:

  • Require federal agencies to give notice of potential sue-and-settle litigation;
  • Require courts to look favorably upon motions to intervene in sue-and-settle lawsuits;
  • Place negotiations pursuant to sue and settle suits under the auspices of a third party; and
  • Require federal agencies to publish any negotiated settlement in the Federal Register for notice and comment.

With its partners at the U.S. Chamber of Commerce, MSCI will continue to support H.R. 712 and reform of the “sue and settle” process. (The U.S. Chamber of Commerce released a report on “sue and settle” in 2013.) It is not clear when, or if, the Senate will consider H.R. 712. 

Also last Thursday: the U.S. House passed the Searching for and Cutting Regulation that are Unnecessarily Burdensome (SCRUB) Act, which “would establish a bipartisan commission to review existing federal regulations and identify rules that should be repealed.” The SCRUB Act passed the House on a 245 to 174 vote. Click the link to see how your member of Congress voted.