Environmental Settlements and Administrative Law

By Courtney R. McVean and Justin R. Pidot

The Obama Administration has come under increasing fire for its decisions to settle lawsuits brought by environmental organizations. Industry groups and Republican politicians claim that such settlements, negotiated behind “closed doors,” unfairly exclude regulated entities from regulatory decisionmaking that tangibly affects economic interests. Environmental organizations and their political allies made similar complaints during the Administration of George W. Bush, arguing that the federal government at that time settled lawsuits on terms overly favorable to economic interests and without the participation of environmentalists or the public.

Objections to environmental settlements are often expressed as process concerns. Opponents of an administration’s political direction argue that settlements allow agencies to make policy choices from the shadows while evading, or perhaps even violating, the process established by the Administrative Procedure Act, including the Act’s public participation requirement. This Article is the first to objectively assess those concerns, and it reveals that environmental settlements rarely circumvent norms of administrative law, and that when they do so, courts can—and do—intervene.

To establish that environmental settlements are consonant with administrative law, this Article develops a novel typology of settlements based on the types of obligations they impose on federal agencies. Settlements can involve agency commitment to resource allocation, procedural obligation, or substantive rule. The Article then considers unique aspects of those categories of commitment and explains why none are generally problematic from the perspective of administrative law. Many decisions made in settlements are of a type excluded from notice-and-comment rulemaking. Others involve preliminary matters that are subject to subsequent judicial challenge once the agency has reached a final decision. And others still involve opportunities for public notice and comment. In the rare circumstance where a settlement violates otherwise-applicable notice-and-comment requirements, courts already possess ample authority to either decline to enter the settlement beforehand or to vacate the settlement afterward. Administrative law demands no more.

Environmental settlements have distinct advantages because they provide federal agencies with the opportunity to control litigation risk and overcome bureaucratic inertia. In the absence of a compelling justification for limiting the discretion of agencies to enter into settlements, Congress and the public should allow environmental settlement practices to persist.

Cite as: Courtney R. McVean & Justin R. Pidot, Environmental Settlements and Administrative Law, 39 Harv. Envtl. L. Rev. 191 (2015).

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