Sue and Settle: Regulating Behind Closed Doors

“Experience has shown that, even under the best forms of government, those entrusted with power have, in time, and by slow operations, perverted it into tyranny.”  — Thomas Jefferson

I have more research to do for my previously intended post, so this is a “filler”, of sorts. But, it’s not empty filler. It’s important, substantial stuff, and if you are like me, it’s likely to tick you off, too.

book_sekulow_0_1431695895One of the books I’ve been reading lately is Undemocratic: How Unelected, Unaccountable Bureaucrats Are Stealing Your Liberty and Freedom by Jay Sekulow, renowned constitutional attorney and Chief Counsel for the American Center for Law and Justice (ACLJ). In it, Sekulow highlights many examples of corruption, incompetency, and just plain irresponsibility that permeates the strongest agencies in the federal bureaucracy — which he calls the “fourth branch of government”. He has a couple chapters on the U.S. Department of Justice, and I decided to share with my readers some of the DoJ’s disturbing behavior from the chapter titled, “The Department of Justice — Permanently Rigging the Game”. At the very least, you will gain some insight into how the game is played by federal attorneys.

“In my career, I have sued the government countless times. And in virtually every case, the pattern is the same.

Immediately the federal government will file what’s called a ‘motion to dismiss,’ claiming that my lawsuit has absolutely no legal merit. Just filing that motion often results in substantial delays — months — as the trial court determines whether my case has merit.

In fact, this is exactly what happened when I filed suit against the IRS on behalf of forty-one conservative groups in twenty-two states…. The government, at taxpayer expense, hired two of the nation’s highest-priced law firms to defend IRS officials, and the DOJ represented the government. All three entities, the two law firms and the DOJ, filed a motion to dismiss, a motion that immediately brought our case to a halt while the judge considered their arguments. In that case, we waited several months for a judge to issue an order, and for each one of those months, the case was essentially frozen…. As of the date of this writing, the case is now on appeal, a process that can take years.

After a motion to dismiss is denied there comes a long period of discovery, in which the parties exchange documents relevant to the case and take depositions — sworn testimony under oath — of the key witnesses.

In my experience this is yet another contentious phase, with the government fighting to hold back documents, fighting to limit questions, and generally doing everything it can to make the process longer, more difficult, and more expensive.

Next, the government files something called a ‘motion for summary judgment’ — yet another attempt to dismiss the case. The government will argue that even after discovery there is not enough proof to support our claims.

It is usually only at this point — late in the case, after years of litigation — that the government will seriously think about settling…. Often even the settlements are hard fought, agreed to only after lengthy and contentious mediation sessions. The government will settle mainly for one reason and one reason only: the risks of litigation outweigh the costs of settlement.

Critically, a settlement creates a legally binding obligation on the government. So even a settlement is subject to constitutional limitations on federal power. In other words, the government cannot agree to violate the Constitution. It cannot agree to spend money in violation of federal appropriations. It cannot agree to create rules without proper regulatory authority.”

This all sounds very frustrating, aggravating, and makes me wonder if there is a better way. But, none of what Sekulow described so far is surprising. In fact, it sounds like what goes on in many TV shows and movies involving such cases. But, this next section is what makes me shake my head in wonder at the audacity of our own Justice Department….

“At least, that’s the way settlements are supposed to work.

To be clear, I don’t believe the government is doing anything inherently wrong when it fights back against litigation[, and] I don’t mind a hard legal fight. No lawyer should….

But what if the Department of Justice doesn’t always fight back? What if it not only fails to contest lawsuits, but actively cooperates with outside activists to create ‘settlements’ that yield new and burdensome rules that send millions of dollars to those same outside activists?

That wouldn’t be a lawsuit, that would be a racket.

government or private sectorIn May 2013, the U.S. Chamber of Commerce blew the lid off just such a scam, issuing a forty-nine-page report called “Sue and Settle: Regulating Behind Closed Doors.” The scheme it described should outrage every American who believes in democracy, the constitutional separation of powers, and fundamental fairness.

Here’s how the scheme works:

First, an outside advocacy group — Earthjustice, for example — will file a lawsuit under the nation’s extraordinarily expansive environmental regulations demanding that the Environmental Protection Agency take certain actions or issue certain regulations.

Ordinarily, as I just outlined, the Department of Justice will vigorously defend against lawsuits, but in the “sue and settle scheme,” the DOJ and the agency (typically the EPA) decide not to defend the government. Instead, they immediately enter into settlement talks. Critically, these talks take place behind closed doors, with zero public input.

The DOJ, EPA, and outside environmental group then agree (among themselves) to specific new environmental rules and then spell out those rules in documents called “consent decrees” or “agreed orders.” These consent decrees are then filed with a federal court and soon signed by a federal judge, giving them the force of law.

Taxpayers, who’ve just been cheated out of a fair and vigorous defense by their own Department of Justice, will also have to support the consent decrees that often contain provisions entitling the outside environmental group to substantial legal fees, fees that can add up to millions of dollars. [Here, Sekulow cites from a Forbes article by Larry Bell, citing millions of dollars awarded to environmental organizations, mostly paid to their attorneys. He continues…]

In addition, the Department of Justice forked over at least $43 million of our money defending EPA in court between 1998 and 2010. This didn’t include money spent by EPA for their legal costs in connection with those rip-offs, since EPA doesn’t keep track of their attorney’s time on a case-by-case basis.

On at least one occasion, the collusion between the environmental group, the DOJ, and EPA was so blindingly obvious that the lawsuit and the corresponding settlement documents were filed on the very same day. To be very clear, the lawsuit, the settlement, and the new regulations were a simultaneous injustice to the American people, who footed the bill for all of these expenses.

Even though it’s a left-leaning technique, the Obama administration did not invent this practice. It’s been embedded in our bureaucracy for years. Career ‘litigators’ (I hate to call any lawyer who colludes with his opposition and fails to zealously represent his client a true litigator) have been doing this for decades. True, the trend accelerated under President Obama, but not by much.

The Chamber of Commerce has traced the number of Clean Air Act sue-and-settle cases since the second Clinton term and found a distressing number since the Clinton administration, with a startling rise under President Obama. In Clinton’s second term there were 27 sue-and-settle cases, 38 in President George W. Bush’s first term (so the number increased under a Republican president), 28 in President Bush’s second term, and a whopping 60 in President Obama’s first term.

dollars-black-holeIn addition to paying the legal fees of the activist lawyers (not to mention the salaries of the DOJ staff that are busy waving the white flag), the rules that result from sue-and-settle cases can be extraordinarily costly to our economy. The Chamber of Commerce’s list of top ten most costly sue-and-settle regulations includes rules that cost $9.6 billion annually and one rule that would have cost a whopping $90 billion every year.

Fortunately, public outcry prevented the most costly of these from full implementation, but just one of the new rules, called the “Utility MACT Rule,” costs almost as much annually as the IRS Earned Income Tax Credit scheme covered in chapter 3.

Bureaucratic partisanship has real costs. And thsoe costs extend beyond dollars and cents. Sue-and-settle contributes to the perception that there are two systems of justice, one for the bureaucracy’s favorites — usually activists representing just the right sort of interest groups — and another, far more adversarial system for the rest of us.

And in no “case” is that bias more evident than in the massive, multibillion-dollar DOJ giveaway known as the Pigford scandal….”

I plan to share more examples — beginning  with the Pigford scandal — in two more posts over the next couple months. (Didn’t want to raise your blood pressure too high all at once.) Of course, if you are already intrigued, then click on the above link and order a copy of Undemocratic for yourself!

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