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North Dakota Supporting EPA Directive to Avoid 'Regulation by Litigation'

North Dakota officials are supporting the Trump administration's pushback against the common use of "sue-and-settle," in which environmental groups and federal agencies reach court settlements that become de facto regulations.

In a pending case in which the U.S. Environmental Protection Agency (EPA) is supposed to review the rules for oil and natural gas operators' wastewater disposal practices, North Dakota is supporting EPA Administrator Scott Pruitt’s directive earlier this month, which declared "the days of regulation through litigation are over," issuing requirements to end sue-and-settle practices.

The federal court case dates to 2016, when state officials expressed concerns about the “strict timeline” regarding a settlement between environmental groups and the EPA over oil and natural gas waste handling.

Pruitt in his directive noted that in recent years special interest groups "have used lawsuits to force federal agencies -- especially EPA -- to issue regulations" advancing their interests and priorities on their specified time frames.

Last December, the U.S. District Court for the District of Columbia granted the joint motion of the Obama administration and plaintiff environmental organizations for a consent decree to settle litigation over EPA's alleged failure to update rules for managing oil and gas drilling waste under the Resource Conservation and Recovery Act (RCRA). The consent decree was issued in Environmental Integrity Project v. McCarthy, No. 1:16-CV-00842-JDB.

The settlement required the incoming Trump administration to either propose by March 15, 2019, a rulemaking to revise Subtitle D criteria regulations of RCRA covering oil and gas wastes at 40 Code of Federal Regulations Part 257, or sign a determination that revising the rules was not necessary.

North Dakota officials basically support the argument that Pruitt's directive backs up its filing to the circuit court to overturn the consent decree. The state argues that the settlement is imposing obligations on EPA that exceed the scope of the existing law. Oral arguments are scheduled for Nov. 7 in the circuit court.

"Administrator Pruitt's directive and memorandum directly implicate the issues raised by North Dakota in this appeal," said North Dakota Attorney General Wayne Stenehjem in a court filing. "Pruitt's admonition that U.S. EPA should not enter into settlement agreements that impose duties that extend beyond what the applicable statute requires aligns with North Dakota's argument that the settlement in this case imposed obligations on EPA that go beyond what is required” under RCRA.

In recent Congressional hearings, industry and environmental advocates have disagreed about the way environmental legal settlements have at times morphed into de facto regulation. A hearing last May by two House subcommittees offered testimony by the U.S. Chamber of Commerce and energy/agriculture attorneys to support legislation that would reduce reliance on using settlement agreements in environmental lawsuits. A Denver environmental law professor also defended the legal tactic.

Among the requirements in Pruitt's recent directive is the provision that proposed or modified consent decrees or settlements be subject to 30-day comment periods and public hearings.

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