Industry and environmental advocates disagreed sharply on Wednesday during a Congressional subcommittee hearing in Washington, DC, about an increasingly common practice of environmental legal settlements morphing into de facto regulation.

The hearing, “Examining ‘Sue-and-Settle’ Agreements Part I” was convened by two House subcommittees. Testimony was offered 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 frequently used legal tactic.

House subcommittees for Intergovernmental Affairs and the Interior, Energy, and the Environment are examining how advocacy groups and federal agencies have essentially “regulated through consent decrees” by citizen lawsuit provisions of environmental law. Those opposed to the process are seeking to assess how protections for transparency and stakeholder involvement in environmental regulations may be circumvented by settlement negotiations that are confidential and nonadversarial.

Rep. Blake Farenthold (R-TX), who chairs the Interior subcommittee, talked about “abuses and manipulation” of the sue-settle tactics that have been used in lawsuits concerning the federal Endangered Species Act, as well as the Clean Water and Clean Air acts, among others.

The Chamber’s William Kovacs, senior vice president of environment, technology and regulatory affairs, emphasized that the business community generally has been concerned about the issue of environmental litigation abuses for a decade.

“These sue and settle agreements occur when an agency chooses not to defend lawsuits brought by activist groups, and the agency agrees to legally binding, court approved settlements negotiated behind closed doors – with no participation by other affected parties or the public,” Kovacs said.

The U.S. Chamber agrees with the current EPA Administrator Scott Pruitt that “regulation through environmental litigation is wrong.” Pruitt’s new approach at the federal agency “is much welcomed and a needed step in the right direction.”

In agreement was Ken Holsinger, a principal in Denver-based Holsinger Law LLC, who told the subcommittee that he has witnessed “the damaging impacts sue-and-settle litigation have had on landowners, agricultural entities, water providers, and energy producers” in his law practice, which concentrates on land, wildlife and water issues.

Holsinger urged Congress to reign in “strong-arm litigation tactics” by environmental litigants. “Scarce resources are being wasted on litigation driven by a handful of activist groups with little or no real conservation benefits,” he said, noting that a “small number of folks are gaming the system.”

Holsinger said he supports reforms such as those proposed in the pending Sunshine for Regulatory Decrees and Settlements Act of 2017. He said congressional action is “long overdue.”

An opposing view was provided by Denver-based attorney Justin Pidot, associate law professor at the University of Denver who specializes in environmental, natural resources and administrative law. He told the subcommittee that he thinks the use of the term “sue-and-settle” is pejorative and used by environmental opponents to connote something “unseemly.”

“The accusation is sometimes made that such settlements are collusive,” he said. “In my experience, this could not be further from the truth.”

Federal attorneys involved in the settlement process at the U.S. Justice Department and various agencies are “among the most dedicated civil servants,” Pidot said. The legal agreements stemming from lawsuits “conserve federal resources and provide the United States with an opportunity to ameliorate the effects of a likely litigation loss when legal risk is high…

“Those are the factors that lawyers for the United States consider, and those are the factors that must be demonstrated for a settlement to be approved.”