As noted in this space, on October 16, 2017, EPA Administrator Scott Pruitt issued a memorandum announcing new policies to avoid what he considered inappropriate approaches to resolving litigation, commonly referred to by the rubric “sue and settle.” The major changes in policy included inviting participation by all interested parties in any settlement negotiations, more aggressive defense of claims based on alleged non-discretionary duties or deadlines, and refusal to pay attorneys fees to plaintiffs in connection with settlements. That policy will soon be tested.

Relying in part on the arguments in that memorandum, the State of North Dakota sought reversal by the DC Court of Appeals of a lower court decision denying it the right to intervene to challenge a settlement by EPA over EPA’s failure to meet statutory time deadlines for regulatory review. In Environmental Integrity Project v. Pruitt, the DC Circuit in an unpublished opinion rejected the State’s appeal, even though it recognized that states are entitled to “special solicitude.” The Court held that the State did not show the necessary impairment to its interests under FRCP Rule 24(a) because the settlement only affected EPA’s timing of a decision to either revise a regulation or determine that no revision was required. In that instance, the State could at best assert the possibility of potentially adverse regulation; not a legally protected interest.

What It Means

The outcome here will not affect the policy change adopted by the Trump Administration. Viewed from the Administration’s perspective, the outcome here demonstrates the need for an opportunity outside the litigation process for stakeholders such as States to involve themselves in deadline settlement discussions. However, it also supports the arguments of critics that what the Administration has characterized as “sue and settle” cases that effect substantive change without involvement of outside parties, in fact are cases that do not present enough substantive impact for courts to allow intervention of right under traditional principles.