Another question about the coal-ash settlement: Was it a sue & settle scheme?

As I said yesterday, there are many, many questions about settlement agreement on coal-ash cleanup between Gov. Roy Cooper’s Department of Environmental Quality, environmental groups, Duke Energy, and not ratepayers. This was all set into motion by DEQ’s sudden April 2019 order to Duke to excavate the remaining coal-ash basins.

It sounds like a classic case of “sue and settle.” What is “sue and settle”? It’s an illiberal tool used by outside pressure groups in cahoots with willing government agencies to bring about a regulatory change they know they could not get through proper political channels. (The normal political process has checks and balances to protect everyone’s rights and interests, you see.)

Here is how David French describes it in his review of John Fund and Hans von Spakovsky’s book, Obama’s Enforcer: Eric Holder’s Justice Department:

Here’s how the scheme works: Unwilling or unable to work through Congress or the conventional regulatory process to pass new environmental laws, a radical environmentalist group (like, say, Earthjustice, the former employer of a past head of ENRD) files a lawsuit seeking a court order enforcing an entirely new environmental standard. The DOJ, rather than vigorously defending existing law, chooses to surrender and then cooperates with the outside activist group in crafting an agreed settlement that binds the government to new environmental standards. In at least 60 cases between 2009 and 2012, the DOJ, in cooperation with the EPA, chose not to defend against environmentalists’ claims, agreeing instead to settle the lawsuits by signing “consent decrees” that essentially function as new environmental regulations.

This “sue and settle” practice resulted, Fund and von Spakovsky report, in “more than 100 new federal rules, many of which are major rules with estimated compliance costs of more than $100 million annually.” And, because the DOJ and the EPA “lost” the cases (by refusing to mount a defense against the lawsuits), the radical environmental group is entitled to a substantial attorneys’-fee award.

As you can easily guess, this “sue and settle” process harms the people who otherwise would’ve been protected by the normal political process with its checks and balances.

In the coal-ash cleanup case, it’s the power customers. Given that electricity is a basic human need, not a luxury item, used by everyone in North Carolina, rich or poor, that’s quite a harm.

It’s for that reason that Cooper, back when he was attorney general running for governor, specifically sought to protect consumers from being saddled with the coal-ash cleanup costs:

I remain concerned that this proposed law will allow the public utility to unfairly charge customers for the cost of these actions. … I realize this issue is complicated and that utilities are entitled to reasonable cost recovery in most instances. However, in this situation it is better to come down on the side of the consumer.

Why Cooper completely reversed himself and now socks consumers with coal-ash cleanup costs is one of the many questions about this settlement.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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