Although the process of notice and comment rulemaking is familiar, typical descriptions may be incomplete. If the experience of the Environmental Protection Agency (EPA) is a guide, promulgation of an initial “final” regulation is merely the first round in a larger process in which the content of a truly final regulation is negotiated as part of a settlement of challenges to the initial rule. These privately negotiated settlement agreements may, both as a legal and practical matter, constrain the agency’s subsequent rulemaking implementing the settlement agreement.
This article addresses issues associated with promulgation of rules pursuant to a negotiated settlement agreement. It begins with a review of the role of settlement agreements in the rulemaking practice at the EPA, one of the largest regulatory agencies in the country. The article will examine the types, frequency, and possible effects of the settlement agreements on the rulemaking process at the EPA. The article next discusses the relation between rulemaking by settlement agreement and proposals for ‘negotiated’ rulemaking. Differences between the two processes suggest both the strengths and weaknesses of settlement agreements. The article next will consider the legal issues relating to the settlement process and to the final rules developed pursuant to these agreements. Although final second round rules should be valid, there are a number of steps, relating both to the structure of the agreement and to the courts' role in supervising the process, which should be taken to ensure that the settlement process is not abused. This article concludes with some suggestions for supervision of the process. It contends that rulemaking through settlement agreement, if properly supervised, may be an appropriate and effective way to implement agencies' rulemaking responsibilities.
Georgetown Law Journal
Jeffrey M. Gaba, Informal Rulemaking by Settlement Agreement, 73 Geo. L. J. 1241 (1985)