by John Fund
The Gibson Guitar fiasco put a spotlight on a little-known division of Justice, the Environment & Natural Resources Division (ENRD). If you ask most Department of Justice veterans (the ones who will give you a straight answer) which division is full of the craziest, most ideologically driven lawyers, they will immediately say the Civil Rights Division. But if you ask them which division comes in second, they will tell you it is ENRD, which boasts on its website that it is “the nation’s environmental lawyer, and the largest environmental law firm in the country.”20 When one of the authors worked in the Civil Rights Division at the Justice Department, he was told by a lawyer who worked in ENRD that all of the lawyers there thought of the ENRD as simply an extension of Greenpeace, the Natural Resources Defense Council, or the Sierra Club. They did not think of themselves as government attorneys who are supposed to act in the best interests of the public, both individual citizens and businesses, by enforcing our nation’s environmental laws in a fair and judicious manner.
That their extremism has simply accelerated under the Obama administration is no surprise—the ENRD in June 2013 was headed by Acting Assistant Attorney General Robert Dreher, the former general counsel for the Defenders of Wildlife and a former attorney at the Sierra Club Legal Defense Fund (now Earthjustice). By an odd coincidence, Earthjustice, Dreher’s former employer, has been the biggest beneficiary of attorneys’ fees paid out by American taxpayers in litigation against the Environmental Protection Agency (EPA) and lawsuits handled by the ENRD when it represents the EPA (more on that later).
All Americans want to protect wildlife and foster a cleaner and healthier environment. And it is ENRD’s job to enforce the laws that Congress has passed to do exactly that. But it is not ENRD’s job to do so in a way that goes beyond the law, abuses its authority, criminalizes ordinary conduct, and benefits the political allies of the president who holds the White House.
As Kim Strassel of the Wall Street Journal has pointed out, the EPA—and thus the ENRD lawyers representing the agency—has suffered an “embarrassing string of defeats” in the courts.21 Those “judicial slapdowns are making a mockery of former Obama EPA Administrator Lisa Jackson’s promise in 2009 to restore the [EPA]’s ‘stature’ with rulemaking that ‘stands up in court.’ ”22 Part of the job of a lawyer, including a government lawyer, is telling clients that the positions they are taking are outside of or not in accord with the applicable law. This is particularly important for Justice Department lawyers who have an obligation to ensure that the agencies they represent are not acting beyond the authority granted to them by Congress. But because most ENRD lawyers agree ideologically with the extreme and often radical positions taken by the EPA and other federal agencies like the Department of the Interior, they are not willing to objectively assess the legality of the government’s misbehavior and regulatory overreach.
This caused the U.S. Court of Appeals for the Federal Circuit, which has jurisdiction over many claims made against the federal government, to recently accuse the Justice Department, and specifically lawyers in the ENRD, of making legal arguments in court that were “so thin as to border on the frivolous.”23 They made such “frivolous” arguments in a rails-to-trails suit in which the federal government was making vigorous efforts to avoid paying landowners any compensation for the portions of their land taken through a program under the National Trails System Act. As the Federal Circuit Court of Appeals said, it could not understand the “sturm und drang” (storm and stress) pushing the Justice Department to fight lower-court judgments against the government. The rails-to-trails program is one that takes railroad corridors established by easements through private land that have been abandoned by the railroads and converts them to biking and hiking trails.
No one doubts the power of the government to take private land for a public purpose, but the Fifth Amendment requires the government to pay “just compensation” for such a taking. However, the Justice Department under Eric Holder has refused to accept that situation and has instead taken what many have called a “scorched earth” approach, arguing in court that private landowners don’t actually own their property that is taken for the environmentally popular rails-to-trails programs. This position is contrary to a 1990 Supreme Court and a subsequent Federal Circuit Court of Appeals decision that the government is taking private property when it converts a railroad line to a trail, as opposed to the government’s claim that the property reverted to the government, not the original property owner, when the railroads stopped using the property.24
After these decisions and several others, according to one analyst, Cecilia Fex, the Justice Department “started stipulating liability” for taking private property, making the only issue in such seizure cases what “just compensation” would be for the homeowner.25 But in recent years, the Justice Department has “resurrected its challenges to the government’s liability . . . [and] in an apparent coordinated litigation strategy, the DOJ routinely raises arguments that the Federal Circuit has previously rejected. Worse for the attorneys and the courts who do not deal with these [types of] cases, the DOJ advances these arguments without acknowledging the contrary law that was established during its earlier attempts to escape the government’s liability.”26 In other words, in addition to trying to prevent private homeowners from being compensated for their property being taken, the ENRD lawyers violate basic ethics requirements by failing to inform courts of controlling authority that is contrary to the position the government is taking. Such outrageous behavior is per se unethical under professional codes of conduct.
Some of ENRD’s arguments aren’t just frivolous, they defy common sense. In one recent case, the Federal Circuit rejected a claim by Justice lawyers that the statute of limitations barred homeowners from making a claim for compensation even though the government had not informed the homeowners of the government’s intent to use their land for a trail, the very action that normally triggers the right of the homeowner to make a claim against the government.27 In fact, Thor Hearne, a lawyer who has represented numerous landowners in these cases, says the government often fails to notify homeowners and many “owners only learn that their property has been taken when a bulldozer shows up and begins grading a public recreational trail across their land.”28
And the Justice Department’s strategy to fight these just claims is costing taxpayers big money. Under the Uniform Relocation Assistance Act, the federal government has to reimburse the litigation expenses of homeowners when they win a case, including attorneys’ fees, as well as pay them compensation for the government’s delay between the date the property is taken and the date the owner is finally paid. In one case in Idaho where the homeowners finally beat the government, a federal court awarded them $2.24 million in attorneys’ fees and costs in addition to $883,312 in “just compensation” for their confiscated property. So the Justice Department’s senseless litigation strategy increased the cost to the American taxpayer of this exercise of eminent domain by more than 250 percent.29
Thor Hearne had a case in which his client, a small village, agreed to forfeit any compensation for the strip of land the government took. All the village wanted was for the feds to agree to mark the boundaries of the land it had taken. But the Justice Department lawyers refused unless the village first sued the government and won on the issue of liability—which was unquestioned under federal law. So the village sued, won, and taxpayers had to pay the village $19,000 for the strip of land and almost $300,000 in attorneys’ fees.
As Hearne says, “the Justice Department’s history of repeatedly taking frivolous and losing arguments—and recycling these same losing arguments—can only be explained by an intentional strategy of trying to make this litigation so lengthy and so expensive that landowners will let the government simply take their land without being” compensated. Hearne adds that the Justice Department should be interested in not just seeing that citizens are justly compensated, but that the government does it “cost-efficiently using taxpayer resources to
promptly resolve the claims.” That has not been his experience with ENRD lawyers. He says he is aware of at least twenty cases that Justice lawyers have lost in which they made “essentially the exact same losing argument” each time.30 The cost to taxpayers of the obstreperous behavior of ENRD lawyers has been enormous. A former Justice Department lawyer who also worked at the EPA told one of the authors that based on his experience, the ENRD lawyers are “zealots” who have a “religious fervor” for environmentalism—they see no reason why the government should have to pay private landowners for anything that helps further their green agenda, and they act accordingly.
Often Justice uses its power over private landowners, business owners, and other parties to indulge in its habit of sending money to a favored organization of its own choosing. Part of the Gibson Guitar settlement required Gibson to “make a community service payment of $50,000 to the National Fish and Wildlife Foundation.” In other words, instead of making a payment to the U.S. Treasury Department for the American taxpayer, Justice in essence extorted money from Gibson Guitar to help fund the NFWF, a congressionally created private charity that hands out funds “to some of the nation’s largest environmental organizations, as well as some of the smallest,” according to its own website.
So basically, the Justice Department used its authority to engineer a settlement of government claims requiring the defendant to provide benefits to a private group that was not involved in the lawsuit and was not injured by the defendants’ actions. These kinds of settlements create a conflict of interest for government lawyers, since their client is the federal government and they are supposed to be acting in the best interest of the public at large, as expressed through the statutes passed by Congress. It is an abuse of their authority to provide a windfall to an outside group instead of the American taxpayer and the government. This is a conflict of interest that Eric Holder simply ignores.
But then, Justice has done a lot of funding of private advocacy groups in its environmental litigation. In 2011, the Government Accountability Office issued a report on the costs of lawsuits filed against the EPA, which were defended by the Justice Department.31 Under various federal statutes, the EPA and the Treasury Department are required to award attorneys’ fees to plaintiffs that successfully challenge the EPA. The intent of such statutes is a good one—reimbursing the costs of those who have to sue the government when bureaucrats do something wrong—but that is not what is happening in the environmental area. Instead, the Justice Department and the EPA have engaged in collusive litigation with political allies and friends of the Obama administration in order to implement regulations and new requirements without the regular process, including public notice, and at the same time using taxpayer money to fund the budgets of liberal environmental organizations.
According to the GAO report, Earthjustice, the former employer of Robert Dreher, who was the acting head of ENRD at Justice in 2013, received 32 percent of the attorneys’ fees paid to EPA litigants. When combined with the attorneys’ fees received by the Sierra Club and the Natural Resources Defense Council, these three groups received 41 percent of the millions of dollars paid out by the American taxpayer to environmental groups who were successful in their lawsuits against the federal government. As Senator David Vitter (R-LA), a member of the Senate Committee on Environment and Public Works, said, “The GAO report shows that taxpayers have been on the hook for years while ‘Big Green’ trial lawyers have raked in millions of dollars suing the government. Even worse, because of sloppy record keeping by the EPA and other agencies and a lack of cooperation by the Justice Department, we’re not even sure how bad the problem really is.”32
Another serious problem with ENRD is its handling of lawsuits over agency regulations. Rule-making by federal agencies is regulated by the Administrative Procedure Act33 and other statutes, such as the Clean Air Act, which outlines its own procedures for creating new regulations. The purpose of these rules is to provide public notice of an agency’s intent to promulgate a new regulation and give an opportunity for comment by affected parties. Federal law also very importantly requires the federal agency to “reference the legal authority under which the rule” is being proposed, in order to ensure that agencies stay within the legal authority that gives them the power to act.34 All of this is intended to prevent arbitrary and capricious actions by unaccountable federal bureaucrats.
Usually, the Justice Department vigorously defends the federal government and agencies when they are sued. But in at least sixty cases between 2009 and 2012, the EPA through its Justice Department lawyers “chose not to defend itself in lawsuits brought by special interest advocacy groups” and in each case “agreed to settlements on terms favorable to those groups.”35 Those cases resulted in “more than 100 new federal rules, many of which are major rules with estimated compliance costs of more than $100 million annually.”36 That is more than double the number of lawsuits settled during the second term of President George W. Bush (only twenty-eight settlements). But almost all of the most costly of EPA’s rule-makings have been settled by Justice Department lawyers through consent decrees without defending the suit. With such “losses,” the lawyers of the ENRD are either professionally incompetent or willing participants in betraying their professional obligations to represent the public rather than the interests of advocacy groups and the particular policy choices of the administration.
The advantage to the Obama administration is that these lawsuits and resulting settlements, known as “sue and settle,” provided an end run around the normal agency rule-making process, cutting out the public and affected parties, like the business community, that might protest or try to stop a bad regulation. Neither the EPA nor the Justice Department discloses the filing of such a lawsuit by a group like the Sierra Club until the case is over, when a settlement agreement has been negotiated and filed with the court. Often this allows the administration to issue regulations or requirements that go beyond their statutory authority.
Thus they can use a legally binding, court-approved settlement agreement “negotiated behind close doors” as their authority to issue, for example, a new regulation on a specific timetable and with specific requirements. As one critic says, “there shouldn’t be secret deals in the determination of how someone regulates a sector, an industry, a pollutant.”37 But by colluding with their political and ideological allies in the radical environmental movement, the administration can essentially short-circuit the regulatory process and implement whatever rules the administration wants by throwing the case, failing to defend, waving the white flag of surrender, and agreeing to a settlement that has what both sides (who are really on the same side) want. There is no participation by the public, the business world, or anyone else in the national economy who would be affected by the new regulation.
Unfortunately, the vast majority of courts will simply rubber-stamp a settlement agreement without looking at its substance or questioning the circumstances under which a group such as Earthjustice and the Justice Department negotiated the deal. At that point the federal statutes awarding attorneys’ fees to winning parties allow taxpayer funds to be transferred to the organizations that initiated the friendly lawsuits the administration wanted filed. The administration gets the burdensome new rules it wants without having to go through the normal transparency and review process, while at the same time helping its political allies. And the American taxpayer pays for it all.
As has been the practice of the Obama administration in many different areas, “sue and settle” actions expand the power of the executive branch and executive agencies at the expense of congressional oversight and authority, including over budget appropriations. The court-approved settlements help drive an agency’s budget, taking it out of the hands of elected representatives in Congress. Such court decrees result in congressionally directed policies being “reprioritized by court orders that the agency asks the court to issue.” This allows an agency like the EPA to “tell Congress ‘we are acting under
court order and we must publish a new regulation.’ ”38
According to the U.S. Chamber of Commerce, which is the largest trade association in the country, this collusive “sue and settle” process allows an agency like the EPA to intentionally transform itself
from an independent actor that has discretion to perform its duties in a manner best serving the public interest into an actor subservient to the binding terms of settlement agreements, which includes using congressionally appropriated funds to achieve the demands of specific outside groups. This process also allows agencies to avoid the normal protections built into the rulemaking process—review by the Office of Management and Budget and the public, and compliance with executive orders—at the critical moment when the agency’s new obligation is created.39
A graphic example of the conspiracy between the administration, Justice Department lawyers, and environmental groups is the litigation filed in December 2008 against the EPA by a coalition of environmental organizations, American Nurses Association v. Jackson. The suit claimed that the EPA had failed to issue “maximum achievable control technology (MACT)” emissions standards for “hazardous air pollutants” from coal- and oil-fired electric utility plants. This was a very questionable claim, and in fact the Bush administration had taken the position that there was no such requirement under the applicable law.
But without notice to the public or the industry members who had been allowed to intervene in the case by the court, the EPA and the environmental groups negotiated a settlement behind closed doors and filed a proposed consent decree to approve the settlement with the court in October 2009. In the settlement agreement, the EPA admitted that it had “failed” to comply with the Clean Air Act by not issuing a MACT rule and specified that the EPA would put out a proposed rule by March 16, 2011, and a final rule by November 16, 2011. The EPA essentially abandoned its ability to argue that no such regulation was needed or that a less burdensome regulation would meet the requirements of the law. It gained the ability through the litigation and court approval to issue a new regulation far more expensive and burdensome than what it could have issued through the normal rule-making process. And it got a very short regulatory approval process, one much shorter than needed for such a complex problem, making it much more difficult for those affected by the proposed regulation to analyze its effects and provide criticisms and comments to the EPA.
