[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
EXAMINING ``SUE AND SETTLE'' AGREEMENTS:
PART II
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON
INTERGOVERNMENTAL AFFAIRS
AND THE
SUBCOMMITTEE ON
THE INTERIOR, ENERGY, AND ENVIRONMENT
OF THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
JULY 25, 2017
__________
Serial No. 115-36
__________
Printed for the use of the Committee on Oversight and Government Reform
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Committee on Oversight and Government Reform
Trey Gowdy, South Carolina, Chairman
John J. Duncan, Jr., Tennessee Elijah E. Cummings, Maryland,
Darrell E. Issa, California Ranking Minority Member
Jim Jordan, Ohio Carolyn B. Maloney, New York
Mark Sanford, South Carolina Eleanor Holmes Norton, District of
Justin Amash, Michigan Columbia
Paul A. Gosar, Arizona Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee Stephen F. Lynch, Massachusetts
Trey Gowdy, South Carolina Jim Cooper, Tennessee
Blake Farenthold, Texas Gerald E. Connolly, Virginia
Virginia Foxx, North Carolina Robin L. Kelly, Illinois
Thomas Massie, Kentucky Brenda L. Lawrence, Michigan
Mark Meadows, North Carolina Bonnie Watson Coleman, New Jersey
Ron DeSantis, Florida Stacey E. Plaskett, Virgin Islands
Dennis A. Ross, Florida Val Butler Demings, Florida
Mark Walker, North Carolina Raja Krishnamoorthi, Illinois
Rod Blum, Iowa Jamie Raskin, Maryland
Jody B. Hice, Georgia Peter Welch, Vermont
Steve Russell, Oklahoma Matt Cartwright, Pennsylvania
Glenn Grothman, Wisconsin Mark DeSaulnier, California
Will Hurd, Texas Jimmy Gomez, California
Gary J. Palmer, Alabama
James Comer, Kentucky
Paul Mitchell, Michigan
Greg Gianforte, Montana
Sheria Clarke, Staff Director
Robert Borden, Deputy Staff Director
William McKenna General Counsel
Kelsey Wall, Professional Staff Member
Kiley Bidelman, Clerk
David Rapallo, Minority Staff Director
Subcommittee on Intergovernmental Affairs
Gary Palmer, Alabama, Chairman
Glenn Grothman, Wisconsin, Vice Val Butler Demings, Florida,
Chair Ranking Minority Member
John J. Duncan, Jr., Tennessee Mark DeSaulnier, California
Trey Gowdy, South Carolina Matt Cartwright, Pennsylvania
Virginia Foxx, North Carolina Wm. Lacy Clay, Missouri
Thomas Massie, Kentucky (Vacancy)
Mark Walker, North Carolina
Mark Sanford, South Carolina
------
Subcommittee on the Interior, Energy, and Environment
Blake Farenthold, Texas, Chairman
Paul A. Gosar, Arizona, Vice Chair Stacey E. Plaskett, Virgin Islands
Dennis Ross, Florida Jamie Raskin, Maryland
Gary J. Palmer, Alabama Jimmy Gomez, California
James Comer, Kentucky (Vacancy)
Greg Gianforte, Montana
C O N T E N T S
----------
Page
Hearing held on July 25, 2017.................................... 1
WITNESSES
The Hon. John Engler, Former Governor, State of Michigan
Oral Statement............................................... 5
Written Statement............................................ 8
David Sanders, Ph.D., Executive Vice-President of Systems
Improvement, Casey Family Programs, Seattle, Washington
Oral Statement............................................... 13
Written Statement............................................ 15
Mr. Robert Weissman, President, Public Citizen, Washington, D.C.
Oral Statement............................................... 20
Written Statement............................................ 22
Mr. Carl E. Geffken, City Administrator, Fort Smith, Arkansas
Oral Statement............................................... 51
Written Statement............................................ 53
APPENDIX
Opening Statement of Chairman Gary Palmer........................ 76
Alabama Policy Institute article titled, ``Consent Decrees in
Institutional Reform Litigation: Strategies for State
Legislatures'' submitted for the record by Chairman Palmer..... 79
EXAMINING ``SUE AND SETTLE'' AGREEMENTS: PART II
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Tuesday, July 25, 2017
House of Representatives,
Subcommittee on Intergovernmental Affairs, joint
with the Subcommittee on the Interior, Energy, and
Environment,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittees met, pursuant to call, at 10:05 a.m., in
Room 2154, Rayburn House Office Building, Hon. Gary J. Palmer
[chairman of the Subcommittee on Intergovernmental Affairs]
presiding.
Present from Subcommittee on Intergovernmental Affairs:
Representatives Palmer, Grothman, Duncan, Foxx, Walker,
Demings, DeSaulnier and Clay.
Present from Subcommittee on the Interior, Energy, and
Environment: Representatives Farenthold, Gosar, Ross, Palmer,
Gianforte, Plaskett, and Raskin.
Also Present: Representative Womack.
Mr. Palmer. The chair notes the presence of our colleague,
Congressman Womack of Arkansas. We appreciate your interest in
this topic and welcome your participation today.
I ask unanimous consent that Congressman Womack be allowed
to fully participate in today's hearing. Without objection, so
ordered.
This hearing is the second part of a set of hearings to
examine the impact of certain Federal settlements referred to
as ``sue and settle.'' The sue-and-settle phenomenon refers to
a process where an outside group will sue a Federal agency,
State, or local government for an alleged violation of Federal
law or constitutional right. The parties will often choose to
settle by entering into a consent decree agreement rather than
face a long and costly trial. These legally binding consent
decree agreements are then approved by a judge and enforceable
by contempt and can only be modified by court order.
Consent decrees can last for decades and end up costing
more than if the parties had gone to trial because the parties
can use consent decrees to set provisions that extend beyond
the scope of the original violation of law, they have become an
effective tool to circumvent policymaking by elected
representatives in order to push a political agenda across
governmental institutions. These actions place an enormous
burden on States, local governments, industry stakeholders, and
taxpayers, who may be shut out of the negotiations but are left
to foot the bill.
Under the threat of enforcement by contempt charge, State
budgets are being reorganized. Local governments across the
country are spending multiple decades and billions of dollars
to comply with impossible mandates through never-ending Federal
oversight. Penalties for the inevitable violation of decrees
redirect funds from these communities to Washington. Worse,
some feel afraid to speak to Congress about what they are
experiencing. Multiple State and local leaders cited fear of
political retaliation from Federal court monitors if they were
to appear to testify before the committee on this issue. This
is unacceptable and a threat to the principles of Federalism.
Unfortunately, I have witnessed this firsthand in my home
State of Alabama. I watched as a consent decree between
Jefferson County and the Environmental Protection Agency
ballooned from a $1.5 billion estimate to cost over $3 billion
to address the storm sewer issue in Jefferson County. Sewer
rates quadrupled over four years in order to pay for the
project, and Jefferson County became the Nation's largest
municipal bankruptcy in history until Detroit filed in 2013.
Because of incomplete data and the lack of proper
categorization, we are unable to fully evaluate the total
amount taxpayers spend as a result of collusive settlement
agreements. For example, in my previous experience leading an
Alabama think tank, I was unable to obtain a complete list of
all Federal consent decrees that apply to the State from the
Department of Justice because of inadequate recordkeeping.
This lack of transparency limits our constitutional duty to
conduct oversight of the management of taxpayer resources. It
is time for the Federal Government to move away from
emphasizing its role as prosecutor or political monitor and
return to serving as the American people's partner in setting
priorities that best represent their interest.
Recently, Congressman Doug Collins introduced the Sunshine
for Regulations and Regulatory Decrees and Settlements Act of
2017 to increase transparency and public engagement by ensuring
opportunity for public notice and comment on consent decrees
and other settlement agreements. I thank Congressman Collins
for his leadership on this issue, and I look forward to
exploring additional solutions with our panel today.
Mr. Palmer. I now recognize Mrs. Demings, ranking member of
the Subcommittee on Intergovernmental Affairs, for her opening
statement.
Mrs. Demings. Thank you so much, Mr. Chairman, and thank
you for our witnesses for being here. Thank you for holding
this hearing today.
Today, we have the opportunity to discuss the Federal
Government's responsibility to ensure that Americans can buy
safe food, have clean air and water and access to the ballot
box. Our great democracy has many ways to do this, but perhaps
the most fundamentally ``little D'' democratic tool is
concerned citizens working together to hold Federal agencies,
the watchers, accountable under the law.
Unfortunately, some of my colleagues view these citizen
actions as irrelevant annoyances that slow down progress. The
result is legislation that seeks to make harder and more
expensive for Americans to use the courts to compel government
agencies to uphold and comply with the law.
These are not small stakes. One of the most frequent
reasons for suits is missed deadlines that leave the public
unprotected. A 2012 study of public health and safety
rulemaking with congressionally mandated deadlines showed, and
I quote, ``most rules are issued long after their deadlines,
which ultimately are putting American lives at risk,'' unquote.
I would like to take this opportunity to highlight just one
rule criticized as, quote, ``too expensive,'' which was long
delayed until, ultimately, a lawsuit pushed the final rule over
the finish line. In 2008, the House and Senate unanimously
passed a bill to help prevent back-over accidents, which
tragically kill more than 200 Americans and injure more than
15,000 every year. Most often the person injured or killed is a
young child, too small to be seen in a rearview or sideview
mirror. Despite a statutory deadline in 2011, a final rule
would not come until 2014, and then only because of public
outrage, and yes, litigation.
When will new passenger vehicles be required to have
cameras? In 2018, 10 years after the bill became law and
several years after auto manufacturers voluntarily installed
cameras on virtually every new car.
Mr. Weissman, I look forward to hearing more about Public
Citizen's work to finalize this long-delayed rule.
When it comes down to it, some in Congress and the
administration would be fine with indefinitely slowing the
rulemaking process, leaving Americans, the people that we swore
to represent, particularly the most vulnerable at risk of
injury from unsafe products and unscrupulous corporations.
Please be assured that won't happen without a fight.
I thank our witnesses for sharing their testimony today,
and I look forward to this very important discussion.
Thank you very much, Mr. Chairman, and I yield back.
Mr. Palmer. Thank you. I will hold the record open for five
legislative days for any members who would like to submit a
written statement.
We will now recognize our panel of witnesses. I am pleased
to welcome the Honorable John Engler, former Governor of the
State of Michigan; Dr. David Sanders, executive vice president
of systems improvement for the Casey Family Programs, Seattle
Washington; and Mr. Robert Weissman, president of Public
Citizen, Washington, D.C.
I now recognize Congressman Womack to introduce our last
witness.
Mr. Womack. Thank you, Mr. Chairman, and my thanks to the
chairman and to the ranking members for allowing for this
testimony here today. At the outset, I would just like to
associate myself with the remarks of the chairman in his
opening comment.
It is not my job here today to pass judgment on the subject
matter of the activities that are under consideration here
today. Moreover, it is my intent to introduce a friend and
somebody that I have an enormous amount of respect for because
he happens to be the city administrator of the largest city in
the 3rd District of Arkansas, that being the city of Fort
Smith.
His name is Carl Geffken, and he is no stranger to the
subject matter today because he was hired by the city of
Reading, Pennsylvania, as a director of finance, and in 2011,
just for the benefit of the audience here this morning, Reading
was deemed the poorest city in the United States of America. In
slightly less than two years' time and after entering the
Pennsylvania Fiscally Distressed Municipalities Program, the
city of Reading had a $12 million general fund reserve and a
revitalized plan to manage its consent decree. The cost of the
consent decree was reduced from $475 million to $200 million.
Now, Carl, in his quest to get back into municipality
government after some time in Berks, Pennsylvania, as a chief
operating officer, accepted the job as city administrator in
the city of Fort Smith, Arkansas, and inherited a pretty
egregious consent decree that has strapped the people and the
administration of the city of Fort Smith.
It's nearly a half-a-billion dollars in improvements to its
wastewater treatment facilities over a 12-year period of time,
and already the citizens of Fort Smith have endured three,
three rate increases. Median household income is going down,
the price to pay for its sewer facilities going up.
So, we are delighted that Carl is here to speak on this
subject. He speaks with great authority, and we are proud to
know that he is running the show in the city of Fort Smith,
Arkansas.
And with that, Mr. Chairman, I yield back my time.
Mr. Palmer. I thank the gentleman.
I would like to recognize the gentlewoman from the Virgin
Islands, Ms. Plaskett, who is the ranking member on the
Subcommittee for Interior, Energy, and Environment for her
opening statement.
Ms. Plaskett. Thank you, Mr. Chairman, and thank you for
calling today's hearing.
The practice we are discussing today is really very
unremarkable: enforcement actions by government agencies.
Congress passes the Nation's Federal laws, and Federal agencies
must implement them by issuing regulations and enforcing them.
When those agencies fail to do that, they are in jeopardy of a
court order requiring them to do so.
Congress has passed laws allowing citizens to sue Federal
agencies when they fail to enforce the laws that Congress has
passed. Because of citizen suits, Americans have had recourse
when their right to vote has been threatened. Because of
citizen suits, Americans have had recourse when housing
discrimination threatened their chance at attaining their piece
of the American dream. Because of citizen suits, doors have
literally been open to Americans with disabilities to create a
more inclusive and accommodating society.
My colleagues would like to diminish citizens' access to
court to enforce Federal statutes. Today, the Republican
justification is that Federal regulations and citizen suits to
enforce them impose a burden on State Governments. Instead,
they would leave States alone to comply with Federal law to the
extent that it is convenient for those States. I say ask the
people of Flint, Michigan, if that makes sense to them because
if we have learned nothing else from the tragedy of water
poisoning in Flint, Michigan, it is that State Governments
should not be left to their own devices to enforce health and
safety regulations.
The Governor's own Health Department director, a member of
his inner circle and cabinet, has been charged with felonies
that contributed to the poisoning, so has the Governor's
appointee who ran the city of Flint under an emergency
management law. And the Governor has accepted responsibility
for that tragedy.
Voting rights, housing laws, education, discrimination, in
terms of disabilities, all of these things, because of the
right of citizens to sue to enforce Federal regulations.
Some States do need help to comply with Federal rules, and
the Federal Government should provide that support and help. An
infrastructure bill and funding that addresses the funding
problems of State and local governments would be a step in the
right direction. But curbing Federal health and safety
regulations is not.
Contrary to what my Republican colleagues might say,
Federal regulations have a positive impact on the economy. A
2016 study conducted by OMB looked at a range of regulations
across the economy and found that their benefits far outweighed
their costs. OMB said, quote, ``found that a decade's worth of
major Federal regulations had produced annual benefits to the
U.S. economy of between $269 billion and $872 billion, while
imposing aggregate costs between $74 billion to $110 billion.''
In spite of these facts, congressional Republicans aim to
diminish the use of citizen suits. That is why I believe we are
called here to today's hearing, but what we should learn from
the hearing is the incredible value to the public's health,
welfare, and environment that Federal regulations and citizen
suits have had. I really look forward to the lively discussion
that I know we are going to be having, and thank you again, Mr.
Chairman, for calling us all to this hearing.
Mr. Palmer. I thank the gentlewoman and now would like to
welcome our witnesses.
Pursuant to committee rules, all witnesses will be sworn in
before they testify. Please rise and raise your right hands.
[Witnesses sworn.]
Mr. Palmer. Thank you. Please be seated. Let the record
reflect that the witnesses answered in the affirmative.
In order to allow time for discussion, we would appreciate
it if you would please limit your testimony to five minutes.
Your entire written statement will be made part of the record.
I would like to recognize now Governor John Engler for his
testimony.
WITNESS STATEMENTS
STATEMENT OF JOHN ENGLER
Mr. Engler. Thank you very much, Mr. Chairman. Chairman
Palmer, Chairman Farenthold, ranking members, subcommittee
members of the committee--two committees on Oversight and
Government Reform, thank you for the invitation to appear this
morning as you continue your examining of sue-and-settle
agreements. And I appreciate the work of the two subcommittees
on this important topic, and I'm certainly appreciative of the
excellent staff who's helped to make the logistics of my
appearance here this morning so easy.
I want to begin this morning by quoting from a foreword to
a publication, Mr. Chairman, you're very familiar with because
it was prepared by the Alabama--or for the Alabama Policy
Institute located in Birmingham, Alabama. And I brought a copy
of it that I--it's entitled ``Consent Decrees in Institutional
Reform Litigation: Strategies for State Legislatures.'' And I
think, given that I'm--my background is 20 years as a State
lawmaker and then 12 years as Governor, I have a distinctly
State perspective and a strong bias toward a robust Federalist
system and the role that States and local government play in
that. And I would like to leave one for the staff so that it
might be added to the record. I think that it is an important
document.
Mr. Engler. And the foreword that I want to quote was
written in 2008 by then-Senator, now Attorney General Jeff
Sessions, and maybe it's good to show him some love today. It
seems maybe in short supply. But Sessions in 2008 wrote this,
and this is quoting extensively from him: ``One of the most
dangerous and rarely discussed exercises of raw power is the
issuance of expansive court decrees. Consent decrees have a
profound effect on our legal system as they constitute an end
run around the democratic process. Such decrees are
particularly offensive when certain governmental agencies
secretly delight in being sued because they hope a settlement
will be reached, resulting in the agency receiving more money
than what the legislative branch or other funding sources would
otherwise have deemed justified. Thus, the taxpayers ultimately
fund the settlement enacted through this undemocratic process.
``A consent decree is the equivalent of a legislative
enactment created at the hands of the courts, often less
subject to modification. By entering into the decrees, current
State executives such as Governors or Attorneys General can
bind the hands of future State executives and legislatures. A
predecessor's consent decree is difficult to alter or end, and,
in practice, a decree can last for many years, longer than the
remedy that was needed.''
Sessions actually went on to describe a remarkable in my
view and somewhat unimaginable example that he personally dealt
with when he became Attorney General in Alabama. His
predecessor had somehow agreed to a consent decree that
mandated an increase in the number of justices on the State
Supreme Court in that State. I thought that went pretty far,
and Sessions viewed that as essentially amending the Alabama
Constitution. Now, he was, as a new Attorney General,
successful in taking an appeal and eventually having the
Eleventh Circuit Court of Appeals reject that consent decree.
While the Alabama example, pretty creative example, it is
the tip of the iceberg, representing merely hundreds of consent
decrees that cover an array of subjects. And for the most part
they remain in force today. And the cost of compliance and the
usurping of State and local decision-making I think will be
truly stunning when the true scope of the abuse is made known
by the work that your committees are doing, and that's why I
was pleased to be able to join you today to put a spotlight on
the end run around accountability that this litigation often
represents.
And I certainly look forward to discussing some of the
judicial battles that we were engaged in when I was elected
Governor of Michigan as we sought to end costly consent decrees
and restore public policymaking to those who were elected to
the legislative and executive branches.
Now, winning reform is not going to be easy. Activists,
they always insist institutional reform litigation, merely
their effort to impose broad, long-term reform of government
programs and laws on backward or recalcitrant States or local
governments, but often the reality is quite a bit different.
These same activists have made their case, given their
arguments, and then lost either in elections or in legislative
forums, and so their last shot at achieving their policy
objectives is litigation. And then these lawsuits are designed
to convince State and local governments now to settle through a
consent decree and you can avoid the long, expensive trial. But
as I point out in my testimony, there are some real weaknesses
in that approach.
Congress has grappled with this in the past. I cite a
proposal from some years back, but I will not--I'll save that
for the questions. But I want to just say the bottom line I
think for Federal policymakers, the State and local governments
you represent are asking for help, the restoration of their
right to exercise the powers reserved for them under the
Constitution. They'd like to be held accountable for their own
decisions and have those decisions made by men and women who
actually are elected, and they want policy choices according to
the wishes of their constituents and set the spending
priorities based on those choices and be freed from having
unelected judges, you know, controlling and reporting for years
to court-appointed monitors who have no accountability.
Thank you, Mr. Chairman.
[Prepared statement of Mr. Engler follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Palmer. I thank the gentleman for his testimony.
Dr. Sanders?
STATEMENT OF DAVID SANDERS
Mr. Sanders. Good morning. I'm David Sanders, executive
vice president of Systems Improvement at Casey Family Programs.
Casey Family Programs is the Nation's largest operating
foundation focused on foster care and child protection. We work
directly with child welfare systems in all 50 States, the
District of Columbia, two U.S. territories, and 16 tribal
nations.
Before coming to Casey, I led the child protection systems
in both Los Angeles and Minneapolis, and I recently served as
chair of the Federal Commission to Eliminate Child Abuse and
Neglect Fatalities.
Today, I'd like to provide a national perspective on the
topic of child protection consent decrees and offer
observations about system reform, oversight, and support, and
successful opportunities for improvement.
Casey Family Programs convened three meetings in 2011,
2014, and 2016 to discuss this issue. These meetings,
including--included leaders and staff from child protection
agencies who had been sued who were under consent decrees, in-
house counsel, Attorney General offices, and others. Before I
share what we learned during these meetings, I'd like to
provide some context.
Over a period of 40 years, class-action lawsuits have
governed some aspect of child welfare or child protection
practice in nearly 30 States. Numerous jurisdictions have had
multiple lawsuits filed against them. The consent decrees have
an average lifespan of 16.8 years, but some have been in place
for decades.
Currently, about 15 States are operating under a consent
decree. Only two have exited successfully--Alabama and Utah--
and most recently, Tennessee just announced its exit from
Federal oversight after 17 years. However, the terms of
Tennessee's exit agreement include oversight of the agency by
an independent commission for 18 months.
Here are some important insights from States. First,
consent decrees can place large demands on State in terms of
both cost and time. We estimate that the legal monitoring and
consulting fees can reach or surpass $15 million on average.
Second, States often felt the consent decrees were cookie-
cutter agreements that didn't adequately address the unique
challenges facing their communities and systems.
Third, the measures that systems are obliged to monitor are
often inconsistent with current best practices defined under
the Child and Family Service Reviews developed by the U.S.
Department of Health and Human Services. In many cases, it's
because the measures predate these critical Federal benchmarks.
At the same time, the measures are significantly more difficult
to achieve than the Federal measures.
In working with States, it's become clear that, by their
very nature, consent decrees are based on process measures
instead of outcomes measures, in other words, how things are
done versus what the outcomes actually are for children. And
more importantly, because the decrees essentially lock child
welfare services in place, the eight States are unable to use
system flexibility and adopt new and improved practices.
The bottom line is this: Consent decrees have not led to
improved outcomes for children. We believe a better-balanced
approach that recognizes the right of States and plaintiffs and
uses alternative oversight mechanisms will be important.
Overall, we should create a more productive path for child
welfare agencies to address the needs of their system in a
problem-solving approach that involve Governors, legislators,
the judiciary, other agencies, the community, and advocates.
The use of evidence-based practice, knowledge of brain science
and trauma, the special attention needed for certain
populations like very young children, the need for cross-agency
coordination, the importance of partnerships with the
community, and the ever-evolving use of technology and data,
including to help us identify who's at greater risk--at greater
risk for maltreatment in the future are fundamentally changing
the path to success for child welfare systems. Reform efforts
should have processes in place to adapt to these new
opportunities.
Which brings me to my final point. Child welfare cannot
serve the needs of all children and families who are or may
become at risk. Many of the children and families who are
involved with child welfare agencies are already known to other
agencies beyond the child protection system itself. But consent
decrees place responsibility for performance and improvement
solely on the child welfare agency. Child safety is a community
responsibility, and any discussion of the merit or challenges
of consent decrees ought to consider how to best support
collaboration and shared responsibility as a means of achieving
successful reform without the necessity of a lawsuit.
Thank you.
[Prepared statement of Mr. Sanders follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Palmer. I thank the gentleman.
The chair recognizes Mr. Weissman for his testimony.
STATEMENT OF ROBERT WEISSMAN
Mr. Weissman. Thank you, Mr. Chairman.
In 2002, Dr. Greg Gulbransen was backing his SUV into his
driveway. As he did every evening, he paused, looked in his
rearview mirror, looked over his shoulder, saw nothing behind
him, and backed into the driveway. What he didn't see was that
his two-year-old son Cameron had run into the driveway behind
him, and he backed over his son and killed him. It's
unimaginable.
Dr. Gulbransen I would say is a hero of mine. I don't think
I could have survived that, but he did and chose to turn his
tragedy into a crusade to make sure that other parents didn't
suffer the same horror that he did. He lobbied this Congress
and in 2008 succeeded in getting passed the Cameron Gulbransen
Act, which required automakers to adopt technologies to prevent
that from every happening again. That technology existed then
and it exists now. We're familiar with it. It's effectively
rearview cameras in cars.
The legislation that this Congress adopted required the
Department of Transportation to adopt a rule by 2011 to force
automakers to install this technology and to prevent this
horror from happening in the future.
The Department of Transportation did not act by 2011.
Instead, it gave itself four extensions, although it was unable
to show, as the statute requires, that there was some reason
for those extensions.
In 2013, my organization Public Citizen sued the Department
of Transportation to force it to comply with the rule and the
deadline established by this Congress.
In 2014, although we did not settle the case, it was
dismissed because the agency finally committed to do what the
Congress had required it to do, years later.
The consequence of that delay is that we have a lot more
Cameron Gulbransens. We have hundreds of children. We may not
know their names, as we do Cameron, but they were run over in
preventable accidents. That's what it means when regulations
aren't issued on time, as required by this Congress. Now, this
is actually a small example, but it's a heart-wrenching one.
As I explain in my written testimony, regulations adopted
pursuant to congressional action save this country enormous
amounts of money, they make our economy stronger, they protect
the lives of Americans, prevent corporate rip-offs, and achieve
a variety of social aims.
Unfortunately, agencies are growing slower in issuing new
regulations. My written testimony discusses research we've done
on this. For substantial regulations, it is very difficult for
an agency to get a rule done in the course of a single
presidential term.
Delays aren't just growing; they are the norm when it comes
to statutory deadlines. Those are deadlines required by this
Congress. The agencies routinely fail to meet those deadlines.
When they do fail to meet the deadlines established by this
Congress, organizations like mine are proud to step in and
enforce the standards, the deadlines that you have established.
We did that in the Cameron Gulbransen case. We do it in others.
Those deadline suits or enforcement suits hold agencies
accountable to the Congress and help achieve the important
objectives that Congress has sought to do. They do not lock the
agencies into any substantive outcome. They only force the
agencies to comply with schedules already determined by this
Congress. They don't actually comply; they just comply less
slowly than they otherwise would. These are lawsuits that the
Congress should both embrace and appreciate as enforcement
mechanisms for the laws that you have passed.
I want to say just a final quick word on the issue
generally of settlements apart from enforcement or deadline
suits. As I discuss in my testimony, I think there are some
serious issues at the Department of Justice regarding where is
an enforcement agency and entering into settlements or not
prosecuting corporations for wrongdoing. I think there is
bipartisan--there's been expressed bipartisan concern about
that issue, whether it's civil settlements or deferred or non-
prosecution agreements regarding big banks and other large
corporations, and I think that would be an area of very
fruitful investigation by this committee.
Thank you very much.
[Prepared statement of Mr. Weissman follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Palmer. I thank the gentleman.
I now recognize Mr. Geffken for his testimony.
STATEMENT OF CARL E. GEFFKEN
Mr. Geffken. Thank you, Chairman.
Chairmen Palmer and Farenthold, I am pleased to join you
and your fellow subcommittee members for today's important
hearing on public policy considerations behind Federal
litigation settlements. On behalf of the city of Fort Smith,
Arkansas, I want to thank the committee for allowing me to
share with you our experiences regarding the Fort Smith consent
decree with the EPA and the State of Arkansas. I can assure you
the city has taken this consent decree seriously. In fact, not
only has the city raised its sewer rates 167 percent in three
years, but it also has complied with all the provisions
contained in the consent decree to date.
We seek successful implementation of all sewer utility
improvements within the consent decree. However, the city has
major concerns about future compliance because aspects of it
are unattainable for the city.
Fort Smith has a population of 87,351, but it is also a
regional metropolitan center in northwestern Arkansas of about
300,000 and the largest manufacturing hub in the State.
Unfortunately, it has experienced some manufacturing setbacks
due to business relocation and foreclosure. Twenty-nine percent
of Fort Smith's population live below the Federal poverty line,
while the national average is 14.7 percent. One of more
troubling statistics is the fact that the median household
income for the city is decreasing.
When the consent decree was finalized in 2015, the MHI was
$37,600, 32 percent lower than the national average. Today,
Fort Smith's MHI is now projected to be $33,500, 11 percent
lower than two years ago. While our resident's incomes dropped
11 percent, the sewer utility bills have increased 167 percent
to pay for the initial work on the consent decree.
Leading up to the consent decree, the city was under an
administrative order with the EPA, one of the oldest active
administrative orders in the country. However, the city was
actively attempting to improve the compliance issues raised by
the EPA by investing $200 million in its sewer infrastructure.
Unfortunately, having one of the oldest administrative orders
may have made us a target for enforcement.
Despite our willingness to comply, the Department of
Justice and the Arkansas State Attorney General browbeat and
coerced Fort Smith into accepting a consent decree. The city
was presented with two options: spending millions in legal fees
required to contest the consent decree or accept it.
The consent decree has many features and requirements in it
that are typical of many other decrees. However, there are six
items in the consent decree the city believes are not realistic
and need modifying. The six items are, first, the city has only
12 years to complete the consent decree; however, there are at
least 12 cities who were granted 20 to 25 years to comply.
Second, the consent decree contains a detailed and
prescribed list of tasks that must be performed over the 12
years. It does not allow for adequate flexibility or an
iterative approach to maximize public benefits with limited
dollars available.
Third, the cost of the consent decree exceeds the Federal
guideline of 2 percent of median household income. The sewer
portion alone of the city's utility bill is already at 2.2
percent of MHI, and rates will need to increase further in
order to complete the consent decree. Funds over and above the
amount needed for the consent decree will be needed for non-
consent decree projects.
Fourth, stipulated penalties in consent decrees are
counterintuitive. Assessing penalties is a tool to change
behavior. However, Fort Smith worked on sewer issues prior to
the consent decree. When a city is complying with its consent
decree, assessing penalties only reduces the funds available to
comply in the future.
Fifth, Fort Smith's consent decree is flawed in that there
is a set, fixed time to complete it, but the ultimate scope of
the projects and the actual cost of these projects was unknown
when the consent decree was finalized.
And sixth, the consent decree requires Fort Smith to repair
structural problems instead of focusing on spending those
dollars where it will have the greatest impact.
The city shares its experiences and concerns with both
subcommittees to show that Fort Smith has made every effort to
comply with the Federal Clean Water Act. The city is spending a
great deal of time, money, and effort on the consent decree.
However, the current consent decree has a price tag of over
$450 million. That makes it the single largest project in the
city's history, and it is more than two years of Fort Smith's
total budget for all government functions. In addition, the
cost of this agreement has resulted in utility rate fatigue
amongst our residents.
As the Fort Smith sewer utility rates rise, our city
becomes less competitive for private economic investment. What
company would choose a city in which sewer utility rates are
three to four times higher than non-consent decree cities? This
results in cities becoming poorer and exacerbates decreasing
investments in cities. It is an unrealistic attempt to coerce
compliance. Cities in consent decrees become less able to
comply financially.
The modification that we will eventually propose to the EPA
will be aggressive in compliance, affordable to the community,
and provide the greatest public benefits for the dollars
invested.
Thank you for the opportunity to share the Fort Smith
perspective on Federal consent decrees, and I will be pleased
to answer any questions you may have.
[Prepared statement of Mr. Geffken follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Palmer. I thank the witnesses for the testimony.
The chair now recognizes the gentleman from Tennessee, Mr.
Duncan, for five minutes.
Mr. Duncan has left the hearing.
The chair recognizes the gentleman from Arizona, Mr. Gosar,
for questions for five minutes.
Mr. Gosar. Thank you, Mr. Chairman.
As we talk about sue-and-settle and their associated cost,
I want to focus a little bit on the EPA. In the last few years,
we have seen the EPA run rampant, imposing extraordinary costs
on States. We know that the EPA and other Federal agencies
collect fines and enforce penalties when consent decrees have
been violated. Mr. Geffken, do you know where these fines go
once they are collected?
Mr. Geffken. Representative, I believe they go into the
Federal coffers. I know when Fort Smith entered its consent
decree, it had to pay $300,000, and the main goal of our--of
the consent decree relates to sewer sanitary system overflows,
and we were hit with stipulated penalties that were thankfully
waived after much pushing back, but that was to go into the
Federal coffers back to the EPA.
Mr. Gosar. Into the EPA ----
Mr. Geffken. Yes, sir.
Mr. Gosar.--specifically?
Mr. Geffken. Yes, sir.
Mr. Gosar. Okay. Now, do you ever receive assistance
through Federal grants to assist in being compliant?
Mr. Geffken. No, sir, neither in the city of Reading, nor
in the city of Fort Smith. The only benefits we can get are
usually from the States if they have available funds.
Mr. Gosar. Are you aware of any other municipality getting
any type of grant to assist them?
Mr. Geffken. No, sir.
Mr. Gosar. Okay. So other than being fined for
noncompliance and then being stuck with the bill to fix the
problem, how else can consent decrees be duplicative?
Mr. Geffken. One more time, sir?
Mr. Gosar. So being fined for noncompliance and then being
stuck with a bill to fix the problem, how else are consent
decrees duplicative?
Mr. Geffken. They--well, that's--your first example is the
most telling, that we're having to spend $450 million and then,
while we're in the consent decree, if there is a violation,
which we could be charged a stipulated penalty.
But in terms of other duplicative actions, you know, there
are areas that we already have NPDES permit levels, and that is
one area that we have the consent decree that requires certain
actions, and yet there are certain--there are other compliance
avenues that we have that duplicate the need to update and
maintain our system.
Mr. Gosar. Now, we have obviously seen a number of changes
with the new administration, so how have things differed
between the last administration and this one?
Mr. Geffken. At this point I can honestly say that we have
seen a greater benefit to having discussions and a willingness
to take our requests under consideration.
Mr. Gosar. So more flexibility?
Mr. Geffken. Yes, more flexibility.
Mr. Gosar. Isn't it true that the EPA, under the direction
of Administrator Scott Pruitt, recently waived all penalties
owned by the city of Fort Smith?
Mr. Geffken. That is correct.
Mr. Gosar. Now, can you explain the impact these fines make
both in terms of the additional fees associated with them and
in terms of being waived?
Mr. Geffken. Well, we had the--we were going to be assessed
approximately $400,000 for violating the corrective actions
that are in the consent decree, and that was reduced to
$120,900. And we spoke with the EPA and the Department of
Justice, and they were able to waive that after much
discussion. We were very grateful for that flexibility, but it
is still--that is money that's taken away from doing other
work. We offered to spend that money to clean sewer lines in
order to go on green projects, and it was denied until such
time as there was a change in the direction and greater
flexibility.
Mr. Gosar. Now, many times specialists are called in to
investigate as well. Do you know how many of these cases are
settled at a rate inconsistent with the manner set forward with
Congress?
Mr. Geffken. I'm sorry, I didn't hear that one.
Mr. Gosar. Yes. Do you know how many of these cases are
settled at a rate consistent with the manner set forward from
Congress?
Mr. Geffken. Well, many of them actually do result in
consent decrees.
Mr. Gosar. Right.
Mr. Geffken. Instead of moving forward and looking to go
through the legislative path, we wind up having cities that are
poorer like Reading and starting to look like Fort Smith that
are having to take their scarce resources and put them in one
project instead of being able to spend it on many different
areas that the city needs.
Mr. Gosar. Yes. What I am alluding to is in many cases in a
sue-and-settle application and particularly highlighting maybe
an endangered species, what ends up happening, we don't see a
rate that is being utilized that is consistent with Congress.
What we see is specialists actually being jacked up because
there are only so many people that have so many--have the
expertise in certain areas. And it is very inconsistent with
what Congress.
Last but not least, in our first question in talking about
fees, I don't think Congress dictates how the agency actually
spends those. They are up to the agencies' flexibility to
whatever they would like to do, and so that is problematic in
that regards to perpetuating certain agenda items that may not
be consistent with what Congress. Giving you an example of that
is the Waters of the U.S. Here, you had parts of five Supreme
Court rulings defying the EPA even going to that aspect, and
yet they still did. And so once again, it took an action by the
States to reel them back in to actually stop the promulgation
of a false type of narrative.
So I want to thank you very, very much for your testimony
today, and with that, I yield back.
Mr. Palmer. The chair recognizes the gentlewoman from
Florida and ranking member, Mrs. Demings, for her questions.
Mrs. Demings. Thank you so much, Mr. Chairman.
Mr. Weissman, I want to take just a few minutes to discuss
the benefits of rulemaking as it pertains to public health.
According to the Center for Disease Control, foodborne
illnesses contribute to about 48 million illnesses, 128,000
hospitalizations, and 3,000 deaths per year. The Food Safety
Modernization Act is one of the most pivotal pieces of
legislation that transformed our food safety industry.
President Obama signed it, as I am sure you know, in 2011.
Mr. Weissman, how will the Food Safety Modernization Act
help to prevent foodborne illnesses and prevent the loss of
economic activity attributable to sicknesses and deaths caused
by those illnesses?
Mr. Weissman. Well, thank you, Ranking Member.
The act was passed after an amazing series of outbreaks of
disease, salmonella, listeria, and other outbreaks. Because
neither the--no agency, including USDA or FDA, had proper
authority to ensure cleanliness in the fields and in processing
factories. The Food Safety Modernization Act gave new
authorities to the agencies, required them to issue some rules,
which, as an aside, they were slow in issuing but is projected
to save really thousands of lives by cleaning up our food
supply.
And I think in this case, as in many others--and your
question alludes to this--the benefit is not just to the people
who will avoid being sick, which is reason enough. There are
massive economic benefits as well. When the cantaloupe industry
is suddenly hit with an outbreak and no one buys cantaloupes,
it affects the farmers, it affects the workers in the fields,
it affects the stores that are selling the food, it affects the
restaurants that wanted to serve dishes made with cantaloupe.
It really goes all the way up, as it were, the food chain. It
has broad economic impact.
Mrs. Demings. You led, Mr. Weissman, with the story of
Cameron Gulbransen, and you are right; it is a small example.
He was two years old. But certainly, his death will have major
lasting impact. Once the Kids Transportation Safety Act was
passed, the transportation industry delayed implementing it.
So, Mr. Weissman, what does history teach us? Why can't we just
rely on the industry to prevent health and safety problems
without Federal laws and regulations?
Mr. Weissman. Well, on this, the history is overwhelming.
Self-regulation will not work. The--although industry is
incredibly innovative and sometimes on its own introduces
lifesaving innovations, by and large, it also has a history of
covering up defects in a wide array of products, failing to
adopt new technologies that could save lives or protecting the
environment, and responds primarily to new government mandates.
When it does so, the retrospective analysis shows the costs are
dramatically less than the industry insisted they would be,
almost without exception, but the benefits are really enormous.
There are endless examples of this, including many in the auto
industry.
In addition to this issue that we talk about with rearview
cameras, we just think about the many abuses in the auto
industry in recent years, including the GM ignition switch
disaster where they covered up for at least six years and
potentially longer what they knew about a flaw in their car
leading to, as they've acknowledged, 174 preventable deaths,
potentially many more.
Now, people who were involved in accidents relating to that
defect were prosecuted personally for manslaughter or for
unsafe driving or sometimes driving under the influence. The
problem wasn't the driver; the problem was the manufacturer.
The manufacturer was not criminally prosecuted. They got off
with a deferred prosecution and a payment of $900 million, a
lot to you and me but not to them and, again, evidence both of
their recklessness and their readiness to cover up safety
problems unless forced by government to do the right thing.
Mrs. Demings. Thank you so very much. Mr. Chairman, thank
you, and I yield back.
Mr. Palmer. The chair now recognizes the gentlewoman from
North Carolina, Ms. Foxx, for her questions.
Ms. Foxx. Thank you, Mr. Chairman. And I want to thank our
witnesses for being here today and shedding light on this very
important issue to all of us.
Governor Engler and City Administrator Geffken, I would
like to ask you a question. States are responsible for the
administration of many Federal programs, including medical
insurance, environment projects, housing, and food stamps. In
fact, the Chamber of Commerce found that States administer 96.5
percent of all Federal delegated environment programs, yet
Federal categorical grants to States fund no more than 28
percent of the amounts needed to run the programs. Can you
explain how consent decrees compound the problem of Federal
unfunded mandates? Governor Engler and then Administrator?
Mr. Engler. Thank you, Madam Chair. I think this is--you
put your finger right on one of the real important abuses that
exist. There are Federal mandates. Special education was one
where there was a promise initially that, as you're familiar,
half that was going to be funded by the Federal Government. I
don't know that funding has ever exceeded, you know, 20 percent
of the total cost. It's--but there are efforts then to use the
litigation at the State level--and I'm--I know we're talking a
lot about Federal laws and Federal agency rulemaking, but at
the State level, it's a different issue. And your question goes
to the heart of it.
The litigation is designed to push the State into setting
different spending priorities on the basis of which activist
group happens to be pursing the litigation. It could be an
education, it could be over in the environmental area, it could
be a prisoners' rights group, but this is a process that we
call the appropriations process at the State level where
committees of the House and Senate fight these things out with
the Governor's budget.
The consent decree is an effort to come in on top of that,
and one of the things that I--was in my testimony I will just
stress, you have to look at who these parties are. Sometimes,
in the legislature there's a difference between the two parties
and we may have a different priority than the Governor but we--
we've seen examples, and I can recall one where the corrections
agency couldn't get what they wanted in the legislature,
actually encouraged the litigation against the Department. The
Department then says, oh, we've been sued; we better settle.
They reach an agreement, which is to do exactly what they
couldn't do politically in the legislature. Then they show up
back at the legislature saying, hey, we've got a court order;
we've--you have no choice. And at that point you don't.
In my case, I happened to later on get elected Governor and
went back to court to say we need to be freed from these
consent decrees. And these were consent decrees--in Michigan's
case, I got elected in 1990. One of these started in 1977; the
others started in 1984.
So to get to your question, whether it's education or any
of these other areas, this is all a fight about spending
priorities and who gets to decide, and I always come down on
the side of let those who get elected fight these fights out.
They're political questions. They're not legal questions unless
there's an assertion there's been a deprivation of some
federally constitutionally protected right, and in many of
these cases, I think that's a very dubious proposition.
Ms. Foxx. Mr. Geffken?
Mr. Geffken. Thank you, Representative Foxx.
In the case of the consent decree dealing with wastewater
and stormwater issues, we believe that the EPA has pressured
the States to step aside from their primary enforcement role
and relinquish that back to EPA. And then the problem that we
have with consent decrees is that both the Department of
Justice and EPA, they do want comprehensive relief and not have
the continued time--they don't want to spend continued time or
money on overseeing these massive programs. And so frequently,
rather than allowing communities to develop an integrated or
innovative program, let's say, in five-year increments, they
want 20 or 25, unfortunately, only 12 in the case of the city
of Fort Smith.
And so you wind up getting caught up and your hands are
tied that in the case of Fort Smith, we see where we now need--
where we need to spend our money on improving the goal of the
consent decree because we do believe in making sure that there
is clean water. However, we are required to replace pipes that
are ranked on a specific and agreed-upon scale that if it's a
problem of four or five, the pipe needs to be replaced. It may
not be causing an issue yet, but it must be replaced due to the
consent decree instead of allowing us to focus where we can
have the greatest bang for the buck.
The problem we're looking at is that we agree with the
Clean Water Act. We want to make sure our residents have clean
water and that everything is handled and treated properly, but
the cure in some instances is killing the patient.
Ms. Foxx. Thank you, Mr. Chairman. I yield back.
Mr. Palmer. The chair now recognizes the gentlewoman from
the Virgin Islands, Ms. Plaskett, for her questions.
Ms. Plaskett. Thank you very much, Mr. Chairman.
Mr. Geffken, although you are from Arkansas and my first
husband is from Arkansas so I have a bias against it, Arkansas
has been good to me. One of my sons is a graduate of University
of Arkansas Pine Bluff in applied mathematics, so--but one of
the things that you said is very intriguing to me and I would
love to find a colleague across the aisle who might be
interested in working on this issue is when you talk about the
fines in the consent decrees and that they are going
specifically to the Federal Government.
While I understand the punitive impetus in creating those
fines, I think that for areas like your own and I know in the
Virgin Islands that those fines mean that there is less money
to actually do the work that needs to be done. And so if there
is a way that we can, through legislation, work on some of
these areas being able to be fined necessarily but that money
somehow be funneled back into working on the issues that the
consent decree is for, I would be happy to work with someone on
something like that. I think that is really important.
EPA has created fines for the Virgin Islands that are very,
very restrictive to us growing our economy, and so that is
something that I hear you on and would be willing to support
you, despite being from Arkansas.
[Laughter.]
Ms. Plaskett. But, Mr. Weissman, I wanted to thank you for
your testimony as well and wanted to talk with you about the
economic importance and the economic rather detriment or
contribution that consent decrees have had. That is something
that is very, very important to me, and I think that, as
lawmakers, in creating these laws, that is something that we
require to be done on the front end.
It has been your testimony and studies that we have been
looking at in the Office of Management and Budget has found
that major Federal regulations have produced annual benefits to
the U.S. economy of between $269 billion and $872 billion. Mr.
Weissman, does this surprise you that the net impact, the net
impact of Federal regulations is positive, meaning there is an
overall economic benefit to those regulations?
Mr. Weissman. It's--you're correct, and it's not surprising
to me both because I'm aware well of that data, which, as you
say, shows, depending on the range, benefits exceed costs of--
by 2-1/2 to 1 or maybe as much as 12 to 1 over the decade
period that you're referring to, so 12 to 1 is quite
substantial.
Ms. Plaskett. So can I ask, when we talk about--I mean,
there are costs, and we have heard testimony today about the
costs, which are real. How does that economic benefit actually
take place, and where is that benefit being felt? Where does it
play itself out in our economy?
Mr. Weissman. Well, there are a lot of areas. The benefits
are generally diffused. They're not focused on individual
persons or individual corporations. They may be the benefits of
averted illness, averted asthma, averted death in the case of
the Cameron Gulbransen Act that we were talking about. They may
be in consumer savings by the introduction of generic drugs,
for example. They may be in the area of averted harm to the
economy in the area of many of the Dodd-Frank rules. They may
be savings to consumers by preventing rip-offs, and on and on.
It's worth pointing out that the regulatory processes that
currently exist requirements what some might say--and this is
prior to the Trump Administration--an excessive focus on costs.
It is almost never the case that an agency proceeds with a
rulemaking where the costs, as defined in a corporate-friendly
way, exceed the benefits.
There are about two examples that I'm aware of over the
last decade, and in those cases, Congress required the agencies
to act. It's also--I'll pause there.
Ms. Plaskett. So, you know, you are talking then about the
requirements. I know that Congress itself requirements the cost
of prospective regulations be considered before a final rule is
ordered, and additionally--excuse me--OMB's annual report to
Congress on agency compliance requires that each agency conduct
a cost-benefit analysis and select the least-costly, most cost-
effective or least-burdensome alternative before promulgating
any proposed or final rule that may result in expenditures of
more than $100 million in at least one year by State, local,
tribal governments or by private sectors.
So the Federal agencies are already required to do
extensive economic analysis prior to issuing those regulations?
Mr. Weissman. Yes. It varies by agency, by statute, and how
the OIRA rules apply, but the general statement that agencies
are required to look hard at costs before proceeding is
correct.
Ms. Plaskett. Thank you. And it appears I have run out of
time. I yield back. Thank you.
Mr. Palmer. The gentlewoman yields back.
The chair recognizes the gentleman from Montana, Mr.
Gianforte, for his questions.
Mr. Gianforte. Yes, Thank you, Mr. Chairman and Ranking
Member.
My questions are for Mr. Geffken. Were you aware that the
Justice Department's Environment and Natural Resources Division
identified the city of Fort Smith as, quote, ``the most
important case'' in all the settlements they negotiated by the
division in 2015?
Mr. Geffken. Thank you, Representative Gianforte. I did not
know that. That is troubling to a city administrator because
the board of directors approved the consent decree
begrudgingly. When you have the world's largest law firm coming
down and saying that, well, if you don't accept this, I have
the complaint ready to be filed immediately. From my
experience, I would have called them on that. I did not know
that that is what it was.
Mr. Gianforte. Yes. And in the fiscal year 2015
Accomplishments Report the Department of Justice wrote, quote,
``The city of Fort Smith agreed to spend what it estimates to
be more than $480 million,'' end quote, on upgrades to its
sewer system and $700,000 in civil penalties and costs. Do you
believe that the EPA and the Department of Justice targeted
Fort Smith with the intent to pressure the city into a consent
decree?
Mr. Geffken. I would have to answer in the affirmative on
that. I mean, we did have the oldest administrative order
outstanding. However, we did have--we did spend over $200
million to come into compliance. And we had replied to the EPA
on several occasions, but as is wont of happening, you do not
get much reply back. We've asked many times who else has a
consent decree that is only 12 years? Who else has a consent
decree where the bill, the cost is already over 2 percent of
median household income? We have yet to receive any of that
information ourselves.
So, to say that Fort Smith was targeted, I mean, I would
believe so. The--in many instances it's good to make an example
of someone, but unfortunately, the Federal consent decree will
cost each and every household in Fort Smith over $15,000.
Mr. Gianforte. Yes. And also in your comments you said,
quote, that the Justice Department ``browbeat and coerced Fort
Smith into accepting this consent decree.'' What are some of
the ways that they did that?
Mr. Geffken. Well, as I mentioned before, one of the
largest ways that--during the negotiations that if there was a
contentious point, the city and its attorney were told that if
you don't accept it, the complaint is already written and we'll
just go ahead and file it. And this being my second consent
decree, I wasn't there, but I have done a lot of my research
with the city's attorneys and the staff that were there, and
when you have the Department of Justice and the--at the time
the former State Attorney General saying you need to take this,
you need to accept this, it's very hard for a city that's on
its own, you know, 87,000 people to try to say no to the United
States Government, or the United States, as they're referred
to.
Mr. Gianforte. Yes. And you also mentioned--you told the
committee that, prior to entering into the consent decree, the
EPA had sent you a letter acknowledging and thanking the city
for the work it had performed prior to that point.
Mr. Geffken. Yes, sir.
Mr. Gianforte. When did the EPA and the Department of
Justice's approach to Fort Smith shift from a collaborative
relationship to one that was more antagonistic?
Mr. Geffken. I believe that was the 2013 time period is
when that shift came. There was also a change in the staff
assigned to the Fort Smith case at the Department of Justice.
And so it did go from a more collaborative ``let's work
together.'' And just as Representative Plaskett may know, that
in Arkansas, the majority of funding is raised through sales
tax, not through property tax as in Pennsylvania, New Jersey,
New York where I'm from. So, the citizens approved a 1 cent
sales tax to pay off debt, which is a large commitment by such
a small city to raise $200 million.
Mr. Gianforte. And just to put a point on it, if you could
just summarize very quickly, what are some of the ways that
consent decree has harmed the community of Fort Smith,
particularly the lower-income families?
Mr. Geffken. Well, you know, we have people--we have
residents that worry when their rent for their, you know,
husband, wife--and it is literally two children will go from
$350 to $450 per month ----
Mr. Gianforte. Okay. Thank ----
Mr. Geffken.--and then ----
Mr. Gianforte. Thank you, Mr. Geffken.
Mr. Geffken. Thank you.
Mr. Gianforte. Yes. I yield back.
Mr. Palmer. The gentleman yields.
The chair now recognizes the gentleman from Missouri, Mr.
Clay, for questions.
Mr. Clay. Thank you, Mr. Chairman.
The underlying issue of this hearing is the value of civic
participation. Citizen suits are an avenue for Americans to
right wrongs and compel the government to do better. When
Americans bring attention to agency noncompliance, they act as
an extension of their government, a lever to enforce the laws.
Republicans would like to discourage that. If they get their
way, they will foreclose a channel that has literally saved
lives, not to mention money.
Mr. Weissman, what are some chief benefits from successful
citizen suits?
Mr. Weissman. Thank you very much, Mr. Clay. The example I
highlighted is one. I highlight in my testimony another 20-year
effort on the part of my organization to have a rule issued
requiring new truck drivers to be adequately trained. In the
environmental area, citizen suits are quite common to enforce,
again, congressionally made law and congressionally established
deadlines, particularly in the clean air area with many lives
saved and asthma attacks averted.
The list is really very, very long, and it's--
unfortunately, it's so long because there should be no need for
these suits. These are suits, again, just to enforce what
Congress has directed the agencies to do.
Mr. Clay. And thank you for that response. You know, some
of the legislation congressional Republicans support would
delay the rulemaking process, make agency action more expensive
or impractical. The main goal is to do away with consent
decrees, yet continuing litigation can often be far costlier
than settling. I know a little bit about consent decrees
because I represent Ferguson, Missouri. And we entered into a
consent decree last year with the Justice Department that made
significant changes to the way the criminal justice system was
conducted in that community, and it has reaped benefits for
that community.
So, Mr. Weissman, can you elaborate on the cost-
effectiveness of consent decrees?
Mr. Weissman. Thank you, sir. Well, you know, in regard to
the consent decrees involving local and State Governments, I'm
sure there are many examples and some cited here where things
have gone awry, but the predicate for all of those lawsuits is
the failure by a State or local government to comply with
federally established rights. That's for sure what was
happening in Ferguson, as well as in many police departments
around the country. I think there is overwhelming agreement
that those consent decrees, not unimportant, have meaningfully
improved police performance in cities across the country.
Mr. Clay. They certainly have. And, Dr. Sanders, thank you
for your work in the foster care space at the Casey Foundation
that impacts so many lives in such a meaningful way. You have
seen firsthand how States have devoted more resources to foster
care programs in response to consent decrees, correct?
Mr. Sanders. That's correct.
Mr. Clay. And it sounds like in this context foster youth
are positively impacted when States in crisis are forced to act
via consent decrees? Do you agree?
Mr. Sanders. I would agree in some cases. In other cases,
it doesn't appear that there have actually been improvements
for children, their--improvements in their outcomes.
Mr. Clay. Well, and I would think that that would be
debatable because we know of--we all know of some atrocities
that occur in the system, so anything that improves that, that
protects the lives of those young people has to be beneficial.
You know, Congress should not continue down a path that weakens
civil participation and citizens' abilities to stand up for
their rights. And I would hope that if we get anything out of
this hearing, Mr. Chairman, is that citizens still need to
participate in our process in an open process.
And with that, I yield back.
Mr. Palmer. I thank the gentleman for that last point.
The chair now recognizes the gentleman from Wisconsin, Mr.
Grothman, for his questions.
Mr. Grothman. Well, Dr. Sanders, I will keep you going
here. You cite in your testimony that child welfare consent
decrees work against the people that are trying to help. Can
you give us examples or elaborate on that a little bit?
Mr. Sanders. Over the last 15 years, there have been
numerous developments in brain science, in research around
predictive analytics, other efforts that have resulted in
improvements in the ability of government agencies to protect
children. The consent decrees often lock States into agreements
that were made at a point in time and don't allow the kind of
flexibility that can be implemented to increase the likelihood
that children will be protected.
So, examples would include some of the States like
Tennessee that were sued more than 15 years ago and aren't able
to implement some of the research changes that have occurred
more recently to improve lives of children.
Mr. Grothman. Let's take an example of a kid. We will call
him Joshua, you know, a fictional kid maybe, but Joshua, a
child who--how would we deal with him without the consent
decree and because of the consent decree, how are we dealing
with him, hurting him?
Mr. Sanders. I may take the liberty and suggest that part
of the solution would be if there were an ability to modify the
consent decrees more regularly based on changes in Federal
regulation, changes in State performance, et cetera. That
doesn't happen as much as we think it should.
So, in Joshua's case, it's quite possible that Joshua, as a
result of the consent decree, would be seen more frequently by
a social worker. What might not happen is that Joshua's social
worker would be better trained in trauma-informed practice,
which is emerging as a way to keep children safe. And so the
visits might occur, but the actual improvements in Joshua's
performance and by the social worker may not occur.
Mr. Grothman. Can you give me an example of, say, in
Joshua's case this is what happens to him under the consent
decree and this is what we would be able to do differently?
Mr. Sanders. So under the consent decree we can assure that
the State will send a social worker out to see Joshua. Under a
consent decree, that would occur. What would not occur is that
that social worker may be trained in new techniques that would
result in Joshua actually being safer.
Mr. Grothman. Okay. In New Jersey in 2004 because of a
consent decree, the State invested billions of dollars in its
child welfare program, but they still haven't been able to exit
their consent decree. In March of this year the Federal judge
overseeing the case called New Jersey's program a national
model. If the program is really so successful according to the
Federal judge, why hasn't the State been able to exit from the
consent decree?
Mr. Sanders. I'm not entirely sure. What I speculate based
on knowing something about New Jersey is that there are
measures that have not yet been achieved that were part of the
initial settlement agreement, and there is a continuing need to
improve on specific measures that were agreed to at the time
and that there is not 100 percent compliance.
Mr. Grothman. Okay. Governor Engler, I think the whole
problem here with consent decrees is it kind of gets at our
whole form of government, okay? Like it or not, every November
and spring elections, people show up and vote for people who
they want to have vote on our laws. The idea behind consent
decrees is that this system of elections doesn't work very
well, and we'd be better off determining our laws when some
bureaucrats and judges and lawyers get together and decide what
they will be, right? So it is kind of--the whole idea is
opposed to kind of our whole form of government. But can you
give us some examples of consent decrees that you think were
damaging to Michigan in your term as Governor?
Mr. Engler. Sure. We had a Federal judge--this started in
1977, but Judge Feikens, the late Judge John Feikens was in
charge of the women's prisons in Michigan, and he referred to
those as his women and he was very solicitous about what needed
to be done in those prisons and he had lots of opinions. And we
had a monitor that he had appointed, and basically, he was in
charge of the prisons. He was setting policy and instructing us
to, you know, follow that.
We had another judge who was dealing with prisoners who
were dealing with mental illness, and in that case, when I
became Governor, we were being fined I think $25,000 a day was
the suggested fine for the State because of the previous
administration failing to comply with the consent decree.
In both of those cases, what I found from our corrections
experts, the people running the department, is that they
thought having to take the temperature of the oatmeal being
served or to be monitoring the temperature of the showers or a
number of other reporting requirements were imposed had gone
far beyond the pale. And they were arguing that you had
differences in opinion respecting different philosophies I
suppose that--of how we ought to run this system. And we even
had at a point a requirement that we could only put one person
in a cell, which we had--we thought that was pretty limiting in
terms of our prison capacity.
The latest one, which I made the decision as Governor not
to enter into consent decrees. I said, look, we'll litigate
these. My legal services actually are free. I've got the
Attorney General to do that, so we'll fight these. And so we
did not do that, but after I left, my successor entered into a
consent decree which now has run, you know, for several years.
It's going to be $50 million a year is what they're saying.
This one is Dwayne B. v. Granholm against the Human Services,
and it was brought by a New York group called Children's
Rights, Inc., a perfect example, activist showing up and saying
this is how you ought to run it. We'd already paid I think $6
million in attorney's fees for them. They're involved with the
monitoring and they're involved with the sort of day-to-day
departmental operation. The State has been trying to modify
that under Governor Snyder. They had a renegotiation of the
consent decree. They end up with 211 goals that were part of
the modified settlement agreement. And so they're not running
these agencies when you're in that kind of situation.
And your premise of the question is very important again
and is something that Congresswoman Foxx mentioned. Who
decides? And I think it ought to be the men and women who get
elected. And if there's a deprivation of a constitutional
right, that's not been a finding in this. This is just a
difference, a fight over how you ought to run this system.
And I thought Dr. Sanders' testimony--one of the things he
pointed out, sometimes you're mandated to spend a lot of money
even on technology because that's what the masters in
Washington or the agencies want. That comes maybe at the
expense of training the caseworker that's dealing one-on-one
with the client.
Mr. Grothman. Thank you. I wish I had more time.
Mr. Palmer. The gentleman's time is expired.
The chair now recognizes the gentleman from Florida, Mr.
Ross, for his questions.
Mr. Ross. Thank you, Mr. Chairman. And I thank the
panelists for being here as well.
As a litigator for a little over 25 years, one of the
things my client and I would discuss is the cost of defense
because we understand, of course, that the economics of being
sued, regardless of the principles, weigh just as heavily. And
so therefore, you see a similar situation here under the APA
under the sue-and-settle procedure, and the way we have
addressed it in civil litigation of course has been with regard
to presumptions, burdens of proof, recovery of attorney's fees,
limitation of attorney's fees, and that has had somewhat of an
impact in trying to keep just frivolous cases from being filed
in an effort to try to force a settlement, again, irrespective
of the principles but basically just on the economics of
continuing to defend the litigation.
So my question to the panel is what would be the most
impactful way of reforming the process, the APA, in order to
reduce these consent decrees? And, Governor, I'll start off
with you.
Mr. Engler. I had mentioned the Federal Consent Decree
Fairness Act. That was a few years ago, but they wanted--there
was sort of three goals in that act, and I think those are
worthy of discussion in terms of--at least as it relates to
State and local government.
Mr. Ross. Right.
Mr. Engler. One, permit the State and local defendants to
apply for a modification or a vacation of the consent decree --
--
Mr. Ross. Based on a significant change in circumstances or
just ----
Mr. Engler. Well, the way they ----
Mr. Ross.--within the discretion of the ----
Mr. Engler. The way they set it up if there was a change in
government, for example, as a new Governor coming in, I maybe
wasn't in that fight, maybe I've got a different approach. I
mean, I literally went down to a Federal judge's office and sat
there and we talked through why he was unhappy and what had
been done. I said, look, I haven't been here, but here's how
we're going to approach this.
Mr. Ross. Got you.
Mr. Engler. Eight, nine years later, we got out of the
consent decree. I mean--but--so that was a piece of it. The
other element was to just to say that there ought to be on a
periodic basis a review of these consent decrees just because,
again, Dr. Sanders' ----
Mr. Ross. Right.
Mr. Engler.--situation changes. The other that I think is
important is that there ought to be--is there any finding of a
constitutional issue here? Because sometimes--I mean, you
literally have a political fight being sort of fought out in
this, and your observation about the cost of defense, that sort
of is a seductive argument.
Mr. Ross. Politically, from an economic--yes, you--I mean,
you are almost forced into entering into a consent decree
because you have to justify the expense of defending it.
Mr. Engler. Yes, but I would say to the Governors and the
Attorneys General--I actually think the problem is a little bit
the other way. I think that sometimes somebody is--there might
be an alignment of political interests trying to do an end run
around the political system that hasn't previously agreed with
that point of view.
Mr. Ross. Got you.
Mr. Engler. And that ----
Mr. Ross. Thank you, Governor.
Mr. Engler.--is also a reason for review.
Mr. Ross. Thank you. Anybody else?
Yes, sir, Mr. Geffken.
Mr. Geffken. Thank you, Mr. Ross.
You know, when it comes to EPA consent decrees and dealing
with water, wastewater, when it--the consent decrees are
comprehensive in nature, so instead of just focusing on the
issue at hand--and this is a 147-page document that's $475
million, and its primary goal was to take care of 22 sanitary
system overflow points. And the problem becomes--it becomes
much more than that. It becomes looking into fats, oils, and
greases. It comes into examining each and every pipe and being
very prescriptive and not iterative. And it also--and the
biggest way to move forward with this is to allow an integrated
planning prospect for consent decrees, so not only having a
five-year window and then reexamining where we're going and
moving forward but also making sure that we're not
shortchanging the other aspects.
You know, the city of Fort Smith spent millions to expand
Lake Fort Smith, its primary reservoir. It spent millions
creating a new reservoir, Lee Creek. Now, it's spending
hundreds of millions of dollars on wastewater, and we still
need to build a brand-new 48-inch transmission line to come
into the city.
Mr. Ross. I understand.
Mr. Geffken. As it stands, we have to now raise water
rates, and this is probably ----
Mr. Ross. Right.
Mr. Geffken.--the first that residents are going to be
hearing that, but also then we've raised our sewer rates 167
percent in such a very short period of time, so an integrated
iterative plan that takes affordability into account but while
not taking our eyes off the ultimate goal.
Mr. Ross. Thank you. One second. Yes, sir, Governor?
Mr. Engler. Yes. One thing that Mr. Weissman and I--we see
the problem. We may have analyzed it differently, but it goes
to what also can be done. We talked about--he testified about
the openness of the process at the Federal level. One of the
concerns I've got at the Federal level is the size of these
fines, and I just totaled up in his testimony, J.P. Morgan, $13
billion; Citigroup, seven. Anyway, the list of just the banks
was over $56 billion. That just works out to about two years'
funding for the Justice Department. Nobody knows where the $56
billion went, and that would be a good question for the
committee ----
Mr. Ross. Okay.
Mr. Engler.--to determine. Where does the money go? And
there ought to be a lot of openness because part of the problem
with this is that these settlements get made, and the
disposition of the funds is handled administratively, and I
think the Attorney General is trying to end that practice, but
that ought to be--those ought to be appropriated dollars if the
injury was to the public. That's two years' funding for the
Department.
Mr. Ross. Thank you. I yield back.
Mr. Palmer. The gentleman yields.
I now recognize myself for questions.
And first of all, Governor, you had asked that ``Consent
Decrees in Institutional Reform Litigation: Strategies for
State Legislatures'' be entered into the record, without
objection, but for transparency's sake, I must confess that I
am a coauthor of that report.
One of the points I want to make here is that we are not
arguing that all consent decrees are bad. In fact, consent
decrees are a legitimate and useful tool in the legal system.
They have proven so in both public and private cases. The point
and focus of this hearing is the abuse of consent decrees, and
I think we got a little off-track on that, particularly when
they are used to circumvent the legislative process, which
denies citizens their right to governance through their elected
representatives. It is particularly egregious in the direct
manner in which they bind State and local governments in
administering their programs and allocating their resources.
Illinois is a prime example of this. They are currently under
80 consent decrees, some dating back to the 1970s.
And just from your perspective as a former Governor, having
served in elected office--and I also for transparency's sake, I
have known the Governor for 20 years--you want that
transparency and that accountability to the voters, which is
denied them when they are under a consent decree and
particularly when the consent decree is being administered by
an unelected judge, an unelected control group, unelected
bureaucrats, and unelected special master. Is that not
problematic for representative government?
Mr. Engler. That's exactly right, and there simply is no
accountability there, at least no accountability back to
voters. And we haven't talked about the role of monitors either
today, but the Federal judge is appointing somebody to kind of
be the master to oversee. And in the case of the ongoing
litigation in Michigan, there's somebody that's reporting every
six months back to the Federal judge.
Now, the criteria for picking the monitors is sort of in
the province of the Federal judge. That's often, you know, I
suppose a qualified university professor or there's a little
cottage industry of monitors that are out there. But the
reality is that when there's 211 sort of factors that are being
monitored, there's not much discretion left for the agency head
or the legislature to set priorities or adjust priorities as
new information becomes available, new technology emerges.
One of the boondoggles that's been out there in the child
welfare world has been the whole SACWIS implementation. Dr.
Sanders is very familiar with this, but, I mean, States have
spent literally tens of millions of dollars trying to meet a
Federal mandate there. This is on data collection. And the way
this has been done I would advise nobody would ever do a data
project that way. But we--I faced that situation, and we were--
by the time I was elected, we were several tens of millions of
dollars into the project. It would cost many more millions to
start over, and it was going to cost many more millions to
finish. We simply slogged on to try to get that done and still
wasn't adequate, and yet that's the kind of micromanagement
you're getting.
Another area where--and a lot of this area--and again, Dr.
Sanders' testimony is important, especially when it comes to
children and children's welfare, the cross-agency cooperation
and collaboration that's necessary today often is precluded by
the very Federal laws that are passed here. They don't allow
the flexibility to bring the mental health services, the public
health services, the education services all together, and in
fact each of the programs often has their own administrator
when we'd be better off--I've said you have to be very smart
sometimes to be trapped in poverty because you've got so many
different agencies with so many different programs who want to
look out for you, and we ought to be able to literally appoint
an individual who could draw all the services together.
Mr. Palmer. Well, in Dr. Sanders' testimony he mentioned a
couple of cases, Alabama being one of them, R.C. v. Hornsby, in
which we were able to work through a consent decree to a
reasonable solution. But there was another consent decree in
Alabama involving the State highway department in which we
literally spent enough money just on legal fees to repave every
mile of interstate highway in Alabama twice. And for those who
don't think we have paved roads, we have got lots of paved
roads.
That is the problem is the ability to work your way through
these. And Dr. Sanders' testimony particularly I think is
relevant in the area of children that as science changes, as
techniques change, those aren't taken into account.
Dr. Sanders, I would like to know, have you seen
circumstances where full compliance with a consent decree is
impossible? And I am thinking of New Jersey, which has been
held up as a model, but they are still under a consent decree.
Mr. Sanders. Thank you for the question. We actually in one
of our convenings had a data expert from Emory University take
a look at the--some of the agreements and found that it was
impossible to achieve all of the measures that were required at
the same time. And in part that happened because the
negotiations for the consent agreement weren't made with data
experts; they were made with attorneys, and they weren't
familiar with some of the measures. And so it was--it would not
be possible for some States to exit, given the current
measures.
Mr. Palmer. Thank you, Dr. Sanders.
Mr. Geffken, who filed the suit against Fort Smith?
Mr. Geffken. I believe that actually came from the State
and EPA ----
Mr. Palmer. Okay. So was ----
Mr. Geffken.--against the city in order to make--to make
the city of Fort Smith compliant regarding sanitary system
overflows.
Mr. Palmer. And you believe they were trying to make an
example of Fort Smith?
Mr. Geffken. I do based on the information I've just heard
from Representative Gianforte. Yes, that was unknown to me when
I went there. I knew we had a large problem, and I knew it was
being addressed by spending several hundred million dollars.
Again, it--the whole process of a consent decree ties one's
hands, and you're not able to apply the latest technology or
focus on actually what yields ----
Mr. Palmer. How much ----
Mr. Geffken.--the best benefit.
Mr. Palmer. How much did you say this is costing the
residents of Fort Smith, say, an average household? What is it?
Mr. Geffken. Fifteen thousand dollars.
Mr. Palmer. Fifteen thousand dollars, and the median
household income is ----
Mr. Geffken. Thirty-three thousand five hundred.
Mr. Palmer. Thirty-three thousand five hundred. This is one
of the examples, again, where overregulation and the abuse of
consent decrees does great harm to low-income people. I grew up
pretty much dirt poor. My dad had an eighth-grade education. It
would have been staggering to us to have had the type of
increases in sewer payments that you guys have had in Fort
Smith or that we have had in Jefferson County in Alabama and
Shelby County. We are going through the same thing, and it has
had a negative impact on the ability to grow the economy.
And just to give you an idea of how overregulation harms
the economy, Gallup put out a report, pointed out that prior to
2008 there were 100,000 more businesses starting up than were
closing. By 2014 in the United States now 70,000 more
businesses are closing than starting up, and the primary
problem is regulation.
One of the problems that we point out in that paper that
Governor Engler cited is the inability to track these consent
decrees. We went to the Justice Department, we went to the
judiciary to try to see if they categorize these in such a way
that we could look at Arkansas or look at Michigan or the State
of Washington and determine, you know, what consent decrees
apply to those States, the State or local government. They
don't track it that way.
So, I would ask, Dr. Sanders and Mr. Weissman, should
Congress consider legislation requiring Federal agencies,
particularly the Justice Department and the judiciary to track
and categorize and publish a list of these consent decrees? Dr.
Sanders?
Mr. Sanders. We found with the child welfare consent
decrees that there actually wasn't any single place where it
was--the information was captured, and so we've started to do
that just based on the convenings and discussions with States.
If--that presents a number of issues, and it seems that it
would be a good direction for Congress to take a look at, at a
minimum tracking the consent decrees, as well as the cost and
the results.
Mr. Palmer. Mr. Weissman, would you have a problem with the
Federal Government tracking these and publishing a list so that
they could be easily identified?
Mr. Weissman. Absolutely not. I think that that would be
highly desirable. I think, you know, there's some difference
between this consent decrees where the Federal Government
initiated the case versus where the--you know, a decentralized
thing by a citizen group. But in--so the second would be harder
to compile but would be desirable in any case.
Mr. Palmer. Well, it really wouldn't because if the Federal
Government entered into a consent decree, it doesn't matter who
initiated the suit. It is a matter of tracking these so that
there is a concise list.
Governor Engler?
Mr. Engler. I think the courts also ought to have an
obligation here. There ought to be something in the judicial
system where each of the--I don't know if it's the circuit
court who oversees the district courts in their region, you
know, whether the circuits would have it or somehow the court
administrator--the Federal judges ought to know how many
consent decrees they're actually enforcing in their
jurisdictions, and that may be an easier way to get it than
trying to go to the agencies and--because who knows? But
they're all--there's a limited number of Federal judges and
Federal, you know, circuit courts, and maybe that's--that--they
should know their caseload, and that's part of it.
Mr. Palmer. I would like to thank our witnesses for taking
the time to appear before us today, and I would particularly
like to thank the ranking member, Mrs. Demings, for her
indulging me going a little bit longer.
If there is no further business, without objection, the
subcommittees stand adjourned.
[Whereupon, at 11:40 a.m., the subcommittees were
adjourned.]
APPENDIX
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