Consent Decrees as Emergent Environmental Law.

• Author: Hester, Tracy

TABLE OF CONTENTS ABSTRACT 687 TABLE OF CONTENTS 689 I. INTRODUCTION 690 II. CONSENT DECREES IN ENVIRONMENTAL LAW 694 III. CONSENT DECREES AS A SOURCE OF LAW 704 A. Creation Through Fostering Substantive Norms 707 B. Creation Through Deferential Judicial Review 714 C. Creation Through Persuasion and Precedent 719 1. Preclusion 721 2. Persuasion 723 3. Precedent 724 4. Retrospective Review 730 5. Prospective Designation 731 IV. TEST RUNS, CAUTIONS, AND CAVEATS 734 I. INTRODUCTION

Consent decrees are the unheralded workhorses of United States regulatory law. In part due to their hybrid nature as mutual contracts and juridical decrees, these consensual judgments serve as a primary vehicle for judicial implementation and oversight of some of the largest and most significant disputes in civil rights, antitrust, labor, immigration, class actions, bankruptcy, and environmental law. (1) For example, the U.S. Department of the Interior alone entered into over 460 consent decrees and settlements between January 1, 2012, and January 17, 2017, that resulted in over $4.4 billion in monetary awards. (2) The value of environmental remedies compelled by consent decrees in U.S. Environmental Protection Agency ("EPA") civil enforcement actions exceeded $4.5 billion in the first six months of 2019, (3) and the federal courts entered 109 consent decrees to resolve civil environmental lawsuits in 2018 alone. (4)

This widespread use of consent decrees has many causes. (5) Some federal statutes, regulations, and policies, for example, explicitly require the United States to use consent decrees lodged in federal courts to settle certain types of environmental claims. (6) In addition, consent decrees offer important benefits, including access to the court's contempt power to enforce the decree and the ability to avoid sovereign immunity defenses that governmental defendants might potentially raise, over bare settlement agreements. (7)

One other key advantage makes consent decrees especially attractive to litigants: like other forms of settlements and arbitral decisions, they leave no footprints. Parties will often settle a case with the expectation--and stipulation--that the resolution contains no factual or legal admissions that could affect future proceedings between the parties and, by extension, future litigants. Consent decrees, by design, can therefore help resolve the largest disputes without disrupting existing environmental case law principles or creating unfavorable precedents that might haunt future litigation.

Because of their lack of precedential heft, consent decrees consistently get overlooked as sources of environmental law. Most public criticism of consent decrees, (8) as well as scholarly assessment of their proper role and use, (9) consistently elides their key role as a potential source of law and policy. Like settlements, private arbitral awards, and unreported opinions, (10) consent decrees get shelved in a jurisprudential netherworld where courts review, approve, lodge, and administer them, but they rarely act as a possible source of guidance or statement of legal principles to inform future judicial decisions. Effectively, consent decrees are discounted almost entirely as a source of organically persuasive legal guidance or precedential authority. The prospective deliberate use of consent decree judgments by courts or parties to shape useful and durable legal precedents and values consequently also gets short shrift.

This Article explores the possibility that consent decrees, like other judicial instruments and opinions, deserve attention in their own right as a possible source of substantive principles, persuasive examples, or even authoritative precedents in environmental law. This expanded jurisprudential role for consent decrees would necessarily operate under different rules than traditional processes of persuasive authority, stare decisis, and the mechanisms of precedent. Because judges play a different role in the review and lodging of consent decrees than their usual dominant position in crafting opinions and remedies, the factors that give some consent decrees weight over others will differ as well. In addition, consent decrees may offer troubling opportunities for undue power and influence by certain parties who can insist on terms and provisions across multiple consent decrees in a strategic fashion to shape precedent by consensual design--including, notably, the United States. (11)

While consent decrees frame judicial oversight and enforcement in multiple legal arenas--most notably in antitrust and civil rights--this Article focuses on their role in environmental and natural resources law. (12) In this sphere, federal law requires their use for certain settlements and mandates public notice about the terms of the decrees. The United States has aggressively used consent decrees as a tool to implement environmental mandates, and these tactics have included the use of model consent decrees that set out the key terms and conditions that the federal government will accept. (13) As a result, environmental consent decrees offer a well-developed body of decisions lodged over a period of forty years in a relatively transparent process mandated by federal statutes or regulations--which should make it a strong test case to assess the possible role for allowing consent decrees to act as persuasive, or even precedential, authority in limited circumstances.

This Article proposes that consent decrees can create new environmental law through three parallel pathways. (14) First, consent decrees can serve as a platform to implement nascent regulatory policy prior to the formal promulgation of rules or regulations. In a sense, consent decrees in these circumstances provide a test bed for new environmental practices and expectations that later mature into full-fledged regulatory standards. This function of consent decrees tends to surface most visibly during coordinated enforcement initiatives involving industrial sectors at the federal level. Second, consent decrees can generate new law through deferential review by the courts. When courts weigh a proposed consent decree to determine whether to lodge it, they use a relaxed standard that does not require the court to substantively assess the merits or legal conclusions of the settlement. This type of review parallels, in many respects, the deferential review that federal courts use when assessing administrative agency action under the federal Administrative Procedure Act. The historical deferential judicial review of agency administrative action nonetheless has generated numerous important principles of environmental law. Judicial determinations of the legality and fairness of consent decrees may play a similar role.

Last, and most controversial, consent decree judgments arguably can directly embody legal holdings that, at a minimum, have persuasive value for subsequent court proceedings. These holdings, in certain circumstances, might even rise to the level of precedential rulings entitled to stare decisis in future actions. This last role of consent decrees in generating environmental law, however, requires close cabining and careful consideration to avoid the risks of manipulation or erosion of judicial authority. This Article concludes with a suggested test run on applying these concepts to the United States' recent consent decrees, including recent settlements of enforcement actions against automobile manufacturers for illegally installing defeat devices that produced fraudulent data in violation of the federal Clean Air Act. It then offers some suggestions for future research.

2. CONSENT DECREES IN ENVIRONMENTAL LAW

   Weighing the generative role of consent decree judgments in environmental law raises difficult challenges because of the slippery nature of consent decrees themselves. Facially, a consent decree is simply defined as an agreement between parties that a judge then enters as a judicial order or court decree. (15) As a result, they range from largely private contractual commitments approved by the court which resolve contested cases, such as settlement agreements simply lodged with the court, up to fully contested judgments crafted largely by the judge in an effort to broker a resolution. (16) They also clearly differ in a fundamental fashion from arbitration awards, mediation agreements, or other varieties of alternative dispute resolution. (17)

   The authority of a court to enter a consent decree arises from an agreement of the parties and the court's inherent power to oversee and enforce settlements of contested cases before it. (18) As a result, a judge need not adjudicate liability before entering a settlement, even over the objection of one of the parties to a multiparty decree. (19) This inherent authority in turn allows a court to approve a consent decree that includes remedial actions or relief accepted by the parties that the court could not order itself under the original claims. (20)

   Past these straightforward predicates, the boundaries quickly blur. The difficulties mount particularly when parties and courts try to approve, enter, implement, or modify consent decrees because such judgments exist in a state of juridical superposition: they are simultaneously both binding contracts between litigants as well as official orders of the court. (21) Courts will consequently interpret the terms of consent decrees pursuant to contract law norms and strive to discern the intent of the parties as expressed by the terms of their agreement. (22) But judges also treat consent decrees as full-fledged judicial instruments subject to enforcement through the court's powers of contempt. As the U.S. Supreme Court has noted, "consent decrees 'have attributes both of contracts and of judicial decrees,' a dual character that has resulted in different treatment for different purposes." (23)

   The courts have constructed a general framework for approving...