Law Firms Pocket Millions Helping Nonprofits, Bureaucrats Expand Environmental Regulations

Since 2013, more than $20 million has been paid in attorney fees alone as a result of environmental law litigation between outside groups, often environmental nonprofits, and the federal government. The highest costs came during the Biden administration.

It highlights a troubling arrangement between federal agencies and litigating nonprofits, which are sometimes also federal grantees. Outside groups suing federal agencies not only cost taxpayers millions of dollars, but result in settlements that allow bureaucrats to create new regulations that bypass Congress and public debate. The scheme, known as “sue and settle,” allows nonprofits and bureaucrats to make policy agreements that amount to an end-run around Congress.

The Environmental Protection Agency (EPA) has been the earliest, and primary, target of sue-and-settle arrangements, although other agencies are also involved in the practice. Trump EPA Administrator Lee Zeldin has not tackled the sue-and-settle issue explicitly, although the administrator during President Trump’s first term had worked to reform the practice.

Background

Open the Books first reported on the scheme in 2024 and laid out how it works.

“Sue and settle” describes cases wherein a party (often an environmental nonprofit or other advocacy group) sues a federal agency, and instead of litigating the lawsuit in court, both parties come to terms via negotiation. Such settlements—or “consent decrees”—may include issuing or determining aspects of a rule or meeting a specific deadline.

While settlements are an important tool for administrators to avoid lengthy and expensive litigation, critics say the practice can create new regulations without a public policy debate and increases federal influence over state laws.

Another pernicious aspect of this practice is the possibility that politically aligned government employees and leaders welcome these lawsuits as an opportunity to expand their regulatory authority without an act of Congress. These “sweetheart deals” between the feds and supposedly oppositional attorneys can also happen when staff move between agencies and nonprofit or private firms which may sue an agency. Lawyers at the agency may be less inclined to vigorously defend the agency’s interests, and more inclined to reach a settlement that favors the litigants.

Congress, and by extension, the American people, are pushed out of the process.

In 2024, Open the Books spoke with Walter Olson, a legal scholar at Cato Institute, who explained:

“The people who staff regulatory agencies very often come from the same communities that litigate against agencies. In a Republican administration, this might include some regulated businesses, or law firms representing regulated businesses.

“In a Democratic administration, it might mean some of the environmental groups. But these are the people who tend to know all about the ins and outs of the agencies, law, and they are often people who run the agency. Sometimes the person who filed the lawsuit or with one of the organizations, by the time they want to settle, is working for the agency.”

Sue-and-settle cases increased dramatically under President Obama. Then, in 2017, Trump EPA Administrator Scott Pruitt published a directive ending the use of consent decrees and settlement agreements to “circumvent the regulatory process set forth by Congress.”

Most of the provisions outlined by Pruitt’s directive were later rescinded by Biden EPA Administrator Michael Regan in 2022.

Settlements & Fees

In addition to providing a backdoor to environmental policymaking, the lawsuits also pay out millions of dollars in plaintiff attorney fees, according to data obtained via Freedom of Information Act. These payments are hidden from public disclosure and oversight, so taxpayers cannot ascertain whether fees are artificially inflated or overly generous.

New data shows such fees increased considerably under the Biden administration and were largely paid out to environmentalist organizations aligned with Biden’s progressive policies.

Attorneys’ fees paid to litigants under the Clean Air Act, Clean Water Act, and Endangered Species Act from 2013-2024. Figures not adjusted for inflation.

• Obama’s second term saw $5.7 million in attorney fee payouts

• Trump’s first term saw $3.6 million. His term also included the year of the lowest attorney fee payout: $530,280 in 2017.

• Biden’s first two years alone saw attorney’s fees nearly double over Trump’s four years: $6.9 million. That’s more than $3 million in fees each year.

• There was a dip in attorney fees in Biden’s final year, to $1.17 million.

• Overall, the Biden administration paid out $10.9 million in attorney’s fees under Clean Air Act, Clean Water Act, and Endangered Species Act litigation.

Payments generally track with the total number of settlements, which reached a high of 37 during Obama’s second term, and a low of 10 in 2019, under Trump’s first term.

Number of settlements from 2013-2024 for the Clean Air Act, Clean Water Act, and Endangered Species Act.

Over a Decade of Payouts

Over $20.3 million has been paid out in attorney fees to various organizations since 2013.

The top three primary plaintiffs in lawsuits that paid out attorney fees over that time are the Sierra Club ($4 million), Northwest Environmental Advocates ($1.8 million), and Center for Biological Diversity ($1.4 million). Although environmental nonprofits received the most attorney fees, the State of California ($653,000) and industry group American Fuel & Petrochemical Manufacturers ($507,312) are also in the top ten.

Top Plaintiffs Under Biden & Trump

Lawsuits led by Sierra Club were awarded about a million dollars more in attorney fees under Biden than under Trump: $1.7 million compared to about $700,000.

Top five primary plaintiffs and attorney fees under Biden.

Top five primary plaintiffs and attorney fees under Trump’s first term.

Three of the top environmental nonprofit plaintiffs under Trump and Biden are also federal grantees from 2016-2024: Air Alliance Houston was awarded a $3 million grant; Clean Air Council received two grants worth $860,000; and Center for Environmental Health won a $75,000 grant.

The Future of “Sue and Settle”

The second Trump administration’s EPA administrator, Lee Zeldin, has not publicly restored Pruitt’s, or similar, directives. The issue is on Administrator Zeldin’s radar, however, and a spokesperson for the agency told Open the Books:

“Outside activist groups should not dictate EPA’s agenda or federal environmental policy. The Trump Administration is keenly aware of concerns with sue-and-settle practices and commits to not engage in them. The Trump EPA will respect the rule of law and the will of the American people in setting policy based on its statutory mandates and Gold Standard Science, not based on side deals with outside activist groups dead-set on driving up costs to Americans or advancing the interests of our foreign adversaries.”

Open the Books has filed a FOIA request for the fiscal year 2025 sue-and-settle data to provide more insight into this evolving issue. Our team will continue to report on this undemocratic scheme.