No Regulation Through Litigation Act Targets Legal Settlements: Federal Agencies Prohibited from Paying Opponents' Legal Fees in Rulemaking Cases

The 'No Regulation Through Litigation Act of 2025' aims to fundamentally change how the federal government settles lawsuits. Currently, if a group sues a federal agency to force them to enforce a law—like a clean water standard or a consumer safety rule—and they reach a settlement that results in a new regulation, the government often pays that group’s legal bills. This bill puts a hard stop to that practice. Specifically, Section 2 prohibits agency heads from paying any attorney fees or litigation costs if a settlement or court order leads to the agency issuing a new regulation or a 'guidance document.' It also mandates that court-ordered agreements, known as consent decrees, cannot require an agency to do anything a judge wouldn't have the power to order on their own.

The Cost of Accountability

For the average person, this change hits the 'checks and balances' of daily life. Imagine a local community group suing the EPA because a nearby factory is leaking chemicals into the groundwater, and the agency hasn't updated its safety guidance in decades. Under this bill, even if the community group wins and the EPA agrees to issue new safety instructions, the group has to eat the entire cost of their lawyers and experts. Since these cases can cost hundreds of thousands of dollars, this provision (found in Section 2) could make it financially impossible for anyone but the wealthiest corporations or massive non-profits to hold the government’s feet to the fire. It essentially raises the 'entry fee' for regular citizens to demand that agencies do their jobs.

Defining the Paper Trail

The bill uses a very wide net to define what counts as a 'guidance document.' It’s not just formal rulebooks; it includes news releases, blog posts, speeches by officials, and even 'no-action letters.' Because the bill blocks fee payments if a settlement leads to any of these items, it creates a massive 'keep out' sign for legal challenges. If a small business owner sues an agency to get a clear interpretation of a confusing tax memo, and the agency settles by updating that memo on their blog, the business owner is stuck with the legal bill. By labeling almost every form of official communication as a guidance document, the bill ensures that almost any successful settlement against an agency will trigger the ban on recovering legal costs.

Limits on Judicial Reach

Beyond the money, the bill limits the 'remedies' available in court. By requiring that consent decrees stay strictly within a court’s specific authority, it prevents agencies and plaintiffs from getting creative with solutions. For example, in a complex case involving veteran benefits, an agency might currently agree to a settlement that sets up a new streamlined application portal—something a judge might not have the specific power to 'order' but that both sides agree is a good fix. This bill would likely block those kinds of practical, flexible compromises, forcing cases into long, drawn-out trials instead of collaborative fixes that save time and taxpayer money in the long run.