No Regulation Through Litigation Act of 2025: Limits on Federal Agency Power Through Court Settlements

The "No Regulation Through Litigation Act of 2025" significantly restricts how federal agencies can use settlement agreements and consent decrees, particularly those that might lead to new regulations. Essentially, it ties the hands of agencies like the EPA or OSHA when they try to resolve legal disputes with companies. The bill, introduced by Representative Michael Cloud, aims to curb what it sees as agency overreach through the court system.

Settlement Shackles

This bill puts some serious constraints on how agencies can settle cases. Here’s the breakdown:

• Limits on Consent Decrees: Federal agencies can't agree to consent decrees that go beyond what a court could directly order. Think of it like this: if a court couldn't force a company to clean up a polluted river beyond a certain point, the agency can't agree to that extra cleanup in a settlement either (SEC. 2). This could impact how effectively agencies can address violations, potentially leading to less comprehensive solutions.
• No More Attorney Fee Reimbursements: If a settlement agreement results in a new regulation or guidance document, the government can't pay the attorney fees or litigation costs of the other party (SEC. 2). Imagine a small environmental group sues a big corporation for polluting. If the settlement leads to a new rule protecting clean water, that group won't get reimbursed for their legal costs. This could make it harder for public interest groups to hold companies accountable.

Redefining "Guidance"

The bill also broadens the definition of a "guidance document" to include pretty much any communication from an agency, from formal memos to even blog posts and speeches by agency officials (SEC. 2). This is important because, under this bill, any settlement that results in one of these broadly defined "guidance documents" triggers the restrictions on attorney fee payments. This wide net could create uncertainty and potentially chill agency communication, making it harder for businesses and the public to understand the rules.

What's "Regulation," Anyway?

The Act defines "regulation" quite broadly, too, encompassing any agency statement that carries the force of law (SEC. 2). However, there are exceptions for rules related to military/foreign affairs (with some caveats), internal agency management, and other categories exempted by the Office of Information and Regulatory Affairs. It's worth noting that the details of these exemptions could become important battlegrounds.

The Real-World Impact

Let's say a factory is exceeding pollution limits. Under the old system, the EPA might have negotiated a consent decree where the factory agrees to stricter pollution controls and pays the legal fees of the environmental group that brought the lawsuit. Under this bill, the EPA's options are more limited. They can't agree to anything in the settlement that a court couldn't directly order, and the environmental group wouldn't get their legal fees covered if the settlement leads to any new guidance or regulations.

This could mean weaker enforcement of environmental and consumer protections. Companies might be less willing to negotiate strong settlements if they know the agency's power is limited. It could also shift the balance of power towards regulated industries, as they may have less incentive to compromise in legal battles.

The Big Picture

This bill is part of a larger trend of efforts to rein in the power of federal regulatory agencies. While proponents argue it prevents agencies from exceeding their authority, critics (though there are no official opponents at this early stage) might worry it weakens their ability to protect the public. The "No Regulation Through Litigation Act of 2025" could make it harder for agencies to address violations effectively and could discourage public interest groups from bringing lawsuits that often lead to important regulations.