When private firms breach environmental standards, the US Environmental Protection Agency (EPA), often in partnership with state governments, uses litigation to deal with these violations. In new research Juan Pablo González and Hye Young You look at why some states don’t join the EPA in litigation against private polluters. They find that states are less likely to take part in EPA litigation when defendant firms have made campaign contributions to Republican candidates in recent elections and when firms contribute to Republican legislators sitting on environmental and other powerful committees.

In the United States, environmental policy is shaped by a collaboration between different levels of government. The Environmental Protection Agency (EPA) sets national standards, while state governments handle much of the implementation. A key area of cooperation is environmental litigation against private firms that pollute, which involves both federal and state governments. This collaboration is crucial, as it deals with significant violations and large financial penalties. States play a vital role by bringing additional resources to legal battles, often resulting in stronger cases and more substantial settlements.

Why don’t some states take part in EPA litigation?

States that choose to join the EPA in litigation can receive a portion of any settlements that result. This raises an important question: why would some states opt out of this process, even when environmental violations occur within their borders? It’s crucial to recognize that the defendants in these cases are typically private firms with significant resources, which they can use to sway regulatory outcomes. While directly influencing federal judges is difficult, the cooperative federalism framework in US environmental policy creates another avenue for influence—one that is central to our analysis. We hypothesize that firms leverage their political connections with state politicians to influence state environmental agencies’ decisions on whether to support the EPA in court.

To test our hypothesis, we analyzed data from major EPA civil cases between 1998 and 2021, focusing specifically on 332 consent decrees – legally binding agreements between government and another party – and private firms as defendants. State agencies have the option to join the EPA in court when these violations occur within their jurisdictions. Our findings show that there is significant variation in state participation in civil litigation (Figure 1). We measured political connections by analyzing campaign contributions, matching the defendants’ information with their contributions to state races. Using data on campaign contributions from Stanford’s Associate Professor Adam Bonica’s Database on Ideology, Money in Politics, and Elections (DIME), we found that more than half of the firms in our sample made at least one contribution to state races during the analysis period. 

Figure 1 – Participation decisions by state agencies

Republican campaign contributions may deter state agencies from joining the EPA in court

Our results indicate that state agencies are less likely to join the EPA in court when defendant firms have made contributions to Republican candidates in state races during previous election cycles. This finding remains consistent across various model specifications and alternative explanations, such as the severity of the violations. Interestingly, we did not observe a similar effect for contributions to Democrats. This difference may be because Republicans and Democrats cater to distinct voter bases with opposing views on environmental regulation, making it more politically costly for Democrats to align with polluting firms.

We also found that the effect is primarily driven by contributions to Republicans in legislative races, rather than contributions to governors. There are several reasons for this. First, legislative races account for 83 percent of the total contributions from the firms in our sample, suggesting that these firms focus more on legislative races to gain influence. Additionally, a single firm’s contribution may hold less significance in gubernatorial races, where many other interest groups and individuals also donate. Last, given the strong influence of partisanship on gubernatorial outcomes, there may be limited opportunities for firms to sway state decisions through additional contributions to these races.

Photo by Thijs Stoop on Unsplash

Connected legislators’ committee assignments

One possible mechanism through which legislators influence the bureaucracy is their oversight authority over these agencies. State legislatures have the formal power to monitor bureaucratic actions and the implementation of regulations. If this mechanism is at play, we would expect the effect to be stronger when defendant firms have political connections to legislators on key committees. Figure 2 shows that the likelihood of state agencies joining the EPA in court is lower when firms contribute to Republican legislators on committees related to environmental regulations. Furthermore, the effect size associated with environmental committees is comparable to that of connections with legislators on powerful committees, such as budget or appropriations. To ensure the robustness of our findings, we conducted a placebo test and found no effect for political connections with legislators on the veterans committee, which is unrelated to the actions of state environmental agencies.

Figure 2 – Effects of contributions by state legislators’ committee assignment

Direct communication between state legislators and the state environment agency is important

Through a Freedom of Information Act (FOIA) request, we analyzed over 5,500 records of communication between Texas state politicians and the Texas Commission on Environmental Quality (TCEQ) from 2000 to 2020, revealing that 80 percent of these contacts were initiated by state legislators, with Republican legislators more frequently requesting hearings or public meetings. Our findings show that firms being sued by the federal EPA contribute more to Texas state races, particularly to Republican candidates, and that these contributions are positively associated with the number of communications from legislators to the TCEQ, supporting our hypothesis of direct communication as a mechanism of influence.

The role of state governments in environmental regulation is growing increasingly important as federal actions to address climate change face significant challenges. The recent Supreme Court ruling in West Virginia v. Environmental Protection Agency, which limited the Agency’s ability to regulate power plant emissions, underscores the limitations of the EPA’s regulatory tools. As states become the key battlegrounds for environmental regulations, it is crucial for scholars to examine how state politics create opportunities for private firms to influence these regulations—an influence that can have profound consequences on climate change, one of the most urgent issues facing society today.

• This article is based on the paper, ‘Money and cooperative federalism: evidence from EPA civil litigation’ in The Journal of Law, Economics, and Organization. 
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• Note: This article gives the views of the author, and not the position of USAPP – American Politics and Policy, nor the London School of Economics. 
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