The Trump administration is deploying a previously limited tactic to achieve its deregulatory goals: entering consent decrees—settlements between the parties that are entered as court orders—with private plaintiffs to wipe a challenged law or regulation from the books. The administration has even started using this tactic offensively, suing Republican-controlled states and settling on the very same day to rapidly dismantle state laws the administration wants gone. These tactics raise fundamental and profound questions about the limits of both judicial and executive power.
To be sure, past administrations have sought to settle litigation against controversial policies, and the Executive Branch’s authority to do so has been the subject of dueling intra-branch memoranda for decades. But the Supreme Court has signaled discomfort with these tactics. After the Biden administration voluntarily dismissed several appeals of lower court orders invalidating the Trump administration’s “public charge” rule, several states unsuccessfully sought to intervene to defend the rule. Writing separately, Chief Justice John Roberts, joined by three of his colleagues, noted that “[a] new administration is of course as a general matter entitled to” settle litigation. However, the four justices faulted the Biden administration for “leverag[ing]” one of the adverse court orders “as a basis to immediately repeal the [r]ule, without using notice-and-comment procedures.” The justices stressed that “[t]hese maneuvers raise a host of important questions,” “[t]he most fundamental [of which] is whether the [g]overnment’s actions, all told, comport with the principles of administrative law.” The Supreme Court did not resolve those questions, leaving them for another day.
These concerns have reemerged with even greater force during Trump’s second term. The administration has turned consent decrees into a deregulatory weapon, and courts are beginning to confront the limits of that strategy.
The Trump Administration’s Use of Consent Decrees for Policymaking
Four recent cases show how the Trump administration has sought to use consent decrees to stop federal policies that it disfavors, including affirmative action programs, vital consumer protections, and longstanding limitations on the ability of nonprofits, including religious organizations, to engage in political activity.
Perhaps the starkest example of the consent decree tactic comes from a challenge to the Small Business Administration’s contracting preferences. In Mid-America Milling Co. v. U.S. Department of Transportation (E.D. Ky.), two private contractors sued to stop the government from using race- and gender-based preferences in selecting construction contractors, as mandated by the Small Business Act. After defending the challenged program during the Biden administration, during the Trump administration the Department of Justice not only ceased its defense, but joined with the plaintiffs in May 2025 to ask the court to enter a consent decree that includes a permanent injunction that would bar the classifications nationwide. The court is currently considering the motion, alongside objections by intervenors.
In another case, a Consumer Financial Protection Bureau rule promulgated during the Biden administration barely lasted three months before being undone through a consent judgment. The CFPB finalized the rule, which prohibits the inclusion of medical debt on credit reports, on January 7, 2025, and it quickly attracted a challenge by two trade associations in Cornerstone Credit Union League v. CFPB (E.D. Tex.). By the end of April, plaintiffs and the CFPB jointly moved for the court to approve a proposed consent judgment. Over intervenors’ objections, the court approved the proposed consent judgment on July 11, vacating the rule under the Administrative Procedure Act (APA).
In some cases, courts have moved so swiftly to approve a consent decree that intervenors have had little time to assert their interests at all. In Chamber of Commerce v. CFPB (N.D. Tex.), various trade groups challenged another Biden-era CFPB rule concerning credit card penalty fees, obtaining a preliminary injunction. In April 2025, the parties jointly moved for the entry of a consent judgment, stating that they now agreed that the rule violated the applicable statute. The very next day, the court granted the motion and vacated the rule under the APA in a barebones three-paragraph order.
Finally, even when relief appears limited, a consent decree can have potentially sweeping implications. In National Religious Broadcasters v. Werfel (E.D. Tex.), two churches and two religious nonprofit organizations challenged the constitutionality of the so-called Johnson Amendment, which bars nonprofits (including churches) from campaigning for individual candidates for public office. On July 7, the parties jointly moved for the court to enter a consent judgment that would interpret the Johnson Amendment to not apply “[w]hen a house of worship in good faith speaks to its congregation.” Although the proposed decree only purports to enjoin the IRS (and its successors) from enforcing the Johnson Amendment against the two plaintiff churches, amici have asserted that the decree would “effectively enshrine a generally applicable exception” for similarly situated churches, and intervenors have objected on similar grounds.
Together, these cases illustrate the administration’s playbook: pivot from defense to collusion with plaintiffs, secure quick consent decrees, and use them to achieve broad policy change outside the regulatory or legislative process.
The Emerging Legal Challenges
These cases have surfaced a set of recurring objections. They roughly fall into four categories: (1) equitable limits, including improper collusion, (2) the rights of intervenors, (3) violations of administrative law (both notice-and-comment requirements and limitations on remedies), and (4) separation-of-powers concerns.
- Equitable Limits: Consent decrees have “attributes both of contracts and of judicial decrees,” and are therefore subject to important equitable limits that the administration appears to have disregarded. Because “[j]udicial approval of a settlement agreement places the power and prestige of the court behind the compromise struck by the parties,” lower courts have generally held that consent decrees must be “fair, adequate, and reasonable” and “not illegal, a product of collusion, or against the public interest.” The Supreme Court also recognized in Frew v. Hawkins that consent decrees “must spring from, and serve to resolve, a dispute within the court’s subject-matter jurisdiction; must come within the general scope of the case made by the pleadings; and must further the objectives of the law upon which the complaint was based.” But as the intervenors allege in Mid-America, the Trump administration may have violated these principles by openly colluding with litigants and seeking to leverage a challenge to one statute into a consent decree invalidating another unchallenged statute.
- Intervenors’ Rights: In some cases, consent decrees may even require intervenors’ agreement. The Supreme Court held in Local No. 93, International Association of Firefighters v. City of Cleveland that, although an intervenor may not “block the decree merely by withholding its consent,” intervenor’s consent is required when the decree would “impose duties or obligations” on them or “dispose of the[ir] valid claims.” To that end, courts have found duties, obligations, or valid claims where intervenors credibly asserted contractual rights, rights under anti-discrimination laws, and constitutional rights. Intervenors might rely on similar arguments in asserting that the court cannot enter a consent decree that they oppose.
- Administrative Law: Turning to administrative limits, the Trump administration’s use of consent decrees to undo duly promulgated legislative rules may violate the APA’s notice-and-comment requirements. Under the APA, agencies are generally required to “use the same procedures when they amend or repeal a rule as they used to issue the rule in the first instance.” By moving jointly with the plaintiffs in a given case to ask the court to vacate a validly promulgated legislative rule, the Trump administration has attempted to sidestep those requirements. But that approach stands on shaky footing, and the Ninth Circuit, at least, has explicitly held that consent decrees that modify or rescind agency rules are subject to rulemaking requirements. It is unclear whether courts even have the authority to vacate agency action by way of a consent decree, which is typically a “pro forma acceptance … of an agreement” rather than an “adjudication of the merits.” That’s a problem because the APA, in 5 U.S.C. § 706(2), authorizes a court to “hold unlawful and set aside agency action” (i.e., vacate it) only when that action is “found to be” unlawful. But “pro forma acceptance” is not equivalent to a “finding.” As one court put it: agency “consent is not alone a sufficient basis for [the court] to stay or vacate a rule” given the risk “that an agency could circumvent the rulemaking process through litigation concessions.”
- Separation of Powers: Finally, the Trump administration’s efforts to set policy through consent decrees raise serious separation-of-powers concerns. As Professor Michael T. Morley has argued, such consent decrees “allow executive officials and agencies to improperly entrench their preferred policies, interpretations of the law, and enforcement priorities against changes by subsequent administrations, without having a court decide whether such restrictions are legally or constitutionally required.” And the Supreme Court has echoed this concern, explaining in Frew that, “[i]f not limited to reasonable and necessary implementations of federal law, remedies outlined in consent decrees … may improperly deprive future officials of their designated legislative and executive powers.” Indeed, that seems to be the administration’s goal.
Why CASA Bars “Universal” Consent Decrees
To these arguments, the Supreme Court’s recent decision in CASA might contribute another: consent decrees that contain universal injunctions against the government exceed equitable limitations on the permissible scope of relief. In CASA, the Court held that courts may not enter injunctions that “are broader than necessary to provide complete relief to each plaintiff with standing to sue.” CASA may therefore be a double-edged sword for the Trump administration—although it makes it more difficult for litigants to obtain universal relief against the administration’s actions, it may likewise make it more difficult for the administration to leverage pending cases to lock in its preferred policies through universal injunctions.
The argument for applying CASA this way is straightforward. Consent decrees are, again, “judicial acts,” which the Supreme Court has instructed are “subject to the rules generally applicable to other judgments and decrees.” An injunction incorporated in a consent decree, like any other injunction, is an equitable remedy subject to CASA. At the very least, CASA might make it more difficult for the Trump administration to assert that a consent decree that contains a universal injunction represents a “fair, adequate, and reasonable” effort to resolve a pending case, given that such a remedy would sweep far beyond providing complete relief to the plaintiffs. Again, that seems to be precisely the Trump administration’s objective.
The government might object that consent decrees are more contract than judicial act and so are not subject to CASA. But that argument would only give rise to another problem for the government: parties cannot use the “contract” of a consent decree to obtain what they cannot accomplish “by themselves,” and so an agency cannot contract to violate the APA, relevant statutes, or the U.S. Constitution. The government’s potential argument would also misapprehend the dual nature of consent decrees. Consent decrees are both contracts that cannot exceed the agency’s authority and judicial acts subject to similar equitable limitations as other orders. Universal consent decrees violate both of these principles.
What’s at Stake
The Trump administration’s attempts to use consent decrees are not technical skirmishes: they represent an effort to use litigation to short-circuit administrative—and democratic—decisionmaking. Policy is supposed to be set by the people’s representatives in Congress and by expert agencies acting pursuant to both presidential and congressional direction, not in backroom deals between Justice Department lawyers and private groups aligned with the administration. Particularly after CASA, litigants might have ample tools to challenge these decrees. And even if litigants do not, courts themselves should resist the Trump administration’s demands that they rubber stamp the executive’s attempts to set policy by decree.
