What Factors Can an Agency Consider in Making a Decision?

Abstract:     
In State Farm, the Supreme Court said that an agency decision is arbitrary and capricious if the agency did not consider adequately a relevant factor or did consider an impermissible factor. The Court did not indicate how courts should distinguish among three categories of potential decision making factors: mandatory, discretionary but permissible, and impermissible. Until 2007, the case law in both the D.C. Circuit and the Supreme Court addressed these questions in sensible ways. In particular, both courts held consistently that congressional silence with respect to a logically relevant factor rendered the factor a permissible factor that an agency could consider in its discretion. Two poorly-reasoned majority opinions issued in five-to-four decisions handed down in 2007 can be interpreted to overrule that long line of cases and to hold that congressional silence should be interpreted to render a logically relevant factor impermissible. In this article, I argue that: (1) the internally inconsistent 2007 opinions should not be interpreted in that manner; (2) the Court should issue another opinion soon in which it clarifies this aspect of its problematic 2007 opinions; and,(3) more broadly, the Court should take doctrine more seriously as one means of counteracting the powerful tendency of each Justice to ignore, discount, or distort doctrine to allow the Justice to vote in accordance with his or her ideological preferences.

Number of Pages in PDF File: 20

Keywords: agency decision-making, discretion, arbitrary and capricious, Chevron

JEL Classification: K23

Accepted Paper Series