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Judicial Review of Agency Benefit-Cost Analysis

34 Pages Posted: 5 Nov 2014 Last revised: 19 Dec 2014

Caroline Cecot

George Mason University - Antonin Scalia Law School, Faculty

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Date Written: November 4, 2014

Abstract

This Article evaluates judicial review of agency benefit-cost analysis ("BCA") by examining a substantial sample of thirty-eight judicial decisions on agency actions that implicate BCA. Essentially, the Administrative Procedure Act tasks federal courts with ensuring that federal agency action is reasonable. As more agencies use BCA to justify their rulemakings, the court's duty often requires judges to evaluate the reasonableness of agency BCAs. In this Article, we discuss the challenges that trigger judicial review of agency BCAs and the standards that govern the review. We then present specific examples of how courts analyze BCAs. Overall, we find many examples of courts promoting high-quality and transparent BCA. Courts have been willing to question BCA methodology and assumptions and request more transparency on these issues. As agencies rely more on BCA in their decision making, judicial review of BCA will be increasingly important. The stakes are high. Additional judicial oversight can be valuable — but bolstering any oversight effort to provide a policy check can also impose societal costs if desirable policies are delayed or left unimplemented. Ideally, efforts to foster greater judicial review should be structured so that the enhanced role of the judiciary itself passes a benefit-cost test. Armed with this Article's examination of the state of judicial review of BCA, scholars can more effectively evaluate the impact of judicial checkpoints on the use of BCA in agency decision making and assess whether shifting more regulatory oversight authority to the courts would be an effective approach to fostering more welfare-enhancing policies.

Keywords: benefit-cost analysis, judges, judicial review, administrative law, regulatory reform

JEL Classification: D61, H43, K23, K32, K41, Q50

Suggested Citation

Cecot, Caroline and Viscusi, W. Kip, Judicial Review of Agency Benefit-Cost Analysis (November 4, 2014). George Mason Law Review, 2015, Forthcoming; Vanderbilt Law and Economics Research Paper No. 14-31. Available at SSRN: https://ssrn.com/abstract=2519139

Caroline Cecot

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

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