Thin Rationality Review

Abstract

Under the Administrative Procedure Act, courts review and set aside agency action that it "arbitrary [and] capricious." In a common formulation of rationality review, courts must either take a “hard look” at the rationality of agency decisionmaking, or at least ensure that agencies themselves have taken a hard look. We will propose a much less demanding and intrusive interpretation of rationality review -- a thin version. Under a robust range of conditions, rational agencies have good reason to decide in a manner that is inaccurate, nonrational, or arbitrary. Although this claim is seemingly paradoxical or internally inconsistent, it simply rests on an appreciation of the limits of reason, especially in administrative policymaking. Agency decisionmaking is nonideal decisionmaking; what would be rational under ideal conditions is rarely a relevant question for agencies. Rather agencies make decisions under constraints of scarce time, information and resources. Those constraints imply that agencies will frequently have excellent reasons to depart from idealized first-order conceptions of administrative rationality.

Thin rationality review describes the law in action. Administrative law textbooks typically suggest that the State Farm decision in 1983 inaugurated an era of stringent judicial review of agency decisionmaking for rationality. That is flat wrong at the level of the Supreme Court, where agencies have won no less than 92% of the 65 arbitrariness challenges decided on the merits since the 1982-83 Term. The Court's precedent embodies an approach to rationality review that is highly tolerant of the inescapable limits of agency rationality when making decision under uncertainty. State Farm is not representative of the law; beloved of law professors, and frequently cited in rote fashion by judges, it nonetheless lies well outside the mainstream of the Supreme Court’s precedent. To encapsulate the Court’s approach to rationality review, the best choice would be the powerfully deferential opinion in Baltimore Gas, decided in the same Term as State Farm. Plausibly, rather than living in the era of hard look review or the State Farm era, we live in the era of Baltimore Gas.