Judicial Review and Cost-Benefit Analysis: Part II
Last week I discussed how the institution of judicial review has been used to amplify the deregulatory nature of cost-benefit analysis. This week, I'll talk about some possible remedies.
An unusual synergy exists between the institutions of cost-benefit analysis and judicial review. Under most circumstances, the institution of judicial review is arguably neutral with regard to regulatory issues. When judicial review is applied to a case involving a regulation that has been weakened by cost-benefit analysis, however, the once neutral institution is transformed into one that that can have no other impact than to aid and abet the deregulatory agenda of cost-benefit analysis. This is because when an agency is forced by cost-benefit analysis to promulgate a rule that is too weak to be supported by the underlying statute, any public interest groups concerned with public health, safety, and the environment is left with a difficult decision to make. If they challenge the rule in court and win, theirs will be a Pyrrhic victory, because everything would return to the pre-regulatory status quo where no protections are in place, while the agency returns to promulgating a new rule. If, however, they decide not to challenge the rule, then they will …
For the last few years now, CPR’s Member Scholars have made the case that cost-benefit analysis is, by itself, fundamentally deregulatory in nature. Unfortunately, other institutions in our federal government tend to exacerbate the deregulatory nature of cost-benefit analysis. Whether by design or dumb luck, cost-benefit analysis allows regulatory opponents to use those institutions—most notably judicial review—to further their deregulatory agendas.
The Clean Air Mercury Rule (CAMR) case is a good example. In February, the Supreme Court decided not to accept an appeal of a case on CAMR, which was the Bush Administration’s feeble regulatory plan for addressing air mercury pollution from power plants. The story of CAMR demonstrates how judicial review has been used to amplify the deregulatory impact of cost-benefit analysis, and it's emblematic of the deregulatory synergy between cost-benefit analysis and judicial review. This synergy typically plays itself out through …
