A Signaling Game of Judicial Review and Agency Implementation

Abstract

As the U.S. Supreme Court observed in Federal Maritime Commission v. South Carolina State Ports Authority, “[t]he founders . . . could not have anticipated the vast growth of the administrative state.” As this growth has occurred in both size and scope in the U.S and in countries around the world, agency action has begun to directly impact the lives of individual citizens in a myriad of ways. This begs the question, how can agency action be checked to ensure these institutions do not infringe upon individual rights? Existing models of court-agency interaction have analyzed one check on agencies – the mechanism of judicial review. Yet, these models ignore the iterative process of court-agency interaction by failing to account for what occurs after a court has ruled on the validity of an agency action. Of equal import is what occurs after a court has rendered its decision, as court decisions are generally not self-enforcing. Moreover, in the context of administrative law judicial rulings often must be implemented by the same agency whose initial action was at issue in the case. To bring additional leverage to bear on our understanding of court-agency interaction, I develop a simple signaling game to model the process of judicial review and agency implementation. To capture the second stage of the process, I draw from the literature on implementation of judicial decisions to model agency implementation of judicial decision and the decision of courts to ‘punish’ agencies that shirk faithful implementation of their rulings. Additionally, I use the signaling aspect of the game to formalize the idea that the importance of all cases – or their salience – is not given equal weight by the actors. From this model, I derive implications about the impact of the costs and salience, on the strategic choices of the actors. I then conduct a preliminary test of the models prediction using a sample of immigration cases in the U.S. Courts of Appeals.