The Importance of Resource Allocation in Administrative Law: A Case Study of Judicial Review of Agency Inaction under the Administrative Procedure Act

Abstract

The Supreme Court's decision in Massachusetts v. EPA is only the most recent example of judicial review of an agency's decision not to take a regulatory action. Despite the importance of this type of judicial review, it has received very little analysis by administrative law scholars or the courts, and the caselaw in the field is ambiguous and confused. As a result, there are serious questions about the nature and scope of judicial review of agency decisions not to take regulatory actions - with some scholars and leading judges calling for sharply limiting this type of judicial review because of the risk new regulation might pose to individual liberty. This paper examines an alternative set of principles to guide judicial review of agency decisions not to regulate - a trade-off between judicial deference to agency decisions as to how to allocate their resources and judicial enforcement of clear Congressional commands to agencies. A proper understanding of that trade-off provides us with guidelines for understanding how and why courts should be intervening in some, but not in other, situations where agencies have refused to take regulatory action. Moreover, the trade-off more broadly helps explain varying levels of judicial deference outside the context of judicial review of agency inaction - and it helps explain why the Supreme Court has set aside certain types of agency decisions as presumptively unreviewable by the courts. Finally, when courts strike the proper balance between judicial deference to agency resource allocation and enforcement of clear Congressional commands they will be able to ameliorate the worst types of public choice failures that might arise from the implementation of regulatory programs that can broadly benefit society, but at the expense of concentrated costs imposed on small groups.