The Internationalization of Agency Actions
U.S. agencies routinely base their domestic regulations on international considerations, such as the benefits of coordinating U.S. and foreign standards or the foreign policy advantages of a particular policy. I refer to this phenomenon as the internationalization of agency actions. This Article examines what the internationalization of agency actions means for agency decision-making processes, institutional design, and legal doctrine. It creates a stylized model of how agencies determine whether to coordinate their standards with foreign regulations. Among other institutional design findings, it shows that court opinions that reduce the stringency of judicial review when agencies implement internationally coordinated standards make such coordination more likely to occur, but they simultaneously deprive the executive of bargaining power because U.S. agencies cannot credibly threaten that any coordinated agreement must align more closely with U.S. values or else risk being overturned in U.S. courts. This Article also develops a taxonomy of international factors relied on by agencies and applies that taxonomy to help clarify the doctrinal issue of whether and when agencies can use international factors to justify their actions in court. This taxonomical approach shows how the Supreme Court’s opinion in Massachusetts v. EPA can reasonably be read to allow agencies to invoke a far broader range of foreign policy rationales than some prevailing views suggest.
A Costly Signaling Theory of Hard Look Review
Judges often review decisions made by government actors, such as agencies or legislatures, with greater expertise about the effects of different policy choices. One judicial response to this asymmetric information problem has been to shift the focus of review from a substantive evaluation of the policy to an assessment of the quality of the explanation the government offers in support of that choice. Proponents of this type of “hard look” review argue that it improves the quality of government decisions; critics charge that it imposes costs on government policymakers without providing useful information to reviewing courts. This paper offers an alternative perspective: Judicially-imposed explanation requirements can help reviewing courts overcome their informational disadvantage for reasons that are independent of their ability to assess the substantive content of government explanations. If producing impressive explanations is expensive, then the court can reason that the government’s willingness to produce a high-quality explanation signals the government’s belief that the proposed policy has large benefits. Furthermore, if the preferences of the court and government are positively correlated in expectation, then the fact that the government places a high value on the policy means the policy is more likely to be acceptable to the court. Therefore, judicial evaluation of explanation quality ameliorates the court’s informational disadvantage, and may induce a court to uphold a government decision it would otherwise invalidate. The paper develops this costly signaling perspective on hard look review in the administrative law context, and then considers other applications in constitutional and criminal law. * Assistant Professor of Law, Harvard Law School. I am grateful to David Barron, Ethan Bueno de Mesquita, Jody Freeman, Barry Friedman, Elizabeth Garrett, Bert Huang, Howell Jackson, Louis Kaplow, Adriaan Lanni, Daryl Levinson, John Manning, Gerry Neuman, Eric Posner, Matt Price, Mark Ramseyer, Fred Schauer, Dan Schwarcz, Ken Shepsle, Jed Shugerman, Bill Stuntz, Cass Sunstein, Judge Stephen Williams, Adrian Vermeule, and the participants in the Harvard Law School Law & Economics Workshop for helpful comments on earlier drafts. A SIGNALING THEORY OF HARD LOOK REVIEW A COSTLY SIGNALING THEORY OF “HARD LOOK” JUDICIAL REVIEW Matthew C. Stephenson © 2006 Matthew C. Stephenson. All Rights Reserved. American public law entrusts judges with considerable power to review the decisions of other government actors. While judicial review sometimes involves only abstract questions of law, more often it entails implicit or explicit evaluation of a government decision-maker’s empirical or predictive judgments. Yet most judges are generalist lawyers with minimal experience in scientific, economic, or policy analysis. The government actors whose decisions are reviewed, on the other hand, are often thought to have considerable expertise in such matters. This creates a dilemma for reviewing courts and raises a more general puzzle regarding the design of American public law institutions. The dilemma for courts is that judges do not want to abdicate their responsibility or their power to constrain other government officials, but they are reluctant to second-guess the choices of more expert decision-makers, especially when complex or technical issues are involved. The institutional design puzzle is how one might account for pervasive review of expert decisions by non-expert courts, and whether mechanisms have emerged to address the difficulties inherent in this sort of arrangement. One judicial response to the dilemma just described is to require that the government provide a sufficient explanation for its proposed action, often in the form of a written record or statement. Proponents of this approach, which is sometimes referred to as “hard look” review, contend that judicial scrutiny of government explanations can reconcile the perceived need for expert decision-making and the perceived need for a judicial check. This proposed reconciliation, however, is problematic. The same lack of expertise that makes it hard for a generalist court to evaluate a government decision on the merits also makes it hard for the court to assess the coherence, accuracy, and methodological soundness of the government’s explanation for its action. Critics of hard look review have also raised serious questions about whether the kind of lawyerly rationality demanded by reviewing courts has any particularly strong connection to substantively rational policy-making. Therefore, in those cases where it is difficult or impossible for courts to assess the substance of the government’s explanation for its decision, it is not always clear what hard look review accomplishes, and some have suggested that it amounts to little more than meaningless theater. 1 The term “hard look” review was coined by Judge Harold Leventhal of the D.C. Circuit. See Pikes Peak Broadcasting Co. v. FCC, 422 F.2d 671, 682 (D.C. Cir. 1969); Greater Boston Television Corp. v. FCC, 444 F.2d 841, 851 (D.C. Cir. 1970). As originally formulated by Judge Leventhal, the term “hard look” review referred to the idea that reviewing courts are supposed to ensure that the agency has taken a “hard look” at salient aspects of the decision problem. Over time, however, the phrase has come to connote the idea that courts are supposed to take a “hard look” at the agency’s decision process. See National Lime Assoc. v. EPA, 627 F.2d 416, 451 n. 126 (D.C. Cir. 1980).
Ossification Revisited: Does Arbitrary and Capricious Review Significantly Interfere With Agency Ability to Achieve Regulatory Goals Through Informal Rulemaking?
This article reports the results of an examination of the effects of a decade's worth of D.C. Circuit remands of informal rules under the "hard look" doctrine. The research identified 71 such remands. Of those, 34 are characterized for a variety of reasons as having essentially no impact on the agency's ability to achieve its goals through the informal rulemaking process. The reasons include the court's explicit refusal to vacate the rule, the court's willingness to delay imposition of the mandate until the agency had recovered, and the insignificant nature of the remand itself. The author examined the aftermath of the remaining 37 remands to determine whether and to what extent the agency was able to recover. The results show that agencies usually succeed in achieving their regulatory goals through informal rulemaking. The author argues that these results challenge the ossification critique of hard look review, at least to the extent that the critique asserts that hard look review significantly interferes with agency pursuit of regulatory goals through informal rulemaking. He suggests that the real story of agency reliance upon informal rulemaking is one of substantial success despite hard look review, and that we should consider returning to a cooperative partnership model to characterize the agency-court relationship with respect to arbitrary and capricious review of agency rules.