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 landmark decision in Massachusetts v. EPA requiring the federal government to reconsider its refusal to regulate greenhouse gases as an air pollutant 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 little analysis by scholars, and the caselaw in the field is confused. Accordingly, there are serious questions about the nature and scope of judicial review of agency decisions not to act - with some scholars and leading judges calling for sharply limiting this type of judicial review to protect "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. This framework provides guidance for understanding how and why courts should be intervening in situations where agencies have refused to act. Moreover, the trade-off helps explain both varying levels of judicial deference outside the context of judicial review of agency inaction and why the Court has found some agency decisions reviewable and others unreviewable - including the Court's decision in Massachusetts v. EPA that agency refusals to regulate are reviewable. 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 counteract public choice failures in the implementation of regulatory programs.