Most federal appellate judges are generalists, not intensively schooled in economic theory and mindful of the limits to their institutional competence. Judicial review of economic analyses is an increasingly important task of the courts, however, particularly courts like the United States Court of Appeals for the District of Columbia Circuit that hear appeals from the rules and rulings of regulatory agencies. Agencies use economic analyses for administrative decision-making in a variety of ways. They may be required by statute to make decisions that are "economically feasible" or to consider "reasonableness of cost." Even when the governing statute says nothing specific about economic principles, the agency may rely heavily on economic analysis to meet more general statutory criteria, such as determining that rates are "just and reasonable." In such cases, the agency often uses economic theory to predict the consequences of a particular action and to determine whether that action is in accord with the statutory mandate. In still other cases, the agency may use economic analysis simply to find jurisdictional facts.
Patricia M. Wald,
Judicial Review of Economic Analyses,
Yale J. on Reg.
Available at: http://digitalcommons.law.yale.edu/yjreg/vol1/iss1/3