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good afternoon today we celebrate John cannons appointment as the inaugural blame t Phillips distinguished professor of Environmental Law the main event of that celebration of course is a lecture by the chair holder John has come down with a cold but is determined about nevertheless to soldier on if by any chance his voice should give out at any point during the lecture I will simply jump up and declare the reception under way a quick word about the chair itself Blaine Philips of the class of nineteen fifty-five is the executive director of the fair play foundation in Wilmington Delaware and is active in a remarkable array of philanthropic endeavors he is also very long-standing and loyal supporter of the law school I might also note that his son Blaine Phillips jr who is vice president of the Conservation Fund was for a time a lawyer here in Charlottesville at the southern Environmental Law Center Blaine endowed the chair in 1999 the search for a senior and distinguished professor of environmental law took some time but no one could quibble with the result the inaugural chair holder john cannon took a delayed path to an academic career having spent many years in the policy arena after practicing environmental law john joined the environmental protection agency in 1992 as assistant administrator for administration and resources management in 1995 he became the EPA’s general counsel and served in that post until nineteen ninety-eight when he joined the law school faculty that move was an experiment both for John and for the law school John’s initial task was to teach in and manage our environmental law and our environmental and land use excuse me law program in this he was successful beyond our most hopeful expectations during his time at the Los cool John has taught the basic environmental law survey course together with a rich array of more specialized offerings that cover land use environmental liability litigation environmental ethics climate change and watershed management among others the number of offerings number of students and national profile of our environmental law program have all increased to a point where we can say proudly that environmental law is one of the law schools curriculum strengths but John also rapidly adapted to the academic culture although his appointment was not initially to a tenure-track position he fully integrated himself into the intellectual life of the law school embarked on a successful scholarly research agenda and ultimately became a tenured member of our faculty John’s research while firmly grounded in environmental law and policy has a broader intellectual reach a nice example is his 2006 article environmentalism and the Supreme Court a cultural analysis the article begins with the observation that the way we think and talk about environmentalism underwent a substantial shift over the course of the 20th century some of us and I must say that John joins me in this category are old enough to remember when what is today called environmentalism was called conservation the term captured the importantly anthropocentric nature of the movement it focused on stewarding resources today in order to have them to consume tomorrow if therefore treated the environment as instrumental as a means to satisfy human ones today’s discourse by contrast is dominated by what John calls the new environmental paradigm a set of ideas and beliefs in which humans are simply one part of a larger ecosystem and not physically or morally more important than the other parts this shift thinking about man’s place in the environment the shift from a hierarchical to a non hierarchical relation is reflected in the priorities of environmental advocacy groups and therefore in the types of litigation that come before the Supreme Court yet also therefore has the capacity to affect the way the Court itself interprets the nature and purposes of environmental law not entirely surprisingly John finds that the court to date has not embraced the implications of taking an eco centric

rather than an anthropocentric approach to environmental policy but he argues that a dialectical process is underway in which the court will have to engage seriously the values asserted in modern environmental litigation but while looking for connections between environmental law and policy and broader theoretical themes John has never abandoned his careful and meticulous policy orientation in his recent article a bargain for clean water for example John observes that failures to meet the water quality objectives set out in the Clean Water Act are in a substantial measure a result of the acts failure to regulate non-point sources principally agricultural runoff John observes that while Congress believed were at least asserted in 1992 that such sources could not be effectively regulated it is only true that they cannot be effectively monitored regulatory devices other than command and control could make a substantial difference John carefully surveys the policy tools available to EPA and suggests plausible ways of reducing pollution from agricultural sources this thorough familiarity with the literature and institutions of environmental law and policy have made John not merely one of the Academy’s most respected and in most respected Environmental Law scholars but an extraordinarily effective and popular teacher if ever there were an area in which supply creates demand you is in John’s courses this semester’s environmental law class has an enrollment of 94 making it one of our largest elective courses the attraction is not difficult to understand John is as knowledgeable about the subject matter as anyone in the nation and brings a contagious enthusiasm to his classes as he does to all the activities of the Environmental Law Program there could be no better choice for the blame t Philips professorship in environmental law and I’m delighted to welcome the inaugural shareholders thank you Paul it all sounds so wonderful and thanks to all of you for coming and thanks to this community for welcoming owls and me into its midst 12 years ago and being so supportive and challenging also in the 12 years that have passed this is a wonderful institution I appreciate it every day and and very grateful to be a part so a cost-benefit analysis and the court this is my topic cost-benefit analysis which is a tool for making policy decisions and the court an institution that does not make policy decisions so you are wondering what’s there to talk about I hope to convince you that there is a topic here and that I have something useful to say about it it’s part as Paul mentioned it’s part of a larger project that I’m still working on which is to track the courts response to and effect on environmental thought and action in this country over the last five or six decades for decades cost-benefit analysis has been a lightning rod in social policy in regulatory policy the left hates it the right loves it d regulatory enforces embrace it environmentalists and others have real difficulty with it there’s some evidence that the battle lines are beginning to ease a little bit but the debate certainly continues and it’s an important debate because it’s a debate about the choices ultimately the choices that we make in environmental policy how where we set the line if you will for what we want to achieve an environmental policy and in these other areas social regulation and for me at least everything else in environmental policy is secondary to that so that when cass sunstein celebrates the the cost/benefit state as he does he is really celebrating efficiency as a touchstone of regulatory policy so my purpose here is not to take sides in this debate instead it’s to explore the courts role in determining the authority of federal agencies to use cost-benefit analysis in

their regulatory decisions and for me the question has two related components one is what’s the level of acceptance of cost-benefit analysis within the political culture and to what is the scope of the courts interpretive role so this ends up being talked about judicial interpretation probably not so surprising in law school I have to say when I was working on this last weekend well I was working on sleeping I had a dream and I dreamed that this week was going to be national statutory interpretation week you think only a lot teacher could have such a dream but I day I that dream so this talk seems to me be perfectly appropriate for this moment in the in the national consciousness I know that’s a little bootstrap you but ok so today in my talk I’m going to focus on three supreme court cases that address agency authority to consider cost-benefit analysis and I’m going to argue that there is a progression in those cases culminating in a recent decision of the Supreme Court decision last term entergy corporation versus Riverkeeper Inc in Entergy the court upheld EPA’s authority to use a weak form and I’ll explain that I’m in a weak form of cost-benefit analysis in setting standards for electric utility plant that case in my view suggest that a majority of the court is now inclined to put a thumb on the scale in favor of cost-benefit analysis to screen out irrational outcomes that’s where the statute is arguably silent or ambiguous on the issue at the same time the court suggested a reluctance to embrace a strong form of cost-benefit analysis with efficiency as its goal and with a purpose of determining efficient outcomes so that’s my interpretive claim my normative claim is that’s a good thing a weak form of cost-benefit analysis of the quote of the sort that the court approved in energy is supported by a political consensus within this country and I hope to demonstrate to you and therefore it’s appropriate that the court presumed in favor of it where the statute was arguably or ambiguous on the issue at the same time a strong form of cost-benefit analysis with efficiency as its goal does not enjoy such a consensus and therefore does not warrant a judicial presumption in its favor so my argument here proceeds through five questions one what has caused benefit analysis what’s the debate about it at least in broad outlines how does that debate get reflected in institutional practices of the executive branch and Congress and we will see divergent practices there what’s the courts history in this debate and going forward what’s the role of the court if any as arbiter of this of this difference of views so cost-benefit analysis in its most developed form or the strong form is i’ll call it is a creature of welfare economics it’s commenced rulest and its welfare is that is it requires that cause some benefits reduce be reduced to a common measure money for comparison purposes and its function is to maximize overall well-being there’s a presumption against regulatory options whose costs exceed their benefits now that it that presumption is irrebuttable for some proponents of cost-benefit analysis other proponents of cost-benefit analysis will acknowledge that that efficiency goal is important but it’s not exclusive there’s room for other considerations other non welfarist considerations to be brought to bear so methodology to determine overall wellbeing seems like a good thing what’s all the problem with it well part of the problem is historical cost benefit analysis came to the fore or achieved its first major institutional recognition in in the administration of Ronald Reagan and that was used in that administration as a deregulatory tool to push back against government regulations in part a

function of that history the standard cost-benefit analysis methodology now includes a number of elements that are criticized as anti-regulatory that is biased against regulation progressives Ricky Rivas Dina Dan Willis cool and Michael little more argue that that methodology can and should be corrected in order to adjust for these biases and if that’s done it could produce a reliable neutral tool so that’s a set of methyl logical criticism but they’re also philosophical criticisms in a vastly simplified form and my apologies to all the Philosopher’s in the room the moral objections to cost benefit analysis goes something like this first critics claim the cost-benefit analysis is based on preference satisfaction and therefore is not a good proxy for human well-being which is what it’s going to get at our preferences typically measured in willingness to pay may not improve our welfare they may be perverse they may be ill informed or otherwise mistaken now in a recent book Matt Adler Eric Posner offered a systematic defense of a preference based approach to welfare and I think that’s quite successful defense but their argument if followed would require a significantly different kind of cost-benefit analysis than is standard today and their argument is still not accepted by a lot of the critics moreover even assuming that cost benefit analysis can approximate human wellbeing welfare is not the only value there may be other moral values that are significant or relevant or argued for in these cases and the critics of cost-benefit analysis say that the commencer ability of cost-benefit analysis it’s welfarist approach crowd out these other values in a way that diminishes their importance these are values like avoiding harm to other human beings or to the environment tomorrow critics of cost-benefit analysis stop short most of them not all stopped short of saying that we must protect the environment or health and safety whatever the cost instead their argument is cost-benefit analysis systematically D values these environmental health and safety concerns proponents of the methodology argue well maybe it’s not a perfect methodology but it’s much more likely to produce welfare enhancing results than procedures that maximize along one dimension of human well-being like breathing clean air or that favored non welfarist rights over welfarist considerations like protection of species so the argue that overall welfare may not be the only measure of the right or the good it’s certainly an important measure we don’t want to end up causing more deaths from loss of income than we save from cleaning up the air this is what John Bram calls a statistical murder just to put a point on now perhaps I’m just an optimist but I think there’s room in the spade for coalescence over a period of time but in the meantime this debate complicates efforts to reconcile divergent practices of the executive branch and the legislative branch as I will in just a moment Cass Sunstein has envisioned this this idea of a cost-benefit state where everybody happily dwells with their welfare maximized but that well that cost-benefit state does not currently enjoy a political consensus and I think probably Cass Sunstein would agree with that on a good day now by contrast to strong cost-benefit analysis of that as discussed and the criticism of it weak the weak form of cost-benefit analysis is much less subject to these criticisms it doesn’t involve reducing everything to a single monetary unit and its goal

is not to establish some point of efficient determination or even some narrow range its purpose is just to weed out obviously or grossly irrational or disproportionate outcome so it avoids a number of the criticism that I mentioned has crucial to the strong form of cost-benefit analysis and this will become important as as we go so how do these competing views of cost-benefit analysis reflect themselves in institutional practices sort of come down out of the clouds now and see how actual institutions reflect this divergence of ideas and thoughts about cost-benefit analysis and I’m going to talk here focus here mostly on the two political branches the executive branch and Congress in authorizing legislation in Congress the practice is mixed there is no organic statute for the Environmental Protection Agency so you’ve got statutes enacted at different times in different contexts a real scattering of provisions if you will and you see within that scattering of provisions a real diversity of congressional views about the ability or merits of cost-benefit analysis in these provisions Congress sometimes expressly provides for cost-benefit analysis sometimes expressly excludes it and more often proudly is arguably silent or ambiguous on the issue an example of this last category a standard that requires protection against environmental harms to the extent feasible though what does feasible mean you just see Justice Scalia working with the word among ten major environmental regulatory statutes enacted in the 1960s 70s and 80s to expressly authorized a balancing of costs and benefits in their core regulatory provisions the remainder relied mainly on harm based or technology based approaches that either expressly excluded cost-benefit analyses analysis or did not expressly provide for it more recently in 1996 the last year in which Congress revised major environmental legislation Congress split it expressly authorized the consideration of cost-benefit analysis in setting drinking water standards and expressly excluded it and setting pesticide standards so the other real mixture here in contrast to this mixed history in Congress since the early 1980s the executive branch particularly the White House in the office of management and budget have consistently in both Democratic and Republican administration required cost-benefit analysis for all significant rulemakings also where the law permits federal agencies are required to adopt only regulations whose benefits justify their costs these requirements are enshrined and are still enshrined executive order 12 8 66 to which I will refer as we go now some agencies like EPA have heroically resisted cost-benefit analysis this is different in different administration’s typically the agency’s epa included are more reluctant to to embrace cost-benefit analysis than 0 MV for the reasons I’ve already talked about they think it undermines their mission to protect the environment worker health safety and so forth this is led to conflicts with OMB arguments constant arguments about the need for environmentally of for cost-benefit analysis and the content of those studies and again Cass Sunstein pays careful attention to these things has done a study which shows not surprisingly that agency implementation of executive order 12 866 is very uneven when some agencies does don’t pay very much attention to it or try their best not to now in the Obama administration this conflict has reached a new level of visibility for the reason that Cass Sunstein now known to you as a primary advocate of the cause benefit stayed his

head of the OMB regulatory review office so his job is to force agencies to do cause benefit analysis to do them well and to consider their results in making decisions Lisa Hines earlene formerly a professor at Georgetown University Law School this or has been appointed as the policy chief at EPA her job is to get EPA rules through OMB but a minimum of interference now to make this even more amusing Lisa Hines erlang is a former student law student of chaos Sunstein’s a very good student one of his best he says so we all wish that our students will thrive but perhaps not to the extent of becoming our major antagonists in life anyway let me make clear here there’s no direct conflict between Congress and the executive branch here executive order 12 866 only requires it requires agencies to consider cost-benefit analysis if they’re permitted to under law but there is a clear tension between the robust embrace of this methodology by the executive branch and the ambivalent or uneven approach to it that we see in the legislative branch and this tension has a clear temporal dimension most key environmental statutes were adopted before that is in the 60s and 70s before the enthusiastic brace of cost-benefit analysis plan of the executive branch so i can now reframe the question with which i began what if anything should the supreme court be doing to address this tension in interpreting the authority of agencies to engage in cost-benefit analysis now there are these three possibilities conceptual possibilities that I can identify here one is that in cases where the statute is silent or ambiguous or otherwise not clear the court could adopt a posture of scrupulous neutrality as it could call them straight up and where the statute made some clear indication of preference one way or the other also call it straight up no thumb on the scale in either direction and I’m going to argue the TV ad Hill which I’ll discuss is a case that adopts just such a position of neutrality second a court could adopt presumptions favoring consideration of cosmetic analysis cass sunstein argues that there should be a mandatory presumption requiring agencies to use cost-benefit analysis where the statute is silent or ambiguous on the issue that is agencies would be pushed in those statutory situations of uncertainty to adopt this procedure a permissive version of this presumption would make room for consideration of cost-benefit analysis at the agencies option but without requiring and we’ll see this presumption at work in energy or so I will argue third a court could adopt comparable comparable presumptions disfavoring cost-benefit analysis that is going in the other direction and we’ll see an example of this in American textiles the case that also discuss but first before we get to the case is a note on presumptions in interpreting statutes that grant agency authority to do things like issue regulations a lot of the interpretive work on questions of agency authority will necessarily be done by chevron versus NRDC the decision 1984 by the Supreme Court that decision in its most basic form establishes a presumption in favor of agency interpretations of their own authority including their authority to do or not do cause benefit analysis under Chevron where Congress has not spoken directly to an issue the court is to defer to an agency’s reasonable interpretation within the Chevron framework however and this is key to my argument here there remains room for a cost-benefit presumption of the sort that I have described to do work in the most extreme case a mandatory presumption pro or con

could foreclose agency interpretive options even in cases of silence or big ambiguity more modestly a permissive presumption could operate to expand or contract the space within which the agency would be given discretion to make its own interpretation presumptions of this sort don’t need to be in the form of formal rules they don’t even need to be explicit they can be in the form or the nature of background norms that influence judges in their understanding of text whether statutes are silent or ambiguous as to some degree in the eye of the beholder and presumptions of the sort that i described can influence how a judge will call that question in a particular alright so that’s prologue let’s go to the cases and we will see how the court has tried each of these different possible presumptions on this issue of in the past and it will bring that to the present first the studiously impartial this is where the court just calls it like it is my example here is TV ad hill the famous snail darter case right all of you have heard about this case some of you have studied it some of you probably written about it this case was decided in 1978 before cost-benefit analysis assumed its present status within the executive branch and also before Chevron which may be relevant and in this case the court famously interpreted section 7 of the endangered species act as precluding the completion and operation of the tellico dam and in the Tennessee River Valley the dam was more than eighty percent complete it had more than 50 million dollars invested in it all that was left basically was to close the gates and let the damn fill out the snail darter which was the reason for their courts determination that they forward was a listed endangered species whose habitat happened to include the area that was going to be flooded by the dam so majority of the court held that section 7 impose an absolute prohibition on any federal action that jeopardized elicited species like the snail darter this is the court talking the Endangered Species Act does not authorize a fine utilitarian calculation or apparently a gross utilitarian calculation right now there is no judicial presumption against cost-benefit analysis working in this case indeed if you read the case carefully which I’ve tried to do you find that the simplest thing the sympathies of the court and you can find textual evidence for that are really with the damn builder not with the little snail dirt right Chief Justice burgers opinion for the court makes pretty clear the view that stopping the dam to save an obscure species of no known economic bath value doesn’t make common sense so along with the holding here there was a message to Congress don’t expect us to pull your chestnuts out of the fire so this is a this is a classic preference eliciting if you claim that privilege scholars would i preffer to preference eliciting outcome rather than a preference estimating I would come now the Dana muah here was interesting Congress took this opinion it changed it amended the the Endangered Species Act to provide for a a cabinet level review team the so-called God Squad which it authorized to make a determination about whether the proposed the benefits of a proposed federal action clearly outweighed the benefits of actions to protect the species if so the project could go forward even if jeopardized the species so a limited cost-benefit analysis was provided for but here the God Squad met and it found that the costs of going forward with the damn were not justified by the benefits right it was just a bad project but it was approved anyway by Congress through an appropriations writer of course I mean this is a damn right it’s got to be

approved but so rather than putting the burden on timers to adjust the outcome which is what the court did here basically here the court could have followed a different track tagged and this tag is laid out by Justice Powell in his dissent in this case he argued that Congress should be presumed not to have intended and absurd result that this was tantamount this sacrificing the dam for the species was can’t amount to an absurd result and he worked to find room in the statute it started with a very strong presumption in favor of weighing cost of benefits to protect to protect against just this kind of outcome he created room found ambiguity in the statute in the word action in order to try to express this very strong presumption and then construed the turn to avoid the absurd outcome now he didn’t carry the day in that case but Powell’s opinion in my view lays the doctrinal groundwork favoring some kind of cost-benefit analysis that we will see used by Justice Breyer and Justice Scalia in energy so our next our next our next case American textile manufacturers Institute there the court arguably embraced a presumption against cost-benefit analysis this case too was decided before cost-benefit analysis became a feature of exec branch practice and it was also before it was before Chevron was decided as well in this case the act at issue required standards to protect worker health to the extent feasible OSHA the the agency had refused to consider cost-benefit analysis and the court upheld that determination and the courts reasoning in support of its holding suggests a presumption against the use of cost-benefit analysis in the absence of Express statutory authority the court observes this is quote when Congress has intended that an agency engaged in cost-benefit analysis it has clearly indicated such an 10 on the face of the statute sounds pretty strong doesn’t it feasibility does not it conveys such an intent and therefore cost-benefit analysis isn’t required so that’s that’s the alternative approach justice Rehnquist had a different view of the meaning of feasibility and would have come to different result Cass Sunstein had nothing but disdain for the American textile decision saying that it made the Occupational Health and Safety Act the statute involved in that case irrational not surprising so that brings us to energy corporation or entergy corporation V Riverkeeper Inc which which was decided last spring that case I argue indulged a presumption in the opposite direction the decision addressed the question of whether EPA’s use of cost-benefit analysis was permissible in setting standards under section 316 B of the Clean Water Act for cooling water intake structures for electric power plants by a vote of 60 3 of 6 to 3 with justice breyer concurring in a separate opinion the court upheld EPA’s authority justice Stevens descended with two justices joining him and I want to spend some time here a little time here on the Scalia and prior opinions to show you how I think the presumption is working and then we’ll talk about I’ll talk about whether the presumption is warranted now Justice Scalia and Justice Breyer have some priors than those rhymes and had some priors on this issue which are probably important to lay out run both of them just may be significant both of them and their prior lies were administrative law professors whether that biases people in favor of some sort of cost-benefit analysis I don’t know but they’re certainly familiar with the issues here and in extrajudicial writings both of them have expressed the view that some form of cost-benefit analysis is essential for rational decision-making Justice Breyer has this has the most complete record on this and

he’s argued in different settings for cost-benefit analysis as a technique for weeding out regulatory controls that promise very small benefits in return for very high costs what the trawler calls the very high costs of achieving the last ten percent of reduction of a pollutant or an environmental harm these extradition judicial views I argue prefigure what these justices do in the entergy case so the Clean Water Act section 316 B requires EPA to set standards for cooling water intake structures that reflect the best technology available for minimizing adverse environmental impacts keep that language in mind if you can EPA interpreted that phrase in its rulemaking to allow it to weigh costs and benefits in establishing standard for these structures on existing power plants in order to avoid grossly disproportionate costs now the point the basic point of section 316 B is to protect aquatic life these cooling water intake structures that are a subject of these standards are big and they suck in just tons of water they suck in the water through the screens which have the effect of impaling aquatic life that is pressed against them and then aquatic life that gets through the screens is likely to be killed in the cooling water machinery itself he’d be a estimated that the intake structure is covered by the rule killed more than 3.4 billion fish and shellfish every year now EPA tried to monetize a course first name monetize the benefits of not killing so many shellfish but it couldn’t really do it because most of these fish and shellfish are little tiny things that aren’t very important to people so that only two percent of these fish and shellfish license in two percent could be could be monetized EPA concluded that the most expensive option that safe the greatest percentage of fish was not warranted and it had selected a less protective level instead so instead of requiring power plants to reduce deaths to fish by ninety-five percent across the range of plants under the most stringent option the plants were required to reduce deaths within a range of sixty to ninety five percent across the range of the of the facilities covered this choice reduced the cost from 3.5 billion to something around 250 million so the costs were reduced as between these two options by more than an order of magnitude it’s important that what the court understood the agency to be doing here was not a full-fledged cost-benefit analysis but instead rough balancing or comparison of costs and benefits with the fish considered in their natural units that is fish patties right and with the purpose of weeding out an option which was determined to have disproportionate or unreasonable costs now innocent up in his opinion upholding justice scalia writes the opinion for the court in his opinion upholding the agency’s authority to proceed in this way Justice Scalia faced an uphill battle with the statutory language the statute requires the agency to adopt the best technology available for minimizing adverse environmental impact statement sorry the best technology available for minimizing adverse environmental impact the phrase that gave you before an ordinary person might read this language as requiring the agency to use the best technology available for minimizing adverse environmental impact but we’re lawyers and we know that it doesn’t always go to the way Justice Scalia uses Chevron and a creative textual analysis of these words to uphold the agencies use of cost-benefit analysis the review of agency statutory interpretations under Chevron is traditionally framed as a two-step analysis step one this is to be answered using two traditional tools of statutory analysis has Congress directly spoken to the issue if you ask go no further that that interpretation is

required step 2 however if not is the agency’s interpretation permissible in Entergy Scalia does a very unusual thing he collapses these two steps into one step and the one step is is the agency’s interpretation reasonable this glee says whoa that’s not a big deal you say I’m doing one step where I should be doing two steps but i’m not going to conclude that an agency’s interpret is reasonable if it’s contrary to a determinant meaning of the statute that’s that’s apparent so logically his collapse of these two steps may make sense but I think there’s a subtle effect here I think the subtle effect is to give Justice Scalia whoever judges working this way more discretion and how to approach the statutory interpretation it allows the court to either one deploy the traditional tools of statutory interpretation in a vigorous search for a definitive meaning or two instead to use a more deferential examination of reasonableness or permissibility the traditional step to analysis and in entertaining Justice Scalia chooses to proceed in the deferential step 2 mode and he finds ample support in the language that I’ve quoted to you for the agency’s interpretation best might mean you know the best technology for not killing a fish but it doesn’t necessarily mean that best might mean most efficient and that’s okay it’s not precluded by maksim I or minimizing adverse environmental impact because minimizing doesn’t specify any level so he concludes that section 316 B does not unambiguously preclude cost-benefit analysis this might not be the most obvious way of construing the statute but it doesn’t have to be because Justice Scalia is proceeding here in deferential step 2 mode he also offers a similarly differential analysis of section 316 B statutory context supporting EPA’s rule I will spare you this it involves a lot of best technology provisions which Justice Scalia dutifully compares and then concludes allow the agency to room to do what it does but importantly mysteriously and importantly and in my view in a way that contradicts the rest of his analysis Justice Scalia suggests that the statutory scheme would not support a rigorous form would cost benefit analysis for section 316 be in effect it creates just enough room in the statute to accommodate the agency’s non rigorous reasonable disk comparison but arguably no more than that justice justice Breyers concurring opinion does a similar or comes to a similar conclusion Justice Breyer is not attached to us like Justice Scalia so he doesn’t get so hung up on the language of the statute he buries himself instead in a piece of opaque legislative history a statement by Senator muskie on the floor about the statute and draws from that legislative history the same conclusion that is EPA’s approach is a reasonable interpretation of the statute that is the approach that allows the agency to percent and consider costs and benefits benefits and non monetized form and use that comparison to avoid results that are absurd or unreasonable to read the statute differently breyer concludes would put the agency in common coating down would put the agency in conflict with a test of reasonableness by threatening to impose massive costs far and ex of anybody are in excess of any benefits and I think you see the last ten percent paradigm very close to the surface here in what Pryor is saying now Breyers analysis also includes some considerations against full costs banded full-fledged cost-benefit analysis right so he sees this statutory arrangement as a compromise between concerns about cost-benefit analysis that it crowds out non economic values or minimizes their

importance that it may that it may frustrate the development of new technologies but he but he compares that to very strong reasons that comes straight from him about the need to compare at some level costs and benefits in order to produce rational decision-making basically can’t have rational decision-making without some consideration of costs and benefits that would seem to compel a result that EPA is required to use cost-benefit analysis but he stops short of that because he has these considerations on the other side so my conclusion about energy is this we see in both justice Breyers and Justice Scalia’s opinions a modest Pro cost-benefit presumption doing work to expand the scope of agency discretion accorded under shoberg and with this I think Entergy vs. riverkeeper takes a modest step toward reconciling the the opposed practice of the administrative branch and the legislative branch particularly the legislative branch as expressed in statutes enacted in the 1970s and 80s of which the Clean Water Act is one so this is a step away from the neutrality of TV AV Hill this is a step in the opposite direction from American textile but I believe is that it is a defensive defensible and desirable step and there are three reasons why it is defensible and desirable because it reflects a political consensus in favor of a weak form of cost-benefit analysis of the kind of the agency used here because it because it preserves the agency’s choice to balance costs and benefits or not and because it works within arguably a space that Congress has left to be filled by administrative agencies or the courts let me elaborate on those reasons reasons just briefly my first my first reason in support of this decision is outcome this is a political consensus justification it’s really the key to what I have to say here judicial presumptions have a number of possible justifications but i think the presumption a presumption that is about agency authority to use cost-benefit analysis is probably most relevantly founded in a political consensus is that the chief justification for such a presumption would be the request of prevailing political preferences of the community a shift in the presumption as we see here would be justified by a new political consensus now this acknowledges a form of dynamic interpretation presumptions that address statutory ambiguities can change and I’m arguing they have changed here is that a good idea we might be concerned that this gives too much discretion to judges to shape statutory meaning to suit their own preferences is ship the presumption when they feel like right but I think a justification for the change here can be framed that appropriately constrains judicial discretion and honors likely legislative preferences the new presumption would only operate where the statute is ambiguous or arguably ambiguous I put the word arguably in there because the presumption isn’t doing any work if there isn’t a larger or smaller boundary that can be established and it would require the support of a demonstrable political consensus not judicial win not something that a judge could just draw out of the air but something very close I think to I Norell huggies is a Harvard professor electable political preference he argues convincingly I think that enacting legislators would prefer a current preferences default rule of this sort which makes present statutory interpretation of all ambiguous statutes correspond to their views that is the prevailing views of their generation their cohort what’s the evidence that this is a this cost-benefit analysis is a current political preference given this high standard well you’ve got the practice of the executive branch the interpretation that the court upheld in

section 316 B was an interpretation of an executive branch agency and you got the background practice of the executive branch using cost-benefit analysis since the 1980s so this makes it more likely that the presumption reflects a current political culture and not merely the Preferences of majority of the justices currently on the court but these actions and practices of executive branch may not be sufficient to establish a political consensus to support the presumption controversy continues to swirl as we seen around cost-benefit analysis there’s even dissension within the executive branch right now in the Obama administration executive order 12 866 is being reviewed to see whether it needs to be changed and then you have the mixed practice in Congress which continues up to the President as far as you can see so in light of all this I think it is important to the defense ability of the entergy presumption that had be limited to a weak form of cost-benefit analysis this form of cost-benefit analysis has broad intuitive appeal it does not provoke the level of resistance that the strong form does for reasons we’ve talked about it is pluralist allowing welfarist considerations to frame the debate but to decide it and I think perhaps most importantly it is based on a concept of rationality with links to the Canon of avoidance of absurd results this goes all the way back to trust us pals to sit in TV a view this cannon avoidance of absurd or irrational results is universally accommodated by legislators within the United States and gets the final piece that gives legitimacy to this move by the Supreme Court now i’m going to move real quickly through my second and third reasons and then to position the second reason for thinking this is a good thing is it a preserves of the providence of the executive branch the agency can side to do or not to do and the executive branch is politically accountable it’s better to leave that choice to an agency you might say I mean there if if if the rationale behind the brine behind the presumption is that not to consider costs and benefits would be irrational you might say well why give the agency the discretion but breyer in his concurring opinion I think even Justice Scalia is careful not to carry this logic too far there may be valid reasons why Congress or an agency might forego cost-benefit analysis even when the goal is efficiency ultimately finally congressional supremacy I think all the although that the analysis stretches the limits of the statutory language here it doesn’t violate those limits and therefore it is consistent with connors the supremacy of the legislature to define the boundaries of agency discretion I would argue further but I’m not going to hear because of considerations of time I think to take the interpretation further that is the statute would have difficulty accommodating a reading that allowed that allowed formal cost-benefit because of the ability of formal cost-benefit analysis to shift the bargain that I think Congress has struck the weep form of cost-benefit analysis in this case and I think a lot of other cases involving at this kind of limitation the weak form does not threaten the early cabins the decision by the agency so my conclusion the entergy decision was by no means inevitable I think the arguments on the other side were very strong they could easily have one what makes the difference I think or what made the difference is the intuitive appeal of these wheat of this week form of cost-benefit analysis as a basic tool to distinguish rational from irrational decisions but the opinion remains a somewhat awkward resting point in the evolution of judicial doctrine on cost-benefit analysis there continue to be as we’ve seen strongly divisive elements but there is also some forward project progress in resolving those debates rivera’s and others analyze the methodology indicate how it can be changed for the better Adler Posner work

on establishing on moral footing for cost-benefit analysis that allows other moral considerations to come into play these efforts over time might relax the crucial objections of the critics of cost-benefit analysis I’m hopeful such the time will likely depend on changes not only in theory and methodology but also in practice and results so it’s going to take a little time if achieved I think a new consensus on cost-benefit analysis would unload almost certainly be more eclectic be more moral than is suggested by Cass Sunstein’s I think unfortunate phrase cost-benefit state but it would be a welcome basis for convergence of congressional and executive branch practice over time with less need for the courts to navigate thank you you

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