University of Chicago Law Review

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The two most vilified cases in administrative law are Business Roundtable v Securities and Exchange Commission and Corrosion Proof Fittings v Environmental Protection Agency. In Business Roundtable, the DC Circuit struck down the SEC’s proxy access rule because the agency’s cost-benefit analysis of the regulation, in the court’s view, was defective. In Corrosion Proof Fittings, the Fifth Circuit struck down an EPA regulation of asbestos products on the same grounds. Nearly all scholars who have written about these cases have condemned them. We argue that the courts acted properly. The regulators’ cost-benefit analyses were defective, seriously so; and the courts were right to require the agencies to show that their regulations passed an adequate cost-benefit analysis. We further argue that the trajectory of law and policy is consistent with our view. Corrosion Proof Fittings and Business Roundtable are harbingers rather than errors—harbingers of an era of enhanced judicial review of cost-benefit analysis.

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