“Public interest” standards in statutory delegations to agencies represent the greatest hopes and the darkest fears of the U.S. administrative state. On the one hand, the public interest standard provides a vessel for agencies to infuse policymaking with the moral and ethical commitments of the community. On the other hand, regulation in the public interest opens the door to the arbitrary exercise of tyrannical state power. Despite the lofty aspirations and ominous warnings about regulation in the public interest, little is known about how agencies actually decide what is in the public interest when charged by statute to do so. This Article seeks to move beyond the rhetoric surrounding regulation in the public interest by conducting a grounded inquiry into how agencies implement public interest standards in the statutes they administer. Using data from agency adjudications under four different statutory schemes dating from the early twentieth century to the present, the study investigates how agencies define the public interest, whether agencies use public interest standards with unfettered discretion based on whatever criteria they wish (as some fear), and whether agencies apply public interest standards in ways that infuse policy making with common good or community values (as some hope).
The study’s findings will surprise many and please few. First, it demonstrates that agencies applying statutory public interest standards exhibit rational and predictable patterns that comport with rule-of-law values of transparency and consistency. Second, the study finds that agencies rarely consider what might be characterized as “common good” or “community” values in their public interest analyses unless such considerations are mandated by statute, and that agencies tend to discount such considerations even when statutorily required. Third, in terms of substantive conceptions of the public interest, the study reveals that in most contexts studied, economic arguments are the most-raised and most-accepted justifications for why a particular outcome is in the public interest.
The Appendix for this paper is available on JREG’s Dataverse account.