Justice Stephen Breyer

On December 4, Supreme Court Justice Stephen Breyer spoke at AEI about the practical difficulties of applying economic reasoning to judicial decisions and about factors that inhibit greater influence of economic analysis on the Supreme Court. Justice Breyer received the 2003 Distinguished Award of the AEI-Brookings Joint Center for Regulatory Studies.

Breyer began by pointing out that, in each case before the high court, the justices participate fully and as generalists, so as to avoid biases that might occur if the justices divided the caseload according to their command of the topics in question.

Second, the pressures of a consistently full docket limit the time frame for consideration of each case. (Breyer reported that each year the Court reviews about 7,500 petitions and proceeds to accept approximately eighty cases.) The justices therefore have little time to engage in economic analysis themselves or to reconsider their views in light of a colleague's analysis.

Moreover, Breyer noted that "cases in which law involves economics are often cases in which the law instructs courts to defer to other governmental decision-makers." In such cases, courts avoid detailed consideration of the economic reasoning of the relevant agency, but instead typically accept the agency's consideration of economic factors.

A fourth factor limiting the influence of economic reasoning on the Court is the desire for rules that give clear guidance about what is allowed and disallowed. Such rules are far easier to administer than subtle or ambiguous ones. Economics, however, tends to involve shades or degrees.

Breyer used the case of Whitman v. American Trucking Associations to illustrate the point. The Clean Air Act required the Environmental Protection Agency to set air standards to protect public health and safety, and the Supreme Court ruled that this instruction did not permit the agency to consider economic costs. Breyer agreed with the decision but argued in a separate opinion that the statute did not forbid economic consideration in all cases. He cited Congress' intent to encourage cheaper and more effective pollution control technology and asserted that the statute "is sufficiently flexible to permit the EPA to take account of the cost, where necessary to avoid counterproductive results."

Breyer used another case, Verizon Communications v. FCC, to demonstrate the difficulties involved in addressing highly technical cases. The Telecommunications Act of 1996 empowered the Federal Communications Commission to set the rates at which upstart telephone companies could use wiring and other elements controlled by existing firms. The legal question in Verizon was whether the FCC's system for determining those rates "was rationally related to the statute's purpose, namely, encouraging new competition." The Court ruled in favor of the FCC, with Breyer casting the only dissenting vote. But in his lecture he acknowledged that his economically grounded opinion had been too complicated for his fellow justices to accept as the basis for overturning the judgment of the commission.

In ending his discussion of the case, he observed, "Since I believe that technical subject matters--biology, communications, computers--will become ever more relevant to the law, I think this kind of problem is of growing importance."

He concluded the lecture by encouraging serious students of economics to engage in legal issues: "Whether serving as experts in individual cases, or more generally as informed court watchers and critics, you have the ability to help encourage and make more accessible to lawyers and judges the tools of analysis. That kind of participation is consistent with my own view of the legal process-that it is too important to be left simply to the legal specialists, to the lawyers, or even to the judges."