The Burden of Justification

The most important legal influence on public regulation appears to be the specter of judicial review. There is no analogy in the private sector. Except for violations of antitrust law, there is no possible basis for challenging the substance of private standards in court (and the antitrust law, as already explained, gives substantial deference to private safety standards in the absence of proven bad motives). With the CPSC, standards are not just reviewable by court, the statute allowing such review is intended to encourage closer judicial scrutiny than under the traditional, more deferential approach.^[37] The agency has not fared well in the courts. A standard for swimming pool slides was rejected because the CPSC "provided little evidence that warning signs would benefit consumers."^[38] The court rejected arguments based on "common sense" and faulted the agency for not having tested the effectiveness of the required signs. That same year, another court, rejecting portions of a safety standard for matchbook covers, practically demanded that the agency justify all of its decisions with cost-benefit analyses.^[39]

This sort of judicial review creates a burden of justification on public agencies that does not hinder their private counterparts. "We cannot go to court on engineering judgment," notes a CPSC staff member with

dismay. This suggests a major difference between public and private standards-writing. Public agencies cannot "get away with" what forms the basis for most private standards: engineering judgment, common sense, and educated guesses. The burden of justification probably helps explain why the government agencies shied away from technical issues in the case studies, seizing issues for which technical proof is least significant, such as warning labels and effective dates.

The final three chapters assess the policy implications of these observations and explanations. Chapter 10 aggregates the institutional considerations, setting forth the comparative institutional advantages of each system. Chapter 11 examines the most common policy prescription for improving standards-setting: changing administrative procedures. Chapter 12 considers interactive strategies and alternative policy instruments that are also worthy of consideration but are often overlooked in discussions of standards policy.