Why Do Some U.S. Industries Sue Their Regulator Routinely While Others Hardly Ever Do?

From one nation to the next, there is much variation in the relationship between industry and government—even across nations that otherwise have much in common. Among large wealthy democracies, the United States is said to have business-government relations that are unusually confrontational and especially dominated by the adversary mentality of litigators.  Hence the subtitle of Robert Kagan’s classic book Adversarial Legalism: The American Way of Law. 

No practice embodies this national tendency better than American industry’s right to hail its governmental regulators into court and try to get judges to strike down the regulators’ actions.  While many nations provide some form of judicial review of government administration, the United States goes especially far, in a variety of ways.  The category of government actions subject to review is expansive and encompasses even the most general and sweeping policy decisions; the judges conducting review are entirely generalist and view themselves as standing apart from ‘the state’; and the remedies available to the challengers, even in a single trial court, can often be nationwide.  Big-ticket industry challenges to regulation are familiar in U.S. law school classes on administrative law and in U.S. media headlines.  In just the last few years, employers sued successfully to stop the Occupational Safety and Health Administration from mandating Covid vaccinations for workers, power companies successfully sued to stop the Environmental Protection Agency from regulating greenhouse gases, and now the Chamber of Commerce has sued to stop Trump’s Department of Homeland Security from limiting visas for skilled workers. 

What observers have largely overlooked is that American business’s signature tendency to use the courts against regulation operates strongly in some industries but hardly at all in others.  Suing your regulator is a choice of business strategy, and different industries make this choice differently.  Documenting this variation reveals the incentives that profit-seeking firms have—when the weapon of judicial review is officially available—to pick up that weapon or leave it aside. 

In a new article in the George Washington Law Review’s annual issue on administrative law, I establish the existence of this variation within one big category of federal regulation (public health and safety) and analyze what it means.  For every major federal health-and-safety regulator, I search dockets to identify every judicial challenge to the agency’s actions brought by the agency’s principal regulated industry—whether by individual companies therein or by trade associations—during the period 2013-2021 and, for several of the agency-industry pairings, for additional time periods extending as far back as the 1980s and as recent as 2024.  The industries covered are meat processors, drugmakers, automakers, airlines, children’s product companies, nuclear plant operators, coal mines, power companies, trucking companies, hospitals, and nursing homes (as well as employers generally in relation to OSHA).  For each industry-agency pairing, I use the data on judicial challenges as the starting point for a qualitative discussion of how big or small a role litigation plays in agency-industry interaction.

I find that industry judicial challenges tend to be few and marginal when two conditions are met.

The first condition is that companies in the industry have a thick relationship with the regulator.  That is, each company knows the regulator will be making repeat decisions impacting its business into the indefinite future, so each company has a stake in winning the agency’s trust and goodwill.

The second condition is that, with regard to the agency action at issue, industry economic interests are aligned with the mission of the regulator. This is especially the case for agency action that has the official purpose of protecting the health and safety of the industry’s own consumers, as opposed to protecting industry workers or victims of externalities of industry conduct. In protection of consumer health and safety, the industry and the regulator are more likely to view each other as on the ‘same team’, and industry tends to (1) see the regulator as a source of credible guarantees that help attract business, (2) fear the ‘bad look’ with consumers that conflict with the regulator could cause, and (3) seek influence and leverage over the agency by less open and adversary means than litigation. 

My hope is that this study may serve as a building block in constructing a more practical understanding of judicial review’s economic and political role in U.S. society—and may helps us see that U.S. regulation’s departures from the norms of large wealthy democracies are more limited than we often assume. 

The author’s full article can be found here.

Nicholas R. Parrillo is Townsend Professor of Law at Yale.