Chenery’s Contemporaneous Rationale Principle and Chenery Cheating
Murphy, Richard W.
Discusses general practice of how an administrative order may be reversed before and after the SEC v. Chenery case in 1943. Previously, in some contexts, where a court reviews another decisionmaker’s action, the court inquires whether the decisionmaker could have reasonably justified the action. Here, courts do not attempt to examine the actual reasoning processes of the legislators. This changed after the Chenery case. Now where an agency’s action is not compelled by law but instead implicates its judgment and discretion, the validity of that action does not depend on whether the agency could have had a reasonable justification at the time it acted. Rather, the validity of the action depends on whether the agency’s contemporaneous rationale was, in fact, legal and reasonable. Since Chenery, courts look to find ways around this, with or without acknowledging that they are doing so.