Judicial Discretion and the "Sunk Costs" Strategy of Government Agencies

Abstract

 When a government agency, during the construction of a public works project, has violated a statute, a court may be hesitant to issue an injunction because of the potential “waste” of public funds that have already been spent. Knowing this, agencies may engage in a “sunk costs” strategy while a decision on enjoining the project is looming—continuing to invest money in the project, often at an increased rate, in order to gain advantage in the equitable balancing used to evaluate the necessity for an injunction. An increase in the amount of irrecoverable public funds invested in furtherance of a statutory violation may tilt the judge’s balancing in the agency’s favor. This Note addresses this sunk costs strategy and concludes that, in light of traditional equitable jurisprudence, the money spent by an agency to take advantage of this balancing cannot be included in the balancing process.