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When made by administrative agencies, decisions concerning mixed questions of law and fact are subjected to arbitrary and capricious review. Additionally, in some areas of substantive law, such as when a court is reviewing a First Amendment issue, an appellate court will use a standard of review called "independent review."
The standard of review for rescinding notice and comment rules is the same as that for enacting rules. The rescission was arbitrary and capricious for failing to consider the alternative of requiring airbags and dismissing too quickly the benefits of automatic seat belts. Court membership; Chief Justice Warren E. Burger Associate Justices
Accordingly, arbitrary and capricious review is understood to be more deferential to agencies than substantial evidence review is. Arbitrary and capricious review allows agency decisions to stand as long as an agency can give a reasonable explanation for its decision based on the information that it had at the time.
Before we start merging Arbitrary, capricious and unreasonable with this I think we should discuss a bit more. The terms Arbitrary and capricious and Arbitrary, capricious and unreasonable are not just terms as per courts of the legal system but occur in tribunal settings involving lay people, eg Boards of Appeal in Universities, School Boards and labor disputes.
Citizens to Preserve Overton Park v. Volpe (1971) - Important case applying the "arbitrary and capricious" review to rule-making. Motor Vehicles Manufacturers Association v. State Farm (1983) - "arbitrary and capricious" to change rule without considering other options for the change.
Intermediate scrutiny may be contrasted with "strict scrutiny", the higher standard of review that requires narrowly tailored and least restrictive means to further a compelling governmental interest, and "rational basis review", a lower standard of review that requires the law or policy be rationally related to a legitimate government interest.
Americans for Safe Access v. Drug Enforcement Administration was a case in which the U.S. Court of Appeals for the D.C. Circuit held that the DEA's denial of a petition by plaintiff Americans for Safe Access for removal of cannabis from Schedule I of the Controlled Substances Act survives review under the deferential arbitrary and capricious standard.
Associated Provincial Picture Houses Ltd. v Wednesbury Corporation [1948] 1 KB 223 [1] is an English law case that sets out the standard of unreasonableness in the decision of a public body, which would make it liable to be quashed on judicial review, known as Wednesbury unreasonableness.