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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."
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.
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
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.
Furthermore, the Fifth Circuit ruled that EPA's new approach violated the Administrative Procedure Act for being arbitrary and capricious because Congress set a standard of "disproportionate economic hardship," whereas evaluating the costs of compliance only examines the extent of economic hardship, not its proportionality. [1]
On further review, the D.C. Circuit Court of Appeals held that the FDA's action was reviewable and that its denial was "arbitrary and capricious". The Supreme Court unanimously reversed the appeals court and declared in an 8–1 decision that agency nonenforcement decisions were presumptively unreviewable.
Auer v. Robbins, 519 U.S. 452 (1997), is a United States Supreme Court case that concerns the standard that the Court should apply when it reviews an executive department's interpretation of regulations established under federal legislation.
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.