What recent judicial rulings illustrate the application of the arbitrary and capricious standard in court?

Recent judicial rulings illustrate the application of the arbitrary and capricious standard in court with a renewed vigor, reflecting a decisive shift in the balance of power between federal agencies and the judiciary. The arbitrary and capricious standard-enshrined in the Administrative Procedure Act (APA)-requires that agency actions be supported by reasoned decision-making, grounded in evidence, and not the result of whim or unexamined preference. The courts, especially at the Supreme Court level, have made it clear that agencies must justify their actions with more than mere assertions of expertise. This heightened scrutiny is not only a matter of statutory interpretation but also a reflection of constitutional principles, particularly the separation of powers and the need for judicial oversight of the administrative state.

The Supreme Court’s recent terms have been marked by a series of rulings that curtail agency discretion and reaffirm the judiciary’s role as a check on administrative power. In Ohio v. EPA, the Court stayed enforcement of an EPA rule, finding that challengers were likely to succeed on their claim that the rule was arbitrary and capricious. The Court’s reasoning underscored the necessity for agencies to adhere to procedural requirements and to provide a rational explanation for their decisions. This case, along with others such as Corner Post v. Board of Governors of the Federal Reserve, signals a new era in which longstanding regulations can be challenged if they inflict new injury, regardless of when they were enacted. The six-year statute of limitations for APA claims now begins when the plaintiff is injured, not when the rule is finalized, opening the door to a wave of litigation against agency actions that may have previously been considered settled law.

The overruling of the Chevron deference doctrine in Loper Bright further amplifies this trend. The Court declared that judges are no longer bound to defer to agency interpretations of ambiguous statutes. Instead, courts must exercise independent judgment to determine if an agency has acted within its statutory authority. This shift places the onus squarely on agencies to demonstrate that their actions are not arbitrary or capricious, but rather are the product of careful consideration and adherence to legislative intent. The combined effect of these rulings is a legal environment in which regulatory challenges are not only more likely but also more likely to succeed, provided that the challenger can show that the agency failed to engage in reasoned decision-making.

The arbitrary and capricious standard is not a mere procedural hurdle; it is a substantive requirement that agencies must meet to withstand judicial review. Courts applying this standard look for several key elements: whether the agency considered all relevant factors, whether it examined the data and evidence before it, and whether it provided a logical explanation for its decision. If an agency fails to address important aspects of the issue, ignores contrary evidence, or relies on factors that Congress did not intend it to consider, its action may be struck down as arbitrary and capricious. This framework ensures that agencies remain accountable, not only to the public but also to the rule of law.

Recent lower court rulings have demonstrated a willingness to invalidate major agency actions for what might once have been considered minor procedural flaws. The increased stringency of arbitrary and capricious review has led to greater conflict between the executive and judicial branches, particularly in high-profile cases involving immigration, environmental regulation, and reproductive rights. Empirical data shows that citations to the landmark case State Farm-which established the modern contours of arbitrary and capricious review-have risen dramatically, reflecting a judiciary increasingly willing to scrutinize agency actions.

A notable example is the litigation over the FDA’s approval of mifepristone, a widely used abortion drug. A district court invalidated the FDA’s approval based on alleged procedural deficiencies, leading to conflicting judgments and an emergency intervention by the Supreme Court. The case highlighted the power of the arbitrary and capricious standard to disrupt agency policymaking, particularly when courts perceive that agencies have failed to follow proper procedures or to provide adequate justification for their decisions. The controversy surrounding this case also sparked debate about the appropriate level of judicial deference to agency expertise and the potential for judicial overreach.

The application of the arbitrary and capricious standard is not limited to cases of agency rulemaking; it also extends to agency adjudications and enforcement actions. Courts will examine whether agencies have provided a reasoned explanation for their findings and conclusions, based on substantial evidence in the record. This helps ensure that individual cases are decided fairly and consistently with applicable laws and regulations. The standard also serves as a check on agency discretion, requiring agencies to act within the bounds of their statutory authority and to justify any departures from established policies or practices.

The use of the arbitrary and capricious standard is particularly significant in cases involving agency policy changes. When an agency reverses a previous policy or adopts a new interpretation of a statute, courts apply heightened scrutiny to ensure that the change is adequately justified. Agencies must provide a reasoned explanation for the change, acknowledging the factors that led to the previous policy and articulating why a new approach is warranted. This requirement prevents agencies from engaging in unexamined policy shifts and promotes stability and predictability in administrative law.

The standard also intersects with important constitutional principles, such as due process and equal protection. When agencies make decisions that affect individual rights or liberties, courts may scrutinize these actions more closely to ensure compliance with constitutional requirements. This can involve examining whether the agency has provided adequate procedural safeguards and whether its decision-making process is fair and impartial.

One emerging area of focus is the use of artificial intelligence and machine learning algorithms in agency decision-making. As agencies increasingly rely on advanced technologies to analyze data and inform policy choices, courts will need to grapple with how to evaluate the reasonableness of decisions that are partially or fully automated. This raises complex questions about transparency, accountability, and the role of human judgment in administrative processes. The arbitrary and capricious standard will play a crucial role in ensuring that agencies do not abdicate their responsibility to provide reasoned explanations for their actions, even when those actions are informed by algorithms.

The arbitrary and capricious standard also serves as an important check on agency enforcement actions. Regulated entities may challenge enforcement decisions as arbitrary and capricious if they deviate from established policies or practices without adequate justification. Courts will examine whether the agency has provided a reasoned explanation for any departure from past precedent or guidance, ensuring that enforcement actions are not the result of caprice or favoritism.

The legal community is divided on the proper scope of arbitrary and capricious review. Some scholars and practitioners argue for a more deferential approach, emphasizing the expertise and specialized knowledge of administrative agencies. Others contend that robust judicial review is necessary to prevent agency overreach and to protect individual rights. The Supreme Court has thus far declined to significantly modify the doctrine established in State Farm, but recent trends suggest that the judiciary is increasingly willing to intervene when agencies fail to meet the standard.

The practical implications of these developments are significant. Regulated parties now have greater opportunities to challenge agency actions, and agencies must be prepared to defend their decisions with detailed explanations and robust evidentiary support. The risk of judicial invalidation is higher than ever, particularly in controversial or high-stakes policy areas. Agencies must ensure that their rulemaking and adjudicative processes are transparent, well-documented, and grounded in a thorough analysis of the relevant facts and law.

For legal practitioners, understanding the nuances of the arbitrary and capricious standard is essential. Successful challenges to agency action often hinge on identifying procedural missteps, gaps in the evidentiary record, or failures to consider relevant factors. Practitioners must be adept at marshaling the administrative record, highlighting inconsistencies or omissions, and articulating clear arguments about why an agency’s action fails to meet the standard.

The future of arbitrary and capricious review is uncertain, but the trend is clear: courts are increasingly willing to hold agencies accountable for their decision-making processes. The demise of Chevron deference, the expansion of opportunities to challenge longstanding regulations, and the heightened scrutiny of agency actions all point to a legal landscape in which judicial oversight is paramount. Agencies must adapt by strengthening their internal procedures, enhancing transparency, and providing detailed justifications for their actions.

In summary, recent judicial rulings illustrate the application of the arbitrary and capricious standard in court by reaffirming the judiciary’s role as a check on administrative power and demanding greater accountability from agencies. The standard serves as a vital safeguard against unreasoned or unjustified agency action, ensuring that regulatory decisions are grounded in evidence and subject to meaningful judicial review. As the legal environment continues to evolve, the importance of the arbitrary and capricious standard will only grow, shaping the contours of administrative law and the relationship between agencies, courts, and the public.

Citations:

• Supreme Court Decisions Curtail Regulatory Agencies’ Powers and Authority
• How Courts Apply the Arbitrary and Capricious Standard in Administrative Law
• Understanding the Arbitrary and Capricious Standard in Lawsuits and Agency Actions
• Key Supreme Court Administrative Law Rulings and Trends in April 2025
• Recent Academic Analysis of Arbitrary and Capricious Judicial Review
• Supreme Court Alters Administrative State: Loper and Relentless Decisions
• Arbitrary or Capricious Test: Legal Standard and Case Examples
• Supreme Court Cases by Topic: Government Agencies and Administrative Law
• After Chevron: What the Supreme Court’s Loper Bright Decision Changed
• Arbitrary and Capricious Standard: Definition, Application, and Review
• Turning Square Corners: Regents and Arbitrary and Capricious Review Stakes
• U.S. Supreme Court Strikes Down Chevron Doctrine: What You Need to Know
• Harvard Law Faculty Dissect Key Supreme Court Administrative Decisions
• What Does Arbitrary or Capricious Mean? Legal Definitions and Context
• Supreme Court Cuts Judicial Review of USCIS Decisions: Immigration Impact
• Congressional Research Service: Arbitrary and Capricious Standard Overview
• Arbitrary and Capricious Review at the Court After FCC v. Prometheus
• Supreme Court Rebalances the Administrative State: Recent Developments
• Arbitrary or Capricious: Legal Library and Regulatory Guidance
• Oyez Supreme Court Cases Database and Summaries