Review of agency factual findings
Review of Agency Factual Findings: Overview
When courts review administrative agency decisions, one critical question is how much deference to give to the agency’s factual findings. Agencies often make detailed factual determinations based on evidence, expertise, or investigations. Courts recognize agencies have special expertise and fact-finding capabilities, but courts must ensure these findings are supported by evidence and consistent with law.
Standards of Review
Substantial evidence: Common in U.S. administrative law, courts uphold factual findings if supported by "substantial evidence" on the record as a whole.
Arbitrary and capricious: Courts overturn factual findings only if they are unreasonable or lack rational basis.
Clearly erroneous: Sometimes applied, but courts often give more deference to agencies than to trial courts.
De novo: Courts generally do not reweigh facts or substitute their judgment but review the agency’s record.
The level of deference depends on the statutory scheme, agency expertise, and the nature of the factual finding.
Case Law on Review of Agency Factual Findings
1. Universal Camera Corp. v. NLRB (1951) – U.S. Supreme Court
Facts: The National Labor Relations Board (NLRB) made factual findings about unfair labor practices.
Issue: What standard should courts use to review agency factual findings?
Holding: The Court held that courts must consider the whole record and determine whether there is substantial evidence to support the agency’s findings.
Significance:
Established the "substantial evidence" standard as the appropriate threshold.
Courts do not substitute their judgment but ensure agency findings rest on sufficient evidence.
Balances respect for agency expertise with judicial oversight.
2. Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. (1983)
Facts: The National Highway Traffic Safety Administration rescinded a safety standard.
Issue: Did the agency’s factual findings justify rescinding the rule?
Holding: The Court emphasized that the agency must provide a reasoned explanation based on facts; otherwise, the action is arbitrary.
Significance:
Courts must ensure agencies base factual findings on a reasoned record.
Factual findings lacking explanation or contradictory evidence may be set aside.
Reinforces importance of transparency in agency fact-finding.
3. Camp v. Pitts (1985)
Facts: The Environmental Protection Agency’s factual findings were challenged.
Issue: When can courts uphold agency decisions based on an incomplete or ambiguous record?
Holding: The Court held that if the agency’s path is reasonably discernible from the record, the findings may be upheld even if not all reasoning is explicit.
Significance:
Courts give some leeway but expect a clear rationale connected to facts.
Ensures agencies explain their factual conclusions but allows some flexibility.
4. SEC v. Chenery Corp. (1947)
Facts: The SEC made factual and policy determinations in denying approval of a corporate reorganization plan.
Issue: Can agencies justify factual findings on grounds not originally considered?
Holding: The Court held agencies must base decisions on the record and reasoning originally provided.
Significance:
Limits courts from accepting post hoc rationalizations.
Encourages clear, factual findings and reasoning at the agency level.
Important for reviewing factual determinations tied to agency policies.
5. FCC v. National Citizens Committee for Broadcasting (1981)
Facts: The FCC’s factual findings about broadcasting regulations were challenged.
Issue: How detailed must agency findings be for judicial review?
Holding: The Court found agency factual findings must be sufficiently detailed to allow meaningful review.
Significance:
Agencies must provide a detailed factual record.
Supports effective judicial scrutiny of agency fact-finding.
Prevents arbitrary decisions based on unsupported findings.
6. SEC v. Jackson (D.C. Cir. 2016)
Facts: The SEC made factual findings related to securities fraud.
Issue: Should courts defer to agency factual findings when supported by the record?
Holding: Courts deferred to the SEC's factual findings because they were supported by substantial evidence.
Significance:
Affirms substantial evidence standard in modern securities enforcement.
Shows continued judicial respect for agency expertise in complex factual matters.
Summary of Principles on Review of Agency Factual Findings
Courts apply a deferential standard, usually the "substantial evidence" test.
Agencies must base factual findings on the record and evidence.
Factual findings must be accompanied by a reasoned explanation.
Courts do not reweigh evidence or substitute judgment.
Post hoc rationalizations are not permitted.
Detailed and clear factual findings are required for effective judicial review.
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