Standards of review under APA §706
APA §706 Overview
APA §706 lays out the scope of judicial review for agency actions. Courts must:
Decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning of agency action.
Set aside agency actions found to be:
Arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law (§706(2)(A))
Contrary to constitutional right (§706(2)(B))
In excess of statutory jurisdiction, authority, or limitations, or short of statutory right (§706(2)(C))
Without observance of procedure required by law (§706(2)(D))
Unsupported by substantial evidence (§706(2)(E))
Unwarranted by the facts to the extent the facts are subject to trial de novo (§706(2)(F))
Courts apply different standards of review depending on the type of agency action.
Standards of Review & Case Law
1. Arbitrary and Capricious Standard (§706(2)(A))
This is the most common standard, applied to informal rulemaking and adjudications.
Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. (1983)
Facts: The National Highway Traffic Safety Administration (NHTSA) rescinded a rule requiring passive restraints (like airbags/automatic seatbelts) in cars.
Holding: The Supreme Court struck down the rescission as arbitrary and capricious. An agency must provide a reasoned explanation and consider all important aspects of the problem.
Principle: Agencies cannot ignore relevant data or fail to explain policy changes.
Citizens to Preserve Overton Park v. Volpe (1971)
Facts: Citizens challenged the Secretary of Transportation’s approval of a highway through a park.
Holding: The Court applied the arbitrary and capricious standard, requiring a “hard look” at the decision to ensure it wasn’t based on irrelevant factors.
Principle: Courts must ensure agency decisions are grounded in rational consideration, even though review remains deferential.
2. Substantial Evidence Standard (§706(2)(E))
Applies to formal adjudication and formal rulemaking (where hearings are required).
Universal Camera Corp. v. NLRB (1951)
Facts: The NLRB found that an employee was wrongfully discharged, but the ALJ had found otherwise.
Holding: The Supreme Court said courts must review the whole record, not just the parts supporting the agency.
Principle: “Substantial evidence” means such relevant evidence as a reasonable mind might accept as adequate—more than a mere scintilla.
Consolo v. Federal Maritime Commission (1966)
Facts: Fishermen challenged FMC findings on shipping rates.
Holding: Substantial evidence allows for two inconsistent conclusions as long as the agency’s choice is reasonable.
Principle: Courts do not reweigh evidence; they defer to the agency if the record supports its findings.
3. De Novo Review (§706(2)(F))
Rare, applies when:
Statutes specifically authorize de novo review, or
Agency fact-finding procedures were inadequate.
Overton Park v. Volpe (again, 1971)
Court hinted that if no adequate record exists, a district court may require de novo fact-finding.
Dickinson v. Zurko (1999)
Facts: Federal Circuit reviewed Patent and Trademark Office (PTO) fact-finding.
Holding: PTO findings are reviewed under APA’s substantial evidence standard, not de novo.
Principle: De novo review is exceptional—default is substantial evidence/arbitrary-capricious review.
4. In Accordance with Law (§706(2)(A) & (C))
Courts review whether agencies act within statutory and constitutional limits.
Chevron U.S.A., Inc. v. Natural Resources Defense Council (1984)
Facts: Dispute over EPA’s interpretation of “stationary source” under the Clean Air Act.
Holding: If a statute is ambiguous, courts defer to reasonable agency interpretations (Chevron deference).
Principle: Courts review legal questions but defer when Congress delegates interpretive authority.
FDA v. Brown & Williamson Tobacco Corp. (2000)
Facts: FDA claimed authority to regulate tobacco as a drug.
Holding: Supreme Court struck it down—Congress had explicitly excluded tobacco regulation from FDA authority.
Principle: Courts must ensure agencies stay within statutory jurisdiction.
5. Procedural Requirements (§706(2)(D))
Courts ensure agencies follow required procedures.
Vermont Yankee Nuclear Power Corp. v. NRDC (1978)
Facts: Environmental groups argued the NRC should have provided additional procedures beyond APA’s notice-and-comment rulemaking.
Holding: Supreme Court ruled courts cannot impose additional procedural requirements not found in statute or APA.
Principle: Courts review whether statutory/APA procedures were followed, not invent new ones.
Summary of Standards
Arbitrary & Capricious: Did the agency give a rational explanation? (State Farm, Overton Park)
Substantial Evidence: Is the decision supported by adequate evidence on the record? (Universal Camera, Consolo)
De Novo: Rare—only when statutorily required or record is inadequate (Overton Park, Zurko)
In Accordance with Law: Did the agency stay within statutory/constitutional bounds? (Chevron, Brown & Williamson)
Procedural Review: Did the agency follow APA/statutory procedure? (Vermont Yankee)
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