Arbitrary and Capricious Review in Administrative Proceedings – An Opportunity for ALJ’s to Grant Undue Deference to Agency Decisions?

By: Andrew Burrows, Journal Staff Member

Quoting Harvard Professor Adam Vermule in his article, TS Glassman remarks that arbitrary and capricious review can skew the analysis of constitutionality in administrative proceedings where massive amounts of discretion is afforded to the administrative agency. This post will briefly discuss arbitrary and capricious review of administrative proceedings and the risk that reviewing courts might be granting excessive deference to determinations by the administrative agency.

What is Arbitrary and Capricious Review?

Under arbitrary and capricious review, “the reviewing court [is directed] to hold unlawful and set aside agency actions, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” One facet of this determination is whether the agency’s decision was based on a consideration of relevant factors and whether there has been a clear error of judgment by the agency. Although this determination may seem simple in practice, a reviewing court in most instances does not have the same level of expertise as the administrative agency in ascertaining and dissecting relevant factors and studies supporting these factors. Thus, a reviewing court is obligated to defer to an agency’s interpretation where the agency has at least considered relevant factors in their determination, supported by at least some credible evidence.

How Might a Reviewing Court Grant Excessive Deference?

Additionally, under the arbitrary and capricious standard of review, a court reviewing an agency determination cannot simply state the basis for an ultimate decision by the agency independently, but that basis must “come from the agency” itself.  Herein lies the danger for a reviewing court to grant undue deference to the agency. If the agency decision was not in fact based upon a consideration of relevant factors, it should be held arbitrary or capricious and remanded for further consideration.  Despite this directive, if the court feels it can discern the purpose of the agency decision, it may improperly feign deference to the agency by pointing to studies or research looked at by the agency to support its own judicially crafted conclusion. By doing this, the reviewing court would supplant the purpose of arbitrary and capricious review and substitute its own basis for any basis that might be shown by the agency on remand. Since arbitrary and capricious review is already an extremely deferential standard, it would be easy for a reviewing court to fall into this line of thinking under the guise of granting deference to the agency’s determination.