Jack Malich (Columbia Law School) has posted The Judiciary's Arbitrary and Capricious Problem on SSRN. Here is the abstract:
The Supreme Court has not been shy in its efforts to change, and in some cases, overturn long-standing administrative law precedent. Yet in one area, arbitrary and capricious review under State Farm, the Court has ostensibly not acted to modify any part of the doctrine. Recently, however, lower courts—and the Supreme Court itself—have increasingly used arbitrary and capricious review to invalidate major agency actions over what seem to be somewhat minor procedural flaws. The increased stringency of such review has led to increasing conflict between the executive and judicial branch. Two Supreme Court decisions from last term, Ohio v. EPA and Corner Post v. Board of Governors of the Federal Reserve, are likely to make this type of judicial interference even more common.
Empirical data supports this proposition. Citations to State Farm—the lodestar case for arbitrary and capricious review—have risen by nearly 120% over the last two decades, reflecting the growing use of arbitrary and capricious review to block agency actions on controversial issues like immigration, environmental policy, and reproductive rights. The recent mifepristone case in particular highlights the issue: a district court invalidated the FDA’s approval of a widely used abortion drug based on alleged procedural deficiencies, triggering conflicting district court judgments, calls for President Biden to ignore a district court, and an emergency Supreme Court intervention where one justice expressed doubts the government would comply with a court order.
This Article argues for a return to a more deferential standard of arbitrary and capricious review. Two solutions stand out as politically palatable, within the power of the judiciary, and grounded in the text of the APA: (1) greater remedial restraint when adjudicating agency action; and (2) a requirement that courts find “prejudicial error” before invalidating agency action. Courts can and should prevent irrational agency decision-making, but they should do so carefully. The blithe approach courts have recently taken to invalidating major policy decisions has already had significant consequences. Reforms must be made to avoid more dire consequences, such as the executive branch simply ignoring a court order.
Recommended.
