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The term arbitrary describes a course of action or a decision that is not based on reason or judgment but on personal will or discretion without regard to rules or standards.
An arbitrary decision is one made without regard for the facts and circumstances presented, and it connotes a disregard of the evidence.
In many instances, the term implies an element of bad faith, and it may be used synonymously with tyrannical or despotic.
The term arbitrary refers to the standard of review used by courts when reviewing a variety of decisions on appeal. For example, the arbitrary and capricious standard of review is the principle standard of review used by judicial courts hearing appeals that challenge decisions issued by administrative bodies.
At the federal level and in most states, administrative law is a body of law made by executive branch agencies that have been delegated power to promulgate rules, regulations, and orders, render decisions, and otherwise decide miscellaneous disputes. Non-elected officials in administrative agencies are delegated this authority in order to streamline the often lengthy and more deliberative process of legislative lawmaking that frequently grinds to a halt amid partisan gridlock. Although administrative agencies are generally designed to make lawmaking and regulation simpler, more direct, and less formal, they still must provide due process to affected parties. They must also comply with administrative procedures created by popularly elected state and federal legislatures.
One important right recognized in most administrative proceedings is the right of judicial review. Citizens aggrieved by the actions of an administrative body may typically ask a judicial court to review those actions for error. In establishing the standard by which judicial courts will review the actions of an administrative body, state and federal legislatures seek to provide agencies with enough freedom to do their work effectively and efficiently, while ensuring that individual rights are protected.
Congress tried to maintain this delicate balance in the Administrative Procedure Act (APA). The APA limits the scope of a reviewing court's authority to determining whether the agency acted arbitrarily and capriciously in exercising its discretion. 5 USCA § 701. In making this determination, the reviewing court will not find that the administrative body acted arbitrarily unless the agency failed to follow proper procedures or rendered a decision that is so clearly erroneous that it must be set aside to avoid doing an injustice to the parties.
Specifically, a reviewing court must determine whether the agency articulated a rational connection between the factual findings it made and the decision it rendered. The reviewing court must also examine the record to ensure that the agency decision was founded on a reasoned evaluation of the relevant factors. Although agencies are given wide latitude, reviewing courts must be careful not to rubber-stamp administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute.
Typically, reviewing courts look at the whole record in making this determination, take into account the agency's expertise on any particular matters, and accept any factual findings made by the agency. However, the reviewing court is free to determine how the law should apply to those facts. If the reviewing court concludes that the agency's actions were so arbitrary as to be out-side any reasonable interpretation of the law, the court may overturn the agency's decision or remand the case back to the agency for further proceedings in accordance with the court's decision.
A reviewing court's determination that an agency acted in an arbitrary manner will often depend on the technical requirements of the governing law. For example, courts are often asked to determine whether a federal agency has acted arbitrarily under the National Environmental Policy Act (NEPA). Pub. L. 91-190, § 2, Jan. 1, 1970, 83 Stat. 852, as amended, 42U.S.C.A. §§ 4321 et seq. In one case the Ninth Circuit ruled that the transportation department acted arbitrarily under NEPA, when it failed to prepare an environmental impact statement, failed to consider whether its regulations would have violated air quality limits, and failed to perform localized analyses for areas most likely to be affected by increased truck traffic. Public Citizen v. Department of Transportation, 316 F. 3d 1002 (9th Cir. 2003).