Arbitrary and capricious
Definition
Arbitrary and capricious is the standard federal courts use under the Administrative Procedure Act to review agency rules and decisions. A rule fails this standard if the agency did not examine the relevant evidence, ignored an important part of the problem, or gave an explanation that runs counter to the evidence before it.
Why it matters
This is the main legal lever citizens, states, and companies use to challenge a federal rule in court without proving the agency acted in bad faith. Courts do not substitute their own judgment for the agency's, so review is deferential, but agencies still have to show their reasoning, not just announce a result.
Seen in the wild
The Supreme Court's 1983 decision in Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. is the case that defined the modern standard, holding that an agency must show a rational connection between the facts it found and the choice it made.1