What does an administration need to show in court so that its change-of-policy decisions are not judged "arbitrary and capricious"?

Question

Regarding a recent SCOTUS decision on the "remain in Mexico" program, I've read that:

The Supreme Court on Tuesday said the Biden administration likely violated federal law in trying to end a Trump-era program that forces people to wait in Mexico while seeking asylum in the U.S. [...]

The court offered little explanation for its action, although it cited its opinion from last year rejecting the Trump administration’s effort to end another immigration program, Deferred Action for Childhood Arrivals. In that case, the court held that the decision to end DACA was “arbitrary and capricious,” in violation of federal law.

Is there some general test for whether an administration's change of policy (like rescinding something initiated by a previous administration) is "arbitrary and capricious"?

Or failing that, are there opposite examples, where such a policy change was challenged on "arbitrary and capricious" grounds, but the courts didn't find it to be so by ruling on the merits of that challenge (instead of side-stepping it—e.g., by dismissing it as a "political question")?

Answer 1

The "arbitrary or capricious" test is a very forgiving standard that asks little more than whether an agency's decision is supported by a “rational connection between the facts found and the choice made.” Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285 (1974).

Using the standard, a reviewing court will not ask whether the decision was wise or unwise, whether a policy will be effective or ineffective, or whether another decision would have better achieved the agency's goals; it will merely ask whether the agency has adequately reviewed the available evidence, considered its available options and explained its decision:

A reviewing court may not set aside an agency rule that is rational, based on consideration of the relevant factors, and within the scope of the authority delegated to the agency by the statute. ... The scope of review under the "arbitrary and capricious" standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a "rational connection between the facts found and the choice made."

Motor Vehicle Manufacturers Assoc. of the United States, Inc. v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 42-43 (1983).

In State Farm, for instance, NHTSA promulgated regulations requiring automobile manufacturers to include passive-restraint systems but then rescinded them based on a conclusion that they it was promoting the use of automatic seat belts at the expense of more effective airbags. State Farm sued, and the courts agreed that the rescission was arbitrary and capricious because NHTSA didn't adequately explain why it believed automatic seatbelts were inadequate and because it failed to consider the possibility of modifying the regulation to simply require the use of airbags.

But this treatment is relatively rare, as the relaxed standard of review naturally results in generally favorable decisions for the agency. For instance, in Bowman, the Interstate Commerce Commission authorized a new group of motor carriers to operate new delivery routes. A trial court blocked the authorization from taking effect because it didn't accept the competitor's evidence that new carriers were unnecessary, but the Supreme Court reversed, holding that the arbitrary-and-capricious standard doesn't allow a reviewing court to second-guess an agency based on its own opinion of what evidence was the most persuasive or what decision would have been the most prudent:

The Commission, of course, is entitled to conclude that preservation of a competitive structure in a given case is overridden by other interests, but where, as here, the Commission concludes that competition aids in the attainment of the objectives of the national transportation policy, we have no basis for disturbing the Commission's accommodation.

Answer 2

The agency must have provided "reasoned analysis" for rescinding its previous rule

The Supreme Court in Motor Veh. Mfrs. Ass'n v. State Farm Ins., 463 U.S. 29 (1983) held that (emphasis added):

An agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance. While the scope of review under the "arbitrary and capricious" standard is narrow, and a court is not to substitute its judgment for that of the agency, the agency nevertheless must examine the relevant data and articulate a satisfactory explanation for its action. In reviewing that explanation, a court must consider whether the decision was based on a consideration of the relevant factors and whether there was a clear error of judgment.

The Supreme Court's denial of the application for a stay in the "Remain in Mexico" case cited Department of Homeland Security v. Regents of Univ. of Cal., which (citing the above case) overturned the rescission of the DACA program because:

In short, the Attorney General neither addressed the forbearance policy at the heart of DACA nor compelled DHS to abandon that policy. Thus, removing benefits eligibility while continuing forbearance remained squarely within the discretion of Acting Secretary Duke, who was responsible for “[e]stablishing national immigration enforcement policies and priorities.” 116Stat. 2178, 6 U. S. C. §202(5). But Duke’s memo offers no reason for terminating forbearance. She instead treated the Attorney General’s conclusion regarding the illegality of benefits as sufficient to rescind both benefits and forbearance, without explanation.

Answer 3

They need to show that they have considered the evidence, followed law and procedure and have rendered a decision on that basis

This is a good overview. With specific reference to the arbitrary and capricious test:

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.

Read more: Arbitrary - Administrative, Agency, Reviewing, and Court - JRank Articles https://law.jrank.org/pages/4415/Arbitrary.html#ixzz75MjVQDPM