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Section 706(2)(A) of the Administrative Procedure Act (APA) instructs courts reviewing regulation to invalidate any agency action found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." The arbitrary-or-capricious test is used by judges when reviewing the factual basis for agency rulemaking. Courts can overturn agency rules if they find the underlying rationale or factual assertions to be unreasonable.

Section 706(2)(A) of the Administrative Procedure Act (APA) instructs courts reviewing regulation to invalidate any agency action found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." The arbitrary-or-capricious test is used by judges when reviewing the factual basis for agency rulemaking. Courts can overturn agency rules if they find the underlying rationale or factual assertions to be unreasonable.

In decisions made after formal adjudication and formal rulemakings, the APA requires a different test, the "substantial evidence" test. But in practice, there is little difference between the two tests.

 

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