What is the core distinction between substantial evidence review and arbitrary and capricious review?

What is the core distinction between substantial evidence review and arbitrary and capricious review?

• A. Substantial evidence focuses on policy preferences; arbitrary and capricious focuses on factual records
• B. Substantial evidence focuses on the sufficiency of factual findings; arbitrary and capricious focuses on the adequacy of the agency's reasoning and process
• C. Both are the same
• D. Substantial evidence is about deference to regulations

Answer: (B)

The key distinction is what the reviewing court checks: whether the agency’s factual findings are supported by enough evidence in the record versus whether the agency’s reasoning and process are adequate and properly explained. Substantial evidence review is about the sufficiency of the factual record—courts defer to the agency’s findings if there is enough evidence to support them. Arbitrary and capricious review, on the other hand, focuses on the decision-making process and the reasoning: the agency must show a rational connection between the facts and its conclusions, consider relevant factors, and provide a clear explanation. If the agency’s reasoning is lacking or it ignored important considerations, the decision can be set aside under this standard.

The key distinction is what the reviewing court checks: whether the agency’s factual findings are supported by enough evidence in the record versus whether the agency’s reasoning and process are adequate and properly explained. Substantial evidence review is about the sufficiency of the factual record—courts defer to the agency’s findings if there is enough evidence to support them. Arbitrary and capricious review, on the other hand, focuses on the decision-making process and the reasoning: the agency must show a rational connection between the facts and its conclusions, consider relevant factors, and provide a clear explanation. If the agency’s reasoning is lacking or it ignored important considerations, the decision can be set aside under this standard.