Under the National Traffic and Motor Vehicle Safety Act, the National Highway Traffic Safety Administration (NHTSA) had adopted Federal Motor Vehicle Safety Standard 208, which required passive restraints in new automobiles. After years of study, the Carter Administration required manufacturers to install passive restraints, including automatic seatbelts or airbags. The Reagan Administration's NHTSA later rescinded the passive-restraint requirement, reasoning in part that manufacturers would likely comply with automatic detachable seatbelts that consumers might not use and that airbags were too costly. State Farm and other respondents challenged the rescission as arbitrary and capricious under the Administrative Procedure Act.
Was NHTSA's rescission of the passive-restraint requirement in Standard 208 arbitrary and capricious under the Administrative Procedure Act?
Under 5 U.S.C. § 706(2)(A), an agency action is arbitrary and capricious if the agency has relied on factors Congress did not intend, failed to consider an important aspect of the problem, offered an explanation contrary to the evidence, or made a decision so implausible that it cannot be ascribed to a difference in view or agency expertise. An agency rescinding a rule is subject to the same requirement of reasoned decisionmaking as when it promulgates one.
Yes. The rescission of the passive-restraint requirement was arbitrary and capricious because NHTSA failed to provide an adequate basis for abandoning the requirement and failed to consider obvious alternatives within the rule.
The Court held that rescission is not exempt from ordinary APA review; an agency must supply a reasoned analysis for changing course. NHTSA inadequately justified its conclusion that automatic seatbelts would not produce sufficient safety benefits, especially because it treated the likely use of detachable automatic belts as fatal without adequately considering requiring nondetachable belts. The agency also failed to give a reasoned basis for rejecting airbags as an alternative. Because the agency ignored important aspects of the problem and did not adequately explain its change in policy, the rescission could not stand.
Justice Rehnquist concurred in part and dissented in part. He agreed the rescission should be set aside as to airbags, but argued that a change in presidential administration could legitimately bring a change in regulatory policy priorities and would have upheld the agency's rejection of automatic seatbelts.
State Farm is a foundational administrative law decision defining hard-look review and the modern arbitrary-and-capricious standard for agency policymaking and deregulatory action. It established that repealing a rule requires the same reasoned explanation as adopting one, strongly influencing later cases on agency policy change, including FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009), and Department of Homeland Security v. Regents of the University of California, 591 U.S. 1 (2020).
FCC v. Fox Television Stations, 556 U.S. 502 (2009) |
Abstain |
Department of Homeland Security v. Regents of the University of California, 591 U.S. 1 (2020) |
Abstain |
5 U.S.C. § 706(2)(A) |
Abstain |
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