§1.5 Arbitrary and Capricious Standard; De Novo Review

• Jurisdiction: United States
• Publication year: 2022

§1.5 Arbitrary and Capricious Standard; De Novo Review

The "arbitrary and capricious standard" is a judicial review standard applied to an agency action or inaction. If an agency in its action or inaction exercises its powers unreasonably, or to deny a party due process, the courts will review such action or inaction where the exercise of the power had been done arbitrarily and capriciously.⁶⁸

De novo is the process whereby an appellate court reviews another court's decision of a matter anew and gives no deference to the findings of the lower court, almost as if the original hearing had not taken place.⁶⁹ De novo judicial review, also known as "de novo review," is a court's non-differential review of an administrative agency decision, usually through a review of the administrative record, plus any additional evidence the parties may present.⁷⁰

Generally, review processes and methods of appealing agency action(s) are designed to give aggrieved parties the opportunity to present their cases for further agency consideration. Depending on the agency involved, the process may involve one or more levels of hearings. The adequacy of such an agency internal review process was recognized by the court in Schweiker v. McClure.⁷¹ In this case, an appeal was made to a summary judgment granted on the basis of an administrative hearing being inadequate and a violation of due process.⁷² The Supreme Court overruled the previous decision, holding the agency's administrative review process to be adequate because the process enabled the claimants to have a review of the agency determination and a right to an oral hearing.⁷³ Apposite, the courts have held that if a party has exhausted all recognized and allowable agency review processes, the court may at its own discretion order a de novo review of the record. This will enable the court to make its own independent determination.⁷⁴ This is deemed necessary because the basis of an agency's favorable determination or denial of a party's right may be factual or an outright bias, and it is only the court that can properly adjudicate on such matter.

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Notes:

^[68] See, Struble v. New Jersey Brewery Employees' Welfare Trust Fund, 732 F.2d 325 (3rd Cir. 1984); see also, Bayles v. Central States, Southeast, and Southwest Areas Pension Fund, 602 F.2d 97 (5th Cir. 1979).

^[69] See, United States v. First City National Bank, 386 U.S. 361, 368 (1967) ("review de novo" means "that the court should make an independent determination of...