Playbook 3: The Judicial Review Playbook
Challenging & Defending Agency Actions in Court
Summary: This playbook charts the judicial review landscape for agency actions under the Administrative Procedure Act (APA). It covers ripeness and exhaustion requirements, standards of review (arbitrary and capricious, substantial evidence, de novo), deference doctrines post-Loper Bright, the major questions doctrine, separation of powers checks, procedural vs. substantive review, and a practical litigation strategy checklist.
Chapter 1 — When and How to Challenge Agency Action
1.1 Final Agency Action and Ripeness
Under the Administrative Procedure Act (APA), judicial review is generally available only against "final agency action." A final agency action marks the consummation of the agency's decision-making process and determines rights or obligations from which legal consequences will flow. The ripeness doctrine prevents premature judicial intervention before an agency's decision has crystallized into a concrete impact on the parties.
Courts assess ripeness through two factors: the hardship of withholding review and the fitness of the issue for judicial decision. Actions that are merely tentative or interlocutory, such as preliminary agency guidance or investigative orders, typically do not qualify as final agency action.
1.2 Exhaustion of Administrative Remedies
Federal judicial review of agency claims is generally available only after agency review procedures have been exhausted. The exhaustion doctrine requires parties to pursue all available administrative remedies before seeking judicial relief.
Key policy rationales include:
- Agency expertise: Agencies should have the first opportunity to correct errors or develop factual records
- Judicial economy: Exhaustion may resolve disputes without court intervention
- Respect for agency processes: Courts should not usurp the agency's primary jurisdiction
Exceptions exist where exhaustion would be futile, where the agency lacks authority to grant relief, or where irreparable harm is imminent.
Chapter 2 — Standards of Judicial Review
2.1 Arbitrary and Capricious (APA § 706)
The arbitrary and capricious standard, codified in 5 U.S.C. § 706(2)(A), is the default standard for reviewing agency action in informal rulemaking or adjudication. Under this standard, a reviewing court must ensure the agency has engaged in reasoned decision-making. As the Supreme Court articulated in State Farm, an agency acts arbitrarily and capriciously if it:
- Relies on factors Congress did not intend it to consider
- Fails to consider important aspects of the problem
- Offers an explanation that runs counter to the evidence
- Provides an explanation that is so implausible it cannot be attributed to agency expertise
The reviewing court conducts a "thorough, probing, in-depth review" of the whole record but may not substitute its judgment for the agency's.
2.2 Substantial Evidence Test (Formal Adjudication)
For agency actions in formal adjudication, courts apply the substantial evidence test under 5 U.S.C. § 706(2)(E). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."
Relationship between standards: As the D.C. Circuit has explained, there is no substantive difference between what the arbitrary-or-capricious standard requires and what the substantial evidence test would require for factual determinations — it is impossible to conceive of a non-arbitrary factual judgment supported only by evidence that is not substantial in the APA sense. The distinctive function of the substantial evidence standard is to require such evidence to be found within the record of closed-record proceedings.
2.3 De Novo Review for Legal Questions
Courts review pure questions of law de novo, meaning they exercise independent judgment without deferring to the agency's interpretation. This is the most searching standard of review and applies to issues of statutory interpretation (though deference doctrines may modify this) and constitutional questions.
Prior to 2024, under Chevron, courts deferred to reasonable agency interpretations of ambiguous statutes. After Loper Bright Enterprises v. Raimondo (2024), courts must exercise independent judgment when deciding whether an agency has acted within its statutory authority.
ProSight Financial Association — Supreme Shift
Chapter 3 — Deference Doctrines (Post-2024 Developments)
3.1 Chevron — Current Status and Limits
On June 28, 2024, the Supreme Court overturned the 40-year-old Chevron doctrine in Loper Bright Enterprises v. Raimondo. Chief Justice John Roberts wrote: "Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority."
Prior to Loper Bright, Chevron directed courts to defer to reasonable agency interpretations of ambiguous statutes. Critics had argued this allowed agencies to stretch statutory language beyond congressional intent. The overruling is likely to have significant implications for regulatory interpretation, potentially leading to increased legal challenges and fragmentation across federal circuits.
Immediate impact: The decision is prospective, meaning previously decided cases relying on Chevron will stand. However, any new standard will take time for lower courts to apply consistently.
3.2 Auer Deference — Status Post-Loper Bright
Auer deference requires courts to defer to an agency's interpretation of its own ambiguous regulations unless that interpretation is plainly erroneous or inconsistent with the regulation. This deference has drawn criticism on separation of powers grounds — allowing an agency to resolve ambiguities in rules it created.
Legal commentators have argued that after the overturning of Chevron, the reasoning in Loper Bright necessitates overturning Auer deference as well. Auer suffers from the same ills identified in Chevron: binding deference that relies on a finding of ambiguity leads to unpredictability and abandons judicial authority to decide matters of law.
The Supreme Court's 2019 decision in Kisor v. Wilkie had already limited Auer, requiring that the regulation be genuinely ambiguous and that the agency's interpretation be reasonable, consistent, and authoritative. Loper Bright may accelerate further restrictions.
3.3 Skidmore — Persuasive Weight Only
Skidmore deference is the least deferential of the major deference doctrines. Under Skidmore v. Swift & Co. (1944), courts may defer to an agency's interpretation only to the extent it is persuasive. Unlike Chevron and Auer, Skidmore does not require deference — it allows courts to consider an agency's interpretation based on:
- The thoroughness of the agency's consideration
- The validity of the reasoning
- The consistency with earlier and later pronouncements
- Any other factors that give the agency position power to persuade
With Chevron overruled and Auer potentially on borrowed time, Skidmore deference may become the predominant framework for evaluating agency interpretations.
ABA Tax Lawyer — Loper Bright and Chevron
Chapter 4 — The Major Questions Doctrine
4.1 West Virginia v. EPA and Its Progeny
In West Virginia v. EPA (2022), the Supreme Court expressly announced the "major questions doctrine" in a majority opinion for the first time. Under this doctrine, a federal agency must point to clear congressional authorization when asserting new regulatory power over issues of vast economic and political significance.
The Court emphasized that "courts should 'hesitate before concluding that Congress meant to confer such authority'" when there is something extraordinary about the history and breadth of authority an agency asserts or the economic and political significance of that assertion.
The doctrine has two prongs:
- The underlying claim of authority concerns an issue of vast economic and political significance
- Congress has not clearly empowered the agency with authority over the issue
The Court has used the doctrine to reject agency claims in cases involving EPA greenhouse gas regulations, OSHA workplace safety rules, and HHS student debt relief programs.
CRS Report — Major Questions Doctrine
4.2 Scope and Limits of the Doctrine
The precise scope of the major questions doctrine remains unknown. The Supreme Court has not clearly explained when an agency's regulatory action will raise a question so significant that the doctrine applies, nor what legislative acts constitute clear congressional authorization.
Key limitations:
- The doctrine was not new in substance — the Supreme Court in West Virginia made clear it was applying the same framework adopted in Brown & Williamson (the 2000 tobacco case)
- The doctrine does not apply where Congress has addressed the issue expressly — in Massachusetts v. EPA (2007), the Court rejected EPA's argument that climate change was too significant an issue for the Agency to regulate absent explicit congressional authorization
- As the ABA notes, "West Virginia is not a talisman" — simply invoking the doctrine is insufficient; courts must engage in substantive statutory analysis
Chapter 5 — Separation of Powers Checks
5.1 INS v. Chadha — The Legislative Veto
In INS v. Chadha (1983), the Supreme Court invalidated a statute authorizing one House of Congress, by resolution, to veto executive branch decisions. The Court held that the "legislative veto" violated the constitutional lawmaking requirements of bicameralism and presentment.
Key holding: When Congress makes "law," it must do so through the constitutionally prescribed channels of bicameralism and presentment rather than through a single-house resolution.
Scholars have characterized the holding as constitutionally prohibiting Congress from reclaiming power once it has delegated that power to an executive branch agency. The dissent in Chadha argued that the legislative veto was "a necessary check on the unavoidably expanding power of the agencies."
5.2 Presidential Oversight and Removal Power
The President's authority to oversee the executive branch and remove agency officials is a critical constitutional check on administrative power. Since Chadha, Congress has developed alternative mechanisms for oversight, such as requiring the Comptroller General to submit reports on agency inaction, as in the Competition in Contracting Act (CICA).
Key constitutional question: The removal power cases ask whether Congress can restrict the President's ability to remove executive officers. Under Myers v. United States, the President may remove purely executive officials. For independent agencies, Congress may impose "for cause" removal restrictions.
Chapter 6 — Procedural vs. Substantive Review
6.1 Notice-and-Comment Failures
Under the APA, agencies must engage in notice-and-comment rulemaking for substantive rule changes. Courts review challenges to procedural compliance strictly.
Common failures include:
- Failure to publish adequate notice of a proposed rule
- Insufficient opportunity for public comment
- Adoption of a rule that is not a logical outgrowth of the proposed rule
- Failure to respond to significant comments
Procedural defects can result in a rule being set aside regardless of its substantive merits. Courts focus on whether the agency provided the public with "meaningful participation" in the rulemaking process.
6.2 Agency Reasoning Under SEC v. Chenery
SEC v. Chenery Corp. (1943) established the "Chenery I" principle: when an agency has not provided an adequate explanation for its decision, even if the court can discern an adequate explanation from the record, the court should remand the case back to the agency. Courts must review agency action based on the reasons the agency gave, not post-hoc rationalizations.
Chenery II (1947) affirmed that agencies can use adjudication to create new policy retroactively if the unfairness to the party is outweighed by the benefit to the public and statutory goals. In Chenery II, the SEC ordered officers of a utility to sell shares they had traded during a restructuring — finding a fiduciary duty that had not been previously codified.
Cases Flashcards — SEC v. Chenery
Chapter 7 — Litigation Strategy Checklist
7.1 Pre-Suit Demands, Record Building, and Forum Selection
Pre-suit demands: Before filing suit, consider submitting a formal petition or comment to the agency to create a record and potentially resolve the issue administratively. Preserve all arguments for judicial review.
Record building: Ensure the administrative record is complete. Under the APA, review is confined to the record before the agency at the time of decision. Courts generally do not consider materials outside the record unless exceptional circumstances exist.
Forum selection: Consider the appropriate venue carefully:
- Regional circuit courts may have differing interpretations of similar issues, particularly post-Loper Bright
- Some circuits are more deferential to agencies than others
- Consider statutory venue provisions — many statutes specify exclusive venue
Strategic considerations:
- Identify whether to challenge the action under arbitrary and capricious, substantial evidence, or de novo standards
- Consider whether to raise constitutional (non-delegation, separation of powers) or procedural arguments
- Evaluate the strength of any Chevron or Auer deference arguments post-Loper Bright
Lands v. FEMA — CourtListener
Chapter 8 — Key Case Clips: Modern Judicial Review Battles
⚖️ Loper Bright Enterprises v. Raimondo (2024) — Chevron Overruled
The Supreme Court overturned the 40-year-old Chevron doctrine, holding that courts must exercise independent judgment in deciding whether an agency has acted within its statutory authority. This fundamentally reshapes administrative law and regulatory litigation.
⚖️ West Virginia v. EPA (2022) — Major Questions Doctrine
The Supreme Court announced the major questions doctrine, holding that agencies must point to clear congressional authorization when asserting new regulatory power over issues of vast economic and political significance. The doctrine traces back to Brown & Williamson (2000).
⚖️ INS v. Chadha (1983) — Legislative Veto Unconstitutional
The Supreme Court invalidated the one-house legislative veto, holding that all legislative acts must comply with bicameralism and presentment under Article I. This landmark separation of powers decision defines the constitutional boundaries of congressional oversight.
⚖️ SEC v. Chenery Corp. (1943, 1947) — Agency Reasoning & Retroactive Policy
Chenery I: Courts must review agency action based on the reasons the agency gave, not post-hoc rationalizations. Chenery II: Agencies may use adjudication to create new policy retroactively if justified by public benefit.
⚖️ Biden v. Nebraska (2023) — Major Questions Doctrine — Student Debt
The Court applied the major questions doctrine to strike down the Secretary of Education's student debt cancellation plan, holding that Congress had not clearly authorized cancellation of $430 billion in loan principal — "nearly one-third of the Government's $1.7 trillion in annual discretionary spending."
FAQ
What is the difference between arbitrary and capricious and substantial evidence review?
The arbitrary and capricious standard (APA § 706(2)(A)) is the default standard for informal rulemaking and adjudication. The substantial evidence test (APA § 706(2)(E)) applies to formal adjudication. However, courts have noted there is "no substantive difference" between the standards as applied to factual determinations — it is "impossible to conceive of a non-arbitrary factual judgment supported only by evidence that is not substantial."
CourtListener — APA Standards
What does Loper Bright mean for future agency rulemaking?
The overruling of Chevron means agencies can no longer rely on deference to uphold ambiguous statutory interpretations. Agencies will need to develop more detailed and carefully reasoned records to support their decisions. This may prolong rulemaking processes and increase the likelihood of legal challenges. The decision is prospective, so previously decided cases stand, but future agency interpretations face heightened judicial scrutiny.
ProSight Financial Association
What constitutes a "major question" under the doctrine?
The precise scope is undefined, but courts consider (1) whether the agency's claim of authority concerns an issue of "vast economic and political significance," and (2) whether Congress has clearly empowered the agency. The doctrine applies to transformative agency rules such as EPA's "generation shifting" regulation, OSHA's workplace vaccine mandate, and HHS's student debt cancellation. However, the Court rejected the doctrine's application in Massachusetts v. EPA, holding that climate change regulation was authorized under the broad language of the Clean Air Act.
CRS Report — Major Questions Doctrine
References
ProSight Financial Association — Is a Supreme Shift About To Hit Regulators? (2026)
ABA — Major Questions Doctrine Analysis (2025)
Vanderbilt Law Review — Chadha and Legislative Veto
CourtListener — APA Arbitrary or Capricious Standard
Emory Law Journal — Auer Deference After Loper Bright (2026)
CRS Report — The Major Questions Doctrine
George Mason Law Review — Compassionate Release and Major Questions
Cases Flashcards — SEC v. Chenery
ABA Tax Lawyer — Loper Bright and Chevron (2026)
Harvard Law — Justice Gorsuch and Administrative Law
CRS Report — Statutory Mechanisms for Agency Oversight After Chadha (2026)
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