Agency action is set aside where it is arbitrary, capricious or an abuse of discretion. The standard is deferential in form and demanding in application.
What is required. The agency must examine the relevant data and articulate a satisfactory explanation, including a rational connection between the facts found and the choice made.
Grounds for reversal. Reliance on factors Congress did not intend it to consider; failure to consider an important aspect of the problem; an explanation running counter to the evidence; or an explanation so implausible that it cannot be ascribed to a difference in view or agency expertise.
Contemporaneous reasoning. The action stands or falls on the explanation given at the time. Post hoc rationalisations by counsel are disregarded, which is why the record and the preamble matter so much.
Response to comments. Significant comments must be addressed. Ignoring a substantial critique with data behind it is a recurring basis for vacatur.
Changes of position. An agency may change policy, and must acknowledge that it is doing so and provide a reasoned explanation, with a more detailed justification where the prior policy engendered serious reliance interests.
Pretext. Where the stated reason is not the actual reason, the action is set aside.