463 U.S. 29, 42 (1983)
In 1966 Congress enacted the National Traffic and Motor Vehicle Safety Act directing the Secretary of Transportation to issue motor vehicle safety standards that reduce traffic accidents and deaths.1 The statute authorized NHTSA to promulgate standards that are practicable, meet the need for motor vehicle safety, and are stated in objective terms.2 Over the next decade NHTSA conducted dozens of rulemaking proceedings on occupant crash protection.3 In 1977 Secretary Brock Adams issued Modified Standard 208, which required automobile manufacturers to phase in passive restraints beginning with large cars in model year 1982 and reaching all cars by model year 1984.4
Automobile manufacturers began preparing to comply with the 1984 deadline.5 As late as July 1980 NHTSA reported that on-the-road experience with thousands of vehicles equipped with airbags and automatic belts confirmed the life-saving benefits of such systems.6 In February 1981, after a change in presidential administration, Secretary Andrew Lewis reopened the rulemaking citing changed economic circumstances and the difficulties facing the automobile industry.7 Two months later the agency delayed the standard for large cars by one year and proposed possible rescission of the entire requirement.8
After receiving comments and holding hearings, NHTSA issued Notice 25 rescinding the passive restraint requirement.9 The agency explained that manufacturers planned to install detachable automatic belts in approximately 99 percent of new cars and that it could no longer reliably predict any significant increase in belt usage.10 State Farm Mutual Automobile Insurance Co. and the National Association of Independent Insurers filed petitions for review in the United States Court of Appeals for the District of Columbia Circuit.11
The Court of Appeals held that the rescission was arbitrary and capricious because NHTSA had failed to consider an airbags-only alternative, had not adequately justified its conclusions about detachable belts, and had not considered requiring nondetachable belts.12 The Supreme Court granted certiorari on November 8, 1982.13
Whether NHTSA acted arbitrarily and capriciously in rescinding the passive restraint requirement of Modified Standard 208?14
Under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), an agency action is arbitrary and capricious if the agency has entirely failed to consider an important aspect of the problem, offered an explanation that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.15 An agency rescinding a prior rule must supply a reasoned analysis for the change beyond that required when the agency does not act in the first instance.16
Yes. NHTSA failed to consider an airbags-only alternative even though the record established the lifesaving potential of airbag technology and the agency had previously found basic airbag technology sound and effective.17 The agency also failed to offer a satisfactory explanation for its conclusion that detachable automatic belts would produce no significant increase in usage, overlooking the critical difference that inertia would favor use once the belt was reattached.18 Finally, NHTSA did not separately analyze the continuous passive belt option or explain why it would trigger the same adverse public reaction as the ignition interlock.19
The Court of Appeals correctly applied the arbitrary-and-capricious standard.20 The Supreme Court reached the same conclusion on somewhat different grounds.21 The agency must either consider the matter further or adhere to or amend Standard 208 along lines its analysis supports.22 The rescission rested on changed manufacturer plans rather than any change in the agency's view of the technology's effectiveness, yet the agency provided no adequate basis for concluding that the standard would no longer produce safety benefits.23
The rescission of the passive restraint requirement was arbitrary and capricious, requiring remand to the agency for further consideration.24
Related opinions on this issue
Joined by The Chief Justice, Justice Powell, And Justice O'connor
Justice Rehnquist joined Parts I through V-A of the majority opinion.25 He agreed that the agency gave no explanation at all for declining to leave the airbag and continuous spool automatic seatbelt requirements intact.26 He dissented from the holding that NHTSA's view of detachable automatic seatbelts was arbitrary and capricious.27
He concluded that the agency adequately explained its decision to rescind the standard insofar as it was satisfied by detachable belts.28 He noted that the agency acknowledged some increase in belt usage would probably occur but concluded the increase would be small and not worth the cost.29
Whether NHTSA was required to consider requiring airbags as an alternative before rescinding the entire passive restraint standard?30
When an agency rescinds a safety standard that can be satisfied by multiple technologies, it must consider alternatives within the ambit of the existing standard, such as requiring only the technology that remains effective, rather than abandoning the standard altogether.31 An agency may not revoke a safety standard simply because the regulated industry has opted for an ineffective design when current technology can satisfy the standard.32
Yes. Modified Standard 208 permitted compliance through either airbags or automatic seatbelts, and the agency had long recognized that airbags were an effective and cost-beneficial life-saving technology.33 Once NHTSA determined that detachable belts would not achieve the anticipated benefits, the logical response under the Act's safety mandate was to consider requiring airbags rather than eliminating the passive restraint requirement entirely.34 The agency did not discuss the airbags-only option in even one sentence of its rulemaking statement.35
The Court emphasized that the Act was technology-forcing and that safety standards need not depend on current industry preferences.36 Because the agency had previously approved the detachable feature only after assurances it would not compromise safety, and because the record showed airbags had none of the problems identified with passive belts, the failure to consider an airbags-only requirement rendered the rescission arbitrary and capricious.37
NHTSA was required to consider an airbags-only alternative before rescinding the entire passive restraint standard.38
Related opinions on this issue
Joined by The Chief Justice, Justice Powell, And Justice O'connor
Justice Rehnquist joined the majority's conclusion that the agency should explain why it declined to leave the airbag requirement intact.39 He agreed that since the airbag and continuous spool automatic seatbelt were explicitly approved in the Standard the agency was rescinding, the agency owed an explanation for removing those options. Of course, if the agency can provide a rational explanation, it may adhere to its decision to rescind the entire Standard.40
He observed that a change in administration brought about by the people casting their votes is a perfectly reasonable basis for an executive agency's reappraisal of the costs and benefits of its programs and regulations.41
Whether NHTSA adequately explained its conclusion that detachable automatic seatbelts would not produce a significant increase in usage?42
An agency may revoke a standard on the basis of serious uncertainties if supported by the record and reasonably explained, but it must articulate a rational connection between the facts found and the choice made.43 Merely reciting substantial uncertainty is insufficient; the agency must explain the available evidence and justify rescinding the regulation before searching for further evidence.44
No. NHTSA was entitled to conclude that field studies of vehicles with ignition interlocks could not be extrapolated to a mandatory standard without interlocks. However, the agency failed to account for the critical difference between detachable passive belts and manual belts. Once reattached, a passive belt continues to function automatically, so inertia works in favor of use.45 The agency offered no explanation why a continuous passive belt would engender the same adverse public reaction as the ignition interlock. Every indication in the record pointed the other way.
The agency predicated its conclusion that costs were no longer reasonable on its prediction of negligible safety benefits, yet that prediction rested on an inadequately supported finding about usage rates.46 When the agency reexamines the likely increase in seatbelt usage, it must also reconsider the reasonableness of the costs.47
NHTSA did not adequately explain its conclusion that detachable automatic seatbelts would not produce a significant increase in usage.48
Related opinions on this issue
Joined by The Chief Justice, Justice Powell, And Justice O'connor
Justice Rehnquist dissented on this issue and concluded that NHTSA adequately explained its decision to rescind the standard with respect to detachable belts.49 He found it reasonable for the agency to decide that studies involving ignition interlocks and voluntary purchases did not support conclusions about automatic belts installed in all cars without interlocks.50 The agency had articulated a rational connection between the facts found and the choice made by acknowledging some increase would occur but concluding it would be small and not worth the cost.51
The agency's obligation is to articulate a rational connection between the facts found and the choice made.52
Whether the arbitrary-and-capricious standard of review applies equally to an agency’s rescission of an existing safety standard as to its initial promulgation?53
The arbitrary-and-capricious standard applies to rescissions of prior agency regulations in the same manner as to initial promulgations.54 Although an agency has latitude to adapt rules to changing circumstances, revocation constitutes a reversal of the agency's former views, and the agency must supply a reasoned analysis for the change.55 The direction in which an agency chooses to move does not alter the standard of judicial review.56
Yes. The National Traffic and Motor Vehicle Safety Act expressly equates orders revoking and establishing safety standards, and neither the Act nor the APA suggests that revocations are to be treated as refusals to promulgate standards.57 There is a presumption that settled rules will be adhered to, and an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change.58 The Court of Appeals correctly applied the arbitrary-and-capricious test but erred in intensifying the scope of review based on post-enactment legislative events.59
The Supreme Court rejected the argument that rescission should be judged by the narrower standard applicable to an agency's refusal to promulgate a rule in the first instance.60 The removal of a regulation may be easier to justify than enacting a new standard, but the standard of review remains the same.61
The arbitrary-and-capricious standard of review applies equally to an agency’s rescission of an existing safety standard as to its initial promulgation.62