Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Insurance Co.

Supreme Court of the United States · 1983 · Administrative Law

463 U.S. 29 (1983)

Updated August 1, 2026

Administrative Lawarbitrary and capricious reviewAPA5 U.S.C. § 706(2)(A)informal rulemakingrescission of rulereasoned decisionmakingreasoned analysis

Facts

Standard 208 required passive restraints in new cars, allowing compliance through airbags or automatic seatbelts. In 1981, NHTSA rescinded that requirement because manufacturers planned to install almost all automatic belts rather than airbags, and the agency concluded that many of those belts would be detachable and therefore would not reliably increase restraint use enough to justify the costs. The agency also expressed concern that the requirement would impose about $1 billion in costs and might undermine public attitudes toward safety regulation if benefits proved slight. The record, however, included the agency's continued acknowledgment that airbags were effective and life-saving, and the agency did not separately analyze either an airbags-only requirement or nondetachable continuous belts.

Issue

Whether NHTSA acted arbitrarily and capriciously under the Administrative Procedure Act when it rescinded the passive-restraint requirement of Standard 208. More specifically, the question was whether the agency adequately explained its change in position and considered the relevant alternatives and evidence in the rulemaking record.

Rule

Under the APA, rescission of an existing rule is reviewed under the same arbitrary-and-capricious standard that governs rulemaking generally. An agency rescinding a rule must examine the relevant data and articulate a satisfactory explanation, including a rational connection between the facts found and the choice made; rescission is arbitrary and capricious if the agency relied on impermissible factors, failed to consider an important aspect of the problem, offered an explanation contrary to the evidence, or gave an implausible explanation. Because rescission changes a settled course, the agency must supply a reasoned analysis for the change, and courts may not uphold the action on post hoc rationalizations offered by counsel.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Federal Consumer Product Bureau issued a rule requiring apartment furnaces sold nationwide to include one of two automatic carbon-monoxide shutoff systems. Three years later, after reopening the record, the bureau revoked the rule, arguing in court that revocation should be reviewed like an agency's initial refusal to regulate because removing a rule is simply inaction. Landlords in Cleveland challenge the revocation.

Which is the strongest response to the bureau's argument?

Explanation. The majority held that rescission of an existing rule is not treated like a mere refusal to regulate in the first instance. Rather, revoking a rule is reviewed under ordinary APA arbitrary-and-capricious review, and because the agency is changing a settled course, it must provide a reasoned analysis for the change. Choices B, C, and D conflict with the Court's rejection of special deference for rescission and its insistence on the agency's own stated reasoning. (Derived from Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Insurance Co. (1983).)