What is a key factor in the arbitrary and capricious test?

The arbitrary and capricious test is a legal standard used to evaluate whether an agency's actions or decisions are based on reasonable considerations or if they are unfounded and lack a solid rationale. A key aspect of this test is that if an agency fails to consider relevant factors that are important to the decision-making process, it can be deemed arbitrary and capricious. This lack of consideration can undermine the legitimacy of the agency's decision, as it suggests that the agency did not give due regard to all the necessary information required to make an informed and balanced choice.

For example, if an environmental agency is making a decision about the impact of a new regulation but fails to account for significant scientific studies or data indicating potential harm, it might be viewed as acting arbitrarily. Therefore, the failure to consider relevant factors is central to determining whether a decision-making process meets the standards of rationality required by law.