CAS Bar Administrative and Regulatory Law 3 — Questions and Answers
Question 1: Under the 'arbitrary and capricious' standard of review, a reviewing court will set aside agency action when the agency:
- Reached a conclusion with which the court disagrees on policy grounds
- Failed to consider an important aspect of the problem or offered an implausible explanation (Correct answer)
- Applied a standard of proof lower than preponderance of the evidence
- Denied a party's request for a formal hearing
Correct answer: Failed to consider an important aspect of the problem or offered an implausible explanation
Under Motor Vehicle Manufacturers Ass'n v. State Farm, an agency acts arbitrarily and capriciously when it fails to consider a relevant factor or offers a rationale that contradicts the evidence.
Question 2: The 'substantial evidence' standard of review applies when:
- A court reviews informal rulemaking under the federal APA
- A court reviews formal agency adjudication or rulemaking on the record (Correct answer)
- A party challenges agency inaction for unreasonable delay
- An agency interprets its own ambiguous regulation
Correct answer: A court reviews formal agency adjudication or rulemaking on the record
The substantial evidence standard under APA §706(2)(E) applies to formal proceedings conducted on the record, requiring evidence a reasonable mind might accept as adequate support.
Question 3: Primary jurisdiction doctrine differs from exhaustion of administrative remedies in that primary jurisdiction:
- Is invoked by courts to refer issues to agencies that have not yet acted, even when no administrative remedy exists (Correct answer)
- Requires a party to appeal all agency levels before court access
- Applies only to state administrative proceedings
- Bars judicial review permanently if the agency has expertise on the subject
Correct answer: Is invoked by courts to refer issues to agencies that have not yet acted, even when no administrative remedy exists
Primary jurisdiction allows a court to stay proceedings and refer a matter to an agency with specialized expertise, even if no prior administrative process is required.
Question 4: In California administrative proceedings, due process generally requires that a party facing license revocation receive:
- A formal trial before a superior court judge prior to any agency action
- Notice of the charges and an opportunity to be heard before a final deprivation (Correct answer)
- An advisory opinion from the Attorney General
- A unanimous vote from the agency board
Correct answer: Notice of the charges and an opportunity to be heard before a final deprivation
Due process requires notice and a meaningful opportunity to be heard before the government deprives a person of a protected property interest such as a professional license.
Question 5: Which of the following best describes California's Office of Administrative Hearings (OAH)?
- The body that reviews all agency regulations for legal sufficiency before enactment
- A centralized panel of administrative law judges that conducts hearings for most state agencies (Correct answer)
- An appellate body that reviews ALJ decisions before judicial review
- The executive office that coordinates rulemaking across all California state agencies
Correct answer: A centralized panel of administrative law judges that conducts hearings for most state agencies
California OAH provides neutral ALJs to conduct evidentiary hearings for more than 50 state and local agencies under the APA's Administrative Adjudication provisions.
Question 6: Under the Mathews v. Eldridge balancing test, courts determine what process is due by weighing:
- The cost to the government, agency expertise, and the statute of limitations
- The private interest, risk of erroneous deprivation, and government's interest including cost (Correct answer)
- Only the severity of the deprivation and whether it is permanent
- Agency efficiency, separation of powers, and federalism concerns
Correct answer: The private interest, risk of erroneous deprivation, and government's interest including cost
Mathews v. Eldridge requires courts to weigh the private interest at stake, the risk of erroneous deprivation given the existing procedures, and the government's interest including administrative burden.
Question 7: When a California court reviews a state agency's interpretation of its own regulation, the standard of deference applied is:
- De novo, because regulation interpretation is a pure question of law for courts
- Deferential if the agency's interpretation is reasonable and not clearly erroneous (Correct answer)
- Arbitrary and capricious, identical to federal APA review
- Substantial evidence, because regulation text constitutes a record
Correct answer: Deferential if the agency's interpretation is reasonable and not clearly erroneous
California courts give substantial deference to an agency's interpretation of its own regulations unless the interpretation is clearly erroneous or unauthorized.
CAS Bar Administrative and Regulatory Law 3
Under the 'arbitrary and capricious' standard of review, a reviewing court will set aside agency action when the agency: