While reviewing an administrative agency action, the reviewing court has to follow the standards set by the Federal Administrative Procedure Act. Though the state courts do not have a strict set of principles, they also perform agency action review upon the light of the Federal Administrative Procedure Act. The reviewing court not only decides over the question of jurisdiction, but will also check if the holding involves a finding of fact or conclusion of law. Regarding legal questions, the proper standard of review is the substitution of judgment test, whereas in deciding over questions of facts, substantial evidence is taken into consideration.
In order to validate an interpretation of a statute, the text and legislative history of the statute has to be clearly understood. This clearly means that the reviewing court is not bound by the agency’s conclusions over construction of the statutes controlling the actions of the agency. However, it has to give ample respect and consideration over the executive agency’s interpretation and reason for action. The court has to look into the fact whether the agency crossed the limits of the statute and its legislative intentions. The executive branch is not permitted to administer a statute in a manner that is inconsistent with the administrative structure that Congress has enacted in law. In case Congress has not specifically addressed the question, a reviewing court must respect the agency’s construction of the statute so long as it is permissible.
For upholding an agency’s construction of a statute which does not speak about the question at issue, it shall not be concluded by a reviewing court that the agency construction was the only one it permissibly could have adopted, or even the reading that the court would have reached if the question initially had arisen in a judicial proceeding. Any legislative regulation by an administrative agency will be considered lawful if it is not arbitrary, capricious, or manifestly contrary to statute. If there is an implicit or explicit legislative delegation to an agency on a particular question, and the executive agency has decided over it prudently, the court need not replace the agency’s interpretation, though it is not obliged to uphold the findings.
The duty of the reviewing court is to review a mixed question of fact and law, and to determine whether the evidence supports the agency’s findings of fact, and whether those findings of fact sustain the agency’s conclusion. The application of law on to the facts has to be checked for clarity. An agency’s expertise and experience in the particular field would serve as proper defense. By reviewing both factual and legal aspects of the question, the reviewing court will determine the correct law independent of the agency’s decision and will apply it to the facts as found by the agency.