Camp v. Pitts
Facts
Respondents applied to the Comptroller of the Currency for a certificate to organize a new bank in Hartsville, South Carolina. The Comptroller denied the application based on information from a national bank examiner and interested parties, first giving only a brief explanation and then, after reconsideration and a supplemental field examination, stating that he could not reach a favorable conclusion on the 'need factor' and listing existing financial institutions and their deposits in the market area. No formal hearing was required by statute or guaranteed by regulation, and respondents did not request one. In the district court, the entire administrative record was filed and the court upheld the Comptroller's action, but the court of appeals found the explanation inadequate and ordered a trial-like evidentiary proceeding in district court.
Issue
When a reviewing court concludes that an agency's explanation for informal action is too inadequate to permit judicial review, may the court conduct or order a de novo evidentiary hearing in the district court? Or must review remain focused on the existing administrative record, with any further explanation obtained from the agency itself?
Rule
Where an agency has taken informal action not required by statute or the APA to be supported by a hearing record or formal findings, judicial review proceeds under APA § 706(2)(A)'s arbitrary-and-capricious standard, with the focal point being the administrative record already in existence. De novo review under § 706(2)(F) is appropriate only when there are inadequate factfinding procedures in an adjudicatory proceeding or when judicial proceedings are brought to enforce certain administrative actions. If the agency's explanation is insufficient to permit review, the proper remedy is to obtain additional explanation from the agency, through affidavits or testimony if necessary, or to vacate and remand to the agency if the action is not sustainable on the record.
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On judicial review, the district court concludes the bureau's explanation is too sparse to permit meaningful review. What is the most appropriate next step?