## Facts

- Organizers applied to the Comptroller of the Currency for a certificate to organize a new national bank in Hartsville, South Carolina under 12 U.S.C. § 27.
- The Comptroller reviewed examiner materials and submissions from interested parties and denied the application by brief letter stating that supporting factors were not favorable.
- No statute required a formal hearing; the Comptroller’s regulations allowed a hearing only if requested and granted in the Comptroller’s discretion.
- The organizers did not request a formal hearing but sought reconsideration.
- After a supplemental field examination, the Comptroller again denied the application, explaining he could not reach a favorable conclusion regarding the “need” factor.
- In federal district court, the matter was presented on the existing administrative record and the Comptroller’s letters; the court reviewed the record and granted summary judgment for the Comptroller.
- The Fourth Circuit found the agency’s explanation inadequate for review and remanded with instructions for a de novo hearing applying a “substantial evidence” test.

## Issues

1. When an agency’s explanation for informal action is inadequate for judicial review, may a court order a de novo trial-type hearing applying a “substantial evidence” test?
2. Or must review proceed under APA § 706(2)(A) on the existing administrative record, with only limited supplementation if necessary to explain the agency’s reasons?

## Decision

- The Supreme Court vacated the Fourth Circuit’s judgment and remanded.
- The Court held that the proper standard is APA § 706(2)(A): whether the Comptroller acted arbitrarily, capriciously, abused discretion, or otherwise acted not in accordance with law.
- The Court rejected de novo, trial-type review and the “substantial evidence” test in this setting.
- The district court must review the administrative record already in existence, supplemented if necessary by affidavits or testimony that explain the Comptroller’s reasons, rather than creating a new evidentiary record.

## Legal Principles

- Informal agency adjudications not required by statute to be preceded by formal, trial-type procedures are reviewed under APA § 706(2)(A), not under the “substantial evidence” standard.
- Judicial review is ordinarily confined to the administrative record that was before the agency decisionmaker.
- If the record is too sparse to permit meaningful review, the remedy is limited supplementation to clarify the agency’s reasoning or remand for a fuller explanation, not a de novo hearing.
- De novo judicial factfinding is exceptional and requires statutory authorization or circumstances showing legally insufficient agency factfinding procedures; those conditions were not present here.

## Conclusion

The Court held that denial of a national bank charter is reviewed as informal agency action under the APA’s arbitrary-and-capricious standard on the existing administrative record, permitting only limited supplementation to explain the agency’s rationale and forbidding de novo trial-type review absent statutory authorization.


Camp v. Pitts, 411 U.S. 138 (1973)