Opinion for the court filed by Chief Judge J. SKELLY WRIGHT.
United States Lines, Inc. (USL), a common carrier, petitioned this court for review of an order of the Federal Maritime Commission (FMC) approving an amendment to a joint service agreement between two of USL's competitors. The amendment's primary effect was to permit addition of a third party to the joint service for the duration of the agreement. When the basic agreement expired five months later the Commission extended it, as amended, pending completion of an investigation and hearing as to whether the joint service authority, including new proposed amendments, should be extended for an additional five-year term. USL petitioned for review of this order as well, and the two cases were consolidated for hearing and decision.
These orders were issued by the Commission under its limited authority to grant exemption from the antitrust laws for anticompetitive agreements among ocean carriers when it is in the public interest to do so, pursuant to Section 15 of the Shipping Act of 1916, 46 U.S.C. § 814 (1970).
The FMC order at issue here concerns an amendment to the Euro-Pacific Joint Service Agreement. When originally established in 1971 this joint service included two parties, Hapag-Lloyd, Aktiengesellschaft,
In April 1976 Euro-Pacific applied to the FMC for approval of an amendment to its joint service agreement, the proposal being designated as Agreement No. 9902-3.
The FMC considered Agreement 9902-3 at its regular meeting on August 26, 1976. At that time the Commission voted to (1) approve the portion of 9902-3 which allowed for replacement of the current fleet, on condition that such replacement fleet be limited to six containerships with an average capacity of 650 TEU's each; and (2) set down for investigation and hearing the questions whether ICT should be allowed to join the Euro-Pacific service, and whether the Euro-Pacific fleet should be allowed to expand to eight 1,000-TEU containerships. The Commission directed that an appropriate order effectuating this action be issued and served upon the parties.
The order, however, was not issued. During the period between August 26 and September 28 a number of communications relating to the merits of Agreement 9902-3 were received by the FMC staff. These included unclassified notices from the governments of France and Germany strongly supporting ICT's participation in the joint service and urging the Commission to approve ICT's admission.
Although USL was a party-protestant to these proceedings, it was not served with nor was it informed of the communications to the FMC staff from the French and German governments or of the additional information and argument provided by the Euro-Pacific parties during the interval between the two Commission meetings. In addition, the Commission's order approving the amendment was not served on USL.
USL then petitioned this court for review and summary reversal of the Commission's order approving Agreement 9902-3, docketed here as No. 76-2004. The Commission requested remand of its order so that it might more fully articulate its reasons for approval. By order of February 7, 1977 this court granted the Commission's motion for remand, retaining jurisdiction of USL's petition for review, and dismissed USL's motion for summary reversal.
Upon remand, without further submissions by the parties, the Commission issued a supplemental opinion outlining the balancing process it applied in reaching the decision to approve the amendment to the Euro-Pacific agreement allowing inclusion of ICT.
By the time the Commission issued its second opinion, the underlying agreement authorizing the Euro-Pacific joint service was due to expire. In a separate opinion the Commission on March 21, 1977 ordered an investigation and hearing on the question whether the agreement should be extended for five additional years and whether the additions to the fleet, proposed by Euro-Pacific, should be permitted.
II. THE STANDARD OF REVIEW
The Administrative Procedure Act (APA)
The scope of review is defined by Section 706 of the APA, which authorizes the courts to review the record and to set aside any agency decision found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," 5 U.S.C. § 706(2)(A) (1976), or any action violating applicable statutory or constitutional requirements.
The governing standards for judicial review of agency action under the arbitrary and capricious test of Section 706, which is applicable here, were defined by the Supreme Court in Citizens to Preserve Overton Park, Inc. v. Volpe (Overton Park), 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), and have been reviewed by this court at some length on a number of recent occasions. See, e.g., Home Box Office, Inc. v. FCC, 185 U.S.App.D.C. 142, 167-169, 567 F.2d 9, 34-36 (per curiam), cert. denied, 434 U.S. 829, 98 S.Ct. 111, 54 L.Ed.2d 89 (1977); Ethyl Corp. v. EPA, 176 U.S.App.D.C. 373, 405-409, 541 F.2d 1, 33-37 (en banc), cert. denied, 426 U.S. 941, 96 S.Ct. 2663, 49 L.Ed.2d 394 (1976). The critical elements of such review are clear. While the decision of the agency is "entitled to a presumption of regularity," the presumption "is not to shield * * * action from a thorough, probing, in-depth review." Overton Park, supra, 401 U.S. at 415, 91 S.Ct. at 823. Initially, the court must determine whether the agency acted within its statutory authority; if it did, the court must then examine the actual choice made to determine whether it is arbitrary or capricious. Id. at 415-416, 91 S.Ct. 814. The ultimate standard of review governing this latter inquiry is a narrow one: the court is not permitted to substitute its judgment for that of the agency. Id. at 416, 91 S.Ct. 814. Nonetheless, the court's inquiry must be "searching and careful," id., and the court must ensure "both that the Commission has adequately considered all relevant factors * * * and that it has demonstrated a `rational connection between the facts found and the choice made,'" Home Box Office, Inc. v. FCC, supra, 185 U.S.App.D.C. at 168, 567 F.2d at 35, quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962). Finally, the court must examine the procedures employed by the agency in reaching its decision to ensure that these procedures comply with applicable statutory and constitutional requirements. Overton Park, supra, 401 U.S. at 417, 91 S.Ct. 814.
Our task in this case, then, is to conduct the "searching and careful" inquiry mandated by the Supreme Court in Overton Park to determine whether the agency action challenged here complies with the standards set forth in the Administrative Procedure Act, as well as with the provisions of the Shipping Act and the agency's own regulations.
A. Antitrust Considerations
Section 15 of the Shipping Act requires all agreements between common carriers by water which deal with such factors as rates, allotments of ports and restrictions of traffic, distribution of earnings, and the like to be submitted to the Federal Maritime Commission for approval.
Petitioner asserts that in reaching its decision to approve the agreements challenged here the Commission has not "adequately considered all relevant factors" specified in the statute, Overton Park, supra, 401 U.S. at 416, 91 S.Ct. 814. The argument, made most strongly here by the Department of Justice,
1. The Obligation of the FMC under Section 15 to Consider Antitrust Implications
Section 15 of the Shipping Act of 1916 represents a compromise between the established national antitrust policy and the potential public benefits to be derived from allowing ocean carriers to restrict or eliminate competition among themselves. An extensive congressional study of the practices of carrier conferences and their advantages and disadvantages was made in 1914, culminating in what has come to be known as the Alexander Report. H.R.Doc. No. 805, 63d Cong., 2d Sess. (1914). While the report found that there were substantial advantages to conference arrangements, it also identified various abuses in which conferences had engaged. Consequently, it was the recommendation of the report, adopted by Congress, that shipping conferences be allowed to continue only under government regulation.
In 1959 Congress undertook an extensive review of the Shipping Act.
It has been repeatedly held, by the Supreme Court as well as this court, that the Commission's mandate to guard "the public interest" requires it to consider the antitrust implications of the agreements submitted to it for approval. In FMC v. Svenska Amerika Lines, 390 U.S. 238, 244-245, 88 S.Ct. 1005, 19 L.Ed.2d 1071 (1968), the Supreme Court rejected the argument that because the Shipping Act is designed to grant antitrust immunity to approved contracts, consideration of the antitrust implications of an agreement cannot serve as grounds for disapproval. The Court noted that "[b]y its very nature an illegal restraint of trade is in some ways `contrary to the public interest,'" id. at 244, 88 S.Ct. at 1009, and it approved the strict antitrust standard applied by the Commission in that case
Under the Shipping Act, then, the FMC has the responsibility to consider carefully the antitrust aspects of all agreements submitted for its approval. While our task as a reviewing court is emphatically not to substitute our judgment as to the public interest for that reached by the Commission, we are charged under the Administrative Procedure Act with ensuring that the Commission has complied with its statutory mandate and considered the relevent factors set forth in the statute in reaching its decision. See Overton Park, supra, 401 U.S. at 415-416, 91 S.Ct. 814; Ethyl Corp. v. EPA, supra, 176 U.S.App.D.C. at 405-409, 541 F.2d at 33-37. In the case of Agreement 9902-3, the Commission has clearly failed to do so, for it neglected to consider adequately an extremely relevant factor: the antitrust implications of the agreement it approved.
2. The Commission's Decision
The Commission's first order approving Agreement 9902-3 as modified simply recited
This second opinion was devoted virtually exclusively to the question whether USL was entitled to an evidentiary hearing prior to Commission action on the agreement. The Commission recognized that "[i]n aid of the public interest, [it] must tread the narrow path between on the one hand, permitting undue concentrations of economic power as a result of anticompetitive agreements entered into among common carriers, and, on the other hand, permitting the processes of the Commission to be used as a competitive tool by individual carriers." JA 86. In this case, the Commission stated, it was "faced with balancing the interest of Protestant in obtaining a trial type evidentiary hearing, which, in the experience of the Commission are usually lengthy, against the interest of the Proponents in modernizing their fleet." Id. While delay in allowing the carriers seeking Commission approval to compete is acceptable in certain circumstances, the Commission reasoned, "it is not acceptable where the amendment is not prima facie contrary to the public interest,[
We appreciate the Commission's concern that Section 15 proceedings might result in delay — to the benefit of protesting carriers — of competition which would serve the public as a whole. Clearly, the public interest is no more served by competitors who seek, through lengthy evidentiary hearings, to delay implementation of agreements which would adversely affect them competitively than it is by those who seek to enter into agreements which would unjustifiably restrict competition. We appreciate, too, the Commission's recognition that an evidentiary hearing may be less appropriate where, as here, only short-term authority is
As noted earlier, the Commission is required under Section 15 to disapprove agreements which it finds to be unjustly discriminatory or unfair as between carriers, shippers, exporters, or importers, to operate to the detriment of commerce, or to be contrary to the public interest.
Whether the arrangement established by Agreement No. 9902-3 is viewed as a division of markets, and illegal per se under the antitrust laws,
Nor was this defect in Agreement 9902-3's approval cured by the Commission's decision extending the joint service authority pendente lite. As might be expected, that decision simply examined whether the agreement as a whole, as it existed at that time, should be extended pending a full investigation
In seeking to justify its failure to address the antitrust implications in this case the Commission emphasizes two points. First, it asserts that the protestant, USL, merely alleged the existence of possible antitrust violations, rather than substantiating its claim with further argument and documentation.
The Commission's second justification for the failure of its decision to address the antitrust implications fares no better. In its brief to this court the Commission suggested that it had, indeed, considered the antitrust implications and, in addition, that its final decision was consistent with an analysis of the competitive ramifications of the contract.
In this case the failure of the Commission to address in its decision the antitrust implications of Agreement 9902-3 requires us to remand the record here to the Commission for further consideration.
B. Blind References
The failure adequately to consider antitrust implications is not the only defect in the Commission's decision approving Agreement 9902-3. Twice in the course of its decision the Commission stated that it had made critical findings on the basis of data which was not included in the record of this case and, indeed, which is nowhere specifically identified by the Commission. "In making its judgment on Agreement 9902-3," the Commission stated, it "considered the submissions of Protestant and Proponents, the identities of Protestant and Proponents, and the reliable data reposing in the files of the Commission." JA 87 (emphasis added). And in resolving USL's claim that approval would overtonnage the trade — the only substantive issue addressed by the Commission in its decision — "the Commission examined that problem carefully, in the light of the data then available to the Commission," and concluded that the agreement as modified should be approved. JA 88 (emphasis added).
We do not know what "reliable data" was "reposing in the files of the Commission" or was "then available" to it. No explanation is given in the rest of the Commission's opinion, or in its briefs to this court, as to what specific information the Commission was relying upon.
The Commission's reliance on these "data" to support its decision precludes effective judicial review in this case. While our task is not to review the evidence for the purpose of determining whether the Commission's decision is supported by "substantial evidence," application of the arbitrary and capricious standard of review does require us to make a "searching and careful" inquiry of the record in this case to ensure "both that the Commission had adequately considered all relevant factors * * and that it has demonstrated a `rational connection between the facts found and the choice made.'" See 189 U.S.App.D.C. at ___, 584 F.2d at 526, supra. This we cannot do where, as here, the data relied on by the Commission in reaching its decision is not included in the administrative record
This is not to say that an agency may never rely on data in its files, or on public information, in reaching its decision.
In reaching this decision, we are not unmindful of the legitimate claims that agency expertise in this area is deserving of the deference of the court. See L. Jaffe, Judicial Control of Administrative Action 576-585 (1965). But agency expertise does not afford the agency absolute power; the existence of judicial review, albeit under a presumption favoring the agency's decisionmaking, see Overton Park, supra, 401 U.S. at 415, 91 S.Ct. 814, negates any notion that the deference to be accorded the agency's expertise in any particular field is absolute or its discretion unreviewable.
While foreclosure of effective judicial review is itself sufficient reason for this court to require the FMC to disclose the information upon which it relies, we think such disclosure is also necessary to ensure the parties to Section 15 proceedings the opportunity to participate in the Commission's decisionmaking which is guaranteed them by statute. As discussed more fully below,
C. The Hearing Requirement and Ex Parte Contacts
Under the Administrative Procedure Act a reviewing court, in addition to examining whether the final agency decision reflects consideration of all relevant factors, must also determine whether the agency complied with applicable procedural requirements in reaching its conclusion. 5 U.S.C. § 706 (1976); see Overton Park, supra, 401 U.S. at 416, 91 S.Ct. 814. In this case it is argued that the FMC failed to conduct the "hearing" required by statute prior to its approval of Agreement 9902-3 and its pendente lite authorization of Agreement 9902-5.
1. The Application of Sections 556 and 557 of the Administrative Procedure Act
The Shipping Act does not itself specify the type of hearing required prior to approval under Section 15; it states only that the Commission decision is to be made "after notice and hearing." 46 U.S.C. § 814 (1970). Petitioner has argued that the hearing provided by the FMC must comply with the procedural requirements of Sections 556 and 557 of the Administrative Procedure Act governing formal agency hearings. These provisions apply, by the terms of the APA, when a "hearing on the record" is required by statute. 5 U.S.C. §§ 553(c), 554(c)(2) (1976). While the exact phrase "on the record" is not an absolute prerequisite to application of the formal hearing requirements, the Supreme Court has made clear that these provisions do not apply unless Congress has clearly indicated that the "hearing" required by statute must be a trial-type hearing on the record. See United States v. Florida East Coast R. Co., 410 U.S. 224, 234-238, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973); United States v. Allegheny-Ludlum Steel Co., 406 U.S. 742, 756-758, 92 S.Ct. 1941, 32 L.Ed.2d 453 (1972).
In this case the Shipping Act itself does not provide for a hearing "on the record," and nothing in the terms of the statute or its legislative history indicates that a trial-type hearing, complete with all of the procedures specified in Sections 556 and 557, was intended in all Section 15 cases.
We conclude, therefore, that Section 15 hearings are not required by statute to be conducted in accordance with Sections 556 and 557 of the APA. The Commission thus enjoys substantial flexibility to structure the hearings it must provide depending on the nature of the case and the issues requiring resolution. But that freedom is not absolute. The Shipping Act does require that there be a "hearing," and that statutory requirement, like the requirement of comment in notice and comment rulemaking,
2. The Ex Parte Contacts in this Case
As noted earlier,
The ex parte communications at issue here took place between August 26th and September 28th; indeed, they appear to be the only comments received by the Commission and its staff during this critical period. We do not know exactly how many contacts there were, or exactly what was said, or what the Commission staff conveyed to the Commission as to the substance of the communications in which it engaged. Our only indication as to the nature of these contacts is found in an excerpt from a September 28th staff memorandum to the Commission, included in the joint appendix in this action, which served at least in part as the basis of the Commission's September 29th decision to permit ICT to join the conference. The memorandum was to provide "additional information to the Commission in the event it wishes to reconsider its decision not to approve the addition of ICT to Euro-Pacific." JA 72. The joint appendix in this case at
Even this brief outline of the ex parte communications in this case makes clear that secret ex parte contacts were employed both to introduce new arguments and positions and to respond to and rebut the arguments which protestant USL made in its public filings. Although the notices from the French and German governments were in no way classified, it appears that they were never mentioned or made available to the parties or to the public; USL, in particular, was completely unaware of the active support of Agreement 9902-3 by foreign governments. Similarly, the argument that addition of ICT was financially imperative to Euro-Pacific's continued survival appears nowhere in Euro-Pacific comments; it emerged for the first time in these ex parte communications. Finally, the argument that ICT should be permitted to join the service as the successor to HAL — albeit with a different name and different owners — was clearly intended to respond to the argument publicly made by USL that addition of a third party which is itself a potential competitor and which is controlled by a dominant carrier raises serious antitrust questions requiring a hearing for their resolution. Euro-Pacific had noted in its filed response to USL's comments that HAL, the former third party in the Euro-Pacific service, had been reorganized under new control as ICT.
USL was unaware of all these contacts. Nor is it reasonable to assume that any other member of the public knew or could have known of their existence, let alone their substance. Indeed, it was not until preparation of the joint appendix to this review action that USL first learned of the existence of ex parte contacts prior to the Commission's decision.
It is, of course, impossible to determine the precise influence of these ex parte contacts on the Commission's final decision. The fact that the Commission reversed its judgment on the participation of ICT in the conference after being informed of the substance
3. Ex Parte Contacts and the Section 15 Hearing Requirement
Under the Shipping Act notice and a hearing are required prior to Commission approval of any agreement subject to Section 15. The Commission is charged by statute with enforcing the public interest, and it recognizes the right of the public — be it carrier, exporters, or interested consumers — to participate in the required hearing.
The inconsistency of secret ex parte contacts with the notion of a fair hearing and with the principles of fairness implicit in due process has long been recognized. In Morgan v. United States, 304 U.S. 1, 18, 58 S.Ct. 773, 776, 82 L.Ed. 1129 (1938), the Supreme Court stated: "The right to a hearing embraces not only the right to present evidence but also a reasonable opportunity to know the claims of the opposing party and to meet them. The right to submit argument implies that opportunity; otherwise the right may be but a barren one." And in Sangamon Valley Television Corp. v. United States, 106 U.S.App.D.C. 30, 33, 269 F.2d 221, 224 (1959), we held that "basic fairness" required that a rulemaking proceeding to allocate television channels among communities "be carried on in the open," without ex parte contacts. Most recently, in Home Box Office, Inc. v. FCC, supra, we set aside FCC regulations relating to cable and subscription television in part because of prohibited ex parte communications between industry leaders and the Commission during the rulemaking proceeding. In that case we noted that "this is a time when all branches of government have taken steps `designed to better assure fairness and to avoid suspicions of impropriety,' * * * and consequently we have no hesitation in concluding with Sangamon that due process requires us to set aside the Commission's rules here." 185 U.S.App.D.C. at 190, 567 F.2d at 57, quoting White House Fact Sheet on Executive Order 11920 (June 10, 1976).
The instant case is not identical in all respects with either Sangamon Valley or Home Box Office. Sangamon Valley involved "resolution of conflicting private claims to a valuable privilege," 106 U.S.App.D.C. at 33, 269 F.2d at 224, a description which is not entirely applicable to this case. For although this case involves a privilege in the sense of exemption from the antitrust laws, it is not one to which there are competing claims which must be resolved in favor of one applicant or another. Nor does this case, like Home Box Office, deal with notice and comment rulemaking governed by Section 553 of the APA. Rather, what is involved here appears quasi-adjudicatory in nature: the
Our earlier decisions dealing with ex parte contacts, as well as prior cases requiring an agency to provide initial notices of proposed action, to disclose internal reports, and to state its reasons for acting as it did,
That the proceedings in this case did not, because of the ex parte contacts, amount to the "hearing" guaranteed by statute is patently clear. While the Commission enjoys substantial flexibility in structuring its hearings in light of the issues involved,
What we are confronted with, then, is an agency procedure denying meaningful participation to the public and an agency decision appearing to rest, at least in significant part, on communications never revealed to the protesting party or to the public. For a court to uphold this decision as satisfying the "hearing" required by statute would be to do violence not only to Section 15 but to the basic fairness concept of due process as well.
4. Ex Parte Contacts and Judicial Review
Ex parte contacts, in addition to being inconsistent with the "hearing" required by the Shipping Act, also foreclose effective judicial review of the agency's final decision according to the arbitrary and capricious standard of the Administrative Procedure Act. Under this standard the reviewing court must test the actions of the FMC for arbitrariness or inconsistency with delegated authority against "the full administrative record that was before the [agency official] at the time he made his decision." Overton Park, supra, 401 U.S. at 420, 91 S.Ct. at 825. But as we recognized in Home Box Office, Inc. v. FCC, supra:
185 U.S.App.D.C. at 187, 567 F.2d at 54.
The agency's secrecy as to ex parte communications is particularly troublesome in this case. For what we do know about the course of the agency's decisionmaking suggests that these communications were vital to the agency decision. This necessarily calls into question whether the justifications put forth by the agency in its decision were in fact its motivating force. As we noted in Home Box Office:
185 U.S.App.D.C. at 187-188, 567 F.2d at 54-55.
To be sure, while we do not know the precise content of the agency communications or what was revealed of them to the Commission by its staff, we have some idea of the substance of the communications from the memorandum excerpted in the joint appendix. This memorandum, however, hardly provides a substitute sufficient
The statutory requirement of a hearing in Section 15 proceedings as well as the governing standards for judicial review make clear that ex parte contacts should not have been allowed in these proceedings.
The FMC, in deciding whether to approve agreements under Section 15, is charged with considering and guarding the public interest. This responsibility requires the agency to consider the antitrust implications of the agreements submitted to it, for the public interest is not served where competition is restrained unnecessarily. Nor is the public interest served when the public is effectively excluded from the decisionmaking process, and the benefits of its participation lost, because of agency resort to and reliance upon blind references and ex parte communications. For such references and communications violate the ideals of fairness and public participation which are embodied in the statutory requirement of a hearing and undermine the efficacy of judicial review under the arbitrary and capricious standard.
The FMC's failure to consider the antitrust implications of Agreement 9902-3 requires remand of the record in this case for further consideration. Upon remand the agency enjoys substantial flexibility in structuring its procedures in view of the issues which it must resolve. But it cannot, in the guise of reasoned decisionmaking, effectively eliminate the roles of the public and of this court in the decisionmaking and review processes.
46 U.S.C. § 814 (1970).
Not only is counsel's statement that ICT would not have entered independently unsupported by any facts included in the record, but it is also unresponsive to the antitrust question of what influence ICT exercises over the market as a potential competitor, even if it would not ultimately choose to enter. Finally, USL's allegations as to the corporate entity known as the Bostrom group — a major operator in both the Atlantic and South Atlantic/Gulf trades — which now controls ICT, and its desire to expand its influence into the Pacific Coast-Europe trade route at least raise questions as to an undue concentration of influence which are nowhere addressed by the Commission.
Nor is City of Chicago v. FPC, 147 U.S.App.D.C. 312, 458 F.2d 731 (1971), cert. denied, 405 U.S. 1074, 92 S.Ct. 1495, 31 L.Ed.2d 808 (1972), inconsistent with our result here. In City of Chicago it was argued that the Federal Power Commission impermissibly relied on extra-record information in reaching a decision as to gas valuation for ratemaking purposes. In rejecting that argument the court pointed out that the statistical data in the Commission's report which was alleged to be extra-record material was accompanied by a footnote identifying its source. As to the remainder of the asserted improper references, the court found that what was involved were interpretations and conclusions which the Commission, making use of its experience in regulating this industry, could permissibly draw from the factual material which did appear in the record. Id. at 756-757.
Nor is our conclusion here inconsistent with the Supreme Court's recent decision in Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., supra note 61. In Vermont Yankee the Supreme Court held that, absent constitutional constraints or extremely compelling circumstances, administrative agencies should be free to fashion their own rules of procedure. The Court thus reversed a decision of this court which had held that the procedures employed by the agency in a rulemaking proceeding were inadequate.
The freedom of administrative agencies to fashion their procedures recognized in Vermont Yankee, however, does not encompass freedom to ignore statutory requirements. The Vermont Yankee Court was careful to point out that "[o]f course, the court must determine whether the agency complied with the procedures mandated by the relevant statutes." 435 U.S. at 549 n.21, 98 S.Ct. at 1214, citing Citizens to Preserve Overton Park, Inc. v. Volpe, supra note 40, 401 U.S. at 417, 91 S.Ct. 814. Nor does Vermont Yankee provide a basis for agency procedures or practices which effectively foreclose judicial review where, as here, such review is provided for by statute. Nothing in that decision calls into question the well established principle, found in the Administrative Procedure Act and in the decisions of the Supreme Court, that the court is required to conduct a "searching and careful" inquiry to determine whether agency action is arbitrary or capricious, or, in appropriate cases, supported by substantial evidence. See 5 U.S.C. § 706 (1976); Citizens to Preserve Overton Park, Inc. v. Volpe, supra note 40, 401 U.S. at 415-417, 91 S.Ct. 814. Indeed, the Vermont Yankee decision remanded the case to the Court of Appeals for just such an inquiry.
In our decision today we have consistently recognized the freedom of the FMC to structure its hearings as it finds appropriate. We have rejected petitioner's arguments that a full evidentiary hearing with opportunities for oral presentations and cross-examination must of necessity be provided. Our prohibition of ex parte contacts is not based on our choice as to "which procedures are `best' or most likely to further some vague, undefined public good." Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., supra note 61, 435 U.S. at 549, 98 S.Ct. at 1214. Rather, it is based on the statutory requirements of a hearing before the FMC and of judicial review under an arbitrary and capricious standard which Congress has chosen to impose.