to promulgation of the rule under review here. In addition, Plaintiffs seek production of every document generated within the Commission in connection with the promulgation of the rule here challenged. Defendants vigorously oppose this discovery, contending that it is inappropriate under Rule 26, Federal Rules of Civil Procedure, as irrelevant and not calculated to lead to the discovery of admissible evidence herein.
Essential to resolution of the present dispute is definition of the scope and basis of this Court's review herein. If a wide-ranging de novo review were appropriate, discovery might well be allowed. Defendants contend, however, that the scope of review is a narrow one and that the Court must base its review on the administrative record compiled by the Commission. The Court finds defendants' position well taken.
The informal rule-making proceedings here under review were initiated pursuant to Section 4 of the Administrative Procedure Act, 5 U.S.C. § 553. This section requires only that the agency publish notice of proposed rule-making, provide opportunity for the presentation of views and comments by interested parties, and, after "consideration of the relevant matter presented," incorporate in the rules adopted a statement of their basis and purpose. There is no statutory provision requiring that F.T.C. rules be made on the record after hearing such that the more stringent, formal rule-making procedures of Sections 7 and 8 of the APA, 5 U.S.C. §§ 556 and 557, would apply.
In this context, it is clear that the standard of review for the Court is whether the Commission's rule is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2) (A), Camp v. Pitts, 411 U.S. 138, 140-42, 36 L. Ed. 2d 106, 93 S. Ct. 1241 (1973), Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971).
To make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. . . . Although inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency. Citizens to Preserve Overton Park v. Volpe, supra, at 416 (citations omitted).