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When the issue on appeal is whether a rule made in informal proceedings meets the criteria of § 10 of the Administrative Procedures Act, 5 U.S.C.S. § 706, the court must necessarily go about the application of that standard in a manner unlike its review of findings of fact and conclusions of law compiled in a formal proceeding. This exercise need be no less searching and strict in its weighing of whether the agency has performed in accordance with the Congressional purposes, but, because it is addressed to different materials, it inevitably varies from the adjudicatory model. The paramount objective is to see whether the agency, given an essentially legislative task to perform, has carried it out in a manner calculated to negate the dangers of arbitrariness and irrationality in the formulation of rules for general application in the future.
Petitioner National Tire Dealers and Retreaders Association, Inc. challenged the constitutionality of an order of respondent Secretary of Department of Transportation, which adopted Federal Motor Vehicle Safety Standard No. 117, 49 C.F.R. § 571.117a (1972), pursuant to section 103 of the National Traffic and Motor Vehicle Safety Act of 1966 (the Act), 15 U.S.C.S. § 1392. Petitioner focused its challenge on paragraph S6.3.2 of Standard No. 117, which required that all pneumatic passenger tires retreaded on or after 1 February 1974 have the following information permanently molded into or on one sidewall of the tire: size; maximum inflation pressure and load; actual number of plies or ply rating; the words "tubeless" or "tube-type," as applicable; and the words "bias/belted" or "radial," as applicable. Petitioner requested a review of the order issued by the departmental Secretary who addressed the standard.
Should the court vacate the Secretary’s order concerning the permanent labeling requirement in the Federal Motor Vehicle Safety Standard?
The court held that the Secretary acted in a manner that did not negate the dangers of arbitrariness and irrationality when he promulgated the permanent labeling requirements of Standard No. 117. The court held that upon the basis of information available in its own files and upon the knowledge and expertise of the agency, the Secretary’s information and knowledge outside the record were unpersuasive in light of the doubts raised by the association and others concerning the practicability of the permanent labeling requirements. The court held that there was nothing in the record to suggest whether the requirement would be practicable and not unreasonably costly. Accordingly, the court vacated in part the order of the Secretary concerning the permanent labeling requirement in the Federal Motor Vehicle Safety Standard.