(dissenting):
With great respect, I take a different view from my brethern as to the nature of the issues raised in this case.
The plaintiff, First National Bank of Smithfield, North Carolina, was notified in July, 1963, that First National Bank of Eastern North Carolina had applied to the Comptroller for permission to open a branch in Smithfield, North Carolina. Smithfield promptly requested the Comptroller to give it access to the application, the supporting data, and the report of the Regional Bank Examiner, so that it could attempt to refute them at the informal conference set before the Comptroller. This request was denied.
The Comptroller offers no explanation for denying this seemingly reasonable request, nor does he point to any interest to be served by the denial. We move here in no area involving emergency or security considerations. The Comptroller’s position strikes me as unfair, unwise and administratively unnecessary. History has given impressive evidence of the necessity for informed and objective regulation of our banking system. Questionable banking practices and excessive competition in the past led to disastrous results during the Great Depression. By affording objecting banks an adequate opportunity to be heard the Comptroller receives the benefit of a report suggesting reasons why the particular application should not be granted. The self-interest of the complainant may thus serve the public interest by raising considerations that might otherwise never come to light before the Comptroller. Thus, in presenting its own position, the objecting bank is also arguing that of the community which has a vital interest in the solvency of its local banks. The bank can perform this useful function only if it is allowed to know the supporting data presented to the Comptroller by the applicant.
The plaintiff bank is acutely interested in the competition threatened by Eastern’s application for permission to establish a branch bank in Smithfield, North Carolina. Rightly, I think, the majority holds that this interest is sufficient to entitle the Smithfield bank to appeal from the Comptroller’s decision granting the application. Smithfield contends, however, that this right of appeal is meaningless unless it has previously been given an effective chance to be heard before the Comptroller reaches his final decision on the merits of the application. With this contention I agree, and would *274hold that such an opportunity, if requested, is a prerequisite to a valid decision on the part of the Comptroller. The right of the plaintiff to appear is of little worth to it if there is no disclosure of the pertinent data and if the Comptroller may make up his mind in a private huggermugger with the applicant.
The action of the Comptroller in issuing a branch bank license, being based in large part on an exercise of discretion, cannot in any true sense be subjected to review do novo, as my brethren indicate, for it may be reversed only if it is found to be “arbitrary, capricious [or], an abuse of discretion.” 5 U.S.C.A. § 1009 (e); Community National Bank of Pontiac v. Saxon, 310 F.2d 224, 226 (6th Cir. 1962). If an objector has been granted no adequate opportunity to present his position before the case reaches the district court stage, a protest will usually be of little avail since the decision under attack comes clothed with a presumption of correctness.
Smithfield’s argument is that it should be allowed to inform itself and express its views before the Comptroller arrives at his decision which will be accorded a large measure of finality in any appeal. Although the court review my brethren hold out to the complaining party may euphemistically be called a hearing de novo, the complainant comes into the reviewing court severely hobbled. The Comptroller’s mind has been made up ex parte upon hearing from the proponent only, but not effectively from any opponents, for they have been kept in the dark as to the issues and the evidence. The operative scope of the court review being limited, it cannot easily repair any damage resulting from the inadequate practice followed by the Comptroller.
I have difficulty, as I think the District Judge on remand will have difficulty, in reconciling two statements in the majority opinion. First it is said that “there is no place in the review for an opening-presumption of correctness of any fact which it may appear to the Court was adopted by the Comptroller for his decision.” (It bears repeating that the Comptroller makes a secret of the facts he has adopted.) In the second statement the court says: “If after the court has made its fact findings, it then appears that the decision of the Comptroller is dependent upon an exercise of discretion, the Court cannot substitute its discretion for the Comptroller’s. However, it can set aside such a determination if, in the light of the facts found by the Court, it concludes that the Comptroller has abused, exceeded or arbitrarily applied his discretion.”
How can the District Court conduct a proper examination if the Comptroller has not disclosed what issues he is resolving? The District Court is told to make its own de novo fact-findings, but it is still in no position to judge how far the Comptroller’s decision rests upon fact-findings which the court deems erroneous and how far it is an exercise of discretionary judgment. It is not apparent how the District Court, observing the admonition against any opening-presumption of correctness, can be sure that it is not intruding in the area of the Comptroller’s discretion, for concededly the court may not substitute an independent discretion.
The Comptroller has not divulged his mental processes, and his determinations of fact, rulings of law and exercises of discretion and judgment are inextricably intermingled. The District Court is thus placed in the unhappy position of choosing between two equally unacceptable alternatives. Either it must blindly assume that the Comptroller’s discretion rests upon an adequate basis in fact, in which event the court review almost inevitably becomes a meaningless gesture; or the District Court, proceeding upon the basis of facts independently determined by it, must act in ignorance of the nature of the decision it is reviewing, in which case the court's judgment is liable to usurp the Comptroller’s function. We should not require or tolerate such a game of “blind man’s bluff.” The majority opinion leaves the District Court without guidance in the dilemma thus created.
*275The District Court held, in accordance with the objecting bank’s contention, that a permit issued by the Comptroller after his bobtailed procedure ought not be permitted to stand. While the court’s order setting aside the Comptroller’s action did not in terms order a rehearing, it was left open to the Comptroller to remedy the deficiency by holding an appropriate administrative hearing.
The indiscriminate use of the term “hearing” has tended to obscure the issues in this case. An administrative hearing may be either a formal, trial-type procedure or an informal conference. For many years the Comptroller pursued the latter course with great success, and I share the majority’s reluctance to interfere. With a different but perhaps analogous question before it (namely the appointment of a receiver), the Supreme Court has indeed noted that more formal procedures, constitutionally necessary in some situations, may not be indispensable in banking cases because of “the delicate nature of the institution and the impossibility of preserving credit during an investigation * * But the Court went on to warn that this “is a heavy responsibilty to be exercised with a disinterestedness and restraint * * * ” Fahey v. Mallonee, 332 U.S. 245, 253-254, 67 S.Ct. 1552, 1556, 91 L.Ed. 2030 (1947).
The absence of a constitutional compulsion to conduct a trial-type hearing does not completely answer the objecting bank’s protest. The Comptroller’s utilization of informal conferences to settle controversies arising out of branch bank applications is certainly an efficient procedure, but while informality is permissible, it may not be administered unfairly.
More attention needs to be paid to the problem of protecting against arbitrary exercises of administrative discretion when it is decided that the safeguards of a trial-type hearing are not appropriate. In commenting on this problem a pioneering authority in this field has said:
“Fair procedure is vital even when [the procedure] is entirely as informal as conversation. Informal procedure is not the equivalent of no procedure. For instance, before an agency makes a discretionary determination that affects a party adversely, the procedural protection is very great if the officer will tell the party what he believes the facts to be, and what he contemplates and why, and then if the officer listens to what the party has to say. The fundamentals of procedural fairness can be observed even in an informal conference * * I Davis, Administrative Law Treatise § 4.14 (1965 Supp.).
In fact, Professor Davis has commented directly upon the decision of the District Court in this case. While he adheres to the view that an informal procedure, such as a conference, is preferable in these circumstances to a trial-type hearing — a view with which I agree — he is nevertheless critical of the procedure followed by the Comptroller in the instant case. He states:
“But even if a conference method is used, the basic principle of fairness that each party should be entitled to know the materials on the other side may still be applicable.
“The Comptroller had little or nothing to gain by denying the existing bank a chance to see the application, the supporting data, the report of the Regional Bank Examiner, and the Comptroller’s decision.” 1 Davis, Administrative Law Treatise § 4.04 (1965 Supp.).
If the Comptroller wishes to continue to use informal proceedings to deal with branch applications he must make sure that the proceedings are fair. Banks potentially affected, which desire to contest an application, should be permitted reasonable access to relevant materials and an opportunity to have their say, if only informally. I would remand the case to the District Court for its return to the Comptroller with instructions to make available to the plaintiff the requested information. Thereafter a con*276ference should be held at which the Smithfield bank may articulate its opposition. Such disposition of the case is preferable to the so-called hearing de novo in court which the majority orders. An informed conference before the Comptroller would not only be more just to the complaining bank but would tend less to disrupt the orderly conduct of the Comptroller’s office.1
. The Comptroller has called our attention to the recent case of Continental Bank v. National City Bank, 245 F.Supp. 684 (N. D. Ohio, August 20, 1965). Its relevance to the instant case is sharply diminished by the fact that it deals only with the question of whether a full-blown, trial-type hearing by the Comptroller was required. While the court refused to order such a hearing, it is noteworthy, as the court pointed out, that the objecting bank was afforded an opportunity to present pertinent information to the Comptroller, and that the Comptroller himself argued that the written application of the national bank would have been made available to the objecting bank had a request been made.