Before KALODNER, STALEY, and HASTIE, Circuit Judges.
We are concerned here with the propriety of an order of the Federal Security Administrator which establishes a standard of identity for salad dressing pursuant to Section 401 of the Federal Food, Drug and Cosmetic Act.*fn1 Petitioner seeks to have the order set aside because the standard does not include the option which it requested of using cream and milk in substitution for part of the water normally present in the starchy paste base of salad dressing. It claims that there was "no substantial evidence of record at the hearing" before the Administrator justifying this exclusion.
Section 401 of the Act provides:
"Whenever in the judgment of the Administrator such action will promote honesty and fair dealing in the interest of consumers, he shall promulgate regulations fixing and establishing for any food, under its common or usual name so far as practicable, a reasonable definition and standard of identity, a reasonable standard of quality, and/or reasonable standards of fill of container * * *.
"In prescribing a definition and standard of identity for any food or class of food in which optional ingredients are permitted, the Administrator shall, for the purpose of promoting honesty and fair dealing in the interest of consumers, designate the optional ingredients which shall be named on the label. * * *"
It is further provided in Section 701(e) that: "* * * The Administrator shall base his order only on substantial evidence of record at the hearing and shall set forth as part of the order detailed findings of fact on which the order is based. * * *" Also applicable is the requirement of Section 7(c) of the Administrative Procedure Act*fn2 that "* * * no sanction shall be imposed or rule or order * * * issued except upon consideration of the whole record or such portions thereof as may be cited by any party and as supported by and in accordance with the reliable, probative, and substantial evidence. * * *"
The scope of judicial review of the Administrator's orders in this court is defined both by Section 701(f)(3) of the Federal Food, Drug & Cosmetic Act and Section 10(e) of the Administrative Procedure Act. Section 701(f)(3) provides:
"The court shall have jurisdiction to affirm the order, or to set it aside in whole or in part, temporarily or permanently. If the order of the Administrator refuses to issue, amend, or repeal a regulation and such order is not in accordance with law the court shall by its judgment order the Administrator to take action, with respect to such regulation, in accordance with law. The findings of the Administrator as to the facts, if supported by substantial evidence, shall be conclusive."
Section 10(e) of the Administrative Procedure Act affirmatively provides for vacation of agency action which is unsupported by "substantial evidence" and adds that "in making the foregoing determinations the court shall review the whole record * * *."
The two statutes provide essentially the same scope for judicial review. Since the argument of this appeal, the Supreme Court has described the scope of judicial review under the provisions of the Administrative Procedure Act which are applicable to this case. It is the teaching and admonition of Universal Camera Corporation v. National Labor Relations Board, u.S., 71 S. Ct. 456, 465, (1) "that substantiality be determined in the light of all that the record relevantly presents", (2) that administrative findings must be set aside "when the record before a Court of Appeals clearly precludes the * * * [administrative] decision from being justified by a fair estimate of the worth of the testimony of witnesses or * * * [the agency's] informed judgment on matters within its special competence or both", and (3) that "reviewing courts must be influenced by a feeling that they are not to abdicate the conventional judicial function".
Thus guided, we examine the record.
The order complained of defines salad dressing as an emulsified semi-solid food prepared from edible vegetable oils, certain acidifying ingredients and a cooked or partly cooked starchy paste prepared from certain flours, in the preparation of which starchy paste, water may be added. Petitioner sought to have included in the standard an alternative authorization to use cream, milk, milk solids, or non-fat dry milk solids as a substitute for part of the water.
For many years, petitioner had marketed a product so composed as a salad dressing under the name "Cream Wipt". It is not disputed that salad dressing containing water and small quantities of cream and milk is at least as nutritious and tasty as the product made with water alone. Beyond that, there was adequate basis for the Administrator's finding, made on conflicting evidence, that such small amounts of cream and milk as ...