Petition — Chrysler Corp. v. Brown

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FILED

| =-pEC 27 1977

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\ onsen RODAK, JR., CLERK

IN THE 4

Supreme Court of the United States

OctoBerR TERM, 1977

noy'Y- 922

CHRYSLER CoRPORATION, Petitioner,

HaroLp Brown, Et AL., Respondents.

—_—

PETITION FOR WRIT OF CERTIORARI

TO THE UNTIED STATES COURT OF

APPEALS FOR THE THIRD CIRCUIT

—_—

Burr A. BRavERMAN

DANIEL STARK

CoLe, ZYtstra & Raywip

2011 Eye Street, N.W.

Washington, D.C. 20006

A. Wrmu1aAM Ro.r

P.O. Box 1919

Detroit, Michigan 48288

Attorneys for Petitioner

Chrysler Corporation

LK —

Paess or Braon S. ADAMS PRINTING, INC., WASHINGTON, D. C.

TABLE OF CONTENTS

Page

Cpemess BERGW cccccccccvcccccccesecccecovcceeees 1

SUMMIT cccccccccccccccescccccvcscccccoecceses 1

QUESTIONS PRBGBUTED 2. cccccccccccccccccccccccccons 2

STATUTES AND REGULATIONS ........0seeeeeecceeeeees 2

STATEMENT OF THE CaBB ......... cece ccceeeeceeeees 3

Reasons FoR GRANTING THE PETITION ..........+.+0++ 9

COMGIAMION co cccccccccccccccccccccccccsecccecocece 28

APUUMBEE B cccccccccccccccccccccccccccccocccccces la

APUGMBEE Bo cccccccccccccccccccccccccccceccoovees 43a

ASTUMBEE © cccccccccccccccvcccssccccccccocccooses 58a

APUBMBER D occccccccccccccccccccccccccccccseccece 60a

ii CITATIONS

Cass: Page

Avco Corp. v. Aero Lodge 735, 390 U.S. 557 (1968) ... 13

Bristol-Myers Co, v. FTC, 424 F.2d 935 Ooeir)

cert. denied, 400 U.S. 824 (1970) ............0... ;

Charles River Park ‘‘A’’, Inc. v. HUD, 519 F.2d 935

I ei kc tc cud 14, 17, 18, 20, 21, 23

Cort v. Ash, 422 U.S. 66 (1975) ........ccccccccccce 23

Dickerson v. United States Steel Corp., 12 E.P.D.

‘ § 11095 (B.DPa 1676) er Tuk Anon 11

nvironmen rotection . Mi

«iF etacaengeeatia an renctingane 11

General Dynamics Corp. v. Dunlop, 427 F.Supp. 578

9D (8th

DU tideehatenlaliiebetdésnsitesedesencssesi 17, 21

Hughes Aircraft v. Schlesinger, 384 F.Supp. 292 (C.D.

Cal. 1974), appeal pending, No. 75-1064 (9th Cir.) 13, 21

McCoy v. Weinberger, 386 F.Supp. 504 (W.D.Ky.

Metin s sApRssrstbsnstecesosnsss sores aisecs ces os 14

i arks and Conservation Assn. v. Kleppe, 547

F.2d 673 (D.C.Cir. 1976) OE eee 18

National Parks and Conservation Association v. Mor-

me hy 498 Sa: y- scopy tl aie leitd te beatae 22

cooper Grain Company v. Kissinger, 385 F.Supp.

769 (D.D.C. 1974) iin ceteseaes a ra Pe hog 14

pase nag > v. whee 5 whe 627 (5th Cir. 1976) .... 14

y v. Carnegie- on University, 12 FEP

101 (W.D.Pa. 1975) ........... ‘ OPS ae -_ : 11

Sears, Roebuck and Co. v. GSA, 553 F.2d 1378 (D.C.

Cir. 1977), cert. den. —— U.S. —— (1977) ....Passim

ye Roebuck = a v. ey ee U.S. 132 (1975) 11

eregger v. Department of the Interior, 424 F. :

847 (D.Idaho 1976) ... ’ oi kéatanehinnsess Supp, 21

The Prudential Insurance Company of America v. National

Organization for Women, No. 76-1052, cert. de-

nied, —— U.S, —, 53 L.Bd.2d 238 (1977). .11, 13, 20

Westinghouse Electric Corp. v. Schlesinger, 542 F.2d

1190 (4th Cir. 1976), cert. denied sub nom. Brown

v. Westinghouse Electric Corp., —— U.S. ——, 53

I Ds vnc c o¢cceduesesecteveses Passim

Citations Continued iii

STaTUTES AND REGULATIONS: Page

Administrative Procedure Act, 5 U.S.C. 701 et seq. 8,

20, 21, 23

BS WS, Fe cccccevccccccosesecevessseses 8, 21

6 U.B.C. 706 (B)(A) ..cccccccccccccccscces 8

Freedom of Information Act:

Bt 2,5

5 U.S.C. 568(a)(4)(G) ...ccecccccccccccees 12

§ U.S.C. S6B(b)(1) 2... ccccvvcccccccccveees 15

5 UB.C. GEB)(S) .cccvccccccccccccces 7, 20, 21

5 U.S.C. 562(b)(4) 2... cccccccccccevvess Passim

6 U.B.C. S52(D)(G) .. nc cvccccccccccccvcess 15

6 U.S.C. S6B(D)(6) on. cccccccccccccvcccces 15

SB WR, Be is ccccvteetctcunsucecsceves 2, 8, 17, 18, 20

GB U.S.C. 1964(1) ..ccccccccccccccccccccccvecs 2

GB UGC. 18Bila) ..ccccceccccccccccccscecceces 7

16 UB... 1908 .nccccccccccccccccccvcccccees Passim

99 C.F.B. 70.21(a) ....ccccccccccccccvcccescess 3

41 O.F.RB. Part GO-1 ....cccccccccccccccccscens 3

Serr TT re 3

GEDED .nccccccccvcccvessvecescevssecones 3

41 C.F.R. Part 60-2 .....cccccccscccccsevvcens 3

41 C.F.R. Part 60-40 .......c cece cceeeeeeees 2,5, 19

§ G0-40.2(8) onc. cceecceeeeeeeceeeeeeereees 5

§ 60-40.2(D)(1) ccc ceeccceeeeeeeeeeeeeeeee 5

AT.) OF Se 5

§ G0-40.4(d) oc ccc eceeeeeeeeceeeeeeeeenees 6

41 O.F.R. Part 60-60 ..... cc cee ccc ee ee eeeeeees 3

MISCELLANEOUS:

Executive Order 11246, 30 Fed. Reg. 12319, as amended

by Executive Order 11375, 32 Fed. Reg. 14303

(3 C.F.R. 169) 0... cece cece cece ee eeeeeeeeenees 3

H. Rep. No. 1497, 89th Cong., 2d Sess. 12 (1966) ...... 9

Lardner, Use, Abuse of Freedom of Information Act,

Washington Post, July 27, 1976 .....+-.+++ee0es 16

iv Citations Continued

Page

Tintaeen tanita.

Rule 19(b) of the Rules of the Supreme Court ....... 13

S.Rep. No. 813, 89th Cong., Ist Sess. 3 (1965) ....... 9

Be GE, EE, GD COU) 6 ccccccccccccccccccccees 18

IN THE

Supreme Court of the United States

OctToBER TERM, 1977

No.

CHRYSLER CORPORATION, Petitioner,

Vv.

HaroLtD Brown, ET AL., Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNTIED STATES COURT OF

APPEALS FOR THE THIRD CIRCUIT

Chrysler Corporatio’. respectfully petitions this

Court to issue a writ of certiorari to review the judg-

ment of the United States Court of Appeals for the

Third Circuit.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra,

pp. la-42a) is not yet officially reported. The opinion

of the district court (App. B, infra, pp. 43a-57a) is

reported at 412 F.Supp. 171.

JURISDICTION

The judgment of the court of appeals (App. C, in-

fra, pp. 58a-59a) was entered on September 26, 1977.

The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1).

QUESTIONS PRESENTED

1. Whether Exemption 4 of the Freedom of Infor-

mation Act, 5 U.S.C. § 552(b) (4), mandates that pri-

vate, confidential information which falls within that

exemption not be publicly disclosed.

2. Whether agency regulations promulgated pursu-

ant to 5 U.S.C. § 301 constitute “authorization by

law” within the meaning of 18 U.S.C. § 1905 for dis-

closure of private, confidential business information.

3. Whether a person who has supplied to a govern-

ment agency private, confidential information which

assertedly is exempt from disclosure under Exemp-

tion 4 of the Freedom of Information Act, 5 U.S.C.

§ 552(b) (4), or whose disclosure assertedly would vio-

late 18 U.S.©. § 1905, is entitled to a trial de novo in a

suit to prevent disclosure of that information by the

Government.

STATUTES AND REGULATIONS

The relevant provisions of the Freedom of Infor-

mation Act, 5 U.S.C. § 552, as amended, 18 U.S.C.

§ 1905, 5 U.S.C. § 301, and the pertinent regulations

of the Office of Federal Contract Compliance Pro-

grams, 41 C.F.R. Part 60-40, are set forth as App. D,

infra, pp. 62a-65a.

STATEMENT OF THE CASE’

1. As a government contractor, Chrysler Corpora-

tion (“Petitioner’’) is required to comply with Execu-

tive Orders 11246 and 11375? (‘‘Executive Orders”)

and with various implementing regulations * which

have been promulgated thereunder by the Department

of Labor’s Office of Federal Contract Compliance

Programs (‘“‘OFCCP”). These orders and regulations

require Petitioner and other government contractors

to, inter alia, prepare and submit to Respondents *

a variety of reports and information, including writ-

ten affirmative action programs (“AAP’s”) and equal

employment opportunity reports (‘‘EEO-1’s’’), for

its entire corporate domestic operations and sepa-

rately for each of its individual domestic facilities.

‘ The statement of facts, which are not in dispute, is based on the

opinion of the court below and the joint appendix in the court of

appeals.

230 Fed. Reg. 12319, 32 Fed. Reg. 14303 (1967), 3 C.F.R. 169-

177 (1974).

$41 C.F.R. Parts 60-1, 60-2 and 60-60.

* Respondents are Harold Brown, Secretary of Defense; Lt. Gen.

W. W. Vaughan, Commander of the Defense Logistics Agency

(formerly, Defense Supply Agency) of the Department of Defense

(‘‘DSA’’); F. Ray Marshall, Secretary of Labor; and Weldon J.

Rougeau, Director of OFCCP. The Secretary of Labor is responsi-

ble for administering the equal employment opportunity program

established by the Executive Orders. Executive Order 11246, Sec.

201. The Secretary discharges his responsibilities through OFCCP

and has designated the Defense Supply Agency as one of the sev-

eral ‘‘compliance agencies’’ responsible for monitoring government

contractors’ compliance with the Executive Orders, investigating

charges made against contractors, and imposing sanctions upon

contractors who do not comply with the Executive Orders. See

Executive Order 11246, Subpart C; 41 C.F.R. §§ 60-1.2, 60-1.6;

OFCCP Compliance Manual, § 2-202.

Under the Executive Orders and OFCCP’s regula-

tions, Petitioner is required to include in each of the

nearly one hundred AAP’s which it prepares annu-

ally highly detailed information of both a statistical

and narrative nature concerning its total, and minor-

ity and female, employment for each department and

subdepartment which exists at the particular facility

and, within each such department, for each job classi-

fication. Such information includes, inter alia, data on

Staffing patterns, pay-scales, actual and expected

shifts in employment and related employment mat-

ters; goals, timetables and future projections for the

employment of minorities and females; and critical

self-analyses where Petitioner believes it has not met

its obligations under the Orders and regulations. 41

C.F.R. §§ 60-1.40, 2.11 and 2.12. The AAP’s specific-

ally at issue below were, respectively, 175 and 257

pages in length.

The EEO-1 reports which Petitioner is also re-

quired to furnish to Respondents are prepared on the

Government’s Standard Form 100. The EEO-1’s con-

tain statistical information with respect to the total

number, and the number of minority and female, per-

sons employed by Petitioner in nine specified job

categories.

To enforce the Executive Orders, Respondents con-

duct “‘compliance reviews” and “complaint investiga-

tions” to determine whether a contractor is in com-

pliance with, or in violation of, the Orders and

OFCCP’s regulations. At the conclusion of these re-

views and investigations, Respondents prepare either

a ‘compliance review report”’ (“‘CRR”’) or ‘complaint

)

investigation report” (‘‘CIR’’) which describes and

discusses the documents and information submitted to

Respondents by the contractor, analyzes the con-

tractor in light of the Orders and regulations, and

recommends corrective measures which the contractor

should be required to implement. The reports may 1n-

corporate, in whole or in part, AAP’s, EEO-1’s or

supporting documents.

The Secretary of Labor has promulgated regula-

tions providing for public disclosure of information

from records of OFCCP and its compliance agencies.

41 C.F.R. Part 60-40. (App. D. infra, pp. 62a-65a).

The regulations provide generally that “[u]pon the

request of any person * * * records shall be made

available for inspection and copying, notwithstanding

the applicability of the exemption from mandatory

disclosure [under the Freedom of Information Act

(“FOIA”), 5 U.S.C. § 552], if it is determined that

the requested inspection and copying furthers the

public interest and does not impede any of the func-

tions of the OFCC[P] or the Compliance Agencies ex-

cept in the case of records disclosure of which is pro-

hibited by law.’’ 41 C.F.R. § 60-40.2(a). In additien,

the regulations specifically provide that, upon request,

‘©* * * TEEO-1 reports] which [are] submitted by

contractors to the OFCC[P] [or] a compliance

agency * * * shall be disclosed’’ (41 C.F.R. § 60-40.4)

and that affirmative action programs, subject to- lim-

ited exceptions (41 C.F.R. § 60-40.3), ‘‘must be dis-

closed.’’ 41 C.F.R. § 60-40.2(b) (1).

2. This action arose when DSA notified Petitioner

that DSA had received requests under the FOIA * for

*The FOIA requires agencies to disclose upon request any docu-

disclosure of affirmative action programs, EEO-1 re-

ports, CRR’s and CIR’s for two of Petitioner’s fa-

cilities. To the extent posible within the brief ten-day

period allowed by Respondents, Petitioner objected

to the proposed disclosure of the documents asserting,

inter alia, that the AAP’s and EEO-1’s were exempt

from disclosure under exemptions to the Freedom of

Information Act and under OFCCP’s rules, and that

disclosure would violate 18 U.S.C. § 1905.°

Thereafter, DSA notified Petitioner that Respond-

ents had determined that the documents at issue were

subject to disclosure virtually in their entirety; and

that Petitioner would not be furnished with a copy of

the CIR or CRR prior to disciosure. In addition, Re-

spondents stated that, because they were required by

the FOIA to make a substantive decision on release

of these documents within ten working days of receipt

of the request, they would not await the result of any

administrative appeal by Petitioner of Respondents’

disclosure decision under the provisions of 41 C.F.R.

§ 60-60.4(d).

Faced with the threatened release of the documents,

Petitioner commenced this action seeking to enjoin

Respondents from publicly disclosing the documents

and further seeking a declaratory judgment that the

public disclosure by Respondents of any other such

ment in their files unless the document falls within one of nine

specifically exempted categories. See App. D, infra, p. 60a.

* Petitioner also requested that Respondents furnish Petitioner

with copies of the CRR and CIR which Respondents proposed to

release—which Petitioner had never seen—so that Petitioner might

be able to determine what parts of the reports were confidential and

to intelligently present its claim of confidentiality.

documents for any of Petitioner’s facilities was con-

trary to, inter alia, Exemptions 3 and 4 of the Free-

dom of Information Act, 5 U.S.C. §552(b)(3) and

(4), and 18 U.S.C. § 1905. The district court con-

ducted a trial de novo during which both Petitioner

and Respondents presented the testimony of ex-

pert witnesses and others relating to the nature of

information contained in the contested documents, the

uses to which such information could be put by com-

petitors of Petitioner, and the adverse consequences

which would be caused by disclosure.

On April 20, 1976, the district court issued its opin-

ion. Appendix B, infra, pp. 43a-57a. The district

court held that it had subject matter jurisdiction un-

der 28 U.S.C. § 1331(a); that portions of the docu-

ments consisted of confidential commercial informa-

tion whose disclosure would cause substantial compe-

titive injury to Petitioner;’ that such information is

exempt from mandatory disclosure under Exemption

4 of the FOIA, 5 U.S.C. § 552(b) (4); and that dis-

closure of that information would violate 18 U.S.C.

§ 1905 and 29 C.F.R. § 70.21(a). On this basis, the

district court concluded that disclosure of those por-

tions of the AAP’s was contrary to law and should be

’ The district court found that ‘‘the testimony clearly shows that

the manning tables are confidential * * * [and that] the release of

the manning tables could cause Plaintiff substantial competitive

harm in several ways. First, the possession of such a document

could aid another corporation in its practice of employee raiding,

@ practice not unknown in the automobile industry. * * * Second,

the possession of a manning table would permit a competitor to

determine the exact use of Plaintiff’s labor force. and thus the

technology being applied by Plaintiff * * * [which information]

would be useful in comparative analysis and would alert competitors

to areas worth their managerial time. * * * Third, the possession

of manning tables . . . would allow Plaintiff’s competitors to reduce

their risk-taking.’’ App. B, infra, p. 51a.

enjoined pursuant to 5 U.S.C. § 706(2)(A). The court

concluded, however, that other portions of the docu-

ments were not immune from public disclosure, and

rejected Petitioner’s request for declaratory relief.

A supplemental memorandum and final order were

filed on June 17, 1976. App. E, infra, pp. 66a-67a.

On cross-appeals by the parties the court of appeals

reversed. App. A, in/ra, pp. la-42a. The court held,

inter alia, that a cause of action to enjoin disclosure

of documents which assertedly will violate FOIA Ex-

emption 4 and 18 U.S.C. § 1905 exists only under

§ 706 of the Administrative Procedure Act (“APA’’),

5 U.S.C. § 706, and that none can be implied under

Exemption 4 or § 1905. The court also held that gov-

ernment agencies have discretion to disclose confiden-

tial, private documents notwithstanding the fact that

the documents fall within an FOIA exemption, and that

disclosure of information pursuant to agency regula-

tions promulgated under 5 U.S.C. § 301 was “author-

ized by law’’ within the meaning of 18 U.S.C. § 1905.

Finally, the court held that an action to enjoin dis-

closure of documents was not to be conducted on a

de novo basis, as the district court had, but rather

that review should be limited to only a determination,

on the basis of the agency record, of whether the

agency’s decision to disclose was arbitrary, capricious

or an abuse of discretion. Finding that the agency rec-

ord was inadequate, the court remanded the case with

instructions that further proceedings be conducted be-

fore the agency.

REASONS FOR GRANTING THE PETITION

Businesses such as Petitioner are asked or compelled

to submit vast amounts of confidential, proprietary in-

formation to federal government agencies on a continu-

ing basis. In the hands of the Government, this infor-

mation enables federal agencies to effectively monitor

the economy and to determine industry’s compliance

with diverse regulatory programs. Indiscriminately

released, the same information can reveal intimate as-

pects of a company’s operations and can result in se-

vere competitive or other injury to the business. Con-

sequently, many, if not most, businesses take careful

precautions designed to guard against the release of

such information and, apart from submission to the

Government for limited regulatory purposes, generally

do not publicly disclose much of the information which

they furnish to federal agencies.

Traditionally, the confidentiality of such private bus-

iness information has been respected by the Govern-

ment. However, under recent interpretations of the

Freedom of Information Act, the tables of business

privacy have turned to the point where, today, busi-

nesses which submit confidential information to gov-

ernment agencies have no assurance that the confiden-

tiality of that information will be respected. This: re-

sult neither was intended nor is appropriate under the

Act.

Although the FOIA was intended to open the pro-

cesses of government to public scrutiny,’ Congress

sought to balance the Act’s disclosure philosophy with

the ‘‘equally important rights of privacy with respect

to certain information in government files.’’* While

*S.Rep.No, 813, 89th Cong., Ist Sess. 3 (1965) (‘‘S.Rep.No.

813°"); H.Rep.No. 1497, 89th Cong., 2d Sess., 12 (1966). See

Bristol-Myers Co. v. FTC, 424 F.2d 935, 938 (D.C.Cir.), cert.

denied, 400 U.S, 824 (1970).

* S.Rep.No, 813, at 3.

CSET PIT (eae

each of the exemptions to the Act reflects this concern

over rights of privacy to a varying degree, it was of

particular significance to Congress in fashioning Ex-

emption 4, Similarly, in enacting Exemption 3, Con-

gress was specifically concerned with preserving the

protection which previously had been afforded to con-

fidential information through preexisting nondisclo-

sure statutes.” Unfortunately, since 1965, courts have

experienced increasing difficulty in accommodating

these competing interests and aims of the Act.

The instant case is representative of a rapidly grow-

ing number of ‘‘reverse FOIA’’ actions which have

been brought by private parties to enjoin federal gov-

ernment agencies from disclosing, pursuant to the Free-

dom of Information Act, confidential information which

those parties have furnished to the Government. As

the court below recognized,

“(t]he case presents several important issues

about agency management of [confidential] .. .

information, about agency discretion to disclose

information . .. and about the availability of rem-

edies for the prevention of disclosure.’’ App. A,

infra, p. 21a.

These issues are of broad public significance since they

affect the disclosability not only of employment infor-

mation provided to the Government by tens of thou-

sands of government contractors such as Petitioner,

but also of an endless array of other commercial and

financial materials of a confidential nature which busi-

nesses and individuals are asked or compelled to sub-

mit to the many hundreds of federal government agen-

cies which are subject to the FOIA. Those materials,

* FAA Administrator v. Robertson, 422 U.S, 255, 263-5 (1975).

although long maintained in well deserved confidence

by the Government, now are, under the construction

of the FOIA urged by the Respondents and endorsed

by the court below, threatened to be disclosed to anyone

from the well intentioned member of the public to the

unscrupulous competitor. Such disclosure portends se-

rious adverse consequences not only to the persons who

have furnished the information to the Government, but

also to the Government itself whose ability to acquire

information on a voluntary basis from the private sec-

tor for implementation of regulatory programs will be

impaired if the confidentiality with which the infor-

mation was initially submitted is not respected.”

While this Court has previously reviewed FOIA

cases involving conflicts between administrative agen-

cies and parties seeking disclosure of documents,” the

Court has as of yet declined to address the equally im-

portant clash between those interests and the right of

businesses and other persons to continued confiden-

tiality of information which they submit to federal

agencies. Although questions similar to those presented

by this case were brought before this Court on at least

three occasions during the last term, ertiorari was de-

nied in each instance.”

1 See, Dickerson v. United States Steel Corp., 12 E.P.D. § 11095

(E.D.Pa. 1976); Sanday v. Carnegie-Mellon University, 12 FEP

Cases 101 (W.D.Pa. 1975).

8 See, e.g., Environmental Protection Agency v. Mink, 410 U.S.

73 (1973); FAA Administrator v. Robertson, supra; Sears, Roe-

buck and Co. v. NLRB, 421 U.S. 132 (1975).

** Brown v. Westinghouse Electric Corp., No. 76-1192, cert. de-

nied, —— U.S. ——, 53 L.Ed.2d 239 (1977) ; The Prudential Insur-

ance Company of America v. National Organization for Women,

No, 76-1052, cert. denied, ——- U.S, ——, 53 L.Ed.2d 238 (1977) ;

The time for review of these issues by this Court is

now at hand. The opinion of the court below is dia-

metrically contrary to the decisions of either the Fourth

or District of Columbia Circuit on each of the funda-

mental reverse FOIA issues presented by this peti-

tion.* Due to the uncertainty caused by these conflict-

ing circuit court decisions,” persons who must decide

whether to furnish confidential information to federal

agencies have no means of knowing whether the confi-

dentiality of such information will be preserved, or

whether the information will be disclosed under the

FOTIA; agencies and their employees have no certain

standards by which to make disclosure decisions; “

Sears, Roebuck and Co. v. GSA, No, 76-1642, cert. denied, ——

U.S. ——, 54 L.Ed.2d 84 (1977).

** Thus, in contrast to those cases in which certiorari was denied

(see n. 13, supra), there is no longer a need for further development

of the law at the circuit court level.

** Disagreement exists not only among, but even within, the cir-

cuits on some of the issues presented by this petition. Compare,

e.g., Crown Central Petroleum Corp. v. Kleppe, 14 FEP Cases 49

(D.Md. 1976), with Westinghouse Electric Corp, v. Schlesinger,

supra.

** Agency employees who must make disclosure decisions are

faced, on the one hand, with the criminal sanctions of 18 U.S.C.

§ 1905 should they erroneously decide to disclose information and,

on the other hand, with the contempt sanctions of 5 U.S.C. § 552(a)

(4)(G) should they mistakenly refuse to disclose information in

response to an FOIA request. Moreover, agency officials have been

directed by some courts to perform what other courts hold to be

criminal acts. While decision makers will always face some uncer-

tainty as to the correctness of their decisions, the conflicting circuit

court decisions, compounded by the liberal venue rules which govern

the choice of the circuit within which such decisions will be re-

viewed, make for a chaotic environment in which reasoned decision

making by government officials on disputed disclosure requests may

be well nigh impossible.

and federal courts are left aimlessly adrift in deciding

not only the substantive issues of reverse FOIA cases

but, also, even in determining fundamental matters

such as the proper scope of judicial inquiry in an action

to enjoin disclosure. Absent guidance by this Court,

whicn has been expressly requested by some courts”

and which is obviously needed by others,” courts and

federal agencies alike will be forced to continue to re-

solve sensitive disclosure questions on the basis of the

diametrically contrary judicial precedent which now

exists,

For these reasons, and those presented below, Peti-

tioner submits that certiorari should be granted.”

1. Respondents asserted below that they had dis-

eretion to disclose Petitioner’s documents notwith-

standing the district court’s finding that the documents

fell within Exemption 4 of the FOIA™ because they

*T See, e.g., Sears, Roebuck and Co. v, GSA, 553 F.2d 1378, 1385

(D.C.Cir. 1977), where the D.C, Circuit expressly noted the absence

of, and need for, ‘‘decisive new guidance by the Supreme Court’’

on some of the very same questions which are presented by this

petition.

* The uncertainty surrounding these issues is reflected by the

action of the U.S. Court of Appeals for the Ninth Circuit in Hughes

Aircraft v. Schlesinger, No. 75-1064, a case involving many of the

same issues that are presented here. There, on April 14, 1977, one

year after oral argument, the Ninth Circuit withdrew the case from

submission pending action by this Court on the petitions filed in

Westinghouse and Prudential. Despite this Court’s denial of cer-

tiorari in those cases in May 1977, the Hughes case remains un-

decided.

* See Rule 19(b) of the Rules of the Supreme Court; and Avco

Corp. v. Aero Lodge 735, 390 U.S. 557, 559 (1968).

*° Exemption 4 provides that the disclosure mandate of the FOIA

‘‘does not apply to matters that are .. . commercial or financial

were confidential and would cause substantial competi-

tive injury to Petitioner if disclosed.”

The court below adopted Respondents’ position in

deciding this case. Although it recognized that, in en-

acting the FOIA, Congress was concerned that “dis-

closure of certain information might injure interests

in privacy and confidentiality which may be as im-

portant as the public’s right to general access to

agency information,’’ the court nonetheless rejected

the notion that ‘‘Congress in the FOIA intended...

that the exemptions make nondisclosure mandatory

. .” and held that government agencies have broad

discretion to disclose exempt information. App. A,

infra, pp. 23a-25a. Two other circuit courts have reached

a similar conclusion.”

As the court of appeals observed (App. A, infra, p.

23a), its holding is contrary to that of the Fourth

Circuit in Westinghouse Electric Corp. v. Schlesinger,

542 F.2d 1190 (4th Cir. 1976), cert. denied sub nom.

Brown v. Westinghouse Electric Corp., supra.” There,

the Fourth Circuit observed that

“(t)he protection from disclosure given such in-

formation by Exemption 4 was stated in the legis-

lative hearings to have been granted to such in-

information obtained from a person and privileged or confidential

..»’’ 5 U.S.C. § 552(b) (4) ; see App. D. infra, p. 61a.

** See n. 7, supra. This finding was not challenged by Respondents

on appeal.

* Charles River Park ‘‘A’’, Inc. v. HUD, 519 F.2d 935 (D.C.Cir.

1975) ; Pennzoil Co. v. FPC, 534 F.2d 627 (5th Cir. 1976).

** See also McCoy v. Weinberger, 386 F.Supp. 564 (W.D.Ky.

1974) ; Neal-Cooper Grain Company v. Kissinger, 385 F.Supp. 769

(D.D.C, 1974), +5

formation ‘not only as a matter of fairness, but as

a matter of right...’ * * * [T]he Act was in-

tended, to use the language of the Senate report,

to set ‘up workable standards for what records

should and should not be open to public inspec-

tion.’ And one of the sections of the Act, which

declared what private information acquired by

the government ‘should not be open to public dis-

closure’ was Exemption 4. * * * This provision in

the Act was more than a simple exemption; it

represented an express affirmation of a legislative

policy favoring confidentiality of private infor-

mation furnished government agencies, the dis-

closure of which might be harmful to private

interests. It was manifestly intended to protect

that private interest.’’ 542 F.2d at 1211 (footnotes

omitted) (emphasis in original).

On this basis, the court concluded that Exemption 4

confers upon a supplier of private, confidential com-

mercial information the right to prevent the disclo-

sure of information which falls within Exemption 4.

There is a fundamental conflict between the decision

of the court below (and those of the Fifth and D.C.

Circuits), on the one hand, and that of the Fourth

Circuit, on the other, which this Court should resolve.

That conflict can be resolved by recognizing the in-

herent difference between those FOIA exemptions

which obviously were intended to protect agenctes

from mandatory disclosure of agency information

(e.g., Exemptions 1 and 5), and those exemptions

which clearly were fashioned to protect private, non-

governmental interests (e.g., Exemptions 4 and 6).

While the Government should and does have the

power to waive the protection from mandatory dis-

closure of agency information afforded by the first

category of exemptions, the agency does not and

should not have the power to waive the protection

which Congress intended to bestow on private parties

through the second. For, although Congress intended

that disclosure of agency documents which fall within

the FOIA exemptions would ordinarily be within the

agency’s discretion, it intended to accord greater pro-

tection to private confidential information which pri-

vate individuals and businesses furnish to the Govern-

ment, the disciosure of which would be harmful to

private interests.”

Petitioner submits that only by recognizing the dis-

tinction drawn by Congress between private and

agency records can the FOIA’s basic disclosure policy

and the equally important congressional policy under-

lying the exemptions both be given their intended ef-

fect. The Fourth Circuit, in contrast to the decisions

of the court below ™ and the D.C. and Fifth Circuits,

* The FOIA ‘‘was not enacted for the purpose of enabling the

public to obtain information about individuals and corporations,

about what those individuals or corporations are doing, or about

what their activities and policies are * ® *;”’ rather, ‘‘[t]he pur-

pose of the .. . Act was to protect the people’s right to obtain

information about their government, to know what their government

is doing, and to obtain information about government activities and

policies.’’ Westinghouse Electric Corp. v. Schlesinger, 542 F.2d at

1210 n. 64 (emphasis added). Curiously, however, most of the

documents whose threatened disclosure has given rise to reverse

FOIA actions have concerned the actions, plans and policies of

private parties, not those of the government, and have been sought

either by corporations or their agents seeking information about

their competiivis or by parties in Ltigation who seek to bypass the

Federal Rules of Civil Procedure. Sec Lardner, Use, Abuse of Free-

dom of Information Act, Washington Post, July 27, 1976, at A 4.

* In fact, the court helow conceded ‘‘that disclosure of submitter

information is qualitatively different ‘rom disclosure of data directly

relating to government operations, and that the interest in privacy

correctly drew this distinction in holding that, regard-

less of the Government’s discretion to disclose exempt

agency documents, Exemption 4 mandates that pr-

vate documents which fall within the exemption not

be disclosed.

2. Section 1905 of Title 18 of the U.S. Code is a

criminal statute which makes it unlawful for any gov-

ernment official or employee, “to any extent not au-

thorized by law’’, to disclose information which con-

cerns or relates ‘‘to the trade secrets, processes, opera-

tions, style of work, or apparatus, or to the identity,

confidential statistical data, amount or source of any

income, profits, losses, or expenditures of any .. . cor-

poration .. .’’ * App. D, infra, p. 61a.

The court below held that 5 U.S.C. § 301”

‘is a separate source of agency authority for the

promulgation of disclosure regulations, and dis-

closures pursuant to such regulations are author-

appears stronger with respect to the former than the latter.’’ App.

A, infra, p. 22a. Yet, the court paid little heed to this qualitative

difference in ruling that Respondents may disclose private informa-

tion which falls within Exemption 4.

** Numerous federal courts have held that an agency may be

enjoined from disclosing information in violation of 18 U.S.C.

§ 1905. See, e.g., Westinghouse Electric Corp. v. Schiesinger, supra;

General Dynamics Corp. v. Dunlop, 427 F.Supp. 578 (E.D.Mo.

1976), appeal pending, No. 77-1192 (8th Cir.) ; Charles River Park

““A’’ Ine. v. HUD, supra.

** See App. D, infra, pp. 61a-62a. 5 U.S.C. § 301 provides in per-

tinent part:

‘‘The head of an executive department or military department

may prescribe regulations for . . . the custody, use, and preser-

vation of its records, papers, and property. This section does

not authorize withholding information from the publie or

limiting the availability of records to the public.’’

ized by law and immune from the prohibitions of

§ 1905. Since the OFCC[P] disclosure regulations

are valid under § 301, all disclosures pursuant to

those regulations are authorized by law and there-

fore not subject to § 1905.” App. A, infra, 29a.

The holding of the court below is both incorrect

and, as that court acknowledged (App. A, infra, p.

29a), in conflict with the decision of the D.C. Circuit

in Charles River Park “A’’, Inc. v. H.U.D., supra.”

There, the D.C. Circuit examined the very same legis-

lative history of the 1958 amendment to § 301” upon

which the court below relied, yet concluded, contrary

to the Third Circuit, that “Section 301 does not au-

thorize regulations limiting the scope of section 1905.”

519 F.2d at 942-3.

The divergent interpretations by these circuit

courts of the same statute and underlying legislative

history warrants this Court’s review, particularly in

light of the unsettling consequences which judicial un-

certainty on this question must have within the Gov-

ernment. Section 1905 is a criminal provision which

imposes penalties upon government employees who

disclose certain types of documents “to any extent not

authorized by law.” Many government officials must

routinely decide whether or not to disclose documents

pursuant to agency disclosure regulations which have

been promulgated pursuant to 5 U.S.C. § 301. Yet, as

** See also National Parks and Conservation Assn. v. Kleppe, 547

F.2d 673 (D.C.Cir. 1976); and Sears, Roebuck and Co. v. GSA,

supra.

*° The sponsor of the amendment expressly stated that it did ‘‘not

affect the confidential status of information given to the government

and carefully detailed in Title 18, United States Code, Section

1905.’’ 104 Cong. Ree. 6550 (1958).

a result of the conflict among the circuits created by

the decision of the court below, these government of-

ficials are now left without reliable guidance as to

whether those regulations provide the authorization

for disclosure necessary under 18 U.S.C. § 1905.”

Review of the decision below is also warranted in

light of the fact that, under the position taken by the

Third Circuit, agency officials such as Respondents who

are potential defendants in a criminal action brought

under § 1905 for the unlawful disclosure of documents

are free to define or redefine the scope of illegal conduct

under that statute merely by amending or promulgat-

ing agency regulations which authorize disclosure.”

Thereby, these potential defendants can relieve them-

selves of criminal liability for acts which, absent the

slender thread of their own agency regulations, would

violate § 1905." Such a result not only violates § 1905

but also contravenes public policy by allowing govern-

ment officials who violate 18 U.S.C. § 1905 to exculpate

themselves merely by promulgating broad agency dis-

closure regulations in justification of their conduct.”

*° See n. 16, supra.

** Indeed, in the instant case the disclosure regulations (41 C.F.R.

Part 60-40) which were found by the court below to render § 1905

inoperative were promulgated by Respondents without prior notice

or opportunity for public comment.

*? This possibility was foreseen by the Fourth Circuit in Westing-

house Electric Corp. v. Schlesinger: ‘‘It would be an incredible rule

that a legislative prohibition such as § 1905, fixing limits on execu-

tive action ..., is to be construed and applied by the executive

.. . This would be tantamount to committing the execution of such

law to ‘the self-restraint of the executive branch’ itself and making

the executive’s ipse dixit final.’’ 542 F.2d at 1215 (citations omit-

ted).

** Should this Court decide that agency disclosure regulations

8 SES SE NON

3. Finally, this Court should declare whether in an

action to enjoin disclosure of documents which assert-

edly will contravene FOIA Exemption 4 and 18 U.S.C.

§ 1905, the plaintiff is entitled to a trial de novo or, as

the court below held, to only a more limited form of

judicial review under the Administrative Procedure

Act. The court below, finding that a cause of action

could not be implied under 18 U.S.C. § 1905 or Exemp-

tion 4, held that a submitter’s cause of action in a re-

promulgated under 5 U.S.C. § 301 do not constitute ‘‘authorization

by law’’ within the meaning of 18 U.S.C. § 1905, Petitioner submits

that the Court should also consider the related question of whether

18 U.S.C. § 1905 is a specific statutory exemption from disclosure

within the meaning of Exemption 3 of the FOTIA, 5 U.S.C. § 552(b)

(3), and therefore whether documents whose disclosure would vio-

late § 1905 are also exempt from mandatory disclosure under the

FOIA, At present, the circuit courts are divided on this question.

Compare Westinghouse Electric Corp. v. Schlesinger, supra (hold-

ing that § 1905 is an Exemption 3 statute) with Charles River

Park ‘‘A’’, Ine. v. HUD, supra (holding that § 1905 is not an

Exemption 3 statute). Indeed, the D.C. Circuit, in one of its most

recent decisions on the issue, referred to this as the **threshold

question’’ in reverse FOIA cases involving confidential, commercial

information and expressly asked this Court for guidance on the

issue. Sears, Roebuck and Co. v. GSA, 553 F.2d at 1385.

This question has been presented to the Court at least three times

within the past year. See Brief of Respondent United States Steel

Corporation in Support of the Petition, pp. 4-8, in Brown v. West-

inghouse Electric Corp., supra; Petition for Writ of Certiorari, at

pp. 20-27, in The Prudential Insurance Company v. National Or-

ganization for Women, supra; Petition for Writ of Certiorari, pp.

-9, in Sears, Roebuck and Co. v. GSA, supra. However, none of

those cases presented the preliminary question—whether agency

regulations constitute ‘‘authorization by law’’—in the context of

a split among the circuits, thus possibly explaining this Court’s

reluctance to decide the Exemption 3 issue. In contrast, as a result

of the decision of the court below, both issues are now the subject

of sharp disagreement among the circuits, making this case an ap-

propriate vehicle for resolution of this troublesome matter.

verse FOIA case arose only under the APA.” Reciting

that ‘‘[jJudicial review under the APA ordinarily is

limited to a ‘review of the whole (agency) record or

parts of it cited by a party’ [5 U.S.C. § 706 (1970)]”’

(App. A, infra, pp. 36a-37a), the court held that, ab-

sent inter alia a finding that the agency’s factfinding

procedures are inadequate, the scope of judicial review

in reverse FOIA actions was to be limited to a deter-

mination of whether the disclosure decision was arbi-

trary, capricious or an abuse of discretion. App. A,

infra, pp. 36a-39a; see 5 U.S.C. § 706.

The holding of the court below is contrary to the

holdings of numerous other federal circuit and district

courts * which have held that a plaintiff in a reverse

FOIA action is entitled to de novo review of its claims

under 18 U.S.C. § 1905 and FOIA Exemption 4. Thus,

in Charles River Park, the D.C. Circuit observed:

‘fA plaintiff in a suit such as this is obviously en-

titled to no relief if the government could be forced

to disclose the information it wishes to reveal in a

suit under the FOTA. Thus, the district court should

hold a hearing to determine whether the informa-

tion involved here would have been exempt just as

it would if a suit had been brought under the

FOIA to compel disclosure. See 5 U.S.C. § 552(b)

** The court held that Congress did not intend ‘‘that the [FOIA]

exemptions . . . provide the predicate for an implied cause of

action’’ and ‘‘reject[ed] tha proposition that § 1905 would serve

as a predicate for a private tivil cause of action.’’ App. A, infra,

pp. 23a, 30a.

** See, e.g., Charles River Park ‘‘A’’, Inc. v. HUD, supra; Sears,

Roebuck and Co. v. GSA, supra; Westinghouse Electric Corp. v.

Schlesinger, supra; General Dynamics Corp. v. Dunlop, supra;

Sonderegger v. Department of the Interior, 424 F.Supp. 847 (D.

Idaho 1976); Hughes Aircraft v. Schlesinger, 384 F.Supp. 292

(C.D.Cal. 1974), appeal pending, No. 75-1064 (9th Cir.).

(3) ; National Parks and Conservation Association

v. Morton [498 F.2d 765 (D.C.Cir. 1975)]. In

holding this hearing the district court is not re-

. viewing agency action; it is making a threshold

determination whether the plaintiff has any cause

of way at all.”’ 519 F.2d at 940 n.4. (Emphasis

a ,

Similarly, in Westinghouse Electric Corp. v. Schles-

inger, the Fourth Circuit expressed the same view:

‘**Should not the person who was threatened with

harm through a disclosure, which Congress had

indicated clearly is against the public policy as

expressed in the FOIA itself be the proper one to

assert that 7 to protection from disclosure as-

sured him under Exemption four, in an equity ac-

tion in which he can have a de novo trial? The en-

vious competitor or the curious busybody demand-

ing access to that private information has the right

to such a de novo trial. The Act gives it to him.

But is not the same right to be implied, when the

supplier, with a right that Congress gave him ‘not

only as a matter of fairness but as a matter of

right,’ seeks what may be regarded as correlative

relief ?’’ 542 F.2d at 1213.

While some of the courts which have reached this

conclusion have no doubt been influenced by, inter alta,

their view that an implied cause of action exists under

Exemption 4 and 18 U.S.C. § 1905 to enjoin disclosure

of confidential information in contravention of those

statutes,” the conclusion that the reverse FOIA plain-

* See, e.g., Westinghouse Electric Corp. v. Schlesinger, where the

Fourth Circuit held both that ‘‘[t]he FOIA itself . . . confers on

a supplier of private information, an implied right to invoke the

equity jurisdiction to enjoin the disclosure of information within

Exemption 4’’ and that a cause of action may be implied to enjoin

‘*the threat of action by a public officer ‘. . . contrary to a specific

[federal statutory] prohibition’ such as § 1905... .’’ 542 F.2d at

tiff is entitled to a de novo tria! pertains even if review

is predicated solely upon the APA. Thus, even within

the District of Columbia Circuit, where the submitter’s

cause of action in reverse FOIA cases has been found

to arise under the APA, the circuit court has directed

the district courts to conduct a de novo judicial deter-

mination of whether the information is subject to man-

datory disclosure, or exempt from disclosure, under the

FOIA. See Sears, Roebuck and Co. v. GSA, 553 F.2d

at 1381; Charles River Park ‘‘A’’, Inc. v. HUD, 519

F.2d at 940 n. 4; Westinghouse Electric Corp. V.

Schlesinger, 542 F.2d at 1207.

This case presents an excellent opportunity for the

Court to resolve the conflict on this important federal

question. Because the issue is one which pervades all

reverse FOIA actions and which has great practical

significance " to persons who are aggrieved by improper

1209, 1210.

The decisions of the Third and Fourth Circuits are clearly in

conflict on this point. See n. 34, supra. Although the resolution of

this question will not significantly affect the access of submitters

to the courts (since all courts have recognized the existence of some

kind of cause of action), the issue does have substantial bearing on

the scope of proceedings to be conducted in the district courts, i.e.,

whether there is to be a de novo trial. Consequently, should the

Court be of the view that a de novo trial would not be appropriate

in an action which is predicated on the APA, Petitioner submits

that the Court should then consider whether a cause of action can,

as the Fourth Circuit correctly held, be implied under 18 U.S.C.

§ 1905 or Exemption 4 and, if so, whether a de novo trial would be

appropriate in such an action. The exercise of certiorari jurisdiction

on this question would be appropriate since the circuit courts have

applied the decisions of this Court (e.9., Cort v. Ash, 422 U.S. 66

(1975) ) in a conflicting and irreconcilable manner.

** Numerous aspects of the agency disclosure process and the

FOIA itself demonstrate why a de novo judicial determination of

whether the disclosure of information would violate § 1905 or

government disclosure of private, confidential informa-

tion, the Court should not let this opportunity pass by.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

Burt A. BRAVERMAN

DANIEL STARK

CoLe, Zytstra & RaywIipD

2011 Eye Street, N.W.

Washington, D.C. 20006

A. Witu14M Ror

P.O. Box 1919

Detroit, Michigan 48288

Attorneys P sid Petitioner

Chrysler Corporation

Exemption 4 is essential to protect the interests of persons who

furnish confidential information to the Government. First, neither

the FOIA nor most agency regulations require that notice be pro-

vided to persons whose documents are to be disclosed. Second, even

where notice is provided gratuitously, disclosure decisions (which

often involve complex economic and technical questions) are made

within the ten day time limit imposed by the FOIA, a period which

generally is far too brief to permit the submitter of the documents

to object with specificity or the lay agency official to engage in a

thorough examination of the documents, and which renders it

likely if not certain that an adequate agency record will not be

developed. Third, as demonstrated by this case, the FOIA does not

rey» °@ an agency to make findings in support of its decision to

dise’vse and, in fact, virtually no agencies do so, thereby making

meaningful judicial review on the basis of the ‘‘agency record’’

impossible. Finally, as also reflected by this case, the essential right

to an administrative appeal from an adverse initia] disclosure

decision is often illusory because agencies, under compulsion of the

FOIA time limits, must disclose the documents prior to completion

of the appeal. Consequently, a person threatened with disclosure of

confidential documents must be afforded the same de novo judicial

determination of the disclosability of the information which the

FOIA guarantees to persons seeking to compel disclosure.

APPENDIX

APPENDIX A

UNITED STATES COURT OF APPEALS

For tHe Tarp Circuit

Nos. 76-1970 and 76-2238

CHRYSLER CORPORATION

James A. Scuiesincer, Secretary United States Depart-

ment of Defense; Lt. Gen. Watiace Rosrnson, Direc-

tor, Defense Supply Agency; Pump J. Davis, Di-

rector, Office of Federal Contract Compliance, and

Joun Duntop, Secretary United States Department of

Labor

Curyster Corporation, Appellant in No. 76-1970

James A. Scuiesincer, Secretary United States Depart-

ment of Defense; Lr. Gen. Wattace Rostnson, Di-

rector, Defense Supply Agency; Purr J. Davis, Di-

rector, Office of Federal Contract Compliance; and

Joun Dun top, Secretary United States Department of

Labor, Appellants in No. 76-2238

(D.C. Civil Action No. 75-159)

Appgat From tHe Unitep States Disrricr Court ror THE

District or DELAWARE

Argued June 13, 1977

Before Van Dusen, Apams and Gissons, Circuit Judges

Opinion of the Court

(Filed September 26, 1977)

[As amended by order dated October 18, 1977]

Gispons, Circuit Judge

Plaintiff, Chrysler Corporation (Chrysler), appeals and

defendants, federal government officials,’ cross-appeal,

from a final judgment of the district court in an action for

injunctive and declaratory relief aimed at preventing pub-

lie disclosure of certain documents furnished by Chrysler

to federal governmental agencies. The action was origi-

nally prompted by the decision of the defendants to honor

a request by third parties* for public disclosure of the

contested documents under the Freedom of Information

Act (FOIA).’ The district court, after a trial de novo,

permanently enjoined public disclosure of certain portions

of the contested documents, but denied the full range of

injunctive relief requested by Chrysler, and also denied

its request for a declaratory judgment that any future dis-

closure of similar documents would violate federal law.

Chrysler appeals from the denial of the full declaratory

and injunctive relief it requested. The federal government

defendants in their cross-appeal originally contended (1)

* James R. Schlesinger, Secretary, United States Department of

Defense; Lt. Gen. Wallace Robinson, Director, Defense Supply

Agency ; Philip J. Davis, Director, Office of Federal Contract Com-

pliance ; and John Dunlop, Secretary, United States Department of

Labor.

* The parties who initially sought disclosure of Chrysler’s docu-

ments neither intervened nor sought to participate in either the

district court proceedings or the proceedings in this court.

*5 U.S.C. § 552 (1970 & Supp. V 1975), as amended by 5 U.S.C.

§ 552(b)(3) (Supp. 1976), Pub. L. No. 80-554, 80 Stat. 383 (1966).

that Chrysler has no right to judicial review of any agency

decision to disclose information requested by third parties

under the FOIA; (2) that even if judicial review is avail-

able the scope of review is limited to that defined in the

Administrative Procedure Act,* and does not include a trial

de novo; and (3) that even if a trial de novo was proper

the district court erred in enjoining disclosure of portions

of the contested documents. After the government’s initial

brief was filed in this court the Solicitor General, in a peti-

tion for a writ of certiorari to review the decision of the

Fourth Circuit in Westinghouse Elec. Corp. v. Schlesinger,

242 F.2d 1190 (4th Cir. 1976), cert. denied sub nom. Brown

v. Westinghouse Elec.Corp., US. ( 1977), took the posi-

tion that the exceptions to judicial revie-r listed in 5 U.S.C.

$701 were inapplicable to so-called reverse FOIA actions,*

and that Pub. L. 94-574, 90 Stat. 2721, eliminated federal

sovereign immunity as a bar to such review. We have been

advised by the Justice Department that it is now the gov-

ernment’s position that judicial review is available to

parties objecting to disclosure of information under the

FOIA, but that the Administrative Procedure Act controls

our scope of review. Chrysler contended in the district

court, and continues to urge here, that any disclosure of

the conested documents was prohibited by several federal

statutes to which specific reference will be made hereafter

and by the due process clause of the fifth amendment. It

maintained in the district court, and urges here, that a

trial de novo was proper. Because we are in substantial

agreement with the government’s present position we va-

cate the judgment of the district court and remand for

further proceedings.

* See 5 U.S.C. § 701 et seq.

* See n.43 infra.

Tue Recuiatory FRaMEWwoRK

Chrysler is a government contractor. As a condition of

its doing business with the government it is required by

an Executive Order,’ and regulations promulgated there-

under by the Secretary of Labor,’ to employ and treat all

employees without regard to race, color, religion, sex, or

national origins, and to take affirmative action to elimi-

nate discrimination in employment. In order to monitor

compliance with these requirements, federal regulations re-

quire that every government contractor or subcontractor

with fifty or more employees and a contract valued at

$50,000 or more prepare and file an annual Employer In-

formation Report, known as an EEO-1 report.* The EEO-1

report contains data on the number of women and minority

group members employed. Contractors must also prepare

and make available for inspection by appropriate federal

agencies an Affirmative Action Program (AAP), providing

detailed information on their past and projected employ-

ment of women and minority group members.’ The AAP

must contain a ‘‘utilization analysis’’ which describes the

occupational levels of minority personnel employed by the

contractor and ‘‘goals and time tables’’ by which oppor-

tunities for minority group members can be improved.”

The failure of a contractor to comply with the Executive

Order and regulations can result in the cancellation, ter-

* Executive Order 11246, 30 Fed. Reg. 12319 (1965), as amended

by Executive Order 11375, 32 Fed. Reg. 14304 (1967), 3 C.F.R.

169-177 (1974).

* 41 C.F.R. 60-1.1 et seq.

* Id. at 60-1.7(a).

* Id. at 60-1.40, 60-2.1.

mination, or suspension of existing contracts and debar-

ment from future awards."

The Secretary of Labor has delegated administrative

responsibility for the enforcement of the Executive Order

to the Director of the Office of Federal Contract Compli-

ance (OFCC).* The Director of OFCC has designated

various federal agencies as ‘‘compliance agencies.’’ These

compliance agencies have primary responsibility for as-

suring adherence to the Executive Order by contractors

within certain geographic areas or industrial classifica-

tions.** In Chrysler’s case the Defense Supply Agency of

the Department of Defense (DSA) is the designated com-

pliance agency. As part of its monitoring duties DSA has

conducted ‘‘compliance reviews’’ of Chrysler’s employment

practices. These reviews consist of an examination of

Chrysler’s EEO-1 and AAP documents, and on site inspec-

tions of its facilities. Compliance reviews result in a compli-

ance review report (CRR), setting forth information sup-

plied by the contractor, an analysis of his performance, and

recommendations for sanctions or corrective measures.”

DSA is also responsible for investigation and resolution of

complaints of violations of the Executive Order, and

must file a ‘‘complaint investigation report’? (CIR) with

OFCC within sixty days of the receipt of a complaint.

Regulations promulgated by the Secretary of Labor

contain rules providing for access by the public to infor-

™ Id. at 60-1.24.

8 Id. at 60-1.2. OFCC is the successor to the President’s Commit-

tee on Equal Employment Opportunity. See 30 Fed. Reg. 12319,

13441.

** Id. at 60-1.3(d), 60-1.6.

* Id. at 60-60.9.

** Id. at 60-1.24(b).

** Id. at 60-1.24(d).

——

mation in the records of OFCC or its various compliance

agencies.”

The regulations implement 5 U.S.C. § 552, the Free-

dom of Information Act and supplement the policy and

regulations of the Department of Labor, 29 C.F.R.

Part 70. It is the policy of the OFCC to disclose in-

formation to the public and to cooperate with other

public agencies as well as private parties seeking to

eliminate discrimination in employment....

41 C.F.R. § 60-40.1. Consistent with the general policy of

disclosure to aid in eliminating employment discrimina-

tion, the regulations provide:

[U]pon the request of any person for identifiable

records obtained or generated pursuant to Executive

Order 11246 (as amended) such records shall be made

available for inspection and copying, notwithstanding

the applicability of the exemption from mandatory

disclosure set forth in 5 U.S.C. 552 subsection (b), if it

is determined that the requested inspection or copying

furthers the public interest and does not impede any of

the functions of the OFCC or the Compliance Agencies

except in the case of records disclosure of which is

prohibited by law.

41 C.F.R. 60-40.2(a). Thus the regulations contain a

blanket waiver of any authority the government might have

to resist disclosure of any information which falls into

one of the nine categories of information which are ex-

empt from mandatory disclosure under the FOIA.”

17 Td. at 60-40.1 et seq.

8 In enacting the FOIA Congress recognized that certain types

of information, such as trade secrets and other confidential matters,

should be exempt from the Act’s mandatory public disclosure pro-

visions. Consequently, the FOIA specifically exempts nine cate-

OFCC’s regulations also provide that ‘‘. . . all contract

compliance documents within the custody of the OFCC and

the Compliance Agencies shall be disclosed upon request

unless specifically prohibited by law or as limited elsewhere

gories of information from mandatory disclosure.

This section does not apply to matters that are—

(1) (A) specifically authorize under criteria by an Executive

order to be kept secret in the interest of national defense or

foreign po'icy and (B) are in fact properly classified pursuant

to such Executive order;

(2) related solely to the internal personnel rules and prac-

tices of an agency;

(3) specifically exempted from disclosure by statute (other

than section 552b of this title), provided that such statute (A)

requires that the matters be withheld from the public in such

a manner as to leave no discretion on the issue, or (B) estab-

lishes particular criteria for withholding or refers to particular

types of matters to be withheld;

(4) trade secrets and commercial or financial information

obtained from a person and privileged or confidential ;

(5) inter-agency or intra-agency memorandums or letters

which would not be available by law to a party other than an

agency in litigation with the agency ;

(6) personnel and medical files and similar files the disclosure

of which would constitute a clearly unwarranted invasion of

personal privacy ;

(7) investigatory records compiled for law enforcement pur-

poses, but only to the extent that the production of such records

would (A) interfere with enforcement proceedings, (B) de-

prive a person of a right to a fair trial or an impartial adjudi-

eation, (C) constitute an unwarranted invasion of personal

privacy, (D) disclose the identity of a confidential source and,

in the ease of a record compiled by a criminal law enforce-

ment authority in the course of a criminal investigation, or by

an agency conducting a lawful national security intelligence

investigation, confidential information furnished only by the

confidential source, (E) disclose investigative techniques and

procedures, or (F') endanger the life or physical safety of law

enforcement personnel ;

(8) contained in or related to examination, operating, or

condition reports prepared by, on behalf of, or for the use of

an agency responsible for the regulation or supervision of finan-

<9 6y

herein.’’ 41 C.F.R. § 60-40.2(b). This blanket and manda-

tory disclosure requirement with respect to compliance

documents is qualified in 41 C.F.R. § 60-40.3(a) which lists

six categories of documents or parts thereof which ‘‘are

exempt from mandatory disclosure by the OFCC and the

compliance agencies and should be withheld if it is de-

termined that the requested information does not further

the public interest and might impede the discharge of any

of the functions of the OFCC or the Compliance Agen-

cies.’’ ** Thus, even information within these six categories

cial institutions; or

(9) geological and geophysical information and data, includ-

ing maps, concerning wells.

5 U.S.C. § 552(b) (Supp. 1976), amending 5 U.S.C. § 552(b) (1970

& Supp. V 1975).

41 C.F.R. § 60-40.3(a) provides:

(a) The following documents or parts thereof are exempt from

mandatory disclosure by the OFCC and the compliance agencies,

and should be withheld if it is determined that the requested inspec-

tion or copying does not further the public interest and might im-

pede the discharge of any of the functions of the OFCC or the

Compliance Agencies.

(1) Those portions of affirmative action plans such as goals and

timetables which would be confidential commercial] or financial in-

formation because they indicate, and only to the extent that they

indicate, that a contractor plans major shifts or changes in his

personnel requirements and he has not made this information avail-

able to the public. A determination by an agency to withhold this

type of information should be made only after receiving verification

and a satisfactory explanation from the contractor that the infor-

mation should be withheld.

(2) Those portions of affirmative action plans which constitute

information on staffing patterns and pay scales but only to the

extent that their release would injure the business or financial

position of the contractor, would constitute a release of confidential

financial information of an employee or would constitute an un-

warranted invasion of the privacy of an employee.

(3) The names of individual complainants.

(4) The assignments to particular contractors of named compli-

ance officers of such disclosure would subject the named compliance

may be disclosed if OFCC determines that such disclosure

is in the public interest and does not impede the discharge

of the functions of OFCC or its compliance agencies.

Finally, 41 C.F.R. § 60-40.4 * provides that EEO-1 reports

shall be disclosed, even though the exact same forms are

furnished to the Equal Employment Opportunity Commis-

sion (EEOC)* and EEOC is statutorily prohibited from

disclosing EEO-1 reports in its possession.”

officers to undue harassment or would affect the efficient enforcement

of the Executive order.

(5) Compliance investigation files including the standard com-

pliance review report and related documents, during the course of

the review to which they pertain or while enforcement action against

the contractor is in progress or contemplated within a reasonable

time. Therefore, these reports and related files shall not be dis-

closed only to the extent that information contained therein consti-

tutes trade secrets and confidential commercial or financial informa-

tion, inter-agency or intra-agency memoranda or letters which would

not be available by law to a private party in litigation with the

agency, personnel and medical files and similar files the disclosure

of which would constitute a clearly unwarranted invasion of per-

sonal privacy, data which would be exempt from mandatory dis-

closure pursuant to the ‘‘informants privilege’’ or such information

the disclosure of which is prohibited by statute.

(6) Copies of preemployment selection tests used by contractors.

2041 C.F.R. § 60-40.4 provides:

The Standard Form 100 (EEO—1) which is submitted by

contractors to the OFCC, a compliance agency or a Joint Re-

porting Committee servicing both the OFCC and the EEOC

shall be disclosed pending further instructions from the Direc-

tor, OFCC. The statutory prohibition on disclosure set forth

in Section 709(e) of the Civil Rights Act of 1964 is limited by

the terms of that section to information obtained pursuant to

the authority of title VII of that Act and its disclosure by

employees of the EEOC.

71 Employers subject to the provisions of both Executive Order

No. 11246 and Title VII of the Civil Rights Act of 1964, 42 U.S.C.

§ 2000e et seq., are required to file EEO-1 reports with both EEOC

(see 29 C.F.R. § 1602.7) and OFCC. To facilitate the collection of

these reports EEOC and OFCC have established the Joint Report-

10a

The contested documents in this case include Chrysler’s

EEO-1 reports and information which falls under three

of the six exempt categories defined in 41 C.F.R. § 60-

40.3(a),** namely: (1) those parts of Chrysler’s AAP’s

which contain confidential commercial information indicat-

ing that a contractor plans major changes or shifts in his

personnel requirements not yet publicly disclosed,* (2)

those parts of Chrysler’s AAP’s which set forth staffing

patterns and pay scales the release of which would injure

the business or financial position of the contractor,” and

(3) compliance investigation files and related documents

to the extent that such information constitutes trade secrets

and confidential commercial or financial information.”

Tue AGENcY PROCEEDINGS

On May 14, 1975, DSA notified Chrysler that third

parties had requested under the FOIA the disclosure of the

1974 AAP of Chrysler’s Newark, Delaware assembly plant,

and the October 1974 CIR for that facility. Chrysler, on

May 23, 1975 objected to the requested disclosure of the

AAP, relying on the FOIA exemptions and OFCC dis-

closure regulations. It also requested a copy of the

ing Committee (JRC), which receives and processes these reports,

and then distributes a copy of each EEO-1 report both to EEOC

and OFCC,

#2 Section 709(c) and (d) of the Civil Rights Act of 1964, 42

U.S.C, § 2000e-8(c) and (d) authorize EEOC to collect the data

contained in the EEO-1 reports. Public disclosure of such data by

EEOC is, however, prohibited by § 709(e), 42 U.S.C. § 2000e-8(e).

See text at IV B 2 infra.

8 See n.19 supra.

**41 C.F.R. § 60-40.3(a) (1).

25 Jd. at § 60-40.3(a) (2).

** Id. at § 60-40.3(a) (5).

BM.

lla

October 1974 CIR, which it had never seen, so that it could

determine which parts of it should be treated as confi-

dential. On May 30, 1975, DSA notified Chrysler that it

had determined that the Newark AAP and CIR were sub-

ject to disclosure under the FOIA and OFCC disclosure

rules, that Chrysler would not be furnished with a copy of

the CIR prior to disclosure, and that both documents would

be disclosed on June 4, 1975.

On July 1, 1975, DSA notified Chrysler that it had

received a request under the FOIA for disclosure of the

AAP and CRR for Chrysler’s Hamtramck, Michigan as-

sembly plant. The July 1 notice indicated that under the

recent amendments to the FOIA, Pub. L. 93-502, 5 U.S.C.

§ 552(a)(6)(A)(i), DSA was required to make a substan-

tive decision on release of these documents within ten

working days of receipt of the request, and for that reason

could not await the results of an appeal to OFCC under 41

C.F.R. § 60-60.4(d).*7 The DSA letter suggested that any

*7 41 C.F.R. § 60-60.4(d) provides:

(d) Public access to information. Information obtained from a

contractor under Subpart B will be subject to the public inspection

and copying provisions of the Freedom of Information Act, 5 U.S.C.

552. Contractors should identify any information which they believe

is not subject to disclosure under 5 U.S.C. 552, and should specify

the reasons why such information is not disclosable. The Contract

Compliance Officer will consider the contractors claim and make a

determination, within 10 days, as to whether the material in ques-

tion is exempt from disclosure. The contract compliance officer will

inform the contractor of such a determination. The contractor may

appeal that ruling to the Director of OFCC within 10 days. The

Director of OFCC shall make a final determination within 10 days

of the filing of the appeal. However, during the conduct of a com-

pliance review or while enforcement action against the contractor is

in progress or contemplated within a reasonable time, all informa-

tion obtained from a contractor under Subpart B except information

disclosable under §§ 60-40.2 and 60-40.3 of this chapter is to be

considered part of an investigatory file compiled for law enforce-

ment purposes within the meaning of 5 U.S.C. 552(b) (7), and such

information obtained from a contractor under Subpart B shall be

—- -—

a ee

12a

comments Chrysler wished to make should be accomplished

promptly. Chrysler, by letters dated July 3 and July 11,

1975, objected to the disclosure of the documents relating

to its Hamtramck plant, contending that both the AAP

and CRR were exempt from disclosure under the FOIA,

and also that disclosure of certain information contained

in the AAP, including EEO-1 data, was prohibited by 18

U.S.C. § 1905," by § 709(e) of the Civil Rights Act of 1964,

42 U.S.C. §2000e-8(e),” and by 44 U.S.C. §3508.”

Chrysler’s letter also requested a copy of the Hamtramck

CRR, which it had never seen. On July 18, 1975, DSA re-

plied in part:

Full consideration has been given by this agency to

your comments and objections. Nevertheless, a deter-

mination has been made to release both the Affirmative

Action Plan and the Compliance Review Report to

the requester, subject to the exceptions noted in the

attached list for the reasons given therein. Your as-

sertions of competitive harm were unsupported by any

showing of the likelihood of such harm, and only in

one context would we agree to the existence of such

a likelihood without such a showing. This is reflected

in the first ten exceptions on the attached list.

This decision may be appealed to the Office of Federal

Contract Compliance, Washington, D.C. 20210, within

10 days, per 41 C.F.R. 60-60.4. However, due to the

time constraints imposed by the recent amendments

to the Act (Public Law 93-502), we cannot wait for

treated as exempt from mandatory disclosure under the Freedom

of Information Act during the compliance review.

38 See n.44 infra.

#° See n.22 supra.

*° See text at n.85 infra.

13a

the results of such an appeal. Accordingly, the sub-

ject documents, with deletions as noted in the attached

list, will be released 5 working days after your receipt

of this letter.

(JA-100) The July 18 letter also made clear DSA’s posi-

tion that neither 18 U.S.C. § 1905, 42 U.S.C. § 2000e-8(e)

nor 44 U.S.C. § 3508 applied to any part of the AAP report,

including the EEO-1 data.

III

Tue District Court Proceepincs

Faced with the DSA determination that the FOIA,

as amended, prohibited the agency from withholding dis-

closure while Chrysler exhausted an administrative appeal

to OFCC, Chrysler commenced this action in the district

court on June 4, 1975. The initial complaint, which was

filed before Chrysler learned of the request for disclosure

of the Hamtramck documents, only sought injunctive relief

against disclosure of the documents relating to the Newark

Delaware plant, and a declaratory judginent that public

disclosure of any similar documents was prohibited by law.

The district court issued a temporary restraining order

which prohibited disclosure of the Newark p:ant docu-

ments, and which required the d»*” “nts te give Chrysler

five days notice prior to the rele » .. any similar doca-

ments relating to any of its other facilities. When DSA

notified Chrysler of its intention to release the Hamtramck

plant documents it amended the complai’ °> -efer to those

documents, and obtained from the distr’.* *-art temporary

relief covering them as well.

Chrysler ’s amended complaint contained three counts.

First, Chrysler charged that disclosure of any portion of

its AAP’s, EEO-1’s, or of any CIR, or CRR relating to

any of its facilities wou!d be unlawful under exemptions

(b)(3)(4)(5) and (7) of the FOIA, 5 U.S.C. § 552(b) (3)

l4a

(4)(5) and (7),** under 42 U.S.C. § 2000e-8(e),” under 18

U.S.C. § 1905,*° and under 44 U.S.C. §3508.% Second, it

alleged that such disclosure would be an abuse of agency

discretion since it would be contrary to 41 C.F.R. 4 60-

40.3(a)* and 29 C.F.R. §§ 70.21," 70.22," 70.24," and

51 See n.18 supra.

52 See n.22 supra.

53 See n.44 infra.

* See text at n.85 infra.

55 See n.19 supra.

8° 29 C.F.R. § 70.21 provides:

(a) Pursuant to the provisions of 18 U.S.C. 1905, every officer and

employee of the Department of Labor is prohibited from publish-

ing, divulging, disclosing, or making known in any manner or to

any extent not authorized by law any information coming to him

in the course of his employment or official duties or by reason of

any examination or investigation made by, or return, report or

record made to or filed with the Department or any agency or officer

or employee thereof, which information concerns or relates to the

trade secrets, processes, operations, style of work, or apparatus, or

to the identity, confidential statistical data, amount or source of any

income, profits, losses, or expenditures of any person, firm, partner-

ship, corporation, or association. No officer or employee of the De-

partment of Labor shal] disclose records in violation of this provi-

sion of law.

(b) No records of the Department of Labor with respect to mat-

ters specifically required by statute to be kept secret shall be made

available for inspection or copying under the provisions of this part.

By virtue of the exclusionary language in 5 U.S.C. 552(b)(3) the

disclosure requirements of the Freedom of Information Act do not

apply to or authorize the disclosure of records with respect to any

matters specifically exempted from disclosure by statute.

ters specifically authorized under criteria established by Executive

order to be kept secret in the interest of the national defense or

foreign policy and properly classified pursuant to such order shall

be made available for inspection or copying under the provisions of

this part. Records concerning such matters are expressly excluded

15a

from the application of the disclosure requirements of the Freedom

of Information Act by the provisions of 5 U.S.C. 552(b) (1).

57 Id. at 70.22 provides:

(a) Records exempt from statutory disclosure requirements. The

Freedom of Information Act, as codified in 5 U.S.C. 552, lists nine

categories of records (in 5 U.S.C. 552(b)) to which the disclosure

requirements of the statute do not apply. The first and third of

these relate to the records described in § 70.21 which are not dis-

closable because protected from disclosure by the express provisions

of a statute or a secret classification authorized by Executive order

in the interest of national defense or foreign policy. The other seven

categories of records excluded from the statutory disclosure require-

ments are set forth in §§ 70.23 through 70.28, inclusive. Informa-

tion from records in these seven categories may, however, be male

available for inspection and copying as provided in paragraph (b)

of this section.

(b) Disclosure of protected records; conditions precedent. Al-

though the Department of Labor is not required by the Freedom

of Information Act to make available for inspection or copying any

materials or documents included in its records which are within the

categories described in 5 U.S.C. 552(b)(2), (4), (5), (6), (7),

(8), or (9) (see §§ 70.23-70.28), under the Department’s disclosure

policy set forth in § 70.11 particular records requested which come

within these categories, or portions thereof, shall nevertheless be

made available to the extent, but only to the extent, that the appro-

priate officer authorized to disclose information from Department

records determines that the disclosure will further the public inter-

est and will not impede the discharge of any of the functions of the

Department of Labor. Such a determination shall be made with due

regard not only to the public interest in accessibility to the people

of information regarding operations of their Government but also

to the public interest in protecting citizens from impairment of their

rights to privacy or from harassment, injury, or the dissemination

of information concerning them which is privileged or has been

submitted by them to the Government on a confidential basis. In

determining whether access to such records will be permitted, due

consideration shall also be given to the public interest in prevent-

ing disclosure of information which would handicap, obstruct, or

jeopardize effective performance of the Department’s functions

under statutes or Executive orders, including its duties with respect

to law enforcement,

- ~——

l6a

58 Jd. at 70.24 provides:

(a) Pursuant to exemption (4) set forth in 5 U.S.C. 552(b), and

as provided in § 70.22, the disclosure from Department of Labor

records of matters that are trade secrets, and of commercial] and

financial information obtained from a person and privileged or

confidential, may be refused. Legal requirements of secrecy and

prohibitions of disclosure may apply to such records as set forth in

§ 70.21. Disclosure shall be refused where these mandatory restric-

tions apply to the records sought. Even where denial of access is

not required by these restrictions, access to records exempted from

the disclosure requirements by exemption (4) cannot be granted

under the policy expressed in §§ 70.11 and 70.22 unless the dis-

closure officer, in balancing the right of the public to know how the

Government operates against the need of the Government to keep

information in confidence and the right of the person from whom

it was obtained to have privileges and confidences respected, is able

to determine that disclosure will serve the public interest and not

impede the discharge of any function of the Department of Labor.

(b) The intent of the examination set forth in paragraph (a) of

this section to protect privileged or confidential information is,

according to the committee reports in both Houses of Congress, not

restricted to the trade secrets and commercial or financial informa-

tion specifically mentioned in the statute. Information the disclosure

of which may be refused pursuant to this exemption is, according to

the legislative history, intended to include information customarily

subject to a doctor-patient, lawyer-client, or other such privilege.

(ec) Information ‘‘obtained from any person’’ would include in-

formation obtained from a person inside as well as outside the Gov-

ernment. The applicability of this exemption does not depend on

whether the record contains information obtained from the public

at large, from a particular person, from within the Department, or

from another agency. While information which is confidential in

the hands of one agency retains its protected character in the hands

of agencies to which it is subsequently furnished, the exemption

does not sanction the rendering of documents confidential by the

expedient of transferring them among agencies.

(d) Except as otherwise provided in this part (e.g., § 70.13),

disclosure in certain cireumstances may be refused of material such

as formulae, designs, drawings, research data, and the like, which

are significant not as records but as items of valuable property.

These may have been developed by or for the Government for its

use and at its expense. Nothing in the legislative history suggests

that the Freedom of Information Act was intended to give away

17a

such valuable property to any person willing to pay the price of

making a copy. Where similar property in private hands would be

held in confidence, the public interest would appear to require that

such property in the hands of an agency should be protected under

exemption (4).

(e) This exemption is further intended to extend protection to

other information in Government records which has been furnished

and accepted in confidence and which would not customarily be

released to the public by the person from whom the Government

obtained it. See, for example, the House Report (H. Rept. 1497,

89th Cong., 2d Sess.) and the President’s signing statement. Accord-

ingly, the exemption assures the confidentiality of information thus

obtained by the Department of Labor through questionnaires and

required reports to the extent that the information would not cus-

tomarily be made public by the person from whom it was obtained.

Nothing in the Freedom of Information Act necessitates a disre-

gard of the right of individuals or groups to rely in good fai‘a on

an understanding of confidentiality for which a Government agency

has reasonably afforded a basis. Maintenance of citizens’ respect

for governmental fairness requires that such understanding be

given due consideration, At the same time, Department representa-

tives should be alert to discourage the development of such under-

standings where not clearly warranted by departmental responsi-

bilities.

(f) Pursuant to exemption (8) set forth in 5 U.S.C. 552(b), and

as provided in § 70.22, the disclosure from Department of Labor

records of any matter contained in, or related to, examination,

operating, or condition reports prepared by, on behalf of, or for

the use of an agency responsible for the regulation or supervision

of financial institutions, may be refused. Exemption (8) emphasizes

the application to financial institutions of the protection from dis-

closure afforded by the exemption set forth in paragraph (a) of

this section, and makes plain the intent to protect information

relating to such institutions which may be prepared for or used by

any agency responsible for the regulation or supervision of such

institutions. Access to any such information in records of the Labor

Department will be refused where disclosure is not legally permitted

or where a determination to disclose is inappropriate for reasons

discussed in paragraph (a) of this section. In cases where another

agency is concerned with information protected by exemption (8)

in 5 U.S.C. 552(b) which is sought from records of the Department,

the provisions of § 70.31 are also applicable.

18a

70.31.% Third, it contended that the FOIA and OFCC

disclosure rules as applied to Chrysler violate due process

in that they afford no meaningful right to be heard in-

itially or on appeal before disclosure of Chrysler’s con-

fidential information. By a stipulation and consent order

the pendente lite restraints were continued until final hear-

ing. In its pre-trial papers the government defendants

objected to the court’s jurisdiction and to the holding of

an evidentiary hearing. The court reserved decision on

these objections until a decision on the merits. Trial on

the merits was held on August 25 and 26, 1975 and there-

after the parties filed a detailed ‘‘Stipulation of Facts

and Issues.”’

The district court’s opinion correctly holds that there

is subject matter jurisdiction under 28 U.S.C. § 1331(a).*

On the merits the court found that part of the information

the agency proposed to release, described generically as

the ‘‘manning tables,’’** was confidential commercial in-

%* Id. at 70.31 provides:

If the release of a record in custody of the Department of Labor

would be of concern not only to the Department but also to another

Federal agency, the record will be made available by the Depart-

ment only if its interest in the record is the primary interest and

only after coordination with the other interested agency. If the in-

terest of the Department in the record is not primary, the request

will be transferred promptly to the agency having the primary in-

terest, and the applicant will be so notified. The release of informa-

tion received from another agency and the release to another agency

of information collected from persons outside the Government shall

be subject to the conditions and restrictions imposed by 44 U.S.C.

3508.

* E.g., Planning Research Corp. v. F.P.C., 555 F.2d 970 (D.C. Cir.

1977) ; Westinghouse Elec. Corp. v Schlesinger, supra, 542 F.2d at

1209-10 ; Sears, Roebuck & Co. v. General Services Administration,

Civ. No. 75-2127, Slip op. at 3 & n.6 (D.C. Cir. filed April 1, 1977) ;

see Bachowski v. Brennan, 502 F.2d 79, 82 (3d Cir. 1974), rev’d

on other grounds, 421 U.S. 560 (1975); ef. Califano v. Sanders,

45 U.S.L.W. 4029 (U.S. February 23, 1977).

“The district court described the manning tables as lists of

19a

formation, the release of which could cause Chrysler sub-

stantial competitive harm.**? On the basis of this finding

the court concluded that the manning tables constituted

information falling within exemption (b)(4) of the FOIA,

and was therefore exempt from its mandatory disclosure

provisions. The court then reasoned that since the man-

ning tables constituted exempt information under the

FOIA, whether DSA possessed the power to disclose

these documents was to be determined by reference to other

federal disclosure statutes, apart from the FOIA. Thus

the court rejected Chrysler’s argument that the FOIA

creates a so-called reverse FOIA cause of action based on

the theory that Congress, by exempting certain informa-

tion from mandatory disclosure, intended to absolutely

prohibit all agency disclosure of such exempt information

under any circumstances.** Instead, the court held that 18

U.S.C. § 1905, a criminal statute, made it a crime for a

Chrysler’s internally used job titles and the number of people who

perform each job.

*?In reaching this conclusion the court relied on the testimony

of Chrysler’s witnesses, rather than on the rather spare administra-

tive record.

*s See generally, Clement, The Rights of Submitters to Prevent

Agency Disclosure of Confidential Business Information: The Re-

verse Freedom of Information Act Lawsuit, 55 Texas L.R. 587

(1977) ; Note, Reverse-Freedom of Information Act Suits: Con-

fidential Information in Search of Protection, 70 Nw. U.L. Rev. 995

(1976) ; Note, Protection From Government Disclorure—The Re-

verse-FOIA Suit, 1976 Duke L.J. 330.

“18 U.S.C. § 1905 provides:

Whoever, being an officer or employee of the United States

or of any department or agency thereof, publishes, divulges,

discloses, or makes known in any manner or to any extent

not authorized by law any information coming to him in the

course of his employment or official duties or by reason of

any examination or investigation made by, or return, report

or record made to or filed with, such department or agency or

officer or employee thereof, which information concerns or

— ~~ mee,

20a

government employee to disclose the manning tables. Ob-

serving that the Secretary of Labor, on the authority of 5

U.S.C. § 301,“ a general statute providing for the use and

custody of government records, promulgated 29 C.F.R.

§ 70.21(a),** which forbids disclosure of confidential infor-

mation the release of which would violate 18 U.S.C. § 1905,

the court concluded that DSA was acting in violation of its

own regulations and contrary to law. Thus it construed

what it held to be DSA’s governing regulation as consis-

tent with 18 U.S.C. § 1905. It issued the injunction appealed

from on the authority of 5 U.S.C. § 706(2)(A) to prevent

agency action ‘‘not in accordance with law.’’ The court

also held that 42 U.S.C. § 2000e-8(e) was inapplicable, and

rejected Chrysler’s due process contentions.

Discussion

This case is one of a burgeoning number growing out of

the conflict between the demands of federal regulatory

agencies, as a necessary by-product of their regulatory

activities, for the submission by private businesses of de-

tailed financial, commercial and employee information,

which would not voluntarily be disclosed to competitors,

and the public access to most information in federal

relates to the trade secrets, processes, operations, style of

work, or apparatus, or to the identity, confidential statistical

data, amount or source of any income, profits, losses, or ex-

penditures of any person, firm, partnership, corporation, or

association ; or permits any income return or copy thereof or

any book containing any abstract or particulars thereof to

be seen or examined by any person except as provided by law;

shall] be fined not more than $1,000, or imprisoned not more

than one year, or both; and shall be removed from office or

employment.

** See text following n.69 infra.

* See n.36 supra.

ithaca

s “ OO elt CORRAL EM,

2la

agency files which is mandated by the FOIA. It is, how-

ever, the first occasion which requires this Court to con-

sider a reverse FOIA case, in which a corporate plaintiff

(the submitter) seeks to enjoin an agency from disclosing

submitter-generated business information.*’ The case pre-

sents several important issues about agency management

of such information, about agency discretion to disclose

information in the public interest, about submitter rights

prior to disclosure and about the availability of remedies

for the prevention of disclosure.

The FOIA requires agencies to disclose upon request

any information not falling within one of nine specifically

exempted categories.** The arguments of Chrysler and

other corporate submitters seeking to prevent disclosure

break down into three broad categories. First, Chrysler

and others have urged that the FOIA itself both prohibits

agency disclosure of information falling within any of the

nine exemptions and affords an implied cause of action for

injunctive or declaratory relief to prevent such disclosure.

Second, they have claimed that even if the FOLIA does not

prohibit agency disclosure of exempt FOIA information,

other statutes, such as 18 U.S.C. §1905 and 42 U.S.C.

§ 2000e-8(e) do so, and afford an implied cause of action.

Third, they contend that disclosure of submitter-generated

business information that is exempt under the FOIA or

protected by some other federal statute or regulation is an

abuse of agency discretion subject to judicial review

under the Administrative Procedure Act at the behest of

a submitter adversely affected by such agency action. The

first two categories would afford relief in the form of a

trial de novo, while in the third judicial review would be

limited to that available under 5 U.S.C. § 706. The posture

‘T But cf. Westinghouse Elec. Corp. v. United States Nuclear

Regulatory Comm'n, 555 F.2d 82, 93-94 (3d Cir. 1977).

* See 0.18 supra.

OE OR ee

22a

of this appeal and cross-appeal requires that we address

each theory on which a reverse FOIA action could be

founded.

A. The Freedom of Information Act

The FOIA expressly creates a cause of action in favor

of requesters of information to enjoin federal agencies

from withholding information.” It does not by its terms

provide a cause of action for submitters of information to

prevent disclosure. But while there is no express provi-

sion for an action by submitters, the FOTA’s nine cate-

gories of exempt information disclose a Congressional

concern that disclosure of certain information might in-

jure interests in privacy or confidentiality which may be

as important as the public’s right to general access to

agency information. The fourth FOIA exemption, for ex-

ample, covers ‘‘trade secrets and commercial or financial

information obtained from a person and privileged or

confidential.’’ ** There is ample Congressional history sug-

gesting that Congress sought to afford some protection of

submitters’ interest in the confidentiality of such infor-

mation.” Moreover we recognize that disclosure of sub-

mitter information is qualitatively different from disclo-

sure of data directly relating to government operations,

and that the interest in privacy appears stronger with

respect to the former than the latter. But while the Con-

gressional concern over confidentiality of submitter infor-

mation is clear, an intention to make mandatory the non-

disclosure of exempt information is less so, and the evi-

* 5 U.S.C. § 552(a) (4)(B) (Supp. V 1975).

5° See n.18 supra.

51 Td.

** See, e.g., 8. Rep. No. 813, 89th Cong., Ist Sess. 9 (1965) ; H.R.

Rep. No. 1497, 89th Cong., 2d Sess. 10, reprinted in 2 U.S. Code

Cong. & Ad. News 2418, 2427 (1966).

IND Vea ©

23a

dence of an intent to create a submitter cause of action

is practically nonexistent.

Among the circuits which have considered the issue the

District of Columbia * and the Fifth Circuits * have held

that the FOIA exemptions are permissive and do not

mandate agency withholding of exempt information. The

Fourth Circuit has held that the exemptions mandate non-

disclosure.** The Ninth Circuit, while first holding that the

exemptions are mandatory, on rehearing withdrew that

part of its opinion as premature.** The closest the Su-

preme Court has come to addressing the issue is the state-

ment in E.P.A. v. Mink, 410 U.S. 73, 80 (1973), that the

FOIA exemptions ‘‘represent[s] the congressional deter-

mination of the types of information that the Executive

Branch must have the option to keep confidential, if it so

chooses.’’ *’ In our view, none of the opinions referred to

contains a complete analysis of the myriad problems pre-

sented in reverse FOIA cases.

We conclude that Congress in the FOIA intended

neither that the exemptions make non-disclosure manda-

tory nor that they provide the predicate for an implied

cause of action. The two questions are interdependent,

58 Charles River Park ‘‘A’’, Inc. v. Department of HUD, 519

F.2d 935 (D.C. Cir. 1975).

** Pennzoil Co. v. FPC, 534 F.2d 627 (5th Cir. 1976).

5° Westinghouse Elec. Corp. v. Schlesinger, 542 F.2d 1190 (4th

Cir. 1976), cert. denied sub nom. Brown v. Westinghouse Elec.

Corp., US. (1977) (apparently overruling Moore-

McCormack Lines, Ince. v. I.T.0. Corp., 508 F.2d 945, 950 (4th

Cir. 1974) ).

% Union Oil Co. of California v. FPC, 542 F.2d 1036, 1045 (9th

Cir. 1976).

°* See FAA Administrator v. Robertson, 422 U.S. 225, 262, 269

n.l1 (1975); Department of the Air Force v. Rose, 425 U.S. 352,

361 (1976).

;

24a

since it would obviously be difficult to imply a cause of

action under the FOIA to bar government officials from

releasing information the disclosure of which Congress in-

tended to leave to agency discretion or other federal

disclosure statutes. Both the plain language of § 552(b)"

and the Congressional reports and debates suggest that no

more was intended than a discretionary exception to the

general mandatory duty of disclosure.** Nor can we ignore

the contrast between the FOIA’s express grant of a cause

of action for requesters of information® and its silence

respecting submitter relief. Moreover, we note that when

Congress in the Prvacy Act of 1974" decided to create a

civil cause of action to enjoin agency disclosure of FOIA

exempt information it did so explicitly. See 5 U.S.C.

§ 552a(g)(1) (Supp. V 1975). But only private persons,

not business entities were afforded this protection.” Fi-

°° The subsection of the FOIA dealing with exempt information

only states that the Act’s mandatory disclosure requirement ‘‘does

not apply to matters that are’’ within the nine exempt categories.

See n.18 supra.

5° F.g., H. Rep. No. 1497, supra n.52, at 2, 5-7, reprinted in 2

U.S. Code Cong. & Ad. News 2418, 2419, 2422-24 (1966) ; S. Rep.

No. 813, supra n.52, at 10; 112 Cong. Ree. 13641 (remarks of Rep-

resentative Moss, sponsor of the FOIA in the House). But see id.

at 13,645 (remarks of Representative King), 13649 (remarks of

Representative Fascell ).

* See n.49 supra.

* Pub. L. 93-597, 88 Stat. 1896, codified at 5 U.S.C. § 552a(b)

(Supp. V 1975). The Privacy Act covers exempt FOIA informa-

tion which relates to individuals and provides that ‘‘[n]o agency

shall disclose any record which is contained in a system of records

by any means of communication to any person, or to any other

agency, except pursuant to a written request by, or with the prior

insert of, the individual to whom the record pertains... .”’

*? The Senate Report to the Privacy Act states that the Act is

intended to

‘*distinguish between the rights which are given to the citizen

25a

nally, we think that judicial reconstruction of the statute

to imply from the exemptions either a mandatory duty of

non-disclosure or a cause of action to prevent disclosure,

would be inconsistent with the basic purpose of the FOIA,

which was not to afford confidentiality, but to overcome

restrictive agency interpretations of the original public

information section of the Administrative Procedure Act.®

The general philosophy reflected in the FOTA is that of

full agency disclosure to provide the public with speedy

access to relevant information. Recognizing an implied

cause of action to prevent agency disclosure of exempt

FOIA information would, we think, be inconsistent with

that general philosophy, since it would place in the hands

of interested submitters of information, rather than those

of presumably disinterested governmental officials, the au-

thority to take steps which might impede the dissemina-

tion of information of public importance. Thus we hold

that the FOIA’s language, legislative history, and philos-

ophy of full disclosure bar a construction of the Act which

mandates agency withholding of exempt information or

recognizes an implied cause of action to prevent the dis-

closure of such information.

B. Other Non-Disclosure Statutes

Although we conclude that the FOIA does not limit the

discretionary power of federal agencies to disclose exempt

as an individual under this Act and the rights of proprietor-

ships, businesses and corporations which are not intended to

be covered by this Act. This distinction was to insure that

the bill leaves untouched the Federal Government’s informa-

tion activities for such purposes as economic regulations.’’

S. Rep. No. 1183, 93d Cong., 2d Sess. 79 (1974).

® See S. Rep. No. 813, supra n.52, at 4, S. Rep. No. 93-854, 93d

Cong., 2d Sess. at 6 (1974): H. Rep. No. 1497, supra n.52, at 4-5,

reprinted in 2 U.S. Code Cong. & Ad. News 2418, 2421-22 (1966) ;

H.R. Rep. No. 93-221, 93d Cong., Ist Sess. at 59-60 (1973).

5d.

26a

FOIA information, we recognize that the exercise of this

discretionary authority may be prohibited, or substantially

curtailed, by other federal non-disclosure statutes.” See

FAA Administrator v. Robertson, supra, 422 U.S. at 264-

66. Chrysler contends that apart from the FOIA, at least

three non-disclosure statutes prohibit DSA from releasing

the contested documents. Our consideration of that con-

tention requires, with respect to each statute, the same

dual inquiry we made respecting the FOIA: (1) does the

statute forbid disclosure of the documents in issue; and

(2) if so, can a private cause of action be implied from it.

1. 18 U.S.C. § 1905

The statute on which Chrysler and most other reverse

FOIA plaintiffs place principal reliance is 18 U.S.C.

§ 1905. On its face, this broadly worded criminal statute

encompasses virtually every category of business informa-

tion likely to be in the files of any federal agency.’ How-

ever, in Westinghouse Elec. Corp. v. Nuclear Regulatory

Commission, supra, we noted that § 1905’s broad non-dis-

closure prohibitions apply only to disclosures ‘‘not au-

thorized by law,’’ and held that information disclosed

pursuant to a validly enacted agency regulation is au-

thorized by law.” Chrysler urges that in Westinghouse

we erred, that an agency regulation does not have the

force of law for purposes of § 1905, and that only specific

Congressional statutes can authorize the release of infor-

mation covered by § 1905. Moreover, it urges that even

assuming the correctness of Westinghouse, disclosures

** For a compilation of federal non-disclosure statutes see Clement,

supra n.43, at 598 n.40.

** See, e.g., Westinghouse Elee. Corp. v. Schlesinger, supra n.55;

Charles River Park ‘‘A’’, Inc., supra n.53.

*" See n.44 supra for text.

** 555 F.2d at 94.

—" (Deere

AO A = TO ee OEE

EERE Ble BREE I oO pe Tee

NN, Gem me

27a

pursuant to the OFCC disclosure regulations are not

authorized by law for purposes of § 1905, because these

regulations were adopted under the authority of 5 U.S.C.

§ 301, and Congress intended that § 301 not be used to

limit the scope of § 1905.

While our discussion of the scope of the ‘‘not author-

ized by law’’ qualification to § 1905 in Westinghouse was

not extended, we are confident that the holding is correct.

In Westinghouse we found authority for the promulgation

of the Nuclear Regulatory Commission’s disclosure regu-

lations in that agency’s Congressionally enacted enabling

act. That holding was consistent with those of the Su-

preme Court in cases involving the disclosure of infor-

mation by other federal agencies. Though OFCC has no

statutory enabling act, it is authorized to promulgate dis-

closure regulations under the so-called housekeeping stat-

ute, 5 U.S.C. § 301, which provides in part:

The head of an exclusive department or military de-

partment may prescribe regulations for . . . the cus-

tody, use, and preservation of its records, papers, and

property. This section does not authorize withholding

information from the public or limiting the avail-

ability of records to the public.

Section 301 can be traced to the Act of July 27, 1789, Ch.

4, §4, 1 Stat. 28, dealing with records of the State De-

partment and the Act of August 7, 1789, Ch. 7, § 4, 1 Stat.

49, dealing with records of the War Department. Various

housekeeping statutes were collected and codified in 1874,”

and, as codified, granted authority to prescribe disclosure

* See, e.g., FCC v. Schreiber, 381 U.S. 279, 289-94 (1965) ;

Isbrandtsen-Mollen Co. v. United States, 300 U.S. 139 (1937);

Norwegian Nitrogen Co. v. United States, 288 U.S. 294 (1933).

7 See Revised Statutes of the United States § 161 (1st ed. 1873-

1874).

25a

regulations. The present version, and in particular the

last sentence, was enacted in 1958." The legislative his-

tory makes clear that the addition of the last sentence was

aimed at stopping agencies from relying on the house-

keeping statute as authority to deny the requests of citi-

zens for information.”

In Non-Resident Taxpayers Ass’n v. Municipality of

Philadelphia, 478 F.2d 456 (3d Cir. 1973), we held that

§ 301 authorized a Bureau of the Budget circular that in-

structs executive departments to furnish information to

state and local taxing authorities regarding compensation

paid to federal employees. Such a disclosure, absent the

regulation, would clearly conflict with the broad language

of § 1905. Thus, although we did not expressly address

§1905 in Non-Resident Taxpayers Ass’n, the holding is

consistent with our conclusion in Westinghouse, that dis-

closures pursuant to validly adopted agency regulations

are not subject to the strictures of § 1905.

We have been referred to no legislative history sug-

gesting that § 1905, a 1948 codification of a gro.» of

statutes applicable to specific agencies," was intended to

™ Act of Aug. 12, 1958, Pub. L. No. 85-619, 72 Stat. 547.

7? See S. Rep. No. 1621, 85th Cong., 2d Sess. 3-4 (1958) ; H.R.

Rep. No. 1461, 85th Cong., 2d Sess. 2 (1958).

"8 See Act of June 25, 1948, ch. 645, § 1905, 62 Stat. 683 (codified

at 18 U.S.C. § 1905 (1970). The Revisers Notes in the House re-

port, H.R. Rep. No. 304, 80th Cong. 1st Sess. A127-A128 (1947),

accompanying the 1948 revision of the Criminal Code states that

§ 1905 consolidated an income tax statute, 18 U.S.C. § 216 (1940),

a Tariff Commission Statute, 19 U.S.C. § 1335 (1940), and a Com-

merce Department statute, 15 U.S.C. § 176a (1940). The Consumer

Federation of America urges in its amicus brief that § 1905 should

be interpreted narrowly, and consistent with interpretations of

these three predecessor statutes. See, e.g., United States v. Cook,

384 U.S. 257 (1966). The basis of our decision in this case pre-

cludes consideration of that contention. For an excellent discus-

sion of the legislative history of § 1905 and its predecessor statutes

ee Clement, supra n.43, at 607-617.

29a

limit the longstanding rulemaking authority under the

1874 codification of the housekeeping statute. Nor do we

attach to the statement of Congressman Moss, respecting

the 1958 amendment to the housekeeping statute (adding

the last sentence of § 301), the same significance as the

District of Columbia Circuit in Charles River Park ‘‘A’’,

Inc. v. Department of HUD, supra, 519 F.2d at 942-43.

Relying on Congressman Moss’ statement that the 1958

amendment ‘‘does not affect the confidential status of

information given to the government and carefully detailed

in Title 18, United States Code, Section 1905 .. .’’,”* that

court concluded that ‘‘§ 301 does not authorize regulations

limiting the scope of § 1905.’’ ** In doing so, however, the

court took the statement out of context. Congressman

Moss only stated that the amendment would not affect the

confidential status of information covered by $1905. He

did not say that the amendment eliminated disclosure au-

thority existing since 1789, or that it eliminated the ‘‘au-

thorized by law’’ qualification in 41905. Such an inter-

pretation of the 1958 amendment is totally at odds with

its central purpose—the elimination of governmental

secrecy "*—as it would transmogrify § 1905 into a weapon

for those parties who advocate government secrecy. Thus

we adhere to the position we took in Non-Resident Taz-

payers Ass’n, that §301 is a separate source of agency

authority for the promulgation of disclosure regulations,

and disclosures pursuant to such regulations are author-

ized by law and immune from the prohibitions of § 1905.

Since the OFCC disclosure regulations are valid under

§ 301, all disclosures pursuant to those regulations are

authorized by law and therefore not subject to § 1905.

Since we find authority for the promulgation of the

OFCC disclosure regulations in § 301 we need not consider

™* 104 Cong. Rec. 6550 (1958).

7° 519 F.2d at 942-43.

*® See n.72 supra.

30a

whether the FOIA itself, properly construed, is an inde-

pendent source of authority for the promulgation of

disclosure regulations for exempt information.” Nor need

we decide whether absent § 301, Executive Order 11246,

which confers authority on the Secretary of Labor to

adopt ‘‘such rules and regulations ... as he deems neces-

sary to achieve the purposes of the order’’,” is a separate

source of authority for such promulgation. Our deferment

of these grounds for sustaining the regulations should not

be considered an expression of doubt as to these sources

of authority, but only of confidence in our prior § 301

holding.

Even if we were incorrect in the Westinghouse holding

that agency regulations are laws for purposes of the

qualification to 41905 we would, in any event, reject the

proposition that § 1905 would serve as a predicate for a

private civil cause of action. Recent pronouncements of

the Supreme Court have severely limited the circum-

stances in which a federal court may imply a private

cause of action from a federal statute. Whatever the

merits of this trend, the decisions bind us. Here the

criminal statute provides for a fine of not more than

™ See General Services Administration v. Benson, 415 F.2d 878,

880 (9th Cir. 1969). A number of federal agencies in addition to

OFCC have promulgated such regulations. See 28 C.F.R. § 16.1(a)

(1976) (Justice Depart.) ; 43 C.F.R. §2.13(d) (1976) (Interior

Dept.) ; 45 C.F.R. § 4.74 (1976) (H.E.W.); 29 C.F.R. § 70.11(b)

(1976) (Labor Dept.); 24 C.F.R. § 15.21 (1976) (HUD); 49

C.F.R. § 7.51 (1976) (Transportation Dept.) ; 32 C.F.R. § 286.4(b)

(Defense Dept.) ; 41 C.F.R. § 105-60.104-2 (1976) (GSA) ; 39 Fed.

Reg. 44,602 (1974) (FDA); 39 Fed. Reg. 30, 298 (1974) (Con-

sumer Product Safety Commission).

8 See n.6 supra.

7 See, e.g., Cort v. Ash, 422 U.S. 66 (1975), Securities Investors

Protection Act v. Barbour, 421 U.S. 412 (1975); National R.R.

Passenger Corp. v. National Ass’n of R.R. Passengers, 414 U.S.

453 (1974).

3la

$1000, imprisonment for not more than a year, and auto-

matic removal from office upon conviction. The adequacy

of these penalties would seem to assure the achievement

of the Congressional objectives underlying § 1905. The

very breadth of the prohibitions in § 1905 militates against

opening the courts to civil suits which may involve sub-

stantial problems of construction. Moreover, as we hold

hereafter, there is an available remedy under the Ad-

ministrative Procedure Act, in which judicial review will

be enlightened by agency interpretation. We do not believe

we can properly imply a cause of action, and thus the

right to a trial de novo, from § 1905.

2. 42 U.S.C. § 2000e-8(e)

Section 709(e) of Title VII of the Civil Rights Act of

1964, 42 U.S.C. § 2000e-8(e), is a criminal statute making

it unlawful

‘‘for any officer or employee of [EEOC] to make

public in any manner whatever any information ob-

tained by [EEOC] pursuant to its authority under

this section prior to the institution of any proceeding

under this subchapter involving such information.”’

Like § 1905, the maximum fine is $1000 and the maximum

imprisonment one year. And, as with § 1905 and the FOIA,

we must determine both whether the prohibition in 4 709

(e) applies and, if it does, whether a private cause of

action for its enforcement may be implied. By its terms

§ 709(e) applies only to employees of EEOC, and only to

information obtained by that agency on its own statutory

authority. Since it is a criminal statute, ordinary rules of

construction would seem to preclude its application, at

least in a criminal enforcement context, to officers or

employees of a different agency or to information obtained

by a different agency under that agency’s separate au-

thority. Two circuits have concluded that OFCC compli-

32a

ance agencies are not governed by the §709(e) prohibi-

tion.” Chrysler argues that those cases were wrongly

decided, first because OFCC and EEOC are performing

identical antidiscrimination functions, and second, because

the EEO-1 reports are filed initially with the Joint Re-

porting Committtee,“* which it describes as the alter ego of

EEOC.

It has long since been settled in this circuit that the

federal government’s antidiscrimination effort directed

at government contractors rests upon a different authority,

and even serves a different, though complementary, pur-

pose that the efforts of EEOC." The Executive Order

program antedated the passage of Title VII, and Congress

has rejected proposals to transfer the Executive Order

functions of OFCC to EEOC." The two agencies function

independently, and we decline the invitation to disregard

that independence in order to read § 709(e) as applicable

to OFCC compliance agencies such as DSA.

The argument that the Joint Reporting Committee

(JRC) is the alter ego of EEOC, and that all EEO-1 forms

“’ Westinghouse Elec. Corp. v. Schlesinger, 542 F.2d 1190, 1199

(4th Cir. 1976), cert. denied sub nom. Brown v. Westinghouse

Klee. Corp. USS. (1977); Sears, Roebuck and Co. v.

General Services Admin., 509 F.2d 527, 529 (D.C. Cir. 1974).

But cf. Chamber of Commerce v. Legal Aid Society, 423 U.S. 1309

(1975) (Douglas, J., denying motion for a stay).

*? See n.21 supra.

** Contractors Ass’n of Eastern Pa. v. Secretary of Labor, 442

F.2d 159, 173 (3d Cir. 1971), cert. denied, 404 U.S. 854 (1971);

EEOC v. AT&T, Civ. Nos. 76-2217, 76-2281, 76-2285 (3d Cir. filed

April 22, 1977), 45 U.S.L.W. 2508 (1977), petition for cert. filed

45 US.L.W. (1977).

** Compcre H. Rep. No. 92-238, 92d Cong. 2d Sess., reprinted

in U.S. Code Cong. & Ad. News, 2137, 2150 (1972) (suggesting

the transfer of OFCC to EEOC) with the final version of the

1972 amendments to Title VII, Pub. L. 92-261, 86 Stat. 104.

33a

filed with JRC must therefore fall within §709(e) is no

more persuasive. The JRC is a consequence of the 1972

amendments to Title VII which established the Equal Em-

ployment Opportunity Coordinating Council, 42 U.S.C.

§ 2000e-14. The Coordinating Council is responsible for,

among other things, implementing inter-agency agree-

ments to eliminate duplication among the operations, func-

tions and jurisdictions of various federal agencies enforc-

ing federal antidiscrimination employment policies. JRC

was organized by the Coordinating Council to streamline

the collection of employment discrimination information

and to distribute it, without the necessity for multiple fil-

ings, to the separate agencies involved.“ It is clear that

JRC is the agent of several enforcement authorities.

Nevertheless, nothing in 42 U.S.C. § 2000e-14 or in the im-

plementing regulations which created JRC suggests an

intention to extend the applicability of § 709(e) to federal

employees outside EEOC or to information possessed by

other agencies on their own authority.

Even assuming the applicability of §4709(e) to DSA,

we are no more persuaded that a private cause of action

can be implied from this criminal statute than from § 1905.

The same reasons for our rejection of a private cause of

action implied from $1905 apply to §709(e), and we will

not repeat them. Chrysler’s argument for a right to a

trial de novo based on § 709(e) of Title VII is rejected.

3. 44 U.S.C. § 3508

Section 423 of the Federal Reports Act of 1942," now

codified as 44 U.S.C. § 3508 * provides:

* See, e.g., 41 C.F.R. 60-40.4.

*5 Pub. L. 77-831, ch. 811, § 4, 56 Stat. 1079. This act was de-

signed to minimize the burden and expense to citizens of com-

plying with multiple government requests for information and to

eliminate unnecessary duplication of reporting requirements. See

88 Cong. Rec. 9165 (Nov. 27, 1942).

** Pub. L. 90-620, 82 Stat. 1304.

34a

(a) If information obtained in confidence by a Fed-

eral agency is released by that agency to another

Federal ageiicy, all the provisions of law including

penalties which relate to the unlawful disclosure of

information apply to the officers and employees of the

agency to which information is released to the same

extent and in the same manner as the provisions apply

to the officers and employees of the agency which

originally obtained the information. The officers and

employees of the agency to which the information is

released, in addition, shall be subject to the same pro-

visions of law, including penalties, relating to the un-

lawful disclosure of information as if the information

had been collected directly by that agency.

(b) Information obtained by a Federal agency

from a person under this chapter may be released to

another Federal agency only—

(1) in the form of statistical totals or sum-

maries; or

(2) if the information as supplied by persons

to a Federal agency had not, at the time of col-

lection, been declared by that agency or by a su-

perior authority to be confidential ; or

(3) when the persons supplying the information

consent to the release of it to a second agency by

the agency to which the information was origi-

nally supplied; or

(4) when the Federal agency to which another

Federal agency releases the information has au-

thority to collect the information itself and the

authority is supported by legal provision for

criminal penalties against persons failing to sup-

ply the information.

Chrysler argues that by virtue of the second sentence in

§ 3508(a) the employees of DSA are subject to the crim-

Se ek

35a

inal provisions of §709(e) of Title VII, even though that

criminal statute would otherwise be applicable only to

EEOC employees. This argument, however, assumes that

DSA obtained the information in question from EEOC.

Clearly that is not the case with respect to the AAP’s, the

CIR’s, or the CRR’s. Though DSA and EEOC both ob-

tain Chrysler’s EEO-1 reports from the JRC, in the pre-

ceding subsection we rejected Chrysler’s contention that

the JRC is an alter ego of EEOC, rather than a collection

agent of both EEOC and OFCC. Since DSA did not ob-

tain the EEO-1 reports from EEOC, but instead, obtained

this information on its own behalf in the first instance,

§ 3508(a) does not apply. Sears, Roebuck & Co. v. GSA,

509 F.2d 527, 529 (D.C. Cir. 1974). Nor may Chrysler

argue that the provisions of § 3508(b) prohibit DSA from

publicly disclosing the contested documents, since this sub-

section only governs inter-agency transfers of information,

and is not applicable to agency decisions to disclose in-

formation to the general public.

We hold that § 3508 is entirely inapplicable to the case

before us. Whether this statute, which contains no sanc-

tions, would support an implied private cause of action to

prevent inter-agency transfers of information in violation

of its terms is a question of some difficulty, which we do

not here decide.

C. The Administrative Procedure Act

The government first took the position that there could

be no judicial review, on behalf of a submitter, of an

agency decision to release information requested by third

parties under the FOIA. It now concedes that judicial re-

view pursuant to the Administrative Procedure Act (APA)

is available because a submitter may be ‘‘[a] person suf-

fering legal wrong because of agency action . .. within the

meaning of a relevant statute.’’* In light of that con-

875 U.S.C. § 702 (1970). See text following n.4 supra.

36a

cession there is no need te expound at length on the reasons

why we agree with those courts which have held that the

APA provide a cause of action for enjoining an agency

from disclosing submitter-generated information." The

district court rejected the government’s first position and

held that judicial review was available under the APA.

But while we agree with that ruling we have some diff-

culties with its application in this case.

Our first difficulty is with the district court’s holding

that DSA, in its decision to disclose the manning tables,

which the court viewed as confidential data, was acting in

violation of its own regulations, 29 C.F.R. § 70.21(a),”

and thus ‘‘not in accordance with law.’’*” Although 29

C.F.R. § 70.21(a) is modeled after the criminal disclosure

prohibitions in 18 U.S.C. § 1905,” it, like § 1905, only pro-

hibits disclosures ‘‘not authorized by law.’’ Since we have

held that any disclosures pursuant to the OFCC disclosure

regulations are authorized by law, the prohibitions in 29

C.F.R. § 70.21(a) are not applicaole to this case.

Our second difficulty with the decision concerns the

proper scope of judicial review under the APA. In reach-

ing its decision the district court held a trial de novo on

the merits of Chrysler’s assertions and relied heavily on

the trial testimony of Chrysler’s witnesses in reaching the

determination that the manning tables constituted confi-

dential data which DSA could not disclose. Judicial review

under the APA ordinarily is limited to a ‘‘review of the

** See, e.g., Charles River Park ‘‘A’’, Inc., supra, 519 F.2d at

941 n.6; Pennzoil Co. v. F.P.C., supra, 534 F.2d at 631-32 (5th

Cir. 1974) ; GTE Sylvania, Inc. v. Consumer Product Safety Com-

mission, 404 F. Supp. 352, 366-67 (D. Del. 1975).

®° See n.36 supra for text.

°° 5 U.S.C. § 706(2)(A) (1970).

"Compare 18 U.S.C. § 1905, supra at n.44, with 29 C.F.R.

§ 70.21(a), supra at n. 36.

37a

whole [agency] record or parts of it cited by a party.’’”

That rule is not inflexible, for certainly evidence may be

taken in connection with an application under 5 U.S.C.

§ 705 for relief pending review. Moreover, the Supreme

Court has approved de novo rather than agency record

review (a) when the agency’s action is either adjudicatory

in nature and its factfinding procedures are inadequate,

or (b) when issues that were not before the agency are

raised in a proceeding to enforce nonadjudicatory agency

action.** In this case, however, the district court relied on

the testimony of trial witnesses not merely to decide the

question of relief pending review, but also to decide the

substantive merits. And in reaching the merits the court

did not address the question whether an agency disclosure

decision pursuant to the FOIA or agency disclosure regu-

lations was adjudicatory, and if so, whether the agency’s

procedures on which the disclosure decision was based were

adequate.”

Chrysler, relying on Sears, Roebuck & Co. v. General

Services Administration, Civ. No. 75-2121, Slip Op. at 4-5

(D.C. Cir. filed April 1, 1977), urges that regardless of the

judicial review provisions of the Administrative Pro-

cedure Act the Declaratory Judgment Act, 28 U.S.C.

§ 2201, provides separate authority for the district court to

hold a de novo hearing. That argument, however, would

be equally applicable to every agency review case, and the

Declaratory Judgment Act so construed would eliminate

the effect of the later enacted Administrative Procedure

Act. The Supreme Court stated in Public Serv. Comm’n

v. Wycoff Co., 344 U.S. 237, 246 (1952), that ‘‘the declara-

25 U.S.C. § 706 (1970).

3 Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402,

415 (1971).

* Neither party contends that the district court was presented

with any issues not before DSA.

¢'

;

}

;

38a

tory judgment procedure will not be used to pre-empt and

prejudge issues that are committed for initial decision to

an administrative body or special tribunal any more than it

will be used as a substitute for statutory methods of re-

view.’’ To construe the Declaratory Judgment Act to

permit a federal court to conduct a trial de novo in re-

verse FOIA cases would transfer primary decisional re-

sponsibility for agency disclosures from the administrative

agencies to the federal courts. We think the construction

which Congress intended is that the scope of judicial re-

view provisions of the Administrative Procedure Act apply

in declaratory judgment actions.

It seems to us that in reverse FOIA cases under the

APA a reviewing court should make the following analysis.

First it should inquire whether any non-disclosure statute

or non-disclosure regulation is applicable. If so, the court

must conclude that the agency has acted outside the scope

of its statutory authority, and should enjoin disclosure. If

no non-disclosure statute or regulation applies, the court

must then determine under what authority the agency in-

tends to disclose the contested information. If the agency

has concluded that the contested information does not fall

within any FOIA exemption, thus mandating disclosure,

the court must examine whether the agency applied the

proper legal standards for the applicability of the FOIA

exemptions. If, however, the agency has concluded (a)

that the contested information does fall within a FOIA

exemption but (b) public disclosure is, nevertheless, both

desirable and permissible under the agency’s own dis-

closure regulations, the court must undertake a two-step

analysis. It must first examine whether the agency applied

the proper legal standards for the applicability of the

FOIA exemptions and, if so, then examine whether the

agency considered the proper factors in determining that

disclosure was permitted under its own disclosure regula-

tions. Under the OFCC disclosure regulations, for ex-

39a

ample, the contested information in this case could only

be disclosed if that agency determined that disclosure

would ‘‘further the public interest and [not] impede the

discharge of any of the functions of the OFCC or the

Compliance Agencies.’’** And, as the FOIA exemptions

make clear, disclosure of certain types of information will

not, in the opinion of Congress, always be in the public

interest. Finally, if the agency record does not establish,

or insufficiently explains, the basis for the agency’s deci-

sion, so as not to permit the reviewing court to effectively

perform the above analysis, the remedy is not a trial de

novo, but a remand to the agency for an additional record

or explanation for its decision.* Interim relief can, of

course, be ordered on the authority of 5 U.S.C. § 705.

Applying the foregoing principles to this case, we

conclude that this is an instance in which a remand to the

agency is appropriate. The agency record is so ambiguous

that it is impossible to determine whether the decision of

DSA to disclose the contested information was based on a

determination that disclosure is mandated by the FOIA,

or is in the public interest snd thus permissible under that

agency’s own disclos.:. regulations. Even if the agency

record clearly revealed that the disclosure decision was

based on a determination that disclosure was mandated

by the FOIA, a remand would still be necessary, as the

record does not sufficiently disclose the basis for the agency

determination that the FOIA exemptions are inapplicable.

Nor would the result be any different if the record revealed

*°41 C.F.R. § 60-40.3(a), see n.19 supra for text; id. at § 60-

40.2(a).

% See Camp v. Pitts, 411 U.S. 138, 142-43 (1973). We recognize

that under Camp v. Pitts, supra, testimony or affidavits from the

administrator setting forth the reasons for the decision made on

agency record may sometimes be appropriate. No such testimony

or affidavits were tendered in this case. Here we think a remand

to the agency is appropriate for the reasons set forth in the text.

40a

that disclosure was pursuant to the agency’s own regula-

tions, as the record does not state that, or why, such dis-

closure would be in the public interest.

Our decision to remand this case is based solely on the

inadequacy of the administrative record under review. The

government has urged that the district court should not

have, and we should not now, reach the merits of the chal-

lenge to the actions of DSA because of Chrysler’s failure

to exhaust an administrative review remedy available in

OFCC. We reject this contention. Judicial review of

agency action must be available at a meaningful time con-

sidering the nature of the alleged injury to the petitioner

for review. As DSA announced in its letters, it considers

the FOIA 10 day time limit for action on requests for non-

exempt FOIA information, 5 U.S.C. §552(a)(6)(A)(i),

binding on it regardless of the pendency of an administra-

tive review proceeding. Since disclosure would render

moot any judicial review, the nature of the subject matter

demands that the action of DSA be regarded as the final

agency action to which such review is directed. The ad-

ministrative appeal to which the government refers is a

creature of regulation, 41 C.F.R. 4 60-60.4(d)," and the

availability of that remedy cannot be permitted to destroy

the subject matter of a proceeding seeking judicial review.

If there were no pending FOIA requests, and Chrysler

were seeking an advance determination that some of the

contested information should be withheld from the public

it would be appropriate to require exhaustion of a § 60-

60.4(d) review in OFCC. But this case is not in that pos-

ture. The district court properly considered both the

requests for interim relief and the merits of the claim for

judicial review.

*? See n.27 supra.

4la

D. Chrysler’s Due Process Claims

Chrysler contends that it was denied due process of

law in the agency proceedings which led to the DSA deci-

sion to disclose the contested documents. To the extent

that Chrysler’s due process claims are procedural we hold

that, in light of the interests involved, OFCC disclosure

regulation 41 C.F.R. 4 60-60.4(d),* coupled with the process

of administrative and judicial review set out above in Part

IVC, meet fifth amendment due process standards. Any

claim to substantive due process protection of ‘‘property’’

interests in information in the hands of the government is

at this stage and on this record too speculative for our

consideration. Since the Supreme Court’s decisions in

Goldstein v. California, 412 U.S. 546 (1973) and Kewanee

Oil Co. v. Bicron Corp., 416 U.S. 470 (1974), there is con-

siderable doubt as to what law, state or federal, and if

state law, what state’s law, should be looked to for such a

‘*property’’ interest. The government urges that whether

or not there is some proprietary interest in the disputed

information, that interest is waived by any contractor doing

business with the government. There is no need for us to

endorse that position, which would require far more

knowledge about government contracting statutes than has

been furnished to us by the parties in this case. We do

note that Chrysler has suggested no proprietary interest

which would be broader than the categories made exempt

from disclosure by 41 C.F.R. § 60-40.3(a).* Until we are

faced with a final decision to release such information we

need not consider any substantive due process contentions.

8 Td.

°° See n.19 supra.

42a

ConcLusiIon

The judgment of the district court shall be vacated

and the case remanded to the district court for entry of an

order that DSA conduct further proceedings consistent

with this opinion. The district court should retain juris-

diction pending such further proceedings, and may con-

sider the entry of an appropriate protective order until

their completion. Pending the entry of the district court’s

order pursuant to the mandate of this court the extant stay

order shall continue in effect. The appellant and appel-

lees shall each bear their own costs.

43a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

No. 75-159

CurysLer Corporation, Plaintiff,

James R. ScHLESINGER, ET AL., Defendants.

Opinion

Layton, Senior District Judge.

Plaintiff, Chrysler Corporation, is engaged, inter alia, in

the manufacturing of automobiles, air conditioning and

heating equipment and chemical and metal products. Plain-

tiff transacts business throughout the United States. A

portion of Plaintiff’s business is comprised of contracts

and subcontracts with the United States and its agencies.

Executive Order 11246, as amended 3 C.F.R. E.O. 11246,

requires that government contractors refrain from discrimi-

natory employment practices. Section 202 of the Executive

Order requires that all large government contracts contain

seven specific paragraphs set forth in that section. Plain-

tiff’s contract with the Government contains the required

language.

The fourth of the numbered paragraphs set forth in sec-

tion 202 requires that the contractor comply with all provi-

sions of Executive Order 11246 and of the rules, regulations

and relevant orders of the Secretary of Labor. The Secre-

tary of Labor has promulgated regulations pursuant to sec-

tion 201 of the Executive Order which are found at 41 C.F.R.

§ 60-1.1 et seq.

Executive Order 11246, as amended, and the regulations

promulgated thereunder require government contractors to

submit equal opportunity reports and programs to the Of-

44a

fice of Federal Contract Compliance (‘‘OFCC’’) or the De-

partment of Labor and various OFCC compliance agencies,

including the Defense Supply Agency (‘‘DSA’’). 3 C.F.R.

E.O. 11246, § 203; 41 C.F.R. §§ 60-1.2 and 60-1.6. Failure of

a government contractor to comply with the Executive Order

and the regulations can result in the cancellation of existing

contracts and debarment of the contractor from future con-

tract awards. 3 C.F.R. E.O. 11246, § 209.

The DSA has acted as the compliance agency for Plain-

tiff. Pursuant to the Executive Order and the regulations,

which have been incorporated into Plaintiff’s contract with

the Government, Plaintiff has been required to file the

Standard Form 100 (‘‘EEO-1’’) with the Joint Reporting

Committee (‘‘JRC’’) which collects the form for the DSA.

A separate form must be filed for each of Plaintiff’s domes-

tic facilities and a separate one for Plaintiff’s entire corpo-

rate domestic operation. 41 C.F.R. § 60-1.7; Stip. par. 3.

The EEO-1’s prepared and filed by Plaintiff contain sta-

tistical information with respect to the total number of per-

sons employed, and the number of minority and female per-

sons employed, by Plaintiff in nine general job categories.

Stip. par. 3.

Plaintiff has also been required, pursuant to the regula-

tions incorporated into its contract with the Government, to

prepare Affirmative Action Plans (‘‘AAP’s’’) for its entire

corporate domestic operation and separately for each of its

individual domestic facilities. 41 C.F.R. § 60-1.40; Stip. par.

4. In its AAP’s, Plaintiff is required to include a great deal

of detailed employment information, both statistical and

narrative in nature, concerning Plaintiff’s total, and minor-

ity and female, employment for each of Plaintiff’s specific,

internally used job classifications. 41 C.F.R. § 60-1.40(a) ;

Stip. par. 4. In this respect each of Plaintiff’s AAP’s in-

cludes information on staffing patterns, pay scales, actual

and expected shifts in employment, promotions, seniority

and related job matters. Plaintiff’s AAP’s are also required

45a

to include forecasts of future employment; to set out goals,

time tables and future projections for the employment, pro-

motion and utilization of minorities and females; and to

include an analysis of Plaintiff’s success in meeting such

goals. 41 C.F.R. § 60-1.40(b); Stip. par. 5..

Plaintiff is not required regularly to file its AAP’s with

the DSA, but the DSA regularly conducts ‘‘compliance re-

views,’’ pursuant to 41 C..F.R. §§ 60-1.20 and 60-60.3, to de-

termine whether Plaintiff is in compliance with the Execu-

tive Order and the regulations promulgated thereunder.

During the course of such compliance reviews, which con-

sists of an examination of Plaintiff’s affirmative action

documents and also an on-site examination of Plaintiff’s

facilities, Plaintiff is required, pursuant to the regulations

incorporated into its contract with the Government, to sub-

mit pertinent AAP’s for its domestic facilities. 41 C.F.R.

§§ 60-1.40(c) and 60-60.3(a); Stip. par. 5.

At the conclusion of a compliance review of one of Plain-

tiff’s facilities, the Government’s compliance review officer

prepares a compliance review report (‘‘CRR’’). 41 C.F.R.

§ 60-60.3. The report includes information submitted to him

by Plaintiff, analyzes Plaintiff’s compliance with the Execu-

tive Order and the regulations, and contains recommenda-

tions to the regional office of the DSA on action which

should be taken against Plaintiff and the corrective meas-

ures which Plaintiff should be required to implement. 41

C.F.R. §§ 60-1.7 and 60-60.3; Stip. par. 5.

The DSA also administers regulations, applicable to

Plaintiff pursuant to the contractual agreement, which pro-

vide for the filing of complaints alleging violations of Ex-

ecutive Order 11246 and for the investigation and resolution

of such complaints. 41 C.F.R. § 60-1.24. These complaints

may be filed by job applicants and employees of a govern-

ment contractor. 41 C.F.R. § 60-1.21.

46a

In investigating a complaint, the DSA generally requests

copies of, and reviews, the Plaintiff’s AAP’s, EEO-1’s and

related supporting material. Stip. par. 6. DSA is required to

file a complaint investigation report (‘‘CIR’’) with OFCC

within sixty days of receipt of the complaint. 41 C.F.R.

§ 60-1.24(d).

On May 14, 1975, DSA notified Plaintiff by telephone that

DSA had received a request for the public disclosure of the

1974 AAP and the report of an October, 1974, complaint in-

vestigation for Plaintiff’s Newark, Delaware, assembly

plant. Stip. par. 9.

By letter dated May 23, 1975, Plaintiff objected to the

proposed disclosure of the AAP and the CIR for the New-

ark, Delaware, plant. Stip. par. 10.

On May 30, 1975, DSA notified Plaintiff by telephone that

DSA would disclose the documents on June 4, 1975. Stip.

par. 11.

On July 1, 1975, DSA notified Plaintiff by telephone that

it had received a request for the public disclosure of the

AAP’s and CRR’s for the Plaintiff’s Hamtramck, Michi-

gan, facility. Stip. par. 12."

By letters dated July 3, 1975, and July 11, 1975, Plaintiff

objected to the proposed disclosure of the documents relat-

ing to its Hamtramck, Michigan, facility. Stip. par. 13.

By letter dated July 18, 1975, DSA notified the Plaintiff

that DSA would disclose the documents on July 25, 1975.

Stip. par. 14.

*In its Second Amended Verified Complaint, Plaintiff alleged

that the Government intends to disclose an EEO-1 submitted by

Plaintiff. The administrative records of the Government’s decisions

to disclose do not indicate this. Nor did Plaintiff show the Court

that an EEO-1 had been attached to any of the documents that

the Government intends to disclose. This being so, the Court finds

that the Plaintiff has failed to prove that the Government intends

to disclose an EEO-1.

47a

In response to the threatened disclosures, Plaintiff has

filed a complaint in this Court seeking declaratory and in-

junctive relief. This Court issued a preliminary injunction

against the threatened disclosures.

Jurisdiction

A factual hearing was held over the Government’s objec-

tion that the Court lacked subject matter jurisdiction of the

case. The Court reserved its decision on this issue until a

decision on the merits could be rendered.

The complaint contains three numbered counts: 1) that 41

C.F.R. § 60-40.1 et seq., 29 C.F.R. § 70.1 et seqg., and 5 U.S.C.

§ 552 violate Plaintiff’s right to due process of law because

they do not require predisclosure notice and hearing;’ 2)

that the threatened disclosure is an unlawful abuse of

agency discretion and that the Secretary of Labor has ex-

ceeded his authority in issuing the regulations upon which

the disclosure is based because the threatened disclosures

and regulations are in conflict with 42 U.S.C. § 2000e-8(e),

44 U.S.C. § 3508 and 18 U.S.C. § 1905; 3) that the threat-

ened disclosure is an unlawful abuse of agency diseretion as

the disclosure violates 41 C.F.R. § 60-40.3 and 29 C.F.R.

§§ 70.21, 70.22, 70.24 and 70.31.*

The Court holds that it has jurisdiction of the case under

28 U.S.C. § 1331 and that the case arises in part under the

Fifth Amendment to the United States Constitution.’ Bell

2 Plaintiff’s Count III, Second Amended Verified Complaint.

* Plaintiff’s Count I, Second Amended Verified Complaint.

‘ Plaintiff’s Count II, Second Amended Verified Complaint.

5«* And a cause of action may be supported by two or more

grounds, and if one ground involves a substantial federal question

that is sufficient to give the federal court jurisdiction to decide

the merits of the entire cause of action, even though the federal

claim is not sustained, . . ..”’ 1 Moore’s Federal Practice, {| 0.60

[8.-3], P. 634.

> |

48a

v. Hood, 327 U.S. 678, 680-83, 56 S.Ct. 773, 774-775, 90 L.Ed.

939, 942-43 (1946). Having so decided, the Court further

holds that the Court may conduct a review, under 5 U.S.C.

§ 701 et seq., of the agency’s decision to disclose. While 5

U.S.C. § 702 is not considered a jurisdiction-granting statute

in the Third Circuit, the Court has jurisdiction of the case

under 28 U.S.C. § 1331, which provides the independent

basis of jurisdiction required by Bachowski v. Brennan, 502

F.2d 79, 82 (3rd Cir. 1974), rev’d on other grounds, 421 U.S.

560, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975).

Public Disclosure of Information By An Agency

The Freedom of Information Act (‘‘FOIA’’), 5 U.S.C.

§ 552, divides the information within the Government’s con-

trol into two kinds: 1) information which must be disclosed

upon request and 2) information which may or must be

withheld from a requestor. Charles River Park ‘‘A’’, Inc.

v. HUD, 171 U.S.App.D.C. 286, 519 F.2d 935, 942 (1975).

The FOIA requires the Plaintiff in this ‘‘reverse’’ Free-

dom of Information case to prove that the information re-

quested is not in the category of information which must be

disclosed upon request. To do this, Plaintiff must prove that

the information sought by the requestor is within one of the

nine categories of information excepted from mandatory

disclosure in 5 U.S.C. § 552(b).* Sears, Roebuck & Co. v.

GSA, 402 F.Supp. 378, 383 (D.D.C.1975).

*5 U.S.C. § 552(b):

‘*This section does not apply to matters that are—

(1)(A) specifically authorized under criteria established by

an Executive order to be kept secret in the interest of na-

tional defense or foreign policy and

(B) are in fact properly classified pursuant to such Execu-

tive order ;

(2) related solely to the internal personnel rules and practices

of any agency ;

49a

The Plaintiff has failed to prove that any category other

than 5 U.S.C. § 552(b)(4) is applicable to any of the re-

quested information. Further, Plaintiff has failed to prove

that 5 U.S.C. § 552(b)(4) is applicable to any information

other than the manning tables contained in the AAP’s and

CRR’s.

(3) specifically exempt frem disclosure by statute ;

(4) trade secrets and commercial or financial information ob-

tained from a person and privileged or confidential ;

(5) inter-agency or intra-agency memorandums or letters

which would not be available by law to a party other than an

agency in litigation with the agency ;

(6) personnel and medical files and similar files the disclosure

of which would constitute a clearly unwarranted invasion of

personal privacy ;

(7) investigatory records compiled for law enforcement pur-

poses, but only to the extent that the production of such

records would (A) interfere with enforcement proceedings,

(B) deprive a person of a right to a fair trial or an im-

partial adjudication, (C) constitute an unwarranted invasion

of personal privacy, (D) disclose the identity of a confidential

source and, in the case of a record compiled by a law enforce-

ment authority in the course of a criminal investigation, or

by an agency conducting a lawful national security intelligence

investigation, confidential information furnished only by the

confidential source, (E) disclose investigative techniques and

procedures, or (F) endanger the life or physical safety of law

enforcement personnel ;

(8) contained in or related to examination, operating, or con-

dition reports prepared by, on behalf of, or for the use of an

agency responsible for the regulation or supervision of finan-

cial institutions; or

(9) geological and geophysical information and data, includ-

ing maps, concerning wells.

Any reasonably segregated portion of a record shall be provided

to any person requesting such record after deletion of the portions

which are exempt under this section.’’

50a

At the evidentiary hearing, Plaintiff placed a copy of an

AAP (Px-1) and a CRR (Px-4) in evidence and called four

principal witnesses: Mr. Harris, Plaintiff’s ‘‘Manager of

personnel administration at the corporate level’’; Mr. Dus-

sey, Plaintiff’s ‘‘manager of personnel research’’; Mr.

Kerr, Plaintiff’s ‘‘assistant corporate controller’’; and Dr.

Plotkin, a ‘‘senior economist’’ employed by Arthur D. Lit-

tle, Inc., an accounting firm.

Most of the evidence presented by the Plaintiff related to

an AAP for the Newark, Delaware, facility (Px-1). Harris

testified that the the AAP contains ‘‘manning”’ tables for

each subdepartment of the facility. (Tr. 31). The manning

table are lists of the Plaintiff’s internally used job titles and

the number of people who perform each job. (Tr. 29). The

number of people who perform the job is known as the

‘*population,’’ and the population is broken down by sex

and race. (Tr. 29).

Similar manning tables can be found in the CRR, Px-4.

Thus, much of the evidence introduced to explain the impor-

tance of the AAP to Plaintiff applies with equal force to the

CRR.

Plaintiff has contended, and proved to the satisfaction of

the Court, that the manning tables contained in the AAP

and CRR are confidential commercial information within

the meaning of 5 U.S.C. § 552(b)(4). In order to be so, the

information must be: 1) confidential and 2) such that release

could cause Plaintiff substantial competitive harm. National

Park & Conservation Assn. v. Morton, 162 U.S. App.D.C.

223, 498 F.2d 765, 770 (1974).

The testimony clearly shows that the manning tables are

confidential. Harris and Dussey testified that the AAP’s

prepared by Plaintiff have not been released to anyone. (Tr.

57, 74-75). Dussey testified that manning tables have never

been disclosed and that a job classification’s population has

never been disclosed. (Tr. 103). Plotkin testified that per-

5la

sonnel data similar to the manning tables is not available

elsewhere (Tr. 227), and the Government failed to show the

contrary.

The record also establishes that the release of the man-

ning tables could cause Plaintiff substantial competitive

harm in several different ways. First, the possession of such

a document could aid another corporation in its practice of

employee raiding, a practice not unknown in the automobile

industry. (Tr. 41). The manning tables, with their race and

sex breakdown, would aid a potential employer in identi-

fying a Chrysler employee with just the skills, race and sex

it needs. (Tr. 45-47). Employee raiding is particularly help-

ful in meeting minority and female hiring goals and re-

quirements. (Tr. 42-43). Losses of such employees are ex-

pensive to the Plaintiff because they distract employees

from their jobs and the loss of an employee means the loss

of the funds spent training him. (Tr. 43-44).

Second, the possession of a manning table would permit

a competitor to determine the exact use of Plaintiff’s labor

force, and thus the technology being applied by Plaintiff.

Plotkin demonstrated this by diagraming Plaintiff’s New-

ark, Delaware, facility based solely upon the information

contained in the manning tables. His diagram was intro-

duced into evidence as Px-9. Such a diagram would be useful

in comparative analysis and would alert competitors to

areas worth their managerial time. (Tr. 162-63; Tr. IT 27).

Third, the possession of manning tables produced over

several years would allow Plaintiff’s competitors to reduce

their risk taking. (Tr. II 54-55). All automobile manufac-

turers purchase machinery from the same producers. (Tr.

IT 52-55). Allowing Plaintiff to buy newly designed equip-

ment and waiting to see the changes in employee utilization

reflected in the different years’ manning tables would allow

the competitor to determine whether the machinery de-

creases or increases labor costs. (Tr. IT 55-56). After read-

ing Plaintiff’s test results from the manning tables, the

52a

competitor would know whether or not the new equipment

was a good investment.

Having found that the manning tables contained in the

AAP’s and CRR’s are exempt from mandatory disclosure,"

they are found to be of the second type of information cre-

ated by the FOIA, information which may or must be with-

held. Information of this type is not controlled by the FOLA,

but by regulations promulgated under 5 U.S.C. § 301."

Charles River Park ‘‘A’’, Inc., 519 F.2d at 942.

5 U.S.C. § 301 is the general statute providing for the

promulgation of regulations for the use and custody of gov-

ernment records. Pursuant to this statute, the Secretary of

Labor promuigated 29 C.F.R. § 70.21(a)* which is applicable

* Data similar to that found in EEO-1’s can be found in the

AAP’s. This data is far less detailed than that found in the

manning tables. The data is broken down into only niue general

job categories. Plaintiff failed to meet iis burden of proof to show

that the release of such general data could cause substantial com-

petitive harm. Therefore, this data is not within the 5 U.S.C.

§ 552b) (4) exemption to the general rule of mandatory disclosure.

®5 U.S.C. § 361:

‘‘The head of an Executive department or military department

may prescribe regulations for the government of his department,

the conduct of its employees, the distribution and performance

of its business, and the custody, use, and preservation of its

records, papers, and property. This section does not authorize

withholding information from the public or limiting the avail-

ability of records to the public.’’

*29 C.F.R. § 70.21(a) :

‘*Pursuant to the provisions of 18 U.S.C. 1905, every officer and

employee of the Department of Labor is prohibited from publish-

ing, divulging, disclosing, or making known in any manner or to

any extent not authorized by law any information coming to him

in the course of his employment or official duties or by reason of

any examination or investigation made by, or return, report or

record made to or filed with the Department or any agency or

officer or employee thereof, which information concerns or relates

53a

to DSA as a delegate of powers of the Department of La-

bor’s OF CC. (See, 41 C.F.R. § 60-1.6).

29 C.F.R. § 70.21(a) forbids the agency to disclose infor-

mation that would expose the disclosing employee to crim-

inal liability under 18 U.S.C. § 1905." That criminal statute

makes it illegal for a government employee to disclose con-

fidential statistical data submitted to the Government by a

corporation.

The manning table contained in the AAP’s and CRR’s

consist entirely of confidential commercial statistical data.

All of the statistics were submitted by Plaintiff, a corpora-

tion. Therefore, an employee disclosing the manning tables

contained in the AAP’s and CRR’s would face criminal lia-

bility under 18 U.S.C. § 1905. Such a disclosure is forbidden

by 29 C.F.R. § 70.21(a).

The DSA’s decision to disclose the manning tables vio-

lates 29 C.F.R. § 70.21(a). An agency which violates its

to the trade secrets, processes, operations, style of work, or ap-

paratus, or to the identity, confidential statistical data, amount

or source of any income, profits, losses, or expenditures of any

person, firm, partnership, corporation, or association. No officer or

employee of the Department of Labor shall disclose records in

violation of this provision of law.’’

2°18 U.S.C, § 1905:

‘*Whoever, being an officer or employee of the United States

or of any department or agency thereof, pablishes, divulges, dis-

closes, or makes known in any manner or to any extent not au-

thorized by law any information coming to him in the course of

his employment or official duties or by reason of any examination

or investigation made by, or return, report or record made to or

filed with, such department or agency or officer or employee thereof,

which information concerns or relates to the trade secrets, processes,

operations, style of work, or apparatus, or to the identity, con-

fidential statistical data, amount or source of any income, profits,

losses, or expenditures of any person, firm, partnership, corpora-

tion, or association ; or permits any income return or copy thereof

or any book containing any abstract or particulars thereof to be

seen or examined by any person except as provided by law; shall

be fined not more than $1,000, or imprisoned not more than one

year, or both; and shall be removed from office or employment.”’

‘

ee - Qs,

ee ee en ee Cre Pe Ow

54a

regulations is acting contrary to law, within the meaning

of 5 U.S.C. §706(2)(A),"* and may be enjoined from so

doing. See, S.S. Logging Co., Inc. v. Barker, 366 F.2d 617,

624 n. 6 (9th Cir. 1966) ; Delaware v. Bender, 370 F. Supp.

1193, 1203 (D.Del.1974). Therefore, the Court will enjoin

the disclosure of the manning tables found in the AAP’s

and CRR’s.

In light of the foregoing, it is not necessary to discuss the

other regulations cited by Plaintiff in Count II of its com-

plaint.

Nor is it necessary to discuss the alleged conflict between

the Government’s disclosure regulations and the statutes

cited by Plaintiff in Count I of its complaint. From what has

™5 U.S.C. § 706:

“To the extent necessary to decision and when presented, the

reviewing court shall decide all relevant questions of law, inter-

pret constitutional and statutory provisions, and determine the

meaning or applicability of the terms of any agency action. The

reviewing court shall—

(1) compel agency action unlawfully withheld or unreasonably

delayed ; and

(2) hold unlawful and set aside agency action, findings, and

conclusions found to be—

(A) arbitrary, capricious, an abuse of discretion, or other-

wise not in accordance with law;

(B) contrary to constitutional right, power, privilege, or

immunity ;

tions, or short of statutory right ;

(D) without observance of procedure required by law;

(E) unsupported by substantial evidence in a case subject

to sections 556 and 557 of this title or otherwise reviewed on

the record of an agency hearing provided by statute; or

(F) unwarranted by the facts to the extent that the facts

are subject to trial de novo by the reviewing court.

In making the foregoing determinations, the court shall review the

whole record or those parts of it cited by a party, and due account

shall be taken of the rule of prejudicial error.’’

55a

been said above, it is clear that the regulations do not con-

flict with 18 U.S.C. § 1905. That section is fully incorporated

into the Government’s disclosure regulation 29 C.F.R.

§ 70.21(a). The other criminal statute cited by Plaintiff, 42

U.S.C. § 2000e-8(e) does not apply to this fact pattern for

the reasons stated in Sears, Roebuck & Co. v. GSA, 166

U.S.App.D.C. 194, 509 F.2d 527 (1974).

Plaintiff’s final claim is that the FOIA and the Govern-

ment’s disclosure regulations violate the Fifth Amendment

to the United States Constitution because they do not re-

quire that Plaintiff be given notice of an FOIA request for

disclosure of information submitted to the Government by

Plaintiff and they do not require that Plaintiff be given a

hearing prior to disclosure in response to such a request.

The Fifth Amendment requires that the Government

grant notice and a hearing to a corporation before it

deprives it of property. Perry v. Sinderman, 408 U.S. 593,

92 S.Ct. 2694, 33 L.Ed.2d 570 (1972); Security Trust Co.

v. Lexington, 203 U.S. 323, 27 S.Ct. 87, 51 L.Ed. 204 (1906).

41 C.F.R. § 60-60.4(d) * provides for a hearing prior to the

241 C.F.R. § 60-60.4(d) :

‘* Public access to information. Information obtained from a con-

tractor under Subpart B will be subject to the public inspection

and copying provisions of the Freedom of Information Act, 5

U.S.C. 552. Contractors should identify any information which

they believe is not subject to disclosure under 5 U.S.C. 552 and

should specify the reasons why such information is not disclosable.

The Contract Compliance Office will consider the contractors claim

and make a determination, within 10 days, as to whether the ma-

terial in question is exempt from disclosure. The contract comonli-

ance officer will inform the contractor of such a determination. The

contractor may appeal that ruling to the Director of OFCC within

10 days. The Director of OFCC shall make a final determination

within 10 days of the filing of the appeal. However, during the

conduct of a compliance review or while enforcement action against

the contractor is in progress or contemplated within a reascnable

time, all information obtained from a contractor under Subpart B

except information disclosable under §§ 60-40.2 and 60-40.3 of this

56a

public disclosure of information submitted by the Plaintiff.

This regulation provides that the AAP’s and the data

which Plaintiff supplies for the CRR’s may be claimed by

the Plaintiff to be non-disclosable at the time they are

submitted to DSA." The regulation provides Plaintiff with

the opportunity to specify why it believes the information

to be non-disclosable and provides for a determination of

Plaintiff’s claims within ten days. It also allows Plaintiff

ten days in which to appeal to the Director of OFCC and

requires the Director to decide the appeal in ten days. The

decision of the Director is a final agency decision review-

able under 5 U.S.C. $701 et seg. Thus, the regulations

grant Plaintiff a constitutionally adequate hearing.

The record shows that Plaintiff was in fact given a pre-

disclosure hearing. Pursuant to 32 C.F.R. § 1285.7(b)(7),"

Plaintiff was notified that an FOIA request to disclose in-

formation which Plaintiff had submitted had been received

by the DSA. Plaintiff was given an opportunity to submit

written objections to, and written arguments against, the

public disclosure of the requested information. DSA de-

cided to disclose the manning table, among other docu-

ments, and it is this decision which the Court has reviewed

and found contrary to the agency’s regulations.

chapter is to be considered part of an investigatory file compiled

for law enforcement purposes within the meaning of 5 U.S.C. 522

(b)(7), and such information obtained from a contractor under

Subpart B shall be treated as exempt from mandatory disclosure

under the Freedom of Information Act during the compliance

review.”’

'S Plaintiff has argued that 41 C.F.R. § 60-60.4(d) does not pro-

vide for a claim of non-disclosability at the time of submission of

information to the Government, but rather at the time an FOIA

disclosure request is received. Such a reading of the regulation’s

language i

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.