Petition — Sears, Roebuck & Co. v. Dahm
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Supreme Court of the Anited States
OcTOBER TERM, 1977
No. 8-97 *
SEARS, ROEBUCK AND CO.,
vs.
CHARLES W. DAHM, O. P.,
and
JACK ECKERD, Administrator, General Services Admin-
istration; GENERAL SERVICES ADMINISTRATION;
WILLIE O. GREEN, Chicago Field Director of Contract
Compliance, General Services Administration; E. E.
MITCHELL, Director of Contract Compliance, General
Services Administration; WILLIAM J. USERY, JR., Secre-
tary of Labor; LAWRENCE Z. LORBER, Director, Office
of Federal Contract Compliance Programs, United States
Department of Labor, Respondents.
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT.
LAWRENCE M. COHEN
S. RICHARD PINCUS
PAUL R. GARRY
Fox AND GROVE
Sears Tower—Suite 7818 t
233 South Wacker Drive
Chicago, Illinois 60606
HyMEN S. BEAR
Sears, Roebuck and Co.
Sears Tower—Suiie 6900
233 South Wacker Drive
icago, Illinois 60684
Attorneys for Petitioner Sears,
Roebuck and Co.
Company, Chicago ¢ Financial 6-6565
— ll
agency regulations ‘Assued under 5 U.S.C. $001 are "authorized by law" and therefore not
Syage yc a = Ew es * "Saas ieee es EN in
probibited by 29-18 U.S.C. §1905°and exempt from release under FOIA Exemption ¥(3). cree
“=~ by the Third” Circuit yh: eee | 30!
Voreover;.as held in “mysler Corp. v. Schlesinger, Shee 565 F.28
1172 (m2 POR Arb), neither Section 1905 nor the FOIA itself pamatior authorizes
mo
reverse FOIA suits. The proper avenue of reviey in such suite is through the ~
Administrative Procedure pty eet 28 v. s. c. §1331 or $1337 as a basis for
jurisdiction. 4pp] ication of the four tests set out in tort v. Ash, 422 U.S. 66,
indicates that on balance Section 1905 meme: not be intaxz interpreted to pes a
~~
private cause of action. . ees he = ie
; 1 @ Freedom of Information Act or 16 Sie U.S.C.
51905 eS a person whe has submitted confidential comercial information toa
federal agency with a cause of action to challenge the proposed public disclosure of that
informat dan? Do agency disclosure regulations. issued pursuant to > U.S.C. §301, the
FOIA or 3.0. 11246 constitute "authorization Yy law” within the me, ing of 18 U.S. Cc.
_ $1905, that parait public disclosure of confidential, commercial information? If not, does
18 U.S.C. §1905 constitute a specific statutory exemption from disclosure under Rxemption
3 of the FOIA? (Sears, oebuck and Co. v. Dahm, Sup. Ct. No. 78-97, 7/17/78) :
At
“ee
18 USC i905 NO BASIS FOR
. FIRMS , bist
The U.S, Court of uit vacates a preliminary injunction
that prohibited the disclosure of certain confidential statistical data submitted by Sears under |
Executive Order 11246, holding that exemption (b) (3) of the Freedom of Information Act,
5 USC &552, and 18 USC $1905, taken together, neither forbid disclosure of the data nor
even provide a basis for an implied cause of action by an information supplier. (Sears,
Roebuck and Co. v. Eckerd, CA-7, 4/25/78)
Sears had submitted equal employment opportunity reports and affirmative action
programs to the Department of Labor's Office of Federal Contract Compliance and it com-
pliance agencies,
In 1976, Sears was informed that under the FOIA, Father Dahm of the Dominican
Order had requested copies of Sears' 1974 affirmative action program for its corporate head-
quarters and that the Government intended to furnish the information. Despite Sears’ appeals,
both the GSA and the OFCC upheld the decision to disclose the data.
Sears filed a complaint, charging that 18 U.S,C. §1905 prohibits the disclosure of its
statistical data and that exemption (b) (3) of the FOIA therefore exempts the data from dis-
closure, Sears sought declaratory and injunctive relief. The U.S. District Court for the
Northern District of Illinois granted Sears a temporary restraining order which was contin-
ued in effect until the hearing on Sears’ motion for a preliminary injunction.
. The district court then granted Sears a preliminary injunction. The court noted that
Sears had tendered Father Dahm cumulative national and Chicago area statistical informa-
tion concerning the racial and sexual composition of its workforce. Sears had declined to
provide Father Dahm with the headquarters data, claiming that it was confidential.
‘The district court concluded that if the data wa ;
parable injury. The court also held that 18 U.S.C, §
disclosing the information and that there was a reaso
vail on its FOIA enemption (bY) claim,
= In December 1976, Father m was given leave to intervene in this action. His
motion to dissolve the preliminary injunction was denied, resulting in his taking this appeal.
ae es osmaaen nL seneaee: — og that the requested documents
a. OIA (b)(3) exemptio
U.S.C, §1905, a criminal statute res : di rs ption,
employees. The act forbids utho of confidential information by federal
federal employee. " ai a — nized by law, of any information by a
The Government and Dahm contend that the OFCC regulations were clearly authorized
under 5 U.S.C, $301 so that the proposed disclosure is “authorized by law" and immunized
from the prohibitions of § 1905.
Sears asserted that agency regulations valid under §301 do not constitute authorization
by law for purposes of §1905.
The appeals court disagrees with Sears, relying heavily upon Chrysler Corp. v.
Schlesinger, (702 FCR A-4) 565 F.2d 1172 Gd Cir. 1977), certiorari granted, 46 U.S.L.W.
3552, and holding that regulations valid under Section 301 satisfy the “authorized by law"
exception to Section 1905. The court reasoned that if validly promulgated regulations have
the force of law, they satisfy the “authorized by law™ exemption.
oe
'
NEWS (FCR! 5-15-78
o. 731)
Sears’ only argument about the interrelationship of Sections 301 and 1905 not fully
discussed in Chrysler is Sears’ assertion, supported in Westinghouse Electric Corp. v.
Schlesinger, (652 FCR A-1) 542 F, 2d 1190, 1215 (4th Cir, 1976), certiorari denied, 431
U.S, 924, that the holding in Chrysler would give Government officials “the unbridled
freedom to redefine the scope of [their own] illegal conduct under Section 1905," Sears
reasons that an independent statutory authorization should be necessary,
The court notes that Sears is not left without a defense against agency disclosure
beeause it could obtain review under the Administrative Procedure Act, 5 U.S.C, §701
» —_
om The court also found two problems with Sears’ position, First, it assumes the answer
to the unresolved question whether Section 1905 was intended to restrict agency action as a
whole in addition to the individual employees of an agency. The court decided that “limiting
the statuic's focus to actions by agency employees seems more consistent with the statutory
scheme because the enforcement mechanism of the statute provides only penalties for guilty
individuals and offers no restraint on agency action, “
Second, “it would be Unreasonable to infer a requirement of independent statutory
authorization because of the tedious and difficult job that such a requirement would force
Congress to undertake." Thus, the court found no persuasive reason for deviating from the
Chrysler holding that disclosure of the requested information is not forbidden by Section 1905,
Vause of Action: The circuit court determined that even 11 Section 1905 did forbid
disclosure, neither it nor the FOIA permits this cause of action, The proper avenue to se-
cure judicial review is through the Administrative Procedure Act, using 28 U.S.C, §1331
or §1337 as a basis for jurisdiction, Sears rejected this avenue because the APA docs not
allow d —. ». 4 j
Applying t fe four tests established in Cort v. Ash, 422 U.S, 66, to discover whether
Congress had intended to imply a cause of action, the court determined that, on balance, a
civil remedy is not available under Section 1905, Although no federal interest is involved
and the history of a Section 1905 predecessor statute indicates a motivation to protect the
privacy of taxpayers who submit information to the Government, the court noted that nothing
in §1905‘s legislative history indicates an intent to create a civil remedy,
Nor would implying a civil remedy be consistent with the purposes OI the statute, the
und, ——nrmngrenne: rr ne 7
CouEs — court held that the reasons for implying a cause of action under the FOIA scem
j weaker. Although the FOIA reflects some degree of congressional concern
pate Risener eal, is clear that the primary beneficiaries of the Act a -
the requesters," The claim of submitters as beneficiaries is further undercut because “ y
_ requesters have been given a cause of action by the Congress," Thus, implying a cause 0
action under the FOIA must also be rejected, _
Text of the decision appears in Section E,
-0O-
> De SIL GO
VISES, REISSUES FOR COMMENT
NTING: CASB RE
AR OBOSED ST N ACCOUNTING FOR INSURANCE COSTS
ANDARD O
The Cost Accounting Standards Board has revised and offered 2 second time for —
(by June 30, 1978) a proposed Standard No, 416, “Accounting for Insurance Costs, to be
criteria for the measurement of insurance costs, the assignment of such costs to cost acc
ing periods, and the allocation of insurance costs to cost objectives.
t
a ee
TABLE OF CONTENTS.
PAGE
SNR aa 54. PAA KEL SC Kee pA eis p00 ak 2
NY ea CO CE oe 2
CE Oo eae ek wee ade eens seek 2
PE i ERLE RETR PETE TUL EREL 3
gs BV EN VER ATE LOT ELET ETT EE 3
Reasons for Granting the Writ ............cccceeeees 6
A. The Instant Case Presents Questions Identical to
Those Pending in Chrysler ................ 6
B. The Instant Case Presents the Opportunity to
Resolve a Substantial Conflict Among the Courts
CE PP Dass ir dacy sabe en eters saeys:s 8
C. The Instant Case Presents Significant Questions
of Federal Law, Which Have Not Been, but
Should Be Decided by This Court ........... 10
Come | 26's So bee ae So ee ae Sa ee 13
ii
TABLE OF AUTHORITIES.
Cases.
Babcock & Wilcox Co. v. Rumsfeld, 70 F. R. D. 595
Cais Sr SEE PIPED oon) cb Ra ek eo Os OC Oea rae bas G
Charles River Park “A”, Inc. v. Dept. of Housing and
Urban Development, 519 F. 2d 935 (D.C. Cir. 1975) 8
Chrysler Corp. v. Schlesinger, 565 F. 2d 1172 (3rd Cir.
1977); cert. granted Chrysler Corp. v. Brown, ............
RY ie Scaled , 46 L. W. 3552, Case No. 77-922 (1978)
RaSh RAED SS EANAREA FRE RUE RENAE ES 2, 6, 7, 8, 9
Gost vi Ash. 422 GB: GG GIST So eivins es cba cowed ode 10
F. A. A. Administrator v. Robertson, 422 U.S. 255 (1975) 12
General Dynamics Corp. v. Marshall, 572 F. 2d 1211 (8th
Ck DETER icra cs oa ba) ce eeaen ih ween acess 8,12
Metropolitan Life Insurance Co. v. Usery, 426 F. Supp.
150: CE BE CIB TG). enh SS FEN ks: 9
N. L. R. B. v. Robbins Tire and Rubber Co., ......... U: &.
ee , 98 LRRM 2617 (June 15, 1978) ...........9,12
Parkridge Hospital, Inc. v. Blue Cross and Blue Shield,
430 F. Supp. 1093 (E. D. Tenn. 1977) ............ 9
Regents of the University of California v. Bakke, ....
he Mb. icaghe ee ree Pere bar 10
Ros v; Wate, 440 VU. BE EID AIS Ee) 6 cee vcccsassanes 7
Sears, Roebuck and Co. v. Equal Employment Opportunity
Commission, ......... . F. 2d ....., pet for reh. pending,
Nos. 77-1822, 1995 and 1996 (D. C. Cir. June 9,
TOTO): cca Saccinkss Hd GeRVewncee kanye ee 4,5,12
Sears, Roebuck and Co. v. General Services Administration,
553 F. 2d 1378 (D. C. Cir. 1977), cert. denied, ............
a Siete , OS En We eee MESTED cvacveiadban 3, 14,22
~~
ili
Westinghouse Electric Corp. v. Schlesinger, 542 F. 2d
1190 (4th Cir. 1976), cert. denied, 431 U. S. 924
IEE eM tin fh GAS: - 0d AE Kian ae a Oe 75 88, 12
Wyandotte Transportation Co. v. U. S., 389 U. S. 191
i ANNES ae th oe ee ot § ee a 10
Statutes, Regulations and Executive Orders.
Ds UN? BGs Cho sab Recess asctesii 2, 8,9, 12
Freedom of Information Act:
Rs bo Sk Kes NE KS Pere eee’ 2,5
De ee | i) a Se 3,9, 12
ee ie es PTY Ks eh ROU eh cadiv ew einn 9
Administrative Procedure Act:
OR ee eee eee ye 5
Se nha 6 a Wick e vkg bse bASye RHNS a passim
BE re ee ee ere 2
ae Ae at ae eek eauene 5
EE 5 CWS an F060 owes Kath eebbe O00 es 5
Federal Declaratory Act:
a ee oe ak Goblins sw baa Cecoas 5
Civil Rights Act of 1964:
Section 709(e), 42 U. S. C. § 2000e-8(e) ........ 12
Public Law No. 93-502, 88 Stat. 156i ................ 11
Public Law No. 94-409, 90 Stat. 1241, .codified as 5
ee or hee AAG oc aS GCS 0 0 0 hewheive eee e% * 12
ic kp oy Ge 6 vikcne bus Geno shee 3
EE Gas kro eh ewctwens ons hams baeeée 3,4
ee oe a Lae bunk wes Sage bs en eame « 4
EFA wk ok na cna ee kane Redden 4
ee EE «5 SA Ge ke cadnscbawecksedeaeca 4,5
iv
Executive Order 11246, 30 Fed. Reg. 12319, as amended
by Executive Order 11375, 32 Fed. Reg. 14303 (3 CFR
ED SI id lec ahetn oHep ed ated elmeowten wees 2, 3,9
Miscellaneous.
House Report No. 1461, 85th Cong. 2d. Sess. (1958),
reprinted in [1958] U. S.C. C. & A. N. 3352 ........ 9
Report of the Surveys and Investigations Staff to the House
Committee on Appropriations, “Federal Energy Data
Colisction Activities and Systems’; at 15 reprinted in
Department of Interior Hearings Before the House
Comm. on Appropriations, Part 8, 341-454 (1977) .. 7
Brief of Petitioner in Chrysler Corp. v. Brown, Case No.
TIMBB. oid c CECE ECET AER EST Cn Say Ces 9,12
Petition for a Writ of Certiorari in Westinghouse Electric
Corp. v. Schlesinger, Case No. 76-1192, O. T. 1976... = 7
Clement, “The Rights of Submitters to Prevent Agency Dis-
closure of Confidential Business Information, The Re-
verse Freedom of Information Act Lawsuit’, 55 Texas
\ ge Se, Be ey) 5 Shh on os 0 6g oon re oe ee 11
Appendix A—Judgment of the United States Court of
Appeals for the Seventh Circuit, April 25, 1978 ..... Al
Appendix B—Opinion of the United States Court of Ap-
peals for the Seventh Circuit, April 25, 1978 ........ A3
Appendix C—Findings of Fact and Conclusions of Law
of the United States District Court for the Northern
District of Illinois, August 27, 1976 ..........55-- Al6
Appendix D—Order of the United States Court of Appeals
for the Seventh Circuit denying Petition for rehearing
Juss 2, 1978 sc ccccecetecdiccecctode vine tcwcw’ A23
Vv
Appendix E—Order of the United States Court of Appeals
for the Seventh Circuit, June 9, 1978, granting Cor-
rected Motion for Stay of Issuance of Mandate Pending
SN UE NOI 5 Cb nc bcabnee Ge Udiaeausariees A24
Appendix F—Order of the United States Court of Appeals
for the Seventh Circuit, July 3, 1978, granting Motion
to Extend Stay of Mandate Pending Filing of Appellee’s
Petition for a Writ of Certiorari ................4. A26
Appendix G—Relevant Portions of the Freedom of Infor-
OD AE E-Ten vic sweevderecees ves A27
Appendix H—18 U.S. C. § 1905 ............ 0. cee A28
PI Or Ria iE Sig awk cen cnceecsncests A28
Appendix J—Relevant Portions of 41 CFR Part 60-40... A29
Appendix K—Opinion of the United States Court of Ap-
peals for the District of Columbia in Sears, Roebuck
and Co. v. Equal Employment Opportunity Commission,
Nos. 77-1822, 1995, 1996 (D. C. Cir., June 9, 1978).. A32
IN THE
Supreme Court of the Gnited States
OCTOBER TERM, 1977
SEARS, ROEBUCK AND CO.,
Petitioner,
vs.
CHARLES W. DAHM, O. P.,
and
JACK ECKERD, Administrator, General Services Admin-
istration; GENERAL SERVICES ADMINISTRATION;
WILLIE O. GREEN, Chicago Field Director of Contract
Compliance, General Services Administration; E. E.
MITCHELL, Director of Contract Compliance, General
Services Administration; WILLIAM J. USERY, JR., Secre-
tary of Labor; LAWRENCE Z, LORBER, Director, Office
of Federal Contract Compliance Programs, United States
Department of Labor,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT.
Sears, Roebuck and Co. (“Sears”) prays that a writ of
certiorari issue to review the judgment of the United States
Court of Appeals for the Seventh Circuit entered in this case
on April 25, 1978 (App. A, p. Al).
OPINIONS BELOW.
The opinion of the Court of Appeals (App. B, pp. A3-A15)
and its order denying rehearing (App. D, p. A23) are not as
yet officially reported. The memorandum and order of the
District Court (App. C, pp. Al6-A22) are reported at .........
F. Supp. ........ (N. D. IIL, 1976).
JURISDICTION.
The judgment of the Court of Appeals was entered on April
25, 1978. App. A, p. Al. A timely petition for rehearing
was filed on May 8, 1978, and denied on June 1, 1978 App.
D, p. A23, On June 9, 1978, the Court of Appeals granted Peti-
tioner’s motion to stay issuance of its mandate pending disposi-
tion of a petition for writ of certiorari App. E, p. A24, and,
on July 3, 1978, extended that stay to and including July 17,
1978, App. F, p. A26.
The jurisdiction of this Court to review this case on petition
for writ of certiorari is invoked under 28 U. S. C. § 1254(1).
QUESTIONS PRESENTED.
The instant case presents many of the same questions which
are presently before this court in Chrysler Corp. v. Brown, No.
77-922, cert. granted March 6, 1978 viz:
1. Whether either 18 U. S. C. § 1905 or the Freedom of
Information Act (“FOIA”), 5 U. S. C. § 552, provide a person
who has submitted confidential commercial information to a
federal agency with a cause of action to challenge the proposed
public disclosure of that information.
2. Whether agency disclosure regulations promulgated pur-
suant to 5 U. S. C. § 301, 5 U. S. C. § 552 or Executive Order
11246 constitute “authorization by law’, within the meaning
3
of 18 U. S. C. § 1905, that permit the public disclosure of
confidential commercial information.
3. Assuming the second question is answered in the negative,
whether 18 U. S. C. § 1905 constitutes a specific statutory
exemption from disclosure within the meaning of Exemption 3
of the Freedom of Information Act, 5 U. S. C. § 552(b)(3).
STATUTES INVOLVED.
The provisions of Exemption 3 of the Freedom of Informa-
tion Act, 5 U. S. C. § 552(b)(3) are set out in Appendix G,
p. A27. The provisions of 18 U. S. C. § 1905 are set out in
Appendix H, p. A28. The provisions of 5 U. S. C. § 301 are
set out in Appendix I, p. A29. The relevant portions of the
regulations of the Office of Federal Contract Compliance Pro-
grams (OFCCP), 41 CFR 60-40, are set out in Appendix J,
pp. A29-A31.
STATEMENT OF THE CASE.
As a government contractor, Sears is required to comply with
Executive Orders 11246 and 11375 (the “Executive Orders”)
and the various regulations promulgated thereunder. One of
these regulations, 41 CFR 60-2.1 ef seq., requires that Sears
prepare and submit equal employment opportunity reports
(commonly known as “EEO-1’s”) as well as maintain and
provide on request, written affirmation action programs (com-
monly known as “AAP’s”) for each of its facilities nationwide
including its Chicago Sears Tower corporate headquarters.
Under the Executive Orders, the penalty for a contractor's
failure to supply such data is cancellation of existing govern-
ment contracts and debarrment from future contracts.
The data provided by Sears to the government in the AAP’s
and EEO-1’s include highly detailed narrative and statistical
information regarding staffing, pay scales, and changes in em-
4
ployment at each unit. The data also includes information as
to the number of applicants and present employees, as well as
the future goals and timetables that have been established to
increase the number of females and minorities in Sears’ work
force. The regulations require that the contractor, in creating
these reports, be as objective as possible in analyzing the reasons
as to why he may not have met previous goals and time-
tables.’
The Secretary of Labor has promulgated regulations, 41
CFR 60-40 (App. J, pp. A29-A31), which establish the stand-
ards for public disclosure of the information which the OFCCP
and its compliance agencies have received from government con-
tractors. Those regulations provide that affirmative action data,
even if subject to FOIA exemptions, should only be withheld
from disclosure if such dissemination would not impede any
of the functions of the OFCCP or other agencies, or would
otherwise be prohibited by law. The regulations specifically pro-
vide that EEO-1’s are disclosable (41 CFR § 60-40.4; App.
J. A31) and that AAP’s are, for the most part, also disclosable
(41 CFR § 60-40.2(b); App. J, pp. A29-A30).
This case arose in February and March, 1976 when Sears
was informed by the General Services Administration (“GSA”),
its compliance agency, that a FOIA request had been made by
Fr. Charles W. Dahm, a Chicago clergyman acting on behalf
of a religious order owning stock in Sears, for Sears’ 1974 AAP
and its 1973 and 1974 EEO-1’s covering its Chicago corporate
headquarters facility, and that GSA intended to comply with
these requests. Pursuant to 41 CFR § 60-60.4(d), Sears filed
objections to the proposed disclosure, which were overruled by
1. Sears supplies an EEO-1 report and AAP for each of its
over 2,000 facilities. In addition to this massive amount of data,
Sears has also voluntarily supplied similar data in different forms to
various governmental agencies, such as the Equal Employment Op-
portunity Commission (“EEOC”), which is presently using that
deta to conduct conciliation proceedings. See Sears, Roebuck and
Ca. %. 5, B.S Gi, ccm Pe GED sentene , pet. for reh. pend., (D. C.
Cir. June 9, 1978), reprinted at App. K. p. A32.
5
GSA’s Director of Contract Compliance on April 27, 1976.
This decision was upheld following Sears’ appeal pursuant to
41 CFR 60-60.4(d), by the Director of the OFCCP on June 24,
1976, who further informed Sears that, unless judicially re-
strained, the OFCCP would disclose the information on July 8,
1976. App. B, p. AS.
On July 2, 1976, Sears filed this suit requesting declaratory
and injunctive relief.2 A temporary restraining order was en-
tered on that date and, thereafter, following an evidentiary hear-
ing, the District Court rendered findings of fact and conclusions
of law in favor of Sears and granted a preliminary injunction.*
The Court noted that Sears had already voluntarily provided
the requestor with access to “cumulative national and Chicago
area statistical information concerning the racial and sexual com-
position of Sears’ workforce”; that the requested corporate head-
quarters information was classified by Sears as confidential and,
if released, would cause Sears irreparable injury “both economi-
cally and in terms of its present and future public relations”;
that neither GSA nor the requestor would suffer prejudice by the
2. The instant case does not represent the only attempt that
has been made to obtain such data from Sears. The Petitioner is
also involved in other litigation seeking to prevent the disclosure of
EEO-1’s and AAP’s for 19 of Petitioner’s other individual facilities.
Sears, Roebuck and Co. v. G. §. A., 553 F. 2d 1378 (D. C. Cir.
1977), cert. denied, ........ ieee , 46 L. W. 3215 (1977), pres-
ently pending on remand to the District Court for the District of
Columbia for a de novo review of the issues raised under FOIA
exemptions three and four. In addition, Sears was recently successful
in preventing the EEOC from disclosing affirmative action informa-
tion accumulated during the investigation and conciliation of an
EEOC Commissioner’s charge. Sears, Roebuck and Co. V.
E. E. O. C., supra. App. K, p. A32. Finally, Sears has been the sub-
ject of numerous other requests for employment information which,
due to the injunction issued by the District Court in the present case,
a nore declined or deferred by the administrative agencies
involved.
3. The Court found that it had jurisdiction under 18 U. S. C.
§ 1905; 28 U. S. C. § 1331; 28 U. S. C. § 1337; the Administrative
Procedure Act, 5 U. S. C. § 701 e¢ seq.; the Freedom of Informa-
tion Act, 5 U. S. C. § 552; and the Federal Declaratory Act, as
amended, 28 U. S. C. §§ 2201-03. App. C, p. A20.
6
grant of a preliminary injunction; and that there was a reason-
able probability that Sears would prevail on the merits of its
claim that the information was exempt from disclosure under
FOIA Exemption 3 because the information “constitutes con-
fidential statistical data or is directly related or concerned
therewith and GSA is, therefore, specifically prohibited from
disclosing such information by 18 U. S. C. § 1905.” App. C,
pp. A20-A22; App. B, pp. A5-A6.
On December 7, 1976, Fr. Dahm was given leave to inter-
vene as a plaintiff in this action. Thereafter, he moved to dis-
solve the preliminary injunction, but his motion was denied by
the District Court on February 15, 1977. Although the federal
defendants had taken no further action, the requestor subse-
quently appealed the refusal to dissolve the preliminary injunc-
tion to the Court of Appeals for the Seventh Circuit. That Court’s
resulting decision vacated the preliminary injunction and re-
manded the case to dismiss the entire complaint. The lower court
concluded, first, that it should “follow the path charted by
Chrysler Corp. v. Schlesinger, 565 F. 2d 1172, 1186-88 (3rd
Cir. 1977), certiorari granted, [Chrysler Corp. Vv. Brown, ............
CA Bic: ,] 46 LW 3552, [Case No. 77-922 (1978)] and hold
that regulations valid under 5 U. S. C. § 301 satisfy the ‘au-
thorized by law’ exception of Section 1905;” and, second, that
“felven, if Section 1905 did forbid disclosure, we agree with
the Chrysler opinion that neither Section 1905 nor the FOIA
itself permits this cause of action. [footnote omitted]” App. B,
pp. A8, All.
REASONS FOR GRANTING THE WRIT.
A. The Instant Case Presents Questions Identical to Those
Pending Before This Court in Chrysler.
This Court granted the petition for certiorari in Chrysler in
order to decide the significant questions of federal law presented
7
therein,‘ and to resolve the conflict between the Third Circuit's
decision in that case and the opinion of the Fourth Circuit in
Westinghouse Electric Corp. v. Schlesinger, 542 F. 2d 1190 (4th
Cir. 1976), cert. denied, 431 U. S. 924 (1977), where the
Government had previously sought review from this Court of
similar questions.’ The Seventh Circuit in the instant case ad-
mittedly “follow[ed] the path charted by Chrysler” in both de-
ciding the scope of the “authorized by law” exception to 18
U. S. C. § 1905 and determining whether that statute or the
FOIA permitted this cause of action. App. B, pp. A8, A11.
A grant of the present petition would thus provide the Court
with the desirable opportunity to resolve, in a different factual
setting, “arguments . . . [which] are necessarily identical.” Roe
v. Wade, 410 U. S. 113, 123 (1973). The Petitioner, who has
fully litigated the important issues raised by Chrysler before
several courts of appeal (see note 2, supra) as well as other
forums, should be afforded full participation when those issues
are decided. Indeed, a denial of review would occasion far more
onerous consequences here than if certiorari had been declined
in Chrysler. In contrast to that decision, the court of appeals
in this case did not remand this matter back to the district court
4. As the court below noted, quoting Chrysler (565 F. 2d at
1186), the impact of Section 1905 “could embrace ‘virtually every
category of business information likely to be in the files of any
federal agency’.” App. B, p. All. The size and complexity of
such documentation is staggering. For example, in 1976 there were
more than 5,000 federal government report forms generating approx-
imately ten billion pieces of paper. Report of the Surveys and Inves-
tigations Staff to the House Comm. on Appropriations, “Federal
Energy Data Collection Activities and Systems”, at p. 15, reprinted
in Dept. of Interior Hearings Before the House Comm. on A ppropria-
tions, Part 8, pp. 341-453 (1977).
5. The Solicitor General sought certiorari in Westinghouse to
resolve issues that are virtually identical to those raised by the
instant case. The Government argued that Westinghouse, as does
the present dispute, raises “important questions concerning the pur-
pose of the Freedom of Information Act, its use by private parties
to obtain judicial relief against the disclosure of information, and
the role of the executive branch in discharging the legislative direc-
tive . . . to permit the ‘fullest possible disclosure’.” Pet. for Cert. in
No. 76-1192, O. T. 1976.
with orders that the administrative agency provide a more de-
tailed consideration of Sears’ objections to disclosure. Instead,
notwithstanding that the present case arose on an appeal from
the denial of a motion to dissolve a preliminary injunction, the
court dismissed Petitioner’s entire complaint outright prior to
any further review of the agency record. App. B, p. AILS.
Consequently, if this Court declines review, there will be no
remand, and the result, unlike that which would have occurred
in Chrysler if certiorari had been denied, would be to permit
GSA to disclose the data in issue without ever having submitted
its decision to any form of judicial scrutiny.
B. The Instant Case Presents the Opportunity to Resolve a
Substantial Conflict Among the Courts of Appeal.
The decision below, by following Chrysler in holding that
Section 1905 cannot limit disclosure of confidential commercial
information where there are agency regulations valid under
5 U.S. C. § 301, necessarily lined up on one side of a growing
dispute among the courts of appeals. The Seventh Circuit is
now in agreement with the Third Circuit in Chrysler, and, as
indicated in the decision (App. B, p. A8), the Eighth Circuit
in General Dynamics Corp. v. Marshall, 572 F. 2d 1211
(1978). At the same time, however, the lower court expressly
disagreed with the views of the Fourth Circuit in Westinghouse
and the District of Columbia Circuit in Charles River Park “A”,
Inc. v. Dept. of Housing and Urban Development, 519 F. 2d
935 (1975). These courts reached a diametrically contrary
conclusion in analyzing the same legislative history of Section
301 which the court below found to control its decision.® In
light of the statute’s purpose, as expressed in the legislative his-
6. Contrary to the opinion below, which held that the amend-
ment “punctures Sears’ position about agencies’ inability to authorize
disclosure” (App. B, p. A9), the Charles River Park court declared:
The government also suggests that Section 301 authorized the
release of information subject to Section 1905. We disagree. To
(Footnote continued on next page.)
9
tory of the 1958 amendment to Section 301--to correct a
situation in which [that Section] had “become a convenient
blanket to hide anything Congress may have neglected or re-
fused to include under specific secrecy laws” (H. Rep. No.
1461, 85th Cong. 2d Sess. (1958), reprinted in [1958] U. S.
C. C. & A. N. 3352)—termination of this confusion among the
lower courts is critical. This Court recently construed FOIA
exemption 7 to resolve a conflict among the lower courts as to
the extent to which that exemption protected “specified con-
fidentiality and privacy interests.” N. L. R. B. v. Robbins Tire
and Rubber Co., .......... | eae , 98 LRRM 2617, 2619
(June 15, 1978). A similar ruling is now warranted with re-
spect to FOIA exemption 3.’
(Footnote continued from preceding page.)
interpret Section 301 in that way would be iaconsistent with
the legislative history. In 1958 an amendment was added to
Section 301 which provided that the section “does not authorize
withholding information from the public or limiting the avail-
ability of records to the public.” However, the sponsor of the
amendment, Congressman Moss, stated explicitly that the
amendment did “not affect the confidential status of informa-
tion given to the government and carefully detailed in Title 18,
United States Code, Section 1905” 104 Cong. Rec. 6550
(1958). Section 301 does not authorize regulations limiting the
scope of Section 1905. [footnotes omitted].
519 F. 2d at 942-943. See also Babcock & Wilcox Co. v. Rumsfeld,
70 F. R. D. 595, 601 (N. D. Ohio 1976); Parkridge Hospital, Inc.
v. Blue Cross and Blue Shield, 430 F. Supp. 1093 (E. D. Tenn.
1977); and Metropolitan Life Insurance Co. v. Usery, 426 F. Supp.
150, 170 (D. D. C. 1976).
7. Although the Court of Appeals did not reach the question
because of its conclusion that Section 301 provided sufficient authori-
zation (App. B, p. A8, n. 8), in the event that this Court should
disagree with that view, this case, like Chrysler, also raises the issue
of whether Executive Order 11246 and the FOIA itself would sup-
port me eliminating Section 1905. See Br. of Pet. in Chrysler
pp. 52-55.
10
C. The Instant Case Presents Significant Questions of Federal
Law, Which Have Not Been, But Should Be, Decided by
This Court.
1. This Court should also grant review to determine whether
the decision below, in its conclusion “that neither [18 U. S. C.
§ 1905] nor the FOIA itself permits this cause of action” (App.
B, p. All), properly construed the tests established in Cort v.
Ash, 422 U. S. 66 (1975).® For example:
a. The lower court initially held that, as to the second Cort
test, “if any inference can be drawn from the legislative history
[of Section 1905] it is that Congress did not think a civil action
was appropriate.” App. B, p. Al2. As four members of this
Court recently observed in Regents of the University of Califor-
nia V. Bakke, ........... U.S. cng 46 L. W. 4896, 4936, n. 28,
(Opinion of Justice Stevens, joined by the Chief Justice and
Justices Rehnquist and Stewart) however, the Cort test does not
require a showing that the legislative history of a particular
statute affirmatively intended to permit a private cause of action;
instead, the test only requires that the legislative history indicate
that Congress did not actually intend to foreclose a private
right of action.
b. The lower court also found that, as to the third Cort test,
the other test which was declared unfavorable to Sears’ argu-
ment that a private remedy was available under Section 1905,
“implying a civil action would not be consistent with the pur-
pose of the statute, especially since the [Administrative Pro-
cedure Act] already provides a remedy.” App. B, p. Aj3.
8. In Cort v. Ash, this Court found that a federal statute im-
plied a onbie cause of action where (1) the person asserting the
cause of action is within the class of people which the statute was
designed to protect; (2) the implied private cause of action is not
at odds with the legislative history of the statute; (3) the private
cause of action is consistent with the underlying statutory scheme;
and “) the cause of action is not one traditionally relegated to
state law.
11
This Court, however, in Wyandotte Transportation Co. v. U. S.,
389 U. S. 191 (1967), held that where the statutory sanction
is not sufficient to enforce the goals of the statute, it is not con-
trary to the statutory scheme to permit a private cause of action.
Such a situation surely exists under Section 1905 where the
submitters of information are the only persons sufficiently in-
terested in its enforcement so as to insure against improper
government disclosure decisions. The opinion below similarly
fails to recognize that, regardless of who the “primary bene-
ficiaries” of the FOIA may be (App. B, p. Al4), since that
statute “grants a private party protection against disclosure, it
carries with it an implied right in the private party to invoke
the equity powers of a court to assure that protection.” West-
inghouse, 542 F. 2d at 1211.
c. The result of the decision below is that, since only APA
review is permissible, the standard of review is one of abuse of
discretion rather than de novo review of agency action. This
conclusion is directly contrary to that reached by the Fourth
Circuit in Westinghouse (see 542 F. 2d at 1213, 1215) and
the District of Columbia Circuit.’ It is also a recurrent question
of national importance'’ worthy of guidance from this Court.
cc a ee —— — a a ee
9. In Sears, Roebuck and Co. v. General Services Administra-
tion, 553 F. 2d at 1381, that court held that a party providing infor-
mation is entitled to a de novo judicial review of any decision to
disclose:
The review standard of the FOIA in a suit to compel dis-
closure is also the appropriate standard in the reverse FOIA
case.” (citation omitted, footnotes omitted).
10. Congress, in limiting the permissible time period between
requests for disciosure and final agency determination to ten days
(see 1974 amendments to the FOIA, Public Law No. 93-502, 88
Stat. 1561), has effectively restricted the ability of administrative
agencies to provide procedures to insure a decision making process
which will protect the submitting party’s due process rights absent
de novo judicial review. See Clement, “The Rights of Submitters to
Prevent Agency Disclosure of Confidential Business Information:
The Reverse Freedom of Information Act Lawsuif’, 55 Texas L.
Rev. 587, 635 (1977).
12
2. Assuming that agency regulations promulgated under 5
U. S. C. § 301 are found to constitute “authorization by law”
for purposes of Section 1905, this Court should also consider,
as urged by Chrysler in its brief on the merits (pp. 56-61), the
related question whether Section 1905 is a specific statutory
exemption from disclosure within the meaning of Exemption 3
of the FOIA. Although the court below did not reach this
question because of its conclusion that the contemplated dis-
closure in the present case would not be covered by Section
1905 (App. B, p. A7, n. 6), this “threshold” reverse FOIA
question (Sears, Roebuck and Co. v. GSA, 553 F. 2d at 1385)
is an important one. There is disagreement as to the extent
to which this Court’s decision in FAA Administrator v. Robert-
son, 422 U. S, 255 (975) has been eroded by the subsequent
amendments to Exemption 3 (PL 94-409, 90 Stat. 1241,
approved Sept. 13, 1976, codified as 5 U. S. C. § 552(b)).
See General Dynamics Corp. v. Marshall, 572 F. 2d at 1217,
n. 7 (“[§ 1905] does not afford a basis for exemption under
§ 552(b)(3)”). Cf. Westinghouse, 542 F. 2d at 1201-03
(“§ 1905 is a statute qualifying under Exemption 3 . . .”).
See also N. L. R. B. v. Robbins Tire and Rubber Co., ...........
We Be ME enc , 98 LRRM at 2630 (Concurring and dissenting
opinion of Justices Powell and Brennan). The instant case
provides a desirable vehicle for this Court to reevaluate Robert-
son and decide the degree to which such erosion has occurred
in the context of the present dispute.
3. A serious anomaly in the administration of federal civil
rights policies has been created by the decision below. While
Section 709(e) of the Civil Rights Act of 1964, 42 U. S. C.
§ 2000e-8 (e), would preclude “dissemination of EEOC investi-
gative data to anyone not within the government” (Sears, Roe-
buck and Co. v. E. E. O. C., supra, App. K, p. A41), the
instant case would nevertheless permit GSA and other federal
agencies to publicly disclose those very same documents. Con-
gress has encouraged cooperation and the sharing of information
13
between various civil rights agencies; it surely did not, however,
contemplate that, by virtue of such coordinated efforts, admin-
istrative agencies would then be able to abrogate the Congres-
sional design to insure the confidentiality of EEOC investigative
data.
CONCLUSION.
For the foregoing reasons, it is respectfully submitted that the
petition for writ of certiorari should be granted.
Respectfully submitted,
LAWRENCE M. COHEN
S. RICHARD PINCUS
PAUL R. GARRY
Fox AND GROVE
Sears Tower—Suite 7818
233 South Wacker Drive
Chicago, Illinois 60606
HyMEN S. BEAR
Sears, Roebuck and Co.
Sears Tower—Suite 6900
233 South Wacker Drive
Chicago, Illinois 60684
Attorneys for Petitioner Sears,
Roebuck and Co.
July 17, 1978
Al
APPENDIX A
UNITED STATES COURT OF APPEALS
For the Seventh Circuit -
Chicago, Illinois 60604
April 25, 1978.
Before
Hon. WALTER J. CuMMINGS, Circuit Judge
Hon. Puitie W. Tone, Circuit Judge
Hon. WILLIAM J, CAMPBELL, Senior District Judge*
SEARS, ROEBUCK & COMPANY, )
Plaintiff-A ppellee,
CHARLES W. Dano, O. P.,
Intervenor-Plaintiff-
Appellant,
No. 77-1417 vs.
Jack Ecxerp, Administrator, Gen-
eral Services Administration, et al.,
Defendants-Appellees. ”
Appeal from the
United States Dis-
trict Court for the
Northern District of
Illinois, Eastern Di-
Vision.
No, 76-C-2444
Frank J. McGarr,
Judge
This cause came on to be heard on the transcript of the
record from the United States District Court for the Northern
District of Illinois, Eastern Division, and was argued by counsel.
° pega fE verng: Judge William J. Campbell of the Northern
District of
ois is sitting by designation.
A2
On consideration whereof, it is ordered and adjudged by this
court that the judgment of the said District Court in this cause
appealed from be, and the same is hereby, Vacated, with costs,
and the cause is Remanded to the district court with directions
to dismiss the complaint, in accordance with the opinion of this
court filed this date.
APPENDIX B
IN THE UNITED STATES COURT OF APPEALS
for the Seventh Circuit
No. 77-1417
SEARS, ROEBUCK AND Co.,
Plaintiff-Appellee,
CHARLES W. Daus, O. P.,
Intervenor-Plaintiff-A ppellant,
vs.
JACK ECKERD, et al.,
Defendants-Appellees.
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 76 C 2444—Frank J. McGarr, Judge.
Argued December 9, 1977—-Decided April 25, 1978
Before CUMMINGs and Tong, Circuit Judges, and CAMrsBELL,
Senior District Judge.*
Cumminecs, Circuit Judge. In July 1976, Sears, Roebuck
and Co. filed a verified complaint for declaratory judgment
and injunction against the General Services Administration
(GSA) and five federal officers." Sears alleged that a portion
*Senior District Judge William J. Campbell of the Northern
District of Illinois is sitting by designation.
1. The General Services Administrator; the Chicago Field Direc-
tor of Contract Compliance of the General Services Administration;
the Director of Contract Compliance of the General Services Admin-
istration; the Secretary of r; and the Director of the Office of
Federal Contract Compliance Programs of the Department of Labor.
A4
of its business consists of contracts or subcontracts with federal
agencies so that it complies with Executive Orders 11246 and
11375? and the Regulations thereunder® requiring Government
contractors to submit equal employment opportunity reports
and other information to the Department of Labor’s Office of
Federal Contract Compliance (OFCC) and its Compliance
Agencies. According to the complaint, the GSA is Sears’ Com-
pliance Agency. Sears has been required to submit GSA Stand-
ard Form 100-s (EEO-1’s) and Affirmative Action Programs
(AAP’s) to the Government covering Sears’ entire corporate
domestic operations and each of its individual domestic estab-
lishments. Sears had also supplied other documents on a con-
fidential basis to the Government to demonstrate its compliance
with the applicable Executive Orders and Regulations.
Sears also alleged that in February 1973, the Secretary of
Labor issued regulations providing that EEO-1’s and AAP’s will
be disclosed (with exceptions) to requesting persons. In Febru-
ary and March 1976, the GSA informed Sears that under the
Freedom of Information Act (5 U. S. C. § 552), Father
Charles W. Dahm of the Dominican Order had requested copies
of Sears’ 1974 AAP’s for its corporate headquarters in the
Sears Tower in Chicago, Illinois, and that GSA intended to
furnish this information to him. He had also asked for head-
quarters EEO-1’s and supporting documents (App. 28).
According to this reverse Freedom of Information Act com-
plaint, in June and July 1974, the GSA’s Chicago Field Con-
tract Compliance Office, pursuant to a complaint of Women
Employed, undertook a compliance review of plaintiff's Sears
Tower facility, and Sears tendered to the GSA investigator its
1973 and 1974 EEO-1 reports and other employment statistics
(presumably already in other Government files) for its national
headquarters and was assured by the investigator that the data
2. 30C. F. R. 12319 and 14303 contain the Executive Orders.
3. 41 C. F. R. Part 60-2 et seq. are the regulations cited b
Sears in Count One, par. 2 of its complaint. F
AS
would remain confidential. Consequently, in late March 1976,
Sears filed objections to the proposed disclosure with the GSA,
but those objections were overruled by the GSA’s Director of
Contract Compliance, causing Sears to appeal his decision to
the Director of the OFCC. However, on June 24, 1976, the
OFCC Director upheld the decision to disclose the data, stating
that it would be released on July 8, 1976.
The complaint was filed six days before that deadline and
charged that 18 U. S. C. § 1905 prohibits the disclosure of
such confidential statistical data and that exemption (b) (3)
of the Freedom of Information Act (5 U. S. C. § 552(b) (3),
note 5 infra) therefore exempts the data from disclosure.* Con-
sequently, Sears sought appropriate declaratory and injunctive
relief. On July 2, Sears was granted a temporary restraining
order which was continued in effect until the hearing on its
motion for a preliminary injunction.
After hearing five witnesses on August 6, 1976, the district
court rendered oral findings of fact and conclusions of law in
favor of Sears. Three weeks thereafter, the court handed down
its formal findings of fact and conclusions of law and granted
Sears a preliminary injunction. In its findings of fact, the court
reiterated the principal contents of Sears’ verified complaint
and noted that on February 25, 1976, Sears had tendered
Father Dahm “cumulative national and Chicago area statistical
information concerning the racial and sexual composition of
Sears’ workingforce” but that Sears had declined to provide him
with the requested Sears Tower headquarters data alone. The
court also found that Sears classified the Sears Tower head-
quarters information as confidential.
4. The complaint also relied on Section 709(3) of Title VII of
the Civil Rights Act of 1964 (42 U. S. C. § 2000e-8(e)) as pro-
hibiting disclosure of the data and on exemptions (b)(4), (6) and
(7) in the Freedom of Information Act (5 U. S. C. § 552(b)(4),
(6) and (7). For purposes of this appeal, Sears does not rely on
these provisions.
A6
The district court concluded that if this data were disclosed,
Sears would suffer irreparable injury “both economically and
in terms of its present and future public relations.” The court
noted that the defendants and Father Dahm would not be
subjected to prejudice by the grant of a preliminary injunction
because the data requested was out of date “and the national
and Chicago area data voluntarily _provided by Sears should
be sufficient to assess Sears’ equal employment commitment
and progress.”
Judge McGarr held that 18 U. S. C. § 1905 prohibits the
GSA from disclosing such information and that there is a rea-
sonable probability that Sears will eventually prevail on its
claim that the information is exempt from disclosure under
exemption (b)(3) of the Freedom of Information Act. On
December 7, 1976, Father Dahm was given leave to intervene
as a plaintiff in this action. Thereafter he moved to dissolve
the preliminary injunction, but his motion was denied on Feb-
ruary 15, 1977, resulting in his taking this appeal. We vacate
the order granting the preliminary injunction.
Sears seeks to justify the district court’s order by contending
that the (b)(3) exemption and 18 U. S. C. § 1905, taken
together, forbid disclosure and provide a basis for an implied
cause of action. We disagree with both contentions.
I. Is Disclosure Forbidden by Statute?
Relying solely on the (b)(3) exemption in this Court,®
Sears argues that the documents requested here are “specifically
exempted from disclosure by statute” for purposes of that ex-
emption because they consist of “confidential statistical data”
forbidden from disclosure by 18 U. S. C. § 1905, a criminal
5. 5 U.S. C. §552(b)(3) as amended in 1976 contains that
exemption and provides:
“(b). This section does not apply to matters that are—
. ? e * «
(Footnote continued on next page.)
A7
statute restricting disclosure of confidential information by
federal employees.® Section 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 relates to the trade secrets, pro-
cesses, 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, 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 employ-
ment.” (Emphasis supplied.)
The federal defendants and the intervenor contend that the
OFCC regulations’ permitting the disclosure of these materials
(Footnote continued from preceding page.)
“(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) establishes
particular criteria for withholding or refers to particular types
of matter to be withheld.”
6. Given our conclusion that the disclosure here is not covered
by 18 U. S. C. § 1905, we need not decide the intervenor’s claim
that Section 1905 does not Bagong exempt documents and
or is not one of the statutes to which the (b)(3) exemption
ers.
7. The applicable regulations are contained in 41 C. F. R. Part
60-40 and generally permit the disclosure of EEO-1 reports and
AAP’s, Sears does not contend otherwise except for a passing refer-
ence to 29 C. F. R. § 70.21(a) (Br. 20-21) which prohibits any
employee of the Department of Labor from disclosing certain
records “in any manner or to any extent not authorized by law.”
A8
were clearly authorized under 5 U. S. C. § 301,® so that the
projected disclosure is “authorized by law” and thus immunized
from the prohibition of Section 1905. 5 U. S. C. § 301 provides:
“The head of an Executive department or military de-
partment may prescribe regulations for the government of
his department, the conduct of its employees, the distribu-
tion 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 availability of records to the
public.”
Sears asserts that agency regulations valid under Section 301
do not constitute authorization by law for purposes of Section
1905. We disagree. Like Judge Lay’s opinion for the Eighth
Circuit in General Dynamics Corp. Vv. Marshall, ........... F, 2d
amie (No. 77-1192, decided February 14, 1978), we follow
the path charted by Chrysler Corp. v. Schlesinger, 565 F. 2d
1172, 1186-1188 (3d Cir. 1977), certiorari granted, 46 LW
3552,° and hold that regulations valid under 5 U. S. C. § 301
satisfy the “authorized by law” exception of Section 1905.’°
8. Because we find Section 301 to be sufficient authorization, we
do not consider the other possible legal authorizations offered by the
federal defendants and the intervenor: the FOIA itself and Execu-
tive Order 11246.
9. To the same effect, see Clement, The Rights of Submitters to
Prevent Agency Disclosure of Confidential Business Information:
The Reverse Freedom of Information Act Lawsuit, 55 Tex. L. Rev.
587, 624 (1977).
10. Neither party offered any legislative history specifically
addressed to the meaning of the phrase “authorized by law” in
Section 1905 or in any of the three statutes that were consolidated in
1948 to form Section 1905. See Clement, supra note 9 at 607. How-
ever, that phrase has been construed broadly over the years by the
courts (see, e.g., Blair v. Oesterlein Company, 275 U. g 220, 227;
United States v. Dickey, 268 U. S. 378; Exchange National Bank v.
Abramson, 295 F. Supp. 87 (D. Minn. 1969); cf. Consumers Union
v. Cost of Living Council, 491 F. 2d 1396 (T. E. C. A.), certiorari
denied sub nom. Business Roundtable v. Consumer Union, 416 U. S.
984), by the Attorney General (see 41 Op. Atty Gen. 166, 169
(1953); 41 Op. Atty Gen. 221 (1955) and apparently by adminis-
trative agencies. See Clement, supra note 9 at 619 n. 136.
A9
Since validly promulgated regulations have the force of law
(see Public Utilities Commission of California v. United States,
355 U. S. 534, 542-543; cf. Service v. Dulles, 354 U. S. 363),
they satisfy the authorization requirement of 18 U: S. C. § 1905.
Cf. Smith v. United States, 305 F. 2d 197, 201-202 (9th Cir.
1962), certiorari denied, 371 U. S. 890; Laughlin v. United
States, 474 F. 2d 444, 453, n. 12 (D. C. Cir. 1972), certiorari
denied, 412 U. S. 941. As the Chrysler opinion demonstrates,
contrary to Sears’ assertion and the opinion of the D. C. Cir-
cuit in Charles River Park “A”, Inc, v. Department of Housing
and Urban Development, 519 F. 2d 935, 942-943 (1975),
such a holding is consistent with the legislative history of the
1958 amendment to Section 301"' (see 565 F. 2d at 1187);
in fact if there were doubt about Congress’ purpose in Section
301 it could be argued that the second sentence of that statute,
added in the 1958 amendment, punctures Sears’ position about
agencies’ inability to authorize disclosure.
The only argument about the interrelationship between Sec-
tions 301 and 1905 raised here that was not discussed fully
in Chrysler is Sears’ contention, supported by Westinghouse
Electric Corp. v. Schlesinger, 542 F. 2d 1190, 1215 (4th Cir.
1976), certiorari denied, 431 U. S. 924, that the holding in
11. Taking out of context language in a 1958 Committee report,
Sears argues that Section 301 was meant to apply only to documents
“which are not restricted under other specific laws.” (Supp. Br. 8:
1958 U. S. Code Cong. and Ad. News 3352 (House Report No.
1461)). This phrase seems inapplicable because it apparently was
offered to make the House Report consistent with the phrase “not
inconsistent with law” that appeared in the earlier, pre-amendment
codification but significantly does not appear in 5 U. S. C. § 301. The
explanatory notes to the new Section suggest that the phrase was
omitted “as surplusage” because “a regulation not inconsistent with
law is invalid.” It therefore appears from the history and language of
Section 301 that the Section was intended to impose no independent
limit on the agencies’ authority and that the determinative question,
discussed infra, is whether agency authority to disclose is incon-
sistent with Section 1905 and thereby inconsistent with law. As a
result we need not reach the question whether, assuming Section 301
itself placed an independent limit on what information could be dis-
closed, that limit would cover the regulations at issue here.
Al0
Chrysler would give Government officials “the unbridled free-
dom to redefine the scope of [their own] illegal conduct under
Section 1905” (Supp. Br. 8) and leave submitters defenseless
against disclosure. Therefore, Sears reasons, an independent
statutory authorization should be necessary.
As a practical matter, however, Sears is not left defenseless
against agency disclosure because affected persons can obtain
review under the Administrative Procedure Act (5 U. S. C.
§ 701 et seq.) See 565 F. 2d at 1190-1191. As a matter of in-
terpreting whether Congress intended to allow agencies to define
the bounds of legal conduct under Section 1905, we note two
problems with Sears’ position. First, Sears’ argument that agen-
cies would be allowed to redefine limits on their own conduct
assumes without explanation or support the answer to the dif-
ficult and as yet unresolved question of whether Section 1905
was intended to restrict agency action as a whole in addition to
individual employees of an agency. Obviously if the statute was
aimed only at unwarranted actions by individual employees,
allowing agencies using approrriate procedures to make clear
what action was warranted would not defeat Congress’ purposes.
The parties did not discuss this question and it has not received
significant attention with the exception of a passing reference
by Attorney General Brownell, who in advising agency heads
in a criminal context wrote that it could not be assumed that
the statute might not be applied to agencies as a whole. 41 Op.
Atty Gen. 221, 223 (1955). While this may have been good
advice in the context of cautious avoidance of potential areas
of criminal liability, we think such caution was unnecessary be-
cause the legislative history of at least one of the predecessors
of Section 1905 reveals that those who expressed concern about
disclosure (rather than just the investigatory powers involved in
the predecessor legislation) seemed to focus their concern not
on regulated official agency action but rather on unwarranted
and uncontrollable action by “poorly paid revenue agents.” 26
Cong. Rec. 6893 (1894) (remarks of Senator Aldrich). See
generally Clement, supra note 9 at 610. Even if the legislative
All
history were unclear, limiting the statute’s focus to actions by
agency employees seems more consistent with the statutory
scheme because the enforcement mechanism of the statute pro-
vides only penalties for guilty individuals and offers no restraint
on agency action.
Second, Sears’ insistence on an independent statutory authori-
zation would mean that each time Congress wanted to except
an item or class of items from Section 1905 it would have to
do so by statute in a manner with sufficient specificity to avoid
agency discretion. Given that Section 1905 if read literally
could embrace “virtually every category of business informa-
tion likely to be in the files of any federal agency” (565 F. 2d
at 1186), and that Congress in the FOIA has adopted a basic
policy of disclosure (Department of the Air Force v. Rose, 423
U. S. 352, 361), certainly if a statute such as Section 1905
were passed today it would be unreasonable to infer a require-
ment of independent statutory authorization because of the
tedious and difficult job that such a requirement would force
Congress to undertake. Cf. Federal Aviation Administration v.
Robertson, 422 U. S. 255, 265-266. Particularly in light of
the precedent in 1948 for agency regulations limiting Section
1905 (see Clement, supra note 9 at 619 n. 136) and Congress’
apparent desire not to alter the substantive scope of Section
1905 (see Clement, supra note 9 at 618), we similarly decline
to impart to the 1948 Congress an intention to require an in-
dependent authorization for exempting any item from the broad
confines of Section 1905. Thus Sears offers no persuasive reason
for deviating from the holding in Chrysler that disclosure of the
information requested here is not forbidden by Section 1905.
Il. Does the Submitter of Information Have a Cause of Action?
Even if Section 1905 did forbid disclosure, we agree with
the Chrysler opinion that neither Section 1905 nor the FOIA
itself permits this cause of action. See 565 F. 2d at 1185, 1188.
As Chrysler held, the proper avenue to secure judicial review
Al2
is through the Administrative Procedure Act, using 28 U. S. C.
§ 1331 or § 1337 as a basis for jurisdiction.’* See 565 F. 2d
at 1191-1192; see also Clement, supra note 9 at 626-633.
Defendant federal officials agree that APA review is appropri-
ate, but Sears seeks review under Section 1905 or the FOIA
because the APA would not allow de novo review. See 565
F, 2d at 1191; 5 U. S. C. § 605(2)(A).
Applying the four tests established in Cort v. Ash, 422
U. S. 66, 78,” to determine whether a civil remedy is available
first under Section 1905 indicates that on balance Section 1905
should not be interpreted to imply a private cause of action.
Beginning with the second of the Cort tests, Sears points to
nothing in the legislative history indicating an intent to create
such a remedy;"* the only apparent relevant item of history is
that at least as to one of Section 1905’s predecessors it was at
one time argued that the criminal penalty provision was
“valueless,” but no attempt was made to compensate with a
civil action. See Clement, supra note 9 at 611 n. 102. Thus if
any inference can be drawn from the legislative history it is
that Congress did not think a civil action was appropriate. As
12. The Administrative Procedure Act does not itself confer
jurisdiction. Califano v. Sanders, 430 U. S. 99; see Clement, supra
note 9 at 627-628.
13. J. I. Case v. Borak, 377 U. S. 426, is inapplicable because
under the statutory scheme there the courts were expressly granted a
broad authority to enforce any liability or duty created by the Securi-
ties Exchange Act of 1934. See Clement, supra note 9, at 624-625
n. 170. Further, in Borak “there was at least a statutory basis for
inferring that a civil cause of action of some sort lay in favor of
someone.” Cort v. Ash, 422 U. S. 66, 79.
14. Because neither party offered any item of legislative history
bearing on intent, each argued that the burden of proof on this test
was on the other party. Our view is that if there is no evidence on
intent, neither party can claim the benefit of that test and the test
simply offers no insight into whether a cause of action should be
implied. In the final analysis it seems fair to infer from the manner
in which the Supreme Court established the tests that plaintiff must
prevail on at least one test in order to justify a cause of action (see
note 16 infra); thus the failure of proof may be of more detriment
to the plaintiff.
Al3
to the third test, we agree with Judge Gibbons in Chrysler that
implying a civil action would not be consistent with the purpose
of the statute, especially since the APA already provides a
remedy. See 565 F. 2d at 1188."*
The remaining tests are not so unfavorable to the plaintiff.
Because the civil action sought would involve enjoining federal
agencies, it of course is not an action traditionally relegated
to state law and thus no federalism interest would be affected if
a cause of action were implied. Turning to the first Cort test,
the history of at least one of Section 1905’s predecessor statute
does indicate that one of its motivations may have been an effort
to protect the privacy of taxpayers who submitted information
to the Government. See Clement, supra note 9 at 608, 610.
Even assuming that all submitters of information are therefore
“one of the class for whose especial benefit the statute was
enacted” (422 U. S. at 78), we would hold that on balance
it is not appropriate to imply a cause of action based on the
weight that the Supreme Court appears to give to the third
factor of whether the requested cause of action is necessary to
ensure the fulfillment of Congress’ purposes. See Santa Fe In-
dustries, lnc. v. Green, 430 U. S. 462, 477.°
15. Sears insists that it would be consistent with the purposes of
Section 1905 to imply a cause of action because the criminal penalties
are inadequate. Its claim of inadequacy is based on the “plethora” of
reverse FOIA suits, which it asserts proves that the Government has
ignored Section 1905, and the lack of criminal prosecutions under the
Section. However, these facts do not necessarily prove that the penal-
ties are inadequate to deter what Section 1905 was meant to deter
but more likely prove that Sears’ substantive interpretation of the
Section has not been accepted. What Scars seeins to be concerned
about is not finding a better sanction to avoid the disclosure that the
statute is interpreted to prohibit but rather another opportunity to
litigate what information is included within the statute’s protections.
16. Although the Supreme Court has not indicated the relative
weight to be given to the four tests and that issue, despite its potential
significance, has received little attention (cf. Rauch v. United Instru-
ments, Inc., 548 F. 2d 452, 460 (3d Cir. 1976)), an analysis of
those tests and the cases applying them indicates that proof by the
plaintiff that it satisfies the first test is generally insufficient to justify
(Footnote continued on next page.)
Ai4
Judge Gibbons’ opinion in Chrysler clearly demonstrates why
an implied cause of action under the FOIA would not satisfy
the second and third prongs of the Cort test. 565 F. 2d at 1185-
1186. As to the remainder of the test, our analysis of the pro-
posed cause of action under Section 1905 is applicable: to the
FOIA claim as well, except that under the FOIA Sears’ claim
to be one of the especial beneficiaries of the statute seems con-
siderably weaker. Without denying that the FOTIA reflects some
degree of Congressional concern about disclosing private in-
formation (see 565 F. 2d at 1184), it is clear that the primary
beneficiaries of the Act are the requesters. See Department of
the Air Force v. Rose, 425 .U. S. 352, 361. Whether or not
submitters therefore should be lumped with indirect and sec-
ondary beneficiaries of other statutes (see Cort v. Ash, 422
U. S. at 81), their claim as especial beneficiaries is undercut
since only requesters have been given a cause of action by the
Congress. 5 U. S. C. § 552(a)(4)(B). Thus the claim of a
cause of action under the FOIA is even weaker than the claim
(Footnote continued from preceding page.)
implying a cause of action. See Starbuck v. City and County of
San Francisco, 556 F. 2d 450, 455 (9th Cir. 1977); Note, Implying
Private Causes of Action from Federal Statutes: Amtrak and Cort
Apply the Brakes, 17 B. C. Ind. L. Rev. 53, 58 n. 126. Without
mandating its application in an extreme case, this result seems
sensible because the first test, whether plaintiff is in the benefited
class, seems in large part a method of i erring the legislative intent
and p es addressed in the second and third tests. If the latter
tests indicate that implying a cause of action is inappropriate, it is
likely that the inference produced by the first test has been rebutted.
While not denying its potential significance, we also do not find
compelling the fact that the cause of action is not one traditionally
relegated to state law. When this factor is not present it merely
indicates that no federalism interest would be affected if a cause of
action were implied; it does not add any positive encouragement for
the creation of a cause of action. Even those cases finding this factor
— have questioned its significance under certain circumstances.
e.g., Kipperman Vv. Academy Life Ins., 554 F. 2d 377, 380 (9th
Cir. 1977). Moreover, although the prime focus of this concern is
federalism, it should be noted that to the extent this inquiry may be
in part concerned with whether the plaintiff will have any remedy if
one is not implied (cf. Mason v. Belieu, 543 F. 2d 215, 221 (D. C.
Cir. 1976)), that concern is satisfied here.
Al5
under Section 1905 and must be rejected suuilarly. See 565
F, 2d at 1191-1192; see also Clement, supra note 9 at 626-633.
Since Sears has posited its case upon 18 U. S. C. § 1905,
and since that statute would not warrant the grant of the relief
sought, the complaint must be dismissed. There is no need
for a further hearing because the present record supports the
projected disclosure. See App. 2-10. The purpose of the Free-
dom of Information Act was to foster “the fullest responsible
disclosure.” S. Rep. No. 813, 89th Cong., 1st Sess. 3 (1965).
Plaintiff has not persuaded us or the officials in charge that
this disclosure would be irresponsible. Accordingly, the order
granting the preliminary injunction is vacated and the cause is
remanded to the district court with directions to dismiss the
complaint.
Al6
APPENDIX C
UNITED STATES DistTrRicT COURT
For the Northern District of Illinois
Eastern Division
SEARS, ROEBUCK AND Co., a
Plaintiff,
vs.
Jack Ecxerp, Administrator, General
Services Administration, GENERAL
SERVICES ADMINISTRATION: WILLIE
O. GREEN, Chicago Field Director
of Contract Compliance, General
Services Administration; E. EB. | Civil Action
MITCHELL, Director of Contract No. 76 C 2444
Compliance, General Services Ad-
ministration; WILLIAM J. USERY,
Jr., Secretary of Labor, United
States Department of Labor; Law-
RENCE Z. LORBER, Director, Office
of Federal Contract Compliance
Programs, United States Depart-
ment of Labor,
Defendants. )
FINDINGS OF FACT, CONCLUSIONS OF LAW
AND ORDER
This matter coming for hearing on August 6, 1976 on the
motion of Sears, Roebuck and Co. for a preliminary injunction
pursuant to Rule 65(a), and the Court having heard the evi-
dence and testimony of the parties and the arguments of
counsel, hereby finds as follows:
——_- ae
Al7
FINDINGS OF FACT
1. Plaintiff, Sears, Roebuck and Co. (“Sears”), a New
York corporation with principal corporate offices located in
Chicago, Illinois, is engaged, inter alia, in the sale and distribu-
tion of merchandise throughout the United States. A portion of
plaintiff's business consists of contracts or subcontracts with
agencies of the United States Government and Sears complies,
therefore, with Executive Orders 11246 and 11375, 30C. F. R.
12319 and 14303 (“the Executive Orders”), and the regula-
tions promulgated thereunder, Title 41, Chapter 60, Part 60-3,
of the Code of Federal Regulations, 41 C. F. R. 60 (“Revised
Order 4”), governing the submission by government contractors
of equal employment opportunity reports and information, under
penalty of cancellation of existing government contracts and
debarrment from future contracts, to the Department of Labor,
Office of Federal Contract Compliance (“OFCC”) and its
various Compliance Agencies.
2. Defendant GSA is an executive agency of the Federal
Government and Sears’ Compliance Agency under the Execu-
tive Orders and Revised Orders 4 and 14. Defendants Jack
Eckerd, E. E. Mitchell and Willie O. Green, occupy the posi-
tions of Administrator, Director of Contract Compliance Pro-
grams, and Chicago Field Director of Contract Compliance, re-
spectively, of GSA. Defendant Lawrence Z. Lorber is the
Director of the OFCC and Defendant William J. Usery, Jr. is
the Secretary of Labor of the United States Department of
Labor. Defendant Willie O. Green, as Chicago Field Director
of Contract Compliance, GSA has an office located in Chicago,
“Illinois.
3. Pursuant to the Executive Orders and Revised Order 4,
Plaintiff has been required to develop and maintain Standard
Form 100 (“EEO-1’s”) or its equivalent, and affirmative action
programs (“AAP’s”) for both its entire corporate domestic
Al8
operations and for each of its individual domestic establish-
ments. Plaintiff has also, pursuant to Revised Order 4, been
subject to compliance reviews at its various domestic establish-
ments and has been required to submit AAP’s, EEO-1’s and
compliance support data in connection therewith. Plaintiff has
also submitted other documents and information to GSA and
has permitted off-site inspection of documents and the removal
of data, apart from documents required to be so inspected and
removed under Revised Order 14, in order to demonstrate its
compliance with the Executive Orders and Revised Order 4.
4. As of February 2, 1973, Defendant Usery’s predecessor
issued new Rules, published as Title 41, Chapter 60, Part 60-
40, of the Code of Federal Regulations, 41 C. F. R. 60-40.1
et seq. (“Disclosure Rules”), regulating the disclosure to the
public of documents in the custody of the OFCC and its Com-
pliance Agencies. The Disclosure Rules provide that various
documents, including EEO-1’s and AAP’s, which have been
obtained by said Agencies pursuant to the Executive Orders and
Revised Order 4, shall be disclosed, with exceptions, to any
persons requesting same.
5. By letter dated January 20, 1976, Charles W. Dahm,
O. P., a Chicago clergyman representing a religious order own-
ing stock in Sears, requested that GSA supply him with the
EEO-1 form, Affirmative Action Plan and supporting documents
submitted for Sears’ Tower headquarters facility in Chicago,
Illinois for the year 1974.
6. By letters of February 19, 1976 and March 5, 1976,
GSA informed Sears of Father Dahm’s request and that it
intended to honor this request and furnish this information to
Mr. Dahm.
7. On or about February 25, 1976 Sears’ representatives
met with Father Dahm and, consistent with Sears’ general dis-
closure policy, provided him with cumulative national and
Chicago area statistical information concerning the racial and
Al9
sexual composition of Sears’ workforce. Sears declined, how-
ever, to provide him with Sears Tower headquarters data alone.
Father Dahm refused, therefore, to withdraw his FOIA request
for the Sears’ headquarters data.
8. The AAP, EEO-1 data and other documents proposed
to be disclosed to Father Dahm had been provided to GSA
by Sears in June, 1974, pursuant to a compliance investigation
conducted by GSA’s Chicago Field Contract Compliance Of-
fice, now headed by Defendant Green, That investigation had
been prompted by a complaint from WE concerning Sears’
affirmative action commitment for its national headquarters
facility. Said information and documentation including, inter
alia, the Goals and Timetables Progress Report and 1973 and
1974 EEO-1 data, was provided to Mr. E. M. Hammes, GSA’s
investigator upon his express assurance that the data would be
retained in strictest confidence by GSA and would not be pub-
licly disclosed. Based on Mr. Hammes’ assurances of con-
fidentiality, Sears permitted him to have access to this confiden-
tial data, and to duplicate it and remove it from Sears’ premises.
This data is the data which GSA now proposes to disclose
to Mr. Dahm.
9. On March 29, 1976, pursuant to 41 C. F. R. 60-60.4(d),
Sears submitted written objections to GSA’s proposed disclosure
claiming, inter alia, that disclosure is prohibited under 18
U. S. C. § 1905 because it “concerns or relates to . . . [Sears]
confidential statistical data” and is, therefore, exempt from
disclosure under section (b)(3) of the Freedom of Informa-
tion Act (“FOIA”) [5 U. S. C. § 552 et. seq.) Sears alterna-
tively claimed that the information was also exempt from manda-
tory disclosure under (b)(4), (b)(6) and (7) of the FOIA
and that disclosure in the circumstances of this case would
constitute an abuse of GSA’s discretion.
10. Sears’ objections were rejected by Defendant Mitchell
on April 27, 1976 and thereafter by Defendant Lorber in a
ruling issued on June 24, 1976. Sears was thereupon advised
A20
that the data would be released on or after July 8, 1976, unless
judicially restrained.
11. The disputed data consists primarily of a statistical and
numeral breakdown by race and sex of Sears Tower head-
quarters workforce within a number of different job classifica-
tions and categories for the calendar year 1974. Sears classifies
this information as confidential internally within the Company
and, excepting those members of Sears’ staff responsible for the
formulation and implementation of its affirmative action pro-
gram, its individual facility data is not made available to Sears
employees, its competitors or the general public. The only public
release of Sears data is on a cumulative national or regional
basis where Sears has been satisfied that there will be no
significant injury to its goodwill or competitive interests.
12. On July 2, 1976, Plaintiff filed with this Court its
Verified Complaint for Declaratory Judgment and Injunction
and a Motion for Temporary Restraining Order. On July 6,
this Court granted said motion requiring the preservation of
the status quo, Said order was thereafter extended pending a
hearing on Plaintiff's motion for Preliminary Injunction.
Throughout this proceeding Defendants have indicated that,
unless they are enjoined by the Court from disclosing these
documents, they will not delay disclosure pending a resolution
by the Court on the merits of the Complaint.
CONCLUSIONS OF LAW
1. This Court has jurisdiction of this action under 18
U. S. C. § 1905; 28 U. S. C. § 1331; 28 U. S. C. § 1337; the
Administrative Procedure Act, 5 U. S. C. § 701, et. seq.; the
Freedom of Information Act, 5 U. S. C. § 552 (hereafter the
“FOIA”) ; and the Federal Declaratory Act, as amended, 28
U. S. C. §§ 2201-03.
2. Venue lies in this Court under § 1391(e) since: (a)
Sears is a resident of this judicial district; (b) Sears’ head-
A21
quarters data, which is the subject of this dispute is within
this district as is the requester of this information, Charles W.
Dahm, O.P.; and (c) the data in issue was submitted to a
representative of Defendant Green’s Chicago office within this
district which has the primary responsibility for ensuring com-
pliance with the applicable Executive Orders.
3. Unless Defendants are enjoined from disclosing this data,
Plaintiff will suffer immediate and irreparable injury for which
there is no adequate remedy at law. Moreover, once said docu-
ments are disclosed, the out-of-date and incomplete informa-
tion contained therein might well become the basis for protests,
picketing or boycotts directed at its Tower headquarters facility
resulting in irreparable damage both economically and in terms
of its present and future public relations.
4. Neither Defendants nor the requester, Father Dahm or
his organization will be subjected to material prejudice by grant
of this preliminary injunction inasmuch as the data is out-of-
date and the national and Chicago area data voluntarily pro-
vided by Sears should be sufficient to assess Sears’ equal em-
ployment commitment and progress.
5. The data which GSA proposes to disclose constitutes
confidential statistical data or is directly related or concerned
therewith and GSA is, therefore, specifically prohibited from
disclosing such information by 18 U. S. C. § 1905. I find,
therefore, that there is a reasonable probability that Sears will
succeed on the merits of its claim that the information herein
is exempt from disclosure under Exemption (b)(3) of the
FOIA and that GSA’s disclosure of such data would constitute
an unauthorized and arbitrary and unlawful exercise of its
powers.
6. Defendants have not requested a bond and the Court
finds, under the circumstances of this case, that no bond is
necessary or required.
A22
WHEREFORE, it is hereby Ordered, Adjudged and Decreed
that:
1. Defendants, and each of them, and their successors in
Office, agents, servants, and employees, and all other persons
in active concert or participation with them, are restrained
and enjoined from disclosing the documents provided to them
by Sears and in issue in this suit and any related materials or
documents, to either Mr. Dahm or any other member of
the public,
2. Defendants, and each of them, and their successors in
Office, agents, servants, employees, and all persons in active
concert or participation with them, are restrained and enjoined
from violating the provisions of 18 U. S. C. § 1905, and from
disregarding the applicable exemption of the Freedom of
Information Act [5 U. S. C. § 552(b) (3)].
3. Pending a final decision on the merits of Plaintiff's Com-
plaint, the defendants are restrained and enjoined from publicly
disclosing any of the “Goals and Timetables” and/or EEO-1
forms or their equivalent which have been submitted to them by
Sears pursuant to the Executive Orders and any other relevant
statutes and regulations, and from in any manner publicly
disclosing any like or related materials or documents.
Enter: August 27, 1976.
/s/ FRANK J. MCGaARR
U. S. District Judge
A23
APPENDIX D
UNITED STATES CoURT OF APPEALS
For the Seventh Circuit
Chicago, Illinois 60604
June 1, 1978.
Before
Hon. WALTER J, CUMMINGS, Circuit Judge
Hon. Puivie W. TONE, Circuit Judge
Hon. WILLIAM J. CAMPBELL, Senior District Judge*
h ) Appeal from the
United States Dis-
SEARS, ROEBUCK AND Co., trict Court for the
Plaintif-Appellee, | Northern District of
No. 77-1417 vs. | Illinois, Eastern Di-
vision,
JACK ECKERD, ef al., No. 76-C-2444
Defendants-Appellees. Frank J. McGarr,
Judge.
ORDER
On consideration of the petition for rehearing filed in the
above-entitled cause by plaintiff-appellee Sears, Roebuck and
Co. and the answer thereto, all of the judges on the original
panel having voted to deny the same,
IT Is HEREBY ORDERED that the aforesaid petition for rehear-
ing be, and the same is, hereby Denied.
* The Honorable William J. Campbell, Senior District Judge of
the Northern District of Illinois, is sitting by designation.
A24
APPENDIX E
UNITED STATES COURT OF APPEALS
For the Seventh Circuit
Chicago, Illinois 60604
June 9, 1978.
Before
Hon. WALTER J. CUMMINGS, Circuit Judge
SEARS, ROEBUCK & COMPANY, ) Appeal from the
Plaintiff-Appellee, | United States Dis-
trict Court for the
CHARLES W. Dau, O. P., Northern District of
Intervenor-Plaintiff- Illinois, Eastern Di-
Appellant, ; vision.
No. 77-1417 VS. No. 76-C-2444
Jack EcKERD, Administrator, Gen-
eral Services Administration, et al., Frank J. McGarr,
Defendants-Appellees. ) Judge.
This matter comes before the court for its consideration upon
the filing herein of the following documents:
1. The “MOTION FOR STAY OR ISSUANCE OF
MANDATE PENDING PETITION FOR CERTIO-
RARI” filed herein on June 5, 1978 by counsel for the
plaintiff-appellee.
2. The “CORRECTED AND AMENDED MOTION
FOR STAY OF ISSUANCE OF MANDATE PENDING
A25
PETITION FOR CERTIORARI” filed herein on June 6,
1978 by counsel for the plaintiff-appellee.
On consideration thereof,
IT 1s ORDERED that plaintiff-appellee’s corrected motion for
stay of mandate is hereby, Granted. The mandate of this court
is hereby, Stayed to and including July 7, 1978.
A26 A27
APPENDIX F : APPENDIX G
UNITED STATES CouRT OF APPEALS The relevant portions of the exemptions to the Freedom of
For the Seventh Circuit Information Act are as follows:
Chicago, Illinois 60604 | 5 U.S.C. § 552(b).
! (b) This section does not apply to matters that are—
July 3, 1978. (3) specifically exempted from disclosure by statute
(other than Section 552b of this title), provided that such
Before | statute (A) requires that the matters be withheld from the
public in such a manner as to leave no discretion on the
Hon. WALTER J. CUMMINGS, Circuit Judge issue, or (B) establishes particular criteria for withholding
or refers to particular types of matter to be withheld;
Sears, RoEBuCK & COMPANY, )) Appeal from the
Plaintiff-A ppellee, United States Dis-
trict Court for the
CHARLES W. Dau, O. P., Northern District of
Intervenor-Plaintiff- Illinois, Eastern Di-
Appellant, : vision.
No. 77-1417 vs. No. 76-C-2444
Jack Eckerp, Administrator, Gen- Sgn
eral Services Administration, et al., Frank J. McGarr,
Defendants-Appellees. ) Judge.
This matter comes before the court on the “MOTION TO
EXTEND STAY OF MANDATE PENDING FILING OF
APPELLEES PETITION FOR A WRIT OF CERTIORARI”
filed herein on June 29, 1978 by counsel for the plaintiff-
appellee. On consideration thereof,
IT is ORDERED that said motion be, and the same is hereby,
Granted. The mandate of this court is hereby Stayed to and
including July 17, 1978, in accordance with the provisions of
Rule 41(b) of the Federal Rules of Appellate Procedure.
A28
APPENDIX H
18 U. S. C. § 1905 provides as follows:
5 U.
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 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, 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. (June 25, 1948, ch. 645, 62 Stat. 791.)
APPENDIX I
S. C. § 301 provides as follows:
The head of an Executive department or military
department may prescribe regulations for the government
of his department, the conduct of its employees, the distri-
bution 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 availability of records to
the public.
Pub.L. 89-554, Sept. 6, 1966, 80 Stat. 379.
A29
APPENDIX J
The relevant portions of 41 C. F. R. Part 60-40 are as
follows:
Sec. 60-40.2. Information Available on Request.—
(a) Upon 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 in-
spection 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.
(b) Consistent with the above, all contact compliance
documents within the custody of the OFCC and the Com-
pliance Agencies shall be disclosed upon request unless
specifically prohibited by law or as limited elsewhere
herein. The types of documents which if in the custody of
the OFCC or Compliance Agencies must be disclosed in-
clude, but are not limited to, the following:
(1) Affirmative action plans, whether or not re-
viewed and finally accepted by the OFCC or the
Compliance Agencies except as limited in 41 CFR
60-40.3 (a) (1).
(2) Imposed plans and hometown plans, pending
or approved.
(3) Text of final conciliation agreements.
(4) Validation studies of tests or other preemploy-
ment selection methods.
(5) Dates and times of scheduled compliance
reviews.
Sec. 60-40.3. Information Exempt from Compulsory
Disclosure and Which May Be Withheld.—(a) The follow-
A30
ing 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
inspection or copying does not further the public interest
and might impede 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 commer-
cial or financial information 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 available to the public.
A determination by an agency to withhold this type of
information should be made only after receiving verifica-
tion and a satisfactory explanation from the contractor that
the information 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 con-
stitute a release of confidential financial information of an
employee or would constitute an unwarranted invasion of
the privacy of an employee.
(3) The names of individual complainants.
(4) The assignments to particular contractors of named
compliance officers if such disclosure would subject the
named compliance officers to undue harassment or would
affect the efficient enforcement of the Executive order.
(5) Compliance investigation files including the stand-
ard compliance 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. There-
after, these reports and related files shall not be disclosed
only to the extent that information contained therein con-
stitutes trade secrets and confidential commercial or finan-
cial information, 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 consti-
A31
tute a clearly unwarranted invasion of personal privacy,
data which would be exempt from mandatory disclosure
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.
(b) Other records may be withheld consistent with the
Freedom of Information Act on a case-by-case basis, with
the prior approval of the Director, OFCC.
Sec. 60-40.4. Information Disclosure of Which Is Pro-
hibited by Law.—The Standard Form 100(EEO-1) which
is submitted by contractors to the OFCC, a compliance
agency or a Joint Reporting Committee servicing both the
OFCC and the EEOC shall be disclosed pending further
instructions from the Director, OFCC. The statutory pro-
hibition 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.
APPENDIX K
Notice: This —- is subject to formal revision before publica-
tion in the Federal Reporter or U. S. App. D. C. Reports. Users are
requested to notify the Clerk of any formal errors in order that
corrections may be made before the bound volumes go to press.
UNITED STATES COURT OF APPEALS
For the District of Columbia Circuit
No. 77-1822
SEARS, ROEBUCK AND COMPANY,
Appellant,
vs.
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, ET AL.
No. 77-1995
SEARS, ROEBUCK AND COMPANY
vs,
EQuaL EMPLOYMENT OPPORTUNITY COMMISSION, ET AL.,
Appellants.
A33
No. 77-1996
SEARS, ROEBUCK AND COMPANY
vs.
EQuAL EMPLOYMENT OPPORTUNITY COMMISSION, ET AL.,
Appellants.
Appeals from the United States District Court
for the District of Columbia
(D. C. Civil Nos. 77-0393 and 77-0924)
Argued March 31, 1978
Decided June 9, 1978
S. Richard Pincus, for appellant in No. 77-1822 and cross
appellee in Nos. 77-1995 and 77-1996.
Ramon V. Gomez, Attorney, Equal Employment Opportunity
Commission, with whom Beatrice Rosenberg, Assistant General
Counsel, and Raj K. Gupta, Attorney, Equal Employment Op-
portunity Commission, were on the brief, for appellee in No.
77-1822 and cross appellants in Nos. 77-1995 and 77-1996.
Barbara Kaye Besser, Margaret Beller and Charlotte Hallam
were on the brief, for intervenor in No. 77-1822.
Robert E. Williams and Frank C. Morris, Jr. were on the
brief, for Amicus Curiae, The Equal Employment Advisory
Council, urging reversal.
Victor H. Kramer, Charles E. Hill and Douglas L. Parker
were on the brief, for Amicus Curiae, Institute for Public In-
terest Representation, urging affirmance of the District Court's
holding that the provisions of 18 U.S.C. § 1905 are inapplicable
to disclosures of information required by Title VII of the Civil
Rights Act of 1964.
A34
Before LUMBARD,* Senior Circuit Judge for the Second Cir-
cuit, and MACKINNON and WILKEY, Circuit Judges.
Opinion for the court filed by Senior Circuit Judge LUMBARD.
LUMBARD, Senior Circuit Judge:
In these appeals we address the question whether the
Equal Employment Opportunity Commission (EEOC) may
furnish to employees proceeding as private litigants under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e to
§ 2000e-17, information regarding employers whom the EEOC
is investigating. The district court ruled that the EEOC could
give to certain individual employees data accumulated pursuant
to the EEOC’s investigatory powers; the court also ruled, how-
ever, that the Commission is statutorily prohibited from giving
to such employees information obtained by the EEOC during
settlement negotiations with employers,
Sears, Roebuck & Co. (Sears), a nationwide retailer, appeals
from the judgment of the district court insofar as it allowed the
EEOC to give some information in its files concerning Sears
to employees who have brought suit against Sears. The EEOC
cross appeals from so much of the judgment as forbad release of
information obtained during its negotiations with Sears. Finding
that Title VII's prohibition on “making public” information
secured by the EEOC during its investigations extends to any
disclosure to persons outside the government, we reverse that
part of the district court’s judgment that allowed the EEOC to
give employees of Sears data from EEOC files concerning Sears;
in all other respects we affirm the judgment of the district court.
I. Facts
A motivating factor behind the Civil Rights Act of 1964
was Congress’ concern over discrimination in employment as
a cause of unemployment of minority members of the work
* Sitting by designation pursuant to 28 U. S. C. § 294(d).
A35
force. See Blumrosen, The Duty of Fair Recruitment Under the
Civil Rights Act of 1964, 22 RutGcers L. REv. 465 (1968).
Thus, as part of the Act, Congress enacted Title VII, 42 U.S.C.
§ 2000e-1 to § 2000e-17, which makes illegal certain “unfair
employment practices” of employers, including the refusal to
hire or the discharge of “. . . any individual . . . because of the
individual’s race, color, religion, sex, or national origin.” 42
U.S.C. § 2000e-2(a) (1).
To facilitate compliance with Title VII's strictures, Congress
created the EEOC; primary enforcement power was left to
aggrieved employees, however. Many observers saw piecemeal
enforcement by individuals to be an inadequate device for
achieving the national goals of Title VII, see Sape & Hart, Title
VI Reconsidered: The Equal Employment Opportunity Act of
1972, 40 Gro. WasuH. L. REV. 824 (1972), and so in 1972
Congress amended the statute to give the EEOC broad authority
to bring enforcement actions in federal court, should negotia-
tions fail to result in comprehensive settlements of Title VII
violations by employers. See 42 U.S.C. § 2000e-5(b), (f) (1);
Alexander v. Gardner-Denver Co., 415 U.S. 36, 44 (1974);
H. Friendly, Federal Jurisdiction: A General View 82-87
(1972). Indeed, to ensure that Title VII violations would be
remedied whenever possible through a conciliation agreement
reaching all employees of a given employer, Congress prohibited
individual employees from bringing suit on their own behalf
until after the EEOC has had an opportunity to investigate and
settle charges of employment discrimination with the employer.
See 42 U.S.C. § 2000e-5; cf. Patterson v. American Tobacco
Co., 535 F.2d 257, 272 (4th Cir. 1976). Thus, Title VII pro-
vides that once a charge of an unfair employment practice is
filed with the EEOC by either a private party or a commissioner,
the Commission must investigate the charge to determine
whether there is reasonable cause to believe that the employer
has engaged in illegal employment discrimination. If the EEOC
finds reasonable cause to believe there has been a violation of
Title VII, it must enter into conciliation discussions with the
A36
employer in an attempt to remedy the situation.’ If these dis-
cussions fail, the EEOC may file suit against the employer in
the district court. Furthermore, parties aggrieved by alleged
Title VII violations may bring suit in federal court 180 days
after filing charges with the EEOC, whether or not the EEOC
has acted within that time.
To enable the EEOC to carry out its statutory role of nego-
tiating settlements with employers, Congress gave the Commis-
sion authority to obtain certain information from employers
against whom employment discrimination charges have been
filed, and to enter into discussions with employers concerning
such charges. The two statutory provisions at issue here, §§
706(b) and 709(e) of Title VII, prohibit the EEOC from
“making public” any information the EEOC receives as a result
of its negotiations with employers or its request for information
from employers.
On August 30, 1973, then-EEOC Chairman William H.
Brown, III, acting under 42 U.S.C. § 2000e-5(b), filed with the
Commission a charge against Sears, claiming that the company
had engaged in unfair employment practices. Specifically, Brown
alleged that Sears had discriminated against job applicants and
employees across the nation on the basis of their race, sex, and
national origin.
The Commission consolidated with Commissioner Brown’s
national charge the several hundred pending charges that had
been filed by private individuals and organizations in various
parts of the country regarding numerous instances of alleged
employment discrimination by Sears.* This consolidation of
1. If the EBOC determines that there is no reasonable cause
supporting the charge, the private party who filed the charge (or on
whose alf the c e was filed, in the case of a commissioner
os may, igo 90 ve ae receiving notice of the EEOC’s
ision, bring a lawsuit in federal court against the employer. S
42 U.S. C. § 2000e-5(f) (1). One wieanadene
2. The precise number and nature of these charge are before
us only in the sealed record on appeal and, like the details of
Brown's charge, are not for public dissemination. See 42 U. S. C.
§ 2000e-5(b). ‘ "
A37
complaints is consistent with the policy of the Commission to
proceed against nationwide employers, whenever possible, by
use of commissioners’ complaints that potentially cover all those
injured by the employers’ alleged discriminatory hiring activities.
The consolidated EEOC proceeding against Sears was re-
ferred to the Commission’s National Programs Division, now
known as the Special Investigations and Conciliation Division,
which requested, pursuant to 42 U.S.C. § 2000e-8(a), informa-
tion from Sears concerning the company’s hiring policies and
activities. The information provided by Sears, dating in some
instances from 1964, pertained to the operation of 168 of Sears’
approximately 3,800 retail facilities, and revealed the sexual,
racial, and ethnic makeup of approximately 30% of Sears’
work-force in various job categories, both hourly and salaried.
Sears also gave data to the EEOC concerning recruitment, selec-
tion, evaluation, promotion, transfer, training, and compensa-
tion of Sears’ employees, and details of the company’s attempts
to hire women and members of minority groups. Much of the
data given to the EEOC had never been given out publicly by
Sears.
Although Title VII expressly requires conciliation discussions
between the EEOC and an employer against whom charges have
been filed only after the Commission has determined there is
reasonable cause to believe that the employer has engaged in
unfair employment practices, see 42 U.S.C. § 2000e-5(b), it
appears that the Commission regularly engages in discussions
(known as “pre-determination settlement discussions”) prior to
making such a determination, see 29 C.F.R. § 1601.19a
(1977); this was done in the proceeding against Sears. Thus, on
November 11, 1975, the EEOC began settlement discussions
with Sears. As part of the offer and counteroffers made during
some ten months of negotiations, Sears compiled and gave to
the EEOC detailed statistical studies covering all of its approxi-
mately 420,000 employees.* The information concerning Sears’
3. See Sears, Roebuck & Co., Annual Report, 14 (1975).
A38
numerous employment tasks was organized into seven “Affirma-
tive Action Job Categories,” in an attempt to define the present
status of Sears’ equal employment endeavors, to establish specific
goals for the employer, and to devise the basis for an agreement
regarding back pay. It is undisputed that, but for its attempts
to reach an agreement with the EEOC, Sears would not have
compiled these statistical analyses. Also as part of its negotia-
tions with the Commission, Sears continued to supply up-to-date
information concerning the company’s affirmative action pro-
gram.
On May 21, 1975, more than six months after the inception
of the Sears settlement discussions, the Commission promulgated
regulations specifying that “charging parties” (that is, private
parties who have filed charges with the EEOC pursuant to 42
U.S.C. § 2000e-5(b) ) and certain others alleged to be aggrieved
by Title VII violations being investigated by the EEOC may be
given EEOC investigative file data. See Section 83.5 of the
EEOC Internal Compliance Manual. See also 29 C.F.R. §
1610.17(d) (1977). Thereafter, on March 12, 1976, the
attorney representing two charging parties, Carolyn Hendrock
and Donna Walker, requested that the EEOC turn over informa-
tion pertaining to her clients which was contained in the con-
solidated EEOC Sears file. Some of the data sought had been
obtained in response to EEOC investigative requests directed
to Sears; other data were part of the statistical analyses that
had been prepared by Sears and given to the EEOC during the
course of settlement discussions. At the time of their request,
Hendrock aud Walker informed the EEOC that they intended
to file a Title VII action against Sears on behalf of a class of
employees, and that they were eligible to do so, as 180 days had
passed since the filing of their charges with the EEOC.
On June 2, 1976, the Commission advised Sears of its inten-
tion to honor the requests for investigative file information
concerning Sears. On August 12, 1976, after having obtained a
postponement of the time for distribution of the file data, Sears
a>
A39
filed suit in the Northern District of Illinois, seeking a declara-
tory judgment and an injunction prohibiting the Commission
from disseminating the information requested. On March 4,
1977, the case was transferred to the District of Columbia on
the motion of the EEOC, and Hendrock and Walker intervened
as defendants on April 7, 1977. Since the initial request for
material from the Sears EEOC file, several other attorneys,
representing both individuals and classes, have made similar
demands for information pertinent to their clients. Presently
there are at least four private Title VII actions pending against
Sears. Moreover, there are at present 343 private charges pend-
ing before the EEOC against Sears, all of which could ripen
into lawsuits.
On April 19, 1977, having failed to reach agreement with
Sears on a plan to remedy the alleged Title VII violations, the
EEOC issued decision 77-21, finding that there was reasonable
cause to believe that Sears had engaged in unfair employment
practices. The 250-page decision included detailed analyses of
much of the data given to the Commission by Sears during the
investigation and settlement discussions. The EEOC then sent
“Letters of Determination” to some private charging parties.
These letters notified the employees of the EEOC’s finding of
reasonable cause, gave details of the factual basis for that find-
ing, and stated that the complete Commission decision would:
soon be sent to them.
Sears, upon learning of the Letters of Determination and
their promise of further disclosure, filed a second suit in the
District of Columbia on June 1, 1977, seeking an injunction
against distribution of investigative file data in the form of the
letters or the decision. After enjoining pendente lite all dissemi-
nation of EEOC material concerning Sears, the district court
held a hearing on the sole factuai issue in dispute (whether the
Commission had promised Sears’ attorneys it would hold con-
fidential all information received during settlement discussions),
and issued a single decision covering both of the Sears actions.
A40
Largely relying on the Fifth Circuit’s decision in H. Kessler
& Co. v. EEOC, 472 F.2d 1147 (Sth Cir.) (en banc), cert.
denied, 412 U.S. 939 (1973), the district court ruled that the
EEOC was not prohibited by § 709(e) of Title VH, 42 U.S.C.
§ 2000e-8(e), from giving out file information to charging
parties, provided that the information had been obtained by the
EEOC under its investigatory powers, see 42 U.S.C. § 2000e-8
(a), rather than as a part of settlement discussions with the em-
ployer under investigation. See Sears, Roebuck & Co. v. EEOC,
435 F.Supp. 751 (D.D.C. 1977). However, the district court,
relying upon the policy supporting out-of-court settlements of
Title VII disputes, ruled that information obtained by the Com-
mission during settlement discussions cannot be disclosed to
charging parties who request it, although the court recognized
that “the appeal of symmetry” suggests that the prohibition of
§ 706(b) of Title VII has a scope similar to that of § 709(e).
The district court also found that the EEOC had promised
Sears that it would not disclose to anyone the information given
to the Commission during settlement discussions. Last, the court
found that, because EEOC decision 77-21 inextricably com-
mingled material obtained by request of the EEOC with mate-
rial obtained during settlement discussions, the decision could
not be distributed to charging parties; and that Letters of Deter-
mination may include only a simple notification of the fact of the
Commission’s finding of reasonable cause.*
From this judgment of the district court both sides appeal.
Sears appeals from that part of the judgment that allows the
EROC to give to charging parties information obtained through
investigative demand. The Commission appeals from the judg-
ment insofar as it precludes dissemination of factual data gleaned
from settlement discussions and restricts notice to charging
parties of the EEOC finding of reasonable cause.
4. Following the judgment of the district court, Sears sought
a stay, both in this court and in the Supreme Court. These requests
were denied. After oral argument, Sears again requested a stay,
rec ag decision. We granted this request by order of April
A4l
II. Discussion
A. §709(e)—INVESTIGATION MATERIAL
§ 709(e) of Title VII provides in relevant part that
[i]t shall be unlawful for any officer or employee of the
Commission to make public in any matter whatever any
information obtained by the Commission pursuant to its
[investigative] authority . . . prior to the institution of any
proceeding under this subchapter involving such informa-
tion. 42 U.S.C. § 2000e-8(e). (emphasis supplied)
The Commission argues that the crucial phrase in this provision,
“to make public in any matter whatever,” refers only to dis-
semination to members of the public other than charging parties.
We disagree. We hold that by enacting § 709(e), Congress
meant to prohibit the EEOC from giving information from its
investigative files to any individual outside the government.°
An examination of the overall statutory scheme persuades us
that Title VII was never meant to permit dissemination of EEOC
investigative data to anyone not within the government. As we
have noted, Congress, after seeing the inadequate results of re-
lying on private actions for securing compliance with Title VII,
settled upon comprehensive settlements negotiated by the EEOC
as the primary mechanism to achieve the broad objectives of
the Act. Through such agreements, compliance with the require-
ments of Title VII may be achieved with respect to all employees
of a given company, rather than merely for those few who might
happen to file charges and later bring private actions.
The EEOC, as enjoined by Congress, has adopted a policy
favoring the consolidation of all charges against an employer,
and negotiations concerning the employer’s overall employment
practices.® It would do violence to this scheme of negotiation
5. To the extent that EEOC regulations conflict with our ruling,
those regulations are invalid as contrary to the terms of Title VII.
6. It appears that the EEOC has met wtih some degree of
success in negotiating settlements with large employers accused of
Title VII violations. See EEOC, 10th Annual Report, Lab. L. Rep.
(CCH), No. 22, at 8 (July 8, 1977).
A42
and settlement if the Commission were permitted to encourage
numerous private litigants by distributing information from
EEOC files before the administrative procedures of Title VII
had run their course.
The facts of the instant case illustrate the extent to which
EEOC efforts to achieve an agreement with respect to nation-
wide employment practices may be undermined should the Com-
mission be allowed to disseminate vast amounts of data to
hundreds of charging parties. After nearly four years, the Com-
mission has concluded its detailed investigation of Sears; exten-
sive informal settlement discussions have been held already.
Now that the EEOC has issued its formal determination of rea-
sonable cause, the conciliation process mandated by the statute
is to begin. Affording the charging parties virtually unlimited,
free-discovery by opening the FOC files at this point would
have the effect, as the district court stated, of “fueling private
lawsuits,” Sears, Roebuck & Co. v. EEOC, 435 F.Supp. 751,
757 (D.D.C. 1977), and might thereby interfere substantially
with the ongoing process of conciliation between the EEOC and
Sears. Rather than focusing upon an immediate agreement that
would result in the correction of Sears’ employment policies as
they pertain to the several hundred thousand people who cur-
rently work for Sears and the many thousands who apply to the
retailer each year for employment, the EEOC and Sears would
be forced to direct their attention toward the claims of a mere
343 individual employees whose lawsuits would be fueled by
the EEOC information. In this way, the overriding public in-
terest in the elimination of employment discrimination through-
out Sears’ facilities across the country would be subordinated
to some extent to the interests of a few individual employees.
Moreover, Title VII provides no effective means to limit dis-
tribution of investigatory material to charging parties alone,
Although the Commission extracted promises from requesting
parties with respect to some of the information it proposed to
distribtue in the instant case, such promises obviously are not
enforceable against those receiving information. At oral argu-
A43
ment, counsel for the Commission asserted that the EEOC or
employees could seek to enjoin parties from violating their
agreement with the Commission. When pressed, however, coun-
sel could point to no instance when this had been done. More
important, injunctive relief would give little protection to em-
ployers once information given to charging parties had appeared
in the news media, or otherwise had been distributed to the
public at large. As there is nothing to prevent charging parties
from redistributing what they receive from the EEOC to whom-
ever they please, distribution of investigative file data to charg-
ing parties would be tantamount to distribution to the public at
large.
If EEOC files were open to charging parties, employers,
realizing the lack of any effective mechanism within the EEOC
for restricting the use of information once it leaves the hands
of the EEOC, in many cases would refuse to comply voluntarily
with investigative demands by the EEOC under § 709(e),
thereby forcing the Commission to use subpoena power and suit
in the district court in place of amicable negotiations. By doing
so, employers would at least have the opportunity to persuade
a court to impose effective restrictions on the scope of distribu-
tion—something which is beyond the power of the EEOC to do.
Thus, if the statute were construed to allow distribution of in-
vestigatory data to individuals outside the government, the oper-
ation of the voluntary investigatory proceedings established by
§ 709(e) would be impeded in a fashion plainly not intended by
Congress when it enacted the restriction on “making public”
data gathered by the Commission.
Although the legislative history is sparse, we believe that
Congress’ intention in enacting § 709(e), viewed in light of the
well-established practice throughout the government, was to
forbid disclosure of sensitive data to any persons outside the
government. Government agencies, such as the Department of
Justice and the National Labor Relations Board, do not give to
private litigants information the government has accumulated
concerning parties it is investigating, absent some express statu-
A44
tory authorization or requirement to do so.” See, e.g., Consumers
Union of United States, Inc. v. Saxbe, [1974] Trade Cases
(CCH) 4 75,057, at 96,759 (D.D.C. 1974). Indeed, Congress
itself has placed strict constraints upon what information the
government may disclose with respect to certain sensitive govern-
mental functions, such as investigations. See, e.g., 18 U.S.C.
§ 1905; Int. Rev. Code of 1954, § 7213. In doing so, Congress
has no doubt been motivated by its concern that critical govern-
ment activities may be impaired by excessive disclosure. See
Charles River Park “A,” Inc. v. HUD, 519 F.2d 935, 940
(D.C, Cir. 1975); National Parks & Conservation Ass'n V.
Morton, 498 F.2d 765, 767 (D.C. Cir. 1974). Plainly these
limitations on disclosure by agents of the Executive Branch
(whether imposed by an agency upon itself or imposed by
Congress) were meant to draw the line against giving infor-
mation to those outside of the government. Thus, there is reason
to believe that Congress in enacting § 709(e) had in mind the
common prohibition against giving investigatory information to
individuals outside the government.
The result we reach is not necessarily inconsistent with that
reached by the Fifth Circuit in H. Kessler & Co. v. EEOC, 472
F.2d 1147 (Sth Cir.) (en banc), cert. denied, 412 U.S. 939
(1973). In that case Judge Tuttle, speaking for the majority,
ruled that the Commission could give to a charging party infor-
mation from the individual's investigative file. Kessler, however,
involved a single charge against an employer by one individual.
There was no national, consolidated file, as in the instant case,
and accordingly the investigatory material available was much
more limited than it is here.* Further, distribution in Kessler was
7. The Freedom of Inf
provides just such explicit poor tcl oat oni c damnony
prohibition. See 5 U. S. C. § 552(b)(3) (1976); Project: Govern-
ment Information and the Rights of Citizens, 73 Mi REV.
1055 (1975). wr cu. Ly Rev. 971,
8. Indeed, the court in Kessler emphasized that it was “dealin
. . . with a very limited form of disclosure . . .” 472 F.
1149 (Sth Cir. 1973) (en banc). ati
A45
restricted to a single person, whereas here the EEOC is asking,
as the trial court observed at the hearing on July 14, 1977, to be
allowed to give information virtually to “anybody [it] want[s].”
To the extent that any language in Kessler may be incon-
sistent with our holding here, we decline to follow Kessler, as
we believe that the statute gives the private Title VII litigant
adequate means of prosecuting the litigation.” Thus, 42 U.S.C.
§ 2000e-5(f) (1) empowers federal courts to appoint an attor-
ney for a Title VII litigant and to “authorize commencement of
the action without the payment of fees, costs, or security.” Most
important, under 42 U.S.C. § 2000e-5(k) the courts may
“allow the prevailing party [in a Title VII action] . . . a reason-
able attorney's fee as part of the costs.” Thus, to the extent that
an employer unreasonably impedes discovery in private litigation
under Title VII, he risks increasing his own liability, inasmuch
as he increases the attorney’s fee of the plaintiff.
Finally, it is significant that one of the court’s primary con-
cerns in Kessler, the short time within which a litigant must
bring suit after receiving notice that the EEOC (or the Attorney
General in cases involving a governmental agency, see 42 U.S.C.
§ 2000e-5(f)(1)) has neither filed suit nor reached a concilia-
tion, is no longer apposite: In 1972 Congress increased this
time period from 30 to 90 days.’®
9. We do not concur in the inference drawn by the court in
Kessler from the 1972 deletion in Conference without comment of
an amendment to § 709(e) that would have expressly limited dis-
tribution of EEOC investigatory material to those within the govern-
ment. The Conference’s action may well have resulted from the
feeling that the amendment was unnecessary, as it merely restated
Congress’ understanding of § 709(e) as it now stands.
Furthermore, we note that § 706(a) (now § 706(b), 42 U. S. C.
§ 2000e-5(b)), as applied by the court in Kessler, required the
“consent of the parties” prior to dissemination of negotiation data.
The statute, as amended in 1972, now requires the “consent of the
persons concerned” (emphasis supplied).
10. prey the Kessler opinion was filed more than nine
months after the 1972 amendments to Title VII took effect, the
court’s opinion took no notice of the amendments.
A46
Thus, we are not persuaded that aggrieved employees are
unduly hindered in commencing suit within the required time
unless they are given ready access to the investigatory files of
the EEOC.
B. § 706(b)—SETTLEMENT NEGOTIATION MATERIAL
§ 706(b) of Title VII provides in relevant part that
[nJothing said or done during and as a part of . . . informal
endeavors [at conciliation] may be made public by the
Commission, its officers or employees, or used as evidence
in a subsequent proceeding without the written consent of
the persons concerned. 42 U.S.C. § 2000e-5(b) (emphasis
supplied).
Having concluded that under 709(e) the EEOC cannot give out
information to any parties outside the government, we hold that
§ 706(b) imposes a similar restriction on the EEOC.
The use of the same language in § 709(e) and § 706(b)
indicates that it should be given the same meaning in both
sections unless there is some reason to do otherwise. We find no
reason to construe the language in § 706(b) differently from
our construction of § 709(e). On the contrary, there are com-
pelling policy reasons for not allowing the EEOC to give, even
to charging parties, information gleaned from settlement nego-
tiations: Only by keeping such data strictly confidential can
employers be encouraged to discuss openly and frankly the
possible grounds for an amicable resolution of the disputes at
hand. As the trial judge perceptively stated, “[k]nowledge that
anything ‘said or done’ by way of settlement with EEOC will be
disclosed to potential litigants is bound to dissuade candor and
even participation by employers in a negotiated settlement”
(footnote omitted). Sears, Roebuck & Co. v. EEOC, 435
F.Supp. 751, 759 (D.D.C. 1977).
We consider the scope of permissible disclosure under
§ 709(e) to be as narrow as that under § 706(b), and thereby
A47
protect the important policy of encouraging settlement by nego-
tiation while at the same time recognizing the symmetry of these
two provisions as drafted by Congress. Accordingly, we hold
that, as with investigative data, information obtained by the
EEOC during settlement discussions with employers cannot be
disclosed to anyone outside the government.”
Affirmed in part, reversed in part.
11. Our conclusion is further buttressed by the EEOC’s own
actions in repeatedly assuring Sears’ negotiating representative that
anything given to the Commission during negotiations would be
held confidential. See Sears, Roebuck Co. v. EEOC, 435 F. Supp.
751, 760 (D. D. C. 1977). We believe, as the Commission itself
indicates in its brief on appeal, that these assurances merely re-
flected what representatives of the EEOC believed to be required
by § 706(b); we disagree with the Commission, however, concern-
ing what “confidential” means.
We need not address the question whether information received
by the Commission during settlement negotiations may be used as
evidence in future proceedings instituted by the EEOC against
Sears. We note, however, that any material given to the EEOC by
Sears that the Commission could have obtained through the in-
vestigative mechanism of § 709(a) might well be immune from the
§ 706(b) restriction on use at trial.
Moreover, because we find that both investigative and negotia-
tion data may not be disclosed to charging parties, we n not
address the question whether it is possible to separate the two as
they appear in the Commission’s written decision supporting its
determination of reasonable cause or in the Letters of Determina-
tion. Anything more than a mere summary statement of the EEOC’s
finding would necessarily rely on either investigatory or negotiation
data and therefore, as Judge Gesell ordered, cannot be distributed
to persons outside the government.
Of course, nothing in our decision affects the EEOC’s authority
to give out investigatory information after it has initiated suit. See
42 U. S. C. § 2000e-8(e):
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.