Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-05361/USCOURTS-caDC-06-05361-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

---

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 20, 2007 Decided June 27, 2008

No. 06-5361

VENETIAN CASINO RESORT, L.L.C.,

APPELLANT

v.

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 00cv02980)

Kenneth J. McCulloch argued the cause for appellant.

With him on the briefs were Richard S. Rosenberg, John J.

Manier, Steven D. Cundra, and Frederick H. Kraus.

Robin S. Conrad and Laura Anne Giantris were on the

brief for amici curiae Chamber of Commerce of the United

States of America and Equal Employment Advisory Council.

Alan Burch, Assistant U.S. Attorney, argued the cause for

appellee. With him on the brief were Jeffrey A. Taylor, U.S.

Attorney, and R. Craig Lawrence, Assistant U.S. Attorney.

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 1 of 20
2

Before: GINSBURG, ROGERS, and GRIFFITH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge: Seven years ago, Venetian

Casino Resort, LLC repaired to district court for an injunction

to keep the Equal Employment Opportunity Commission from

disclosing certain confidential information without notice.

The district court dismissed the case as unripe, but we held

otherwise and remanded the case for proceedings on the

merits. The district court then granted the Commission’s

motion for summary judgment and Venetian appealed,

arguing the Commission’s disclosure policy is unlawful. We

agree, reverse, and remand the case for the district court to

enter an injunction prohibiting the Commission from

disclosing Venetian’s confidential information pursuant to its

current disclosure policy.

I. Background

Venetian operates a hotel and casino in Las Vegas,

Nevada. When it opened in 1999 it hired approximately

4,400 new employees out of 44,000 applicants. Numerous

disappointed applicants filed complaints with the Commission

alleging Venetian had violated various civil rights statutes,

including, as relevant here, the Age Discrimination in

Employment Act of 1967 (ADEA), 29 U.S.C. § 621 et seq. 

To assist the Commission with its investigation of the

ADEA claims, Venetian supplied the Commission with

information that Venetian deemed, and identified as,

confidential. The Commission subsequently issued a

subpoena for more documents. In 2001, after the Commission

denied Venetian’s petition to revoke the subpoena, Venetian

brought this action. It argued the Commission’s policy, which

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 2 of 20
3

permits Commission employees to disclose an employer’s

confidential information to potential ADEA plaintiffs without

first notifying the employer that its information will be

disclosed, violates the Administrative Procedure Act (APA),

the Freedom of Information Act (FOIA), and the Trade

Secrets Act (TSA). In particular, Venetian contended the

disclosure policy could not be reconciled with the

Commission’s own FOIA regulations, 29 C.F.R. § 1610.19 et

seq., which do require the Commission to notify an employer

before disclosing its confidential documents to a third party

pursuant to a FOIA request. Venetian’s particular concern

was that competitors and labor unions would obtain

confidential information regarding its hiring practices, which

information they would use to its economic detriment.

Venetian also sought to enjoin disclosure as infringing its

copyrights.

The district court dismissed the case as unripe. Venetian

Casino Resort, LLC v. EEOC (Venetian I), 360 F. Supp. 2d

55, 60 (2004). We reversed, first noting that the case

“presents a clear-cut legal question, i.e., whether the

Commission’s disclosure policy is inconsistent with the Trade

Secrets Act, FOIA, or the APA.” Venetian Casino Resort,

LLC v. EEOC (Venetian II), 409 F.3d 359, 364-65 (D.C. Cir.

2005). We further concluded that Venetian would face the

hardship necessary to make its claim ripe because, were

review postponed, Venetian would be unable to prevent the

Commission from disclosing the confidential information

Venetian had already submitted. Id. at 365-66.

Turning to the merits of Venetian’s complaint, we found

the precise terms of the disclosure policy at issue quite

uncertain. In the district court, the parties had focused upon

the disclosure policy as it appeared in the EEOC Compliance

Manual of 1987, which permitted the Commission to disclose

without notice an employer’s confidential information related

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 3 of 20
4

to an ADEA investigation. Id. at 361-62. On appeal,

however, the Commission informed this court that the parties

had been arguing about a version of the Compliance Manual

that was no longer in use; it had been superseded by a new

version, released in 1992 but never approved by the

Commissioners of the EEOC.

 

The 1992 Manual is not clear either about what the policy

of the Commission is. The introduction to Section 83.1 of the

1992 Manual states: “This section applies to ADEA [and

Equal Pay Act] files, but only as set out in [§ 83.1(a)] below.”

The referenced subsection provides that information in an

ADEA file related to an ongoing investigation may be

disclosed either under the Commission’s regulations

implementing the FOIA or under its regulations implementing

the Privacy Act. The former regulations explicitly require

that when a third party makes a FOIA request for confidential

commercial information, the Commission must notify the

submitter before disclosing the information. 29 C.F.R. §

1610.19 et seq. The latter regulations permit, as a “routine

use” of confidential information, disclosure of “pertinent

information to a ... third party as may be appropriate or

necessary to perform the Commission’s functions under the

[ADEA].” 56 Fed. Reg. 10,889, 10,889-90. 

Venetian understood this “routine use” provision to mean

that, absent a FOIA request, the Commission may disclose

confidential information without first notifying the party that

submitted it. According to the district court, counsel for the

Commission had “unequivocally conceded” it might disclose

Venetian’s confidential information without notice. Venetian

II, 409 F.3d at 362. At oral argument on appeal, however,

counsel for the Commission first seemed to repudiate that

position outright and then expressed uncertainty whether the

Commission had any policy at all regarding the disclosure of

confidential information. Id. at 362-63.

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 4 of 20
5

We concluded that “the record of this case is deficient, in

part because the argument before the District Court was based

on an outdated version of the agency’s Manual and in part

because the Commission’s litigation position has been

inconsistent.” Id. at 367. Inasmuch as it remained “unclear

what the disputed provision in the revised Manual means,” we

remanded the case to the district court “to ascertain the

contours of the precise policy at issue. If Venetian’s

allegations turn out to be correct, the District Court must

determine in the first instance whether the policy is contrary

to law.” Id.

On remand, the Commission submitted the affidavit of

Nicholas Inzeo, its Director of Field Programs. He reported

that “[t]he 1992 version of the EEOC compliance manual was

never submitted to the Commissioners for approval, and the

Commissioners never rescinded the 1987 version,” but

“EEOC employees rely on the 1992 version” nonetheless.

Any difference between the two versions was immaterial,

however:

Neither version of section 83 requires EEOC field office

staff to notify persons that have submitted information

(confidential or otherwise) to EEOC during an

investigation when a request for that information is

received under section 83 or prior to release of

information under section 83. 

Inzeo added that “[n]othing in any EEOC policy ... is meant to

contravene ... the Trade Secrets Act” and, in particular, that

Section 83 does not authorize any conduct that would violate

the TSA. Even though the introduction to Section 83.1 of the

1992 Manual states, “This section applies to ADEA ... files,”

Inzeo also declared:

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 5 of 20
6

Neither version of section 83 of the Compliance Manual

applies to ADEA or EPA charge files, and both versions

state that requests for information from closed ADEA ...

charge files must be processed under the Freedom of

Information Act. 

The parties submitted dueling statements of undisputed

facts. Venetian claimed the “EEOC’s practice is to disclose

confidential documents when it deems it appropriate or

necessary, without prior notice to the submitter.” In response,

the Commission stated it follows the 1992 version of the

Compliance Manual and “[t]he provisions of Section 83 speak

for themselves.” It conceded Section 83 does not require the

Commission to notify submitters before releasing their

confidential information, but represented that it had neither

released nor decided to release any of Venetian’s confidential

information.

The district court determined that “[t]hough it is not

definitively clear whether the 1987 or 1992 version

constitutes the ‘official version’ of the manual, Section 83 is

identical in all material aspects in the two versions.” Venetian

Casino Resort, LLC v. EEOC (Venetian III), 453 F. Supp. 2d

157, 160 n.3 (2006). The court “assum[ed] the EEOC ha[d] a

disclosure policy or practice, written or otherwise, that allows

the agency to release documents that the submitting party has

identified as containing trade secrets and/or confidential

material without first notifying the submitting party.” Id. at

160 (emphasis and internal quotation marks omitted). The

court then granted the Commission’s motion for summary

judgment on the ground that the policy was not arbitrary or

capricious in violation of the APA because it did not violate

any other statute or regulation. Id. at 162-68.

II. Analysis

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 6 of 20
7

We review the district court’s grant of summary

judgment de novo. Galvin v. Eli Lilly & Co., 488 F.3d 1026,

1031 (D.C. Cir. 2007). Before proceeding to the legal

analysis, we explain our factual conclusion that it is the

Commission’s policy to disclose confidential information

without notice.

A. Factual posture

When reviewing a grant of summary judgment, we “view

the evidence in the light most favorable to the nonmoving

party and draw all reasonable inferences in its favor.” Id.

(internal quotation marks omitted). If we determine there is a

“genuine dispute concerning a material fact,” which makes

the case unsuitable for summary judgment, then we remand

the case to the district court to resolve the factual issue.

Arrington v. United States, 473 F.3d 329, 339 (D.C. Cir.

2007). In this case, unlike the district court, we do not

merely “assume” the truth of Venetian’s allegations: Their

truth has been established. 

Although the details of the Commission’s disclosure

policy are still unclear, the record leaves no doubt the

Commission has a policy of disclosing confidential

information without notice to the submitter. Venetian so

asserted in its statement of undisputed facts before the district

court and, although the Commission made several ambiguous

statements, it never denied Venetian’s description of the

agency’s policy.

Here are the Commission’s assertions, in chronological

order:

• Inzeo asserted in his Declaration, and the Commission

in its brief confirms, “Neither version of section 83 of

the Compliance Manual applies to ADEA or [Equal

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 7 of 20
8

Pay Act] charge files.” We find this statement

incredible inasmuch as § 83.1(a) of both the 1987 and

the 1992 Manuals explicitly applies to ADEA files,

and those are the very provisions Venetian challenges

as unlawful.

• Inzeo also asserted in his Declaration that the

Commission does not “violate the Trade Secrets Act.”

This is a legal conclusion and is not responsive to

Venetian’s claim that the Commission will disclose

without notice information Venetian has labeled

“confidential.”

• In its statement of undisputed facts before the district

court, the Commission asserted, “The provisions of

Section 83 speak for themselves.” This is, to say the

least, surprising in light of this court’s having

previously found it “unclear what the disputed

provision in the revised Manual means.” Venetian II,

409 F.3d at 367. In any event, § 83 permits disclosure

as authorized by the Commission’s regulations

implementing the Privacy Act, which in turn permits

disclosure without notice “as may be appropriate or

necessary to perform the Commission’s functions

under the [ADEA].” Such an open-ended statement of

policy casts no doubt upon Venetian’s allegation.

When directly questioned about the disclosure policy at

oral argument, counsel for the Commission conceded

employees of the Commission might disclose confidential

information without notice:

Counsel: If the agency thought that the information had

any chance of actually being [a trade secret] then they

would tee up some sort of notice provision or something

to ... create a decision as to whether the information was

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 8 of 20
9

confidential commercial information.

The Court: What if you think it’s not?

...

Counsel: Then they would take their chances as to

whether they’re complying with the Trade Secrets Act.

(Oral Arg., 21:26-21:56). Counsel later reaffirmed this policy

as follows:

The Court: If a submitter marks a document as

confidential ... what happens?

... 

Counsel: [T]he agency would need to decide whether it

was going to refrain on the basis that ... it might actually

be ... trade secret information. The agency could say the

claim is obviously preposterous and proceed ... or the

agency could send out notice to the submitter.

(Oral Arg., 26:25-27:18).

In sum, the Commission has never denied Venetian’s

allegations, even when styled as “statements of undisputed

fact,” and counsel for the Commission conceded their

essential truth at oral argument. On this record it is clear the

Commission has a policy of disclosing confidential

information without notice; we proceed to the question

whether that policy is lawful.

B. Administrative Procedure Act

Venetian challenges the Commission’s disclosure policy

primarily as a violation of the APA. It asks us to enjoin the

Commission from disclosing its confidential information

without notice because the policy is “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.”

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 9 of 20
10

5 U.S.C. § 706(2)(A). Before we proceed to the merits of

Venetian’s claim, we consider the Commission’s argument

that Venetian has no cause of action under the APA.

1. Cause of action

The Commission contends Venetian’s claims are not

cognizable under the APA for two reasons: Its policy (a) does

not constitute “final agency action” and therefore is not

reviewable pursuant to 5 U.S.C. § 704, and (b) is “committed

to agency discretion by law” and therefore expressly made

unreviewable by 5 U.S.C. § 701(a)(2). Neither reason

persuades.

a. Final agency action

A “final agency action” within the meaning of the APA is

“the consummation of the agency’s decisionmaking process ...

by which rights or obligations have been determined or from

which legal consequences will flow.” Bennett v. Spear, 520

U.S. 154, 177-78 (1997) (internal quotation marks omitted).

The agency claims its Compliance Manual is not a “final

agency action” because it is merely a guidance document that

does not affect its own or the public’s legal obligations. 

This argument is misdirected because Venetian does not

contend the Manual itself is a final agency action. Rather,

Venetian challenges the decision of the Commission to adopt

a policy of disclosing confidential information without notice.

The Manual is relevant insofar as it illuminates the nature of

the policy, but the agency took final action by adopting the

policy, not by including it in the Manual. 

Adopting a policy of permitting employees to disclose

confidential information without notice is surely a

“consummation of the agency’s decisionmaking process,” and

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 10 of 20
11

“one by which [the submitter’s] rights [and the agency’s]

obligations have been determined.” In sum, as we held in

Venetian II, rejecting the Commission’s challenge to the

ripeness of Venetian’s claims, “the question whether EEOC’s

disclosure policy is lawful presents a live and focused dispute

emanating from agency action that is both final and

consequential to Venetian.” 409 F.3d at 367.

b. Committed to agency discretion by law

The Commission next argues that because the ADEA

does not dictate the terms of its Manual or even require the

issuance of a Manual, there are “no judicially manageable

standards against which a court may analyze the [agency’s]

exercise of discretion,” Dickson v. Secretary of Defense, 68

F.3d 1396, 1401 (D.C. Cir. 1995), and the contents of the

Manual are therefore “committed to agency discretion by

law.” 5 U.S.C. § 701(a)(2). That the ADEA neither gives

content to nor requires the Commission to issue a Compliance

Manual is, however, irrelevant. Again, Venetian’s challenge

is not to the Manual but to the policy underlying it, to which

we now turn.

2. The merits of the APA claim

Venetian asserts the policy of the Commission is arbitrary

and capricious for two reasons: It violates the Trade Secrets

Act and it is inconsistent with the Commission’s own

regulations governing FOIA requests.

a. The Trade Secrets Act

The TSA prohibits an officer or employee of the United

States from disclosing “in any manner or to any extent not

authorized by law any information coming to him in the

course of his employment ... which ... concerns or relates to

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 11 of 20
12

the trade secrets ... of any ... firm.” 18 U.S.C. § 1905.

Although the TSA is a criminal statute and does not create a

private right of action, the Supreme Court has held a party

may file an action under the APA to enjoin an agency (and

any employee thereof) from disclosing its confidential

information in violation of the TSA. Chrysler Corp. v.

Brown, 441 U.S. 281, 317-18 (1979).

As we recently explained, the protection provided by the

TSA is at least as broad as that provided by Exemption 4 of

the Freedom of Information Act, which

protects “matters that are ... trade secrets and commercial

or financial information obtained from a person and

privileged or confidential.” 5 U.S.C. § 552(b)(4).

Commercial or financial information obtained from a

person involuntarily “is ‘confidential’ for purposes of the

exemption if disclosure [would] ... cause substantial harm

to the competitive position of the person from whom the

information was obtained.” Nat’l Parks & Conservation

Ass’n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974); see

also Critical Mass Energy Project v. NRC, 975 F.2d 871,

880 (D.C. Cir. 1992) (en banc) (adhering to National

Parks with regard to commercial or financial information

involuntarily submitted to the Government). We have

long held the Trade Secrets Act ... is “at least coextensive with ... Exemption 4 of FOIA.” CNA Fin.

Corp. v. Donovan, 830 F.2d 1132, 1151 (D.C. Cir. 1987).

The upshot is that, unless another statute or a regulation

authorizes disclosure of the information, the Trade

Secrets Act requires each agency to withhold any

information it may withhold under Exemption 4 of the

FOIA. Bartholdi Cable Co., Inc. v. FCC, 114 F.3d 274,

281 (D.C. Cir. 1997). 

Canadian Comm. Corp. v. Air Force, 514 F.3d 37, 39 (2008).

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 12 of 20
13

Venetian contends any disclosure of its confidential

information is contrary to the TSA; moreover, because the

Manual is not “a statute or regulation,” it does not render

disclosure of the information “authorized by law.” This

argument fails because disclosure of information does not

violate the TSA merely because that information was labeled

“confidential” by the submitter. Information is protected by

the TSA only if its disclosure would “cause substantial harm

to the competitive position of the person from whom the

information was obtained.” National Parks, 498 F.2d at 770.

According to the Inzeo Declaration, the Commission

strives not to and does not disclose information in violation of

the TSA; indeed, no employee of the Commission has ever

been accused of having done so. At oral argument counsel for

the Commission asserted that, when deciding whether to

disclose information labeled confidential, the agency makes

an independent assessment of whether the information is a

trade secret. These statements are undisputed: Venetian

presents no evidence the Commission has ever disclosed any

information in violation of the Trade Secrets Act, and absent

any such evidence we must presume the agency is acting in

accordance with the law. Horowitz v. Peace Corps, 428 F.3d

271, 278 (D.C. Cir. 2005).

Venetian next argues that, should a Commission

employee determine the release of a document Venetian has

labeled confidential will not divulge a trade secret, it will not

have the opportunity to contest and prevent the disclosure. If

only Venetian were notified in advance that the Commission

intended to disclose its confidential information, then

Venetian could explain to the Commission why the document

is a trade secret and, if the Commission is unconvinced,

contest the matter in court; without notice, it is at risk of an

uninformed and erroneous judgment by an agency employee

that disclosure of its confidential information will not cause it

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 13 of 20
14

*

Criminal prosecution under the TSA seems particularly

unlikely; such prosecutions are rare -- we have located no published

report of such a case in our circuit -- and may be impossible if the

employee was acting in good faith. See United States v.

Wallington, 889 F.2d 573, 577-79 (5th Cir. 1989) (no TSA

violation unless government employee was aware “disclosure is

forbidden” by law, lest statute be unconstitutionally vague or “an

overbroad restriction on the right of government employees to

speak”).

competitive harm. 

Venetian’s argument is not without force. Commission

employees, who cannot be intimate with the circumstances of

each of the more than 600,000 firms subject to the ADEA, see

29 U.S.C. § 630(b) (making ADEA applicable to any

company with twenty or more employees); Statistics about

Business Size from the U.S. Census Bureau, available at

http://www.census.gov/epcd/www/smallbus.html (noting

there were 629,940 firms with twenty or more employees in

2004), cannot be expected to anticipate the competitive

implications of disclosing an employer’s confidential

information. Moreover, although we do not doubt

Commission employees attempt in good faith to abide by the

TSA, the Commission points to no reason to think they have

an incentive to take the precaution of notifying the submitter

before disclosing its information.*

In sum, an employee of the Commission is likely unable

to assess accurately whether a document is a genuine trade

secret before disclosing it. Therefore, although the agency’s

policy of disclosure without notice does not itself violate the

TSA, it does increase the probability that an employee of the

Commission will violate the TSA; according to Venetian, that

alone makes the policy arbitrary and capricious.

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 14 of 20
15

*Prior to this litigation the Commission never explained how it

reconciles its disclosure policy under the Privacy Act with its

obligations under the Trade Secrets Act. In these circumstances we

review the explanation advanced in the agency’s brief. See Auer v.

Robbins, 519 U.S. 452, 462 (1997) (“Petitioners complain that the

[agency]’s interpretation comes to us in the form of a legal brief; but

that does not, in the circumstances of this case, make it unworthy of

deference. The [agency]’s position is in no sense a ‘post hoc

rationalization’ ... There is simply no reason to suspect that the

interpretation does not reflect the agency’s fair and considered

judgment on the matter in question.”) (citation and alteration omitted);

Nat’l Wildlife Fed’n v. Browner, 127 F.3d 1126, 1129 (D.C. Cir.

1997) (deferring to agency’s litigation position when “there is nothing

to suggest that the agency has ever before had any reason to address

the issue”).

In its brief,* the Commission relies heavily upon EEOC v.

Associated Dry Goods Corp., 449 U.S. 590 (1981), and

University of Pennsylvania v. EEOC, 493 U.S. 182 (1990).

As the Commission acknowledges, however, those cases are

relevant only to the question whether its disclosure policy is

inconsistent with Title VII of the Civil Rights Act of 1964, 42

U.S.C. § 2000e et seq. -- and Venetian raises no issue of that

sort. Indeed, the Court in the former case expressly noted that

issues concerning the APA, the TSA, and the FOIA “are not

now before us.” 449 U.S. at 594 n.4. 

The Commission supplies two explanations for its policy

that do specifically reference the TSA. It first contends,

without citing any authority, that the TSA “proscribes the

behavior of individual officers and employees of the federal

government, not that of agencies more generally,” and

pronounces this argument “insurmountable.” Perhaps the

absence of supporting citations is attributable to the Supreme

Court’s precisely contrary holding in Chrysler Corp., the

seminal case on the intersection between the APA and the

TSA: “[W]e conclude that § 1905 [the TSA] does address

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 15 of 20
16

formal agency action.” 441 U.S. at 301. 

 

The agency’s second argument is more convincing: In

the absence of any evidence it has violated the TSA in the

past, it should not be required to adopt a policy in order to

ensure it will not violate the TSA in the future. The policy

does not violate the TSA in letter or in spirit, on its face or as

applied thus far; the Commission has simply failed to adopt a

prophylactic rule in order to reduce the probability that an

employee will disclose a trade secret. Although the purpose

of the TSA might well be furthered if the Commission gave

submitters notice before disclosing their confidential

information, the agency is not required “to take explicit

account of public policies that derive from federal statutes

other than the agency’s enabling [a]ct.” Pension Benefit

Guar. Corp. v. LTV Corp., 496 U.S. 633, 646 (1990). 

The situation might look different if the Commission’s

disclosure policy, although not a violation of the TSA,

routinely caused agency employees to violate that Act, but

that is not the case. Indeed, in the Inzeo Declaration, the

Commission not only reported that it knew of no employee

ever having been accused of violating the TSA; it also stated

it was committed to making a good-faith effort to abide by the

TSA. In sum, we cannot find the Commission’s disclosure

policy is contrary to or otherwise frustrates the policy of the

Trade Secrets Act and we therefore have no warrant in the

Administrative Procedure Act for disturbing it on that ground.

b. The Commission’s FOIA regulation

Venetian next argues the Commission’s policy is

arbitrary and capricious because it is inconsistent with the

agency’s regulations regarding requests made under the

FOIA. Those regulations, which implement Executive Order

12,600, 52 Fed. Reg. 23781 (1987), require the Commission

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 16 of 20
17

*

At oral argument counsel also offered a pragmatic, albeit

subjective, justification for the Commission’s failure to establish a

formal policy of notifying the submitter before making a disclosure

under Section 83: He was personally unaware of any previous

instance in which a company had disclosed confidential commercial

information to the EEOC and, because the situation “just doesn’t

come up,” he thought it unnecessary “as a practical matter” to

establish a formal notice procedure. He also volunteered his view

to “provide a submitter with explicit notice of a FOIA request

for confidential commercial records whenever ... the submitter

previously, in good faith, designated the records as

confidential commercial information.” 29 C.F.R. §

1610.19(b)(3). They further oblige the Commission to afford

the submitter the opportunity “to provide it with a detailed

statement of objections to disclosure,” id. § 1610.19(d), to

“consider carefully the objections of a submitter,” id. §

1619.19(e)(1), and, when it decides information should be

disclosed notwithstanding such objections, to “provide the

submitter with a written statement briefly explaining why the

objections were not sustained ... in order that the submitter

may seek a court injunction to prevent release of the records if

it so chooses.” Id.

Venetian and the two amici contend Section 83 of the

Compliance Manual constitutes a “back door” that allows the

Commission unlawfully to avoid the requirements of its own

FOIA regulations. According to Venetian, the Commission

can decline to notify the submitter of confidential information

when it discloses the information to a third party as long as

the disclosure is styled “disclosure under Section 83” rather

than “disclosure under the FOIA.” In its brief before this

court, the only justification the Commission musters in

response is the question-begging statement that because “the

EEOC has not received a FOIA request ... for the Venetian’s

information ... the [FOIA regulations] do[] not ... apply to this

case.”*

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 17 of 20
18

that the information Venetian had disclosed was “unlikely to be the

sort of information” that would be disclosed under Section 83. We

do not consider these assertions because we cannot be confident

such apparently extemporaneous arguments, which appear nowhere

in the Commission’s brief, “reflect the agency’s fair and considered

judgment on the matter.” Auer, 519 U.S. at 462.

With this as the only cognizable justification for the

Commission’s policy, we cannot but agree with Venetian that

the policy is arbitrary and capricious. To maintain two

irreconcilable policies, one of which -- the Compliance

Manual section relating to the Privacy Act -- apparently

enables the agency or, for that matter, any person asking for

information, to circumvent the other, viz., the regulation

implementing the FOIA and requiring pre-release notification,

is arbitrary and capricious agency action. See INS v. Yang,

519 U.S. 26, 32 (1996) (“[A]n irrational departure from [a

governing] policy ... constitute[s] action that must be

overturned as ‘arbitrary, capricious, or an abuse of discretion’

within the meaning of the Administrative Procedure Act”

(alteration omitted)). 

We do not say the disclosure policy is necessarily

contrary to law; perhaps the EEOC can yet supply a reasoned

reconciliation of Compliance Manual § 83.1 and its

regulations governing FOIA requests, preferably accompanied

by a definitive explanation of exactly when each applies.

Until then, however, the agency may not maintain its policy to

Venetian’s detriment. Venetian is entitled to an injunction

against the release of its confidential information in any

manner other than that prescribed in the Commission’s FOIA

regulations.

III. Conclusion

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 18 of 20
19

*

Venetian also contends it is entitled to “an injunction

restraining the EEOC from releasing its ... documents ... that [are]

protected under the Federal Copyright Act,” 17 U.S.C. § 101 et seq.

The district court denied this claim on the merits because “[n]othing

in the Act requires the establishment of particular internal agency

procedures.” 453 F. Supp. 2d at 166. This is true but not

dispositive because the Act does entitle a copyright holder to an

injunction barring infringement of its copyright. 17 U.S.C. § 502.

Disclosure is not an act of infringement but reproduction is. Id. §

106.

This claim is not ripe for judicial review. Whether

reproduction of a particular document would violate the Copyright

Act depends upon the characteristics of that document, but the

record indicates neither the precise nature of the documents

Venetian has submitted nor of the documents, if any, the

Commission intends to disclose. We note also that, should the

EEOC infringe its copyright, Venetian has a remedy in damages.

17 U.S.C. § 504. We therefore vacate the judgment of the district

court insofar as it denied Venetian’s copyright claim on the merits;

Absent an adequate justification, the Commission’s

disclosure policy must be deemed arbitrary and capricious.

Therefore, we remand this case to the district court to enjoin

the Commission from disclosing Venetian’s confidential

information without adhering to the notice and other

requirements of the agency’s regulations implementing the

FOIA. The injunction may be dissolved if and when the

Commission provides an explanation for its disclosure policy

that satisfies the standards to which agency action must be

held pursuant to the APA. See Fla. Power & Light Co. v.

Lorion, 470 U.S. 729, 744 (1985) (“[I]f the agency has not

considered all relevant factors, or if the reviewing court

simply cannot evaluate the challenged agency action on the

basis of the record before it, the proper course ... is to remand

to the agency for additional ... explanation”).

 

So ordered.*

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 19 of 20
20

on remand the district court should dismiss that claim as unripe.

USCA Case #06-5361 Document #1124156 Filed: 06/27/2008 Page 20 of 20