Source: https://supreme.justia.com/cases/federal/us/415/1/
Timestamp: 2019-04-19 04:26:42+00:00

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Renegotiation Board v. Bannercraft Clothing Co., Inc.
and de novo proceedings in the Court of Claims as provided under the Renegotiation Act were inadequate to prevent irreparable harm. Petitioner contends that the FOIA's provision in 5 U.S.C. § 552(a)(3) for enjoining an agency from withholding its records and ordering the production of records improperly withheld from a complainant is the sole method of judicial enforcement.
1. The FOIA does not limit the inherent powers of an equity court to grant relief, as is manifest from the broad statutory language that Congress used, with its emphasis on disclosure, its carefully delineated exemptions, and the fact that § 552(a) vests equitable jurisdiction in the district courts. Pp. 415 U. S. 16-20.
2. In a renegotiation case, a contractor must pursue its administrative remedy under the Renegotiation Act, and cannot, through resort to preliminary litigation over an FOIA claim, obtain judicial interference with the procedures set forth in the Renegotiation Act. Aircraft & Diesel Equipment Corp. v. Hirsch, 331 U. S. 752; Lichter v. United States, 334 U. S. 742; Macauley v. Waterman S.S. Corp., 327 U. S. 540. Pp. 415 U. S. 20-25.
(a) It would contravene the Act's legislative purpose if judicial review by way of injunctive relief under FOIA were allowed to interrupt the process of bargaining that inheres in the statutory renegotiation scheme, and would delay the Government's recovery of excessive profits. Pp. 415 U. S. 20-23.
(b) The contractor, through a de novo proceeding in the Court of Claims, where discovery procedures are available, is not limited in exercising its normal litigation rights. Pp. 415 U. S. 23-24.
BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, WHITE, and REHNQUIST, JJ., joined. DOUGLAS, J., filed a dissenting opinion, in which STEWART, MARSHALL, and POWELL, JJ., joined, post, p. 415 U. S. 26.
Three cases, consolidated for hearing in the court below, raise the issue of the effect of the Freedom of Information Act (FOIA), 5 U.S.C. § 552, upon proceedings pending under the Renegotiation Act of 1951, C. 15, 65 Stat. 7, as amended, 50 U.S.C.App. § 1211 et seq. In particular, they concern the jurisdiction of a federal district court to enjoin the renegotiation process until an FOIA claim is resolved.
The three respondents, Bannercraft Clothing Company, Inc., Astro Communication Laboratory, a division of Aiken Industries, Inc., and David B. Lilly Co., Inc., successor to Delaware Fastener Corporation, all possessed national defense contracts with a "Department" of the United States, as defined in § 103(a) of the Renegotiation Act, 50 U.S.C.App. § 1213(a). These agreements, therefore, under § 102 of that Act, 50 U.S.C.App. § 1212, were subject to renegotiation.
"it is not possible to state [as the Regulation's proviso required] whether all relevant evidence has been submitted, since we have never had in writing the basis upon which you made this determination."
The Regional Board replied that, because "the statement required by the regulation" was not submitted, "your request for a summary is defective."
renegotiation proceedings," but that this was "without prejudice to an opportunity to offer evidence on the issues disclosed by the [Regional Board's] Summary of Facts and Reasons," and that the required statement was "somewhat meaningless when we do not have a written statement of the issue upon which you have made your finding."
On March 16, Bannercraft, pursuant to the FOIA, made a written request of the Renegotiation Board that six categories of documents be produced. [Footnote 3] No response to this request was forthcoming.
$1,450,000 for 1967 (an increase of $50,000 over the Regional Board's determination).
B. Astro. This respondent's factual case is essentially the same as Bannercraft's. The year at issue is the fiscal year ended September 30, 1967. Astro, pursuant to the FOIA, requested production by the Board of five categories of material. [Footnote 6] At a conference held on May 12, 1970, Astro was advised that the Board had made a tentative determination of excessive profits for the year in the amount of $225,000. In July, the Board denied Astro's FOIA request.
On August 12, Astro filed its complaint against the Board in the United States District Court for the District of Columbia. I t prayed for relief similar to that sought by Bannercraft. Judge Pratt enjoined the Board from continuing renegotiation proceedings with Astro. The court also ordered the Board to allow Astro, within 30 days, to inspect and obtain copies of all documents requested by Astro that the Board had no objection to turning over, and to submit to the court, in camera, all documents the Board objected to producing, with a statement of reasons for each objection. The Board appealed.
of Columbia, praying for an order compelling the Board to produce the documents demanded and restraining the Board from acting and, in particular, from requiring the contractors to elect a procedure until the documents had been produced and the contractors had been given a reasonable time to study them. Thereafter, the Board denied the request for information.
equitable jurisdiction upon the district courts, and that "temporary stays of pending administrative procedures may be necessary on occasion to enforce the policy" of the FOIA. 151 U.S.App.D.C. at 181-183, 466 F.2d at 352-354.
"when the purposes of the doctrine are individually measured against the facts of these cases, it is plain that no legitimate judicial policy would be served by depriving these appellees of the relief they seek."
151 U.S.App.D.C. at 184, 466 F.2d at 355. In effect, the court reasoned that contractors need exhaust only their administrative remedies under the FOIA, and not their administrative remedies under the Renegotiation Act, as a condition precedent to requesting injunctive relief against renegotiation proceedings. The court found the contractors' remedies before the Board and de novo proceedings in the Court of Claims inadequate to prevent irreparable harm.
The dissenting judge began with the accepted proposition that federal courts have only limited jurisdiction, and stated that the majority's observation, to the effect that the "existence of present need for judicial intervention does have a bearing on both jurisdiction and exhaustion," is "an error bordering on constitutional dimensions," for the appellees' need "is wholly irrelevant to determination of the jurisdiction of the District Courts in these cases." Id. at 191, 466 F.2d at 362.
"the specific, narrow, remedies of an injunction against withholding agency records and an affirmative order to produce such records improperly withheld."
Ibid. The dissent concluded that no jurisdiction to grant any other remedy was conferred by Congress, and that the District Court, therefore, was without jurisdiction to enjoin the proceedings before the Renegotiation Board. Nothing in the congressional reports cited by the majority justified its contrary conclusion. The dissent further concluded that there was no suggestion that Congress had any concern with litigants before the administrative agencies, and that what they were concerned with was to make information available "to any member of the public without requiring any showing of need therefor." Id. at 192, 466 F.2d at 363.
The dissent also was at odds with the majority's disposition of the exhaustion issue. It asserted that the majority seriously misconstrued the intended functioning of the Renegotiation Board's procedures, namely, that controlled access to information concerning the Government's position plays a significant role in the administrative process; that interruption of the administrative proceedings totally destroys the balance of negotiating strength; and that the attempt to enjoin the ongoing negotiations was really not a request for relief under the FOIA, but was a challenge to the Board's procedures themselves. Id. at 194-195, 466 F.2d at 365-366.
We granted certiorari, 410 U.S. 907 (1973), because of the importance of the issue of the impact of the FOIA upon long-established procedures of the Renegotiation Board.
A. The FOIA. This statute, 5 U.S.C. § 552, was enacted in 1966, 80 Stat. 383, as a revision of § 3 of the Administrative Procedure Act, 5 U.S.C. § 1002 (1964 ed.). S.Rep. No. 813, 89th Cong., 1st Sess., 3-4 (1965); H.R.Rep. No. 1497, 89th Cong., 2d Sess., 1-6 (1966). It was amended by Pub.L. 90-23, adopted June 5, 1967, 81 Stat. 54.
Section 552(a) states, "Each agency shall make available to the public" certain information of enumerated categories. This covers virtually all information not specifically exempted by § 552(b). Section 552(a)(2) [Footnote 9] provides the sanction that a "final order, opinion, statement of policy, interpretation, or staff manual or instruction"
Board is established as an independent agency in the Executive Branch to accomplish this objective. § 107, 50 U.S.C.App. § 1217(a). The Board's functions are excluded from the operation of the Administrative Procedure Act (5 U.S.C. § 551 et seq., and § 701 et seq.) except the public information section thereof (5 U.S.C. § 552). § 111, 50 U.S.C.App. § 1221.
The Board operates primarily by informal negotiation with the contractor, and not by formal hearing. It is directed to "endeavor to make an agreement with the contractor . . . with respect to the elimination of excessive profits." § 105(a), 50 U.S.C.App. § 1215(a). The contractor subject to the Act must file, for its fiscal year, a detailed financial statement. § 105(e)(1), 50 U.S.C.App. § 1215(e)(1). On the basis of this statement, an initial determination of excessive profits is made. From the date of filing of the statement, the Board has one year to commence proceedings, [Footnote 12] and, with stated exceptions, the renegotiation is to be completed within two years following its commencement or "all liabilities of the contractor . . . for excessive profits with respect to which such proceeding was commenced shall thereupon be discharged." [Footnote 13] § 105(c), 50 U.S.C.App. § 1215(c).
therefor, and of its reasons for such determination." Ibid. The contractor then may initiate a de novo proceeding in the Court of Claims, [Footnote 14] which has exclusive jurisdiction to determine the contractor's excessive profits. § 108, 50 U.S.C.App. § 1218 (1970 ed., Supp. II). The action "shall not be treated as a proceeding to review the determination of the Board," ibid., and the Board's statement "shall not be used in the Court of Claims as proof of the facts or conclusions stated therein," § 105(a), 50 U.S.C.App. § 1215(a) (1970 ed., Supp. II).
of the level below; the recommended settlement may decrease or increase at each level. Ibid.
proceedings until the court determines that the contractor is or is not entitled to information it claims under the FOIA.
As to this question, the respondent contractors assert that, although the FOIA does not grant this injunctive power in express terms, the power is to be implied from the court's inherent capacity to provide appropriate equitable relief. The Board, on the other hand, emphasizes that Congress in the Act expressly authorized the court to compel the production of agency records improperly withheld, placed the burden on the agency to sustain its action, and directed precedence on the docket for suits under the Act "over all other causes" and expedition of those suits "in every way." 5 U.S.C. § 552(a)(3). The Board then contends that these provisions constitute the exclusive method for enforcing the disclosure requirements of the Act and that any implication of other injunctive power, at the behest of a litigant before the agency, would be inconsistent with the statutory language.
"to enable the public to have sufficient information in order to be able, through the electoral process, to make intelligent, informed choices with respect to the nature, scope, and procedure of federal governmental activities"
"to enjoin the agency from withholding agency records and to order the production of any agency records improperly withheld from the complainant."
"Congress, for reasons of its own, decided upon the method for the protection of the 'right' which it created. It selected the precise machinery and fashioned the tool which it deemed suited to that end."
"Congress has utilized . . . the broad equitable jurisdiction that inheres in courts and where the proposed exercise of that jurisdiction is consistent with the statutory language and policy, the legislative background and the public interest.Porter v. Warner Holding Co., 328 U. S. 395, 328 U. S. 403 (1946)."
There is significant authority, however, that points to the opposite conclusion. Porter itself, although recognizing the kind of situation to which Babcock is applicable, 328 U.S. at 328 U. S. 403, upheld broad equitable power in the District Court under a statute authorizing the court to grant injunctive and restraining relief "or other order," and did so, not only because of the presence of the "other order" language, but because of the "traditional equity powers of a court." Id. at 328 U. S. 400. Emphasis on broad equity power, even in the face of a silent statute, also appears in Mitchell v. Robert DeMario Jewelry, Inc., 361 U. S. 288, 361 U. S. 290-291 (1960); Scripps-Howard Radio, Inc. v. FCC, 316 U. S. 4 (1942); Arrow Transportation Co. v. Southern R. Co., 372 U. S. 658, 372 U. S. 671 n. 22 (1963); see L. Jaffe, Judicial Control of Administrative Action 659 (1965), and is sometimes related to the All Writs Act, 28 U.S.C. § 1651(a). FTC v. Dean Foods Co., 384 U. S. 597, 384 U. S. 603-604 (1966).
Switchmen's Union principle of a statutorily prescribed special and exclusive remedy is not applicable to FOIA cases. With the express vesting of equitable jurisdiction in the district court by § 552(a), there is little to suggest, despite the Act's primary purpose, that Congress sought to limit the inherent powers of an equity court.
Court's emphasis was on the absence of any "lawful function" on the part of the courts "to anticipate the administrative decision with their own," Aircraft, 331 U.S. at 331 U. S. 767; on the availability of a due process hearing in the post-administrative de novo proceeding in the Tax Court, Macauley, 327 U.S. at 327 U. S. 543, where constitutional as well as nonconstitutional issues could be resolved, Aircraft, 331 U.S. at 331 U. S. 769 n. 30, citing 89 Cong.Rec. 9930 (1943), [Footnote 20] and at 771; and on the Act's provisions for expeditious settlement in informal negotiation free "from the tedious burden of litigation." Id. at 770.
In Aircraft, the Court rejected arguments substantially the same as those advanced by the respondents here, id. at 758 n. 12 (inability to participate effectively because of lack of information upon which the Board had relied, see No. 95, O.T. 1946, Tr. of R., Vol. I, p. 141), and refused to permit renegotiation to be enjoined.
"To countenance short-circuiting of the Tax Court proceedings here would be, under all the circumstances but more especially in view of Congress' policy and command with respect to those proceedings, a long overreaching of equity's strong arm."
331 U.S. at 331 U. S. 781.
take, and with stress upon and use of the strengths of one's own position and the weaknesses of the position of the other party. It is in a process such as this where the phrase "leading from strength" has been so effectively transferred in practical application from the card table to the world of commerce. It is part of the warp and woof of production. It is pure bargaining -- permitted by the statute with respect to contracts already made -- the same kind of bargaining that produces the union-employer agreement or the transfer of substantial property from the willing seller to the interested buyer.
We see nothing in the adoption of the FOIA in 1966 that impinges upon the settled law of the Aircraft-Lichter-Macauley cases or that warrants an exception to the principle they espouse. Nothing new by way of due process emerged with the FOIA. Nothing therein indicates that Congress wished to change the Renegotiation Act's purposeful design of negotiation without interruption for judicial review. FOIA's stress was on disclosure, to be sure, but it was on disclosure for the public, EPA v. Mink, 410 U. S. 73, 410 U. S. 80 (1973), and not for the negotiating self-interested contractor. Id. at 410 U. S. 86; see K. Davis, Administrative Law Treatise § 3A.4, p. 120, § 3A.29, p. 171 (Supp. 1970). And when Congress in 1971 reviewed the Renegotiation Act and substituted the Court of Claims for the Tax Court, no other significant change in the existing process was effected. See S.Rep. No. 92-245 (1971), accompanying H.R. 8311, which became the amending statute, Pub.L. 92-41, 85 Stat. 97.
Seeking injunctive relief during the pendency of renegotiation encourages delay through resort to preliminary litigation over an FOIA claim. The delay is not imaginary, or without ultimate consequence. The present cases provide an example of this, for each has been pending now for more than three years. The Government is foreclosed from taking action to recover excessive profits until the Board's final order is entered; even then, interest does not begin to run until 30 days after the entry of that order. 50 U.S.C.App. §§ 1215(b)(1) and (2). The contractor, by delay, has little to lose and much to gain.
unsuccessful in the de novo bargaining process and the incurrence of the expense incident to renegotiation. [Footnote 22] Mere litigation expense, even substantial and unrecoupable cost, does not constitute irreparable injury. Myers v. Bethlehem Shipbuilding Corp., 303 U. S. 41, 303 U. S. 51-52 (1938); L. Jaffe, Judicial Control of Administrative Action 429 (1965). Without a clear showing of irreparable injury, see Virginia Petroleum Jobbers Assn. v. FPC, 104 U.S.App.D.C. 106, 111, 259 F.2d 921, 926 (1958), failure to exhaust administrative remedies serves as a bar to judicial intervention in the agency process. Myers, supra; Sears, Roebuck & Co. v. NLRB, 153 U.S.App.D.C. 380, 382, 473 F.2d 91, 93 (1972).
Interference with the agency proceeding opens the way to the use of the FOIA as a tool of discovery, see Sears, Roebuck & Co. v. NLRB, 433 F.2d 210, 211 (CA6 1970), over and beyond that provided by the regulations issued by the Renegotiation Board for its proceedings. See 32 CFR §§ 1480.1-1480.12 (1972). [Footnote 23] Discovery for litigation purposes is not an expressly indicated purpose of the Act. Protection for the contractor in the renegotiation process is afforded through the injunctive power specifically bestowed by 5 U.S.C. § 552(a)(3).
was excessive profit, not the fair and reasonable one. The latter was anticipated and accepted. The line between a reasonable profit and excessive profit is not always easily ascertained or brightly lit. But the ascertainment of excessive profits was a duty vested by the Congress in the Renegotiation Board in the first instance. The Board thus is the fulcrum of a process that enables the Government initially to consult a contractor, to make a contract with it, and then to have the contract subject to modification for excessive profits, whenever they materialize, without violation of the Due Process Clause of the Fifth Amendment. The disgorging of excessive profits is not by way of a tax, but the process is not unlike the imposition of a tax equivalent to the excessive profits. Congress' initial placing of the contractor-initiated final proceeding in the Tax Court is indicative of the relationship.
We stress, in conclusion, that the merits are not before us. They are yet to be decided by the District Court. Whether any demand made by these contractors is so vague as not to constitute a "request for identifiable records," 5 U.S.C. § 552(a)(3), or is for material exempt from disclosure under 5 U.S.C. § 552(b), are questions that remain open for decision on remand.
"§ 1477.3 Furnishing of other statements."
"When a Regional Board has made . . . a final recommendation in a Class A case . . . and the contractor is unable to decide whether to enter into an agreement for the refund of excessive profits so determined or recommended, the Regional Board . . . will furnish the contractor a written summary of the facts and reasons upon which such final determination or recommendation is based in order to assist the contractor in determining whether or not it will enter into an agreement: Provided, That the contractor requests such a statement within a reasonable time after it has been advised of such final determination or recommendation, and states that it has submitted all the evidence which it believes to be relevant to the renegotiation proceedings."
The request was based on the decision, only six days earlier, in Grumman Aircraft Engineering Corp. v. Renegotiation Board, 138 U.S.App.D.C. 147, 425 F.2d 578 (1970), that the Renegotiation Board was subject to the FOIA and that certain Board orders and opinions were accessible to the contractor after deletions made in the light of the Act's exemption provisions. See the same case on remand, 325 F.Supp. 1146, aff'd, 157 U.S.App.D.C. 121, 482 F.2d 710 (1973).
The documents Bannercraft requested were: (1) communications between the Board and other Government agencies with respect to Bannercraft's renegotiable contracts for 1966 and 1967; (2) investigatory or other reports prepared by Board employees "containing facts which are relevant to the Board's determination as to Bannercraft's renegotiable contracts" for the two years; (3) final opinions, and the like, and summaries on which determinations were based for the years 1962 through 1968 for 11 named companies engaged in similar manufacture; (4) facts upon which the Board concluded that Bannercraft's pricing policy in 1966 was unreasonable; (5) identification of those manufacturers with which Bannercraft's production cost was compared, as stated in the summary for 1966, with cross-reference to comparable data as to each of the 11 named manufacturers; and (6) the "procurement information," described in the summary for 1966, that the Board contended indicated that there was a lack of effective price competition.
"(7) investigatory files compiled for law enforcement purposes except to the extent available by law to a party other than an agency. . . ."
The Board took the position (a) that the Board-agency communications, the investigatory and other reports, and the "procurement information" (to the extent it consisted of written records), being the first, second, and sixth items specified in the request of March 16, were exempt under 5 U.S.C. §§ 552(b)(3), (4), (5), and (7); (b) that the facts relied upon by the Board in concluding that Bannercraft's pricing policy was unreasonable, that is, the fourth item in the request of March 16, and the identification of manufacturers, the fifth item, were not requests "for records"; and (c) that copies of clearance notices, orders, and renegotiation agreements issued with respect to the 11 companies named in the third item of the March 16 request, and with respect to manufacturers with whom Bannercraft's production cost was compared, as called for by the fifth item, all with identifying details deleted, were supplied therewith. Beyond this, documents requested by Bannercraft were refused.
These were all documents that constituted the Astro renegotiation report for the year; all documents in the file that analyzed "or in any way [bore] upon" Astro's treatment of selling expenses; all file documents that had to do with "Information received," as referred to in a stated communication from the Regional Board to Astro; all file documents that related to the reasons for the Board's order denying Astro's request to file an untimely application for commercial exemption; and all records that had to do with Astro's renegotiation for the year "to the extent that such documents have been generated by and are in the custody of either" the Regional Board or the Board itself.
The corporations requested all communications between the Board and other governmental agencies concerning either corporation; all sections of the Report of Renegotiation prepared by the Regional Board; all analyses used in comparing either of the corporations "with other contractors or subcontractors and reflecting the facts relating to such comparisons"; all written communications between the Board and firms holding renegotiable contracts or subcontracts in any way concerning either of the corporations and their performance; and all intra-agency memoranda and written communications consisting of recommendations or analyses prepared by the Board in connection with the renegotiation proceedings.
"§ 552. Public Information; agency rules, opinions, orders, records, and proceedings."
"(2) Each agency, in accordance with published rules, shall make available for public inspection and copying --"
"(A) final opinions . . ."
"(B) . . . statements of policy and interpretations . . . and"
"(C) administrative staff manuals and instructions to staff that affect a member of the public;"
". . . A final order, opinion, statement of policy, interpretation, or staff manual or instruction that affects a member of the public may be relied on, used, or cited as precedent by an agency against a party other than an agency only if -- "
"(i) it has been indexed and either made available or published as provided by this paragraph; or"
"(ii) the party has actual and timely notice of the terms thereof."
"On complaint, the district court . . . has jurisdiction to enjoin the agency from withholding agency records and to order the production of any agency records improperly withheld from the complainant. In such a case the court shall determine the matter de novo and the burden is on the agency to sustain its action. In the event of noncompliance with the order of the court, the district court may punish for contempt the responsible employee. . . . Except as to causes the court considers of greater importance, proceedings before the district court, as authorized by this paragraph, take precedence on the docket over all other causes and shall be assigned for hearing and trial at the earliest practicable date and expedited in every way."
Predecessor renegotiation statutes are cited and described in Lichter v. United States, 334 U. S. 742, 334 U. S. 745 n. 1 (1948).
Section 105(c), 50 U.S.C.App. § 1215(c), provides that, in the absence of fraud, malfeasance, or willful misrepresentation, all liabilities of the contractor for excessive profits shall be discharged if the "proceeding is not commenced prior to the expiration of one year following the date upon which such statement is so filed."
Until July, 1971, the proceeding was to be initiated in the Tax Court. 65 Stat. 21.
The CFR citations throughout this section of this opinion are to the 1972 version of Renegotiation Board procedures in effect at the time of the Court of Appeals' decision. The regulations were amended substantially in the fall of 1972. See 32 CFR pts. 1400 1599 (1973).
The Court of Appeals in the present litigation and other federal decisions have recognized the general applicability of the FOIA to the Renegotiation Board. See Fisher v. Renegotiation Board, 153 U.S.App.D.C. 398, 473 F.2d 109 (1972); Lykes Bros. S.S. Co. v. United States, 198 Ct.Cl. 312, 327, 459 F.2d 1393, 1401 (1972); Grumman Aircraft Engineering Corp. v. Renegotiation Board, 138 U.S.App.D.C. 147, 425 F.2d 578 (1970).
Among other decisions emphasizing this general public purpose of the Act are Ethyl Corp. v. EPA, 478 F.2d 47, 48 (CA4 1973); Sterling Drug, Inc. v. FTC, 146 U.S.App.D.C. 237, 242, 450 F.2d 698, 703 (1971); Soucie v. David, 145 U.S.App.D.C. 144, 153, 448 F.2d 1067, 1076 (1971); LaMorte v. Mansfield, 438 F.2d 448, 451 (CA2 1971); Bristol-Myers Co. v. FTC, 138 U.S.App.D.C. 22, 25, 424 F.2d 935, 938, cert. denied, 400 U.S. 824 (1970).
S. 1666, 88th Cong., 2d Sess., was passed by the Senate on July 28, 1964, 110 Cong.Rec. 17086-17089, and reconsidered and passed again on July 31, 1964, 110 Cong Rec. 17666-17668. There was insufficient time, however, for full consideration by the House. S. 1160, 89th Cong., 1st Sess., then became the FOIA, and "is substantially S. 1666." S.Rep. No. 813, 89th Cong., 1st Sess., 4 (1965). There was no change in the remedy provided.
"The provision for enjoining an agency from further withholding is placed in the statute to make clear that the district courts shall have this power."
S.Rep. No. 1219, 88th Cong., 2d Sess., 7 (1964). In discussing the contempt provision, the Report states, "This is another addition which has been made to avoid any possible misunderstanding as to the courts' powers." Ibid.
See Note, 1973 U.Ill.L.F.180, 191 (1973); Note, 51 Tex.L.Rev.757, 765 (1973).
The committee has provided that any contractor aggrieved by a determination of excessive profits under the old law, whether he was cooperative and signed a closing agreement or not, may have a review of that determination in the Tax Court of the United States and in the review have all issues, constitutional and otherwise, decided by the court.
The Court of Claims has been described, "by virtue of its role in the renegotiation process and its general expertise in the field of government contracts," as being "uniquely qualified to supervise discovery against the Renegotiation Board." Note, 41 Geo.Wash.L.Rev. 1072, 1084 (1973).
The Court reverses the Court of Appeals, saying that respondent contractors had not exhausted their administrative remedies. At issue is whether data in possession of the Renegotiation Board and relevant to the controversy between respondents and that Board should be disclosed to respondents. That raises a question under the Freedom of Information Act. It is, I submit, clear that respondents had exhausted every known way to obtain those data through administrative channels. Nothing remained to be done at that level. The District Court is the enforcement arm of the FOIA. Today's decision, however, says that court cannot act. Hence, respondents are without remedy. The end result is to make the FOIA a dead letter in this area. Hence, my dissent.
Board, id. § 1215(e)(1). If, on the basis of those data, the Board decides to proceed, it refers the case to a Regional Renegotiation Board, which determines tentatively the amount of excessive profits, 32 CFR § 1472.3(e). [Footnote 2/1] A conference with the contractor is then arranged. It may agree with the Regional Board's determination or contest it. If the latter, a second conference is held with a panel of the Regional Board, which hears the arguments of the contractor and submits its recommendations to the Regional Board, which may be for a greater or lesser amount than the original tentative determination, id. §§ 1472.3(f), (h), (i). Thereupon, the Regional Board makes its recommendation, id. § 1472.3(i). If the contractor is still dissatisfied, it can appeal to the Renegotiation Board itself. In that event, the case is assigned to a division of the Board, which is not bound by or limited to any finding or determination of the Regional Board, id. § 1472.4(b). The division studies the case de novo, and makes a recommendation to the Board which then makes a determination greater than, equal to, or less than any of the prior determinations, id. § 1472.4(d). Even then, the renegotiation process continues, the Board seeking to obtain the contractor's voluntary agreement. Only if that effort fails is a final order determining the amount of excessive profits made, ibid.
That is the end of the administrative road, but the contractor still has an appeal to the Court of Claims, which may redetermine de novo what the excessive profits are, 50 U.S.C.App. § 1218 (1970 ed., Supp. II); and from the Court of Claims, certiorari may be sought here, id., § 1218a (1970 ed., Supp. II).
respect to rate of profit, or otherwise,"
32 CFR § 1460.8. The vagueness of the standards and the risk of an increase in liability at every level of the administrative process have a powerful coercive influence. Approximately 88% of the Board's cases are ended by voluntary agreement, coercive orders being entered in only 12% of the cases. See Fifteenth Annual Report, Renegotiation Board 13 (1970).
In the three cases involved in this litigation, the District Court entered its stay orders before the contractors had run the gauntlet of the administrative process in the limited sense that each of them had another opportunity to negotiate a lower settlement with the Board, not counting a de novo hearing before the Court of Claims.
arm of the FOIA. But it denies relief here on the ground that these contractors are obliged to pursue their "administrative remedy" before going to court for an enforcement order.
"prevent a citizen from losing a controversy with an agency because of some obscure and hidden order or opinion which the agency knows about but which has been unavailable to the citizen simply because he had no way in which to discover it,"
S.Rep. No. 813, 89th Cong., 1st Sess., 7.
The FOIA deals with problems of discovery, to use a lawyer's term, and it does not leave the formulation of precise rules of discovery exclusively to the agencies themselves, but, as noted, makes the district court the enforcement arm of the Act.
Exhaustion of administrative remedies has skeins of various colors, McKart v. United States, 395 U. S. 185, 395 U. S. 193-194. Ordinarily courts do not interfere until the agency has completed its action, id. at 395 U. S. 194, "or else has clearly exceeded its jurisdiction," ibid. The present case does not entail supplanting administrative expertise on the merits. The issues tendered concern only administrative procedure.
"[I]t should be apparent here that, if the contractors are to be granted relief at all, they must have it now, before the administrative momentum carries their cases beyond the point where the harm can be undone. If we take Congress' declaration of purpose seriously, then the parties are supposed to negotiate over excess profits at the lower administrative levels. The seemingly endless de novo reviews were intended to make the negotiating process work, not to provide a substitute for negotiation. If the negotiating process fails to occur, the opportunity is lost forever. To say that compulsory awards imposed by the Board or the Court of Claims at the end of the process provide an adequate remedy is to ignore the difference between an agreement freely arrived at, as preferred by Congress, and a judgment imposed by a court of law."
151 U.S.App.D.C. 174, 186, 466 F.2d 345, 357.
treated as a proceeding de novo."
(Emphasis added.) There is no power, as I see it, for the Court of Claims to remand the case to the Board to cure any irregularity in its procedures. If these contractors are to have the remedy of full disclosure, it is now or never.
activities of the Renegotiation Board. If a contractor does not know the reasons why the Board or any of its agencies cuts the profits of a contractor 95%, it has no meaningful criteria to determine whether it should settle with the Board or continue to pursue its remedies up the escalator of the hierarchy. It is as if a court could rule for the plaintiff or for the defendant without ever having to disclose its reasons.
The result of today's decision is to put the citizen in a game of "blind man's buff" with the Renegotiation Board. Enforcement of the policy of full disclosure under the FOIA is no intrusion in the determination of the merits of the controversy before the Board. The expertise of the Board does not relate to the FOIA, but only to the Renegotiation Act. The FOIA merely describes some of the procedure to be followed by the Board. Aircraft concerned the intrusion of the judiciary into the administrative process by a suit to declare the whole renegotiating procedure unconstitutional prior to any adjudication of the merits of the contractor's claim. Granting the relief asked in that case would have gutted the statutes. Granting the relief here would merely make the rules of discovery, established by Congress, applicable to the Renegotiation Board. Denial of the relief establishes a regime of secrecy when Congress has demanded disclosure, and gives the Renegotiation Board a degree of administrative absolution [Footnote 2/4] at war with the philosophy of the FOIA.
"full of loopholes which allow agencies to deny legitimate information to the public. It has been shown innumerable times that information is often withheld only to cover up embarrassing mistakes or irregularities and justified by such phrases . . . as -- 'requiring secrecy in the public interest,' 'required for good cause to be held confidential,' and 'properly and directly concerned.'"
cannot be asked to prove that an agency has withheld information improperly, because he will not know the reasons for the agency action."
"Court and agency are the means adopted to attain the prescribed end, and so far as their duties are defined by the words of the statute, those words should be construed so as to attain that end through coordinated action. Neither body should repeat in this day the mistake made by the courts of law when equity was struggling for recognition as an ameliorating system of justice; neither can rightly be regarded by the other as an alien intruder, to be tolerated if must be, but never to be encouraged or aided by the other in the attainment of the common aim."
"In determining excessive profits, favorable recognition must be given to the efficiency of the contractor or subcontractor, with particular regard to attainment of quantity and quality production, reduction of costs, and economy in the use of materials, facilities, and manpower; and in addition, there shall be taken into consideration the following factors:"
"When a Regional Board has made . . . a final recommendation in a Class A case, . . . and the contractor is unable to decide whether to enter into an agreement for the refund of excessive profits so determined or recommended, the Regional Board or the Board, as the case may be, will furnish the contractor a written summary of the facts and reasons upon which such final determination or recommendation is based in order to assist the contractor in determining whether or not it will enter into an agreement: Provided, That the contractor requests such a statement within a reasonable time after it has been advised of such final determination or recommendation, and states that it has submitted all the evidence which it believes to be relevant to the renegotiation proceedings."
The hygienic effect of the Administrative Procedure Act is absent here, because the Renegotiation Board is excluded from that Act by reason of 50 U.S.C.App. § 1221, the only exception being found in 5 U.S.C. § 552, at issue in this case.
For an account of the operation of the FOIA between 1967 and 1971, see Archibald, Access to Government Information -- The Right Before First Amendment, in The First Amendment and the News Media, Final Report, Annual Warren Conference on Advocacy in the United States, June 9, 1973, p. 64.

References: v. 
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 § 1217
 § 551
 § 701
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 § 111
 § 1221
 § 105
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 § 108
 § 1218
 § 105
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 § 552
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 § 1651
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 § 552
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 § 3
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 § 1215
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 § 1215
 § 1472
 § 1472
 § 1472
 § 1472
 § 1218
 § 1218
 § 1460
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 § 1221
 § 552