Source: https://openjurist.org/575/f2d/1197
Timestamp: 2017-08-19 20:10:08
Document Index: 658879858

Matched Legal Cases: ['§ 1905', '§ 552', '§ 1905', '§ 1905', '§ 301', '§ 1905', '§ 1331', '§ 1337', '§ 706', '§ 552', '§ 2000', '§ 552', '§ 552', '§ 1905']

575 F2d 1197 Sears Roebuck and Co Op v. Eckerd | OpenJurist
575 F. 2d 1197 - Sears Roebuck and Co Op v. Eckerd
575 F2d 1197 Sears Roebuck and Co Op v. Eckerd
575 F.2d 1197
17 Fair Empl.Prac.Cas. 436, 16 Empl. Prac.
Dec. P 8308,
24 Cont.Cas.Fed. (CCH) 82,364
Charles W. Dahm, O.P., Intervenor-Plaintiff-Appellant,
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.4 Consequently, 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.
Judge McGarr held that 18 U.S.C. § 1905 prohibits the GSA from disclosing such information and that there is a reasonable 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 February 15, 1977, resulting in his taking this appeal. We vacate the order granting the preliminary injunction.
Relying solely on the (b)(3) exemption in this Court,5 Sears argues that the documents requested here are "specifically exempted from disclosure by statute" for purposes of that exemption because they consist of "confidential statistical data" forbidden from disclosure by 18 U.S.C. § 1905, a criminal statute restricting disclosure of confidential information by federal employees.6 Section 1905 provides:
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. v. Marshall, 572 F.2d 1211 (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, --- U.S. ----, 98 S.Ct. 1466, 55 L.Ed.2d 504,9 and hold that regulations valid under 5 U.S.C. § 301 satisfy the "authorized by law" exception of Section 1905.10 Since validly promulgated regulations have the force of law (see Public Utilities Commission of California v. United States, 355 U.S. 534, 542-543, 78 S.Ct. 446, 2 L.Ed.2d 470; cf. Service v. Dulles, 354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed.2d 1403), 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, 83 S.Ct. 189, 9 L.Ed.2d 124; Laughlin v. United States, 154 U.S.App.D.C. 196, 205, 474 F.2d 444, 453, n. 12 (1972), certiorari denied, 412 U.S. 941, 93 S.Ct. 2784, 37 L.Ed.2d 402. As the Chrysler opinion demonstrates, contrary to Sears' assertion and the opinion of the D.C. Circuit in Charles River Park "A", Inc. v. Department of Housing and Urban Development, 171 U.S.App.D.C. 286, 293-294, 519 F.2d 935, 942-943 (1975), such a holding is consistent with the legislative history of the 1958 amendment to Section 30111 (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.
Second, Sears' insistence on an independent statutory authorization 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 information 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, 425 U.S. 352, 361, 96 S.Ct. 1592, 48 L.Ed.2d 11), certainly if a statute such as Section 1905 were passed today 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. Cf. Federal Aviation Administration v. Robertson, 422 U.S. 255, 265-266, 95 S.Ct. 2140, 45 L.Ed.2d 164. 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 independent 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.
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 is through the Administrative Procedure Act, using 28 U.S.C. § 1331 or § 1337 as a basis for jurisdiction.12 See 565 F.2d at 1191-1192; see also Clement, supra note 9 at 626-633. Defendant federal officials agree that APA review is appropriate, but Sears seeks review under Section 1905 or the FOIA because the APA would not allow de novo review. See565 F.2d at 1191; 5 U.S.C. § 706(2)(A).
Applying the four tests established in Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 45 L.Ed.2d 26,13 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;14 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 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 1188.15
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, 95 S.Ct. at 2088), 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 Industries, Inc. v. Green, 430 U.S. 462, 477, 97 S.Ct. 1292, 51 L.Ed.2d 480.16
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 proposed 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 considerably weaker. Without denying that the FOIA reflects some degree of Congressional concern about disclosing private information (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, 96 S.Ct. 1592, 48 L.Ed.2d 11. Whether or not submitters therefore should be lumped with indirect and secondary beneficiaries of other statutes (see Cort v. Ash, 422 U.S. at 81, 95 S.Ct. 2080), 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 under Section 1905 and must be rejected similarly. See 565 F.2d at 1191-1192; see also Clement, supra note 9 at 626-633.
The complaint also relied on Section 709(e) of Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e-8(e)) as prohibiting 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
5 U.S.C. § 552(b)(3) as amended in 1976 contains that exemption and provides:
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 "specifically" exempt documents and therefore is not one of the statutes to which the (b)(3) exemption refers
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)
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. However, that phrase has been construed broadly over the years by the courts (see, e. g., Blair v. Oesterlein Company, 275 U.S. 220, 227, 48 S.Ct. 87, 72 L.Ed. 249; United States v. Dickey, 268 U.S. 378, 45 S.Ct. 526, 69 L.Ed. 1006; Exchange National Bank v. Abramson, 295 F.Supp. 87 (D.Minn.1969); cf. Consumers Union v. Cost of Living Council, 491 F.2d 1396 (Em.App.), certiorari denied sub nom. Business Roundtable v. Consumer Union, 416 U.S. 984, 94 S.Ct. 2387, 40 L.Ed.2d 761), by the Attorney General (see 41 Op.Atty.Gen. 166, 169 (1953); 41 Op.Atty.Gen. 221 (1955)) and apparently by administrative agencies. See Clement, supra note 9 at 619 n. 136
The Administrative Procedure Act does not itself confer jurisdiction. Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192; see Clement, supra note 9 at 627-628
J. I. Case v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423, 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 Securities 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, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26
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