Source: http://www.chanrobles.com/usa/us_supremecourt/421/168/case.php
Timestamp: 2019-10-16 22:05:38
Document Index: 653705966

Matched Legal Cases: ['§ 552', '§ 552', '§ 552', '§ 1211', '§ 1215', '§ 1215', 'art 1470', '§ 1215', '§ 1471', '§ 1213', '§ 1472', '§ 1472', '§ 1472', '§ 1472', 'art 1475', '§ 1215', '§ 1480', '§ 552', '§ 552', '§ 552', '§ 552', '§ 552', '§ 1221', '§ 557', '§ 551', '§ 552']

RENEGOTIATION BD. V. GRUMMAN AIRCRAFT, 421 U. S. 168 (1975) - US SUPREME COURT DECISIONS ON-LINE
US Supreme Court Decisions On-Line> Volume 421 > RENEGOTIATION BD. V. GRUMMAN AIRCRAFT, 421 U. S. 168 (1975)
RENEGOTIATION BD. V. GRUMMAN AIRCRAFT, 421 U. S. 168 (1975)
Subscribe to Cases that cite 421 U. S. 168
Renegotiation Bd. v. Grumman Aircraft, 421 U.S. 168 (1975)
No. 73-1316
Pursuant to the Government contract renegotiation process in effect under the Renegotiation Act of 1951 for so-called Class A cases (those in which the contractor reported profits of more than $800,000 on the relevant contracts) during the period involved in this case, if the Regional Board made a recommendation as to the amount of excessive profits in the year in issue, rather than recommending a clearance, i.e., a unilateral determination that a contractor realized no excessive profits during the year in issue, the case, if the contractor declined to enter into an agreement, would be reassigned to the Renegotiation Board (Board). The case file, including the Regional Board Report, was then transmitted to the Board and assigned to a division of the Board, usually consisting of three of its five members, which, in due course, would make its own decision and submit to the full Board a Division Report, including a recommendation for final disposition of the case. If the Regional Board concluded that no excessive profits had been realized and that a clearance should therefore issue, a "final recommendation" that a clearance be issued was sent to the Board, which considered the case on the basis of the Regional Board Report. Respondent brought an action pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, seeking disclosure of certain Regional Board Reports resulting in a recommendation of clearance and Board approval, and of Division Reports in other cases, all related to and issued during renegotiation proceedings involving 14 other companies during the period 1962-1965. The District Court ultimately granted relief on the grounds that both the Regional Board and Division Reports were "final opinions" within the meaning of § 552(a)(2)(A), which requires a Government agency to make available to the public "final opinions, including concurring and dissenting opinions, as well as orders, made in the adjudication of cases," and were not exempt from disclosure under § 552(b)(5) (Exemption chanroblesvirtualawlibrary
Page 421 U. S. 169
5) as "inter-agency or intra-agency memorandums . . . which would not be available by law to a party other than an agency in litigation with the agency." The Court of Appeals affirmed, further holding that, even if the Regional Board Report were not "final opinions" of the Board, they were disclosable as final opinions of the Regional Board, which was to be considered an "agency" for purposes of the FOIA.
WHITE, J., delivered the opinion of the Court, in which BURGER, C.J.,and BRENNAN, STEWART, MARSHALL, BLACKMUN, and REHNQUIST, JJ., joined. DOUGLAS, J., dissented. POWELL, J., took no part in the consideration or decision of the case. chanroblesvirtualawlibrary
Page 421 U. S. 170
Essential to the consideration of whether the documents at issue in this case must be disclosed pursuant to the relevant provisions of the Act is an understanding of the renegotiation process, a process that itself serves to define the documents in issue and hereinafter described. [Footnote 1] chanroblesvirtualawlibrary
Page 421 U. S. 171
Under the Renegotiation Act of 1951, 65 Stat. 7, as amended, 50 U.S.C.App. § 1211 et seq., the Government is entitled to recoup from those who hold contracts or subcontracts with certain departments of he Government any "excessive profits" received by such persons on such contracts. The amount of the profits which will be considered "excessive" in connection with a particular contract depends upon the statutory factors which are set forth in the margin. [Footnote 2] As the Board's name suggests, it chanroblesvirtualawlibrary
Page 421 U. S. 172
endeavors to, and in fact does, conclude the vast majority of its cases by agreement. 50 U.S.C.App. § 1215(a) (1970 ed., Supp. I). Absent an agreement, however, the Board must decide either to issue a "clearance," i.e., a unilateral determination that the contractor realized no excessive profits during the year in issue, or to issue a unilateral order fixing excessive profits at a specified amount and directing the contractor to refund them. The unilateral order is final unless a de novo determination regarding excessive profits is sought within 90 days before the Court of Claims. [Footnote 3] It is in those cases not terminated by agreement that the documents at issue in this case were generated. [Footnote 4] With this in mind, we turn to the details of the renegotiation process as it existed during the period relevant to the decision in this case. [Footnote 5]
Persons holding contracts or subcontracts with certain departments of the Government were required to file financial statements as prescribed by the Board, 50 U.S.C.App. § 1215(e)(1) (1964 ed.); 32 CFR Part 1470, if their receipts from those contracts met the requisite jurisdictional amount, 50 U.S.C.App. § 1215(f). These statements chanroblesvirtualawlibrary
Page 421 U. S. 173
were reviewed by the staff of the Board, and, if that initial review indicated the possibility that the contractor realized "excessive" profits, the "case" was referred to one of two Regional Boards for further action. [Footnote 6] At the time of this assignment, each case was designated as a Class A case or a Class B case: the former if the contractor had reported profits of more than $800,000 on the relevant contracts covered in his financial statement, and the latter in all other cases. [Footnote 7] The principal difference between Class A cases and Class B cases was that the Regional Boards had some final decisional authority in the latter, and none in the former. 32 CFR §§ 1471.2(b), 1473.2(a), 1474.3(a), and 1475.3(a). Since the documents sought by respondent in this case were all generated in Class A cases, only the procedure applicable to those cases will be discussed.
After reference to a Regional Board, a case was usually assigned to a staff team consisting of an accountant and a renegotiator. [Footnote 8] This team, after determining what further information from the contractor was required, secured such information and received any submissions chanroblesvirtualawlibrary
Page 421 U. S. 174
the contractor might have wanted to make with regard to his case, including his position concerning the statutory factors that largely determined whether he had received "excessive profits," 50 U.S.C.App. § 1213(e). A document entitled "Report of Renegotiation" was then prepared by the team. Part IA of that report, the accountant's section, contained pertinent financial and accounting data, and was furnished to the contractor upon request. [Footnote 9] Part II of the Report of Renegotiation, prepared by the renegotiator, and not furnished to the contractor, generally contained
After a Report of Renegotiation was prepared, but, chanroblesvirtualawlibrary
Page 421 U. S. 175
prior to its submission to the Regional Board, the team assigned to the case endeavored to meet with the contractor to resolve "any issues or disputed matters of fact, law or accounting." 32 CFR § 1472.3(b). The report was then submitted to the Regional Board.
After reviewing the Report of Renegotiation and the case file, the Regional Board would make a "tentative recommendation with respect to the amount of excessive profits realized in the fiscal year under review." 32 CFR § 1472.3(e). [Footnote 10] This "tentative recommendation" could "be in an amount greater than, equal to, or less than the amount recommended in the Report of Renegotiation." Ibid. After a "tentative recommendation" was made, the contractor, unless he declined, attended a meeting with the renegotiation team at which he was informed of the tentative recommendation of the Regional Board, as well as the Regional Board's reasons therefor, and was afforded the opportunity to respond. The Regional Board would then enter a "final recommendation" either that a clearance be issued or that excessive profits be found in an amount greater than, equal to, or less than the tentative recommendation reached previously. If this final recommendation of the Regional Board corresponded to that of the staff team or panel, the report would be signed by the chairman of the Regional Board, signifying the approval of the staff or panel recommendation; if the Regional Board's final recommendation differed from the prior recommendation, an addendum would be attached to the report. The Report of Renegotiation, with addenda, if any, will hereafter be referred to for convenience as the Regional Board Report. chanroblesvirtualawlibrary
Page 421 U. S. 176
If the contractor declined to enter into an agreement, the case was then reassigned to the Board, to which the case file, including the Regional Board Report, was transmitted. The case was then assigned to a "division" of the Board, usually consisting of three of its five members, which would undertake a study of the case. Staff personnel would go over both Part IA and Part II of the Regional Board Report and indicate, in memoranda, their chanroblesvirtualawlibrary
Page 421 U. S. 177
agreement or disagreement with the recommendation made by the Regional Board. At an appropriate juncture, the contractor would be afforded an opportunity to meet with the division members to discuss his case and submit additional relevant material. The division, in due course, would reach its own decision as to what recommendation should be made to the Board, "not . . . bound or limited in any manner by any evaluation, recommendation or determination of the Regional Board." 32 CFR § 1472.4(b). The division would then submit to the full Board a report of the case, prepared by one of the members (Division Report), and including a recommendation for final disposition along with additional or contrary views, if any, of the other division members. The Division Report is one of the categories of documents sought by respondent under the Act.
The Board would then meet, each member having had the opportunity to study the case file and the report submitted on behalf of the division, discuss the case, and vote on a final disposition. Neither the Board nor any of its members were bound by any prior recommendations. The Board was free, after discussion, to reject the proposed conclusion reached in the Division Report, or to accept it for reasons other than those set forth in the report. 32 CFR § 1472.4(d). Assuming the Board did not decide that a clearance should issue, the contractor was then notified of the Board's conclusion, and would be given, at his request, a Summary to enable him to decide whether to enter into an agreement with the Board. If an agreement was not reached, the Board would then enter a unilateral order within a specified time, 32 CFR Part 1475, and would issue, pursuant to statute, at the request of the contractor, a "statement of such determination, of the facts used as a basis therefor, and of its reasons for such determination." 50 U.S.C.App. chanroblesvirtualawlibrary
Page 421 U. S. 178
§ 1215(a) (Statement). [Footnote 12] Absent a contractor's request for a Statement, there is no indication that one was ever prepared in his case. For this type of case, the renegotiation process thus came to an end. [Footnote 13]
If the Regional Board concluded that no excessive profits had been realized by a particular contractor and that a clearance should therefore issue -- or if the contractor agreed with the Regional Board as to an amount of excessive profits before the case was reassigned to the Board -- then a Division Report was never created in that case. Instead, a "final recommendation" that a clearance be issued or that the agreement be consummated was sent to the Board, and the Board considered the case on the basis of the Regional Board Report, together with comments made by the Board's accounting and review divisions. After meeting and discussing the case on the basis of these documents, the Board decided whether to approve the Regional Board's conclusion. If it did, appropriate closing documents were prepared by the chanroblesvirtualawlibrary
Page 421 U. S. 179
Regional Board. No explanation of the Board's reasons for agreeing with the Regional Board's recommendation was prepared or sent to the contractor, and it is not possible to know whether the Board agreed with the reasoning of the Regional Board Report or just its conclusion. If the conclusion of the Regional Board was not approved, the case was either returned to the Regional Board for further factfinding, or assigned to a division of the Board as though no recommendation agreeable to the contractor had ever been made. The Regional Board Reports in the category of cases in which clearances were recommended and approved by the Board -- and therefore in which no Division Report was created -- is the other type of document in issue in this case.
"[i]ntra-agency memoranda and communications consisting of advisory
Page 421 U. S. 180
opinions, conclusions, recommendations, and analyses prepared by personnel and members of the Board"
in its own case. 138 U.S.App.D.C. 147, 150, 425 F.2d 578, 581 (1970). The District Court denied relief. On appeal, the Court of Appeals appears to have assumed that the "opinions" sought by respondent were limited to Statements and Summaries as defined in 32 CFR § 1480.8. [Footnote 15] 138 U.S.App.D.C. at 148, and n. 2, 425 F.2d 579, and n. 2. On this basis, the Court of Appeals reversed, rejecting the claim of the Renegotiation Board that the documents sought were "completely immune" from disclosure under 5 U.S.C. § 552(b)(4), the provision of the Act exempting certain privileged or confidential information submitted to the Government by any person. [Footnote 16] The court, stating that the Board was required to make available "final opinions, including concurring and dissenting opinions,'" [Footnote 17] remanded the case to the District Court for further proceedings in which the requested documents were to be made available after "suitable deletions." 138 U.S.App.D.C. at 150, 425 F.2d 581. chanroblesvirtualawlibrary
Page 421 U. S. 181
"inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency. "
Page 421 U. S. 182
As to the Division Reports, the court said that, although the Board may disagree with the reasoning of the report, "[i]t is, in fact, the last document which explains reasons for the Board's decision," it should "at the very least . . . reflect the analysis of one member," and thus it must be disclosed at least as a "concurring [or] dissenting opinion." 5 U.S.C. § 552(a)(2)(A). On appeal, the Court of Appeals affirmed the "findings of fact" and "conclusions" reached by the District Court and found two additional grounds supportive of the lower court's judgment as to the Regional Board Reports. The court held that, even if the Regional Board Reports recommending a clearance subsequently approved by the Board [Footnote 19] were not "final opinions" of the Board, they were disclosable as final opinions of the Regional Board: the Regional Board itself was to be considered an "agency" for purposes of the Act, and the reports were certainly its "final opinions" and, as such, they were disclosable under the express provisions of 5 U.S.C. § 552(a)(2)(A), and therefore outside the scope of Exemption 5. In concluding that the Regional Boards are agencies, the court relied in part on the power of the Regional Boards finally to dispose of certain Class B chanroblesvirtualawlibrary
Page 421 U. S. 183
cases. [Footnote 20] In concluding that its decisions were "final," notwithstanding inevitable Board review, it analogized the power of the Regional Board in Class A cases to the power of a United States district court: the former's decisions being reviewable by the Board and the latter's by a United States court of appeals. The fact that the Regional Board's decisions were subject to review did not obviate the fact, any more than it does in the case of a United States district court, that its decisions are "final," 157 U.S.App.D.C. 121, 128, 482 F.2d 710, 717 (1973), and that its report leading to a clearance was perforce a "final opinion" of an "agency" subject to disclosure under the Act. The Court of Appeals additionally held that the Regional Board Reports were, in any event, "identifiable records," 5 U.S.C. § 552(a)(3), which are disclosable, unless exempt, and that these reports were not within the purview of Exemption 5 of the Act because they "are not solely part of the consultative and deliberative process, but, rather, reflect actual decisions communicated outside the agency." 157 U.S.App.D.C. at 129, 482 F.2d 718. See NLRB v. Sears, Roebuck Co., ante, p. 421 U. S. 132.
Strictly speaking, the issue in this case is whether the Division Reports and the Regional Board Reports fall chanroblesvirtualawlibrary
Page 421 U. S. 184
within Exemption 5, pertaining to
5 U.S.C. § 552(b)(5). [Footnote 21] As we hold today in the companion case of NLRB v. Sears, Roebuck & Co., ante at 421 U. S. 149, Exemption 5 incorporates the privileges which the Government enjoys under the relevant statutory and case law in the pretrial discovery context; and both Exemption 5 and the case law which it incorporates distinguish between pre-decisional memoranda prepared in order to assist an agency decisionmaker in arriving at his decision, which are exempt from disclosure, and post-decisional memoranda setting forth the reasons for an agency decision already made, which are not. Because only the full Board has the power by law to make the decision whether excessive profits exist, because both types of reports involved in this case are prepared prior to that decision and are used by the Board in its deliberations, and because the evidence utterly fails to support the conclusion that the reasoning in the reports is adopted by the Board as its reasoning, even when it agrees with the conclusion of a report, we conclude chanroblesvirtualawlibrary
Page 421 U. S. 185
that the reports are not final opinions, and do fall within Exemption 5.
"[W]hen the recommendation clearance of the Regional Board comes up on the Board agenda, the Board simply approves or disapproves the clearance. It does not adopt any of the memoranda that are before it. It does not ratify or adopt any of these staff memoranda. It simply, in the exercise of its judgment, says it is a clearance or it isn't a clearance.
Page 421 U. S. 186
And there is no Board-adopted document which you could call an opinion."
The Court of Appeals' attempt to impute decisional authority to Regional Boards by analogizing their final recommendations to the final decisions of United States district courts must fail. The decision of a United States district court, like the decision of the General Counsel of the NLRB discussed in NLRB v. Sears, Roebuck & Co., ante at 421 U. S. 158-159, n. 25, has real operative effect independent of "review" by a court of appeals: absent appeal by one of the parties, the decision has the force of law; and, even if an appeal is filed, the court chanroblesvirtualawlibrary
Page 421 U. S. 187
of appeals will be bound, within limits, by certain of the district court's conclusions. [Footnote 23] The recommendation of a Regional Board, by contrast, has no operative effect independent of the review: consideration of the case by the Board is not dependent on the decision by a party to "appeal" -- such consideration is an inevitable event without which there is no agency decision, and the recommendation of the Regional Board carries no legal weight whatever before the Board -- review by the latter is, as the Court of Appeals conceded, de novo. Indeed, "review" is an entirely inappropriate word to describe the process by which the Board decides whether to issue a clearance following a recommendation to that effect by the Regional Board. The latter's recommendation is functionally indistinguishable from the recommendation of any agency staff member whose judgment has earned the respect of a decisionmaker. There is simply no sense in which Regional Boards have the power to make "final dispositions," and thus no sense in which the explanations of their recommendations can be characterized as "final opinions." [Footnote 24] See NLRB v. Sears, Roebuck & Co., ante at 421 U. S. 158-159.
In concluding that the Regional Board Reports are within the scope of Exemption 5, it is unnecessary to chanroblesvirtualawlibrary
Page 421 U. S. 188
decide whether, as respondent strenuously argues and the Court of Appeals concluded, the Regional Boards are themselves "agencies" for the purposes of the Act. Respondent and the court below proceed on the premise that the final written product of an "agency's" deliberations may never fall within Exemption 5, and reason that, since the Regional Board Report is the final product of the Regional Board, it must therefore be disclosable if the Regional Board is a separate agency. [Footnote 25] The premise is faulty, however, overlooking as it does the fact that Exemption 5 does not distinguish between inter-agency and intra-agency memoranda. By including inter-agency memoranda in Exemption 5, Congress plainly intended to permit one agency possessing decisional authority to obtain written recommendations and advice from a separate agency not possessing such decisional authority without requiring that the advice be any more disclosable than similar advice received from within the agency. Thus, if the Regional Boards are agencies for Class A purposes, their final recommendations are inter-agency memoranda; and, if they are not agencies separate from the Board, their recommendations are intra-agency memoranda. In either event, the Regional Boards' total lack of decisional authority brings their reports within Exemption 5 and prevents them from being "final opinions." chanroblesvirtualawlibrary
Page 421 U. S. 189
It is true that those who participate in the writing of the Division Report are among those who participate in the Board's decision, and that, human nature being what it is, they may not change their minds after discussion by the full Board. This creates a greater likelihood that the Board's decision will be in accordance with the Division Report than is the case with respect to a Regional Board Report, and that, where the Board's decision is different, the Division Report will reflect the final views of at least one of the Board's members. See NLRB v. Sears, Roebuck & Co., ante at 421 U. S. 158-159, n. 25. However, this is not necessarily so. The Board obviously considers its discussion following the creation of the Division Report to be of crucial importance to its decision for, notwithstanding chanroblesvirtualawlibrary
Page 421 U. S. 190
the fact that a division is made up of a majority of the Board, it has been delegated no decisional authority. The member of the Board who wrote the report may change his mind as a result of the discussion or, consistent with the philosophy of Exemption 5, he may have included thoughts in the report with which he was not in agreement at the time he wrote it. The point is that the report is created for the purpose of discussion, and we are unwilling to deprive the Board of a thoroughly uninhibited version of this valuable deliberative tool by making Division Reports public on the unsupported assumption that they always disclose the final views of at least some members of the Board. [Footnote 26] chanroblesvirtualawlibrary
Page 421 U. S. 191
The effect of this decision is that, in those cases in which Statements and Summaries were not issued, the public will be largely uninformed as to the basis for decisions by the Renegotiation Board. Indeed, the decisions of both courts below -- conceding, as they both did, the absence of decisional authority in either the Regional Boards or divisions of the statutory board -- appear to have rested in the final analysis on the notion that the Renegotiation Board has an affirmative obligation under the Act to make public the reasons for its decisions, and that it must disclose its opinion, or the nearest thing to an opinion, in every case. However, Congress explicitly exempted the Renegotiation Board from all provisions of chanroblesvirtualawlibrary
Page 421 U. S. 192
the Administrative Procedure Act except for the Public Information Section. 50 U.S.C.App. § 1221. Thus, the opinion-writing section of the APA, 5 U.S.C. § 557 -- which itself applies only to "adjudication required by statute to be determined on the record after opportunity for an agency hearing," and even then only if the agency decision is not subject to de novo court review, 5 U.S.C. § 551 -- is inapplicable to Board decisions. The Freedom of Information Act imposes no independent obligation on agencies to write opinions. It simply requires them to disclose the opinions which they do write. NLRB v. Sears, Roebuck & Co., ante p. 421 U. S. 132. If the public interest suffers by reason of the failure of the Board to explain some of its decisions, the remedy is for Congress to require it to do so. It is not for us to require disclosure of documents, under the purported authority of the Act, which are not final opinions, which do not accurately set forth the reasons for the Board's decisions, and the disclosure of which would impinge on the Board's pre-decisional processes.
138 U.S.App.D.C. at 149, 425 F.2d 580, quoting from 5 U.S.C. § 552(a)(2)(A).