Opinion ID: 437220
Heading Depth: 2
Heading Rank: 3

Heading: The Adequacy of Agency Factfinding Procedures

Text: 29 As noted earlier, regulations of the Department of Labor inform the administrative handling of requests for either confidentiality or disclosure of data obtained from government contractors. 101 These materials, the regulations warn, are subject to FOIA's public inspection and copying mandates. 102 Contractors are permitted, however, to identify information in their affirmative action programs and included workforce analyses which they deem exempt from compulsory release under FOIA, and to specify reasons for nondisclosure. 103 An agency officer must pass on a contractor's claim within ten days and, should the contractor appeal from an adverse ruling, the agency's director must make the final determination within another ten-day period. 104 That was the methodology employed in the cases now before us 105 and, so far as we are advised, is the sum total of the procedure the agency affords for resolution of even the most complex of the variegated factual issues that FOIA exemptions can and frequently do present. 30 The caselaw offers little guidance for determinations on whether agency factfinding procedures are adequate within the meaning of Section 10 of the APA, as interpreted by the Supreme Court. 106 I perceive no occasion, however, for any general exploration or dissertation on that subject. For whatever adequacy at its broadest may require, it is clear enough to me that in one critical respect it was lacking here, and accordingly that the District Court was empowered by the APA to engage de novo in such factfinding as a preliminary assessment of the companies' exemption claims necessitated. 107 31 I start with the fundamental proposition of administrative law that interested parties must have an effective chance to respond to crucial facts. 108 This precept finds expression in the familiar requirement of notice of contemplated agency action and opportunity to be heard, 109 and its reach extends to a demand for suitable means of addressing not only the opponent's case but the agency's concerns as well. 110 As the Supreme Court has declared, where governmental action seriously injures an individual, and the reasonableness of the action depends on fact findings, the evidence used to prove the Government's case must be disclosed to the individual so that he has an opportunity to show that it is untrue. 111 Beyond that, [a] party is entitled ... to know the issues on which decision will turn and to be apprised of the factual material on which the agency relies for decision so that he may rebut it. 112 And [t]hose who are brought into contest with the Government in a quasi-judicial proceeding aimed at the control of their activities are entitled to be fairly advised of what the Government proposes and to be heard upon its proposals before it issues its final command. 113 The opportunity for response must come, of course,  'at a meaningful time and in a meaningful manner.'  114 32 These principles, so essential to fairness of the proceeding and accuracy of the factfinding process, have already achieved recognition by this court. As far back as 1974, we announced that [a]n agency may not validly take action against an individual without a hearing unless its notice to the individual of the adverse action proposed to be taken against him specifies the nature of the facts and evidence on which the agency proposes to take action. 115 The reason, we said, is that [s]uch notice enables the affected party to prepare an informed response which places all the relevant data before the agency. 116 Much more recently, we affirmed, without comment, 117 a District Court ruling articulating the proposition that [w]here no 'hearing' of any type is required by statute, procedural fairness demands that plaintiffs be informed of the [agency's] position on [an] issue and have an opportunity to respond to [the agency's] contentions before the issuance of a final determination on the issue. 118 Other decisions of the court are of similar effect. 119 33 In the litigation at bar, the principal question before OFCCP was the applicability of FOIA's Exemption 4, which ushered in centrally a test distinctly factual in nature: whether disclosure of the sought-after data likely would beget substantial harm to the companies' competitive positions. 120 The agency's regulations confined the companies, in their efforts to establish just such a threat, to written specifications of reasons for confidential treatment. 121 The companies put forward lengthy and detailed written statements in support of their position, 122 only to learn in the end that overwhelmingly their efforts were unsuccessful. 123 Neither the agency's regulations nor its procedures offered the companies any guidance in focusing their presentations or documentation 124 and, for much of the material implicated, the companies became aware of the agency's objections to their claims only after the agency's final decision to disclose. 125 Indeed, in two of the three cases at bar, the second-level administrative decisionmaker not only denied the companies' confidentiality requests but also, in several instances, decreed the release of data which the first-level decisionmaker had ordered withheld. 126 And while, of course, the findings and reasons advanced in support of the first-level administrative decision are open to attack on administrative appeal, OFCCP regulations provide no mechanism for combatting the findings and reasons assigned in an adverse second-level decision--the all-important final determination of the agency. 127 Put another way, the companies had no opportunity whatsoever to learn the final decisionmaker's concerns, much less to address them. 34 I would hold, then, that the factfinding procedures in vogue when OFCCP undertook to resolve the companies' FOIA-exemption claims were too meager to survive the test of adequacy. It follows that the District Court, in assessing those claims provisionally on the companies' preliminary injunctive motion, did not err when it engaged in de novo factfinding. With the agency's own factfinding methodology inadequate, that course was fully authorized by the APA; 128 more importantly, it ensured fulfillment of the statutory pledge of adequate factfinding 129 in the only way possible without change in the agency's procedures responsive to the principles I have explicated. 35 It does not follow, however, that the same course is indicated ineluctably when the District Court reaches these cases on the merits. An adequate factfinding process must, of course, be afforded at some point, but, with the agency's factfinding machinery sufficiently improved, that could be done at the administrative level; and in that event de novo judicial review of the agency's exemption-related factual determinations would lose the legal foundation it now has. 130 Judicial review would then be confined to the administrative record, 131 and the agency's exemption rulings would be vulnerable only if arbitrary, capricious, abusive of discretion or otherwise contrary to law. 132 36 So, whether the factfinding essential on exemption claims properly is to take place before the agency or the court depends upon the caliber of the procedures the agency is prepared to extend. And just what an agency will offer in this regard is basically a matter of policy--kgenerically legislative, but usually administrative--which is neither a court's function nor prerogative to prescribe. 133 Congress has, of course, established a policy for cases generally by providing for de novo judicial review in those instances where agency adjudicative factfinding procedures are entirely lacking or seriously infirm. 134 But an agency can totally eliminate the alternative of de novo review by providing adequate factfinding mechanisms, or elevating those it may have to a legally acceptable level. 37 It may well be more desirable, from the perspective of both the administrative process and the judicial system, for the agency, rather than the court, to function as the primary factfinder in reverse-FOIA cases. Not the least of the considerations relevant is that Congress has not specifically designated the forum for such factfinding, 135 and there is reason to doubt that, were it ever to do so, its designee would be the court. 136 At any rate, the choice presently is one for the agency to make--it is a by-product of the agency's power to set policy on the methodology of its factfinding--and one I am loathe to foreclose. I think an opportunity for an upgrading of OFCCP's factfinding procedures should be afforded before the District Court continues on with de novo exemption-factfinding in its consideration of the merits.