Opinion ID: 490507
Heading Depth: 2
Heading Rank: 3

Heading: Evaluating the ITC's Use of its Discretion

Text: 17 The ITC makes two additional arguments in opposing the protective order as unnecessary to assure confidentiality. The first claims that Tenneco's materials are already protected by federal law. We ultimately reject this contention as being irrelevant to the issue before us. The second argument relies upon the ITC's stated practice of opposing disclosure requests or notifying affected parties otherwise. We hold this to be an insufficient assurance to satisfy the dictates of Schreiber and Owens. 18 The Commission claims that Tenneco's information is safe without a protective order. It points first to 19 U.S.C. Sec. 1677f(b), which on its face appears to prevent disclosure of confidential information submitted to the ITC, with exceptions that admittedly do not apply in this case. 3 The Commission next points to exemptions 3 and 4 of the FOIA, 5 U.S.C. Secs. 552(b)(3) & (4), and contends that Tenneco's information would fit within those exemptions as well and thus not be subject to mandatory disclosure. 4 Finally, the Commission also indicates that the Trade Secrets Act, 18 U.S.C. Sec. 1905, prohibits disclosure of confidential information like that involved here. 5 19 Regardless of the validity of the ITC's statutory arguments, we find them inapposite. The contention that a court would ultimately find Tenneco's information to be protected from disclosure under federal law does not address the issue of how the Commission will (or will not) seek to protect that information. Neither Schreiber nor Owens, the leading cases on agency discretion in releasing confidential information supplied by third parties, deals with the ultimate substantive law that protects the information in question; rather, both speak only to the relevant Commission procedures for disclosure of that information. 20 Owens in fact is quite clear about the distinction between the Commission's procedures and the underlying substantive law. One of Owens' entreaties at the appellate level was for an order requiring the FTC to determine, in advance of any request for information, whether the documents contained any trade secrets. We held this plea to be premature, reasoning that [t]he Commission has promised to notify the affected appellant of any congressional request.... Thus, the appellants will be able to seek confidential treatment from the requestor itself.... 626 F.2d at 972. The Owens court realized that the question of appropriate Commission procedure regarding disclosure requests and the question of whether those requests would ultimately be granted by a court were two separate issues. 21 The ITC's second argument derives from its statement at the hearing below that its practice has been to oppose disclosure requests: 22 [I]t has been the practice of the ITC to prohibit this information from being disclosed under (b)(3) and (b)(4), the exceptions to the [FOIA]. 23 We do not believe that [Tenneco's] information is discloseable. We take the strong position that this information is confidential information, and in the event that, either through the age of the documents or any other unforeseen circumstance, we would look at the information in the future and believe that it might not fall within the protection of the [FOIA], it has been the practice of the Secretary's office of the Commission to inform the parties that the information may not be subject to the protection of the [FOIA], and to allow those parties to act to protect that information. 24 Hear.Tr. at 4-5, Tenneco Br.App. at 27-28. 25 The Commission maintains that this in-court assertion, regarding its practice of either opposing disclosure or informing submitters if it has any intention of disclosing the information, constitutes a legitimate exercise of agency discretion falling within permissible limits under Schreiber. With due respect for the Commission's good faith in guarding confidential information, we do not think that its assurances during the hearing below--that it has been the practice to prohibit disclosure or to notify the relevant parties if it determines the information is not protectable--offer the same level of certainty as either a formal rule or published procedure like that involved in Schreiber or an explicit agreement like that involved in Owens. 26 Schreiber emphasizes that an agency is in a better position than a court to design procedural rules adapted to the peculiarities of the industry and the tasks of the agency involved. 381 U.S. at 290, 85 S.Ct. at 1467. In order to give this degree of deference to an agency's choice regarding protection of information, though, we need to determine that the agency has indeed made a choice. Schreiber's deference, accordingly, is in the context of an established agency procedural rule. Owens' deference is to an explicit promise made to the party in question to provide notice a reasonable time prior to disclosing information. This vow, like the procedural rule in Schreiber, provides a significant measure of certainty regarding how the relevant agency will go about protecting information from disclosure. 6 Parties like Tenneco who harbor grave concerns about the ultimate safety of their information can rely on such rules and promises in planning how to protect their information. While Schreiber emphasizes the deference due an agency in choosing its own procedures for guarding confidentiality, we must remain cognizant of the correlative interests of the information-disclosers in knowing precisely how their materials will be protected. 27 In this case we do not find the Commission's averment that it has been its general practice to oppose disclosure or to notify the affected party otherwise to be the equivalent of a rule or explicit promise. It falls short of assuring the uneasy party how the Commission will proceed with regard to the specific information at issue. Accordingly, the District Court was justified in imposing the order requiring that the practice be followed in this case. 28 Our holding today is a limited one: given the circumstances of this case, i.e., the Commission neither promised any form of notice, nor promised not to disclose the materials, nor acted pursuant to an established agency rule, but only alluded to a practice of either nondisclosure or notice, the ITC did not provide the appropriate degree of protection to material it admitted was ultimately nondisclosable under substantive law. It therefore failed to act within permissible limits. 29