Opinion ID: 490507
Heading Depth: 1
Heading Rank: 3

Heading: issuance of protective order

Text: 10 In determining whether a district court appropriately entered a protective order regarding confidential materials submitted pursuant to an agency subpoena, we are guided by FCC v. Schreiber, 381 U.S. 279, 85 S.Ct. 1459, 14 L.Ed.2d 383 (1965), and FTC v. Owens-Corning Fiberglas Corp., 626 F.2d 966 (D.C.Cir.1980). In Schreiber, the Supreme Court held that [t]he question for decision was whether the exercise of discretion by the Commission was within permissible limits, not whether the District Judge's substituted judgment was reasonable. Id. at 291, 85 S.Ct. 1468 (emphasis in original). Although Schreiber concerns the issue of whether an FCC procedural presumption in favor of public instead of in camera investigative proceedings was within permissible limits, its lesson is that a court must focus on the adequacy of the agency's (and not the district court's) discretion regarding what is necessary to protect confidentiality. 11 Owens involves an application of Schreiber in a fact setting closer to the case at bar. In Owens, the FTC sought enforcement of an administrative subpoena, and promised in writing that it would provide Owens reasonable notice (ten days when possible) prior to disclosing any subpoenaed information pursuant to a congressional or judicial request. 626 F.2d at 969. The Commission also agreed to inform the requestor that Owens believed the information sought was confidential. Id. at 974. The District Court supplemented this promise by requiring the FTC to advise Owens of any such request immediately upon its receipt. Id. at 970. We reversed the District Court's supplementation on appeal, holding under Schreiber that the FTC's promises were sufficient to safeguard the appellants' interests in confidentiality. Id. at 974. 12
13 The ITC maintains that it has agreed to provide Tenneco notice within a reasonable time prior to release of documents in the event of any third-party request, and that this agreement clearly satisfies the within permissible limits standard for agency action under Schreiber and Owens. If indeed the Commission had made such a promise, it would be difficult, if not impossible, to distinguish Owens from this case. However, our reading of the record reveals no such pledge by the ITC regarding notice. The ITC cites to two pages of the hearing transcript from the District Court proceeding below. On page 5, the ITC's counsel stated that the ITC's practice has been to inform the provider of information whenever the Commission concludes that the information might not be protected under the Freedom of Information Act (FOIA). Hear.Tr. at 5, Tenneco Br.App. at 28. This is certainly not a promise to give notice a reasonable time before release of Tenneco's information. Cf. part III.C., infra (regarding the ITC's other argument based in part on this practice). 14 On page 21 of the transcript, the ITC's counsel agreed to inform Tenneco if and when the anti-dumping case were appealed to the CIT. Hear.Tr. at 21, Tenneco Br., App. at 44. Again, this statement fails to qualify as an agreement to provide notice a reasonable time before disclosing Tenneco's documents. In sum, although the Commission asserts on appeal that it has agreed to provide notice a reasonable time prior to release of Tenneco's information, we can find no evidence in the record of such an agreement. 2 15 Thus, neither Schreiber, which held an FCC procedural rule to be within permissible limits, nor Owens, which held an agency agreement to provide notice a reasonable time before disclosure to be within permissible limits, directly controls this case. The remaining issue is whether the ITC has abused its discretion insofar as taking adequate steps to protect the submitter's confidentiality. 16
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
30 In issuing its protective order, the District Court did not rely upon the rationale we have set forth. Instead, it pointed out that the order would not impede the Commission's investigation, and then added that the order would grant additional protection to Tenneco in the event of a third-party request for its information. Here, the court cited GTE Sylvania, Inc. v. Consumers Union of the United States, Inc., 445 U.S. 375, 100 S.Ct. 1194, 63 L.Ed.2d 467 (1980), for the proposition that an agency which refuses to release documents because of a court injunction prohibiting release is not 'improperly' withholding agency records. Mem.0p. at 2, ITC Br.App. GTE Sylvania indeed holds that an agency is not improperly withholding records under 5 U.S.C. Sec. 552(a)(4)(B) 7 if it is doing so to obey a federal district court injunction. However, the GTE Sylvania Court explicitly stated that it had no view on whether or not the underlying injunction should have issued, only that once it had issued, the agency had to abide by it. Id. at 387 n. 10, 100 S.Ct. at 1202 n. 10. The District Court, therefore, could not rely upon GTE Sylvania to support the appropriateness of the protective order itself. 31 It is clear, though, that we may affirm a district court on grounds other than those upon which it relied. See Langnes v. Green, 282 U.S. 531, 538-39, 51 S.Ct. 243, 246, 75 L.Ed. 520 (1931); Molerio v. FBI, 749 F.2d 815, 820 (D.C.Cir.1984). Accordingly, for the reasons we have stated herein the judgment is 32 Affirmed.