Opinion ID: 3033172
Heading Depth: 4
Heading Rank: 1

Heading: a statement of the time, place, and nature of

Text: public rulemaking proceedings; (2) reference to the legal authority under which the rule is proposed; and 10610 LOUIS v. U.S. DEP’T OF LABOR (3) either the terms or the substance of the pro- posed rule or a description of the subjects and issues involved. 5 U.S.C. § 553(b). In turn, Section (c) requires in pertinent part: After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose. 5 U.S.C. § 553(c).
[2] Subsection (e)(4) of the Privacy Act requires each agency that maintains a system of records to publish information pertaining to each system, including: the system’s name, the categories of individuals covered by the system, the categories of records contained within the system, routine uses for the records, and policies and practices regarding storage, retrieval and access to records. Id. § 552a(e)(4)(A)-(I). Subsection (e)(4) does not require or suggest that the agency include in its notice whether a particular system of records is exempt from disclosure. In April of 2002, the Department published an updated notice of all systems of records entitled “Publication in Full of All Notices of Systems of Records Including Several New Systems; Publication of Proposed Routine Uses.” 67 Fed. Reg. at 16816. That notice, which unequivocally states that it was published in accordance with subsection (e)(4) of the Privacy Act, contained the required information for scores of LOUIS v. U.S. DEP’T OF LABOR 10611 systems of records maintained by the Department. Id. at 16816-16948. Yet nowhere in its introductory section does the notice mention that the agency is proposing to exempt certain systems from disclosure. Id. at 16816. Instead, in the description of certain individual systems, the Department included a statement that the system was exempt from disclosure under the Privacy Act, citing the statutory provision relied upon and giving a justification for the exemption. For example, with respect to the DOL/SOL-15 database at issue in the present appeal, the agency stated: SYSTEM EXEMPTED FROM CERTAIN PROVI- SION OF THE ACT: Under the specific exemption authority provided by 5 U.S.C. 552a(k)(2), this system is exempt from the following provisions of the Privacy Act : 5 U.S.C. § 552a . . . (d) . . . . Disclosure of information could enable the subject of the record to take action to escape prosecution and could avail the subject greater access to information than that already provided under rules of discovery. In addition, disclosure of information might lead to intimidation of witnesses, informants, or their families, and impair future investigations by making it more difficult to collect similar information. 67 Fed. Reg. at 16942. [3] In general, the notice and comment provisions of the APA require an agency to publish a notice of “proposed” rulemaking, then allow for comment before publishing a “final” rule that includes a discussion of the comments received. See Nat’l Tour Brokers v. United States, 591 F.2d 896, 901-902 (D.C. Cir. 1978) (rejecting procedure of publishing final rule with opportunity for reconsideration). “Th[e] requirement is designed to give interested persons, through written submissions and oral presentations, an opportunity to participate in 10612 LOUIS v. U.S. DEP’T OF LABOR the rulemaking process.” Erringer v. Thompson, 371 F.3d 625, 629 (9th Cir. 2004) (quoting Chief Prob. Officers of Cal. v. Shalala, 118 F.3d 1327, 1329 (9th Cir. 1997). The test for sufficiency of the notice is whether the notice “fairly apprise[s] interested persons of the subjects and issues before the Agency.” Natural Res. Def. Council v. EPA, 279 F.3d 1180, 1186 (9th Cir. 2002) (quoting Natural Res. Def. Council v. EPA, 863 F.2d 1420, 1429 (9th Cir. 1988). “[A]n interested member of the public should be able to read the published notice of an application and understand the ‘essential attributes’ of that application. . . . [and] should not have to guess the [agency’s] ‘true intent.’ ” State of California ex rel. Lockyer v. FERC, 329 F.3d 700, 706-07 (9th Cir. 2003) (noting connection between Due Process Clause and notice provisions). [4] With these basic principles in mind, we conclude that the notice in this case was insufficient. While it is true that each of the components of section 553(b) are technically present in the Federal Register notice published by the Department, the presentation of the information obscures the intent of the agency and allows for broad exemption of records systems through the back door. Rather than a “notice of proposed rule,” the Department’s notice was simply entitled “Notices,” with a subtitle reading, “Privacy Act of 1974; Publication in Full of All Notices of Systems of Records Including Several New Systems; Publication of Proposed Routine Uses.” See 67 Fed. Reg. at 16816. Everything about the title and introductory paragraphs of the notice indicates that the Department is simply complying with subsection (e)(4) of the Privacy Act.5 5 The opening paragraphs of the Department’s notice contain a section labeled “ACTION” and a section labeled “SUMMARY.” The described agency “action” involves publication of notices of systems including several new systems, publication of “a new universal routine use for all systems,” publication of several “proposed system specific routine uses,” and some “substantive amendments.” The “summary” expands on this information only slightly, and notes that thirty-one systems will be deleted. Additional sections called “Background” and “The Current Action” explain more specifically the information contained in the notice, but none of these sections includes the word “exempt.” LOUIS v. U.S. DEP’T OF LABOR 10613 Id. Nothing in those sections indicates that the agency proposes to exempt systems from access. This omission allows potentially controversial subject matter — exemption of entire systems of records from public disclosure laws — to go unnoticed buried deep in a non-controversial publication generally describing existing systems and their contents. We cannot say that an “interested member of the public [would] be able to read the published notice” and “understand [its] ‘essential attributes.’ ” See State of California ex rel. Lockyer, 329 F.3d at 707. Indeed, a member of the public would likely read the first few pages of this document and conclude that this was a simple disclosure made by the Department pursuant to (e)(4), not a proposed rule exempting certain records systems from disclosure. While we have yet to address the sufficiency of a notice of proposed rulemaking in a factual context substantially similar to that presented in the present case, we note that cases from at least two other circuits are instructive to our analysis and support our view. In McLouth Steel Products Corp. v. Thomas, 838 F.2d 1317 (D.C. Cir. 1988), the D.C. Circuit stressed the importance of a notice’s heading and summary in “alert[ing] a reader to the stakes.” Id. at 1322-23. In that case, the court held that the EPA’s failure to mention its use of a particular diagnostic model to evaluate potentially hazardous wastes in the summary of the proposed rule rendered its notice inadequate as to its use of that model. Id.; see also AFL-CIO v. Donovan, 757 F.2d 330, 339 (D.C. Cir. 1985) (holding rule invalid where no notice given of an important change between proposed and final rule; some changes to rule were highlighted in the notice of proposed rulemaking, giving impression that only highlighted portions had been selected for change). Similarly, in American Iron and Steel Institute v. EPA, 568 F.2d 284 (3d Cir. 1977), the Third Circuit declared a rule invalid where the notice of proposed rulemaking failed to indicate that the proposed rule would apply to steelmaking, as 10614 LOUIS v. U.S. DEP’T OF LABOR opposed to other processes involved in iron and steel manufacturing. Id. at 291. The court specifically determined that such a defect in the notice of proposed rulemaking rendered it ineffective at enabling an “interested person . . . to make comments which could assist the [agency] in formulating [the] regulations.” Id. [5] Again, in the present case the Department’s notice only indicates that it is publishing information about hundreds of pre-existing systems of records, with a few additions and deletions. The introductory sections of the notice speak of compliance with subsection (e)(4) of the Privacy Act, and indicate that there have been changes to the universe of systems, but do not refer to subsection (k)(2) and do not mention “exemptions” at all. Under these circumstances, we conclude that the Department’s notice was insufficient in that it does not “fairly apprise interested persons of the subjects and issues before the Agency.” See Natural Res. Def. Council, 279 F.3d at 1186.
[6] Louis next argues that the Department failed to comply with the requirements of § 553(c) of the APA because the notice failed to give a meaningful opportunity to comment on the exemption of records systems. 5 U.S.C. § 553(c). This argument flows directly from the improper notice given by the agency. Although the notice invited comment “on newly published systems and on the proposed routine uses, both universal and specific,” 67 Fed. Reg. at 16816, there was no specific invitation to comment on the exemption of systems from disclosure. The Department thus never afforded itself the opportunity “to educate itself on the full range of interests the rule affects” with respect to the exempted systems. See Alcaraz v. Block, 746 F.2d 593, 611 (9th Cir. 1984); see also Pac. Coast European Conference v. United States, 350 F.2d 197, 205 (9th Cir. 1965). In short, the Department did not comply with the comment provision of the APA. LOUIS v. U.S. DEP’T OF LABOR 10615 [7] In summary, subsection (k)(2) of the Privacy Act by its text requires that a rule be promulgated in accordance with the notice and comment provisions of the APA. We hold that mere notice of an agency’s invocation of subsection (k)(2) to exempt information from the Act’s disclosure requirements, when published under headings indicating that the purpose of the publication is compliance with a routine reporting requirement of the statute, is insufficient to constitute the kind of notice of proposed rulemaking and invitation to comment required by the APA. Exemption from the Privacy Act’s fundamental requirement that an individual have access to an individual’s “record or to any information pertaining to him” collected by the government is a serious matter requiring the strictest compliance with the APA’s rulemaking procedures. The Department may not withhold documents contained in the DOL/SOL-15 system of records on the basis of the (k)(2) exemption.