Legal Document

443 U.S. 340 99 Supreme Court Reporter 2800 61 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 587 FEDERAL OPEN MARKET COMMITTEE OF the RESERVE SYSTEM, Petitioner,v.David R. MERRILL. Number 77-1387. Argued Dec. 6, 1978. Decided June 28, 1979. Syllabus This case presents question whether Freedom of Information Act (FOIA) is violated by petitioner's practice, authorized regulation, 12 Code Federal Regulations § 271.5 (1978), withholding certain monetary policy directives from public during month they are in effect, such being published full Register at end month. To implement its authority to conduct open market operations Reserve System, petitioner has established a combined investment pool for all banks, administered Account Manager. Petitioner meets approximately once review overall state economy and consider appropriate course policy. Its principal conclusions embodied "Domestic Policy Directive," which indicates general terms wishes follow an expansionary, deflationary, or unchanged period ahead, includes specific tolerance ranges growth money supply federal funds rate. The Manager guided Domestic Directive his transactions with dealers who trade Government securities. A exists as document one before it appears Register, time been supplanted new Directive. Respondent, had denied immediate access under FOIA records actions, instituted suit declaratory injunctive relief against operation delayed disclosure. Without expressly considering contention that disclosure Directives would interfere national policy, District entered judgment respondent, holding, inter alia, were "statements policy" which, FOIA, be "currently" Register; 1-month delay failed satisfy current publication requirement; could not withheld Exemption 5 applies documents "inter-agency intra-agency memorandums letters available law party . litigation agency." Appeals affirmed, also expressing no opinion about assertion seriously Held : 1. Petitioner's "intra-agency memorandums" within meaning FOIA. clearly "agency" term defined Administrative Procedure Act, essentially written instructions Manager, subordinate official agency. binding only upon neither establish rules govern adjudication individual rights nor require particular forbearance any member public. Pp. 352-353. 2. Although does confer agency, without regard privilege enjoyed civil discovery context, undermine effectiveness agency's if released immediately, nevertheless incorporate qualified confidential commercial information, least extent this information generated itself process leading up awarding contract. See Fed.Rule Civ.Proc. 26(c)(7). 353-360. 3. can fairly described containing contract, necessarily protected process. If contain sensitive otherwise available, release significantly harm Government's functions interests, then slight Directives, 271.5, permitted 5. Determination whether, what extent, fact afforded protection must await development proper record on remand. concludes protection, should operative portions feasibly segregated purely descriptive materials therein, latter made subject delay. EPA versus Mink, 410 73, 91, 93 827, 837, 35 119. 361-364. 184 U.S.App.D.C. 203, 565 Reporter, 2nd 778, vacated remanded. Kenneth S. Geller, Washington, D. C., petitioner. Victor Haw. Hawai‘i KFH45 A2 Kramer, respondent. Mr. Justice BLACKMUN delivered Court. 1 Open Market Committee (1978),1 effect. At month, Register. Columbia Circuit held practice violates KF62 552. 778 (1977). We granted certiorari strength Committee's representations ruling implementation 436 917, 98 2260, 56 757 (1978). 2 * operations—the purchase sale securities domestic market—are most important instrument System.2 When System buys market, payment ordinarily credited reserve account seller's bank, increasing total volume bank reserves. sells sales price usually debited buyer's decreasing Changes reserves affect ability banks make loans investments.3 turn substantial impact interest rates activity whole. 3 (FOMC Committee), herein, statute exclusive control over entire System. 263(b). FOMC4 charged conducting "with view accommodating commerce business their bearing credit situation country." 263(c). authority, known Account. senior officer Bank New York regularly appointed 4 FOMC statement called summarizes economic background FOMC's deliberations ahead. attempts agree rate.5 recent include these Directive.6 day-to-day associated ranges, daily conference call staff FOMC. Subject oversight, broad discretion implementing In transacting Account, he deals 25 actively agency Roughly half departments large banks; others firms smaller specialize These primarily own account. App. 33. 6 Board required keep actions taken respect operations. 247a. comply requirement, secretariat prepares after each meeting. Record Actions. It contains conditions meeting, text Directive, other Committee, votes dissenting views, any. draft Actions distributed participants next meeting comments, revised few days later. 41 Fed.Reg. 22261 (1976). 7 words, almost soon drafted approved final form Committee.7 however, exists, makes first appearance part Moreover, Actions, longer effective II 8 when action was May 1975, student Georgetown University Law Center, D.C. 8. complaint alleged "developed strong administrative agencies government," formed desire study "the regulates through frequent adoption directives." Ibid. 9 pursuit professed academic respondent March counsel, filed request seeking "[r]ecords meetings January 1975 February including, but limited to, person relating foreign currencies." Id., 13.8 request, explaining Records including basis set forth 271.5.9 An appeal resulted requested documents, because expired. Governor Robert C. Holland Board, behalf wrote respondent's counsel remained firmly committed "a legislative premature disclosures impair agencies." 21. 10 Respondent Columbia, 7. due moved summary judgment, submitted affidavits members generally advanced two reasons why statutory functions. 11 First, argued difficult gradual changes Disclosure objectives have "announcement effect," quickly adjust holdings anticipation purchases result sudden rate movements, might considerably larger than contemplated beyond power control. Second, contended permit institutional investors, means analyze act rapidly buying selling securities, obtain unfair advantage small investors. 13 counter-affidavits contentions, since considered them "irrelevant" legal issues presented. Brief 33-34, n. 12. apparently agreed. addressing affidavits, entering findings effect operations, court 413 F.Supp. 494 (DC 1976). held, conceded, formulated adopted agency" that, 552(a)(1)(D), "currently publish[ed] guidance public."10 further concluded waiting until promulgated publishing preceding one, violation "current-publication" requirement. F.Supp., 505. Finally, rejected contentions either internal personnel practices 5, inter-agency agency.11 14 On Circuit, did contest publish[ed]" Similarly, challenge conclusion abandoned argument covered instead, concentrated disrupt continued urge 15 arguments. exempt "executive" attaching predecisional communications. ruled designed protect decisions. there serve holding Like Court, expressed true, suggested, Congress specifically material prompt-disclosure requirement FOIA.12 III 16 occasion FOIA,13 necessary describe history detail. suffices say purpose "to philosophy unless exempted delineated language." S.Rep. 813, 89th Cong., 1st Sess., (1965). records, divides into three categories: some currently 552(a)(1); "promptly publicly indexed, 552(a)(2); promptly furnished 552(a)(3). defines nine categories "does apply." 552(b). district given jurisdiction enjoin order production improperly withheld. 552(a)(4)(B). burden proceeding exempt. 17 issue here provides affirmative provisions do apply 552(b)(5). (a) letters," (b) consist "would Atlantic 18 There little doubt constitute letters." Act. §§ 551(1), 552(e). And instructions, although possibly public, dividual rights, They thus B 19 Whether more question. House Report states intended allow withhold memoranda "routinely disclosed private ." H.R.Rep. 1497, (1966), U.S.Code Cong. & Admin.News, Pages 2418, 2428. 86-87, 836, 119 (1973), recognized class shielded reports working papers deliberations. NLRB Sears, Roebuck Co., 421 132, 95 1504, 44 29 (1975), confirmed interpretation, encompasses privileged attorney's work product. 154-155, S.Ct., 1518. 20 contend communications product.14 argument, confers immediately. according FOMC, even routinely discovered 21 reject analysis. indicate asserted defer rests fundamentally odds plain language statute. U.S., 85-86, 835; 149, 1515. addition, proves too much. Such interpretation appear memoranda, those opinions statements whenever promote "efficiency" "public interest." leave little, anything, FOIA's prompt disclosure, run counter Congress' repeated rejection vague interest" standard. supra, 9; 3, 8; 78-80, 831-32. 22 argues, alternative, several privileges, addition privileges product, operative. contends incorporates shields 23 Preliminarily, we note clear every discovery. Robbins Tire Rubber 437 214, 254 12, 2311, 2321, 57 159 (1978) (POWELL, J., concurring part). are, sure, our cases construing imply See, e. g., Renegotiation Grumman Aircraft Corp., 168, 184, 1491, 1500, (1975) ("Exemption enjoys relevant pretrial context"). Heretofore, and, 150-154, 1516-1518, emphasized, both mentioned Exemption.15 may eight exemptions particularly Exemptions 1, 4, 7.16 hesitate construe substantially duplicate another exemption. Given incorporated dealt claim executive attorney viewed caution. 24 plausible FOMC17 based 26(c)(7), court, "for good cause shown," "that secret research, development, designated way."18 argues "confidential information," provide therefore period. courts long evidentiary secrets information. E. I. du Pont de Nemours Powder company Masland, 244 100, 103, 37 575, 576, L.Ed. 1016 (1917); Judge Wigmore, Evidence 2212, 156-157 (McNaughton rev. 1961). Rules Civil similar context. Rule replaced former 30(b) 1970, "reflec[t] existing law." Advisory Notes 26, 28 App., Page 444. Rules, course, fully applicable party. Procter Gamble 356 677, 681, 78 983, 985, 1077 (1958); Moore, Practice ¶ 26.61[2], 26-263 see reason not, case, protective 26(c)(7).19 26 Senate same unequivocal support information" product privileges. Nevertheless, think Report, read conjunction hearings conducted Committees, authorizing information." 27 preceded enactment various complained original bill, present 5,20 sufficient transactions. For example, Department Defense concern real estate, materials, property protected, Hearings 1160, etc., Subcommittee Judiciary, 418 (1965); General Services Administration stressed need avoid early prejudice bargaining position transactions, id., 480; Post Office urged matters negotiation contracts, stand footing H.R. 5012, etc. Operations, 224 Included among criticism Acting Counsel Treasury, referred Department's concerning 49.21 After completed, amended provision ultimately became nondisclosure echoing 1219, 88th 6-7, 13-14 (1964), explained thereby ensure "full frank exchange opinions" 15, 10, Admin.News 1966, 2427. added, significantly: "Moreover, cannot always operate effectively disclose received completes contract issuing order, decision regulation. clause wherever without, time, permitting indiscriminate secrecy" (emphasis added). 30 light complaints registered reasonable infer referring "information [in] contract," pertaining contracts.22 31 reinforced consideration differences between type privilege. insure decisionmaker will receive unimpeded advice associates. theory revealed, associates reluctant candid frank. follows remain pertain effected, inhibit free flow advice, analysis, reports, expression behind hampered, placed competitive disadvantage consummation endangered. Consequently, rationale protecting expires awarded offer withdrawn. 32 convinced recognition closest possibility "trade financial obtained confidential." 552(b)(4). "obtained person," is, outside Government. 551(2). contracts contrast, confined itself. 33 accordingly conclude contract.23 Contract 34 remaining questions sort so, analogy exact, During surely confidential, nature relates market. providing ongoing direction execution large-scale securities; sense, buy-sell broker. As law, "there absolute Wright Miller, 2043, 300 (1970); 26.60[4], 26-242 (1970). Cf. Nixon, 683, 705-707, 94 3090, 3106-07, 1039 (1974). "The automatic complete immunity weighed privacy Frequently, protection." U.S.C.App., 444; 26.75, 26-540 26-543 (1970).24 mindful applied way rough analogies," 86, 835, particular, applicant's determining Ibid.; 149 16, 1516. sensitivity involved, inflicted continue criteria applicability Accordingly, 36 Here, ranges. unanswered purporting show orderly policies, give sought supplement arguing, jeopardize interests imposing additional borrowing costs Treasury.25 sought, again disagreement experts actually believe beneficial 33-46. Under circumstances, That determination record. remand Directives26 837. 38 vacated, remanded proceedings consistent opinion. 39 so ordered. 40 STEVENS, whom STEWART* joins, dissenting. practical System's monthly immediately filtered handful sophisticated representatives firms. describing says. 42 level, seems me "open" committee all—not just selected few.1 N Immigration Nationality Decisions am satisfied correctly 43 552(a)(1), "agency shall separately publish agreed policy." disagree conclusion. imposes mandatory "current" publication. my "temporarily"—i. e., become obsolete. principle construction annual statements. while effective. 45 recognizes permanently violating nonetheless temporary suppression warranted find incomprehensible. 46 place, nothing situation.2 But fundamentally, Court's exemption inconsistent structure released, specified manner—i. "currently"—unless fits categories. categories, simply 552(b) Between exemption, therefore, establishes middle ground. third alternative "exempt" applies—albeit basis. category "slight delay," created rather 47 newly impose burdens requesting overcome objection henceforth prove compliance statute's mandate "significantly interests." Ante, 363. imposition obstacle overriding giving ordinary citizen unfettered how operates.3 48 respectfully dissent. regulation provides: "§ Deferment availability "(a) Deferred instances, types inspection copying determine reasonably effects paragraph section prevent impairment discharge responsibilities. "(b) Reasons deferment availability. Publication of, deferred earlier would: "(1) Interfere policies performance functions; "(2) Permit speculators gain profits advantages speculative trading exchange, otherwise; "(3) Result unnecessary unwarranted disturbances market; "(4) Make costly; "(5) concerned fiscal matters; "(6) with, bankers, countries influence gold dollar balances countries." 46, 55. Purposes Functions 14-15, 49-67 Other major tools employed setting requirements discount banks. 56. Board's Regulation D, Pt. 204 hold prescribed ratio deposits. Member typically respond increase (or reduction reserve-to-deposit ratio) making investments, excess take lending opportunities. 47. composed seven Governors five 263(a). stated "M1," currency circulation plus demand deposits "M2," "M1" savings deposits, negotiable certificates deposit, 81. willing lend borrow overnight 78. such, use concepts, illustrated October 17, 1978, FOMC: "Early regular directed attaining weekly-average slightly above level. Subsequently, maintaining range 83/4 91/4 per cent. deciding objective mainly M -2 October-November 51/2 91/2 cent, provided -1 exceed 61/2 cent." 64 Fed.Res.Bull. 947, 956 Prior 1977, Instead, contained phrases seeks achieve easing conditions, aggregates growing excessively"; rapid months ahead occurred months"; moderate ahead." 82-83. manner communicated began supra. explanation time. Nor issued 63 380-394 1967, Annual Congress. Press Release, Mar. 24, 59; 494, 504 response passage year, releasing 90 Commission. 21, instant lawsuit filed, shortened days. 13204 (1975). 1976. Because completed formally applies, conceded guidelines 207, 782 Memoranda Discussion meetings. 13. detailed minutes 552(b)(5) entitled parts "reasonably segregable" fact, 506, parties subsequently factual produced. challenged Appeals, U.S.App.D.C., 207 8, F.2d, here. 1976, voted discontinue preparation Discussion. 62 581, 590-591 accordance then-current 7, directive date adoption." Section 552 Each follows: public— "(D) substantive interpretations indexed pursuant 552(a)(B). Title are— related solely agency; covers (other 552b title), (A) requires issue, (B) refers withheld." (1973); Bannercraft Clothing 415 1028, 123 (1974); (1975); FAA Administrator Robertson, 422 255, 2140, 164 Air Force Rose, 425 352, 96 1592, (1976); (1978); Chrysler Corporation Brown, 441 281, 1705, 60 208 (1979). privilege, presented 22. (1966) (referring "advice assistants ideas personnel"); (1965) (noting come attorney-client parties"). classified security information; person; medical files invasion privacy; investigatory gathered enforcement purposes. 552(b)(1), (4), (6), (7). "official government whose harmful interest, Machin Zuckert, 114 335, 338, 316 336, 339, cert. denied, 375 896, 84 172, 124 (1963), 26(c)(2), permits "may designation place." disposition reads: "Upon motion shown, pending alternatively, deposition, where deposition justice annoyance, embarrassment, oppression, undue expense, following: (7) way." Menominee Engineering States, Fed.Rules Serv.2d 894 (Ct.Cl.1975); Consolidated Box Incorporated 115 (Ct.Cl.1973) (involving applications orders identically worded 71(f) Claims). 1666, introduced 1963, included fifth-numbered dealing reported favorably Judiciary Sess. passed Senate, reached late action. 362-363, 1600; 18, 1037 18. Substantially measure reintroduced 1160 5012. Source Book, Procedure, S.Doc. 93-82, April 1965, (1965), struck words "dealing policy," inserted lieu thereof "which amended, 13, 1965. 20, signed President Johnson July 1966. Smith stated: "I interpolate point example statement. prematurely have, feel, serious handling financing things timing. many timelag, basic secrecy matters, yet very damaging reference inconsistency Report. 363-367, 1600-1602. Our potentially eligible conflict finding agency," 552(a)(1). 504-505. true noted obvious relationship portion indexing 552(a)(2). opinions, never apply; 552(a)(2), said "reluctant" ever apply. 153-154, observations, discussion kind mutually hand, communications, other, exist respect, Sears memorandum 552(a)(2) 160, 1521. Actually, forbidding rare. More commonly, trial enter restricting see, Chesa International, Limited Fashion Associates, Inc., 234 (SDNY 1977); Xerox International Business Machines F.R.D. 367 1974); Scovill Mfg. Sunbeam 598 (Del.1973); parties, Borden Sylk, 289 847 (ED Pa.1968); Article Drug Consisting Individually Cartoned Jars, Less, 181 (Del.1967); Standard Oil (New Jersey ), 1958). "privileged," purposes, therein brief, effect" produced sharper fluctuations traded fluctuations, risk purchasing increase. compensate risk, purchasers higher yield huge amount change represent cost estimates high $300 million annually. 29. nn. STEWART joins insofar expresses views "legal question" Professor Milton Friedman Chicago "May favor recommended repeatedly testimony Friday later Sunday night pass available." 9465 9589 Monetary Banking, Finance Urban Affairs, 95th 202 reflect Sherman Maisel, context "[m]ost markets better market." Managing Dollar 175 (1973). relies analysis unpersuasive. admirably danger allowing conceivable ante, 354-355. proposes, Exemption. subcommittee disclosing governmental test—virtually appeared list "dangers"—the render meaningless. test limit references bear understanding justification "commercial component on, [an agency] 2427, different (i. procurement goods services acting buyer) stage "before [its] process") involved case. engaged activity—the markets—and already settled acted it. absence thin reed significant accurate reflection congressional 1600-1602, 11. albeit case—Exemption persuasively adopting novel strained encompass unsuccessfully amend proposed 51, 55, 228, 229 Having surprised 361, 1599; 79-80, 832,

Classification Label: 4