Legal Document

421 U.S. 168 95 Supreme Court Reporter 1491. 44 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 57 The RENEGOTIATION BOARD, Petitioner,v.GRUMMAN AIRCRAFT ENGINEERING CORPORATION. Number 73—1316. Argued Jan. 14, 1975. Decided April 28, Syllabus Pursuant to the Government contract renegotiation process in effect under Renegotiation Act of 1951 for so-called Class A cases (those which contractor reported profits more than $800,000 on relevant contracts) during period involved this case, if Regional Board made a recommendation as amount excessive year issue rather recommending clearance, i.e., unilateral determination that realized no issue, declined enter into an agreement, would be reassigned (Board). case file, including Report, was then transmitted and assigned division Board, usually consisting three its five members, due course make own decision sumbit full Division final disposition case. If concluded had been clearance should therefore 'final recommendation' issued sent considered basis Report. Respondent brought action pursuant Freedom Information (FOIA), 5 Code KF62 § 552, seeking disclosure certain resulting approval, other cases, all related proceedings involving 14 companies 1962—1965. District ultimately granted relief grounds both were opinions' within meaning 552(a)(2)(A), requires agency available public opinions, concurring dissenting well orders, adjudication cases,' not exempt from 552(b)(5) (Exemption 5) 'inter-agency or intra-agency memorandums . by law party litigation with agency.' Appeals affirmed, further holding even opinions they disclosable 'agency' purposes FOIA. Held: Neither nor are do fall Exemption 5, since (1) only has power whether exist; (2) types reports prepared prior used deliberations; (3) evidence fails support conclusion reasoning is adopted reasoning, when it agrees report's conclusion. Pp. 183-190. (a) Reports, being long before reached discussion, precisely kind predecisional deliberative advice recommendations contemplated must remain uninhibited thus undisclosed, order supply maximum assistance reaching decision. Regardless Boards agencies so their inter-agency memoranda, separate ntra-agency Boards' total lack decisional authority brings prevents them opinions.' 185-188. (b) Since assist deliberations, deprived such thoroughly version valuable tool making unsupported assumption always disclose views at least some members. 189-190. 157 U.S.App.D.C. 121, 482 Federal Reporter, 2nd 710, reversed. Allan Atlantic Tuttle, Raleigh, N.C., petitioner. Tom M. Schaumberg, Washington, D.C., respondent. Mr. Justice WHITE delivered opinion Court. 1 documents—documents generated (Board) performing task deciding contractors have earned, refund, 'excessive profits' contracts—are explaining reasons decisions already made, expressly subject (Act), instead consultative memoranda exempted 552(b)(5). See NLRB versus Sears, Roebuck & Co., 2 132, 1504, 29. N Dec. Immigration Nationality Decisions Essential consideration documents disclosed provisions understanding process, itself serves define hereinafter described.1 Under 1951, 65 Statutes-at-Large 7, amended, 50 App. 1211 et seq., entitled recoup those who hold contracts subcontracts departments any received persons contracts. will 'excessive' connection particular depends upon statutory factors set forth margin.2 As Board's name suggests, endeavors to, fact does, conclude vast majority agreement. 1215(a). (1970 ed., Supp. I). Absent however, decide either 'clearance,' fixing specified directing refund them. unless de novo regarding sought 90 days Claims.3 It terminated agreement generated.4 With mind, we turn details existed case.5 3 Persons required file financial statements prescribed 1215(e)(1) 1964 ed.); 32 Regulations Part 1470, receipts met requisite jurisdictional amount, 1215(f). These reviewed staff and, initial review indicated possibility profits, 'case' referred one two action.6 At time assignment, each designated B case: former covered his statement, latter cases.7 principal difference between none former. §§ 1471.2(b), 1473.2(a), 1474.3(a), 1475.3(a). respondent procedure applicable discussed. 4 After reference team accountant renegotiator.8 This team, after determining what information required, secured submissions might wanted regard position concerning largely determined he profits,' 1213(e). document 'Report Renegotiation' team. IA report, accountant's section, contained pertinent accounting data furnished request.9 II Report Renegotiation, renegotiator, contractor, generally 'an analysis evaluation case; respect any, fiscal review.' 1472.3(d). According testimony given outline form follows: 'A. Sources 6 'B. Application Statutory Factors: 7 '1. Character Business 8 '2. Capital Employed 9 '3. Extent Risk Assumed 10 '4. Contribution Defense Effort 11 '5. Efficiency 12 '6. Reasonableness Costs Profits 13 '(a) '(b) Pricing 15 '(c) 16 'C. Special Matters 17 'D. Conclusion Recommendation.' 18 prepared, but submission endeavored meet resolve 'any issues disputed matters fact, accounting.' 1472.3(b). report submitted Board. 19 reviewing 'tentative 1472.3(e).10 could 'be greater than, equal less recommended Renegotiation.' Ibid. declined, attended meeting informed tentative therefor, afforded opportunity respond. found previously. corresponded panel, signed chairman signifying approval panel recommendation; differed recommendation, addendum attached report. addenda, hereafter convenience (i) 20 Assuming did recommend notified effort obtain Toward end, request, 'summary facts reasons' (Summary) based. 1472.3(i).11 request document, there indication ever 21 transmitted. 'division' undertake study Staff personnel go over indicate, disagreement appropriate juncture, members discuss submit additional material. division, course, reach 'not bound limited manner evaluation, Board.' 1472.4(b). (Division Report), along contrary views, categories Act. 22 meet, member having behalf vote disposition. recommendations. free, reject proposed accept 1472.4(d). given, Summary enable him reached, time, 1475, statute, 'statement determination, determination.' s 1215(a) (Statement).12 contractor's Statement, For type came end.13 23 (ii) 24 issue—or agreed Board—then never created Instead, consummated together comments divisions. discussing these documents, decided approve did, closing No explanation agreeing contractor; possible know just approved, returned factfinding, though agreeable made. category clearances approved Board—and created—is 25 Against foregoing backdrop, filed complaint, Act, June 27, 1968, 'certain orders identifiable records' 1962 1965.14 additionally then-pending 1965, later access '(i)ntra-agency communications advisory conclusions, recommendations, analyses Board' 138 147, 150, 425 578, 581 (1970). denied relief. On appeal, appears assumed 'opinions' Statements Summaries defined 1480.8.15 U.S.App.D.C., 148, n. 2, F.2d, 579, 2. basis, reversed, rejecting claim 'completely immune' 552(b)(4), provision exempting privileged confidential person.16 court, stating "final opinions,"17 remanded requested 'suitable deletions.' 581. 26 Subsequent remand Appeals, turned Summaries, attempted compliance mandate court. Respondent, satisfied disclosed, moved disclosure, inter alia, neither 'Statements' 'Summaries' created; clearance; above.18 27 question permitted take deposition Chairman That constitutes almost record bearing statutes regulations. Although conceding, Chairman's deposition, authority, studies considers, does adopt held rejected contention specifically subsection (b)(5) 5), encompasses: 28 letters court characterized 'decision' 'unless accord'; '(i)n fully informed, behind report.' said that, although may disagree '(i)t last explains decision,' 'at very reflect member,' 'concurring (or) opinion.' 552(a)(2)(A). affirmed 'findings fact' 'conclusions' supportive lower court's judgment Reports. subsequently Board19 Board: certainly such, express 552(a)(2)(A) outside scope 5. In concluding agencies, relied part finally dispose cases.20 'final,' notwithstanding inevitable review, analogized district court: former's reviewable latter's appeals. obviate 128, 717 (1973), leading perforce opinion' were, event, 'identifiable records,' 552(a)(3), disclosable, exempt, purview because 'are solely actual communicated 129, 718. 29 certiorari, 417 907, 94 2602, 41 211 (1974), setting argument 29, important questions presented, particularly proper construction interpretation hereafter, reverse Appeals. III 30 Strictly speaking, pertaining 552(b) (5).21 today companion U.S., 149, .s.Ct., 1515, incorporates privileges enjoys pretrial discovery context; distinguish decisionmaker arriving decision, postdecisional not. Because utterly 31 undisputed legal cases.22 investigate recommend, decide. 1472.3—1472.4. discussion conclusion, often result flexible completely different Hartwig testified: '(W)hen comes up agenda, simply approves disapproves clearance. it. ratify memoranda. simply, exercise judgment, says isn't 33 And Board-adopted you call 79. 34 Moreover, absent adopted, little interest 'The marginally concerned supporting (decision) rejected, supplied, supply, actually ground.' 152, S.Ct., 1517. Indeed, release theory would, affirmatively misleading. Sterling Drug, Incorporated FTC, 146 237, 246—247, 450 698, 707—708 (1971); International Paper company FPC, 438 1349, 1358 (CA2), cert. denied, 404 827, 92 61, 56 (1971). Accordingly, opinions,' protection compulsory 35 Appeals' attempt impute analogizing courts fail. like General Counsel discussed 159 25, 1520, real operative independent 'review' appeals: appeal parties, force law; filed, appeals bound, limits, conclusions.23 contrast, review: dependent 'appeal'—such event without decision; carries weight whatever Board—review is, conceded, novo. entirely inappropriate word describe decides following functionally indistinguishable whose earned decisionmaker. There sense dispositions' explanations can opinion.'24 158—159, 1520—1521. 36 unnecessary whether, strenuously argues concluded, themselves 'agencies' below proceed premise written product 'agency's' deliberations reason agency.25 faulty, overlooking By Congress plainly intended permit possessing requiring similar agency. Thus, purposes, memoranda; baron 37 equally clear Once again, analyze remains uncontradicted testified, 'prepared designed deliberations'; material Following agree likely occur highly judgmental nature number generality criteria. adopted—though be—and anything result. 38 true participate writing among human change minds creates likelihood accordance where different, However, necessarily so. obviously considers creation crucial importance for, delegated authority. wrote mind or, consistent philosophy included thoughts point purpose unwilling deprive Board.26 39 issued, uninformed conceding absence divisions board appear rested notion affirmative obligation decisions; nearest thing every explicitly Administrative Procedure except Public Section. 1221. Thus opinion-writing section A.P.A., 557—which applies 'adjudication statute hearing' 554—is inapplicable decisions. imposes write opinions. write. suffers failure explain decisions, remedy require us desclosure purported accurately impinge processes. 40 Reversed. 42 DOUGLAS dissents. 43 POWELL took S.Rep.No.93—927, Pages 1—2 (1974); Review Recommendations Made Process: Preliminary 3—5 (1974) (prepared use House Committee Ways Means Senate Finance Joint Internal Revenue Taxation (hereinafter Review)). Title 1213(e) reads '(e) term means portion derived Departments title (§§ 1224 Appendix) excessive. favorable recognition efficiency subcontractor, attainment quantity quality production, reduction costs, economy materials, facilities, manpower; addition shall taken factors: '(1) costs volume normal earnings, comparison war peacetime products; '(2) net worth, source private capital employed; '(3) risk assumed, incident reasonable pricing policies; '(4) Nature extent contribution defense effort, inventive developmental cooperation supplying technical assistance; '(5) business, complexity manufacturing technique, character subcontracting, rate turnover; '(6) Such fair equitable dealing require, published regulations adopted.' 'factors' developed War Contracts Price Adjustment World II, incorporated original Acts era, continued undergone development. Review, supra, 1, 23, nn. 3436. Prior July 1971, Tax 85 98. Through 30, 1970, 3,524 out 4,006 Of remaining challenged 203 cases. description existing through 1965—the changes since. Unless otherwise indicated, citations throughout (i.e., revised January 1967). normally georgraphical considerations, 1471.2(a). established 1952 regulation, 1451.32, authorization, 1217(d). Unlike appointed President, civil servants. circumstances, redesignated designation. 1471.2(f). During years 1962—1965, renegotiator employed itself. current regulations, acts specific thereafter barred participation 1472.3(d) (1974). comparable regulation 1972 amendments discontinued replaced 1472.3(e)—(g), longer makes 1472.3(k) (l) general February 24, Fed.Reg. 3808, 1480.5(a) (1972). When first summaries stated '(w)ithout (s) 552(a)(2) ..' effective date controversy respondent's apparently mooted, circumstances. 325 F.Supp. 1146, 1151—1152 (DC 1971). amended indicating now automatically receives 'Proposed Opinion,' willingness 1477.3(a) format content. 35—41; 1477.4. lieu above, furnishes 'Regional Opinion' forwarded (c) also 'Final place Statement same enters order. 1477.3(b) All public. dissatisfied right bring Court, jurisdiction determine (see 3, supra); transferred Claims. Bannercraft Clothing 415 1028, 1036, 123 complaint correspondence 26, determinations, agreements, notices cases' 'written agreements reached.' Nothing letter suggests 1480.8 read part: 'Except authorized inasmuch regarded contractors. paragraph, 'opinion' includes statement (32 1477) 'order' eliminate determination. Opinions cited precedents proceedings.' 1477, 1962—1967, Summaries. 552(b)(4) exempts 'trade secrets commercial obtained person matters.' 580, quoting detailed our F.Supp., 1151. instances concurred recommendation. Id., 1154. purport extend contexts. 126—127, 715—716, (1973). Grumman claims noted 147—148, dispositive Government's favor, 'does apply' documents; against Government, concedes 552(a)(3). strictly construed 153—154, 1518, include We decline consider facto if, 'reviewed' clearly erroneous deferential standard; failed bulk reports, special contrary. recent Comptroller 209 times. General, Congress: Operations Activities 33—34 (B—163520—May 1973). Fact example, 'clearly erroneous' standard judgments abuse discretion. distinction, 'recommendations' compelling. arguments options, encouraged disagree. qualify decisions—even review—they discouraged basing publicly note passing while status stemmed 'orders' finds 1359 Washington Research Project, Department HEW, 164 169, 504 238 pending, 74 736, purposes. free deliberation place, need expressing view written. concurrences dissents thereto, constitute individual relying reference, assertedly accompanied H.R.Rep.No.1497, 89th Cogn., Sess. (1966), 1966 U.S.Code Cong. Admin.News, Page 2418. speaking Committee's codified stated: '(Subsection (A)) inspection. present law, most public, implies disclosed. Subcommittee investigation ago, major regulatory survey agencies—including Board—do minority members.' 8, 2425. legislative history supports proposition Act's provisions, 16, blush lends issuing withholding put end practice. Our research convinces us, language read. 'survey' conducted 1963 Foreign House. unpublished gathered indicate response subcommittee practices publication, 1480.4(a) (attached), RBR ) 1480.8) 1480.8, 15, clear, nonexistent

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