Court Opinion

ID: 9465746
Source: CourtListenerOpinion
Date Created: 2023-08-05 00:54:27.80634+00
Date Added: 2024-06-11T17:39:20.740291
License: Public Domain

PELL, Circuit Judge,
concurring.
As the matter appeared to me in Eli Lilly & Co. v. Staats,1 it does here, that an officer of the United States government, without the necessary Congressional authorization, is attempting to delve into private business records under the public interest cloak of a *675belief that profits are too high in the pharmaceutical drug business. That belief may or may not be true in fact but as of this time I am unable to find that the Congress has authorized such a wide-ranging exploratory gambit.
In the case before us, Abbott had contracts for four specific products which were standard commercial items for which there existed regularly published catalog prices. The products were primarily sold by Abbott commercially. Sales of these products to the government approximated only 0.35% of the total consolidated sales of these products at the time of the subject contracts. In each contract, the solicited proposal submitted by Abbott was the lowest or sole offer, and, in each case, Abbott’s proposed price was lower than its published catalog price. In each case, Abbott’s price was considered reasonable by the procurement agency. Data respecting the cost of the products sold or the manner in which the prices were established was not sought during the procurement process, apparently in view of statutory relief from furnishing such data where the contractor supplies commercial items sold to the general public at prices based on established catalog prices. 10 U.S.C. § 2306(f)(4); 41 C.F.R. § l-3.807-3(a), (b).
While Abbott did agree in its contracts to an examination of some of its records, that agreement was confined to records “that directly pertain to, and involve transactions relating to, the contract or subcontract.” The Comptroller General, giving what I regard as a fair reading to his demands, goes far beyond “directly pertinent books, documents, papers, and records.” In sum, it appears to me that the government is attempting to gather data for its general study of the drug industry through a coercive power of access to records granted it by statutes enacted for the limited purpose of reviewing the negotiation and performance of certain government contracts.
That records of private businesses are not subject to limitless governmental foraging is reflected in the recent Supreme Court decision of Marshall v. Barlow’s, Inc., 436 U.S. 307, 324, n.22, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978). In that case, the statute authorized warrantless OSHA inspections but did not expressly include any records, merely providing that the employer was to “make available” his pertinent records. The regulations of the Secretary of Labor provided for broad powers of inspection. The Court rejected the position of the Secretary that an inspection of documents of this scope may be effected without a warrant.
In my opinion, the Comptroller General has not demonstrated a basis for a claim of right to pry without any real limitation into the records of the private business here involved.
Nevertheless, having said this, I am confronted with the Lilly case, which I believe is essentially undistinguishable. The majority of the panel in Lilly ruled that the Comptroller General was acting within the law and not by subterfuge. On the petition for rehearing only two active judges of this court would have reheard the case en banc. The Supreme Court denied certiorari. Under these circumstances, I have no choice but to follow the law, which in my opinion, if this had been an a priori matter, the Comptroller General was not doing. I therefore, albeit unhappily, concur in the foregoing opinion by Judge Sprecher.
HARLINGTON WOOD, Jr., Circuit Judge, concurring.
I concur only because I am bound by this court’s prior decision in Lilly, in which I did not participate.