Court Opinion

ID: 9457514
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:24:05.338379+00
Date Added: 2024-06-11T17:31:44.480437
License: Public Domain

BAZELON, Chief Judge
(concurring in part and dissenting in part):
Sterling Drug, Inc. contends that the Freedom of Information Act, 5 U.S.C. § 552 (1970), requires the Federal Trade Commission to disclose two types of documents :1 first, Commission-prepared papers which allegedly described the rationale for the Commission’s approval of a merger between Miles Laboratories and S.O.S.; and second, statements submitted to the Commission in connection with the Miles-S.O.S. merger and which were apparently relevant to the Commission’s review of that merger.2 The Commission refused disclosure on the grounds that the documents fall within the Act’s exemptions for intra-agency memoranda,3 or confidential financial information.4 Thus, the interpretation of these exemptions lies at the heart of this controversy, and I respectfully disagree with the interpretation put forward by the Court.
I.
The Freedom of Information Act requires disclosure of each agency’s
(A) final opinions, including concurring and dissenting opinions, as well as orders, made in the adjudication of cases;
*713(B) those statements of policy and interpretation which have been adopted by the agency and are not published in the Federal Register.
§ 552(a) (2) (A-B). It then exempts from disclosure “inter-agency or intraagency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.” § 552(b) (5).5
In Bristol-Myers Co. v. FTC, 138 U.S. ' App.D.C. 22, 424 F.2d 935 (1970) we pointed out that the inter-agency memorandum exemption was designed to encourage “the free exchange of ideas among government policy makers.”6 But it should be clear that Congress hoped to encourage discourse during the policy formulation stage-, the exemption was not designed to facilitate the easy exchange of substantive declarations of policy. Indeed, if it were, the exemption would have engulfed the rule. For at the same time that Congress sought to enhance the process of policy formulation, it indicated unequivocally that the purpose of the Act was to forbid secret law.’7 And substantive declarations of policy are clearly “law” within the meaning of that prohibition. It necessarily follows that opinions and statements of policy must be disclosed while memoranda drafted as part of the agency’s process of formulating such policy need not.8
Instead of asking whether any of the documents at issue were in substance policy declarations which should be disclosed, the Court makes an artificial division of the material into three categories: first, memoranda prepared by the Commission staff; second, memoranda prepared by individual members of the Commission; and third, memoranda issued by the Commission itself. The Court’s treatment of documents in the third category — remanding them to the District Court to determine whether they contain binding opinions or statements of policy and interpretation- — is consistent with *714the purposes of the Act. But I disagree strongly with the Court’s conclusion that memoranda falling within the first or second categories need never be disclosed.
The Court denies access to memoranda of staff and individual Commissioners primarily on the ground that the mem-oranda may not accurately reflect the decision of the Commission. I agree that the scheme of the Act exempts memo-randa which are wholly preliminary or tentative in character, but I insist that the Act does require disclosure where the memoranda reveal opinions or policy statements which provided the basis for the administrative action in question. The Court seems to concede the point since it follows Gulick by allowing disclosure of memoranda within the forbidden categories if they are specifically referred to in memoranda within the non-forbidden category.9 But Gulick was, after all, a fairly easy application of the statutory principle, and I can see no reason to read the facts of that particular case as marking the outer limits of the statute’s reach. If these memoranda were in fact treated as having been adopted by the agency — as indicated by an affidavit of the Commission or testimony at the remand hearing — then the statute would clearly require disclosure even though the documents had never been referred to in other Commission memoranda.10 Indeed, the Court recognizes that a particular document must be disclosed if it was adopted by the Commission, regardless of how that adoption is indicated.11
It follows that the case, should be remanded with an instruction to determine whether any of the documents, regardless •of artificial categories or labels, are “opinions” or “statements of policy and interpretation.”12 In making this determination, the burden of proof is upon the Commission. § 552(a) (3). If it seeks to withhold cdl of the memoranda, the Commission must show that an accurate statement of either the reasons for or the policies adopted by its approval of the Miles-S.O.S. merger does not •exist.13 Although proof may be made by *715affidavit, a bare statement that the documents are within the exemption is insufficient. See Affidavit of Joseph Shea, Secretary of the Federal Trade Commission, Joint Appendix at 52.
II.
The Commission also refused Sterling’s request for various documents submitted to the Commission by General Foods and others in connection with Miles’ Purchase of S.O.S. and contained in the General Foods Final Compliance Report.14 I agree with the Court that at this stage of the controversy these documents fall within the confidential financial information exemption. § 552 (b) (4). But if on remand the District Court finds that one or more of the Commission prepared documents are “opinions” or “statements of policy and interpretation,” it may well also find that they contain sales, cost, or profit data derived from documents in the Compliance Report. The statute provides:
To the extent required to prevent a clearly unwarranted invasion of personal privacy, an agency may delete identifying details when it makes available or publishes an opinion, statement of policy, interpretation, or staff manual.
§ 552(a) (2). See Grumman Aircraft Engineering Corp. v. Renegotiation Board, 138 U.S.App.D.C. 147, 425 F.2d 578 (1970).
In this case, however, deletion is unlikely to provide a viable course. Deletion of names15 would at this stage be fruitless, and deletion of the data, given the nature of Section 7 litigation, would likely render the opinion or interpretation meaningless. In such a situation the language of the statute, unlike that found in the confidential financial information exemption,16 directs the court to balance the interests affected by disclosure.17 The Senate Report indicates the nature of that balance as one of “the public’s right to know with the private citizen’s right to be secure in his personal affairs which have no bearing or effect on the general public.” 18 The maintenance of secret law would weigh heavily against the public interest.19
III.
In the proceedings below, the District Court reviewed the documents in camera. While we have recommended this procedure in Freedom of Information Act cases, Soucie v. David,-U.S.App.D.C. -, 448 F.2d 1067 (1971), I am troubled by the fact that this short circuits the adversary process. The party seeking disclosure lacks the knowledge of the actual contents of the documents necessary to question the affidavits of the agency. *716Still, we are unable to discern any solutions which would not require disclosure of all agency documents. Perhaps the parties in this and future cases may be able to propose some acceptable solutions of the problem. Until then litigants will have to rely on the trial court’s careful examination and appellate review.20

. Sterling contends alternatively that absent disclosure it will be denied the full and fair hearing required by the Administrative Procedure Act, 5 U.S.C. § 551 et seq. (1970). I agree with the Court that consideration of this alternative claim is barred by the failure to exhaust administrative remedies.

. Shortly after issuing a complaint charging that the acquisition by Sterling Drug of Lelin & Fink violated Section 7 of the Clayton Act, 15 U.S.C. § 18 (1964), the FTC approved without opinion a divestiture plan in another case calling for the sale of the S.O.S. Company to Miles. In the proceedings before the Commission, Sterling has taken the position that the approval of the Miles-S,O.S. merger demonstrates, that its acquisition of Lehn & Fink did not violate the Clayton Act. Sterling seeks disclosure in order to show that both mergers involve factors which require application of the same policy and result.

. 5 U.S.C. § 552(b) (5) (Supp. IV 1969).

. 5 U.S.C. § 522(b) (4) (Supp. IV 1969).

. Contrary to my view, the Court concludes that most of the documents are “memorandums” within the terms of the exemption. It then goes on to consider the explicit limitation on the exemption. By its terms the exemption protects only those “memorandums” which “would not be available by law to a party' other than an agency in litigation with an agency.” The Court construes this awkward phrase to mean that only those memoranda which would be routinely available through discovery in litigation —without regard to special need — fall outside the exemption. I agree. AYliether or not the purpose of the Act would have been better served by allowing courts to apply discovery law to the facts of the particular applicant, that course is prohibited by the language of the Act and its legislative history.

. 138 U.S.App.D.C. at 26, 424 F.2d at 939. See S.Rep.No.813, 89th Cong., 1st Sess. 9 (1965); H.Rep.No.1497, 89th Cong., 1st Sess. 10 (1965).

. “The governing principle, which I think is without exception, is that secret law is forbidden.” K. Davis, Administrative Law Treatise, § 3A.21 at 159 (1970 Supp.). Such an accommodation com-poi-ts with this Court’s earlier lidding that “[t]lie legislative plan creates a liberal disclosure requirement, limited only by specific exemptions which are to be narrowly construed.” Bristol-Myers v. FTC, supra, 138 U.S.App.D.C. at 25, 424 F.2d at 938. See Soucie v. David, 145 U.S.App.D.C. -, at -, 448 F.2d 1067, at 1080 (1971).

. Davis, supra note 7, at 159. The application of this principle is not limited to the precise facts in American Mail Line, Ltd, v. Gulick, 133 U.S.App.D.C. 382, 411 F.2d 696 (1968). In Gulick the Maritime Subsidy Board specifically stated that its decision was based upon the memorandum sought disclosed, and quoted the last five pages of the memorandum as its own findings and determination. In this situation it was clear that the memorandum was substantive law adopted by the agency rather than a recommendation or step in the process of formulating policy. Accordingly, the Court ordered disclosure. It is crucial, however, to understand the limited significance of both the Board’s reference to the memoranda as the basis, of its decision and its extensive quotation from it. By doing so, the Board made it obvious that the memoranda had been adopted as policy. It is the adoption of a memorandum as policy, however, and not the particular manner in which the adoption is indicated which is the touchstone of disclosure.

. See note 11 of the opinion of the Court.

. See note 8 supra. The Xinth Circuit seems to have reached the result I suggest in General Services Administration v. Benson, 415 F.2d 878 (9th Cir. 1969). With reference to documents that had apparently never been made public or referred to by the agency, the court stated: v
For example, exhibits A and B, described in Benson v. General Services Administration, D.C., 289 F.Supp. .590, 591, are not merely advisory opinions submitted for policy making purposes. Rather once exhibit A (the disposal » plan) was approved, “it was to be followed by the regional office in making the disposal;” and the memorandum described as exhibit B “was used as a guide for higher authority and as a record of the reasons for the action taken.” Thus, documents A and B took on the character of “statements of policy and interpretation which have been adopted by the agency and are not published in the Federal Register” —a category of materials specifically available to the public under 5 U.S.C. § 552(a) (2) (B). Id. at 881.

. See note 7 of the opinion of the Court.

. The Court would deny access to the statements issued by the individual Com- ■ missioners on the possibility that “[s]ince different Commissioners, may have approved the merger for different reasons, the two memoranda at issue may provide only the individual Commissioner’s reasons for approving the decision, not the reasons of the Commission as a whole.” Opinion of the Court at 707. I submit, however, that if the memoranda in fact provide the reasons for the vote of the individual Commissioners to approve or disapprove the merger, they fall directly within the terms of the statute since subsection (a) (2) (A) provides for disclosure of “final opinions, including concurring and dissenting opinions.” (Emphasis added).

. If the Commission had issued either an opinion or statement of reasons with its order approving the Miles-S.O.S. merger, there would have been no necessity to disclose the underlying memo-randa. The Court says that it is unrealistic to require an opinion or statement to protect agency documents since some agencies, such as the Social Security Administration, issue millions of *715orders each year. Opinion of the Court at 14, 14n.9. Unlike the Social Security Administration, the Federal Trade Commission does not issue millions of orders of the type involved here. Indeed, as of 1965, the F.T.C. brought only 23 Section 7 cases which culminated in finding a violation or the entry of a consent decree. And only some fewer number resulted in the eventual approval of a divestiture purchaser. Elzinga, The Anti-merger Law: Pyrrhic Victories.?, 12 J. of Law & Eeon. 43 (1969). In those agencies where millions of orders are issued the likelihood is that extensive memoranda are not written or required because decisions are made simply on the basis of staff manuals, already required to be disclosed, § 552(a) (2) (C).

. These documents are described at page 708 of the Court’s opinion.

. See S.Rep. supra note 6, at 7; H.Rep., supra note 6, at 8; Grumman Aircraft Engineering Corp. v. Renegotiation Board, 138 U.S.App.D.C. 147, 425 F.2d 578 (1970).

. See generally, Davis, supra note 7, at § 3A.19.

. See S.Rep., supra note 6, at 7; H.Rep., supra note 6, at 8.

. S.Rep., supra note 6, at 7.

. In construing the identical phrase in exemption 6, this. Court recently held that “[t]he statutory language ‘clearly unwarranted’ instructs the court to tilt the balance in favor of disclosure.” Get-man v. NLRB, 146 U.S.App.D.C. -, at -, 450 F.2d 670, at 674 (1971).

. When the decision of the trial court is based on written or uncontraverted oral evidence alone, there is no particular reason to be bound by the trial court’s findings of fact and the clearly erroneous rule does not apply. See generally 5 J. Moore, Federal Practice H 52.04 (1969) and cases there cited.