Bristol-Meyers Company v. Federal Trade Commission , 598 F.2d 18 ( 1978 )

MacKINNON, Circuit Judge,

dissenting:

Since I do not perceive any significant fault in the district court’s disposition of this matter, I would affirm the judgment under review.

I. THE DOCUMENTS IN QUESTION

The 327 documents in dispute, comprising some 765 pages (J.A. 4a n.2), are divided into nine categories (Maj.Op. at - of 194 U.S.App.D.C., at 21 of 598 F.2d). Category A contains 17 documents, all of which are intra-agency memoranda relating to pending charges against Bristol-Myers, the companion cases to those charges, or previous investigations of similar cases (J.A. 114a-15a, 208a-16a). According to the index, these memoranda were prepared by staff attorneys or the heads of an FTC office or Bureau for submission to the Commission, individual Commissioners, or other FTC officials, and are recommendations or opinions pertaining to various aspects of the enforcement proceeding (J.A. 208a). Category B consists of over 100 “blue minutes,” which are staff directives from the Commission reflecting on trial strategy and other aspects of the Commission’s deliberations (J.A. 115a, 216a). Category C contains four memoranda from individual Commissioners to the full Commission discussing such matters as weaknesses of the case, proposed revisions in the complaint, the relative merits of proceeding by adjudication as opposed to rulemaking, and other reflections on strategy and theories in the conduct of the enforcement proceeding (J.A. 115a-16a, 216a). Category D consists of approximately 150 non-verbatim reports of interviews of expert witnesses by agency complaint counsel (J.A. 116a-18a, 217a).

Category E contains three letters between agency complaint counsel and expert consultants. These letters are follow-up letters to particular experts (J.A. 218a-20a). Category F referred to one letter discussing the dissatisfaction of a witness with his compensation; plaintiff’s request for this document was withdrawn (J.A. 282a). Category G consists of three documents, which are early drafts of the complaint and orders issued in the proceeding (J.A. 221a). Category H consists of notes taken by Commission attorneys of interviews of two experts in connection with a companion case (J.A. 222a). Category I consisted of memoranda from files of the U.S. Pharmocopeial Convention; this request was withdrawn (J.A. 282a).

The seven categories remaining in controversy can be divided into two broad classes for purposes of analysis: (1) Categories A, B, C, and G consist of documents prepared by Commission staff, individual Commissioners, or the Commission itself during the process of deciding how to proceed, if at all, against analgesic manufacturers (see Maj.Op. at - of 194 U.S.App.D.C., at 22 of 598 F.2d); and (2) Categories D, E, and H consist of documents prepared by staff counsel which contain reports and notes on communications, including interviews, with expert consultants contacted by the agency during the investigation (Maj.Op. at - of 194 U.S.App.D.C., at 22 of 598 F.2d).

II. EXEMPTION 7(A)

It is my view that Exemption 7(A) protects these documents from disclosure. The Commission pressed this argument before the district court, but its argument there was largely rejected.¹ The Commission argues Exemption 7(A) again on appeal. The majority note that the Supreme Court left open in NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 95 S.Ct. 1504, 44 L.Ed.2d 29 (1975), the question of whether Exemption 7 applies to Advice and Appeals Memoranda deciding not to issue a complaint, 421 U.S. 162-65, 95 S.Ct. 1504.² The majority also note that the Court did rule that a document protected by Exemption 7 “does not become disclosable solely because it is referred to in a ‘final opinion,’ ” 421 U.S. at 166, 95 S.Ct. at 1524.³ In my view, the proper scope of Exemption 7 for this situation was established in NLRB v. Robbins Tire and Rubber Co., 437 U.S. 214, 98 S.Ct. 2311, 57 L.Ed.2d 159 (1978).

In Robbins Tire, respondent had been charged in an unfair labor practice complaint issued by the Acting Regional Director of the NLRB with having committed numerous violations of § 8(a)(1) of the National Labor Relations Act. A hearing on the complaint was scheduled for late April, 1976. On March 31, 1976, respondent wrote to the Acting Regional Director, and requested pursuant to the FOIA that he make available for inspection and copying, at least seven days prior to the hearing, copies of all potential witnesses’ statements collected during the Board’s investigation. The request was denied on April 2 on various grounds, particularly Exemption 7(A).⁴ An action was thereafter filed in the distriet court, which held that Exemption 7(A) did not apply; ⁵ the Fifth Circuit affirmed.⁶

In determining whether the Board had met its burden of demonstrating that disclosure of the potential witnesses’ statements “would interfere with enforcement proceedings,” 5 U.S.C. § 552(b)(7), the Court relied primarily on the fact that the NLRB had historically provided little prehearing discovery ⁷ and that failing to recognize the applicability of the exemption would “change the substantive discovery rules.”⁸ The Court stated:

Our reluctance to override a long tradition of agency discovery, based on nothing more than an amendment to a statute designed to deal with a wholly different problem, is strengthened by our conclusion that the dangers posed by premature release of the statements sought here would involve precisely the kind of “interference with enforcement proceedings” that Exemption 7(A) was designed to avoid.

98 S.Ct. at 2325. In my view, the logic which underlies Robbins Tire —specifically, that the FOIA does not authorize the production of NLRB records that could not be obtained through the agency’s normal discovery process during a law enforcement proceeding — applies to any law enforcement proceeding before any agency. It is my position that the FOIA does not authorize discovery greater than that available under the rules normally applicable to a law enforcement proceeding. If the statute authorized more discovery, it would “interfere” with the proceeding, and this is not what Congress intended.⁹

The facts of this case demonstrate that it is precisely the situation where the. proposition which emerges from Robbins Tire should be applied. On February 23, 1973, the Commissioners of the FTC caused a complaint to be issued against Bristol-Myers for violations of sections 5 and 12 of the FTC Act, 15 U.S.C. §§ 45, 52 (J.A. 226a-251a). Plaintiff elected to contest the charges, and an adjudicative proceeding was commenced before an administrative law judge (“ALJ”) (J.A. 112a). As part of its discovery, plaintiff in March, 1976, applied to the AU for the issuance of four subpoenas to the FTC or its employees, through which plaintiff sought discovery of a wide variety of FTC documents relating to the pending administrative proceeding (J.A. 129a-62a). On March 31, 1976, the AU directed the agency to make available to plaintiff most of the documents sought, but he denied plaintiff access to certain other documents on the ground that such material was privileged and not discoverable (J.A. 121a-25a, 135a-38a). In so ruling, the ALJ expressly relied upon the Commission’s discovery rules, 16 C.F.R. §§ 3.31-.39, and its construction thereof. Plaintiff unsuccessfully sought reconsideration by the ALJ of his discovery ruling, and the Commission declined plaintiff’s request to accept an interlocutory appeal from the ruling (J.A. 126a-38a, 184a-204a, 206a).

Having failed to persuade the ALJ to reconsider his discovery ruling, plaintiff on May 6, 1976 (while its petition for an interlocutory appeal from the discovery ruling was pending before the Commission) made a broad FOIA request for virtually all material relating to the FTC’s investigation of and proceedings against analgesic producers (J.A. 18a-20a). On May 11, plaintiff modified this request to exclude, inter alia, any records previously supplied it in discovery before the ALJ (J.A. 21a).

These records were not authorized to be disclosed by the normal discovery rules. Furthermore, they were “investigatory records compiled for law enforcement purposes.” These records resulted from and reflected the investigative effort of the Commission in enforcing the Federal Trade Commission Act.¹⁰ The 1974 amendment was not intended to be “a radical departure from existing case law under the Freedom of Information Act.” Freedom of Information Act Source Book, S.Doc. 93-82, Subcommittee on Administrative Practice and Procedure, Senate Judiciary Comm., 93d Cong., 2d Sess. (1974), (hereafter “Source Book”), at 334 (Sen. Hart). The intent Congress had in 1966 to protect the Government’s case from harm by the “premature release of evidence or information” continued through the 1974 amendment. Id., at 333 (Sen. Hart).

Thus, these records were within the purview of Exemption 7(A), and their disclosure was not authorized by the normal discovery rules. Since I do not believe that the FOIA authorizes discovery greater than that made available by the agency’s own discovery rules normally applicable in the law enforcement proceeding, I would hold that the documents in question need not be disclosed to plaintiff.

In my view, the legislative history of Exemption 7(A) clearly bears out such conclusion. As originally enacted in 1966, Exemption 7 removed from the coverage of the FOIA

investigatory files compiled for law enforcement purposes except to the extent available by law to a party other than an agency.

5 U.S.C. § 552(b)(7) (1970). A basic concern of Exemption 7 was that law enforcement agencies should be allowed to keep certain records confidential, lest they be hindered in their investigations or placed at a disadvantage when it was time to present their case. Congress clearly wanted to prevent “harm [to] the Government’s case in court,” S.Rep.No.813, 89th Cong., 2d Sess. (1965), reprinted in Source Book, at 44, by not allowing “any earlier or greater access to the government’s case than he would have directly in such litigation or proceeding.” H.R.Rep.No.1497, 89th Cong., 2d Sess. (1966), reprinted in Source Book, at 32 (emphasis added). In short, Exemption 7, as enacted in 1966, was not intended to disclose more records than an individual would be entitled to by the applicable discovery rules of the agency in the law enforcement proceeding.

However, this court in a series of cases ¹¹ ruled that the court in an FOIA suit has no duty to inquire into whether nondisclosure of investigatory files would serve any of the purposes underlying Exemption 7. Therefore, in 1974, Congress amended Exemption 7 because it disapproved of the approach taken in those cases. The amending legislation, which affected FOIA in several respects, as reported out of the committees did not recommend any changes in Exemption 7; the amendment instead resulted from a proposal on the floor of the Senate made by Senator Hart during Senate debate.

Senator Hart’s amendment accomplished two things: (1) it substituted the word “records” for “files,” thereby making it clear that courts were required to consider the nature of the particular document as to which the exemption was claimed, Source Book at 451; (2) it explicitly enumerated the purposes and objectives of the exemption, thereby requiring reviewing courts to “look[] to the reasons” for allowing the withholding of investigatory records before making their decisions. Id., at 334. Thus, as stated in Robbins Tire, the thrust of the 1974 amendment to Exemption 7 was to make clear that it did not “endlessly protect material simply because it was in an investigatory file.” 98 S.Ct. at 2321. In fact, the Court stated that the Hart amendment was identical in the respects there relevant to a proposal submitted during the hearings by the Administrative Law Division of the American Bar Association, one description of which the Court said suggested

that the release of information in investigatory files prior to the completion of an actual, contemplated enforcement proceeding was precisely the kind of interference that Congress continued to want to protect against.

98 S.Ct. at 2322 (emphasis added). Senator Hart stated specifically that Exemption 7(A) would apply

whenever the Government’s case in court — a concrete prospective law enforcement proceeding — would be harmed by the premature release of evidence or information.

Source Book, at 333. I think it reasonable to conclude that the 1974 amendment sought to preserve the purpose of the original 1966 enactment, and not to permit the disclosure of more records than an individual would be entitled to by the discovery rules applicable to the agency in the law enforcement proceeding.

The language of Exemption 7(A) takes on even greater force when it is considered that the enforcement proceeding here is still going on. This is a valid distinction which the Supreme Court has recognized can be considered in deciding whether Exemption 7(A) should be applied. In discussing the meaning of this exemption in light of the legislative history, the Court stated in Robbins Tire:

Although much of the debate on this amendment [to Exemption 7] focused on the problems of access to “closed files,” two of the four D.C. Circuit cases involved files in still-pending investigations. Ditlow v. Brinegar, supra; Center for National Policy Review of Race & Urban Issues v. Weinberger, supra. But we do not understand the thrust of the Board’s argument to depend solely on its file being “open.” Instead, the Board points to the particular nature of these proceedings and the imminence of an actual adjudicatory proceeding on the charge. Since Senators Kennedy and Hart carefully explained the amendment’s purpose as being to eliminate a “wooden” and overly literal approach to the language of the exemption, we do not read their reference to these two cases to mean that consideration of the pendency of an as-yet-unresolved charge to which the material sought relates is a factor that cannot be considered.

98 S.Ct. at 2320 n.10 (emphasis added). Robbins Tire approved several circuit court decisions, see 98 S.Ct. at 2315 n.5, some of which noted the importance of the pendency of a law enforcement proceeding. In Title Guarantee Co. v. NLRB, 534 F.2d 484 (2d Cir. 1976), the court stated:

We cannot envisage that Congress intended to overrule the line of cases dealing with labor board discovery in pending enforcement proceedings by virtue of a back-door amendment to the FOIA when it could very easily have done so . by a blanket enactment pertaining to discovery in pending administrative enforcement proceedings.

534 F.2d at 491-92 (emphasis added).¹² Exemption 7(A) has particular relevance when a law enforcement proceeding is pending, as is the case here.

Ill, EXEMPTION 5

Since in my view that Exemption 7(A) requires affirming the district court’s judgment, I would not need to reach the question of the applicability of Exemption 5. See Maj.Op. at -of 194 U.S.App.D.C., at 30 of 598 F.2d. Yet even with respect to Exemption 5, I do not perceive a significant fault with the result reached by the district court.

I agree with much of the majority’s discussion of the scope of Exemption 5. That exemption “withholds from a member of the public documents which a private party could not discover in litigation with the agency.” NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 148, 95 S.Ct. 1504, 1515, 44 L.Ed.2d 29 (1975). The Exemption is aimed at protecting “confidential intra-agency advisory opinions” the disclosure of which would injure “the consultative functions of government,” id., at 149, 95 S.Ct. 1504, and in preserving the attorney-client and attorney work-product privileges generally available to all litigants, id. See Maj.Op. at - of 194 U.S.App.D.C., at 23 of 598 F.2d. Properly construed, Exemption 5 requires the disclosure of all documents which embody the agency’s “effective Jaw and policy,” and permits the withholding of documents which “reflect the agency’s group thinking in the process of working out its policy and determining what its law shall be.” Sears, supra, 421 U.S. at 153, 95 S.Ct. at 1517. As a rough guide, predecisional documents are protected, while postdecisional documents are not. Id., at 150-53, 95 S.Ct. 1504, Maj.Op. at-of 194 U.S.App. D.C., at 23 of 598 F.2d.

In Sears, the Court ruled that memoranda prepared by the General Counsel for the National Labor Relations Board (NLRB) deciding not to issue a complaint must be disclosed under the FOIA. Sears, supra, 421 U.S. at 155-59, 95 S.Ct. 1504. Against the General Counsel’s contention that the memoranda represented only the first step in litigation, the Court stated:

Plainly, an Appeals Memorandum is the first step in litigation only when the appeal is sustained and it directs the filing of a complaint;

Id., at 157, 95 S.Ct. at 1520. The Court concluded as follows:

[TJhese memoranda are “final opinions” made in the “adjudication of cases” which must be indexed pursuant to 5 U.S.C. § 552(a)(2)(A). The decision to dismiss a charge is a decision in a “ease” and constitutes an “adjudication”: and “adjudication” is defined under the Administrative Procedure Act, of which 5 U.S.C. § 552 is a part, as “agency process for the formulation of an order,” 5 U.S.C. § 551(7); an “order” is defined as “the whole or a part of a final disposition, where affirmative [or] negative . of an agency in a matter . . .,”5 U.S.C. § 551(6) (emphasis added); and the dismissal of a charge, as noted above, is a “final disposition.” Since an Advice or Appeals Memorandum explains the reasons for the “final disposition” it plainly qualifies as an “opinion”; and falls within 5 U.S.C. § 552(a)(2)(A).

Id., at 158-59, 95 S.Ct. at 1520 (emphasis added).

However, the Court in Sears also ruled that memoranda “which direct the filing of a complaint . . . fall within the coverage of Exemption 5.” Id., at 159, 95 S.Ct. at 1521; emphasis added. The Court indicated that it reached that conclusion only because the decisionmaker, namely, the General Counsel, had to become a litigating party to the case with respect to which he had made his decision, and that this fact invoked the attorney’s work-product policies covered by the exemption. Id., at 160, 95 S.Ct. 1504.

It is significant, in my view, that the documents disclosed in Sears involved decisions not to file complaints which ended the adjudicatory process. Here, the adjudicatory process continues. There is no absolute barrier to amending the complaint, perhaps to include charges that the Commission as an initial matter chose not to include in the complaint at this time. See 16 C.F.R. § 3.15(a) (amendments of pleadings, including complaints). While it is true that the FTC apparently terminated an early effort to deal with alleged violations in the analgesics industry by rule, and while the FTC at this time has concluded that certain charges should not be included in the complaint, it seems to me that these conclusions are not “final” until the proceeding has come to an end or has been finalized in some definite way.

Because I do not believe that a final disposition has been made with respect to the records which appellant seeks, I would hold that the documents are predecisional and reflective of the agency’s group thinking in the process of working out its policy and determining what action to take. This is not a situation where the information will be forever hidden from the public; rather, in due course, the information will be available once the final decision is rendered. Discovery for litigation purposes not being a stated purpose of the Act, Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1, 24, 94 S.Ct. 1028, 39 L.Ed.2d 123 (1974), I do not see that the purpose of the Act is thwarted by such result.

Also, I agree with the majority’s conclusion that the documents in categories D, E, and H fall well within the category of work-product. Maj.Op. at-of 194 U.S. App.D.C., at 29 of 598 F.2d. Because I do not believe that the Commission has issued a “final opinion” which might render such work-product documents disclosable, see Sears, supra, 421 U.S. at 161, 95 S.Ct. 1504, I find here an independent basis for applying the fifth exemption. And I find no reason to remand the case for further consideration on this point.

For the reasons stated in the foregoing opinion, I respectfully dissent.

1 . Exemption 7(A) was applied to documents in Categories D and H by the district court (J.A. 6a). It was held expressly inapplicable to the documents in Category A (J.A. 4a). In a footnote to the discussion of Category A, the district court stated that “[t]he Commission index repeatedly invokes Exemption 7A in situations in which the exemption is not even arguably available” (J.A. 4a n.5). The exemption was not discussed with respect to categories other than A, D, and H. Compare Maj.Op. at n.27.

2 . Maj.Op. at ----- of 194 U.S.App.D.C., at 30 of 598 F.2d.

3 . Id.

4 . 5 U.S.C. § 552(b) provides:

This section does not apply to matters that are—

******

(7) investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would (A) interfere with enforcement proceedings

5 . 92 L.R.R.M. 2586 (N.D.Ala.1976) 57 L.Ed.2d 159 (1976).

6 . Robbins Tire & Rubber Co. v. NLRB, 563 F.2d 724 (5th Cir. 1977).

7 . 98 S.Ct. at 2324.

8 . 98 S.Ct. at 2324.

9 . See 98 S.Ct. at 2327. (Stevens, J., joined by Burger, C. J. and Rehnquist, J.):

The “act of meddling in” a process is one of Webster’s accepted definitions of the word “interference.” A statute that authorized discovery greater than that available under the rules normally applicable to an enforcement proceeding would “interfere” with the proceeding in that sense. The Court quite correctly holds that the Freedom of Information Act does not authorize any such interference in Labor Board enforcement proceedings. Its rationale applies equally to any enforcement proceeding. On that understanding, I join the opinion.

It was unnecessary to go this far to decide the narrow issue presented by Robbins Tire, but three Justices explicitly did so. It may be that, if presented with a case more like this one, this position will be adopted by more members of the Court. Compare Maj.Op. at n.27. See also Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1, 24, 94 S.Ct. 1028, 1040, 39 L.Ed.2d 123 (1974):

Interference with the agency proceeding opens the way to the use of the FOIA as a tool of discovery . . over and beyond that provided by the regulations issued by the Renegotiation Board for its proceedings. . Discovery for litigation purposes is not an expressly indicated purpose of the Act.

10 . In my view, the term “records” in Exemption 7 has the same intrinsic meaning as the term “records” in the remainder of the FOIA, that is, as a general matter, any recorded information in the possession of or owned by the federal government, whatever the content or format.

11 . Weisberg v. U.S. Dept. of Justice, 160 U.S. App.D.C. 71, 489 F.2d 1195 (1973), cert. denied, 416 U.S. 993, 94 S.Ct. 2405, 40 L.Ed.2d 772 (1974); Aspin v. Department of Defense, 150 U.S.App.D.C. 231, 491 F.2d 24 (1973); Ditlow v. Brinegar, 161 U.S.App.D.C. 154, 494 F.2d 1073 (1974); Center for National Policy Review on Race and Urban Issues v. Weinberger, 163 U.S.App.D.C. 368, 502 F.2d 370 (1974).

12 . It should be noted that the court limited its holding to the NLRB context. 534 F.2d at 492. I believe that holding should not be so limited.

1 also agree with United States v. Murdock, 548 F.2d 599 (5th Cir. 1977), which involved an appeal from a criminal tax conviction:

We hold that the discovery provisions of the Federal Rules of Criminal Procedure and the FOIA provide two independent schemes for obtaining information through the judicial process. Although information obtained through the FOIA may be useful in a criminal trial, we find that the FOIA was not intended as a device to delay ongoing litigation or to enlarge the scope of discovery beyond that already provided by the Federal Rules of Criminal Procedure.

548 F.2d at 602.