ΜΑΡΙ 52 G-117 the definitions of the trade secret or confidential FTC.--Other agencies have been less mindful of the need to protect business confidentiality. The Federal Trade Commission (FTC), for one, has had continuing problems in Congress because of its view that business secrets need minimal protection. One example is the retreat on the confidentiality commitments given business with respect to line-ofbusiness and quarterly financial reports./2 The FTC in the waning months of 1979 proposed new regulations that would have resulted in the release ("phased access") of this information pursuant to any FOIA request, rather than continue to argue its confidentiality./3 Congressional action mooted this proposal./4 The main difficulty lay in the fact that the pre-1980 Section 6(f) of the FTC Act/5 used the older "in the public interest" test originally established by the APA to govern disclosure but also stated that "trade secrets and names of customers" cannot be released. It was therefore a policy decision as to which rule received more attention. In spite of other nondisclosure rules adopted by the FTC,/6 the agency is considered so prodisclosure that Congress, as will be seen later, had to act to narrow the range of permitted disclosure. In another area, the FTC had sought to disclose the results of some investigations to state attorneys general. A recent court decision/7 appears to have ratified that by relying on the Chrysler case's "authorized by law" language and the fact that the information was not a trade secret that would cause the companies competitive harm. Disturbingly, the court also found that a release by the FTC to the attorneys general was also proper if they promised to keep the information confidential. Justice.--In addition to the oversight role that the Justice Department plays, described later, Justice is also responsible for specific laws that lead to decisions to disclose or withhold. One that is just now coming to the fore is the Foreign Corrupt Practice Act (FCPA)./8 On March 24, 1980, the Justice Department announced its FCPA Review 1/ 21 C.F.R. Part 20.61. 2/ See MAPI Executive Letter L-261. 3/ 44 Federal Register 59552 (October 16, 1979); comment period for 1977 LB reports extended, 45 Federal Register 18946 (March 24, 1980). See MAPI Executive Letters L-245, L-283, and L-291. 4/ See discussion infra at pages 72-76. 5/ 15 U.S.C. 846(f). 6/ If a submitter can make a prima facie showing that the data falls within an exemption, confidentiality can be assured for up to three years. 7/ Interco, Inc. v. FTC, 478 F. Supp. 103 (D.D.C. 1979). 8/ MAPI Bulletin 6003. ΜΑΡΙ - 53 G-117 Procedure,/1 whereby companies can solicit a Justice Department opinion as to possible violations of the corrupt payments provision of the FCPA. Because detailed corporate information must be disclosed in order to obtain an accurate and binding opinion, the protection afforded this confidential information is critical. As an indication of how much protection can be given on the one hand yet withdrawn on the other, the following is the Justice Department's policy that it will apply to FCPA requests: (1) The requesting party or parties may ask the (2) Nothing contained in subparagraph (1) of this 1/ 45 Federal Register 20800 (March 31, 1980), to be codified at 28 C.F.R. Part 50. (3) This paragraph reflects a policy determination by the Department of Justice and is subject to any limitations on public disclosure and any required public disclosure arising from statutory restriction, Executive Order, or the national interest./1 Other.--The decision in the Chrysler case has brought the policies of the procurement agencies into the spotlight. The Chrysler case involved the policies of the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) which provided that equal opportunity data be released by the compliance agencies (here in the Defense Logistics Agency) if such a release did not "impede any of the functions of the OFCC[P] or the Compliance Agencies. . ."/2 Obviously, under such a test the interests of the information submitter are cognizable only if the nondisclosure of information threatens to destroy the efficiency of the agency's functioning. In this case the outcome of the Supreme Court's decision is less important than the policy OFCCP chooses to follow. Since the Supreme Court looked only at the very narrow "exception" to disclosure based on Section 1905, it is quite likely that disclosure could still be the policy even if more circumscribed than before the Court's decision. Until 1978, the procedure set up by the OFCCP required that submitters identify confidential information at the time of submission for the agencies to rule on its status. This did not seem to occur with regularity, though, because it was too burdensome to make decisions such as these on information that might never be requested. /3 The individual agency, not the OFCCP, made this initial determination. It was appealable from that agency to the OFCCP if the decision was made to disclose the information,/4 a unique interagency approach that probably retarded disclosure. However, a 1978 change/5 gave the OFCCP direct contract compliance oversight and withholding and disclosure decisions became more routine. 5/ President's Reorganization Plan No. 1 of 1978, Executive Order 12086, reproduced in MAPI Bulletin 5776. ΜΑΡΙ 55 G-117 In any event, the OFCCP policy presented in the Chrysler case may be atypical. Most of the procurement-oriented agencies follow a more restrictive policy. The principal driving force has been in the form of the clarifying language of the National Parks decision which allows withholding if the government agency's function would be impaired or if release would cause substantial competitive harm to the submitter. The Department of Defense, for example, codified this view in 1977,/1 even though it also stated that disclosure would not be delayed beyond the statutory time limits (absent a court order) just because a submitter objects to the release. In 1978 the Office of Federal Procurement Policy (OFPP) issued a policy letter broadening this nondisclosure viewpoint to all procurement agencies. It stated that disclosure be viewed with an eye toward the fact that: (a) commercial and financial information submitted in (b) the context in which such commercial and financial Notice Even if the agency has a liberal disclosure policy, it may be critical to the information submitter to know that specific information is going to be released in order to prevent or delay release./3 Although there is no requirement in FOIA that agencies inform submitters of requests made for their data, some do so. Notice gives submitters this opportunity to object to the agency's release of information before it is too late. It also enables the agency to make a more informed judgment about release, either because the submitter is more knowledgeable or because the submitter has the greater interest in the information and will make more forceful arguments for nondisclosure. Such entry into the process by the submitter also tends to lessen the charge 1/ 32 C.F.R. Part 286.11. See MAPI Bulletin 5624 and Executive Letter L-90 which analyzes and discusses these changes. 2/ OFPP Policy Letter No. 78-3, reprinted in MAPI Bulletin 5709. 3/ The usual route is a temporary restraining order based on the possible commercial damage release might entail. ΜΑΡΙ 56 G-117 that the agency is so disclosure-oriented that objections made by submitters are useless./1 There is also an elementary due process argument that can be made for giving a submitter advance notice of disclosure. At the start, it should be mentioned that several court decisions have found no violation of due process in the agency practice of not giving submitters notice of disclosure./2 In one case where the agency had such notice rules, but was challenged because plaintiff submitters did not feel they went far enough, the court said: [N]otice requirements are relative and circumstantial rather than absolute. They are determined by weighing the private rights at stake, the government's interests, the type of proceeding, the manner of notification, the likelihood of eliciting a response, and the practical difficulties of time and cost. Assuming that plaintiff's members possess valuable ... But with the advent of agency regulations that provide notice to submitters the question becomes one of "how much" rather than "if." Notice can be in two different forms. One is before-the-fact and the other only after the decision to release the data has been made. stated by the House committee: When given prior to the agency's decision in the FOIA request, notice invites the submitter to As 1/ But if notice is given and submitters challenge unsuccessfully, this also creates a better record for reviewing courts to uphold the agency action. 2/ See cases cited in the Twenty-fifth Report, at 27; FOIA Handbook, at 74-75. 3/ Pharmaceutical Manufacturers Association v. Weinberger, 411 F. Supp. 576, 578 (D.D.C. 1976) (footnotes omitted). |