C: Text of Freedom of Information Act Department of Justice, Statement Concerning the Department of Justice, Current and Future Litigation TABLE OF CASES 96 103 111 THE FREEDOM O F INFORMATION ACT Introduction The Freedom of Information Act (FOIA)/1 was enacted in 1966 in order to provide a general right of public access to government information. Until that time, the rights granted under the Administrative Procedure Act (APA) produced conflicting results, with agencies often "erring" on the side of secrecy. FOIA reversed this practice by generally favoring disclosure unless an agency could justify withholding under one of nine exemptions to FOIA. It quickly became obvious that FOIA could be used both for and against those outside the government. The original goal of seeking to open agency files concerning information for which there is no legitimate need to keep secret has largely been met, thereby aiding citizens and businesses in their dealings with the government. But in many cases there have been detrimental side effects to this disclosure. One problem--the heart of this memorandum--is the fact that business information collected by government can be obtained by competitors through use of the FOIA, notwithstanding the existence of at least one exemption/2 supposedly designed to protect it. The general cost and administrative burden to the federal agencies is another problem. And, as we shall see, many of the issues prominent under the APA, such as the conflicting interpretations made by different agencies, can arise under FOIA as well./3 Currently, however, the major problem of concern here centers on the release of confidential business information. The source of this problem is twofold. First, the applicable FOIA exemptions do not protect all information submitted to the government in confidence. Second, even where requested information falls within one of the nine FOIA exemptions, withholding is not prohibited, but is merely discretionary: i.e., the invocation of an exemption lies at the option of the agency. Even though there are some restrictions on the free exercise of this right, the Senate Judicary Committee report on the 1974 amendments to the Act makes clear the purpose behind this construction: Congress did not intend the exemptions in the FOIA to be used either to prohibit disclosure of information or to justify automatic withholding of information. Rather, they are only permissive. They merely mark the outer limits of information that may be withheld where the agency makes a 1/ 5 U.S.C. 8552, as amended. See Appendix A. 2/ Exemption 4, found at 5 U.S.C. §552 (b)(4). page 30. See discussion infra at 3/ Mezines, Stein & Gruff, Administrative Law, vol. II, 7-78 (1979). ΜΑΡΙ 2 G-117 specific affirmative determination that the public But the difficulties in utilizing this discretion usually have not arisen because agencies have failed to follow congressional intent. They have in fact taken the words of the Attorney General to heart in recognizing [t]hat Congress neither intended to exempt all should seek to follow the congressional intention The crux of the matter is that the courts have often limited the discretion of the agencies beyond what apparently was intended by the Congress. In most cases this has meant fuller disclosure than the agencies felt was appropriate. In other cases, however, the outcome of litigation may have been limited nondisclosure. The result in either situation, though, has shifted agency practice away from the congressional standard. Summary of Recent Developments Activity in the field of Freedom of Information law has grown dramatically in the last year, even though the only legislative changes were made in 1974 and 1976. The predominant changes have been judicial, some to the benefit of confidentiality and some not. Because the number of decisions affecting business has increased with the advent of the reverse-FOIA suit, the focus on individual rights to information--which has always been the driving force behind using FOIA--may be decreasing. Hence, more of the recent decisions may favor confidentiality of business source material. In procedural areas, two 1980 Supreme Court opinions/3 have further defined the scope of "agency record," a critical concept if business is ever to be able to distinguish between information originating within government and that originating within industry and merely held by government. In one case the Court decided that documents not held by 1/ Senate Committee on the Judiciary, Amending the Freedom of Information Act, S. Rep. No. 93-854, 93d Cong., 2nd Sess. 6 (1974). 2/ Attorney General's Memorandum on the Public Information Section of the Administrative Procedure Act, June 1967, at 34 [hereinafter cited as 1967 Attorney General's Memorandum]. 3/ Forsham v. Harris, 100 S. Ct. 978 (1980) and Kissinger v. Reporters Committee for Freedom of the Press, 100 S. Ct. 960 (1980). ΜΑΡΙ G-117 government could not be reached through use of FOIA even if the information embodied in those documents was used in government decision making or collected by a private group using federal funding. The other case held that information that has left the government's possession cannot be retrieved. Recent court decisions have been focused primarily on the area of the exemptions rather than the disclosure provisions. Much of this has concerned Exemption 1--relating to national security--and so is of little interest to business./1 Exemption 5--dealing with internal agency communications--similarly has been of active interest and some of these decisions could impact on business. One example is the Shermco case/2 in which the Fifth Circuit upheld the confidentiality of intra-agency communications relating to contractor cost proposals in certain circumstances. The Supreme Court also upheld confidentiality in relation to Federal Reserve Board memoranda concerning reserve requirements./3 Of more concern to business has been the activity in Exemptions 3 and 4 areas. Concerning Exemption 3--information exempted by specific statutes--the Supreme Court recently decided in Consumer Product Safety Commission v. GTE Sylvania, Inc./4 which affirmed the Third Circuit's decision that the Congress intended at least some of the information collected under the Consumer Product Safety Act to be confidential. Such a result is critical due to similar questions of congressional intent in the areas of antiboycott data and Shipper's Export Declarations (SEDs). Both of these, in theory, have statutory immunity from disclosure; however, both have been challenged in lower courts./5 In the former case the Department of Commerce will evidently disclose the information. Congress, in the latter case, has had to act to protect the SEDs from release through new legislation. Other litigation, some brought by business in the form of reverse-FOIA suits to block disclosure, also exists where the submitter has had fears that an agency will release confidential information without giving it notice or an opportunity to make an objection./6 The novel appearance of the Trade Secrets Act/7 in litigation in this area is testimony to the fact that industry does not wish to rely on FOLA's remedies and protections alone. In Chrysler Corp. v. Brown,/8 1/ However, there are some areas of overlap where sensitive technological data could be kept from disclosure under either Exemption 1 or 4. 2/ Shermco Industries v. Secretary of the Air Force, 613 F.2d 1314 (5th Cir. 1980). 3/ Federal Open Market Committee v. Merrill, 99 S. Ct. 2800 (1979). 4/ 100 S. Ct. 2051 (1980). 5/ American Jewish Congress v. Kreps, 574 F.2d 624 (D.C. Cir. 1978) and Twin Coasts Newspaper, Inc. v. Department of Commerce, (D.D.C. 1979) [Docket No. 78-0975]. 6/ Reverse suits are examined at page 42. F. Supp. 7/18 U.S.C. 81905. The statute imposes liability upon government employees for unlawful disclosure of information. 8/ 441 U.S. 281 (1979). MAPI G-117 discussed in detail later in this memorandum, the information submitter successfully argued before the Supreme Court that the Trade Secrets Act was an antidisclosure statute akin to, but separate from either Exemption 3 or 4. Although many issues in the case were left unresolved, the Court's bottom line was that disclosure could be constrained. All this judicial activity is mirrored in the actions of the Administration and Congress. The section of this memorandum entitled the "Administrative Interpretation of FOIA and Exemption 4" contains the responses of several different agencies to the FOIA problem. The Justice Department's specific response to the Chrysler case appears in Appendices B and C. The Administration is also moving to ensure the confidentiality of statistical information. Legislative interest is also increasing. In addition to providing a solution to the problems involving SEDS, Congress has also extended confidentiality protection to FTC Line-of-Business Reports and other information. There are also some broad-based bills that would greatly extend the entire range of FOIA protection. Both of these approaches are discussed as well in the conclusion of this memorandum. FOLA Outline of Memorandum FOIA includes (1) disclosure requirements and information required to be made public, (2) exemptions from disclosure requirements, (3) procedures for obtaining disclosure, and (4) requirements for reporting on FOIA implementation to Congress. 11 Sections 552 (a)(1)-(a)(3) and (a) (5) constitute the FOIA public information and disclosure requirements. Subsection (a) (1) lists that information which must be published in the Federal Register or, if otherwise "reasonably available," incorporated by reference into the Federal Register. Subsection (a) (2) describes that information which any agency must make available for public inspection and copying. Subsection (a)(3) provides for disclosure to "any person" of other records--i.e., other than those available through (a)(1) and (2)--which are "reasonably describe (d)." Subsection (a) (5) requires an agency with more than one member to make available for public inspection a record of its members' votes. Sections (a) (4) and (a)(6) incorporate the FOIA procedural requirements. Subsection (a) (4) governs the fees that an agency can charge for processing a FOIA request and the judicial remedy for agency nondisclosure. Subsection (a) (6) limits the time in which an agency must decide whether it will comply with a FOIA request. |