Federal Trade Commission v. Owens-Corning Fiberglas Corporation v. Michael Pertschuk Federal Trade Commission v. Owens-Corning Fiberglas Corporation

WALD, Before TAMM and Circuit Judges, GREENE,* and HAROLD H. U. S. Judge District for the District of Columbia. Opinion for the court filed Circuit Judge TAMM.

Opinion concurring part dissenting part Judge filed Circuit WALD. TAMM, Judge: Circuit cross-ap- This case comes before us on peals from an order of the United States District Court for the District of Columbia enforced, subject conditions, to certain subpoenas three duces tecum issued appel- Federal Trade Commission. The lants, respondents in the enforcement ac- tion, against protections seek further they disclosure of assert trade secrets appear subpoena. in the documents under and, addition, disagrees The Commission argues that the district court exceeded its attaching authority by conditions subpoenas appearing those beyond original orders. We conclude Commission’s presented by appellant the issues ripe are either meritless yet protective review conditions and that added the district court are unwarrant- ed. the order insofar We therefore affirm issued, and subpoenas as it enforces the portions we vacate those of the order that impose further restrictions.

I. BACKGROUND straightfor- The facts in this case are Rindler, C., Washington, nonpublic Richard M. antitrust part D. ward. As of a Geldon, industry, whom investigation Gilbert E. Daniel J. the insulation Plaine, Ward, Smith, July Alan 1977 issued S. John Lewis staff III, and Shirley Johnson, C., duces tecum to Washington, virtually subpoenas D. identical * Sitting by designation pursuant to 28 U.S.C. 292(a)

§ (1976). Corporation, Fiberglas Owens-Corning any event as much notice as can reason- Corporation, Certain- ably given.” Appendix (J.A.) Joint Johns-Manville appellants 233, 237, 311, (letters herein. Corporation, from the Commis- Teed for various counsel). asked documents sion staff subpoenas appellants’ Subse- technical, business, and financial containing quently, appellants tendered additional companies. documents, the thrée about but still refused to surren- meetings with members of the After Com- der the rest without further assurances of produced mutually staff satisfacto- confidentiality. mission modifications, appellants ry submitted 23,1978, October On the Commission filed documents to the Commis- nonconfidential petition in the district court for an order refused, however, They to turn over sion. to enforce under section 9 of certain other documents that they claimed (FTC the Federal Trade Commission Act trade secrets.1 contain Act), (1976). appellants, 15 U.S.C. agreed court, respondents

The Commission to afford the in the district filed sub- stantially withheld documents confidential treatment counterclaims asking identical customary procedures under for han- a declaration that the documents contain dling Specifically, meaning such information.2 it trade secrets within the giving Act, itself company (1976),3 committed to the Trade Secrets U.S.C. § Act, a ten notice be- days’ 6(f) submitted document and section of the FTC 15 U.S.C. disclosing anyone 46(f) (1976),4 its contents to out- fore and that the documents are § exempt the Commission. The Commission of side from release under the Freedom (FOIA), excepted procedure nevertheless from this Information Act U.S.C. § requests (1976). sought or arms of They protective official from courts also a order instances, Congress. promised provide guarantees In these it that would additional days’ prior possible, confidentiality.5 “ten notice where and law; person Specifically, appellants except provided by 1. the contend that the shall be $1,000, imprisoned contain detailed information con- documents cerning fined not more than or costs, customers, sales, profits, both; year, mar- not more than one or shall be and kets, plans strategies, plants employment. business and and removed from or office development, equipment, research and new (1976). and § 18 U.S.C. 1905 processes. and secret provides part in relevant that the 4. This section general procedures regard- 2. The Commission’s power Commission shall have the make “[t]o ing confidentiality appear in the and access public portions from time to time such 15, Manual, Operating reprinted FTC ch. hereunder, by except information obtained it (J.A.) Appendix Joint at 715-42. customers, it trade secrets and names of expedient public in the interest shall deem provides: 3. This statute 46(f) 6(f), Act 15 U.S.C. § . .” FTC Whoever, being employee officer or (1976) (emphasis added). any department or the United States or of agency discloses, thereof, divulges, publishes, particular, appellants asked the district the 5. any any or makes extent manner or to known in compelling to enter an order the Commis- court by any not authorized law (1) per- not to disclose the documents to sion employ- coming to him in the course of his except pursuant sons outside the Commission any ment or reason of official duties or formally request Congress to a authorized by, investigation examination or re- or made court, (2) compulsory process from a to of or notify turn, with, report or filed or record made to appellants immediately in the case department such ployee or em- or or officer (3) any congressional request, such a to inform thereof, which information concerns requestor se- that the documents contain trade secrets, processes, or relates to the trade prohibited from dis- crets the Commission closing publicly, operations, style work, apparatus, or to or (4) any judicial seek from data, identity, the confidential statistical any requestor docu- in camera treatment of income, profits, amount or source of surrendered, (5) return the docu- and ments ments, losses, firm, expenditures any person, notes, copies, together ab- ap- with all association; partnership, corporation, or or or materials, stracts, working to the or other permits any any copy income return or thereof days pellants the of the conclusion of within 30 containing any particu- book abstract or any resulting litigation. investigation or lars thereof to be seen or examined Requests 31,1979, Congressional court A. January entered an On dismissing counterclaims and en- order has Recently court had sever subject to forcing the Com- congressional al to discuss re occasions procedures regarding promised mission’s quests confidential in the documents First, two confidentiality, with additions. we particular, hands the Commission. In requires the in the order Commission explicitly have held the Commission congressional a request a case of may deny access to confiden upon “immediately, receipt by forthwith documents, including tial that contain those request, respondent a advise of such [to] FTC, g., Corp. trade E. v. secrets. Exxon document, by had tele- which furnished (D.C. 1978), cert. 589 F.2d 585-86 Cir. communication, written phone denied, 2160, 60 441 U.S. 99 S.Ct. made indicate that the has been Oil, (1979); Ashland Inc. v. L.Ed.2d request.” nature extent of the FTC, 1976). (D.C. Cir. Fiberglas Owens-Coming Corp., congressional requestor is not a Release to 78-313, 31,1979) (D.D.C. No. at 2 Misc. Jan. 6(f) section disclosure forbidden subpoenas), reprinted in (order enforcing FTC, 589 Corp. Act. Exxon Second, 12. of con- J.A. case 589; Oil, FTC, 548 F.2d at Ashland Inc. v. obliges the order gressional Moreover, F.2d courts “verif[y] Commission require delay surrender controlling made in accordance with ing notify affect documents rule, congressional the re- advance, parties judiciary [to advise] ed for the claimed questor respondent slowing must refrain from or otherwise in the document contains confidential legitimate investigatory with the terfering trade secrets.” Id. This order is now be- Anderson, Congress. functions of FTC v. cross-appeals, appellants 1979); fore us on con- 17, (D.C.Cir. Sept. No. 78-1032 tending go district court did FTC, at 588-89. v. Corp. Exxon enough far it and the Commission hands, in congressional Once documents went too far. committees presume “courts must powers their will exercise II. COMMISSION DISCLOSURE OF regard and with due responsibly CONFIDENTIAL INFORMATION 589 parties.” rights of affected analysis embarking Before on an FTC, F.2d at Oil, Inc. 548 v. (citing Ashland arguments particular parties, raised disclosure 979).7 may court block A recapitulate gen- we believe it useful to at Congress’s possession, information governing eral terms the law serve disclosure would least when the disclosure of in confi- information contained McMillan, v. purpose. Doe legislative valid dential documents it has obtained under 2018, 912 306, L.Ed.2d 93 36 412 S.Ct. U.S. subpoena. appellants Specifically, are trou- debate (1973) (construing speech by requests sources, bled from two Con- I).8 I, 6, clause, art. cl. § U.S.Const. gress general public.6 and the We there- fore shall review the formal Commission’s Requests B. FOIA Public Under the release of secret information to these groups, pursuant may either voluntarily Members of the also some grant. agency law it obtain “records” must information Appellants gressional appear requestor divulge 6. trade do not concerned intends to Corp. good thefts or “leaks” from the Commission. We secrets without See Exxon cause. FTC, 589; Oil, employee note that v. Inc. v. officer or of the Com- 589 F.2d at Ashland FTC, mission who releases information without au- 548 F.2d at 979. $5,000 may up thorization im- be fined Supreme 8. The held that Court McMillan prisoned up 10, year. to one 15 §Act staffs were members of their (1976). U.S.C. § 50 liability absolutely for circu- immune from civil Language lating legislative among persons indicates courts in the some cases involved may process per- agency able confidential to order an not to deliver information documents District the con- formance of identified when it is “evident” that children

971 document, the Freedom Information Act. submitted however, under may 552(a)(3) (1976).9 An agency challenge 5 in court the agency’s See U.S.C. § evaluation sought material unless release the and decision to release must as “agency action exemption found in the within an stat- not in falls accordance with law” un- id. 552(b)-(c). The ute. See 706(2)(A) (1976), fourth such der 5 U.S.C. § § because agency to exemption permits protected an withhold release of information would vio- Act. Chrysler Corp. “trade secrets and commercial financial late the Trade Secrets Brown, person from a obtained information U.S. S.Ct. at 1726.11 Id. hand, .” or confidential. On the other if the privileged agency believes it exceptions 552(b)(4). The listed should withhold the document as confiden- tial, an from re- prohibit agency public requestor do not FOIA file an action sought; only allow leasing material in a federal district court to compel Chrysler Corp. agency deny 552(a)(4) (1976). access. disclosure under 5 U.S.C. § Brown, 281, 293, 1705, Thus, agency 441 U.S. S.Ct. no matter what conclusion the Nevertheless, (1979). concerning reaches 60 L.Ed.2d the confidential status information, Act10 forbids expressly losing party may the Trade Secrets or other agency to release trade secrets seek review of this decision. possession, confidential in its law. See id.

except as authorized III. PRESENT DETERMINATION OF 290-94, 99 S.Ct. at 1712-14. THE DOCUMENTS’ STATUS AS TRADE SECRETS receiving Upon for a docu possession, agency argue itself appellants ment in its first that we in the first instance whether it in require decides should the Commission to determine now, confidential any request cludes trade secrets or other in advance of for informa tion, agency information. If the concludes that whether the documents contain confidential, appellants the document is not it must trade secrets. The believe that carry more party release the information. such a determination would 978, 979, system. 100 S.Ct. of S.Ct. at 2024. 412 U.S. at 445 U.S. L.Ed.2d Columbia school Nevertheless, (1980), the Court also but “an must first either damages held that the children could recover from gress’s prerequisite create or obtain a record as a to it government officials who executed Con becoming ‘agency an the mean record’ within publish order to this information to the 170, ing of 445 U.S. at 100 the FOIA.” Id. 315-16, general public. Id at 93 S.Ct. at 2026. S.Ct. at 979. The usual test for a document not speech The Court reasoned that the and debate originated agency looks to “whether un protects only clause of acts taken furtherance document has der all the facts of the case the passed legislative of in functions. Dissemination originator] from the control of and [its formation to members of and their subject disposition property become to the free aides, by press even if accessible the and the agency re with which the document part lawmaking gen public, process; is (D.C. CIA, 339, v. 347 sides.” Goland eral, Congress beyond public distribution of information 927, denied, 1978), 100 cert. 445 U.S. Cir. legiti no and its functionaries serves 1312, Accord, (1980). S.Ct. Ryan Department 63 L.Ed.2d 759 legislative purpose no mate constitutional and thus receives Justice, of 617 F.2d 781 at 324, 317, protection. 93 (D.C. 1980). 785 Cir. 2027, S.Ct. at 2030. Hutchinson v. Prox Cf. mire, 111, 2675, 443 L.Ed.2d U.S. 99 S.Ct. 61 text, supra. 10. For see note 3 (1979) (members Congress 411 of not immune from libel in news actions based on statements press releases). letters and Act forbids dis- the Trade Secrets 11. Because only authorized closure law,” to the “extent not provides agency, 9. This section that “each argue (1976), can 18 1905 one § U.S.C. upon any request (A) for records which reason- any releasing other than trade information ably (B) describes such records and is made permissi- is or the names of customers secrets stating published the accordance with rules ble; 6(f) expressly of all release § authorizes time, place, (if any), procedures fees and to be categories. See outside these two followed, promptly shall make the records supra. on this 4 We intimate no view note issue. any person.” 552(a)(3) available 5 U.S.C. (1976). The what consti- FOIA does not define “record,” Harris, agency tutes an Forsham v. 972 quent litigation, to hold the and their Commis- members

weight with deter would release once sion’s definitions of “trade secrets” is too thus and staffs narrow, assuming Even this the hands. and to declare that documents congressional true, does not it follow are not “records” under the hypothesis advice to Con- must FOIA. counters that these the Commission The Commission advisory opin- render gress. ripe do claims are for review. In eval- yet Courts ions, require no reason uating we see we arguments ripeness, must ask so. The Commission presented to do whether have been in a the issues notify appellant the affected promised to form appropriate for resolution the request, advance of any congressional hardships parties what the would face possible, when transfer documents’ delay in of their consideration claims. Ab- re- appellant recipient inform the Gardner, 136, bott Laboratories v. 387 U.S. as confidential and gards the information 149, 1515, 1507, 18 L.Ed.2d 681 S.Ct. Thus, appellants protection. needing Association, (1967); Gardner v. Toilet Goods confidential treatment will be able to seek 158, 162, 387 U.S. S.Ct. usually before requestor from the itself (1967). analysis L.Ed.2d Applying but in event receives the information questions appellants, raised meantime, In the we must soon thereafter. they yet ripe we are not conclude that Congress will act dis- assume that arms of our consideration. creetly, regard for the documents’ with due p. supra.12 quickly appel mayWe dismiss sensitive nature. See time, that, present at the lants’ contention RIPENESS IV. we to return should order the Commission its investiga the end of present documents at also several appellants The return compelling tion. An order would arguments concerning the documents' sta become if the Commission appropriate “rec tus as trade secrets or Commission unlawfully of were to the documents ords” treatment withhold Commission’s investigation. point Spe at some in the future. Commis them at the end of its us sion has situations in which it appellants ask to order listed several cifically, might reasons to upon legitimate have retain the Commission to return the documents completion in- completion investigation beyond subse- documents of its of its crets; only self-serving argue they presented appellants in the ab- also have speculation sence now the reduce their of a determination Commis- scenario, present featuring deprived property sion without due any market value. This disclosure, process argument only hypothetical This as it falls of law. devoid does First, requires short if the comes from Con- far of what Constitution merit. gress, public erty. taking. generally surrendering is not a See Penn. the information demonstrate a City, taking prop- Transp. not a v. New York disclosure and thus Cent. Co. U.S. FTC, Corp. (1978). 589 F.2d at 589. 57 L.Ed.2d 631 Exxon S.Ct. Second, public requests present Appellants if a member of also assert that a determi necessary permit judicial under the information from the documents FOIA, is nation before to review indicated, they deprived property. the Commission has both of their In to brief, surrendering its and at place, see Brief of Commission at first if the the documents argument, practice taking, is to oral its standard that Commission does not amount to a deny exemption falling right judicial under the process is there As we no due to review. Any noted, deviation appellants confidential information. already will have practice may challenged from that that be opportunity adequate have to attack dis time. FOIA, closure and courts can made under prevent do little congressional the transfer of documents to appellants try salvage argument protect once hands or to them asserting possibility of that the increased Moreover, asking to command a there. us simply disclosure caused leaving the documents’ simply permit us determination Commission to review it not effect rendering their the val- exclusive control reduces circular but also in ue of the information as trade secrets and thus lay present taking. agree. have us the foundation would amounts to a We do not advisory opinion appellants ourselves should interfer- have demonstrated no ruling appealed. ability ence the Commission’s with their to use their trade se- appellants.13 At the mo for documents vestigation of the accorded confiden- ment, investiga- not know when the tial even if we do treatment do not contain end, will will whether the Commission secrets. note 12 supra. tion trade See Should documents, retain the or what attempt change its policy the Commission and decide does, might if it if justification it have to release information contained in the doc- required at all. Our refusal to act now in uments, appellant affected will receive appellants from way prevents no seek- days’ ten notice and be able to enter court ing judicial relief should the Commission challenge then to the release as an abuse of unlawfully in the future. act discretion or as Commission action not in If, accordance with law.15 on the other questions now to the con We turn hand, the request, Commission denies the cerning documents’ status as trade se seeking the party the information can file far, no crets and Commission“records.” So its own action to force disclosure. In either requested information from the one has event, documents, status both as documents. Should it receive trade secrets or confidential a member of the under the “records,” and as Commission will be sub- FOIA,14 fully capa will be the Commission judicial ject to full evaluation at that time. determination, to make its ble then Anderson, See FTC v. at-. particular context of a document. Until time, any evaluation of the Commis focus on sion’s views trade secrets will V. THE PROTECTIVE ORDER principles instead of the contents abstract appellants Both the and the Com specific rapid of a document. Given challenge mission the district court’s final pace technological change today’s trade — protective appellants order. The contend easily secret can become tomorrow’s com the district court its discretion abused knowledge ruling par mon unrelated to —a adding protections in not further ensure pieces ticular of information is of little val of information in the docu nondisclosure Deferring ue. consideration of the docu argues ments. The Commission ments’ status as trade secrets Commis original promises protection in its sub helps the full factual sion “records” ensure poena according and letters confiden order development of the case. FTC v. An See treatment were within its discretion tial derson, Moreover, any at -. decision court exceeded its au and thus the district might this court or the Commission thority safeguards. additional imposing necessarily reque- bind a make would not did not Because we believe the Commission later, appearing have stor for he would not discretion, we must vacate the abuse Thus, party been a to this case. we believe impos order portions of the district court’s yet crystallize the issues have into a form ing further conditions on the Commission permits resolution. sought by protections and refuse to add the Furthermore, hardship little will befall appellants. appellants by delaying consideration Act, the FTC 15 U.S.C. questions request actually these until a oc- Section of jurisdic (1976),gives curs. In courts place, the first the Commissionhas the district practice indicated that issued it refuses FOIA tion to enforce congres- example, may require sought 13. For render the documents if the Commission supra. p. investigative pro- the ceeding, See 970 information in another source. sional rulemaking, compiling or in infor- 6(d) reports mation for it must make under § no view on whether the Com- 15. We intimate Act, (f) 46(d), (f) and (1976). of the FTC 15 U.S.C. § mission, by indicating practice it denies requests has accorded for information it FOIA treatment, repre- is bound confidential 14. The documents’ status as trade secrets or abusing discretion or would be its sentation only Commission “records” becomes material by abandoning practice simply in the fu- if a under the comes from a of the member ture. FOIA, for the Commission must sur- 974 Although leaving promised give this has as power sion much notice as

Commission. reasonably it it than the Commission can once determines it the courts rather in congressional honor a or a should not rub must judges simply indicates that request. It has out that pointed historically ber-stamp subpoenas, gen see Commission Co., days’ it ten provide has been able to full Young & 584 F.2d erally v. Arthur SEC every in case. J.A. at denied, notice almost 783 1018, (D.C. 1978), cert. 1032-33 Cir. (affidavit Rubin). R. The Com- Barry 1071, 841, 99 S.Ct. 59 37 U.S. L.Ed.2d 439 re- agreed mission also has inform the determining role is limited to (1979), their questor the in- appellant believes authority is within the inquiry “if the sought formation is confidential. These too demand is not indefinite agency, guarantees appear safeguard sufficient sought reasonably and the information appellants’ interests. The incremental relevant,” Co., v. Morton Salt United States protection by the district afforded court’s 369, 357, 632, 652, 70 S.Ct. 94 L.Ed. 338 U.S. minimal, speculative additions Anderson, (1950), in FTC v. at quoted 401 changes only would burden the Commis- protec regard slip 369 5. With op. at forcing sion to halt other activities to it conditions, the court asks whether tive appellant immediately contact affected its in provid has abused discretion upon receipt of request. a Schreiber, ing safeguards. FCC v. 381 See 1459, 1468, 14 279, 291, 85 S.Ct. L.Ed.2d U.S. requires The court’s also the Com- order Texaco, Inc., (1965); 383 FTC v. verify request purportedly mission to a Cir.) banc) (“it (D.C. (en 884 n.62 is the made coming Congress from has been in courts, should, in agencies, not the which with The Com- applicable accordance rules. instance, procedures the first establish the mission, conferring confidential treat- safeguarding confidentiality”), for cert. de documents, excepted ment on the nied, 97 53 L.Ed.2d S.Ct. days’ U.S. commitment to ten notice (1977). congressional requests. Implicit- “official” , then, ly effort to screen out makes some The court’s in this case district additions Again, the unofficial ones.16 district court’s apparently designed ensure the fast- little, if any, protection contribute additions possible appellant est notice to the affected beyond what the Commission has volun- Congress if a court an arm of seeks a or Indeed, instance, provide. teered to this procedures subpoenaed document. These may embroil the Commission need- very well may be reasonable ones. disputes and committees less with members us, however, question is “whether before propriety their re- over the of discretion the Commis- exercise quests. generally Murphy Depart- v. See limits, permissible sion was within (D.C. F.2d Army, ment of whether Judge’s the District substituted 1979). Cir. judgment was reasonable.” FCC Schreiber, promised 381 U.S. at 1468 S.Ct. Commission has Here, (emphasis original). reasonably as much as it can Commis- practice sought by 16. The Commission has stated that withhold information a member of regardless complied requests it treats from individual members of of whether he Congress, opposed applicable to from committees or committee or subcommittee subcommittees, rules, public requests under the at least when he the information 6; Reply pursuant legislative FOIA. See of Commission at to his not “in Brief duties and capacity,” (affidavit Barry Rubin). purely private personal J.A. at R. 782-83 id. at argued, panel required Since this case was a different 1157. The verification F.2d at this another court has concluded in context in most district court thus irrelevant there is “no the statute or in basis in instances. public policy distinguishing pur- FOIA course, purportedly coming Of poses congressional between a committee Congress simply some arm member from may single acting capacity.” a Murphy Member in an official single telephone call could be a hoax. A Army, Department F.2d fact, would discover and the Commission (D.C. 1979). Murphy ap- 1151 at 1157 Cir. If the document. not have to surrender here, plies lawfully could not portions of the order impose it must honor that determined that additional once it has has judicial request. It restrictions on the future con- or a Commission’s congressional duct. agreed requestor to inform the information appellant that submitted It is so ordered. Agencies regards it as confidential.

sought procedures, to determine their own free WALD, Judge, concurring part Circuit long they do violate constitutional dissenting part: safeguards. Yankee statutory Vermont I in Parts Judge concur I to IV of Corp. v. Resources Power Natural Nuclear for the opinion Tamm’s court. As for Part 519, 543-44, Council, Defense U.S. V, pro- I would affirm district court’s 1121-22, (1978); 55 L.Ed.2d 460 S.Ct. imposed upon tective conditions the en- Schreiber, v. 85 S.Ct. FCC U.S. subpoenas. forcement of the FTC FTC, Corp. Exxon v. 589 F.2d at 1467. See were, The district court’s conditions as to Moreover, appears until evidence at 587. Congressional requests for access to assert- pre- agencies are entitled to a contrary, data, ed (1) trade secret that the FTC “ver- regularity of administrative sumption that the if[y] made in accordance See, g., Na- good e. Association of faith. controlling requirements with the FTC, Advertisers v. 627 F.2d 1151at tional rule,” congressional (2) the FTC (D.C.Cir. 1979); Hercules, Inc. v. immediately notify, and in by telephone EPA, 1978). 123 (D.C. 598 F.2d Cir. writing, the owner of trade the asserted With no indication that the Commission requests J.A. secrets when such are made. faith, cavalierly or will act in bad simply I believe that the 12. first condition promises of advance notice and release implemented the this court laid mandate pursuant to official requests adequately FTC, Corp. down for the FTC Exxon protect appellants’ and thus interests (D.C.Cir.1978), 592-94 fall within its discretion. The district court there is substantial material imposing thus erred in terms on the further hearing the district record of the before subpoenas as issued.17 justify the J.A. 39-49. court to second. See ap- counsel hearing, same At VI. CONCLUSION part agree as to the peared for the most ample has tools at its The Commission (see id. at of the conditions appropriateness disposal to ensure confidential treatment 46-47), though attempted he 39-41 even & while subpoena for the documents under imposing from the district court to dissuade Like- are in its control. those documents them. wise, assume shown other- we must until congressional committee wise that CONDITION I. THE VERIFICATION obtaining act with subcommittee them will held, following Ash appellants’ With Exxon this court regard rights. for the due (D.C.Cir. FTC, Oil, F.2d 977 be- land Inc. v. no actual the information Congress is entitled access present 1976),that fore us and with no demonstration FTC, including subpoenaed by the doc- material that the will mishandle disclo protected them, we must secrets” possesses uments once it “trade Act. The 6(f) of as it under affirm the district court’s order insofar sure however, out, subpoenas point sub- court was careful enforces the Commission’s “be disclosed secrets should ject im- that such trade to the conditions the Commission itself, valid formal posed only upon and we vacate the must protections issued act- we enforced Our determination the Commission granted requires the Commission similar to those ed within the bounds its discretion any court-imposed condi- reject any protections without here and us also to additional (affirming district sought appellants. See 589 F.2d not believe tions. We do entirety”). “in its way enforcement order with our court’s this result conflicts FTC, Corp. case decision in Exxon for in that (em- nothing it is at 588 more than common its committees.” sense for or original). The court refused to phasis in to not the FTC disclose trade secrets ex- period mandatory notice before impose any cept upon legally requests authorized requests, response to such be- in disclosure verify therefore and to that fact before dangerously skirt close to it “would cause secrets, statute, delivery. Trade by temporary ‘equivalent to being at least the position ordinary in a than non- different official quashing an order [the pos- confidential information within the generally impermissi- which is subpoena] session the Commission. congressional power ble frustration (emphasis original). Id. at 593 ” (bracketed investigate . . . .’ Id. The Exxon court also noted that the FTC original). But the court never- material had, January rulemaking initiated a emphasized: theless proceeding protection to consider ample feel that there is [W]e confidentiality of such data and declared: insisting justification for the Com- “It provide would seem that the rule should statutorily protected mission reveal party that in all instances the will be noti- when it has indeed received trade secrets Congress immediately fied whenever makes subpoena. proper request such proper request for trade secrets.” (emphasis original). The court Id. at 592 later, however, years 590 n.16. Two we do separation powers doc- noted that yet confidentiality; not have rule on trine, prevents the courts from inter- which argument nor could the FTC counsel at oral fering Congressional with demands for enlighten the as to when such a rule court data, play only for formal Con- comes into might eventuate.1 gressional requests access. specific proceeding In the enforcement does . Election to here, involved the district court made sever- give subpoena power an individual inquiries regard al practices as to FTC hap- may over whatever information he responses Congressional requests. in, pen particularly to be interested FTC, requests prior in answer to secrets, not over trade whose oftentimes subpoenaed owners of trade secret enormous value be forfeited dis- Congressional material before release to public. closure court, promise only committees or to a will Congress itself has mani- . [A]s possible that it will much notice as “as prevent the issuance fested a concern to 42; see, under the J.A. e. circumstances.” subpoenas by individual members as g., requestor id. at 168. It will advise the committees, opposed to subcommittees or the material to be the owner believes chairmen, duly committee it is authorized confidential, nothing promised but about appropriate require the FTC to take checking on the “official” nature steps validity to ascertain the of a sub- Manual, request. Operating FTC Ch. See poena (or requests it treats as formal 718); (1978) (J.A. 4.11 15.1.3 16 C.F.R. § subpoenas) releases it is before it data (1979) (“[Requests for disclosure of records” required by kept to be confi- statute [sic] FTC). from the dential. An affidavit in this case from an FTC em- Accordingly, although . we do Rubin, ployee, Barry R. who handles such require proce- the FTC to observe the requests, alleges “[o]nly requests from proposed dures to limit appellants Congressional Committees and the manner in which the re- Subcommit- sponds requests requests for trade se- tees are treated as official of Com to formal committees[,] gress” (J.A. 78?); crets in no instance has the or its hearing, year ago process preparing the final Over a in the district court the staff is in the FTC counsel was rulemaking . .” asked about the status recommendations to the Commission (elipse original). proceeding FTC counsel oral and answered: “The J.A. yet hap- argument more Commission has not pen I before us was unable to be ruled on that. personal specific. knowledge to have of the fact that been “aware” that committees authorize their chairman to responded was not properly which it make official for information. Id. at 783. That affidavit fur- authorized. chairman, alone, So sometimes the acting “nearly every ther states that in instance” can do it. by subpoenas; Some work provide “has been able” to ten some work other requests, documental days’ agreed notice when it has to attempt compulsory process put- and aids. The Although may Id. to do so. be the words, ting in precise exactly, words predominant practice, re- only FTC’s what obliged the Commission is to re- quirement “possible” notice as as much to, spond exactly what duties it has to assurances, incorporated is in its written verify requests, validity of the language and the in the Rubin affidavit requests, very this is difficult. I think quoted suggests above at least general obligation that a part on the may not be “able” to the full ten confident, the Commission to be to be notice, days’ notice, any indeed advance is, request least, certain that the on its in all instances. face an request appropriate; official is but say go that the Commission can instance, asserts, only In one the affidavit over to an ordinate branch of [sic] provided day was notice as late as the Government asking questions and start (id.), release but the Rubin affidavit also you?” about “Who are your and “What is warns: authority in . .” congressional In all instances where a committee or subcommittee has indicated J.A. 46-47 (elipse original). requested that access is to Commission (and The impression apparently distinct I prior to the end of the notice court) glean district from those remarks period, accepted the Commissionhas is attempt “verify” that no whether a representation, has had no reason not to request conformity applicable is in with accept representation grant- and has Congressional rules for relevant committees ed access. subcommittees, general or even with the (emphasis Id. at 783-84 supplied). Senate, rules of the or the is current- House opined FTC counsel in this case ly being The district made.2 court’s reac- hearing before the district court that the expressly tion to this was to re- disclosure e., Exxon mandate verify to the FTC—i. quire such verification in accordance with a Congressional request that a was “formal” mandate, any way the Exxon without in vague, —was but he also admitted that the telling job. it the FTC how should do its practice FTC’s own honoring only an Representatives The rules of the House of request” (as “official Congress from set dealing are the Senate affidavit, 782) forth in the Rubin J.A. was easily a record and as- matter of just as indefinite: nonsubpoena re- certainable. Even as to problem which, Congress implic- The here is that quests as the Rubin affidavit is, concedes, works in ways; itly different some sometimes made tele- Owens-Coming places 2. As counsel for remarked in number of in the Commission different court, hearing any the contradiction before the district without from direction. Also, counsel: case in this has the Exxon Circuit duty Commission, itself, it clear that the has a made to make a determination as Commission . The even ad- to whether the technological mits that trade secrets fall request, class, request Congress they classify from is an official this trade but refuse to them as vote, pursuant was it to committee issued secrets and we are told now under the proposed over, present practice rule that if we turned these and so on. may get we never as to be- If a letter from a chairman of notice is not to do so. in, obligation stationery cause the under the rule and his comes a committee on official, official, the letter which to Your is was read Honor whether or not treat it as give may telephone after the decision to release is even be a call. it made, request not at the time in. comes Id at 55. you say, any request As come in to authority na- did not mean some of the official verification phone,3 request only common- exemptions of the seems not its own impede ture access FOIA strictures of but essential if the sensical granting found that material and such to have effect at all. Exxon are Congressman access to individual not amount to a waiver materi- did 16, sug- majority opinion’s footnote exempt nature. But here we deal with al’s single Congressman’s that a gesting protected statute specifically material protected by confidential information public,5 disclosure to 6(f), though is unauthor- even like disclosure Murphy where by any committee or subcommittee situation ized footing government.6 Congress, may on the same stand left to discretion duly authorized or subcommit- committee Congressional requests Duly authorized request, especially troubling. tee a narrow ex- judicially recognized as were discretion, of its exercise administrative 6(f) statutory ban Exx- far; ception to the § gone even the FTC therefore, 592-94; on, 589 F.2d at treats for access purportedly to that these re- Congressmen doubly important from to insure trade secrets individual “unofficial,” majority and thus akin to Freedom of quests are authorized ones. (FOIA), Act 5 552 regard. Information U.S.C. § in this casually dismisses Exxon too (1976), requests public. from the J.A. 782. own, acting on his Congress, Member of No suggestion Frankly, majority’s I find the to declared have yet judicially been surprising opinion’s in view overrid- of their trade secret rights subpoenaed access in ing emphasis agency on discretion these individually-defined for his own material matters. legiti- how legislative purposes, no matter interest. mate his cita- agree majority’s

I cannot with the Army, Murphy Department tion of expand suggest Murphy may To that J.), (D.C.Cir.1979)(Greene, 613 F.2d 1151 any Member Exxon’s limited access to cover position. support Murphy their dealt with seriously dilute acting individually is to Army’s Congressman to a of disclosure 6(f), of even to undermine exempt protections material otherwise mandatory § public processes duly authority disclosure to the under the FOIA. constituted 552(c)4 invoked oper- The court Congress. Legislative § U.S.C. branch of “nearly joint Congress 3. The Rubin all” of or subcommittee affidavit states that committee Congressional requests subpoenaed any joint for data in such committee. possession 552a(b)(9) supplied). (emphasis the FTC’s are written. Id. at 782. §Id. Pending Act which amendments to the FTC provision provides part pertinent 4. That in would, February passed the Senate authority is not to withhold infor- “[the FOIA] alia, expand protections accorded Congress.” 552(c) inter mation from § U.S.C. (1976). Act to also cover secrets in 6 of the trade or financial informa- “confidential commercial exempt Murphy from man- all such materials 5. The tion” and datory decision makes no reference to Privacy Act to the under the FOIA. S. of 1974 which follows the release (1980) provides, Cong., in the FOIA statute books and 3 & 15 §§ 96th 2d Sess. part: 2313); (passed relevant version of H.R. as the Senate (daily Cong.Rec. Feb. SI ed. 177-1242 126 1980); any No record which shall disclose Cong., S.Rep. 1st Sess. 96th see No. system any in a contained of records 5, 6, 26-27, (1979) any person, [hereinafter & 50-53 §§ means of or communication to pending Report]. amend- agency, Those except pursuant 1979 Senate another request by, to a written “[n]othing” emphasize in the prior or ments also confidentiality protections with the written consent of, per- would individual to whom the record tains, (see possession place note unless of the record disclosure would on data FTC’s 11, infra) prevent be— disclosure to “is intended to any body Congress authoriz- either (9) or, committee ed subcommittee Congress, to either House of (em- Report at 51 & . .” 1979 Senate jurisdiction, any extent of matter within its thereof, phasis supplied). any committee or subcommittee II. THE ates NOTIFICATION CONDITION secret of trade sensitive area branch, coordinate with its disclosure During counsel, questioning his of FTC Executive, and dele- through the structure the district court was told that the FTC Congressional committees powers of gated already policy immediately had a notify- if the Only Executive and subcommittees. ing possession owners of data in the FTC’s structure will the and the courts honor that upon receipt Congressional request of a itself, agencies, Legislature as well as access. J.A. 40. counsel stated that subpoenaed parties that their able to assure (id.), this was set out in the Rubin affidavit subject secret material is not to indis- trade speak but in fact does not that affidavit any or all of the 535 criminate disclosure to policy petitioner’s such notification political Members of with diverse disputed policy counsel was in legislative interests. That is what I counsel, effect. Id. at 49. FTC in answer opinion 1978 Exxon was think this court’s question to the district court’s whether the fact, And, just recently in all about. willing notify compa- FTC would be Corp., v. Exxon States F.2d United upon receipt Congressional request nies 1980) curiam), 70, (D.C.Cir. (per this court case, in this “I think so.” Id. at 41. said opinion enforcing a affirmed a district court suggest pulled He later back to Department Energy (DOE) subpoena might giving difficulty have imposed protective which the district court “immediately,” because re- notification access, upon conditions all all over the quests personnel come into including those of individual Members of (even secretaries), but FTC Congress, except “pursuant those made to a equivocation counsel without stated that request formally authorized a committee point request in which the is “at the [sic] or subcommittee Congress jurisdic- with who knows about person funnelled to the tion subject documents, over case, matter of who knows about the ” point given.” notice will be Id. documents or information at this requested . . .. subsequently developed It that all 77.7 42.8 up get requests. Congressmen confidentiality protections call forthwith 7. The in the recent opinion put say, Exxon were forth the FTC as a “I tomor- and row; want it down here noon settlement, protections staff, your bring going as were the basis for to have a we’re Texaco, Inc., imposed in 555 F.2d 862 hearing.” FTC denied, 974, (en banc), (D.C.Cir.) cert. 431 U.S. may want to look at MR. You GRIMES: (1977) (see in 97 S.Ct. 53 L.Ed.2d 1072 Respondent’s which is an affi- Exhibit ), merely that fra but that reinforces the view attorney filed a staff davit Commission imposing protections was not on the FTC directly kind of is involved with these who requests unreasonable. years was an affi- over the and that proceeding before filed in the Anderson davit colloquy portions were: 8. The relevant affidavit, Judge Flannery. In that he discuss- . . . What is THE COURT: reason past has done in es what Commission why there with this order a directive mediately there should not be in connection like he indicates that in situations cases and from me that im- this, immediately ad- Commission request upon for trade secret a by telephone. respondents vised receive, prop- you or document that er court a formal willing to do that THE COURT: You’d be request byor reason of a here? subpoena, you give telephonic will my prob- MR. I think so. Now GRIMES: parties? notice to the Now I and written meant to lem with that as a ment? my you’re asking me whether lem is time say immediately. prob- What is the subjected agency order to a court should practical working arrange- that, calling you’re into me like question it seems to good presumption faith that It has been counsel]: MR. GRIMES [FTC anyway. You are also do that do, we would policy essentially, the Commission’s that. subjecting . us . . Well, say your Well, then, rules don’t encourages THE COURT: THE COURT: good possibly, idea. me to think that it’s Well, good ****** I think there is a MR. GRIMES: say why and that don’t the rules reason is that THE not advanced notice. COURT: It’s if, example, FOIA under [Repeating] It’s not advanced notice. You NLRB, are channelled into Congressional U.S. 99 S.Ct. (1979). at the L.Ed.2d 333 Office of General Counsel FTC There the Court held: upon are made them and that decisions . rule of deference to the [T]he 92-93; cf. the Commission. remedy does not Board’s choice of consti- Manual, (1978) (J.A. Operating ch. 15.1.3 arbitrary tute a blank check for action. 718). 10(e) The role that § [of Act, Administrative Procedure 5 U.S.C. circumstances, Under these I believe the 706(e) (1976)] has entrusted to the justified probing court was district fur- petitions in reviewing courts the Board’s ther as to how the intended to comply for enforcement of its orders is not that “promise” with its as much notice as passive conduit. possible. Supreme recently rec- Court (citation omitted). Id. S.Ct. at 1132 ognized example, rejecting a National require Labor Relations Board decision to disputes No one if the owners of employer aptitude to disclose certain trade secrets know in do not time of the officials, testing materials to union likelihood of release their material confidentiality Congress, attempt determinations they can neither to dis- data,9 are not sacrosanct. Detroit Edison releasing Co. v. suade the FTC from nor ted means as soon as the wants that. ly, the were to commit us in a that that will be the comes in from what the Commission is about this cy is documents should be thing like, which the who knows about about the be selves to do someone ments will not be them as much notice as given comes retary’s quest may and the FOIA. I’m THE COURT: So Now I don’t see how we MR. GRIMES: I THE COURT: Yes. MR. GRIMES: ... THE MR. GRIMES: giving we have committed ourselves in our given. request, circumstances, phone give in this case. The ****** ^[******] in— giving COURT: office at a person might as much notice as documents, as much notice as and the documents, they generally But I can’t—For gets “as talking the comes in to someone’s is a come person much notice as be on that notice that the immediately big organization I’m much notice as Ultimately, believe the term is some- and is funneled to the out, respondent about in, you say you produced more than very turned at that might he vacation, certainly, say, today problem supposing obviously, court person committed Congress. case, come into the sec- low level—the re- immediately or the talking possible, can over at the point example, be out that possible. after possible without notice will be order and commit that, really. who knows who knows are commit- and think if a immediate- telling reasonably court notice will about the receipt the docu- possible? secretary to point but the . I person person if giving under doing is on That poli- day, our- him you say of . 9. The partment tions to be Chairman subpoena been production commonplace. 385-88 567 F.2d extensive and Interstate and and under what conditions of It is break down that a Even where be disclosed v. American Tel. & Tel. gressional request cally just to the Executive are often followed sive agency J.A. 39-43 for data from the cial” “official” or “formal” trying isn’t You see? tive law. bite to it. It’s all deliberate possible,” most convenient weasels in the administra- “reasonably.” something THE COURT: THE COURT: Investigations I’m sure MR. GRIMES: negotiations only or issued, trying description anything (D.C.Cir.1976), and “informal” is negotiations that: a from the Subcommittee at the of the Subcommittee on and (elipses as to the manner of pin imposed Congress to like that. to cabal 123-25 you Congressional subpoenas substantial Foreign it down. For the that talks about Representative “ FTC point “Reasonably” is one between the “request.” don’t intend short of of a of the House Committee Well, . Well, “Reasonably,” Congressional investigator example, on AT&T’s (D.C.Cir.1977),there were subpoena original). as to what material will between the Justice or . on [sic] Commerce, misleading. Any that such Congressional I did remember I think . . appeal opposed negotiations Co., subpoena federal speed. in United States Such compliance that, is resorted to. confidentiality. department telling response after possible,” John you, negotiations that has no over condi- to “unoffi- asking “requests” F.2d Oversight agency by and I am I is techni- . remand, mean, but I’m request them— before exten- Moss, . have Con- that, to a De- are on or as court, seek Additionally, they finding relief.10 question for deci “[t]he negotiate cannot their own with sion was whether the exercise of discretion legislators requesting access to honor the by the Commission was within permissible pleas confidentiality, owners’ they limits, not whether the District Judge’s sub disadvantage taking at a in timely pre- judgment stituted (Em was reasonable.” cautions if should phasis material be subse- original). Schreiber concerned an quently public released to the by Con- investigation FCC industry television gress.11 Corporation which the America, Music (MCA), Inc. unsuccessfully sought FCC as The district court fairly reason- —and surances subpoenaed certain data ably required that the trade secret owner — kept would be Following confidential. be of a Congressional request notified rejection, again without success —re MCA— upon receipt person access by at the quested that all its testimony data even charged FTC with the responsibility representatives of its publicly be dis dealing with such requests. The district closed. at S.Ct. (as court’s order need read not be the FTC subsequent proceedings, enforcement does) apparently to require upon required district court that all MCA testi mere physical receipt anyone at the FTC mony and documents received the FCC access, of a Congressional request for even be held public confidence and made when it personnel is received who after the conclusion the investigation nothing know about the case. The purpose upon showing “good cause” the FCC of the district court’s notice condition n.14, to the court. Id. at 287 at S.Ct. simply the trade secret owners no- 1465-1466. Congressional tice of point at the begins consider them. Supreme upheld agency’s Court right investigative proce- to fashion its own III. THE PROPER STANDARD dures, including deciding hearings whether OF REVIEW closed, agencies would be because I do not doubt the district court’s authori are “familiar with the industries which ty to it did act as here. In FCC v. regulate Schreib and will in a position better er, 279, 291, 1459, 1468, U.S. S.Ct. than courts federal itself (1965), L.Ed.2d 383 design adapted pecu- Court reversed procedural rules to the Ninth Circuit’s affirmance of im conditions liarities of the and the industry tasks posed on a Federal Communications Com involved.” Id. 85 S.Ct. (FCC) investigation by mission against judicial district 1467. The Court cautioned wiretaps. obviously disclosing appellants’ FBI materials on the request It is or ring trade Bar- secrets. negotiation period disclosure, Congressional appel- between a the imminence rights FTC’s decision to release that lants’ constitutional are not fact arguments by delivery data owner can best use his jeopardized of their secrets agency Congress with the deter or condition and to justifi- even Congress. On this record there is no release, but he can do that for this to the cation operations court interfere with only request if he knows that the has been legislative branch .... made. (emphasis supplied; at 590 F.2d citations omitted). open 10. Both Ashland and Exxon leave the judicial possibility to the of intervention block pending 11. amendments to the FTC Act containing Congress FTC’s to of release data require, materials obtained would also as to secrets, if trade the of can owners that data pursuant investigation pos- into the FTC to an likely establish it is that Members of Con- violations, statutory or as to materi- sible other gress Congressional employees or will act irres- or als in the FTC’soossession which the owner ponsibly, past by demonstrating history such as a of confidential, designates provider the releases them the to of data “immediately provider notify the owner FTC containing trade As the secrets. Exxon court of such when re- information” remarked: 52; quests Report see at 51 & it. Senate This court cannot assume that also id. at 27. irresponsibly regulating will act agency’s Wearly supports second-guessing “procedural of an fact the data owners Although here. the Third Circuit there rule, favor of establishing presumption a pre-enforcement proceeding prema- found a . . at public proceedings . Id. ture, it noted: however, itself, rule 85 S.Ct. at That acting to appeals [a] for individualized provision made petition [by an an order en- par- of treatment the for confidential FCC forcing subpoena] a the district court’s documents, the Court noted that ticular stamp, role rubber is not that a mere when was demanded “[i]f independent reviewing but of an authori- injure in fact MCA might disclosed which if ty upon integrity called to insure the ample oppor- be competitively, there would proceeding. system judicial the “The it be request received tunity to designed provide a enforcement confidence, judicial protection if and to seek meaningful day resisting in court one were denied.” the subpoena.” administrative (citation omitted). This is S.Ct. at discharge duty, In the of that the court precisely happening what is here. power condition enforcement subpoena proceed- This is a enforcement upon safeguards observance of to the re- involving as to ing specific documents spondent’s valid interests. 6(f) which owners have asserted a § omitted; (citation at 665 footnote omit- Id. privilege and as to the owners seek which ted). Corp., Cf. v. Johns-Manville FTC protective which the FTC has conditions 62,830 78,792-93 ¶ Cas. 1979-2 Trade Thus, rejected.12 we already are (D.Colo.1979) (holding that Schreiber was been point which had not reached in subpoena controlling in an en- FTC Schreiber, e., i. the data owners here have forcement action because in Schreiber the trade “request[ed] that secret [their data] pursuant validly promulgat- acted FCC confidence,” be received regulation adopt- ed while the had not FTC “seeking] protection now regarding confidentiality ed a rule requests] . . . were de- subpoenaed material). [since their] pre-enforcement nied.” Id. This is not day provided itself the “10 FTC has might uncertainty action there where respect to the re- notice” assurance with position on whether and what FTC’s lease of these documents other —i. same its subpoenas, extent it will enforce nor is e., thereby non-Congressional requestors, — FTC, like Wearly case preliminarily validating the documents’ eli- (3d 1980), yet Cir. where FTC “has gibility protection for some from disclosure. position take a should on which documents 10 days’ pre- cannot assure Since be subject type to what of confidential Congressional requests, it release notice for treatment.” At 667. seems that the FTC should reasonable concedes, 12. The were to the As documents here turned over the FTC documents with- “[t]he respondent companies FTC after the enforcing court entered its order district held were made attorneys denied this court available to Commission staff spection for in- stay pending data owners’ for a owners’] at the offices of data [the appeal. But Although several months before .” n. 3. counsel limited, . Gov’t Br. 3 brought companies this action unsuccess- the “focus” that examination was: fully quash impose pro- moved FTC to respon- [T]o determine whether provisions subpoenas, g., tective on the see e. prima showing dents had made a facie 177-97, opin- J.A. ion ly and after this court’s Exxon scope the information falls within the companies specifical- in December 1978the “trade secrets and commercial or financial offered, again success, comply without to person privi- information obtained from a leged if, alia, subpoenas with the inter the FTC would 552), (5 so or confidential” U.S.C. pursu- except not release the data to day pledge to warrant Commission of ten a request ant to a formal and if the FTC would protection. any data owners immediate notice (emphasis original). Id. in Congressional request for access. See id. at 566a, 566b, 837 & 841.

983 mold, provide do what it can to notice at the tional without limitation on the time, e., i. possible earliest when a court’s discretion to ensuring set terms Requiring receipt notice at the comes in. that the enforcement order does not be- clearly for access seems necessary engine a come an oppression. Stated if the trade secret owners are to have somewhat differently, judicial authority plead opportunity to their case at the FTC to temper enforcement with fairness level about what is to be released under stems inexorably congressional from en- Otherwise, what conditions or assurances. subpoena trustment of enforcement by the judiciary. time “reasonable” notice of the Congres- FTC’s decision to release data to (Citations omitted). Young The Arthur comes, sional committees agency posi- panel subpoena noted that the enforcement any dialogue tion will have hardened and court, formulating protective “in conditions agency between the and the owner about subpoenas, administrative futile, disclosure will be frozen or or the may analogously techniques resort con- may already documents have been released. ventional to subpoena[s] . . . .” 26(c)(7) (per- Id. 1033. Cf. Fed.R.Civ.P. Schreiber, Since courts have continued to mitting protective insuring orders “that a impose protective conditions on enforce- research, trade secret or other confidential agency subpoenas appropriate ment of development, or commercial circumstances. This court’s recent Exxon not be disclosed or be opinion regarding disclosed subpoena DOE’s enforce- designated Furthermore, powers way”).13 ment in re- authority: reaffirms viewing imposition subpoena rejection “Since the enforcement of a of such is an action, protections, independent judicial merely standard review ancillary an action agency an earlier whether the district court exercised sound action, Brimson, 447, discretion, v. taking ICC 154 U.S. into Schreiber's mandate 1125, (1894), S.Ct. 38 L.Ed. 1047 a court is Lonning, consideration. FTC v. 539 F.2d change 202, free to (D.C.Cir.1976)(“[t]he the terms of an decision as to subpoena Products, as it sees fit. Flotill type scope any protective order FTC, 850, (9th Inc. v. 278 F.2d Cir. rests within the sound discretion of the trial I960).” Exxon, (emphasis 628 F.2d judge on a case and must be determined supplied). principle That no means basis”) omitted); accord, (footnote case novel, Judge recognized Robinson in SEC Div., Corp., EEOC Packard Elec. GM Co., Young Arthur & 584 F.2d (5th 1978); F.2d 317-18 Cir. NLRB v. (D.C.Cir.1978): 1032-33 Friedman, (3d 1965) 352 F.2d Cir. (standard subpoe- Enforcement of administrative of review is “whether or committed, long nas has been not to ad- there was an abuse of district court’s] [the themselves, discretion”), ministrative tribunals in- quoting Goodyear but NLRB, stead to the courts. Power to enforce Tire & Rubber Co. v. (6th 1941). ... is cast this tradi- Cir. govern-

13. The Second Circuit United States v. GAF discretion of the district court in the Corp., (2d 1979), appears protect parties’ 596 F.2d 10 Cir. ment action to interests: uphold power have reached the same result. That case dealt “We District Court of the question investiga- upon any with the tive demand of whether superimpose a civil . enforcement (CID) Department protective of Jus- be re- orders such quired orders as tice, subpoena, parties safeguard similar to a could be enforced the interests against party 76,758 particular for documents it obtained from Id. at circumstances.” target government investiga- (citation omitted). of a antitrust The Second Circuit con- tion. GAF had obtained documents from Ko- in this cluded that case, order enforcement “[aln dak, target government investigation, prohibit accordingly, specifically should private subject in a antitrust action to an order government disclosure further private of the district court in the action that ‘producer’ of Kodak as the without the consent any- GAF would not disclose the documents to of documents under . .” CID [the statute] CID, upholding one else. In enforcement of the 76,757. appeals upon the court of relied the sound F.Supp. (S.D.N.Y.1966), and that sensi- requires that due def- of Schreiber course agency’s to own given given be the not be erence must tive information in documents protective of condi- kind judgment ju- of what (except grand party over to third practices in view of its appropriate tions are ries) in to let days’ order without ten notice reality the abuses.14 But any potential and relief, parties to court for apply the the of seeking enforcement is that the Corp., 404 Aircraft SEC Lockheed inevitably its will almost own (D.D.C.1975).15 F.Supp. 651 least number with the wish them enforced similarly was ex- The district court here what may on it of conditions or restrictions discretion; of ercising propriety it is the the FTC has in Here do with the material. evaluating. be we should its actions which condition is agreed the notice effect that of I not that the rationale do believe feasible, it and asserted that reasonable and a compels so absolute deference Schreiber in cases. J.A. 42. actually provided is most self-imposed provi- disclosure to the FTC’s simply required not want to be The FTC did retains no discre- judge sions that a district by provide cases court to that notice all provide statutorily-pro- of tion to the owner post-Schreiber district order. Id. But tected material with reasonable assurances conditions, imposed not unlike courts have when verification of immediate notice and here, sub- those at issue confidential made access Congressional requests are for be poenaed not disclosed to com- material Co., petitors, FTC Can to that material. v. Continental noted, contrary parties] par- poenaed believe a 14. Schreiber to the In the Court here, proposed improper.” “neither District Court situation the ticular disclosure Appeals inquired requirement nor the Court of into the here 884-85. The district court’s validity rulemaking the exercise of its Commission’s receipt Congres- upon the for notice FTC’s a authority. the Instead District request simply provides oppor- a sional similar procedures to followed the Court devised be judicial tunity for trade secret owners to seek concep- Commission on basis of the court’s the of, perhaps provide to substantive review and input private tion of how the and interests into, to to data the FTC’sdecision release 291, could best served.” 381 U.S. Congress. S.Ct. at 1468. The district court here conduct- Appeal opinion Line of of FTC This court’s inquiry proposed ed insure into how the FTC an (D.C. Litigation, Report 595 F.2d 685 Business confidentiality 6(f) under and the Exx- denied, Cir.) curiam), (per 439 U.S. cert. mandate, imposed nothing on more than and (1978), in which S.Ct. L.Ed.2d effectively appro- was what the FTC conceded Judge (the opinion for Bazelon author priate already being large part. and done Texaco) directly joined, cuts court Texaco, Inc., supra, 15. note cited majority’s against the invocation of Schreiber contrary majority opinion, to the proposition Texaco we must for subpoenaed I here. result would reach parties The the FTC concern ourselves with whether supplied there had not the material at whether has abused its discretion and opinion, issue at the FTC had not confidential FTC has all the time of court’s imposition protections the district court’s specific requests on for ruled appropriate. in Line was lower court contrast, treatment. here day require imposed ten notice Business had a requested it documents it Corporate Pat on ment the FTC’s release pleas has refused the trade secret owners’ data, Reports (CPR) the CPR “[s]ince terns appellants’ requirement an Exxon verification and notice potential involve the release claims upon receipt Congressional request for of a company data.” Id. at of their individual Additionally, although the access. court eschewed Texaco necessary, day provision was A ten notice rule, adopting general “ found, protect order district court ‘[i]n adopted put a condition forth the FTC parties any precipitous corporate action required purposes itself for settlement FTCto ing appellants part could of the FTC’before days’ ten notice even before releas Id. their administrative remedies.” exhaust subpoenaed Congress. The material to reviewing that concluded when As court making of that offer indicates at the expressly “Although we stated decision: very universally opposed least it is not required as a an is not Texaco that such order respond ability im interference with its rule, general is think District Court’s we mediately Congressional requests for access protective under the circum of a order suance subpoenaed supra. See data. note its discretion.” at bar was well within stances procedure Texaco court noted “[s]uch omitted). (emphasis supplied; would, footnote course, Id. provide opportunity date, review some if the [sub- later furthermore, here, ground The district court ex- to believe that those conditions im- practical burdens that pose amined two any undue burden on the FTC. It prescribed impose. ap- conditions would It be that as a result of its rulemaking pro- parently (and agree) concluded I ceeding, propose the FTC will different or burden of both conditions on the better problem solutions to the of imple- currently since the small channels all mentation of the “trade secret” provision, Congressional requests to the General but for except now it has none its “as much Counsel’s office for decision the Commis- possible” promise. Nor do I find condition, As sion itself. to the notification persuasive argument there is no following colloquy is instructive: need impose the district court’s minimal e., THE COURT: Yes. protections So Con- unless until the FTC releases [i. gressional requests go all pursuant to data Congres- an unauthorized access] the General Counsel? sional without prior as much “possible.” notice as proceeding This in- MR. GRIMES That’s [FTC counsel]: many alleged volved trade secret docu- correct, and the Commission is the body ments, and if the owners have enforce- finally grant decides whether to rights respect documents, able to these Congress. The Ashland Oil protective precede, conditions must not fol- case . low, unauthorized releases. so, THE COURT: If that’s then there practical why is no reason the General Accordingly, I would affirm district Counsel can’t advise people these at the court here in respects. all they get request, time It’s there?

centralized, therefore, you’ve got so

mechanism.

MR. I agree, GRIMES: would as soon

as the just pick up

THE COURT: He can

telephone and tell them as soon as he hears about it. 626 F.2d 985 America, UNITED STATES MR. As soon as the GRIMES: General it, certainly Counsel knows about we would be aware it in this case. FULCHER, Jr., Appellant. James E. They THE wouldn’t COURT: Sure. No. 76-1714. question people away have the on va- cation, or secretary his needs to come in. Appeals, United Court States J.A. 93 (elipses original). As to the re- District Circuit. of Columbia quirement ascertaining Congression- Argued June 1979. requests authorized, too, al as the 14, 1980. Decided March concluded, district court should not be un- duly burdensome, again because of the Rehearing April Denied practice channeling FTC’s Compare to the General Counsel’s office.

id. at 47-48 with id. at 93.

IV. CONCLUSION sum, ap- the district court’s conditions

pear to entirely reasonable in view of the

present practices of the FTC as disclosed at hearing court, before the district and in

view of this court’s mandate to the FTC in opinion.

our 1978 Exxon Nor is there

Case Details

Case Name: Federal Trade Commission v. Owens-Corning Fiberglas Corporation v. Michael Pertschuk Federal Trade Commission v. Owens-Corning Fiberglas Corporation

Court Name: Court of Appeals for the D.C. Circuit

Date Published: Mar 13, 1980

Citation: 626 F.2d 966

Docket Number: 79-1167, 79-1443

Court Abbreviation: D.C. Cir.