575 F.2d 1197 | 7th Cir. | 1978
In July 1976, Sears, Roebuck and Co. filed a verified complaint for declaratory judgment and injunction against the General Services Administration (GSA) -and five federal officers.
Sears also alleged that in February 1973, the Secretary of Labor issued regulations providing that EEO-l’s and AAP’s will be disclosed (with exceptions) to requesting persons. In February and March 1976, the GSA informed Sears that under the Freedom of Information Act (5 U.S.C. § 552), Father Charles W. Dahm of the Dominican Order had requested copies of Sears’ 1974 AAP’s for its corporate headquarters in the Sears Tower in Chicago, Illinois, and that GSA intended to furnish this information to him. He had also asked for headquarters EEO-l’s and supporting documents (App. 28).
According to this reverse Freedom of Information Act complaint, in June and July 1974, the GSA’s Chicago Field Contract Compliance Office, pursuant to a complaint of Women Employed, undertook a compliance review of plaintiff’s Sears Tower facility, and Sears tendered to the GSA investigator its 1973 and 1974 EEO-1 reports and other employment statistics (presumably already in other Government files) for its national headquarters and was assured by the investigator that the data would remain confidential. Consequently, in late March 1976, Sears filed objections to the proposed disclosure with the GSA, but those objections were overruled by the GSA’s Director of Contract Compliance, causing Sears to appeal his decision to the Director of the OFCC. However, on June 24, 1976, the OFCC Director upheld the decision to disclose the data, stating that it would be released on July 8, 1976.
The complaint was filed six days before that deadline and charged that 18 U.S.C. § 1905 prohibits the disclosure of such confidential statistical data and that exemption (b)(3) of the Freedom of Information Act (5 U.S.C. § 552(b)(3), note 5 infra) therefore exempts the data from disclosure.
After hearing five witnesses on August 6, 1976, the district court rendered oral findings of fact and conclusions of law in favor of Sears. Three weeks thereafter, the court handed down its formal findings of fact and conclusions of law and granted Sears a preliminary injunction. In its findings of fact, the court reiterated the principal contents of Sears’ verified complaint and noted that on February 25, 1976, Sears had tendered Father Dahm “cumulative national and Chicago area statistical information concerning the racial and sexual composition of Sears’ workingforce” but that Sears had declined to provide him with the requested Sears Tower headquarters data alone. The court also found that Sears classified the Sears Tower headquarters information as confidential.
The district court concluded that if this data were disclosed, Sears would suffer irreparable injury “both economically and in terms of its present and future public relations.” The court noted that the defendants and Father Dahm would not be subjected to prejudice by the grant of a preliminary injunction because the data requested was out of date “and the national and Chicago area data voluntarily provided by Sears should be sufficient to assess Sears’ equal employment commitment and progress.”
Judge McGarr held that 18 U.S.C. § 1905 prohibits the GSA from disclosing such information and that there is a reasonable probability that Sears will eventually prevail on its claim that the information is exempt from disclosure under exemption (b)(3) of the Freedom of Information Act. On December 7, 1976, Father Dahm was given leave to intervene as a plaintiff in this action. Thereafter he moved to dissolve the preliminary injunction, but his motion was denied on February 15, 1977, resulting in his taking this appeal. We vacate the order granting the preliminary injunction.
Sears seeks to justify the district court’s order by contending that the (b)(3) exemption and 18 U.S.C. § 1905, taken together, forbid disclosure and provide a basis for an implied cause of action. We disagree with both contentions.
I. Is Disclosure Forbidden by Statute?
Relying solely on the (b)(3) exemption in this Court,
“Whoever, being an officer or employee of the United States or of any department or agency thereof, publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties or by reason of any examination or investigation made by, or return, report or record made to or filed with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of*1200 any person, firm, partnership, corporation, or association; or permits any income return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person except as provided by law; shall be fined not more than $1,000, or imprisoned not more than one year, or both; and shall be removed from office or employment.” (Emphasis supplied.)
The federal defendants and the interve-nor contend that the OFCC regulations
U.S.C. § 301 provides:
“The head of an Executive department or military department may prescribe regulations for the government of his department, the conduct of its employees, the distribution and performance of its business, and the custody, use, and preservation of its records, papers, and property. This section does not authorize withholding information from the public or limiting the availability of records to the public.”
Sears asserts that agency regulations valid under Section 301 do not constitute authorization by law for purposes of Section 1905. We disagree. Like Judge Lay’s opinion for the Eighth Circuit in General Dynamics Corp. v. Marshall, 572 F.2d 1211 (No. 77-1192, decided February 14, 1978), we follow the path charted by Chrysler Corp. v. Schlesinger, 565 F.2d 1172, 1186-1188 (3d Cir. 1977), certiorari granted, - U.S. -, 98 S.Ct. 1466, 55 L.Ed.2d 504,
The only argument about the interrelationship between Sections 301 and 1905 raised here that was not discussed fully in Chrysler is Sears’ contention, supported by Westinghouse Electric Corp. v. Schlesinger, 542 F.2d 1190,1215 (4th Cir. 1976), certiora-ri denied, 431 U.S. 924, that the holding in Chrysler would .give Government officials “the unbridled freedom to redefine the scope of [their own] illegal conduct under Section 1905” (Supp. Br. 8) and leave submitters defenseless against disclosure. Therefore, Sears reasons, an independent statutory authorization should be necessary.
As a practical matter, however, Sears is not left defenseless against agency disclosure because affected persons can obtain review under the Administrative Procedure Act (5 U.S.C. § 701 et seq.). See 565 F.2d at 1190-1191. As a matter of interpreting whether Congress intended to allow agencies to define the bounds of legal conduct under Section 1905, we note two problems with Sears’ position. First, Sears’ argument that agencies would be allowed to redefine limits on their own conduct assumes without explanation or support the answer to the difficult and as yet unresolved question of whether Section 1905 was intended to restrict agency action as a whole in addition to individual employees of an agency. Obviously if the statute was aimed only at unwarranted actions by individual employees, allowing agencies using appropriate procedures to make clear what action was warranted would not defeat Congress’ purposes. The parties did not discuss this question and it has not received significant attention with the exception of a passing reference by Attorney General Brownell, who in advising agency heads in a criminal context wrote that it could not be assumed that the statute might not be applied to agencies as a whole. 41 Op.Atty. Gen. 221, 223 (1955). While this may have been good advice in the context of cautious avoidance of potential areas of criminal liability, we think such caution was unnecessary because the legislative history of at least one of the predecessors of Section 1905 reveals that those who expressed concern about disclosure (rather than just the investigatory powers involved in the predecessor legislation) seemed to focus their concern not on regulated official agency action but rather on unwarranted and uncontrollable action by “poorly paid revenue agents.” 26 Cong.Rec. 6893 (1894) (remarks of Senator Aldrich). See generally Clement, supra note 9 at 610. Even if the legislative history were unclear, limiting the statute’s focus to actions by agency employees seems more consistent with the statutory scheme because the enforcement mechanism of the statute provides only penalties for guilty individuals and offers no restraint on agency action.
Second, Sears’ insistence on an independent statutory authorization would mean that each time Congress wanted to except an item or class of items from Section 1905 it would have to do so by statute in a manner with sufficient specificity to avoid agency discretion. Given that Section 1905 if read literally could embrace “virtually every category of business information like
11. Does the Submitter of Information Have a Cause of Action?
Even if Section 1905 did forbid disclosure, we agree with the Chrysler opinion that neither Section 1905 nor the FOIA itself permits this cause of action. See 565 F.2d at 1185, 1188. As Chrysler held, the proper avenue to secure judicial review is through the Administrative Procedure Act, using 28 U.S.C. § 1331 or § 1337 as a basis for jurisdiction.
Applying the four tests established in Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 45 L.Ed.2d 26,
Judge Gibbons’ opinion in Chrysler clearly demonstrates why an implied cause of action under the FOIA would not satisfy the second and third prongs of the Cort test. 565 F.2d at 1185-1186. As to the remainder of the test, our analysis of the proposed cause of action under Section 1905 is applicable to the FOIA claim as well, except that under the FOIA Sears’ claim to be one of the especial beneficiaries of the statute seems considerably weaker. Without denying that the FOIA reflects some degree of Congressional concern about disclosing private information (see 565 F.2d at 1184), it is clear that the primary beneficiaries of the Act are the requesters. See Department of the Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 48 L.Ed.2d 11. Whether or not submitters therefore should be lumped with indirect and secondary beneficiaries of other statutes (see Cort v. Ash, 422 U.S. at 81, 95 S.Ct. 2080), their claim as especial beneficiaries is undercut since only requesters have been given a cause of action by the Congress. 5 U.S.C. § 552(a)(4)(B). Thus the claim of a cause of action under the FOIA is even weaker than the claim under Section 1905 and must be rejected similarly. See 565 F.2d at 1191-1192; see also Clement, supra note 9 at 626-633.
. The General Services Administrator; the Chicago Field Director of Contract Compliance of the General Services Administration; the Director of Contract Compliance of the General Services Administration; the Secretary of Labor; and the Director of the Office of Federal Contract Compliance Programs of the Department of Labor.
. 30 C.F.R. 12319 and 14303 contain the Executive Orders.
. 41 C.F.R. Part 60-2 et seq. are the regulations cited by Sears in Count One, par. 2 of its complaint.
. The complaint also relied on Section 709(e) of Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000.e-8(e)) as prohibiting disclosure of the data and on exemptions (b)(4), (6) and (7) in the Freedom of Information Act (5 U.S.C. § 552(b)(4), (6) and (7)). For purposes of this appeal, Sears does not rely on these provisions.
. 5 U.S.C. § 552(b)(3) as amended in 1976 contains that exemption and provides:
“(b). This section does not apply to matters that are—
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“(3) specifically exempted from disclosure by statute (other than Section 552b of this title), provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on
the issue or (B) establishes particular criteria for withholding or refers to particular types of matter to be withheld.”
. Given our conclusion that the disclosure here is not covered by 18 U.S.C. § 1905, we need not decide the intervenor’s claim that Section 1905 does not “specifically” exempt documents and therefore is not one of the statutes to which the (b)(3) exemption refers.
. The applicable regulations are contained in 41 C.F.R. Part 60-40 and generally permit the disclosure of EEO-1 reports and AAP’s. Sears does not contend otherwise except for a passing reference to 29 C.F.R. § 70.21(a) (Br. 20-21) which prohibits any employee of the Department of Labor from disclosing certain records “in any manner or to any extent not authorized by law.”
. Because we find Section 301 to be sufficient authorization, we do not consider the other possible legal authorizations offered by the federal defendants and the intervenor: the FOIA itself and Executive Order 11246.
. To the same effect, see Clement, The Rights of Submitters to Prevent Agency Disclosure of Confidential Business Information: The Reverse Freedom of Information Act Lawsuit, 55 Tex.L.Rev. 587, 624 (1977).
. Neither party offered any legislative history specifically addressed to the meaning of the phrase “authorized by law” in Section 1905 or in any of the three statutes that were consolidated in 1948 to form Section 1905. See Clement, supra note 9 at 607. However, that phrase has been construed broadly over the years by the courts (see, e. g., Blair v. Oesterlein Company, 275 U.S. 220, 227, 48 S.Ct. 87, 72 L.Ed. 249; United States v. Dickey, 268 U.S. 378, 45 S.Ct. 526, 69 L.Ed. 1006; Exchange National Bank v. Abramson, 295 F.Supp. 87 (D.Minn.1969); cf. Consumers Union v. Cost of Living Council, 491 F.2d 1396 (Em.App.), certiorari denied sub nom. Business Roundtable v. Consumer Union, 416 U.S. 984, 94 S.Ct. 2387, 40 L.Ed.2d 761), by the Attorney General (see 41 Op.Atty.Gen. 166, 169 (1953); 41 Op.Atty.Gen. 221 (1955)) and apparently by administrative agencies. See Clement, supra note 9 at 619 n. 136.
. Taking out of context language in a 1958 Committee report, Sears argues that Section 301 was meant to apply only to documents “which are not restricted under other specific
. The Administrative Procedure Act does not itself confer jurisdiction. Califano v, Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192; see Clement, supra note 9 at 627-628.
. J. I. Case v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423, is inapplicable because under the statutory scheme there the courts were expressly granted a broad authority to enforce any liability or duty created by the Securities Exchange Act of 1934. See Clement, supra note 9, at 624-625 n. 170. Further, in Borak “there was at least a statutory basis for inferring that a civil cause of action of some sort lay in favor of someone.” Cort v. Ash, 422 U.S. 66, 79, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26.
. Because neither party offered any item of legislative history bearing on intent, each argued that the burden of proof on this test was on the other party. Our view is that if there is no evidence on intent, neither party can claim the benefit of that test and the test simply offers no insight into whether a cause of action should be implied. In the final analysis it seems fair to infer from the manner in which the Supreme Court established the tests that , plaintiff must prevail on at least one test in order to justify a cause of action (see note 16 infra); thus the failure of proof may be of more detriment to the plaintiff.
. Sears insists that it would be consistent with the purposes of Section 1905 to imply a cause of action because the criminal penalties are inadequate. Its claim of inadequacy is based on the “plethora” of reverse FOIA suits, which it asserts proves that the Government has ignored Section 1905, and the lack of criminal
. Although the Supreme Court has not indicated the relative weight to be given to the four tests and that issue, despite its potential significance, has received little attention (cf. Rauch v. United Instruments, Inc., 548 F.2d 452, 460 (3d Cir. 1976)), an analysis of those tests and the cases applying them indicates that proof by the plaintiff that it satisfies the first test is generally insufficient to justify implying a cause of action. See Starbuck v. City and County of San Francisco, 556 F.2d 450, 455 (9th Cir. 1977); Note, Implying Private Causes of Action from Federal Statutes: Amtrak and Cort Apply the Brakes, 17 B.C.Ind.L.Rev. 53, 58 n. 126. Without mandating its application in an extreme case, this result seems sensible because the first test, whether plaintiff is in the benefit-
ed class, seems in large part a method of inferring the legislative intent and purposes addressed in the second and third tests. If the latter tests indicate that implying a cause of action is inappropriate, it is likely that the inference produced by the first test has been rebutted.
While not denying its potential significance, we also do not find compelling the fact that the cause of action is not one traditionally relegated to state law. When this factor is not present it merely indicates that no federalism interest would be affected if a cause of action were implied; it does not add any positive encouragement for the creation of a cause of action. Even those cases finding this factor present have questioned its significance under certain circumstances. See e. g., Kipperman v. Academy Life Ins., 554 F.2d 377, 380 (9th Cir. 1977). Moreover, although the prime focus of this concern is federalism, it should be noted that to the extent this inquiry may be in part concerned with whether the plaintiff will have any remedy if one is not implied (cf. Mason v. Belieu, 177 U.S.App.D.C. 68, 74, 543 F.2d 215, 221 (1976)), that concern is satisfied here.