Chrysler Corp. v. BrownAnnotate this Case
441 U.S. 281 (1979)
U.S. Supreme Court
Chrysler Corp. v. Brown, 441 U.S. 281 (1979)
Chrysler Corp. v. Brown
Argued November 8, 1978
Decided April 18, 1979
441 U.S. 281
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Petitioner, as a party to numerous Government contracts, was required to comply with Executive Orders 11246 and 11375, which charge the Secretary of Labor with ensuring that corporations that benefit from Government contracts provide equal employment opportunity regardless of race or sex. Regulations promulgated by the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) require Government contractors to furnish reports about their affirmative action programs and the general composition of their workforces, and provide that, notwithstanding exemption from mandatory disclosure under the Freedom of Information Act (FOIA), records obtained pursuant to Executive Order 11246 shall be made available for inspection if it is determined that the requested inspection furthers the public interest and does not impede agency functions, except in the case of records disclosure of which is prohibited by law. After the Department of Defense's Defense Logistics Agency (DLA), the designated compliance agency responsible for monitoring petitioner's employment practices, informed petitioner that third parties had made an FOIA request for disclosure of certain materials that had been furnished to the DLA by petitioner, petitioner objected to release of the materials. The DLA determined that the materials were subject to disclosure under the FOIA and OFCCP disclosure rules, and petitioner then filed a complaint in the Federal District Court seeking to enjoin release of the documents. Petitioner contended, inter alia, that disclosure was barred by the FOIA and was inconsistent with the Trade Secrets Act, 18 U.S.C. § 1905, which imposes criminal sanctions on Government employees who disclose or make known, in any manner or to any extent "not authorized by law," certain classes of information submitted to a Government agency, including trade secrets and confidential statistical data. Finding jurisdiction to subject the disclosure decision to review under the Administrative Procedure Act (APA), the District Court held that certain of the requested information fell within Exemption 4 of the FOIA, relating to trade secrets and commercial or financial information; that whether the requested information may or must be withheld thus
depended on applicable agency regulations; and that, here, a regulation (29 CFR § 70.21(a) (1977)) which states that no officer or employee of the Department of Labor is to violate 18 U.S.C. § 1905, and which proscribes specified disclosures if "not authorized by law," required that the information be withheld. Both sides appealed, and the Court of Appeals vacated the District Court's judgment. While agreeing with the District Court that the FOIA does not compel withholding of information that falls within its exemptions, and that analysis must proceed under the APA, the Court of Appeals reached a different conclusion as to the interpretation of 29 CFR § 70.21(a). In the Court of Appeals' view, disclosures made pursuant to OFCCP disclosure regulations are "authorized by law" by virtue of those regulations.
1. The FOIA is exclusively a disclosure statute, and affords petitioner no private right of action to enjoin agency disclosure. The language, logic, and history of the FOIA show that its provisions exempting specified material from disclosure were only meant to permit the agency to withhold certain information, and were not meant to mandate nondisclosure. Congressional concern was with the agency's need or preference for confidentiality; the FOIA, by itself, protects the interest in confidentiality of private entities submitting information only to the extent that this interest is endorsed by the agency collecting the information. Pp. 441 U. S. 290-294.
2. The type of disclosure threatened in this case is not "authorized by law" within the meaning of the Trade Secrets Act on the theory that the OFCCP regulations relied on by DLA were the source of that authorization. Pp. 441 U. S. 295-316.
(a) The Act addresses formal agency action as well as acts of individual Government employees, and there is nothing in its legislative history to show that Congress intended the phrase "authorized by law" to have a special, limited meaning different from the traditional understanding that properly promulgated, substantive agency regulations have the "force and effect of law." In order for a regulation to have the "force and effect of law," it must be a "substantive" or "legislative-type" rule affecting individual rights and obligations (as do the regulations in the case at bar), and it must be the product of a congressional grant of legislative authority, promulgated in conformity with any procedural requirements imposed by Congress. Pp. 441 U. S. 295-303.
(b) The disclosure regulations at issue in this case cannot be based on § 201 of Executive Order 11246, as amended, and a regulation which permits units in the Department of Labor to promulgate supplemental
disclosure regulations consistent with the FOIA. Since materials that are exempt from disclosure under the FOIA are outside the ambit of that Act, the Government cannot rely on the FOIA as congressional authorization for disclosure regulations that permit the release of information within the Act's exemptions. In order for regulations adopted under § 201 of Executive Order 11246 -- which speaks in terms of rules and regulations "necessary and appropriate" to achieve the Executive Order's purposes of ending discrimination by the Federal Government and those who deal with it -- to have the "force and effect of law," there must be a nexus between the regulations and some delegation of the requisite legislative authority by Congress. When Congress enacted statutes which arguably authorized the Executive Order (the Federal Property and Administration Services Act of 1949, Titles VI and VII of the Civil Rights Act of 1964, and the Equal Employment Opportunity Act of 1972), it was not concerned with public disclosure of trade secrets or confidential business information, and it is not possible to find in these statutes a delegation of the disclosure authority asserted by the Government here. Also, one cannot readily pull from the logic and purposes of the Executive Order any concern with the public's access to information in Government files or the importance of protecting trade secrets or confidential business statistics. Pp. 441 U. S. 303-308.
(c) Legislative authority for the OFCCP disclosure regulations cannot be found in 5 U.S.C. § 301, which authorizes heads of Government departments to prescribe regulations to govern internal departmental affairs and the custody and use of its records, and which provides that it does not authorize withholding information from the public or limiting the availability of records to the public. Section 301 is a "housekeeping statute," authorizing rules of agency organization, procedure, or practice as opposed to "substantive rules." There is nothing in the legislative history to indicate that § 301 is a substantive grant of legislative power to promulgate rules authorizing the release of trade secrets or confidential business information. Thus, § 301 does not authorize regulations limiting the scope of the Trade Secrets Act. Pp. 308-312.
(d) There is also a procedural defect in the OFCCP disclosure regulations that precludes courts from affording them the force and effect of law, since they were promulgated as "interpretative rules" without complying with the APA's requirement that interested persons be given general notice of an agency's proposed rulemaking and an opportunity to comment before a "substantive rule" is promulgated. An "interpretative regulation" cannot be the "authoriz[ation] by law" required by the Trade Secrets Act. Pp. 441 U. S. 312-316.
3. However, the Trade Secrets Act does not afford a private right of action to enjoin disclosure in violation of the statute. Where this Court has implied a private right of action under a criminal statute, "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, 422 U. S. 79. Nothing in the Trade Secrets Act prompts such an inference; nor is there any indication of legislative intent to create a private right of action. Most importantly, a private right of action under the Act is not necessary to make effective the congressional purpose, since review of DLA's decision to disclose petitioner's employment data is available under the APA. Pp. 441 U. S. 316-317.
4. Since the Trade Secrets Act and any "authoriz[ation] by law" contemplated by that Act place substantive limits on agency action, DLA's decision to disclose petitioner's reports is reviewable agency action, and petitioner is a person "adversely affected or aggrieved" within the meaning of the APA's provision affording the right of judicial review of agency action to such a person. Because the Court of Appeals did not reach the issue whether disclosure of petitioner's documents was barred by the Trade Secrets Act, the case is remanded in order that the Court of Appeals may consider whether the contemplated disclosures would violate the Act. Pp. 441 U. S. 317-319.
565 F.2d 1172, vacated and remanded.
REHNQUIST, J., delivered the opinion for a unanimous Court. MARSHALL, J., filed a concurring opinion, post, p. 441 U. S. 319.
MR. JUSTICE REHNQUIST delivered the opinion of the Court.
The expanding range of federal regulatory activity and growth in the Government sector of the economy have increased federal agencies' demands for information about the activities of private individuals and corporations. These developments have paralleled a related concern about secrecy in Government and abuse of power. The Freedom of Information Act (hereinafter FOIA) was a response to this concern, but it has also had a largely unforeseen tendency to exacerbate the uneasiness of those who comply with governmental demands for information. For, under the FOIA, third parties have been able to obtain Government files containing information submitted by corporations and individuals who thought that the information would be held in confidence.
This case belongs to a class that has been popularly denominated "reverse-FOIA" suits. The Chrysler Corp. (hereinafter Chrysler) seeks to enjoin agency disclosure on the grounds that it is inconsistent with the FOIA and 18 U.S.C. § 1905, a criminal statute with origins in the 19th century that proscribes disclosure of certain classes of business and personal information. We agree with the Court of Appeals for the Third Circuit that the FOIA is purely a disclosure statute. and affords Chrysler no private right of action to enjoin agency disclosure. But we cannot agree with that court's conclusion that this disclosure is "authorized by law" within the meaning of § 1905. Therefore, we vacate the Court of Appeals' judgment and remand so that it can consider
whether the documents at issue in this case fall within the terms of § 1905.
As a party to numerous Government contracts, Chrysler is required to comply with Executive Orders 1146 and 11375, which charge the Secretary of Labor with ensuring that corporations that benefit from Government contracts provide equal employment opportunity regardless of race or sex. [Footnote 1] The United States Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) has promulgated regulations which require Government contractors to furnish reports and other information about their affirmative action programs and the general composition of their workforces. [Footnote 2]
The Defense Logistics Agency (DLA) (formerly the Defense Supply Agency) of the Department of Defense is the designated compliance agency responsible for monitoring Chrysler's employment practices. [Footnote 3] OFCCP regulations require that Chrysler make available to this agency written affirmative action programs (AAP's) and annually submit Employer Information Reports, known as EEO-1 Reports. The agency may also conduct "compliance reviews" and "complaint investigations," which culminate in Compliance Review Reports (CRR's) and Complaint Investigation Reports (CIR's), respectively. [Footnote 4]
Regulations promulgated by the Secretary of Labor provide for public disclosure of information from records of the OFCCP and its compliance agencies. Those regulations state that, notwithstanding exemption from mandatory disclosure under the FOIA, 5 U.S.C. § 552,
"records obtained or generated pursuant to Executive Order 11246 (as amended) . . . shall be made available for inspection and copying . . . if it is determined that the requested inspection or copying furthers the public interest and does not impede any of the functions of the OFCC[P] or the Compliance Agencies except in the case of records disclosure of which is prohibited by law. [Footnote 5]"
It is the voluntary disclosure contemplated by this regulation, over and above that mandated by the FOIA, which is the gravamen of Chrysler's complaint in this case.
This controversy began on May 14, 1975, when the DLA informed Chrysler that third parties had made an FOIA request for disclosure of the 1974 AAP for Chrysler's Newark, Del., assembly plant and an October, 1974, CIR for the same facility. Nine days later, Chrysler objected to release of the requested information, relying on OFCCP's disclosure regulations and on exemptions to the FOIA. Chrysler also requested a copy of the CIR, since it had never seen it. DLA responded the following week that it had determined that the requested material was subject to disclosure under the FOIA and the OFCCP disclosure rules, and that both documents would be released five days later.
On the day the documents were to be released, Chrysler filed a complaint in the United States District Court for Delaware
seeking to enjoin release of the Newark documents. The District Court granted a temporary restraining order barring disclosure of the Newark documents and requiring that DLA give five days' notice to Chrysler before releasing any similar documents. Pursuant to this order, Chrysler was informed on July 1, 1975, that DLA had received a similar request for information about Chrysler's Hamtramek, Mich., plant. Chrysler amended its complaint and obtained a restraining order with regard to the Hamtramek disclosure as well.
Chrysler made three arguments in support of its prayer for an injunction: that disclosure was barred by the FOIA; that it was inconsistent with 18 U.S.C. § 1905, 42 U.S.C. § 2000e-8(e), and 44 U.S.C. § 350, which, for ease of reference, will be referred to as the "confidentiality statutes"; and finally that disclosure was an abuse of agency discretion insofar as it conflicted with OFCCP rules. The District Court held that it had jurisdiction under 28 U.S.C. § 1331 to subject the disclosure decision to review under the Administrative Procedure Act (APA). 5 U.S.C. §§ 701-706. It conducted a trial de novo on all of Chrysler's claims; both sides presented extensive expert testimony during August, 1975.
On April 20, 1976, the District Court issued its opinion. It held that certain of the requested information, the "manning" tables, fell within Exemption 4 of the FOIA. [Footnote 6] The District Court reasoned from this holding that the tables may or must be withheld, depending on applicable agency regulations, and that, here, a governing regulation required that the information be withheld. Pursuant to 5 U.S.C. § 301, the enabling statute which gives federal department heads control over department records, the Secretary of Labor has promulgated a regulation, 29 CFR § 70.21(a) (1978), stating that no officer or employee of the Department is to violate 18 U.S.C. § 1905. That section imposes criminal sanctions on Government employees
who make unauthorized disclosure of certain classes of information submitted to a Government agency, including trade secrets and confidential statistical data. In essence, the District Court read § 1905 as not merely a prohibition of unauthorized disclosure of sensitive information by Government employees, but as a restriction on official agency actions taken pursuant to promulgated regulations.
Both sides appealed, and the Court of Appeals for the Third Circuit vacated the District Court's judgment. Chrysler Corp. v. Schlesinger, 565 F.2d 1172 (1977). It agreed with the District Court that the FOIA does not compel withholding of information that falls within its nine exemptions. It also, like the District Court, rejected Chrysler's reliance on the confidentiality statutes, either because there was no implied private right of action to proceed under the statute or because the statute, by its terms, was not applicable to the information at issue in this case. It agreed with the District Court that analysis must proceed under the APA. But it disagreed with that court's interpretation of 29 CFR § 70.21(a). By the terms of that regulation, the specified disclosures are only proscribed if "not authorized by law," the standard of 18 U.S.C. § 1905. In the Court of Appeals' view, disclosures made pursuant to OFCCP disclosure regulations are "authorized by law" by virtue of those regulations. Therefore, it held that 29 CFR § 70.21(a) was inapplicable.
The Court of Appeals also disagreed with the District Court's view of the scope of review under the APA. It held that the District Court erred in conducting a de novo review; review should have been limited to the agency record. However, the Court of Appeals found that record inadequate in this case, and directed that the District Court remand to the agency for supplementation. Because of a conflict in the Circuits [Footnote 7] and the general importance of these "reverse-FOIA"
cases, we granted certiorari, 435 U.S. 914, and now vacate the judgment of the Third Circuit and remand for further proceedings.
We have decided a number of FOIA cases in the last few years. [Footnote 8] Although we have not had to face squarely the question whether the FOIA ex proprio vigore forbids governmental agencies from disclosing certain classes of information to the public, we have, in the course of at least one opinion, intimated an answer. [Footnote 9] We have, moreover, consistently recognized that the basic objective of the Act is disclosure. [Footnote 10]
In contending that the FOIA bars disclosure of the requested equal employment opportunity information, Chrysler relies on the Act's nine exemptions and argues that they require an agency to withhold exempted material. In this case, it relies specifically on Exemption 4:
"(b) [FOIA] does not apply to matters that are -- "
"* * * *"
"(4) trade secrets and commercial or financial information obtained from a person and privileged or confidential. . . ."
5 U.S.C. § 552(b)(4). Chrysler contends that the nine exemptions in general, and Exemption 4 in particular, reflect a sensitivity to the privacy interests of private individuals and nongovernmental entities. That contention may be conceded without inexorably requiring the conclusion that the exemptions impose affirmative duties on an agency to withhold information sought. [Footnote 11] In fact, that conclusion is not supported by the language, logic, or history of the Act.
The organization of the Act is straightforward. Subsection
(a), 5 U.S.C. § 552(a), places a general obligation on the agency to make information available to the public and sets out specific modes of disclosure for certain classes of information. Subsection(b), 5 U.S.C. § 552(b), which lists the exemptions, simply states that the specified material is not subject to the disclosure obligations set out in subsection (a). By its terms, subsection (b) demarcates the agency's obligation to disclose; it does not foreclose disclosure.
That the FOIA is exclusively a disclosure statute is, perhaps, demonstrated most convincingly by examining its provision for judicial relief. Subsection(a)(4)(b) gives federal district courts
"jurisdiction to enjoin the agency from withholding agency records and to order the production of any agency records improperly withheld from the complainant."
5 U.S.C. § 552(a)(4)(b). That provision does not give the authority to bar disclosure, and thus fortifies our belief that Chrysler, and courts which have shared its view, have incorrectly interpreted the exemption provisions of the FOIA. The Act is an attempt to meet the demand for open government while preserving workable confidentiality in governmental decisionmaking. [Footnote 12] Congress appreciated that, with the expanding sphere of governmental regulation and enterprise, much of the information within Government files has been submitted by private entities seeking Government contracts or responding to unconditional reporting obligations imposed by law. There was sentiment that Government agencies should have the latitude, in certain circumstances, to afford the confidentiality desired by these submitters. [Footnote 13] But the congressional concern
was with the agency's need or preference for confidentiality; the FOIA, by itself, protects the submitters' interest in confidentiality only to the extent that this interest is endorsed by the agency collecting the information.
Enlarged access to governmental information undoubtedly cuts against the privacy concerns of nongovernmental entities, and, as a matter of policy, some balancing and accommodation may well be desirable. We simply hold here that Congress did not design the FOIA exemptions to be mandatory bars to disclosure. [Footnote 14]
This conclusion is further supported by the legislative history. The FOIA was enacted out of dissatisfaction with § 3 of the APA, which had not resulted in as much disclosure by the agencies as Congress later thought desirable. [Footnote 15] Statements in both the Senate and House Reports on the effect of the exemptions support the interpretation that the exemptions
were only meant to permit the agency to withhold certain information, and were not meant to mandate nondisclosure. For example, the House Report states:
"[The FOIA] sets up workable standards for the categories of records which may be exempt from public disclosure . . . ."
". . . There may be legitimate reasons for nondisclosure and [the FOIA] is designed to permit nondisclosure in such cases."
"[The FOIA] lists in a later subsection the specific categories of information which may be exempted from disclosure. [Footnote 16]"
We therefore conclude that Congress did not limit an agency's discretion to disclose information when it enacted the FOIA. It necessarily follows that the Act does not afford Chrysler any right to enjoin agency disclosure.
Chrysler contends, however, that, even if its suit for injunctive relief cannot be based on the FOIA, such an action can be premised on the Trade Secrets Act, 18 U.S.C. § 1905. The Act provides:
"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 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."
There are necessarily two parts to Chrysler's argument: that § 1905 is applicable to the type of disclosure threatened in this case, and that it affords Chrysler a private right of action to obtain injunctive relief.
The Court of Appeals held that § 1905 was not applicable to the agency disclosure at issue here, because such disclosure was "authorized by law" within the meaning of the Act. The court found the source of that authorization to be the OFCCP regulations that DLA relied on in deciding to disclose information on the Hamtramek and Newark plants. [Footnote 17] Chrysler contends here that these agency regulations are not "law" within the meaning of § 1905.
It has been established in a variety of contexts that properly promulgated, substantive agency regulations have the "force and effect of law." [Footnote 18] This doctrine is so well established that agency regulations implementing federal statutes have been
held to preempt state law under the Supremacy Clause. [Footnote 19] It would therefore take a clear showing of contrary legislative intent before the phrase "authorized by law" in § 1905 could be held to have a narrower ambit than the traditional understanding.
The origins of the Trade Secrets Act can be traced to Rev.Stat. § 3167, an Act which barred unauthorized disclosure of specified business information by Government revenue officers. There is very little legislative history concerning the original bill, which was passed in 1864. [Footnote 20] It was reenacted numerous times, with some modification, and remained part of the revenue laws until 1948. [Footnote 21] Congressional statements made at the time of these reenactments indicate that Congress was primarily concerned with unauthorized disclosure of business information by feckless or corrupt revenue agents [Footnote 22] for
in the early dys of the Bureau of Internal Revenue, it was the field agents who had substantial contact with confidential financial information. [Footnote 23]
In 1948, Rev.Stat. § 3167 was consolidated with two other statutes -- involving the Tariff Commission and the Department of Commerce -- to form the Trade Secrets Act. [Footnote 24] The statute governing the Tariff Commission was very similar to Rev.Stat. § 3167, and it explicitly bound members of the Commission as well as Commission employees. [Footnote 25] The Commerce
Department statute embodied some differences in form. It was a mandate addressed to the Bureau of Foreign and Domestic Commerce and to its Director, but there was no reference to Bureau employees, and it contained no criminal sanctions. [Footnote 26] Unlike the other statutes, it also had no exception for disclosures "authorized by law." In its effort to "consolidat[e]" the three statutes, Congress enacted § 1905 and essentially borrowed the form of Rev.Stat. § 3167 and the Tariff Commission statute. [Footnote 27] We find nothing in the legislative history of § 1905 and its predecessors which lends support to Chrysler's contention that Congress intended the phrase "authorized by law," as used in § 1905, to have a special, limited meaning.
Nor do we find anything in the legislative history to support the respondents' suggestion that § 1905 does not address formal agency action -- i.e., that it is essentially an "anti-leak" statute that does not bind the heads of governmental departments or agencies. That would require an expansive and unprecedented holding that any agency action directed or approved by an agency head is "authorized by law," regardless
of the statutory authority for that action. As Attorney General Brownell recognized not long after § 1905 was enacted, such a reading is difficult to reconcile with Congress' intent to consolidate the Tariff Commission and Commerce Department statutes, both of which explicitly addressed ranking officials, with Rev.Stat. § 3167. [Footnote 28] It is also inconsistent with a settled understanding -- previously shared by the Department of Justice -- that has been continually articulated and relied upon in Congress during the legislative efforts in the last three decades to increase public access to Government information. [Footnote 29] Although the existence of this understanding
v. The Darlington, Inc., 35 U.S. 84, 358 U. S. 90 (1958). In sum, we conclude that § 1305 does address formal agency action, and that the appropriate inquiry is whether OFCCP's regulations provide the "authorization by law" required by the statute.
In order for a regulation to have the "force and effect of law," it must have certain substantive characteristics and be the product of certain procedural requisites. The central distinction among agency regulations found in the APA is that between "substantive rules," on the one hand, and "interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice," on the other. [Footnote 30] A "substantive
rule" is not defined in the APA, and other authoritative sources essentially offer definitions by negative inference. [Footnote 31] But in Morton v. Ruiz,415 U. S. 199 (1974), we noted a characteristic inherent in the concept of a "substantive rule." We described a substantive rule -- or a "legislative-type rule," id. at 415 U. S. 236 -- as one "affecting individual rights and obligations." Id. at 415 U. S. 232. This characteristic is an important touchstone for distinguishing those rules that may be "binding" or have the "force of law." Id. at 415 U. S. 235, 415 U. S. 236.
That an agency regulation is "substantive," however, does not, by itself, give it the "force and effect of law." The legislative power of the United States is vested in the Congress, and the exercise of quasi-legislative authority by governmental departments and agencies must be rooted in a grant of such power by the Congress and subject to limitations which that body imposes. As this Court noted in Batterton v. Francis,432 U. S. 416, 432 U. S. 425 n. 9 (1977):
"Legislative, or substantive, regulations are 'issued by an agency pursuant to statutory authority and . . . implement
the statute, as, for example, the proxy rules issued by the Securities and Exchange Commission. . . . Such rules have the force and effect of law.' [Footnote 32]"
Likewise, the promulgation of these regulations must conform with any procedural requirements imposed by Congress. Morton v. Ruiz, supra, at 415 U. S. 232. For agency discretion is limited not only by substantive, statutory grants of authority, but also by the procedural requirements which "assure fairness and mature consideration of rules of general application." NLRB v. Wyman-Gordon Co.,394 U. S. 759, 394 U. S. 764 (1969). The pertinent procedural limitations in this case are those found in the APA.
The regulations relied on by the respondents in this case as providing "authoriz[ation] by law" within the meaning of § 1905 certainly affect individual rights and obligations; they govern the public's right to information in records obtained under Executive Order 11246 and the confidentiality rights of those who submit information to OFCCP and its compliance agencies. It is a much closer question, however, whether they are the product of a congressional grant of legislative authority.
In his published memorandum setting forth the disclosure regulations at issue in this case, the Secretary of Labor states that the authority upon which he relies in promulgating the regulations are § 201 of Executive Order 11246, as amended, and 29 CFR § 70.71 (1978), which permits units in the Department of Labor to promulgate supplemental disclosure regulations consistent with 29 CFR pt. 70 and the FOIA. 38 Fed.Reg. 3192-3194 (1973). Since materials that are exempt from disclosure under the FOIA are, by virtue of 441 U. S. outside the ambit of that Act, the Government cannot rely on the FOIA as congressional authorization for
disclosure regulations that permit the release of information within the Act's nine exemptions.
Section 201 of Executive Order 11246 directs the Secretary of Labor to "adopt such rules and regulations and issue such orders as he deems necessary and appropriate to achieve the purposes thereof." But in order for such regulations to have the "force and effect of law," it is necessary to establish a nexus between the regulations and some delegation of the requisite legislative authority by Congress. The origins of the congressional authority for Executive Order 11246 are somewhat obscure, and have been roundly debated by commentators and courts. [Footnote 33] The Order itself, as amended, establishes a program to eliminate employment discrimination by the Federal Government and by those who benefit from Government contracts. For purposes of this case, it is not necessary to decide whether Executive Order 11246, as amended, is authorized by the Federal Property and Administrative Services Act of 1949, [Footnote 34] Titles VI
and VII of the Civil Rights Act of 1964, [Footnote 35] the Equal Employment Opportunity Act of 1972, [Footnote 36] or some more general notion that the Executive can impose reasonable contractual requirements
in the exercise of its procurement authority. [Footnote 37] The pertinent inquiry is whether, under any of the arguable statutory grants of authority, the OFCCP disclosure regulations relied on by the respondents are reasonably within the contemplation of that grant of authority. We think that it is clear that, when it enacted these statutes, Congress was not concerned with public disclosure of trade secrets or confidential business information, and, unless we were to hold that any federal statute that implies some authority to collect information must grant legislative authority to disclose that information to the public, it is simply not possible to find in these statutes a delegation of the disclosure authority asserted by the respondents here. [Footnote 38]
The relationship between any grant of legislative authority and the disclosure regulations becomes more remote when one examines § 201 of the Executive Order. It speaks in terms of rules and regulations "necessary and appropriate" to achieve the purposes of the Executive Order. Those purposes are an end to discrimination in employment by the Federal Government and those who deal with the Federal Government. One cannot readily pull from the logic and purposes of the Executive Order any concern with the public's access to information in Government files or the importance of protecting trade secrets or confidential business statistics.
The "purpose and scope" section of the disclosure regulations indicates two underlying rationales: OFCCP's general policy "to disclose information to the public," and its policy "to cooperate with other public agencies as well as private parties seeking to eliminate discrimination in employment." 41 CFR § 640.1 (1978). The respondents argue that
"[t]he purpose of the Executive Order is to combat discrimination in employment, and a disclosure policy designed to further this purpose is consistent with the Executive Order and an appropriate subject for regulation under its aegis."
Brief for Respondents 4. Were a grant of legislative authority as a basis for Executive Order 11246 more clearly identifiable, we might agree with the respondents that this "compatibility" gives the disclosure regulations the necessary legislative force. But the thread between these regulations and any grant of
authority by the Congress is so strained that it would do violence to established principles of separation of powers to denominate these particular regulations "legislative" and credit them with the "binding effect of law."
This is not to say that any grant of legislative authority to a federal agency by Congress must be specific before regulations promulgated pursuant to it can be binding on courts in a manner akin to statutes. What is important is that the reviewing court reasonably be able to conclude that the grant of authority contemplates the regulations issued. Possibly the best illustration remains Mr. Justice Frankfurter's opinion for the Court in National Broadcasting Co. v. United States,319 U. S. 190 (1943). There the Court rejected the argument that the Communications Act of 1934 did not give the Federal Communications Commission authority to issue regulations governing chain broadcasting beyond the specification of technical engineering requirements. Before reaching that conclusion, however, the Court probed the language and logic of the Communications Act and its legislative history. Only after this careful parsing of authority did the Court find that the regulations had the force of law and were binding on the courts unless they were arbitrary or not promulgated pursuant to prescribed procedures.
"Our duty is at an end when we find that the action of the Commission was based upon findings supported by evidence, and was made pursuant to authority granted by Congress. It is not for us to say that the 'public interest' will be furthered or retarded by the Chain Broadcasting Regulations. The responsibility belongs to the Congress for the grant of valid legislative authority and to the Commission for its exercise."
Id. at 319 U. S. 224.
The respondents argue, however, that, even if these regulations do not have the force of law by virtue of Executive Order 11246, an explicit grant of legislative authority for such
regulations can be found in 5 U.S.C. § 301, commonly referred to as the "housekeeping statute." [Footnote 39] It 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."
The antecedents of § 301 go back to the beginning of the Republic, when statutes were enacted to give heads of early Government departments authority to govern internal departmental affairs. Those laws were consolidated into one statute in 1874. and the current version of the statute was enacted in 1958.
Given this long and relatively uncontroversial history, and the terms of the statute itself, it seems to be simply a grant of authority to the agency to regulate its own affairs. What is clear from the legislative history of the 1958 amendment to § 301 is that this section was not intended to provide authority for limiting the scope of § 1905. [Footnote 40]
The 1958 amendment to § 301 was the product of congressional concern that agencies were invoking § 301 as a source of authority to withhold information from the public. Congressman Moss sponsored an amendment that added the last sentence to § 301, which specifically states that this section "does not authorize withholding information from the public." The Senate Report accompanying the amendment stated:
"Nothing in the legislative history of [§ 301] shows that Congress intended this statute to be a grant of authority to the heads of the executive departments to withhold information from the public or to limit the availability of records to the public."
S.Rep. No. 1621, 85th Cong., 2d Sess., 2 (1958). The logical corollary to this observation is that there is nothing in the legislative history of § 301 to indicate it is a substantive grant of legislative power to promulgate rules authorizing the release of trade secrets or confidential business information. It is indeed a "housekeeping statute," authorizing what the APA terms "rules of agency organization, procedure or practice," as opposed to "substantive rules." [Footnote 41]
This would suggest that regulations pursuant to § 301 could not provide the "authoriz[ation] by law" required by § 1905. But there is more specific support for this position. During the debates on the 1958 amendment, Congressman Moss assured the House that the amendment would "not affect the confidential status of information given to the Government and carefully detailed in title 18, United States Code, section 1905." 104 Cong.Rec. 6550 (1958).
The respondents argue that this last statement is of little significance, because it is only made with reference to the amendment. But that robs Congressman Moss' statement of any substantive import. If Congressman Moss thought that records within the terms of § 1905 could be released on the authority of a § 301 regulation, why was he (and presumably the House) concerned with whether the amendment affected § 1905? Under the respondents' interpretation, records released pursuant to § 301 are outside § 1905 by virtue of the first sentence of § 301.
The remarks of a single legislator, even the sponsor, are not controlling in analyzing legislative history. Congressman Moss' statement must be considered with the Reports of both Houses and the statements of other Congressmen, all of which refute the respondents' interpretation of the relationship between § 301 and § 1905. [Footnote 42] Of greatest significance, however,
is the "housekeeping" nature of § 301 itself. On the basis of this evidence of legislative intent, we agree with the Court of Appeals for the District of Columbia Circuit that "[s]ection 301 does not authorize regulations limiting the scope of section 1905." Charles River Park "A," Inc. v. Department of HUD, 171 U.S.App.D.C. 286, 293-294, 519 F.2d 935, 942-943 (1975)
There is also a procedural defect in the OFCCP disclosure regulations which precludes courts from affording them the force and effect of law. That defect is a lack of strict compliance with the APA. Recently we have had occasion to examine the requirements of the APA in the context of "legislative" or "substantive" rulemaking. In Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc.,435 U. S. 519 (1978), we held that courts could only in "extraordinary circumstances" impose procedural requirements on an agency beyond those specified in the APA. It is within
an agency's discretion to afford parties more procedure, but it is not the province of the courts to do so. In Vermont Yankee, we recognized that the APA is "a formula upon which opposing social and political forces have come to rest.'" Id. at 435 U. S. 547 (quoting Wong Yang Sung v. McGrath,339 U. S. 33, 339 U. S. 40 (1950)). Courts upset that balance when they override informed choice of procedures and impose obligations not required by the APA. By the same token, courts are charged with maintaining the balance: ensuring that agencies comply with the "outline of minimum essential rights and procedures" set out in the APA. H.R.Rep. No.1980, 79th Cong., 2d Sess., 16 (1946); see Vermont Yankee Nuclear Power Corp., supra at 435 U. S. 549 n. 21. Certainly regulations subject to the APA cannot be afforded the "force and effect of law" if not promulgated pursuant to the statutory procedural minimum found in that Act. [Footnote 43]
Section 4 of the APA, 5 U.S.C. § 553, specifies that an agency shall afford interested persons general notice of proposed rulemaking and an opportunity to comment before a substantive rule is promulgated. [Footnote 44] "Interpretive rules, general
statements of policy or rules of agency organization, procedure or practice" are exempt from these requirements. When the Secretary of Labor published the regulations pertinent in this case, he stated:
"As the changes made by this document relate solely to interpretive rules, general statements of policy, and to rules of agency procedure and practice, neither notice of proposed rule making nor public participation therein is required by 5 U.S.C. 553. Since the changes made by this document either relieve restrictions or are interpretative rules, no delay in effective date is required by 5
U.S.C. 553(d). These rules shall therefore be effective immediately."
"In accordance with the spirit of the public policy set forth in 5 U.S.C. 553, interested persons may submit written comments, suggestions, data, or arguments to the Director, Office of Federal Contract Compliance. . . ."
38 Fed.Reg. 3193 (1973). Thus, the regulations were essentially treated as interpretative rules, and interested parties were not afforded the notice of proposed rulemaking required for substantive rules under 5 U.S.C. § 553(b). As we observed in Batterton v. Francis, 432 U.S. at 432 U. S. 425 n. 9:
"[A] court is not required to give effect to an interpretative regulation. Varying degrees of deference are accorded to administrative interpretations based on such factors as the timing and consistency of the agency's position, and the nature of its expertise."
We need not decide whether these regulations are properly characterized as "interpretative rules." It is enough that such regulations are not properly promulgated as substantive rules, and therefore not the product of procedures which Congress prescribed as necessary prerequisites to giving a regulation the binding effect of law. [Footnote 45] An interpretative regulation or general statement
of agency policy cannot be the "authoriz[ation] by law" required by § 1905.
This disposition best comports with both the purposes underlying the APA and sound administrative practice. Here, important interests are in conflict: the public's access to information in the Government's files and concerns about personal privacy and business confidentiality. The OFCCP's regulations attempt to strike a balance. In enacting the APA, Congress made a judgment that notions of fairness and informed administrative decisionmaking require that agency decisions be made only after affording interested persons notice and an opportunity to comment. With the consideration that is the necessary and intended consequence of such procedures, OFCCP might have decided that a different accommodation was more appropriate.
We reject, however, Chrysler's contention that the Trade Secrets Act affords a private right of action to enjoin disclosure in violation of the statute. In Cort v. Ash,422 U. S. 66 (1975), we noted that this Court has rarely implied a private right of action under a criminal statute, and, where it has done so, "there was at least a statutory basis for inferring that a civil cause of action of some sort lay in favor of someone." [Footnote 46] Nothing in § 1905 prompts such an inference. Nor are other pertinent circumstances outlined in Cort present here. As our review of the legislative history of § 1905 -- or
lack of same -- might suggest, there is no indication of legislative intent to create a private right of action. Most importantly, a private right of action under § 1905 is not "necessary to make effective the congressional purpose," J. I. Case Co. v. Borak,377 U. S. 426, 377 U. S. 433 (1964), for we find that review of DLA's decision to disclose Chrysler's employment data is available under the APA. [Footnote 47]
While Chrysler may not avail itself of any violations of the provisions of § 1905 in a separate cause of action, any such violations may have a dispositive effect on the outcome of judicial review of agency action pursuant to § 10 of the APA. Section 10(a) of the APA provides that
"[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action . . . is entitled to judicial review thereof."
5 U.S.C. § 702. Two exceptions to this general rule of reviewability are set out in § 10. Review is not available where "statutes preclude judicial review" or where "agency action is committed to agency discretion by law." 5 U.S.C. §§ 701(a)(1), (2). In Citizens to Preserve Overton Park, Inc. v. Volpe,401 U. S. 402, 401 U. S. 410 (1971), the Court held that the latter exception applies "where statutes are drawn in such broad terms that, in a given case, there is no law to apply,'" quoting S.Rep. No. 752, 79th Cong., 1st Sess., 26 (1945). Were we simply confronted with the authorization in 5 U.S.C. § 301 to prescribe regulations regarding "the custody, use, and preservation of [agency] records, papers, and property," it would be difficult to derive any standards limiting agency conduct which might constitute "law to apply." But our discussion in 441 U. S. S. 318
Official Supreme Court caselaw is only found in the print version of the United States Reports. Justia caselaw is provided for general informational purposes only, and may not reflect current legal developments, verdicts or settlements. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or information linked to from this site. Please check official sources.
Official Supreme Court caselaw is only found in the print version of the United States Reports. Justia caselaw is provided for general informational purposes only, and may not reflect current legal developments, verdicts or settlements. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or information linked to from this site. Please check official sources.