34 F.3d 774 (9th Cir. 1994), 94-35140, Exxon Shipping Co. v. United States Dept. of Interior

Docket Nº:94-35140.
Citation:34 F.3d 774
Party Name:Fed.R.Serv.3d 971, 24 Envtl. EXXON SHIPPING CO.; Exxon Corporation, Plaintiffs-Appellants, and Alyeska Pipeline Service Company, Plaintiff, v. UNITED STATES DEPARTMENT OF INTERIOR; Department of Agriculture; Secretary of Health & Human Services; United States Department of Commerce; National Marine Fisheries Service; National Oceanic and Atmospheri
Case Date:August 29, 1994
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 774

34 F.3d 774 (9th Cir. 1994)

Fed.R.Serv.3d 971,

24 Envtl.

EXXON SHIPPING CO.; Exxon Corporation, Plaintiffs-Appellants,


Alyeska Pipeline Service Company, Plaintiff,



Agriculture; Secretary of Health & Human Services; United

States Department of Commerce; National Marine Fisheries

Service; National Oceanic and Atmospheric Administration,

et al., Defendants-Appellees.

No. 94-35140.

United States Court of Appeals, Ninth Circuit

August 29, 1994

Argued and Submitted July 13, 1994.

Page 775

E. Edward Bruce, Robert A. Long, Jr., John F. Duffy, Covington & Burling, Washington, DC, for plaintiffs-appellants.

Andrew C. Mergen, U.S. Dept. of Justice, Washington, DC, for defendants-appellees.

Appeal from the United States District Court for the District of Alaska.

Before: A. GOODWIN, D.W. NELSON, and HALL, Circuit Judges.

GOODWIN, Circuit Judge:

Exxon Corp. and Exxon Shipping Co. ("Exxon") appeal the dismissal of their complaint against five federal administrative agencies and their employees seeking to compel discovery. Exxon made the discovery requests as part of its defense in an underlying damage action arising out of the Exxon Valdez oil spill.

The government instructed eight federal employees not to submit to depositions and restricted the testimony of two others. Exxon contends that the government's action violated the Federal Housekeeping Statute, 5 U.S.C. Sec. 301, and the Administrative Procedure Act (APA), 5 U.S.C. Sec. 706(2)(A). The district court found that Sec. 301 authorized the agencies' actions, and that the actions were not arbitrary or capricious under Sec. 706(2)(A). We reverse and remand.


In 1989, commercial fishermen, landowners, local governments, businesses, and others sued Exxon seeking compensatory and punitive damages for injuries they allegedly suffered as a result of the Exxon Valdez oil spill. SeaHawk Seafoods, Inc. v. Exxon Corp., No. A89-0095-CV (D. Alaska); Exxon Valdez Litigation, 3AN-89-2533CI (Alaska Sup.Ct.).

Between June and November 1992, Exxon issued a notice of deposition and subpoena to ten federal employees who work for five federal agencies. 1 Exxon claimed that the employees,

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through their work with the federal government, had obtained information central to the underlying litigation. Such information purportedly included the extent of damage to Alaska's natural resources, including bird and animal populations, as a result of the spill. 2 However, the government did not comply with Exxon's discovery requests, nor did it file a motion to quash the subpoenas. Instead, the agencies simply instructed eight of the ten employees not to submit to a deposition. Two other employees appeared at the scheduled depositions and gave testimony on certain topics, but were instructed not to answer questions on other matters.

In February 1993, Exxon filed this complaint, alleging that: 1) the government's refusal to provide the requested discovery violated the Federal Rules of Civil Procedure and the U.S. Constitution because the United States was a de facto party to the action; 2) the agencies' actions were not authorized by 5 U.S.C. Sec. 301, or federal regulations promulgated pursuant to that statute; and 3) the agencies' actions were unlawful under the APA, 5 U.S.C. Sec. 702 et seq. In January 1994, the district court rendered judgment for the United States on all three claims. Exxon appeals on its second and third claim. Trial in federal district court began on May 2, 1994 in the underlying civil suit and was still ongoing as of this writing.


In declining the deposition requests, the five federal agencies relied on regulations promulgated under 5 U.S.C. Sec. 301. These internal regulations generally provide that an employee may not be deposed unless an agency head authorizes it. 3

The government argues, and the district court agreed, that Sec. 301 authorizes agency heads to prohibit their employees from testifying in litigation in which the United States is not a party. 4 As authority, the court cited United States ex. rel. Touhy v. Ragen, 340 U.S. 462, 71 S.Ct. 416, 95 L.Ed. 417 (1951). However, Touhy does not support as broad a reading as the agencies seek. In Touhy, the Supreme Court ruled that an FBI agent could not be held in contempt for refusing to obey a subpoena duces tecum when the Attorney General, acting pursuant to valid federal regulations governing the release of official documents, had ordered him to refuse to comply. Id. at 469, 71 S.Ct. at 420. However, the Court specifically refused to reach the question of the agency head's power to withhold evidence from a court without a specific claim of privilege. Id. at 472, 71 S.Ct. at 421 ("We find it unnecessary ... to consider the ultimate reach of the authority of the Attorney General to refuse to produce at a court's order the government papers in his possession."); see also id. at 471, 71 S.Ct. at 421 (Frankfurter, J., concurring); In re Recalcitrant Witness Richard Boeh v. Daryl Gates, 25 F.3d 761, 764 & n. 4 (9th Cir.1994) (noting that Touhy did not decide the legality of agency heads' executive privilege claim).

At issue in Touhy was whether lower federal officials could be held in contempt for refusing to comply with a subpoena when

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agency regulations prohibited them from disclosing relevant documents. Here, unlike in Touhy, the agencies themselves are named defendants. Thus, the ultimate question of federal agencies' authority to withhold discovery, including deposition testimony, is squarely at issue.

Section 301 does not, by its own force, authorize federal agency heads to withhold evidence sought under a valid federal court subpoena. Section 301 reads:

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.

5 U.S.C. Sec. 301 (1982) (emphasis added). The second sentence of Sec. 301 was added by Congress in 1958. According to the legislative history, Congress was concerned that the statute had been "twisted from its original purpose as a 'housekeeping' statute into a claim of authority to keep information from the public and, even, from the Congress." 2 U.S.Code Cong. & Admin.News 3352 (1958); see Chrysler Corp. v. Brown, 441 U.S. 281, 310, 99 S.Ct. 1705, 1721-22, 60 L.Ed.2d 208 (1978). The House Report accompanying the 1958 amendment explained that the proposed amendment...

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