381 U.S. 279 (1965), 482, Federal Communications Commission v. Schreiber

Docket Nº:No. 482
Citation:381 U.S. 279, 85 S.Ct. 1459, 14 L.Ed.2d 383
Party Name:Federal Communications Commission v. Schreiber
Case Date:May 24, 1965
Court:United States Supreme Court
 
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381 U.S. 279 (1965)

85 S.Ct. 1459, 14 L.Ed.2d 383

Federal Communications Commission

v.

Schreiber

No. 482

United States Supreme Court

May 24, 1965

Argued April 27, 1965

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

To secure comprehensive information about various practices in the television industry, the Federal Communications Commission initiated an investigatory proceeding pursuant to § 403 of the Communications Act. The Presiding Officer, assigned to conduct the proceeding, was authorized by the Commission to subpoena witnesses and to compel the production of any records or documents deemed relevant. The proceedings were to be public unless the Presiding Officer found that "the public interest, the proper dispatch of the business . . . , or the ends of justice" would be served by nonpublic sessions. The Presiding Officer issued a subpoena duces tecum directing respondent Schreiber, an executive of respondent Music Corporation of America, Inc. (MCA), to produce lists of network programs which MCA had produced (Annex A to subpoena) or packaged (Annex B). Respondent Schreiber produced the material called for in Annex A, but, claiming that public disclosure of the Annex B information might reveal trade secrets and confidential data, refused to produce said information unless assured that it would be received and held in confidence. The Presiding Officer rejected the demand. The full Commission upheld the Presiding Officer and reaffirmed its resolve to permit nonpublic sessions only in extraordinary situations where it was shown that irreparable damage to private competitive interests outweighed the public interest in disclosure. The Commission noted that the Presiding Officer had acted consistently with that standard, and held that respondents' claim of likely competitive injury was unsupported by the pleadings and contrary to the record. Upon remand, the Presiding Officer rejected respondents' broadened claim for confidential treatment of all information to be elicited from them, but respondent Schreiber persisted in his refusal to comply with the Commission's orders and subpoena. The District Court granted the Commission's petition for enforcement, but, "to preclude disclosure of trade secrets of which (MCA's) competitors might take advantage," ordered that the material be received and held in confidence. The court's order further provided

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that, after the investigation of respondents had been completed, the Commission could move the court, upon good cause, for an order permitting such testimony and documents to be made public. The Court of Appeals affirmed, holding that the District Court had not abused its discretion in conditioning the enforcement of the Commission's subpoena and orders.

Held:

1. Under the broad delegation of procedural rulemaking authority in § 4(j) of the Communications Act, which authorizes the Commission to "conduct its proceedings in such manner as will best conduce to the proper dispatch of business and to the ends of justice," the Commission was empowered to promulgate the procedural rule requiring public proceedings except where the proponents of a request for in camera treatment have demonstrated the need therefor. Pp. 289-294.

2. In providing for judicial review of administrative rulemaking, Congress has not empowered district courts to substitute their judgment for that of the agency; instead, judicial responsibility is limited to insuring consistency with governing statutes and the demands of the Constitution. Pp. 290-291.

3. The Commission did not abuse its discretion in applying its procedural rule and in rejecting respondents' requests for confidential treatment of all material to be elicited in the future, pp. 295-298, and for confidential treatment of the Annex B information, pp. 298-300.

329 F.2d 517 modified and remanded.

WARREN, J., lead opinion

MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.

At issue in this case are the extent of the Federal Communications Commission's authority to promulgate procedural standards for determining whether testimony

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taken and documents produced during an investigatory proceeding should be accorded confidential treatment, and the scope of judicial review of determinations made pursuant to such standards.

This case had its origin in a subpoena and various orders issued during the course of an investigatory proceeding conducted by the Federal Communications Commission pursuant to § 403 of the Communications Act of 1934, as amended, 48 Stat. 1094, 47 U.S.C. § 403 (1958 ed.).1 The proceeding, financed by specific congressional appropriation,2 was initiated on February 26, 1959, and had as its objective the gathering of

comprehensive information concerning the respective roles played by the networks, advertisers, agencies, talent, film producers and distributors, and other major elements in the television industry.3

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As an initial step in the investigation, the Commission ordered that an

inquiry be made to determine the policies and practices pursued by the networks and others in the acquisition, ownership, production, distribution, selection, sale and licensing of programs for television exhibition, and the reasons and necessity in the public interest for said policies and practices. . . .4

The Commission authorized its chief hearing examiner to conduct the investigation. He was empowered, inter alia, to subpoena witnesses, compel their attendance,

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and require the production of any records or documents deemed relevant to the inquiry.5 The Commission ordered that

said investigatory proceeding shall be a public proceeding except that the said presiding officer may order non-public sessions of the said investigatory proceeding where and to the extent that the public interest, the proper dispatch of the business of said proceeding, or the ends of justice will be served thereby.6

In October, 1960, public sessions were held in Los Angeles, California, at which time evidence was received concerning the functions, policies and practices of [85 S.Ct. 1464] television companies, talent agencies and representatives, program "packagers,"7 sales representatives, and others. On October 17, 1960, the Presiding Officer issued a subpoena duces tecum to respondent Schreiber, a Vice President of respondent Music Corporation of America, Inc. (MCA) -- one of the largest packagers and producers of network television programs,8 directing him to appear at

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the hearing and to produce certain documents described in the annexes to the subpoena. Respondent Schreiber appeared and produced the material specified in Annex A.9 He refused, however, to submit without qualification the material called for in Annex B,10 which included a list of the programs packaged by MCA. Respondent Schreiber stated that he would produce the subpoenaed materials only

if the Commission will take this information and assure us that it will be held in confidence, will not be published, and will not be made available to other people, other than those on the Commission, and that serve the Commission.

As grounds for confidential treatment, he asserted that the information sought might disclose trade secrets and confidential data, and that the information was outside the scope of the hearing. He

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also objected generally to the procedures governing the hearing on the ground that they would require

public disclosure of trade secrets and confidential data of my company which might be of aid to its many competitors in this highly competitive television industry.

The Presiding Officer found "no doubt" as to the relevance of the material and [85 S.Ct. 1465] rejected, as "without merit," the claim that the information should be received in confidence.

Respondents then petitioned the Commission for review. On January 25, 1961, the Commission affirmed the Presiding Officer and ordered respondents to appear, testify and produce the material subpoenaed at a reconvened hearing. In its opinion, the Commission stressed the importance of publicizing the information gathered during the course of the investigation11 and reaffirmed its resolve to permit in camera sessions only in extraordinary situations:

[W]e determined that public proceedings should be the rule herein, and that non-public procedures should be used only in those extraordinary instances where disclosure would irreparably damage private, competitive interests and where such interests could be found by the Presiding Officer to outweigh the paramount interest of the public and the Commission in full public disclosure.

The Commission noted that the Presiding Officer and Commission counsel had made

every effort to avoid public disclosure of detailed internal financial information or detailed contractual arrangements which might in fact irreparably harm private interests without sufficient compensating benefit to the public,

and found that they had not departed from this standard in rejecting respondents' claim of likely competitive harm which, the Commission held, was, "totally unsupported by their pleadings and

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contrary to the record." Accordingly, the Commission ordered respondents "to testify . . . regarding all matters deemed relevant by said Presiding Officer," and to produce the information required by the subpoena and "such other information and data as may be deemed relevant and ordered or directed to be produced by the said Presiding Officer." On remand, a broader claim for confidentiality was made by respondents. They requested that all testimony and documentary evidence to be elicited from them be received in nonpublic sessions, and disclosed only if a court, in subsequent...

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