Title Guarantee Co. v. N.L.R.B.

• Decision Date: 02 April 1976
• Docket Number: No. 725,D,725
• Citation: 534 F.2d 484,91 L.R.R.M. 2993
• Parties: 91 L.R.R.M. (BNA) 2993, 78 Lab.Cas. P 11,363 TITLE GUARANTEE CO., Appellee, v. NATIONAL LABOR RELATIONS BOARD, Appellant. ocket 75-6119.
• Court: U.S. Court of Appeals — Second Circuit

Page 484

534 F.2d 484

91 L.R.R.M. (BNA) 2993, 78 Lab.Cas. P 11,363

TITLE GUARANTEE CO., Appellee, v. NATIONAL LABOR RELATIONS BOARD, Appellant.

No. 725, Docket 75-6119.

United States Court of Appeals, Second Circuit.

Argued Jan. 26, 1976.

Decided April 2, 1976.

Joseph Norelli, Atty., N. L. R. B., Washington, D. C. (John S. Irving, Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Abigail Cooley, Asst. Gen. Counsel for Sp. Litigation, N. L. R. B., Washington D. C., of counsel), for appellant.

Roger Kaplan, New York City (Robert Lewis, Jackson, Lewis, Schnitzler & Krupman, New York City, of counsel), for appellee.

Gerard C. Smetana, Jerry Kronenberg, Washington, D. C., Julian D. Schreiber, Chicago, Ill. (Borovsky, Smetana, Ehrlich & Kronenberg, Washington, D. C., Lawrence B. Kraus, Richard B. Berman, U. S. Chamber of Commerce, Washington, D. C., of counsel), for U. S. Chamber of Commerce, amicus curiae.

Before MOORE, OAKES and MESKILL, Circuit Judges.

OAKES, Circuit Judge:

The National Labor Relations Board appeals from an order requiring disclosure under the Freedom of Information Act (FOIA) ¹ of investigative statements obtained by the Board from employees (and their union representatives) prior to an unfair labor practice hearing on a charge against their employer for refusal to bargain. ² The United States District Court for the Southern District of New York, Lee P. Gagliardi, Judge, held that such statements were not exempt from the disclosure requirements of the FOIA. He expressly rejected the Board's contention that these statements fell within Exemptions 5, 7(A), 7(C) or 7(D) of the Act, 5 U.S.C. § 552(b)(5), 7(A), 7(C), 7(D). ³ Following the district court's decision on the merits of the FOIA claim, the court directed the Board to produce the statements forthwith or stay the conduct of its administrative hearing. On the Board's appeal, we reverse. ⁴

On or about May 28, 1975, District 65 Wholesale, Retail, Office and Processing

Union, Distributive Workers of America (hereinafter District 65), filed an unfair labor practice charge with Region 2 of the Board alleging that the Title Guarantee Co. had violated §§ 8(a)(3) and (1) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(3) and (1), by refusing to execute a collective bargaining agreement which had been previously agreed upon with District 65. Subsequent amendments to the charge alleged violation of § 8(a)(5) of the Act, 29 U.S.C. § 158(a)(5). The Board conducted an investigation in the course of which it took written statements and affidavits from representatives of District 65 and employees of the Title Guarantee Co. As a result of these investigations, the Board issued a complaint against Title Guarantee on or about June 30, 1975. The Company requested copies of all written statements, signed or unsigned, but the NLRB Regional Director denied them, asserting privilege from disclosure under the exemptions to the FOIA. This ruling was appealed to the Board's General Counsel pursuant to Agency Regulations, 29 C.F.R. § 102.117(c)(2)(ii) (1975), which was denied. Title Guarantee then filed this suit under the FOIA, claiming that the Board's failure and refusal to furnish the requested information is arbitrary and capricious and deprives it of public information, and that absent such information it will be wrongfully precluded from properly preparing its defense and will therefore suffer irreparable injury. Title Guarantee concededly has standing to bring this suit both as a member of the "public," 5 U.S.C. § 552(a), and as a "person" within the language of the statute, 5 U.S.C. § 552(a)(3), and the language of the Administrative Procedure Act, 5 U.S.C. § 551(2). The Board moved for dismissal under Fed.R.Civ.P. 12(b)(6) or alternatively for summary judgment under Fed.R.Civ.P. 56(c), and Title Guarantee cross-moved for summary judgment.

Following in camera review of the material in question, 5 U.S.C. § 552(a)(4) (B), the district court concluded that release of the information "would not block further information of the same type from similar sources nor would it stifle effective preparation of the case." The court additionally found that "it does not appear that the specific enforcement proceeding would be harmed," see Exemption 7(a), 5 U.S.C. § 552(b)(7)(A), going on to say that whatever value Title Guarantee might gain from the information would not be based "on the timing of such release but rather on its determination of whether any material contained in the released documents supports its contentions." Additionally the court found that the material in question contained "no personal matters which should be protected under Exemption 7(C)" and that the Board had "not presented any evidence that the material which is sought was elicited after an express assurance of confidentiality (such as might bring it within Exemption 7(D) to FOIA)." In this connection the court reviewed the material and concluded that it was not "reasonable to infer that the statements were made under some understanding on the part of the deponent that his statements would be confidential." As the court said, "The nature of the material as well as the identity of the deponents indicates that an understanding of confidentiality or lack of it would be entirely irrelevant to whether the information would have been offered to the Board." The court concluded that the Board had failed to sustain its statutory burden of proof, 5 U.S.C. § 552(a)(4)(B), that there was an exemption from disclosure under FOIA for the investigative materials. The court directed the Board to turn over the materials sought for inspection and copying, failing which the Board would be enjoined from conducting any hearings on the unfair labor practice charge until such time as the Board were in compliance with the court order. The court did not consider that its injunction was barred in any way by Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1, 20, 94 S.Ct. 1028, 1038, 39 L.Ed.2d 123, 137 (1974). ⁵ The Board appeals.

Since the substantive effect of acceptance of appellee's disclosure contentions would be tantamount to the issuance of new, broader discovery rules for NLRB proceedings, it is desirable to consider, as preliminary matter, the Board's authority to promulgate rules for the conduct of proceedings before it, 29 U.S.C. § 156, as well as its responsibility to conduct such proceedings "in accordance with the rules of evidence applicable in the district courts of the United States under the rules of civil procedure for the district courts of the United States . . . ." 29 U.S.C. § 160(b). This court has held, in NLRB v. Interboro Contractors, Inc., 432 F.2d 854 (2d Cir. 1970), cert. denied, 402 U.S. 915, 91 S.Ct. 1375, 28 L.Ed.2d 661 (1971), that the Labor-Management Relations Act does not specifically authorize or require the Board to adopt discovery procedures. ⁶ See also NLRB v. Globe Wireless, Ltd., 193 F.2d 748, 751 (9th Cir. 1951). The matter of discovery in enforcement proceedings is a matter committed to the Board's rule-making power. See NLRB v. Interboro Contractors, Inc., supra, 432 F.2d at 858; Electromec Design and Development Co. v. NLRB, 409 F.2d 631, 635 (9th Cir. 1969). Since 1935 the Board rule pertaining to an enforcement proceeding, now contained in 29 C.F.R. § 102.30 (1975), has not provided for the taking of depositions for the purposes of discovery as in the case of the Federal Rules of Civil Procedure. Instead, it has permitted limited discovery only for the purpose of obtaining and preserving evidence for trial. NLRB v. Interboro Contractors, Inc., supra, 432 F.2d at 858. The policy has been said to be a "logical one," id., followed by other administrative agencies and in no way affected by the Administrative Procedure Act. Id. at 858-59. Under the Board rules, however, affidavits become available to a litigant "after a witness called by the general counsel or by the charging party has testified in a hearing upon a complaint . . . ." 29 C.F.R. § 102.118(b)(1) (1975). The rules provide that the administrative law judge shall "order the production of any statement . . . of such witness in the possession of the general counsel which relates to the subject matter as to which the witness has testified (for) examination and use for the purpose of cross-examination." Id. In other words, the only discovery available to the party charged with an unfair labor practice under the National Labor Relations Act, absent the requirements of the Freedom of Information Act, is equivalent to that available to a criminal defendant under the Jencks Act, 18 U.S.C. § 3500. Neither the liberal provisions of the Federal Rules of Civil Procedure pertaining to pretrial discovery nor the liberalized rules of the Federal Rules of Criminal Procedure have any bearing on Board discovery procedures. The Board rules prohibit anyone, including any employee of the Board, regional director or administrative law judge, from producing any "files, documents, reports, memoranda, or records of the Board or of the general counsel, whether in response to a subpoena duces tecum or otherwise" except as might be required under the Freedom of Information Act or upon the written consent of the Board or the chairman of the Board. 29 C.F.R. § 102.118(a) (1975). Accordingly, if pre-hearing discovery is to be obtained as a matter of right by a party charged under 29 U.S.C. § 160 with an unfair labor practice, the source for the right must be found within the Freedom of Information Act. ⁷

Before analyzing the specific exemptions claimed under and by virtue of the Act as it now reads, it is well to recall that the thrust of the FOIA since its initial enactment has been to provide for disclosure of governmental files unless an exemption is established. See Center for National Policy Review on Race and Urban Issues v. Weinberger, 163 U.S.App.D.C. 368, 502 F.2d 370, 374 (1974). At the same time ...