Associated Dry Goods Corp. v. EEOC

• Citation: 543 F. Supp. 950
• Decision Date: 20 July 1982
• Docket Number: Civ. A. No. 75-0297-R.
• Parties: ASSOCIATED DRY GOODS CORPORATION, Plaintiff, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

543 F. Supp. 950

ASSOCIATED DRY GOODS CORPORATION, Plaintiff, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, et al., Defendants.

Civ. A. No. 75-0297-R.

United States District Court, E. D. Virginia, Richmond Division.

July 20, 1982.

Hill B. Wellford, Jr., Hunton & Williams, Richmond, Va., and Roger S. Kaplan, Jackson, Lewis, Schnitzler & Krupman, New York City, for plaintiff.

Anthony DeMarco, Washington, D. C., and G. Wingate Grant, Asst. U.S. Atty., Richmond, Va., for defendants.

MEMORANDUM

MERHIGE, District Judge.

Plaintiff, Associated Dry Goods Corporation ("Associated"), brought this action challenging certain practices of the defendant, Equal Employment Opportunity Commission ("EEOC") regarding disclosure of EEOC investigative files to charging parties. The facts surrounding this matter have been fully set out in prior opinions of this Court,¹ the Court of Appeals for the Fourth Circuit,² and the Supreme Court.³

The Supreme Court held that the proscription of disclosure to the "public" of information in EEOC investigative files found in § 706(b), 42 U.S.C. § 2000e-5(b), and § 709(e), 42 U.S.C. § 2000e-8(e), of Title VII does not include a charging party to the extent of disclosure to such a party of the content of his own file. Thus, ruled the Court, EEOC regulations contained in 29 C.F.R. §§ 1601.22 and 1610.17(d) and in § 83 of the agency's Compliance Manual⁴ did not contravene the statutory ban on public disclosure by authorizing pre-suit disclosure to a charging party of materials contained in his or her own file. A charging party is, however, a member of the "public" with respect to EEOC files on charges by other employees and information in files other than his own may not be revealed to him. The Court then remanded the case to the Court of Appeals, which in turn remanded it to this Court, to consider two other claims raised by Associated in its complaint and not addressed by the Court in its original opinion. The parties have filed cross-motions for summary judgment on the remaining issues.

Associated contends that the EEOC rules regarding disclosure are invalid because:

(1) the rules are "substantive" regulations and the EEOC has statutory authority to promulgate only "procedural" rules; or

(2) the rules were established by the EEOC without providing the notice and opportunity for comment required by § 553 of the Administrative Procedure Act ("APA"), 5 U.S.C. § 553.

The EEOC responds by arguing that the regulations are "procedural" or "interpretative."

I. EEOC AUTHORITY TO PROMULGATE THE DISCLOSURE RULES: THEIR LEGAL EFFECT

Congress granted the EEOC the authority to "issue, amend, or rescind suitable procedural regulations to carry out the provisions of Title VII." § 713(a) of Title VII, 42 U.S.C. § 2000e-12(a). This has been interpreted to preclude the EEOC from issuing substantive regulations which would have the force and effect of law. General Electric Co. v. Gilbert, 429 U.S. 125, 141, 97 S.Ct. 401, 410, 50 L.Ed.2d 343 (1976); Emerson Electric Co. v. Schlesinger, 609 F.2d 898, 902 (8th Cir. 1979); EEOC v. Raymond Metal Products Co., 530 F.2d 590, 593 (4th Cir. 1976). To determine whether the EEOC had the power to issue the disclosure rules found in 29 C.F.R. §§ 1610.17, 1601.22 and § 83 of its Compliance Manual, and to ascertain the legal effect of the rules, the Court must ascertain whether the rules are "procedural," or whether they are "substantive."

The EEOC labeled the § 1601.22 and § 1610.17 disclosure rules procedural when it published them in the Federal Register.⁵ Also, the May 21, 1975 "Directives Transmittal" which provided § 83 of the Compliance Manual to all manual holders dubbed the rules "procedures for making available information contained in case files of EEOC." These labels, however, are not controlling, and the Court must determine what the agency did in fact. Brown Express, Inc. v. United States, 607 F.2d 695 (5th Cir. 1979); Standard Oil Co. v. Department of Energy, 596 F.2d 1029 (Temp. Emer.Ct.App.1978); Lewis-Mota v. Secretary of Labor, 469 F.2d 478 (2nd Cir. 1972).

The EEOC now argues that the disclosure rules are both interpretative of the Title VII dictate that charges not be "made public," and procedural, in that they were designed to provide guidance to EEOC field offices on how to handle requests for disclosure of the contents of the agency's investigative files. Associated, on the other hand, contends that the regulations affect substantive rights of the parties involved, since they govern access to information which aids a party in deciding whether to settle or litigate, and they discriminate in favor of a charging party by granting him or her first access to the files. The Court postpones consideration of the EEOC's argument that the rules are interpretative until after discussion of the substantive-procedural distinction.

A substantive rule is one which "affects individual rights and obligations." Chrysler Corporation v. Brown, 441 U.S. 281, 302, 99 S.Ct. 1705, 1717, 60 L.Ed.2d 208 (1979), quoting from Morton v. Ruiz, 415 U.S. 199, 232, 94 S.Ct. 1055, 1073, 39 L.Ed.2d 270 (1974); Emerson Electric Co. v. Schlesinger, supra, 609 F.2d at 902; Lewis-Mota v. Secretary of Labor, supra, 469 F.2d at 482. The Court of Appeals for the Fourth Circuit used this definition of "substantive" in its Raymond Metal ruling that Congress intended to limit the EEOC "to making rules for conducting its business, and to deny it the power to make substantive rules that create rights and obligations." 530 F.2d at 593.

A bit of a detour is inevitable here. Apparently, some courts have equated the substantive-procedural test used to determine whether an agency had statutory authority to issue a rule and its resulting legal effect with that used to ascertain the applicability of the notice and comment procedures of § 553 of the APA to an agency's rulemaking. Under § 553(b)(3)(A), notice and comment procedures are not required when an agency issues "interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice...." The Court of Appeals for the Fourth Circuit analyzed this § 553 applicability problem in Reynolds Metals Co. v. Rumsfeld, 564 F.2d 663, 669 (4th Cir. 1977), cert. denied, 435 U.S. 995, 98 S.Ct. 1646, 56 L.Ed.2d 84 (1978), stating:

To draw the line between substance and procedure in the context of administrative rulemaking, courts have generally held that notice and comment is required if the rule makes a substantive impact on the rights and duties of the person subject to regulation. If the rule does not have such an impact, it is exempt from the notice and comment procedures of the statute. citations omitted; cf. EEOC v. Raymond Metal Products Co., 530 F.2d 590, 593 (4th Cir. 1976).

This statement of the rules, as well as the Court's reference to Raymond, imply that a similar analysis governs the substantive-procedural inquiry into the agency's authority to issue a rule and the distinction between those "procedural" rules which are exempt from § 553 and those "substantive" rules which are not. Accord, Emerson Electric Co. v. Schlesinger, supra, 609 F.2d at 902. This is not to say that the question of whether a rule is legislative and thus has the force of law and the question of the applicability of § 553 are identical, for they are not. The former issue turns also on an examination of the statutory power granted an agency, and the Court rejects any notion that the impact of a rule can alone give it the force of law. See Chrysler Corporation v. Brown, supra, 441 U.S. at 302, 99 S.Ct. at 1717; K. Davis, Administrative Law Treatise §§ 7:15, 7:16 (2d ed. 1979) ("Davis"). The narrow position of the Court here is that where an agency is granted statutory power to promulgate procedural, but not substantive rules, the test used by those courts which assign such labels to a rule in order to characterize a regulation as "procedural" or "substantive" for purposes of determining the agency's authority to issue the rule resembles that used by such courts to distinguish "procedural" rules exempt from § 553 from those "substantive" rules which are not — both require examination of the nature of the impact of the rules on the rights and duties of the parties involved. To resolve the question of the EEOC's authority to issue the disclosure rules in dispute in the instant action, the Court must determine whether such rules have a substantive impact on the parties affected.

§ 1610.17(b) and (c) describe the penalties imposed on EEOC employees who disclose information in violation of § 706(b) or § 709 of Title VII. Section 1610.17(d) provides that "special disclosure rules" apply to charging parties, aggrieved persons on whose behalf a charge has been filed, and entities responding to charges. Section 1601.22 contains a similar prohibition of prelitigation disclosure of the contents of EEOC files, allowing such disclosure to charging parties, their attorneys, respondents or their counsel, and witnesses "where disclosure is deemed necessary to securing appropriate relief." The net effect of the rules set out in § 83 of the Compliance Manual is that charging parties and their attorneys, aggrieved persons and their counsel, persons or organizations filing on behalf of an aggrieved person, and employees of EEOC-funded groups are allowed access to the files once 180 days have passed after the charge is filed, or once the party demonstrates a "compelling need" for access before such time, while employers and other entities responding to a charge are granted access only if the charging party has filed suit under Title VII. §§ 83.3(a), 83.5. In its briefing and at oral argument, the EEOC has presented several alternative rationales behind these regulations. On this point, it argues that the rules were designed merely to establish the procedures by which the agency's employees are to handle disclosure requests. Associated contends that...