Public Citizen Health Research Group v. Food and Drug Admin.

• Citation: 227 U.S. App.D.C. 151,704 F.2d 1280
• Decision Date: 15 April 1983
• Docket Number: No. 82-1745,82-1745
• Parties: PUBLIC CITIZEN HEALTH RESEARCH GROUP, Appellant, v. FOOD AND DRUG ADMINISTRATION, et al.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 1280

704 F.2d 1280

227 U.S.App.D.C. 151

PUBLIC CITIZEN HEALTH RESEARCH GROUP, Appellant, v. FOOD AND DRUG ADMINISTRATION, et al.

No. 82-1745.

United States Court of Appeals District of Columbia Circuit.

Argued Jan. 21, 1983.

Decided April 15, 1983.

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 79-01710).

David C. Vladeck, Washington, D.C., with whom Alan B. Morrison, Washington, D.C., was on the brief, for appellant.

Jeffrey Gibbs, Sp. Asst. U.S. Atty., Rockville, Md., of the Bar of the Supreme Court of New Jersey, pro hac vice, by special leave of Court, with whom Stanley S. Harris, U.S. Atty., Royce C. Lamberth and R. Craig Lawrence, Asst. U.S. Attys., and Thomas Scarlett, Chief Counsel, Food and Drug Admin., Washington, D.C., were on the brief, for appellees, Food and Drug Admin., et al. Patricia J. Kenney, Asst. U.S. Atty., Washington, D.C., also entered an appearance for Food and Drug Admin., et al.

Jerald A. Jacobs, Washington, D.C., with whom Richard F. Mann and Glenn P. Sugameli, Washington, D.C., were on the brief, for appellees, CILCO, Inc., et al. Richard J. Leighton, Washington, D.C., also entered an appearance for appellees, CILCO, Inc., et al.

Before EDWARDS and SCALIA, Circuit Judges, and VAN DUSEN, ^* Senior Circuit Judge, United States Court of Appeals for the Third Circuit.

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

HARRY T. EDWARDS, Circuit Judge:

This Freedom of Information Act ("FOIA" or "Act") case involves an appeal from a grant of summary judgment against the Public Citizen Health Research Group ("HRG"), a nonprofit organization engaged in research and consumer advocacy on health and safety matters. The prevailing parties were the Food and Drug Administration ("FDA"), the agency in possession of the records the HRG seeks, the Department of Health and Human Services ("HHS"), which is responsible for reviewing FDA denials of FOIA requests, and various manufacturers of intraocular lenses ("IOLs"), who submitted the data requested by the HRG to the FDA as part of the agency's investigation of IOLs. The District Court held that the requested records, which were produced during ongoing clinical studies of the safety and efficacy of IOLs, are immune from disclosure under Exemptions 3 and 4 of the FOIA. These exemptions allow agencies to withhold, respectively, (1) records that are "specifically exempted from disclosure by statute" if the relevant statute satisfies one of two limiting conditions and (2) "trade secrets and commercial or financial information obtained from a person and privileged or confidential." ¹ The effect of the trial court's decision was to shield from disclosure data relating to the incidence of adverse reactions and complications associated with IOLs.

We believe that the District Court erred in its application of Exemption 3 and adopted an overly broad construction of the term "trade secrets" in Exemption 4. With respect to most of the documents, however, these errors are of little consequence since the District Court properly concluded that the records contain confidential "commercial information." But we have questions concerning the confidentiality of certain of the requested documents. Accordingly, we affirm in part, reverse in part, and remand the case for further proceedings consistent with this opinion.

I. BACKGROUND

Exercising the authority conferred on it by the Medical Device Amendments of 1976, ² the FDA in 1977 classified IOLs--disks implanted in patients' eyes to correct vision following the removal of cataracts--as investigational devices available only under conditions designed to allow well-controlled clinical evaluations of their safety and efficacy. ³ Although the devices had been widely used for a number of years, the FDA concluded that further study was necessary to confirm their effectiveness and safety. As a result, manufacturers of IOLs, while still able to market the devices, are required to submit voluminous data to the FDA, including information concerning their prior experience with IOLs ⁴ and detailed reports on adverse reactions and other complications. ⁵ Portions of these clinical test results are the subject of the current controversy.

The events leading to this appeal commenced on February 22, 1979, when the HRG, seeking information to assist it in monitoring the FDA's regulation of IOLs and promoting public understanding of the advantages and risks of IOLs, filed a number of FOIA requests covering much of the clinical test information submitted by the manufacturers to the FDA. These requests later were narrowed and, still later, were partially granted and partially denied by the FDA. At issue on this appeal are two undated summary reports of complications and adverse reactions in IOL studies, an adverse reaction summary log, several thousand adverse reaction reports, data on study sponsors' prior experience with IOLs, a note pertaining to an inspection report, a letter written by an official of the FDA regarding problems with one manufacturer's IOLs, memorandums of a telephone conference and a meeting in which the participants discussed adverse reactions, two memorandums concerning recalls of one manufacturer's lenses, and letters approving the export of IOLs. The withholding of these documents was justified on the ground that the requested information constituted "trade secrets" within the meaning of Exemption 4, as defined by the FOIA regulations of the FDA. ⁶ The HRG appealed the FDA's decision to HHS, but received no answer. It then filed an action in the District Court in July 1979 to compel disclosure under the FOIA and 21 U.S.C. Sec. 360j(h) (1976). The HRG now pursues only its FOIA claim.

The District Court prefaced its assessment of that FOIA claim with a general discussion of the standards governing release under Exemption 4. Following the lead of the FDA, the court defined "trade secrets" by reference to the definition set forth in section 757 of the Restatement of Torts. ⁷ It noted correctly, moreover, that "once a document ... is determined to be a trade secret, the inquiry ends there and the document is exempt from the requirements of FOIA." Public Citizen Health Research Group v. FDA, 539 F.Supp. 1320, 1325 (D.D.C.1982). If a document does not contain trade secrets, the District Court continued, it is necessary to consider whether disclosure would reveal exempt "commercial or financial information" under the test adopted by this court in National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C.Cir.1974) ("National Parks I "), and refined in National Parks & Conservation Association v. Kleppe, 547 F.2d 673 (D.C.Cir.1976) ("National Parks II "), and Gulf & Western Industries v. United States, 615 F.2d 527 (D.C.Cir.1979).

The District Court then proceeded to analyze the applicability of Exemption 4 to each of the requested documents. Several were found to reveal neither trade secrets nor confidential commercial information; several were characterized as including commercial information; and many were held to contain both trade secrets and confidential commercial information. These conclusions rested largely on the District Court's determinations whether substantial competitive injury would result from the disclosure of each document. The theory underlying the withholding of most of the information was that the manufacturers "would sustain substantial competitive injury because their competitors would be receiving, free of charge, the benefits of [their] costly research and testing." 539 F.Supp. at 1327.

The District Court finally held that those documents not immune from disclosure under Exemption 4 could be withheld under Exemption 3. Section 520(h) of the Medical Device Amendments, 21 U.S.C. Sec. 360j(h) (1976), the court found, satisfied the stringent conditions necessary to qualify as a withholding statute under Exemption 3. The District Court held, therefore, that "all of the documents are exempt from disclosure under FOIA Exemption 3 by reason of 21 U.S.C. Sec. 360j(h)(2), at least until an administrative order described in 21 U.S.C. Sec. 360j(h)(1) is issued." 539 F.Supp. at 1331 (emphasis in original).

II. DISCUSSION

A. Exemption 3

We begin our analysis with the broadest of the District Court's holdings. To invoke Exemption 3, an agency must demonstrate that (1) a statute exists and was in effect at the time of the request; (2) the statute either requires that matters be withheld from the public "in such a manner as to leave no discretion on the issue," or "establishes particular criteria for withholding or refers to particular types of matters to be withheld," 5 U.S.C. Sec. 552(b)(3) (1976); and (3) the records in question are among those covered by the statute. See American Jewish Congress v. Kreps, 574 F.2d 624, 628-30 (D.C.Cir.1978); 1 J. O'REILLY, FEDERAL INFORMATION DISCLOSURE Sec. 13.02 (1982). In this case, the District Court and the corporate appellees argue that 21 U.S.C. Sec. 360j(h) (1976) is an Exemption 3 statute and that all of the requested documents are exempt from disclosure. We disagree.

Section 360j(h) establishes a scheme under which the FDA must make available to the public "a detailed summary of information respecting the safety and effectiveness of a device which information was submitted to the [agency] and which was the basis for" specified orders or was submitted to an advisory committee and formed the basis for its recommendations to the FDA. These summaries, the statute makes clear, are to be released only after the issuance of one of the specified orders. Because the FDA has not yet issued such an order, the District Court concluded that section 360j(h) barred disclosure of the raw data submitted by the manufacturers that eventually would be included in an agency-compiled summary: "Congress provided that release of these summaries should not occur until issuance of the...