Ashland Oil, Inc. v. F.T.C., s. 76-1174

• Citation: 179 U.S. App. D.C. 22,548 F.2d 977
• Decision Date: 02 March 1977
• Docket Number: Nos. 76-1174,76-1304,s. 76-1174
• Parties: , 1976-2 Trade Cases 61,088 ASHLAND OIL, INC., Appellant, v. FEDERAL TRADE COMMISSION et al. ASHLAND OIL, INC. v. FEDERAL TRADE COMMISSION et al. Appeal of John E. MOSS, Chairman, Subcommittee on Oversight and Investigations of the Committee on Interstate and Foreign Commerce, United States House of Representatives.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 977

548 F.2d 977

179 U.S.App.D.C. 22, 1976-2 Trade Cases 61,088

ASHLAND OIL, INC., Appellant, v. FEDERAL TRADE COMMISSION et al.

ASHLAND OIL, INC. v. FEDERAL TRADE COMMISSION et al.

Appeal of John E. MOSS, Chairman, Subcommittee on Oversight

and Investigations of the Committee on Interstate

and Foreign Commerce, United States

House of Representatives.

Nos. 76-1174, 76-1304.

United States Court of Appeals District of Columbia Circuit.

Argued May 10, 1976.

Decided Sept. 20, 1976.

Rehearing Denied March 2, 1977.

Ray S. Bolze, Washington, D.C., with whom Roger C. Simmons, Washington, D.C., was on the brief for appellant in No. 76-1174 and appellee Ashland Oil, Inc., in No. 76-1304.

Joseph A. Califano, Jr., Washington, D.C., with whom Richard M. Cooper and Benjamin W. Heineman, Jr., Washington, D.C., were on the brief for appellant in No. 76-1304 and appellee Moss in No. 76-1174.

Edwin E. Huddleson, III, Atty., Dept. of Justice, Washington, D.C., with whom Rex E. Lee, Asst. Atty. Gen., Earl J. Silbert, U. S. Atty., Robert J. Lewis, Gen. Counsel, F.T.C., Gerald P. Norton, Deputy Gen. Counsel, Gerald Harwood, Asst. Gen. Counsel, William A. E. Doying, Atty., F.T.C. and Leonard Schaitman, Atty., Dept. of Justice, Washington, D.C., were on the brief for appellee, F.T.C., and others in No. 76-1174.

Before BAZELON, Chief Judge, Mac- KINNON and ROBB, Circuit Judges.

Opinion Per Curiam.

Dissenting opinion filed by Circuit Judge MacKINNON.

PER CURIAM:

This action was brought by Ashland Oil, Inc. to enjoin the Federal Trade Commission from transferring information obtained from Ashland to the House Subcommittee on Oversight and Investigation of the Committee on Interstate and Foreign Commerce. The Subcommittee Chairman, Rep. John E. Moss, intervened. The information in question consists of Ashland's reserve estimates for all its natural gas leases and contracts on federal lands. All parties concede this information is a "trade secret" of great competitive value to Ashland. It is also of great interest to the Subcommittee for whatever light it may cast on the causes of the current natural gas shortage. See generally FTC v. Texaco, 170 U.S.App.D.C. 323, 517 F.2d 137 (1975), vacated and rehearing en banc ordered (Feb. 6, 1976).

Judge Corcoran denied Ashland's request for preliminary and permanent injunctive relief in a comprehensive opinion. 409 F.Supp. 297 (1976). Ashland's central argument is that experience shows that if the information is made available to Congress, it will inevitably be "made public." This in turn is alleged to violate the prohibition in 15 U.S.C. § 46(f) against the FTC's "mak(ing) public" trade secrets. ¹ Judge Corcoran rejected this argument on the grounds that "the courts must presume that the committees of Congress will exercise their powers responsibly and with due regard for the rights of affected parties," 409 F.Supp. at 308. Concluding that Ashland's showing was insufficient to overcome this presumption, the court held that no likelihood of irreparable injury warranting an injunction had been established, id., 309.

We affirm, essentially for the reasons stated in Judge Corcoran's opinion.

I

No substantial showing was made that the materials in the possession of the FTC will necessarily be "made public" if turned over to Congress. Therefore, we need not decide what application, if any, 15 U.S.C. § 46(f) might have if it were evident that Congress intended to "make public" trade secrets. At a minimum, we think it is clear that absent such a showing, 15 U.S.C. § 46(f) does not preclude the FTC from transmitting trade secrets to Congress pursuant either to subpoena or formal request. ²

II

Unlike the dissent, we find it unnecessary to decide whether the subpoena issued for the data was valid under House Rules. The FTC's decision to turn over the materials in question was not based on and in fact predated issuance of the subpoena. On It is clear that but for the temporary restraining order, the FTC would have submitted Ashland's data to the Subcommittee; indeed, on November 28, the FTC did deliver to the Subcommittee similar data from other companies, which had not challenged the release in court. J.A. 60. The dissent does not, and cannot deny that the FTC action challenged in this case was bottomed on a Congressional request for the data, not the subsequent subpoena. Nor does the dissent suggest that 15 U.S.C. § 46(f) must be read differently as a matter of law where a request, rather than a subpoena, is involved. The dissent's entire discussion of the subpoena rests solely on an interpretation of statements made by Government counsel during oral argument. ³ As the dissent interprets it, this exchange indicates that "the legal position of the United States before this Court is that any presently intended compliance is based solely on the subpoena, and on no other request." Dissent, 5.

October 29, 1975, Congressman Moss, in his capacity as Subcommittee Chairman, wrote to the FTC requesting all data gathered by the Commission relating to extensions of oil and gas leases on federal lands. J.A. 36-37. On November 18, 1975, Chairman Engman of the FTC responded that "(t)he Commission has determined to grant your request" and " . . . will deliver the information requested on November 28, 1975." J.A. 38-39. By telephone and confirming letter of November 18, the FTC notified Ashland that the agency planned to release the requested information to the Subcommittee. J.A. 40. Subsequently Ashland filed this action, and on November 24, Judge Corcoran issued a temporary restraining order precluding the turnover. J.A. 49-50. Only then, on December 2, 1975, did the Subcommittee issue its subpoena. J.A. 52-53.

In our opinion, this is a strained reading of what was said at argument. Contrary to the dissent's interpretation, government counsel never stated that the FTC had repudiated its prior position and that "any presently intended compliance is based solely The reason counsel asked the court to uphold the FTC based on the subpoena is clear from the colloquy. Counsel forthrightly acknowledged that there may be some latent disagreement between the Department of Justice and the FTC regarding the obligation of regulatory agencies to comply with mere Congressional requests for information. ⁴ Thus, the dissent's repeated insistence on a single, unitary "legal position of the United States" is belied by counsel's explicit statement that the FTC and the Department of Justice may hold different views as to the correct interpretation of 15 U.S.C. § 46(f). ⁵ Far from indicating that the United States had "abandoned" the view adopted by the FTC, counsel articulated the FTC's position and then stated that the Department of Justice wished to "reserve" its own position on the matter. Tr., 30. In our view, counsel's statements at oral argument meant no more and no less than what they said: that the Department of Justice felt it was "unnecessary to reach", Tr., 29, the request because it maintained that the subpoena was valid.

on the subpoena." Quite the contrary, the brief filed by the Department of Justice on behalf of the FTC clearly states that "whether or not the subcommittee subpoena is technically valid (and it is), 15 U.S.C. § 46(f) obligates the FTC to comply with these official Congressional requests for information." Brief at 13. Counsel did urge that the court need not reach this back-up argument, since in his view the subpoena was valid: "We ask the court to confine its decision to the facts of this case, where there is a valid subpoena." Tr., 29. But that is a long way from conceding that if the court rejected counsel's opinion that the subpoena was valid (as the dissent does), it must ignore the grounds relied upon by the FTC when it acted originally, and upon which it still felt "obligated" to act.

Even if government counsel had attempted to disavow the basis on which the FTC acted and it is clear from the foregoing that he did not his statements could not bind the court to ignore the rationale on which the FTC's decision was actually based. No principle of administrative law is more firmly established than that a court must review discretionary actions in terms of the rationale on which the agency acted, rather than "accept appellate counsel's post hoc rationalizations," Burlington Truck Lines v. United States,371 U.S. 156, 169, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962); SEC v. Chenery Corp.,318 U.S. 80, 88, 63 S.Ct. 454, 87 L.Ed. 626 (1943). Without citation of authority, the dissent would go far beyond merely accepting appellate counsel's post hoc rationalizations and would hold that such rationalizations may actually preclude the court from considering the basis on which the agency in fact acted. ⁶ There is no support for this novel Here, of course, the Department of Justice does not purport to "confess" that FTC committed legal error in deciding to turn over the materials to Congress; it merely "reserves" its own position on whether the FTC was obligated to do so.

doctrine. The analogy that comes closest is a confession of error by appellate counsel, but even there, it is settled that such a confession of error is not binding. ⁷

III

Since we do not read the district court's opinion as finding Congressman Moss ever broke a promise of confidentiality, we have no occasion to address the grounds of his separate appeal.

We extend the stay previously entered for a period of 15 days from the date hereof to enable the parties to seek a further stay from the Supreme Court of the United States, if they are so advised.

So ordered.

MacKINNON, Circuit Judge (dissenting):

The majority opinion strips the Department of Justice of its litigating authority, effectively repeals 28 U.S.C. § 516, and wrests all substance from the role of oral argument in federal appellate court.

The majority opinion states that the very valuable trade secrets here involved may be surrendered to Congress "pursuant either...