Associated Dry Goods Corp. v. E.E.O.C.

• Citation: 720 F.2d 804
• Decision Date: 01 November 1983
• Docket Number: No. 82-1905,82-1905
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)
• Parties: 33 Fair Empl.Prac.Cas. 181, 32 Empl. Prac. Dec. P 33,887 ASSOCIATED DRY GOODS CORPORATION, Appellee, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant.

Page 804

720 F.2d 804

33 Fair Empl.Prac.Cas. 181,

32 Empl. Prac. Dec. P 33,887

ASSOCIATED DRY GOODS CORPORATION, Appellee, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant.

No. 82-1905.

United States Court of Appeals, Fourth Circuit.

Argued March 9, 1983.

Decided Nov. 1, 1983.

Colleen M. O'Connor, Washington, D.C. (Michael N. Martinez, Gen. Counsel, Salt Lake City, Utah, Philip B. Sklover, Associate Gen. Counsel, Vella M. Fink, Asst. Gen. Counsel, Washington, D.C., on brief), for appellant.

Andrew A. Peterson, New York City (Roger S. Kaplan, Jackson, Lewis, Schnitzler

& Krupman, New York City, on brief), for appellee.

Robert E. Williams, Douglas S. McDowell, Jeffrey A. Norris, Lorence L. Kessler, McGuiness & Williams, Washington, D.C., on brief, for amicus curiae.

Before RUSSELL and HALL, Circuit Judges, and HAYNSWORTH, Senior Circuit Judge.

DONALD RUSSELL, Circuit Judge:

This proceeding arose out of certain discrimination charges filed under Title VII of the Civil Rights Act of 1964 by a number of its employees against the Joseph Horne Company (hereafter Horne), a division of the appellee, Associated Dry Goods Corporation (hereafter Associated), with the Equal Employment Opportunity Commission (hereafter Commission). ¹ In connection with the investigation of such charges, the Commission requested of Horne "the employment records of the complainants, and statistics, documents, and other information relating to Horne's general personnel practices" and, when this request was refused unless the Commission would give "an assurance of absolute secrecy," a condition found unacceptable by the Commission, a subpoena was issued by the Commission for the same material and information. At this point, Associated (acting on behalf of its division Horne) filed this action to enjoin the enforcement of the subpoena because of the Commission's restricted rules allowing disclosure of information procured by it in the course of its investigation to charging parties. These rules and procedures for disclosure were alleged by Associated to be invalid and, in its action, Associated asked for a declaratory judgment to that effect.

Broadly stated, the Commission's rules and procedures on disclosure of materials to the parties to a charge allowed limited disclosure to a charging party of material in its investigation of the party's individual claim after the expiration of 180 days from the filing of the party's charge with the Commission, or after a Notice of a Right-to-Sue letter had been issued but only "for the purpose of reviewing information in the file in connection with pending or contemplated litigation," and on "the condition that the person requesting disclosure agrees in writing not to make the information obtained public except in the normal course of a civil action or other proceeding instituted under Title VII." ² The right of disclosure to the party charged, on the other hand, accrues only after suit has been filed by the charging party. ³

The ground on which Associated based its claim of invalidity of these rules and procedures were 1) that the Commission's rules and procedures for limited disclosures were violative of the statutory prohibition against public disclosure of these records as set forth in Sec. 2000e-5(b) and 8(e), 42 U.S.C., ⁴ 2) that they are substantive and are unauthorized since the Act restricts the rulemaking power of the Commission to procedural rules and procedures (Sec. 2000e-12(a), 42 U.S.C.); and 3) that, as substantive rules, they were not issued in compliance with the notice and comment provision of the Administrative Procedure Act (APA), Secs. 551, and 553, 5 U.S.C. ⁵

On Associated's motion for summary judgment, the District Court granted declaratory judgment in favor of Associated on the sole ground that under Sec. 2000e the Commission was prohibited from disclosing "its investigative files to anyone outside the government, including charging parties." It did not rule on the other grounds asserted by Associated. Associated Dry Goods Corp. v. Equal Emp., Etc., 454 F.Supp. 387 (E.D.Va.1978). We affirmed on appeal this decision in Equal Emp. Opportunity Com'n. v. Jos. Horne Co., 607 F.2d 1075 (4th Cir.1979). The Supreme Court granted certiorari and reversed. EEOC v. Associated Dry Goods Corp., 449 U.S. 590, 101 S.Ct. 817, 66 L.Ed.2d 762 (1981). In its decision, the Supreme Court confined its decision to the single ground which had been assigned by the District Court as the basis for its decision, and emphasized that, since neither the District Court nor the Court of Appeals addressed the other grounds raised by Associated, those issues were not before it. 449 U.S. at 594, n. 4, 101 S.Ct. at 820, n. 4. It held on the point reviewed that "charging parties [were not included] within the 'public' to whom disclosure [was] ... illegal" under Sec. 2000e-5(b). 449 U.S. at 598, 101 S.Ct. at 822. It did hold, however, that "there is no reason why the charging party should know the content of any other employee's charge, and [that] he must be considered a member of the public with respect to charges filed by other people." Id., at 603, 101 S.Ct. at 825. It remanded the cause to this Court for the resolution of the other challenges of Associated to the Commission's disclosure rules and regulations and we in turn remanded the action to the District Court for the disposition of those issues.

On remand both parties moved in the District Court for summary judgment. In resolving these motions, the District Court again found the Commission's disclosure rules and regulations invalid. Associated Dry Goods Corp. v. E.E.O.C., 543 F.Supp. 950 (E.D.Va.1982). In reaching this conclusion, the Court first held that such rules and procedures were substantive and not "procedural." In reaching this conclusion, it found that the disclosure rules and regulations "affect[ed] ... the rights of charging parties, respondents and members of the public to access to ... the EEOC's investigative files" by "enhancing or diminishing a party's willingness to settle, and thereby affects a charging party's decision on whether to exercise his or her right to sue." Since the Commission was only authorized under Sec. 2000e-12(a) of the Act to "issue, amend, or rescind suitable procedural regulations to carry out the provisions of [Title VII]," these disclosure rules and regulations, being substantive and not procedural, were beyond the Commission's authority and were invalid. Id. at 953, 956-57. However, it chose not to rest its decision on this ground, recognizing that, whether authorized under the Commission's power as granted by the Act, the Commission's rules might be accorded judicial deference as within the inherent power of the Commission in implementing the purposes of the Act. It held, though, that rules and regulations which gave the charging party access, before access was given the party being charged, were neither fair nor consistent and that only a disclosure procedure which made the investigative files available to both parties at the same time would justify judicial deference. It accordingly concluded that, in the District Court's opinion, these regulations and procedures were not entitled to judicial deference and could not be sustained as valid interpretative rules and regulations. The District Court then addressed the question whether the validity of the Commission's disclosure of the rules and regulations depended on compliance in their issuance with the procedures for notice and comment prescribed by Sec. 553, 5 U.S.C. of the Administrative Procedure Act. It held that, though that section expressly exempted " 'interpretative rules, general statements of policy, or rules of agency organization, procedure or practice,' " ⁶ it applied to these particular rules and procedures because they had a "substantial impact" on the rights of the parties. It, therefore, as an alternative ground invalidated Sec. 1610.17 and Sec. 83 of the Manual for failure to comply with Sec. 553. ⁷ The Commission has appealed that decision and we reverse.

Before addressing the merits of the appeal, we are confronted with a motion of the Commission, filed after appeal to this Court, to dismiss the present action as moot. The basis for such motion was the claim that during the pendency of this proceeding the files involved had been destroyed by the Commission and that any objection to their disclosure has been thereby rendered moot. We tarry to observe that it is odd that the Commission would have destroyed these files while this appeal was pending and would use its own act of destruction as a basis for dismissal of the action as moot. In any event, we are not disposed under the circumstances to dismiss the action. As Associated has said, it is anomalous "to ask an appellate court to vacate a lower court decision because the losing party has destroyed what it belatedly purports (sic) to be the subject matter of the law-suit." Contrary to the Commission's assumption, the issue here is not the disclosure of these particular files so much as the legal validity of the Commission's disclosure rules and procedures. That validity is an issue that will likely recur often and it is one which it would seem the Commission itself, as much as Associated, should have wished to have resolved. Undoubtedly it is an issue Associated, as a national concern with subsidiaries employing thousands of persons within the Act, is likely to be concerned with in the future. We conclude that both parties--the Commission and Associated--have a substantial stake in the subject matter of this action, which is the validity of the Commission's disclosure rules and procedures. ⁸ They have been litigating this issue for years. Both parties are represented by able counsel, who are thoroughly acquainted with the points in issue and the law involved, and both have the financial resources and have given every indication of an intention to litigate this issue to the...