CAB v. Dreyer, 78 C 1475.
| Decision Date | 30 October 1980 |
| Docket Number | No. 78 C 1475.,78 C 1475. |
| Citation | 501 F. Supp. 905 |
| Parties | CIVIL AERONAUTICS BOARD, Plaintiff, v. Rodney DREYER and North Atlantic Buying Service, Inc., Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Edward R. Korman, U. S. Atty., for the Eastern Dist. of New York by Reuben S. Koolyk, Asst. U. S. Atty., Brooklyn, N. Y. (Howard M. Schmeltzer, Bureau of Consumer Protection, Civil Aeronautics Board, Washington, D. C., of counsel), for plaintiff.
The instant action is no stranger to this Court. Beginning in 1977 when the Civil Aeronautics Board (hereinafter "CAB" or the "Board") instituted it pursuant to § 1007 of the Federal Aviation Act of 1958 as amended, 49 U.S.C. § 1487 (1976), this Court has been asked to decide a number of issues.1 The motion now before the Court seeks to suppress the deposition of defendant Rodney Dreyer taken by the CAB on December 6, 1977. The defendants argue that the deposition was improperly filed with the Court in this action. The second motion seeks a stay and a remand of the instant action to afford the CAB an opportunity to reevaluate its prosecution in light of "changed circumstances".
The defendants argue that Rodney Dreyer's December, 1977 deposition must be suppressed because the CAB was without authority to make "civil investigative demands backed with subpoena power." This contention, however, plainly ignores the import of the relevant regulation, which explicitly provides:
Upon request of the Director, Bureau of Enforcement, any Member of the Board, the chief administrative law judge or the administrative law judge designated to preside ... may issue a subpoena directing the person named therein to appear ... to testify or to produce documentary evidence relating to any matter and investigation ...
14 C.F.R. § 305.7
Defendant's reliance in support of its position on See v. City of Seattle, 387 U.S. at 541, 87 S.Ct. 1737, 18 L.Ed.2d 943 (1967) and Camara v. Municipal Court, 387 U.S. 523, 87 S.Ct. 1727, 18 L.Ed.2d 930 (1967), is misplaced. These cases address the issue of whether a property owner may refuse entry to a health or fire inspector who has no search warrant. Upon holding that such an intrusion was an impermissible search under the Fourth Amendment, the Court required that, absent an emergency, a warrant must be procured prior to inspection. Mr. Dreyer has failed to demonstrate what effect, if any, these decisions have on the constitutionality of an investigative subpoena issued pursuant to 14 C.F.R. § 305.7. Accordingly, this Court concludes that the subpoena of Mr. Dreyer was properly issued pursuant to the Board's statutory subpoena power.
Mr. Dreyer next contends that Part 305 investigations are "strictly confidential," and that disclosure of any evidence obtained in such a proceeding is improper. He urges that the sole function of Part 305 investigations is to determine whether or not formal proceedings will be brought and not to assist judicial proceedings. To bolster this contention, defendants have cited § 902(f) of the Act, 49 U.S.C. § 1472(f) (1976), which makes disclosure of information obtained "during the course of an examination of the accounts, records and memoranda of an air carrier or which is withheld from public disclosure under § 1504 of this title" punishable as a criminal offense. In addition, defendant asserts that a Board order2 was required before he could release copies of the CAB's investigative records to this Court.3
It is the opinion of this Court, however, that the defendants contention misconstrues the rationale of Part 305. A Part 305 proceeding is a means by which the Civil Aeronautics Board, prior to bringing formal charges, employs compulsory process to inquire into possible regulatory violations. These investigations are conducted in a "non-public" forum in order to protect participants from adverse publicity and invasion of privacy upon appearing at a Part 305 investigation. See CAB Order C-206, Docket No. 25953 (January 31, 1977). Since one of the reasons Part 305 investigations are held is to obtain evidence of violations that could support the prosecution of an enforcement proceeding, the Board contemplated that such evidence would be used in enforcement actions brought in federal courts, where it is admissible. See 28 Fed. Reg. 5990 (May 28, 1963). To interpret the regulation as defendant suggests would render the use of Part 305 as an investigative procedure impossible.
It is well-settled that an agency's interpretation of its own regulations is controlling unless it is erroneous or inconsistent with the law. See Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); Chrysler Corp. v. Tofany, 419 F.2d 499, 512 (2d Cir. 1969). See also K. Davis. Administrative Law Treatise § 5.03 (1958). In CAB Order C-213, Docket No. 29593, adopted by the CAB on July 29, 1977, and submitted by plaintiffs in opposition to this motion, the Civil Aeronautics Board held that, "while § 305.10 provides that the records of Part 305 proceedings are internal Board documents not available to the general public, this does not mean that such records remain nonpublic in perpetuo." The Board then referred to the Explanatory Statement to the enactment of Part 305, which stated that an investigative record would lose its non-public status when "used in subsequent enforcement actions in accordance with law." 28 Fed.Reg. 5989 (1963).
The Board's position is consistent with the interpretation by the courts of similar regulations concerning non-public investigations conducted by other agencies. In LaMorte v. Mansfield, 438 F.2d 448 (2d Cir. 1971), the Second Circuit had the opportunity to interpret 17 C.F.R. § 203.6, an SEC regulation nearly identical to the Part 305 regulation at issue here. The Court noted: "The long-standing regulation ... was an articulation of the discretion possessed by the agency ... whether to disclose information acquired in the course of certain investigatory proceedings. * * * To the extent that a privilege exists, it is the agency's, not the witness'" Id. at 451.
In its reply, defendants argue that the CAB has held that § 902(f) of the Federal Aviation Act, 49 U.S.C. § 1472(f) (1976), does apply to information gathered via a Part 305 proceeding. In support of this contention, Rodney Dreyer and NABS rely on Order C-206, which they urge the Court to order disclosed. Such an order is unnecessary because plaintiffs provided the court with a copy of it at oral argument.4
Order C-206 was the CAB's response to Rodney Dreyer's and NABS' Petition for Review of Order C-185, Docket No. 29593 (July 30, 1976), which instituted an informal non-public investigation into the unlawful practices in the North Atlantic Charter Market. At that time, Rodney Dreyer and NABS contended that the issuance of a non-public order contravened the Federal Aviation Act of 1958, because §§ 1001 and 204(a) of the Act, 49 U.S.C. §§ 1481, 1324 (1958), require all Board orders to be made public.
In rejecting the defendants' claim, the Board cited § 1104 of the Act, which provides for the withholding of information from the public when the information "would adversely affect the interests of such person and is not required in the interest of the public." 49 U.S.C. § 1504. The CAB then noted that the defendants' interpretation would make the Act inconsistent, and would expose the Board and its employees to criminal liability.5
It is just this position that Rodney Dreyer and NABS now urge upon this Court with respect to the release of Mr. Dreyer's 1977 deposition. For this reason, this Court finds such a position to be without merit. Two additional points, however bear consideration. First, the Court has noted that Order C-206 relies on another section of the Act to support its interpretation of § 204(d)'s call for disclosure. Section 1001, 49 U.S.C. § 1481 (1976), provides that the Board "... conduct their proceedings in such manner as will be conducive to the proper dispatch of business and to the ends of justice." Thus, the Board is free to conduct its proceedings as public or non-public in its own discretion. Second, the Board's rationale for not disclosing the order initiating a non-public investigation, namely the protection of those under investigation, is not present here, where the enforcement bureau has decided to initiate formal public proceedings.
Finally, it has been Rodney Dreyer's and NABS' position that a formal vote of the Board is necessary to order disclosure of Part 305 material in an enforcement proceeding. The parties have stipulated that there was no CAB vote to release this material to the Court.6 Thus, according to the defendants, plaintiff has committed a federal offense by releasing the deposition and Order C-206 without a Board vote. The Court rejects this view.
It has already been established as the law in this case7 that the Bureau of Consumer Protection (the "Bureau") has the authority to initiate this action. Moreover, 14 C.F.R. § 385.22, entitled "Delegation to the Director, Bureau of Consumer Protection", authorizes the Director to:
Therefore, it is the opinion of this Court that the foregoing sections constitute a lawful delegation of authority to the Director of the Bureau of Consumer Protection, to institute actions like this one and to disclose relevant Part 305 material for the purpose of these enforcement actions. The adoption of defendants' interpretation of the authority to delegate would hamper the...
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