Chrysler Corporation v. Brown, No. 77-922

CourtUnited States Supreme Court
Writing for the CourtREHNQUIST
Citation99 S.Ct. 1705,441 U.S. 281,60 L.Ed.2d 208
PartiesCHRYSLER CORPORATION, Petitioner, v. Harold BROWN, Secretary of Defense, et al
Decision Date18 April 1979
Docket NumberNo. 77-922

441 U.S. 281
99 S.Ct. 1705
60 L.Ed.2d 208
CHRYSLER CORPORATION, Petitioner,

v.

Harold BROWN, Secretary of Defense, et al.

No. 77-922.
Argued Nov. 8, 1978.
Decided April 18, 1979.
Syllabus

Petitioner, as a party to numerous Government contracts, was required to comply with Executive Orders 11246 and 11375, which charge the Secretary of Labor with ensuring that corporations that benefit from Government contracts provide equal employment opportunity regardless of race or sex. Regulations promulgated by the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) require Government contractors to furnish reports about their affirmative-action programs and the general composition of their work forces, and provide that notwithstanding exemption from mandatory disclosure under the Freedom of Information Act (FOIA), records obtained pursuant to Executive Order 11246 shall be made available for inspection if it is determined that the requested inspection furthers the public interest and does not impede agency functions, except in the case of records disclosure of which is prohibited by law. After the Department of Defense's Defense Logistics Agency (DLA), the designated compliance agency responsible for monitoring petitioner's employment practices, informed petitioner that third parties had made an FOIA request for disclosure of certain materials that had been furnished to the DLA by petitioner, petitioner objected to release of the materials. The DLA determined that the materials were subject to disclosure under the FOIA and OFCCP disclosure rules, and petitioner then filed a complaint in the Federal District Court seeking to enjoin release of the documents. Petitioner contended, inter alia, that disclosure was barred by the FOIA and was inconsistent with the Trade Secrets Act, 18 U.S.C. § 1905, which imposes criminal sanctions on Government employees who disclose or make known, in any manner or to any extent "not authorized by law," certain classes of information submitted to a Government agency, including trade secrets and confidential statistical data. Finding jurisdiction to subject the disclosure decision to review under the Administrative Procedure Act (APA), the District Court held that certain of the requested information fell within Exemption 4 of the FOIA, relating to trade secrets and commercial or financial information; that whether the requested information may or must be withheld thus

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depended on applicable agency regulations; and that here a regulation which states that no officer or employee of the Department of Labor is to violate 18 U.S.C. § 1905, and which proscribes specified disclosures if "not authorized by law," required that the information be withheld. Both sides appealed, and the Court of Appeals vacated the District Court's judgment. While agreeing with the District Court that the FOIA does not compel withholding of information that falls within its exemptions, and that analysis must proceed under the APA, the Court of Appeals reached a different conclusion as to the interpretation of 29 CFR § 70.21(a). In the Court of Appeals' view, disclosures made pursuant to OFCCP disclosure regulations are "authorized by law" by virtue of those regulations.

Held:

1. The FOIA is exclusively a disclosure statute and affords petitioner no private right of action to enjoin agency disclosure. The language, logic, and history of the FOIA show that its provisions exempting specified material from disclosure were only meant to permit the agency to withhold certain information, and were not meant to mandate nondisclosure. Congressional concern was with the agency's need or preference for confidentiality; the FOIA by itself protects the interest in confidentiality of private entities submitting information only to the extent that this interest is endorsed by the agency collecting the information. Pp. 290-294.

2. The type of disclosure threatened in this case is not "authorized by law" within the meaning of the Trade Secrets Act on the theory that the OFCCP regulations relied on by DLA were the source of that authorization. Pp. 295-316.

(a) The Act addresses formal agency action as well as acts of individual Government employees, and there is nothing in its legislative history to show that Congress intended the phrase "authorized by law" to have a special, limited meaning different from the traditional understanding that properly promulgated, substantive agency regulations have the "force and effect of law." In order for a regulation to have the "force and effect of law," it must be a "substantive" or "legislative-type" rule affecting individual rights and obligations (as do the regulations in the case at bar), and it must be the product of a congressional grant of legislative authority, promulgated in conformity with any procedural requirements imposed by Congress. Pp. 295-303.

(b) The disclosure regulations at issue in this case cannot be based on § 201 of Executive Order 11246, as amended, and a regulation which permits units in the Department of Labor to promulgate supplemental

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disclosure regulations consistent with the FOIA. Since materials that are exempt from disclosure under the FOIA are outside the ambit of that Act, the Government cannot rely on the FOIA as congressional authorization for disclosure regulations that permit the release of information within the Act's exemptions. In order for regulations adopted under § 201 of Executive Order 11246—which speaks in terms of rules and regulations "necessary and appropriate" to achieve the Executive Order's purposes of ending discrimination by the Federal Government and those who deal with it—to have the "force and effect of law," there must be a nexus between the regulations and some delegation of the requisite legislative authority by Congress. When Congress enacted statutes which arguably authorized the Executive Order (the Federal Property and Administration Services Act of 1949, Titles VI and VII of the Civil Rights Act of 1964, and the Equal Employment Opportunity Act of 1972), it was not concerned with public disclosure of trade secrets or confidential business information, and it is not possible to find in these statutes a delegation of the disclosure authority asserted by the Government here. Also, one cannot readily pull from the logic and purposes of the Executive Order any concern with the public's access to information in Government files or the importance of protecting trade secrets or confidential business statistics. Pp. 303-308.

(c) Legislative authority for the OFCCP disclosure regulations cannot be found in 5 U.S.C. § 301, which authorizes heads of Government departments to prescribe regulations to govern internal departmental affairs and the custody and use of its records, and which provides that it does not authorize withholding information from the public or limiting the availability of records to the public. Section 301 is a "housekeeping statute," authorizing rules of agency organization, procedure, or practice as opposed to "substantive rules." There is nothing in the legislative history to indicate that § 301 is a substantive grant of legislative power to promulgate rules authorizing the release of trade secrets or confidential business information. Thus, § 301 does not authorize regulations limiting the scope of the Trade Secrets Act. Pp. 308-312.

(d) There is also a procedural defect in the OFCCP disclosure regulations that precludes courts from affording them the force and effect of law, since they were promulgated as "interpretative rules" without complying with the APA's requirement that interested persons be given general notice of an agency's proposed rulemaking and an opportunity to comment before a "substantive rule" is promulgated. An "interpretative regulation" cannot be the "authoriz[ation] by law" required by the Trade Secrets Act. Pp. 312-316.

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3. However, the Trade Secrets Act does not afford a private right of action to enjoin disclosure in violation of the statute. Where this Court has implied a private right of action under a criminal statute "there was at least a statutory basis for inferring that a civil cause of action of some sort lay in favor of someone." Cort v. Ash, 422 U.S. 66, 79, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26. Nothing in the Trade Secrets Act prompts such an inference; nor is there any indication of legislative intent to create a private right of action. Most importantly, a private right of action under the Act is not necessary to make effective the congressional purpose, since review of DLA's decision to disclose petitioner's employment data is available under the APA. Pp. 316-317.

4. Since the Trade Secrets Act and any "authoriz[ation] by law" contemplated by that Act place substantive limits on agency action, DLA's decision to disclose petitioner's reports is reviewable agency action and petitioner is a person "adversely affected or aggrieved" within the meaning of the APA's provision affording the right of judicial review of agency action to such a person. Because the Court of Appeals did not reach the issue whether disclosure of petitioner's documents was barred by the Trade Secrets Act, the case is remanded in order that the Court of Appeals may consider whether the contemplated disclosures would violate the Act. Pp. 317-319.

3d Cir., 565 F.2d 1172, vacated and remanded.

Burt A. Braverman, Washington, D. C., for petitioner.

Barbara Allen Babcock, Asst. Atty. Gen., Washington, D. C., for respondents.

Page 285

Mr. Justice REHNQUIST delivered the opinion of the Court.

The expanding range of federal regulatory activity and growth in the Government sector of the economy have increased federal agencies' demands for information about the activities of private individuals and corporations. These developments have paralleled a related concern about secrecy in Government and abuse of power. The Freedom of...

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