Irwin Memorial Blood Bank of San Francisco Medical Soc. v. American Nat. Red Cross, 79-4180

• Citation: 640 F.2d 1051
• Decision Date: 26 March 1981
• Docket Number: No. 79-4180,79-4180
• Parties: IRWIN MEMORIAL BLOOD BANK OF THE SAN FRANCISCO MEDICAL SOCIETY, Appellant, v. AMERICAN NATIONAL RED CROSS, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1051

640 F.2d 1051

IRWIN MEMORIAL BLOOD BANK OF THE SAN FRANCISCO MEDICAL

SOCIETY, Appellant, v. AMERICAN NATIONAL RED CROSS, Appellee.

No. 79-4180.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted June 9, 1980.

Decided March 26, 1981.

David E. Willett, Hassard, Bonnington, Rogers & Huber, San Francisco, Cal., for appellant.

James Skelly Wright, Jr., Washington, D. C., argued for appellee; Howard T. Weir, Morgan, Lewis & Bockius, Washington, D. C., on brief.

Appeal from the United States District Court for the Northern District of California.

Before ANDERSON and TANG, Circuit Judges, and MURRAY, ^* District Judge.

J. BLAINE ANDERSON, Circuit Judge:

Appellant Irwin initiated this action in the lower court pursuant to the provisions of the Freedom of Information Act, 5 U.S.C. § 552. It sought an order requiring disclosure by appellee Red Cross of certain financial information. Red Cross defended by asserting that it was not an "agency" of the Federal Government within the meaning of the FOIA. The controlling facts were not disputed, and cross-motions for summary judgment were made. Finding that Red Cross was not an "agency" as defined by 5 U.S.C. § 552(e), summary judgment was granted in favor of Red Cross, from which Irwin appeals. We affirm the lower court's decision.

Irwin strongly contends that this court should hold Red Cross subject to the requirements of the FOIA because it has generally been regarded as a federal agency and characterized as such by various state and federal government entities and officials, and by the Red Cross itself. Specifically, Irwin argues that Red Cross' ability to avoid the requirements of various state regulatory statutes because of its relationship with the federal government is entirely inconsistent with its assertion of non-agency status. In addition, Irwin directs us to the Supreme Court's decision in which the Red Cross was held to be "an instrumentality of the United States for purposes of immunity from state taxation...." Department of Employment v. United States, 385 U.S. 355, 358, 87 S.Ct. 464, 467, 17 L.Ed.2d 414 (1966).

Even though this argument is intuitively appealing, we think it misses the mark. It is significant that none of the above characterizations were made within the context of the FOIA. Because Congress has expressly defined those agencies to which the statute applies, the relevance of characterizations of an entity in different contexts is substantially diminished. The only issue before this court is whether the Red Cross is an "agency" for purposes of the Freedom of Information Act, 5 U.S.C. § 552.

Prior to November, 1974, the requirements of the FOIA were applicable only to "agencies" as defined in section 2(a) of the Administrative Procedure Act, 5 U.S.C. § 551(1). With certain specific exceptions not relevant to this discussion, section 551(1) defines "agency" to mean "each authority of the Government of the United States, whether or not it is within or subject to review by another agency." Although this definition was viewed as unsatisfactory by most courts, a broad standard was eventually developed. In Lombardo v. Handler, 397 F.Supp. 792 (D.D.C.1975), aff'd, 546 F.2d 1043 (D.C.Cir.1976), cert. denied, 431 U.S. 932, 97 S.Ct. 2639, 53 L.Ed.2d 248 (1977), the court's reference to the legislative history of § 551(1) led to the following observation:

"The theme that runs through the legislative history of section 2 is that an administrative agency is a part of government which is 'generally independent in the exercise of (its) functions' and which 'by law has authority to take final and binding action' affecting the rights and obligations of individuals, particularly by the characteristic procedures of rule-making and adjudication."

Id. 397 F.Supp. at 795, quoting Freedman, Administrative Procedure and the Control of Foreign Direct Investment, 119 U.Pa.L.Rev. 1, 9 (1970); see also, Washington Research Project, Inc. v. Dept. of Health, Education and Welfare, 504 F.2d 238, 248, 248 n. 15 (D.C.Cir.1974), cert. denied, 421 U.S. 963, 95 S.Ct. 1951, 44 L.Ed.2d 450 (1975). This concept of "substantial independent authority," therefore, was the focal point of analysis under § 551(1). See Lombardo, supra, 397 F.Supp. at 795 (and the cases cited therein).

On November 21, 1974, the Freedom of Information Act, 5 U.S.C. § 552, was amended to include § 552(e), which provides as follows:

"For purposes of this section, the term 'agency' as defined in section 551(1) of this title includes any executive department, military department, Government Corporation, Government controlled corporation; or other establishment in the executive branch of the Government (including the Executive Office of the President), or any independent regulatory agency."

Irwin does not contend, nor do we think it could, that the Red Cross is an agency under § 551(1) as that section was interpreted by the courts. Rather, it argues that Red Cross' relationship with the federal government is sufficient to include it within the language of § 552(e) as either a government-controlled corporation, or other establishment in the executive branch of the Government.

It is true, as Irwin argues, that section 552(e) was intended to expand the definition of "agency" to include entities that may not have been considered agencies under the act prior to the amendment. On March 5, 1974, the Committee on Government Operations released its report on the proposed amendment. In pertinent part, it reads:

"DEFINITION OF 'AGENCY'

"For the purposes of this section, the definition of 'agency' has been expanded to include those entities which may not be considered agencies under section 551(1) of title 5, U.S.Code, but which perform governmental functions and control information of interest to the public. The bill expands the definition of 'agency' for purposes of section 552, title 5, United States Code. Its effect is to insure inclusion under the Act of Government corporations, Government controlled corporations, or other establishments within the executive branch, such as the U.S. Postal Service.

"The term 'establishment in the Executive Office of the President,' as used in this amendment, means such functional entities as the Office of Telecommunications Policy, the Office of Management and Budget, the Council of Economic Advisers, the National Security Council, the Federal Property Council, and other similar establishments which have been or may in the future be created by Congress through statute or by Executive order.

"The term 'Government corporation,' as used in this subsection, would include a corporation that is a wholly Government-owned enterprise, established by Congress through statute, such as the St. Lawrence Seaway Development Corporation, the Federal Crop Insurance Corporation (FCIC), the Tennessee Valley Authority (TVA), and the Inter-American Foundation.

"The term 'Government controlled corporation,' as used in this subsection, would include a corporation which is not owned by the Federal Government, such as the National Railroad Passenger Corporation (Amtrak) and the Corporation for Public Broadcasting (CPB)." (emphasis in original)

H.R.Rep.No.93-876, 93rd Cong., 2d Sess., reprinted in (1974) U.S.Code Cong. & Ad.News 6267, 6274. ¹ In its report dated October 1, 1974, the Committee of Conference modified this definition of "government controlled corporation" to exclude "corporations which receive appropriated funds but are neither chartered by the Federal Government nor controlled by it, such as the Corporation for Public Broadcasting." Joint Explanatory Statement of the Committee of Conference, Conference Report No. 93-1200, 93rd Cong., 2d Sess., reprinted in (1974) U.S.Code Cong. & Ad.News 6285, 6293.

We think these examples furnish a helpful starting point and aid in the difficult task of discerning the limits of the Act's intended coverage. Nonetheless, the true extent of the Act's expanded coverage under section 552(e) is a matter to be developed by the courts on a case-by-case basis. This decision-making process is an unavoidable consequence resulting from "the 'myriad organizational arrangements' adopted 'for getting the business of the government done.' " Public Citizen Health Research Group v. Dept. of Health, Education and Welfare, 449 F.Supp. 937, 940 (D.D.C.1978). Therefore, each arrangement must be examined in its own context. Washington Research Project, supra, 504 F.2d at 246.

Moreover, this vast diversity of organizational arrangements undermines the precedential value of prior decisions. The characteristics of separate entities may differ so drastically, both quantitatively and qualitatively, that no meaningful comparison between the two can be made. We recognize the shortcomings of this developmental process, and the fact that in some cases it is wholly inadequate in terms of the certainty and predictability of the Act's applicability, but this is the inherent and inevitable course we must follow.

Turning to the case at hand, Irwin argues that Red Cross is an agency within § 552(e) because it is either a Government controlled corporation, or other establishment in the executive branch of the Government. In the context within which the Red Cross operates, we think it is unnecessary to distinguish between the two because regardless of its label, be it a department, corporation, office, etc., a threshold showing of substantial federal control or supervision is required before an entity can be characterized as "federal" for some purpose. Forsham v. Harris, 445 U.S. 169, 180-81, 100 S.Ct. 978, 984-85, 63 L.Ed.2d 293, 304 (1980); Rocap v. Indiek, 539 F.2d 174, 177 (D.C.Cir.1976); Public Citizens, supra, 449 F.Supp. at 941; Lombardo, supra, 397 F.Supp. at 802. It is the existence of this element of substantial federal control that distinguishes those entities that can be fairly denominated as federal agencies under the FOIA from the...