Mattox v. F.T.C.
| Citation | 752 F.2d 116 |
| Decision Date | 21 January 1985 |
| Docket Number | No. 84-1768,84-1768 |
| Parties | 1985-1 Trade Cases 66,410 Jim MATTOX, Attorney General for the State of Texas, Plaintiff-Appellant, v. FEDERAL TRADE COMMISSION, Defendant-Appellee, and Chevron Corporation, Intervenor-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Jim Mattox, Atty. Gen., Thomas M. Mengler, Paul Rich, Asst. Attys. Gen., Austin, Tex., for plaintiff-appellant.
Robert M. Langer, Neil G. Fishman, Asst. Attys. Gen., Hartford, Conn., for amicus curiae States of Alaska, Cal., Conn., etc.
Joanne L. Levine, Sandra McKeown Vidas, Howard E. Shapiro, F.T.C., Washington, D.C., Helen M. Eversberg, U.S. Atty., San Antonio, Tex., for F.T.C.
Harry M. Reasoner, Houston, Tex., Pillsbury, Madison & Sutro, Richard W. Odgers, San Francisco, Cal., for Chevron.
Appeal from the United States District Court for the Western District of Texas.
Before CLARK, Chief Judge, WISDOM, and HIGGINBOTHAM, Circuit Judges.
Section 7A(h) of the Hart-Scott-Rodino Act of 1976 provides that premerger notification materials obtained under that act may not be "made public". The Attorney General of Texas nevertheless seeks premerger information from the Federal Trade Commission; he argues that state attorneys general who promise to keep premerger documents in confidence are not part of the Sec. 7A(h) "public". The district court accepted the FTC's contrary interpretation. We affirm.
In March 1984, Chevron Corporation and Gulf Corporation filed pre-merger notification materials with the Federal Trade Commission as required by the Hart-Scott-Rodino Act. On April 1, the Texas Attorney General requested access to pre-merger materials obtained by the FTC from Chevron and Gulf and to certain commission staff workpapers and analyses. 1 The written request assured that the Texas Attorney General "would keep confidential" all pre-merger materials shared by the FTC with Texas, except as they might be relevant to official law enforcement purposes.
The FTC had received similar requests for materials furnished in anticipation of a merger between Texaco, Inc. and Getty Oil Company. By a divided vote, it denied those requests on May 2, 1984. The Commission concluded that section 7A(h) of the Hart-Scott-Rodino Act 2 prevented its disclosing pre-merger notification material to state law enforcement agencies regardless of any assurance that the furnished materials would be held in confidence. The request by Texas was then denied and this suit followed. 3 Connecticut, Minnesota, Pennsylvania and Rhode Island, denied access to the pre-merger notification materials filed in connection with the Texaco-Getty merger, filed a similar lawsuit. Lieberman v. FTC, 598 F.Supp. 669 (D.Conn.1984). The district court there rejected, but the district court here accepted the construction given HSR by the Justice Department and the FTC. In June 1984 the Federal Trade Commission entered into a consent agreement with Chevron and Gulf, subject to final approval after public comment.
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Texas first argues that the sharing of HSR data with state law enforcement agencies is not a "public" disclosure. It points out that before 1980, section 6(f) of the FTC Act 4 was phrased similarly to Sec. 7A(h) and had been read by the courts to allow confidential disclosure to states. See Interco, Inc. v. FTC, 490 F.Supp. 39 (D.D.C.1979); Jaymar-Ruby, Inc. v. FTC, 651 F.2d 506, 510 n. 10 (7th Cir.1981). Texas further notes that Congress explicitly accepted this interpretation in 1980 when it amended 6(f) 5 to allow the FTC to disclose trade secrets:
to any officer or employee of any State law enforcement agency upon the prior certification of an officer of any such Federal or State law enforcement agency that such information will be maintained in confidence and will be used only for official law enforcement purposes.
To its argument that legislative provisions, similar in language and purpose, ought to be similarly interpreted, Texas adds that the legislative history of amended Sec. 6(f) demonstrates that in amending it Congress expressed a policy favoring the FTC's sharing of data on a confidential basis with state attorneys general, a policy that should inform the reading of 7A(h) of HSR, enacted four years earlier. Texas directs our attention to the House Conference Report on amended Sec. 6(f) which states The Conference substitute has also amended the prohibitions on disclosure in Sections 3 and 15 of the Senate bill to permit the Commission to continue sharing information with Federal, as well as State, law enforcement agencies for official law enforcement use if the agency certifies that such information will be maintained in confidence. This change is made to assure effective coordination within the Government and to eliminate needlessly duplicative information requests to private persons....
That is, the Commission is permitted to provide documents to another agency, even if public disclosure were otherwise prohibited, if the agency requests the material in connection with any criminal, civil or administrative proceeding, or any investigation potentially resulting in such a proceeding.
H.R. Conference Rep. No. 96-917, 96th Cong., 2d Sess. 33, reprinted in 1980 U.S.Code Cong. & Admin.News 1073, 1150.
The argument continues that a governmental policy of cooperating with states in the enforcement of the antitrust laws requires a tandem reading of Sec. 7A(h) and Sec. 6(f), and that nothing in the congressional history of HSR is inconsistent with such disclosures. Finally, Texas urges that the decision by the Federal Trade Commission not to release these materials is entitled to little, if any, weight.
The FTC and Chevron, in turn, urge that the plain language of Sec. 7A(h) prevents the release of materials obtained under its provisions, and that this interpretation is supported by basic principles of statutory construction as well as the legislative history of the statute. They argue that Sec. 6(f), a disclosure statute, is inapposite to any interpretation of Sec. 7A(h), a provision designed to restrict the dissemination of information. They further contend that the construction given the statute by the enforcing agency is entitled to deference. In addition to the FTC's May 2 ruling, the defendants point to the position of the Department of Justice, the co-enforcer of Hart-Scott-Rodino, that Sec. 7A(h) bars the disclosure of HSR information to state attorneys general. 6
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We begin with the Act itself. The 1976 Hart-Scott-Rodino Act has three titles. See generally Pub.L. No. 94-435, 90 Stat. 1383 (July 30, 1976). 7 Title I expanded the civil investigatory power of the Department of Justice Antitrust Division to include requests for depositions and interrogatories. It also established "detailed controls over the Division's use of CID information, in order to protect the confidentiality of these investigative files." H.R.Rep. No. 94-1343, 94th Cong., 2d Sess. 4, reprinted in 1976 U.S.Code Cong. & Admin.News 2572, 2596, 2598. It contains its own nondisclosure provision. See 15 U.S.C. Sec. 1313(c)(3).
Title II requires parties to certain acquisitions to file pre-merger notification materials with either the FTC or the Department of Justice and to wait a statutorily defined period of time before proceeding with the merger. The statute was designed to allow review of mergers before they were completed. It reflects a congressional judgment that divestiture and other post-acquisition remedies were difficult, expensive and sometimes futile. It was thought that Title II of the Act would give the government:
a meaningful chance to win a premerger injunction--which is often the only effective and realistic remedy against large, illegal mergers--before the assets, technology, and management of the merging firms are hopelessly and irreversibly scrambled together, and before competition is substantially and perhaps irremediably lessened, in violation of the Clayton Act.
H.R.Rep. No. 94-1373, 94th Cong., 2d Sess. 5, reprinted in 1976 U.S.Code Cong. & Admin.News 2572, 2637, 2637.
In Title III, Congress empowered state attorneys general to enforce federal antitrust laws by the filing of parens patriae suits on behalf of citizens. Congress directed the Justice Department to make available to state attorneys general materials for use in the prosecution of such suits but only "to the extent permitted by law." 15 U.S.C. Sec. 15f(b).
The three Titles of HSR are traceable to three distinct bills passed by the House in early 1976. On June 10, 1976 the Senate passed its version called Hart-Scott but it was refused by the House. In the summer of 1976, an informal conference was formed and in September of 1976 the conference compromise was accepted by both houses and signed by the President.
The Senate Bill would have permitted wide disclosure of the required premerger notification materials. The materials would have been subject to the Freedom of Information Act, making them available to anyone on demand. The conference rejected the Senate's approach to the disclosure of the required merger materials and adopted the confidentiality provision now embodied in Sec. 7A(h). On the bill's return to the House, Congressman Rodino explained:
The House applied the same two confidentiality safeguards to premerger data that both the House and Senate bills appl[y] to CID [civil investigative demand] files compiled pursuant to Title I * * *. These two safeguards provide that, first, the premerger data is exempt from the Freedom of Information Act, so that the Government cannot be forced to disclose it to the public, and second, the Government agencies themselves cannot discretionarily release premerger data to anyone, but can disclose it only in "judicial or administrative proceedings."
Mr. Rodino continued:
The compromise bill adopts the House provisions, because premerger data compiled pursuant to Title II will, in essence,...
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