Verrazzano Trading Corp. v. United States

• Decision Date: 10 October 1972
• Docket Number: C.R.D. 72-19,No. 70/16253-12995-69.,70/16253-12995-69.
• Parties: VERRAZZANO TRADING CORP. v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

349 F. Supp. 1401

VERRAZZANO TRADING CORP. v. UNITED STATES.

C.R.D. 72-19; Nos. 70/16253-12995-69.

United States Customs Court.

October 10, 1972.

Rode & Qualey, New York City (Peter Jay Baskin, New York City, of counsel), for plaintiff.

Harlington Wood, Jr., Asst. Atty. Gen. (Gilbert Lee Sandler, New York City, trial attorney), for defendant.

C.R.D. 72-19; Port of New York Court Nos. 70/XXXXX-XXXXX-XX, etc. on man-made fabric.

I

MALETZ, Judge:

Plaintiff has moved pursuant to rule 6.5(a)(ii) for an order to compel defendant to produce for inspection and copying work notes, written data, and computations pertaining to a laboratory report of the Bureau of Customs. Defendant opposes the motion, claiming that the materials are "privileged from disclosure" by the Freedom of Information Act, 5 U.S.C. (1970 ed.) § 552,¹ and the customs regulations; and that in order to prevail, plaintiff must show a "compelling necessity" for production of the claimed privileged materials which would "outweigh the need to insulate such materials from disclosure."

The motion has its genesis in a pending action which involves the classification by the government of certain imported fabrics under item 338.30 of the tariff schedules as other woven fabrics of man-made fibers which carries a duty assessment of 22 cents per pound plus 22½ percent ad valorem. Plaintiff argues that the fabric is in chief value of rabbit hair, and thus properly dutiable at only 15½ percent under item 339.10, as amended, as other woven fabrics of textile materials "not covered by the foregoing subparts of this part". Defendant, on the other hand, contends that the imported merchandise is in chief value of man-made fibers. Thus, one of the major issues in this action is component material of chief value.

Pursuant to this court's rule 6.4 plaintiff requested the government to produce for inspection, copying and/or testing: (a) the government's copy of New York Customs Laboratory Report #G17003 dealing with merchandise taken from entry 719203 of July 15, 1967; (b) all Customs Laboratory work notes, written work data, and computations pertaining to that report; and (c) a portion of the sample or samples used for the report so that it might be tested by an independent laboratory designated by plaintiff.

Defendant acceded to requests (a) and (c) but refused to make available the materials requested in (b) on the single ground that they "constitute work sheets, advisory opinions, and intraoffice communications which are privileged from disclosure" by § 552(b)(5) of the Freedom of Information Act— which subparagraph provides that the requirements of that Act—that each agency shall make available to the public specified information—are not applicable to "inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency."

There is, however, a basic difficulty with the entire premise of defendant's argument. The difficulty is that the Freedom of Information Act was enacted to provide the public with the right to obtain information from administrative agencies and agencies in the executive branch of the government; it was not enacted to provide discovery procedures for obtaining information during litigation. Put otherwise, the fact that § 552(b) of the Information Act provides specified exemptions from the Act's public information requirements does not in and of itself create a judicial discovery privilege with respect to such exemptions. Thus, if the Information Act were intended to apply to judicial discovery proceedings there would be no need for the provisions of paragraph (a)(3) of the Act which gives any person who has been denied information after a request the right to file a complaint in the appropriate United States district court to compel the production of records. This same paragraph also places the burden on the government agency to sustain its action. Further, the very language of § 552(b)(5) denies any applicability to judicial discovery proceedings:

This section does not apply to matters that are—

* * * * * *

(5) inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.

On its face this exemption does not apply to inter- or intra-agency memorandums or letters which would be available to a party during litigation. Clearly, the defendant cannot use an administrative exemption which specifically does not cover judicial discovery as a basis for claiming a judicial discovery privilege.

II

But even assuming arguendo that the Freedom of Information Act is applicable to discovery procedures during litigation, it still would not insulate the requested materials from disclosure. At the outset, it is to be noted that the primary purpose of the Information Act was to increase the citizen's access to government records. Bristol-Myers Company v. Federal Trade Commission, 138 U.S.App.D.C. 22, 424 F.2d 935 (1970); M. A. Schapiro & Co. v. Securities and Exchange Commission, 339 F. Supp. 467 (D.C.C.1972).

Prior to 1967, section 3 of the Administrative Procedure Act, known as the Public Information Section (5 U.S.C. § 1002), had "been used as an authority for withholding, rather than disclosing, information."² Under its provisions "agency and department heads enjoyed a sort of personal ownership of news about their units,"³ employing broad discretion to suppress information. In the face of a mounting storm of criticism from newspapermen, legislators and the general public, the Freedom of Information Act was enacted to "reverse the self-protective attitude of the agencies"⁴ under which they had found that the public interest required secrecy, and to make disclosure the general rule, permitting only information specifically exempted to be withheld.

The Act reflects an intent to reach a workable balance between the right of the government to keep information in confidence to the extent necessary without permitting indiscriminate secrecy. Accordingly, it:

(1) Eliminates the "properly and directly concerned" test of who shall have access to public records by providing that—

* * * each agency, on request for identifiable records * * * shall make the records promptly available to any person * * * Subsection (a)(3).

(2) Exempts from public disclosure nine specific categories of information subsection (b), declaring that—

This section does not authorize withholding of information or limit the availability of records to the public, except as specifically stated in this section. This section is not authority to withhold information from Congress. Subsection (c).

(3) Gives an aggrieved person whose request for information is denied the right to file an action in a United States district court with the matter to be determined de novo with the burden on the agency so that the court can consider the propriety of the withholding.⁵ Thus it provides that—

* * * On complaint, the district court * * * has jurisdiction to enjoin the agency from withholding agency records and to order the production of any agency records improperly withheld from the complainant. In such a case the court shall determine the matter de novo and the burden is on the agency to sustain its action. * * * Subsection (a)(3).

It is in this setting that we consider the government's reliance here upon the Congressional direction that the Freedom of Information Act—

§ 552(b) * * * does not apply to matters that are—

* * * * * *

(5) inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency;

* * * * * *

Excluded from this exemption are interor intra-agency memoranda or letters which would ordinarily be available to a party during litigation. Thus, the Attorney General's Memorandum on the Public Information Section of the Administrative Procedure Act⁶ states at page 35:

Accordingly, any internal memorandum which would "routinely be disclosed to a private party through the discovery process in litigation with the agency" is intended by the clause in exemption (5) to be "available to the general public" (H.Rept., 10) unless protected by some other exemption. * * *

In short, the criterion for the applicability of the fifth exemption is whether the records sought are inter- or intra-agency memoranda or letters which would not be available to any party in any litigation in which the agency having the records might be involved.⁷ And the standards for this test are the discovery practices as regulated by the courts. Tennessean Newspapers, Inc. v. Federal Housing Administration, 464 F. 2d 657 (6th Cir. 1972); General Services Administration v. Benson, 415 F.2d 878 (9th Cir. 1969); Consumers Union of United States, Inc. v. Veterans Administration, supra, 301 F.Supp. 796.

The scope of discovery under rule 6.1(b) of the Rules of the Customs Court and rule 26(b) of the Federal Rules of Civil Procedure, as amended, is quite broad. Both provide that unless otherwise limited by order of the court —

* * * the scope of discovery is as follows:

(1) * * * Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

Thus, this court and the federal district courts permit the discovery of "any matter, not privileged, which is relevant to the subject...