RENEGOTIATION BOARD v. BANNERCRAFT CO.
Legal provision: Freedom of Information, Sunshine, or Privacy Act
Argument of Harriet S. Shapiro
Chief Justice Warren E. Burger: We will hear arguments next in number 72-822, Renegotiation Board against Bannercraft.
Mrs. Shapiro, you may proceed whenever you are ready.
Ms Harriet S. Shapiro: Mr. Chief Justice and may it please the Court.
This case is here on a writ of certiorari to the District of Columbia, Circuit Court of Appeals on a petition of the Renegotiation Board.
It is a suit under the Freedom of Information Act.
That Act provides that any member of the public is entitled to non-exempt federal agency records.
If the party requesting records does not receive them from the agency voluntarily, he is entitled to sue in the District Court to compel the production of the records.
The plaintiffs are government contractors who are negotiating to determine whether they must refund excess profits to the government.
They have sued to compel the Board to produce documents relating to their renegotiation proceedings.
The District Court in this Freedom of Information Act suits issued temporary injunctions against the continued conduct of the negotiation procedures pending the resolution of the Court of Claim -- the Freedom of Information Act claims.
The Court of Appeals affirmed those rulings, the government is here appealing on that issue.
The merits of the party’s Freedom of Information Act claims are not before this Court.
In order to evaluate the issues in this case, it is important to understand the nature of the Renegotiation Act proceedings.
The Renegotiation Act requires the Board to try to reach an agreement with government contractors concerning the amount of excess profits they have earned which they should refund to the Government.
The Board is involved in negotiations essentially in offers of settlement rather than in adjudications on the merits of the claims.
They attempt to reach settlement by a series of essentially five different negotiating levels within the Board, there’s Regional Board and National Board, and you negotiate through five levels.
The contractor submits statements giving financial statements.
The Board then considers the statements, meets with the contractor, and makes an offer in settlement.
The contractor is then entitled to a statement giving the basis for that settlement offer in order for him to determine whether he was just to accept it or to require the Board to negotiate again at a higher level.
And of course, at each level, the Board may increase or decrease the amount of the offer in settlement.
Justice William H. Rehnquist: If the contractor accepts the first level offer, Mrs. Shapiro, is that then binding on the government?
Ms Harriet S. Shapiro: Yes.
If no settlement is reached within the Board, the Board issues an assessment, a determination of the amount of the contractor’s liability.
Then the contractor is entitled to a trial on the merits in the Court of Claims, that trial is de novo.
The government must prove the amount of the contractor’s liability and the proceedings in the Board are simply not relevant to the Court of Claims determination.
Of course, the contractor when he gets to the Court of Claims is entitled to use the Court of Claims’ discovery procedures.
Unknown Speaker: And were they used to be approximate?
Ms Harriet S. Shapiro: To the extent that they were relevant and were not otherwise privileged, yes, there’s --
Unknown Speaker: They are not work product for anything?
Ms Harriet S. Shapiro: Well, some of them may be work product and therefore privileged.
It’s the Court of Claims discovery procedures are as broad as the Freedom of Information.
Unknown Speaker: So that would be adequate anything they are privileged?
Ms Harriet S. Shapiro: Yes.
Unknown Speaker: Well, Mrs. Shapiro, then I think the only real issue here whether this sort of thing has to wait until it gets to the Court of Claims before they are entitled to these documents?
Ms Harriet S. Shapiro: The question is whether or not the Board proceedings can be enjoined –-
Unknown Speaker: I am just wondering if, it is all what we are talking about substantially is, they can not have this kind of discovery at this stage.
However, they can back in, its like if they have any discovery they have to wait until the case, if it does, gets to the Court of Claims?
Ms Harriet S. Shapiro: Yes, sir.
Unknown Speaker: That’s really what it’s all about.
Well, either I’m not sure that you would say they could have the remedies under the Freedom of Information Act and if they say yes, the administrative proceeding has to go on.
Ms Harriet S. Shapiro: The administrative proceeding has to be concluded.
Certainly, the Court of Claims would not be acting under the Freedom of Information Act.
They would be acting under their discovery procedures.
Unknown Speaker: Mrs. Shapiro, what in your estimation are these particular contractors seeking here, is it information as to comparative costs with respect to competitors or something?
Ms Harriet S. Shapiro: That is part of it.
Their requests were very broad and what they requested were documents related to the renegotiation procedure.
The exact scope of quick documents there, whether or not they are entitled to them is of course in the Court of Claims.
But there is a very broad request for documents.
Unknown Speaker: Well, there certainly is a broader request than under the practice prevailing before the Freedom of Information Act?
Certainly, all of the post-World War II, immediately post - World War II renegotiations, is this not correct?
Ms Harriet S. Shapiro: That’s right.
These documents are not documents which the Renegotiation Board ordinarily supplies.
Unknown Speaker: But you can’t describe them anymore definitively than in these broad terms?
Ms Harriet S. Shapiro: Well, no.
This Court held in Aircraft and Diesel Equipment Corporation against Hirsch that these proceedings were not to be enjoined even when as in that case, the contractor alleged that he had been unable to participate effectively in the proceedings because he did not have information upon which the Board had relied.
The Court, nevertheless, found that Congress had intended the entire negotiation ending with the adjudication was supposed to be completed without judicial interference.
Unknown Speaker: Excuse me, may I interrupt just once more.
I noticed in your footnote 6, page 5 of the Board’s brief this gets back to my brother Blackmun’s question that Astro asked copies of the recommendations contained in the renegotiation report prepared by the staff.
All records, analysis, determinations, opinions, reports or summaries bearing upon the renegotiation of its profits that Bannercraft along with all communications between government agencies regarding Bannercraft’s performance of its contacts and disposition of renegotiation proceedings.
Lilly sought the recommendations contained in the report, material supplied by other government agencies and all intra-agency memoranda and written communications consisting of recommendations and/or analyses prepared by the personnel or members of the Board.
That’s quite everything, isn’t it?
Ms Harriet S. Shapiro: It’s very broad.
Unknown Speaker: And if you got into the discovery proceedings in the Court of Claims, as the case got there, might that –- as much I have trouble on the breadth of that as a matter of discovery?
Ms Harriet S. Shapiro: Well, certainly you would have trouble on the breadth of that in the Court of Claims.
You would also have a great trouble on the breadth of that on the Freedom of Information Act.
The effect of the decision below is to alter the ruling of this Court in the Aircraft and Diesel Equipment Corporation against Hirsch at least to the extent of permitting temporary injunctions against Board procedures while Freedom of Information Act questions are litigated.
Our contention is that this is a misinterpretation of the Freedom of Information Act.
The Freedom of Information Act was not designed to permit courts to review agency rulings on the scope of discovery in pending proceedings.
The Freedom of Information Act was specifically intended to change the rule that had existed before that those properly and directly concerned had a greater right to agency records than others.
Instead, the Freedom of Information Act indicated that all members of the public have an equal right to the use of agency records regardless of the use that they intend to make of them.
The contractors here claim that the special use they wish to make of these records entitles them to a special remedy.
But what the Act says is that all members of the public have an equal right to a prompt resolution of their claims of entitlement to documents.
The Congress provided a very specific remedy to protect the specific right, which they established.
And in that remedy, they emphasized the importance of speed.
They provided that the suits to compel the production of documents should be given priority on the District Court’s docket and expedited in every way.
If the remedy, which the Court below found is permitted, it will tip the balance that Congress established instead of making the Freedom of Information Act claims promptly determined, instead, it will become a very effective tool for delay.
For once people in the position of the contractors here have obtained a stay of the proceeding, which threatens them, they have no interest in the prompt resolution of their claims under the Freedom of Information Act.
Instead, their interest is entirely in delaying the resolution of these claims and therefore delaying the continuation of the administrative procedure which can affect them adversely.
Even if the state rarely granted the existence of the jurisdiction to grant the remedy will encourage litigation, this is a possible means of obtaining a delay of the agency action.
We therefore contend that the issuance of injunctions against the continuation of agency proceedings is not consistent with the purposes of the Freedom of Information Act.
And that the courts below expanded on the Act and acted legislatively rather than judicially.
Certainly, Congress could have concluded the specific uses to be made of the information just to find specific protections.
They could have concluded that the interests of those involved in agency proceedings were so important that it was appropriate to require the courts to review agency rulings on the scope of discovery and pending procedures proceedings.
We contend that the Act simply does not do so.
If it had intended to change the traditional allocation of responsibilities between agencies and courts, they would have said so clearly and there is no indication of any such intent.
We do not believe that the issuance of the injunction in these cases was consistent with the traditional equitable power to maintain the status quo because in this case, it was not a situation in which a court has acted to stay agency action while it determines the validity of that agency action.
Instead, what they did was to stay the agency proceedings while they reviewed the validity of collateral agency action.
In effect, they have stayed the Renegotiation Board proceedings while they reviewed the Board’s determination of the proper scope of discovery.
And this is certainly not a traditional exercise of equitable power.
In some, as this Court recognized last term in Environmental Protection Agency against Mink.
The Freedom of Information Act provides a workable formula which carefully protects and balances all interests.
The Act protects the public interest and prompt access to government records.
It also protects the public interest in minimal of interference with efficient government operations.
The specific remedy that they provided is an important part of this balance.
The additional remedy that the Court below granted upsets this careful balance and it does not, if not, in order to achieve the purposes of the statute which is a prompt availability of government records.
But instead, to give the contractors the specific benefit in their negotiations with the Board.
This is simply not consistent with the purposes of the Act.
The Court below, nevertheless, found that the District Court had properly exercised not only that it had jurisdiction to enjoin agency proceedings under the Freedom of Information Act but that it had properly exercised this jurisdiction.
Since unless the proceedings -- renegotiation proceedings were enjoined, the contractors would be irreparably injured if they were compelled to negotiate without the information they wanted.
And since there was no review as such of the proceedings in the Court of Claims, we believe this is incorrect in both of the Aircraft case and in Lichter against United States, this Court recognized that the renegotiation procedures were designed to be very informal and that they were not to be adjudications with the discovery, formal discovery.
They are not subject to the Administrative Procedure Act.
They are designed to help the defense and effort by obtaining rampant settlement in procurement matters and they are not designed to help the contractors get a more favorable settlement than they might be entitled to by an adjudication on the merits.
So the contractors are not entitled to the most favorable settlement that they could reach if they were negotiating with full information.
What they are entitled to is a full and fair hearing in the Court of Claims on the merits of their liability and that is what is provided in the Renegotiation Act.
Furthermore, the fact that the review in the Court of Claims is de novo does not mean that there is any irreparable injury if they don’t get the information before.
If they are not satisfied that the Board determination is fair, they may get a determination in the Court of Claims.
And at that point, the prior Board procedures are irrelevant.
In one sense, they are in a better position than they would be if there was a review proceeding in the Court of Claims.
Since the Court of Claims does not need to consider whether there’s substantial evidence to support the Board procedures and they may not show that they received any prejudice from Board procedures.
In short, the Board procedures can impose no continuing disadvantage on the contractors.
And therefore the enjoining of those procedures was improper.
I would like to reserve the rest of my time for rebuttal.
Chief Justice Warren E. Burger: Very well, Mrs. Shapiro.
Argument of Robert L. Ackerly
Mr. Robert L. Ackerly: Mr. Chief Justice and may it please the Court.
I would like to at the onset note sharp disagreement with a couple of statements of Government Counsel.
First, the regulations of the Board as they were amended last November -- November 197, in fact provide that from now on, a contractor on request will get all of the information, I believe that Bannercraft asked for and most of the information that the other contractors asked for.
For example in 32 CFR Section 1472.7, the regulations of the Board now provide that a contractor may have on request the performance information.
That is the performance evaluation of other agencies of government.
Or in the case of a subcontractor-prime contractor relationship, the performance information provided by prime contractor on the level of performance of the subcontractor.
Unknown Speaker: Those regulations just apply to future cases or yours too?
Mr. Robert L. Ackerly: I don’t know, Your Honor.
I think the Board –-
Unknown Speaker: Well, let’s just assume that the regulations did apply to your case.
Mr. Robert L. Ackerly: Did?
Unknown Speaker: Yes.
And that you could get all of this information that you wanted, right now,with respect to this case?
Mr. Robert L. Ackerly: Well, assuming that the Board complies fully with their own regulations, and with the further decision of the Court of Appeals in Grumman Aircraft this summer, I think there’s nothing left of this case.
Unknown Speaker: What’s Grumman got to do with it?
Mr. Robert L. Ackerly: Well, Grumman decided in July that --
Unknown Speaker: I take that your point was that there are new regulations which give you everything you want?
Mr. Robert L. Ackerly: Yes, sir.
The new regulation, yes, as implemented by Grumman.
The Grumman decision simply says, --
Unknown Speaker: Well, you haven’t got much of the point based on the regulations in it because I suppose Grumman is just a Court decision.
Mr. Robert L. Ackerly: Grumman is a decision of the United States Court of Appeals of the District of Columbia which only relates to one portion.
I might direct the Court’s attention to Section 1418.5 of the regulations.
There are 15 categories of documents that are now made available by the Renegotiation Board.
They were not made available when we first filed this lawsuit.
They do include agreements determining excessive profits, orders determining the excessive profits, statement of facts and the reasons issued by the Board and so on.
Now, at the bottom of that section it says this –-
Unknown Speaker: Well, have you gone back and sought these materials you want on these new regulations?
Mr. Robert L. Ackerly: We are not going back to seek them and the Board has not made them available.
We have exhausted our remedies if the Court please.
We have no remedy left at the Board level.
Unknown Speaker: Not even under their new regulations?
Mr. Robert L. Ackerly: No, sir.
We filed our request for information to the Secretary; that was denied.
We went to the Board.
The Board denied our final request.
There’s no time period that I know of within which we could go back and ask for reconsideration.
Unknown Speaker: You normally would, I suppose because there has been a change in the regulation in your favor?
Mr. Robert L. Ackerly: Well, I think this is a change in the regulation in our favor but it was just --
Unknown Speaker: If it falls generally in the area of the procedural regulation, which this does, normally the new procedures apply to pending cases?
Mr. Robert L. Ackerly: Well, I am not sure of the Board’s point of view, Your Honor.
But I would assume that if the Board wanted to, they could have then communicated.
They gave us some documents which were worthless that the District Courts have found.
They could have simply responded further to our request which was pending before the Board and said we are going to make available, these documents, we may or may not have an issue of that before the District Court.
If we had one, it would have been very narrow.
I submit because the only issue left, really, is the issue which was decided by the Court of Appeals in Grumman.
Now if the Board -- of course, I cannot predict how the Board is going to apply these regulations.
But I assume if the Board complied with the spared -- other regulations is implemented by Grumman that we would have very little remaining an issue.
These documents are not only available under the Freedom of Information Act but they are critically important to the conduct of renegotiation, and there again --
Unknown Speaker: Why can you say that when your renegotiator did not have them in 1950?
And that renegotiation seems to me went off pretty successfully?
Mr. Robert L. Ackerly: Well –-
Unknown Speaker: At least we thought that did –-
Mr. Robert L. Ackerly: Well, the Freedom of Information Act, if the Court please, I submit is an important national policy which should be read in conjunction with all existing statutes and it’s clearly applicable to the Renegotiation Board.
There’s no argument there and the Renegotiation Board should not be permitted to ignore its responsibilities under the Freedom of Information Act and continue with renegotiation because the importance of these documents comes down to this.
Unknown Speaker: Have any of your clients pursued relief as a member of the general public as distinguished from a contractor in renegotiation?
Mr. Robert L. Ackerly: No, Your Honor.
Well, there’s only one group that I know of, not our clients.
But only one group that I know of and that’s the group of Georgetown students.
Their request resulted in the decision of the Court of Appeals in Fisher versus Renegotiation Board.
But it's unlikely, that any public interest group would request documents from the Board except maybe a group of law students or an effective contractor.
I think in some sense, we in there not only on our own behalf but on the concept of a private attorney general.
We are suggesting that the Renegotiation Board must follow the Freedom of Information Act.
That seems like a very reasonable and plausible proposition.
And the court below found that the Renegotiation Board was not following the Freedom of Information Act.
And the simple question is, should they be allowed to proceed with renegotiation?
Now as the Court of Appeals --
Justice William H. Rehnquist: Mr. Ackerly, the Freedom of Information Act gives you plenty of remedy as a private Attorney General or as a citizen.
I mean, going to District Court and make the Board comply with the Freedom of Information Act.
That is not a reason by itself to go for stating the administrative proceedings, I would think.
Mr. Robert L. Ackerly: Well, precisely, if the Court please, Your Honor.
There’s plenty of relief in the Freedom of Information Act, however, there’s nothing in the Freedom of Information Act that says that the Court does not have a general equity of power to consider whether the renegotiations that stayed for a short period of time, the renegotiation process, but it seems clear on the face of it and I submit on the face of the regulations now that it’s abundantly clear that they are ignoring the responsibility under the other Act.
This is just a traditional exercise of the equity power where -- I think we established the irreparable injury can accrue by virtue of the Boards’ refusal to follow the statute.
The Board has been told in numerous cases that they must follow the statute.
There are several Federal Court decisions and Appellate Court decisions instructing the Board to follow the statute and now they have done so in their regulations.
We do not suggest that there’s any authority in the Freedom of Information Act to grant this type of an injunction but we say that when a failure of an agency to follow its own regulation or follow a statute is brought to the attention of the Court.
The Court does have general equity power which can be exercised only in very limited circumstances.
I wish to point out that as this Court has held, and as the Court of Appeals in the District of Columbia has held repeatedly where there is judicial review of the agency process, the Court should not entertain interlocutory appeals except in very rare special circumstances.
We have no problem with that.
The NLRB cases, the other agency cases where there’s statutory review, there you get review in the Court of Appeals of a denial of due process or denial of procedural or substantive errors.
We don’t get that here.
A counsel said in response to you in response to you Mr. Justice Rehnquist that if we agree with the first level of renegotiation, is the government bound?
They are not bound.
The Statutory Board, can at any time, and they have done this to me on more than one occasion, set aside an agreement with the Regional Board reached after a conference with the renegotiator and assign the case to itself and go through the entire process all over again.
And understanding -- we get no understanding of what the Board is doing until after the fact.
Let me try to explain.
We have a meeting with the Regional Board.
The Regional Board writes us a letter and it’s shown in the exhibits to our complaint to ask Bannercraft $1,400,000.00.
We then asked summary of facts and reasons.
It was after the fact that they gave us their reasons and we could take it or leave it.
It is after they have made their judgments.
Then we go to the Statutory Board and the same procedure obtains.
Justice William H. Rehnquist: Well, if you say that even if you decided to pay over the $1,400,000.00 they asked you for, the Statutory Board might still have transferred the case to itself and imposed a higher amount?
Mr. Robert L. Ackerly: They absolutely have that authority and they have done it.
I have a hearing coming up in November before the Board following an agreement with the Regional Board.
The Statutory Board has that authority in their regulations.
They can reassign the case to itself at any time.
After the Statutory Board makes its determination then you get, it's on request, a statement of the reasons for the Statutory Board action.
But there’s no further negotiation.
You would have paid it or you don’t.
Now, as a result of the summary where the Regional Board told us that we have been compared with other contractors as they are required to in their own regulations and where they said that their procurement information indicated a lack of adequate competition that we wrote and asked for these documents.
We wanted to get the documents that supported the contentions of the Regional Board.
For example, in 1967, Bannercraft performed four contracts, two primes and two subs.
We took the subcontracts on the same price or less than the prime.
Now, if the Board did not renegotiate the prime, but renegotiated us on the same price, they were being penalized for efficiency.
We have a right to examine that.
And now, I think the Board will give us that information.
I sincerely believe under their regulations, they would give us that information.
Maybe they don't want to apply these regulations retroactively but when they tell us we’ve been compared with other contractors, and refused to tell us who they are.
When they say that procurement information, procurement documents indicated lack of adequate competition and refused to give us the procurement documents, there’s not much that we can do by way of renegotiation except to say, “Look, we still think we are efficient.
And we still think that if you will compare us with this primes under whom we perform subcontracts, we can establish that.
That’s really what we asked for” Now, how long should the stay be in this case?
There need not be extensive delay in a case like this.
In the first place, with the change in regulations, and the status of Grumman and I understand the status of Grumman to be this.
A petition for rehearing by the government was denied the mandate has issued, I thought it was final.
Late yesterday afternoon, I heard by telephone that the Government had filed a motion to recall the mandate.
Now, whatever degree of finality that takes away from the case that is its present posture.
The case will never rise again even under the Renegotiation Board.
And this case can never rise with an agency that has Statutory Judicial Review.
Justice William H. Rehnquist: How about the case, say with the Renegotiation Board where you obtain an injunction of the renegotiation proceedings and you fight out your Freedom of Information Act case in the District Court then that is appealed by the losing party of the Court of Appeals.
Certainly, you are looking at a year or two in that process, aren’t you?
Mr. Robert L. Ackerly: In this case, Your Honor, yes.
But the rules have been clarified now.
We have several decisions relating to the Renegotiation Board and the Board has recognized the ease in their regulations.
Justice William H. Rehnquist: Well, but presumably this is the principle of some general application and it isn’t completely foreclosed that somebody will get into dispute with the Board in the future about some fine point of their regulation and then you will have to litigate the Freedom of Information Act?
Mr. Robert L. Ackerly: I doubt.
I doubt that any District Court.
And as what we’ve shown in our brief, the District Courts have not entered injunctions automatically.
They have denied injunctions in similar circumstances depending upon the Board’s response to the Act.
A District Court is unlikely to grant an injunction where the distinction is on two or three documents as against the broad denial.
Understand what the Board gave me and charged me for was a stack of documents.
With everything blanked out which I think we’ve said on our brief which are just mimeographed forms of the Board and then they move to dissolve their injunction that went before a different judge who looked at the documents and denied the motion to dissolve.
Two judges examined the Bannercraft documents plus the Court of Appeals but they found that it was an absolute total refusal to comply.
A minor dispute over one document or two documents would not result in a District Court entering this type of an injunction, I am sure.
And certainly it would not apply on the rule under the decisions of this Court to any agency --
Unknown Speaker: Exactly, what in the way of the principle of general wide importance is now involved in this case in light of the new regulations?
Mr. Robert L. Ackerly: Of general wide importance I think there’s very little.
For this contractor, it’s extremely important because before we go to the Court of Claims, a final order is entered.
We must post a bond equal to 100%.
It’s almost like a judgment.
It’s immediately collectible, if the Court please.
The final order is not the result of a breakdown in negotiations.
It has the effect of a final judgment of a Court.
We must post a bond of 100% of the amount of the determination in government bonds with the Court of Claims to prevent collection.
So at each step of the agency process and in the Court of Claims, the demand can be raised or lowered.
Therefore, if we don’t have a fair opportunity to negotiate with the Board and reach agreement, we go to the Court of Claims fully informed, we run the risk of having that $1,400,000.00 go to a $1,700,000.00.
We don’t have opportunity to make a fair judgment.
But this is not an earth-shaking case.
This is not a case of even any great presidential value in my judgment.
Because it would only apply to agencies like the Board and I’m not sure that there are very many that don’t have statutory review.
And secondly, it probably will come up with the Board.
I do want to make one quick reference to Aircraft and Diesel Equipment Corporation which the counsel has raised.
That case in my judgment affirmed the authority of the District Court to issue an injunction.
Because what the Court said was, the District Court had no jurisdiction in equity and since the appellant had a complete remedy at law.
And the complete remedy of law that this Court was talking about was this, Aircraft was a subcontractor.
Its prime contractors were withholding money from Aircraft at the direction of the Government based upon a renegotiation claim.
This Court said to Aircraft, “Sue your prime contractor.
Your prime contractor hold and we know of no reason why all of the issues that you raised before this Court could not be raised in litigation with your prime contractor.”
And this Court would not have go into the light of saying that you have an adequate remedy at law, if they didn’t recognize the inherent equity jurisdiction of the District Court to under limited circumstances issue a very temporary stay.
And I emphasize, if the Board had gone back and complied with Grumman.
If the Court please, the first Grumman decision had been entered before this preliminary injunction was held.
The Board didn’t seek cert --
Justice William H. Rehnquist: But when you say a temporary stay though Mr. Ackerly, you are talking about whatever time it takes to resolve the Freedom of Information Act issue.
Whether that can be done by simply the use of already established precedence or whether it may take another District Court and Court of Appeals decision.
Mr. Robert L. Ackerly: It conceivably could but that’s always subject to the discretion of the Court.
The Court can always say that the plaintiff is not proceeding diligently and therefore dissolve the injunction and that is an inherent power of the Court.
The Court of Appeals -- the Courts do not necessarily have to entertain delay.
The Freedom of Information Act cases get priority on every calendar by the Act itself.
And if they feel that the plaintiff is delaying, that Court has inherent power to dissolve the injunction.
But I am suggesting that if the Board complies with its own regulations, these cases will not arise.
I can’t conceive of a District Court granting this type of an injunction if there’s substantial compliance.
Here, Your Honor, there was no compliance.
And I think that is clearly the distinction.
Unknown Speaker: But the fact remains that what was decided below was an important matter that you can enjoin an administrative agency while you, as a way of enforcing Freedom of Information Act.
Mr. Robert L. Ackerly: I would disagree with that a little bit, Your Honor and –-
Unknown Speaker: Well, they did enjoin it, didn’t they?
Mr. Robert L. Ackerly: They did, sir.
Unknown Speaker: And as the government’s argument here is that they could not have -- they should not have done it.
Mr. Robert L. Ackerly: That’s correct.
Unknown Speaker: And if you say, there’s nothing left to this case, if you in effect say it is moot.
Mr. Robert L. Ackerly: I didn’t say it was moot.
I said, if they comply with their own regulations as with Grumman, it might be --
Unknown Speaker: Well, let’s assume that they do comply with the -- if you went back and ask them they would comply with their own regulations and with Grumman and you could get what you wanted, would there be anything left to the case?
And if they worked, you would say that the Court of Appeals’ opinion would be set aside.
Mr. Robert L. Ackerly: No, I say, if once they comply with the Freedom of Information Act, the very basis for the injunction disappear, the injunction would be dissolved.
I don’t think there’s any quarrel with that.
There’s not any quarrel with that at all.
Unknown Speaker: And the opinion of the Court of Appeals is set aside?
Mr. Robert L. Ackerly: I don’t think they would have to be set aside if the injunction was -- The question here on jurisdiction critically the District Court had equitable authority into this injunction.
It only applies to an agency, which does not otherwise have statutory review.
This is a very peculiar agency.
Most agencies do have statutory judicial review.
It would not apply to any of those agencies and these decisions of this Court and consistent in line of cases of the Federal Court.
So, it’s a peculiar type of agency, number one.
Number two, there was a flat defiant refusal to comply with any portion of the Freedom of Information Act by the Board.
And I am sure this had a tremendous impact on the District Court judge.
His equitable authority, I think, is confirmed by Aircraft and Diesel.
We did not have an adequate remedy at law here.
The final action of the Board does have severe consequences to a contractor and should we let the agency completely refuse to comply with the public policy of the Congress and yet go ahead with renegotiation, which has severe penalties for the contractor.
The District Court said no.
The Court of Appeals said no.
I must say that on the equities of this case, I think that it’s examined carefully I think this Court will agree that in this case and on its peculiar facts, on the complete defiant refusal of the Board to make any real pretext to compliance with this important public policy, the District Court’s judgment was correct.
Chief Justice Warren E. Burger: Mr. Ackerly you’re using some of the Mr. Schwalb’s time now.
Mr. Robert L. Ackerly: I was waiting for the light.
Forgive me, Your Honor.
Chief Justice Warren E. Burger: I think something happened there.
Mr. Robert L. Ackerly: I’m sorry.
Chief Justice Warren E. Burger: Mr. Schwalb.
Argument of Burton A. Schwalb
Mr. Burton A. Schwalb: Mr. Chief Justice and may it please the Court.
Directing myself to the point that has been raised by the Court and by counsel and mainly by the Government, namely; why is this case here and what is this prevailing issue that warrants that consideration?
Perhaps the best way for me to put it is not to paraphrase it but to quote one sentence from the Government’s brief because I think if any one sentence in the brief states the issue that warrants the case being here, it’s this one.
Referring now to Page 50.
Chief Justice Warren E. Burger: Of the main brief?
Mr. Burton A. Schwalb: Of the Government’s main brief, yes.
And I quote about three quarters of the way down the page.
“Accordingly, this is not a situation where Congress has utilized the Board equitable jurisdiction that inheres in Court and where the proposed exercise of that jurisdiction is consistent with the statutory language and policy, the legislative background and the public interest.”
Now, the reason why this statement is important is that the Freedom of Information Act is silent on the question of whether or not a plaintiff suing under that Act can also enjoin an agency, which is preceding with the procedure to which the documents requested relate.
What do you do in a situation where accord its given equity power in one respect under a statute and the statute is silent as to any other powers of that that District judge now vested with at least partial equity can do, what can he perform?
And I think this is why the government must have felt that this issue was important namely: Federal Jurisdiction under a statute creating at least some equity jurisdiction under the circumstances but not stating just how far that jurisdiction goes.
Now, if indeed the test is as it seems to be, as the Government set out and as case would seem to set out that when a statute is silent, you don’t assume that there is no further remedy of jurisdiction.
You look at the legislative history of the policy of the public interest etcetera to see whether or not that extra power should be applied in the act namely, employing it or reading it in or inferring it or whatever.
Does it serve a public interest?
Does it serve a purpose that Congress had in mind?
Because if it does, it should be read in and there’s many a case so holds.
And I think this is why the Government has formulated the issue as it has in page 15 talking about legislative history, purpose, and public interest because its conclusion is that what the District Court did below was contrary to the legislative history, to the purpose, and to the public interest.
And therefore, that kind of an injunction should not be implied because it undercuts rather than furthers Congressional Policy.
And if that is the main issue which I think it is then I want to address myself to that in the few minutes that we have left because I think that the equity isn’t clear.
The Government counsel has said they are not contesting the matter on their right to document.
That is something that is still left for the District Court.
I think the equities are things that are better left to the District Court.
They have been faced once on a preliminary injunction to be faced again if the Court’s case was back.
The legislative history is something that this Court very recently explored in the EPA-Mink case and I don’t intend to spend much time in identifying it.
There are basically three documents I would like to refer to.
The Freedom of Information Act as it now is was Senate Bill 1160 in the Eighty-Ninth Congress First Session.
In the Senate Report number 813 that accompanied that bill said on page 7 as follows, “Requiring the agencies to keep a current index of their orders, opinions, etcetera.
It is necessary to afford the private citizen, the essential information to enable him to deal effectively and knowledgeably with the federal agencies.
The change will prevent a citizen from losing a controversy with an agency because of some obscure and hidden order or opinion which the agency knows about but which has been unavailable to the citizen simply because he had no way in which to discover it.
The House Report which was May 1966 report in the Second Session of the Eighty-ninth Congress, Report number 1497 says very much the same thing, namely, a purpose to prevent a citizen from losing a controversy with an agency.
Now, in the Eighty-eighth Congress, the prior Congress, the Senate had a similar bill.
In fact, I think that I can’t represent it exactly the same.
Basically, the same bill came up in the Eighty-eighth Congress and consequently in the Senate, but I think it was passed too late to go to the House so it was renewed in the Eighty-ninth.
But the Senate Report number 1219 which accompanied the bill in the Eighty-eighth Congress.
At page 3, it said very much the same thing.
They were talking about the old Administrative Procedure Act 3 which permitted disclosure but only if it wasn’t in the public interest.
They were decrying the fact that the public interest exception or notion was being used as a shield to disclosure rather than an aid.
And said as follows, “retention of such an exception”, we are talking now about that Section 3 of the exception.
In Section 3 (a) is therefore inconsistent with this section’s general objective of enabling the public readily to gain access to the information necessarily to deal effectively and upon equal footing to the federal agencies.
Justice William H. Rehnquist: Not this took away the discretionary right of the agency to deny under the old Act and then they made it available to citizens unless the agency could meet its burden of --
Mr. Burton A. Schwalb: I think it went far beyond that.
It not only limited disclosure to those documents which directly affected a person who is in that litigated process.
Justice William H. Rehnquist: Well, I’m talking about the particular section of the legislative history you just read about from the report on the Bill that wasn’t passed.
Is that still your answer to the question?
Mr. Burton A. Schwalb: Well, I’m not sure.
I may have misunderstood your question.
I thought the point was, did that merely give to all citizens what had there to for been available only to litigants under the administrative procedure.
And my answer is yes, it did that except that it went farther.
In other words, the restrictions with respect to what kinds of documents would be given no matter what burden of proof, the acceleration on Court dockets.
The whole notion of a speedy and full disclosure by government agencies was endemic to this statute, which began rolling at the Eighty-eighth Congress and had some 10 or 11 years of --
Justice William H. Rehnquist: Did the Freedom of Information Act would give you anything more than what you would get under discovery in the Court of Claims?
Mr. Burton A. Schwalb: That’s right, Your Honor.
There is a specific provision in the Freedom of Information Act that relates it to the rules of discovery.
Justice William H. Rehnquist: So that you won’t get any more than the discovery rules that the Court would give you?
Mr. Burton A. Schwalb: Well, that may not be so, because for example --
Unknown Speaker: I thought you just said it was?
Mr. Burton A. Schwalb: Well, at least that for this reason.
There’s an element of relevancy or materiality in terms of discovery under the Federal Rules and certainly in the Court of Claims.
The element of relevancy and materiality is not a prerequisite under the Freedom of Information Act.
Consequently, there may be --
Unknown Speaker: Well, I must say that you wouldn’t ask -- you certainly wouldn’t ask for an injunction against an agency proceeding in order to get a document that was not relevant, would you?
Mr. Burton A. Schwalb: Clearly not.What we are saying here is this
Unknown Speaker: In this language that these three reports, shows a legislative purpose to do what?
Mr. Burton A. Schwalb: To permit someone in a controversy with an agency because that language is right there not to be handed or not to lose that controversy because you can’t deal on an equal footing or cannot deal effectively or cannot deal efficiently or doesn’t have the kind of information that the agency has.
Now that is exactly what the injunction below did.
It was geared to putting these respondents in a position where they could be among that more equal footing, more efficiently, more knowledgeably and not run to the risk of losing the controversy.
Now, this perhaps goes to the matter of the legislative history.
Are the injunctions below so contrary to this legislative history or policy that the Court should assume that Congress would not have intended it and that this violates that legislative history and we say simply no.
The Congress was anticipating the needs of a litigant because they used words that involved litigants.
We know that there’s an acceleration provision that litigants often need information quickly.
Lilly did below.
This case was brought only on the eve of being forced to an election of how to proceed without even an acknowledgment that the Renegotiation Board had received our request for documents.
Now there is, I would like to call the Court’s attention for the moment ahead to relate in 1972 Report on House Committee and Government Operations Number 921419.
Now, I am not suggesting that a House Report in 1972 is dispositive in what Congress intended or must have assumed in 1966.
But this very lengthy report which is cited in our brief undertaken from 90 pages to discuss the purpose of the Act as it was and more important how it operated in the six-year period between 1966 -- July 1966 when the bill was first passed and 1972.
And without reading in detail, I might point out in the page 90, there is a reference to the fact that the regulations of agencies promulgated under the statute have not been effective in obtaining or requiring the voluntary compliance during these periods of years.
Unknown Speaker: What would you say if the Renegotiation Board wrote into its rules of procedure if it has some, so I take it was, letting those rules of procedures that very terms of the renegotiation or of that of the Freedom of Information Act?
Mr. Burton A. Schwalb: I think that’s there already by implication.
Unknown Speaker: All right, let’s assume it is and then you demanded something under paragraph so and so of these rules and it was refused.
Now, normally, what is your remedy when you lose on an effort to make a discovery?
Mr. Burton A. Schwalb: well, I have to that it would normally in two separate context because this is going to be a norm depending on what the context is.
Let’s take a norm in a situation where there is no review of that procedure anywhere.
That is no subsequent procedure somewhere down the line with the propriety of that action can be reviewed, studied, analyzed, passed upon and which might result in a reversal and remand to cure it.
That’s situation A.
Situation B is where that arises that the administrative process under law takes us through step by step by step and ultimately whether it would be to a District Court or to Court of Appeals such as a labor situation for example.
Where the Court of Appeals or whatever the reviewing tribunal is can look at the procedure.
Now taking the first one first, a document is asked for under the rules.
The agency, let’s assume on this hypothesis, violates its own rules which by implication --
Unknown Speaker: I don’t hypothesize at all.
I just say that you claim that it has.
Mr. Burton A. Schwalb: All right.
Then I think we have basically what would be a service Dallas type operation, namely: the agency has, as part of its rules, an obligation to do A, B, and C.
It has violated those rules and that would be –-
Unknown Speaker: Well, it has not violated the rules.
The question is whether normally, a discovery dispute -- whether the main proceeding may be held up while you settled that discovery dispute, in some other form?
Mr. Burton A. Schwalb: Yes, but in the situation in my second context, where we have reviewed.
The Courts haven’t said there’s no jurisdiction and no power, they have said that the evil that you’re concerned about, the alleged wrong, might very well become moot, might very well be taken care of later on.
Therefore, why invoke the power of the Court.
Why clutter its dockets?
Why cause the conflict and the tension between court and agency when it might be a moot situation?
Ordinarily, discovery points sometimes can be looked at as not only critical.
But I think it makes a difference on whether or not people like these respondents ever have a right to say that anybody after the fact we were not given the rights that the statute or a regulation or combination gave us.
Cure the defect by putting us back in status quo ante, so we will be in as good as shape as we would if the agency had complied.
At renegotiation, it can never happen.
Chief Justice Warren E. Burger: Your time is consumed now, Mr. Schwalb.
Do you have anything further, Mrs. Shapiro?
Rebuttal of Harriet S. Shapiro
Ms Harriet S. Shapiro: The legislative history that the counsel pointed to, indicating that one of the intents of the Freedom of Information Act was to prevent people from losing a controversy within agency on a basis of secret information is a discussion, a section of the Act, which requires the indexing of agency opinions and essentially agency case law, the end product of the administrative actions.
That section requires not only the indexing of these materials but it also provides that none of the materials that’s required to be indexed and has not been indexed may be relied upon as a precedent against anyone who hasn’t been informed of these secret laws.
This is quite a different situation from the situation that’s in this case.
And in effect, there was a specific provision for this specific problem in the Act.
You simply can’t rely on that information or on those decisions.
Also, the contention that the fact that there is no statutory review of the renegotiation procedures here means that in this case, there is jurisdiction under the Freedom of Information Act to enjoin agency procedures.
This is an incorrect analysis, I believe.
I think that whether or not there’s jurisdiction to review agency procedures goes to the question of the propriety of the exercise of jurisdiction under the Freedom of Information Act.
It doesn’t go to the existence of that jurisdiction.
In the Sixth Circuit, and the Sears, Roebuck case found that there was no jurisdiction to enjoin agency proceedings against the NLRB.
They also mentioned that there would be a review of the NLRB procedures later but the question is, is really jurisdiction not the exercise of jurisdiction?
I don’t agree that there it’s clear that the contractors are entitled to any of the information that they have asked for.
The Grumman case that they referred to the petition for rehearing has been denied but the Government’s time to petition for certiorari hasn’t expired and it would settle some of the issues it wouldn’t settle all of them.
The fact that performance information is available under the regulations now doesn’t necessarily mean that the performance information supplied earlier in Bannercraft would be since under the new regulations when the Board asks the various contractors to supply the information to the Board.
The request indicates that this information will be made available to the contractor before the request indicated that it would be kept confidential and so there is a question of protecting an assurance of confidentiality.
The only other point I had was that once the Statutory Board makes a final determination that is the determination, the contractor can still make a compromise offer and that may be considered.
It will be considered by the Board if the Board’s action doesn’t become final until it makes an order.
Unknown Speaker: Mrs. Shapiro, do you agree that the Freedom of Information Act is implicitly part of the discovery rules of the Renegotiation Board?
Ms Harriet S. Shapiro: I certainly agree that the principles –-
Unknown Speaker: If in the course of a proceeding, you demand from the Board in connection of this particular litigation, certain documents covered by the Freedom of Information Act which you allege are relevant to the proceedings.
Would you think that the Freedom of Information Act to that extent is part of the discovery rule?
Ms Harriet S. Shapiro: Well, the Board’s regulations do contain the Freedom of Information Act.
The documents that has been made available under the Freedom of Information Act --
Unknown Speaker: So, the question is whether if you have a dispute over discovery the proceeding must be hold until you settle it?
Ms Harriet S. Shapiro: That’s right.
That’s the point.
Unknown Speaker: It really doesn’t have to be put in the context of what the Freedom of Information Act intended?
Ms Harriet S. Shapiro: Well, it does because the Freedom of --
Unknown Speaker: But even if it did not, it may be that the normal rules of how to settle a discovery dispute might mean that you lose the case.
Namely, what if the rule were that you do enjoin the main proceeding while you settle the discovery dispute, wholly aside from the Freedom of Information Act, you might be in trouble here.
Ms Harriet S. Shapiro: Well, if the rule were --
Unknown Speaker: For example, what if the plaintiff here brought a mandamus action in the Federal Court saying that the official of the Renegotiation Board had flatly refused to do his duty under his own discovery rules, which included the Freedom of Information Act?
Ms Harriet S. Shapiro: Well, I believe that under Aircraft and Lichter v. U.S., the Court has said that you don’t enjoin Renegotiation Act proceedings.
Unknown Speaker: Okay.
Chief Justice Warren E. Burger: Very well, thank you gentlemen.
The case is submitted.