Chrysler Corp. v. Brown
441 U.S. 281 (1979)
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Rule of Law:
The Freedom of Information Act's exemptions are permissive, not mandatory, and do not provide a private right of action to enjoin agency disclosure of exempt materials. However, disclosure of information protected by the Trade Secrets Act (18 U.S.C. § 1905) is prohibited unless specifically 'authorized by law,' which requires that the authorizing agency regulation be a substantive rule rooted in a congressional grant of legislative authority and promulgated with proper APA procedures.
Facts:
- Chrysler Corp. was a party to numerous government contracts.
- As a contractor, Chrysler was required by Executive Orders to provide equal employment opportunity and submit reports to the government about its affirmative action programs and workforce composition.
- These reports, including Affirmative Action Programs (AAPs) and Employer Information Reports (EEO-1s), were submitted to the Defense Logistics Agency (DLA), the designated compliance agency.
- In May 1975, third parties filed a Freedom of Information Act (FOIA) request with the DLA, seeking disclosure of Chrysler's 1974 AAP and a Complaint Investigation Report (CIR) for its Newark, Delaware plant.
- Chrysler formally objected to the release of the requested information, asserting it contained confidential data.
- Despite Chrysler's objection, the DLA determined that the material was subject to disclosure under its own regulations and informed Chrysler that it would release the documents.
- Shortly thereafter, the DLA received a similar request for information concerning Chrysler's Hamtramck, Michigan, plant.
Procedural Posture:
- Chrysler Corp. filed a complaint in the U.S. District Court for the District of Delaware seeking to enjoin the Defense Logistics Agency (DLA) from releasing the documents.
- The District Court granted a temporary restraining order and, after a trial de novo, permanently enjoined the release of certain documents, finding they were protected by both a FOIA exemption and the Trade Secrets Act, 18 U.S.C. § 1905.
- Both Chrysler and the government agency appealed to the U.S. Court of Appeals for the Third Circuit.
- The Court of Appeals vacated the District Court's judgment, holding that FOIA exemptions are discretionary and that the agency's own disclosure regulations provided the necessary 'authorization by law' to make the Trade Secrets Act inapplicable.
- The Court of Appeals remanded the case to the agency for further proceedings, finding the District Court had improperly conducted a de novo review.
- The U.S. Supreme Court granted Chrysler's petition for a writ of certiorari.
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Issue:
Do agency regulations, promulgated under general authority like an Executive Order or the federal housekeeping statute, constitute 'authorization by law' sufficient to permit the disclosure of confidential business information otherwise prohibited by the Trade Secrets Act, 18 U.S.C. § 1905?
Opinions:
Majority - Justice Rehnquist
No. Agency regulations do not constitute 'authorization by law' under the Trade Secrets Act unless they are substantive, legislative-type rules issued pursuant to a specific grant of authority from Congress. First, the Freedom of Information Act (FOIA) is exclusively a disclosure statute; its exemptions permit an agency to withhold information but do not mandate it, nor do they create a private right of action to enjoin a discretionary release. Second, for a disclosure to be 'authorized by law' under § 1905, the authorization must come from a regulation with the 'force and effect of law.' This requires establishing a clear nexus between the regulation and a congressional delegation of legislative authority. The regulations at issue, based on an Executive Order and the general federal housekeeping statute (5 U.S.C. § 301), lacked this nexus, as neither source represents a specific congressional grant of power to authorize the disclosure of confidential business data. Furthermore, the regulations were not promulgated with the notice-and-comment procedures required by the Administrative Procedure Act (APA) for substantive rules, making them procedurally defective. While § 1905 does not create a private cause of action, an agency's decision to disclose information in violation of § 1905 is reviewable under the APA as an action 'not in accordance with law.'
Concurring - Justice Marshall
I agree that the disclosure is not 'authorized by law' under 18 U.S.C. § 1905 and join the Court's opinion. The essential conclusion is that the agency's regulations are not sanctioned by federal legislation and therefore cannot create an exception to the prohibition in § 1905. Congress intended to control such disclosures, and agencies cannot create their own authority to bypass this control. This holding does not question the general validity of the Executive Order or the regulations for other purposes, only that they do not provide the specific legal authorization required by the Trade Secrets Act. The failure to comply with the APA's procedural requirements is an independent and correctable reason why these regulations lack the force of law.
Analysis:
This case is the seminal 'reverse-FOIA' decision, establishing the framework for challenging discretionary agency disclosures of private information. It clarifies that FOIA is a floor for disclosure, not a ceiling, and cannot be used as a shield by information submitters. The decision significantly reinforces the separation of powers by limiting an agency's ability to create law through regulation, requiring that substantive rules affecting private rights be traceable to a distinct congressional grant of authority. It also elevates the importance of APA procedural requirements, linking procedural compliance (like notice-and-comment) to a regulation's substantive legal force. This holding solidifies the APA as the primary vehicle for judicial review of agency actions that may conflict with other federal statutes.
