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Lieberman v. Federal Trade Commission


August 20, 1985


Appeal from an order of the United States District Court for the District of Connecticut, M. Joseph Blumenfeld, Judge, holding that section 7A(h) of the Clayton Act, 15 U.S.C. § 18a(h), enacted as part of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, does not prohibit the disclosure of premerger information by federal authorities to state law enforcement officials on a confidential basis.

Author: Oakes

Before: MANSFIELD, OAKES, and MESKILL, Circuit Judges.

OAKES, Circuit Judge:

On a difficult question of statutory interpretation, seldom does a court of appeals have the benefit, as we do in this case, of guidance from two cogent, well-reasoned opinions going in opposite directions. The difficulty of the question is revealed not only in the direct conflict between these two decisions, but also in the three-to-two decision of the Federal Trade Commission ("FTC" or "Commission"), the administrative agency that deals with the statute we must interpret. The question is whether section 7A(h) of the Clayton Act, 15 U.S.C. § 18a(h) (1982), enacted as part of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. No. 94-435, 90 Stat. 1383 ("H-S-R"), prohibits the Commission from furnishing premerger information to state attorneys general acting in their parens patriae capacities. The United States District Court for the District of Connecticut, M. Joseph Blumenfeld, Judge, disagreed in the decision now on appeal. Lieberman v. FTC, 598 F. Supp. 669 (D. Conn. 1984). The Fifth Circuit, however, agreed with the Commission in Mattox v. FTC, 752 F.2d 116 (5th Cir. 1985). We find the language of section 7A(h) not unambiguous, the legislative history sparse, and the administrative interpretation of debatable if not doubtful usefulness. But in light of the congressional purpose we divine to be at work, we come down with the Fifth Circuit and the majority of the Commission, and therefore are required to reverse.


The Attorneys General of Connecticut, Minnesota, Pennsylvania, and Rhode Island brought this action against the Commission alleging that the Commission improperly denied their requests for access to documents generated by the Commission in connection with a merger proposed between Texaco, Inc., and Getty Oil Company.*fn1 The attorneys general sought the information as part of an effort to enforce both federal and state antitrust laws. States have long had the right under section 16 of the Clayton Act, 15 U.S.C. § 26, to seek to enjoin antitrust violations, such as violations of section 7 of the Clayton Act, 15 U.S.C. § 18, which prohibits mergers that my tend substantially to lessen competition or to create a monopoly. See Hawaii v. Standard Oil Co., 405 U.S. 251, 259-60, 31 L. Ed. 2d 184, 92 S. Ct. 885 (1972); Georgia v. Pennsylvania Railroad Co., 324 U.S. 439, 450-52, 89 L. Ed. 1051, 65 S. Ct. 716 (1945). The state attorneys general, of course, may also seek to enjoin unlawful mergers under their respective state antitrust laws. See Connecticut Anti-trust Act, 17 Conn. Gen. Stats. Ann. ch. 624, §§ 35-26,-32 (West 1981); Minnesota Antitrust law, 20B Minn. Stat. Ann. §§ 325D.51, .59 (West 1981); Commonwealth Attorneys Act, 71 Pa. Cons. Stat. Ann. § 732-204(c) (Purdon Supp. 1985); Rhode Island Antitrust Act, 2 R.I. Gen. Laws §§ 6-36-4, -11, -12 (Supp. 1984). As part of the FTC's policy "to cooperate with other governmental agencies to avoid unnecessary overlapping or duplication of regulatory functions," 16 C.F.R. § 4.6 (1985), federal regulations allow state law enforcement agents to request access to Commission records if the state officials certify that the information will be maintained in confidence and used only for official law enforcement purposes. Id. § 4.11(c). Between January and April 1984, appellees made several such requests for premerger information about the Texaco/Getty merger.*fn2

In letters issued May 2, 1984, the four state attorneys general were notified that the Commission had held that it was not authorized to share information and documentary material filed with it before merger by the merging companies pursuant to Title II of H-S-R, now codified as section 7A of the Clayton Act. The Commission's decision turned on its interpretation of section 7A(h), which states that "no [section 7A] information or documentary material may be made public" except in administrative or judicial proceedings but provides for disclosure to Congress or any duly authorized congressional committee or subcommittee. The decision marked the first time that the Commission addressed whether section 7A(h) barred the confidential disclosure of premerger information to state law enforcement officials, but on prior occasions Commission General Counsels had granted state officials access to premerger materials. The Justice Department, however, has always denied such access, according to an affidavit submitted to the district court in this case by the Assistant Attorney General for Antitrust, J. Paul McGrath. See also Antitrust Div., U.S. Dep't of Justice Antitrust Division Manual V11-15 (1979) (stating that H-S-R material "will not be disclosed to state attorneys general").

It will be recalled that the FTC, an independent federal agency, has a multifaceted role in federal antitrust law enforcement. For example, the agency is authorized to enforce section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45 ("FTC Act"), with [which] prohibits "unfair or deceptive acts or practices in or affecting commerce." More to the point in this case, together with the Department of Justice the Commission also enforces section 7 of the Clayton Act, 15 U.S.C. § 18, which, as noted above, prohibits acquisitions that may tend to have anticompetitive effects. Section 11 of the Clayton Act, 15 U.S.C. § 21, vests the Commission with authority to enforce compliance with the substantive provisions of the Clayton Act, such as section 7, by means of administrative proceedings reviewable in the court of appeals.*fn3 In connection with such administrative proceedings, the agency may issue orders to cease and desist or orders of divestiture under 15 U.S.C. §§ 21, 45, as well as bring suit in federal district court for a preliminary injunction under section 13(b) of the FTC Act, 15 U.S.C. § 53(b), to preserve the status quo pending completion of its administrative challenge. At the same time, the FTC has played the role of publicist since its inception. Congress enacted section 6(f) of the FTC Act, 15 U.S.C. § 46(f), to authorize the FTC "to convey the informational fruits of its labors [of investigation and adjudication] to the American Public." FTC v. Cinderella Career & Finishing Schools, Inc., 131 U.S. App. D.C. 331, 404 F.2d 1308, 1319 (D.C. Cir. 1968) (Robinson, J., concurring).

A crucial element of the Commission's and Justice Department's enforcement strength is the power to investigate possible antitrust violations. The Commission has long had authority to use the compulsory process conferred by sections 6 and 9 of the FTC Act, 15 U.S.C. § 46(a), (b), 49, to investigate corporate acquisitions that might violate section 7 of the Clayton Act. See, e.g., Menzies v. FTC, 242 F.2d 81, 83-84 (4th Cir.), cert. denied, 353 U.S. 957, 77 S. Ct. 863, 1 L. Ed. 2d 908 (1957). The Antitrust Civil Process Act, 15 U.S.C. § 1311-1314, gives the Antitrust Division of the Justice Department similar investigative powers by authorizing it to use Civil Investigative Demands ("CIDs"). Prior to 1976, however, enforcement of section 7 was hampered because both agencies were often unable to obtain important information about a merger before it was consummated.*fn4

Congress designed H-S-R in part to solve this problem. The statute has three titles. Title I expanded the general civil investigatory power of the Antitrust Division and established "controls over the Division's use of CID information, in order to protect the confidentiality of these investigative files." H.R. Rep. No. 1343, 94th Cong., 2d Sess. 4 (1976), reprinted in 1976 U.S. Code Cong. & Ad. News 2596, 2598. This case requires us to note in particular amended section 4(c)(3) of the Antitrust Civil Process Act, which limits disclosure of CID information to Justice Department or other authorized officials as well as to members of Congress.*fn5 Title III added section 4C to the Clayton Act, 15 U.S.C. § 15c, which authorizes state attorneys general to bring parens patriae actions for monetary damages sustained by state residents "by reason of any violation of [the Sherman Act]," id. § 15c(a)(1). As noted above, Congress addressed the problem of premerger information in Title II, which amended the Clayton Act by adding section 7A. Section 7A outlines an elaborate process requiring those who attempt acquisitions above a specified size to notify the Commission and the Antitrust Division of their intentions, to furnish information requested by the agencies, and to wait a period of time before consummating the transactions, allowing the agencies to analyze the data.*fn6 Because much of the information involves sensitive and confidential commercial or financial matters that would ordinarily not be made available without compulsory process, Congress adopted section 7A(h), which reads in full:

Any information or documentary material filed with the Assistant Attorney General or the Federal Trade Commission pursuant to this section shall be exempt from disclosure under . . . [the Freedom of Information Act] and no such information or documentary material may be made public, except as may be relevant to any administrative or judicial action or proceeding. Nothing in this section is intended to prevent disclosure to either body of Congress or to any duly authorized committee or subcommittee of the Congress.

On cross-motions for summary judgment the court below held that section 7A(h) does not prohibit confidential disclosure to state law enforcement officials. The court's conclusion turned in large part on its agreement with the state attorneys general that section 7A(h) should be interpreted in the same way the courts had interpreted the pre-1980 version of section 6(f) of the FTC Act.*fn7 The Court relied on the decision in Interco, Inc. v. FTC, 490 F. Supp. 39, 44-46 (D.D.C. 1979). The Interco court had held that section 6(f)'s provision keeping trade secrets from being made public did not prohibit confidential disclosure to state law enforcement officials. The district court interpreted section 7A(h)'s "public" as in pari materia with the term "public" in the pre-1980 version of section 6(f). 598 F. Supp. at 674-75. Moreover, it read Congress's 1980 amendment to section 6(f), which effectively codified the Interco holding,*fn8 as support for its conclusion; the amendment demonstrated a legislative intention "to create a Federal-State sharing of information." Id. at 676.

The district court further declined to defer to the FTC decision, finding that the agency's past practice had been inconsistent with its present stand. Id. at 672. It also rejected any suggestion that section 7A(h)'s legislative history offered an indication of what Congress had intended. Id. at 673-74. The FTC's construction of legislative intent was said to go to the issue of confidentiality, not to the issue of disclosure on a confidential basis. See, e.g., id. at 674. In sum, the district court considered that it was construing a statutory provision "in the face of a question which the Congress did not squarely consider in the enactment of the statute." Id. at 677.

It should come as no surprise that the district court also held that section 6(f) in fact authorized the FTC's disclosure of premerger information to the state officials. The Commission's contention that section 6(f) only authorizes disclosure of information obtained under the FTC Act, not premerger information obtained under the Clayton Act, failed to persuade. Id. at 677-78. Finally, the court easily avoided the anomaly of finding that the FTC could disclose the information while the Justice Department could not by suggesting the H-S-R expressly included a provision authorizing such disclosure by justice.*fn9 Id. at 679.


Preliminarily we take note that as a matter of both jurisdiction and jurisprudential prudence we must determine whether, on the one hand, we face a ripe case or controversy, or whether, on the other hand, the disclosure issue has been mooted by the consummation of the Texaco/Getty merger. Since we trust that the attorneys general still could challenge the merger and are still interested in the information, we consider the case not moot. In any event, the question presented is "capable of repetition, yet evading review." Southern Pacific Terminal Co. v. Interstate Commerce Commission, 219 U.S. 498, 515, 55 L. Ed. 310, 31 S. Ct. 279 (1911). And while the state officials sought only declaratory and injunctive relief ordering the FTC to exercise its discretion to disclose, we have no reason to believe that the case is not ripe. The problem is, of course, that even if the FTC exercised its discretion it might decide not to turn over the information. At the same time, several courts have held that this exercise of discretion is unreviewable. See Fleming v. FTC, 216 U.S. App. D.C. 153, 670 F.2d 311, 316-17 (D.C. Cir. 1982); Jaymar-Ruby, Inc. v. FTC, 651 F.2d 506, 510-12 (7th Cir. 1981); cf. Heckler v. Chaney, 470 U.S. 821, 105 S. Ct. 1649, 1655-58, 84 L. Ed. 2d 714 (1985) (discussing when certain agency actions are unreviewable because "committed to agency discretion by law"). Thus, holding that the FTC has the discretion to disclose premerger information may have no practical effect. At oral argument, however, the FTC's General Counsel stated that the Commission has not yet considered the question of exercising its discretion. At this point, we are in no position to determine that affirming the decision below would not lead to disclosure in the future.

Turning to the merits, we begin by addressing the Commission's argument that we must defer to its interpretation of section 7A(h). We are, of course, well aware that recent precedent in the Supreme Court reaffirms that a federal court must defer to a reasonable interpretation of a statute by the agency charged with the statute's administration. Chevron USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 2781-83, 81 L. Ed. 2d 694 (1984).*fn10 However, where, as here, Congress has entrusted more than one federal agency with the administration of a statute, we cannot conclude that either has been vested exclusively with the power authoritatively to interpret the statute. Under such circumstances a reviewing court does not, therefore, owe as much deference as it might otherwise give if the interpretation were made by a single agency similarly entrusted with powers of interpretation. Although here both the Commission and the Justice Department have reached the same result, at least at the present time, there is no reason to think that agency decisions might not differ in an analogous case.*fn11

Although we do not defer to the agency interpretation, we agree with the FTC that section 7A(h)'s limitation on the disclosure of premerger information to the "public" precludes confidential disclosure to state law enforcement officials.*fn12 The language of Section 7A(h) does not resolve the issue, but does support our conclusion. The provision's lack of clarity is revealed by noting two disclosure provisions that plainly do address whether federal authorities can disclose information to state officials. The new language in section 6(f) of the FTC Act, see supra note 8, shows that Congress knows how to require that information be made available to state officials on a confidential basis. And section 4(c)(3) of the Antitrust Civil Process Act, see supra note 5, provides an excellent example of how Congress can articulate the opposite intention. See Illinois v. Abbott & Associates, 460 U.S. 557, 570-73, 75 L. Ed. 2d 281, 103 S. Ct. 1356 (1983).

Nevertheless, we find significant the express exception in section 7A(h) for disclosure "to either body of Congress or to any duly authorized committee or subcommittee of the Congress." The Supreme Court has recently revived the notion that where Congress provides express exceptions, courts should not imply others. See Andrus v. Glover Construction Co., 446 U.S. 608, 616-17, 64 L. Ed. 2d 548, 100 S. Ct. 1905 (1980). But cf. Note, Intent, Clear Statements, and the Common Law: Statutory Interpretation in the Supreme Court, 95 Harv. L. Rev. 892, 895-96, 904-07 (1982) (suggesting general application of "clear statement" rule unrealistic and immaterial). Moreover, if the term "public" as used in section 7A(h) does not include state officials, why was it necessary to provide an express exception for disclosure to Congress? If state officials are not part of the public, neither are members of Congress. Indeed, the District of Columbia Circuit interpreted the pre-1980 prohibition against public disclosure in section 6(f) as inapplicable to the release of information to Congress. See Exxon Corp., v FTC, 191 U.S. App. D.C. 59, 589 F.2d 582, 589 (D.C. Cir. 1978), cert. denied, 441 U.S. 943, 99 S. Ct. 2160, 60 L. Ed. 2d 1044 (1979); Ashland Oil, Inc. v. FTC, 179 U.S. App. D.C. 22, 548 F.2d 977, 979 (D.C. Cir. 1976).

Similarly, the legislative history of section 7A(h) supports, but does not compel, our conclusion.*fn13 Much of the legislative history simply reveals the obvious; Congress wanted premerger information kept confidential.*fn14 Such evidence provides sparse support for the proposition that Congress rejected confidential disclosure to state officials. The FTC, however, cites as crucial a statement by Representative Rodino, one of the sponsors of H-S-R, equating the limitation on disclosure of CID information, which as we have noted clearly precludes disclosure to state officials, and the limitation on the availability of premerger information. On the bill's return to the House--after the Senate had acquiesced in and adopted the House version of the confidentiality provision now codified in section 7A(h)--Congressman Rodino explained that "the House applied the same two confidentiality safeguards to premerger data that both the House and Senate bills applied to CID files" and that "the Government agencies themselves cannot discretionarily release premerger data to anyone, but can disclose it only in 'judicial or administrative proceedings.'" 122 Cong. Rec. 30,877 (1976). Congressman Rodino also stated that "the compromise bill adopts the House provisions, because premerger data compiled pursuant to title II of the compromise bill will, in essence, contain the same kind of information as a CID file compiled in a premerger investigation pursuant to title I." Id. In Mattox, 752 F.2d at 120-21, the Fifth circuit relied in part on the import of Mr. Rodino's statement: "Although a single legislative sponsor's statements do not control our interpretation of a statute, Chrysler Corp. v. Brown, 441 U.S. 281, 311, 60 L. Ed. 2d 208, 99 S. Ct. 1705 . . . (1979), they 'deserve[] to be accorded substantial weight[.]' FEA v. Algonquin SNG, Inc., 426 U.S. 548, 564, 49 L. Ed. 2d 49, 96 S. Ct. 2295 (1976)."

We agree that Congressman Rodino's statement furthers the FTC's argument. Appellees attempt to discount the significance of the remark by noting that it must be read in the context of the earlier disagreement between the House and the Senate over whether premerger information should be disclosed under FOIA, see supra note 13. Mr. Rodino's comments, however, go beyond the confidentiality debate and equate the scope of section 7A(h) with that of section 4(c)(3). At the same time, this case is distinguishable from North Haven Board of Education v. Bell, 456 U.S. 512, 72 L. Ed. 2d 299, 102 S. Ct. 1912 (1982). In North Haven, 456 U.S. at 526-27, the Supreme Court found a sponsor's statement during debate to be "authoritative" in the absence of a committee report discussing the provision. Here a committee report fails to draw Mr. Rodino's analogy. In addition, we are chary of finding that Congress expressly intended to give two provisions in the same legislation the same scope, while drafting them differently. The state officials have also provided the court with a recent letter from Congressman Rodino that purports to bolster their argument. The letter states that to Mr. Rodino's memory, Congress did not consider the question presented in this case. Of course, the Congressman acknowledges that he cannot rewrite the legislative history. For that reason, we find the letter of little or no probative value. See Bread Political Action Committee v. FEC, 455 U.S. 577, 582 n.3, 71 L. Ed. 2d 432, 102 S. Ct. 1235 (1982).*fn15

Fortunately, we need not rely on Congressman Rodino's remarks. Our analysis of the statutory structure as a whole and the purpose behind Congress's action reveals that Congress did not contemplate the use of premerger information by state officials. That is to say, although a state official can seek a preliminary injunction against an illegal merger under federal antitrust law, the structure and legislative history of section 7A show that Congress envisioned that only the Department of Justice and the FTC would use premerger information. Congress enacted section 7A to facilitate federal prevention of unlawful mergers by insuring that relevant data was furnished to federal authorities in time to enable them to act before the "merging firms are . . . irreversibly scrambled." See supra note 4. The statute is premised on disclosure followed by a short waiting period; section 7A(b)(2) allows the federal authorities to terminate that waiting period if "neither [the FTC or the Department of Justice] intends to take any action," while section 7A(e) provides for extensions of the waiting period if the federal authorities ask for additional information, see supra note 6. At the same time, section 7A(f) provides for prompt consideration of premerger actions by federal authorities. And the House Report on section 7A refers only to the premerger actions of federal authorities. See H.R. Rep. No. 1373, supra, at 7-11, reprinted in 1976 U.S. Code Cong. & Ad. News at 2639-43. As the Mattox Court recognized, giving state authorities the premerger information and the chance to bring suit more easily might well mean big delays in the fast world of mergers--delays Congress has not countenanced. We doubt if Congress would have intended to have the staffs of fifty state attorneys general sitting as oversight committees reacting to Commission or Justice Department decisions whether to block large-scale mergers of national or international significance.

The district court, 598 F. Supp. at 675, recognized that the key to appellees' arguments was a finding that section 7A(h) and the pre-1980 version of section 6(f) should be read in pari materia. Unlike the district court, however, we find that the interpretation of section 6(f) should not guide our interpretation of section 7A(h). The state officials argue that at one level both statutes are meant to protect the confidentiality of sensitive commercial information. We find this narrow view of the two statutes inappropriate under in pari materia analysis. The Supreme Court has stated that two statutory terms that are part of provisions with the same language and same "raison d'etre" should be read in pari passu. See Northcross v. Memphis Board of Education, 412 U.S. 427, 428, 37 L. Ed. 2d 48, 93 S. Ct. 2201 (1973). And this court has suggested that in pari materia analysis turns on indications whether Congress intended the terms to have different meanings. See Hargrave v. Oki Nursery, Inc., 646 F.2d 716, 720 (2d Cir. 1980). Section 7A(h) contains an express exception that the pre-1980 version of section 6(f) did not. More important, section 7A(h) and section 6(f) have very different goals. Congress enacted section 6(f) to provide information to the public, albeit with an exception for trade secrets and confidential commercial information. Section 7A(h), however, plays an important limiting role in a comprehensive regulatory scheme that offers no place for state law enforcement efforts. See Mattox, 752 F.2d at 122. In short, our independent interpretation of section 7A(h) provides several indications that Congress did not intend section 7A(h) to mean what the Interco court found section 6(f) to mean.*fn16

Judgment reversed.

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