MR. JUSTICE BLACKMUN delivered the opinion of the Court.
The Federal Open Market Committee has a practice, authorized by regulation, 12 CFR § 271.5 (1978),
Open market operations—the purchase and sale of Government securities in the domestic securities market—are the most important monetary policy instrument of the Federal Reserve System.
The Federal Open Market Committee (FOMC or Committee), petitioner herein, by statute has exclusive control over the open market operations of the entire Federal Reserve System. 12 U. S. C. § 263 (b). The FOMC
The FOMC meets approximately once a month to review the overall state of the economy and consider the appropriate course of monetary and open market policy. The Committee's principal conclusions are embodied in a statement called the Domestic Policy Directive. The Directive summarizes the economic and monetary background of the FOMC's deliberations and indicates in general terms whether the Committee wishes to follow an expansionary, deflationary, or unchanged monetary policy in the period ahead. The Committee also attempts to agree on specific tolerance ranges
The Federal Reserve Board is required by statute to keep a record of all policy actions taken by the FOMC with respect to open market operations. 12 U. S. C. § 247a. To comply with this requirement, the FOMC secretariat prepares a document during the month after each Committee meeting. This document is called the Record of Policy Actions. It contains a general review of economic and monetary conditions at the time of the meeting, the text of the Domestic Policy Directive, any other policy actions taken by the Committee, the votes on these actions, and the dissenting views, if any. A draft of the Record of Policy Actions is distributed to the participants at the next meeting of the Committee for their comments, and is revised and released for publication in the Federal Register a few days later. 41 Fed. Reg. 22261 (1976).
In other words, the Record of Policy Actions is published in the Federal Register almost as soon as it is drafted and approved in final form by the Committee.
Respondent, when this action was instituted in May 1975, was a law student at Georgetown University Law Center, Washington, D. C. App. 8. The complaint alleged that he had "developed a strong interest in administrative law and the operation of agencies of the federal government," and had formed a desire to study "the process by which the FOMC regulates the national money supply through the frequent adoption of domestic policy directives." Ibid.
In pursuit of these professed academic interests, respondent in March 1975, through counsel, filed a request under the Freedom of Information Act (FOIA) seeking the "[r]ecords of policy actions taken by the Federal Open Market Committee at its meetings in January 1975 and February 1975, including, but not limited to, instructions to the Manager of the Open Market Account and any other person relating to the purchase and sale of securities and foreign currencies." Id., at 13.
Respondent then instituted this litigation in the United States District Court for the District of Columbia, seeking declaratory and injunctive relief against the operation of 12 CFR § 271.5 and the policy of delayed disclosure. App. 7. The FOMC in due course moved for summary judgment, and submitted affidavits from Committee members and staff that generally advanced two reasons why immediate disclosure of the Domestic Policy Directives and tolerance ranges would interfere with the FOMC's statutory functions.
First, the Committee argued that immediate release of the
Second, the FOMC contended that immediate disclosure of the Directive and tolerance ranges would permit large institutional investors, who would have the means to analyze the information quickly and act rapidly in buying or selling securities, to obtain an unfair advantage over small investors.
Respondent submitted no counter-affidavits to these contentions, since he considered them "irrelevant" to the legal issues presented. Brief for Respondent 33-34, n. 12. The District Court apparently agreed. Without addressing the FOMC's affidavits, or entering any findings about the effect that premature disclosure might have on open market operations, the court granted summary judgment for respondent. 413 F.Supp. 494 (DC 1976). It held, as the FOMC had conceded, that the Domestic Policy Directives were "statements of general policy . . . formulated and adopted by the agency" that, under 5 U. S. C. § 552 (a) (1) (D), had to be "currently publish[ed] in the Federal Register for the guidance of the public."
On appeal to the United States Court of Appeals for the District of Columbia Circuit, the FOMC did not contest the ruling that the Domestic Policy Directives were "statements of general policy" that, under § 552 (a) (1) (D), had to be "currently publish[ed]" in the Federal Register. Similarly, it did not challenge the conclusion that the 1-month delay failed to satisfy the current-publication requirement. Moreover, the Committee abandoned the argument that the Directives were covered by Exemption 2. The Committee, instead, concentrated on the contention that premature disclosure would seriously disrupt the conduct of open market operations, and continued to urge that the policy of delayed disclosure was authorized by Exemption 5.
This Court has had frequent occasion to consider the FOIA,
At issue here is Exemption 5 of the FOIA, which provides that the affirmative disclosure provisions do not apply 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." § 552 (b) (5). Exemption 5, in other words, applies to documents that (a) are "inter-agency or intra-agency memorandums or letters," and (b) consist of material that "would not be available by law to a party . . . in litigation with the agency."
There can be little doubt that the FOMC's Domestic Policy Directives constitute "inter-agency or intra-agency memorandums or letters." FOMC is clearly an "agency" as that term is defined in the Administrative Procedure Act. 5 U. S. C. §§ 551 (1), 552 (e). And the Domestic Policy Directives are essentially the FOMC's written instructions to the Account Manager, a subordinate official of the agency. These instructions, although possibly of interest to members of the public, are binding only upon the Account Manager. The Directives do not establish rules that govern the adjudication of individual
Whether the Domestic Policy Directives "would not be available by law to a party . . . in litigation with the agency" presents a more difficult question. The House Report states that Exemption 5 was intended to allow an agency to with-hold intra-agency memoranda which would not "routinely be disclosed to a private party through the discovery process in litigation with the agency . . . ." H. R. Rep. No. 1497, 89th Cong., 2d Sess., 10 (1966). EPA v. Mink, 410 U.S. 73, 86-87 (1973), recognized that one class of intra-agency memoranda shielded by Exemption 5 is agency reports and working papers subject to the "executive" privilege for predecisional deliberations. NLRB v. Sears, Roebuck & Co., 421 U.S. 132 (1975), confirmed this interpretation, and further held that Exemption 5 encompasses materials that constitute a privileged attorney's work product. Id., at 154-155.
The FOMC does not contend that the Domestic Policy Directives are protected by either the privilege for predecisional communications or the privilege for an attorney's work product.
We must reject this analysis. First, since the FOMC does not indicate that the asserted authority to defer disclosure of
The FOMC argues, in the alternative, that there are several civil discovery privileges, in addition to the privileges for predecisional communications and an attorney's work product, that would allow a district court to delay discovery of documents such as the Domestic Policy Directives until they are no longer operative. The Committee contends that Exemption 5 incorporates each of these privileges, and that it thus shields the Directives from a requirement of immediate disclosure.
Preliminarily, we note that it is not clear that Exemption 5 was intended to incorporate every privilege known to civil discovery. See NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 254 n. 12 (1978) (POWELL, J., concurring in part and dissenting in part). There are, to be sure, statements in our cases construing Exemption 5 that imply as much. See, e. g., Renegotiation Board v. Grumman Aircraft Corp., 421 U.S. 168, 184 (1975) ("Exemption 5 incorporates the privileges which the Government enjoys under the relevant statutory and
The most plausible of the three privileges asserted by the FOMC
The federal courts have long recognized a qualified evidentiary privilege for trade secrets and other confidential commercial information. See, e. g., E. I. du Pont de Nemours Powder Co. v. Masland, 244 U.S. 100, 103 (1917); 8 J. Wigmore, Evidence § 2212, pp. 156-157 (McNaughton rev. 1961). The Federal Rules of Civil Procedure provide similar qualified protection for trade secrets and confidential commercial information in the civil discovery context. Federal Rule Civ. Proc. 26 (c) (7), which replaced former Rule 30 (b) in 1970, was intended in this respect to "reflec[t] existing law." Advisory Committee's Notes on Fed. Rule Civ. Proc. 26, 28 U. S. C. App., p. 444. The Federal Rules, of course, are fully applicable to the United States as a party. See, e. g., United States v. Procter & Gamble Co., 356 U.S. 677, 681 (1958); 4 J. Moore, Federal Practice ¶ 26.61 , p. 26-263, (1976). And
To be sure, the House and Senate Reports do not provide the same unequivocal support for an Exemption 5 privilege for "confidential . . . commercial information" as they do for the executive and attorney work product privileges. Nevertheless, we think that the House Report, when read in conjunction with the hearings conducted by the relevant House and Senate Committees, can fairly be read as authorizing at least a limited form of Exemption 5 protection for "confidential . . . commercial information."
In hearings that preceded the enactment of the FOIA, various agencies complained that the original Senate bill, which did not include the present Exemption 5,
In light of the complaints registered by the agencies about premature disclosure of information relating to Government contracts, we think it is reasonable to infer that the House Report, in referring to "information . . . generated [in] the process of awarding a contract," specifically contemplated a limited privilege for confidential commercial information pertaining to such contracts.
This conclusion is reinforced by consideration of the differences between commercial information generated in the process of awarding a contract, and the type of material protected by executive privilege. The purpose of the privilege for predecisional deliberations is to insure that a decision-maker
We are further convinced that recognition of an Exemption 5 privilege for confidential commercial information generated in the process of awarding a contract would not substantially duplicate any other FOIA exemption. The closest possibility is Exemption 4, which applies to "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U. S. C. § 552 (b) (4). Exemption 4, however, is limited to information "obtained from a person," that is, to information obtained outside the Government. See 5 U. S. C. § 551 (2). The privilege for confidential information about Government contracts recognized by the House Report, in contrast, is necessarily confined to information generated by the Federal Government itself.
We accordingly conclude that Exemption 5 incorporates a qualified privilege for confidential commercial information, at least to the extent that this information is generated by the Government itself in the process leading up to awarding a contract.
The only remaining questions are whether the Domestic Policy Directives constitute confidential commercial information of the sort given qualified protection by Exemption 5, and, if so, whether they would in fact be privileged in civil discovery. Although the analogy is not exact, we think that the Domestic Policy Directives and associated tolerance ranges are substantially similar to confidential commercial information generated in the process of awarding a contract. During the month that the Directives provide guidance to the Account Manager, they are surely confidential, and the information is commercial in nature because it relates to the buying and selling of securities on the open market. Moreover, the Directive and associated tolerance ranges are generated in the course of providing ongoing direction to the Account
Although the Domestic Policy Directives can fairly be described as containing confidential commercial information generated in the process of awarding a contract, it does not necessarily follow that they are protected against immediate disclosure in the civil discovery process. As with most evidentiary and discovery privileges recognized by law, "there is no absolute privilege for trade secrets and similar confidential information." 8 C. Wright & A. Miller, Federal Practice and Procedure § 2043, p. 300 (1970); 4 J. Moore, Federal Practice ¶ 26.60 , p. 26-242 (1970). Cf. United States v. Nixon, 418 U.S. 683, 705-707 (1974). "The courts have not given trade secrets automatic and complete immunity against disclosure, but have in each case weighed their claim to privacy against the need for disclosure. Frequently, they have been afforded a limited protection." Advisory Committee's Notes on Fed. Rule Civ. Proc. 26, 28 U. S. C. App., p. 444; 4 J. Moore, Federal Practice ¶ 26.75, pp. 26-540 to 26-543 (1970).
Here, the District Court made no findings about the impact of immediate disclosure of the Domestic Policy Directives and tolerance ranges. The Committee submitted unanswered affidavits purporting to show that prompt disclosure of this information would interfere with the orderly execution of the FOMC's monetary policies, and would give unfair advantage to large investors. In this Court, the FOMC has sought to supplement those affidavits by arguing, for the first time, that immediate release of the Domestic Policy Directives would jeopardize the Government's commercial interests by imposing substantial additional borrowing costs on the United States Treasury.
Under the circumstances, we do not consider whether, or to what extent, the Domestic Policy Directives would in fact be afforded protection in civil discovery. That determination must await the development of a proper record. If the District Court on remand concludes that the Directives would be afforded protection, then it should also consider whether the operative portions of the Domestic Policy Directives
The judgment of the Court of Appeals is therefore vacated, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
MR. JUSTICE STEVENS, with whom MR. JUSTICE STEWART
The practical question in this case is whether the Federal Reserve System's monthly changes in monetary policy should be made available immediately to the general public or should be filtered into the market through a handful of sophisticated representatives of large commercial banks and investment firms. The legal question is whether the statutory requirement that statements describing such policy changes be published "currently" means what it says.
On the practical level, it seems to me that the operation of an "open" market committee should be open to all—not just
The FOIA, 5 U. S. C. § 552 (a) (1), provides that every "agency shall separately state and currently publish in the Federal Register for the guidance of the public . . . statements of general policy . . . formulated and adopted by the agency." It is agreed that the Federal Open Market Committee is an agency within the meaning of the Act, and both the District Court and the Court of Appeals concluded that the monthly monetary policy directives are "statements of general policy." This Court does not disagree with that conclusion. It is plain therefore that the statute imposes a mandatory requirement of "current" publication.
In my opinion that requirement is not satisfied by withholding publication "temporarily"—i. e., until the policy directives become obsolete. The same principle of construction should apply to monthly policy statements as to annual policy statements. They should be made public while they are effective.
Although the Court recognizes that these policy directives may not be permanently withheld from public view without violating the Act, it nonetheless concludes that their temporary
In the first place, nothing in any of the nine exemptions to the Act has any bearing on the present situation.
The Court's newly created category will impose substantial litigation costs and burdens on any requesting party seeking to overcome an agency's objection to immediate disclosure. For henceforth that party must prove that compliance with the statute's disclosure mandate would not "significantly harm the Government's monetary functions or commercial interests." Ante, at 363. The imposition of such an obstacle to prompt disclosure is inconsistent with the overriding statutory policy of giving the ordinary citizen unfettered access to information about how his Government operates.
I respectfully dissent.
"§ 271.5 Deferment of availability of certain information.
"(a) Deferred availability of information. In some instances, certain types of information of the Committee are not published in the FEDERAL REGISTER or made available for public inspection or copying until after such period of time as the Committee may determine to be reasonably necessary to avoid the effects described in paragraph (b) of this section or as may otherwise be necessary to prevent impairment of the effective discharge of the Committee's statutory responsibilities.
"(b) Reasons for deferment of availability. Publication of, or access to, certain information of the Committee may be deferred because earlier disclosure of such information would:
"(1) Interfere with the orderly execution of policies adopted by the Committee in the performance of its statutory functions;
"(2) Permit speculators and others to gain unfair profits or to obtain advantages by speculative trading in securities, foreign exchange, or otherwise;
"(3) Result in unnecessary or unwarranted disturbances in the securities market;
"(4) Make open market operations more costly;
"(5) Interfere with the orderly execution of the objectives or policies of other Government agencies concerned with domestic or foreign economic or fiscal matters; or
"(6) Interfere with, or impair the effectiveness of, financial transactions with foreign banks, bankers, or countries that may influence the flow of gold and of dollar balances to or from foreign countries."
Other major economic tools employed by the Federal Reserve System include the setting of reserve requirements for commercial banks that are members of the Federal Reserve System, and the determination of the discount rate for borrowing by member banks. App. 46, 56.
"Early in the period before the next regular meeting, System open market operations shall be directed at attaining a weekly-average Federal funds rate slightly above the current level. Subsequently, operations shall be directed at maintaining the weekly-average Federal funds rate within the range of 8 3/4 to 9 1/4 per cent. In deciding on the specific objective for the Federal funds rate the Manager shall be guided mainly by a range of tolerance for growth in M-2 over the October-November period of 5 1/2 to 9 1/2 per cent, provided that growth of M-1 over that period does not exceed an annual rate of 6 1/2 per cent." 64 Fed. Res. Bull. 947, 956, (1978).
After February 1977, the operative language of the Directives began to incorporate specific tolerance ranges of the form set forth in n. 5, supra. The record contains no explanation as to why the FOMC began including the tolerance ranges in the Directives at that time. Nor is there any explanation in the Record of Policy Actions issued after the February meeting. 63 Fed. Res. Bull. 380-394. (1977).
Because the Record of Policy Actions is not completed and formally adopted until the meeting after the meeting to which it applies, respondent apparently conceded in the Court of Appeals that the Committee's present guidelines for release of that document are consistent with the FOIA. See 184 U. S. App. D.C. 203, 207, 565 F.2d 778, 782 (1977).
In May 1976, the FOMC voted to discontinue the preparation of Memoranda of Discussion, 62 Fed. Res. Bull. 581, 590-591 (1976).
"(a) Each agency shall make available to the public information as follows:
"(1) Each agency shall separately state and currently publish in the Federal Register for the guidance of the public—
"(D) substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the agency."
The District Court also held that policy actions of the FOMC other than the Domestic Policy Directive had to be indexed and promptly disclosed pursuant to 5 U. S. C. § 552 (a) (B).
"(b) This section does not apply to matters that are—
"(2) related solely to the internal personnel rules and practices of an agency;
"(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."
"(3) specifically exempted from disclosure by statute (other than section 552b of this title), provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld."
"Upon motion by a party or by the person from whom discovery is sought, and for good cause shown, the court in which the action is pending or alternatively, on matters relating to a deposition, the court in the district where the deposition is to be taken may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: . . . (7) that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way." Fed. Rule Civ. Proc. 26 (c) (7).
"I might interpolate at this point another example or two which I do not have in my statement. Information as to purchases by the Federal Reserve System, for example, of Government securities in the market, if prematurely disclosed could have, we feel, serious effects on the orderly handling of the Government's financing requirements so that in all of these things there is a question of timing. There are many things on which full disclosure is made in reports which are published or filed with the Congress with a timelag, there is no basic secrecy about these matters, and yet the premature release of these could be very damaging to the general interest."
These views also reflect those of Sherman Maisel, a former member of the Federal Reserve Board, who has written in this context that "[m]ost experts on markets . . . believe that the better the information, the better the market." S. Maisel, Managing the Dollar 175 (1973).
First, the passage in the House Report that the Court relies on, which refers to "information which [an agency] has received or generated before it completes the process of awarding a contract," H. R. Rep. No. 1497, 89th Cong., 2d Sess., 10 (1966), is rather clearly directed both at a different governmental activity (i.e., procurement of goods or services by the Government acting as commercial buyer) and at a different stage in the course of that activity (i. e., "before it completes [its] process") than is involved in this case. Here, the agency is engaged in a clearly governmental activity—the regulation of financial markets—and has already settled upon its final position and has acted upon it. Moreover, the absence in the Senate Report of even this thin reed to support the Court's analysis is significant in light of our recognition that Report, rather than the House Report, is the most accurate reflection of the congressional will with respect to FOIA. Department of Air Force v. Rose, 425 U.S. 352, 363-367. Finally, the fact that Congress did include a "commercial information" exemption in the Act, albeit one that clearly does not apply in this case—Exemption 4—should persuasively counsel against our adopting a novel and strained interpretation of another exemption to encompass such information. This is particularly so in this case in view of the fact that the very agency involved here unsuccessfully requested that Congress amend the proposed Exemption 4 to provide protection for the policy directives involved in this case. Hearings on H. R. 5012, etc., before a Subcommittee of the House Committee on Government Operations, 89th Cong., 1st Sess., 51, 55, 228, 229 (1965). Having failed to provide such protection in Exemption 4, which so clearly relates to commercial information, Congress will no doubt be surprised to find that the Court has read that protection into Exemption 5.