procedural protections to submitters, it is clearly insufficient to warrant a massive change in the substantive reach of the FOIA, such as those changes in Exemption 4 and in the relationship between the Trade Secrets Act and the FOIA encoded in the DoleHorton bill, propose. I thank the Committee again for the invitation to appear here today.*/ I wish to express my gratitude to Anne Goldstein, a thirdyear law student at Harvard Law School, for her assistance and advice in the preparation of this statement. Mr. RADER. Mr. Vladeck, we would advise you that your statement will be made a part of the record. We urge you to make your oral comments very concise. STATEMENT OF DAVID C. VLADECK, STAFF ATTORNEY, PUBLIC CITIZEN LITIGATION GROUP Mr. VLADECK. Thank you. Before turning to the specific comments I have about the substantive provisions of the Dole bill, I would like to just briefly introduce Public Citizen and explain why we are so interested in any proposed amendment to exemption 4. Public Citizen Litigation Group has long been active in FOIA litigation. We have litigated over 70 FOIA cases, probably more than any other public interest group in the country, including such landmark cases as FAA v. Robertson, the GTE Sylvania case, and Vaughn v. Rosen. We have had a long-standing interest in the act and represented journalists and other public interest groups who are anxious to use its substantive provisions to get a sense of how the Government is working and how it is interacting with the corporations it regulates. I have only two major points to make in addition to the ones I have made in my public statement. 1. EXEMPTION 4 DOES NOT NEED TO BE AMENDED The first is, as Ms. Campbell has said, there is no evidence to support the assumption that there is a need to amend the substance of exemption 4. In many respects, this hearing is very reminiscent of hearings that were held 4 years ago before the House Committee on Government Information, which addressed the same issues and which heard the same sorts of testimony about corporate horror stories. After carefully reviewing a considerable amount of evidence and testimony, they concluded, as did Professor Stevenson, that there was at best meager evidence to support the notion that there was a need for a substantive amendment of exemption 4. At this juncture, it is also worth noting that most of these horror stories you hear about pose one fundamental question; that is, would the information that allegedly has been disclosed would be exempt under exemption 4? Universally, the answer is probably yes. What the opponents of the presently drafted exemption 4 really are driving at is that there may well be problems in administration. I submit that where laws are being enforced by people, there may well be an occasional slipup. One example which comes to mind is the National Highway Transportation Safety Administration. Inadvertent disclosure of documents relating to the Firestone 500 tire was apparently the result of a mistake caused by a secretary within the agency. The real issue-the issue that this committee should be exploring-is whether there is any evidence that an agency has knowingly disclosed information which falls within the ambit of exemption 4. Like the House committee and like Professor Stevenson, I am not aware of any documented instance in which that sort of disclosure has taken place. I would also point out that the act has now been extant for 15 years. Over the course of its history, at best there has been meager evidence that exemption 4, as currently drafted, is inadequate to protect legitimate business interests. In this vein, the committee ought to recognize that there are very strong incentives on behalf of the agency personnel for not disclosing information under exemption 4. First and foremost, there is a provision of the criminal code, 18 USC 1905, which makes individual agency employees subject to criminal sanctions if they disclose trade secret information. Admittedly, there is a dispute about the scope of 1905 and whether it is coextensive with exemption 4. However, by and large, most of the information that is subsumed under exemption 4 is probably covered under 1905. Thus, someone working within the agency runs a terrible risk if they knowingly disclose information which falls within that provision. The second disincentive is that most agencies now-virtually all I am aware of-as a matter of course consult with submitters prior to disclosing allegedly trade secret information. Most agencies have regulations requiring consultation. In my written testimony, we do endorse congressional action to simply codify these rules concerning notice to submitters and to make them uniform. But, as a practical matter, submitters are notified in advance and there is dialog between the agency and the submitter prior to release. The last point is that courts have not been predisposed to disclose exemption 4 information. In my written testimony, I briefly canvassed some of the exemption 4 cases that have been reported. They demonstrate that by and large, when the requester gets to court, the requester loses. There are several reasons for that, one of which is the gross disparity between the means available to requesters and submitters. Courts are also highly sensitive to claims of trade secret material, as are agencies, and that in some instances they have really bent over backwards to give deference and respect to corporate claims that material is trade secret material. In this regard, it is now the rule in the District of Columbia Circuit, which is the major site for FOIA litigation, that there are now trials under exemption 4 cases where the submitter is given a full opportunity to intervene or to join in the case and to present evidence in a full-blown trial. At bottom, the point that I want to stress is that there are seldom going to be instances where the corporation has not been fully informed and has had an opportunity to either file a reverse case or to join in an action brought by the requester to compel disclosure and to have their arguments concerning trade secret status fully aired before a neutral hearing officer. Unless and until industry comes up with some far more concrete examples than they have, this committee ought to be guided by Professor Stevenson's report, the work done by the House committee 4 years ago on precisely this issue, and by the other neutral studies that have been conducted which show that there is no evidence to support the claim that there really is a legitimate problem with disclosure of business records. II. THE PROCEDURAL PROVISIONS OF S. 1247 ARE UNWARRANTED AND CONTRARY TO BASIC STRUCTURE OF THE FOIA I would like to very briefly address the procedural forms that are incorporated into S. 1247. By and large, we oppose them. We read S. 1247 as an attempt to stack the deck in some respects in favor of the submitter and against the requester. For example, under the procedures built into S. 1247, the submitter essentially has a right to two trials-the first is sort of an informal hearing before the agency and the second is a separate de novo trial before a Federal judge. Why there is a need for such a dual procedure escapes me. It seems to me that giving submitters an opportunity to make their cases before the agency and have that decision ultimately reviewed under an arbitrary and capricious standard is far more than adequate protection. Worst of all, one provision of the bill as drafted raises serious legal questions. That is the need to conduct agency hearings ex parte. Ex parte hearings have long been the bane of our judicial system. They are alien to our entire system of jurisprudence. It is surprising to me that the proposal now incorporates an ex parte hearing. At the very least the requester should be notified of the hearing and given an opportunity to participate. The final point that I would like to make is that the committee should be sensitive as to how corporate information winds up in Government files. Corporations do not submit information to the Government because they are trying to be nice. Information is submitted because corporations are trying to influence the course of governmental conduct. It seems to me that given that premise, the public ought to know how a Government is interacting with corporations that it regulates. Thank you. [The prepared statement of Mr. Vladeck follows:] PREPARED STATEMENT OF DAVID C. VLADECK Mr. Chairman, Members of the Subcommittee: Thank you for the invitation to appear before the subcommittee this morning to address what have been asserted to be the many problems presented by the trade secret exemption of the Freedom of Information Act and the so-called reverse litigation which has resulted from it. We are pleased that the subcommittee is undertaking these hearings with a view towards exploring what legislative changes might be appropriate for resolving these problems and eliminating uncertainties which exist under the present law. Prior to turning to the specific proposals pending before the Subcommittee, however, I think it would be useful to spend a minute tracing the origins of the Freedom of Information Act. The concept of freedom of information is by no means new in this country. Indeed it is fundamental to our democratic society. For example, in 1822 James Madison wrote that: A popular Government without proper information, or the Over the years, however, public knowledge of what government is doing has proved to be an elusive goal. When Congress 1 Letter from James Madison to W.T. Barry, Aug. 4, 1822, in The Complete Madison 337 (Padover ed. 1953). |