ELR Citation: ELR 20088
No(s). 84-2066 (7th Cir. Dec 21, 1984)

The court holds that the Nuclear Regulatory Commission (NRC) apparently violated neither the Freedom of Information Act (FOIA) nor its own disclosure regulations in deciding to release a General Electric (GE) internal document that was submitted to it under subpoena during a licensing hearing, but remands for promulgation of clearer findings by NRC on one issue. The court first notes the existence of two separate, non-identical, applicable provisions—FOIA and NRC's Rule 790. The rule cannot protect documents from FOIA disclosure, but it can require broader disclosure, since FOIA requires certain disclosures, but forbids none. The court holds that FOIA creates no cause of action for organizations seeking to prevent release of information. GE, however, may make and has made claims under the Administrative Procedure Act (APA) for violation of some other law or for arbitrary and capricious action.

GE's violation-of-law arguments are based on Rule 790. Those arguments fail. Though subsection (b)(5) requires NRC to determine whether the information should be withheld from the public, there are no criteria for determination that could be violated, and there is no explicit commitment to withhold the information, regardless of the outcome of the determination. Another sentence of subsection (b)(5) that requires NRC to return irrelevant or unnecessary documents is inapplicable to this case. Subsection (c), which permits license applicants to withdraw documents before they are released to the public when NRC denies a subsection (b)(5) application to withhold, might be read to defeat the purpose of FOIA. NRC's interpretation that subsection (c) is inefficacious once a FOIA request has been filed is both reasonable and necessary to prevent absurdities.

GE bases its arbitrary and capricious arguments on NRC's interpretations of FOIA. That act applies only to "agency records," but that term includes not only documents created by the agency but also documents submitted to the agency for use in carrying out its duties. The GE report at issue is an agency record. It is irrelevant to that conclusion that the report was the subject of a protective order and was received in camera; that the licensing proceeding was abandoned after the FOIA request was filed; and that NRC made only limited use of the report in the licensing proceeding. The court next examines whether the report falls within one of the FOIA exemptions. It does not fall under exemption 3, "specifically exempted from disclosure by statute." Section 103(b)(3) of the Atomic Energy Act might require NRC to withhold commercial secrets, but it is not broader than FOIA's exemption 4 and was not intended to prevent disclosure of information—like this report—that is merely embarrassing. The Trade Secrets Act has no independent force where FOIA is involved. With regard to exemption 4, the issues are whether releasing the report to the public would either (1) make it hard for the NRC to obtain similar information in the future or, (2) substantially harm GE's competitive position. The court easily upholds the Commission's negative conclusion on the first point, despite the absence of explanation of the Commission's basis for its decision. The Commission's unexplained negative conclusion on the second point is not due so much deference. this second decision is not of a quintessentially managerial nature like the decision on the first point, but is of the reviewable sort made all the time in antitrust and unfair competition cases. Though NRC's rejection of GE's assertion of competitive injury seems reasonable, the Commission's one short sentence on the issue is not sufficient for effective judicial review. Therefore, the district court is directed to remand to NRC for development of a record on this one point.

Counsel for Appellant
George L. Edgar
Newman & Holtzinger
1615 L St. NW, Washington DC 20036
(202) 955-6600

William A. Gordon
Mayer, Brown & Platt
231 South LaSalle St., Chicago IL 60604
(312) 750-3369

Counsel for Appellee
Leonard Schaitman, Douglas Letter
Appellate Staff, Civil Division
Department of Justice, 10th & Constitution Ave. NW, Washington DC 20530
(202) 633-3441

Counsel for Intervenor
William David McGrath
McGrath, Kuknyo & McGrath
44 E. Main, 503 Lincoln Bldg., Champaign IL 61820
(217) 351-3157

Before POSNER, Circuit Judge, SWYGERT, Senior Circuit Judge, and DUPREE, Senior District Judge.^*