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JOHN DOE AGENCY AND JOHN DOE GOVERNMENT AGENCY v. JOHN DOE CORPORATION

decided: December 11, 1989.

JOHN DOE AGENCY AND JOHN DOE GOVERNMENT AGENCY, PETITIONERS
v.
JOHN DOE CORPORATION



ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.

Blackmun, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Brennan, White, O'connor, and Kennedy, JJ., joined. Blackmun, J., also filed a separate statement, post, p. 158. Brennan, J., filed a concurring opinion, post, p. 158. Stevens, J., filed a dissenting opinion, post, p. 159. Scalia, J., filed a dissenting opinion, in which Marshall, J., joined, post, p. 160.

Author: Blackmun

[ 493 U.S. Page 147]

 JUSTICE BLACKMUN delivered the opinion of the Court.

Once again, we are faced with an issue under the Freedom of Information Act (FOIA or Act), 5 U.S.C. § 552. This time, we are concerned with the Act's Exemption 7, § 552 (b)(7). That provision exempts from disclosure

"records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information (A) could reasonably be expected to interfere with enforcement proceedings, (B) would deprive a person of a right to a fair trial or an impartial adjudication, (C) could reasonably be expected to constitute an unwarranted invasion of personal privacy, (D) could reasonably be expected to disclose the identity of a confidential source, including a State, local, or foreign agency or authority or any private institution which furnished information on a confidential basis, and, in the case of a record or information compiled by criminal law enforcement authority in the course of a criminal investigation or by an agency conducting

[ 493 U.S. Page 148]

     a lawful national security intelligence investigation, information furnished by a confidential source, (E) would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law, or (F) could reasonably be expected to endanger the life or physical safety of any individual . . . ."

Our focus is on the Exemption's threshold requirement that the materials be "records or information compiled for law enforcement purposes."

I

Respondent John Doe Corporation (Corporation) is a defense contractor. As such, it is subject to periodic audits by the Defense Contract Audit Agency (DCAA), the accounting branch of the Department of Defense.*fn1 See 32 CFR §§ 357.2 and 357.4 (1988). In 1978, in connection with an audit, an exchange of correspondence took place between the DCAA and the Corporation concerning the proper accounting treatment of certain costs. The Government auditor, by letter dated May 2 of that year, claimed that the costs should have been charged to identifiable programs instead of to a technical overhead account. About $4.7 million in 1977 costs were discussed. The Corporation, by letter dated July 11, 1978, replied and defended its allocation. App. 22-28. No

[ 493 U.S. Page 149]

     further action regarding the allocation of those costs was taken by the DCAA or the Corporation during the next eight years.

In 1985, the office of the United States Attorney for the Eastern District of New York instituted an investigation into possible fraudulent practices by the Corporation. A subpoena was issued to the Corporation by a grand jury on February 21, 1986. It requested documents relating to the cost allocation question which was the subject of the 1978 correspondence. On September 30, 1986, the Corporation submitted to the DCAA a request under the FOIA for any documents "that are related in any way to the subject matter" of the 1978 correspondence. Id., at 19. Upon the advice of an Assistant United States Attorney, the DCAA denied the request on November 18, citing Exemptions 7(A) and (E) of the Act. App. 29. Two days later the requested records were transferred to the Federal Bureau of Investigation (FBI). Id., at 92.

On February 3, 1987, the Corporation renewed its FOIA request but this time directed it to the FBI. Id., at 46. That agency denied the request, citing only Exemption 7(A). Id., at 49.

After exhausting its administrative remedies, the Corporation instituted the present litigation, seeking review of the withholding of the requested documents, in the United States District Court for the Eastern District of New York. Id., at 6, 11. In due course, the Corporation moved to compel the preparation of a " Vaughn Index."*fn2

The Government opposed disclosure, the preparation of the Index, and answers to propounded interrogatories on the

[ 493 U.S. Page 150]

     ground that compliance with any of these would interfere with the grand jury proceeding and would provide the Corporation with information that might be useful to it in connection with anticipated criminal litigation. The District Court ordered the Government to prepare a Vaughn Index and to answer the interrogatories. It ordered sua sponte, however, that this material be submitted to the court for examination in camera rather than be given directly to the Corporation. Id., at 62, 66.

After conducting its examination without a hearing, the District Court ruled that petitioners were not required to turn over any of the contested documents to the Corporation. It then dismissed the complaint, stating: "We are satisfied that there is a substantial risk that disclosure of any of this material, the documents, the Vaughn index and the answers to [the] interrogatories, would jeopardize the grand jury proceeding." App. to Pet. for Cert. 13a-14a.

The Corporation appealed to the United States Court of Appeals for the Second Circuit. That court reversed and remanded the case. 850 F.2d 105, 110 (1988). It ruled that the law enforcement Exemption 7, upon which the District Court implicitly relied, did not protect the records from disclosure because they were not "compiled for law enforcement purposes." Id., at 109. It observed that the records "were compiled in 1978, seven years before the investigation began in 1985," id., at 108, and that the 1974 amendments to the Act "make it clear that a governmental entity cannot withhold materials requested under the FOIA on the ground that materials that were not investigatory records when compiled have since acquired investigative significance." Id., at 109. The Court of Appeals acknowledged that compliance with the FOIA may compel disclosure of materials that ordinarily are beyond the scope of discovery in a criminal investigation, and thus may enable a potential defendant to prepare a response and construct a defense to a criminal charge. The court concluded, however, that this concern was more properly addressed

[ 493 U.S. Page 151]

     to Congress.*fn3 Ibid. The court ruled, nonetheless, that on remand the Government was to be allowed to bring to the District Court's attention "any particular matter that would, if disclosed, expose some secret aspect of the grand jury's investigation." Id., at 110.

The court refused to stay its mandate; it was issued on November 28, 1988. App. to Pet. for Cert. 15a. On remand, the District Court concluded that the Second Circuit's opinion required that the Vaughn Index be turned over to the Corporation. App. 86. The Court of Appeals on January 10, 1989, refused to stay the District Court's order requiring the furnishing of the Index, id., at 96, but later that same day the Circuit Justice entered a temporary stay pending a response from the Corporation. On January 30, the Circuit Justice granted a full stay. See 488 U.S. 1306 (Marshall, J., in chambers).

Because of the importance and sensitivity of the issue and because of differing interpretations of the pertinent language of Exemption 7,*fn4 we ...


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