Center for Auto Safety v. National Highway Traffic Safety Administration

United States Court of Appeals for the District of Columbia Circuit · Administrative Law

Administrative LawFOIAExemption 4Paperwork Reduction ActFOIAExemption 4confidential commercial informationvoluntary submissions

Facts

In 1997, NHTSA sent an Information Request to nine airbag manufacturers and importers seeking information about airbag systems for model years 1990-98, stating that the recipients were required to respond and could face penalties for noncompliance. After the Center requested the withheld materials under FOIA, NHTSA released some information but withheld 33 items under Exemption 4. The district court concluded that NHTSA's request violated the Paperwork Reduction Act because NHTSA had not obtained OMB approval even though the request was expected to reach 10 or more entities, so the submissions were not legally enforceable. The district court then treated the submissions as voluntary and held the disputed items exempt, including 10 items it classified as trade secrets.

Issue

When an agency obtains information through a request that appears mandatory but is legally unenforceable under the Paperwork Reduction Act, should the submissions be treated as mandatory or voluntary for FOIA Exemption 4 purposes? Also, did the district court apply the correct standard in deciding whether the information was customarily disclosed and whether certain items were trade secrets?

Rule

For FOIA Exemption 4, actual legal enforceability determines whether a submission is mandatory or voluntary; if the agency lacks authority to compel compliance, the submission is not mandatory even if the request appeared compulsory and the parties believed it was. Voluntarily submitted commercial information is confidential if it is of a kind the submitting party would not customarily release to the public. The Niagara Mohawk requirement that information be identical applies only to the public-domain theory, not to the separate Critical Mass inquiry into customary disclosure. Trade secrets are narrowly limited to secret, commercially valuable plans, formulas, processes, or devices used in making or processing commodities, not merely end-product characteristics.

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The Federal Product Safety Bureau sent letters to seven appliance makers in Ohio and Michigan stating that each company "must" submit internal testing data and that noncompliance could lead to civil penalties. The bureau had not obtained required OMB approval even though it expected each recipient to gather responsive information from foreign affiliates and parts suppliers, bringing the total number of entities involved above ten.

When a consumer group later seeks the data under FOIA, how should a court characterize the companies' submissions for Exemption 4 purposes?

Explanation. The governing rule is that mandatory versus voluntary turns on the agency's actual legal authority to compel production, not on the request's wording, the submitters' beliefs, or the agency's intent. If the request was unenforceable because required OMB approval was missing, the submissions are treated under the voluntary-submission standard of Exemption 4.