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U.S. Supreme Court

Federal Open Market Comm. v. Merrill, 443 U.S. 340 (1979)

Federal Open Market Committee of the

Federal Reserve System v. Merrill

No. 77-1387

Argued December 6. 1978

Decided June 2, 1979

443 U.S. 340


This case presents the question whether the Freedom of Information Act (FOIA) is violated by petitioner's practice, authorized by regulation, 12 CFR § 271.5 (1978), of withholding certain monetary policy directives from the public during the month they are in effect, such directives being published in full in the Federal Register at the end of the month. To implement its authority to conduct open market operations of the Federal Reserve System, petitioner has established a combined investment pool for all Federal Reserve banks, administered by the Account Manager. Petitioner meets approximately once a month to review the overall state of the economy and consider the appropriate course of monetary and open market policy. Its principal conclusions are embodied in a "Domestic Policy Directive," which indicates in general terms whether petitioner wishes to follow an expansionary, deflationary, or unchanged monetary policy in the period ahead, and which includes specific tolerance ranges for the growth in the money supply and for the federal funds rate. The Account Manager is guided by the Domestic Policy Directive in his transactions with dealers who trade in Government securities. A Domestic Policy Directive exists as a document for approximately one month before it appears in the Federal Register, by which time it has been supplanted by a new Directive. Respondent, who had been denied immediate access under the FOIA to certain records of petitioner's policy actions, instituted suit for declaratory and injunctive relief against the operation of 12 CFR § 271.5 and the policy of delayed disclosure. Without expressly considering petitioner's contention that immediate disclosure of Domestic Policy Directives and tolerance ranges would interfere with the conduct of national monetary policy, the District Court entered judgment for respondent, holding, inter alia, that the Directives were "statements of general policy" which, under the FOIA, had to be "currently" published in the Federal Register; that the 1-month delay failed to satisfy the current publication requirement.; and that the Directives could not be withheld under Exemption 5 of the FOIA, which applies to documents that are

"inter-agency or intra-agency memorandums or letters which would not be

Page 443 U. S. 341

available by law to a party . . . in litigation with the agency."

The Court of Appeals affirmed, also expressing no opinion about petitioner's assertion that immediate disclosure of Domestic Policy Directives and tolerance ranges would seriously interfere with the conduct of national monetary policy.


1. Petitioner's Domestic Policy Directives are "intra-agency memorandums" within the meaning of Exemption 5 of the FOIA. Petitioner is clearly an "agency" as that term is defined in the Administrative Procedure Act, and the Directives are essentially petitioner's written instructions to the Account Manager, a subordinate official of the agency. The instructions are binding only upon the Account Manager, and neither establish rules that govern the adjudication of individual rights nor require particular conduct or forbearance by any member of the public. Pp. 443 U. S. 352-353.

2. Although Exemption 5 does not confer general authority upon an agency, without regard to any privilege enjoyed by the Government in the civil discovery context, to delay disclosure of intra-agency memorandums that would undermine the effectiveness of the agency's policy if released immediately, nevertheless Exemption 5 does incorporate 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. See Fed.Rule Civ.Proc. 26(c) (7). Pp. 443 U. S. 353-360.

3. Although petitioner's 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 would be protected against immediate disclosure in the civil discovery process. If the Directives contain sensitive information not otherwise available, and if immediate release of the Directives would significantly harm the Government's monetary functions or commercial interests, then a slight delay in the publication of the Directives, such as that authorized by 12 CFR § 271.5, would be permitted under Exemption 5. Determination of whether, or to what extent, the Directives would in fact be afforded protection in civil discovery must await the development of a proper record on remand. If the District Court concludes that the Directives would be afforded protection, then it should also consider whether the operative portions of the Directives can feasibly be segregated from the purely descriptive materials therein, and the latter made subject to disclosure or publication without delay. See EPA v. Mink, 410 U. S. 73, 410 U. S. 91. Pp. 443 U. S. 361-364.

184 U.S.App.D.C. 203, 565 F.2d 778, vacated and remanded.

Page 443 U. S. 342

BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J.,and BRENNAN, WHITE, MARSHALL, POWELL, and REHNQUIST, JJ., joined. STEVENS, J., filed a dissenting opinion, in which STEWART, J., joined in part, post, p. 443 U. S. 364.

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