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PUBLIC CITIZEN v. NATIONAL ECONOMIC COMMN.

January 5, 1989

PUBLIC CITIZEN, THE BUREAU OF NATIONAL AFFAIRS, THE WASHINGTON POST, THE WALL STREET JOURNAL, and STEPHEN WILDSTROM, Plaintiffs,
v.
THE NATIONAL ECONOMIC COMMISSION and ADMINISTRATOR OF THE GENERAL SERVICES ADMINISTRATION, Defendants



The opinion of the court was delivered by: GREEN

JOYCE HENS GREEN, UNITED STATES DISTRICT JUDGE.

 On December 9, 1988, this Court issued a memorandum opinion granting plaintiffs' motion for a temporary restraining order which prohibited defendants from closing to the public the proposed December 12, 1988 meeting of the National Economic Commission ("Commission"), at which it intended to discuss economic assumptions and budget options. Thereafter, the December 12 meeting was rescheduled to January 4, 1989. On December 12, 1988, plaintiffs filed an amended complaint and motion for a preliminary or permanent injunction, seeking to prevent defendants from closing to the public the January 4 meeting as well as certain subsequent meetings under the Federal Advisory Committee Act ("FACA"), 5 U.S.C. App. II (1972), as amended. *fn1" On December 16, 1988, defendants filed a motion for summary judgment, asserting that the January 4 meeting and the subsequent meetings could be lawfully closed under exemption 9(B) of the Government in the Sunshine Act ("Sunshine Act"), 5 U.S.C. § 552b(c)(9). *fn2" Defendants advised the Court by a memorandum filed on December 23, 1988 that the January 4, 1989 meeting had been rescheduled once again for January 10, 1989. *fn3"

 Having carefully considered plaintiffs' motion, defendants' motion, and the entire record, the Court grants plaintiffs' motion for a permanent injunction and denies defendants' motion for summary judgment.

 I. BACKGROUND

 The relevant facts up until this stage of the litigation have been adequately set out in this Court's Memorandum Opinion of December 9, 1988 and need not be repeated here. The January 10, 1989 meeting, which has been twice re-scheduled from its original date of December 12, 1988, is the first of twelve meetings that have been scheduled by the Commission. The subject matter of the January 10, 1989 meeting has not changed. Two issues are to be discussed: (1) "economic assumptions", i.e., projections of growth, inflation, interest rates, and unemployment, and (2) "budget options", i.e., spending cuts or revenue measures. Senior economists from the Office of Management and Budget ("OMB") and the Congressional Budget Office ("CBO") plan to answer questions and give testimony before the Commission.

 The agenda for the remaining meetings of the Commission is set forth in a memorandum to the members of the Commission dated October 12, 1988. First Mathiasen Declaration, para. 4; Def. Ex. B. *fn4" Originally, meetings were scheduled to take place between November 18 and December 16, 1988. On October 13, 1988, Drew Lewis and Robert Strauss, Co-Chairmen of the Commission, wrote to Richard G. Austin, Acting Administrator of the General Services Administration, requesting a written determination that eleven meetings be closed (some meetings in whole, some in part) under 5 U.S.C. § 10(b)(c)(2). Def. Ex. C. They enclosed a draft determination for Austin to consider. By letter dated October 24, 1988, Lewis and Strauss again wrote to Austin, supplementing their October 13, 1988 letter. Def. Ex. D. On October 26, 1988, Lewis and Strauss wrote yet again to Austin, supplementing their previous letters. Def. Ex. E. On November 3, 1988, the Administrator issued his determination, closing eleven meetings of the Commission to be held between November 28 and December 16 under exemption 9(B) of the Sunshine Act, 5 U.S.C. § 552b(c)(9). Def. Ex. F. *fn5" Because the Commission later decided not to hold itself to a self-imposed December 21 deadline for issuance of its recommendations, the closed meetings listed in that memorandum were not held. First Mathiasen Declaration, para. 7. The Commission has not held any of these meetings as of this date.

 Defendants state in their Memorandum of Points and Authorities in Support of Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for a Preliminary Injunction ("Def. Memo.") that "plaintiffs are correct in assuming . . . that the topics of the closed meetings will closely follow those announced in October: 'economic assumptions and treatment of social security', 'alternative baseline concepts', 'fiscal policy and deficit targets', 'components of deficit reduction package', 'spending programs', 'deficit reduction options', and 'deficit reduction options and enforcement.'" Def. Memo., at 5. The eleven meetings listed in the November 3, 1988 determination of the Acting Administrator and described in the October 12, 1988 memorandum are the meetings with which the Court is presently concerned. Plaintiffs now seek a permanent injunction preventing defendants from closing to the public these meetings as well as any other meetings in which the Commission intends to address these issues. *fn6"

 II. ANALYSIS

 The issue before the Court is virtually identical to the issue that existed on plaintiffs' motion for a temporary restraining order: Does exemption 9(B) of the Sunshine Act apply to meetings of the National Economic Commission where the above topics are to be addressed? *fn7" Defendants vehemently argue that this question must be answered in the affirmative. In support of their position, defendants offer the same arguments previously raised in their opposition to plaintiffs' motion for a temporary restraining order. They sum up their concerns at page 11 of their memorandum.

 
In particular, the Commission's concerns break down into two interrelated categories: first, the likely ramifications of public testimony by the senior economists from the Office of Management and Budget and the Congressional Budget Office, and second, the likely consequences of public examination of the internal debate by the Commission members themselves.

 Def. Memo., at 11.

 Defendants also continue to express their previously stated concerns that the senior economists from OMB and CBO will not be candid in public testimony before the Commission and that the Commission members themselves will be inhibited in publicly questioning these witnesses. Defendants state:

 
The Commission faces the dual problem of encouraging the witnesses to be frank and open in their testimony and allowing the Commission members themselves to be unreserved in questioning the witnesses.

 Def. Memo., at 12 (emphasis in original).

 
First, public officials, if they are responsible, must be circumspect in their public comments. Market reactions to incorrectly reported and/or misunderstood statements or statements taken out of context by senior government officials are facts of life. The risk is greater when the statements are made by persons who are perceived to be decision makers, close to decision makers, or parts of small groups making a decision. . . .
 
In this respect this Commission is precisely like a committee of Congress with jurisdiction in a particular area. Although the members often have public positions, at some point the members have an opportunity to speak bluntly with one another without public observation, as they try to reach a compromise. . . . [The Commission] will not succeed if members of the Commission must work under the dual concern of either maintaining their public stances and or fearing that their statements, and even their short term disagreements, will lead to damaging financial speculation both here and abroad.
 
Second, for some elements of the Commission's work such as economic assumptions, the nature of the information we receive from an outside source can be, from my experience, markedly different if the meeting is public rather than private.
 
Any realistic policy maker understands that the questions that can be asked of a witness, such as the officials of the Office of Management and Budget and Congressional Budget Office whom we would like to bring before the Commission in closed session, are markedly different if the questioning is in public rather than private. Likewise, the answers that can be expected of such witnesses will be significantly different.
 
Holding all of the Commission's working sessions in public will alter the outcome of the Commission's work because of the conscientious efforts of each Commissioner to avoid discussion, comments or even confrontation, that could result in unwarranted speculation in the financial markets. Experienced public officials know that their public statements must be undertaken with care, be they to the press, in speeches or in television or radio interviews. . . . I can only state from my experience that the Commission must have an opportunity to work out its differences in private if it is to most effectively execute the mandate entrusted to it by Congress.

 Lewis Decl., para. 6. In the second declaration, Co-Chairman Robert Strauss explains why the internal debate must be protected from public scrutiny until the final recommendations are made. He states that

 
The recommendations of this Commission will inevitably have an effect upon financial markets both here and abroad. However, it will be less disruptive to these markets if there is only one response to a completed set of recommendations, rather than repeated effects from partial reports which would occur if every aspect of the Commission's work is commented on before it is completed.

 Strauss Decl., para. 7. He goes on to state that

 
My fellow Commissioners are all public figures many of whose views on the Federal budget deficit and related issues are matters of public record. Unfortunately, the historic views of many of the Commissioners are significantly at odds with each other. . . . What this Commission must do is take these divisions and through hard bargaining, reach a compromise. To believe that this process will work as well in public goes against common sense and against my entire life's experience in government. Indeed, the true question is whether the process, under these constraints, will work at all.

 These declarations present no new arguments, nor any basis for diverging from this Court's conclusion in its December 9 memorandum opinion that defendants have failed to establish that opening the meetings will "significantly frustrate implementation of a proposed agency action" under exemption 9(B) of the Sunshine Act. They merely repeat, through different affiants, the same concerns which Mathiasen raised in his original declaration and which this Court specifically rejected in its December 9 opinion.

 Defendants persist in arguing that their internal debate should be closed to the public because it would create market speculation which would "significantly frustrate" the Commission's mandate. This contention was specifically addressed and rejected in the December 9, 1988 memorandum opinion. Defendants' argument seems all the more disingenuous at this moment given the fact that the Commission's Co-Chairmen, Robert Strauss and Drew Lewis, appeared on national television on December 11, 1988 and spoke about the very issues which the Commission plans to debate and which they wish to prevent the public from seeing and hearing. On NBC News' Sunday morning program "Meet the Press", Strauss and Lewis discussed various budget options that the Commission is considering. Lewis stated that the Commission is going in the direction of addressing the deficit through reductions in spending. See Transcript of NBC News "Meet the Press", Plaintiff's Memo. in Support, Exhibit 1, p. 2. Strauss, on the other hand, stated that in his judgment, there are not sufficient spending cuts to make up the shortfall. Id. at 4. They discussed the possibility of gasoline and broad base energy taxes as well as a means tested consumption tax. Id. at 7. Defendants fail to explain why these comments by the Co-Chairmen will not cause market speculation and instability similar to that they fear will be engendered by opening the Commission's meetings to the public.

 The Court's analysis in its December 9 opinion as to defendants' other arguments is equally applicable to the instant motion for a permanent injunction. That opinion is incorporated herein by reference and attached hereto, with its accompanying order, for convenience. The reasoning of Common Cause v. Nuclear Regulatory Commission, 218 U.S. App. D.C. 262, 674 F.2d 921 (D.C. Cir. 1982) continues to control the instant case. A close scrutiny of defendants' arguments reinforces the view that defendants continue to seek the broad deliberative process privilege which Common Cause specifically prohibits.

 In Common Cause, the Nuclear Regulatory Commission sought to close a series of meetings to discuss preparation of the agency's annual budget request for fiscal year 1982, invoking exemption 9(B) of the Sunshine Act. The Court concluded that "there is no blanket exemption for agency meetings at any stage of the budget preparation process. The availability of exemptions for specific portions of budgetary discussions must be determined upon the facts of each case." 674 F.2d at 923. The Court recognized that "specific items discussed at Commission budget meetings might be exempt from the open-meeting requirement of the Act, and might justify closing portions of the Commission meetings. . . ." Id. at 936 (emphasis added). However, Common Cause made it clear beyond any doubt that this could only be done "on an individual and particularized basis." Id. at 936. Furthermore, the burden is on the party seeking to close the meeting to establish that the invoked exemption properly applies. Id. at 929.

 Defendants in the instant case are not seeking to close specific portions of the scheduled meetings on an "individual and particularized" basis. On the contrary, defendants wish to shield the internal debate from the public by closing, in their entirety, all working sessions of the Commission. They have not carried their burden of establishing that exemption 9(B) applies to all of the scheduled meetings of the Commission.

 The only meetings the Commission has opened to the public are preliminary hearings, a meeting at which the Commissioners introduced themselves, four staff presentations, and one meeting of a panel of experts. Defendants' position can only be characterized as an extreme and inflexible attempt to invoke a blanket exemption, thereby screening its deliberative processes from public scrutiny. That defendants are asserting such a broad privilege is demonstrated by defense counsel's responses to questions propounded by the Court at December 7, 1988 hearing on plaintiffs' motion for a temporary restraining order. When the Court asked defense counsel for examples of the kind of Commission discussions which could be open to the public, the sole example given was testimony concerning the economic history of the country. See Transcript of proceedings of December 7, 1988 ("Tr."), pp. 13-14, 26-28. As to discussions concerning the present state of the economy or projections about its future course, the sense of defendants' argument was that all such discussions should be closed.

 A glance at the Commission's proposed work agenda demonstrates that defendants have not described with any specificity or particularity the content of the meetings it wishes to close. For example, the schedule describes the content of the closed portion of the November 28, 1988 meeting, entitled Economic Assumptions, as "Working session on economic assumptions and treatment of social security." Def. Ex. B, at 2. The closed portion of the November 29, 1988 meeting entitled Alternative Baselines is described as "Working session on alternative baseline concepts." Id. Like descriptions exist for the meetings scheduled for November 30, December 1, December 2, December 5, December 6, and December 7. The description of the closed portions of the meetings, vague at best, does little, if anything, to enable this Court to determine, "upon the facts of each case," as Common Cause requires, whether exemption 9(B) is properly invoked by defendants.

 Common Cause as well as the legislative history of the Sunshine Act make it evident that there is a presumption of openness for the Commission's meetings which can only be overcome if one of the ten narrowly-construed exemptions of the Sunshine Act applies. Defendants' approach, by contrast, appears to be a presumption of closure, rather than openness. Such an approach is impermissible. That defendants are operating under a presumption of closure is supported by the Co-Chairmen's October 13, 1988 letter to Richard Austin, Acting Administrator of the General Services Administration, requesting the closure of several meetings, *fn8" as well as the Administrator's November 3, 1988 determination that certain meetings of the Commission could be closed. *fn9" Although the fall agenda shows that closed meetings were scheduled for certain specific hours, the Co-Chairmen requested and the Administrator determined that the meetings were properly closed for time periods in excess of that set out in the Commission's written agenda. For instance, the fall schedule states that at the November 29, 1988 meeting, the working session from 1:00 PM until 5:30 PM will be closed. However, the Co-Chairmen requested and the Administrator determined that the November 29 meeting should be closed from 11:00 AM until 5:30 PM, two additional hours. The Court is unable to discern whether any discussion is planned for those two additional hours. If a discussion is planned, defendants have failed to explain why there is no description of the discussion in the agenda. If no discussion is planned, defendants have failed to explain why the additional two hours have been designated on the Administrator's determination as properly closed. Similar discrepancies are present for the meetings scheduled for November 28, November 30, December 1, and December 2. Although not determinative of the ultimate issue in this case (whether exemption 9(B) applies to the Commission's proposed meetings), this propensity to closure is indicative of defendants' overall posture in this case and supports the conclusion that defendants are asserting the broad deliberative process privilege which Common Cause specifically and unequivocally rejected.

 Congress specifically made the Commission subject to FACA, which incorporates the ten exceptions of the Sunshine Act to the open meeting requirement of Section 10(a)(1) of FACA. Plaintiffs represented at the December 7, 1988 hearing on their motion for a temporary restraining order that they could envision no instance in which the Commission could properly close its meetings. Tr., at 8. Defendants maintain that this extreme position reads the ten exceptions of the Sunshine Act out of the law completely. The Court agrees with defendants that closing particularized portions of Commission meetings for discussions of specific items might be appropriate on an individualized basis and the Court's opinion therefore must not be read as holding that all meetings of the Commission, of whatever nature, must always be open to the public and that exemption 9(B) can never apply. But, the burden remains upon the defendants to establish the applicability of the narrowly construed exemption from the open meeting requirement of FACA, by demonstrating specifically the individualized and particularized basis on which they seek closure from the public. Defendants, in this case, have failed to make the showing which satisfies this burden.

 Congress, a deliberative body of renown, and not a stranger to some closed meetings, could have -- had it so elected -- exempted the National Economic Commission, with its important, far-reaching mandate, from the enveloping strictures of FACA. It did not do so. Indeed, fully recognizing that the Commission's composition would be prestigious and its activities significant to the national need and the international community, ...


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