Beruflich Dokumente
Kultur Dokumente
)
In the Matter of )
) FOIA-2005-00267 (Rambus Case)
CITIZENS FOR VOLUNTARY TRADE )
dba THE VOLUNTARY TRADE COUNCIL, )
)
a corporation. )
)
MEMORANDUM IN SUPPORT OF
THE VOLUNTARY TRADE COUNCIL’S APPEAL
OF PARTIAL DENIAL OF FREEDOM OF INFORMATION ACT REQUEST
S.M. Oliva
President & CEO
The Voluntary Trade Council
Post Office Box 100073
Arlington, Virginia 22210
(703) 740-8309
smoliva@voluntarytrade.org
4.11(a)(2), respectfully appeals the decision of Federal Trade Commission attorney Joan
E. Fina partially denying a Freedom of Information Act (FOIA) request filed by VTC on
November 17, 2004. VTC seeks the disclosure of records identified by Ms. Fina in her
response dated March 15, 2005, notwithstanding her claims that the records are exempt
from disclosure under 15 U.S.C. § 552(b)(3 & 7(a)) (hereinafter “Exemption 3” and
“Exemption 7(A)).
currently before the Commission on appeal, VTC respectfully requests that the General
Counsel exercise his discretion and refer this appeal to the Commission for
Introduction
Federal Trade Commission Act, 15 U.S.C. § 45.1 The charges arose from Rambus’s
business practices within the synchronous DRAM industry, and particularly the alleged
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Rambus.
After a 54-day hearing that included 59 witnesses and more than 1,900 exhibits,
Administrative Law Judge Stephen J. McGuire dismissed the complaint against Rambus
on February 17, 2004. Counsel supporting the complaint appealed, and the
In early 2004, VTC opened an investigation into the facts and circumstances
and education organization that analyzes federal antitrust cases according to free-
market economic principles. VTC filed an amicus brief with the Commission on June 2,
VTC has filed several FOIA requests with the Commission related to the Rambus
case. The first request, dated March 17, 2004, sought information on the Bureau of
followup request was filed on July 12, 2004, seeking additional budget information
specific to the Rambus case. Both of these requests were answered to VTC’s
satisfaction.
VTC’s third FOIA request related to Rambus was initially filed on November 17,
2004. The request had three parts. First, VTC requested any “[c]ommunications dated
on or before June 26, 2002, by and between FTC staff and any officer, employee, agent,
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between FTC staff and Congressman C.L. “Butch” Otter regarding Rambus.2 Finally,
When the Commission did not respond to this third FOIA request within the
statutory period, VTC sent a followup letter to the General Counsel on January 21, 2005.
VTC finally received a reply on March 15, 2005, when Joan Fina granted the request for
manufacturers.
Ms. Fina based her denial on two statutory exemptions within FOIA: Exemption 3,
which covers any material exempt from disclosure by another federal statute; and
Exemption 7(A), which exempts certain records compiled for law enforcement
purposes. Ms. Fina applied Exemption 3 on the grounds that under Section 21(f) of the
Federal Trade Commission Act, 15 U.S.C. § 57b-2, “the FTC may not disclose
compulsory process.” Ms. Fina then applied Exemption 7(A) by broadly asserting that
2 VTC believes that the Commission is not withholding any communications from Congressman Otter
relevant to the Rambus case. Accordingly, this appeal only deals with documents from Hynix,
Micron, and Infineon.
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Summary of Argument
documents than the courts have recognized. As for Exemption 7(A), it is inapplicable
even under the case law cited by Ms. Fina, because VTC’s request is not an attempt to
circumvent civil discovery rules for its own gain and there can be no reasonable claim
of interference with a “law enforcement” proceeding that ended more than 18 months
ago. Accordingly, the Commission (or the General Counsel) should order disclosure of
the 27 boxes of responsive records identified in Ms. Fina’s March 15, 2005, reply to VTC.
Argument
1. Exemption 3 does not apply to documents voluntarily disclosed by third parties who
lobby the Commission to open an investigation or issue an administrative complaint.
Ms. Fina cited a single case from the Second Circuit, A. Michael’s Piano, Inc. v.
boxes of documents that respond to VTC’s request. Michael’s Piano, however, does not
exempt from FOIA disclosure all documents that are voluntarily submitted to the
The Second Circuit said that in enacting Section 21(f) of the FTC Act—the statute
that allows the Commission to invoke Exemption 3 in the first place—Congress “did not
intend to create a broad exemption that would effectively eliminate the FTC’s
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accountability to the public.”4 To the contrary, Section 21(f) was a response to the
Commission's abuse of power, which one senator described as “an arrogance that
Section 21(f) exempts from FOIA disclosure all materials “provided pursuant to
compulsory process” under the FTC Act and those that are “provided voluntarily in
place of such compulsory processes.” Ms. Fina’s reply to VTC only advanced the latter
thus conceded that the 27 boxes of responsive records were not obtained under
subpoena or similar order, but rather they were provided voluntarily by Hynix,
provided voluntarily to the Commission is exempt from public disclosure under Section
21(f): First, the Commission itself must request the documents; second, the requested
jurisdiction; and finally, the requested documents could have been subpoenaed if the
The Commission cannot satisfy the first part of the test, because it is unlikely that all
Commission’s own request. The public record strongly suggests that the Commission
4 Id. at 145.
5 Id.
6 Id. at 145-146.
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only opened its investigation of Rambus and brought its subsequent complaint after a
by the government cannot find safe harbor from public disclosure under Exemption 3
On July 17, 2000, reporter Jack Robertson wrote that Hynix7, Micron, and Infineon,
along with Intel Corp. and several other companies, “held talks . . . to consider whether
to ask the Federal Trade Commission to investigate Rambus Inc. on antitrust grounds.”8
Less than one month later, the memory manufacturers signed a “joint defense
In October 2000, according to Jack Robertson, Micron and Hynix officially “leveled
antitrust charges against Rambus Inc. at the Federal Trade Commission.” Robertson
said that officials of the two companies “met quietly with FTC representatives” in an
effort to “escalate the dispute [with Rambus] by trying to get the FTC to launch its own
investigation of Rambus.”9
Robertson then reported in February 2001 that the FTC had in fact opened an
7 In 2000, Hynix was known as Hyundai. For simplicity’s sake, we will refer to the company as Hynix
throughout this memorandum.
8 Jack Robertson, “Rambus ties strained as Intel, DRAM makers ponder FTC antitrust suit,” (July 17,
2000) <available online at http://www.eetimes.com/story/OEG20000717S0028>.
9 Jack Robertson, “Micron, Hyundai ask FTC to charge Rambus on antitrust violations,” (November 22,
2000) <available online at http://www.my-esm.com/story/OEG20001122S0038>.
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investigation of Rambus at Hynix and Micron’s urging. This same report said that
Hynix was “seeking to declassify documents submitted by Rambus to the U.S. District
Court in San Jose in the hope that the FTC can use the files in a formal investigation.“ It
was not until August 2001, according to Robertson, that the Commission had
The timeline reported by Robertson demonstrates the central role played by Hynix
and Micron—and Infineon, given its participation in the joint defense agreement—in
The manufacturers’ efforts can only be described as lobbying given their preexisting
litigation against Rambus and the substantial benefits that could be obtained if the
regulatory action against a third party do not fall within the scope of Exemption 3,
coordinated political campaign to enlist the government’s support for their patent and
antitrust causes against Rambus. Any Commission records that provide the details of
10 Jack Robertson, “Chip makers questioned by FTC about Rambus actions,” (August 31, 2001)
<http://www.my-esm.com/story/OEG20010831S0046>.
11 Of course, it is possible that not all 27 boxes of documents cited in Ms. Fina’s reply fall within the
“lobbying” argument discussed above. However, since Ms. Fina provided no specific information
about the contents of the 27 boxes, it is the Commission’s burden to provide additional information
demonstrating which materials may in fact fall under a proper reading of Exemption 3.
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interpreted by a single appellate court in Michael’s Piano, does not provide otherwise.
2. Exemption 7(A) does not apply when documents are requested by a non-party after a law
enforcement proceeding has concluded.
As with Exemption 3, Ms. Fina only cited a single case—this time Robbins Tire &
Rubber Co. v. NLRB12—to justify the blanket application of Exemption 7(A). Robbins Tire,
however, is even less applicable to VTC’s request than Michael’s Piano. The facts and
circumstances are easily distinguished, and the Supreme Court’s holdings in Robbins
In Robbins Tire an employer that was the respondent in a National Labor Relations
seeking copies of all potential witness statements gathered by the NLRB during its
investigation. The NLRB denied this request, placing “particular reliance on Exemption
7(A)”.13 The Supreme Court upheld the NLRB’s decision. In so doing, the Court said
that “FOIA was not intended to function as a private discovery tool,” which was the
employer’s FOIA request and the NLRB proceeding: “The most obvious risk of
‘interference’ with [NLRB] enforcement proceedings in this context is that employers or,
in some cases, unions will coerce or intimidate employees and others who have given
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statements, in an effort to make them change their testimony or not testify at all.”15 The
court said that “prehearing disclosure of witnesses’ statements” under FOIA was
precisely the type of situation that Congress sought to prevent when enacting
Exemption 7(A).16
VTC’s request for documents related to the Rambus case is clearly distinguishable
from the situation described in Robbins Tire. First, unlike the employer in that case, VTC
is not the subject of the underlying prosecution. VTC is an uninterested third-party that
seeks disclosure to further its mission of providing public oversight of the Commission
obtaining greater access to investigation files than what is available through normal
Exemption 7 after the District of Columbia Circuit held, in several cases, that any record
compiled for law enforcement purposes was exempt from disclosure indefinitely.
Senator Gary Hart, the principal sponsor of the current Exemption 7(A) language, said
the courts had misconstrued the intent of the original Exemption 7: “Material cannot be
and ought not be exempt merely because it can be categorized as an investigatory file
15 Id. at 239.
16 Id. at 241.
17 Id. at 227.
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The Supreme Court adopted Senator Hart’s view that Exemption 7(A) applied to “a
not apply to VTC’s request, because the law enforcement proceeding against Rambus
has already taken place, and thus the release of information would not be premature or
October 8, 2003, when Judge McGuire ordered the record closed. Although the case
remains pending on appeal before the Commission, briefing and oral arguments have
already taken place, and there is no reason to believe that any post-hearing disclosure
would interfere with the Commission’s ability to issue a final decision and order.19 In
contrast, Robbins Tire dealt with a FOIA request that would “change the substantive
discovery rules” and “cause substantial delays” in the adjudication of the government’s
case.20
Exemption 7(A) protects the government from FOIA requests that present a conflict
between the duty of public disclose and the power to pursue investigation and trial of
defendants without undue interference. This conflict is no longer present with respect
to the Rambus case, and accordingly, the Commission’s duty to disclose is unhampered
18 Id. at 232.
19 If the Commission reverses Judge McGuire and upholds the complaint, Rambus may seek review in
an appropriate U.S. court of appeals. The possibility of such additional proceedings, however, does
not alter the status of the requested documents under Exemption 7(A). The Supreme Court’s holdings
in Robbins Tire do not extend to appellate proceedings subsequent to the initial administrative hearing.
20 437 U.S. at 237.
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3. Even if the requested documents are exempt, it is in the public interest for the
Commission to disclose them because of the exceptional circumstances of the Rambus case.
history. Several million dollars and thousands of man-hours have been spent by the
Commission in an effort to effectively cripple Rambus’s business. The public has the
right to know the events that led to the opening of the Rambus investigation and the
Commission’s interest in maintaining what the Second Circuit in Michael’s Piano called
Two factors unique to this case support disclosure of the requested documents
beyond what FOIA may exempt. First there is the “revolving door” of lawyers between
the Commission and law firms representing the DRAM manufacturers. M. Sean Royall,
who served as chief Complaint Counsel during the Rambus trial, left the Commission
shortly after the case was presented to Judge McGuire and became co-chairman of the
antitrust group at Gibson, Dunn & Crutcher, a firm that represents Micron in antitrust
matters. Then there is Timothy Muris, the Commission chairman who authorized the
Rambus investigation and voted to issue the subsequent complaint. After leaving the
Commission in 2004, Muris became co-chairman of the antitrust group at O’Melveny &
Myers, which represents Hynix before the Commission in the Rambus case.
The presence of two former senior Commission officials on law firms representing
Rambus opponents creates an impression that the Rambus case was brought, at least in
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part, to further the professional interests of these officials upon their planned return to
the private sector. Not only did Messrs. Royall and Muris have a an interest in
advancing the interests of the clients of their future law firms, they also had an
incentive to create the novel theory of law at the heart of the Rambus case—antitrust
Disclosure of the documents requested by VTC would likely shed some light on the
actual roles played by Royall and Muris during the pre-complaint stage of the Rambus
case. The documents may exonerate them, or they may raise further questions about
their conduct. In either case, the known facts create an apparent conflict-of-interest that
clear interest in maintaining public confidence in its proceedings that outweigh any
of the Commission’s jurisdictional claims in the Rambus case. The Commission took
the unprecedented step of interfering with the exclusive jurisdiction of the U.S. Court of
Appeals for the Federal Circuit over patent law. The Federal Circuit’s January 2003
decision in Rambus v. Infineon addressed the same set of facts as the Commission’s 2002
complaint against Rambus, and while the Federal Circuit analyzed those facts under
the facts in an attempt to find Rambus guilty of an FTC Act violation. Judge McGuire
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ultimately rebuffed the Commission’s efforts, and relied heavily on the Federal Circuit’s
The public has a strong interest in maintaining judicial independence from political
interference by the executive branch, which includes the Commission. If cases that are
litigated in the Article III courts can be retried before a political agency with no regard
for decided questions of fact and law, the result will be an increased likelihood that
private parties will resort to political lobbying over the judicial system, and that in turn
will undermine public confidence in both the Commission and the Article III courts. For
this reason, it is important that the Commission disclose any information that sets forth
the origins of the Rambus case so that the public will know whether the Commission
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Conclusion
For the foregoing reasons, the decision of Joan Fina partially denying VTC’s
Freedom of Information Act request should be reversed, and the 27 boxes of documents
Respectfully Submitted,
S.M. Oliva
President & CEO
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