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The Voluntary Trade Council

Post Office Box 100073 Tel/Fax: (703) 740-8309


Arlington, Virginia 22210 www.voluntarytrade.org

October 7, 2005

Richard L. Huff & Daniel J. Metcalfe


Co-Directors
Office of Information and Privacy
U.S. Department of Justice
Flag Building, Suite 570
Washington, DC 20530

Re: FOIA/PA Appeal – FOIA Request No. ATFY05-092

Dear Messrs. Huff & Metcalfe:

On behalf of the Voluntary Trade Council (VTC) and acting under the
Freedom of Information Act, 5 U.S.C. § 552, and 28 C.F.R. § 16.9, I file this appeal
of the adverse determination of Ann Lea Richards dated August 10, 2005,
rejecting in part a FOIA request filed by VTC.

On June 30, 2005, VTC filed its FOIA request with Ms. Richards seeking
documents held by the Antitrust Division that met the following descriptions: (1)
any agreement between the Division and Micron Technology, Inc., made under
the Division’s Corporate Leniency Policy; (2) any communication between the
Division and any officer or counsel for Micron Technology, Inc., dated on or after
July 1, 2002; and (3) any communication between the Division and any member
or agent of the United States Congress related to Micron Technology, Inc. dated
on or after July 1, 2002.

In her August 10 letter, Ms. Richards granted only VTC’s third request
and provided two pages or responsive documents. She advised us that any
documents related to our first two requests were exempt from public disclosure
under FOIA Exemption 7(A), because they “relate to ongoing enforcement
proceedings and their disclosure could reasonably be expected to interfere with
such proceedings.” She did not elaborate any further on the nature of the
proceedings involved, or how granting VTC’s request might interfere.

In this appeal, VTC will address only the first part of its request—public
access to any agreement made by the Antitrust Division and Micron under the
Corporate Leniency Policy (CLP). In August 1993, the Antitrust Division
announced a revised CLP whereby a company could receive amnesty from
criminal antitrust prosecution under one of two circumstances: If a company
reports illegal activity before the Division has commenced an investigation,
amnesty is automatically granted; or, alternatively, if an investigation has
already begun, amnesty may be awarded at the Division’s discretion to the first
company to come forward.

The Division has chosen not to publicly disclose any amnesty agreements
made under the CLP. Nevertheless, companies often voluntarily disclose their
participation in CLP, and it is usually possible to determine an amnesty recipient
based on the other members of a purported cartel that are prosecuted by the
Antitrust Division.

In June 2002, media outlets reported that the Antitrust Division had
opened an investigation into allegations of price-fixing in the dynamic random
access memory (DRAM) market. A Micron spokesman said at the time that the
company did not believe that it had violated federal antitrust laws, but it would
nonetheless cooperate with the Division’s investigation. However, in December
2003, former Micron executive Alfred Censullo pleaded guilty to obstructing the
grand jury’s investigation of the DRAM market.

Two of Micron’s competitors, Infineon Technologies AG and Hynix


Semiconductor Inc., have pleaded guilty to price-fixing charges as the result of
the Antitrust Division’s investigation. Several individuals also pleaded guilty in
connection with the DRAM investigation. Micron was not charged criminally
despite being implicated in the conspiracy with Infineon and Hynix.

On November 11, 2004, responding to media reports, Micron chief


executive Steven Appleton issued a press release that stated, in part:

The DOJ’s investigation revealed evidence of price fixing by


Micron employees and its competitors on DRAM sold to certain
computer and server manufacturers. Nevertheless, if Micron
fully complies with the Corporate Leniency Policy, Micron will
not be subject to criminal sanctions or fines, notwithstanding
Micron’s involvement in the misconduct.1

The Antitrust Division has not publicly confirmed or denied Micron’s claim that
it is participating in the CLP.

1 http://micron.com/news/corporate/2004-11-10_micron_responds.html

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According to the Antitrust Division, when a company seeks amnesty
under the CLP, it is given a “model letter” outlining the conditions and
qualifications for participation. This model letter, in turn, forms the basis of a
signed agreement between the Division and the amnesty recipient.2 Presumably,
then, Micron was given a copy of the model letter and later signed a written
agreement to confirm its amnesty under the CLP. This agreement is the subject of
VTC’s FOIA request.

Had Micron been the subject of a plea agreement, as was the case with
Infineon and Hynix, a FOIA request would be unnecessary. Plea agreements are
court documents and thus a matter of public record. Indeed, the Antitrust
Division published the Infineon and Hynix plea agreements on its website.3
Amnesty agreements, like plea agreements, are contracts between the
government and the subject of a criminal investigation. Both provide for the
disposition of outstanding criminal charges in exchange for cooperation with
ongoing investigations. The only difference is that a plea agreement is subject to
approval and supervision by an Article III court, while the CLP is wholly a
creature of the Antitrust Division and subject only to “prosecutorial discretion.”

FOIA Exemption 7(A) applies to “records or information compiled for law


enforcement purposes, but only to the extent that the production of such law
enforcement records or information . . . could reasonably be expected to interfere
with enforcement proceedings.”4 Assuming that the Antitrust Division’s
investigation of the DRAM market remains an ongoing proceeding, the issue
here is whether release of the Division’s amnesty agreement with Micron “could
reasonably be expected to interfere” with the investigation. Neither Ms.
Richards’ letter to VTC nor any applicable case law interpreting Exemption 7(A)
demonstrates that it would.

The seminal Supreme Court case on Exemption 7(A) is NLRB v. Robbins


Tire & Rubber Co.5. In that case, the subject of a National Labor Relations Board
proceeding attempted to use FOIA to obtain the statements of witnesses that the
agency planned to call before an administrative hearing. The Court held that
FOIA was “not intended to function as a private discovery tool,” and that
requiring the disclosure of the witness statements would “interfere” with the
2 See Brief for Appellant United States of America, Stolt-Nielsen v. United States (3rd Cir. May 17, 2005)
(available at http://www.usdoj.gov/atr/cases/f209100/209127.htm).
3 http://www.usdoj.gov/atr/cases/f209200/209231.htm (Hynix plea agreement) and
http://www.usdoj.gov/atr/cases/f206700/206700.htm (Infineon plea agreement).
4 5 U.S.C. § 552(b)(7)(A).
5 437 U.S. 214 (1978).

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NLRB’s ability to present its case. The Court wrote of Exemption 7 generally that,
“Congress recognized that law enforcement agencies had legitimate needs to
keep certain records confidential, lest the agencies be hindered in their
investigations or placed at a disadvantage when it came time to present their
cases.”

VTC is not a party to the DRAM investigation, and its FOIA request is not
an attempt to conduct private discovery. But the thesis of Robbins Tire remains
central to Ms. Richards‘ attempt to invoke Exemption 7(A). The Court has
defined “interference” to include any disclosure that would directly hinder or
prejudice the government’s investigation or prosecution. The Justice
Department’s own FOIA Guide describes the application of Exemption 7(A) as
follows:

The exemption has been held to be properly invoked when


release would hinder an agency’s ability to control or shape
investigations, would enable targets of investigations to elude
detection or to suppress or fabricate evidence, or would
prematurely reveal evidence or strategy in the government’s
case. Additionally, information that would reveal investigative
trends, emphasis, and targeting schemes has been determined
to be eligible for protection under Exemption 7(A) in those
instances when disclosure would provide targets with the
ability to perform a “cost/benefit analysis” of compliance with
agency regulations.6 (Footnotes omitted.)

Micron’s amnesty agreement does not fall within Exemption 7(A) even
under the DOJ’s broad statement of its application. First and foremost, Micron
has already made a public statement acknowledging its participation in the CLP.
There is no strategic secrecy for the Antitrust Division to preserve. Based on the
plea agreements with Infineon, Hynix, and numerous individuals, it is clear that
that the Division has already shaped its investigation. There is no danger that
disclosure would cause any potential target to “elude detection,” as all of the
targets have already been detected, and in any event, the DRAM investigation
itself has been public knowledge for more than three years. Disclosure of
Micron’s amnesty agreement would be, if anything, anti-climactic.

In Robbins Tire, the Court was “hesitant” to allow FOIA to displace the
NLRB’s discovery process absent “clear congressional direction.” At the same
6 http://www.usdoj.gov/oip/exemption7a.htm

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time, FOIA creates a “strong presumption in favor of disclosure.” While the
balancing of these interests favored the government in Robbins Tire, here there is
no such conflict. The CLP is not a product of congressional legislation, but of
unilateral action by the Antitrust Division. Any conflict between the CLP and
FOIA must be resolved in favor of the latter.

Indeed, Congress has long favored prompt public disclosure by the


Antitrust Division when disposing of antitrust investigations. For example, the
Tunney Act, 15 U.S.C. § 16, requires the Division to publish proposed consent
judgments in civil antitrust cases. The Hart-Scott-Rodino Act, 15 U.S.C. § 18a,
requires the Division to publish notices terminating the waiting period for
certain mergers. And as noted above, plea agreements are matters of public
record. The differences between those documents and agreements made under
the CLP are insignificant.

Unless the Antitrust Division can identify some concrete harm that would
materialize from disclosure of the Micron amnesty agreement, there is no basis
for invoking Exemption 7(A), and accordingly, the Voluntary Trade Council’s
appeal should be upheld.

Submitted for Your Consideration,

S.M. Oliva
President & CEO
The Voluntary Trade Council

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