Oliva Foia Appeal Micron

The Voluntary Trade Council Post Office Box 100073 Arlington, Virginia 22210

Tel/Fax: (703) 740-8309 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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