To secure comprehensive information about various practices in the television industry, the Federal Communications Commission initiated an investigatory proceeding pursuant to 403 of the Communications Act. The Presiding Officer, assigned to conduct the proceeding, was authorized by the Commission to subpoena witnesses and to compel the production of any records or documents deemed relevant. The proceedings were to be public unless the Presiding Officer found that "the public interest, the proper dispatch of the business . . . or the ends of justice" would be served by nonpublic sessions. The Presiding Officer issued a subpoena duces tecum directing respondent Schreiber, an executive of respondent Music Corporation of America, Inc. (MCA), to produce lists of network programs which MCA had produced (Annex A to subpoena) or packaged (Annex B). Respondent Schreiber produced the material called for in Annex A, but, claiming that public disclosure of the Annex B information might reveal trade secrets and confidential data, refused to produce said information unless assured that it would be received and held in confidence. The Presiding Officer rejected the demand. The full Commission upheld the Presiding Officer and reaffirmed its resolve to permit nonpublic sessions only in extraordinary situations where it was shown that irreparable damage to private competitive interests outweighed the public interest in disclosure. The Commission noted that the Presiding Officer had acted consistently with that standard and held that respondents' claim of likely competitive injury was unsupported by the pleadings and contrary to the record. Upon remand, the Presiding Officer rejected respondents' broadened claim for confidential treatment of all information to be elicited from them, but respondent Schreiber persisted in his refusal to comply with the Commission's orders and subpoena. The District Court granted the Commission's petition for enforcement, but "to preclude disclosure of trade secrets of which [MCA's] competitors might take advantage" ordered that the material be received and held in confidence. The court's order further provided [381 U.S. 279, 280] that after the investigation of respondents had been completed, the Commission could move the court, upon good cause, for an order permitting such testimony and documents to be made public. The Court of Appeals affirmed, holding that the District Court had not abused its discretion in conditioning the enforcement of the Commission's subpoena and orders. Held:
Assistant Attorney General Douglas argued the cause for petitioner. With him on the brief were Solicitor General Cox, Nathan Lewin, Sherman L. Cohn, Harvey L. Zuckman and Henry Geller.
Allen E. Susman argued the cause for respondents. With him on the brief were Jeffrey L. Nagin and Harry M. Plotkin.
MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.
At issue in this case are the extent of the Federal Communications Commission's authority to promulgate procedural standards for determining whether testimony [381 U.S. 279, 281] taken and documents produced during an investigatory proceeding should be accorded confidential treatment, and the scope of judicial review of determinations made pursuant to such standards.
This case had its origin in a subpoena and various orders issued during the course of an investigatory proceeding conducted by the Federal Communications Commission pursuant to 403 of the Communications Act of 1934, as amended, 48 Stat. 1094, 47 U.S.C. 403 (1958 ed.). 1 The proceeding, financed by specific congressional appropriation, 2 was initiated on February 26, 1959, and had as its objective the gathering of
Respondents then petitioned the Commission for review. On January 25, 1961, the Commission affirmed the Presiding Officer and ordered respondents to appear, testify and produce the material subpoenaed at a reconvened hearing. In its opinion the Commission stressed the importance of publicizing the information gathered during the course of the investigation 11 and reaffirmed its resolve to permit in camera sessions only in extraordinary situations:
The Commission thereupon petitioned the United States District Court for the Southern District of California for the enforcement of its subpoena and orders. The District Court found that the investigation was statutorily authorized, that the information requested in Annex B was relevant to the inquiry, and that respondents had disobeyed valid orders and a valid subpoena. 13 Accordingly, the District Court ordered respondents to appear at a reconvened hearing and to comply with the Commission's subpoena and orders. However, the court, in order to protect "respondents' rights and to preclude disclosure of trade secrets of which competitors might [381 U.S. 279, 287] take advantage," ordered that all testimony given and documents produced by respondents be received and held in confidence. 14 The court's order further provided that, after the investigation of respondents had been completed, the Commission could move the court for an order, "should good cause exist therefor," permitting such testimony and documents to be made public. 201 F. Supp. 421.
On appeal, a divided Court of Appeals for the Ninth Circuit affirmed that portion of the District Court's order which pertains to the questions now before this Court. 15 [381 U.S. 279, 288] The Court of Appeals held that the District Court had not abused its discretion in conditioning its order to require confidential treatment of the information sought. 329 F.2d 517. In dissent, Judge Browning stated that the Commission's procedural rule, requiring public hearings unless in camera proceedings could be justified by those from whom the information was sought, was well within the Commission's power. It was Judge Browning's view that the District Court could require confidential treatment only if the Commission's application of its procedural rule and consequent refusal to accord confidential treatment were found to be arbitrary or an abuse of the Commission's discretion. Id., at 528-534. Because this case presents important questions concerning the respective roles to be performed by federal courts and the Federal Communications Commission in the administration of the Communications Act of 1934, we granted certiorari. 379 U.S. 927 .
We hold that the Commission's rule - requiring public disclosure except where the proponents of a request for confidential treatment have demonstrated that the public interest, proper dispatch of business, or the ends of justice would be served by nonpublic sessions - was well within the Commission's statutory authority. We further find that the Commission did not abuse its discretion in applying this rule. Accordingly, we modify the decision below insofar as it affirms the District Court's imposition of conditions upon the enforcement of the subpoena and orders issued by the Commission. [381 U.S. 279, 289]
Section 4 (j) of the Communications Act of 1934, as amended, 48 Stat. 1068, 47 U.S.C. 154 (j) (1958 ed.), empowers the Federal Communications Commission to "conduct its proceedings in such manner as will best conduce to the proper dispatch of business and to the ends of justice." This Court has interpreted that provision as "explicitly and by implication" delegating to the Commission power to resolve "subordinate questions of procedure . . . [such as] the scope of the inquiry, whether applications should be heard contemporaneously or successively, whether parties should be allowed to intervene in one another's proceedings, and similar questions." Federal Communications Comm'n v. Pottsville Broadcasting Co., 309 U.S. 134, 138 . The statute does not merely confer power to promulgate rules generally applicable to all Commission proceedings, cf. Federal Communications Comm'n v. WJR, 337 U.S. 265, 282 ; it also delegates broad discretion to prescribe rules for specific investigations, cf. Norwegian Nitrogen Co. v. United States, 288 U.S. 294, 321 -322, and to make ad hoc procedural rulings in specific instances, Federal Communications Comm'n v. Pottsville Broadcasting Co., supra. Congress has "left largely to its judgment the determination of the manner of conducting its business which would most fairly and reasonably accommodate" the proper dispatch of its business and the ends of justice. Federal Communications Comm'n v. WJR, supra. 16 [381 U.S. 279, 290]
In the Pottsville Broadcasting case, this Court stressed, in upholding this delegation of broad procedural authority, the established principle that administrative agencies "should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties." 309 U.S., at 143 . This principle, which has been upheld in a variety of applications, 17 is an outgrowth of the congressional determination that administrative agencies and administrators will be familiar with the industries which they regulate and will be in a better position than federal courts or Congress itself to design procedural rules adapted to the peculiarities of the industry and the tasks of the agency involved. Thus, underlying the broad delegation in 4 (j) of procedural rule-making power to the Federal Communications Commission is a "recognition of the rapidly fluctuating factors characteristic of the evolution of broadcasting and of the corresponding requirement that the administrative process possess sufficient flexibility to adjust itself to these factors." Federal Communications Comm'n v. Pottsville Broadcasting Co., supra, at 138.
To permit federal district courts to establish administrative procedures de novo would, of course, render nugatory Congress' effort to insure that administrative procedures be designed by those most familiar with the regulatory problems involved. Thus, in providing for judicial review of administrative procedural rule-making, Congress has not empowered district courts to substitute [381 U.S. 279, 291] their judgment for that of the agency. Instead, it has limited judicial responsibility to insuring consistency with governing statutes and the demands of the Constitution. Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186, 214 -218; Federal Communications Comm'n v. Pottsville Broadcasting Co., supra, at 144-145; Federal Radio Comm'n v. Nelson Bros. Co., 289 U.S. 266, 276 -277.
It is apparent that the courts below did not respect this congressional distribution of authority. The Commission promulgated a rule governing disclosure in this investigation. Yet, neither the District Court nor the Court of Appeals inquired into the validity of the Commission's exercise of its rule-making authority. Instead, the District Court devised procedures to be followed by the Commission on the basis of the court's conception of how the public and private interests involved could best be served. In reviewing this determination, the Court of Appeals found that the District Judge had not abused his discretion, "but, on the contrary, established a fair and just procedure whereby a most important investigation could proceed without being unduly disrupted, obstructed or prolonged, and at the same time afford [respondents] protection against the improvident disclosure of possible valuable trade secrets." 329 F.2d, at 524. In so doing, the Court of Appeals erred. The question for decision was whether the exercise of discretion by the Commission was within permissible limits, not whether the District Judge's substituted judgment was reasonable.
It is also evident that the Commission's procedural rule - requiring public proceedings except where it is shown that the public interest, the dispatch of business, or the ends of justice would be served by nonpublic sessions - was well within the Commission's power. Grants of agency authority comparable in scope to 4 (j) have [381 U.S. 279, 292] been held to authorize public disclosure of information, 18 or receipt of data in confidence, 19 as the agency may determine to be proper upon a balancing of the public and private interests involved. That 4 (j) is broad enough to empower the Commission to establish standards for determining whether to conduct an investigation publicly or in private is demonstrated by this Court's decision in Norwegian Nitrogen Co. v. United States, 288 U.S. 294 . There, the Court pointed out that a similar grant of rule-making authority - 315 (c) of the Tariff Act of 1922, 42 Stat. 941, 942-943 - which authorizes the Tariff Commission "to adopt such reasonable procedure, rules, and regulations as it may deem necessary," empowered the Commission
We hold, therefore, that the Commission's adoption of the procedural rule favoring public disclosure and placing upon those from whom information is sought the burden of demonstrating the need for in camera proceedings is statutorily authorized. [381 U.S. 279, 295]
Remaining for determination is whether the Commission's application of its disclosure rule and the consequent rejection of respondents' requests for confidential treatment were so arbitrary or unreasonable as to warrant the imposition by the District Court of conditions upon enforcement of the Commission's subpoena and orders. 23
Upon remand from the Commission, respondents moved that all testimony and documents to be elicited from them - not merely Annex B - should be received in camera. Respondents asserted that in light of the announced scope of the inquiry, the Commission's order to produce documents upon request and to testify "regarding all matters deemed relevant" would require MCA "to disclose all of its business information to its many competitors and to make a public record of all of its activities," and that such a disclosure, if demanded, would necessarily include confidential business secrets. No factual showing was made; there was only the argument.
The District Court accepted the argument, finding "well-grounded [the] fears of the respondents that the testimony to be given might result in disclosure of trade-secrets, of which competitors might take advantage." 201 F. Supp., at 425. Accordingly, the court ordered that all testimony and documents adduced by respondents be received in confidence. In so doing the District Court erred, for it is clear that the Presiding Officer did not abuse his discretion in rejecting this request for blanket nondisclosure.
The Presiding Officer did not know what information would actually be sought, what questions asked. Indeed, he could only speculate as to whether the Commission would seek to elicit any data which, if disclosed to MCA's [381 U.S. 279, 296] competitors, would work competitive harm. He could not ascertain the likelihood of irreparable damage to private competitive interests, nor could he discern whether the private interest outweighed the public interest in disclosure. If and when information was demanded which if disclosed might in fact injure MCA competitively, there would be ample opportunity to request that it be received in confidence, and to seek judicial protection if the request were denied. Cf. Reisman v. Caplin, 375 U.S. 440 . The Presiding Officer would have abused his discretion in denying the request only if it were shown that no information could have been elicited from respondents which could be publicly disclosed. The record affords no justification for such a proposition.
The only other possible basis for the District Court's order would be an assumption that the Presiding Officer would consistently require disclosure even if a balancing of public and private interests compelled secrecy. There is no support for such an assumption in the record and it runs contrary to the presumption to which administrative agencies are entitled - that they will act properly and according to law.
Nor can the District Court's order be saved on the ground that it did not direct that all information be held in confidence, but merely deferred the determination of whether the information was entitled to confidential treatment until after the inquiry of respondents had been completed. The order directs that there be no disclosure until the court so orders, "should good cause exist therefor." Not only does this order seem to shift the burden of proof to the Commission to justify publication, despite the valid rule to the contrary, but it also permits respondents to avoid submitting the issue of disclosure to the Presiding Officer despite the "long settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed [381 U.S. 279, 297] administrative remedy has been exhausted." Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50 -51; Reisman v. Caplin, supra. Moreover, the District Court's order forbids disclosure until completion of the investigation of respondents without any showing that secrecy is justified. During this period the Commission could not make the information available to Congress, and the Commission would be denied the benefit of other evidence stimulated by disclosure. And the period during which the benefits of disclosure would be denied would inevitably be long. Respondent first appeared before the Presiding Officer on October 21, 1960, and resolution of the issues then raised has caused a delay of more than four and one-half years.
We do not find forceful respondents' contention that the District Court's order was necessary to protect against the discriminatory treatment of MCA by the Commission. The allegation finds little support in the record; moreover, no reference is made to this factor in the District Court's opinion or findings of fact. Respondents' assertions that "the Commission's interest in MCA was deep" and that "concentration upon MCA was unique," even if true, would not demonstrate the need for secrecy. Instead, such assertions merely lend credence to the Commission's unchallenged finding that because of the importance of MCA in the industry, the failure to explore fully the policies and practices of MCA "would seriously impair, if not render nugatory, any attempt on the Commission's part to understand and delineate the policies, practices and activities involved in the creation, production, sale and licensing of television filmed programs." Furthermore, it is clear that respondents are adequately protected against improvident disclosure, even if the Commission should unfairly seek disclosure of information which would be competitively disastrous to respondents. Not only does the administrative remedy exist, but judicial [381 U.S. 279, 298] protection against Commission overreaching also remains available with respect to any requests for information made in the future.
We conclude, therefore, that the Commission did not abuse its discretion in rejecting respondents' requests for blanket nondisclosure and accordingly hold that the District Court erred in ordering the Commission to afford confidential treatment to all information elicited from respondents.
Respondents also moved that confidential treatment be accorded Annex B which called for the production of a list of programs as to which MCA served as a "packager" and those in which MCA had a financial interest. Respondent Schreiber testified that the information sought would disclose MCA's confidential agency relationships with clients, "might be used detrimentally," and "would be possibly advantageous to our competitors."
We find that the Commission's affirmance of the Presiding Officer's determination that the material sought in Annex B should be received in public session was clearly proper. Certainly private agreements between MCA and its clients not to disclose facts without the client's consent could not affect the Commission in the discharge of its public duties. See 8 Wigmore, Evidence 2286 (McNaughton rev. 1961). And the naked assertion of possible competitive injury does not establish that the Presiding Officer abused his discretion in declining to accord confidential treatment. Moreover, there is nothing in the District Court's opinion, findings or conclusions of law which indicates the likelihood, or even the possibility, of competitive harm from public disclosure of the Annex B information. MCA's competitors and others engaged in similar businesses had furnished publicly the same type of information without objection. Respondents did not attempt before the Commission or on review to distinguish the information furnished by MCA's competitors or the [381 U.S. 279, 299] list of programs produced by MCA (subpoenaed in Annex A) which was introduced without objection by respondent Schreiber. Nor did respondents file affidavits in support of their position. But, even if it were conceded that disclosure of Annex B might have some competitive impact, there is no warrant for concluding that the Presiding Officer abused his discretion in finding that respondents had not sustained their burden of demonstrating that the private interest involved outweighed the public interest in disclosure.
One further point should be discussed. During oral argument counsel for respondents suggested that his clients were prejudiced in their efforts to demonstrate the need for confidential treatment of the information contained in Annex B by restrictions imposed upon the participation of counsel by the then-prevailing Commission rules. 24 We do not find this contention persuasive. Respondents filed a petition, prepared and signed by counsel, seeking review before the full Commission of the Presiding Officer's rejection of their confidentiality request. Subsequently, they filed a second motion for confidential treatment with the Presiding Officer and respondents' counsel was afforded an opportunity to argue orally in support of the motion. Thus, it is evident that the then-existing Commission rules restricting the rights of counsel did not prejudice respondents in their efforts to secure in camera proceedings with regard to Annex B, 25 and hence [381 U.S. 279, 300] there is no occasion to order that respondents be afforded an additional opportunity to present objections to the disclosure of the information subpoenaed in Annex B.
The judgment of the Court of Appeals is modified so as to strike paragraph 2 of the District Court's order, and the cause is remanded to the District Court with directions to enforce the Commission's orders and subpoena without qualification.
[ Footnote 2 ] Independent Offices Appropriations Act, 1956, 69 Stat. 199, 201-202.
[ Footnote 3 ] Statement of Commission Chairman McConnaughey; Hearings before the Subcommittee of the Senate Appropriations Committee, Independent Offices Appropriations for 1956, 84th Cong., 1st Sess., p. 293. Chairman McConnaughey also noted that "[o]nly with this information can the problems affecting the further expansion of television outlets be adequately identified and evaluated, and appropriate recommendations made for their solution." Id., at 294. See [381 U.S. 279, 282] also Hearings before the Subcommittee of the House Appropriations Committee, Independent Offices Appropriations for 1956, 84th Cong., 1st Sess., pp. 663-664.
[ Footnote 4 ] The purpose and scope of the inquiry are set forth in the Commission's order of Feb. 26, 1959. 24 Fed. Reg. 1605. On Nov. 10, 1959, the Commission entered a supplemental order
[ Footnote 5 ] Id., at 1605.
[ Footnote 6 ] Ibid.
[ Footnote 7 ] "Packagers" develop and assemble the talent and scripts for a particular program or programs. A "producer" has general charge of the process of preparing the package for television showing.
[ Footnote 8 ] The Commission's unchallenged finding was:
[ Footnote 9 ] "(A) A list by name or title of all television programs whether series programs, special programs, or otherwise, which appeared or were exhibited by or through the facilities of the television networks operated by NBC, CBS, or ABC since September 1, 1958, which programs were produced by MCA, Inc. or Revue Productions, Inc. and/or in which MCA, Inc. or Revue Productions, Inc. has or had a financial or proprietary interest or with regard to which MCA, Inc. or Revue Productions, Inc. is or was entitled to receive or has received a percentage of the profits or other compensation or fees in connection with the production or exhibition of such programs other than remuneration or compensation for the representation as agent of individual natural persons as talent."
[ Footnote 10 ] "(B) A list of all television programs whether series programs, special programs, or otherwise, which appeared on or were exhibited by or through the facilities of the television networks of NBC, CBS, or ABC, since September 1, 1958, in which MCA, Inc. or any predecessor affiliate or subsidiary of MCA, Inc. acted as packager and/or, by agreement or otherwise, is entitled to receive or has received a percentage of the cost or selling price of said program or was or is entitled to receive or has received other compensation, remuneration or fees in connection with the packaging, licensing for broadcast or selling of said program, otherwise than as remuneration or compensation for the representation as agent of individual natural persons as talent."
[ Footnote 11 ] See infra, pp. 293-294.
[ Footnote 12 ] On review of the Presiding Officer's first order, the Commission, although dealing with the merits of that order, held "that the orders and directions of the Presiding Officer as to relevance and public disclosure of evidence, information and data are interlocutory in nature, do not of themselves `aggrieve' any person, and are not, as of right, appealable to the Commission." This holding precluded an application to the Commission for review of the Presiding Officer's second order.
[ Footnote 13 ] Respondents do not challenge these findings.
[ Footnote 14 ] Paragraph 2 of the District Court's order provides:
[ Footnote 15 ] Under the procedures established by the Presiding Officer, counsel for a witness could not, during the course of interrogation of his client, take exception to, request clarification of, or object to any question, nor could he initiate consultation with his client. Counsel could consult with his client only upon the request of the client if approved by the Presiding Officer. The District Court held that under 6 (a) of the Administrative Procedure Act, 60 Stat. 240, respondents were entitled to the assistance of counsel in the following respects: the right to have counsel object to any question and state his reasons therefor, and the right to have counsel initiate consultation without interference by the Commission or its agents. The Court of Appeals disagreed, concluding that the procedures established by the Presiding Officer were not violative of any constitutional or statutory provisions. On Sept. 2, 1964, the Commission amended Part I of its Rules and Regulations, permitting counsel for any person compelled to appear in Commission proceedings to advise his client either upon his own initiative or that of his client, "to make objections on the [381 U.S. 279, 288] record, and to state briefly the basis for such objections." 29 Fed. Reg. 12774-12775. Finding this amendment to be "in accord with respondents' legal position on this matter," respondents did not seek review of the ruling below. Given the change in the Commission's rules, we need not, and do not, express any views as to the legality of the prior rules concerning a witness' right to the assistance of counsel.
[ Footnote 16 ] The Commission's own conception of its authority is similarly broad. Section 1.1 of the Commission's General Rules of Practice and Procedure provides that procedures to be followed in investigative proceedings shall "be such as in the opinion of the Commission will best serve the purposes of such proceeding." 47 CFR 1.1 (1965).
[ Footnote 17 ] Civil Aeronautics Board v. Hermann, 353 U.S. 322 ; Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186 ; Wallace Corp. v. National Labor Relations Board, 323 U.S. 248 ; Endicott Johnson Corp. v. Perkins, 317 U.S. 501 ; Utah Fuel Co. v. National Bituminous Coal Comm'n, 306 U.S. 56 ; Norwegian Nitrogen Co. v. United States, 288 U.S. 294 .
[ Footnote 18 ] Isbrandtsen-Moller Co. v. United States, 300 U.S. 139 ; American Sumatra Tobacco Corp. v. Securities & Exchange Comm'n, 71 App. D.C. 259, 110 F.2d 117 (1940); E. Griffiths Hughes, Inc. v. Federal Trade Comm'n, 61 App. D.C. 386, 63 F.2d 362 (1933).
[ Footnote 19 ] Norwegian Nitrogen Co. v. United States, supra.
[ Footnote 20 ] Section 3 (c) of the Administrative Procedure Act, 60 Stat. 238, 5 U.S.C. 1002 (c) (1958 ed.), provides:
[ Footnote 21 ] See generally Rourke, Law Enforcement Through Publicity, 24 U. Chi. L. Rev. 225 (1957); Note, 72 Yale L. J. 1227 (1963).
[ Footnote 22 ] Statement of Senator Magnuson, 101 Cong. Rec. 7629.
[ Footnote 23 ] Respondents do not contend that a denial of confidential treatment would result in the abridgment of any constitutional right.
[ Footnote 24 ] See note 15, supra.
[ Footnote 25 ] It should also be noted that during the initial proceeding before the Presiding Officer when respondent Schreiber first objected to disclosure of the Annex B information, he was afforded an opportunity to consult with counsel. In addition, the Commission rules then in effect contained no restrictions on the right of counsel to prepare written documents in support of requests for confidential treatment or on the right of witnesses, such as respondent Schreiber, to submit such documents. [381 U.S. 279, 301]