Renegotiation Bd. v. Bannercraft Clothing Co.

Renegotiation Bd. v. Bannercraft Clothing Co.

Opinion

 [*3]  [***127]  [**1030]    MR. JUSTICE BLACKMUN delivered the opinion of the Court.

Three cases, consolidated for hearing in the court below, raise the issue of the effect of the Freedom of Information Act (FOIA), 5 U. S. C. § 552, upon proceedings pending under the Renegotiation Act of 1951, c. 15, 65 Stat. 7, as amended, 50 U. S. C. App. § 1211 et seq. In particular, they concern the jurisdiction of a federal district court to [****5]  enjoin the renegotiation process until an FOIA claim is resolved.

The three respondents, Bannercraft Clothing Company, Inc., Astro Communication Laboratory, a division of Aiken Industries, Inc., and  [***128]  David B. Lilly Co., Inc., successor to Delaware Fastener Corporation, all possessed national defense contracts with a "Department" of the United States, as defined in § 103 (a) of the Renegotiation Act, 50 U. S. C. App. § 1213 (a). These agreements, therefore, under § 102 of that Act, 50 U. S. C. App. § 1212, were subject to renegotiation.

A. Bannercraft. In 1966 and 1967, this respondent manufactured uniforms at a plant in Philadelphia. Its fiscal year was the calendar year. Because most of its production was subject to renegotiation, the company, for each of the two years, timely filed with the Renegotiation Board the financial statement required under § 105 (e)(1) of the Act, 50 U. S. C. App. § 1215 (e)(1). Representatives  [*4]  of the Eastern Regional Renegotiation Board then reviewed Bannercraft's operations and conferred with its president. On February 20, 1970, the Regional Board,  [****6]  by letter, advised the contractor that it was recommending that Bannercraft in 1967 had realized excessive profits in the amount of $ 1,400,000, subject to the usual adjustment for state taxes measured by income and for any tax credit to which the contractor was entitled under § 1481 of the Internal Revenue Code of 1954, 26 U. S. C. § 1481. ²

Bannercraft promptly requested that it be furnished, pursuant to 32 CFR § 1477.3 (1970), ³ with a "written summary  [**1031]  of the facts and reasons" upon which the determination was based. It asserted, however, that "it is not possible to state [as the Regulation's proviso required] whether all relevant evidence has been submitted since we have never had in writing the basis upon which you made this determination." The Regional Board replied that because "the statement required [****7]  by the regulation" was not submitted, "your request for a summary is defective."

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