Case No. VFA-0358, 26 DOE ¶ 80,243

December 29, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: Dykema Gossett, PLLC

Date of Filing: November 26, 1997

Case Number: VFA-0358

On November 26, 1997, the law firm of Dykema Gossett (Appellant) filed an Appeal from a final determination issued on November 3, 1997 by the Department of Energy’s (DOE) Oak Ridge Operations Office (Oak Ridge). The Appellant had requested these documents under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004. In its determination, Oak Ridge withheld numerous requested documents, either partially or in their entirety, under FOIA Exemption 4. This Appeal contends that Oak Ridge’s withholdings under Exemption 4 were improper. In addition, the Appellant also questions the adequacy of the search for documents responsive to his request that Oak Ridge conducted. This Appeal, if granted, would require the DOE to release the withheld documents and to conduct an additional search for responsive documents.

I. BACKGROUND

On June 26, 1996, the Appellant submitted an extensive request to Oak Ridge for information relating to the Superconducting Super Collider Laboratory (SSCL). This request was in turn composed of 14 sub-requests. On October 6, 1997, Oak Ridge released a number of responsive documents to the Appellant. Accompanying this release was a letter from Oak Ridge’s FOIA Officer informing the Appellant that additional responses would be forthcoming. (1) On November 3, 1997, Oak Ridge issued a determination letter informing the Appellant:

This letter and enclosures complete our review of agency documents located in the U.S. Department of Energy (DOE) and contractor files of the Superconducting Super Collider Laboratory found responsive to your request . . . . Enclosed are amendments to contract SSC-91-B-01701 and SSC-91-B-01707, as well as additional records with deletions of commercial, financial information, settlement sensitive data, and trade secret information in accordance with 5 U.S.C. § 552(b)(4).

November 3, 1997 Determination Letter at 1.

On November 26, 1997, the Appellant filed the present Appeal, contending that Oak Ridge’s search for responsive documents was inadequate and that Oak Ridge had not sufficiently justified its withholdings under Exemption 4.

II. ANALYSIS

A. Adequacy of the Search

Following an appropriate request, the FOIA requires agencies to search their records for responsive documents. We have stated on numerous occasions that a FOIA request deserves a thorough and conscientious search for responsive documents, and we have not hesitated to remand a case where it is evident that the search conducted was in fact inadequate. See, e.g., Hideca Petroleum Corp., 9 DOE ¶ 80,108 (1981); Charles Varon, 6 DOE ¶ 80,118 (1980). We review the adequacy of an agency's search under a "standard of reasonableness." McGehee v. CIA, 697 F.2d 1095, 1100-01 (D.C. Cir. 1983), modified in part on rehearing, 711 F.2d 1076 (D.C. Cir. 1983). This standard "does not require absolute exhaustion of the files; instead, it requires a search reasonably calculated to uncover the sought materials." Miller v. Department of State, 779 F.2d 1378, 1384-85 (8th Cir. 1985).

After conducting a search for responsive documents under the FOIA, the statute requires that the agency provide the requester with a written determination notifying the requester of the results of that search and, if applicable, of the agency’s intentions to withhold any of the responsive information under one or more of the nine statutory exemptions to the FOIA. 5 U.S.C. § 552(a)(6)(A)(i). The statute further requires that the agency provide the requester with an opportunity to appeal any adverse determination. Id.

The written determination letter serves to inform the requester of the results of the agency’s search for responsive documents and of any withholdings that the agency intends to make. In doing so, the determination letter allows the requester to decide whether the agency’s response to its request was adequate and proper and provides this office with a record upon which to base its consideration of an administrative appeal.

It therefore follows that the agency has an obligation to ensure that its determination letters: (1) adequately describe the results of searches; (2) clearly indicate which information was withheld, and (3) specify the exemption(s) under which information was withheld. Research Information Services, Inc., 26 DOE ¶ 80,139 (1996) (RIS); Burlin McKinney, 25 DOE ¶ 80,205 at 80,767 (1996). Without an adequately informative determination letter, the requester and the review authority must speculate about the appropriateness of the agency’s determinations. Id.

While the determination letter issued to the Appellant generally indicates that responsive information was withheld under Exemption 4, the determination letter does not identify the specific information it is withholding under Exemption 4. As a result, the determination letter does not satisfy DOE’s obligation under the applicable FOIA case law.

The Appellant contends that it has not received any documents from at least nine of the 14 subcategories in its FOIA request. Since the determination letter does not explain why no responsive documents were located for these nine subcategories, it is unclear whether documents responsive to these nine subcategories were identified and withheld under Exemption 4 or were never located at all.

We are therefore remanding this matter to Oak Ridge for clarification. On remand, Oak Ridge should issue a new determination letter in which it identifies each document responsive to the June 26, 1996 request, indicates whether any responsive document (or portion thereof) has been withheld, and justifies any withholding.

B. Exemption 4

While the FOIA generally requires that information held by government agencies be released to the public upon request, Congress has provided nine exemptions to the FOIA which set forth the types of information agencies are not required to release. Only Exemption 4 is at issue in the present case.

Exemption 4 exempts from mandatory public disclosure "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4); 10 C.F.R. § 1004.10(b)(4). In order to qualify under Exemption 4, a document must contain either (1) trade secrets or (2) information that is "commercial" or "financial," "obtained from a person," and "privileged or confidential." National Parks & Conservation Ass'n. v. Morton, 498 F.2d 765 (D.C. Cir. 1974) (National Parks).

In National Parks, the United States Court of Appeals for the District of Columbia Circuit found that commercial or financial information submitted to the federal government involuntarily is "confidential" for purposes of Exemption 4 if disclosure of the information is likely either (1) to impair the government's ability to obtain necessary information in the future or (2) to cause substantial harm to the competitive position of the person from whom the government obtained the information. Id. at 770; Critical Mass Energy Project v. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992), cert. denied, 113 S. Ct. 1579 (1993). It is well settled that information required to be submitted in order to obtain a DOE contract is considered to be submitted on a non-voluntarily basis for Exemption 4 purposes. See, e.g., Milton L. Loeb, 23 DOE ¶ 80,124 (1993). The federal courts have reasoned that even though such submissions are voluntary in the sense that no company is forced to do business with the government, information required by the terms of a Request for Proposal must be submitted if “contractors want to win lucrative government contracts . . .” McDonnell Douglas Corp. v. NASA, No. 91-3134, slip op. (D.D.C. June 30, 1995). Since the information was submitted to the DOE specifically for the purpose of acquiring a contract, it was clearly involuntarily submitted. See Industrial Constructors Corporation, 25 DOE ¶ 80,196 (1996) (Industrial). Since the information was submitted involuntarily, it is only "confidential" if it meets the test set out in National Parks. See Hanford Education Action League, 23 DOE ¶ 80,143 (1993).

In the present case, the Appellant contends that Oak Ridge failed to adequately explain why it concluded that release of the withheld information could reasonably be expected to cause substantial competitive harm.

Both the FOIA and the DOE regulations implementing it require reasonably specific justifications for the withholding of documents or portions of documents. Mead Data Central, Inc. v. United States Dep't of the Air Force, 566 F.2d 242 (D.C. Cir. 1977); National Parks & Conservation Ass'n v. Kleppe, 547 F.2d 673 (D.C. Cir. 1976); Data Technology Industries, 4 DOE ¶ 80,118 (1979). Conclusory and generalized claims by agency officials that material is exempt from disclosure are not acceptable. Thus, an agency determination that material should be withheld under Exemption 4 because its disclosure is likely to cause substantial competitive harm must include the reasons for believing that such harm will result to the competitive position of the person from whom the information is obtained. Federal Information Tools, 3 DOE ¶ 80,163 at 80,807 (1979). An adequate explanation would, for example, indicate the type of competitive injury which would result from disclosure, and the manner in which the information, if disclosed, could be utilized by a competitor to damage the firm's market position. Exxon Co., U.S.A., 8 DOE ¶ 80,162 at 80,794-95 (1981).

Oak Ridge’s determination letter does not meet these standards. The determination letter does not contain a sufficient explanation of why Oak Ridge determined that release of the information it is withholding would cause competitive harm to the information’s submitters. Accordingly, we shall remand this matter to Oak Ridge with instructions to issue a new determination letter. The new determination letter should specifically identify all information that the agency is withholding under Exemption 4. The determination letter should also explain why release of each document (or portion thereof) could reasonably be expected to cause competitive harm to the submitters if released. (2)

III. CONCLUSION

For the reasons set forth above, we are remanding this matter to the Oak Ridge Operations Office with instructions to promptly issue a new determination letter that complies with the requirements discussed above.

It Is Therefore Ordered That:

1) The Freedom of Information Act Appeal filed by Dykema Gossett, PLLC on November 26, 1997 (Case Number VFA-0358) is hereby granted as set forth in Paragraph (2) and denied in all other aspects.

(2) This case is hereby remanded to the Oak Ridge Operations Office for further processing in accordance with the instructions set forth above.

(3) This is a final order of the Department of Energy from which any aggrieved party may seek judicial review pursuant to 5 U.S.C. § 552(a)(4)(B). Judicial review may be sought in the district in which the requester resides or has a principal place of business, or in which the agency records are situated, or in the District of Columbia.

George B. Breznay

Director

Office of Hearings and Appeals

Date: December 29, 1997

(1) On October 20, 1997, Oak Ridge issued another partial response to the June 26, 1996 request releasing more responsive documents to the Appellant. However, Oak Ridge withheld several portions of these documents under Exemption 4. In a previous appeal, VFA-0349, the Appellant contested Oak Ridge’s withholding of one of these documents, entitled “Part III Prime Item Development Specification” (Part III), which was withheld in its entirety. Dykema Gossett PLLC, 27 DOE ¶ 80,__ (December 11, 1997).

(2) The DOE regulations direct the DOE to release to the public material exempt from mandatory disclosure under the FOIA if the DOE determines that federal law permits disclosure and disclosure is in the public interest. 10 C.F.R. § 1004.1. However, in cases involving material determined to be exempt from mandatory disclosure under Exemption 4, we also do not make the usual inquiry into whether release of the material would be in the public interest. Disclosure of confidential information that an agency can withhold pursuant to Exemption 4 would constitute a violation of the Trade Secrets Act, 18 U.S.C. § 1905, and is therefore prohibited. See, e.g., Chicago Power Group, 23 DOE ¶ 80,125 at 80,560 (1993). Accordingly, we may not consider whether the public interest warrants discretionary release of the information properly withheld under Exemption 4.