Case No. VFA-0393, 27 DOE ¶ 80,129

April 16, 1998

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: Moore Brower Hennessy & Freeman, P.C.

Date of Filing: March 18, 1998

Case Number: VFA-0393

On March 18, 1998, Moore Brower Hennessy & Freeman, P.C. (Moore) filed an Appeal from a determination that the Idaho Operations Office (Idaho) of the Department of Energy (DOE) issued to Moore on February 19, 1998. That determination concerned a request for information submitted by Moore pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004. If the present Appeal were granted, the DOE would be required to release all responsive documents to Moore.

I. Background

This case presents the issue of whether records generated under a contract between DOE and a management and operating (M&O) contractor are agency records under the FOIA, and if not, whether those records are nonetheless subject to disclosure under DOE’s regulation on contractor records, 10 C.F.R. Section 1004.3(e).

In 1993, M-K Ferguson, then M&O contractor (1) of the Idaho National Engineering Laboratory (INEL), awarded a construction contract to Caddell Construction Company, Inc. (Caddell). Caddell then awarded a subcontract to PKM Steel Services, Inc. (PKM). Moore, a law firm representing PKM, made a FOIA request in November 1996 for the disclosure of certain records relating to the construction project. Letter from Moore to FOIA Officer, Idaho (November 29, 1996). Idaho, with the assistance of LMITCO, sent Moore copies of various responsive documents. On August 26, 1997, Moore requested additional records related to the project. In September 1997, Idaho, again assisted by LMITCO, released further responsive material to Moore. However, due to the volume of the records requested, Idaho and Moore agreed to an on-site inspection of the material. In late

January 1998, Idaho and Moore scheduled an on-site inspection of the remaining responsive documents to take place on February 25, 1998 at LMITCO’s offices in Idaho.

However, prior to the inspection, LMITCO refused to cooperate with the disclosure of any additional documents. LMITCO informed Idaho that because PKM was in litigation(2) with LMITCO, LMITCO wanted to “ shut down the FOIA process and disclose the requested documents under discovery in order to be fair to all the litigants against LMITCO.” Letter from FOIA Officer, Idaho, to Valerie Vance Adeyeye, Staff Attorney, Office of Hearings and Appeals (OHA) (March 31, 1998) (Comment Letter). According to the FOIA Officer, LMITCO flatly refused to surrender the requested documents, which were in its physical control, and Idaho was unsuccessful in other attempts to obtain the records. Id. LMITCO also alleged that Moore was using the FOIA to supplement discovery.(3) Id.

In its determination letter, Idaho stated that “ [because] LMITCO has been brought into the litigation with Caddell and PKM as a third party defendant . . . , and because the documents that have been subject to your FOIA request are in the possession of LMITCO and are not in the possession or under the control of the DOE, DOE is unable to proceed with providing documents . . . pursuant to the FOIA.” Letter from FOIA Officer, Idaho, to Moore (February 19, 1998) (Determination Letter). Moore appealed to this Office, arguing that the FOIA Officer submitted no legal foundation for the denial of the request and that, under the contract, the requested records were DOE property. Letter from Moore to Director, Office of Hearings and Appeals (OHA) (March 18, 1998) (Appeal). If granted, this Appeal would require Idaho to release all responsive records to Moore.

II. Analysis

The appropriate test of whether a document is an agency record for purposes of the FOIA was set forth by the U.S. Supreme Court in United States Department of Justice vs. Tax Analysts, 492 U.S. 136, 144-45 (1989). In that decision, the Court stated that documents are “agency records” for FOIA purposes if they (1) were created or obtained by an agency, and (2) are under agency control at the time of the FOIA request. The FOIA defines the term “agency” to include any “executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch . . . , or any independent regulatory agency.” 5 U.S.C. § 552(f). Even if contractor-acquired or contractor-generated records fail to qualify as agency records, they may still be subject to release under DOE regulations which state that:

“When a contract with DOE provides that documents acquired or generated by the contractor in its performance of the contract shall be the property of the Government, DOE will make available to the public such records that are in the possession of the Government or the contractor, unless the records are exempt from public disclosure under 5 U.S.C. 552(b).”

10 C.F.R. § 1004.3(e)(1) (emphasis added). See also Dr. Nicolas Dominguez, 27 DOE ¶ 80,117 (1998); STAND of Amarillo, Inc., 26 DOE ¶ 80,162 (1997).

Based on the M&O contract between LMITCO and DOE, we find that the records requested are not agency records, but that they are still subject to disclosure under DOE regulations. LMITCO, a privately owned and operated corporation, is clearly not an “agency” as that term is defined in the FOIA. See William Kuntz III, 25 DOE ¶ 80,157 (1995) (establishing that LMITCO is not an agency for FOIA purposes). In addition, the records were not under agency control at the time of the FOIA request. Thus the records are not subject to disclosure under the FOIA. Nevertheless, we find that the records are the property of the government and therefore subject to disclosure under DOE regulations unless exempt under the FOIA. The contract between LMITCO and DOE provides, in pertinent part, that:

(a) ... [E]xcept as provided in paragraph (b) of this clause ... , all records acquired or generated by the Contractor in its performance of this contract shall be the property of the Government and shall be delivered to the Government ... as the Contracting Officer may from time to time direct ....

(b) ... The following records ... are considered the property of the Contractor and are not within the scope of paragraph (a) above.

TO BE NEGOTIATED WITH MUTUAL AGREEMENT BETWEEN BOTH PARTIES DURING TRANSITION.

Contract NO. DE-AC07-94ID13223, Modification No. M0004, Section I.105.(4) Contracts between DOE and M&O contractors normally provide a detailed list of those records that are the property of the contractor. See, e.g., Cincinnati Enquirer, 26 DOE ¶ 80,205 (1997); STAND of Amarillo, Inc., 26 DOE ¶ 80,162 (1997). The contract clearly states that all records acquired or generated in the performance of the contract are the property of the agency, unless specifically excluded. However, the contract has not identified any category of records as LMITCO property. Therefore, because the records that Moore requested are not identified in the contract as the property of LMITCO, we find that those documents requested are subject to disclosure under DOE regulations unless exempt under the FOIA. Since Idaho has already determined that the documents should be released to Moore, Idaho has no basis to now withhold the documents. As a DOE contractor, LMITCO knows that it is bound to comply with the agency’s regulations, including § 1004.3(e), and cannot unilaterally elect to disregard them. See Contract No. DE-AC07-94ID13223, Modification No. M071 (August 3, 1994). The possibility that some of the documents may also be released through the discovery process to other parties in the litigation over the construction contract does not justify LMITCO’s refusal to continue to make them available to Idaho in response to Moore’s FOIA request.

It Is Therefore Ordered That:

(1) The Appeal filed on March 18, 1998, by Moore Brower Hennessy & Freeman, P.C., Case No. VFA-0393, is hereby granted as set forth in Paragraph (2) below, and is denied in all other respects.

(2) This matter is remanded to the FOIA Officer of the Idaho Operations Office of the Department of Energy who shall make available all non-exempt portions of the requested material or issue a new determination adequately justifying continued non-disclosure of this information.

(3) This is a final Order of the Department of Energy from which any aggrieved party may seek judicial review pursuant to the provisions of 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: April 16, 1998

(1)Lockheed Martin Idaho Technologies Company (LMITCO) succeeded M-K Ferguson as M&O contractor in 1994.

(2)In December 1996, PKM sued Caddell for damages arising from the construction contract. In early January 1998, Caddell filed a third-party action against LMITCO in the suit, alleging that M-K Ferguson and LMITCO were liable to Caddell if Caddell was liable to PKM. Appeal at 2.

(3)LMITCO’s contention that Moore is using the FOIA to circumvent, displace, or supplement discovery in the litigation over the construction project is irrelevant to the present appeal.

(4)“Transition” refers to the period of the change in M&O contractors in 1994.