Case No. VFA-0421, 27 DOE ¶ 80,152

August 11, 1998

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner:International Brotherhood of Electrical Workers

Date of Filing:June 8, 1998

Case Number: VFA-0421

On June 8, 1998, the International Brotherhood of Electrical Workers (Appellant) filed an Appeal from a determination issued to it on March 26, 1998, by the Savannah River Operations Office (SR) of the Department of Energy (DOE).(1) In that determination, SR released various relevant records and withheld other information identified as responsive to the Appellant's July 30, 1997 Request under the Freedom of Information Act (FOIA). SR charged $226.90 for search and review. In an earlier determination, SR denied the Appellant’s request for a fee waiver. This Appeal, if granted, would require the DOE to release the withheld information, conduct a further search, and order SR to either grant the Appellant a fee waiver or reduce the amount the Appellant has been ordered to pay for search and review costs.

The FOIA requires that agency records held by a covered branch of the federal government generally be released to the public upon request. 5 U.S.C. § 552(a)(3). In addition to this requirement, the FOIA lists nine exemptions that set forth the types of information that may be withheld at the discretion of the agency. 5 U.S.C. § 552(b)(1)-(b)(9); 10 C.F.R. § 1004.10(b)(1)-(b)(9). The DOE regulations further provide that documents exempt from mandatory disclosure will nonetheless be released to the public if the DOE determines that disclosure is not contrary to federal law and is in the public interest. 10 C.F.R. § 1004.1. In addition, the FOIA and DOE regulations promulgated thereunder establish procedures for performing searches for, and waiving applicable fees for, information responsive to a request. 5 U.S.C. § 552(a)(4)(A)(i); 10 C.F.R. § 1004.9.

I. Background

On July 30, 1997, the Appellant submitted a FOIA request to SR seeking the following nine items:

(1) a copy of any and all correspondence, memos, directives, electronic mail, etc., concerning the IBEW and [its] organizing activity generated by Wackenhut Services, Inc. (WSI) and/or the DOE Savannah River site since October 1996;

(2) a copy of any and all flyers, letters, brochures, buttons, training plans, videos and other data or material used by WSI to counter our efforts and the cost to produce or procure each item;

(3) a copy of the list of anti-Union consultants provided to WSI management by the DOE;

(4) a copy of the contract between WSI and the anti-Union consultants they retained including their names and addresses;

(5) a copy of the contract between WSI and the law firm retained to represent them during the organizing, election and post-election period;

(6) a copy of any and all documents showing each expense charged by the consultants and attorneys including salary, fees, per diem, travel, lodging, expenses, materials, etc.;

(7) a copy of any and all documents such as financial records, requests for expenditures, vouchers, payroll records, timecards, travel expenses, receipts, etc. for moneys spent for all supervisor training, [and] time spent on the clock by the “Vote No” Committee while influencing their co-workers and the employees during their “captive audience” anti-Union informational meetings with the supervisors;

(8) a copy of the request from WSI to DOE for employees’ salary increases and /or bonuses for the current year and DOE’s response granting same;

(9) a copy of any and all documents showing how all of the above costs were passed on to the DOE.

Letter from Appellant to Pauline Conner, Freedom of Information Act Officer, SR (July 30, 1997) (Request Letter).

In its Request Letter, the Appellant also requested a fee waiver. On August 4, 1997, SR determined that the Appellant was ineligible for a fee waiver. Letter from Pauline Conner to Appellant (August 4, 1997) (Fee Waiver Determination Letter). In a September 11, 1997 letter, SR estimated the cost of the search to be performed at $1,330.52. SR explained that it had, discretionarily, agreed to absorb 50 hours of search cost for Request Item 1, but added that the Appellant would still be required to assure SR that it would pay the total remaining estimated cost of $290.00. The Appellant responded in an October 6, 1997 letter that it would make that assurance, with the proviso that it expected the charges to be much less than estimated and that they expected a large volume of information to be released.

In its March 26, 1998 Determination Letter, SR released approximately 78 documents (362 pages) to the Appellant, and withheld or redacted approximately 35 documents, citing FOIA Exemptions 4, 5 and 6. The majority of the withheld documents at issue consist of legal billing records and expense reports. All of the withheld and released documents were listed in an attached document (list of Response Documents). SR further determined that some requested documents were not agency records. It also withheld some responsive videos but failed to state a reason for this withholding. SR charged the Appellant $226.90 for fees, including search and review costs. Letter from Greg Rudy, Authorizing Official, SR, to Appellant (March 26, 1998) (Determination Letter). On June 8, 1998, the Appellant filed the present Appeal in which it contends that SR’s refusal to release withheld information was improper, SR’s search was inadequate, and that SR should have granted the Appellant a fee waiver or alternatively reduced its fees. The Appellant is also appealing an earlier August 29, 1997 FOIA determination by SR of a different request.(2) Appeal Letter from Appellant to Director, Office of Hearings and Appeals (June 2, 1998) (Appeal Letter).

II. Analysis

A. Earlier Request

The Appellant failed to appeal the earlier August 29, 1997 determination within the thirty day regulatory deadline. See 10 C.F.R. § 1004.8(a). Normally, this Office would request that the Appellant submit a new request for that information and receive another determination. The Appellant could then appeal that determination in a timely manner. But since SR has agreed that no administrative or other interests will be harmed by allowing the Appellant to appeal the August 29, 1997 determination at this point, and we are obligated to issue a decision in any event on the appeal of the March 26, 1998 determination, we will consider the appeal of the earlier action as a matter of our discretion.

The August 29, 1997 determination was issued in response to a July 23, 1997 request for information. That request was for “a copy of the exact salary (not range) paid to each non-exempt employee by name and classification of those listed on the Excelsior list [enclosed] provided to the Union by WSI in February of this year.” SR responded that it was releasing one document but it possessed no other responsive documents. It stated that WSI, a DOE contractor, possessed responsive documents. SR found that these documents are neither agency records nor subject to release. SR determined that pursuant to its contract with WSI, WSI owns this information and it is therefore not subject to release under the contractor records regulation, 10 C.F.R. § 1004.3(e).

The Appellant asserted in its Appeal that all taxpayer-funded records are subject to release under the FOIA. This assertion is incorrect. Our threshold inquiry in FOIA matters is whether any of the requested records are "agency records," and thus subject to the FOIA, under the criteria set out by the federal courts. Cf. 5 U.S.C. § 552(f) (describing the scope of the term “agency” under the FOIA). Records that do not meet these criteria can nonetheless be subject to release under the DOE regulations. 10 C.F.R. § 1004.3(e); see 59 Fed. Reg. 63,884 (December 12, 1994). For the reasons set forth below, we conclude that no responsive “agency records” exist at SR and that none of the records is subject to release under the DOE regulations.

The statutory language of the FOIA does not define the essential attributes of "agency records," but merely lists examples of the types of information agencies must make available to the public. See 5 U.S.C. § 552(a). In interpreting this phrase, we have applied a two-step analysis the courts have fashioned for determining whether documents created by non-federal organizations, such as WSI, are subject to the FOIA. See, e.g., BMF Enterprises, 21 DOE ¶ 80,127 (1991); William Albert Hewgley, 19 DOE ¶ 80,120 (1989); Judith M. Gibbs, 16 DOE ¶ 80,133 (1987) (Gibbs). That analysis involves a determination (i) whether the organization is an "agency" for purposes of the FOIA and, if not, (ii) whether the requested material is nonetheless an "agency record." See Gibbs, 16 DOE at 80,595- 96.

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). The Supreme Court has identified certain factors to consider in determining whether we should regard an entity as an agency for purposes of federal law. The Supreme Court ruled that for FOIA purposes, an organization will be considered a federal agency if its day-to-day operations are supervised by the federal government. Forsham v. Harris, 445 U.S. 169, 180 (1980) (Forsham). See also Washington Research Project, Inc. v. HEW, 504 F.2d 238, 248 (D.C. Cir. 1974), cert. denied, 421 U.S. 963 (1975) (degree of independent governmental decision-making authority considered); Rocap v. Indiek, 539 F.2d 174 (D.C. Cir. 1976).

Pursuant to its contract with the DOE, WSI is responsible for providing security at the Savannah River Site. While the DOE obtained WSI’s services and exercises general control over the contract work, it does not supervise WSI’s day-to-day operations. See Printout of Electronic Mail Message from Pauline Conner to Dawn Goldstein (June 15, 1998). We therefore conclude that WSI is not an "agency" subject to the FOIA.

Although WSI is not an “agency” for the purposes of the FOIA, its records could be considered "agency records" if the DOE obtained them and they were within the DOE's control at the time the Appellant made his FOIA request. Department of Justice v. Tax Analysts, 492 U.S. 136, 144-46 (1989) (Tax Analysts). In its Appeal, the Appellant argues that Response Document 66, a letter from SR to WSI asking for responsive records, demonstrates that the DOE has or had possession of additional responsive records, thereby making them “agency records.” SR has informed us that contrary to the Appellant’s contention, WSI never turned over to the agency the records requested by SR in Response Document 66. See Record of Telephone Conversation between Pauline Conner and Dawn Goldstein (June 11, 1998). It therefore does not appear that DOE obtained or controlled the WSI records at issue. Consequently, these documents clearly do not qualify as "agency records" under the test set forth by the federal courts. See Tax Analysts, 492 U.S. at 145-46; see also Forsham, 445 U.S. at 185-86.

Even if contractor-acquired or contractor-generated records fail to qualify as "agency records," they may still be subject to release if the contract between the DOE and that contractor provides that the document in question is the property of the agency. The DOE regulations provide that "[w]hen a contract with the DOE provides that any records acquired or generated by the contractor in its performance of the contract shall be the property of the Government, the 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) (DOE contractor records regulation). We therefore next look to the contract between the DOE and WSI to determine the status of the requested records. The relevant contract provision states “All personnel records relating to Contractor’s employees, including salary records, references, training records, performance or promotability appraisals, disciplinary actions, medical records, Employee Assistance Program records, or any other personnel related records, . . . generated or retained in the course of performance of this contract shall be the property of the Contractor. . . [emphasis in original].” Contract No. DE-AC09-93SR18292, Modification No. A011, Clause H.16. Since the Appellant requested salary records, SR’s August 29, 1997 determination that these records are owned by WSI and therefore not subject to the DOE contractor records regulation was correct.

B. Fee Waiver

Regarding the Appellant’s instant request for fee waiver, we note that this request is very similar to another fee waiver request it filed. See I.B.E.W., 26 DOE ¶ 80,153 (1997). In that case, we held that because the Appellant has a commercial interest in the requested material and the Appellant’s primary interest in the information is for the benefit of its membership, it is not entitled to a fee waiver. That earlier request for documents seeks material similar to that requested currently. Moreover, the Appellant has made the same arguments in favor of the fee waiver that we responded to in the earlier case. We see no reason to depart from our analysis set forth in that decision. Accordingly, we find that the Appellant is not entitled to a fee waiver.(3)

In its request and its Appeal, the Appellant requests that the agency calculate the difference between savings DOE could gain from stopping alleged fraud and the amount that the Appellant could hope to gain from exposing the alleged fraud, in order to justify its position that its interest is not primarily commercial. We note that the FOIA does not require this type of quantitative analysis. However, the FOIA does require an analysis similar to the one we performed in the earlier I.B.E.W. decision when we balanced the Appellant’s commercial interest against the identified public interest. See I.B.E.W., 26 DOE at 80,672. In that balancing, this Office found that disclosure of the requested information is primarily in the commercial interest of the requester. See 5 U.S.C. § 552(a)(4)(A)(iii). SR has made the same finding regarding the current request. See Letter from Pauline Conner to Appellant (August 4, 1997). Therefore, we find that SR correctly evaluated the public and commercial interests at stake, and this argument is not grounds for reversal.

C. Reasonableness of Fees

The DOE regulations provide for fees to be assessed to cover the “full allowable direct costs incurred” of responding to requests for information. 10 C.F.R. § 1004.9. Pursuant to the FOIA, the DOE has issued regulations "specifying the schedule of fees applicable to the processing of requests . . . ." 5 U.S.C. § 552(a)(4)(A)(i). Under this fee schedule, the DOE charges for manual searches at the salary rate(s) (i.e. basic pay plus 16 percent) of the employees making the search. 10 C.F.R. § 1004.9(a)(1). In addition, "[t]he DOE will charge requesters who are seeking documents for commercial use for time spent reviewing records to determine whether they are exempt from mandatory disclosure." 10 C.F.R. § 1004.9(a)(3).

The Appellant makes several arguments that the fees assessed in this case should be reduced. We reject each of these arguments. First, the Appellant argues that it should not be charged as a commercial use requester. The Appellant is incorrect. As we found in the earlier I.B.E.W. decision, the Appellant has a strong commercial interest in requesting this information. Therefore, it was properly classified as a commercial requester.

Second, the Appellant argues that the amount of documents generated does not appear substantial enough to justify the $226.90 fee charged. The Appellant’s complaint regarding the number of responsive documents received is not relevant to whether appropriate fees were charged. There can never be any assurance that a FOIA request will yield any releasable documents or that the requester will find the documents released to be useful. Fees are not charged because the requester may derive a benefit from the documents, but because the government expends money to process the request. See Association of Public Agency Customers, 25 DOE ¶ 80,200 at 80,749 (1996) (sixteen pages

released and $1,145.63 in fees found to be properly assessed); ITech, Inc., 25 DOE ¶ 80,169 at 80,678 (1996). In fact, DOE regulations specifically provide that fees will be assessed even if no responsive documents are located. 10 C.F.R. § 1004.9(b)(6). Here, the Appellant in fact received 362 pages. Moreover, SR discretionarily chose not to charge for the first 50 hours of search time for Request Item 1. Its charges were actually considerably less than SR estimated.

We contacted SR to determine how it calculated the fees charged to the Appellant. In this case, SR charged $167.04 for search time, based on 10 hours of search time by both clerical and non-clerical employees (for the remaining eight request items), $41.76 for two hours of review time, and $18.10 for photocopying charges. Given the size of the Appellant’s request, the amount of search and review time was reasonable.(4)

Third, the Appellant asserts that it should not be charged for duplicates, heavily redacted pages (which the Appellant called “blank pages”), or non-responsive information such as Appellant- generated material. Regarding the Appellant’s complaints regarding the duplicate pages, SR informed us that it photocopied all enclosures to responsive documents in an effort to be complete and to demonstrate that it was not hiding any responsive documents. See Record of Telephone Conversation between Pauline Conner and Dawn Goldstein (June 10, 1998). In addition, we note that it would have increased the review time spent, and thus the Appellant’s fees, if SR had taken the time to search for duplicates. SR also heavily redacted some of the pages. By releasing the redacted version, we find that SR correctly showed to the Appellant the precise amount of redacted material, as is required under the Electronic Freedom of Information Act Amendments of 1996. 5 U.S.C. § 552(b). Therefore, the portion of the fees due to duplicate and redacted pages was reasonable.

With regard to the Appellant-generated material, we note that Item 1 of the Appellant’s request asked for “any and all correspondence . . . concerning the International Brotherhood of Electrical Workers (I.B.E.W.) and [its] organizing activity generated by Wackenhut Services, Inc. (WSI) and/or the DOE Savannah River site since October 1996 [emphasis added].” SR explained to us that the Appellant- generated material was part of their correspondence files and therefore SR included the 80 to 90 pages of this material in its response. See Record of Telephone Conversation between Dawn Goldstein, Pauline Conner and Timothy Fischer, Office of Chief Counsel, SR (July 22, 1998). We find SR’s inclusion of this material to be unreasonable because the Appellant’s request specifically excluded this material. Further, it should have been fairly simple to remove these pages. Therefore, we are remanding this portion of the Appeal so that SR can reduce the amount it charged the Appellant for photocopying pages generated by neither SR nor WSI. The remainder of the fees that SR imposed in this case were proper.

D. Withholding of Videos

In its determination, SR withheld several videos responsive to Request Item 2 and informed the Appellant of the private entity from whom it could purchase copies. However, SR did not provide

in that determination its reason for withholding these videos. Both the FOIA and the DOE regulations require reasonably specific justifications for the withholding of documents or portions of documents. See, e.g., Mead Data Central, Inc. v. Department of the Air Force, 566 F.2d 242 (D.C. Cir. 1977); Digital City Communications, Inc., 26 DOE ¶ 80,149 at 80,657 (1997); 10 C.F.R. § 1004.7(b)(1). Those DOE regulations provide that a denial of records will contain the following: “A statement of reason for the denial, containing a reference to the specific exemption under the Freedom of Information Act authorizing the withholding of the record and a brief explanation of how the exemption applies to the record withheld, and a statement why a discretionary release is not appropriate.” We are therefore remanding this portion of the Appeal for a further determination on this issue. (5)

E. Adequacy of the Search

We have held that a FOIA request deserves a thorough and conscientious search for responsive documents. When we have found that a search was inadequate, we have consistently remanded the case and ordered a further search for responsive documents. E.g., Native Americans for a Clean Environment, 23 DOE ¶ 80,149 (1993); Marlene R. Flor, 23 DOE ¶ 80,130 (1993); Eugene Maples, 23 DOE ¶ 80,106 (1993). However, the FOIA requires that a search be reasonable, not exhaustive. "The standard of reasonableness that we apply to the agency search procedures does not require absolute exhaustion of 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).

We contacted SR to determine how it conducted the search for each item of the request. See Record of Telephone Conversation between Timothy Fischer and Dawn Goldstein (June 22, 1998). SR conducted a search of its own Office of Chief Counsel, Chief Financial Office (consisting of the Finance Division, Financial Evaluation Division and the Planning and Budget Division), the Contracts Management Division and the Office of Safeguards and Security (the program office having oversight responsibility for WSI). See Memorandum from Timothy Fischer to Dawn Goldstein (June 12, 1998); Record of Telephone Conversation between Donna Brown, Paralegal, Office of Chief Counsel, SR, and Dawn Goldstein (June 29, 1998). In addition, SR supervised a search of the following WSI offices: Environmental Protection Department, Accounting, Site Security Support Department, Zone Operations Training Department, Zone Operations, Office of Deputy Assistant General Manager for Administration, Dispute Resolution and Compliance, Security Programs and Projects Department, Training Department and Labor Relations. See Printout of Electronic Mail Message from Pauline Conner to Dawn Goldstein (June 12, 1998).

SR later informed us that it had mistakenly failed to search a file held by SR’s Office of Chief Counsel which appears to be responsive to the July 30, 1997 request. The file consists, inter alia, of additional attorney invoices, invoices by the labor consultant, SR/WSI correspondence, National Labor Relations Board documents, settlement-related documents and a letter referred to in Response Document 6 from WSI’s outside counsel, Mr. Savitz, to Ms. Lucy Knowles, attorney at SR’s Office of Chief Counsel. SR is reviewing the contents of this file and plans to issue a determination regarding that file after this Decision is issued.(6) See Record of Telephone Conversation between Donna Brown and Dawn Goldstein (July 1, 1998). In addition, in its Appeal, the Appellant noted that an SR litigation manual was referred to Response Document 103 and asked that SR release the manual to it. Since the filing of this Appeal, SR has released the litigation manual to the Appellant.

Next, we will examine each of the request items for which the Appellant has made a specific argument regarding the adequacy of SR’s and WSI’s search.

1. Request Item 1

SR’s search for Request Item 1, concerning correspondence and other documents pertaining to the union, generally appears to have been adequate. However, regarding WSI’s search, the contractor has stated that it did not turn over documents responsive to Request Item 1 if it had already released these documents to the Appellant during the union drive. See Memorandum from B. Weber, Labor Relations, WSI, to Timothy Fischer (November 4, 1997) (WSI Response). This limitation was inappropriate. WSI is obligated to release responsive, DOE-owned, non-exempt documents that have been requested under the FOIA. Therefore, we must remand this issue to SR so that WSI can conduct a complete search. SR must then determine whether, under the applicable ownership of records provision, DOE owns these documents.(7) If DOE owns these documents, SR must then determine whether these documents are exempt under 5 U.S.C. § 552(b), see 10 C.F.R. § 1004.3(e)(1), and whether WSI claims a privilege recognized under federal or state law and that there is a reasonable basis for that privilege claim. See 10 C.F.R. § 1004.3 (e)(2); Sangre de Cristo Animal Protection, Inc., 25 DOE ¶ 80,121 at 80,552 (1995). On remand, SR shall make a determination on these issues.

Also regarding Request Item 1, the Appellant stated that it had not received deposition transcripts referred to in some of the released records such as Response Documents 73 and 103. SR informed us, after a thorough search of the logical places for such transcripts, it does not possess them. Nor does WSI possess these transcripts. Instead, these documents are solely in the possession of WSI’s outside counsel. See Record of Telephone Conversation between Timothy Fischer, Pauline Conner and Dawn Goldstein (June 29, 1998). Since the terms of the contractor records regulation do not include the records of a subcontractor, we find that the FOIA and 10 C.F.R. § 1004.3 do not apply to these records. Apart from the issues discussed above, WSI’s search for Request Item 1 was adequate.

2. Request Item 3

It appears that the offices of SR that would logically possess the list of labor consultants were adequately searched. However, WSI’s response to this item of the request was that it had no “ ?anti- Union consultant’ nor was any such list provided us by DOE.” See WSI Response. WSI appears to object to the Appellant’s description of the labor consultant ultimately hired by WSI, Mr. Sommerville, as an “anti-Union” consultant, and therefore WSI did not search for any documents relating to his hiring. We believe that SR should have consulted with the Appellant to ascertain whether the Appellant was indeed referring to a list containing Mr. Sommerville’s name, or any other list containing names of labor consultants, and then notified WSI of this clarification. Cf. 10 C.F.R. §1004.4(c)(2). We shall therefore remand this portion of the Appeal for a further search by WSI.

3. Request Items 4 and 5

It does not appear that SR ever possessed a copy of either the WSI contract with the labor consultant, or the contract between WSI and the law firm it retained. It does appear that these records exist and are in the possession of WSI, notwithstanding WSI’s response that it possesses no contracts with any “anti-union consultants.” SR has also never determined whether either contract is subject to release under the DOE contractor records regulation, 10 C.F.R. § 1004.3. See Record of Telephone Conversation between Timothy Fischer and Dawn Goldstein (June 22, 1998). From our reading of the applicable ownership of records provision, WSI does not own these contracts. On remand, SR shall make a determination whether these contracts are subject to release under the DOE contractor records regulation.

4. Request Item 7

SR released no documents responsive to Request Item 7 pertaining to WSI expenditures on behalf of what the Appellant called the “Vote No” committee. WSI stated that it uses “no separate coding” to mark the time cards of employees who attended the training sessions referred to in the request. WSI also stated, “The Company did not knowingly pay for time spent by the voluntary committee referred to by the IBEW as the ?Vote No’ committee and, as such, we have none of the documentation requested.” See WSI Response.

Based on our review and in view of the way the Appellant formulated its request, we believe that DOE and WSI performed an adequate search for this item of the request. However, we suggest that the Appellant, with the aid of SR, formulate a new request that could be the basis for a further search. For instance, if the Appellant makes a new request for records pertaining to a specific period of time or specific meetings prior to the union election, WSI may be able to find responsive records.(8)

5. Request Item 8

This item concerned WSI’s request to SR for salary increases for WSI employees, and SR’s response to this request. In its determination, SR explained that it released a responsive document to the Appellant on August 29, 1997 as a result of a previous FOIA request.(9) This document contains various tables and is entitled, “WSI-SRS 1997 Salary Increase Fund.” In addition, SR explained that other responsive documents that WSI owned and possessed are not subject to release under DOE’s contractor records regulation. Finally, in response to the instant FOIA request, SR released Response Document 32, “Calendar Year 1997 Salary Increase Chronology,” of which a small portion was redacted, as discussed below.

The Appellant notes that several other salary-related documents are referred to in this chronology, none of which was released or listed in the Response Documents list. These documents include a November 25, 1996 proposal by WSI, another document submitted by WSI on December 18, 1996, a January 22, 1997 approval letter from DOE, proposed matrix guidelines submitted by WSI on February 19, 1997 and SR’s approval of the matrices on February 20, 1997. It is unclear whether any of these documents are responsive to the Appellant’s request. We suggest that the Appellant make a new request for each of these items. We nevertheless find that WSI’s and SR’s search was adequate for this item.

6. Request Item 9

This Office consulted with the Appellant in order to clarify what was meant by Request Item 9, which pertains to documents related to reimbursements by DOE to WSI for costs pertaining to the union election. The Appellant specified that this item was meant to include documents showing reimbursements by DOE to WSI for the following expenditures: labor consultant bills; law firm bills; the “Vote No” Committee (Request Item 7); and any other WSI expenditures on behalf of fighting the union organizing campaign later reimbursed by DOE. See Record of Telephone Conversation between Appellant and Dawn Goldstein (July 6, 1998). While DOE has released redacted versions of the law firm bills, it has not yet done so for the labor consultant’s bills. As explained earlier, SR is currently making a determination regarding the releasibility of these bills. In addition, we have upheld the adequacy of WSI’s and SR’s search regarding Item 7. We are therefore remanding this portion of the Appeal in order that SR may issue its determination regarding the labor consultant’s bills.

F. Exemption 5

Exemption 5 protects "inter-agency or intra-agency memorandums or letters which would not be available to a party other than an agency in litigation with the agency." 5 U.S.C. § 552(b)(5); 10 C.F.R. § 1004.10(b)(5). The Supreme Court has held that this provision exempts "those documents, and only those documents, normally privileged in the civil discovery context." NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149 (1975) (Sears). Exemption 5 is generally recognized as encompassing certain distinct privileges, including the attorney-client privilege, the attorney work- product privilege, and the governmental deliberative process privilege. Coastal States Gas Corp. v. DOE, 617 F.2d 854, 862 (D.C. Cir. 1980). In the present case, SR relied on the work-product privilege of Exemption 5 to withhold Response Document 56.

However, this document does not meet the threshold test of Exemption 5, that the document be inter- agency or intra-agency. This document was prepared by a Mr. Brian Weber, a labor relations employee (but not an attorney) for WSI. Mr. Weber prepared this document at the request of Mr. Savitz, WSI’s outside counsel, so that Mr. Savitz could learn the facts regarding several issues in litigation before the National Labor Relations Board. We note that in William H. Payne, 26 DOE ¶ 80,161 at 80,698 (1997), this Office said that Exemption 5 could protect billing records generated by outside counsel and sent to a DOE contractor. However, in that case, we noted that the billing records at issue there were used by DOE to monitor the litigation as part of its decision-making process and to determine whether it might be necessary to impose additional controls. Id. That is not the case here, since the DOE never obtained the document at issue. Thus, because DOE was not involved in preparing this document in any way, and it is not an inter-agency or intra-agency document, Exemption 5 does not apply and cannot be used to withhold it. We will therefore remand this issue so that SR may either release the document or determine that another exemption such as Exemption 4 justifies its withholding.(10)

G. Exemption 4

SR withheld several documents under Exemption 4, including the labor consultant’s normal billing rates, a portion of Response Document 32 and portions of attorney invoices. 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 (a) trade secrets or (b) information that is (1) "commercial" or "financial," (2) "obtained from a person," and (3) "privileged or confidential." National Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 766 (D.C. Cir. 1974) (National Parks). Clearly, a request for payment for services rendered, a labor consultant’s normal rates and a document concerning salary increases are “commercial” within the meaning of Exemption 4. In addition, the information submitted by WSI was obtained from a “person,” as required by Exemption 4, since corporations are deemed “persons” for purposes of that Exemption. See Ronson Management Corp., 19 DOE ¶ 80,117 (1989). Moreover, we also consider the information submitted by the Savitz law firm to be obtained from a “person.” See Nadler v. FDIC, 92 F.3d 93, 95 (2d Cir. 1996) (term “person” includes partnerships (relying upon definition found in Administrative Procedure Act, 5 U.S.C. § 551(2))).

1. “Confidential” documents

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 (i) to impair the government's ability to obtain necessary information in the future or (ii) to cause substantial harm to the competitive position of the person from whom the information was obtained. Id. at 770; see also Critical Mass Energy Project v. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992), cert. denied, 113 S. Ct. 1579 (1993) (Critical Mass). By contrast, information that is provided to an agency voluntarily is considered "confidential" if "it is of a kind that the provider would not customarily make available to the public." Critical Mass, 975 F.2d at 879. Because the information at issue in this case was submitted as part of a contract between the DOE and WSI, this information is not considered to have been submitted voluntarily and is therefore considered "confidential" if it meets the test set out in National Parks. Cf. Nayar & Company, P.C., 23 DOE ¶ 80,185 at 80,710 (1994) (information submitted in response to request for proposal).(11)

a. The labor consultant’s normal rates

SR explained that it withheld the labor consultant’s rates as confidential business information pursuant to Exemption 4, not under the attorney-client privilege as the Appellant appears to believe. WSI’s only statement regarding this issue was that the rates should be withheld as “proprietary information” under Exemption 4. See WSI Response. Both the FOIA and the DOE regulations require reasonably specific justifications for the withholding of documents or portions of documents, as discussed above. Thus, a FOIA determination that material should be withheld pursuant to Exemption 4 because its disclosure is likely to cause substantial harm must include the reasons for believing such harm will result to the competitive position of the person from whom the information is obtained. Larson Associated, Inc., 25 DOE ¶ 80,204 (1996); Milton L. Loeb, 23 DOE ¶ 80,124 (1993).

In this case, WSI could, but did not, provide any explanation as to why release of the rates would likely cause substantial harm to the competitive position of either it or the labor consultant. Alternately, SR could provide an explanation why the release of specific information within the proposal would impair the government's ability to obtain necessary information in the future. See Critical Mass, 975 F.2d at 879. In making the latter determination, SR should keep in mind that conclusory allegations of harm do not suffice to protect information from disclosure under Exemption 4. Lykes Bros. S.S. Co. v. Peña, No. 92-2780, slip op. at 13 (D.D.C. Sept. 2, 1993) (Westlaw, DCT database) (submitters are “required to make assertions with some level of detail as to the likelihood and the specific nature of the competitive harm they predict”). Since neither SR nor WSI provided a reasonably specific justification, we are remanding this aspect of the Appeal so that SR may determine if adequate justification exists. In addition, if SR finds that it believes that this material should be released, it should consult with Mr. Sommerville and WSI on their views regarding this matter. See 10 C.F.R. § 1004.11(f). SR should then either release the withheld material or issue a new determination setting forth a specific explanation as to why Exemption 4 applies to the labor consultant’s normal rates.

b. Response Document 32

SR released Response Document 32, the “Calendar Year 1997 Salary Increase Chronology,” in response to Request Item 8. SR redacted a portion of the document pursuant to Exemption 4. As with the labor consultant’s rates, SR failed to provide any explanation as to why this portion is exempt. We therefore shall remand this aspect of the Appeal so that SR can perform the type of analysis described in the proceeding section.

2. “Privileged” documents

Several of the withheld documents are invoices for legal fees incurred by WSI’s attorneys. WSI forwarded the invoices to the DOE for payment in accordance with the provisions of the DOE’s contract with WSI. SR withheld portions of these documents under the attorney-client privilege and the attorney work-product privilege. The attorney-client privilege protects “confidential communications between an attorney and his client relating to a legal matter for which the client has sought professional advice.” Mead Data Cent., Inc. v. Department of the Air Force, 566 F.2d 242, 252 (D.C. Cir. 1977).(12)

SR released the rates billed for each item of service, the dollar figure shown for the total services rendered in the billing period, and the expenses charged on the bills prepared by the firm. SR also released in Response Documents 73 and 103 the identities of the partner, Mr. Savitz, who worked on this case, his rates for counseling and litigation, and the identity of the associate, Mr. Timothy O’Rourke, who worked on this matter. SR also released in Response Document 95 the fact that a paralegal would be working on this case and that person’s rate. The withheld portions of the documents consist of the total amount of time spent by the firm on the case, the dates services were rendered, a description of the services rendered, the attorney who worked on the case, the amount of hours billed for each service, and the cost for each service. SR also withheld several invoices for travel expenses incurred by the attorneys.

Some withheld portions of the documents consist of information protected by the attorney work- product privilege or the attorney-client privilege. Specifically, those portions include descriptions of the legal services provided, the cost of each service and the amount of time spent by the attorneys in performing each service. The descriptions of the services provided reflect the legal theories and strategies of the attorneys. The time and cost figures reveal the relative importance attached to each task by the attorneys. For these reasons, we have previously determined that this type of information is subject to the attorney work-product privilege. C.D. Varnadore & Betty Freels, 24 DOE ¶ 80,123 at 80-557. We also note some of the Westlaw and Federal Express invoices were redacted to protect the attorney-client privilege of non-WSI clients of the law firms. We note that release of this information, since it is privileged attorney-client communication, would impair the ability of the government to obtain necessary information in the future. We also find that in applying each of the first four criteria listed in 10 C.F.R. § 1004.11(f) to the facts of this case, this information should remain withheld. We therefore reject the Appellant’s contention that SR improperly withheld those portions of the invoices pursuant to Exemption 4.

However, we find that SR cannot properly withhold some of the information contained in the attorney billing invoices using either the attorney-client privilege or the attorney work-product privilege. In addition to the information already disclosed, that information includes the total time on the matter spent by the firm within the given billing period, and amounts of expenses such as travel and telephone bills, withheld in Response Document 96.(13) Given the facts of this case, disclosure of this information would not reveal WSI’s motive for seeking representation, litigation strategy, the specific nature of the services rendered by the attorneys or any privileged communications.

Moreover, we note that SR already released the identities of the attorneys working on this case, and their rates, most of which are different. Because SR also released the rate per service on the attorney invoices, SR has effectively released the identities of those attorneys whose rates are different. Therefore, it is required to release most of the initials shown in the “attorney or staff” column.(14) Releasing the initials of the paralegal who worked on this case would also reveal nothing that would harm the attorney-client or work-product privilege. Accordingly, we find that SR cannot withhold such information using the attorney-client privilege. Nor would release of this information reveal mental impressions, litigation strategy, conclusions or legal theories of the attorneys. Therefore, this information is not withholdable under the attorney work-product privilege. See C.D. Varnadore & Betty Freels, 24 DOE ¶ 80,123 at 80,556-57 (1994). We are therefore remanding this issue so that SR may either release the withheld material or find that another exemption applies.

3. Public Interest Analysis

The DOE regulations provide that material exempt from mandatory disclosure under the FOIA shall nonetheless be released to the public if the DOE determines that disclosure is permitted by federal law and 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 do not make the usual inquiry into whether release of the material would be in the public interest. Disclosure of confidential information that can be withheld 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.(15)

III. Conclusion

We therefore uphold SR’s earlier determination and its current determination regarding the Appellant’s request for a fee waiver. We also find most of the fees SR charged to be reasonable. However, we find that we must remand certain aspects of this case so that SR can reduce the fees which it charged for photocopying and so that it can make a proper determination regarding the requested videos. In addition, SR has agreed to make a determination regarding a responsive file found in its Office of Chief Counsel. It and WSI must also conduct a further search for some of the items requested and SR must either release the Weber memorandum previously withheld under Exemption 5 or issue a determination stating another justification for withholding it. Finally, some portions of the attorney billing records, the labor consultant’s normal rates, and the redacted portion of Response Document 32, withheld under Exemption 4, must either be released or a new determination must be issued stating that another exemption properly applies.

It Is Therefore Ordered That:

(1) The Appeal filed by the International Brotherhood of Electrical Workers on June 8, 1998, Case Number VFA-0421, is granted to the extent set forth in paragraph (2) below and is denied in all other respects.

(2) This case is hereby remanded to the Savannah River Operations Office, which shall promptly issue a new determination in accordance with the guidance set forth in the above Decision.

(3) This is a final order of the Department of Energy of 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: August 11, 1998

(1) 1/ On May 8, 1998, this Office granted the Appellant an extension of time to submit this Appeal beyond the regulatory deadline of thirty calendar days after receipt of the determination letter. See Letter from Director, Office of Hearings and Appeals (OHA) to Appellant; 10 C.F.R. § 1004.8(a). In addition, due to the complexity and number of matters discussed herein, this Office sought an extension of time to issue this Decision beyond the regulatory deadline of twenty working days after receipt of the Appeal. See 10 C.F.R. § 1004.8(d). The Appellant had no objections. See Record of Telephone Conversation between Appellant and Dawn Goldstein, Staff Attorney, OHA (June 29, 1998).

(2) 2/ The Appellant is not appealing SR’s March 26, 1998 determination with respect to its application of Exemption 6. See Record of Telephone Conversation between Appellant and Dawn Goldstein (June 16, 1998); Appeal Letter. Therefore, that issue will not be discussed in this Decision.

(3) 3/ In its Appeal, the Appellant argues that one of the cases SR relied upon in denying the fee waiver is inapposite. That case is American Airlines, Inc. v. National Mediation Board, 588 F.2d 863 (2d Cir. 1978). We find that SR correctly applied the principles of that case to the issue at hand in the instant case. It is true, as the Appellant points out, that the basic issue in the earlier case concerned whether the number of authorization cards submitted by a union constituted “commercial information.” Id. at 870. However, in order to reach that decision, the Second Circuit necessarily had to decide whether unions engage in commercial activity, precisely the issue at stake in the instant case.

(4) 4/ We note that the Appellant originally requested that a breakdown of the fees be sent to it with its final bill. Since this was not done with the determination, this Office requested that SR send this breakdown to the Appellant and it has done so.

(5) 5/ In this regard, SR should consider whether the agency exercises the requisite amount of legal control over the copyrighted videos sufficient to render them agency records. See, e.g., Tax Analysts, 492 U.S. at 144-46.

(6) 6/ In its Appeal, the Appellant made an argument regarding the applicability of the attorney- client privilege to these documents. Since SR has not yet made a determination regarding these documents’ releasability, the Appellant’s argument is premature and we will not consider it at this time.

(7) 7/ SR has informed us that on May 18, 1998, a new ownership of records clause went into effect between WSI and DOE, known as Modification No. 35. See Record of Telephone Conversation between Timothy Fischer, Pauline Conner and Dawn Goldstein (June 28, 1998). It is our initial view that the ownership of records clause in effect at the time of the request at issue, Modification No. 11, should govern this Appeal, as well as SR’s determination on remand.

(8)We note that any records indicating WSI’s reimbursement of individual employees should be considered personnel records that WSI owns under its contract with the agency. These records include payroll records, time cards, and potentially vouchers, travel expenses and receipts. Such records are not subject to mandatory release. However, other types of responsive records might not be WSI-owned. These other types of records might include financial records showing outlays by WSI not related to specific personnel. Such records are owned by DOE and therefore subject to release under the contractor records regulation.

(9)With regard to these documents, SR correctly informed the Appellant of these documents’ existence and that they had already been released to the Appellant. However, we note that SR is still obligated to provide another copy of these documents to the Appellant, if it so requests.

(10) 10/ We further note that this document does not appear to qualify as attorney work-product. It was not prepared by an attorney, nor was Mr. Weber acting as an agent for an attorney.

(11) 11/ DOE regulations set forth four additional criteria to be considered in determining whether information is exempt from mandatory disclosure pursuant to Exemption 4: (i) whether the information has been held in confidence by the person to whom it pertains; (ii) whether the information is of a type customarily held in confidence by the person to whom it pertains and whether there is a reasonable basis therefor; (iii) whether the information was transmitted to and received by the DOE in confidence; and (iv) whether the information is available in public sources. 10 C.F.R. § 1004.11(f).

(12) 12/ We note that because SR is relying on the government impairment prong of Critical Mass, it was not required to obtain the submitter’s views as to the application of Exemption 4 to the invoices.

(13) 13/ SR argued that the dates of these travel bills may reveal something about WSI’s litigation strategy. See Record of Telephone Conversation between Timothy Fischer and Dawn Goldstein (June 22, 1998). While that is a sufficient justification for withholding the dates shown on the hotel bill and the travel expense form, it does not justify withholding these two documents in their entirety, as SR did in this case. SR also mentioned that it withheld the name of the hotel listed on the bill in the interest of privacy. Id. However, this justification was not mentioned in its determination letter. Nor does that reason provide a justification for withholding the entire bill. Thus, nothing on the travel bills and expense forms, with the possible exception of the date and the identity of the person traveling, appears to be properly withholdable.

(14) 14/ Two of the partners who worked on this case charged the same rate for litigation. Response Document 95. Therefore, to protect the identities of these two partners, their initials, for the items noting litigation charges, must continue to be withheld.

(15) 15/ We note that in contrast to Exemption 4, this public interest analysis does apply to documents withheld under Exemption 5. However, because we have not upheld SR’s sole Exemption 5 determination, a public interest analysis is not required with respect to that document.