Case No. VFA-0435, 27 DOE ¶ 80,159

September 2, 1998

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner:Heart of America Northwest

Date of Filing:August 5, 1998

Case Number:VFA-0435

On August 5, 1998, Heart of America Northwest (HOAN) filed an Appeal from determinations the Director of the Office of External Affairs (Director) of the Richland Operations Office of the Department of Energy (DOE) issued to it on July 1, 1998 and July 7, 1998. In those determinations, the Director partially granted a request for information that HOAN filed under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented in 10 C.F.R. Part 1004. The FOIA requires that a federal agency generally release documents to the public upon request. The FOIA, however, lists nine exemptions that set forth the types of information that a federal agency may withhold at its discretion. 5 U.S.C. § 552(b); 10 C.F.R. § 1004.10(b).

In its request for information, HOAN sought information regarding various types of waste at the Hanford Site. In her July 1, 1998 determination, the Director released a copy of a document from Corpex Technologies, but she deleted information that identified a Corpex Technologies chemical product and its chemical composition pursuant to Exemption 4 of the FOIA. See 5 U.S.C. § 552(b)(4); 10 C.F.R. § 1004.10(b)(4). In her July 7, 1998 determination, the Director released a copy of an estimated cost proposal Fluor Daniel Northwest, Inc. submitted to the DOE, but deleted specific types of cost information pursuant to Exemption 4 of the FOIA. The types of cost information the Director deleted included general and administrative percentages, profits, and overhead rates.

Regarding the Corpex Technologies information, HOAN contends that the DOE should disclose the name and chemical composition of the Corpex Technologies chemical product and the “owners, generators or transporters” of this material. HOAN argues that the DOE cannot use Exemption 4 to withhold the name and chemical composition of the Corpex Technologies product because the release of this information is in the public interest. HOAN also states that the chemical composition of the Corpex Technologies chemical product is not a trade secret or commercial or financial information and is neither confidential nor privileged. Specifically, HOAN states that the Corpex Technologies chemical product is not a trade secret because it is a waste product created without any innovation or effort.

Furthermore, HOAN contends that the DOE should not have withheld Fluor Daniels Hanford’s overhead costs because other numbers in the released document allow one to calculate the deleted information. HOAN also contends that the DOE should have revealed the reasons why it did not designate hazardous materials as “dangerous materials” pursuant to the laws in the State of Washington. HOAN also states that the DOE’s Richland Office of External Affairs improperly delegated to other DOE regional offices the responsibility for responding to its FOIA request. Finally, HOAN argues that the DOE should not have disseminated responsive information to it in a “piecemeal” fashion without an index.

Analysis

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) (Critical Mass). By contrast, information a submitter provided to an agency voluntarily is "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. In choosing between these two tests, we have consistently held that a submitter involuntarily submits information in response to a request for proposal. Thus, the information is "confidential" if it meets the test set out in National Parks. See Glen M. Jameson, 25 DOE ¶ 80,191 (1996) (Jameson); Hanford Education Action League, 23 DOE ¶ 80,143 (1993).

As an initial matter, we note that HOAN is correct when it argues that Exemption 4 does not protect the name of the Corpex Technologies chemical product. A representative of the Director informed us that it should have released this information. See August 28, 1998 Record of Telephone Conversation between Leonard M. Tao, OHA Attorney, and Yvonne Sherman, Richland Operations Office. We agree. The name of the chemical product available for public sale, “Corpex 918," is not withholdable pursuant to the FOIA under these circumstances.

We do not agree with HOAN that Corpex 918 is itself a waste product and Corpex Technologies did not create it using any innovation or effort and thus the DOE should have released the chemical composition of Corpex 918. In Public Citizen Health Research Group v. FDA, the U.S. Court of Appeals for the D.C. Circuit defined a trade secret as “a secret, commercially valuable plan, formula, process, or device that is used for the making, preparing, compounding, or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort.” 704 F.2d 1280, 1288 (D.C. Cir. 1983). The Director’s representative informed us that Corpex 918's formula is a unique commercial product for sale to the public for chemical decontamination and recycling of radiologically contaminated metals. See August 28, 1998 Record of Telephone Conversation between Leonard M. Tao, OHA Attorney, and Yvonne Sherman, Richland Operations Office. Since Corpex 918 is a unique product created to safely neutralize dangerous chemicals and to recycle radiologically contaminated metals, we do not agree with HOAN that Corpex 918 is a waste product created without any innovation or substantial effort. Rather, we find that it is an innovative product whose formula falls within the definition of a trade secret. Accordingly, we find that the chemical formula of Corpex 918 is a trade secret withholdable pursuant to Exemption 4.

HOAN also is incorrect when it argues that Exemption 4 does not protect the release of Fluor Daniels Hanford’s overhead costs because other numbers in the released document allow one to calculate the deleted information. The Director’s representative informed us that the DOE mistakenly released figures that might assist HOAN in calculating Fluor Daniels Hanford’s overhead costs for its estimated cost proposal concerning the “Navy RC Landhaul Road Improvements.” See August 28, 1998 Record of Telephone Conversation between Leonard M. Tao, OHA Attorney, and Yvonne Sherman, Richland Operations Office. Simply because the DOE mistakenly released information it meant to withhold is not a proper justification for releasing additional information. We find that an agency’s ability to withhold information pursuant to Exemption 4 does not evaporate simply because an agency inadvertently released some information it intended to withhold.

In appropriate cases, Exemption 4 protects the release of the type of information the requester seeks. We find that the overhead costs are confidential commercial information within the meaning of Exemption 4. The DOE obtained this material from a "person" as Exemption 4 requires, since the FOIA considers corporate entities as persons for the purposes of that exemption. See John T. O'Rourke & Associates, 12 DOE ¶ 80,149 (1985). As stated above, we have consistently held that a submitter involuntarily submits information in response to a request for proposals. Thus, the information is "confidential" if it meets the test set out in National Parks. We conclude that the overhead costs are confidential because their release would substantially harm the submitter's competitive position. We have stated in the past that a competitor could use the release of cost information to undercut another firm's bids and thus effectively eliminate the disclosing firm from competition. See International Technology Corporation, 22 DOE ¶ 80,107 (1992); U.S. Rentals, 21 DOE ¶ 80,118 (1991). In this case, for example, any competitor could use overhead costs to easily determine how to adjust its proposal to offer more favorable terms than the submitter in a future bid process.

We have reviewed HOAN’s FOIA request and have confirmed that HOAN did not specifically request the names of the “owners, generators, or transporters” of Corpex 918 in its original FOIA request. We have generally held that an appellant may not expand the scope of a request on appeal by requesting new information. F.A.C.T.S., 26 DOE ¶ 80,132 at 80,578 (1996); Energy Research Found., 22 DOE ¶ 80,114 at 80,529-30 (1992). Because this additional request clearly represents an expansion of the scope of HOAN's request, we must deny this portion of HOAN’s appeal. Furthermore, the Director’s representative confirmed that the DOE searched and did not find any information detailing the reasons why it did not designate hazardous materials as “dangerous materials” pursuant to the laws in the State of Washington. See August 31, 1998 Record of Telephone Conversation between Leonard M. Tao, OHA Attorney, and Yvonne Sherman, Richland Operations Office. Accordingly, we must deny this portion of HOAN’s appeal.

We do not find any merit to HOAN’s other arguments. First, HOAN argues that the DOE’s Richland Office of External Affairs improperly delegated to other DOE regional offices the responsibility of responding to its FOIA request. In addition to searching at the DOE Richland Operations Office, the DOE Richland Office of External Affairs forwarded copies of HOAN’s request to other DOE field offices based on its belief that other DOE field offices were also likely to possess responsive information. See August 28, 1998 Record of Telephone Conversation between Leonard M. Tao, OHA Attorney, and Yvonne Sherman, Richland Operations Office. The Director forwarded HOAN’s request in an effort to help HOAN rather than require HOAN to make separate requests to the individual DOE field offices. We find nothing improper with the DOE Richland Office of External Affairs’ customer-friendly forwarding of HOAN’s request to facilitate the search process.

Finally, HOAN argues that the DOE should not have disseminated responsive information to it in a “piecemeal” fashion without an index. The Director’s representative stated that if HOAN had requested that the DOE not release the documents to it in a “piecemeal” fashion, that the DOE would have complied with HOAN’s request. The Director’s representative informed us that the DOE sent HOAN copies of documents in a “piecemeal” fashion to expedite the response rather than delay the release until the DOE had culled together all of the 12,000 pages HOAN eventually received. See August 28, 1998 Record of Telephone Conversation between Leonard M. Tao, OHA Attorney, and Yvonne Sherman, Richland Operations Office. Finally, the Director’s representative informed us that it sent to HOAN a copy of a document called the “matrix,” which is the only extant DOE document similar to an index of responsive information. See August 28, 1998 Record of Telephone Conversation between Leonard M. Tao, OHA Attorney, and Yvonne Sherman, Richland Operations Office. However, since the FOIA does not require the DOE to create an index of documents the DOE provided in response to a FOIA request, we find no merit to HOAN’s contention that the DOE should have released a nonexistent index.

The Public Interest in Disclosure

The DOE regulations provide the DOE should release to the public material exempt from mandatory disclosure under the FOIA if the DOE determines that federal law permits disclosure and it is in the public interest. 10 C.F.R. § 1004.1. 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 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.

It Is Therefore Ordered That:

(1) The Appeal filed by FOIA Group, Inc. on January 20, 1998, Case No. VFA-0369, is hereby granted as set forth in paragraph (2) below, and is denied in all other respects.

(2) This matter is hereby remanded to the Director of the Office of External Affairs of the Richland Operations Office of the Department of Energy, who will release a new copy of the document containing the name of the Corpex Technologies chemical product.

(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 either in the district where 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: September 2, 1998