Case No. VFA-0467, 27 DOE ¶ 80,183

January 21, 1999

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner:The Oregonian

Date of Filing:December 21, 1998

Case Number: VFA-0467

On December 21, 1998, The Oregonian, a newspaper located in Portland, Oregon, filed an Appeal from a determination issued to it by the Department of Energy’s Bonneville Power Administration (BPA). The BPA issued this determination in response to a previous Decision and Order that this office issued on February 3, 1998 (The Oregonian I). The Appeal, if granted, would require that documents that the BPA withheld be released in whole or in part.

The Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004, generally requires that documents held by the federal government be released to the public upon request. However, Congress has provided nine exemptions to the FOIA that set forth the types of information agencies are not required to release. Under the DOE’s regulations, a document that is exempt from disclosure under the FOIA shall nonetheless be released to the public whenever the DOE determines that disclosure is in the public interest. 10 C.F.R. § 1004.1.

I. Background

In its FOIA requests, The Oregonian had sought access to all expense records and related correspondence pertaining to the defense of lawsuits filed by Chase Manhattan Bank and Tenaska Washington Partners II against the BPA. In response to the requests, the BPA released a wealth of material -- mainly copies of contracts by which it has procured legal advice, analysis and assistance in contesting the lawsuits. The BPA withheld a number of documents, including travel vouchers, estimates of future litigation expenses, and invoices for shipping, travel, courier and legal expenses pursuant to the attorney-client and attorney work product privileges. Finding that the information it was withholding was encompassed by Exemption 5 of the FOIA, BPA stated that release of these documents “might prejudice BPA in the current litigation with Tenaska by revealing BPA’s litigation strategies.” BPA's Original Determination at 2.

The Oregonian appealed, claiming that BPA applied Exemption 5 too broadly in withholding the expense-related documents in their entirety. The newspaper contended that BPA improperly withheld documents “which cannot possibly reveal attorney thought processes or truly confidential attorney- client communications.” The Oregonian's Original Appeal at 3.

On February 3, 1998, OHA issued a decision and order in which we found:

[S]ome of the material withheld by BPA is not subject to the attorney-client or attorney work product privileges. This non-exempt material includes information pertaining to travel, copying, communications, shipping and courier service expenses, as well as the attorneys’ identities. Based on the record before us, we cannot conclude that release of this information would reveal BPA’s litigation strategy or the mental impressions, conclusions, or legal theories of their attorneys.

The Oregonian I, 27 DOE ¶ 80,108 at 80,516 (1998) (The Oregonian I). However, we also found

the expense statements at issue also contained information which could reflect BPA’s litigation strategy or the thoughts and conclusions of BPA’s outside counsel. Accordingly, we concluded:

This information consists of the descriptions of the specific services performed by the attorneys, the dates on which those services were performed, the hours billed by each attorney, and the amounts charged for each attorney’s services. Disclosure of this information would provide opposing counsel with insights into BPA’s litigation strategy and would reveal the timing and intensity of the legal services provided. Release of the number of hours billed by the attorneys, as well as the dollar amounts charged, would indicate the manner in which the outside counsel’s legal services were being allocated and could therefore reveal an important component of BPA’s legal strategy. This information was therefore properly withheld under Exemption 5.

Id. Therefore, we remanded the appeal to BPA. On remand, BPA was instructed to review the withheld material in accordance with the guidelines set forth above, and to make every reasonable attempt to segregate and release non-exempt material.

In response to our remand, BPA issued another determination letter on November 12, 1998 (the November 12th Determination Letter). The November 12th Determination Letter released copies of the requested billing records from which it redacted information that it continues to find exempt. Specifically, BPA continues to categorically withhold those portions of the billing statements which describe (1) the services performed by attorneys, consultants and witnesses, (2) the dates on which those services were performed (3) the hours billed by each attorney, witness or consultant and (4) the amounts charged for the services of each attorney, witness or consultant. BPA justified its withholdings under Exemption 5 by stating, in pertinent part:

[T]he release of this exempt material would not be in the public interest and would harm the interest[s] protected by the attorney-client and attorney work product privileges by revealing BPA's litigation strategy and the thought processes of outside counsel. Release of this information, even after litigation is concluded, could discourage BPA's outside counsel from providing similarly detailed information in future billings, thus impeding BPA's ability in any future litigation, to effectively monitor and control legal costs. BPA continues to believe that the release of the withheld information would result in foreseeable harm to the BPA institutional interests that are protected by Exemption 5.

November 12th Determination Letter. On December 21, 1998, The Oregonian filed the present Appeal.

II. Analysis

A. Adequacy of the Determination

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 informs 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); 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.

As an initial matter, we note that the November 12th Determination Letter claims the attorney-client privilege, but fails to explain to which withheld information it is applying this privilege. Moreover, the November 12th Determination Letter fails to provide any justification of its withholdings under the attorney-client privilege. We have reviewed a representative sample of the withheld documents and it is not clear to us that the withheld information is protectable under the attorney-client privilege.

Our review also indicates that the November 12th Determination Letter is flawed in two important ways. First, The Oregonian contends that BPA's determination letter:

[D]id not include any supporting documentation provided to BPA by [its outside counsel] as part of its routine billings. BPA, by its own actions, had earlier identified these supporting records as subject to the FOIA request. Yet when BPA offered its FOIA response, the records were not only missing, but the agency also failed to explain it was withholding these records.

December 21, 1998 Appeal at 5. Our review of a representative sample of the billing information BPA received from its outside counsel supports this contention. The billing information that BPA received from its outside counsel was accompanied by supporting documentation including telephone bills and hotel invoices. This supporting documentation was responsive to The Oregonian's requests and therefore BPA should have identified it as responsive to the requests and either released this information or justified its withholding.

In addition, as discussed in the next section, the November 12th Determination Letter inappropriately justifies its categorical withholdings under Exemption 5's attorney work product and attorney-client privileges by referring to an analysis appropriate only under Exemption 4.

We are therefore remanding this matter to BPA. On remand, BPA should issue a new determination letter in which it identifies each document responsive to The Oregonian's requests, indicates whether any responsive document (or portion thereof) has been withheld, and justifies any withholdings. The new determination letter must also specifically indicate which exemptions or privileges are being applied to each withholding.

B. Applicability of Exemption 5

Exemption 5 of the FOIA exempts from mandatory disclosure documents that are "inter-agency or intra-agency memorandums or letters which would not be available by law 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 Exemption 5 incorporates those “privileges which the Government enjoys under the relevant statutory and case law in the pre-trial discovery context.” Renegotiation Board v. Grumman Aircraft Engineering Corp., 421 U.S. 168, 184 (1975). The attorney-client and attorney work product privileges are among the privileges incorporated by the courts under Exemption 5. Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 862 (D.C. Cir. 1980) (Coastal States).

The attorney-client and the attorney work product privileges are frequently confused with each other. The attorney-client privilege exists to protect confidential communications between attorneys and their clients made for the purpose of securing or providing legal advice. In Re Grand Jury Proceedings 88-9 (MIA), 899 F.2d 1039 (11th Cir. 1990); In Re Grand Jury Subpoena of Slaughter, 694 F.2d 1258, 1260 (11th Cir. 1982); 8 J. Wigmore, Evidence, § 2291, p. 590 (McNaughton Rev. Ed. 1961); McCormack, Law of Evidence, Sec. 87, p.175 (2d ed. E. Cleary 1972). Not all communications between attorney and client are privileged, however. Clark v. American Commerce National Bank, 974 F.2d 127 (9th Cir. 1992) (Clark). The courts have limited the protection of the privilege to those disclosures necessary to obtain or provide legal advice. Fisher v. United States, 96 S. Ct. 1569, 1577 (1976) (Fisher). In other words, the privilege does not extend to social, informational, or procedural communications between attorney and client.

The attorney work product privilege protects from disclosure documents which reveal “the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.” Fed. R. Civ. P. 26(b)(3); see also Hickman v. Taylor, 329 U.S. 495, 511 (1947). This privilege is also limited. It does not extend to every written document generated by an attorney. In order to be afforded protection under the attorney work product privilege, a document must have been prepared either for trial or in anticipation of litigation. See, e.g., Coastal States, 617 F.2d at 865.

The billing statements involved in this case set forth, on a daily basis, the date of the services provided, the name of the attorney providing the services, a brief description of the nature of the services provided, the daily number of hours billed by each attorney and the hourly cost of those services. The billing statements also state the amounts charged for various administrative services such as court reporting and photocopying.

It is well settled that attorney fee information is normally not privileged. See, e.g., Clark, 974 F.2d at 129; United States v. Leventhal, 961 F.2d 936, 940 (11th Cir. 1992); United States v. Sims, 845 F.2d 1564, 1568 (11th Cir. 1988); In Re Slaughter, 694 F.2d 1259, 1260 (11th Cir. 1982); In Re Grand Jury Proceedings (Jones), 517 F.2d 666, 671 (5th Cir. 1975); Indian Law Resource Center, 477 F. Supp. 144, 147 (D.D.C. 1979) (Indian Law). For example, the courts have repeatedly found that the specific amount of fees paid to attorneys is not privileged. See, e.g., In Re Grand Jury Witness (Salas, Waxman), 695 F.2d 359 (9th Cir. 1982) (Salas). Nor is the general purpose for which the legal work was performed usually privileged. Clark, 974 F.2d at 129. However, in those cases where a party has been able to show that the attorney billing statements or time records at issue reveal the motive of the client in seeking representation, litigation strategy, privileged communications or the specific nature of the services provided by attorneys, such as research into particular areas of the law, courts have found them to be privileged. Id.; Salas, 695 F.2d at 362 (emphasis supplied).

Accordingly, we have held that information in expense records pertaining to the total amount charged by a law firm for a litigation, the attorneys’ identities, their hourly rates, and the costs of travel, reporting services and document reproduction are generally not exempt from disclosure pursuant to the attorney-client or attorney work product privileges. See, e.g., William H. Payne, 26 DOE ¶ 80,161 (1997); C.D. Varnadore and Betty Freels, 24 DOE ¶ 80,123 (1994). Information that could reveal the litigation strategy, thoughts or impressions of the attorneys, however, is protected from mandatory disclosure under these privileges. Id.

Turning to the present case, it is important to note that the litigation between BPA and the Tenaska Washington Partnership II has recently been settled. The significance of this settlement is that some of the information which was originally properly withheld under the attorney work product privilege may no longer be properly withheld under that privilege.

Prior to October 4, 1993, an agency could withhold information under any of the privileges encompassed by Exemption 5 as long as there was "a substantial legal basis" for doing so. However, on that date, Attorney General Janet Reno issued a Memorandum for Heads of Departments and Agencies, which requires that FOIA exemptions be applied only in those circumstances where release can reasonably be expected to harm a protectable interest. See FOIA Update, U.S. Department of Justice, Office of Information and Privacy (Spring 1994); Memorandum from Janet Reno, Attorney General, to Heads of Departments and Agencies (October 4, 1993) (the Reno Memorandum). As a result of the policies adopted in the Reno Memorandum, BPA must now show that release of information could reasonably be expected to harm an interest protectable under Exemption 5 in order to withhold it under Exemption 5. The Reno Memorandum ("it shall be the policy of the U.S. Department of Justice to defend the assertion of a FOIA exemption only in those cases where the agency reasonably foresees that disclosure would be harmful to an interest protected by that exemption").

Prior to the termination of litigation to which the agency is a party, the release of any information, generated in expectation or preparation for that litigation that might reveal the mental impressions, conclusions, opinions or legal theories of the agency's attorneys or representatives could reasonably be expected to interfere with the agency's litigation efforts. Such information may therefore be categorically withheld under Exemption 5. However, once that litigation is resolved, the release of that information cannot harm the agency's interests in the resolved litigation. However, it is foreseeable that the release of some of that information which could be protected from mandatory disclosure under the attorney work product privilege prior to the termination of the litigation might continue to harm the agency's other litigation interests even after the original litigation has concluded. For example, information that could reasonably be expected to reveal the agency's settlement threshold or that could reasonably be expected to reveal litigation strategies that might be used in other cases could properly be withheld. In such circumstances, it would be entirely appropriate to continue withholding such information under Exemption 5's attorney work product privilege.

However, the interest cited by BPA in justifying its decision to withhold the information was not among those interests protected by the attorney work product privilege. BPA's determination letter contends:

Release of this information, even after litigation is concluded, could discourage BPA's outside counsel from providing similarly detailed information in future billings, thus impeding BPA's ability in any future litigation to effectively monitor and control legal costs.

November 12, 1998 Determination Letter. This justification is not appropriate under Exemption 5's attorney work product privilege. The purpose of the attorney work product privilege is to protect the adversarial trial process by insulating attorneys' preparations from scrutiny by opposing parties. SeeJordan v. U.S. Dept. of Justice, 591 F.2d 755 (D.C. Cir. 1978) (en banc). The attorney work product privilege was clearly not created with the intention to protect the rights of clients to receive accurate and reliable billing statements. (1)

Applying these principles to the present case, we find that BPA has not properly applied Exemption 5 to the attorney billing information. Specifically, we find that BPA has categorically withheld all portions of the attorney billing statements that describe (1) the services performed by attorneys, consultants and witnesses, (2) the dates on which those services were performed, (3) the hours billed by each attorney, witness or consultant, and (4) the amounts charged for the services of each attorney, witness or consultant without segregating and releasing that information which could not reasonably be expected to harm interests protected under Exemption 5's attorney work product privilege now that the subject litigation has ended. In addition, BPA applied a justification available only under Exemption 4 to some of its withholdings under Exemption 5.

Accordingly, we are remanding this matter to BPA. On remand, BPA must conduct a line-by-line review of any information responsive to the requests at issue in the present case which it has withheld under the attorney work product privilege. This information should then be released, withheld under another appropriately applied and justified FOIA exemption or privilege, or withheld under Exemption 5, but with an adequate explanation showing how its release could reasonably be expected to harm interests protectable under Exemption 5.

III. Conclusion

For the reasons set forth above, we are remanding this matter to BPA for further processing in accordance with the instructions set forth above.

It Is Therefore Ordered That:

(1) The Appeal filed by The Oregonian on December 21, 1998 is hereby granted as set forth in paragraph (2) below and denied in all other aspects.

(2) This matter is hereby remanded to the Bonneville Power Administration for further proceedings consistent with the guidelines set forth in the above Decision.

(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 located, or in the District of Columbia.

George B. Breznay

Director

Office of Hearings and Appeals

Date: January 21, 1999

(1)In some circumstances however, release of information which the government has obtained from outside sources might reasonably be expected to impair the agency's ability to obtain similar information in the future. In those circumstances, such information may be withheld under FOIA Exemption 4. Exemption 4 permits an agency to withhold from 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 be exempt from mandatory disclosure under Exemption 4, a record must consist of 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 Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974) (National Parks). In National Parks, the D.C. Circuit established the broadly employed “National Parks” test for defining “confidential” information. Under this test, commercial or financial information is "confidential" for purposes of Exemption 4 if its disclosure is likely to either impair the government's ability to obtain necessary information in the future or cause substantial harm to the competitive position of the person from whom the information was obtained. Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871, 879 (D.C. Cir. 1992) (Critical Mass) (emphasis supplied); National Parks, 498 F.2d at 770. In most circumstances, it is unlikely that disclosure of information subject to a filing requirement would impair the government’s ability to obtain similar information in the future. Accordingly, the courts have presumed that the Government’s interest in receiving similar information in the future is not threatened by disclosure of information that is required to be submitted. Critical Mass, 975 F.2d at 878; National Parks, 498 F.2d at 770. This presumption is clearly rebuttable. SeeCritical Mass, 975 F.2d at 878; Washington Post v. Department of Health & Human Services, 690 F.2d 252, 268-69 (D.C. Cir. 1982). However, it can only be rebutted by a preponderance of evidence showing that disclosure would likely impair the government’s future ability to obtain similar information.