Case No. VFA-0492, 27 DOE ¶ 80,205

May 7, 1999

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: Wray & Kracht

Date of Filing: April 9, 1999

Case Number: VFA-0492

Wray & Kracht (Wray) filed this Appeal on April 9, 1999 with the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) in response to a determination that the DOE’s Strategic Petroleum Reserve Project Management Office (SPRO) issued to Wray on March 10, 1999. The determination concerned a request for information that Wray submitted 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, SPRO would be required to release any responsive material.

I. Background

Wray is a law firm that represents a subcontractor of SPRO’s management and operating contractor, DynMcDermott Petroleum Operations Company (DM). On December 18, 1998, Wray requested copies of several categories of documents, including (1) DOE Performance Evaluation Committee Reports (PECs) from September 1996 to September 1998; and (2) a copy of DM’s Responses to the PECs (Responses).(1) On March 10, 1999, SPRO provided some responsive material to Wray, but withheld the PECs and Responses in their entirety. Letter from SPRO to Wray (March 10, 1999) (Determination Letter). In its determination, SPRO withheld the PECs and Responses under Exemption 5, and justified its action by explaining that “[t]he subject documents are recommendatory in nature and consist of opinions which are part of the process by which governmental decisions and policies are formulated.” Determination Letter at 2.

Wray appeals this determination on several grounds. First, Wray argues that SPRO has waived the deliberative process privilege by incorporating the withheld material into the Award Fee Letter, which SPRO released to Wray in response to the FOIA request. Letter from Wray to Director, OHA (April 9, 1999) (Appeal) at 3. Second, Wray argues that SPRO did not comply with DOE regulations, which require a statement explaining why discretionary release was not appropriate, and also require SPRO to address the issue of releasing any segregable, nonexempt factual material. Appeal at 1. Finally, Wray contends that the documents at issue contain only “objective, factual reports” of DM’s performance and thus are not associated with the deliberative process. Appeal at 3.

II. Analysis

Exemption 5 of the FOIA exempts from mandatory disclosure documents that are “inter-agency memoranda 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 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) (NLRB). The “deliberative process” privilege falls under this definition of exclusion, and this is the privilege that SPRO relied upon in its determination. Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 862 (D.C. Cir. 1980).

The deliberative process privilege shields from public disclosure records reflecting the predecisional, consultative process of an agency. See Matthew Cherney, M.D., 27 DOE ¶ 80,187 (1999); Los Alamos Study Group, 27 DOE ¶ 80,177 (1999) (LASG); Edwin S. Rothschild, 27 DOE ¶ 80,150 (1998) (Rothschild). Predecisional materials are not exempt merely because they are prepared prior to a final action, policy, or interpretation. These materials must be a part of the agency’s deliberative process by which decisions are made. Vaughn v. Rosen, 523 F.2d 1136, 1144 (D.C. Cir. 1975). This privilege was developed primarily to promote frank and independent discussion among those responsible for making government decisions. EPA v. Mink, 410 U.S. 73, 87 (1973) (Mink) (quotingKaiser Aluminum & Chem. Corp., v. United States, 157 F. Supp. 939 (Cl. Ct. 1958)). The ultimate purpose of the exemption is to protect the quality of agency decisions. NLRB, 421 U.S. at 151 (1975).

Wray contends that SPRO waived the deliberative process privilege by incorporating material from the PECs and Responses into the Award Fee Letter. Wray states that “information which may otherwise be privileged is discoverable if the Government incorporates it either expressly or by reference into the agency’s preliminary or final decision. This is consistent with . . . the principle articulated by the Supreme Court in Mink that statements of policy and deliberations that become final policy are not privileged . . . .” Appeal at 3. We do not agree. We reviewed Mink and found no support for Wray’s interpretation of that case asserted here. Rather, Mink supports our conclusion that the privilege continues to apply to pre-decisional material used in the deliberative process even after the agency has determined and disclosed to the public its final policy. See Mink, 410 U.S. at 87 (advisory opinions merit privilege in order to promote frank discussions of policy matters in writing). See also Vaughn, 523 F.2d at 1144 (predecisional material is privileged under Exemption 5 so long as it is part of the agency’s deliberative process); Rothschild, 27 DOE at 80,614 (1998) (deliberative, pre-decisional material does not lose its privilege under the FOIA when that material is subsequently used as the basis for final agency policy). Therefore, we find that SPRO did not waive the deliberative process privilege when it released the Award Fee Letter to Wray.

Wray also argues that the determination letter did not address the issues of discretionary disclosure and the release of segregable, nonexempt factual material. DOE regulations provide that “[t]o the extent permitted by other laws, the DOE will make records available which it is authorized to withhold under 5 U.S.C. § 522 whenever it determines that such disclosure is in the public interest.” 10 C.F.R. § 1004.1. Thus, under DOE regulations, SPRO is obligated to consider release of the withheld documents if such release is in the public interest. (2) In addition, the FOIA requires the agency to provide to the requester any reasonably segregable portion of a record after deletion of the portions that are exempt. See 5 U.S.C. § 552(b). See also FAS Engineering Inc., 27 DOE ¶ 80,131 (1998), quoting Soucie v. David, 448 F.2d 1067, 1077 (D.C. Cir. 1971) (factual material must be disclosed unless inextricably intertwined with exempt material). Since the determination letter did not consider the issue of discretionary disclosure or identify segregable, nonexempt factual material, we find SPRO’s determination to be insufficient in this regard.

Finally, Wray submits that the withheld documents contain only factual material. After a careful review of the documents, this office finds that the responsive information contains both factual and non-factual material. Much of the information is purely opinion and reflects the observations of various individuals on DM’s performance during a six-month period. Nonetheless, the documents also contain some reasonably segregable factual information (e.g., dates of subcontract awards, project completion dates, report dates) that may not be withheld under Exemption 5 unless inextricably intertwined with exempt material.

III. Conclusion

Our review of the documents at issue reveals that they contain reasonably segregable factual material that is subject to release. However, these documents were withheld in their entirety. In addition, the Determination Letter did not address the issues of whether release of the withheld material would be in the public interest. Accordingly, we shall remand this matter to SPRO. On remand, SPRO must review the withheld documents and segregate and release all purely factual portions of the documents, or issue a new determination that justifies further withholding. In addition, in the new determination, SPRO must address discretionary disclosure and the issue of the public interest in the withheld material.(3)

It Is Therefore Ordered That:

(1) The Appeal filed on April 9, 1999 by Wray & Kracht, OHA Case No. VFA-0492, is hereby granted as set forth in paragraph (2) below, and is in all other respects denied.

(2) This matter is hereby remanded to the Strategic Petroleum Reserve Project Management Office, for further proceedings in accordance with the instructions set forth in this Decision and Order.

(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: May 7, 1999

(1)SPRO evaluates DM’s performance as management and operating contractor every six months using PECs, recommendations from the Award Fee Board, and DM’s self- assessment. See, e.g., Letter from Deputy Assistant Secretary, SPRO, to Project Manager, DM (May 15, 1998) (Award Fee Letter). Using these documents, SPRO determines DM’s award fee for that evaluation period in accordance with the provisions of the contract. Id.

(2)We note that Wray has not provided any arguments which would support a conclusion that it would further the public interest if the withheld material were disclosed.

(3)We note that it is DOE policy with respect to Exemption 5 to withhold only information that if released would result in foreseeable harm to the interests that it protects. Thus, SPRO may withhold information under Exemption 5 only if its disclosure would result in foreseeable harm to the interests that are protected by the deliberative process privilege. See LASG, 27 DOE at 80,692-693.