Case No. VFA-0494, 27 DOE ¶ 80,206

May 12, 1999

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Appellant: Vladeck, Waldman, Elias & Engelhard

Date of Filing: April 13, 1999

Case Number: VFA-0494

On April 13, 1999, Vladeck, Waldman, Elias & Engelhard (Appellant) filed an Appeal from a final determination issued on March 15, 1999 by the Department of Energy’s Savannah River Operations Office (SR). In that determination, SR released several documents in response to a June 25, 1998 Request for Information concerning a DOE contractor's Affirmative Action Programs. This request was filed by the Appellant under the Freedom of Information Act (FOIA), 5 U.S.C. § 552(b), as implemented by the DOE in 10 C.F.R. Part 1004. In its determination, SR also withheld some responsive information under FOIA Exemption 4. This Appeal, if granted, would require SR to release the withheld information.

I. BACKGROUND

On March 15, 1999, SR issued a determination letter releasing several documents to the Appellant. However, SR withheld all or portions of ten documents under FOIA Exemptions 4 and 6. Determination Letter at 1. The present Appeal was submitted on April 13, 1999, challenging SR's withholdings under Exemption 4. (1)

II. ANALYSIS

The FOIA generally requires that records held by federal agencies be released to the public upon request. 5 U.S.C. § 552(a)(3). However, the FOIA lists nine exemptions that set forth the types of information that an agency may withhold. 5 U.S.C. § 552(b)(1)-(b)(9); 10 C.F.R. § 1004.10(b)(1)- (b)(9).

The only exemption at issue in the present case is found at 5 U.S.C. § 552(b)(4) (Exemption 4). 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 be withheld under Exemption 4, a document must contain either (a) trade secrets or (b) 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). If the agency determines the material is a trade secret for the purposes of the FOIA, its analysis is complete and the material may be withheld under Exemption 4. Public Citizen Health Research Group v. Food & Drug Admin., 704 F.2d 1280, 1286, 1288 (D.C. Cir. 1983). If the material does not constitute a trade secret, a different analysis applies. First, the agency must determine whether the information in question is commercial or financial. It is well settled that any information relating to business or trade meets this criteria. See, e.g. Lepelletier v. FDIC, 977 F. Supp. 456, 459 (D.D.C. 1997) (appeal pending). The Court of Appeals for the Second Circuit has specifically held that the term "commercial" as used in the FOIA, includes anything "pertaining or relating to or dealing with commerce." American Airlines, Inc. v. National Mediation Bd., 588 F.2d 863, 870 (2d Cir. 1978). Next the agency must determine whether the information is "obtained from a person." It is well settled that information generated by the federal government is not "obtained from a person" and is therefore excluded from Exemption 4's coverage. See, e.g. Board of Trade v. Commodity Futures Trading Comm'n, 627 F.2d 392, 404 (D.C. Cir. 1980). Next the agency must determine whether the information is "privileged or confidential." If the information is subject to a valid claim of legal privilege on the part of its submitter, it may properly be withheld under Exemption 4.

In order to determine whether the information is "confidential" the agency must first decide whether the information was involuntarily or voluntarily submitted. If the information was voluntarily submitted, it may be withheld under Exemption 4 if the submitter would not customarily make such information available to the public. Critical Mass Energy Project v. Nuclear Regulatory Comm’n, 975 F.2d 871, 879 (D.C. Cir. 1992) (Critical Mass). If the information was involuntarily submitted, the agency must show that the information is likely to either (i) impair the government's ability to obtain necessary information in the future or (ii) cause substantial harm to the competitive position of the person from whom the information was obtained before withholding it under Exemption 4. National Parks, 498 F.2d 765 at 770; Critical Mass, 975 F.2d 871 at 879, cert. denied, 113 S. Ct. 1579 (1993).

In addition, once an agency decides to withhold information, both the FOIA and the Department’s regulations require the agency to provide a reasonably specific justification for its withholding. 5 U.S.C. § 552(a)(6), 10 C.F.R. § 1004.7(b)(1); Mead Data Central, Inc. v. Department of the Air Force, 566 F.2d 242 (D.C. Cir. 1977); National Parks & Conservation Ass'n v. Kleppe, 547 F.2d 673 (D.C. Cir. 1976) (Kleppe); Digital City Communications, Inc., 26 DOE ¶ 80,149 at 80,657 (1997); Data Technology Industries, 4 DOE ¶ 80,118 (1979). This allows both the requester and this Office to determine whether the claimed exemption was accurately applied. Tri-State Drilling, Inc., 26 DOE ¶ 80,202 at 80,816 (1997). It also aids the requester in formulating a meaningful appeal and this Office in reviewing that appeal. Wisconsin Project on Nuclear Arms Control, 22 DOE ¶ 80,109 at 80,517 (1992).

Thus, if an agency withholds material under Exemption 4 because its disclosure is likely to cause substantial competitive harm, it must state the reasons for believing such harm will result. Larson Associated, Inc., 25 DOE ¶ 80,204 (1996); Milton L. Loeb, 23 DOE ¶ 80,124 (1993). On the other hand, conclusory and generalized allegations of substantial competitive harm are unacceptable and cannot support an agency's decision to withhold requested documents. Public Citizen Health Research Group v. F.D.A., 704 F.2d 1280, 1291 (D.C.Cir. 1983); Kleppe, 547 F.2d at 680 ("Conclusory and generalized allegations are indeed unacceptable as a means of sustaining the burden of nondisclosure under the FOIA").

We contacted SR to discuss its withholdings under Exemption 4. As a result of our discussions, SR has agreed to release a substantial portion of the information it originally withheld under Exemption 4. Specifically, SR agreed to release the documents identified by the Appellant as Request Nos. 1, 2, 7(a), 7(c), and 9. Accordingly, the portions of the present appeal relating to those documents are moot.

We turn now to our consideration of SR's withholding of the document identified by the Appellant as "Request No. 4: Letter re: WSRC Self Evaluation." During our discussions with SR about this document, SR advanced a justification for withholding under Exemption 4 different from the one it provided in the Determination Letter. Accordingly, we shall remand this matter to SR for a thorough articulation of this new justification for withholding.

SR also withheld a document described by the Appellant as: "Request No. 7b: WSRC Discrimination charges." After reviewing this document, we find that it cannot be withheld under Exemption 4. The document is a listing of discrimination charges filed against the DOE contractor tasked with the management and operation of DOE's Savannah River Site. The document, which was prepared by the DOE Contractor, lists each claim's filing date, the type of claim, the alleged discriminatory action, the agency that each claim was filed with and the status of each claim. In addition, the document lists the name, gender and race of each claimant. In our discussions, SR was unable to articulate how release of this document could reasonably be expected to cause its submitter substantial competitive harm. The only justification provided by SR in our discussions was that release of this information could result in an invasion of personal privacy. While that justification may be valid, it cannot be used to withhold information under Exemption 4. Moreover, any invasion of personal privacy could be prevented by providing the Appellant with a copy of this document with the individuals' names and other identifying information redacted.

Accordingly, on remand, SR should either release this document in its entirety or release a redacted version of it with a new determination letter that fully explains and justifies any withholdings or redactions.

We now turn our consideration to the document described by the Appellant as "Request No. 8: Craft Activity at SRS." SR has informed us that it released to the Appellant all of this document except for individuals' Social Security numbers, which it withheld under Exemption 6, and the wage rates that it pays members of certain professions. Since the Appellant is not appealing SR's withholdings under Exemption 6, we have confined our analysis of this document to SR's withholding of wage rates. SR explained that release of the wage rates could reasonably be expected to result in substantial harm to the submitter, a DOE Contractor. Specifically, SR indicated that release of this information would facilitate "raiding" of the submitter's staff by competitors. We agree. Accordingly, we are upholding SR's withholding of wage rates under Exemption 4.

Finally we turn our consideration to the documents described by the Appellant as "Request No. 10: Diversity findings from Towers Perrin Survey" and "Request No. 11: WSRC Executive Summary." SR agrees that its determination letter does not adequately justify the withholding of these documents and has therefore requested that this portion of the appeal be remanded to it so that it can provide a more thorough justification. We will therefore remand this portion of the appeal to SR for further action consistent with this determination.

III. CONCLUSION

We are remanding several portions of the present Appeal to SR, specifically, those portions of the Appeal concerning Request Nos. 4, 7b, 10 and 11. On remand, SR shall either release the withheld information or provide a new justification for withholding. If SR continues to withhold information under Exemption 4, it must explain which Exemption 4 test it is applying. In doing so, it must provide more than a simple restatement of the applicable test. Instead, it should include a statement of the reason for any withholding, and a brief explanation of how the exemption applies to the matter withheld. 10 C.F.R. § 1004.7(b)(1); William H. Payne, 26 DOE ¶ 80,221 at 80,861 (1997); Davis Wright & Jones, 19 DOE ¶ 80,104 at 80,510 (1989). Since SR has convinced us that the remainder of its withholdings under Exemption 4 were proper, the rest of the Appeal should be denied.

It Is Therefore Ordered That:

(1) The Appeal filed by Vladeck, Waldman, Ellis & Engelhard, Case No. VFA-0494, is hereby granted as specified in Paragraph (2) below and denied in all other aspects.

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

(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 12, 1999

(1)The Appeal does not contest SR's withholdings under Exemption 6.