Case No. VFA-0514, 27 DOE ¶ 80,230

September 7, 1999

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner:Vladeck, Waldman, Elias & Engelhard, P.C.

Date of Filing: August 3, 1999

Case Number: VFA-0514

On August 3, 1999, Vladeck, Waldman, Elias & Engelhard, P.C. (Vladeck) filed an Appeal from a final determination that the Savannah River Operations Office (SR) of the Department of Energy (DOE) issued on June 29, 1999. In its determination, SR withheld portions of three documents that were responsive to a request for information that Vladeck filed under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004.

I. BACKGROUND

In a request for information dated May 18, 1998 (Request), Vladeck requested copies of reports and data submitted to the DOE regarding contractor compliance with federal equal employment laws and contractor conduct regarding personnel matters. On March 15, 1999, SR issued a determination letter releasing copies of various documents and indicating that information contained in ten documents were being withheld pursuant to Exemptions 4 and 6 of the FOIA. Vladeck appealed SR's determination to the Office of Hearings and Appeals (OHA) regarding the information withheld in the documents pursuant to Exemption 4. See Vladeck, Waldman, Elias & Englehard, P.C., 27 DOE ¶ 80,206 (1999) (Vladeck). In Vladeck, we remanded the case to SR so that it could issue another, more detailed and explicit, determination regarding Vladeck's Request Item Nos. 4, 7b, 10 and 11. Id. at 80,764-65.

Pursuant to our instructions in Vladeck, SR issued another determination on June 29, 1999, regarding documents responsive to Request Item No. 4, 7b, 10 and 11. In this determination, SR withheld portions of two documents (Documents No. 10 and 11) pursuant to Exemption 4. SR asserted that these documents had been submitted to SR on a "voluntary basis" and that the withheld information in the documents was of a type that the submitter of the information in the documents, Westinghouse Savannah River Company (WSRC), would not customarily disclose to the public. SR withheld portions of another document (Document No. 4) pursuant to the deliberative process privilege of Exemption 5. SR stated that Document No. 4 was created at the DOE's request and that it contained a self-evaluation of WSRC's performance in operating the DOE's Savannah River facility. SR determined that Document No. 4 was a predecisional, deliberative document and that

release of this document would impair the DOE's ability to obtain candid written assessments in the future. (1)

In its submission, Vladeck challenges SR's use of Exemptions 4 and 5 to withhold the information in Document Nos. 4, 10 and 11. Specifically, Vladeck asserts that Document No. 4 was improperly withheld pursuant to Exemption 5 because the document was not created by a DOE consultant to assist DOE in arriving at a policy decision; instead, Vladeck claims that Document No. 4 was a document that WSRC submitted to DOE so that DOE could assess its compliance with Executive Order 11246. (2)Vladeck argues that documents submitted to the government to assess the submitter's compliance with affirmative action law may not be withheld pursuant to the deliberative process privilege of Exemption 5.

Vladeck also challenges SR's determination that Documents No. 10 and 11 were "voluntarily submitted" to DOE for Exemption 4 purposes. Vladeck asserts that these documents should not be considered "voluntarily submitted" since the documents were required to be submitted by Executive Order 11246 and "other federal regulations." Because these documents were "involuntarily submitted," Vladeck argues that SR should have used the Exemption 4 test articulated for such submissions. Vladeck argues that there could be no competitive harm to WSRC if Document Nos. 10 and 11 were released and thus, under the case law interpreting the application of Exemption 4 to involuntarily submitted documents, the information should be released.

II. ANALYSIS

A. 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 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." (3) National Parks and Conservation Ass'n V. Morton, 498 F.2d 765, 766 (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. By contrast, information a submitter provides 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 Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871, 879 (D.C. Cir. 1992) (Critical Mass). SR withheld portions of Documents Nos. 10 and 11 pursuant to Exemption 4.

We reject Vladeck's argument that Document Nos. 10 and 11 should be considered to be "involuntarily submitted" since the documents were required to be submitted pursuant to Executive Order 11246. Section 202 of Executive Order 11246 requires that contractors file Compliance Reports containing information as to the practices, policies, programs, and employment policies, programs, and employment statistics of the contractor. See Executive Order 11246, § 202 (1965). Document No. 10 is a summary of the "Towers-Perrin Survey" conducted on WSRC employees. This document provides a summary of a survey of the various opinions of the WSRC employees concerning employment issues. Document No. 11 is an Executive Summary of the "Towers-Perrin Survey" which describes in greater detail the opinion survey results. Neither of these documents is the type of report mandated by Executive Order 11246 or similar federal regulations. In addition, SR has informed this Office that Vladeck was provided all monthly reports containing the information requested in Executive Order 11246 and that WSRC was not required to submit Document Nos. 10 and 11 to SR. See Memorandum of telephone conversation between Pauline Conner, SR, and Richard Cronin, OHA Staff Attorney, (August 25, 1999). Consequently, we believe that Documents No. 10 and 11 were voluntarily submitted to SR.

Because we find that Document Nos. 10 and 11 were voluntarily submitted to SR, these documents would be protected from disclosure by Exemption 4 if they contain information which WSRC would not customarily release to the public. As described above, Document Nos. 10 and 11 contain frank assessments of WSRC employee opinions regarding workplace issues and management practices. We find it highly unlikely that WSRC would customarily make such potentially sensitive information available to the public. Consequently, we believe that SR properly applied Exemption 4 to Document Nos. 10 and 11. Further, we find that SR segregated and released all non- withholdable information contained in these documents.

B. 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 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) (footnote omitted). The courts have identified several traditional privileges that fall under this definition of exclusion, such as the attorney-client privilege, the attorney work product privilege and the executive "deliberative process" or "predecisional" privilege. Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 862 (D.C. Cir. 1980) (Coastal States). In the present case, SR withheld portions of Document No. 4 pursuant to the deliberative process privilege.

The "deliberative process" privilege of Exemption 5 permits the government to withhold documents that reflect advisory opinions, recommendations, and deliberations comprising part of the process by which government formulates decisions and policies. Sears, 421 U.S. at 150. The ultimate purpose of the exemption is to protect the quality of agency decisions by promoting frank and independent discussion among those responsible for making governmental decisions. Sears, 421 U.S. at 151. See EPA v. Mink, 410 U.S. 73, 87 (1973) (quoting Kaiser Aluminum & Chem. Corp. v. United States, 157 F. Supp. 939, 946 (Ct. Cl. 1958)) (Mink).

In order for Exemption 5 to shield a document, the document must be both predecisional, i.e. generated before the adoption of agency policy, and deliberative, i.e. reflecting the give-and-take of the consultative process. Coastal States, 617 F.2d at 866. The exemption thus covers documents that reflect, among other things, the personal opinion of the writer rather than the final policy of the agency. Id. Even then, however, the exemption only covers the subjective, deliberative portion of the document. Mink, 410 U.S. at 87-91. An agency must disclose factual information contained in the protected document unless the factual material is "inextricably intertwined" with the exempt material. Soucie v. David, 448 F.2d 1067, 1077-78 (D.C. Cir. 1971).

Document No. 4 is a letter from a WSRC official to an official of the DOE's WSRC Award Fee Board. This document contains WSRC's self-evaluation of performance for the period October 1, 1996 to March 31,1997. The withheld portions contain the WSRC official's assessment as to what he believes WSRC's accomplishments were in various areas along with his assessment of areas in which he believes WSRC can make improvements. SR has informed us that WSRC submitted this letter to SR in furtherance of WSRC's attempt to establish that it is eligible to receive an award fee from the DOE. See memorandum of telephone conversation between Pauline Conner, SR, and Richard Cronin, OHA Staff Attorney (August 26, 1999).

In assessing whether this document is properly within the deliberative process privilege, we take note of the fact that the creator of the document, a WSRC official, is not a DOE employee. For this reason, the document does not appear to be an "intra- or inter-agency" document. However, courts have used a "functional" approach when determining whether a document generated from a non- governmental entity may be considered to be an "intra- or inter-agency" document. See Durns v. Bureau of Prisons, 804 F.2d 701, 704 n.5 (D.C. Cir 1988). Under this approach, documents generated by outside entities upon which agency officials rely in making agency decisions can be deemed to be "intra- or inter-agency" documents for Exemption 5 purposes. See Formaldehyde Inst. v. HHS, 889 F.2d 1118 (D.C. Cir. 1989). In Document No. 4, WSRC provided SR with the necessary factual analysis to use in making its determination regarding a fee award. Functionally, Document No. 4 supplied information critical to the decision-making process. Consequently, we find that Document No. 4 is an "intra- or inter-agency" document for Exemption 5 purposes.

We have also determined that Document No. 4 is predecisional and deliberative. Document No. 4 contains WSRC's assessment of its accomplishments and shortcomings. While the bulk of the withheld material concerning WSRC's accomplishments is factual, disclosure of these facts would reveal WSRC's deliberations and opinions as to the areas of its performance that should merit an award from DOE. The portion of Document No. 4 concerning potential areas of improvement for WSRC operations also consists of deliberative and predecisional material. Further, we find that SR properly released all of the segregable, non-deliberative material contained in Document No. 4. In sum, we find that the predecisional, deliberative portions of Document No. 4 were properly protected by the deliberative process privilege and Exemption 5. (4)

C. The Public Interest in Disclosure

The DOE regulations provide that 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. Notwithstanding our finding that SR properly applied Exemptions 4 and 5 to Document Nos. 4, 10 and 11, we must consider whether the public interest demands disclosure pursuant to 10 C.F.R. § 1004.1. In applying this regulation, we note that the Department of Justice has reviewed its administration of the FOIA and adopted a "foreseeable harm" standard for defending FOIA exemptions. Memorandum from the Attorney General to Heads of Departments and Agencies (October 4, 1993) (Reno Memorandum). The Reno Memorandum indicates that whether or not there is a legally correct application of an exemption, it is the policy of the Department of Justice to defend the assertion of a FOIA exemption only in those cases where the agency articulates a reasonably foreseeable harm to an interest protected by that exemption. See Reno Memorandum at 1, 2. With regard to the material properly withheld in this matter pursuant to Exemption 5, the requested information consists of the opinions of a WSRC official concerning strengths and weaknesses of WSRC's management of the DOE Savannah River facility. The release of this information would in our opinion have a chilling effect on the willingness of WSRC and other contractors to give DOE accurate self-assessments, including frank appraisals of their own shortcomings, so that DOE may not only appropriately award contractors for good performance but also monitor their efforts at improvement. Consequently, we find that this harm satisfies the reasonably foreseeable harm standard articulated by the Attorney General and that the release of the material protected pursuant to Exemption 5 contained in the requested documents would not be in the public interest.

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. Consequently, we will deny Vladeck's Appeal.

It Is Therefore Ordered That:

(1) The Appeal filed by Vladeck, Waldman, Elias & Engelhard, P.C. on August 3, 1999, Case No. VFA-0514, is hereby denied.

(2) 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 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 7, 1999

(1)SR withheld information in Document No. 7b pursuant to Exemption 6. Vladeck does not challenge SR's determination regarding information withheld pursuant to Exemption 6.

(2)Executive Order 11246 provides generally that a federal contractor not discriminate against any employee or applicant for employment because of race, creed, color or national origin, and that it take affirmative action on their behalf, § 202, and also provides that it file reports demonstrating compliance with this policy, § 203.

(3)For the purposes of Exemption 4, the term "person" refers to a wide range of entities including partnerships, corporations, associations, and public or private organizations other than an agency. See Nadler v. FDIC, 92 F.3d 93, 95 (2d Cir. 1996).

(4)Vladeck directs our attention to Witten v. A.H. Smith & Co., 100 F.R.D. 446 (D. Md. 1984) (Witten), for the proposition that the deliberative process privilege cannot be used to protect from disclosure critical self-evaluations concerning affirmative action plans and Equal Employment Opportunity (EEO) reports. We believe Vladeck has misconstrued Witten. The court in Witten held that the critical self-analysis privilege does not protect such documents from discovery. Witten, 100 F.R.D. at 452. It did not consider whether the deliberative process privilege could be applied to those documents. Moreover, none of the documents at issue in the present case is an affirmative action plan or an EEO report.