Case No. VFA-0635, 28 DOE ¶ 80,157

March 29, 2001

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: Woolcott & Co.

Date of Filing: December 11, 2000

Case Number: VFA-0635

On December 11, 2000, H. Jay Spiegel & Associates (Spiegel), attorneys for Woolcott & Co. (Woolcott), filed an Appeal from a determination issued to Woolcott by the Department of Energy’s Schenectady Naval Reactors Office (Schenectady). In that determination, Schenectady released some documents in their entirety, released some documents with redactions, and withheld some documents in their entirety. The determination responded to a request for information 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. This Appeal, if granted, would require the DOE to release the withheld information.

The FOIA 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 which set forth the types of information agencies are not required to release. Under the DOE’s regulations, a document exempt from disclosure under the FOIA shall nonetheless be released to the public whenever the DOE determines that disclosure is not contrary to federal law and in the public interest. 10 C.F.R. § 1004.1.

I. Background

On June 25, 1999, Woolcott submitted a FOIA request to DOE for copies of “any documents, research materials, submission, grant applications, or any other material related to U.S. Statutory Invention Registration No. H1115.” Attachment 1 to Letter from the Office of Naval Reactors (DOE/NR) to Valerie Vance Adeyeye, Office of Hearings and Appeals (OHA) Staff Attorney (January 31, 2001). (1) DOE’s Headquarters FOIA Division then transferred the request to

Schenectady. (2) Schenectady searched its files and released 279 pages of responsive material. Id. However, Schenectady withheld some material under FOIA Exemptions 3, 4 and 6. Letter from Schenectady to Woolcott (November 9, 2000) (Determination). On December 11, 2000, Spiegel filed an Appeal on behalf of Woolcott. Letter from Spiegel to Director, OHA (December 11, 2000) (Appeal). In the Appeal, Spiegel requested that Schenectady compare the responsive material with U. S. Statutory Invention Registration No. H1115, a public document, and release any responsive material found in its possession that was also found in the public document. Id.

II. Analysis

A. Exemption 6

Exemption 6 shields from disclosure “[p]ersonnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” 5 U.S.C.§ 552(b)(6); 10 C.F.R. § 1004.10(b)(6). The purpose of Exemption 6 is to “protect individuals from the injury and embarrassment that can result from the unnecessary disclosure of personal information.” Department of State v. Washington Post Co., 456 U.S. 595, 599 (1982).

In order to determine whether information may be withheld under Exemption 6, an agency must undertake a three-step analysis. First, the agency must determine whether a significant privacy interest would be invaded by the disclosure of the record. If no privacy interest is identified, the record may not be withheld pursuant to Exemption 6. Ripskis v. Department of HUD, 746 F.2d 1, 3 (D.C. Cir. 1984) (Ripskis). Second, the agency must determine whether release of the document would further the public interest by shedding light on the operations and activities of the government. See Department of Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749 (1989) (Reporters Committee); Hopkins v. Department of HUD, 929 F.2d 81, 88 (2d Cir. 1991); FLRA v. Department of Treasury Financial Management Service, 884 F.2d 1446, 1451 (D.C. Cir. 1989), cert. denied, 110 S. Ct. 864 (1990). Finally, the agency must weigh the privacy interests it has identified against the public interest in order to determine whether the release of the record would constitute a clearly unwarranted invasion of personal privacy (the Exemption 6 standard). Reporters Committee, 489 U.S. at 762-770. See generally Ripskis, 746 F.2d at 3.

1. Privacy Interest

In its determination, Schenectady stated that it withheld small portions of two documents under Exemption 6 in order to protect the privacy rights of the private citizens mentioned in those documents. Determination at 3-4. The agency redacted the home address and home phone number of a non-Federal employee from one document, and also redacted from a second document the names and home addresses of contractor personnel, along with the amounts of the cash awards given to these individuals. According to Schenectady, those individuals are “entitled to privacy protections so that they will be free from harassment, intimidation and other personal intrusions.” Determination at 3. Schenectady further explained that because the requester knew the identity of one of the cash award recipients, disclosure of the amount of the award (all recipients received the same amount) could enable the requester to determine how much cash that individual had received. Attachment 10 to Letter from DOE/NR to Valerie Vance Adeyeye, OHA Staff Attorney (January 31, 2000) (Attachment 10).

This office reviewed unredacted copies of the two documents. We find that Schenectady properly withheld the names and addresses of the private citizens listed in the material, and also properly withheld the amount of the cash awards. This office has previously held that disclosure of the amount of a cash award to a requester who knows the identity of a recipient would constitute a “serious invasion of personal privacy.” See Jurgis Paliulionis, 27 DOE ¶ 80,235 (1999) (Paliulionis).

2. Public Interest in Disclosure

Having established the existence of a privacy interest in the identity of a private citizen, the next step is to determine whether there is a public interest in disclosure. The Supreme Court has held that there is a public interest in disclosure of information that “sheds light on an agency’s performance of its statutory duties.” Reporters Committee, 489 U.S. at 773. See Marlene Flor, 26 DOE ¶ 80,104 at 80,511 (1996) (Flor). The requester has the burden of establishing that disclosure would serve the public interest. Flor, 26 DOE at 80,511 (quoting Carter v. Department of Commerce, 830 F.2d 388 (D.C. Cir. 1987)). Spiegel has not offered any evidence of a public interest in the disclosure of the withheld material. Therefore, we find that there is little or no public interest in the disclosure of the identity of the private citizens and of the amount of their cash awards.

3. The Balancing Test

In determining whether the disclosure of the responsive information would constitute a clearly unwarranted invasion of personal privacy, courts have used a balancing test, weighing the privacy interests that would be infringed against the public interest in disclosure. Reporters Committee, 489 U. S. at 762 (1989); Safecard Services, Inc. v. Securities Exchange Commission, 926 F.2d 1197 (D.C. Cir. 1991).

We have concluded above that there is a cognizable privacy interest at stake in this case. Moreover, we found that Spiegel has not provided any evidence to justify finding a substantial public interest in the disclosure of the withheld information. Therefore, we find that the public interest in disclosure of the identities of the private citizens and their cash awards is outweighed by the real and identifiable privacy interests of those individuals. See Paliulionis, 27 DOE at 80,846.

B. Exemption 4

Exemption 4 of the FOIA exempts from mandatory 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 Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974) (National Parks). 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. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992), cert. denied, 113 S. Ct. 1579 (1993) (Critical Mass).

We have reviewed the documents withheld under this exemption (a letter with three attached technical drawings) and find that the deleted information was properly withheld under the Critical Mass test. First, the information withheld was clearly commercial information. The withheld material referred to a new product that had been designed for commercial application. Second, the information was obtained from the manufacturer, a corporation. We have previously found that corporations are deemed “persons” for purposes of Exemption 4. See Myers Bigel Sibley & Sajovec, 27 DOE ¶ 80,225 (1999). Finally, we find that the information withheld was properly considered confidential for purposes of Exemption 4. The submitter provided the information voluntarily to Schenectady. Attachment 10 at 1. Material submitted voluntarily will be protected from disclosure by Exemption 4 if the material contains information that the submitter would not customarily release to the public. See Vladeck, Waldman, Elias & Engelhard, P.C. , 27 DOE ¶ 80,230 (1999).

After reviewing the withheld material, we find that the information that Foster-Miller, the manufacturer of the product, provided to Schenectady is not of the type that a company would customarily make available to the public. The documents in question contain specific details of a project that, if released, could cause substantial harm to Foster-Miller’s commercial success. In fact, the technology under discussion is subject to three pending legal cases. Letter from Foster-Miller to Director, DOE/NR (September 26, 2000). None of the design drawings are available to the public. Id. Thus, in view of the competitive environment in which Foster-Miller operates, we agree with the company’s argument that public release of any proprietary information could cause substantial harm to the company’s competitive position. The information contained in the letter, when viewed in conjunction with the design drawings, has great commercial value to the company. Therefore, we conclude that the information withheld is properly subject to withholding under FOIA Exemption 4. (3)

C. Exemption 3

Exemption 3 of the FOIA allows agencies to withhold information that is “specifically exempted from disclosure by statute [other than the FOIA itself] provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld.” 5 U.S.C. § 552(b)(3). As articulated by the U.S. Supreme Court in CIA v. Sims, 471 U.S. 159, 167 (1985), application of Exemption 3 is a two-step process. First, an agency must determine whether the statutory provision in question satisfies the foregoing requirements of Exemption 3, and if so, the agency must next determine whether the subject information falls within the purview of that statutory provision. Id. See also Kelly, Anderson & Associates, Inc., Case No. VFA-0638, 28 DOE ¶ 80,137 (2001). In its determination, Schenectady used the protection of two statutes, 10 U.S.C. § 130 and 22 U.S.C. § 2778, to withhold a technical drawing (in its entirety) and a portion of another document under Exemption 3.

1. The Technical Data Statute

The first statute used by Schenectady (“technical data” statute) prohibits disclosure of “any technical data with military or space application in the possession of, or under the control of, the Department of Defense, if such data may not be exported lawfully outside the United States without an approval, authorization, or license” granted under specified statutes. 10 U.S.C. § 130 (a). The term “technical data with military or space application” is defined as “any blueprints, drawings, . . . or other technical information that can be used, or be adapted for use, to design, engineer, produce, manufacture, operate, repair, overhaul, or reproduce any military or space equipment or technology concerning such equipment.” 10 U.S.C. § 130(c).

The “technical data” statute has been found to satisfy subpart (B) of the Exemption 3 criteria because it refers to sufficiently “particular types of matter to be withheld.” Chenkin v. Department of the Army, No. 93-494, slip op. at 7 (M.D. Pa. Jan. 14, 1994); affirmed, 61 F.3d 894 (3d Cir. 1995) (Chenkin); Colonial Trading Corp. v. Department of the Navy, 735 F. Supp. 429, 431 (D.D.C. 1990). It therefore qualifies as a statute upon which a claim of withholding under Exemption 3 may be based. See Keith E. Loomis, 25 DOE ¶ 80,183 (1996) (Loomis).

2. The Arms Export Control Act

Schenectady also based its use of Exemption 3 on the Arms Export Control Act. Under this statute, the President is authorized to control the import or export of “defense articles and defense services” and is also “authorized to designate those items which shall be considered as defense articles and defense services.” 22 U.S.C. §2778(a)(1). These items cannot be exported without special licensing. Id. at (a)(2), (a)(3), (b). Items designated as “defense articles and defense services” are found on the United States Munitions List (“the List”). Id.; 22 C.F.R. § 121.1. Among the restricted items on the List are “technical data and defense services,” “naval nuclear propulsion plants” and facilities and “any machinery, device, component or equipment specifically developed, designed or modified for use in such plants or facilities.” 22 C.F.R. § 121.1, Category VI (Vessels of War and Special Naval Equipment), Sections (e)-(g).

The United States Munitions List defines “technical data and defense services directly related to the defense articles” mentioned above as including information required for the design, development and manufacture of defense articles, including blueprints, drawings, plans, instructions and documentation. 22 C.F.R. § 121.1, Category VI, Section (g); 22 C.F.R. § 120.10(a)(1). Thus, we find that the Arms Export Control Act, through its reference to the United States Munitions List, also satisfies subpart (B) of the Exemption 3 criteria because it refers to sufficiently “particular types of matters to be withheld.” See Chenkin.

3. Use of Exemption 3 Was Justified

Consistent with Executive Order 12344, 3 C.F.R. § 128 (1982), reprinted in 42 U.S.C. § 7158 (1995), and statutorily prescribed by the Department of Defense Authorization Act, P.L. 98-525, 98 Stat. 2492 (1984), the Director of DOE/NR has been designated as the official who shall make the final determination for the DOE regarding FOIA appeals involving classified Naval Reactors information and Naval Nuclear Propulsion Information (NNPI). See Loomis, 25 DOE at 80,706 (1996). Upon referral of this Appeal from OHA, the Director of NR reviewed the responsive material and concluded that the withheld information is Naval Nuclear Propulsion Information (NNPI). Determination at 2. The withheld information contains details of the design of steam generator equipment, which meets the definition for non-releasable sensitive military technical data. Attachment 10. The federal regulations treat NNPI as technical data with military application of the sort envisioned in 10 C.F.R. § 130. See, e.g., 15 C.F.R. §§ 778.1, 778.5. The withheld material is also properly classified under Category VI, Sections (e)-(g) of the U.S. Munitions List. 22 C.F.R. § 121.1. Consequently, information accurately identified as NNPI is exempt from mandatory disclosure to the public under Exemption 3 of the FOIA. Determination at 1-2. (4)

DOE/NR has stated that this material was not disclosed to the general public in the public document mentioned by Spiegel (U.S. Statutory Invention Registration No. H1115). Id. DOE/NR indicated that because it would be unable to control further dissemination of the responsive material if it were released to any member of the public, such disclosure would be “tantamount to disclosure to foreign nationals.” Attachment 10 at 2. We have no evidence that Woolcott has the license required by the Arms Export Control Act to export the responsive information. Disclosure to foreign nationals is also prohibited by the technical data statute, and requires continued protection from release. Id.; see also Loomis, 25 DOE at 80,706 (consideration of the public interest is not permitted where non- disclosure is required by statute).

However, after a second review of the withheld material, DOE/NR has agreed to release additional responsive material. Letter from DOE/NR to Valerie Vance Adeyeye, OHA Staff Attorney (March 23, 2001). DOE/NR recommends the release of the last three sentences in Section 9 of Attachment 8, and also portions of a redacted sentence in Section 10. A newly redacted version of Attachment 8, disclosing all releasable information, will be provided to the appellant under separate cover.

D. Segregable Information

The FOIA also 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).

As regards the letter and drawings withheld under Exemption 4, the determination letter did not identify any segregable, non-exempt factual material. This office has reviewed the documents. The letter is very brief and presents most of the product information in the form of “bullets.” Thus, we find that the small amount of segregable, non-exempt factual material in the letter is inextricably intertwined with the exempt information. Our review disclosed no segregable, non-exempt factual material in the drawings. Therefore, we find that Schenectady’s withholding under Exemption 4 was correct. Finally, we find that Schenectady properly released all segregable, non-exempt factual material under Exemption 6.

It Is Therefore Ordered That:

(1) The Appeal filed by Woolcott & Co. on December 11, 2000, OHA Case No. VFA-0635, is hereby denied.

(2) 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 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: March 29, 2001

(1)U. S. Statutory Invention Registration No. H1115, filed with the U. S. Patent Office in July 1990, describes a robot arm apparatus provided for inspecting and/or maintaining the interior of a steam generator. The U.S. government has rights to the invention pursuant to a contract between DOE and General Electric Company. Exhibit 2 to Letter from Spiegel to Director, OHA (December 11, 2000).

(2)Schenectady reports to DOE/NR in Washington, D.C. DOE/NR has dual agency status–the Director of the Naval Nuclear Propulsion Program (within the Department of Defense) is also the DOE’s Deputy Assistant Secretary for Naval Reactors. See Memorandum from Acting Director of Administration and Management, DOE to Director of Naval Nuclear Propulsion Program (June 9, 1993); Memorandum from Deputy Director for Naval Reactors to Assistant Secretary for Human Resources and Administration, DOE (Aug. 3, 1993).

(3) 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 Greenpeace USA, 26 DOE ¶ 80,219 (1997).

(4)It is not clear whether DOE/NR acted as a Department of Defense entity or a DOE entity in withholding the information under 10 U.S.C. §130, the “technical data” statute. That statute refers to material in the possession or control of the Department of Defense. OHA does not have jurisdiction over appeals regarding information that is in the possession or control of another agency. Nonetheless, there is no such restriction on information under the Arms Export Control Act, which also satisfies the requirements of Exemption 3.