Flightsafety Svc v. Department of Labor

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED APRIL 23, 2003 March 3, 2003
Charles R. Fulbruge III
IN THE UNITED STATES COURT OF APPEALS Clerk
FOR THE FIFTH CIRCUIT
____________________
No. 02-10817
Summary Calendar
____________________
FLIGHTSAFETY SERVICES CORPORATION
Plaintiff - Appellant
v.
DEPARTMENT OF LABOR; ET AL
Defendants
DEPARTMENT OF LABOR
Defendant - Appellee
_________________________________________________________________
Appeal from the United States District Court
for the Northern District of Texas
3:00-CV-1285-P
_________________________________________________________________
Before KING, Chief Judge, and BARKSDALE and STEWART, Circuit
Judges.
PER CURIAM:
This action arises from an unsuccessful request by
FlightSafety Services Corporation to the Department of Labor for
statistical information regarding salaries and wages under the
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Freedom of Information Act, 5 U.S.C. § 522 (1996 & Supp. 2001).
After requiring the Bureau of Labor Statistics, a component of the
Department of Labor, to submit a Vaughn index to the court
justifying its decision to withhold the requested documents and
requiring the Bureau of Labor Statistics to submit, for in camera
review, the withheld documents, the district court granted summary
judgment in favor of the Bureau of Labor Statistics. Upon review,
we affirm the judgment of the district court.
FACTUAL HISTORY
FlightSafety Services Corporation (“FSSC”) is a publicly held
company under contract (the McNamara-O’Hara Service Contract Act
(“SCA”)) with the United States Air Force Air Mobility Command to
provide student aircrew academic and simulator instruction. Under
the terms of this contract, employee wage rates are determined in
accordance with Department of Labor (“DOL”) Wage Determination
schedules. The SCA requires the DOL to issue prevailing wage rates
and fringe benefits for service employees who are working under a
covered SCA contract. To meet this requirement, cross-industry
surveys of occupational wages and benefits conducted by the Bureau
of Labor Statistics (“BLS”) are relied upon to develop SCA Wage
Determinations.
The request by FSSC that engendered the current suit sought a
redacted electronic copy of all raw data collected to create
(1) specified wage determinations for Wichita Falls, Texas and
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Oklahoma City, Oklahoma, (2) the 1997 Occupations Employment
Statistics for Lawton, Oklahoma and Wichita Falls, Texas, and
(3) the 1995 Occupational Compensation Survey, National Summary.
The DOL denied the FSSC’s request, contending that because these
surveys were procured by the BLS with a pledge of confidentiality
to the individual businesses contributing to the surveys, the data
is exempted from disclosure under the Freedom of Information Act
(“FOIA”).
FSSC appealed the denial administratively to the DOL; however,
after being told of a two-year backlog on appeals, FSSC brought
suit in federal court against the DOL and the BLS in three separate
cases under the FOIA. The district court consolidated the cases,
and FSSC voluntarily dismissed the DOL. Both FSSC and the BLS then
moved for summary judgment. The district court held that the
information sought was generally exempted from disclosure under the
FOIA. However, in order to determine if the exempt portions of the
documents could be reasonably segregable from the rest of the
information contained in the documents, the district court ordered
the BLS to produce a Vaughn index to justify the agency’s
withholding of documents, under which the BLS was required to
correlate each document withheld with a particular FOIA exemption,
and to submit the withheld documents under seal for in camera
review by the district court. Vaughn v. Rosen, 484 F.2d 820 (D.C.
Cir. 1973). The district court reviewed the documents submitted
under seal and the Vaughn index prepared by the BLS and determined
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that summary judgment in favor of the BLS was appropriate. Final
judgment in favor of the BLS was thereafter granted on May 16,
2002. FSSC appeals this judgment.
On appeal, pursuant to a court-requested supplemental letter
brief by the BLS to this court, FSSC became aware, allegedly for
the first time, that the BLS had submitted a “representative
sample” of withheld documents to the district court for its in
camera review rather than submitting all the withheld documents, as
requested by the district court.1 In response, FSSC requests that
we “order the DOL to comply with the District Court’s order [to
produce all withheld documents] so that the full in camera review
may be conducted by this Court.”
STANDARD OF REVIEW
As is the case here, most FOIA cases are resolved at the
summary judgment stage. Cooper Cameron Corp. v. United States
Dep’t of Labor, 280 F.3d 539, 543 (5th Cir. 2002). This court
reviews de novo the district court’s grant of summary judgment
under the FOIA, using the same standard used by the district court
in reviewing the agency’s decision to, in this case, deny FSSC
1
The BLS also, in its supplemental letter brief to this
court, apologized for “inadvertent error” in stating that certain
withheld segregable material had already been disclosed to FSSC
when, in fact, the information had not yet been disclosed. The
BLS then stated that “[i]n a telephone conversation on January
21, 2003, Government counsel informed counsel for [FSSC] that
this process would begin promptly.”
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access to requested documents.2 Id. Further, the FOIA “expressly
places the burden ‘on the agency to sustain its action.’” Id.
(quoting United States Dep’t of Justice v. Reporters Comm. for
Freedom of the Press, 489 U.S. 749, 755 (1986).
ANALYSIS UNDER THE FOIA
2
The parties dispute the standard with which this court
should review the finding of the district court, after conducting
an in camera review of the withheld documents, that the non-
exempt portions of the documents could not be reasonably
segregated from the exempt portions. At least one circuit has
stated that such a determination should be reviewed for clear
error given its apparent roots in a factual determination. See
Nat’l Wildlife Fed. v. United States Forest Serv., 861 F.2d 1114,
1116 (9th Cir. 1988) (“In reviewing a district court’s judgment
under the FOIA, we ‘must determine whether the district judge had
an adequate factual basis for his or her decision’ and, if so, we
‘must determine whether the decision below was clearly
erroneous.’”) (quoting Church of Scientology v. United States
Dep’t of the Army, 611 F.2d 738, 742 (9th Cir. 1979)); but see
Simmons v. United States Dep’t of Justice, 796 F.2d 709, 710 (4th
Cir. 1986) (“Congress provided in the FOIA that courts should
make a de novo review of any claimed exemption by an agency,
review documents in camera if necessary, and release any
reasonably segregable non-exempt portion of a document that an
agency claims is exempt.”) (internal citations omitted); Goland
v. CIA, 607 F.2d 339, 364 (D.C. Cir. 1978) (“This rationale [to
utilize a deferential standard of review] violates the court’s
statutory responsibility to undertake de novo review for
‘reasonably segregable material.’). This case does not require
us to weigh in on the debate whether the statutory mandate that a
district court must review an agency’s determination that non-
exempt portions of exempt documents are not reasonably segregable
likewise applies to our review of the district court’s
determination on this issue. Our conclusion here remains the
same whether the district court’s judgment is reviewed de novo or
for clear error. See also Halloran v. Veterans Admin., 874 F.2d
315, 319 (5th Cir. 1989) (stating that “[b]ecause the district
court based its decision not upon the unique facts of this case,
but upon categorical rules regarding what does and does not
constitute an [exemption] for FOIA purposes, we treat its
conclusions as conclusions of law, and thus review them de novo,”
in a case that reviewed the district court’s conclusion that
certain information was reasonably segregable).
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Congress created nine exemptions (found under 5 U.S.C.
§ 552(b)) to its general policy of full agency disclosure under the
FOIA “because it ‘realized that legitimate governmental and private
interests could be harmed by release of certain types of
information.’” United States Dep’t of Justice v. Julian, 486 U.S.
1, 8 (1988) (quoting FBI v. Abramson, 456 U.S. 615, 621 (1982));
Halloran v. Veterans Admin., 874 F.2d 315, 318 (5th Cir. 1989). At
issue here is the exemption found under § 552(b)(4), which protects
“trade secrets and commercial or financial information obtained
from a person and privileged or confidential.” 5 U.S.C.
§ 552(b)(4) (1996 & Supp. 2002).
To demonstrate that this exemption shelters the relevant
documents here from disclosure, the BLS is required to show that
the information contained in the documents is (1) commercial or
financial, (2) obtained from a person and (3) privileged or
confidential. Cont’l Oil Co. v. Fed. Power Comm’n, 519 F.2d 31, 35
(5th Cir. 1975).
The district court correctly held that the business
establishments surveyed by BLS fall within the FOIA’s definition of
“person,” statutorily defined to “include[] an individual,
partnership, corporation, association, or public or private
organization other than an agency.” 5 U.S.C. § 551(2) (1996 and
Supp. 2002).3 FSSC does not dispute the accuracy of this finding.
3
The BLS asserts that the source data for the
Occupational Compensation Survey consisted of about 25,000
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The district court also properly held that the documents at
issue (in unredacted form) include “confidential” and “commercial”
information, thus allowing the documents to fall within the
confines of the “trade secrets” exemption under § 552(b)(4). See
Calhoun v. Lyng, 864 F.2d 34, 36 (5th Cir. 1988) (stating that
information is confidential under 5 U.S.C. § 552(b)(4) if its
disclosure would likely (1) impair the government’s ability to
obtain necessary information in the future, or (2) cause
substantial competitive harm to the person from whom it was
obtained). As cogently stated by the district court:
The BLS is the principal data-gathering agency of the
federal government in the broad field of labor economics,
which includes information on employment, unemployment,
wages, productivity, prices and occupational safety and
health. Because it is not empowered with any statutory
right to procure the data it needs, it must give the
source of information a pledge of confidentiality.
Moreover, being a specifically designated statistical
agency within the Executive Branch, whose activities are
predominately the collection, compilation, processing, or
analysis of information for statistical purposes, it also
subject [sic] to the requirements of the Office of
Management and Budget’s (“OMB”) Order Providing for the
Confidentiality of Statistical Information.
. . .
In addition, the Wage Survey, National Compensation
Survey, and Occupation Employment Survey forms at issue
in this case all contain pledges to the non-government
establishments collected annually in a sample representing the
contiguous United States, and an additional 7,000 establishments
in surveys required for administering the SCA. The National
Summary, which replaced the Occupational Compensation Survey,
called for a 36,000-establishment survey, with one-half providing
wage date information and the remaining one-half providing both
wage date and benefit information. The source data for the
Occupations Employment Statistics survey consisted of a total of
1.2 million establishments collected over three years.
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establishments providing information to the BLS that such
information will be used only for statistical purposes
and will be held in confidence and will not be disclosed
without their written consent, to the full extent
permitted by law. The Court finds there can be no doubt
on this record that disclosure of the requested
information would impair the BLS’ ability to collect data
in the future. It is reasonable to conclude that such an
opening wedge of disclosure would make it difficult, if
not impossible, for the BLS to collect other data which
is essential to its efficient operation since not
empowered with any statutory right to procure the data it
needs.
Plainly, the information sought in this case is the type of
information Congress intended to exempt from disclosure under the
FOIA. See S. REP. No. 89-813 at 9 (1966), reprinted in 1966
U.S.S.C.A.N. 2418 (discussing its goal of “protect[ing] the
confidentiality of information which is obtained by the government
through questionnaires or other inquiries, but which would
customarily not be released to the public by the person from whom
it was obtained”). In order for the DOL to apply its regulatory
authority consistently, it must rely on BLS generated data. The
document disclosure here presents a serious risk that sensitive
business information could be attributed to a particular submitting
business. This attribution would indisputably impair BLS’s future
ability to obtain similar information from businesses who provide
it under an explicit understanding that such information will be
treated confidentially. FSSC does not genuinely dispute this
point.
The real dispute raised by FSSC in this case is whether the
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requested documentation contains any reasonably segregable non-
exempt data. The FOIA states that “[a]ny reasonably segregable
portion of a record shall be provided to any person requesting such
record after deletion of the portions which are exempt under this
subsection.” 5 U.S.C. § 552(b) (1996 & Supp. 2002). FSSC contends
that the BLS should be required to redact any uniquely identifying
private company descriptives and disclose the remainder of the
“reasonably segregable” material. The BLS disagrees, contending
that any disclosable information is so inextricably intertwined
with the exempt, confidential information, that producing it would
require substantial agency resources and produce a document of
little informational value.
Upon independent review of the documentation submitted to the
district court for an in camera inspection, we agree with the
district court that FSSC’s request should be denied. The fact
that only a “representative sample” of the documents rather than
all the withheld documents were submitted to the district court for
an in camera review does not alter our determination. When it
submitted documents for the in camera review, the DOL clearly
stated in a declaration appended to the materials submitted to the
district court, that the BLS was submitting just “a sample of the
withheld records” and a Vaughn index for the court’s in camera
review. The district court was thus aware that only a portion of
the documents withheld by the BLS were submitted for the district
court’s review when it granted summary judgment in favor of the
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BLS.4
It is clear to us upon review of these documents (and the
detailed Vaughn index) that any disclosable information is so
inextricably intertwined with the exempt, confidential information
that producing it would require substantial agency resources and
produce a document of little informational value. In addition to
providing an adequate sample of the withheld documents, the BLS
took the time to prepare a Vaughn index to allow the district court
(and us) to satisfy ourselves that the information contained in the
documents is exempt and does not contain reasonably segregable
material. Vaughn v. Rosen, 484 F.2d 820, 823 (D.C. Cir. 1973); see
also Kent Corp. v. NLRB, 530 F.2d 612, 624 (5th Cir. 1976)
(rejecting claim that documents within the executive privilege
exemption contained “reasonably segregable” material). We thus
agree with the district court’s conclusion that the documents
contain no reasonably segregable information. See, e.g.,
Willamette Ind., Inc. v. United States, 689 F.2d 865, 867-68 (9th
Cir. 1982). Further, FSSC’s requests that the BLS be required to
simply insert new information in place of the redacted information
requires the creation of new agency records, a task that the FOIA
does not require the government to perform. NLRB v. Sears, Roebuck
Co., 421 U.S. 132, 161, 162 (1975).
4
We note that a copy of this declaration (and the Vaughn
index) were served on counsel for FSSC on July 15, 2002, before
its notice of appeal was filed.
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CONCLUSION
The exemption found under 5 U.S.C. § 552(b)(4) shelters the
withheld documents from the requested FOIA disclosure, and we do
not find a portion of those documents that can be reasonably
segregated from the portions which are exempt under this
subsection. We therefore AFFIRM the judgment of the district
court.
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