Opinion
Case No. C2-00-134
September 3, 2002
MEMORANDUM ORDER
Plaintiff Cody Zeigler Inc. ("Zeigler") filed this suit against the United States Department of Labor, Occupational Safety and Health Administration ("DOL"). Pursuant to the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, Zeigler sought an order compelling the DOL to produce certain documents, including copies of several "Dodge Reports." The Dodge Reports are used by the DOL to select which work sites will be subject to inspection under the Occupational Safety and Health Act. Zeigler's request was limited to those Dodge Reports used by the DOL to determine which inspections would be conducted from February 1, 1999 through May 31, 1999. By requesting and obtaining the Dodge Reports from this specified time frame, Zeigler hoped to determine why it was chosen for numerous inspections. The DOL, however, refused to produce the requested Dodge Reports, claiming that they were "protected contractually and considered trade secrets." Zeigler then filed suit seeking disclosure of the requested reports.
On March 28, 2001, the Court denied cross motions for summary judgment. Defendant was instructed to, within 60 days, provide a supplemental declaration or affidavit and a supplemental motion for summary judgment on the issue of whether disclosure of the Dodge Reports for the period from February through May of 1999 would either make it more difficult for the DOL to obtain such reports or place the suppher of those reports, The McGraw-Hill Company ("McGraw-Hill"), at a competitive disadvantage. The supplemental motion has now been fully briefed, and this matter is ripe for decision.
I.
The basic purpose of the Freedom of Information Act ("FOIA") "is to ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed." NLRB v. Robbins Tire Rubber Co., 437 U.S. 213, 242 (1978). In general, government agencies are required to disclose agency records upon request. However, not all information must be disclosed. One of the exemptions set forth in the FOIA protects "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4) (hereafter "Exemption 4").
The scope of this exemption has received significant judicial review.In National Parks Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974), the appellate court set the standard for review for defining "confidential commercial information." Commercial information is "confidential" for purposes of the application of Exemption 4 if disclosure of the information is likely to: (1) impair the Government's ability to obtain necessary information in the future; or (2) cause substantial harm to the competitive position of the person from whom the information was obtained. Id. at 770.
The first step in determining whether commercial information is "confidential" is to determine if that information is already in the public domain. As the Court of Appeals for the District of Columbia has stated, "if a party claiming the exemption has customarily disclosed similar information to the public, it may be hard pressed to justify a subsequent claim of confidentiality." National Parks Conservation Assoc. v. Kleppe, 547 F.2d 673, 678 n. 16 (D.C. Cir. 1976). In this case, in its March 28, 2001 Opinion and Order, the Court already determined that the Dodge Reports are not freely obtained. Like any other person who desires access to the information in the reports, the DOL is required to subscribe and pay a fee.
The Court then proceeded to examine the issues of whether disclosure of the Dodge Reports would hinder DOL's ability to obtain necessary information in the future or would cause competitive harm to McGraw-Hill. In its initial finding, the Court determined that McGraw-Hill would be extremely reluctant to supply the Dodge Reports to the DOL and would be placed at a competitive disadvantage if the reports were readily available under the FOIA; there would be little reason for anyone else to purchase the Dodge Reports if they could be obtained for free from a government agency through a FOIA request. However, the Court also determined that this finding alone did not require a conclusion that the Dodge Reports were properly withheld pursuant to Exemption 4, particularly if the reports sought no longer had any commercial value. The Court asked for supplemental briefing in order to balance the fundamental purpose of the FOIA against the risk of competitive disadvantage that might lessen over a period of time.
II.
"FOIA mandates disclosure of records held by a federal agency. . . unless the documents fall within enumerated exemptions. . . these limited exemptions do not obscure the basic policy that disclosure, not secrecy, is the dominant objective of the Act." Department of Interior v. Klamath Water Users Protective Ass'n, 532 U.S. 1, 7-8 (2001)(citing Department of Air Force v. Rose, 425 U.S. 352, 361 (1976)). The exemptions must be narrowly construed in order to further the purpose of the FOIA.Washington Post Co. v. Department of Health Human Serv., 865 F.2d 320, 324 (D.C. Cir. 1989). The courts have been willing to allow the government to withhold requested information under an FOIA exemption when the documents would cause competitive harm to the source of that information. Numerous types of competitive injury have been recognized by the courts. See, e.g., Kleppe, 547 F.2d at 684 (disclosure of a company's detailed financial information harmful); Cortez III Serv. Corp. v. NASA, 921 F. Supp. 8, 12 (D.D.C. 1996) (disclosure of costs, break-even calculations, profits harmful). The passage of time can often mitigate the potential for harm that might otherwise have resulted from the release of commercial information. See Teich v. FDA, 751 F. Supp. 243, 253-54 (D.D.C. 1990); Lee v. FDIC 923 F. Supp. 451, 455 (S.D.N.Y. 1996). However, if the government can show that the information sought retains its commercial value despite the passage of time, and that its disclosure would still result in substantial competitive harm, Exemption 4 may still apply.
In connection with its supplemental brief, Defendant submitted a declaration of Richard Galgay, Assistant Counsel for Administrative Legal Services, Office of the Solicitor, United States Department of Labor. (Ex. 1 to Def.'s Supp.). Mr. Galgay procured a letter from William P. Farley of F.W. Dodge, the unit of McGraw-Hill responsible for publication of the Dodge Reports. (Ex. 2 to Def.'s Supp) Mr. Farley claims that "the Dodge data retain for an indefinite period significant commercial value and its disclosure pursuant to FOIA would pose significant competitive harm." Id. He notes that the Dodge Reports cover some projects that can last several years and that, under certain circumstances, early reports relating to multi-year construction projects remain "to some extent current" in the latter stages of those construction projects. Farley also notes that McGraw-Hill sells the historical data to subscribers who wish to offer their services to potential customers in newly completed construction projects.
The problem with Mr. Farley's letter is that the effect to be given older Dodge Reports remains nebulous and speculative. It is not known to what extent, if any, the specific reports requested by Zeigler contain useful information about ongoing or recently completed construction projects. Therefore, it is impossible to determine whether the requested reports retain any special value or significance today. Mr. Farley's comment that long-term construction projects cause the older Dodge Reports to "remain to some extent current" is not the type of specific evidence the Court anticipated might be presented. As the Court noted in its earlier Order, "[i]f the competitive harm is minimal, the policy underlying the FOIA may well be determinative of whether the documents could be released." Because the record was silent on that issue and because Defendant has the burden of proving the applicability of FOIA exemptions, the Court denied the motions for summary judgment but permitted Defendant to file a supplemental motion for summary judgment with "additional evidentiary submissions on this issue." The issue was — and is — whether the current disclosure of the requested Dodge Reports "might cause some competitive disadvantage to F.W. Dodge, which in turn would make it more difficult for the government to obtain Dodge Reports." (Opinion and Order at 16). In this case, the generalizations and speculative possibilities cited by Mr. Farley do not convince the Court that the competitive harm that may be caused by releasing the requested Dodge Reports is anything more than minimal.
McGraw-Hill asserts an additional argument. It claims that even older Dodge Reports, like those requested by Zeigler, could provide a competitor with information about Dodge's sources of project data, including contractors, owners, and architects — information that has been gathered at considerable expense and effort. However, this same information is already made available to any person subscribing to the Dodge Reports. Therefore, Defendant's claim of harm in this instance once again fails to rise the level needed to override the strong presumption in favor of disclosure.
After carefully considering all information submitted by the parties in connection with the supplemental briefs, the Court concludes that the DOL has failed to carry its burden of proof The Dodge Reports requested by Zeigler are not protected from disclosure by Exemption 4.
III.
Having determined that Exemption 4 does not apply, and that Zeigler should, therefore, have access to the requested Dodge Reports, the only remaining issue is how the documents should be produced in order to avoid copyright infringement. Initially, the parties did not raise, and the Court consequently did not consider, this copyright issue. However, McGraw-Hill now claims that if DOL were to provide copies of the Dodge Reports to Zeigler, it "would be engaged in the unauthorized distribution and reproduction of Dodge's copyrighted reports." (Farley letter at 2). Nevertheless, McGraw-Hill concedes that the Fair Use doctrine might be implicated and states that it is "willing to enter into reasonable arrangements for access to and use of our copyrighted materials so long as Dodge's legitimate proprietary rights are recognized. In no event, however, do we believe that FOIA provides a blanket exemption from the protections of the Copyright Act." Id.
In turn, Zeigler claims to be "more than willing to work with Dodge to protect its interests so long as it is given the right to review the Dodge Reports at issue." Zeigler notes that it does not need actual copies of the relevant Dodge Reports; it merely wants to review the information contained in those documents. The Court believes that permitting Zeigler to inspect the requested Dodge Reports, but not copy them, is an appropriate compromise. Zeigler will be able to obtain the information it needs without implicating Dodge's copyright concerns.
IV.
For the foregoing reasons, Defendant is DIRECTED to make the requested Dodge Reports available for Plaintiffs inspection within forty-five (45) days of the date of this Order. Since all remaining issues have now been resolved, the Clerk is directed to TERMINATE this case.