Opinion
No. C 02-00673 WHA
November 25, 2002
ORDER: (1) GRANTING DEFENDANT'S MOTION TO DISMISS AND FOR SUMMARY JUDGMENT AND (2) DENYING PLAINTIFF'S MOTION UNDER FRCP 56(f)
INTRODUCTION
In this Freedom of Information Act action, defendant moves under the exhaustion doctrine to dismiss the claim challenging the adequacy of search for responsive documents. Additionally, defendant moves for summary judgment on the applicability of an FOJA statutory exemption for information in identified documents currently withheld. Plaintiff, meanwhile, moves for discovery on the adequacy-of-search claim. This order GRANTS defendant's motion and DENIES plaintiff's motion. The Clerk shall CLOSE the file.
STATEMENT
In a letter dated June 18, 2001, plaintiff Homer J. Olsen, Inc., requested that defendant United States Department of Transportation Federal Transit Administration provide access to files relating to a light-rail construction project for a municipal transportation authority. The project was funded by a grant from defendant. The letter stated (Jones Decl. Exh. A):
Re: FTA Project/Grant # CA-03-0402 Tasman Corridor Project Contract C310/410 (97007) Lockheed Way to Old Ironsides
Dear Ms. Marler:
Pursuant to the Freedom of Information Act, 5 U.S.C. § 552, we request the Federal Transit Administration ("FTA") make available for inspection and copying all of its files relating to the above-referenced grant and project.
On July 18, 2001, defendant made documents available to Olsen's project manager and counsel for inspection and copying. Olsen inspected and copied over four thousand documents as a result. Afterwards, defendant issued an initial determination dated August 1, 2001, that denied the FOIA request insofar as identifying certain documents that were withheld pursuant to FOIA statutory exemptions. Those documents were identified as "Part II — Administrative Reports from Gannett Fleming, Inc., and other Gannett Fleming, Inc., and other Gannett Fleming, Inc./FTA correspondence" (Frame Decl. Exh. A). Dissatisfied, Olsen administratively appealed the initial determination in a letter dated August 16, 2001. None of the three arguments raised therein addressed the adequacy of defendant's search for responsive documents, a point detailed below.
The Part II reports were generated by defendant's project-management oversight contractor, Gannett Fleming, Inc., on a monthly basis to provide defendant with information and advice on a project's compliance with federal program requirements and schedule and budget goals.
Defendant issued a final administrative decision in a letter dated December 28, 2001. It did not address the adequacy of the search for documents responsive to Olsen's FOIA request. Instead, that nine-page single spaced letter addressed point-for-point the arguments Olsen raised in its FOIA appeal letter. Rather than challenge the adequacy of the search administratively, plaintiff filed this action on February 7, 2002. The complaint alleges that Olsen is aware of the probable existence of files related to the construction project that were not produced and that defendant is unlawfully withholding responsive documents without any legal basis (¶¶ 10-11). Also, it alleges that Olsen's administrative remedies have been exhausted. Attached as exhibits to the complaint are copies of the FOLA request, defendant's initial determination, the FOLA appeal letter and defendant's administrative appeal decision.
ANALYSIS
1. FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES.
Under the FOIA, the district court "has jurisdiction to enjoin the agency from withholding agency records and to order the production of any agency records improperly withheld from the complainant." 5 U.S.C. § 552(a)(4)(B). Exhaustion of a complainant's administrative remedies, however, is required before that party can seek redress from the district court. In re Steele, 799 F.2d 461, 465 (9th Cir. 1986). Prior to instituting suit in district court, the complainant must request specific information from the agency in accordance with published administrative procedures, have the request improperly refused, file an administrative appeal and present proof that she or he exhausted all administrative remedies. Fish v. Internal Revenue Service, 2001 WL 505307, *1-2 (E.D. Cal. 2001) (citations omitted). Failure to exhaust administrative remedies before filing suit operates as a jurisdictional bar to judicial review of a plaintiffs claims. Steele, supra, 799 F.2d at 466.
Defendant contends that the Court cannot adjudicate the adequacy-of-search claim. Specifically, the government argues that Olsen failed to challenge the adequacy of search for responsive documents at the administrative level and thus cannot raise it here in the first instance. Olsen disagrees. This order holds that the adequacy-of-search claim is not properly presented for decision. Olsen has failed to exhaust its administrative remedies on this issue. Specifically, it did not challenge the adequacy of the government's search in an administrative appeal, much less receive a final decision on this issue that would be subject to judicial review. As such, the adequacy-of-search claim is dismissed without prejudice for lack of jurisdiction.
The government's alternative contention that Olsen lacks standing herein is rejected. True, the FOIA request from Olsen's attorney Carol Watson is unclear. It failed to state that the request was being made on behalf of Olsen (Jones Decl. A). This ambiguity, however, was resolved during the administrative-appeals process. The government's final decision on Olsen's administrative appeal stated (Frame Decl. Exh. C):
This responds to your May 11, 2001 [sic August 16, 2001] letter on behalf of Homer J. Olsen, Inc. ("Olsen"), appealing the Federal Transit Administration's ("FTA") August 1, 2001 decision denying, in part. Olsen's request for agency documents under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552.
Olsen has standing to seek judicial review of the final administrative decision on its FOIA request dated June 18, 2001.
This order makes clear that no rulings on the merits have been made on the adequacy-of-search claim in this action. As such, the Court would be greatly disappointed if defendant were to raise a res judicata defense to this claim based on this action in any subsequent litigation between the parties.
Contrary to Olsen's contention, its FOIA appeal letter dated August 16, 2001, did not challenge the adequacy of the government's search. Olsen only raised three points therein. First, Olsen argued that the government failed to produce the identified documents in redacted form even though the government "claimed it was withholding portions of documents" (Frame Decl. Exh. B). Second, Olsen contended that the government "failed to establish any exemptions applied" to the identified documents (ibid). Specifically, Olsen argued that defendant had failed to establish that statutory exemptions for confidential commercial information (under 5 U.S.C. § 552(b)(4)) or communications on the deliberative process (under 5 U.S.C. § 552(b)(5)) applied to the identified documents. Third, Olsen faulted the government for not providing a Vaughn index.
Plainly, none of the points raised in Olsen's FOIA administrative appeal were related to the adequacy of the government's search for responsive documents. Olsen did not charge that the government had failed to locate responsive documents. Nor did Olsen complain about the completeness of the files it inspected on July 18, 2001. As such, Olsen's challenge based on the adequacy of search cannot be raised here in the first instance. Cleary, Gottlieb, Steen Hamilton v. Dep't of Health and Human Services, 844 F. Supp. 770, 779-80 (D. D.C. 1993) (holding that the plaintiff may not in district court challenge the completeness of records because it failed to raise that issue during its administrative appeal, which was restricted to the CDC's assertion of FOIA exemption five); Crooker v. Federal Bureau of Prisons, 579 F. Supp. 309, 310-11 (D.D.C. 1984) (holding that the issue concerning redactions based on statutory exemptions was not subject to judicial review due to the plaintiffs failure to exhaust his administrative remedies).
Olsen's opposition essentially admits this action was initiated based on the government's alleged unlawful withholding of documents absent legal basis, not due to a failure to locate them. It states (Opp. 1-2) (emphasis added):
This case began based on the FTA's determination to withhold its reports and correspondence. In essence, it began as a "withholding" case, and continued to be a withholding case until the FTA's first motion for summary judgment was denied on the ground that the handwritten notes outlining a possible settlement agreement were never complete, since Olsen refused to agree to the many additional terms imposed by the FTA in exchange for releasing documents which it had been withholding.
But, rather than describing what it had earlier represented as withheld in a Vaughn index, the FTA changed course, released its oversight contractor Gannett Fleming reports, and asserted it had not withheld anything. It was then that a genuine issue arose that the FTA had failed to search their files given its position was directly contrary to the FTA's August 1, 2001, letter upon which Olson's appeal is based in which the FTA states it is withholding all reports and correspondence.
Olsen's challenge to the adequacy of search was raised here in the first instance and did not crystallize until after it had proceeded through the administrative-appeals process.
Olsen contends that defendant's exhaustion defense is defective for three reasons. First, it argues that the government is estopped from pursuing this defense. Specifically, Olsen contends that it administratively appealed the government's initial determination relying on the representation therein that all responsive documents had been made available for inspection and copying on July 18, 2001, except those identified and withheld under statutory exemptions (Opp. 4). As such, Olsen argues that it challenged that withholding through the administrative appeals process because "the FTA represented to Olsen that it possessed just those documents now sought, but that the FTA was withholding them" (Opp. 4). In short, Olsen argues that it should be excused from pursuing its administrative remedies challenging the adequacy of search because it relied on the government's alleged misrepresentation.
Olsen's argument is rejected as unconvincing and unsupported. True, the government's initial determination dated August 1, 2001, stated (Frame Decl. Exh. A) (emphasis added):
This is in response to your letter of June 18, 2001, requesting that the Federal Transit Administration (FTA), under the Freedom of 28 Information Act (FOIA), make available for inspection and copying all of its files relating to the FTA Project/Grant #CA-03-0402 Tasman Corridor Project Contract C310/410 (97007) Lockheed Way to Old Ironsides.
On Wednesday, July 18, 2001, you and Mr. Brian Thompson, Project Engineer for Homer J. Olsen visited the FTA Region 9 Office. FTA made available for your inspection all documents responsive to your request, except as noted below. Thursday and Friday of the same week, OMNIDOX Copy Service copied a total of 4,231 documents at your request.
However, the FTA withheld portions of the Tasman Corridor Project documents under two exemptions under FOIA. FTA is withholding Part II — Administrative Reports from Gannett Fleming, Inc., and other Gannett Fleming, Inc./FTA correspondence based on Exemptions 4 and 5 of FOLA, 5 U.S.C. Subsection 552(b)(4) and (b)(5), as implemented by the Department of Transportation regulations, 49 C.F.R. § 7.13.
Significantly, as confirmed therein, Olsen's attorney and project engineer Brian Thompson had already personally inspected the aforementioned documents at defendant's Region 9 office. Thompson — who is primarily responsible for review and analysis of documents concerning the Tasman Project — stated in his declaration (¶¶ 1-3):
In July 2001, I accompanied Carol Watson, an attorney with McInerney Dillon, P.C., which has been representing Olsen concerning this matter, to review the documents made available to Olsen by the Federal Transit Agency ("FTA") in San Francisco, California, in response to its June 2001 request under the Freedom of Information Act. When I examined those documents in July 2001 at the San Francisco Region 9 Office, I and Ms. Watson made a point to tab any and all correspondence and e-mails as part of our instructions to the copy service to copy these various documents.
In reviewing those documents copied, I noticed that a substantial number of financial records were missing which should otherwise exist given the FTA was responsible for funding this project which was included in our FIOA request.
Olsen's assertion that it blindly relied on defendant's statement that all responsive documents had been produced and thereby failed to challenge the adequacy of search in its administrative appeal is contradicted by its own evidence. Moreover, the government's initial determination dated August 1, 2001, expressly informed Olsen (Frame Decl. Exh. A) (emphasis added):
If you are not satisfied with this response you may appeal by writing to the Deputy Administrator of the Federal Transit Administration, 400 Seventh Street, S.W., Washington D.C. 20590. An appeal must be submitted within thirty (30) days after you have received these documents. It should contain any information and argument you may wish to rely on and the envelope in which the appeal is sent should be prominently marked "FOIA Appeal." The Deputy Administrator's determination will be administratively final.
It bears repeating that Olsen, through the same counsel representing it herein, did not raise the adequacy-of-search issue in its administrative appeal. Lastly, Olsen proffers no evidence to substantiate that it or its counsel failed to raise an adequacy-of-search challenge at the administrative level due to statements in the government's initial determination.
Moving to Olsen's second excuse to avoid the exhaustion defense, it contends that it challenged the adequacy of search in its administrative appeal letter dated August 16, 2001, when it stated the "FTA has met none of its obligations under the Freedom of Information Act" (Opp. 5; Frame Decl. Exh. B). Reasonably read, this statement pertained to Olsen's overarching contention that the government had no legal basis for withholding the identified documents, not the adequacy of search. In context, this statement in the last full paragraph of the appeal letter charged ( ibid.):
FTA has met none of it obligations under the Freedom of Information Act. It has not produced the documents requested and it has failed to provide sufficient information to justify withholding these documents. Please produce the documents. If FTA does not produce these documents in their entirety, please produce the documents in redacted form and supply a detailed affidavit supporting the reasons for the redactions, as required by law.
The administrative appeal decision dated December 28, 2001, did not address the adequacy of search. Rather, it responded point-for-point to the three contentions raised by Olsen in its appeal letter. In closing, that decision stated (Frame Decl. Exh. C):
This decision constitutes the final administrative action on Olsen's FOLA request No. FY01-62. Olsen may appeal this decision to the United States District Court for the District in which it resides or has its principal place of business, the District in which the records are kept, or the District of Columbia.
Significantly, there is nothing in this record wherein Olsen complained that the administrative appeal decision failed to address the adequacy-of-search issue fairly raised within its FOIA appeal letter. Instead, Olsen subsequently sent a letter dated January 28, 2002, whereby it indirectly raised a challenge to the adequacy of search for the first time (on this record). It stated (Frame Decl. Exh. D):
We have recently become aware of the probable existence of files relating to the grant and project that were not produced, namely, applications from the Santa Clara Valley Transportation Authority ("VTA") to FTA for grant money to pay for funding of the project.
This letter, however, came one month after defendant's final decision on Olsen's administrative appeal concerning the production of redacted documents identified, the applicability of statutory exemptions and the Vaughn index. Olsen did not raise nor did the government decide the adequacy-of-search issue during the administrative-appeals process. Thus, Olsen cannot raise this claim here in the first instance. Steele, supra, 799 F.2d at 466 ("However, the purposes underlying the exhaustion doctrine include the opportunity for the agency to exercise its discretion and expertise and the opportunity to make a record for the district court to review") (emphasis in original).
This order notes that Olsen's objection to the declaration of Sigrid Jones for lack of personal knowledge on the file-organization system is irrelevant (Opp. 13). This order does not rely on any portion of her declaration concerning the adequacy-of-search claim that cannot be adjudicated herein.
Olsen's objection for lack of personal knowledge to page two, lines fifteen through eighteen of the declaration of Bruce Frame is sustained ( ibid.). There is insufficient evidence to support a finding that Frame has personal knowledge on what the regional office produced for inspection in July 2001. On this point, Jones' declaration suffices and is admissible. She was the responsible paralegal at the regional office (Jones Decl. ¶ 1).
Olsen's objection under FRE 408 to all evidence concerning the parties' settlement negotiations is sustained. Contrary to the government's reliance on Henry v. Radio Station KSAN, 374 F. Supp. 260, 263 n. 1 (N.D. Cal. 1974) (Renfrew, J.), the common-law rule allowing the admissibility of factual admissions made during settlement negotiations is no longer viable. As the Advisory Committee Notes to FRE 408 states (citations omitted):
The practical value of the common law rule has been greatly diminished by its inapplicability to admissions of fact, even though made in the course of compromise negotiations, unless hypothetical, stated to be "without prejudice," or so connected with the offer as to be inseparable from it. An inevitable effect is to inhibit freedom of communication with respect to compromise, even among lawyers. Another effect is the generation of controversy over whether a given statement falls within or without the protected area. These considerations account for the expansion of the rule herewith to include evidence of conduct and statements made in compromise negotiations, as well as the offer or completed compromise itself.
Of course, it is disappointing any time a lawyer and/or a party reneges on an apparent settlement, especially one in writing, and disavows written recitals. Once the settlement agreement, however, was found unenforceable, as here, the better course is to disregard it entirely.
At the hearing, Olsen raised its third excuse. It contended that the adequacy of search was raised in its appeal letter dated August 16, 2001, when it stated that the government was required to provide a Vaughn index (Frame Decl. Exh. B). Asking for a Vaughn index is not the same as protesting the adequacy of the search for responsive documents. Indeed, the nine-page single spaced final decision on Olsen's appeal was silent on the adequacy of search. Instead, it squarely addressed the various points actually raised and held that Olsen was not entitled to a Vaughn index at the administrative level (Frame Decl. Exh. C, at 8). It bears repeating that there is nothing in this record wherein Olsen complained that the final administrative decision failed to address the adequacy-of-search issue fairly raised within its FOIA appeal letter.
* * *
Although styled as a motion for summary judgment, in actuality, Olsen moves for further discovery and "to continue briefing so that information may be incorporated in any summary judgment" (Br. 7). Specifically, absent any declaration supporting its FRCP 56(f) request, Olsen argues that it needs discovery: (1) to confirm and determine what the government is withholding and (2) to address the adequacy of the search performed for responsive documents. Olsen makes no arguments concerning the applicability of statutory exemptions for withholding the identified documents. In light of the foregoing, to the extent Olsen requests discovery on the adequacy-of-search claim ( i.e., scope of agency's search, its indexing and classification procedures and so on), the motion is denied as moot. To the extent Olsen requests discovery on what the government is withholding and this is related to statutory exemptions, the motion is denied for failure to demonstrate that further discovery is warranted. Indeed, Olsen has neglected to address the applicability of statutory exemptions herein, a point it raised and was addressed in the administrative appeal.
2. SUMMARY JUDGMENT ON APPLICABILITY OF STATUTORY EXEMPTION.
Turning to the claim within the Court's jurisdiction, defendant moves for summary judgment on the applicability of a statutory exemption to the identified documents it is withholding.
When a request is made, an agency may withhold a document or redact portions thereof, only if the material at issue falls within one of the statutory exemptions found in 5 U.S.C. § 552(b). The agency bears the burden of establishing that the information is exempt from disclosure. 5 U.S.C. § 552(a)(4)(B). To meet its burden, the agency must offer oral testimony or affidavits that are "detailed enough for the district court to make a de novo assessment of the government's claim of exemption." They must contain "reasonably detailed descriptions of the documents and allege facts sufficient to establish an exemption." Only if affidavits and oral testimony cannot provide a sufficient basis for a decision will the district court rely on in camera review of those materials in question. Maricopa Audubon Soc. v. U.S. Forest Service, 108 F.3d 1089, 1092 (9th Cir. 1997).
Here, the government contends that only statutory exemption six under 5 U.S.C. § 552(b)(6) is applicable. Specifically, it argues that of the documents identified during the administrative-appeals process, it is only currently withholding information within monthly reports generated by its project-management oversight contractor, Gannett Fleming, Inc., that include the names of Gannett Fleming and subcontractor employees who worked overseeing the light-rail project. The government argues that public disclosure of these names "would constitute a clearly unwarranted invasion of personal privacy." 5 U.S.C. § 552(b)(6).
This order holds that the government has demonstrated that exemption six is applicable to the employee names within the June 1997 through March 2000 monthly reports generated by Gannett Fleming. The government's declaration contains a reasonably detailed description of these documents and alleges facts sufficient to establish that the exemption six applies. Specifically, the documents at issue are the "FTA Project Management Oversight Program Part II-Administrative Reports" on the Tasman Corridor Project which were generated by Gannett Fleming on a monthly basis from June 1997 through March 2000 (Frame Decl. ¶¶ 9-10). The only information currently withheld from those reports are "the names of the contractor and subcontractor employees working on the Project under Exemption 6" ( id. at ¶¶ 18, 3). Accordingly, the government has met the burden to demonstrate that exemption six applies to prevent the public disclosure of employee names from the oversight contractor's monthly reports. Painting and Drywall Work Preservation Fund, Inc. v. Dep't of Housing and Urban Dev., 936 F.2d 1300, 1303 (D.C. Cir. 1991) (holding that the disclosure of names and addresses of construction workers from payroll records submitted by contractors would constitute a substantial invasion of privacy not outweighed by the public interest in disclosure).
Olsen does not contest the applicability of exemption six to the employee names contained in these monthly reports by Gannett Fleming. Indeed, Olsen stated at the last telephone conference that it did not intend to challenge the withholding of this information. It stated (Tr. of Sept. 27, 2002, at 12):
Ms. Hargleroad: Okay. First, what we want to depose Mr. Hunt about is the adequacy of the search, absolutely, because there is a disputed issue of fact. Ms Kenney — the issue here is not withholding names and stuff. I mean, we really have never cared about that. We've never argued about that—
As stated, Olsen has neglected to address the applicability of statutory exemptions in briefing even though this was raised and decided during the administrative-appeals process.
* * *
In light of the foregoing, no justiciable claims remain in this action. To the extent that Olsen challenges the adequacy of defendant's search, that claim must be dismissed without prejudice. Olsen has failed to exhaust its administrative remedies. To the extent that Olsen challenges defendant's withholding of "Part II— Administrative Reports from Gannett Fleming, Inc., and other Gannett Fleming, Inc./FTA correspondence" (the documents identified in the initial determination), either exemption six applies or the issue is now moot. Specifically as to mootness, the final decision granted in part and denied in part Olsen's administrative appeal. It released to Olsen charts within the Part II reports which, inter alia, listed the hours spent by Gannett Fleming and its subcontractors on the oversight project and monthly amounts charged to defendant (Frame Decl. Exh. C, at 4). Additionally, that decision released information in the Part II reports on Gannett Fleming's descriptions of completed and upcoming tasks as well as the cover letters to defendant that were enclosed with the monthly Part II reports ( id. at 6-7).
In this action, the Court previously ordered defendant to file declarations which describe the searches performed in response to Olsen's FOIA request and to explain how those searches were reasonably designed to identify responsive documents. The requirement, however, preceded defendant's instant motion to dismiss the adequacy-of-search claim. Had this motion been made earlier, it would have been granted.
The final decision, however, denied in part Olsen's administrative appeal. The government continued to withhold information within the Part II reports on: (1) Gannett Fleming's evaluations of the light-rail project and its oversight performance pursuant to the deliberative-process privilege of 5 U.S.C. § 552(b)(5) and (2) the names of employees working for Gannett Fleming and its subcontractors pursuant to the invasion of personal-privacy exception of 5 U.S.C. § 552(b)(6) ( id. at 4, 6). As discussed above, the withholding of these names is lawful because exemption six applies. Any claim concerning the applicability of exemption five is now moot. Specifically, the government has already released to Olsen the information within the Part II reports it originally withheld under exemption five. Olsen's counsel received these documents in July 2001 when some Part II reports were inadvertently produced during the inspection and in September 2002 when the government intentionally released the remainder to Olsen (Jones Decl. ¶ 9; Frame Decl. ¶ 3, 7, Exh. H; Plaintiff's Br. 5). Accordingly, any and all claims raised by Olsen's complaint have either been decided or are non-justiciable.
CONCLUSION
Defendant's motion to dismiss the adequacy-of-search claim under FRCP 12(b)(1) is GRANTED. Its motion for summary judgment on the applicability of 5 U.S.C. § 552(b)(6) to the employee names within the June 1997 through March 2000 monthly reports generated by Gannett Fleming, Inc., is GRANTED. Plaintiffs motion for further discovery is DENIED. Any and all other pending motions are terminated as moot. The Clerk shall CLOSE the file.