Legal Opinion: GMP-0146

Index: 7.340, 7.350

Subject: FOIA Appeal: General Partner\'s Finances

January 27, 1993

Mr. Murray Haber

201 East 66th Street

New York, New York 10021

Dear Mr. Haber:

This is in response to your Freedom of Information Act (FOIA)

appeal dated November 24, 1992. On your own behalf, as well as

on behalf of the other limited partners, you appeal the

October 27, 1992 partial denial of your attorney\'s FOIA request

by William Hernandez, Manager, Hartford Office. Mr. Hernandez

withheld 19 items of documents, as identified in the Attachment

to his FOIA denial (\"the Attachment\"), pursuant to Exemptions 4

and 5 of the FOIA, 5 U.S.C. Section 552(b)(4), (5).

In accordance with your December 14, 1992 telephone

conversation with Abraham Brandwein, Assistant Regional Counsel,

Boston Regional Office, you are appealing the denial of all of

the documents listed in the Attachment. You contend that the

FOIA exemptions cited in Mr. Hernandez\'s letter were improperly

applied to the documents and, in the alternative, that

Exemption 4 may not be used to withhold financial information

from you and the other limited partners, since you have an

identity of interest with the General Partner who submitted the

financial information.

I have decided to affirm the denial of the documents under

Exemptions 4 and 5.

Exemption 4 of the FOIA exempts from mandatory disclosure

under FOIA \"trade secrets and commercial or financial information

obtained from a person and privileged or confidential.\"

Information may be withheld pursuant to Exemption 4 if its

disclosure is likely to have either of the following effects:

\"(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 information

was obtained.\" National Parks and Conservation Association v.

Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).

I have determined that the items identified in the Attachment

as subject to Exemption 4 contain information pertaining to the

trade secrets and commercial or financial status of the General

Partner regarding his operation of the properties. Release of

such information would permit competitors to gain \"valuable

insight into the operational strengths and weaknesses of the

supplier of the information.\" National Parks and Conservation

Association v. Kleppe, 547 F.2d 673, 684 (D.C. Cir. 1976).

Courts have recognized the competitive harm to a requester

that would arise from the release of such information. See,

e.g., Gulf & Western Industries, Inc. v. United States, 615 F.2d

527 (D.C. Cir. 1979) (protecting from disclosure financial

information including profit and loss data, expense rates, and

break-even point calculations); Timken Co. v. United States

Customs Service, 531 F.Supp. 194 (D.D.C. 1981) (protecting

financial and commercial information on pricing and marketing).

Moreover, although HUD retains discretion to determine that

information falling under an exemption may be released, the Trade

Secrets Act, 18 U.S.C. Section 1905, makes it a criminal offense

for an employee of the United States, or its agencies, to

disclose trade secrets and other forms of confidential commercial

or financial information, except when such disclosure is

authorized by law. Pursuant to the Trade Secrets Act,

confidential commercial or financial information includes the

\"amount or source of any income, profits, losses, or expenditures

of any person, firm, partnership, corporation or association.\"

Your alternative argument in support of your appeal is that

the identity of interest between the projects\' limited partners

and the General Partner, makes Exemption 4 inapplicable to deny

the limited partners access to the documents.

There is no basis under the FOIA for concluding that a

requester\'s legal, contractual, or other relationship with the

submitter is relevant to a determination of the requester\'s right

to obtain information. Moreover, the Supreme Court has held

that a requesting party\'s identity \"has no bearing on the merits

of his or her FOIA request.\" Dept. of Justice v. Reporters

Committee for Freedom of the Press, 489 U.S. 749, 771 (1989).

Therefore, Federal agencies must treat all FOIA requesters alike,

without taking into account a particular requedster\'s identity.

Although your status as a limited partner may indeed confer

upon you an enforceable contractual right to obtain these

documents from the General Partner, HUD may not release these

documents to you in response to your FOIA request unless we would

be required to release these documents to all other requesters as

well. As noted above, the Department is prohibited by the Trade

Secrets Act from doing so. Consequently, your status as a

limited partner does not affect my determination that the

documents were properly withheld under Exemption 4 and the Trade

Secrets Act.

Exemption 5 of the FOIA permits the Department to withhold

inter-agency or intra-agency memoranda or letters that would not

be available by law to a party other than an agency in litigation

with the agency. Documents that are privileged in the context of

civil discovery are thus exempt from mandatory release under

Exemption 5. NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149

(1975). Among the civil discovery privileges incorporated into

Exemption 5 are the deliberative process privilege and the

attorney-client privilege.

The deliberative process privilege of Exemption 5 was the

basis for withholding the documents identified in Items 16 and 19

in the Attachment. The purpose of this privilege is to preserve

free and candid internal agency deliberations that lead to

executive branch decision-making. The deliberative process

privilege applies to documents that are predecisional and

deliberative in nature. A predecisional document is one that is

\"antecedent to the adoption of an agency policy.\" Jordan v.

Department of Justice, 591 F.2d 753, 774 (D.C. Cir. 1978) (en

banc). A deliberative document is one that is a \"direct part of

the deliberative process in that it makes recommendations or

expresses opinions on legal or policy matters.\" Vaughn v. Rosen,

523 F.2d 1136, 1143-44 (D.C. Cir. 1975).

The attorney-client privilege was the basis for withholding

Item 18 of the Attachment. Item 18 was prepared by a member of

the Field Office legal staff and provided legal advice to program

officials. The attorney-client privilege, as incorporated into

Exemption 5, protects such \"confidential communications between

an attorney and his client relating to a legal matter for which

the client has sought professional advice.\" Mead Data Central,

Inc. v. Department of the Air Force, 566 F.2d 242, 252 (D.C. Cir.

1977). Accordingly, I have determined that Items 16, 18, and 19

of the Attachment were properly withheld in accordance with

Exemption 5 of the FOIA.

I have also determined, pursuant to 24 C.F.R. Section 15.21,

that the public interest in protecting confidential commercial

and financial information and the deliberative process, militates

against disclosure of the withheld information.

You are advised that you have the right to judicial review of

this determination under 5 U.S.C. Section 552(a)(4). Judicial

review of my action on this appeal is available to you in the

United States District Court for the judicial district in which

you reside or have your principal place of business, or in the

District of Columbia, or in the judicial district where the

records you seek are located.

Very sincerely yours,

George L. Weidenfeller

Deputy General Counsel (Operations)

cc: Yvette Magruder

Marvin Lerman, 1G