FOIA Appeal: Proposed Plans of Action/Related Info.

Legal Opinion: GMP-0067

Index: 7.340, 7.350

Subject: FOIA Appeal: Proposed Plans of Action/Related Info.

March 30, 1992

Glen A. Smith, Esq.

Senior Staff Counsel

Los Angeles Times

Times Mirror Square

Los Angeles, California 90053

Dear Mr. Smith:

This is in response to your August 22, 1991 Freedom of

Information Act (FOIA) appeal. You appeal the partial denial of

information by Reagan S. Reed, Public Affairs Officer in the

Department\'s Los Angeles Office, dated July 10 and 22, 1991.

Mr. Reed denied your request for numerous documents relating to

the Lakeview Terrace Apartments and the Alvarado Gardens under

Exemptions 4, 5 and 6 of the FOIA, 5 U.S.C. 552(b)(4),(5),(6).

Specifically, you appeal the information withheld under

Exemptions 4 and 5.

I have decided to affirm, in part, and reverse, in part, the

initial denial of the information withheld under Exemptions 4

and 5.

Exemption 4

In response to your appeal regarding amendments to the

Regulatory Agreements, I have determined to reverse the denial of

the 1989 and 1990 proposed amendments and two undated amendments.

These are draft documents which were not adopted by the

Department and contain no privileged or confidential business

information. Therefore, I have determined to release this

information to you. However, in regard to your request for the

Plans of Action, I am affirming the initial denial from the Los

Angeles Office. The proposed Plans of Action and two unapproved

amendments relating to these plans are preliminary documents

which contain \"commercial or financial\" information obtained in

the course of business negotiations with the Department. As

such, the documents are confidential and, thus, protected from

disclosure under Exemption 4.

With respect to the letters between HUD, Lawrence Levy and

John Knapp, attorneys representing Richard Spieker, owner of the

Lakeview Terrace and Alvarado Gardens Apartments, I have

determined to affirm the initial denial. These letters contain

proposed provisions for various parts of the Plans of Action

which were not agreed upon between the parties. They also

contain confidential \"commercial and financial information\"

obtained in discussions among the parties. This is privileged

information protected under FOIA\'s Exemption 4 and nondisclosure

of such information is essential to the Department\'s effort to

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successfully negotiate future Plans of Action. Likewise, the

Supplement to the Project Analysis contains detailed information

regarding the owner\'s projected costs and profits. Release of

this confidential commercial and financial information could

cause the owner substantial competitive harm and jeopardize

efforts toward future projects. Moreover, if we permitted

disclosure of this information under the FOIA, it could provide

interested parties with useful insight into the owner\'s projected

plans and lead to an unfair competitive advantage. It would also

cause harm to the Agency\'s negotiation process by prohibiting

other prospective owners from engaging in candid and open

discussions regarding their plans and mortgage obligations.

Exemption 4 of the FOIA, 5 U.S.C. 552(b)(4), exempts from

mandatory disclosure \"trade secrets and commercial or financial

information obtained from a person which is privileged or

confidential.\" Information may be withheld under Exemption 4 if

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 Ass\'n. v. Morton,

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

I have determined that the proposed Plans of Action and

amendments, letters between the project owner\'s attorneys and the

Department, and the Supplement to the Project Analysis

constitutes confidential commercial and financial information

protected from disclosure under Exemption 4. Therefore, it is my

determination to affirm the initial denial of this information.

See 9 to 5 Org. for Women Office Workers v. Board of Governors of

the Federal Reserve System, 721 F.2d 1 (1st Cir. 1983). I am,

however, releasing Exhibits A and C which accompany one of the

proposed amendments to the Plans of Action. I have determined

that disclosure would not result in divulging any confidential

business information. These exhibits include letters involving

repairs to Lakeview Terrace and Alvarado Gardens. The letters

are from Mr. Spieker to Sharon Bowman, Supervisor and Loan

Specialist in the Department\'s Los Angeles Office.

Exemption 5

In regard to Exemption 5, you appeal the denial of several

letters issued from HUD to Mr. Spieker. Since these letters are

communications between the Department and an outside party, they

do not constitute intra-agency documents afforded protection

under Exemption 5. Therefore, I have determined to release this

information. However, the Department\'s originator, concurrences

and complimentary lists on these letters qualify as trivial

administrative markings exempt from disclosure under Exemption 2,

5 U.S.C. 552(b)(2). Therefore, this information is not

enclosed.

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Exemption 5 protects from disclosure \"inter-agency or intra-

agency memoranda or letters which would not be available by law

to a party other than an agency in litigation with the

Department .\" 5 U.S.C. 552(b)(5). A document can qualify for

exemption from disclosure under the deliberative process

privilege of Exemption 5 when it is predecisional, i.e.,

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

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

deliberative, i.e., \"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, 1144

(D.C. Cir. 1975).

I have affirmed, in part, and denied, in part, your appeal

for 24 intra-office memoranda involving various aspects of the

Lakeview Terrace and Alvarado Gardens Plans of Action. Twenty

two of these memoranda were written prior to the November 1, 1990

approval of the final plans and contain predecisional advice and

recommendations. Release of this privileged information would

harm the Agency\'s deliberative process by inhibiting employees

from expressing open and candid views in predecisional

assessments and evaluations. Therefore, I am affirming the

initial denial of 22 of these intra-agency memoranda. I am,

however, reversing the initial denial by the Los Angeles Office

and releasing two documents. One document, dated November 29,

1990, was written by the San Fernando Valley Neighborhood Legal

Services, Inc. to the Department and is not protected under

Exemption 5. A second document, dated December 3, 1990, is a

handwritten intra-office routing and transmittal slip which does

not contain predecisional advice or recommendations.

Finally, you appeal the denial of the Management Review

Report dated April 22, 1987. This document contains opinions,

recommendations and deliberations which reveal the Department\'s

evaluative and decisional process. I have determined to affirm

the initial denial of this information pursuant to the FOIA\'s

Exemption 5. However, page 1 of this report contains factual

information not covered by Exemption 5. Since the material is

\"reasonably segregable\" from the opinions, recommendations and

deliberations, I am releasing the segregable information.

Conclusion

Based on the above analysis, I have determined to affirm the

denial of the following documents:

1\. Interoffice memoranda of the following dates: (Exemption 5)

1-88 6-11-89 6-04-90 8-21-90

1-10-88(p.4) 5-11-90 6-08-90 10-12-90

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2-2-88 5-22-90 6-22-90 10-25-90

1-11-89 5-23-90 7-02-90

1-15-89 5-30-90 7-31-90

2-15-89 12-27-89 8-22-90

1-24-89

2\. Supplement to Project Analysis: (Exemption 4)

12-24-90

3\. Management Review Report: (Exemption 5)

4-22-87 (pp. 2 to 4)

4\. Amendments to Plans of Action: (Exemption 4)

Undated Amendment

Unapproved Amendment

5\. Letters from Lawrence Levy, Esq. to HUD: (Exemption 4)

6-13-90

6-06-90

3-28-89

1-24-89 (with attachment letter dated 8-10-88)

6\. Letters from John Knapp, Esq. to HUD: (Exemption 4)

12-07-89

10-09-89

2-17-89

5-25-88

7\. Proposed Plans of Action: (Exemption 4)

12-16-88 2-13-90 6-06-90 3-23-90

11-89 3-07-90 6-11-90

11-21-89 5-04-90 6-13-90

I have reversed the initial denial with respect to the

following documents, copies of which are enclosed:

1\. Letter to Keith Axtell, San Francisco Office, from

San Fernando Valley Neighborhood Legal Services, Inc.,

dated 12-03-90, and intra-office routing and

transmittal slip dated 12-03-90

2\. Amendments to Regulatory Agreement

1989

1990

Two undated documents

3\. Management Review Report

4-22-87 (p. 1)

4\. Letters from HUD to Mr. Spieker

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3-09-90

1-26-89

2-17-89

1-20-89

2-15-89

5\. Exhibits A and C to Unapproved Amendment to Plan of

Action

Pursuant to the Department\'s regulations at 24 C.F.R.

15.21, I have determined that the public interest to protect the

deliberative process and to protect confidential commercial and

financial information militates against release of the withheld

information.

Please be advised that you have the right to judicial review

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

Very sincerely yours,

C.H. Albright, Jr.

Principal Deputy General Counsel

Enclosures

cc: Janine Dolezel 9.4G

Reagan S. Reed 9.4SP

Beverly Agee 9G