Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-05217/USCOURTS-caDC-99-05217-0/pdf.json

Parties Involved:
Daniel S. Jacobs
Appellant
Lois J. Schiffer
Appellee

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 24, 2000 Decided March 7, 2000

No. 99-5217

Daniel S. Jacobs,

Appellant

v.

Lois J. Schiffer, in her official capacity

as Assistant Attorney General for the

Environment and Natural Resources Division

of the U.S. Department of Justice,

Appellee

Appeal from the United States District Court

for the District of Columbia

(No. 97cv00506)

Kathleen L. Jennings argued the cause for appellant.

With her on the briefs was Robert A. Van Kirk.

Thomas M. Bondy, Attorney, United States Department of

Justice, argued the cause for appellee. With him on the brief

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were David W. Ogden, Acting Assistant Attorney General,

Barbara C. Biddle, Assistant Director, and Wilma A. Lewis,

United States Attorney.

Before: Ginsburg, Sentelle and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: Having obtained a partial judgment

in his favor, see Jacobs v. Schiffer, 47 F. Supp.2d 16 (D.D.C.

1999), Daniel S. Jacobs appeals the denial of attorney's fees

under the Equal Access to Justice Act, 28 U.S.C. s 2412

("EAJA"). Jacobs contends that the district court misperceived the relevant inquiry under EAJA and that as a matter

of law the government was not substantially justified in its

position that Jacobs obtain its advance approval before sharing information with his attorney in the course of obtaining

legal advice about a potential lawsuit against his employing

agency. We agree, and reverse, remanding the case for the

district court to determine the amount of attorney's fees to

award Jacobs.

I.

The underlying litigation stems from the reaction that

Jacobs, a trial lawyer in the Environment and Natural Resources Division, Environmental Enforcement Section, of the

United States Department of Justice, received when he reported his "qualms" about the propriety of certain strategies

and tactics by the Section in cases to which he was assigned

to his supervisors--ultimately, to Lois J. Schiffer, Assistant

Attorney General for the Environment and Natural Resources Division of the Department of Justice. See Jacobs,

47 F. Supp.2d at 17-18. During the same period Jacobs

reported his qualms, Jacobs' performance rating was lowered

and he was involuntarily transferred to a different litigating

group. Id. at 18. Jacobs consulted a private attorney to

determine "whether the conduct that he reported within the

[Department] constituted wrongdoing, whether his supervisors improperly retaliated against him, and what public disUSCA Case #99-5217 Document #501277 Filed: 03/07/2000 Page 2 of 13
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closures he might lawfully make under the Whistleblower

Protection Act, 5 U.S.C. s 2302(b)(8)." Id.

Recognizing the potentially sensitive nature of some of the

materials Jacobs sought to disclose, Jacobs' attorney at the

time, Jonathon Turley, asked Assistant Attorney General

Schiffer to notify Division management that he "would have

to review internal memoranda on the specific litigation that is

the subject of the retaliation claims," and that "any confidentiality or departmental objections to such a review be made as

soon as possible so as to expedite this matter." The Department's response on behalf of the Assistant Attorney General

was that the Freedom of Information Act ("FOIA"), 5 U.S.C.

s 552 (1996), controlled, and hence any records that Jacobs

wanted to disclose to his attorney had to be identified before

the Department could authorize their disclosure. Citing its

FOIA regulations, 28 C.F.R. s 16 (1996), the Department

advised that Jacobs " 'must describe the records sought in

sufficient detail to enable Department personnel to locate the

records with a reasonable amount of effort.' "

Jacobs responded through counsel that a whistle-blower

does not make documents "public" by showing them to his or

her attorney, and that he was entitled "to seek legal advice

and discuss internal matters without such discussions being

classified as an unauthorized or public disclosure." Jacobs

asked whether the Department would consider certain communications by him to his attorney without prior approval to

violate Department rules, specifically: (1) oral communications between a whistle-blower and his attorney discussing

the basis of his claim and the handling of specific cases that

are material to the whistle-blower complaint; (2) internal

electronic messages and memoranda from or to supervisors

concerning the whistle-blower's internal complaints; and (3)

internal electronic messages and memoranda concerning the

handling of cases that are material to the whistle-blower

complaint. The Department's position was that these communications were not exempt from the general restrictions on

the release of non-public information.

Because Jacobs and the Department were at loggerheads

concerning how Jacobs could obtain legal advice with respect

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to his contemplated lawsuit against the Department, Jacobs

filed suit against Assistant Attorney General Schiffer in 1997,

seeking injunctive relief for what he considered to be a denial

of his rights secured by the First and Fifth Amendments.1

Jacobs' first cause of action, claiming a First Amendment

right to communicate with his attorney, was premised largely

on Martin v. Lauer, 686 F.2d 24 (D.C. Cir. 1982) ("Martin

II"). Jacobs' second cause of action went beyond Martin II,

alleging that his First Amendment associational interests

gave him the right to disclose FOIA-exempt information in

the course of seeking legal advice from his attorney and from

"public interest and professional organizations committed to

civil rights, whistle-blower rights, government accountability,

and environmental enforcement." His third cause of action

alleged an unconstitutional impairment of attorney-client

communications that impeded his access to the courts in

violation of the Due Process Clause.

The district court granted summary judgment for Jacobs

on his first cause of action, ruling that the Department's

"absolute embargo" on Jacobs' communications with his attorney constituted "a prior restraint ... considerably more

onerous than the one that the D.C. Circuit found unconstitutional in [Martin II]," and thus violated Jacobs' free speech

rights. Jacobs, 47 F. Supp.2d at 20, 22, 24. After reviewing

in camera documents Jacobs proposed to show his attorney,

the district court found that "it is clear on this record that

__________

1 Jacobs sought three orders: (1) that the prohibition on unauthorized disclosures of non-public information in attorney-client communications, or any requirement of pre-communication review of

such disclosures, violates the right of freedom of speech under the

First Amendment; (2) that the prohibitions on such disclosures in

attorney-client communications, or any requirement of precommunication review of the same, violates freedom of association

under the First Amendment; and (3) that such prohibition or

requirement violates the right to unimpeded access to the courts

under the Due Process Clause of the Fifth Amendment. The

prayer for relief also sought orders enjoining the Department from

enforcing pre-disclosure restrictions and awarding Jacobs reasonable attorney's fees and costs under EAJA.

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Mr. Jacobs could show his attorney some, if not all, of the

documents that he would like to disclose without violating any

statute or regulation." Id. The district court likewise rejected the Department's position that a government lawyer,

under D.C. Rules of Professional Conduct Rule 1.6(a), " 'reveal[s]' his client's confidences and secrets when he discloses

to his personal attorney--with the express understanding

that the information should go no further--only those confidences and secrets that the latter needs in order to advise the

government lawyer of his rights and obligations as a possible

whistle-blower." Id. at 20-21. The district court concluded,

therefore, that the Department's restraint "is broader than

that imposed by law or professional ethics," id. at 21, and,

relying on Martin II, 686 F.2d at 31-35, the court ruled that

the restraint violated Jacobs' First Amendment rights. Jacobs, 47 F. Supp.2d at 24. In the district court's view, to

address the Department's concerns about the disclosure of

confidential information, "[a]ll that is required ... is an order

directing Mr. Jacobs' attorney to keep in confidence, and to

use only for the purpose of rendering advice to Mr. Jacobs,

any nonpublic information that his client may impart to him."

Id. at 24.2 While concluding that Jacobs had no right to

disclose FOIA-exempt information to public interest groups,

the court found it unnecessary to resolve Jacobs' second and

third causes of action. Id.

Although Jacobs had succeeded on his free speech claim,

the district court denied Jacobs attorney's fees under EAJA,

explaining only that:

__________

2 The district court also permanently enjoined the Department

from requiring [Jacobs] to notify the [Department] and obtain

authorization before disclosing to counsel hereinafter identified

any nonpublic information without which, according to counsel's

good-faith belief, counsel cannot formulate effective legal advice

to [Jacobs] regarding matters arising from events giving rise to

this action....

Jacobs, 47 F. Supp.2d at 25. The district court's order provided

that "nothing in this Order shall be read to authorize [Jacobs] or

counsel to violate any law or rule of professional conduct...." Id.

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Mr. Jacobs' prayer for relief generally exempting him

from inhibitions on the disclosure of nonpublic information to any sympathetic third party likely to offer to

advise him represents an extreme to which the Court has

not found him entitled. In the circumstances the Court

concludes that [the Department] was substantially justified in resisting Jacobs' request for carte blanche permission to disclose without following the rules.

Id. at 24-25. The Department did not appeal the judgment

on Jacobs' free speech claim, and our review, therefore, is

limited to Jacobs' contention that the district court erred in

denying him attorney's fees under EAJA.

II.

Under EAJA, a party is entitled to attorney's fees when (1)

the party "prevailed" in the underlying litigation by "succeed[ing] on a significant issue in litigation that achieves some

of the benefits the party sought in bringing suit," Anthony v.

Sullivan, 962 F.2d 586, 589 (D.C. Cir. 1993), (citing Hensley

v. Eckerhart, 461 U.S. 424, 433 (1983)), and (2) the government cannot demonstrate substantial justification for its position. See, e.g., F.J. Vollmer Co. v. Magaw, 102 F.3d 591, 594

(D.C. Cir. 1996). The government's "position" includes both

its pre-litigation and litigation positions, id., and is "substantially justified if it is 'justified in substance or in the main--

that is, justified to a degree that could satisfy a reasonable

person. That is no different from ... [having] a reasonable

basis both in law and fact.' " Id. at 595 (quoting Pierce v.

Underwood, 487 U.S. 552, 565 (1988)). The government

bears the burden of demonstrating substantial justification.

Id. The district court ruled that the Department had met its

burden, and our review of the district court's denial of

attorney's fees is for abuse of discretion. See, e.g., Pierce,

487 U.S. at 562-63; Vollmer, 102 F.3d at 596.

It is well established that a party "prevails" under EAJA's

first inquiry even if success is only partial, Farrar v. Hobby,

506 U.S. 103, 111 (1996); Texas State Teachers Ass'n v.

Garland Indep. Sch. Dist., 489 U.S. 782, 791 (1989), and it is

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undisputed that Jacobs prevailed on his first cause of action:

the district court ruled that the Department's position requiring preclearance was an "absolute embargo" and an unconstitutional prior restraint. Jacobs, 47 F. Supp.2d at 20, 24. In

such circumstances, the district court's task with respect to

the EAJA inquiry was to determine whether the government's position with respect to the issue on which the party

prevailed was substantially justified. See, e.g., Air Transport

Ass'n. of Canada v. FAA, 156 F.3d 1329, 1332 (D.C. Cir.

1998); Cinciarelli v. Reagan, 729 F.2d 801, 804-05 (D.C. Cir.

1984).

The district court's terse denial of attorney's fees effectively precluded inquiry into the reasonableness of the Department's position with respect to the issue upon which Jacobs

prevailed, namely his right to disclose information to his

attorney without first revealing that information to the Department for preclearance. Instead, the district court evaluated the Department's position primarily as a reaction to

Jacobs' broader contentions concerning public interest groups

on which he did not prevail. The court has explained that

such a "holistic" approach to the government's position is

contrary to EAJA, see Air Transport Ass'n of Canada, 156

F.3d at 1332, and that the relevant "position" of the government is that which corresponds to the claim or aspect of the

case on which the private party prevailed. Thus, even if the

Department was, as the district court found, justified in

refusing to authorize carte blanche disclosure of non-public

information to public interest organizations, the question for

the district court under EAJA was whether the Department's

preclearance restraint on Jacobs' communications with his

attorney was reasonable. By lumping together the Department's positions on Jacobs' first and second causes of actions,

involving disclosure to his attorney and public interest organizations, respectively, the district court never addressed that

crucial question.

The district court's failure to make the appropriate inquiry

under EAJA was an error of law, which, by definition, was an

abuse of discretion. See Cooter & Gell v. Hartmax Corp., 496

U.S. 384, 405 (1990). Because the question of whether the

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Department's position was substantially justified can be answered as a matter of law, a remand is unnecessary, see, e.g.,

George Hyman Constr. Co. v. Brooks, 963 F.2d 1532, 1539

(D.C. Cir. 1992); Shaw v. FBI, 749 F.2d 58, 63 (1984), and we

turn to the critical question that the district court did not

address.

In view of the district court's judgment on the merits of

Jacobs' free speech claim, which the government did not

appeal,3 the appropriate inquiry under EAJA is whether the

Department was substantially justified in placing on Jacobs'

communications with his attorney a prior restraint considerably more onerous than the one that the court held unconstitutional in Martin II.4 On the undisputed facts, the answer

can only be "No." The Department has been consistently

unwilling to recognize that communication of government

information by a federal government employee to the employee's attorney, where the attorney is bound to keep such

information confidential, is not a public disclosure of such

information, and that the employee enjoys rights under the

First Amendment to engage in such communications in addition to those the employee enjoys as a member of the general

public under FOIA. In response to Jacobs' initial request for

__________

3 The Department in its brief to this court takes issue with the

district court's characterization of the government's position as

requiring Jacobs to receive advance approval before disclosing

information to his attorney and as a restriction more severe than

that at issue in Martin II. This it cannot do; it did not appeal that

judgment. See, e.g., Trahan v. Brady, 907 F.2d 1215, 1218 (D.C.

Cir. 1990); Trahan v. Reagan, 824 F.2d 96, 103 (D.C. Cir. 1987),

vacated on other grounds, 866 F.2d 1424 (D.C. Cir. 1988). In any

event, we find no basis on which to conclude that the district court

clearly erred in its characterization. See Cooter & Gell, 496 U.S. at

403-05; Vollmer, 102 F.3d at 596.

4 Subsequently, the court affirmed the district court's judgment

that even in the absence of specific precedent regarding a federal

employee's rights to communicate with the employee's attorney, the

government's position had not been substantially justified under

EAJA. See Martin v. Lauer, 740 F.2d 36, 45-47 (D.C. Cir. 1984)

(Martin III).

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the Department to register its objections to any of Jacobs'

contemplated disclosures to his attorney, the Department

responded: "[W]e know of no authority under which the

types of communications described in your letters are excepted from the general restrictions on the release of confidential

information." Jacobs, 47 F. Supp.2d at 18 n.2. Once Jacobs

filed his lawsuit, the Department's position changed only to

refer to additional statutory and regulatory obstacles to disclosure,5 but at no point did the Department yield from its

preclearance position as to the first cause of action on which

Jacobs ultimately prevailed.

Yet the Department's position--its professed unawareness

of any authority that might justify Jacobs' contemplated

communications with his attorney--failed to acknowledge that

the First Amendment, superior to the statutory and regulatory provisions relied upon by the Department, might provide

such authority. This failure was inexplicable in light of

Martin II, which was decided more than a decade earlier. In

Martin II, the Department had required two employees who

were challenging the legality of a reduction-in-force to inform

it of what non-public, FOIA-exempt information they had

revealed to their attorney. 686 F.2d. at 26-27. Noting that a

balancing test to weigh the First Amendment rights of government employees against the government's interests will

vary according to the type and context of the speech at issue,

id. at 31 (citing Pickering v. Bd. of Education, 391 U.S. 563,

568 (1968)), the court concluded that:

Since the [Department's] memorandum works to restrict

communications between government employees and

__________

5 The additional statutes and regulations cited by the Department

included the Privacy Act, 5 U.S.C. s 552a(b) (1996); the Trade

Secrets Act, 18 U.S.C. s 1905 (1996); an ethics regulation concerning use of non-public information by a government employee, 5

C.F.R. s 2635.703 (1996); the so-called "Touhy" regulations governing production or disclosure in federal and state proceedings, 28

C.F.R. s 16.21-16.29 (1996); and a regulation prohibiting the improper use of official information, 28 C.F.R. s 45.735-10 (1996).

Schiffer also cited Department Order 2710.8A (1997), regarding

removal and maintenance of documents.

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their attorneys, it implicates the fundamental right of

those employees to meaningful access to the courts.

Absent grounds to believe that discussions in this limited

context would significantly impair any governmental interest, we conclude that the ... memorandum provisions,

as applied to FOIA-exempt information violate appellants' first amendment rights.

Id. at 32.6 Observing that there is a critical distinction

between disclosures in the attorney-client context and public

disclosures, id. at 32, 34-35, the court further concluded that

"the government may protect its interest in prohibiting public

disbursal of any sensitive information without intruding on

the employee's substantial interest in freely discussing his

legal rights with his attorney." Id. at 34. While the government arguably "could protect its interest in preventing public

disclosure of government information by requiring the employee not to authorize any subsequent disclosure of sensitive

government information by his or her attorney," the court

stated that a "broad restriction, undermining the confidentiality of the attorney-client relationship and chilling discussions

with counsel in order to protect the government's unclear

interest in monitoring all discussions of FOIA-exempt information cuts too deeply into the employee's first amendment

rights." Id. at 34-35.

It thus has long been clear that the First Amendment does

not provide a federal employee seeking legal advice regarding

a dispute with the employing agency with carte blanche

authority to disclose any and all confidential government

information to the employee's attorney, but rather that the

scope of the First Amendment right is determined by balanc-

__________

6 In Martin II, the court

emphasize[d], however, that this conclusion pertains only to the

communications made to the employees' attorneys and not to

any subsequent use made of those communications. Were the

employees to reveal the FOIA-exempt information to others, or

to authorize their attorney to do so, the balance between the

government's interests and the employees' might well shift.

Id. at 32.

ing the employee's interests in communication with the government's interests in preventing communication. Relevant

to this balancing is whether the attorney is likely to keep this

information in confidence, as suggested by willingness to

enter into a protective order, or whether such communications to the personal attorney will operate as a de facto public

disclosure. Where, as here, there was no evidence to suggest

that Jacobs' attorney would publicly disclose the information

Jacobs sought to communicate, the First Amendment required a balancing of interests beyond the balance between

disclosure and non-disclosure under the Freedom of Information Act. Understandably, the Department would be concerned about giving carte blanche approval of unlimited disclosures to one of its attorneys who has access to a broad

range of potentially sensitive, non-public information and who

is challenging its management of litigation. But the reasonUSCA Case #99-5217 Document #501277 Filed: 03/07/2000 Page 10 of 13
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ableness of the Department's position with respect to Jacobs'

free speech claim regarding his attorney must be evaluated in

light of Martin II. In that regard it is bears noting that in

Martin II the court observed, albeit in dictum, that in the

whistle-blower context, where a legal question arises as to

whether a contemplated public disclosure would be prohibited

by law, "[s]urely, [the employee] must be allowed to consult

his attorney for an answer to that question absent some

strong governmental interest in limiting such communications." Martin II, 686 F.2d at 33 n.41.

Consequently, the Department's position was not substantially justified as a matter of law in light of the Department's

complete unwillingness to acknowledge that Jacobs had an

interest in communicating with his attorney on his side of the

First Amendment's scale. While the district court's judgment on the merits is a separate matter, see Vollmer, 102

F.3d at 595, the gap between where the district court determined the point of First Amendment equilibrium to be and

the Department's "absolute embargo" evidences the Department's unwillingness to confront the constitutional implications of its dispute with Jacobs. Instead, prior to the instant

litigation, the Department stated that it was aware of no

authority that would have allowed Jacobs to make his contemUSCA Case #99-5217 Document #501277 Filed: 03/07/2000 Page 11 of 13
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plated communications to his attorney. In the district court,

the Department continued to claim that it was unable to

assess the scope of the information that Jacobs contemplated

sharing with his attorney, even though Jacobs' attorney had

previously indicated to the Assistant Attorney General that

"the scope of the inquiry concerns primarily one case and

correspondence with the Section and yourself on that case."

Although Jacobs' attorney also acknowledged that more than

one case might be involved in Jacobs' contemplated whistleblower claim the Department was not faced with an employee

engaged in an unbounded fishing expedition. In this court,

the Department continues to treat Jacobs' disclosures to his

attorney as disclosures to the public and attempts to distinguish Martin II by maintaining, contrary to the district

court's findings by which it is bound, see supra n.3, that the

Department never required preclearance of information Jacobs sought to share with his attorney, and further, but

without claiming that the protective order entered by the

district court is insufficient to address its concerns, that the

sensitive information to which Jacobs had access was fundamentally different from the information at issue in Martin II.

That Jacobs sought also, in his second cause of action, to

share information with third parties is irrelevant to the EAJA

issue, for he did not prevail on that claim, and thus the

Department's continued focus on that part of his complaint is

misplaced, particularly insofar as prior to Jacobs' filing suit

the Department's position was directed solely at Jacobs'

request to share information with his attorney.

Under the circumstances, the Department could not reasonably insist that its interests could be protected only by

preclearing document-by-document the information Jacobs

sought to share with his attorney. Even assuming the Department could have adopted a position that would have been

substantially justified short of agreeing to a protective order,

in light of Martin II and the willingness of Jacobs and his

attorney to address the Department's concerns that their

communications not be disclosed to the general public, the

Department cannot meet its burden to demonstrate that its

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prior restraint on Jacobs' communications with his attorney

was substantially justified.

Accordingly, we reverse and remand the case for the

district court to determine the amount of attorney's fees to

award Jacobs.

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