Source: http://openjurist.org/644/f2d/969
Timestamp: 2015-01-26 16:29:59
Document Index: 22970316

Matched Legal Cases: ['§ 552', '§ 552', '§ 552', '§ 552', '§ 552', '§ 1292', '§ 552']

644 F2d 969 Coastal States Gas Corporation v. Department of Energy | OpenJurist
644 F. 2d 969 - Coastal States Gas Corporation v. Department of Energy	Home644 f2d 969 coastal states gas corporation v. department of energy
644 F2d 969 Coastal States Gas Corporation v. Department of Energy 644 F.2d 969
Energy Mgt. P 26,279COASTAL STATES GAS CORPORATION,v.DEPARTMENT OF ENERGY, Appellant.
No. 80-2199.
Argued Dec. 4, 1980.Decided March 19, 1981.Rehearing and Rehearing In Bank Denied April 14, 1981.
Alice Daniel, Asst. Atty. Gen., Washington, D. C., James W. Garvin, Jr., U. S. Atty., Wilmington, Del., William Kanter, Marc Johnston (argued), Attys., Civ. Div., U. S. Dept. of Justice, Washington, D. C., for appellant.
Rene P. Lavenant, Jr., J. Todd Shields (argued), Charles S. Patterson, Jr., Fulbright & Jaworski, Houston, Tex., William O. LaMotte, III, Morris, Nichols, Arsht & Tunnel, Wilmington, Del., for appellee.
This appeal presents two interrelated questions dealing with the role of a district court in passing on requests for information submitted under the Freedom of Information Act, 5 U.S.C. § 552(a)(4)(B) (FOIA). First, did the district court abuse its discretion in refusing to consider a revised index and affidavit, submitted by the government immediately prior to the hearing on the plaintiff's "motion for partial judgment" to explain the claimed exemptions? Second, did the district court err in ordering a government agency to produce forthwith all documents for which claims of exemption were not adequately supported by the initial index provided to justify the withholding? Because we conclude, in the circumstances here, that the district court abused its discretion in rejecting the revised index and erred in ordering immediate disclosure of the documents, we vacate the order of the district court and remand.
In October, 1978, plaintiff Coastal States Gas Corp. (Coastal) transmitted a FOIA request to defendant Department of Energy (DOE).1 Coastal sought agency records pertaining to (1) the formulation, adoption, interpretation and territorial application by DOE of certain petroleum price and allocation regulations; (2) regulations concerning an exemption from the petroleum price charged for the "first sale into U.S. Commerce" of imports; and (3) enforcement activity by DOE against firms alleged to have violated regulations because of participation in a "foreign transaction." Coastal candidly admitted that the records sought were directly related to questions raised by a Proposed Remedial Order2 issued by DOE to Coastal on September 6, 1978.
DOE did not comply with the ten day period provided in the statute for an agency response to a FOIA request, 5 U.S.C. § 552(a)(6)(A); instead, it answered Coastal with two letters granting itself extensions of time. Having exhausted its administrative remedies,3 Coastal initiated a FOIA suit in the district court, in April 1979, pursuant to § 552(a)(4)(B).4 Coastal simultaneously filed a motion to compel preparation by DOE of a Vaughn index covering all documents that DOE asserted to be exempt from disclosure under FOIA. A Vaughn index is a procedural tool developed in Vaughn v. Rosen, 484 F.2d 820, 826-28 (D.C.Cir.1973), cert. denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974), to enable a district court to evaluate allegations of exemption advanced by a governmental agency, and to assure that claimed exemptions are justified under the Act. The contemplated indexing system would subdivide requested documents into manageable sections and cross-reference relevant portions to the various justifications for nondisclosure asserted by the government. An adequate Vaughn index would thus narrow the scope of the court's inquiry, contribute to informed court evaluation of disputed documents, aid appellate review, and enhance an opposing party's ability to argue effectively against nondisclosure.
Under the FOIA statute, which embodies a policy of expedited handling of requests for documents, a government agency has thirty days to answer a FOIA complaint and motion, rather than the sixty day period usually accorded the government. 5 U.S.C. § 552(a)(4)(C). After a court conference, the parties entered into a stipulation, which was approved by an order dated May 9, 1979, setting June 15, 1979 as the production date for the non-exempt documents and June 22 as the filing date for the Vaughn index of withheld documents. The order approving the stipulation contained a provision carefully detailing the information which the government was required to set forth in the index so as to justify nondisclosure.5 At DOE's request the deadline for filing the Vaughn index was extended to July 2, 1979. Pursuant to the May 9 order, DOE collected and reviewed over 800 documents; 500 were immediately released and approximately 200, withheld in whole or in part, are in issue here.6
Following DOE's filing of the Vaughn index together with counsel's affidavit, which described the withheld documents, Coastal sought discovery from DOE concerning the method employed to prepare the index. DOE responded with a motion for a protective order to limit discovery to interrogatories. It also represented that it would file an affidavit with the court the next day, supplying additional information regarding the documents being withheld and theoretically mooting the need for discovery. In addition DOE stated that it intended to move for summary judgment by August 17, 1979. The district court denied DOE's application for a protective order, and explained that it would not rule on a summary judgment motion in a FOIA case if the plaintiff had not been afforded an opportunity to examine the scope and adequacy of the agency's document search and to discover what documents are in existence.7
Although DOE never filed the motion for summary judgment as it had promised, discovery nonetheless ensued. Then, on December 7, 1979, Coastal filed a "motion for partial judgment," requesting production of all documents listed in the July 2, 1979 index8 and a compilation of a new, adequate Vaughn index covering any documents not ordered disclosed. Coastal failed to denominate with any particularity what type of proceeding was sought, but requested an expedited hearing. In doing so, it invoked the docket priority directive of § 552(a)(4)(D).9 Oral argument was set for February 28, 1980. The day before the hearing, DOE filed with the court a revised 400-page Vaughn index and an accompanying affidavit the revised index and affidavit that it had promised in its January 11, 1980 answering brief. Coastal immediately countered with a motion to strike the revised index and affidavit on the ground they were untimely filed.
The district court granted the plaintiff's motion to strike the revised index, maintaining that to permit DOE "to rely upon its latest eleventh-hour effort to delay these proceedings would make a mockery of the legislation."10 The district judge reasoned that DOE's long-standing knowledge of the Vaughn index requirement, the acknowledged importance of such indices in the effective enforcement of the FOIA, and the congressional policy favoring expeditious handling of FOIA cases militated against allowing the agency to revise and correct its index until it "got it right." Next, the court found that DOE's initial July 2 index did not comply with the order of May 9 requiring a particularized justification for any refusal to release a document. The inadequacy of the document index, the district judge declared, created four problems: the court was incapable of determining whether the documents were in fact exempt; Coastal was unable to argue with desirable legal precision that specific records were not exempt;11 in camera review, on the basis of such minimal information would be unfair to Coastal and extremely burdensome and unproductive for the court; and meaningful appellate review would be difficult.12 Thus, the deficient index also provided the basis for the district court's rejection of in camera review as a viable alternative for determining possible exemptions.
Nevertheless, the judge specifically rejected the plaintiff's argument that the failure by DOE to comply with the May 9 Order merited the sanction of partial judgment as a matter of discovery law. Rather, in holding that partial judgment ordering production without consideration of the revised index was an appropriate remedy, the district court relied on what it characterized as "the provisions and policies of the FOIA," "the well-established purpose for requiring the filing of an adequate Vaughn index," and on the trial court's "inherent power to control the proceedings before it."13 After the district judge denied DOE's motion for reconsideration of the order, the agency sought a stay from this Court pending appeal. Finding that the "partial judgment" granted by the district court achieved the plaintiff's very objective to compel production of documents and that compliance with the order would effectively moot DOE's claim that the documents are in fact exempt, a stay was granted.
First, we hold that this Court has jurisdiction pursuant to § 1292(a)(1), on the ground that this appeal was from an interlocutory order granting injunctive relief.14 Because the order to produce in and of itself grants full relief to the FOIA requester, this is a quintessential case of an interlocutory order with "serious, perhaps irreparable, consequence," and which can be "effectually challenged" only by immediate appeal.15
The procedural history of this matter has been related in some detail because it is critical to a proper disposition of the immediate controversy. As is now well-known, FOIA was enacted in furtherance of the belief that "an informed electorate is vital to the proper operation of a democracy."16 The Act's central provision instructs agencies, upon request, to release promptly responsive records in their possession,17 subject to nine specific exemptions.18 Moreover, the FOIA places the burden of proof on the agencies to establish and sustain their claims of exemption.19 Unfortunately, requests under the Act have produced almost as much advice from courts about how the FOIA ought to operate as they have generated information from agencies about how the government actually operates.
The Supreme Court, in adjudicating FOIA suits, has recently evolved a tripartite test to determine whether a district court has authority to order the production of documents pursuant to 5 U.S.C. § 552(a)(4)(B). The judicial remedy is properly invoked if:
(1) the requested documents are agency records
(2) the records have been withheld by the agency and
(3) the withholding was improper.
See Forsham v. Harris, 445 U.S. 169, 177, 100 S.Ct. 978, 983, 63 L.Ed.2d 293 (1980); Kissinger v. Reporters Comm., 445 U.S. 136, 150, 100 S.Ct. 960, 968, 63 L.Ed.2d 267 (1980).
Because the regulations and interpretations promulgated by DOE and sought by Coastal are clearly agency records,20 and because these documents, within the agency's control, are admittedly being withheld,21 our inquiry focuses on whether the withholding was improper. While the questions whether a document is an agency record and whether it is being withheld are largely substantive ones, discerning whether the withholding is improper raises substantive as well as procedural issues. As a substantive matter, if the agency cannot sustain its burden of proof, because the actual contents of the records do not fall within one of the specified exemptions, withholding is not in order. From a procedural standpoint, agency delay in providing the court with sufficient information to determine if an exemption is justified, could amount to a failure to carry the statutory burden of proof and could also constitute improper withholding, given the policies of full and expeditious disclosure that are embodied in the Act.22
Coastal, apparently to guard against all contingencies, argues in the alternative that the district court's order can be rationalized as a default judgment, a summary judgment, a final judgment, or as an exercise of the court's inherent power to control its docket. The analysis advanced by Coastal, which is premised on the FOIA policy of prompt disclosure, implicitly intertwines procedure and substance. It contends that to interpret FOIA to require that "an agency can 'improperly withhold' agency records only if a district court affirmatively finds that records being withheld are not exempt"23 would emasculate the "make promptly available" language of the Act.24 Rather, to effectuate fully the goals of FOIA, Coastal maintains that an improper withholding occurs if an agency, solely on the basis of conclusory allegations of exemption, retains records for time periods far beyond those prescribed in the Act,25 and beyond any reasonable conception of promptness. The argument equates the agency's dilatoriness in proving the validity of an exemption with the agency's inability to carry its burden of proof on the merits of an exemption.
Originally, Coastal supported its "partial judgment motion" with a default theory: that the persistent failure of DOE to comply with the May 9 court order to produce a Vaughn index of sufficient evidentiary detail justified a default judgment for Coastal.26 The district court, however, explicitly declined to rest its holding on a default judgment theory. Without in any way excusing DOE's failure to submit revised and complete information to the court, the district judge stated that he believed that partial judgment as a matter of discovery law premised solely on noncompliance with a discovery order was an inappropriate sanction.27 Because there is no precedent for the draconian sanction of default subsequent to an initial noncompliance with a discovery order,28 and because FOIA cases do not offer examples of dismissals based on a single failure to comply with an order to produce a Vaughn index,29 we are unable to say that the district judge erred in rejecting Coastal's default theory. In light of the district court's declination to enter a default judgment and Coastal's failure to specify what rule of civil procedure governed this action,30 it is necessary for us to analyze the record carefully in order to ascertain precisely what the court did do, and whether it was permissible.
Although we in no way intend to condone DOE's lack of celerity in this proceeding, a comparison of the present case with Coastal States Gas Corp. v. Dept. of Energy,31 helps to illuminate some of the problems present here. Coastal believes we are entitled to rely on the rationale of this recent case in which the District of Columbia Circuit upheld a district court order requiring DOE to produce all documents for which its claims of exemption were not adequately supported by a Vaughn index. In doing so, the District of Columbia Court stated "(a)t several points in the course of this opinion we will rely on a conclusion not that the documents are not exempt as a matter of law, but that the agency has failed to supply us with even the minimal information necessary to make a determination." 617 F.2d at 861. This premise, acceptable in the context of Coastal I, does not appear to be applicable when engrafted on the proceedings presently before us.
In Coastal I, where the matter came before the district court on cross-motions for summary judgment, DOE was fully informed of its procedural posture.32 DOE had submitted a Vaughn index in July 1978 and had been ordered by the court half a year later to supplement the index, which it did. Thus, had the district court in the matter before us temporarily accepted the revised index, the time frame of the two proceedings would be quite similar. Most importantly, when the District of Columbia district court, in August 1979, ordered that the documents, with a few minor exceptions, be released, it carefully parsed the Vaughn index33 and made copious findings in support of its decision. In rejecting any of DOE's generalized claims of exemption, the district court there indicated either that the rationale of the particular exemption did not apply to the documents in issue or that the agency had failed to demonstrate the prerequisites to proper invocation of the exemption. Such analysis would be equally desirable in the present proceeding in which the same exemptions, five and seven, are in issue.34
For example, in assessing the merits of DOE's claims to Exemption 5, which is cast in terms of discovery law protecting documents "which would not be available to a private party in litigation with the agency" the Coastal I court divided that exemption into its three recognized privileges.35 With respect to the attorney-client privilege, the District of Columbia district court found that DOE failed to establish a fundamental prerequisite to its assertion: confidentiality maintained at the time of, and subsequent to, the communication.36 Yet in the present case, there appear to be communications between counsel for DOE and agency compliance personnel, requesting advice with respect to information confidentially disclosed by the agency's personnel to counsel, which arguably are exempt under this privilege.37 And DOE in some instances has made an attempt to establish that disclosure was limited and premised on confidentiality.38 The district court here, however, did not consider such proffered justifications.
In addressing the attorney work-product privilege, the district court in Coastal I held that few of the allegedly exempt documents were being properly withheld, because DOE had failed to demonstrate that the papers were prepared in anticipation of litigation.39 Here, in contrast, DOE had issued a Proposed Remedial Order to Coastal on September 6, 1978 and is presently engaged in administrative enforcement proceedings, as well as involved as an intervenor in private litigation between Coastal and NEPCo, a public utility which brought an action against a Coastal subsidiary. Nor has Coastal sought to conceal the fact that it wants the documents in conjunction with the ongoing proceedings.40 While this particular need does not diminish the validity of Coastal's claim,41 it is relevant to the legitimacy of DOE's claimed exemptions. Unlike Coastal I, the affidavit and index filed by DOE in the present case describe documents which contain legal analyses, strategies and mental impressions of DOE attorneys participating in the enforcement proceedings and the NEPCo litigation.42 These documents, therefore, would appear to fall, at least facially, under the attorney work-product rubric.
Similarly, the existence of enforcement proceedings distinguishes the DOE's Exemption 7 claims made in this case from the unsubstantiated assertions in Coastal I. The scope of Exempt