Case Name: Lawrence J. DIRKSEN, M.D., John S. Wilson, M.D., Joseph A. Hewitt, M.D., Charles H. Eid, M.D., Robert J. Blahut, M.D., Malcolm C. Hill, M.D., Leon G. Kaseff, M.D., Richard A. Nelson, M.D., a partnership, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; Health Care Financing Administration; James L. Scott, individually and as Acting Deputy Administrator for Health Care Financing Administration; Dennis F. Siebert, individually and as Director, Office of Public Affairs, Health Care Financing Administration, et al., Defendants-Appellees
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1986-11-04
Citations: 803 F.2d 1456
Docket Number: No. 85-2771
Parties: Lawrence J. DIRKSEN, M.D., John S. Wilson, M.D., Joseph A. Hewitt, M.D., Charles H. Eid, M.D., Robert J. Blahut, M.D., Malcolm C. Hill, M.D., Leon G. Kaseff, M.D., Richard A. Nelson, M.D., a partnership, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; Health Care Financing Administration; James L. Scott, individually and as Acting Deputy Administrator for Health Care Financing Administration; Dennis F. Siebert, individually and as Director, Office of Public Affairs, Health Care Financing Administration, et al., Defendants-Appellees.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 803
Pages: 1456–1463

Head Matter:
Lawrence J. DIRKSEN, M.D., John S. Wilson, M.D., Joseph A. Hewitt, M.D., Charles H. Eid, M.D., Robert J. Blahut, M.D., Malcolm C. Hill, M.D., Leon G. Kaseff, M.D., Richard A. Nelson, M.D., a partnership, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; Health Care Financing Administration; James L. Scott, individually and as Acting Deputy Administrator for Health Care Financing Administration; Dennis F. Siebert, individually and as Director, Office of Public Affairs, Health Care Financing Administration, et al., Defendants-Appellees.
No. 85-2771.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted May 13, 1986.
Decided Nov. 4, 1986.
Kathleen Hayes, Jensen, Rust & Doyle, San Francisco, Cal., for plaintiffs-appellants.
Sandra L. Willis, Asst. U.S. Atty., San Francisco, Cal, for defendants-appellees.
Before SNEED, FARRIS, and FERGUSON, Circuit Judges.

Opinion:
SNEED, Circuit Judge:
Appellant Lawrence J. Dirksen, M.D., and his medical group (Dirksen) appeal from a district court order granting the Department of Health and Human Services' (DHHS) motion for summary judgment and dismissing his complaint brought under the Freedom of Information Act (FOIA), 5 U.S.C. § 552. We affirm.
I.
FACTS AND PROCEEDINGS BELOW
The Department of Health and Human . Services administers the Medicare program through an operating division designated as the Health Care Financing Administration (HCFA). Pursuant to statutory authority, DHHS has contracted with Blue Shield of California (Blue Shield) to process claims for payment submitted by physicians and other health care providers under Part B of the Medicare program. To carry out this task, Blue Shield has developed an internal document known as the "Medicare Policy Guidelines" (the Guidelines). The Guidelines determine whether, at the first stage of claims processing, claims for billed services should be paid, denied, or reviewed more closely. The Guidelines also contain instructions for computer coding and routing within Blue Shield.
Dirksen is a member of a medical partnership. He contacted HCFA in November 1983, to inquire whether the information submitted to Blue Shield on a standard claim form was adequate. In response to this inquiry, HFCA provided him with information and documents, including specific instructions for the completion of the form and Blue Shield's manual dealing with diagnosis coding. Dirksen expressed dissatisfaction with this response. On February 3, 1984, he submitted an FOIA request seeking disclosure of Blue Shield's "internal processing guidelines" (i.e., the Guidelines).
HCFA's Director of the Office of Public Affairs denied the request, based on his determination that release of the document could lead to "circumvention of agency regulations used in the discharge of the agency's regulatory function" and that, therefore, the document was exempt from disclosure pursuant to 5 U.S.C. § 552(b)(2). He also contended that nondisclosure of the Guidelines was justified by Exemption 5, 5 U.S.C. § 552(b)(5), encompassing documents that would not be available by law to a party in litigation with an agency. Dirksen appealed that decision to the Deputy Administrator. On August 20, 1984, the appeal was denied by HCFA's Acting Deputy Administrator on the same grounds cited in the initial denial. At various times during this exchange of letters, Blue Shield made itself available to Dirksen to discuss billing procedures.
Dirksen then brought an action in the district court, pursuant to 5 U.S.C. § 552(a)(4)(B), to obtain review of the denial of the FOIA request. On May 20, 1985, pursuant to a stipulation between the parties, DHHS submitted Regional Administrator John O'Hara's affidavit, which described the document at issue and explained the basis for the denial of Dirksen's request. Based on this declaration, DHHS moved for summary judgment. Subsequently, Dirksen filed a cross-motion for summary judgment, supported in part by Dirksen's affidavit. At a hearing on July 18, 1985, the district court granted DHHS' motion for summary judgment and denied Dirksen's motion. Dirksen appeals.
II.
DISCUSSION
A. Standard of Review
Review of summary judgment in this type of ease is unusual. It is based on, first, whether "the district court had an adequate factual basis upon which to make its decision, and . [second, whether] its decision that the documents were exempt . was not clearly erroneous." Pollard v. FBI, 705 F.2d 1151, 1155 (9th Cir.1983); see Van Bourg, Allen, Weinberg & Roger v. NLRB, 751 F.2d 982, 984 (9th Cir.1985) (per curiam); Church of Scientology v. United States Department of the Army, 611 F.2d 738, 742 (9th Cir.1979).
DHHS meets the first part of this test squarely; the O'Hara affidavit was "detailed enough [to enable] the district court to make a de novo assessment of the government's claim of exemption." Doyle v. FBI, 722 F.2d 554, 555-56 (9th Cir.1983). See Clerk's Record (C.R.) item 19. We therefore turn to the issue of whether the district court clearly erred in finding that the material in question was exempt under FOIA, keeping in mind that "disclosure, not secrecy, is the dominant objective of the Act." Department of the Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 1599, 48 L.Ed.2d 1 (1976).
B. Exemption 2: "Internal Personnel Rules and Practices"
Exemption 2, 5 U.S.C. § 552(b)(2), protects from disclosure under FOIA "matters that are . related solely to the internal rules and practices of an agency." The interpretation of this exemption has been hotly contested. See, e.g., Department of the Air Force v. Rose, 425 U.S. 352, 362-70, 96 S.Ct. 1592, 1599-1603, 48 L.Ed.2d 11 (1976); Hardy v. Bureau of Alcohol, Tobacco & Firearms, 631 F.2d 653, 655-57 (9th Cir.1980); Ginsburg, Feldman & Bress v. Federal Energy Administration, 591 F.2d 717, 723-31, aff'd en banc and per curiam by an equally divided court, 591 F.2d 752 (D.C.Cir.1978), cert. denied, 441 U.S. 906, 99 S.Ct. 1994, 60 L.Ed.2d 374 (1979); Caplan v. Bureau of Alcohol, Tobacco & Firearms, 587 F.2d 544, 546-48 (2d Cir.1978). In Rose, the Supreme Court interpreted Exemption 2 in light of the differing House and Senate reports on the bill and determined that the Senate report, which more narrowly construed the exemption, controlled. 425 U.S. at 366-67, 96 S.Ct. at 1601-02. However, in Rose, the parties had not alleged that circumvention of agency regulations might result from disclosing the material. Id. at 364, 96 S.Ct. at 1600. The Court indicated that Exemption 2 might be applicable "where disclosure may risk circumvention of agency regulation." 425 U.S. at 369, 96 S.Ct. at 1603.
Here circumvention of this sort is a real possibility, and controlling is our decision in Hardy v. Bureau of Alcohol, Tobacco & Firearms, 631 F.2d 653 (9th Cir.1980), in which we held that Exemption 2 did apply under such circumstances. In Hardy, an attorney requested portions of the Bureau's "Raids and Searches" manual. The court, persuaded that the materials — if disclosed — could lead to circumvention, adopted the Second Circuit's reasoning in Caplan v. Bureau of Alcohol, Tobacco & Firearms, 587 F.2d 544 (2d Cir.1978). The Caplan court determined that disclosure of the manual would "hinder investigations [and] enable violators to avoid detection." Id. at 545. The Hardy court agreed with this reasoning and reemphasized the distinction between law-enforcement materials, which involve enforcement methods, and administrative materials, which define violations of the laws. 631 F.2d at 657. The latter are more likely to contain "secret law" that should be disclosed if requested. The former may be exempt if circumvention is likely. Id.
The Guidelines that Dirksen seeks do not define new classes of approved services different from what the public understands to be "covered"; instead, they merely categorize, for speed in processing, which claims are to be automatically granted, denied, or reviewed in more detail. See C.R. item 19, at 11 (affidavit stating that the Guidelines were "an internal claims pro cessing blueprint which enables Blue Shield to handle the millions of claims it receives each year uniformly and expeditiously"). It is not difficult to believe that, among the care providers in possession of these materials, there would be some who would try to fit their claims into the "automatically granted" category. Nor is it difficult to believe that, upon the submission of a barrage of claims fashioned to conform to the Guidelines, the Guidelines would lose the utility they were intended to provide. The requested Guidelines serve an auditing function. Cf. Ginsburg, Feldman & Bress v. Federal Energy Administration, 591 F.2d 717, 718-21 (exempting, under section 552(b)(2), guidelines intended "to assure that the costs oil refiners use in computing their prices are correct and that the reports they make to the FEA are accurate"), affd en banc and per curiam by an equally divided court, 591 F.2d 752 (D.C.Cir.1978), cert. denied, 441 U.S. 906, 99 S.Ct. 1994, 60 L.Ed.2d 374 (1979). This puts them into the category of exempt law enforcement material. As Ginsburg noted,
[N]ormal policy considerations also require that [operational directives] remain confidential____ To turn such manuals over to those who are the subject of regulatory supervision is to dig a den for the fox inside the chicken coop.
Id. at 730. Because we find that the Guidelines are exempt under section 552(b)(2), we need not discuss whether they are also exempt under section 552(b)(5) (intra-agency memoranda).
C. Attorneys' Fees
Dirksen seeks attorneys' fees under 5 U.S.C. § 552(a)(4)(E), which provides for fees "in any [FOIA] case . in which the complainant has substantially prevailed." Because Dirksen prevailed neither below nor here, we deny an award of fees.
AFFIRMED.