Court Opinion

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Opinions of the United
2000 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

7-26-2000

OSHA Data CIH Inc v. US Dept Labor
Precedential or Non-Precedential:

Docket 99-5457

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Recommended Citation
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Filed July 26, 2000

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 99-5457

OSHA DATA/CIH, INC.,
       Appellant

v.

UNITED STATES DEPARTMENT OF LABOR

On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil No. 98-cv-00283)
District Judge: Hon. Alfred J. Lechner, Jr.

Argued February 3, 2000

Before: MANSMANN, NYGAARD and RENDELL,
Circuit Judges

(Filed: July 26, 2000)

       Philip D. Stern, Esq. [ARGUED]
       The Common - Suite 203
       225 Millburn Avenue
       Millburn, NJ 07041
        Counsel for Appellant
       Susan Handler-Menahem, Esq.
       Office of United States Attorney
       970 Broad Street, Room 700
       Newark, NJ 07102

       Wendy M. Keats, Esq. [ARGUED]
       Leonard Schaitman, Esq.
       United States Department of Justice
       Civil Division, Appellate Staff
       Room 9152
       601 D Street, N.W.
       Washington, DC 20530
        Counsel for Appellee

OPINION OF THE COURT

RENDELL, Circuit Judge.

In this appeal, we are asked to determine whether the
projected $1.7 million cost of notifying companies affected
by two requests seeking potentially confidential information
under the Freedom of Information Act ("FOIA"), 1 and of
evaluating those companies' responses, were properly
chargeable to a commercial use requester as "review costs."2
This is an issue of first impression in the courts of appeals.
The United States District Court for the District of New
Jersey dismissed two counts of a four-count FOIA suit on
the basis that plaintiff-appellant, OSHA Data/CIH, Inc.,
who had requested the data in question, was responsible
for paying such costs to defendant-appellee, the United
States Department of Labor,3 but that OSHA Data had
indicated it was unable to pay these costs. OSHA Data now
_________________________________________________________________

1. 5 U.S.C. S 552 (1994).

2. The United States Department of Labor sought to undertake this
notification process in order to determine whether any of the requested
records might qualify as "confidential commercial information" within the
meaning of Exemption 4 to FOIA. See 5 U.S.C.S 552(b)(4).

3. To avoid confusion between the name of the appellant and the name
of the agency, we will refer to the Department of Labor or any of its
subdivisions, including OSHA (the Occupational Safety and Health
Administration), as "the DOL" or "the agency" rather than "OSHA."

                               2
appeals from the District Court's dismissal of these two
counts (Counts I and II) of its action. We agree with the
District Court that the costs of notification were"review
costs" that OSHA Data was required to pay in connection
with the agency's determination of the appropriate
disposition of the FOIA requests, and will affirm the
dismissal of Counts I and II.

The District Court also dismissed the remaining two
counts of the suit on mootness grounds. OSHA Data
concedes that Count IV was moot but argues that Count III
was incorrectly dismissed. We agree that Count III was
properly dismissed as moot and will affirm the dismissal of
this count as well.4

I. Facts and Procedural History

The facts of this case are largely undisputed. OSHA Data
is a private business that collects regulatory compliance
and enforcement information from various federal
government agencies, repackages that information into
computer databases and customized reports, and then sells
the information to its clients.5See OSHA Data
web site, Who We Are (visited June 1, 2000)
; see also A. at 172 (statement
of Philip D. Stern, counsel for OSHA Data). Among the
governmental information gathered by OSHA Data is data
from the DOL concerning workplace compliance with
Occupational Safety and Health Administration ("OSHA")
requirements. The DOL routinely supplies this information
to OSHA Data in the form of 9-track computer tapes,
provided in response to OSHA Data's FOIA requests.

At issue here are three separate FOIA requests for
information from the DOL, which form the basis of the
three counts in OSHA Data's complaint.6 Counts I and II
_________________________________________________________________

4. As we mention below, we will also leave undisturbed certain
intermediate rulings made by the District Court, including the District
Court's affirmance of a stay issued by the Magistrate Judge. See infra
n.20.
5. OSHA Data is a New Jersey corporation with its primary place of
business in Maplewood, New Jersey. See A. at 4-5.
6. Although OSHA Data filed a First Amendment to Complaint adding a
fourth count reflecting a fourth FOIA request, see A. at 49-50, the
parties have since agreed that the records sought in this fourth request
have been produced, rendering Count IV of the complaint moot. See
OSHA Data Br. at 5; DOL Br. at 3.

                                  3
seek certain records maintained by the DOL7 for calculating
Lost Work Day Injury and Illness ("LWDII") rates for
individual work sites. The LWDII rate for a particular
workplace is the ratio of the number of incidences of
serious injuries and illnesses to the number of employee
work hours performed at that work site during a given time
period. The information needed to calculate the LWDII rate
is generated by the private employers themselves.

OSHA Data's first FOIA request (Count I)8 sought data
collected by the DOL in its 1996 "Data Collection Initiative,"
a massive information-gathering endeavor covering
approximately 80,000 establishments in the manufacturing
sector and in other industries; these industries were chosen
on the basis either of high injury and illness rates or
previous DOL inspection history. See A. at 5-6, 12, 16. The
information obtained through the Data Collection Initiative
included each establishment's name and address, the
average number of employees who worked at that
establishment in 1995, total employee work hours for 1995,
numbers and kinds of occupational injuries and illnesses at
the establishment in 1995, and whether those injuries and
illnesses resulted in deaths or lost work days. See A. at
146-49. The DOL would use this information to calculate
injury and illness rates such as the LWDII rate. See A. at
19. Much, but not all, of the data collected in the Data
Collection Initiative paralleled information that employers
had already been recording on a form called "OSHA Form
200" or "Log 200." In the FOIA request that is the subject
of Count I, OSHA Data requested the following:

       [A] copy of all Log 200 data gathered from
       approximately 80,000 employers under the so-called
_________________________________________________________________

7. These records are maintained by OSHA (the Occupational Safety and
Health Administration), which is a subdivision of the Department of
Labor.

8. The information at issue in Count I was requested by OSHA Data in
a letter dated October 29, 1996. The information at issue in Counts II
and III was requested on October 24, 1996, and September 12, 1997,
respectively. Strictly chronologically speaking, therefore, Count I is the
second request rather than the first; but we will refer to the Count I
request as the "first request" and Count II as the "second request," to
track the language in the parties' papers.

                               4
       "Data Collection Initiative" which began in February
       1996. We specifically request the data include all
       captured fields of information such as the
       establishment name and address, name and telephone
       number of person who provided the data, average
       employment, hours worked, reporting period and the
       calculated LWDI [sic] value itself.

A. at 12 (Letter from Matthew M. Carmel, OSHA Data
President, to DOL official Steve Newell, Oct. 29, 1996); see
also A. at 5-6 (Complaint, First Count).

OSHA Data's second request also sought information on
LWDII rates. In contrast to the Count I request, which
targeted information obtained via the Data Collection
Initiative survey, the Count II request concerned
information obtained during the DOL's inspections of
approximately 7000 individual work sites.9 In addition to
conducting the inspection, DOL compliance officers were
directed to record injury and illness data from the
establishments' Log 200 forms; this data was then recorded
in a centralized DOL database, the Integrated Management
Information System ("IMIS"). The database software would
automatically calculate each establishment's LWDII rate
from the information collected. OSHA Data sought the
following information in its Count II request:

       [A] copy of the Lost Work Day Injury and Illness (LWDI
       [sic]) data calculated during OSHA enforcement
       inspections and entered into the Integrated
       Management Information System (IMIS) and current
       through September 30, 1996. . . . We specifically
       request the data include all captured fields of
       information associated with calculation of the LWDII
       such as the inspection activity number, number of
       work hours, reporting period and the LWDII value
       itself.

A. at 32 (Letter from Matthew M. Carmel, OSHA Data
President, to DOL official Bruce Beverage, Oct. 24, 1996);
see also A. at 6-7 (Complaint, Second Count).
_________________________________________________________________

9. The industries that underwent these inspections were different from
the industries covered by the Data Collection Initiative. Compare A. at 33
with A. at 16-17. See also DOL Supp. App. at 1.

                                5
The Count III request sought certain computerized
information relating to the DOL onsite inspections
themselves. The Count III request is limited to information
collected in the 30 days immediately prior to creation of the
computer file tape. OSHA Data alleges that this FOIA
request "was targeted specifically to address[DOL]'s new
policy of withholding the most recent 30 days of
information from the computer `derived' file supplied to
FOIA requesters." OSHA Data Br. at 9; see also A. at 8-9
(Complaint, Third Count). The DOL does not admit that it
has such a policy. See A. at 63 (Answer, Third Count); DOL
Br. at 51-53. The Count III request seeks the following
information:

       [A] copy of the sequential IMIS derived file. We
       specifically request the file contain all available data
       elements including the inspection, violation,
       administrative payment, hazardous substance,
       accident, related activity, debt, event history and
       optional segments for all inspection records up to and
       including the date of file tape creation. The requested
       file period of coverage is 30 days.

A. at 46 (Letter from Matthew M. Carmel, OSHA Data
President, to DOL official Bill Wright, Sept. 12, 1997); see
also A. at 8-9 (Complaint, Third Count).

The DOL denied the Count I and Count II requests 10 and,
thereafter, OSHA Data lodged administrative appeals of
these denials.11 See A. at 5, 7. After awaiting resolution of
the appeals for over a year, OSHA Data filed a three-count
complaint in the United States District Court for the
District of New Jersey, requesting an injunction preventing
the DOL from withholding the records -- in effect, an
_________________________________________________________________

10. The DOL initially asserted grounds for withholding the records that
are different from the grounds it now asserts. However, the agency may
justify the withholding of documents under any applicable exemption to
FOIA, even if it is not the exemption that was initially asserted. Cf. 5
U.S.C. S 552(a)(4)(B) (describing district court review of agency's FOIA
decision).

11. The DOL did not rule on the Count III request, because the DOL
maintains that it has provided the data in question in response to later
FOIA requests by OSHA Data.

                               6
injunction compelling the DOL to produce the records
pursuant to FOIA.12 The complaint also contained a request
for reasonable attorney's fees and litigation costs. The DOL
moved to stay the matter as to Counts I and II, arguing
that, because of potential issues of confidentiality, the
agency was required to implement a process of notifying
affected companies before it could finally determine whether
the requested records were subject to disclosure under
FOIA. The DOL asserted that this procedure was mandated
by its own regulations, see 29 C.F.R. S 70.26(d), and that
these costs, incurred in order to make a determination of
whether disclosure was appropriate, were "review costs."
The DOL further contended that OSHA Data, as a
"commercial use" requester of FOIA records, was required
by statute to pay all "review costs" in connection with the
request, and that these "review costs" would include the
costs of notifying the companies and evaluating their
responses.13

After an interim grant of the stay requested by the DOL,14
_________________________________________________________________

12. OSHA Data later filed an amended complaint that included the now-
moot fourth count mentioned above.

13. The DOL projected these costs to total approximately $1.7 million.
For the Count I request, the DOL estimated a cost of $1,554,250 --
$24,000 in mailing costs ($0.32 x 75,000 companies), $6,250 in
preparing letters for mailing ($10/person/hour x 75,000 ö 120
envelopes/hour/person), $1,500,000 for staff time reviewing the
submitters' responses ($20/person/hour x 75,000 ö 1
response/hour/person), and $24,000 for a second mailing. For the
Count II request, the DOL estimated a cost of $145,063, using the same
hourly rates for a base of 7,000 submitters. See DOL Supp. App. at 1.

It is worth noting that these are projected rather than actual costs.
Should it occur that many of the companies contacted would not wish
to object to disclosure of the requested information, the actual costs
might be much lower, and of course OSHA Data would be responsible
only for the actual costs.

14. The DOL sought this stay to allow the agency the opportunity to
contact the submitters of the information requested, so that the agency
could determine whether this information fell under one of FOIA's nine
exemptions to disclosure. This Motion to Stay was referred to Magistrate
Judge Dennis M. Cavanaugh pursuant to 28 U.S.C.S 636(b)(1)(A); Judge
Cavanaugh granted the motion, ruling that the DOL was required to

                               7
the District Court ruled on the merits of OSHA Data's
Motion for Summary Judgment as to Counts III and IV, and
on the DOL's Cross-Motion to Dismiss, or in the
Alternative, for Summary Judgment as to all counts. See A.
at 321-50 (unpublished Letter-Opinion and Order of
District Court, May 10, 1999). The District Court granted
the DOL Motion to Dismiss as to all counts, and denied the
OSHA Data Motion for Summary Judgment. The District
Court found that OSHA Data, by stating its inability and/or
unwillingness to pay the estimated $1.7 million"review
costs," had demonstrated that it was not able to meet the
conditions required for the lifting of the stay. The District
Court found that OSHA Data was required to pay the costs
of notification in order to pursue its claim, and dismissed
Counts I and II based on OSHA Data's stated inability to
pay.15 See A. at 340-41. The District Court dismissed
Counts III and IV as moot, reasoning that OSHA Data had
already received the information requested in those counts.
Although OSHA Data conceded that it had received the
Count III information as a result of subsequent FOIA
requests, OSHA Data had alleged that Count III presented
a scenario that was "capable of repetition, yet evading
review,"16 A. at 343, and as such should be exempted from
the application of the mootness doctrine. The District Court
found that OSHA Data had not met its burden of showing
_________________________________________________________________

undertake the notification and that it was appropriate to charge OSHA
Data the costs of notification and mailing, as well as the costs of
evaluating responses, as "review costs." See A. at 224-234. The District
Court (Judge Alfred J. Lechner, Jr.) then affirmed the stay, interpreting
it as a stay specifically of Counts I and II.

15. The District Court denied summary judgment to both parties,
reasoning that there remained a genuine issue of fact as to whether the
requested records did in fact fall under an exemption to FOIA. The
District Court also rejected the DOL's argument that Counts I and II
should be dismissed on the ground that nonpayment constituted a
failure to exhaust administrative remedies. The parties do not appeal
these determinations.

16. Perhaps the classic example of such a scenario is Roe v. Wade. See
Roe v. Wade, 410 U.S. 113, 125 (1973) (quoting Southern Pac. Terminal
Co. v. ICC, 219 U.S. 498, 515 (1911)).

                               8
an exception to the mootness doctrine.17 See A. at 347.
OSHA Data now appeals the District Court's order.

II. Jurisdiction and Standard of Review

The District Court had subject matter jurisdiction over
this case pursuant to FOIA, 5 U.S.C. S 552(a)(4)(B), and
pursuant to Congress's grant of federal question
jurisdiction, 28 U.S.C. S 1331. We have appellate
jurisdiction pursuant to 28 U.S.C. S 1291.

We review the District Court's dismissals of Counts I, II,
and III de novo. See Ditri v. Coldwell Banker Residential
Affiliates, Inc., 954 F.2d 869, 871 (3d Cir. 1992) (exercising
plenary review over dismissal for failure to state a claim);
Northeast Women's Center, Inc. v. McMonagle, 939 F.2d 57,
61 (3d Cir. 1991) (exercising plenary review over a district
court's decision that a case is moot).

III. FOIA and Its Allocation of Responsibility for Costs

The Freedom of Information Act, 5 U.S.C. S 552, was
enacted in 1966 in response to Congress's perception that
section 3 of the original Administrative Procedure Act, 5
U.S.C. S 1002 (1964 ed.), did not provide for adequate
governmental disclosure of information to the public. See,
e.g., Chrysler Corp. v. Brown, 441 U.S. 281, 293 & n.15
(1979). Congress therefore structured FOIA to reflect "a
general philosophy of full agency disclosure unless
information is exempted under clearly delineated statutory
language." S. Rep. No. 89-813, at 3 (1965), quoted in
Department of the Air Force v. Rose, 425 U.S. 352, 360-61
(1976). As the District Court for the District of Columbia
has succinctly described: "An agency may withhold
documents responsive to a FOIA request only if the
responsive documents fall within one of nine enumerated
statutory exemptions. The agency bears the burden of
justifying the withholding, and the [district] court reviews
the agency claims of exemption de novo." Winterstein v.
United States Dep't of Justice, 89 F. Supp. 2d 79, 80
(D.D.C. 2000) (citations omitted). An agency can be sued for
_________________________________________________________________

17. OSHA Data conceded that Count IV was moot. See A. at 348.

                               9
refusing to disclose information that it should have
disclosed pursuant to FOIA, see 5 U.S.C.S 552(a)(4)(B); this
is the type of suit that is before us in this case. 18 However,
an agency can also be sued through the vehicle of the
Administrative Procedure Act for allowing disclosure of
information that was in fact covered by one of the nine
exemptions to FOIA. See Chrysler Corp. v. Brown , 441 U.S.
at 317-18. This latter type of suit is commonly referred to
as a "reverse FOIA" suit.

FOIA contains provisions governing the circumstances
under which a requester will be required to pay the costs of
producing the records it has requested. As amended in
1986, FOIA delineates three types of costs --"search
costs," "duplication costs," and "review costs" -- and places
requesters into three categories that determine which of
these costs a given requester must pay. If a requester wants
the information for a "commercial use," it must pay for all
three types of costs incurred. In contrast, educational
institutions and the news media are required to pay only
duplication costs, and all other requesters are required to
pay search and duplication costs but not review costs. See
5 U.S.C. S 552(a)(4)(A)(ii). OSHA Data agrees that it is
making a request for "commercial use," and therefore is
liable for all three categories of costs, including review
costs. See OSHA Data Br. at 29.

Prior to 1986, FOIA did not require commercial users to
pay "review costs," and in fact the pre-1986 statute did not
differentiate between requests for commercial use and
requests for non-commercial use. Thus, by their very
existence, the 1986 amendments reflect a desire to treat
commercial uses differently from other uses, requiring that
commercial users shoulder more of the costs of FOIA
requests, rather than having taxpayers bear costs incurred
in processing these commercial requests. See 5 U.S.C.
S 552(a)(4)(A)(ii)(I) (reflecting language added via the
_________________________________________________________________

18. FOIA explicitly provides that the district court shall review de novo
the agency's determination that records are not subject to disclosure.
See 5 U.S.C. S 552(a)(4)(B).

                               10
Freedom of Information Reform Act of 1986, Pub. L. No. 99-
570, S 1803, 100 Stat. 3207).19

FOIA defines review costs as "only the direct costs
incurred during the initial examination of a document for
the purposes of determining whether the documents must
be disclosed under this section and for the purposes of
withholding any portions exempt from disclosure under this
section." 5 U.S.C. S 552(a)(4)(A)(iv). The DOL argues that the
costs of notifying the affected businesses and evaluating
their responses were "review costs," since they were part of
the process of the initial review of the records in order to
make the determination as to the applicability of Exemption
4, the FOIA provision that exempts confidential commercial
information from FOIA's disclosure requirements.

IV. Discussion

A. Issues Raised on Appeal

The essential issues before us are: whether the costs of
notification and evaluation were appropriately considered
"review costs" by the DOL such that the DOL could assess
these costs to OSHA Data, and could withhold the records
based on nonpayment of these costs; whether the resort to
notification was proper; and whether Count III was moot.
We conclude that the District Court correctly held that the
_________________________________________________________________

19. Legislative history and agency interpretations of the statutory
language further flesh out the policies that are apparent from the
language of the 1986 amendments themselves. The Office of
Management and Budget, which is charged with issuing guidance on
FOIA fees, see 5 U.S.C. S 552(a)(4)(A)(i), has commented as follows on the
1986 amendments: "[I]t seems clear that the Congress intended to
distinguish between requesters whose use of the information was for a
use that furthered their business interests, as opposed to a use that in
some way benefitted the public. The amendment shifts some of the
burden of paying for the FOIA to the former group and lessens it for the
latter." 52 Fed. Reg. 10,011, 10,013 (1987); see also 132 Cong. Rec.
29,616 (1986) (statement of Rep. English) ("[H]igher fees for commercial
users will recover more of the costs of processing requests when one
business uses the FOIA to seek information about another under
circumstances in which there are no public interest aspects to the
disclosure").

                                11
costs of notification and evaluation were "review costs"
which DOL would properly incur and for which OSHA Data
was responsible, and that Count III was moot.20

B. Applicable Law

1. Review Costs

The District Court determined that the anticipated costs
of notification and evaluation were "review costs." OSHA
Data argues that these are not the types of costs that are
covered by the statutory and regulatory definitions of
"review costs."

FOIA itself contains a definition of "review costs":

       Review costs shall include only the direct costs
       incurred during the initial examination of a document
       for the purposes of determining whether the
       documents must be disclosed under this section and
       for the purposes of withholding any portions exempt
       from disclosure under this section.

5 U.S.C. S 552(a)(4)(A)(iv).21 The DOL regulations give
_________________________________________________________________

20. OSHA Data lists four separate "issues presented" on appeal. OSHA
Data Br. at 2. Some involve procedural objections to intermediate
decisions of the District Court, including the District Court's decision
to
affirm the stay and to affirm other orders of the Magistrate Judge. We
will not address the procedural aspects of these interlocutory objections
to the District Court's intermediate orders, as these aspects do not
affect
the outcome on appeal; it is a well-known general principle that
interlocutory orders merge in the final judgment of the District Court.
See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949)
(stating that 28 U.S.C. SS 1291 and 1292 do not "permit appeals, even
from fully consummated decisions, where they are but steps towards
final judgment in which they will merge"). However, OSHA Data can of
course attack the substance of the reasoning that underlies the District
Court's order affirming the stay, since the substantive basis of this
decision -- i.e., that the DOL was justified in charging the costs of the
notification to OSHA Data as "review costs"-- is memorialized, and
indeed specifically included, in the District Court's final order of May
10,
1999. See A. at 336-37. To the extent that these objections implicate the
substantive issues presented by this appeal, we will dispose of them via
our discussion of the merits, see infra section IV.C.
21. FOIA also allows an agency to require advance payment of part of the
anticipated costs when those costs are predicted to exceed $250. See 5
U.S.C. S 552(a)(4)(A)(v).
12
further substance to this definition of review costs, terming
them the "costs associated with . . . [r]eviewing records to
determine whether any materials are exempt." 29 C.F.R.
S 70.40(a). The regulations define "direct costs" as "those
expenditures which an agency actually incurs in searching
for and duplicating (and in the case of a commercial
requester, reviewing) documents to respond to an[sic] FOIA
request," and further specify that these costs include
employee salaries. Id. S 70.38(b). The regulations lay out a
general rule as to when review costs can be charged to the
requester:

       [C]harges may only be assessed for review at the initial
       level, i.e. the review undertaken the first time the
       documents are analyzed to determine the applicability
       of specific exemptions to the particular record or
       portion of the record. Thus a requester would not be
       charged for review at the administrative appeal level
       with regard to the applicability of an exemption already
       applied at the initial level.

Id. S 70.40(d)(3). The regulations do not specifically make
reference to, or provision for, the type of costs at issue here.

2. Confidentiality and Notification Procedures

The DOL argues that it had to follow the notification
procedure, and incur the costs at issue, in order to
determine whether any of the requested records22 fell within
Exemption 4 to FOIA. Exemption 4 provides that an agency
is not required to disclose "trade secrets and commercial or
financial information obtained from a person and privileged
or confidential."23 5 U.S.C.S 552(b)(4). If the information
_________________________________________________________________

22. The parties agree that the requested information qualified as
"records" within the meaning of FOIA. See A. at 279-80 (DOL's responses
to interrogatories); OSHA Data Br. at 10.

23. OSHA Data concedes that the information is commercial in
character, and, with the exception of one piece of data (the LWDII rate),
concedes that the information is obtained from a person. Employers are
"persons" within the meaning of FOIA. See 5 U.S.C. S 551(2) (defining
"person" to include "an individual, partnership, corporation, association,
or public or private organization other than an agency"). OSHA Data
contends that the LWDII rate is not "obtained from a person" because it

                               13
requested is "confidential commercial information" as
described by the exemption, the agency need not release it
pursuant to FOIA.24

Therefore, the determination that the DOL would
ultimately have to make is whether the information was
"confidential" so as to be exempt from disclosure under the
statute.25 The issue presently before us, however, is
_________________________________________________________________

is a derived figure calculated by the DOL. See OSHA    Data Br. at 18.
However, as it appears that the LWDII rate is merely   a ratio calculated
from individual components all of which are obtained   from employers, we
find that the LWDII rate, like the other information   sought by OSHA
Data, is "obtained from a person."

24. The leading case interpreting Exemption 4 is National Parks &
Conservation Ass'n v. Morton, 498 F.2d 765 (D.C. Cir. 1974). National
Parks lays out the following test governing the ultimate agency decision
whether requested information is exempt from disclosure:

         [C]ommercial or financial matter is "confidential" for purposes of
the
         exemption if disclosure of the information 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.

Id. at 770 (footnote omitted).

25. OSHA Data argues as an initial matter that the Log 200 and LWDII
information cannot be considered "confidential" because this information
is readily available elsewhere. See OSHA Data Br. at 28-29; Reply Br. at
7-13. It is true that DOL regulations require employers to post an annual
summary of Log 200 data at the workplace itself, see 29 C.F.R. 1904.5,
and that some information about workplace safety for selected work sites
has been posted on portions of the DOL's World Wide Web site, see
OSHA News Releases & Statements: Combined National & Regional Index
(visited June 19, 2000) .
However, we reject OSHA Data's argument that these limited
disseminations of information render the Log 200 and LWDII data
"officially made available to the public" such that predisclosure
notification would not be required. 29 C.F.R.S 70.26(g)(2). As the DOL
points out, see DOL Br. at 40-41, the posting of an annual injury and
illness summary at the work site itself is a limited disclosure to a
limited
audience, a disclosure which is surely insufficient to render the data
publicly available; similarly, the DOL's inclusion on its Web site of
14
whether the notification costs that the agency anticipates
incurring in furtherance of this ultimate determination
would be properly incurred by the DOL, and properly
charged to OSHA Data. In this case, of course, the DOL is
not arguing that the requested information can ultimately
be withheld as confidential commercial information under
Exemption 4; the DOL is merely arguing that it cannot
provide the requested information without first ascertaining
whether it is confidential commercial information within the
meaning of Exemption 4. The DOL asserts that, as part of
its process of determining whether the statutory exemption
was applicable, it was required by its own regulations to
undertake the notification procedures at issue, and that
FOIA and these regulations permit the agency to charge the
commercial requester the costs of these procedures.

These regulations mandate notification whenever the
DOL "has reason to believe that disclosure of the
information could reasonably be expected to cause
substantial competitive harm," 29 C.F.R. S 70.26(d)(2)(ii).
The DOL concluded, and the District Court agreed, that the
possibility of substantial competitive harm was sufficient to
trigger the regulations mandating notification of the
business submitters. That is, the DOL believed that it had
to pursue notification so it could determine whether
information requested by OSHA Data would ultimately
qualify as "confidential" under Exemption 4.

The notification procedures that are to precede the
disclosure of potentially confidential information have as
their genesis a presidential order. In 1987, President
Ronald Reagan signed Executive Order 12,600 ("E.O.
12,600"), entitled "Predisclosure Notification Procedures for
Confidential Commercial Information." Exec. Order No.
12,600, 52 Fed. Reg. 23,781 (1987). E.O. 12,600's stated
purpose is "to provide predisclosure notification procedures
_________________________________________________________________

information on a few specific workplaces is not tantamount to a public
dissemination of the entire Data Collection Initiative information. OSHA
Data has not met its burden of producing evidence that the information
it seeks in its FOIA requests has already been made public by the
agency. See Occidental Petroleum Corp. v. SEC , 873 F.2d 325, 343 (D.C.
Cir. 1989).

                               15
under the Freedom of Information Act concerning
confidential commercial information, and to make existing
agency notification provisions more uniform." Id. at 23,781
(preamble). The Executive Order directs agency heads to
"establish procedures to notify submitters of records
containing confidential commercial information." Id. (S 1).
Section 3(b) of E.O. 12,600 provides that each agency head
"shall . . . provide the submitter notice . . . whenever the
department or agency determines that it may be required to
disclose records . . . the disclosure of which the department
or agency has reason to believe could reasonably be
expected to cause substantial competitive harm." Id. at
23,781-82 (S 3(b)). The Executive Order further states that
the agency procedures should afford the submitter an
opportunity to "object to the disclosure of any specified
portion of the information and to state all grounds upon
which disclosure is opposed," id. at 23,782 (S 4), that the
agency "shall give careful consideration to all such specified
grounds for nondisclosure" prior to making afinal
determination whether the information is subject to
disclosure, id. (S 5), and that, in the event the agency shall
decide to disclose information following a submitter's
objection, the agency shall provide the submitter with a
written statement explaining its decision to disclose, see id.

Pursuant to E.O. 12,600, see id. (S7), the DOL enacted
regulations to govern predisclosure notification for requests
that potentially triggered Exemption 4. These regulations
contain language similar to that in the Executive Order.
The regulations provide that the DOL "shall provide a
business submitter with notice of a FOIA request," 29
C.F.R. S 70.26(d)(2), whenever the DOL or its component
agency "has reason to believe that disclosure of the
information could reasonably be expected to cause
substantial competitive harm," id. S 70.26(d)(2)(ii).26 The
regulations also state that the agency "shall afford a
business submitter a reasonable period within which to
provide . . . a detailed statement of any objection to
_________________________________________________________________

26. The DOL regulations also require notification when "[t]he business
submitter has in good faith previously designated the information as
commercially or financially sensitive information." 29 C.F.R.
S 70.26(d)(2)(i).

                               16
disclosure"; such statement must "specify all grounds for
withholding any of the information under Exemption 4." Id.
S 70.26(e).

According to the DOL, these regulations required it to
notify the 80,000 affected businesses of OSHA Data's FOIA
request so that the DOL could fulfill its responsibility to
determine whether the information in question was subject
to disclosure or whether it instead came under the
confidential commercial information exemption to FOIA.

C. Resolution of Issues Raised on Appeal

OSHA Data argues that the District Court's assessment
of the costs to OSHA Data was erroneous for two reasons:
first, because these costs were not the type of costs
encompassed by the statutory and regulatory definitions of
"review costs," and second, because the agency had not
shown a need for the notification procedures that led to the
imposition of these projected costs. In furtherance of its
first claim, OSHA Data asserts that the "initial examination
of a document," for which review costs can be charged, 5
U.S.C. S 552(a)(4)(A)(iv), should be narrowly construed, and
that the predisclosure notification and evaluation are not
part of this initial examination. The construction urged by
OSHA Data, in effect, equates "initial examination" with an
"initial step" in the process.27 The DOL argues that the
"initial examination" includes all relevant steps taken by
the agency culminating in its decision as to whether the
information is subject to disclosure or is instead exempt.
DOL asserts that "initial examination" refers to the entire
_________________________________________________________________

27. OSHA Data states that "[i]n order to assert the need to notify
business submitters, [the DOL] must have already conducted its `initial
examination' " and thus cannot charge for any"additional" review costs.
OSHA Data Br. at 30. Although OSHA Data does not (and cannot)
dispute the fact that commercial requesters, due to their responsibility
to pay "review costs," are generally required to shoulder more of the cost
burden of FOIA requests than are other requesters, OSHA Data has not
identified what costs incurred by the agency in this case would qualify
as review costs. Thus, while in theory OSHA Data seems willing to bear
costs beyond the costs of duplication and search, OSHA Data has not
suggested what would be the permissible "review costs" in this case if, as
OSHA Data argues, the notification and evaluation costs are not such
costs.

                                17
process leading to the disclosure decision, and that the
word "initial" is used primarily to distinguish this process
from the process of "reviewing the materials again for
purposes of applying the same exemption on an
administrative appeal." DOL Br. at 21.

While FOIA does not set forth a definition of"initial
examination," we conclude that its language does not
support OSHA Data's interpretation. The statute refers to
"initial examination of a document for the purposes of
determining whether the documents must be disclosed
under this section and for the purposes of withholding any
portions exempt from disclosure under this section." 5
U.S.C. S 552(a)(4)(A)(iv). It cannot be doubted that DOL
proposes to undertake predisclosure notification and
evaluation for exactly the purpose stated in the statute: to
determine whether the documents must be disclosed or
whether they are exempt from disclosure. Without
complying with these notification procedures, the agency
would have great difficulty engaging in any meaningful
"review" so as to make that determination. Thus, we
conclude that the statute suggests a broader reading of
"initial examination," sufficiently broad to encompass the
contested steps in the predisclosure decision making
process.

In addition, the DOL regulations described above are
available to fill in the interstices in the statute; these
regulations clearly suggest an interpretation of"initial
examination" that mirrors the meaning suggested by the
DOL. The regulations specifically state that costs may be
assessed for "review at the initial level, i.e. the review
undertaken the first time the documents are analyzed to
determine the applicability of specific exemptions to the
particular record or portion of the record," and clarify that,
therefore, "a requester would not be charged for review at
the administrative appeal level with regard to the
applicability of an exemption already applied at the initial
level." 29 C.F.R. S 70.40(d)(3). The regulatory language
clearly supports the view that "initial examination" was
being contrasted to "subsequent review on appeal," not the
view that "initial examination" consists only of an agency's
first internal look at the requested records. OSHA Data has

                               18
not challenged the validity of these regulations, and we will
adopt the meaning apparent to us under the regulations'
plain language. We therefore conclude that the expenses of
predisclosure notification and evaluation are the types of
expenses to which the term "review costs" was meant to
apply.

OSHA Data next contends that, regardless of whether
notification costs fall within the general ambit of "review
costs," the costs in this case should not be charged to
OSHA Data because it was unnecessary for the agency to
incur them. OSHA Data claims that the DOL had no reason
to notify -- that is, that there is no basis for the DOL's
determination that the information in question might give
the agency "reason to believe that disclosure of the
information could reasonably be expected to cause
substantial competitive harm," the trigger for mandatory
notification specified by the applicable regulations. 29
C.F.R. S 70.26(d)(2)(ii).

OSHA Data is, in essence, contesting the propriety of the
agency's resort to the notification procedures. FOIA
explicitly provides a right of action for requesters to contest
an agency's ultimate decision to withhold data. See 5
U.S.C. S 552(a)(4)(B) (giving the district court jurisdiction,
"[o]n complaint," to "enjoin the agency from withholding
agency records and to order the production of any agency
records improperly withheld"). It is well established that
requesters can challenge the costs charged to them. See,
e.g., 5 U.S.C. S 552(a)(4)(A)(vii) (referring to an "action by a
requester regarding the waiver of fees"). We construe OSHA
Data's argument, then, as an argument that the
assessment of "review costs" includes within it some
determination that these review costs were reasonably or
appropriately incurred.28 We will accordingly examine, as
did the District Court, the DOL's basis for its decision to
_________________________________________________________________

28. It is important to note that in this appeal, OSHA Data does not
challenge the amount of the predisclosure costs estimated by the DOL;
rather, OSHA Data challenges the agency's determination that it was
necessary to incur notification and evaluation costs at all.

                               19
incur the notification and evaluation costs that it claims as
"review costs."29

As the District Court recognized, the DOL has provided
several justifications for its decision to pursue predisclosure
notification, all of which go toward assessing the risk of
"substantial competitive harm." The DOL gives several
reasons why it believed that some of this specific
information might eventually be deemed to qualify as
confidential under Exemption 4. First, the DOL had
previously represented to submitters that it would maintain
the confidentiality of their responses.30 See A. at 18-25. The
DOL has also presented evidence that legislators and
businesses consider information of this sort to be
confidential because of its risk of causing "substantial
competitive harm" if disclosed. See, e.g., A. at 143-44
(Letter from Rep. Cass Ballenger, Chairman, Subcommittee
on Workforce Protections, Committee on Economic and
_________________________________________________________________

29. The district courts clearly have de novo review over the ultimate
agency decision to withhold records. See 5 U.S.C. S 552(a)(4)(B).
However, the parties have provided no guidance as to what standard of
review a district court would employ in evaluating the reasonableness of
the agency's intermediate decision to pursue predisclosure notification.
Is
this a case of an agency interpreting its own regulations (here, the
predisclosure regulations) that might entail Chevron deference? See
Chevron v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 842-44
(1984); Auer v. Robbins, 519 U.S. 452, 461-63 (1997). Or is it a situation
where the courts review an adverse agency action for arbitrariness or
caprice as provided for by the Administrative Procedure Act? See 5
U.S.C. S 706(2)(A). Or does the de novo FOIA standard apply? We need
not decide this question, for we cannot say that the agency erred, under
any standard of review, in making the decision to undertake
predisclosure notification.

30. The DOL asserts that, if the requested information were deemed to
have been provided voluntarily by submitters, rather than provided
pursuant to a compulsory regulation, the DOL would have an even more
heightened responsibility to keep the information confidential. See DOL
Br. at 33-34 (citing Critical Mass Energy Project v. NRC, 975 F.2d 871,
879-880 (D.C. Cir. 1992) (en banc)). Because wefind that the DOL had
ample justification for its decision to pursue predisclosure notification
even under the assumption that the DOL compelled submitters to
provide it, we need not reach the question whether the information was
in fact provided voluntarily or by regulatory compulsion.

                               20
Educational Opportunities, to Charles Bowsher,
Comptroller General of the United States, Nov. 12, 1996)
(outlining confidentiality concerns stemming from the
specific Data Collection Initiative at issue in this case); A. at
196, 200-01 (Declaration of DOL official Emily Sheketoff,
Apr. 27, 1998) (describing the basis for the confidentiality
concerns expressed by representatives of Goodyear, one of
the companies submitting Data Initiative Collection data).

More important, as the District Court noted, at least one
federal court has held that information similar to the
workplace data in question here was competitively sensitive
and therefore confidential within the meaning of Exemption
4. See Westinghouse Elec. Corp. v. Schlesinger , 392 F.
Supp. 1246, 1249 (E.D. Va. 1974), aff 'd, 542 F.2d 1190
(4th Cir. 1976) (superseded by statute on other grounds,
see CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1141 &
n.62 (D.C. Cir. 1987)). The District Court concluded that
Westinghouse provided support for DOL's contention that
"[t]he information sought by OSHA Data could give a
submitter's competitors insight into the productivity, hours
worked, market share and production," and that the
disclosure of such information could cause the submitter
"substantial competitive harm." A. at 337 n.7. We agree. In
Westinghouse, the District Court for the Eastern District of
Virginia held that information appearing in a business's
equal employment opportunity workforce report and
affirmative action plan, could, if disclosed, enable
competitors to calculate (via "reverse engineering") that
business's labor costs and profit margins. See
Westinghouse, 392 F. Supp. at 1249. Similarly, argues the
DOL, a competitor could use information about a
business's number of employees and employee work-hours
to calculate estimates of that company's labor costs and
productivity, which would give that competitor valuable
inside information to assist its pricing strategies.

In fact, previous litigation concerning the Data Collection
Initiative itself has touched on confidentiality concerns. See
American Trucking Assocs. v. Reich, 955 F. Supp. 4, 6
(D.D.C. 1997) (noting employers' concerns about the
confidentiality of the Data Collection Initiative). The DOL
maintains that the District Court's order for injunctive relief

                               21
in American Trucking depended in part upon OSHA's
assurance that it would keep the survey data for internal
use only. See DOL Supp. App. at 3 (District Court order
granting injunction, American Trucking Assocs. v. Reich,
D.D.C. Civ. No. 96-552 (TPJ), Mar. 18, 1997); see also A. at
200 (Declaration of DOL official Emily Sheketoff, Apr. 27,
1998).31

The issue before us as we examine this early stage of the
DOL's process is whether disclosure of the information
sought could lead to substantial competitive harm. The
evidence produced was sufficient for this purpose. We are
not faced with the ultimate issue for the agency, namely
whether the information in the Count I and II requests was
actually confidential and therefore covered by Exemption 4,
and we take no position on this question.32 However, as the
_________________________________________________________________

31. In addition, we cannot fault the agency's decision to exercise caution
in making its determination whether the requested information was
exempt from disclosure. As the DOL points out, the consequences of an
agency's wrongful disclosure of records can be serious. The predisclosure
notification regulations mandate notification and evaluation whenever
the agency has "reason to believe that disclosure of the information
could reasonably be expected to cause substantial competitive harm." 29
C.F.R. S 70.26(d)(2)(ii). A submitter that believes that its information
was
wrongfully disclosed when that information should have been withheld
can bring a "reverse FOIA" suit against the agency under the
Administrative Procedure Act. See Chrysler Corp. v. Brown, 441 U.S.
281, 318 (1979). Wrongful disclosure of information protected under
Exemption 4 can even lead to criminal liability for an agency under the
Trade Secrets Act, 18 U.S.C. S 1905. See CNA Fin. Corp. v. Donovan, 830
F.2d 1132, 1151-52 (D.C. Cir. 1987). While the fact that wrongful
disclosure can lead to agency liability cannot, standing alone, justify
the
agency's decision to undertake notification (under such a rationale, an
agency could potentially justify mandatory notification whenever
commercial information of any kind, no matter how innocuous, is
requested), surely it is appropriate for the agency to consider its
responsibility not to wrongfully disclose confidential information as well
as its responsibility to disclose all information whose disclosure is
mandated by FOIA.

32. As Magistrate Judge Cavanaugh acknowledged, one can imagine
information that is far more commercially sensitive than the information
requested in Counts I and II. See A. at 188-89 (Transcript of Motion,
Apr. 21, 1998, at 38-39).

                               22
District Court found, the evidence is clearly sufficient to
surpass the much less onerous threshold of showing that
the DOL acted appropriately in concluding that it had
"reason to believe that disclosure of the information could
reasonably be expected to cause substantial competitive
harm," 29 C.F.R. S 70.26(d)(2)(ii).33 This standard for
triggering mandatory predisclosure notification is obviously
much less burdensome than the standard for justifying an
ultimate withholding of information under Exemption 4.
See supra note 24 (describing National Parks standard). The
DOL need not show that the disclosure of the information
requested would cause substantial competitive harm, but
must show only that the DOL had "reason to believe that
disclosure . . . could reasonably be expected to cause
substantial competitive harm."34 The totality of the evidence
of the potential for substantial competitive harm that was
available to the DOL at the time it assessed the need for
predisclosure notification was sufficient to give the DOL
reason to believe that substantial competitive harm might
reasonably result from some of the disclosures in question.

In summary, we conclude that the estimated $1.7 million
costs for notification and evaluation were "review costs"
properly chargeable to OSHA Data in connection with the
notification procedure authorized by agency regulations,
and that the District Court correctly dismissed Counts I
_________________________________________________________________

33. We note that the breadth of the Count I and II requests -- seeking
information for over 80,000 companies -- makes it difficult for the DOL
to determine whether the information falls under Exemption 4 without
going through predisclosure notification. The inquiry into the likelihood
of substantial competitive harm is a fact-based inquiry that evaluates
the circumstances of the employer submitting the information. See CNA
Fin. Corp. v. Donovan, 830 F.2d 1132, 1152-53 (D.C. Cir. 1987).
Particularly in a case where, as here, the agency collecting the
information is collecting it for the first time, see DOL Supp. App. at 11
(Declaration of DOL official Miriam McD. Miller, May 12, 1998), it is
unrealistic to expect the agency to be familiar with the competitive
circumstances of each of 80,000 submitters without contacting those
submitters for further information.

34. It is clear that in order to prove that the agency had "reason to
believe X," the agency need show something less than "X is true." (Here,
"X" = "disclosure could reasonably be expected to cause substantial
competitive harm.")

                               23
and II of the Amended Complaint based on OSHA Data's
inability to pay these costs.

D. Mootness of Count III

OSHA Data concedes that it has received the specific
data that were the subject of the Count III request.
Ordinarily, the receipt of the data would render Count III
moot. See, e.g., National Resources Defense Council, Inc. v.
NRC, 680 F.2d 810, 814 (D.C. Cir. 1982) (stating that a
federal court "is not empowered to decide moot questions
. . . or to declare, for the government of future cases,
principles or rules of law which cannot affect the result as
to the thing in issue in the case before it") (quoting
California v. San Pablo & Tulare R.R. Co., 149 U.S. 308, 314
(1893)) (internal quotation marks omitted). However, OSHA
contends that Count III falls into the narrow category of
controversies that are "capable of repetition, yet evading
review" and thus constitute an exception from the
application of the mootness doctrine. See Press-Enterprise
Co. v. Superior Ct. of Cal., 478 U.S. 1, 6 (1986).

In order to qualify for this exception, OSHA Data has the
burden of meeting both parts of the following test:"(1) the
challenged action was in its duration too short to be fully
litigated prior to its cessation or expiration, and (2) there
was a reasonable expectation that the same complaining
party would be subjected to the same action again." United
States v. Criden, 675 F.2d 550, 553 (3d Cir. 1982) (quoting
Murphy v. Hunt, 455 U.S. 478, 482 (1982)) (additional
citation and internal quotation marks omitted). For much
the same reasons as the District Court, we conclude that
OSHA Data has not satisfied the second part of that test.

OSHA Data alludes in its brief to a DOL "policy" of
withholding the last 30 days of information from the
computer file tapes provided in response to FOIA requests
for data on violations uncovered during workplace
inspections. See OSHA Data Br. at 9. However, the only
record evidence that might point to such a policy consists
of two letters from OSHA Data to DOL officials. See A. at 41
(Letter from Matthew M. Carmel, President of OSHA Data,
to DOL official Cathryn Goedert, Aug. 5, 1997); A. at 46
(Letter from Matthew M. Carmel to DOL official Bill Wright,

                               24
Sept. 12, 1997). The first letter states that a DOL employee
had informed OSHA Data that there was a "new policy" of
not providing inspection records for establishments that
were issued violations during the 30 days prior to the tape
creation date. A. at 41. OSHA Data has not provided any
direct documentation of such a policy. Although OSHA
surely need not prove, at the complaint stage, that such a
policy exists, the mere allegation of an agency policy does
not satisfy OSHA Data's burden of showing that it is
reasonably likely to be subject to the 30-day blackout
period in the future. Similarly, the second letter, which
alludes to a previous DOL "offer" to exclude most requested
information within the 30-day period, does not satisfy this
burden. OSHA Data does not include in the record the
letter from the DOL in which this offer was allegedly made.

As the District Court observed:

       OSHA Data argues there are, and will continue to be,
       quarterly requests for information contained in the
       derived file. OSHA Data further argues that because
       the Department of Labor has not stated it will cease
       the practice of withholding the thirty day data, there is
       a reasonable expectation OSHA Data "will be subject to
       the same action." Accordingly, OSHA Data asserts
       Count Three is not moot.

        OSHA Data, however, has failed to demonstrate that
       any of its future information requests will be denied as
       a result of the operation of the alleged thirty day
       exclusionary period.

       * * *

        OSHA Data commenced this matter on 22 January
       1998. Since the commencement of this matter and the
       filing of the OSHA Data Motion for Summary
       Judgment, several quarters have passed. No argument
       has been presented by OSHA Data to suggest that any
       of the intervening quarterly requests for information
       were impacted by the operation of the alleged thirty
       day exclusionary policy. A. at 344-46 (District Court
       Letter-Opinion, May 10, 1999). Thus, the District Court
       concluded, OSHA Data had not shown a reasonable

                                  25
       expectation that it would be subjected to the alleged
       blackout period. See id. at 346-47.35

We agree with the District Court's assessment. OSHA
Data has not satisfied its burden of establishing that Count
III falls under the category of claims that are"capable of
repetition, yet evading review." We will therefore affirm the
District Court's dismissal of Count III as moot.

V. Conclusion

For the foregoing reasons, we will affirm the judgment of
the District Court.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit
_________________________________________________________________

35. On appeal, OSHA Data has moved to supplement the record with a
letter from DOL official Cathryn Goedert to OSHA Data President
Matthew M. Carmel. OSHA Data asserts that this letter demonstrates
that the DOL has applied the 30-day blackout policy to subsequent
OSHA Data quarterly FOIA requests. We will deny OSHA Data's motion
to expand the record. OSHA Data had ample opportunity to present this
letter to the District Court, but failed to do so; the letter, which is
dated
December 4, 1998, came into OSHA Data's possession well before the
District Court heard argument on OSHA Data's motion for summary
judgment on Count III in February 1999 and ruled on this motion in
May 1999. Our role as a Court of Appeals is to review the decision made
by the District Court; we will do so based on the evidence presented to
the District Court.

                               26