United States District Court, District of Columbia
April 24, 2001
AMFAC RESORTS, L.L.C., PLAINTIFF,
UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL., DEFENDANTS. NATIONAL PARK HOSPITALITY ASSN., PLAINTIFF, V. UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL., DEFENDANTS. HAMILTON STORES, INC., PLAINTIFF, V. UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL., DEFENDANTS. ARAMARK SPORTS AND ENTERTAINMENT SERVICES, INC., PLAINTIFF, V. UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Lamberth, District Judge.
MEMORANDUM AND ORDER
Now before the Court are several issues related to the
parties' access to and use of information. The plaintiffs seek
discovery of materials outside the administrative record, and
seek to share with their experts certain proprietary information
that is already in the record. The defendants oppose the
plaintiffs' motions for discovery, and demand a protective order
limiting the circumstances under which the plaintiffs' experts
may view portions of the administrative record. After a full
consideration of the parties' memoranda, the applicable law, and
for the following reasons, the Court DENIES the plaintiffs'
discovery motions, and GRANTS in part and DENIES in part the
defendants' motion for a protective order.
The plaintiffs in these cases have been concessioners at
various national parks throughout the United States for over 30
years. Although their concession contracts expire at the close
of this year, they are interested in continuing as
concessioners. To this end, they have been participating in the
National Park Service ("NPS") bidding process. It is this
process to which the plaintiffs object, and seek to reform by
the instant suit.
The plaintiffs' suits allege that the NPS's contracting
process violates the Administrative Procedure Act ("APA") and
the Tucker Act in that it
(1) denies the plaintiffs a preferred status in the
contract renewal process;
(2) undervalues the plaintiffs' capital investment in
their concession stores; and
(3) permits the NPS to review corporate transfers of
"any controlling interest in a concessioner."
See, e.g., Complaint for Aramark, Dec. 22, 2000, at 3, 18.
From the outset of these cases, a chief area of dispute has
been the information available to the plaintiffs. Although an
official administrative record has been filed with the Court,
the plaintiffs seek information beyond the record which they
believe bolsters their cases. Specifically, the plaintiffs seek
two main classes of information:*fn1 (1) information related
to the plaintiffs' preferred status in contract renewal, and (2)
information related the NPS's possessory interest valuation
With respect to the preferred status issue, the plaintiffs
claim that discovery is necessary to show that they are indeed
entitled to a preferred status in the contract renewal process.
The plaintiffs concede that their concession contracts do not
explicitly grant them such a status, but contend nonetheless
that it is an implied term in the contracts. Discovery of
information surrounding the contract
negotiations will show, allege the plaintiffs, that a preferred
status was contemplated and agreed upon by the parties.
With regard to the valuation issue, the plaintiffs claim that
discovery is necessary to show that NPS's calculation of
franchise fees and possessory interests is arbitrary and
capricious. These calculations form an important part of the
concession contract negotiation process, and an understanding
how these values are calculated, argue the plaintiffs, is
essential to challenging their validity. Although the
administrative record includes a 13-page summary of the
valuation process, the plaintiffs still claim that further
information is necessary.
Besides seeking discovery, the plaintiffs also seek to share
the aforementioned 13-page summary with their experts.
Currently, the defendant argues that the summary contains
important proprietary information, and that any expert who views
it must agree never again to serve as an expert in a concession
contract case against the NPS. The plaintiffs argue that such a
condition prevents them from retaining an expert for their
cases. They therefore propose a protective order that would
permit limited disclosure to their experts.
A. The Plaintiffs' Demand for Discovery
Although the parties have characterized this as a discovery
dispute, it is more properly understood as a dispute over the
sufficiency of the administrative record. For, in cases brought
under the APA and the Tucker Act, judicial review is normally
confined to the administrative record.*fn2 Thus, any
discovery request is necessarily predicated on the notion that
the record is insufficient.*fn3 The Court below undertakes an
analysis of the plaintiffs' plea for extra-record discovery, and
finds that such discovery is not merited.
1. Judicial Review Under the Tucker Act and APA
By the text of the Administrative Procedure Act*fn4, a
court is to evaluate agency action by "review[ing] the whole
record or those parts of it cited by a party." 5 U.S.C. § 706.
On its face, this provision says nothing about whether a court
may look beyond the record to review an
agency action. Under long-standing precedent, however, judicial
review is ordinarily "confined to the administrative record."
See Texas Rural Legal Aid, Inc. v. Legal Servs. Corp.,
940 F.2d 685, 698 (D.C.Cir. 1991); see also Camp v. Pitts,
411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973); Citizens
to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct.
814, 28 L.Ed.2d 136 (1971); Environmental Defense Fund, Inc. v.
Costle, 657 F.2d 275, 284 (D.C.Cir. 1981).
The rationale for this rule derives from a commonsense
understanding of the court's functional role in the
administrative state. The Court of Appeals in this Circuit has
explained it as such:
[J]udicial reliance on an agency's stated rationale
and findings is central to a harmonious relationship
between agency and court, one which recognizes that
the agency and not the court is the principal
decision maker. Were courts cavalierly to supplement
the record, they would be tempted to second-guess
agency decisions in the belief that they were better
informed than the administrators empowered by
Congress and appointed by the President. The accepted
deference of court to agency would be turned on its
head: the so-called administrative state would be
replaced with one run by judges lacking the expertise
and resources necessary to discharge the function
they had arrogated unto themselves.
San Luis Obispo Mothers for Peace v. NRC, 751 F.2d 1287,
1325-26 (D.C.Cir. 1986) (en banc).
Like most well-tested rules, the rule limiting judicial review
to the record is subject to certain narrow exceptions. In this
Circuit, four separate exceptions are well established.*fn5
First, a court may look beyond the record if "there was such a
failure [by the agency] to explain administrative action [so] as
to frustrate effective judicial review." Camp, 411 U.S. at
142-43, 93 S.Ct. 1241; James Madison Ltd., Inc. v. Ludwig,
82 F.3d 1085, 1095 (D.C.Cir. 1996). Second, courts have looked
beyond the record when it is necessary to determine whether the
agency "considered all the relevant factors." Environmental
Defense Fund, Inc. v. Costle, 657 F.2d 275, 285 (D.C.Cir.
1981); see also James Madison Ltd., Inc., 82 F.3d at 1095.
Third, non-record review is merited when the agency may have
"deliberately or negligently included documents that may have
been adverse to its decision." Kent County v. U.S.
Environmental Protection Agency, 963 F.2d 391, 395-96 (D.C.Cir.
1992); see also James Madison Ltd., Inc., 82 F.3d at 1095.
Finally, non-record review is also permissible in situations
where there is a "strong showing of bad faith or improper
behavior" on the part of the
agency. Community for Creative Non-Violence v. Lujan,
908 F.2d 992, 997 (D.C.Cir. 1990) (citing Citizens to Preserve Overton
Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136
In the first two of the four circumstances, the record itself
will reveal whether non-record review is merited. For example,
it will be apparent from the face of the record whether the
agency action is "adequately explained in the record," or
whether an agency appears to have "considered all the relevant
factors." Thus, in these circumstances, a party seeking
non-record review has everything at its disposal (i.e., the
record) needed to successfully urge the Court to look beyond the
A different situation, however, is presented by the second two
circumstances. In those circumstances, the completeness of the
record and the good faith behind it can only be grasped by
looking beyond the record itself. Thus, in these circumstances,
the only way a non-agency party can demonstrate to a court the
need for extra-record judicial review is to first obtain
discovery from the agency. See Bar MK Ranches v. Yuetter,
994 F.2d 735, 739 (10th Cir. 1993) (permitting discovery when a
party has made a "showing that the record may not be complete");
Community for Creative Non-Violence, 908 F.2d at 998
(permitting discovery upon a showing of "bad faith or improper
behavior"); Portland Audubon Society v. Endangered Species
Committee, 984 F.2d 1534, 1548 (9th Cir. 1993) (permitting
discovery where there is reason to infer bad faith or improper
behavior by the agency); Natural Resources Defense Council v.
Train, 519 F.2d 287, 292 (D.C.Cir. 1975) (permitting "limited
discovery" to ensure that "documents which are properly part of
the administrative record have [not] been withheld").
To obtain discovery from an agency in an APA case, a party
must overcome the standard presumption that the "agency properly
designated the Administrative Record." Bar MK Ranches, 994
F.2d at 740. That is, a party must provide good reason to
believe that discovery will uncover evidence relevant to the
Court's decision to look beyond the record. Thus, a party must
make a significant showing — variously described as a "strong",
"substantial", or "prima facie" showing — that it will find
material in the agency's possession indicative of bad faith or
an incomplete record. See Overton Park, 401 U.S. at 420, 91
S.Ct. 814 (requiring a "strong showing" before extra-record
inquiry will be permitted); San Luis Obispo, 751 F.2d at 1327
(requiring a party to make a "prima facie showing"); Train,
519 F.2d at 291 (finding discovery merited by a "substantial
To determine whether a party has made a "strong showing" that
a record is incomplete, it is necessary to comprehend what
constitutes the "whole record." 5 U.S.C. § 706. First and most
basically, a complete administrative record should include all
materials that "might have influenced the agency's decision,"
and not merely those on which the agency relied in its final
decision. See Bethlehem Steel v. EPA, 638 F.2d 994, 1000 (7th
Cir. 1980) (citing National Courier Association v. Board of
Governors of the Fed. Reserve Sys., 516 F.2d 1229, 1241
(D.C.Cir. 1975)). Thus, if the agency decisionmaker based his
decision on the work and recommendations of subordinates, those
materials should be included as well. See Bar MK Ranches, 994
F.2d at 739 ("The complete administrative record consists of all
documents and materials directly or indirectly considered by the
agency."); Novartis Pharmaceuticals v. Shalala, 2000 WL
1769589, *2 (D.C. 2000); Miami Nation
of Indians of Ind. v. Babbitt, 979 F. Supp. 771, 775 (N.D.Ind.
1996); Lloyd v. Illinois Regional Transp. Auth., 548 F. Supp. 575,
590 (N.D.Ill. 1982); Tenneco Oil Co. v. Department of
Energy, 475 F. Supp. 299, 317 (Del. 1979). However, deliberative
intraagency memoranda and other such records are ordinarily
privileged, and need not be included in the record. See In re
Subpoena Duces Tecum Served on Office of Comptroller of
Currency, 156 F.3d 1279, 1280 (D.C.Cir. 1998); Madison County
Bldg. & Loan Ass'n v. Federal Home Loan Bank Bcd, 622 F.2d 393,
395 n. 3 (8th Cir. 1980); National Nutritional Foods Ass'n v.
Mathews, 557 F.2d 325, 331 (2d Cir. 1977).
Having defined the general scope of judicial review, as well
as the instances meriting extra-record discovery and review, the
Court now turns to the question of whether the plaintiffs may
probe the agency's extra-record materials.
2. The Plaintiffs' Demand for Discovery
The plaintiffs argue that discovery is necessary to properly
dispute (1) the literal terms of its concession contract, and
(2) the NPS's financial valuations. The Court finds that the
plaintiffs have not adduced sufficient material to merit
As explained above, discovery is only available if a party
makes a "substantial showing" that material providing a basis
for extra-record review will be uncovered. In the case at hand,
the plaintiffs have only proffered a single affidavit, a
declaration by David Morris Gossett. Mr. Gossett is an attorney
for one of the plaintiffs, and declares the following:
I believe that further discovery from the NPS, as
requested in the discovery requests previously filed
by Hamilton Stores, Amfac, and Aramark, will generate
additional evidence that will assist the
concessioners in proving the existence of [the
aforementioned] implied contractual rights over the
government's objection. For example, I have
personally reviewed the documents produced by the
National Park Service in response to NPHA's FOIA
request. I found, and we cite in our briefs . . .
several documents that support our position that were
not included in the government's Administrative
I . . . believe that without further discovery
summary judgment in favor of the government would be
inappropriate because "facts essential to justify"
the concessioners' opposition, Fed.R.Civ.P. 56(f),
are within the control of the NPS and have not been
produced pursuant to lawful and reasonable discovery
requests previously filed.
Declaration of David M. Gossett, Feb. 27, 2001, at ¶ 6.
The Court finds this statement to be far short of the
"substantial showing" necessary to gain discovery. First of all,
the declaration completely misconstrues the showing necessary
for discovery in an APA case. The declaration seems to suggest
that, just because several non-record documents "support [their]
position," discovery is therefore merited. But this is not the
showing necessary to gain discovery; the mere fact that certain
information is not in the record does not alone suggest that the
record is incomplete. As explained above, large categories of
information are routinely excluded from the record. See In re
Subpoena Duces Tecum Served on Office of Comptroller of
Currency, 156 F.3d at 1280; Madison County Bldg. & Loan
Ass'n, 622 F.2d at 395 n. 3; National Nutritional Foods
Ass'n, 557 F.2d at 331. And even if the Court were to
generously infer that the existence of "additional evidence"
incomplete record, this single statement in the plaintiffs' only
declaration is much too little to merit discovery in this type
of case — a type of case where discovery is rarely permitted.
In conclusion, the Court finds that the plaintiffs have not
made the "substantial showing" necessary to obtain discovery in
this case. Their discovery motions are therefore denied.
B. The Protective Order Applicable to the Plaintiffs'
In addition to their interest in obtaining more information,
the plaintiffs also seek greater leeway in using certain parts
of the administrative record. More specifically, the plaintiffs
seek to share with their experts 13 pages of background
information on the NPS's valuation practices. The defendant
asserts that this information is highly sensitive, and demands
that the information not be shown to an expert unless the expert
agrees (1) never to serve as a consultant in a NPS concession
contract bidding process, and (2) never again to serve as an
expert in any concession contract case against the NPS. This is
necessary, argues the defendant, because the expert's knowledge
would put the NPS or another concessioner at a distinct
disadvantage in any future concession contract bidding or
litigation. See Declaration of Cynthia Orlando, Jan. 23, 2001.
The plaintiffs argue that this restriction prevents them from
retaining an expert. The Court finds that, although a protective
order is necessary, neither party's order is appropriate.
Accordingly, a separate protective order consistent with the
requirements discussed below shall be issued this date.
Federal Rule of Civil Procedure 26(c)(7) permits a court to
issue a protective order to require that "a trade secret or
other confidential research, development, or commercial
information not be revealed or be revealed only in a designated
way." As the Supreme Court has explained, this rule "confers
broad discretion on the trial court to decide when a protective
order is appropriate and what degree of protection is required."
Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36, 104 S.Ct.
2199, 81 L.Ed.2d 17 (1984). In exercising this discretion, a
court is to engage in a "balancing of various factors: the
requester's need for information . . ., its relevance to the
litigation at hand, the burden of producing the sought-after
material, and the harm which disclosure would cause to the party
seeking to protect the information." Burka v. United States
Department of Health and Human Servs., 87 F.3d 508, 517
(D.C.Cir. 1996). In crafting a protective order, a court may
"limit the conditions, time, place, or topics of discovery; or
limit the manner in which a trade secret or other confidential
research, development, or commercial information may be
revealed." Id. at 518.
Viewing the dispute now before it, the Court first observes
that the information sought is of high importance to this case;
indeed, the legitimacy of the NPS's financial valuations is one
of the core issues the plaintiffs address in their complaint.
See, e.g., Complaint for Aramark, Dec. 22, 2000, at 3. From
this observation, the Court logically infers that the
plaintiffs' need for this information is great. Nonetheless, the
Court also notes the NPS's declaration of Cynthia Orlando, which
suggests that fairness of the negotiating process may be
compromised if the valuation information is made public. See
Declaration of Cynthia Orlando, Jan. 23, 2001. In issuing a
protective order then, the Court seeks a middle ground where the
plaintiffs will be fully able to press their case, and the NPS's
proprietary interests will be compromised no more than
With this goal in mind, the Court concludes that a protective
order is appropriate, and that it should be designed as follows:
First, any expert or consultant permitted to view the
valuation data shall agree not to disseminate in any way any of
the confidential information viewed, unless expressly permitted
by the NPS or the terms of the protective order. This is a
standard requirement, and one to which neither party objects.
Second, any expert permitted to view the valuation data shall
agree not to serve as a consultant in any future concession
contract bidding involving the NPS.*fn6 This requirement is
necessary to protect the NPS's substantial and ongoing interest
in a fair bidding process. See Declaration of Cynthia Orlando,
Jan. 23, 2001. Although the plaintiffs argue that this prevents
them from retaining an expert, the better characterization is
that it only increases the cost of retaining an expert. There is
no doubt that, at some price level, some consultant would be
willing to forgo his future profits from NPS
concessioners.*fn7 While the Court does not wish to
unnecessarily escalate the costs of litigation, the Court sees
this as the proper balance considering the significant interest
of the NPS as well as the significant litigation resources that
the plaintiffs have demonstrated they possess. Moreover, the
Court is not fully convinced that the population of available
experts is so homogenous, and the NPS concession contract
business segment so large, that all available financial advisors
will balk at a case requiring them to forgo certain future
dealings with concessioners. If these unlikely circumstances are
indeed the case, and the cost of an expert is drastically
exorbitant, the plaintiffs may, of course, always file a motion
for reconsideration accompanied by the proper affidavits. For
now however, this requirement shall stand.
Third, the expert shall agree to reveal to all adverse parties
in any future litigation the general nature and scope of his
knowledge gained from this case. This is a routine requirement
which ensures that a party will not unwittingly be prejudiced
through another's prior involvement in other litigation.
In summary, the Court today holds (1) that the plaintiffs are
not entitled to any discovery from the NPS and (2) that the
plaintiffs may share the 13-page summary of the NPS's valuation
processes with their experts under the conditions described in
the protective order issued separately this date. Further, in
Civil Action No. 002838, it is hereby
ORDERED that the defendants' motion for a protective order as
to discovery  is GRANTED; further, it is
ORDERED that defendants' motion for a protective order as to
the use of
confidential information [22-1] is GRANTED in part and DENIED in
part; further, it is
ORDERED that the plaintiffs motion for discovery [30-1] is
DENIED; further it is
ORDERED that the plaintiffs motion for a protective order as
to the use of confidential information [15-1] is GRANTED in part
and DENIED in part.
Further, in Civil Action No. 00-2937, it is hereby
ORDERED that the plaintiffs motion for a protective order and
to compel discovery [10-1] is GRANTED in part and DENIED in
part; further, it is
ORDERED that the defendants' motion for a protective order as
to the use of confidential information [18-1] is GRANTED in part
and DENIED in part; further, it is
ORDERED that the plaintiff's motion to compel discovery [26-1]
is DENIED; further, it is ORDERED that the defendants'
protective order as to discovery [32-1] is GRANTED.