United States District Court for the District of Columbia
March 3, 2004.
JUDICIAL WATCH, INC., Plaintiff,
UNITED STATES DEPARTMENT OF JUSTICE, et al., Defendants
The opinion of the court was delivered by: ROSEMARY COLLYER, District Judge
The financial collapse of Enron Corp. ("Enron") caused immense public
interest in the company and its former chairman, Kenneth Lay. Just three
days after the December 2, 2001, filing of Enron's voluntary bankruptcy
petition, Judicial Watch, Inc. ("Judicial Watch"), a public interest
organization, submitted a request under the Freedom of Information Act,
5 U.S.C. § 552 ("FOIA"), to the Department of Justice ("DOJ"), the
Federal Energy Regulatory Commission ("FERC"), and the Department of the
Treasury ("Treasury") for records relating to Enron and Mr. Lay. These
government agencies then searched their files and produced some
documents, while withholding others in full or in part pursuant to
various FOIA exemptions. Not satisfied with the level of disclosure,
Judicial Watch filed suit on January 14, 2002. Currently before the Court
are two motions for summary judgment, which Judicial Watch opposes in
part.*fn1 For the following reasons, the Court will grant these motions
in part and deny them in part.
The facts are not disputed and are taken mainly from the defendants'
thorough presentations. In its December 2001 FOIA request, Judicial Watch
sought 19 different categories of records relating to Enron and Mr. Lay,
including all documents that refer or relate to "[t]he bankruptcy of the
Enron Corporation." Compl. Exh. 1. DOJ made an interim production of
responsive non-exempt documents on March 14, 2002, and completed
production on May 24, 2002. FERC made four rolling productions of
documents on February 28, 2002, April 12, 2002, July 8, 2002, and
February 14, 2003. Treasury which received 15 similar requests
for Enron-related materials began its production of documents on
February 19, 2002, and made 20 additional productions through January 15,
2003.*fn2 In addition, Treasury determined that certain documents it had
collected originated with the Department of State ("State"), the
Executive Office of the President ("EOP"), and the Office of the United
States Trade Representative ("USTR"), among others. Such documents were
referred back to the originating entities. Production of these documents,
in full or in part, and withholding of some pursuant to FOIA exemptions,
is now complete.
Judicial Watch's FOIA request to DOJ was sent to the Office of
Information and Privacy ("OIP").*fn3 OIP determined that the Offices of
the Attorney General, Deputy Attorney
General, Associate Attorney General, and the Department Executive
Secretariat were reasonably likely to have responsive records. Searches
of those offices revealed 22 documents, totaling 90 pages. On March 14
and May 24, 2002, OIP released in whole 12 documents totaling 33 pages
and released another five documents in part based on FOIA Exemptions 5
and 6. Three documents, totaling four pages, were withheld in full
pursuant to Exemption 5. DOJ produced a Vaughn index of
responsive, exempt documents on July 1, 2002.*fn4
In addition, OIP referred one document to the Executive Office for
United States Attorneys ("EOUSA") for processing and direct response and
one document of 18 pages to the Criminal Division of DOJ. After initially
informing Judicial Watch that it would release two pages in part, EOUSA
later released the document referred to it in full. The Criminal Division
released three of the 18 pages referred to it and referred the remaining
15 pages to the Internal Revenue Service ("IRS"). IRS withheld all 15
pages under Exemption 3.
After some initial correspondence concerning Judicial Watch's request
for a fee waiver for processing its request, which was granted in all
material respects, FERC searched all of its offices in response to the
initial 19 categories of requests and additional requests received from
Judicial Watch on January 14, 2002.*fn5
On February 28, 2002, in the first of its rolling responses to Judicial
Watch, FERC released 72 documents together with an index. FERC further
released 210 documents on April 12, 2002. Approximately two months later,
on July 8, 2002, FERC released 47 documents in full and
36 in part. Like DOJ, FERC produced a Vaughn index on July
1. Finally, FERC sent complete copies of an additional nine documents,
that had previously been withheld in whole or in part, on February 14,
2003. In the end, FERC withheld in full 59 documents. FOIA Exemptions 5
and 6 were cited as the basis for its withholdings and redactions.
Treasury received 15 requests for Enron-related documents, including
the December 2001 request from Judicial Watch. Pursuant to regulation, it
afforded all such requests priority treatment as required when it
receives more than five requests for substantially the same documents.
See 31 C.F.R. § 1.5(a)(4). All Treasury offices were
required to search their files, to certify their completion of that
search, and to provide responsive documents to the Counselor for the
General Counsel. Technical help was provided to employees who were having
difficulty searching electronic files. Treasury retrieved and searched
records that had been sent to storage under normal retention procedures
and also searched the closed electronic files of departed officials
reasonably believed to have responsive documents. The Counselor for the
General Counsel received approximately 13,000 pages in response to these
At this point, Treasury is no longer certain of the number of documents
it has produced specifically in response to the December 2001 request
from Judicial Watch. From February 19, 2002, to January 14, 2003,
Treasury released 5,456 pages in full and 4,779 pages in part, and
withheld 280 pages in full in response to all of the Enron-related FOIA
requests it received. These documents were produced to all requesters,
including Judicial Watch.
Additionally, Treasury discovered over 1,000 pages of documents that
originated with other agencies and referred those documents back to the
originating agencies. Seven of those
agencies determined that documents referred to them contained
exempt material: the Export-Import Bank ("Ex-Im Bank"), the Overseas
Private Investment Corporation ("OPIC"), the Department of Labor ("DOL"),
the Federal Reserve Bank ("Federal Reserve"), State, EOF, and the USTR.
With respect to the document referred to Ex-Im Bank, Treasury was
instructed to release three pages in full and, pursuant to FOIA
Exemptions 4 and 5, redact two pages and withhold the remaining pages.
OPIC determined that three documents referred to it should be withheld in
full and two documents should withheld in part under Exemptions 4 and 5.
A document referred to DOL was released in redacted form pursuant to
Exemptions 5 and 7(a). Of the ten responsive documents referred to the
Federal Reserve, five were redacted and one was withheld in full pursuant
to Exemptions 4 and 5.
Treasury referred 94 documents to State, which released 22 documents in
full, 48 documents in part, and withheld 19 documents in full based on
Exemptions 1, 4, 5 and 6 of FOIA. State also returned two documents to
Treasury, which released them in full, and referred three documents for
inter-agency coordination. OPIC withheld several lines from one of the
three documents pursuant to Exemption 4; the other two were produced
directly to Judicial Watch by the Department of Commerce. In consultation
with EOP, Treasury released 28 pages in full and withheld 50 pages in
part pursuant to Exemptions 2, 4 and 5. USTR withheld eight of 11
referred documents under Exemption 5.
II. LEGAL STANDARD
Summary judgment is appropriate when there is no genuine issue as to
any material fact and the moving party is entitled to a judgment as a
matter of law. FED. R. CIV. P. 56(c); Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). This procedural device is not a
"disfavored legal shortcut" but a reasoned and careful way to resolve
cases fairly and expeditiously.
Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). In
determining whether a genuine issue of material fact exists, the Court
must view all facts and reasonable inferences in the light most favorable
to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith
Radio, 475 U.S. 574, 587 (1986); Tao v. Freeh, 27 F.3d 635,
638 (D.C. Cir. 1994). To be "material" and "genuine," a factual dispute
must be capable of affecting the substantive outcome of the case.
Anderson, 477 U.S. at 247-48;Laningham v. United States
Navy, 813 F.2d 1236, 1242-43 (D.C. Cir. 1987).
In the context of FOIA, the government must demonstrate that it
"conducted a search reasonably calculated to uncover all relevant
documents" and that any withheld material falls within a statutory
exemption. Weisberg v. Dep't of Justice, 705 F.2d 1344, 1351
(D.C. Cir. 1983); see also 5 U.S.C. § 552(a)(4)(B);
Petroleum Info. Corp. v. Dep't of Interior, 976 F.2d 1429 (D.C. Cir.
1992). With respect to the latter showing, an "agency may meet this
burden by submitting affidavits or declarations that describe the
withheld material in reasonable detail and explain why it falls within
the claimed FOIA exemptions." Judicial Watch, Inc. v. United States
Postal Service, 2004 U.S. Dist. LEXIS 1147, No. 02-1101, at *5
(D.D.C. Jan. 21, 2004). "[D]isclosure, not secrecy, is the dominant
objective of [FOIA, so its exemptions] are explicitly made
exclusive . . . and must be narrowly construed." Dep't of the Air
Force v. Rose, 425 U.S. 352, 361 (1976).
Unlike the typical FOIA lawsuit, Judicial Watch does not challenge the
adequacy of the defendants' searches.*fn6 It argues only that the
defendants "are improperly withholding many
[documents]."*fn7 Pl.'s Opp. to 1st Mot. for Summ. J. at 2
("Because a close examination of the Defendants' Vaughn Indexes
demonstrates that their claims of exemption cannot withstand scrutiny,
[Judicial Watch] respectfully submits that Defendants . . . are not
entitled to summary judgment as a matter of law. Rather, the responsive
documents at issue must be turned over to [Judicial Watch] without
further delay."). The Court will address these disputed withholdings in
A. Exemption 1
Exemption 1 of FOIA protects from disclosure records that are "(A)
specifically authorized under criteria established by an Executive order
to be kept secret in the interest of national defense or foreign policy
and (B) are in fact properly classified pursuant to such Executive
order[.]" 5 U.S.C. § 552(b)(1). In determining whether certain
information should be withheld under this exemption, courts are "quite
deferential" to the agency's classification decisions. See Washington
Post v. Dep't of Defense, 766 F. Supp. 1, 6-7 (D.D.C. 1991).
[T]he court is not to conduct a detailed inquiry
to decide whether it agrees with the agency's
opinions; to do so would violate the principle of
affording substantial weight to the expert opinion
of the agency. Judges, moreover, lack the
expertise necessary to second-guess such agency
opinions in the typical national security FOIA
Halperin v. CIA, 629 F.2d 144, 148 (D.C. Cir. 1980)
Pursuant to Executive Order 12958, as amended, Treasury withheld
material classified as confidential from 43 documents that it had
previously referred to State.*fn8 Executive
Order 12958, entitled "Classified National Security Information,"
provides that information may be classified if it concerns, among other
things, "foreign government information" or "foreign relations or foreign
activities of the United States, including confidential sources[.]"
Executive Order 12958 § 1.4(b) and (d). "The unauthorized disclosure
of `foreign government information' is presumed to cause damage to the
national security."*fn9 Id. § 1.1(c).
Judicial Watch makes two arguments in favor of disclosure of records
withheld by Treasury/State under Exemption 1. Judicial Watch first
asserts that Treasury "has failed to indicate whether responsive records
were classified after it received Plaintiff's FOIA request" and
whether any records were properly classified. Pl's Opp. to 2nd Mot. for
Summ. J. at 6. Treasury's affidavit, however, makes clear that only two
documents were classified after the date of Judicial Watch's FOIA request
and that State followed proper procedures in classifying those documents.
See Decl. of Bernard C. Dowling ¶¶ 17-19.
Next, Judicial Watch objects to the descriptions of two groups of
documents. With respect to Document Nos. T108, T88, T87, T86, T103, T102,
T89, T100, T91, T98, T106, andTlOO, Judicial Watch asserts that "[t]hese
documents [are] all described simply as telegrams" between the U.S.
Embassy in Santo Domingo, Dominican Republic, to and from State. Pl.'s
Opp. to 2nd Mot. for Summ. J. at 7. According to Judicial Watch, "[a]
date and a telegram number are the only additional information provided."
Id. at 7-8. Judicial Watch argues that Document Nos. T9, T34 and
T33, which consist of telegrams from the U.S. Consulate in Mumbai and New
Delhi, India, to
State, should be disclosed because the descriptions are conclusory
This characterization of Treasury/State's position is simply too
limited to be accurate. Through the affidavit of Bernard C. Dowling,
Acting Director, Office of Information Resources Management Programs and
Services at State, Treasury has provided extensive and detailed
information to support the conclusion that these telegrams are exempt
from disclosure under FOIA Exemption 1. See Decl. of Bernard C.
Dowling at 23-25, 26-31, 36-37. As an example, Mr. Dowling states:
Four of the telegrams, Document Nos. T88, T86,
T103, and T89, contain information concerning
the dispute given to the Embassy in Santo Domingo
by Smith-Enron officials in the expectation that
it would be treated confidentially. Matters
discussed include comments by Smith-Enron
officials concerning the role of the World
Bank/IFC in mediating the dispute, the details of
a preliminary Memorandum of Understanding (MOU)
settling the dispute, and roles of the Dominican
Republic officials involved. Document No.
T86 also reports the comments of a Dominican
official concerning the dispute that were given to
Embassy officials in the expectation that his
comments would be treat confidentially. In
addition, these four telegrams plus Document
No. T108 all report Embassy Santo Domingo's
comments on the state of play in the dispute.
These comments include the Embassy's views on the
World Bank/IFC mediation effort, the preliminary
MOU and the roles of the Dominican Republic
officials involved. Finally, Document Nos. T87
and T102 provide information given to
Department of State officers concerning the World
Bank/IFC mediation effort by IFC officials in the
expectation that their views would be treated
confidentially. Release of the information in all
seven telegrams described in this paragraph could
adversely affect the persons involved, inhibit the
willingness of corporate and foreign government
officials to discuss frankly with the U.S.
Government officials matters affecting our
national interests, and damage relations with the
Dominican Republic. The information in all seven
telegrams . . . is currently and properly
classified CONFIBENTIAL under Section 1.4(d) of
E.O. 12958 and information in T86, T87 and T102 is
additionally classified under Section 1.4(b) of
Id. at 23-24. Based on Mr. Dowling's affidavit, the Court
concludes that the challenge by Judicial
Watch to these documents is in error; the documents were properly
withheld from disclosure under Exemption 1.
B. Exemption 3
DOJ cites FOIA Exemption 3 as the basis for withholding 15 pages of
documents that it referred to the IRS and ultimately refused to release
to Judicial Watch. Exemption 3 permits an agency to withhold records
"specifically exempted from disclosure by statute . . . provided that
such statute (A) requires that the matters be withheld from the public in
such a manner as to leave no discretion on the issue, or (B) establishes
particular criteria for withholding or refers to particular types of
matters to be withheld[.]" 5 U.S.C. § 552(b)(3). The statute at issue
here is § 6103 of the Internal Revenue Code. See
26 U.S.C. § 6103. "This court and others have recognized consistently that
I.R.C. § 6103(a) is a nondisclosure statute falling within the scope
of FOIA Exemption 3." Tax Analysts v. IRS, 214 F.3d 179, 182
(D.C. Cir. 2000); see also Church of Scientology of Calif, v.
IRS, 484 U.S. 9, 11 (1987) ("[I]f § 6103 forbids the disclosure
of material, it may not be produced in response to a request under the
FOIA."). Section 6103(a) requires that "[r]eturns and return information
shall be confidential" and generally cannot be disclosed. The term
"return information" is defined broadly to include "data, received by,
recorded by, prepared by, furnished to, or collected by the Secretary
with respect to . . . the existence, or possible existence, of liability
(or amount thereof) of any person" under the Code.
26 U.S.C. § 6103(b)(2)(A).
Judicial Watch argues that "DOJ has failed to make the requisite
nonconclusory and detailed showing with respect to the 15 pages of
documents that it referred to the IRS. . . ." Pl's Opp. to 1st Mot. for
Summ. J. at 6. It contends that the declaration of Gerald A. Richards is
insufficient because "Mr. Richards only describes the documents as
`internal memoranda of the
third-party corporate taxpayer.'" Id. (quoting Decl. of
Gerald A. Richards ¶ 5). The plaintiff seriously understates Mr.
Richards's affidavit and his explanation of the return data. In addition
to describing the documents as quoted by Judicial Watch, Mr. Richards
The subject matter addressed in the four documents
concerned issues pertinent to the existence of
income to the corporation and the disallowance of
a deduction, and I examined these four internal
memoranda in the course of my official duties in
consideration of whether to open an examination to
determine the existence, or possible existence, of
liability of the third-party taxpayer under the
Decl. of Gerald Richards ¶ 6. Mr. Richards's entire
statement shows that these four documents were records "received by" the
IRS in 1995 "with respect to the . . . possible existence . . . of
liability" under the Internal Revenue Code. Based on this description,
the Court concludes that these documents constitute "return information"
and are exempt from disclosure under Exemption 3.
C. Exemption 4
Judicial Watch asserts that Treasury and State have improperly withheld
non-confidential commercial material pursuant to FOIA Exemption 4, which
protects "trade secrets and commercial or financial information obtained
from a person and privileged or confidential[.]"
5 U.S.C. § 552(b)(4). "Information . . . falls within the second prong of the
exemption if it is shown to be (1) commercial or financial, (2) obtained
from a person, and (3) privileged or confidential." Pub. Citizen
Health Research Group v. FDA, 704 F.2d 1280, 1290 (D.C. Cir. 1983).
Judicial Watch contests the government's position that the documents in
question are confidential.
The confidentiality of a record may turn on whether the information was
voluntarily submitted to the government or whether it was compelled.
"[F]inancial or commercial information provided to the Government on a
voluntary basis is `confidential' for the purpose of Exemption 4
if it is of a kind that would customarily not be released to the
public by the person from whom it was obtained." Critical Mass Energy
Project v. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992). On the other
hand, when the government requires production,
commercial 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.
Nat'l Parks & Conservation Ass'n v. Morton, 498 F.2d 765,
770 (D.C. Cir. 1974) (footnote omitted). The D.C. Circuit explained the
reason for this distinction: "when information is obtained under duress,
the Government's interest is in ensuring its continued reliability; when
that information is volunteered, the Government's interest is in ensuring
its continued availability." Critical Mass, 975 F.2d at 878.
Judicial Watch challenges Treasury's withholding of documents received
from Enron concerning that company's involvement in power projects in
India, Bangladesh, and the Dominican Republic, as well as documents
referred to State relating to Enron's power projects in India, Mongolia,
Vietnam, Qatar, and Turkey. Specifically, Judicial Watch contends that
Treasury's "descriptions fail to provide any concrete evidence of
specific harm to Enron that will occur if the records are disclosed and
fail to show that disclosure would discourage Enron and other companies
from providing such information in the future." Pl.'s Opp. to 1st Mot.
for Summ. J. at 9; see also Pl.'s Opp. to 2nd Mot. for Summ. J.
at 10 (same). This argument, however, puts the cart before the horse
because it assumes that Enron was obligated to furnish Treasury with
these documents. Judicial Watch does not offer a reason to support its
belief that the documents in question were not
submitted voluntarily, in contrast to the affidavits of Thomas M.
McGivern and Mr. Dowling.*fn10 See Decl. of Thomas M. McGivern
¶ 51 ("Enron voluntarily submitted to Treasury information
regarding its private dealings with a number of foreign governments, with
foreign power projects in which it had an interest or investment, and
with financial market studies being conducted by Treasury.") (emphasis
added); Decl. of Bernard C. Dowling at 22-23, 28-29, 30-32, 36, 43-44,
49-50, 55-56, 59, 69-72, 74-75, and ¶ 24. Therefore, the Court defers
to the only evidence or argument before it on this issue
and concludes that Enron voluntarily supplied these documents to
Treasury. See generally Ground Saucer Watch, Inc. v. CIA,
692 F.2d 770, 771 (D.C. Cir. 1981) ("Agency affidavits enjoy a presumption of
good faith. . . .").
Treasury's stated justification for withholding material concerning
Enron's involvement in these overseas power projects easily fulfills the
standard set forth by the D.C. Circuit in Critical Mass for
documents produced voluntarily to the government. Mr. McGivern's
affidavit attests that "the information withheld was provided with an
expectation that it would be kept confidential and is information that
Enron does not disclose publicly." Decl. of Thomas M. McGivern ¶ 52.
Further, Mr. McGivern's description of three documents cited by Judicial
Watch reveals that they contain material that would not ordinarily be
divulged to the general public. Document No. 005000000001868-70 includes
"detailed financial and commercial information describing Enron's
investment in the Dabhol Power Company in India, including construction
and expected profits[,]" and Mr. McGivern stated that the
"confidential commercial and financial information . . . was submitted
voluntarily with an expectation of privacy, was information that Enron
does not disclose publicly and was necessary for Treasury' s
determination regarding whether to raise the matter with officials of the
government of India." Id. Document No. 00500000000981 91
discusses "commercial and financial projections" of a proposed emergency
power plant that Enron was attempting to build in Bangladesh.
Id. Finally, Document No. 005000000001151-53 relates to Smith
Enron's Dominican Republic power project and the backing of that project
by the International Finance Corporation. Smith Enron "revealed
confidential commercial and financial information to detail some of the
problems encountered with the Dominican government." Id.
The material withheld by State pursuant to Exemption 4 includes "(1)
internal financial information concerning foreign companies and power
projects, including amounts owed by foreign governments to those
projects . . . (2) company business plans, including proposed pricing and
production information . . . (3) the views of Enron officials on disputes
with foreign governments . . . (4) the impact of the economic policies of
foreign governments . . . and (5) Enron's negotiations with foreign
governments[.]" Defs.' 2nd Mot. for Summ. J. at 13 (citations omitted).
Treasury supports each of these statements with reference to Mr.
Dowling's affidavit. Judicial Watch asserts that the descriptions of
Document Nos. T9, T165, T10, and T33, which relate to Enron's investment
in the Dabhol Power Company in India, are inadequate However, as Mr.
Enron representatives voluntarily provided the
information to officers of the U.S. Consulate
General in Mumbai and, in the case of Document
No. T33, to officers of the U.S. Embassy in
New Delhi. The six telegrams all contain
proprietary commercial and/or financial
information, which is of a type that is not
customarily released to the public.
Decl. of Bernard C. Dowling at 36. The Court finds that Mr.
Dowling's affidavit properly supports withholding these documents under
D. Exemption 5
FOIA does not apply to "inter-agency or intra-agency memorandums or
letters which would not be available by law to a party other than an
agency in litigation with the agency[.]" 5 U.S.C. § 552(b)(5).
Exemption 5 incorporates "all civil discovery rules. . . ." Martin v.
Office of Special Counsel, 819 F.2d 1181, 1185 (B.C. Cir. 1987);
see also NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 148
(1975) ("[I]t is reasonable to construe Exemption 5 to exempt those
documents, and only those documents, normally privileged in the civil
discovery context."). In this case, the defendants have withheld
documents under the deliberative process and attorney-client privileges,
which have been recognized to fall within Exemption 5. See
Formaldehyde Inst. v. Dep't Health and Human Servs., 889 F.2d 1118,
1121 (B.C. Cir. 1989) ("Courts have construed this exemption to encompass
the protections traditionally afforded certain documents pursuant to
evidentiary privileges in the civil discovery context, including
materials which would be protected under the attorney-client privilege,
the attorney work-product privilege, or the executive deliberative
process privilege.") (internal quotation marks omitted).
1. Deliberative Process Privilege
The deliberative process privilege "`protects the decisionmaking
processes of government agencies' and `encourages the frank discussion of
legal and policy issues' by ensuring that agencies are not `forced to
operate in a fishbowl.'" Mapother v. Dep't of Justice,
3 F.3d 1533, 1537 (B.C. Cir. 1993) (quoting Wolfe v. Dep't of Health and
Human Servs., 839 F.2d 768, 773 (B.C. Cir. 1988)). To qualify for
withholding, material must be both predecisional and deliberative.
A document is predecisional if it was prepared in
order to assist an agency decisionmaker in
arriving at his decision, rather than to support a
decision already made. Material is deliberative if
it reflects the give-and-take of the consultative
process. [The D.C. Circuit's] recent decisions on
the deliberativeness inquiry have focused on
whether disclosure of the requested material would
tend to discourage candid discussion within an
Petroleum Info. Corp. v. Dep't of Interior, 976 F.2d 1429,
1434 (D.C. Cir. 1992) (citations and internal quotation marks omitted).
This exemption "covers recommendations, draft documents, proposals,
suggestions, and other subjective documents which reflect the personal
opinions of the writer rather than the policy of the agency." Coastal
States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 866 (D.C. Cir.
Citing the deliberative process privilege, DOJ redacted handwritten
notes from an invitation from Mr. Lay to Attorney General John Ashcroft
inviting the Attorney General to address the Business Council at Enron's
winter meeting in February 2001. Judicial Watch takes issue with the
sufficiency of DOJ's affidavit, arguing that "[t]he only description
given of the redacted portions of the document are that they consist of
`handwritten notes.'" Pl.'s Opp. to 1st Mot. for Summ. J. at 15. To the
contrary, the affidavit explains that "[d]isclosure of the handwritten
notes on this document would reveal what the staff member who wrote the
notes considered to be important in this case [of Enron] and how the
decision to attend the event may have been reached." Decl. of Melanie Ann
Pustay ¶ 14.
The decision of which invitations to accept, of the many received by
the Attorney General, would normally require staff opinions that must be
candid to be useful. It is obvious, given the Attorney General's role as
the chief law enforcement officer of the federal government, that
there would be either legal or policy (or both) issues associated
with an invitation from a large company in the energy industry, such as
Enron. The Court finds that DOJ has adequately explained that the
handwritten notes were withheld as predecisional advice to the Attorney
General and are exempt from disclosure under Exemption 5.
Judicial Watch challenges four groups of documents withheld in full or
in part by Treasury pursuant to the deliberative process privilege.
First, Judicial Watch objects to redactions in Document Nos.
0010000000019 and 20, which consist of an email dated December 11, 2001,
from Jim Langdon of the law firm Akin Gump to Robb LaKritz of Treasury
and a subsequent exchange(s) between Treasury officials.*fn11 According
to Judicial Watch, the description of these documents is vague and
conclusory, fails to indicate what decision or role these documents
played in the decision-making process, and fails to establish that
disclosure would harm "the process by which policy is
formulated." Petroleum Info. Corp. v. Dep't of Interior,
976 F.2d 1429, 1435 (D.C. Cir. 1992) (emphasis in original). The Court
disagrees. Treasury's affidavit attests that it "redacted material that
contains an internal discussion regarding what position to take at a
meeting with Langdon with respect to the impact of credit rating agencies
on the energy sector and opinions as to which Treasury employee should
attend the meeting." Decl. of Thomas M. McGivern ¶ 33. In addition,
Treasury's disclosure of the entire original email between Mr. Langdon
and Mr. LaKritz provides a context for the redactions and suggests the
subject matter of the subsequent internal discussions. The Court
therefore concludes that these email exchanges contain predecisional
discussions of what policy Treasury should follow and are properly
Judicial Watch next attacks Treasury's description of a redaction from
Document No. 0010000000730, which is an "October 29, 2001 email from
Michael Dawson to Tim Adams re: Pippa" that apparently discussed "the
status of various ongoing policy issues." Id. Exh. H. Assuming
that "Pippa" is a person and not a project, this generic reference to
"various ongoing policy issues" fails to give the Court adequate
information to determine whether this redaction is legitimate. The
description does not convey whether the policies in question have already
been made, much less what types of policies were involved.
In contrast, Treasury's description of Document No. 00200000000257-258
is quite sufficient for the conclusion that material in this email and
attachment is exempt from disclosure. Treasury states that this document
"contains opinions on policy implications with respect to Enron collapse
and draft recommendations for further discussion and analysis concerning
priorities and the way to structure research, on evaluating impact and
implications of Enron for purposes of developing policy on issue prepared
for General Counsel and Under Secretary in advance of meeting with both
and others on issue." Decl. of Thomas M. McGivern Exh. H. Judicial Watch
unfairly criticizes this description as "rambling as well as vague[.]"
Pl.'s Opp. to 1st Mot. for Summ. J. at 14. There is no doubt that the
collapse of Enron caused enormous waves throughout the U.S. economy and
international business. The description of this document indicates that
the writers were developing "recommendations for further discussion and
analysis concerning priorities" to deal with the situation. This is
sufficient to demonstrate that the document includes pre-decisional
opinion on a policy matter that is shielded from disclosure under FOIA.
Finally, Judicial Watch argues that Treasury has failed to substantiate
a reason to
withhold material from Document Nos. 00500000000101-103, 265-266,
267-268, 269-270, 279-280, 2080, 2329-30, and 01000000001057-59. These
documents constitute a "December 3-4, 2001 e-mail exchange between Geetha
Rao, Bonnie Resnick, and Gary Sills as well as Greg Christopoulos and
Larry McDonald re: Dam trip to India." Decl. of Thomas M. McGivern Exh.
H. Treasury states that it redacted material containing "policy
discussion of Enron project in India and impact of Enron bankruptcy on
project, as well as contents of briefing material for Deputy Secretary,
in advance of Deputy Secretary's trip to India." Id. This
description suffices to demonstrate the subject matter of the documents
(Enron's bankruptcy, its construction project in India, and material for
the Deputy Secretary to brief him for a trip to India). These internal
predecisional exchanges from which the Deputy Secretary would
determine how to communicate Treasury policy to India are
quintessential information protected by Exemption 5.
FERC refused to disclose a January 16, 2002 email (Document No. 190) on
the grounds that it "reflects internal agency deliberations related to
preparation of Chairman for congressional testimony, including
preliminary suggestions of Chairman and other FERC officials as to
potential issues to be addressed in the testimony and relative importance
of particular issues related to Enron." Decl. of Kevin F. Cadden Exh. G.
Judicial Watch asserts that the description fails to specify what policy
is being discussed, fails to specify where in the development of policy
this email played a role, and fails to establish that disclosure would
harm the process of policy formulation. See Pl.'s Opp. to 1st
Mot. for Summ. J. at 16.
The Court finds that FERC's description of this document is sufficient.
Testimony before Congress is a critical aspect of the duties of an agency
head. Such testimony allows
congressional i.e., public oversight of the
Executive Branch. Especially in the fluid context of an on-going
investigation, where multiple federal departments and agencies have
policy and enforcement interests and the rights of those under the
microscope must also be protected, congressional testimony must be
carefully considered and developed. The Vaughn index describes
Document No. 190 as a predecisional discussion of various issues that
might be addressed by FERC's chairman in his testimony and the "`relative
importance'" of those issues. The email is exactly the kind of internal
predecisional discussion that, if revealed, might confuse the public as
to the bases for the chairman's later testimony. See Judicial Watch,
Inc. v. Clinton, 880 F. Supp. 1, 13 (D.D.C. 1995) ("[D]isclosure [of
draft memoranda to agency ethics officers] would impede agency
decision-making and create public confusion regarding the agency's
rationale."). FERC's chairman is entitled to have a full and frank
discussion with his staff concerning issues, priorities, and policy
matters about which he is about to give public testimony. Accordingly,
FERC's withholding of this document under Exemption 5 was appropriate.
Judicial Watch also contests FERC's decision not to produce Document
No. 504, a "draft notational order concerning future role of Enron in New
England Power Pool." Decl. of Kevin F. Cadden Exh. G. Judicial Watch
asserts that this description fails to specify what policy is under
discussion in the document. The Court cannot agree. Document No. 504 is
aptly described as a draft FERC order that would govern Enron's
participation, if any, in the collective pooling of power resources to
provide electric power to New England. As a draft order, which may or may
not have ever seen the light of day, this document is a predecisional
reflection of the potential exercise of policy-oriented judgment.
Judicial Watch complains that EOP, through Treasury, has improperly
withheld material from Document No. 00300000000127-153 without
sufficiently explaining why the claimed deliberative process privilege
should apply to this information. Pl.'s Opp. to 2nd Mot. for Summ. J. at
14-15. This record is an "inter-agency memorandum on the subject of
Electricity Industry Restructuring." 3rd Decl. of Thomas M. McGivern
¶ 4. Judicial Watch asserts that the proffered description is "vague
and conclusory," fails to indicate "what decision or what role, if any,
these records or the information contained therein played in the decision
making process," and does not establish how the document's full
disclosure would harm the policy process. Pl.'s Opp. to 2nd Mot. for
Summ. J. at 15.
Mr. McGivern, however, addresses these issues:
The memorandum contains the [inter-agency] working
group's opinion and analysis of electricity
industry restructuring and its ideas on how to
proceed with restructuring. . . . The group
suggested a number of options on key issues and
discussed the pros and cons of each option. . . .
This energy policy group produced advice to the
White House on national policy for the electricity
3rd Decl. of Thomas M. McGivern ¶ 4. Further, he notes that the
document is marked "For Internal Use Only Contains Market
Sensitive Information." Judicial Watch's objection to this description is
without merit and the Court sustains Treasury/EOP's redactions with
respect to this document.
On referral from Treasury, USTR determined that three documents should
be released in full and eight should be withheld. Decl. of Sybia Harrison
¶ 3. Judicial Watch challenges seven
of the eight withheld documents.*fn12 It asserts that the
descriptions are vague and conclusory, that there is no information on
what role these records played in the decision-making process, and that
Treasury/USTR failed to establish that disclosure would harm the policy
process. See Pl.'s Opp. to Mot. for Summ. J. at 15 ("No further
description is provided other than that these records `are an internal
USTR issue paper and drafts of that paper addressing the impact of a
decision of the United States International Trade Commission (`ITC')
concerning the trade effect of welded line pipe imports.'").
Treasury/USTR has submitted detailed information to demonstrate the
applicability of the deliberative process privilege. In addition to the
description quoted above, Sybia Harrison, USTR FOIA officer, avers that
provide analysis, commentary and, in some cases,
recommendations that are predecisional to a
potential USTR recommendation in response to the
ITC decision. . . . Moreover, because these
documents were prepared by a USTR attorney in a
matter that was anticipated to become a dispute
before the World Trade Organization, as indeed
occurred, these documents are covered by the
attorney work-product doctrine.
Decl. of Sybia Harrison ¶ 5. The Court accepts Ms. Harrison's
factual description and agrees with her legal conclusion. The redacted
material is not subject to FOIA disclosure; it is privileged and
therefore protected by Exemption 5.
2. Attorney-Client Privilege
The attorney-client privilege protects "confidential communications
between an attorney and his client relating to a legal matter for which
the client has sought professional advice." Mead Data Ctr., Inc. v.
Dep't of the Air Force, 566 F.2d 242, 252 (D.C. Cir. 1977).
"Uninhibited confidence in the inviolability of the relationship is
viewed as essential to the protection of a client's legal rights, and to
the proper functioning of the adversary process." Coastal States Gas
Corp. v. Dep't of Energy, 617 F.2d 854, 862 (D.C. Cir. 1980). This
privilege "extends to all situations in which an attorney's counsel is
sought on a legal matter"; however, it is "limited to those situations in
which its purposes will be served." Id.
Treasury describes Document No. 01000000000625-26 as "a July 1994
memorandum for the Treasury General Counsel from the Deputy General
Counsel and Designated Ethics Official containing legal advice concerning
a prospective letter by the Secretary of the Treasury concerning Enron
Corp." Decl. of Thomas M. McGivern ¶ 50. Judicial Watch contends that
"this record primarily concerns advice given by attorneys rather than
facts communicated by clients." Pl.'s Opp. to 1st Mot. for Summ. J. at
18-19. This argument misconstrues the scope of the privilege. "While its
purpose is to protect a client's disclosures to an attorney, the federal
courts extend the privilege also to an attorney's written communications
to a client, to ensure against inadvertent disclosure, either directly or
by implication, of information which the client has previously confided
to the attorney's trust." Coastal States, 617 F.2d at 862. The
document in question is a staff memorandum
to the General Counsel to assist him in providing legal advice to
the Secretary of the Treasury. In this instance, the Secretary as
head of the agency is the "client" and the communication is
therefore privileged and exempt from disclosure. "Like the deliberative
process, the attorney-client privilege helps improve the quality of
agency decision making by safeguarding the free flow of information that
is a necessary predicate for sound advice." Murphy v. Tenn. Valley
Auth., 571 F. Supp. 502, 506 (D.D.C. 1983).
Judicial Watch next argues for disclosure of Document No.
01000000000802-03, which consists of a series of "e-mail exchanges
between the Deputy Assistant General Counsel for General Law and Ethics,
the Acting General Counsel, the Assistant General Counsel for General Law
and Ethics, an Attorney-Advisor, and the Treasury Chief of Staff
regarding the confidential communication of a Treasury official seeking
legal advice from the General Counsel's office in its capacity as legal
advisor concerning personal financial information as it related to his
official duties." Decl. of Thomas M. McGivern ¶ 50. Judicial Watch
objects that this document "primarily concerns advice given by attorneys
rather than facts communicated by the client in confidence." There is no
legitimate argument that these emails are not privileged, if not as
attorney-client communications (based on information provided by the
Treasury official seeking legal advice) then pursuant to the deliberative
process privilege, both of which Treasury cites for withholding.
Lastly, Treasury has withheld "weekly office reports for the weeks
ending June 22, 2001, July 27, 2001, and December 14, 2001" (Documents
No. 0100000001035-1049). Id. These memoranda involve "various
discrete entries referring to various ongoing projects and issues
involving Treasury[.]" Id. Judicial Watch asserts that "[t]here
is no indication that these documents contain any facts communicated by
clients or advice based on those facts." Pl.'s Opp. to 1st Mot.
for Summ. J. at 19. Mr. McGivern, however, plainly states in his
[These documents] in many cases reflect
confidential communications made by Treasury
personnel for the purpose of seeking legal advice
on matters relating to official duties. . . . The
discrete sections regarding Enron in the
June and July memoranda reflect the opinion of the
office of the Assistant General Counsel for
International Affairs on issues related to Enron's
dispute with the Government of India and the
contract with Azurix Corp. with the government of
Id. Judicial Watch also contends that "there is no
indication that these reports are kept within the [Treasury] General
Counsel's Office and not circulated to other portions of [the agency.]"
Decl. of Thomas. M. McGivern ¶ 50. Mr. McGivern resolves this issue
by explaining, "These memoranda are confidential and not distributed
outside of the Treasury Legal Division. . . ." Id.
FERC refuses to release Document Nos. 568E and 580 on the grounds that
they "contain a confidential communication from the Solicitor in the
General Counsel's office to FERC's General Counsel seeking legal advice
on a matter related to the Enron bankruptcy, and the legal advice
provided by the General Counsel in response." Decl. of Kevin F. Cadden
¶ 16. Judicial Watch argues that "[t]his description indicates no
communication from a client, rather it is a lawyer to lawyer
communication." Pl.'s Opp. to 1 st Mot. for Summ. J. at 20. "In the
governmental context, the `client' may be the agency and the attorney may
be an agency lawyer." Tax Analysts v. IRS, 117 F.3d 607, 618
(D.C. Cir. 1997). Just as a lawyer representing a corporation responds to
corporate/client questions posed by individuals within the corporation,
so too does the FERC General Counsel represent the agency by providing
legal advice to FERC employees, including
other attorneys. The description of Document Nos. 568E and 580
demonstrates just such a request for legal advice and a response, and is
shielded from disclosure.
FERC Document No. 591, however, remains something of a mystery. It is
said to contain "a confidential communication from an agency staffer to
the General Counsel concerning a visit from an Enron official." Decl. of
Kevin F. Cadden ¶ 16. Despite the broad responsibilities of the FERC
General Counsel for all agency legal matters, this description fails to
identify any legal issue or even that legal advice was sought.*fn15 A
communication is not privileged merely because it involves a lawyer.
Without more to justify withholding, this document must be released.
E. Exemption 7
Exemption 7 of FOIA allows a federal agency to withhold records that
are compiled for law enforcement purposes, if their production "could
reasonably be expected to interfere with enforcement proceedings[.]"
5 U.S.C. § 552(b)(7)(A). "To establish a law enforcement purpose, [the]
declarations must establish (1) `a rational nexus between the
investigation and one of the agency's law enforcement duties;' and (2) `a
connection between an individual or incident and a possible security risk
or violation of federal law.'" Ctr. for Nat'l Sec. Studies v. Dep't
of Justice, 331 F.3d 918, 926 (D.C. Cir. 2003) (quoting Campbell
v. Dep't of Justice, 164 F.3d 20, 32 (D.C. Cir. 1998)). An
"enforcement proceeding" need not be presently pending, so long as it
is likely to occur. See id.
Treasury withheld material from two records (Document Nos.
00200000000012 and 00200000000016-17, along with copies of these
documents) that relate to an ongoing investigation
of Enron by the Securities and Exchange Commission ("SEC").
Judicial Watch argues that the description proffered by Treasury does not
indicate how the documents fit within Exemption 7, except for general and
conclusory statements. Pl.'s Opp. to Ist Mot. for Summ. J. at 22.
However, in a supplemental affidavit, Mr. McGivern states that "[t]he
documents describe the status of the investigation, the SEC's `main
concern,' the material the SEC had thus far collected, its assessment of
that information, and the information that it still required." Suppl.
Decl. of Thomas M. McGivern ¶ 2; see Swan v. SEC,
96 F.3d 498, 500 (D.C. Cir. 1996) (finding documents exempt under 7(A) where
disclosure "could reveal much about the focus and scope of the
Commission's investigation"). Revelation of such information during the
course of the SEC's investigation of Enron could damage that agency' s
ability to obtain all relevant information and could reveal premature
and/or unfounded questions that full investigation might resolve.
Accordingly, Treasury's redactions in two documents under Exemption 7
For the reasons stated above, the Court will grant the defendants'
summary judgment motions in part and deny them in part. The motions will
be granted as to all challenges except for two documents for which the
government's descriptions are insufficient. The motions will be denied as
to Treasury Document No. 0010000000730 and FERC Document No. 591, which
must be produced in full. A separate order accompanies this memorandum
For the reasons stated in the memorandum opinion that accompanies this
order, it is hereby
ORDERED that the defendants'   motions for summary
judgment are GRANTED in part and DENIED in part. It
FURTHER ORDERED that the defendants shall produce to the
plaintiff complete copies of Treasury Document No. 0010000000730 and FERC
Document No. 591. It is
FURTHER ORDERED that this is a final appealable order.
See FED. R. APP. P. 4(a).