Louis v. U.S. Dept. of Labor

• Decision Date: 15 August 2005
• Docket Number: No. 04-35389.,04-35389.
• Citation: 419 F.3d 970
• Parties: Jeffrey M. LOUIS, DPM, Plaintiff-Appellant, v. U.S. DEPARTMENT OF LABOR, an executive department of the United States, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

419 F.3d 970

Jeffrey M. LOUIS, DPM, Plaintiff-Appellant, v. U.S. DEPARTMENT OF LABOR, an executive department of the United States, Defendant-Appellee.

No. 04-35389.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 16, 2005.

Filed August 15, 2005.

Kenneth G. Kieffer, Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim, LLP, Tacoma, WA, for the appellant.

Peter A. Winn, Assistant United States Attorney, Seattle, WA, for the appellee.

Appeal from the United States District Court for the Western District of Washington, Franklin D. Burgess, District Judge, Presiding. D.C. No. CV-03-05534-FDB.

Before B. FLETCHER, McKEOWN, and GOULD, Circuit Judges.

BETTY B. FLETCHER, Circuit Judge:

Plaintiff Jeffrey Louis appeals from the district court's grant of summary judgment on his claims for disclosure of documents by the Department of Labor ("Department") under the Privacy Act, 5 U.S.C. § 552a, and the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552.¹ Louis contends a system of records from which he sought information about himself was improperly exempted by the Department pursuant to subsection (k)(2) of the Privacy Act, 5 U.S.C. § 552a(k)(2), because the Department did not comply with the rulemaking procedures of the Administrative Procedure Act ("APA") in exempting the system. Louis further contends that the Department's belated reliance on subsection (d)(5) of the Privacy Act, 5 U.S.C. § 552a(d)(5), which exempts from disclosure "any information compiled in reasonable anticipation of a civil action or proceeding," is improper "post-hoc rationalization" for the Department's decision to withhold information because it did not assert this exemption during the administrative proceedings.

We hold that the Department failed to follow the APA's rulemaking procedures for designating its system of records as exempt, and therefore cannot rely on this exemption to withhold documents from Louis. However, because an agency's withholding of information under the Privacy Act is reviewed de novo by the district court, we hold that the Department may rely on § 552a(d)(5) to withhold documents that were compiled in anticipation of litigation, even though it raised this provision for the first time before the district court. Because the Department's description of the withheld documents demonstrates that each falls within the scope of subsection (d)(5), we affirm the judgment of the district court as to Louis' Privacy Act claims.

I.

From 1986 to 1988, Dr. Jeffrey Louis was employed as a podiatric surgeon with the Department of Veterans Affairs. He claims to have become disabled as a result of his employment, and thus filed for disability workers' compensation in 1993. For reasons not completely explained in the record and beyond the scope of the current appeal, that claim is still pending before the Office of Workers' Compensation Programs ("OWCP") within the Department of Labor.²

After a series of agency decisions and appeals, one of which was to this court,³ Louis made a series of Privacy Act requests to the Department of Labor between August 7, 2002, and October 27, 2002. The Department eventually denied access to the records in a letter decision, stating that all of the requested records were exempt from disclosure under the Privacy Act, indirectly relying on 5 U.S.C. § 552a(k)(2) as grounds for exemption of the system of records in which the documents were located. The agency then released some documents under FOIA, but continued to assert that a subset of the documents were exempt from disclosure under Exemption 5 of FOIA, which covers privileged and attorney work-product materials. The parties agree that this letter constitutes the agency's original partial denial of Louis' requests.

Louis appealed this initial decision to the Solicitor of Labor. The reviewing officer again determined that all of the information sought by Louis was contained in the "DOL/SOL-15" system of records, a system which had been designated as an "exempt system" under 5 U.S.C. § 552a(k)(2). Specifically, the reviewing officer explained that the system of records had been properly exempted from disclosure by the agency, citing to the Federal Register, in which the Department purportedly gave notice of the exemption. See Notices, 67 Fed.Reg. 16816, 16941 (April 8, 2002). The officer further explained that because the records sought by Louis were located in "SOL files maintained for the purposes of defending the Department of Labor in law suits and claims filed against it," they "were prepared for a law enforcement purpose," and were therefore exempt from disclosure. The reviewing officer went on to determine that some additional documents should be disclosed under FOIA, but still withheld certain groups of documents under Exemptions 2 (internal procedures) and 5 (privilege and work product) of FOIA. 5 U.S.C. §§ 552(b)(2) & (b)(5).

Louis then filed a complaint in district court challenging the agency's reliance on the (k)(2) exemption of the Privacy Act and Exemptions 2 and 5 of FOIA. When the plaintiff began serving discovery requests on the Department, the Department moved for a protective order. Louis moved to compel the requested discovery, seeking to obtain discovery related to the designation of the DOL/SOL-15 database as an "exempt system" and the Department's methodology in searching for responsive documents. During the pendency of these motions, the Department filed its motion for summary judgment, arguing that the DOL/SOL-15 database had been properly exempted from disclosure under the Privacy Act by promulgation of an agency rule. In the alternative, the Department argued for the first time that the requested information was properly withheld pursuant to § 552a(d)(5). In his cross-motion for summary judgment, Louis submitted a list specifically identifying fifteen documents sought under the Privacy Act. The district court granted the Department's motion for a protective order, thereby prohibiting any discovery, and directed the parties to proceed with briefing the cross-motions for summary judgment.

Louis filed a motion for a continuance under Federal Rule of Civil Procedure 56(f), seeking much of the same discovery he had moved for in his motion to compel. The district court denied the Rule 56(f) motion and granted the Department's motion for summary judgment. The court held both that the system of records in which the requested information was located had been properly exempted from disclosure under the Privacy Act by administrative rule, and that disclosure of the records was barred under subsection (d)(5) of the Privacy Act.⁴ The court specifically found that the "rule" promulgated by the Department was valid.

Because Louis brought this suit under the Privacy Act and the Freedom of Information Act, 5 U.S.C. §§ 552a and 552, respectively, jurisdiction was proper in the district court pursuant to 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1291 over this direct appeal of a final judgment of the district court. Our review of the district court's grant of summary judgment under the Privacy Act is de novo. Rose v. United States, 905 F.2d 1257, 1259 (9th Cir.1990); see also 5 U.S.C. § 552a(g). We also review de novo determinations regarding the scope of the notice-and-comment and publication requirements of the APA. Natural Res. Def. Council, Inc. v. Evans, 316 F.3d 904, 910 (9th Cir.2003).

II.

The Privacy Act of 1974 requires each agency that maintains a "system of records" to provide access to an individual's "record or to any information pertaining to him" by that individual. 5 U.S.C. § 552a(d)(1). However, the Act specifically provides that "nothing in this section shall allow an individual access to any information compiled in reasonable anticipation of a civil action or proceeding." Id. § 552a(d)(5). In addition, the Act provides a mechanism by which an agency may promulgate rules in accordance with the APA in order "to exempt [certain] system[s] of records within the agency" from disclosure. Id. § 552a(k). Relevant to the present appeal, agencies may under most circumstances exempt systems that consist of "investigatory material compiled for law enforcement purposes." Id. § 552a(k)(2).

Louis argues that the Department's "rule" exempting the DOL/SOL-15 system of records did not follow the APA's procedures and is therefore invalid, and that the DOL cannot rely on § 552a(d)(5) because the final agency determination did not rely on this section. We address each of these arguments in turn.

A. Exemption by Rule pursuant to § 552a(k)(2)

Louis argues that the agency never properly invoked subsection (k)(2) because it did not appropriately give notice of a proposed rulemaking in accordance with the requirements of the APA, 5 U.S.C. § 553, as incorporated at 5 U.S.C. § 552(a)(k). Specifically, Louis argues that the Department did not properly publish a notice of proposed rulemaking in accordance with 5 U.S.C. § 553(b), and did not properly solicit public comment in accordance with 5 U.S.C. § 553(c).

Section (b) of the APA requires a notice of proposed rulemaking to include:

(1) a statement of the time, place, and nature of public rulemaking proceedings;

(2) reference to the legal authority under which the rule is proposed; and

(3) either the terms or the substance of the proposed rule or a description of the subjects and issues involved.

5 U.S.C. § 553(b). In turn, Section (c) requires in pertinent part:

After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose.

5 U.S.C. § 553(c).

1. Sufficiency of the Department's Notice

Subsection (e)(4) of...