547 F.2d 673 (D.C. Cir. 1976), 76-1044, National Parks and Conservation Ass'n v. Kleppe

Docket Nº:76-1044.
Citation:547 F.2d 673
Party Name:NATIONAL PARKS AND CONSERVATION ASSOCIATION, Appellant, v. Thomas S. KLEPPE, Secretary, U. S. Department of the Interior, et al.
Case Date:November 15, 1976
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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547 F.2d 673 (D.C. Cir. 1976)

NATIONAL PARKS AND CONSERVATION ASSOCIATION, Appellant,

v.

Thomas S. KLEPPE, Secretary, U. S. Department of the Interior, et al.

No. 76-1044.

United States Court of Appeals, District of Columbia Circuit

November 15, 1976

Argued May 24, 1976.

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[Copyrighted Material Omitted]

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Victor H. Kramer, Washington, D. C., with whom Richard B. Wolf, Washington, D. C., was on the brief for appellant.

Michael F. Hertz, Atty., Dept. of Justice, Washington, D. C., with whom Rex E. Lee, Asst. Atty. Gen., Earl J. Silbert, U. S. Atty. and William Kanter, Atty., Dept. of Justice, Washington, D. C., were on the brief for Federal appellees.

W. Stanfield Johnson, Washington, D. C., with whom A. Tupper Brown, Washington, D. C., was on the brief for appellee, Conference of National Park Concessioners.

Before TAMM and MacKINNON, Circuit Judges, and KAUFMAN, [*] United States District Judge for the District of Maryland.

Opinion for the Court filed by Circuit Judge TAMM.

TAMM, Circuit Judge.

This appeal arises out of a suit under the Freedom of Information Act, 5 U.S.C. § 552 (1975 Supp.) (FOIA) brought by appellant National Parks and Conservation Association 1 to enjoin various governmental defendants from withholding financial records filed by certain national park concessioners with the National Park Service (NPS). 2 The district court initially granted the government's motion for summary judgment, holding that the information requested fell within the Act's fourth exemption. 3 National Parks and Conservation Association v. Morton, 351 F.Supp. 404 (D.D.C.1972). On appeal, this court reversed that decision and remanded for further proceedings to determine whether public disclosure of the information in question would be likely to cause substantial harm to the competitive positions of the parties from whom it had been obtained. National Parks and Conservation Association v. Morton, 162 U.S.App.D.C. 223, 498 F.2d 765 (1974) (National Parks I ). The Conference of National Park Concessioners (Conference) 4 was joined as an intervenor-defendant on remand, and two days of further evidentiary hearings were held on the competitive injury issue. The district court, applying the standard elucidated in National Parks I, held that with certain exceptions disclosure of the information was still not required. The Association once again appealed to this court, but after carefully examining the record, the briefs and the district court's memorandum, we find reversible error in the district court's decision only as to two of the concessioners and therefore affirm its judgment with respect to the rest.

I. FACTUAL BACKGROUND

The National Park System, which began in 1872, has grown into an extensive network of recreational preserves enjoyed by millions of tourists every year. 5 Private concessioners licensed by the National Park Service to operate within the parks provide innumerable goods and services including

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food, lodging, gasoline and souvenirs. 6 Concession activity in the national parks is a thriving business which is becoming increasingly dominated by large corporate concessioners. 7

The relationship between the Park Service and the park concessioners is long-standing and has been fostered in large measure by various financial incentives aimed at maintaining the quality and continuity of goods and services available to park visitors. See generally S.Rep. No. 765, 89th Cong., 1st Sess. 2 (1965), U.S.Code Cong. & Admin.News 1965, p. 3489. The Secretary of the Interior is authorized to permit only one concessioner to operate within any particular park, or to grant a monopoly in the supply of particular goods or services within a park. 16 U.S.C. § 20c (1970). The Secretary also may grant an existing concessioner a preferential right to provide any new or additional services, id., § 20c, and, most importantly, may renew a concessioner's contract if he determines that it has performed its prior obligations satisfactorily. Id. § 20d. Moreover, a concessioner is given a possessory interest in any structure, fixture or improvement it constructs on land administered by the Park Service, id. § 20e, and every concessioner benefits from the Secretary's statutory mandate to exercise his authority in such a manner as to ensure that all concessioners have a reasonable opportunity to profit from their investment. Id. § 20b(b).

This arrangement, on which the government has always heavily depended to provide park visitors with necessary facilities and services, does impose certain controls on concessioners. The Secretary is required to examine periodically the reasonableness of the prices charged by each concessioner and the franchise fee it pays to the government, considering the prices charged by comparable businesses and the value of the concession privileges. Id. §§ 20b(c)-(d). Concessioners are required to assist in this examination by submitting detailed financial information to the Service on a continuing basis. Id. § 20g. It is this information, contained for the most part in four separate reports, that appellant seeks to acquire.

Whenever a concessioner enters a licensing agreement with the Service, it must submit a "Concessioner Opening Balance Sheet," 8 revealing its assets, liabilities, net worth and additional supporting information detailed in eight separate schedules. 9 Every year each National Park concessioner must file a "Concessioner Annual Financial Report," 10 exacting similar balance sheet information and an exhaustive cataloguing of operating data 11 which provides a complete

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picture of a concessioner's operating condition. A third form, the "Annual Report of Capital Improvements to Concessions Facilities", 12 calls for a detailed yearly description of all projects existing or planned for the following year, by location, cost and occupancy capacity. The Park Service requires still another form, the "Annual Report of Statistical Information Concession Facilities", 13 describing every type of concession facility, by location, number of rooms and baths, percentage of room occupancy during peak months, trailer site capacity and additional similar information. 14 Finally, the Service also compiles reports from periodic audits of concession operations which contain similar though even more detailed financial information. See J.A. 211-12.

In September 1971 the National Parks and Conservation Association undertook to study the Service's concessions management program to determine whether existing concession arrangements were consistent with the public interest and congressional objectives. See J.A. 8. In order to prosecute this study, the Association requested a substantial number of documents from the NPS, see J.A. 11-14, which had been submitted by eight different national park concessioners. 15 Many of the documents were made available, but not the financial reports described above and certain other financial information contained in correspondence from the concessioners. See J.A. 15-17. The Association then filed suit in the United States District Court for the District of Columbia.

II. LEGAL BACKGROUND

The sole issue before the district court was whether the information sought by the Association was "confidential" within the meaning of the fourth exemption, since the parties conceded that it was financial, obtained from a person and not subject to a privilege. 351 F.Supp. at 406 (1972). The court decided that the financial information was exempted because it was of a kind "that would not generally be made available for public perusal." Id. at 407. The Association appealed to this court and, although we agreed that whether information would customarily be disclosed to the public by the person from whom it is obtained is a relevant inquiry, we held that it was not the only relevant inquiry in deciding whether information is confidential for fourth exemption purposes. National Parks I, supra, 498 F.2d at 767. We examined the legislative history and determined that for purposes of exemption for commercial or financial information is confidential if its disclosure is likely: "(1) to impair the Government's ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive

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position of the person from whom the information was obtained." 16 Id. at 770.

On remand the district court was directed to hold further proceedings only on the competitive injury issue, since it was evident that the government's ability to obtain information in the future would not be impaired by disclosure where the information in this instance was required by statute of all NPS-licensed concessioners. 17 The district court conducted two additional hearings and held that, with respect to most of the information, appellees had sustained their burden of proving that disclosure would be likely to cause the concessioners substantial competitive harm. 18 The court rejected the Association's argument that the concessioners were statutory monopolists without meaningful competitors and found that the concessioners did face meaningful competition for both the tourist dollar and the renewal of their concession contracts. J.A. 287-88. Still not all of the information requested was exempted from required disclosure. Recognizing that the Act as a whole seeks to balance the policies of public disclosure and protection of private rights, id. at 293, citing Environmental Protection Agency v. Mink, 410 U.S. 73, 80, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973), the court held that at least some of the information requested does not fall within the fourth exemption under National Parks I and consequently must be disclosed. 19

The Association now argues that the district court's conclusion...

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