Conoco Inc. v. U.S. Dept. of Justice, s. 81-2897

• Decision Date: 25 August 1982
• Docket Number: Nos. 81-2897,81-2963,s. 81-2897
• Parties: Energy Mgt. P 26,389 CONOCO INC., a Delaware corporation, Appellant, v. UNITED STATES DEPARTMENT OF JUSTICE. CONOCO INC., Appellant, v. UNITED STATES DEPARTMENT OF ENERGY.
• Court: U.S. Court of Appeals — Third Circuit

Page 724

687 F.2d 724

Energy Mgt. P 26,389

CONOCO INC., a Delaware corporation, Appellant, v. UNITED STATES DEPARTMENT OF JUSTICE.

CONOCO INC., Appellant, v. UNITED STATES DEPARTMENT OF ENERGY.

Nos. 81-2897, 81-2963.

United States Court of Appeals, Third Circuit.

Argued June 16, 1982.

Decided Aug. 25, 1982.

Donald B. Craven, Mark L. Evans, Robert K. Huffman, Stuart M. Bluestone (argued), Miller & Chevalier, Chartered, Washington, D. C., Charles S. Crompton, Jr., Potter, Anderson & Corroon, Wilmington, Del., for appellant; David M. Francis, Marjorie Wilhelm, Houston, Tex., of counsel.

D. Lowell Jensen, Asst. Atty. Gen., Lawrence Lippe, Atty., Dept. of Justice, Daniel S. Friedman (argued), Atty., Dept. of Justice, Washington, D. C., for appellee Dept. of Justice.

Joseph J. Farnan, Jr., U. S. Atty., Peggy L. Ableman, Asst. U. S. Atty., Wilmington, Del., Janice Alperin (argued), Larry P. Ellsworth, Gary A. Gegenheimer, U. S. Dept. of Energy, Washington, D. C., for appellee Dept. of Energy.

Before ALDISERT, GIBBONS and HIGGINBOTHAM, Circuit Judges.

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

In this case, Conoco Inc. appeals from the granting of summary judgment in favor of the Department of Energy (DOE) and the Department of Justice shielding certain documents from disclosure under two exemptions to the Freedom of Information Act (FOIA), 5 U.S.C. § 552 (1976). Conoco sought access to, and copies of twenty-seven documents possessed by DOE and seven documents from the Department of Justice. ¹ The district court held that all twenty-seven documents possessed by DOE were exempt from disclosure under the FOIA and six of the seven documents held by the Department of Justice were exempt. We will affirm the grant of summary judgment

insofar as it pertains to the twenty-seven DOE documents and to five of the six documents held by the Department of Justice. We will reverse and remand the question whether the Department of Justice's Document No. 1, Schedule II, a 19-page handwritten collection of notes which was undated, unaddressed, and contained no indication of its author's identity is entitled to exemption as attorney work-product.

I.

During an internal investigation conducted by Conoco, information was uncovered which indicated that in 1973 and 1974 certain of its employees had been involved in a scheme to circumvent petroleum price controls established by the Cost of Living Council. Conoco reported this information to the Federal Energy Administration, the predecessor agency to DOE. An investigation was undertaken by DOE and in July 1977, DOE referred the case to the Department of Justice for criminal prosecution.

On August 11, 1978, a federal grand jury returned indictments against Conoco and two of its corporate customers for making false record entries under 18 U.S.C. § 1001 (1976) and for intentionally selling and buying oil at prices in excess of those promulgated by the Cost of Living Council. Conoco entered pleas of nolo contendere to one felony and one misdemeanor count. The company was fined $15,000 and agreed in a consent order to repay two million dollars in overcharges and to pay $985,000 in civil penalties.

On March 23, 1979, Conoco filed a written request under the FOIA seeking access to, and copies of, all documents in DOE's possession that related to the investigation by DOE and the Department of Justice of Conoco's sales of refined petroleum products to two resellers. Conoco filed a similar request with the Department of Justice on July 31, 1980.

Conoco filed suit against DOE on October 22, 1980, seeking the documents which DOE classified as exempt in their revised index of documents of August 15, 1980. DOE further revised its index on January 15, 1981, but continued to claim an exemption for the twenty-seven documents which formed the basis of Conoco's cause of action in the court below.

Having received no response from the Department of Justice to its FOIA request, Conoco instituted suit against the Department of Justice on August 25, 1980. The Department of Justice identified thirteen documents as responsive to Conoco's FOIA request and released six of those documents. The district court, 521 F.Supp. 1301, consolidated Conoco's suits against the two governmental agencies and undertook a de novo review of DOE's and the Department of Justice's decisions to withhold the requested documents.

II.

The FOIA enumerates nine categories of documents which are exempt from the general requirement of full disclosure. The Act and its exemptions represent an effort by Congress to effect a compromise between the important principle calling for the opening of government operations to public scrutiny and the pragmatic realization that some measure of secrecy is necessary to promote government efficiency and initiative. The exemptions are intended to be exclusive and narrowly construed to insure that government agencies do not develop a rubber stamp "top secret" mentality behind which legitimately disclosable documents can be shielded.

In this case, DOE and the Department of Justice rely on Exemptions 5 and 7 of the FOIA, which provide as follows:

(5) 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;

....

(7) investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would ... (C) constitute an unwarranted invasion of personal privacy, (D) disclose the identity of a confidential source and, in the case of a record compiled Any reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this subsection.

by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source....

5 U.S.C. § 552(b)(5) and (7).

DOE asserts Exemption 5 as the basis for withholding all twenty-seven of its documents. The Department of Justice claims Exemption 5 for Schedule II, Document Nos. 1, 2, 3, 4 and 6; Exemption 7(C) for Document Nos. 4, 5 and 7; and Exemption 7(D) for Document Nos. 5 and 7. ²

A. Exemption 5

As can be seen from the language of § 552(b)(5), a document is not disclosable if it is an "inter-agency or intra-agency memorandum or letter" and "would not be available by law to a party other than an agency in litigation with the agency." Exemption 5 has been interpreted to shield from disclosure documents "which a private party could not discover in litigation with the agency." NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 148, 95 S.Ct. 1504, 1515, 44 L.Ed.2d 29 (1975), citing EPA v. Mink, 410 U.S. 73, 85-86, 93 S.Ct. 827, 835, 35 L.Ed.2d 119 (1973). In Sears, the Supreme Court construed Exemption 5 to protect any document which would be "normally privileged in the civil discovery context." 421 U.S. at 149, 95 S.Ct. at 1515 (footnote omitted).

The Supreme Court recognized that Congress intended Exemption 5 to embody an executive privilege with contours broad enough to protect the deliberative and decision-making processes of government. Sears, 421 U.S. at 150, 95 S.Ct. at 1516. "Manifestly, the ultimate purpose of this long-recognized privilege is to prevent injury to the quality of agency decisions. The quality of a particular agency decision will clearly be affected by the communications received by the decisionmaker on the subject of the decision prior to the time the decision is made." Id. at 151, 95 S.Ct. at 1516.

In this case, DOE claims the executive privilege and the attorney work-product privilege for all twenty-seven documents it withheld. ³ Justice asserts the attorney work-product privilege for Document Nos. 2, 4 and 6. Conoco's first argument goes to all of the documents withheld by both agencies under Exemption 5. Conoco asserts that, since the documents were located in the agencies' files and for the most part were unaddressed, they cannot constitute an "intra-agency" memorandum or letter. In Conoco's view, a document must circulate within the agency to qualify under Exemption 5.

The district court addressed this argument squarely and, we think, properly rejected it. The court reasoned as follows:

Conoco would construe the term "intra-agency" to require that memoranda be "circulated within the agency." The Court finds no support for this definition. Instead, this Court believes that "intra-agency" should be given its commonplace, everyday meaning. It holds that the term "intra-agency memorandums" includes handwritten notes written by agency employees which remain within the files or confines of the agency. This definition is consistent with the commonsense approach suggested by Ryan v. Department of Justice, 617 F.2d 781, 790 (C.A.D.C.1980):

We start from the proposition that FOIA exemptions are to be interpreted narrowly. The Senate Committee attempted to keep Exemption 5 as narrow as was "consistent with efficient Government operation." S.Rep.No.813, 89th Congs., 1st Sess. 9 (1965). Unquestionably, efficient government operation requires open discussions among all government policy-makers and advisors, whether those giving advice are officially part of the agency or are solicited to give advise only for specific projects. Congress apparently did not intend "inter-agency" and "intra-agency" to be rigidly exclusive terms, but rather to include any agency document that is part of the deliberative process.... This common sense interpretation of "intra-agency" to accommodate the realities of the typical agency deliberative process has been consistently followed by the courts.

Applying a commonsense approach, courts have found agency employee's handwritten notes directed "to file" to be privileged under Exemption Five. See e.g., Associated Dry Goods Corp. v....