Flightsafety Services Corp. v. Department of Labor, 02-10817 Summary Calendar.

• Decision Date: 03 March 2003
• Docket Number: No. 02-10817 Summary Calendar.,02-10817 Summary Calendar.
• Citation: 326 F.3d 607
• Parties: FLIGHTSAFETY SERVICES CORPORATION, Plaintiff-Appellant, v. DEPARTMENT OF LABOR; et al., Defendants, Department of Labor, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

326 F.3d 607

FLIGHTSAFETY SERVICES CORPORATION, Plaintiff-Appellant, v. DEPARTMENT OF LABOR; et al., Defendants, Department of Labor, Defendant-Appellee.

No. 02-10817 Summary Calendar.

United States Court of Appeals, Fifth Circuit.

March 3, 2003.

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Iwana Marceen Miller Rademaekers, Jackson, Lewis, Schnitzler & Krupman, Dallas, TX, for Plaintiff-Appellant.

Peter Rolf Maier, Leonard Aaron Schaitman, U.S. Dept. of Justice, Civ. Div.-App. Staff, Washington, DC, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before KING, Chief Judge, and BARKSDALE and STEWART, Circuit Judges.

PER CURIAM:

This action arises from an unsuccessful request by FlightSafety Services Corporation to the Department of Labor for statistical information regarding salaries and wages under the Freedom of Information Act, 5 U.S.C. § 522 (1996 & Supp.2001). After requiring the Bureau of Labor Statistics, a component of the Department of Labor, to submit a Vaughn index to the court justifying its decision to withhold the requested documents and requiring the Bureau of Labor Statistics to submit, for in camera review, the withheld documents, the district court granted summary judgment in favor of the Bureau of Labor Statistics. Upon review, we affirm the judgment of the district court.

FACTUAL HISTORY

FlightSafety Services Corporation ("FSSC") is a publicly held company under contract (the McNamara-O'Hara Service Contract Act ("SCA")) with the United States Air Force Air Mobility Command to provide student aircrew academic and simulator instruction. Under the terms of this contract, employee wage rates are determined in accordance with Department of Labor ("DOL") Wage Determination schedules. The SCA requires the DOL to issue prevailing wage rates and fringe benefits for service employees who are working under a covered SCA contract. To meet this requirement, cross-industry surveys of occupational wages and benefits conducted by the Bureau of Labor Statistics ("BLS") are relied upon to develop SCA Wage Determinations.

The request by FSSC that engendered the current suit sought a redacted electronic copy of all raw data collected to create (1) specified wage determinations for Wichita Falls, Texas and Oklahoma City, Oklahoma, (2) the 1997 Occupations Employment Statistics for Lawton, Oklahoma and Wichita Falls, Texas, and (3) the 1995 Occupational Compensation Survey, National Summary. The DOL denied the FSSC's request, contending that because these surveys were procured by the BLS with a pledge of confidentiality to the individual businesses contributing to the surveys, the data is exempted from disclosure under the Freedom of Information Act ("FOIA").

FSSC appealed the denial administratively to the DOL; however, after being told of a two-year backlog on appeals, FSSC brought suit in federal court against the DOL and the BLS in three separate cases under the FOIA. The district court consolidated the cases, and FSSC voluntarily dismissed the DOL. Both FSSC and the BLS then moved for summary judgment. The district court held that the information sought was generally exempted from disclosure under the FOIA. However, in order to determine if the exempt portions of the documents could be reasonably segregable from the rest of the information contained in the documents, the district court ordered the BLS to produce a Vaughn index to justify the agency's withholding of documents, under which the BLS was required to correlate each document withheld with a particular FOIA exemption, and to submit the withheld documents under seal for in camera review by the district court. Vaughn v. Rosen, 484 F.2d 820 (D.C.Cir.1973). The district court reviewed the documents submitted under seal and the Vaughn index prepared by the BLS and determined that summary judgment in favor of the BLS was appropriate. Final judgment in favor of the BLS was thereafter granted on May 16, 2002. FSSC appeals this judgment.

On appeal, pursuant to a court-requested supplemental letter brief by the BLS to this court, FSSC became aware, allegedly for the first time, that the BLS had submitted a "representative sample" of withheld documents to the district court for its in camera review rather than submitting all the withheld documents, as requested by the district court.¹ In response, FSSC requests that we "order the DOL to comply with the District Court's order [to produce all withheld documents] so that the full in camera review may be conducted by this Court."

STANDARD OF REVIEW

As is the case here, most FOIA cases are resolved at the summary judgment stage. Cooper Cameron Corp. v. United States Dep't of Labor, 280 F.3d 539, 543 (5th Cir.2002). This court reviews de novo the district court's grant of summary judgment under the FOIA, using the same standard used by the district court in reviewing the agency's decision to, in this case, deny FSSC access to requested documents.² Id. Further, the FOIA "expressly places the burden `on the agency to sustain its action.'" Id. (quoting United States Dep't of Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749, 755, 109 S.Ct. 1468, 103 L.Ed.2d 774 (1989)).

ANALYSIS UNDER THE FOIA

Congress created nine exemptions (found under 5 U.S.C. § 552(b)) to its general policy of full agency disclosure under the FOIA "because it `realized that legitimate governmental and private interests could be harmed by release of certain types of information.'" United States Dep't of Justice v. Julian, 486 U.S. 1, 8, 108 S.Ct. 1606, 100 L.Ed.2d 1 (1988) (quoting FBI v. Abramson, 456 U.S. 615, 621, 102 S.Ct. 2054, 72 L.Ed.2d 376 (1982)); Halloran v. Veterans Admin., 874 F.2d 315, 318 (5th Cir.1989). At issue here is the exemption found under § 552(b)(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) (1996 & Supp.2002).

To demonstrate that this exemption shelters the relevant documents here from disclosure, the BLS is required to show that the information contained in the documents is (1) commercial or financial, (2) obtained from a person and (3) privileged or confidential. Cont'l Oil Co. v. Federal Power Comm'n, 519 F.2d 31, 35 (5th Cir.1975).

The district court correctly held that the business establishments surveyed by BLS fall within the FOIA's definition of "person," statutorily defined to "include[] an individual, partnership, corporation, association, or public or private organization other than an agency." 5 U.S.C. § 551(2) (1996 and Supp.2002).³ FSSC does not dispute the accuracy of this finding.

The district court also properly held that the documents at issue (in unredacted form) include "confidential" and "commercial" information, thus allowing the documents to fall within the confines of the "trade secrets" exemption under § 552(b)(4). See Calhoun v. Lyng, 864 F.2d 34, 36 (5th Cir.1988) (stating that information is confidential under 5 U.S.C. § 552(b)(4) if its disclosure would likely (1) impair the government's ability to obtain necessary information in the future, or (2) cause substantial competitive harm to the person from whom it was obtained). As cogently stated by the district court:

The BLS is the principal data-gathering agency of the federal government in the broad field of labor economics, which includes information on employment, unemployment, wages, productivity, prices and occupational safety and health. Because it is not empowered with any statutory right to procure the data it needs, it must give the source of information a pledge of confidentiality. Moreover, being a specifically designated statistical agency within the Executive Branch, whose activities are predominately the collection, compilation, processing, or analysis of information for statistical purposes, it also subject [sic] to the requirements of the Office of Management and Budget's ("OMB") Order Providing for the Confidentiality of Statistical Information.

...

In addition, the Wage Survey, National Compensation Survey, and Occupation Employment Survey forms at issue in this case all contain pledges to the non-government establishments providing information to the BLS that such information will be used only for statistical purposes and will be held in confidence and will not be disclosed without their written consent, to the full extent permitted by law. The Court finds there can be no doubt on this record that disclosure of the requested information would impair the BLS' ability to collect data in the future. It is reasonable to conclude that such an opening wedge of disclosure would make it difficult, if not impossible, for the BLS to collect other data which is essential to its efficient operation since not empowered with any statutory right to procure the data it needs.

Plainly, the information sought in this case is the type of information Congress intended to exempt from disclosure under the FOIA. See S. REP. No. 89-813 at 9 (1966), reprinted in 1966 U.S.S.C.A.N. 2418 (discussing its goal of "protect[ing] the confidentiality of information which is obtained by the government through questionnaires or other inquiries, but which would customarily not be released to the public by the person from whom it was obtained"). In order for the DOL to apply its regulatory authority consistently, it must rely on BLS generated data. The document disclosure here presents a serious risk that sensitive business information could be attributed to a particular submitting business. This attribution would indisputably impair BLS's future ability to obtain similar information from businesses who provide it under an explicit understanding that such information will be treated confidentially. FSSC does not genuinely dispute this point.

The real dispute raised by FSSC in this case is whether the requested documentation contains any reasonably segregable non-exempt data. The F...