Herrick v. Garvey

• Decision Date: 24 July 2002
• Docket Number: No. 01-8011.,01-8011.
• Parties: Greg HERRICK, Plaintiff-Appellant, v. Jane GARVEY, Administrator, Federal Aviation Administration, Defendant-Appellee. The Fairchild Corporation, Amicus Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

298 F.3d 1184

Greg HERRICK, Plaintiff-Appellant, v. Jane GARVEY, Administrator, Federal Aviation Administration, Defendant-Appellee.

The Fairchild Corporation, Amicus Curiae.

No. 01-8011.

United States Court of Appeals, Tenth Circuit.

July 24, 2002.

COPYRIGHT MATERIAL OMITTED

Michael J. Pangia (Joseph F. Moore, Jr., Moore & Myers, Jackson, WY, with him on the briefs), Washington, DC, for Plaintiff-Appellant.

David Kubichek, Assistant United States Attorney (John R. Green, Interim United States Attorney, Nicholas Vassallo, Assistant United States Attorney, Cheyenne WY, on the brief), Casper, WY, for Defendant-Appellee.

Emily M. Yinger and N. Thomas Connally, Hogan & Hartson L.L.P., McLean, VA, filed an amicus brief on behalf of The Fairchild Corporation in support of Defendant-Appellee.

Before SEYMOUR, Circuit Judge, BRORBY, Senior Circuit Judge, and LUCERO, Circuit Judge.

LUCERO, Circuit Judge.

This suit under the Freedom of Information Act ("FOIA") requires us to determine the proper application of the "trade secret" exemption to FOIA's general requirement that the federal government release information to the public. We have jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

I

Greg Herrick, the plaintiff and appellant in this case, sought information from the Federal Aviation Administration ("FAA") regarding a 1936 antique F-45 aircraft manufactured by Fairchild Engine and Airplane Corporation ("Fairchild"). In November 1997 Herrick sent a FOIA request to the FAA for plans and specifications submitted by Fairchild in 1935 to the Civil Aeronautics Agency ("CAA"), the predecessor to the FAA. Herrick has stated that he desires this information for the purpose of restoring the F-45 that he owns.

Fairchild had submitted these materials to the CAA in order to receive an "Approved Type Certificate." Obtaining such a certificate is a requirement for the construction, sale, and use of a new type of aircraft in the United States. After the agency has reviewed the documents related to the aircraft design, conducted (or required the manufacturer to conduct) tests, and determined that the aircraft is airworthy, the agency grants a type certificate that gives the manufacturer the legal right to produce the new type of aircraft. See United States v. S.A. Empresa de Viacao Aerea Rio Grandense, 467 U.S. 797, 804-07, 104 S.Ct. 2755, 81 L.Ed.2d 660 (1984). Thus, the materials that Herrick seeks include detailed plans and specifications for the construction of the F-45. Although the CAA granted Fairchild a type certificate to produce the F-45, only sixteen were ever built.

Herrick made the November 1997 request in a letter to the FAA, to which the FAA replied in December that it would be unable to release the materials because they were exempt from FOIA as "trade secrets" pursuant to 5 U.S.C. § 552(b)(4). Instead, the FAA instructed Herrick to contact the owner of the materials — listed in its records as Fairchild Industries, Inc., based in Maryland — to obtain permission for their release. Herrick attempted to contact Fairchild Industries but determined that the company had since been merged and then sold to a new corporation, The Fairchild Corporation.¹ In January 1998 Herrick appealed the FAA's adverse determination, stating that counsel at The Fairchild Corporation had told him that all Fairchild aircraft archive memorabilia had been donated to the Smithsonian Institute in Washington, D.C.² In response, the FAA stated in October 1998 that they had contacted counsel at The Fairchild Corporation, that counsel still objected to the release of the type certificate materials, and that therefore the "trade secrets" exemption of FOIA continued to apply. The FAA also notified Herrick that this was a final administrative decision and that he had a right to file suit in federal court to appeal the decision.

Herrick filed suit in district court, arguing that the FAA had improperly applied the "trade secrets" exemption to the materials in question and that the FAA therefore had a legal duty under FOIA to release the materials. Following discovery, the parties filed cross-motions for summary judgment. The district court granted the FAA summary judgment, holding that the "trade secrets" exemption applied to the materials. Herrick appeals.

II

We begin with an overview of FOIA and the relevant principles of statutory interpretation. We then examine whether the documents in question qualify as "trade secrets" under FOIA.

A

FOIA, enacted in 1966, provides the public with a right of access to federal agency records, a right of access that is subject to nine exemptions. See 5 U.S.C. § 552. Agencies are required to make all records accessible to the public upon request. § 552(a)(3). Deadlines are set for the time within which the agency must respond to record requests, § 552(a)(6), and fees may be charged for reasonable copying and search costs, § 552(a)(4)(A). Federal courts are granted the authority to enjoin the agency from withholding records. § 552(a)(4)(B). However, agencies need not release records that fall within the nine specified exemptions listed in 5 U.S.C. § 552(b); these exemptions include classified documents, personnel records, exemptions under other statutes, trade secrets and other confidential commercial information, and law enforcement records. § 552(b). For the purposes of this case, the only relevant exemption is "Exemption 4," which applies to "trade secrets and commercial or financial information obtained from a person and privileged or confidential." § 552(b)(4).

FOIA's purpose is "to ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed." Anderson v. Dep't of Health & Human Servs., 907 F.2d 936, 941 (10th Cir.1990) (quoting NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 241, 98 S.Ct. 2311, 57 L.Ed.2d 159 (1978)). FOIA achieves this goal by "pierc[ing] the veil of administrative secrecy and ... open[ing] agency action to the light of public scrutiny." Id. (quotation omitted). FOIA is "to be broadly construed in favor of disclosure, and its exemptions are to be narrowly construed." Id. (citation omitted). If an agency has been sued by an individual because the agency has refused to release documents, the agency "bears the burden of justifying nondisclosure." Id.

In any FOIA action challenging an agency decision to withhold records, the district court reviews de novo the agency's decision not to disclose. Id. (citing DeSalvo v. I.R.S., 861 F.2d 1217, 1221 (10th Cir.1988)). On appeal, the initial role of the court of appeals is to determine "whether the district court had an adequate factual basis upon which to base its decision." Id. at 942 (citing King v. United States Dep't of Justice, 830 F.2d 210, 225 (D.C.Cir.1987)).

We review the district court's grant of summary judgment de novo. Simms v. Oklahoma ex rel. Dep't of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir.1999). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When applying this standard, we view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmovant. Simms, 165 F.3d at 1326. "The mere existence of a scintilla of evidence in support of the nonmovant's position is insufficient to create a dispute of fact that is `genuine'; an issue of material fact is genuine only if the nonmovant presents facts such that a reasonable jury could find in favor of the nonmovant." Id. (quotation omitted).

"If there is no genuine issue of material fact, we determine whether the district court correctly applied the substantive law." Id. In particular, when a district court has granted summary judgment in favor of a government agency in a FOIA suit, we "must review de novo the district court's legal conclusions that the requested materials are covered by the relevant FOIA exemption." Anderson, 907 F.2d at 942 (citing Johnson v. United States Dep't of Justice, 739 F.2d 1514, 1517 (10th Cir.1984)).

B

Grounding its decision to withhold the records on Exemption 4 of FOIA, the FAA determined that the records in question are "trade secrets" protected by that exemption. We have defined a "trade secret" for the purposes of FOIA as "a secret, commercially valuable plan, formula, process, or device that is used for the making, preparing, compounding, or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort." Id. at 944 (quoting Pub. Citizen Health Research Group v. Food & Drug Admin., 704 F.2d 1280, 1288 (D.C.Cir.1983)). In developing this definition, we rejected the Restatement definition of "trade secret" for FOIA purposes in favor of the D.C. Circuit's narrower interpretation of the term. Id. at 943-44.

On appeal, Herrick raises three primary arguments. He argues first that the documents here no longer constitute a "trade secret" because to be a trade secret the documents must be owned by someone and the FAA has not shown that The Fairchild Corporation is the "owner" of the documents. Second, he argues that the "secret" status of the documents was lost when Fairchild granted the FAA permission to release the documents to the public in 1955. Finally, in response to the government's argument that the trade secret status of the documents was restored when Fairchild Corporation refused to release the documents to Herrick, Herrick argues that this current refusal did not restore the exempt status of the documents because, again, The Fairchild Corporation is not their owner.³

C

We first address Herrick's argument that the government must show "ownership" by a party...