Nationwide Bldg. Maintenance, Inc. v. Sampson

• Decision Date: 18 April 1977
• Docket Number: No. 76-1453,76-1453
• Citation: 559 F.2d 704,182 U.S.App.D.C. 83
• Parties: NATIONWIDE BUILDING MAINTENANCE, INC., Appellant, v. Arthur SAMPSON, Administrator, U. S. General Services Administration, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 704

559 F.2d 704

182 U.S.App.D.C. 83

NATIONWIDE BUILDING MAINTENANCE, INC., Appellant, v. Arthur SAMPSON, Administrator, U. S. General Services

Administration, et al.

No. 76-1453.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 12, 1976.

Decided April 18, 1977.

John B. Tieder Jr., Washington, D. C., with whom William W. Thompson Jr., Washington, D. C., was on the brief for appellant.

Eloise E. Davies, Atty., Dept. of Justice, Washington, D. C., with whom Rex E. Lee, Asst. Atty. Gen., Earl J. Silbert, U. S. Atty., and Leonard Schaitman, Atty., Dept. of Justice, Washington, D. C., were on the brief for appellees.

Before BAZELON, Chief Judge, and TAMM and ROBB, Circuit Judges.

Opinion for the Court filed by TAMM, Circuit Judge.

TAMM, Circuit Judge:

Nationwide Building Maintenance, Inc. appeals from the summary judgment of the United States District Court for the District of Columbia which denied its request for an award of attorney fees and litigation costs ¹ under section 552(a)(4)(E) of the Freedom of Information Act (FOIA), 5 U.S.C. § 552(a)(4)(E) (Supp. V 1975). The district court's judgment rests on its conclusion that Nationwide had not "substantially prevailed" within the meaning of section 552(a)(4)(E) because the government abandoned its exemption claims and disclosed the requested information before the court made any finding that it had been wrongfully withheld. We disagree with the district court's ruling on this question of law and hold that Nationwide was eligible for an attorney fees award.

Section 552(a)(4)(E) does not provide, however, for an automatic award of attorney fees to every successful FOIA plaintiff. It contemplates a reasoned exercise of the courts' discretion taking into account all relevant factors. With respect to Nationwide's petition for attorney fees we think that particular consideration should have been given to the reasonableness of the government's exemption claims, the potential commercial benefit to Nationwide from disclosure of the information it sought and any general public benefit resulting from disclosure of the documents actually obtained. The single most important element under section 552(a)(4)(E), however, is the courts' discretion, and we think that that discretion is more properly exercised by the trial court which has had a continuing relationship with the parties throughout the suit. We therefore remand this case to the district court for a decision whether Nationwide, as a party who has substantially prevailed, should be awarded attorney fees and litigation costs under section 552(a)(4)(E).

I. BACKGROUND

On June 12, 1975, Nationwide filed a bid protest ² with the General Accounting Office protesting the General Services Administration's (GSA) award of a janitorial services contract for an Internal Revenue Service Center in Philadelphia, Pennsylvania, to Ensec Service Corp. ³ Nationwide requested that "the award to Ensec be cancelled and the GSA be directed to award the contract to Nationwide." J.A. at 25. On July 18, 1975 Nationwide asked GSA to provide copies of certain documents relating to this contract award. ⁴ Ten days later GSA received a second FOIA request from Nationwide seeking documents relating to the cleaning services contract for the New Executive Office Building in Washington, D. C. ⁵ No bid protest had been filed with respect to that contract at the time of the request for documents. Just over two weeks later, however, Nationwide did file a protest with the General Accounting Office urging that the New Executive Office Building contract should have been awarded through small business restricted advertising. J.A. at 26-31.

In separate letters the first sent nearly three weeks after Nationwide's request, the second only two GSA advised Nationwide that no decision had been made on its requests. GSA had yet to reach a decision as of September 17, 1975, and Nationwide filed suit in the Unites States District Court for the District of Columbia ⁶ alleging as part of its complaint that it needed the requested documents in order to substantiate its arguments in the bid protests before the General Accounting Office. One month later, and one day after Nationwide made its motion for a preliminary injunction, the GSA notified Nationwide that as of that date it had decided that the documents relating to the New Executive Office Building contract would be disclosed but that those relating to the Internal Revenue Service Center fell within specific exemptions of the FOIA and would not be disclosed. ⁷ Nationwide was also informed that this decision was being processed through GSA's internal appeal procedure. ⁸

With the approval of the court, the parties agreed to file "dispositive motions" by late December 1975 in lieu of proceedings on Nationwide's motion for a preliminary injunction. Before any such motions were filed, GSA revised its opinion on disclosure of the Internal Revenue Service Center documents. It granted complete disclosure of one set of documents ⁹ and limited disclosure of three other documents. ¹⁰ GSA continued to refuse to disclose ten sets of documents, however, relying on exemptions four and five of the FOIA. ¹¹ On five subsequent occasions, from late November to the middle of December, GSA made further disclosures explaining that, although some of the information provided was exempt, it nevertheless would be furnished unless it was also prejudicial to the government or the firm which had submitted it. See J.A. at 79-87.

Finally on December 19, 1975 the parties stipulated that GSA had provided all the information necessary for a complete response to Nationwide's request, J.A. at 52, and the government moved for dismissal or summary judgment on grounds of mootness. In its cross-motion for summary judgment Nationwide conceded that an injunction was now unnecessary but urged the court to award attorney fees under section 552(a)(4)(E). The district court entered summary judgment for the government and denied Nationwide's claim for attorney fees reasoning that Nationwide had not "substantially prevailed." J.A. at

154-55. Nationwide

now seeks review of that denial. II. COURT ORDER COMPELLING

DISCLOSURE NOT A PREREQUISITE FOR AWARD OF ATTORNEY FEES

The government argues that Nationwide is not eligible for an attorney fees award under section 552(a)(4)(E) in the absence of a court order holding that GSA had wrongfully withheld the requested documents. It relies primarily on cases construing analogous attorney fees provisions in the civil rights laws, ¹² the Social Security Act, ¹³ and the courts' interpretation of "prevailing party" for purposes of awarding costs under Rule 54(d) of the Federal Rules of Civil Procedure. ¹⁴ The only direct authority cited as support for its position is a district court decision denying attorney fees to a FOIA plaintiff that had received its requested information shortly after filing suit. Vermont Low Income Advocacy Council v. Dunlop, 71 F.R.D. 343 (D.Vt.), aff'd sub nom., Vermont Low Income Advocacy Council v. Usery, 546 F.2d 509 (2d Cir. 1976).

Although the Second Circuit did affirm the denial of attorney fees in Vermont Low Income Advocacy Council under the circumstances of that case, ¹⁵ it expressly repudiated the district court's conclusion that an order directing production is a necessary condition for an award of attorney fees under the FOIA. Vermont Low Income Advocacy Council v. Usery, 546 F.2d at 510, 513 (2d Cir. 1976). We agree with the Second Circuit and adopt its conclusion that a court judgment is not a prerequisite for an attorney fees award under section 552(a)(4)(E). See Cuneo v. Rumsfeld, 180 U.S.App.D.C. ----, at ---- - ----, 553 F.2d 1360 at 1364-1365 (1977).

It has long been the rule in American courts that attorney fees should not generally be awarded in the absence of explicit statutory authorizations. ¹⁶ In the early 1970's a broad exception to this rule began to evolve in the lower federal courts for litigants who advanced an important public interest. ¹⁷ This liberalization was short-lived, however, for the Supreme Court soon reaffirmed the strict application of the "American Rule" in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). ¹⁸ For our purposes, the most significant aspect of Alyeska is the Court's statement that its holding was based not on any evaluation of the merits of the rule barring attorney fees, 421 U.S. at 270, 95 S.Ct. 1612, but only on its conclusion that a rule so deeply rooted in court practice and congressional policy should not be departed from by courts, acting on their own, without legislative guidance. Id. at 271, 95 S.Ct. 1612. Alyeska thus does not condemn the awarding of attorney fees to successful litigants per se ; it only admonishes the courts not to take the initiative in fashioning "drastic new rules" with respect to "a policy matter that Congress has reserved for itself." Id. at 269, 95 S.Ct. at 1627.

In the 1974 amendments to the FOIA, Congress explicitly authorized the courts to award attorney fees to complainants who have "substantially prevailed." ¹⁹ If, as Alyeska cautions, Congress is the master of this policy area, our construction of "substantially prevailed" should rely on the particular legislative intent behind section 552(a)(4)(E) rather than on any "common law" meaning of that phrase derived from court interpretations of similar language in other statutory contexts. The "unusually complete" legislative history of section 552(a)(4)(E) is extensively discussed in Vermont Low Income Advocacy Council, supra, 546 F.2d at 512-13, and clearly indicates that Congress did not intend to require a court judgment as a prerequisite for an award of attorney fees under section 552(a)(4)(E). Id. at 512-13; see H.R.Rep.No.93-1380, 93d Cong., 2d Sess. 9-10 (1974) (conference report); S.Rep.No.93-854, 93d Cong., 2d Sess. 17-20 (1974);...