Oil, Chemical & Atomic Workers v. Dept. of Energy

• Decision Date: 16 March 2001
• Docket Number: No. CIV.A. 98-1670(GK).,CIV.A. 98-1670(GK).
• Citation: 141 F.Supp.2d 1
• Parties: OIL, CHEMICAL & ATOMIC WORKERS INTERNATIONAL UNION, AFL-CIO, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF ENERGY, Defendant.
• Court: U.S. District Court — District of Columbia

Page 1

141 F.Supp.2d 1

OIL, CHEMICAL & ATOMIC WORKERS INTERNATIONAL UNION, AFL-CIO, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF ENERGY, Defendant.

No. CIV.A. 98-1670(GK).

United States District Court, District of Columbia.

March 16, 2001.

COPYRIGHT MATERIAL OMITTED

Reuben Guttman, Provost & Umphrey Law Firm, L.L.P., Washington, DC, for Plaintiffs.

Anne L. Weismann, David Michael Glass, U.S. Dept. of Justice Civil Division, Washington, DC, for Defendant.

MEMORANDUM OPINION

KESSLER, District Judge.

This matter is before the Court on the Motion for Fees and Expenses of Plaintiffs James K. Phillips and the Oil, Chemical & Atomic Workers International Union, AFL CIO (collectively "OCAW"). Upon consideration of the Motion, Opposition, Reply, and the entire record herein, for the reasons discussed below, the Motion for Fees and Expenses [# 28] is granted in part and denied in part.

I. Background

The United States Enrichment Corp. ("USEC") was created in 1992 as a wholly owned government corporation charged with producing enriched uranium at two gaseous diffusion plants ("GDPs") owned by the United States Department of Energy ("DOE").¹ Plaintiff OCAW, a labor union with approximately 85,000 members, was the collective bargaining agent for approximately 2,000 workers at the two GDPs operated by USEC.

In April 1996, Congress enacted the USEC Privatization Act, Pub.L. 104-134, tit. III § 3101, 110 Stat. 1321-335 (codified at 42 U.S.C. § 2297h-1 et seq.), which directed the USEC Board to transfer the federal government's interest in USEC to the private sector.² By June 1998, the Board was left with three options for accomplishing that objective: (1) the sale of USEC, through a merger and acquisition to a consortium led by the Carlyle Group; (2) the sale of USEC, through a merger and acquisition, to a consortium consisting of Texas Pacific Group and General Atomic; and (3) the sale of USEC stock to the public in an initial public offering ("IPO"). In early June 1998, the USEC Board met on three separate occasions to consider these privatization options. The meetings were closed to the public. At the end of the final meeting, on June 11, the Board voted unanimously for the IPO option. On June 29, the Board announced a proposed IPO to the public.

The very next day, Plaintiffs brought the present action (Civ.A. No. 98-1670(GK)) under the Freedom of Information Act, 5 U.S.C. § 552(a), requesting that USEC produce all records, not previously produced, that came within the scope of the Plaintiff Phillips' December 22, 1997, FOIA request. See supra note 2. Plaintiffs also brought a separate lawsuit (Civ.A. No. 98-1756(GK)) two weeks later, on July 14, 1998, under the Government in the Sunshine Act, 5 U.S.C. § 552b, in which they moved to enjoin USEC from closing to the public a follow-up Board meeting, scheduled for July 22. This Court denied Plaintiffs' motion, and allowed the July 22 meeting to go forward, in which three of the five USEC Board members voted to confirm the earlier decision to hold an IPO.

The IPO was held July 23 through July 28, 1998, resulting in a transfer of the federal government's ownership in USEC to the private sector. Subsequently, USEC moved for dismissal of both cases, contending that it was now a private entity and that neither FOIA nor the Government in the Sunshine Act applied to it. In response, the Court dismissed USEC from both lawsuits, ordered that DOE be substituted for USEC, and directed DOE to respond to the requests made by Plaintiffs in both lawsuits. See Memorandum Opinion and Order of March 18, 1999 (Civ. A. Nos. 98-1670 and 98-1756).

Defendant DOE provided Plaintiffs with certain documents in July 1998, and the parties thereafter entered into a settlement agreement. In December 1999, both cases were voluntarily dismissed, except insofar as Plaintiffs wished to seek attorneys' fees and litigation costs.³ The parties' negotiations to settle Plaintiffs' fees and costs proved unsuccessful, and on April 17, 2000, Plaintiffs filed the present motion.

II. Analysis

Plaintiffs bring a motion for fees and costs, pursuant to 5 U.S.C. § 552(a)(4)(E), to recover their expenses for both lawsuits.⁴ Defendant contends that Plaintiffs are not entitled to an award of fees and costs or, in the alternative, that Plaintiffs are not entitled to all the compensation that they request. These contentions will be addressed in turn.

A. Whether Plaintiffs are Entitled to Any Fees and Costs

Analysis of a section 552(a)(4)(E) motion requires a determination of both eligibility and entitlement to the award. See, e.g., Ralph Hoar & Assocs. v. NHTSA, 985 F.Supp. 1, 5 (D.D.C.1997). However, since Defendant has not contested Plaintiffs' eligibility, the only question for the Court to consider is whether Plaintiffs are "entitled" to fees and costs. See Chesapeake Bay Found., Inc. v. United States Dep't of Agric., 11 F.3d 211 (D.C.Cir.1993).

To determine entitlement, the Court must consider four factors: "(1) the public benefit derived from the case; (2) the commercial benefit to the plaintiff; (3) the nature of the plaintiff's interest in the records; and (4) whether the Government had a reasonable basis for withholding requested information." Burka v. United States Dep't of Health & Human Servs., 142 F.3d 1286, 1288 (D.C.Cir.1998) (internal citations and quotations omitted). The second and third factors are "closely related and often considered together." Cotton v. Heyman, 63 F.3d 1115, 1120 (D.C.Cir. 1995) (quoting Tax Analysts v. United States Dep't of Justice, 965 F.2d 1092, 1095 (D.C.Cir.1992)). In determining a plaintiff's entitlement to attorneys' fees, the Court must balance all four criteria. Ralph Hoar & Assocs., 985 F.Supp. at 9.

1. The Public Benefit

To determine whether this FOIA action resulted in a public benefit, the Court asks whether Plaintiffs' victory is "likely to add to the fund of information that citizens may use in making vital political choices." Cotton, 63 F.3d at 1120 (quoting Blue v. Bureau of Prisons, 570 F.2d 529, 534 (5th Cir.1978)). In making this inquiry, it is important to remember that the "central purpose" of FOIA is "to assist our citizenry in making the informed choices so vital to the maintenance of a popular form of government." Blue, 570 F.2d at 533.

It is undisputed that USEC has experienced extreme financial and other difficulties since its privatization. See, e.g., Pl.'s Mot. at 7-10 (citing testimony of Joseph Stiglitz, Shelby Brewer and numerous newspaper and magazine articles) & accompanying exhibits. It is also undisputed that by bringing the present lawsuit and Civ. A. No. 98-1756,⁵ Plaintiffs have forced the public release of countless important documents relating to the privatization of USEC, including information on USEC's corporate organization (i.e., bylaws, organization chart, and personnel data); the minutes and transcripts of the June — July 1998 USEC meetings which had been closed to the public; contracts entered into between USEC and lawyers, investment advisors, and consultants; and studies of a certain type of technology (referred to as "AVLIS"), which Plaintiffs allege was projected to be the cornerstone to USEC's commercial profitability.⁶ Id. at 17-18.

Defendant argues that these and other documents do not add to the public fund of information because they do not reveal the specific "flaws" in the privatization process which Plaintiffs allegedly point to in their Motion. See Def.'s Opp'n at 12. Defendant also argues that since the privatization of USEC is a fait accompli, documents regarding "alleged defects in the privatization process do[] not provide any information relevant to future action." Id. at 16.

The Court finds that the documents obtained by Plaintiffs, and widely disseminated to the media and the public,⁷ clearly and overwhelmingly add to the growing public body of knowledge concerning the privatization of governmental entities generally, and of USEC specifically. Accordingly, Plaintiffs are entitled to attorneys' fees and costs under Cotton and Blue.

The public benefits of Plaintiffs' lawsuits are substantial. For one thing, the released documents inform the public about what "went wrong" with privatization in this case, and what procedures and criteria should be used in the future when other federal entities consider privatization. The fact that the privatization of USEC is a fait accompli is of little relevance. Undoubtedly, the question of whether an agency should be privatized will surface again, and the released documents in this case will assist our legislators, their respective constituents, and executive branch officials in "making vital political choices" regarding how certain government functions should be organized and how taxpayer money should be spent. See Cotton, 63 F.3d at 1120.

In addition, the released documents have been, and will continue to be, greatly beneficial to academic and scholarly commentators who are interested in privatization, "reinvention of government," non-proliferation policy, and/or decision-making theory. See Pls.' Mot. at 30-31; Decl. of Dan Guttman ¶ 14. The transcripts of the closed Board meetings — especially when viewed in conjunction with the extraordinarily favorable terms of the contracts between USEC and its lawyers and advisors — reveal the ways in which bias, self-interest, and self-dealing can influence the decision-making process, especially when that process is kept entirely secretive. See Pls.' Reply to Def.'s Opp'n ("Pls.' Reply") at 8-10.⁸

Defendant's contention that the USEC Board's deliberations were a "model of corporate decision-making," Def.'s Opp'n at 15 (citing a Washington Post article) is patently incorrect. The transcripts of the June-July 1998 meetings — which were disclosed to the public only because of Plaintiffs' lawsuits — show that the Board's deliberations were "model" only insofar as they were a model of what not to do when...