Reliant Energy Power Generation, Inc. v. F.E.R.C.

• Decision Date: 08 November 2007
• Docket Number: Civil Action No. 04-774 (PLF).
• Citation: 520 F.Supp.2d 194
• Parties: RELIANT ENERGY POWER GENERATION, INC. et al., Plaintiffs, v. FEDERAL ENERGY REGULATORY COMMISSION, Defendant.
• Court: U.S. District Court — District of Columbia

520 F.Supp.2d 194

RELIANT ENERGY POWER GENERATION, INC. et al., Plaintiffs, v. FEDERAL ENERGY REGULATORY COMMISSION, Defendant.

Civil Action No. 04-774 (PLF).

United States District Court, District of Columbia.

November 8, 2007.

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Randolph Quaile McManus, Steven R. Hunsicker, Baker Botts, LLP, Washington, DC, for Plaintiffs.

Blanche L. Bruce, Pamela D. Huff, U.S. Attorney's Office, Washington, DC, for Defendant.

MEMORANDUM OPINION

PAUL L. FRIEDMAN, District Judge.

Rule 72(b) of the Federal Rules of Civil Procedure authorizes the referral of dispositive motions to a magistrate judge for a report and recommendation. See FED. R.Civ.P. 72(b); see also Local Civil Rule 72.3(a). When a party files written objections to any part of the magistrate judge's recommendation, the court considers de novo those portions of the recommendation to which objections have been made, and "may accept, reject, or modify the recommended decision[.]" 72(b).

Defendant's motion for summary judgment and plaintiff's motion for summary judgment were referred to Magistrate Judge Alan Kay for a report and recommendation pursuant to Local Civil Rule 72.3(a) on April 21, 2006. On July 31, 2006, Magistrate Judge Kay issued a report and recommendation recommending that this Court deny both motions and order defendant to produce the requested documents or submit a sufficiently detailed Vaughn index justifying its claims of exemption. No objections were filed, and the Court adopted that report and recommendation on August 22, 2006, denying both motions.

On January 12, 2007, defendant filed its second motion for summary judgment, attaching an affidavit from Wilbur T. Miller, a senior attorney in defendant's General and Administrative Law section, in lieu of a formal Vaughn index. Plaintiff filed its second motion for summary judgment on February 20, 2007. On May 3, 2007, this Court again referred the parties' motions for summary judgment to Magistrate Judge Kay for a report and recommendation. On September 11, 2007, Magistrate Judge Kay ordered defendant to produce for in camera review documents that it withheld under Freedom of Information Act Exemption 5. On October 5, 2007, Magistrate Judge Kay issued a report and recommendation recommending that this Court grant defendant's motion for summary judgment and deny plaintiff's motion for summary judgment. Plaintiff filed an objection to the report and recommendation on October 22, 2007, and defendant filed a response to plaintiff's objection on November 2, 2007.

Upon consideration and de novo review of the October 5, 2007 report and recommendation of Magistrate Judge Kay, and upon consideration of the objections and responses thereto and the entire record herein, the Court hereby adopts and approves the report and recommendation of Magistrate Judge Kay in its entirety. An Order consistent with this Opinion will issue this same day.

REPORT AND RECOMMENDATION

ALAN KAY, United States Magistrate Judge.

The trial court referred this matter to the undersigned pursuant to Local Civil Rule 72.3(a) for a Report and Recommendation on Defendant FE RC's Motion for Summary Judgment [26] and Plaintiff Reliant's Motion for Summary Judgment [27]. (See Order dated 5/3/07.) Both parties seek summary judgment on the merits of Plaintiff's Freedom of Information Act ("FOIA") request. Based on the submissions of the parties and an in camera review of documents submitted by FERC, the undersigned recommends that the trial court grant Defendant's Motion for Summary Judgment [26] and deny Plaintiffs Motion for Summary Judgment [27].

I. BACKGROUND¹

In the wake of the 2000-2001 California energy crisis, the Staff of the Federal Energy Regulatory Commission ("FERC") conducted a fact-finding investigation to determine, among other things, whether significant increases in gas prices in California were the result of competitive market conditions or whether certain companies' trading practices unfairly inflated gas prices. See Final Report on Price Manipulation in Western Markets, Fact-Finding Investigation of Potential Manipulation of Electric and Natural Gas Prices (hereinafter "Staff Report"), Executive Summary at 3-5 (FERC March 26, 2003) (Dkt. No. PA02-2-000), available at http://www.ferc. gov/legal/ma j-ord-reg/land-docs/PARI-3-26-03.pdf.²

In March of 2003, FE RC Staff released the final report detailing their conclusions from the investigation. See id. Among the conclusions reached by the Staff was that Reliant Energy Power Generation, Inc. and Reliant Energy Services, Inc. ("Reliant") "engaged in a high-volume, rapid-fire trading strategy ... b[uying] and s[elling] [at] many times its needs ...." Id., Ch. II at 1. Chapter II of the Staff Report concluded that Reliant's trading activities "significantly increased the price of gas in that [California] market" and that "gas prices [were] not a result of competitive conditions." Id. The Staff Report referred to Reliant's trading practices as "churning." Id. According to Reliant, it is now facing multiple lawsuits seeking as much as $2.75 billion in damages, largely as a result of the factual findings and conclusions published in the report. (Compl. ¶ 14.)

On April 21, 2003, Reliant submitted a FOIA request to FERC seeking any documents either relied on by Staff in preparing Chapter II of the Report or related to its conclusion that Reliant's trading activities were responsible for the dramatic increase in gas prices. (Compl., Ex. A.) Specifically, Reliant sought

copies of the workpapers, input data and other documents that comprise or explain the `econometric analysis' relating to or underlying Staffs conclusion in preparing Chapter II of the Staff Report, ... and/or that support or explain the purported showing of the `econometric analysis of the effect of Reliant's trading on market prices ...'³

(Id.) FERC responded a month later without providing any responsive documents. After noting that the data sets used for Chapter II were publicly available, FERC withheld all remaining responsive documents. (Compl., Ex. B.) FERC claimed that all internal working papers responsive to Reliant's request were deliberative in nature and therefore covered by FOIA's Exemption 5. See 5 U.S.C. § 552(b)(5) (2000) Reliant appealed. (Compl., Ex. C.) FERC's General Counsel denied the appeal but conceded that the work papers reflected "other ways, besides the final way, of manipulating the deliverables or raw data." (Id., Ex. D at 4.) In a follow-up letter, FERC's General Counsel explained that the internal work papers responsive to Reliant's request were actually earlier drafts of Chapter II. (Id., Ex. E.) FERC further claimed that it had not maintained "in any form, printed or electronic" any of the "varying econometric analyses performed or considered in connection with Chapter II" except those that were adopted in the final report. (Id.)

FERC filed the present action on May 13, 2004. A few months FERC amended its response to Plaintiffs original FOIA request to include newly discovered documents that had been in the possession of Analysis Group, consultants to FERC on the Staff Report. (Pl.'s Mot. at 4.) Of these documents, FERC released the "varying econometric analyses" performed in connection with Chapter II, but withheld other documents, including memoranda and emails. (Id.) In its Answer, FERC conceded that it did not provided an itemized index of any withheld documents, but maintained that it validly withheld all responsive documents pursuant to the deliberative process privilege encompassed by FOIA's Exemption 5. (Answer ¶¶ 26-27.)

On July 29 and August 19, 2004 respectively, FERC and Reliant filed Motions for Summary Judgment and the trial court referred both motions to the undersigned for a Report and Recommendation. The undersigned's recommendation, which was adopted by the trial court on August 22, 2006, was that the trial court should deny both motions and order FERC to either produce the requested documents to Reliant or submit a Vaughn Index [22].⁴ On January 12, 2007, FERC filed its second Motion for Summary Judgment, attaching an affidavit from Wilbur T. Miller ("Miller Declaration"), a senior attorney in FERC's General and Administrative Law section, in lieu of a formal Vaughn index. Reliant filed its second Motion for Summary Judgment on February 20, 2007.

On September 11, 2007, the undersigned ordered FERC to produce for in camera review documents that it withheld under FOIA Exemption 5. ([31] Order dated 9/11/07.) This included 73 documents identified in the Miller Declaration as report drafts, 184 documents identified as internal discussions, 26 documents identified as data analysis, and 7 documents that FERC withheld solely on the basis of the attorney-client privilege. (Id.) The undersigned did not order FERC to produce for in camera review the documents that it withheld pursuant to Exemptions 4 or 6.

II. LEGAL STANDARD

Summary judgment is appropriate when 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 judgment as a matter of law." See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party points to facts showing that there is an absence of evidence supporting the nonmoving party's ease, the nonmoving party may not rest on mere allegations, but must point to specific facts in the record showing that there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "[T]he mere scintilla of evidence in support of [the nonmovant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving] party." Id. at 252, 106 S.Ct. 2505. In...