Trifid Corp. v. National Imagery and Mapping Agency

Decision Date17 July 1998
Docket NumberNo. 4:97-CV-2163 CAS.,4:97-CV-2163 CAS.
Citation10 F.Supp.2d 1087
CourtU.S. District Court — Eastern District of Missouri

Thomas J. DeGroot, Husch and Eppenberger, St. Louis, MO, for Plaintiff.

Maria C. Sanchez, Office of U.S. Attorney, St. Louis, MO, for Defendant.


SHAW, District Judge.

This matter is before the Court on the parties' cross-motions for summary judgment. For the reasons which follow, the Court will grant defendant's motion for summary judgment and deny that of the plaintiff.

I. Background.

In this "reverse" Freedom of Information Act case, plaintiff TRIFID Corporation ("TRIFID" or "plaintiff") seeks to prevent disclosure of certain unit price information contained in a contract between it and defendant National Imagery and Mapping Agency ("NIMA" or "defendant"). One of plaintiff's competitors has requested the information pursuant to the Freedom of Information Act ("FOIA"), 5 U.S.C. §§ 552 et seq. TRIFID contends the information is excluded from disclosure by exemption four of FOIA, 5 U.S.C. § 552(b)(4) (exempting "trade secrets and commercial or financial information obtained from a person and privileged or confidential"), and by the Trade Secrets Act, 18 U.S.C. § 1905. NIMA disagrees and has stated its intention to comply with the FOIA request unless this Court concludes that exemption four applies.

The parties appeared before the Court on October 24, 1997, for hearing on plaintiff's motion for temporary restraining order. By agreement of the parties, the Court ordered that defendant not disclose the disputed information until the preliminary injunction hearing could be held on December 17, 1997. On November 25, 1997, after consultation with the parties and pursuant to Rule 65(a), Federal Rules of Civil Procedure, the Court consolidated the hearing on plaintiff's application for preliminary injunctive relief with trial on the merits. By consent, the order of October 24, 1997 concerning nondisclosure remains in full force and effect until resolution of this matter.

By order dated May 20, 1998, the Court ordered defendant to provide plaintiff with a certified copy of the entire administrative record in this matter. In compliance with the Court's order, the parties informally resolved their differences concerning the administrative record. Accordingly, on July 2, 1998, the Court granted defendant's agreedupon Motion to Amend the Administrative Record to withdraw from consideration documents numbered 1 and 19-26 of the administrative record because these items (i) were created after defendant's determination to release information pursuant to the FOIA request at issue, or (ii) relate to other contractors' pricing information. The Court therefore does not consider those documents in resolving the instant motions.

The Court granted plaintiff leave to file a supplemental memorandum in support of its motion for summary judgment on July 2, 1998, following its review of the administrative record, and defendant filed its response thereto on July 10, 1998.

The matter now being properly before the Court for decision, the Court turns to the merits of the motions pending before it.

II. Summary Judgment Standard.

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall be entered "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." In ruling on a motion for summary judgment, a court is required to view the facts in the light most favorable to the non-moving party and must give that party the benefit of all reasonable inferences to be drawn from the underlying facts. AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987). The moving party bears the burden of showing both the absence of a genuine issue of material fact and its entitlement to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Fed. R.Civ.P. 56(c).

Once the moving party has met its burden, the non-moving party may not rest on the allegations of its pleadings but must set forth specific facts, by affidavit or other evidence, showing that a genuine issue of material fact exists. Fed.R.Civ.P. 56(e). Anderson, 477 U.S. at 257, 106 S.Ct. 2505; City of Mt. Pleasant v. Associated Elec. Coop., Inc., 838 F.2d 268, 273-74 (8th Cir.1988). Rule 56(c) "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

III. Facts.

TRIFID is a Missouri corporation which develops computer software to create seamless photographic images of geography throughout the world. NIMA is a Component Agency of the United States Department of Defense. Effective October 1, 1996, NIMA took over the duties and functions of the Defense Mapping Agency ("DMA"), a former Department of Defense Component Agency.

On August 20, 1996, DMA issued Solicitation Number DMA402-96-R-003, a Negotiated Request for Proposals (RFP), seeking to procure controlled image base (CIB). (NIMA Resp. to Def.'s Mot. Summ. J., Ex. C.) Section A of the RFP provided, inter alia, that all offerors must have a secret facility clearance in order to participate in the procurement. (Id.) Section B of the RFP provided in pertinent part, "The contractor shall furnish all labor, equipment, materials (except those furnished by the Government), quality control, security and supervision required to deliver to the Defense Mapping Agency Controlled Image Base (CIB) in both compressed, on Compact Disks (CD-ROMs), and uncompressed forms, on Eight (8) mm data cassettes." Amendments to the RFP were issued on August 20, 1996, September 17, 1996, October 8, 1996, October 31, 1996, November 18, 1996, and December 3, 1996.

TRIFID was one of four contractors to respond to the RFP. As part of its proposal, TRIFID provided NIMA with dollar figures ("unit prices") it proposed to charge for each of the four types of images ("CIB cells") specified in the RFP, for the initial "base" contract year and three one-year options.

On March 21, 1997, NIMA awarded contracts to three of the four contractors which submitted proposals. The base year of contract DMA402-96-R-003 (the "contract") ran from March 31, 1997 through September 30, 1997, with option years covering the periods October 1, 1997 through September 30, 1998 (first option year), October 1, 1998 through September 30, 1999 (second option year), and October 1, 1999 through September 30, 2000 (third option year).1

By letter dated July 25, 1997, ERIM International, Inc. ("ERIM"), a competitor of TRIFID, lodged a FOIA request with NIMA's St. Louis, Missouri facility, seeking Section B unit price information from all participants in the RFP process. (See Admin. Rec. at 2.) NIMA advised TRIFID of the FOIA request by letter dated August 26, 1997 from Barbara J. Bahr, Assistant General Counsel, Mission Support and Administrative Law. (Admin. Rec. at 8; NIMA Mem. Supp. Summ. J., Ex. A.) In the letter, NIMA stated that if TRIFID had any objections to release of the information, it should provide a detailed explanation of its objections by September 8, 1997. NIMA sent similar letters to the other successful contracting parties, Hughes Information Technology Systems and Harris Corporation, ISD. (Admin. Rec. at 5, 6.)

TRIFID responded to the NIMA letter three days later, by letter dated August 29, 1997, from Nancy Riddle, its Director of Administration. TRIFID notified NIMA that it objected to the release of unit price information. (Admin. Rec. at 9; NIMA Mem. Supp. Mot. Summ. J., Ex. C.) TRIFID enclosed a copy of a letter dated May 25, 1995 prepared by its attorney Thomas DeGroot (the "DeGroot letter"), objecting to a prior FOIA request. (Id.) TRIFID also submitted the affidavit of Ms. Riddle, which (i) stated that unit price information is a "closely guarded secret at TRIFID"; (ii) detailed the measures TRIFID has taken to restrict access to unit price information, which it considers "proprietary"; and (iii) asserted that disclosure of TRIFID's unit price information to its competitors would put TRIFID at a competitive disadvantage and cause it substantial harm particularly with respect to the four levels of service covered by the contract, by giving competitors insight into its profit margins, pricing and bidding strategy, and could allow competitors to formulate future bids designed to undercut TRIFID's prices. (Id.)

In the DeGroot letter, TRIFID made the following arguments: TRIFID's unit price information is a closely guarded secret which is not disclosed to competitors; access to the information would give a competitor insight in TRIFID's cost structure and profit margin; TRIFID's unit price information met the requirements for nondisclosure under FOIA's exemption four, 5 U.S.C. § 552(b)(4); TRIFID voluntarily supplied the information as part of the bidding process for contract No. DMA 402-96-R-003; the test formulated in Critical Mass Energy Project v. Nuclear Regulatory Commission,2 should be applied to determine whether the unit price information is exempt from disclosure under FOIA; under the Critical Mass test, the unit price information should not be disclosed because it is confidential and was voluntarily provided; and finally, because the information is not subject to disclosure under the Critical Mass test, neither ...

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