Washington Post v. Minor. Bus. Opp. Com'n

• Decision Date: 16 June 1989
• Docket Number: No. 87-785.,87-785.
• Citation: 560 A.2d 517
• Parties: The WASHINGTON POST COMPANY, Appellant, v. MINORITY BUSINESS OPPORTUNITY COMMISSION, et al., Appellees.
• Court: D.C. Court of Appeals

560 A.2d 517

The WASHINGTON POST COMPANY, Appellant, v. MINORITY BUSINESS OPPORTUNITY COMMISSION, et al., Appellees.

No. 87-785.

District of Columbia Court of Appeals.

Argued March 8, 1989.

Decided June 16, 1989.

Barbara P. Percival, with whom Boisfeuillet Jones, Jr., Washington, D.C., and Denise E. Holmes were on the brief, for appellant.

Christopher M. Kerns, with whom Mitchell Barry Rosenfeld and Joseph F. Giordano, Washington, D.C., were on the brief, for appellees Fort Myer Const. Corp. and Opportunity Concrete Corp.

Edward E. Schwab, Asst. Corp. Counsel, with whom Frederick D. Cooke, Jr., Corp. Counsel, and Charles L. Reischel, Deputy Corp. Counsel, Washington, D.C., were on the brief, for appellee Minority Business Opportunity Com'n.

Before MACK, STEADMAN and SCHWELB, Associate Judges.

SCHWELB, Associate Judge:

The District of Columbia is committed by statute both to the right of its citizens to freedom of information and to the principle of affirmative action to correct the effects of past racial discrimination. This appeal requires us to consider the application of the first of these statutory policies to facts which potentially implicate the second.

Appellant Washington Post Company (the Post), relying on the District's Freedom of Information Act (FOIA), D.C.Code § 1-1521 et seq. (1987 Repl.), seeks access to extensive information in the possession of the District of Columbia Minority Business Opportunity Commission (MBOC). The requested materials relate to fifteen companies which have sought to participate as "local minority business enterprises" in the District's affirmative action "set-aside" program. MBOC and two of the affected businesses, which were permitted to intervene in the trial court, contend primarily that the information sought is exempt from the requirements of the Act because its disclosure would significantly impair the firms' competitive position. They apprehend that rejection of their claims of exemption would frustrate the purposes of a remedial civil rights law by providing nonminority competitors of minority enterprises, on a non-reciprocal basis, with information which could be used to the minority enterprises' competitive disadvantage.

The controversy began when MBOC declined to comply with a broad-ranging request from the Post to permit two of its reporters to inspect the applications of the fifteen enterprises for participation in the program, as well as supporting documentation for the applications and some additional materials. The Post brought suit in the Superior Court challenging MBOC's action. The trial judge granted summary judgment in favor of MBOC and the two intervening enterprises with respect to most of the documents sought, and the Post appeals from that judgment. We conclude that, as appellees effectively concede, the order sustaining claims of exemption by MBOC and the intervenors was too broad, and that the trial judge did not make a sufficient inquiry as to whether any part or parts of the requested materials could be segregated from the others and released without causing competitive injury to the affected companies. Accordingly, we reverse the judgment and remand for further proceedings.

I

Not so very many years ago, our capital city was rigorously divided by race into two societies so unequal that, in the words of a writer who cared about the title of his book, "young [black] men with college educations had to take jobs as bellhops and bus boys." KLUGER, SIMPLE JUSTICE 107 (1976). The schools were racially segregated by law, see Bolling v. Sharpe, 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed. 884 (1954), job discrimination was rampant, see generally GREEN, WASHINGTON, A HISTORY OF THE CAPITAL, 1800-1950, 221-24, 474-75 (1962), and blacks and others were denied equal housing opportunity, Hurd v. Hodge, 334 U.S. 24, 68 S.Ct. 847, 92 L.Ed. 1187 (1948), and access to places of public accommodation, District of Columbia v. Thompson, 346 U.S. 100, 73 S.Ct. 1007, 97 L.Ed. 1480 (1953), rev'g 92 U.S.App.D.C. 34, 203 F.2d 579 (1953).¹

As a part of a policy of affirmative action designed to correct these and other injustices and to heal the wounds of the past, the Council of the District of Columbia enacted the Minority Contracting Act of 1976, D.C.Code § 1-1141 et seq. (1987 Repl.) and the Procurement Practices Act of 1985, § 1-1181 et seq. Finding that "a persistent pattern of racial discrimination" had deprived minority businesses of the opportunity to obtain a fair share of contracts and sub-contracts for construction and procurement in the public and private sectors, § 1-1141(1), the Council created the "sheltered market" program as a means of partial redress.² Under that program, each District of Columbia agency must have as its goal a "set-aside" for certified minority enterprises of 35% of the dollar volume of its construction and procurement contracts, unless MBOC determines that a different allocation is appropriate. § 1-1146(a). Certified minority contractors compete with one another, preferably through sealed bidding, to obtain contracts within the sheltered market. See §§ 1-1183.3(a) and 1-1183.6. Many also compete on the open market for contracts which are not within the set-aside.

In order to participate in the sheltered market program, a business must demonstrate that it is in fact a minority enterprise, that it is local, and that it is qualified by expertise, experience and financing to perform the contract which it seeks. See 27 D.C.M.R. § 702.8. To that end, each applicant must complete two lengthy application forms. The first, an "Eligibility Statement", is designed to elicit whether the enterprise is in fact both minority and local. It consists of a ten-page questionnaire calling for a wide range of information about the enterprise and its owners and stockholders.³

The second application form, which is called a "business profile", is designed to identify the types of contracts which the enterprise is equipped to perform. Applicants are required to submit in depth information regarding their corporate structure and by-laws, the financial structure and management of this enterprise, the ownership of stock in the company, and whether the company is certified as a minority business in any other jurisdiction. Individuals associated with the enterprise must reveal their other business interests. Each enterprise must provide information regarding any prior government contracting experience, as well as any history of debarment on its part or on the part of its principals, partners or stockholders. Applicants are also required to disclose previous services performed by the enterprise, the equipment which it owns, its sources of credit, its bonding capability, and any marketing techniques which it proposes to use in promoting its business.

II

The materials which the Post sought to obtain from MBOC consisted primarily of the eligibility statements and business profiles described above. The Post also requested production of certain other documents relating to individual enterprises, and a number of memoranda prepared by District of Columbia employees in relation to the enterprises but transmitted only to other District of Columbia employees. In support of its motion for summary judgment, MBOC submitted the affidavit of its Executive Director, Maudine Cooper. Ms. Cooper stated that the extensive financial information which applicants submit to MBOC is "essential for the Commission to determine whether a business qualifies as a minority business." She related that public disclosure of this business and financial information would "seriously jeopardize the ability of the Commission" to obtain necessary data from enterprises seeking certification. According to Ms. Cooper, MBOC could not responsibly make its eligibility determinations without this information.

MBOC and the intervenors also submitted the affidavits of executives of the two intervening enterprises. These individuals attempted to explain how release of information which their companies had submitted to MBOC would prejudice their competitive posture. Lewis Shrensky, the secretary-treasurer of Fort Myer Construction Company, explained in some detail how his firm, which had bid on 200 projects during the previous year, would be harmed by public disclosure of financial information which it had submitted to MBOC because the information which it had provided could be used by competitors in anticipating whether Fort Myer would bid on a project, or the amount of any possible bid by the company. Shrensky also asserted that such information could be used by a labor union to its advantage in negotiating a collective bargaining agreement. Monte Newman, vice president of Opportunity Concrete, made similar claims for his company in more conclusory form. Neither affiant demonstrated or attempted to demonstrate that none of the documents sought could be disclosed without injury to his company's competitive position.

The Post did not present counter-affidavits in response to the motion for summary judgment. No affidavits or other materials were filed relating to the particular competitive circumstances of any of the enterprises which did not intervene in the litigation.

The trial judge granted summary judgment in favor of MBOC and the intervening enterprises on most issues in an order which reads, in its entirety, as follows:

Upon consideration of the cross-motions for summary judgment, the exhibits and memoranda of law submitted in support thereof, oral arguments of counsel, and the applicable statutes and case law, the Court reaches the following conclusions of law:

1. The information contained in the Eligibility Statements and Business Profiles of the Minority Business Opportunity Commission is exempt from disclosure under D.C.Code § 1-1524(a)(1).

2. The June 20, 1984 memorandum from Maudine Cooper, Director, Office of Human Rights, to John E. Touchstone, Director, Department of Public Works,...