American Management Services, LLC v. Department of Army

703 F.3d 724, 2013 U.S. App. LEXIS 531, 2013 WL 93154
CourtCourt of Appeals for the Fourth Circuit
DecidedJanuary 9, 2013
Docket12-1274
StatusPublished
Cited by22 cases

This text of 703 F.3d 724 (American Management Services, LLC v. Department of Army) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Management Services, LLC v. Department of Army, 703 F.3d 724, 2013 U.S. App. LEXIS 531, 2013 WL 93154 (4th Cir. 2013).

Opinion

Affirmed by published opinion. Chief Judge TRAXLER wrote the opinion, in which Judge WYNN and Judge THACKER joined.

OPINION

TRAXLER, Chief Judge:

This dispute focuses on communications between Clark Realty Capital, LLC (“Clark”) and the Department of the Army (“Army”). The appellant, American Management Services, LLC, d/b/a Pinnacle (“Pinnacle”), claims that the Army unlawfully withheld many of these communications in violation of the Freedom of Information Act (“FOIA”). The district court granted summary judgment to the Army, and Pinnacle appeals from that judgment. For the reasons that follow, we affirm.

I.

Acting under the authority granted to it by the Military Housing Privatization Initiative, see 10 U.S.C. §§ 2871-2885, the Army has privatized family housing at several Army installations, including Fort Benning in Georgia and Fort Belvoir in Virginia. To effect this privatization, according to the parties, the Army sought bids from the private sector to develop, own, operate, manage, and maintain family housing. At both Fort Benning and Fort *727 Belvoir, Clark teamed up with Pinnacle to compete for the housing projects.

At Fort Benning, Clark and Pinnacle formed Clark Pinnacle Benning, LLC (“CPBenning”). Clark owned 70% of CPBenning and served as its managing member. Pinnacle owned the remaining 30% of CPBenning. Once CPBenning was awarded the housing project, CPBenning and the Army formed Fort Benning Family Communities, LLC (“FBFC”), with CPBenning owning 51 % of FBFC and the Army owning the remaining 49%. Clark served as the managing member of FBFC. American Management Services East, LLC (“AMSE”), a subsidiary of Pinnacle, served as the property manager for FBFC.

The arrangement at Fort Belvoir was slightly different and more complicated. Clark and Pinnacle initially formed two entities: Clark Pinnacle Belvoir, LLC (“CPBelvoir”) and Belvoir Holdings, LLC. These two entities, owned 70% by Clark and 30% by Pinnacle, then formed Fort Belvoir Residential Communities, LLC (“FBRC”). Clark served as the managing member for FBRC, and AMSE served as its property manager. 1 The Army did not own any part of FBRC; however, Belvoir Land, LLC, an entity owned 49% by the Army and 51% by CPBelvoir, leased land to FBRC for the development of housing.

II.

In 2010, Clark contends it discovered evidence of alleged fraud being committed by Pinnacle. 2 As a result, by May 2010, Clark had decided to appoint a replacement property manager for both FBFC and FBRC and to initiate litigation against Pinnacle. In order for FBFC and FBRC to appoint a replacement property manager and to initiate litigation, however, Clark was obligated by the companies’ operating agreements to obtain the Army’s approval. Clark met with the Army on May 6, 2010, and provided the Army with a binder of documents prepared by Clark’s outside counsel, Kirkland & Ellis. The documents contained in the binder were meant to provide the Army with evidence of the fraudulent conduct that Clark alleged. After viewing these documents, the Army, on May 14, 2010, approved of Clark’s proposed course of action. Six days later, Clark, on behalf of FBFC and FBRC, filed a lawsuit against Pinnacle in the Superior Court of Muscogee County, Georgia (the “Georgia litigation”), seeking, among other things, a declaratory judgment that the property management agreements at Forts Benning and Belvoir were automatically terminated as a result of Pinnacle’s alleged misconduct. The Army is not a party to the Georgia litigation. However, after the Army gave its approval to Clark, and during the pendency of the Georgia litigation, which is ongoing, Clark and the Army continued to correspond about the litigation and about the management of the military housing projects generally.

Through the discovery process in the Georgia litigation, Pinnacle sought the binder provided to the Army by Clark and various other communications between Clark and FBFC/FBRC. FBFC and FBRC objected to the discovery requests, asserting various privileges. Instead of moving to compel disclosure of these documents or challenging the validity of the *728 assertions of privilege, Pinnacle submitted a FOIA request to the Army. In that request, Pinnacle sought, among other things, “[a]ll records of any nature referring directly to pending litigation or matters known to be directly related to” the Georgia litigation and “[a]ll records submitted or requested by Clark.” J.A. 344. On February 24, 2011, a government official provided Pinnacle with an interim release of 48 documents. Believing that this interim release was unresponsive to its FOIA request and that the Army had violated FOIA by failing to timely respond to its request, Pinnacle filed the instant FOIA action in the Eastern District of Virginia. In its complaint, Pinnacle sought a declaration that the Army had violated FOIA and sought an order compelling the Army to produce all responsive records and provide Pinnacle with an index of all responsive documents, pursuant to Vaughn v. Rosen, 484 F.2d 820, 827-28 (D.C.Cir.1973) (requiring agencies to correlate documents withheld with a specific FOIA exemption and the agency’s nondisclosure justification).

On May 20, 2011, the Army issued its final administrative decision on Pinnacle’s FOIA request. In that decision, the Army acknowledged that 929 pages of responsive documents remained after accounting for the interim release of 48 pages. Of the 929 pages of responsive documents, the Army released 7 pages, withheld 383 pages claiming they were either in Pinnacle’s possession already or contained only boilerplate language, 3 and withheld the remaining 344 pages based on Exemptions 4 and 5 of FOIA. See 5 U.S.C. § 552(b)(4), (5). Subsequent to this administrative release, the Army answered Pinnacle’s complaint, filed a motion for summary judgment, and attached a Vaughn index to the motion. Pinnacle opposed the Army’s motion and filed a cross-motion for summary judgment.

In addressing these motions, the district court first grouped the documents at issue into three separate categories, an organizational approach that we will follow. Category A contained correspondence and memoranda internal to the Army; Category B contained correspondence between the Army and Clark or between the Army and Clark’s outside counsel; and Category C contained documents submitted by Clark to the Army. The district court found that the Category A and B documents fell within Exemption 5 of FOIA, see 5 U.S.C. § 552(b)(5), and that the Category C documents fell within Exemption 4 of the statute, see id. § 552(b)(4). The district court, therefore, denied Pinnacle’s motion and granted the Army’s motion. Pinnacle now appeals from that grant of summary judgment.

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703 F.3d 724, 2013 U.S. App. LEXIS 531, 2013 WL 93154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-management-services-llc-v-department-of-army-ca4-2013.