American Small Business League v. Department of Defense

District Court, N.D. California·Decided November 24, 2019·No. 3:18-cv-01979·Unknown

Opinion

FOR THE NORTHERN DISTRICT OF CALIFORNIA AMERICAN SMALL BUSINESS LEAGUE, No. C 18-01979 WHA Plaintiff, v. UNITED STATES DEPARTMENT OF ORDER ON JOINT MOTION DEFENSE and UNITED STATES FOR SUMMARY JUDGMENT DEPARTMENT OF JUSTICE, Defendants, and LOCKHEED MARTIN CORPORATION, Defendant-Intervenor. / INTRODUCTION In this FOIA action, defendants and intervenor move for summary judgment. For the reasons stated below, the motion is GRANTED IN PART and DENIED IN PART. A prior order dated March 8 has set forth the detailed background of this action (Dkt. No. 58). In brief, plaintiff American Small Business League, a non-profit organization that promotes the interests of small businesses, seeks the release of various documents related to defendant United States Department of Defense’s Comprehensive Subcontracting Plan Test Program (“Test Program”). This program, which Congress authorized in 1990 in an effort to increase subcontracting opportunities for small businesses, allows prime contractors to submit a single annual “comprehensive subcontracting plan” to identify all subcontract amounts awarded to small businesses on government contracts. Participation in the Test Program is voluntary (Dkt. No. 107-1 ¶¶ 4–5, 8). The Defense Contract Management Agency (“DCMA”) manages the Test Program for the DOD. It conducts an annual review, known as the “640 compliance review,” of each contractor’s compliance with policy requirements and performance with respect to its approved comprehensive subcontracting plan (id. ¶¶ 9–10). This review includes narrative descriptions and an overall adjectival rating (i.e., exceptional, satisfactory, good, marginal, or unsatisfactory) (id. ¶ 10). Herein, the DOD, defendant Department of Justice, and defendant-intervenor Lockheed Martin Corporation (collectively, “defendants”) seek to withhold approximately 2,000 pages of details related to defense contractors Lockheed, Sikorsky Aircraft Corporation, and GE Aviation System’s small business subcontracting relationships, strategies, and goals. This withholding is based on Exemption 4 of the FOIA, 5 U.S.C. § 552(b)(4) (Dkt. No. 107 at 7–8). Specifically, the documents at issue are as follows (Dkt. Nos. 20 ¶ 21): All documents transmitted between (a) D[O]D or the Department of Justice and (b) Lockheed Martin Corp. (‘LM,’ including Sikorsky Aircraft Corp. (‘Sikorsky’) and other LM subsidiaries concerning: (1) the FOIA request dated August 9, 2013, from the American Small Business League (‘ASBL’) to D[O]D, (2) ASBL”) [sic], (3) Lloyd Chapman, (4) the CSPTP [(Comprehensive Subcontracting Plan Test Program)], (5) SBIR [(Small Business Innovation Research)], and (6) Mentor-Protégé program. Additionally, plaintiff seeks GE’s comprehensive subcontracting plan for the 2014 fiscal year (Dkt. No. 20 ¶ 14). Exemption 4 excepts from disclosure, as relevant here, “commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4). Our court of appeals has held that “[i]nformation qualifies as ‘confidential’ for the purposes of Exemption 4 if disclosure of the information is likely to have either of the following effects: (1) to impair the Government’s ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.” GC Micro Corp. v. Def. Logistics Agency, 33 F.3d 1109, 1112 (9th Cir. 1994), overruled on other grounds by Animal Legal Def. Fund v. U.S. Food & Drug Admin., 836 F.3d 987 (9th Cir. 2016). Under the then-standard for Exemption 4, the prior order herein dated March 8 on the parties’ cross-motions for summary judgment found that issues of fact as to whether disclosure would cause substantial competitive harm precluded summary judgment (Dkt. No. 58 at 9–11). An order dated April 9 set the bench trial date on the Exemption 4 issue for December 9 (Dkt. No. 61 at 2). On June 24, however, the Supreme Court altered the standard for Exemption 4 in Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019), by rejecting the “competitive harm” test. In light of the new standard under Food Marketing, defendants have moved again for summary judgment on the Exemption 4 issue (Dkt. No. 107). A prior order dated September 15 granted plaintiff’s request to continue the hearing on defendants’ summary judgment motion under Rule 56(d) in order to allow plaintiff to take up to three depositions (Dkt. No. 126). This order follows full briefing, including supplemental briefing following plaintiff’s requested discovery, oral argument, and an in camera review of documents selected by the parties. Summary judgment is appropriate where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Most FOIA cases are resolved by the district court on summary judgment, with the district court entering judgment as a matter of law.” Animal Legal Def. Fund v. Food & Drug Admin., 836 F.3d 987, 989 (9th Cir. 2016) (en banc). FOIA’s purpose is to let us see what our government has been up to by “provid[ing] public access to official information ‘shielded unnecessarily’ from public view and establish[ing] a ‘judicially enforceable public right to secure such information from possibly unwilling official hands.’ ” Lahr v. Nat’l Transp. Safety Bd., 569 F.3d 964, 973 (9th Cir. 2009) (quoting Dep’t of Air Force v. Rose, 425 U.S. 352, 361 (1976)). Such access “ensure[s] an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed.” John Doe Agency v. John Doe Corp., 493 U.S. 146, 152 (1989) (citation omitted). FOIA thus “mandates a policy of broad disclosure of government documents.” Maricopa Audubon Soc. v. U.S. Forest Serv., 108 F.3d 1082, 1085 (9th Cir. 1997) (quoting Church of Scientology v. Dep’t of the Army, 611 F.2d 738, 741 (9th Cir. 1979) (internal quotations omitted)). An agency may withhold a document “only if the material at issue falls within one of the nine statutory exemptions.” Ibid. These exemptions are “explicitly exclusive and must be narrowly construed in light of FOIA’s dominant objective of disclosure, not secrecy.” Ibid. (internal quotation marks and citations omitted). Because of FOIA’s strong presumption in favor of disclosure, the government bears the burden of proving that the information it seeks to shield properly falls within an exemption. Hamdan v. U.S. Dep’t of Justice, 797 F.3d 759, 772 (9th Cir. 2015). It must further provide all “reasonably segregable” portions of that record to the requester. 5 U.S.C. § 552(b). The issue here is whether the information Lockheed and Sikorsky seek to withhold is “confidential” within the meaning of Exemption 4. In rejecting the “substantial compet

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