Canadian Commercial Corp. v. Department of Air Force

514 F.3d 37, 379 U.S. App. D.C. 354, 85 U.S.P.Q. 2d (BNA) 1693, 2008 U.S. App. LEXIS 1859, 2008 WL 220638
CourtCourt of Appeals for the D.C. Circuit
DecidedJanuary 29, 2008
Docket06-5310
StatusPublished
Cited by40 cases

This text of 514 F.3d 37 (Canadian Commercial Corp. v. Department of Air Force) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Canadian Commercial Corp. v. Department of Air Force, 514 F.3d 37, 379 U.S. App. D.C. 354, 85 U.S.P.Q. 2d (BNA) 1693, 2008 U.S. App. LEXIS 1859, 2008 WL 220638 (D.C. Cir. 2008).

Opinions

Opinion for the Court filed by Chief Judge GINSBURG.

Concurring opinion filed by Circuit Judge TATEL.

GINSBURG, Chief Judge:

Canadian Commercial Corporation and Orenda Aerospace Corporation (hereinafter collectively CCC) brought this “reverse” Freedom of Information Act case to prevent the Air Force from releasing line-item pricing information in CCC’s contract to provide services to the Air Force. The district court enjoined the release and, for the reasons set forth below, we affirm its judgment.

I. Background

The facts are fully set forth in the thorough opinion of the district court. 442 F.Supp.2d 15,17-27 (2006). To summarize briefly, in 2002 CCC and the Air Force signed a three-year contract, which the Air Force had the option to extend for up to four more years, for CCC to repair, over[39]*39haul, and modify J85 turbojet engines. In 2003 Sabreliner, which had bid unsuccessfully for the job, filed a FOIA request for a copy of the contract. CCC objected, contending the line-item prices as well as certain hourly labor rates listed in the contract constituted trade secrets. After the Air Force issued a Decision Letter in which it rejected CCC’s contentions, CCC filed suit in the district court to enjoin disclosure of the information. Id. at 22. Applying our decision in McDonnell Douglas Corp. v. Air Force, 375 F.3d 1182 (2004), that court entered a summary judgment holding the decision of the Air Force was arbitrary and capricious insofar as it concluded the line-item prices were not trade secrets; the court enjoined the Air Force from disclosing those prices, 442 F.Supp.2d at 41, but not the hourly labor rates. Id. at 37 n. 10. The Air Force alone appealed to this court.

II. Analysis

We review the district court’s grant of summary judgment de novo. McDonnell Douglas v. Air Force, 375 F.3d at 1186. The underlying Decision Letter issued by the Air Force must be set aside if and only if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).

Exemption 4 of the Freedom of Information Act protects “matters that are ... trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4). Commercial or financial information obtained from a person involuntarily “is ‘confidential’ for purposes of the exemption if disclosure [would either] ... impair the Government’s ability to obtain necessary information in the future; or ... cause substantial harm to the competitive position of the person from whom the information was obtained.” Nat’l Parks & Conservation Ass’n v. Morton, 498 F.2d 765, 770 (D.C.Cir.1974); see also Critical Mass Energy Project v. NRC, 975 F.2d 871, 880 (D.C.Cir.1992) (en banc) (adhering to National Parks with regard to commercial or financial information involuntarily submitted to the Government). We have long held the Trade Secrets Act, 18 U.S.C. § 1905, a criminal statute that prohibits Government personnel from disclosing several types of confidential information unless “authorized by law,” is “at least coextensive -with ... Exemption 4 of FOIA.” CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1151 (D.C.Cir.1987). The upshot is that, unless another statute or a regulation authorizes disclosure of the information, the Trade Secrets Act requires each agency to withhold any information it may withhold under Exemption 4 of the FOIA. Bartholdi Cable Co., Inc. v. FCC, 114 F.3d 274, 281 (D.C.Cir.1997). A person whose information is about to be disclosed pursuant to a FOIA request may file a “reverse-FOIA action” and seek to enjoin the Government from disclosing it. See Chrysler Corp. v. Brown, 441 U.S. 281, 317-18, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979).

In two recent reverse-FOIA cases, we held the Air Force was arbitrary and capricious in concluding disclosure of line-item pricing information in a government contract would not cause “substantial competitive harm” to the contractor. McDonnell Douglas v. Air Force, 375 F.3d at 1190; McDonnell Douglas Corp. v. NASA, 180 F.3d 303, 307 (D.C.Cir.1999). The Air Force nevertheless contends we have never decided whether line-item pricing information is subject to Exemption 4 in the first place, and proposes we hold such information categorically excluded from Exemption 4 and therefore subject to disclosure.

[40]*40Contrary to the contention of the Air Force, it is the law of this circuit that line-item prices do come within Exemption 4. In McDonnell Douglas v. Air Force we stated:

We recoil ... from the implication ... of a per se rule (or at least a strong presumption) that all constituent pricing information—as opposed to the bid price itself—is to be disclosed; such a rule would be squarely at odds with the protection we have always understood Exemption 4 to provide for such pricing information.

375 F.3d at 1192. Similarly, in McDonnell Douglas v. NASA, after noting “McDonnell Douglas has shown ... that it is likely to suffer substantial competitive harm” if NASA releases its pricing information, we stated that “under present law, whatever may be the desirable policy course, appellant has every right to insist that its line item prices be withheld as confidential.” 180 F.3d at 307. We reaffirm today what we have held twice before: Constituent or line-item pricing information in a Government contract falls within Exemption 4 of the FOIA if its disclosure would “impair the government’s ability to obtain necessary information in the future” or “cause substantial harm to the competitive position of the person from whom the information was obtained.” Nat’l Parks, 498 F.2d at 770.

Even if the law of the circuit were unsettled, we would not find the arguments advanced by the Air Force convincing. Its primary contention is that the Congress must not have intended Exemption 4 to cover line-item prices in Government contracts because the FOIA was intended to broaden the array of information to which citizens have access and the Air Force regularly disclosed such pricing information prior to enactment of that statute— indeed, we are told, it was then required to do so under its procurement regulations.

Our interpretation of the FOIA would not necessarily be affected even if the Air Force could document these assertions of historical fact.

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514 F.3d 37, 379 U.S. App. D.C. 354, 85 U.S.P.Q. 2d (BNA) 1693, 2008 U.S. App. LEXIS 1859, 2008 WL 220638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/canadian-commercial-corp-v-department-of-air-force-cadc-2008.