Critical Mass Energy Project v. Nuclear Regulatory Commission

975 F.2d 871, 39 Cont. Cas. Fed. 76,602, 298 U.S. App. D.C. 8, 22 Envtl. L. Rep. (Envtl. Law Inst.) 21373, 1992 U.S. App. LEXIS 19336
Court of Appeals for the D.C. Circuit·Decided August 21, 1992·No. 90-5120·Published·Cited by 411 cases

Opinions

Opinion for the court en banc filed by Circuit Judge BUCKLEY, in which Circuit Judges SILBERMAN, WILLIAMS, D.H. GINSBURG, SENTELLE, HENDERSON, and RANDOLPH join.

Concurring opinion filed by Circuit Judge RANDOLPH, in which Circuit Judges SILBERMAN and SENTELLE join.

Dissenting opinion filed by Circuit Judge RUTH BADER GINSBURG, in which Chief Judge MIKVÁ and Circuit Judges WALD and HARRY T. EDWARDS join.

BUCKLEY, Circuit Judge, with whom SILBERMAN, STEPHEN F. WILLIAMS, D.H. GINSBURG, SENTELLE, KAREN LeCRAFT HENDERSON, and RANDOLPH, Circuit Judges, join:

Appellant seeks the release of certain reports that have been provided to the Nuclear Regulatory Commission by the Institute of Nuclear Power Operations on the understanding that they will be treated as confidential. In granting the petition to rehear the case en banc, we agreed to reconsider a seventeen-year-old decision, National Parks and Conservation Ass’n v. Morton, 498 F.2d 765 (D.C.Cir.1974), in which we established a two-part test for determining when financial or commercial information in the Government’s possession is to be treated as confidential under Exemption 4 of the Freedom of Information Act. We reaffirm the test but confine it to information that persons are required to provide the Government. We hold that where, as here, the information sought is given to the Government voluntarily, it will be treated as confidential under Exemption 4 if it is of a kind that the provider would not customarily make available to the public.

I. BACKGROUND

A. Legal Framework

When Congress enacted the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552 (1988), it “set[] forth a policy of broad disclosure of Government documents in order to ensure ‘an informed citizenry, vital to the functioning of a democratic society.’ ” FBI v. Abramson, 456 U.S. 615, 621, 102 S.Ct. 2054, 2059, 72 L.Ed.2d 376 (1982) (citation omitted). At the same time, however, “Congress realized that legitimate governmental and private interests could be harmed by release of certain types of information.” Id. Balancing these private and public interests, Congress enacted nine exemptions to FOIA. Exemption 4, the provision at issue here, shields from disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4).

In the years immediately following the enactment of FOIA, we had frequent occasion to put flesh on the exemption. See, e.g., Sterling Drug, Inc. v. FTC, 450 F.2d 698 (D.C.Cir.1971); Soucie v. David, 448 F.2d 1067, 1078 (D.C.Cir.1971); Grumman Aircraft Engineering Corp. v. The Renegotiation Board, 425 F.2d 578, 580-81 (D.C.Cir.1970); Bristol-Myers Co. v. FTC, 424 F.2d 935, 938-39 (D.C.Cir.), cert. denied, 400 U.S. 824, 91 S.Ct. 46, 27 L.Ed.2d 52 (1970). In Sterling Drug, we considered a FOIA request for records submitted to the Federal Trade Commission. In order to determine the purpose of Exemption 4, we examined the following passage from a Senate committee report:

This exception is necessary to protect the confidentiality of information which is obtained by the Government through [873]*873questionnaires or other inquiries, but which would customarily not be released to the public by the person from whom it was obtained.

Sterling Drug, 450 F.2d at 709 (quoting S.Rep. No. 813, 89th Cong., 2d Sess. 9 (1964) U.S.Code Cong. & Admin.News 1966, p. 2418 (“Senate Report”)). We then concluded that the requested information was protected by the exemption because it was of “the type ‘which would customarily not be released to the public by the person from whom it was obtained.’ ” Id.

Three years later, we decided National Parks. The plaintiff in that case sought disclosure of audits and other financial materials that the National Park Service required its concessioners to submit. We reversed the district court’s grant of summary judgment in favor of the agency based on Exemption 4. After observing that the statute did not define “confidential,” we noted that we had been guided, in earlier decisions, by the “would customarily not be released to the public” passage from the Senate Report. National Parks, 498 F.2d at 766. We found, however, that whether the person providing the information would customarily not have released it “is not the only relevant inquiry in determining whether that information is ‘confidential.’ ... A court must also be satisfied that non-disclosure is justified by the legislative purpose which underlies the exemption.” Id. at 767. We then stated that “[i]n general, the various [FOIA] exemptions ... serve two interests — that of the Government in efficient operation and that of persons supplying certain kinds of information in maintaining its secrecy.” Id.

We determined that Exemption 4 serves both of these purposes. As to the governmental interest, we noted that “[ujnless persons having necessary information can be assured that it will remain confidential, they may decline to cooperate with officials^] and the ability of the Government to make intelligent, well informed decisions will be impaired.” Id. After discussing the legislative history, we concluded that “[t]his exemption is intended to encourage individuals to provide certain kinds of confidential information to the Government[.]” Id. at 768 (quoting Soucie, 448 F.2d at 1078).

Turning to the private interests, we noted that the exemption “protects persons who submit financial or commercial data to government agencies from the competitive disadvantages which would result from its publication.” Id. We also recognized

a twofold justification for the exemption of commercial material: (1) encouraging cooperation by those who are not obliged to provide information to the government and (2) protecting the rights of those who must.

Id. at 769. We concluded that the legislative history “firmly supports the inference that section 552(b)(4) is intended for the benefit of persons who supply information as well as the agencies which gather it.” Id. at 770. We then offered what has come to be known as the National Parks “two-part test”:

[Cjommercial or financial matter is “confidential” ... if disclosure of the information is likely ... either ... (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.

Id. at 770 (footnote omitted). At the same time, we reserved the question whether the impairment of other governmental interests might be implicated in the exemption. See id. at 770 n.

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Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871, 39 Cont. Cas. Fed. 76,602, 298 U.S. App. D.C. 8, 22 Envtl. L. Rep. (Envtl. Law Inst.) 21373, 1992 U.S. App. LEXIS 19336 (D.C. Cir. 1992).

975 F.2d 871 (Critical Mass Energy Project v. Nuclear Regulatory Commission) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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