Payne Enterprises, Inc. v. United States of America

837 F.2d 486, 34 Cont. Cas. Fed. 75,423, 267 U.S. App. D.C. 63, 1988 U.S. App. LEXIS 510, 1988 WL 2512
CourtCourt of Appeals for the D.C. Circuit
DecidedJanuary 19, 1988
Docket87-5002
StatusPublished
Cited by275 cases

This text of 837 F.2d 486 (Payne Enterprises, Inc. v. United States of America) 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.

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Payne Enterprises, Inc. v. United States of America, 837 F.2d 486, 34 Cont. Cas. Fed. 75,423, 267 U.S. App. D.C. 63, 1988 U.S. App. LEXIS 510, 1988 WL 2512 (D.C. Cir. 1988).

Opinions

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

Concurring statement filed by Circuit Judge D.H. GINSBURG.

HARRY T. EDWARDS, Circuit Judge:

This case raises issues of mootness, ripeness, and the appropriateness of equitable relief for the tardy release of bid abstracts by the Air Force in response to Freedom of Information Act (“FOIA”) requests by Payne Enterprises, Inc. (“Payne”). Beginning in March 1985, officers at Air Force Logistics Command (“AFLC”) bases refused to supply Payne with copies of bid abstracts when, in their judgment, competition for contracts was so limited that release of the abstracts might result in higher prices in the future. The base officers perfunctorily invoked FOIA Exemptions 4 and 5, 5 U.S.C. § 552(b)(4), (5) (1982), in justifying their denials. Payne appealed these denials to the Secretary of the Air Force, who without exception ordered disclosure because neither FOIA exemption applied to the material Payne had requested. Nevertheless, AFLC officers continued to refuse Payne’s FOIA requests for bid abstracts, thereby necessitating further— and invariably successful — administrative appeals. The delay occasioned by these appeals injured Payne’s business by frustrating its clients’ desire for the prompt delivery of information on contract bids.

In July 1986, Payne filed suit in the District Court, under 28 U.S.C. § 1331 (federal question jurisdiction), 28 U.S.C. § 1361 (mandamus), 28 U.S.C. § 1651 (All Writs Act) and 5 U.S.C. § 552 (FOIA), challenging the Air Force’s practice of unjustified delay and seeking declaratory and injunc-tive relief to compel the defendants to release abstracts of negotiated acquisitions.1 [488]*488Payne’s suit was dismissed, however, on the ground that it had received all of the material it had requested through the administrative appeals procedure specified by the FOIA. The District Court concluded that the Secretary of the Air Force’s failure to compel AFLC bases to comply with the FOIA in ruling on Payne’s initial requests did not warrant judicial intervention. After Payne filed a notice of appeal with this court, the officers at AFLC bases finally began to grant Payne’s requests for bid abstracts even where there existed limited competition for contracts. None of Payne’s requests have been denied since January 1987. In addition, the Air Force has conceded that Exemptions 4 and 5 do not apply to the material Payne desires, and an Air Force officer has promised release of the abstracts by AFLC bases in the future.

We hold that the claimed voluntary cessation of the Air Force practice of refusing to release bid abstracts (absent an appeal to the Secretary of the Air Force) does not render moot Payne’s challenge to the Air Force’s practice of unjustified delay. We also hold that Payne’s challenge is ripe for adjudication. Because the Air Force has admitted that the information initially denied Payne does not fall within FOIA Exemptions 4 and 5, and because the repeated delays Payne suffered in securing that information pursuant to an Air Force practice constitute clear violations of the FOIA, we reverse the District Court’s dismissal and remand with instructions to afford Payne declaratory relief and to consider the propriety of injunctive relief.

I. Background

Payne sells information and advice about Government contracts to prospective contractors. Payne obtains much of that information through FOIA requests. From 1970 through March 1985, Payne regularly requested from AFLC bases, and routinely received, copies of bid abstracts listing the offerors’ names and aggregate offer prices for negotiated contracts once those contracts had been awarded. Starting in March 1985, officers at several AFLC bases refused to supply Payne with copies of bid abstracts prepared in connection with contracts for which there was limited competition.2 These refusals were apparently prompted by an AFLC policy letter that reads in part:

When the release of the negotiated contract abstracts will reveal to the successful offeror that there is (a) no other offeror, or (b) only one other offeror with a large price disparity between the two offerors, we believe that the successful offeror, knowing the extent of the limited competition, would naturally be compelled to, and most likely would, increase the prices in future acquisition [sic] for the same item, thereby prejudicing the Government’s interest.

Letter from Steven Thompson to Major General Charles McDonald (June 20, 1986), reprinted in Appendix (“App.”) 21 (quoting AFLC policy letter). In denying Payne’s requests for bid abstracts when the foregoing conditions were met, the AFLC officers relied on FOIA Exemptions 4 and 53 as legal rationales, although they [489]*489never stated precisely why they thought these exemptions were applicable.4

Payne appealed the denials to the Secretary of the Air Force. Without exception, the Secretary’s Office released the bid abstracts Payne had requested. It appears that the Secretary concluded that release of the information would not necessarily result in higher prices for the Government, because unsuccessful bidders would have an incentive to lower their bids when competing for later contracts and because the Air Force could refuse to grant large price increases in negotiated contracts that could not be justified by corresponding increases in contractors’ costs.5 Whether for this reason alone or for other reasons as well, the Secretary determined that Exemptions 4 and 5 did not apply to the information Payne was seeking. Indeed, the Secretary’s Office expressed some irritation over the “excessive” number of FOIA appeals attributable to the stubborn refusal of AFLC officers to release bid abstracts.6 Advice to the officers from the Secretary’s staff made it clear that the officers’ position was wholly unjustified:

The most recent denials within AFLC contain broad general conclusions that release would be harmful to the deliberative process within the Air Force and would be inimical to the competitive in[490]*490terests of the Government. However, in considering each appeal, we have found it quite difficult to envision how the release of the requested NCAs [negotiated contract abstracts], or other NCAs in similar circumstances, would be demonstrably adverse to the interests of either the Government or the submitter(s). We have also been unable to devise any theory under which an NCA could be found to be a deliberative document....
In view of the above, I ask that you revise your guidance to bring it in line with our actions on the recent cases. Considerable time and effort spent on NCA appeals by both your people and those of us here in the Pentagon could be eliminated by your releasing this information.7

The AFLC officers, however, did not mend their ways immediately.

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837 F.2d 486, 34 Cont. Cas. Fed. 75,423, 267 U.S. App. D.C. 63, 1988 U.S. App. LEXIS 510, 1988 WL 2512, Counsel Stack Legal Research, https://law.counselstack.com/opinion/payne-enterprises-inc-v-united-states-of-america-cadc-1988.