Planning Research Corporation v. Federal Power Commission

555 F.2d 970, 181 U.S. App. D.C. 33, 2 Media L. Rep. (BNA) 1681, 1977 U.S. App. LEXIS 14380
CourtCourt of Appeals for the D.C. Circuit
DecidedMarch 10, 1977
Docket75-1540
StatusPublished
Cited by10 cases

This text of 555 F.2d 970 (Planning Research Corporation v. Federal Power Commission) 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
Planning Research Corporation v. Federal Power Commission, 555 F.2d 970, 181 U.S. App. D.C. 33, 2 Media L. Rep. (BNA) 1681, 1977 U.S. App. LEXIS 14380 (D.C. Cir. 1977).

Opinion

McGOWAN, Circuit Judge:

In this “reverse-Freedom of Information Act” case, appellant, a supplier of services under a contract with the Federal Power Commission, sought in the District Court to prevent the Commission from complying with a request by a third party under the Act for information about the contract. The District Court granted a pretrial motion to dismiss the complaint for want of subject-matter jurisdiction; and this appeal is from that action. For the reasons hereinafter set forth, we hold that the District Court had jurisdiction to entertain the suit.

I

In May, 1974, the Commission issued a Request for Proposal (RFP No. FP-7074), together with technical specifications, seeking bids for the development and implementation of a computer based regulatory information system. In response to the RFP, appellant Planning Research Corporation (PRC) submitted a methodology for the development of the system, including some 1200 pages of detailed, highly-technical descriptions relating to its proposed undertaking. Following detailed analysis of the bid proposals by staff members of the FPC, PRC was awarded the contract on June 29, 1974.

A formal request was filed by the Associated Press (AP) on November 5,1974 pursuant to FOIA for release of the contract. Alternatively, AP requested release of those portions of the contract not exempt from the disclosure provisions of FOIA. AP’s request was submitted by the Commission to the United States Department of Justice under the terms of 28 CFR 50.9. 1 The Commission’s letter of transmittal of November 22, 1974, was accompanied by a proposed letter to AP denying the latter’s request in part on the basis of Exemption 4 of FOIA, 5 U.S.C. § 552(b)(4). 2 The Commission requested advice as to the propriety *972 of this action. The Commission’s letter characterized the document in question as

“exempt from the Freedom of Information Act requirements in that it represents the ultimate summation of PRC’s methodology, in terms of corporate strategy, management techniques, and state-of-the-art technology, for entry into a new business area. It discloses in detail the company’s techniques for informational system analysis, design, and verification, system implementation, facility planning, operation and maintenance, and project management procedures. It reveals not only the company’s criteria for hardware and software selection, but also detailed confidential evaluations of a number of hardware and software companies and their products. It describes in great detail the company’s unique corporate approach to planning and executing large-scale projects, including specific blueprints for the company’s every step in planning, installing, and operating a sophisticated computer facility. It offers innovative options, not solicited by the Request for Proposals, for dynamic system modeling and alternatives to the plan embodied in the Request for Proposals. It provides costing information in complete detail, the disclosure of which would enable any competitor to predict the company’s pricing schedules with alarming accuracy in any bidding procedure. In short, it sets forth all of the company’s trade and marketing secrets, developed over more than 20 years of experience at great expense, the disclosure of which to competitors would provide those competitors with a direct source of materials for their own proposals now being developed for the installation of similar computer systems in other agencies.”

The record indicates that there was never any formal written response by the Department of Justice to the Commission’s letter. A further letter of December 18, 1974 from the Commission’s General Counsel to the Assistant Attorney General originally addressed recites that the latter had made his recommendation on December 9, 1974 “in the course of a conversation” with the Commission’s Executive Director who had written the initial letter of November 22. This reference to “December 9, 1974” is apparently in error since a letter of that date from the Secretary of the Commission to counsel for AP refers to the Department of Justice’s recommendation as having been made in a telephone call on December 5, 1974.

In any event, the Commission’s understanding of the Department’s oral advice is formulated in a Notice to Show Cause issued by it on December 23,1974, in which it invited appellant and AP to show cause

“why the entire contract should not be released or, in the alternative, why it should not be released except for those portions thereof which are determined to be exempt from the disclosure requirements of the Freedom of Information Act, 5 U.S.C. 552(b)(4), unless otherwise required to be kept confidential by Federal Procurement Regulations, 41 CFR 1— 3.103(b).”

In that Notice the Commission recited as follows:

On December 4, 1974, [sic] the Justice Department responded to the Commission’s request by recommending as a basis for making a determination as to the material which should be publicly disclosed and that which should be withheld from public disclosure, the following criteria:
(a) From the entire contract, the Commission should extract the “essence of the contract”; that is, all of the provisions which, upon the execution of the contract, create a contract obligation on the part of PRC (failure of performance of which would constitute contract default). These provisions should be made available to the requester (AP).
*973 (b) From the remainder of the contract, delete all material which is exempt from disclosure as constituting trade secrets, and commercial or financial information obtained from a person which is privileged or confidential under Exemption 4 of the Freedom of Information Act, 5 U.S.C. 552(b)(4).

The Notice further identified the determinations made by the Commission’s Staff in the light of the criteria supplied by the Justice Department, and asserted that, since Justice had refused a further Commission request to review these particular determinations, the Commission had concluded that the fairest thing to do was to set the matter down for hearing before an Administrative Law Judge.

Such a hearing was held on January 2, 1975; and, on January 10, the ALJ issued a Tentative Initial Decision on which he scheduled oral argument for January 21. In his Tentative Initial Decision, Judge Zwerdling noted that the controversy to be resolved derived from appellant’s objection to the disclosure of the following technical materials in its bid proposal, which he characterized as “included by reference” in its resulting contract with the Commission:

(1) Vol. II, Parts A, B, C, and D, in their entirety. 3
(2) Vol. III,

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555 F.2d 970, 181 U.S. App. D.C. 33, 2 Media L. Rep. (BNA) 1681, 1977 U.S. App. LEXIS 14380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/planning-research-corporation-v-federal-power-commission-cadc-1977.