Taylor v. Babbitt

760 F. Supp. 2d 80, 98 U.S.P.Q. 2d (BNA) 1455, 2011 U.S. Dist. LEXIS 5122, 2011 WL 159769
CourtDistrict Court, District of Columbia
DecidedJanuary 19, 2011
DocketCivil Action 03-0173 (RMU)
StatusPublished
Cited by1 cases

This text of 760 F. Supp. 2d 80 (Taylor v. Babbitt) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Taylor v. Babbitt, 760 F. Supp. 2d 80, 98 U.S.P.Q. 2d (BNA) 1455, 2011 U.S. Dist. LEXIS 5122, 2011 WL 159769 (D.D.C. 2011).

Opinion

MEMORANDUM OPINION

Granting the Plaintiff’s Motion for Summary Judgment; Denying the Defendant’s Motion for Summary Judgment; Denying as Moot the Plaintiff’s Motion for Discovery

RICARDO M. URBINA, District Judge.

I. INTRODUCTION

This matter is before the court on the Federal Aviation Administration’s (“FAA”) motion for summary judgment and the plaintiffs cross-motion for summary judgment or, in the alternative, for discovery. The plaintiff, an aircraft enthusiast, submitted a request to the FAA under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, seeking design specifications for a 1930s-era antique aircraft, the Fair-child F-45. The FAA denied the request on the grounds that the requested materials constituted trade secrets and were thus exempt from disclosure under 5 U.S.C. § 552(b)(4) (“Exemption 4”).

The plaintiff has moved for summary judgment, asserting that the requested materials are not trade secrets for Exemption 4 purposes because they are neither secret nor commercially valuable. In the alternative, the plaintiff moves for leave to seek discovery regarding whether the intervenor-defendant, The Fairchild Corporation, owns the F^45 materials. The FAA has also moved for summary judgment, arguing that the materials are both secret and commercially valuable, and as such are exempted from FOIA disclosure under Exemption 4. For the reasons discussed below, the court concludes the requested materials do not qualify as trade *82 secrets for Exemption 4 purposes because they are neither secret nor commercially valuable. Accordingly, the court grants the plaintiffs motion for summary judgment, denies the defendant’s motion for summary judgment and denies the plaintiffs motion for discovery as moot.

II. FACTUAL & PROCEDURAL BACKGROUND

A. The F-45 Type Certificate Application

In 1935, the Fairchild Aircraft Corporation (“FAC”) submitted an application to the Civil Aeronautics Authority (“CAA”), the predecessor to the FAA, for a type certificate 1 for a new aircraft model, the F-45 airplane. FAA’s Renewed Mot. for Summ. J. (“FAA’s Mot.”) at 1-2; Pl.’s Mot. for Summ. J. or Disc. (“Pl.’s Mot.”), Decl. of Michael Pangia (“Pangia Decl.”), Ex. B at 1. Pursuant to CAA regulations, FAC submitted numerous materials along with its type certification application, including “technical blueprints depicting the design, materials, components, dimensions and geometry of the aircraft, engineering analyses and engineering test reports.” FAA’s Statement of Material Fact (“FAA’s Statement”) ¶ 1; see also FAA’s Mot., Decl. of Vito Pulera (“Pulera Decl.”) ¶ 11; FAA’s Mot., Aff. of Donald Miller (“Miller Aff.”) ¶ 5. The CAA subsequently granted FAC a type certificate for the F-45. See Pangia Decl., Ex. B at 7.

In 1939, the Fairchild Aircraft Division of the Fairchild Engine and Airplane Corporation (“FEAC”) informed the CAA that it had acquired the assets and business of FAC through a statutory merger, and requested that all type certificates be transferred from FAC to FEAC. Pl.’s Mot., Ex. B. The type certificate for the F-45 aircraft was formally transferred to FEAC in 1942, the year that production of the F-45 ceased. Id. In total, less than twenty F-45s were manufactured. See Pl.’s 1st Mot. for Disc. at 2.

In 1955, FEAC sent a letter (“the 1955 Letter”) to the CAA authorizing the agency to “loan” the F-45 type certification materials to members of the public who wished to make repairs to their aircraft. 2 Pangia Decl., Ex. A. Although the 1955 Letter specified that FEAC was not authorizing individuals to manufacture or sell parts built in accordance with the materials, it did not impose any confidentiality requirements on individuals requesting the materials. See id. Despite this authorization, neither the CAA nor the FAA ever *83 disclosed the F-45 type certification materials to members of the public. FAA’s Mot. at 2.

B. Ownership of the F-45 Type Certificate

Beginning in 1961, FEAC underwent a series of name changes, finally settling on Fairchild Industries, Inc. in 1971. FAA’s Mot., Decl. of John Jackson (“Jackson Decl.”) ¶¶ 16-18. In 1987, Fairchild Industries, Inc. merged with another corporation of the same name, and the surviving entity, also named Fairchild Industries, Inc., held all the assets of the merging corporations. Id. ¶ 19. In 1989, Fairchild Industries, Inc. became a subsidiary of Banner Industries, Inc. Id. ¶ 20. Because this corporate restructuring did not involve a transfer of corporate assets, Fairchild Industries remained the holder of the F-45 type certificate. Id. In 1990, Banner Industries, Inc. changed its name to The Fairchild Corporation (“Fairchild”), the intervenor-defendant in this case. Id. ¶ 21. Fairchild Industries, Inc., now a subsidiary of Fairchild, remained the holder of the F-45 type certificate. Id. In 1996, all non-telecommunications assets of Fairchild Industries, Inc. (including the F-45 type certificate) were transferred to the Fairchild Holding Corporation, a wholly owned indirect subsidiary of Fairchild. Id. ¶ 22. Consequently, the Fairchild Holding Corporation became the holder of the F-4Í5 type certificate. Id. The FAA maintains that Fairchild is the present-day corporate successor of the F-45 type certification materials. FAA’s Statement ¶ 9.

C. The Herrick Litigation

In 1997, Greg Herrick, the owner of one of the few remaining F-45 airplanes, submitted a FOIA request to the FAA for the F-45 type certification materials for the purpose of restoring his airplane. Herrick v. Garvey, 298 F.3d 1184, 1188 (10th Cir. 2002). The FAA informed Herrick that it had contacted Fairchild, which objected to the release of the type certification materials. Id. at 1188-89. As a result, the FAA denied Herrick’s request, asserting that the materials were exempt from disclosure as trade secrets under FOIA Exemption 4. Id.

Herrick filed suit in the United States District Court for the District of Wyoming, asserting that the FAA had improperly applied the trade secrets exemption. Id. at 1189. The district court granted summary judgment to the FAA, and the Tenth Circuit affirmed. Id. at 1189, 1195. As discussed below, the Tenth Circuit declined to address two matters that had not been challenged on appeal: (1) the district court’s determination that Fairchild’s revocation of the authority to disclose granted in the 1955 Letter restored the secrecy of the materials for Exemption 4 purposes and (2) the district court’s determination that the materials were commercially valuable.

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760 F. Supp. 2d 80, 98 U.S.P.Q. 2d (BNA) 1455, 2011 U.S. Dist. LEXIS 5122, 2011 WL 159769, Counsel Stack Legal Research, https://law.counselstack.com/opinion/taylor-v-babbitt-dcd-2011.