General Electric Co. v. Dept. of Air Force ( 2009 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
GENERAL ELECTRIC COMPANY, )
)
Plaintiff, )
)
v. ) Civil Action No. 01-1549 (CCB)
)
DEPARTMENT OF THE AIR FORCE, )
)
Defendant. )
____________________________________)
MEMORANDUM OPINION
In this case brought pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. §
552 et seq., and the Administrative Procedure Act (“APA”), 5 U.S.C. § 706 (2000), plaintiff
General Electric (“GE”) seeks to prohibit defendant United States Department of the Air Force
(“Department” or “Air Force”) from disclosing unit pricing information contained in two
contracts GE negotiated with the Air Force. Because the disclosure of unit pricing information is
barred in this case by the Trade Secrets Act, 18 U.S.C. § 1905, the court will deny the Air
Force’s renewed motion for summary judgment and grant GE’s renewed cross-motion for
summary judgment.
I. Factual Background
The underlying facts in this “reverse FOIA” case were thoroughly set out in Judge
Reggie Walton’s March 31, 2004 memorandum opinion.1 In brief, this dispute centers around
1
I received this case from Judge Walton in June 2009 through inter-circuit assignment.
1
the disclosure of unit pricing information contained in two contracts between GE and the Air
Force for spare parts for GE-manufactured jet engines. These contracts, F34601-99-D-2000
(“D-2000 contract”) and F41608-00-D-0323 (“D-0323 contract”), are for the procurement of
spare parts for GE’s F101, F110, and F118 series jet engines and J85, TF34, and TF39 jet
engines respectively. The first was entered into on February 12, 1999, and the second was
entered into on September 12, 2000.
The Air Force received a FOIA request for the D-2000 contract and related documents in
May 2000 from John J. Fausti and Associates, LLC, and it notified GE of this request via letter
on May 22, 2000. After some initial communications between GE and the Air Force, GE
expressed its opposition to the disclosure of the D-2000 contract’s unit pricing information in a
March 13, 2001 letter, stating that such disclosure would cause it substantial competitive harm,
therefore bringing it within the scope of FOIA Exemption 4,2 which exempts from disclosure
“trade secrets and commercial or financial information obtained from a person and privileged or
confidential.” 5 U.S.C. § 552(b)(4). Nevertheless, the Air Force informed GE on July 16, 2001
that it intended to release the disputed information on July 30, 2001, basing its decision on its
conclusion that the release of this information would not cause GE substantial competitive harm.
This decision was a reversal of two prior decisions by the Air Force – one on October 7, 1999
and one on November 2, 1999 – not to disclose this information on the basis of FOIA Exemption
4.
The Air Force received a FOIA request for the D-0323 contract and related documents on
2
For a discussion of why substantial competitive harm brings information within the
scope of FOIA Exemption 4, see infra Section II.B.
2
September 18, 2000 from Sabreliner Corporation, and it notified GE of this request via letter on
February 15, 2001. Again after some communications between GE and the Air Force, in which
GE expressed its opposition on the ground that such disclosure would cause it substantial
competitive harm, the Air Force informed GE on June 21, 2001 that it intended to release the
disputed information on or after July 12, 2001 (fourteen working days later), stating that such
information was not exempt under FOIA Exemption 4.3
In response, GE promptly filed suit in the District of Columbia on July 17, 2001, seeking
to prevent the disclosure of unit pricing information in the D-2000 and D-0323 contracts. Cross-
motions for summary judgment were submitted to the district court, and on March 31, 2004,
Judge Walton issued a memorandum opinion in which he found that the Air Force had failed to
justify adequately its decision to disclose the disputed information in the face of GE’s objections.
Specifically, he found that “the Air Force neglect[ed] to . . . address GE’s argument that
releasing the unit price information could cause its customers, such as foreign governments, to
leverage GE’s negotiated prices against it in future competitions” (March 31, 2004 Mem. Op. at
9-10 (internal footnotes omitted)), and suggested that this specter of customer competition
“could qualify the pricing information at issue here as exempt under FOIA Exemption Four.”
(Id. at 10 (citing McDonnell Douglas Corp. v. Nat’l Aeronautics & Space Admin., 180 F.3d 303,
307 (D.C. Cir. 1999) (“NASA”)).) He also found that the Air Force’s decision “was in direct
contradiction to what it had previously decided regarding the same unit prices at issue,” and that
this departure from precedent was not sufficiently explained. (Id. at 17 (citing Am. Fed’n of
3
The Air Force has agreed not to disclose the disputed information from either contract
pending judicial resolution of this matter.
3
Labor & Congress of Indus. Orgs. v. Brock, 835 F.2d 912, 917 (D.C. Cir. 1987), for the
proposition that such a departure requires proper justification). The court therefore vacated the
Air Force’s decision and remanded the case to the Air Force, ordering it to issue a new decision
within thirty days “regarding whether to disclose the unit pricing information at issue in
accordance with the concerns raised in the Court’s Memorandum Opinion.” (March 31, 2004
Order.)
After receiving an extension of time, the Air Force issued its follow-up decision in a
letter dated May 28, 2004 (“May Decision Letter”). In this letter, the Air Force explained that its
previous decisions to withhold unit pricing information for the D-2000 contract were made
pursuant to the D.C. Circuit’s decision in NASA, which it understood as potentially creating a per
se rule that unit pricing information must always be withheld. It stated that its later decision to
release the unit pricing information in both the D-2000 and D-0323 contracts was made after
reading the D.C. Circuit’s denial of rehearing en banc in that case, in which the court clarified
that government disclosure of unit pricing information need not always be withheld. This
clarification of the law, it stated, explained its apparent departure from past agency precedent.
The Air Force also abided by the district court’s request that it address GE’s arguments
about competitive harm. The Air Force first asserted that GE faces no actual competition over
these contracts because they are “sole source” contracts, i.e. contracts for which only GE can
supply the parts needed. The Air Force then asserted that, even if GE faced actual competition
over these contracts, it had failed to demonstrate precisely how the disclosure of unit pricing
information would cause it substantial competitive harm, but rather had offered only “conclusory
allegations.” (A.R. Tab 60, May Decision Ltr. at 5.) It also argued that, as a general matter, a
4
customer’s demand for prices comparable to those in the D-2000 and D-0323 contracts “is not by
itself competitively harmful.” (Id. at 7.) Lastly, the Air Force contended that GE had no other
customers who would order parts in quantities as large as those the Air Force orders, and so none
of GE’s other customers were in a position to demand price concessions based on the unit
pricing GE offered to the Air Force. (Id. at 8.)
Because the Air Force found that GE had failed to demonstrate adequately substantial
competitive harm, it concluded once again that the unit pricing information was not confidential
and therefore not exempt from disclosure under FOIA Exemption 4. Accordingly, the Air Force
ordered the disclosure of the disputed information. GE submitted two additional letters
requesting that the Air Force reconsider this decision, but the Air Force was unpersuaded and
reiterated its reasons for disclosure in a February 8, 2006 letter (“February Reconsideration
Letter”). As an additional reason for disclosure, this letter also argued that the legislative history
of FOIA and related regulations shows a congressional intent to put unit pricing information
beyond the reach of Exemption 4. Renewed cross-motions for summary judgment were
subsequently filed.
II. Analysis
A. Standard of Review
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment
“should be rendered if the pleadings, the discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any material fact and that the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). The Supreme Court has clarified
5
this does not mean that any factual dispute will defeat the motion. “By its very terms, this
standard provides that the mere existence of some alleged factual dispute between the parties will
not defeat an otherwise properly supported motion for summary judgment; the requirement is
that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986) (emphasis in original).
In reverse FOIA cases like this one, the court’s reviewing authority arises under Section
706 of the APA. See Occidental Petroleum Corp. v. S.E.C., 873 F.2d 325, 337 (D.C. Cir. 1989)
(citing Chrysler Corp. v. Brown, 441 U.S. 281, 317-18 (1979)). Section 706 directs reviewing
courts to set aside agency decisions that they find to be “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). This “arbitrary and
capricious” review is narrow in scope; “a court is not to substitute its judgment for that of the
agency.” Mount Royal Joint Venture v. Kempthorne, 477 F.3d 745, 753 (D.C. Cir. 2007)
(quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).
Nevertheless, a court should not “defer to the agency’s conclusory or unsupported suppositions.”
McDonnell Douglas Corp. v. U.S. Dept. of the Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004)
(“USAF II”) (citing State Farm, 463 U.S. at 43). Also, a court’s review under Section 706
should be based on the full administrative record that was available to the agency at the time of
its decision. See Occidental Petroleum Corp., 873 F.2d at 338. Any post hoc rationales an
agency provides for its decision are not to be considered. See USAF II, 375 F.3d at 1188.
Under review here is the Air Force’s renewed decision to disclose unit pricing
information from the D-2000 and D-0323 contracts, despite GE’s objection on the ground that
such pricing falls within the scope of FOIA Exemption 4. The court will base its analysis, then,
6
on the reasons put forward by the Air Force in its May Decision Letter and February
Reconsideration Letter. Before examining the Air Force’s reasons for disclosure, however, it is
important to set forth the D.C. Circuit’s test for determining what information falls within the
scope of FOIA Exemption 4.
B. Scope of FOIA Exemption 4
As mentioned, FOIA Exemption 4 exempts from disclosure “trade secrets and
commercial or financial information obtained from a person and privileged or confidential.” 5
U.S.C. § 552(b)(4). This exemption is co-extensive with the Trade Secrets Act, which prohibits
federal government employees from disclosing confidential information. 18 U.S.C. § 1905; see
Canadian Commercial Corp. v. Dep’t of Air Force, 514 F.3d 37, 39 (D.C. Cir. 2008) (citing
CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1151 (D.C. Cir. 1987)). “Accordingly, when a
person can show that information falls within Exemption 4, then the government is precluded
from releasing it under the Trade Secrets Act.” NASA, 180 F.3d at 305 (citing McDonnell
Douglas Corp. v. Widnall, 57 F.3d 1162, 1164 (D.C. Cir. 1995)); see Canadian Commercial, 514
F.3d at 39.
Where, as here, the parties agree that the information is “commercial or financial
information obtained from a person” (where “person” includes corporations), the key inquiry is
whether that information is “privileged or confidential.” Frequently this inquiry focuses on
whether the information is “confidential”4; indeed, both GE and the Air Force focus their
4
“Privileged” information is generally understood to be information that falls within
recognized constitutional, statutory, or common law privileges. See Washington Post Co. v. U.S.
Dep’t of Health & Human Servs., 690 F.2d 252, 267-268 & n.50 (D.C. Cir. 1982) (discussing
7
attention here. The D.C. Circuit has set out a multi-part test for determining whether information
is “confidential.” First, the court must determine whether the information was submitted to the
government voluntarily. See NASA, 180 F.3d at 304. If it was, then the court must look to see
whether the submitted information is “the kind of information ‘that would customarily not be
released to the public by the person from whom it was obtained.’” Id. (quoting Critical Mass
Energy Project v. Nuclear Regulatory Comm’n, 975 F.2d 871, 879 (D.C. Cir. 1992) (en banc)).
If it is, then the information is “confidential,” and therefore precluded from disclosure by FOIA
Exemption 4 and the Trade Secrets Act. Critical Mass, 975 F.2d at 880. If the submission of the
information was compelled, however, then the court must determine whether its disclosure
“would be 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.” NASA, 180 F.3d at 305 (citing Critical Mass, 975 F.2d at 878-
80; Nat’l Parks & Conservation Ass’n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974) (“National
Parks I”)). If the party seeking nondisclosure can show either impaired government ability to
obtain necessary future information or substantial competitive harm, then the information is
“confidential” and therefore precluded from disclosure by FOIA Exemption 4 and the Trade
Secrets Act.5 National Parks I, 498 F.2d at 770-71.
the meaning of “privileged” and noting that cases finding information “privileged” under FOIA
Exemption 4 involved the attorney-client privilege); see generally 139 A.L.R. Fed. 225 § 14.
5
As mentioned above, the Air Force originally disputed whether unit pricing information
could come within the scope of Exemption 4 at all, regardless of whether it could be shown to be
confidential in any of the ways mentioned. (A.R. Tab 63, February Reconsideration Letter at 1-
4.) It is no longer advancing this argument, in light of the D.C. Circuit’s ruling in Canadian
Commercial. (Def.’s Mot. at 20.) See Canadian Commercial, 514 F.3d at 40 (“Contrary to the
contention of the Air Force, it is the law of this circuit that line-item prices do come within
8
The parties dispute whether the submission of unit pricing information was voluntary or
compelled in this case; GE claims that it was voluntary and the Air Force claims that it was
compelled. I will assume without deciding that the information was not submitted voluntarily
and move on to the question of whether the disclosure of the information would cause substantial
competitive harm.6 See NASA, 180 F.3d at 306-7 (regardless of whether information was
voluntarily submitted, if it is confidential, then it is precluded from disclosure under FOIA
Exemption 4 and the Trade Secrets Act); cf. McDonnell Douglas Corp. v. NASA, 895 F. Supp.
316, 318 (D. D.C.1995) (“[P]ricing information necessary for a government contract is
considered involuntary for a FOIA exemption four analysis. . . . Price is an essential and required
piece of information for the contract, no matter how it was achieved.”).
C. Air Force’s Reasons for Finding Disclosure of the Disputed Information Unlikely to
Cause Substantial Competitive Harm
As already discussed, the Air Force’s main reasons for disclosing the disputed
information are as follows: (1) GE has failed to show that it faces actual competition over these
particular contracts and so it has failed to show competitive harm from the disclosure7; (2) to the
Exemption 4.”)
6
The parties do not dispute that disclosure of the information would not impair the
government’s ability to obtain necessary information in the future. Accordingly, this prong of
the inquiry need not be addressed.
7
The Air Force writes:
[I]t is clear that GE does not actually face competition with respect to the items on
the two contracts that are the subjects of the FOIA requests. Both contracts . . . were
obtained on a sole source basis and each is restricted to items for which GE is the
only source of supply. It necessarily follows that if a source of supply is the only
source, it does not face competition.
9
extent that GE may face competitive harm, it has failed to articulate the nature of that
competitive harm with precision8; (3) customer leverage is not by itself cognizable as
competitive harm for purposes of FOIA Exemption 49; and (4) even if customer leverage is
cognizable, GE’s customers are all sufficiently distinct from the Air Force that knowledge of
GE’s unit pricing in Air Force spare parts contracts would not give them leverage over GE in
their own contracts.10 All of these reasons lead the Air Force to conclude that no substantial
competitive harm would result from the disclosure of the unit pricing information. Therefore,
the information cannot be deemed “confidential” – and therefore not disclosable – under FOIA
Exemption 4 and the Trade Secrets Act. Unfortunately for the Air Force, each of these reasons is
either contrary to prevailing case law in this circuit or unsupported in light of the evidence in the
administrative record.
(A.R. Tab 60, May Decision Ltr. at 4.)
8
The Air Force writes that GE’s letters and supporting affidavits fail to sufficiently
explain how a competitor could use the disclosed unit pricing information to “determine the
values assigned by GE to the many fluctuating variables such as raw material cost, labor cost,
overhead, and acceptable profit that make up a unit price.” (A.R. Tab 60, May Decision Ltr. at
7.)
9
As the Air Force puts it, “That a customer would demand or seek prices for spare parts
comparable to those in the contracts that are the subject of the FOIA requests in this case is not
by itself competitively harmful.” (A.R. Tab 60, May Decision Ltr. at 7.)
10
Regarding this contention, the Air Force writes:
GE has not shown that it has any other customer that would order parts in large
quantities comparable to the anticipated Air Force orders. Consequently, it has not
shown that any of its possible customers are in a position to be able to demand price
concessions from GE based on the production efficiencies and savings from which
GE would benefit.
(A.R. Tab 60, May Decision Ltr. at 8.)
10
Regarding the Air Force’s actual competition argument, while it is true that GE needs to
put forward evidence of actual competition, see Gulf & Western Indus., Inc. v. United States, 615
F.2d 527, 530 (D.C. Cir. 1979), such evidence need not be of actual competition over these
particular contracts. See National Parks I, 498 F.2d at 770-71 (noting that, even though the
concessioners faced no actual competition during the term of the contract with the government,
disclosure of certain contract information might hurt their competitive position in a non-
concession enterprise, making disclosure improper). Rather, GE need only put forward evidence
that it has actual competition and that disclosure of the disputed information is likely to cause it
substantial competitive harm in the future. Gulf & Western, 615 F.2d at 530 (citing Nat’l Parks
& Conservation Ass’n v. Kleppe, 547 F.2d 673 (D.C. Cir. 1976) (“National Parks II”)); see
USAF II, 375 F.3d at 1189 (withholding information under FOIA Exemption 4 because its
disclosure would “significantly increase the probability” [plaintiff’s] competitors would
underbid it in the event the Air Force rebids the contract”); National Parks I, 498 F.2d at 771(tasking the district court with determining “whether public disclosure of the information in
question poses the likelihood of substantial harm to the competitive positions of the parties from
whom it has been obtained” in the future).
GE has adequately shown that it faces actual competition over jet engine spare parts. It
competes directly with Sabreliner Corporation, the requester of the D-0323 contract’s unit
pricing information, for the provision of spare parts for J85 jet engines, parts which are covered
by the D-0323 contract. (A.R. Tab 61, Supp. Metzger Aff. ¶ 4.) It also competes with Pratt &
11
Whitney, Inc. and other companies for the provision of jet engines more generally.11 (Id. ¶ 3; see
id. ¶ 7 (noting that Pratt & Whitney, Inc. manufactures “similar if not identical parts” to the ones
GE produces for the jet engines covered by the D-2000 and D-0323 contracts).) While there was
technically no competition for these two contracts – since GE was awarded them on a sole
source basis – GE has demonstrated that there remains actual competition over both future
contracts with the Air Force and contracts with other countries’ air forces, such as those of South
Korea and the United Arab Emirates. (See A.R. Tab 61, Supp. Metzger Aff. ¶¶ 3, 4 & 6.) Cf.
NASA, 180 F.3d 303, 304 & 307 (withholding contract’s pricing information under FOIA
Exemption 4 on competitive harm grounds in case where no other contractors submitted
proposals for the contract at issue). Thus, GE has adequately shown the likelihood of substantial
competitive injury as well. Accordingly, the Air Force’s actual competition argument fails.
Regarding the Air Force’s imprecision argument, the case law is clear that GE is to be
held to a lower standard than the one the Air Force suggests. While the burden is on GE to
produce evidence indicating that release of pricing information would be competitively harmful,
see National Parks II, 547 F.2d at 679, it need not demonstrate precisely how the release of the
information would cause competitive harm. As the D.C. Circuit has stated, a party need not
demonstrate how a competing firm would use the disclosed information to “model exactly or
11
While the parties debate whether competition over jet engines may be considered here,
and not simply competition over jet engine spare parts, the court agrees with GE that competition
over jet engine spare parts is a subset of overall jet engine competition, and entities like the Air
Force undoubtedly consider the likely cost of jet engine spare parts when considering which
company to select for the provision of jet engines themselves. Accordingly, the court finds it
appropriate to consider GE’s actual competition in the realm of jet engine manufacturing in
addition to its actual competition in the specific area of jet engine spare parts manufacturing.
12
pinpoint precisely [its] pricing strategy” in order to show a likelihood of substantial competitive
harm; “pinpoint precision is not required to inflict substantial competitive harm.” USAF II, 375
F.3d at 1193; cf. McDonnell Douglas Corp. v. U.S. Dept. of Air Force, 215 F. Supp. 2d 200, 205
(D. D.C. 2002) (reversed in part by USAF II) (“The harm from disclosure is a matter of
speculation[.]”). GE has submitted extensive material explaining how its competitors could use
the disputed information for competitive advantage (see, e.g., GE Statement of Material Facts ¶¶
38-39; A.R. Tab 61, Supp. Metzger Aff. ¶¶ 3-8) and the Air Force’s response has been to assert
that the material provided is insufficiently detailed. While there may be cases where a party fails
to put forward sufficient evidence of the likelihood of substantial competitive harm, for instance
cases where the party offers “mere conclusory opinion testimony,” National Parks II, 547 F.2d at
679 (internal quotations omitted), this is not one. Cf. USAF II, 375 F.3d at 1192 (finding district
court’s decision to disclose certain contract information not arbitrary and capricious where the
party seeking nondisclosure “present[ed] neither a viable theory nor any evidence to support its
claim” that release of that information would cause it substantial competitive harm); Boeing Co.
v. U.S. Dep’t of Air Force, 616 F. Supp. 2d 40, 47-49 (D. D.C. 2009) (finding Boeing had
presented insufficient evidence as to how years-old labor rates could be used to calculate future
labor rates, and thereby cause it substantial competitive harm). Accordingly, the Air Force’s
imprecision argument in this instance is unsupported by the evidence in the administrative record
and prevailing case law.
Regarding customer leverage, contrary to the Air Force’s assertion, this circuit has
expressly found such leverage to have the potential to be substantially competitively harmful and
therefore a basis for nondisclosure. In NASA, plaintiff McDonnell Douglas argued for
13
nondisclosure of certain line-item pricing information in part because its disclosure would “allow
the company’s commercial customers to negotiate more effectively and thereby ‘ratchet down’
McDonnell Douglas’ prices.” 180 F.3d at 305. The agency found this competitive harm
rationale unconvincing, but in its review, the D.C. Circuit found it “indisputable.” Id. at 307; see
also National Parks II, 547 F.2d at 684 (ruling that disclosure of certain information would
increase the likelihood of substantial competitive harm in part because “[s]uppliers, contractors,
labor unions and creditors, too, could use such information to bargain for higher prices, wages or
interest rates”). Accordingly, the court finds the Air Force’s rejection of the customer leverage
argument here to be unsupported by the prevailing case law.
Finally, the court finds the Air Force’s contention that GE’s other customers do not enjoy
comparable bargaining positions to be both irrelevant and unsupported by the administrative
record. Nowhere in the regulations or case law is it suggested that, in order to show a likelihood
of substantial competitive harm from customers, a party needs to demonstrate that its customers
are in a wholly comparable bargaining position to the government agency involved in the
dispute. Moreover, many of GE’s customers, despite not being the size of the U.S. Air Force,
are still in a position to buy jet engine spare parts in vast quantities. (See A.R. Tab 61, Supp.
Metzger Aff. ¶¶ 4 & 6 (discussing GE’s competition for jet engine spare parts contracts with the
Brazilian Air Force, the Korean Air Force, the Turkish Air Force, and the air forces of Israel and
the United Arab Emirates.) Thus, while it is unlikely that these customers – upon learning the
unit pricing to which GE agreed in the D-2000 and D-0323 contracts – would be able to demand
the same unit pricing in their own contracts with GE, it is likely that they nonetheless would be
able to demand lower unit pricing in an array of contracts covering a large body of jet engine
14
equipment. The administrative record therefore shows that disclosure of unit pricing information
would likely pose substantial competitive harm to GE from its customers; that showing is
sufficient to deem the information “confidential” for purposes of FOIA Exemption 4 and the
Trade Secrets Act.12
12
For the reasons discussed above, the applicable statutes and precedent require a finding
that the pricing information at issue here should not be disclosed, given the likelihood of
substantial competitive harm that would result. See Canadian Commercial, 514 F.3d at 40(“line-item pricing information in a Government contract falls within Exemption 4 of the FOIA
if its disclosure would . . . ‘cause substantial harm to the competitive position of the person from
whom the information was obtained.’”) (quoting National Parks I, 498 F.2d at 770); NASA, 180
F.3d at 307 (“McDonnell Douglas has shown . . . that it is likely to suffer substantial competitive
harm. And 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.”) Nevertheless, the court shares
the view expressed by some in the D.C. Circuit that such nondisclosure is not the optimal policy
course. As Judge Tatel writes in his concurrence in Canadian Commercial, “given that FOIA’s
primary purpose is to inform citizens about what their government is up to, it seems quite
unlikely that Congress intended to prevent the public from learning how much the government
pays for goods and services.” 514 F.3d at 43 (internal quotations and citation omitted); see
USAF II, 375 F.3d at 1203 (Garland, J., concurring in part and dissenting in part) (noting that
application of the substantial competitive harm test “may bar disclosure of [line-item] prices in
the very situation in which the public interest in disclosure is at its apogee”); Widnall, 57 F.3d at
1167 (“the idea that a price charged to the government for specific goods or services could be a
‘trade secret’ appears passing strange to us”). A change in policy course, however, is not up to
this court to effectuate, as “the question [is] settled in this circuit.” Canadian Commercial, 514
F.3d at 44 (Tatel, J., concurring); see Widnall, 57 F.3d at 1167.
15
III. Conclusion
Because the Air Force’s reasons for rejecting GE’s competitive harm arguments are
either contrary to prevailing case law in this circuit or unsupported in light of the evidence in the
administrative record, its resulting disclosure decision is arbitrary, capricious, and not in
accordance with the law. See NASA, 180 F.3d at 307 (finding agency’s decision to be “arbitrary
and capricious for its illogical application of the competitive harm test”).13 Accordingly, the Air
Force’s motion for summary judgment shall be denied and GE’s cross-motion for summary
judgment shall be granted.
A separate Order follows.
August 28, 2009 /s/
Date Catherine C. Blake
United States District Judge
13
Because I am finding against the Air Force on this ground, I need not reach the
question, raised in the court’s previous memorandum opinion, whether the Air Force’s reasoning
adequately justifies its departure from its prior decisions. See generally Seminole Nation of
Oklahoma v. Norton, 223 F. Supp. 2d 122, 143 (D. D.C. 2002) (“An agency’s departure from its
prior decisions can be considered to be arbitrary, capricious and an abuse of discretion,
especially where the agency has failed to explain its departure from prior precedent.”) (internal
quotations and citations omitted); Brock, 835 F.2d at 917 (“Whatever the [agency’s] ground for
the departure from prior norms, however, it must be clearly set forth so that the reviewing court
may understand the basis of the agency’s action and so may judge the consistency of that action
with the agency’s mandate”) (quoting Atchison, Topeka & Santa Fe Ry. Co. v. Wichita Bd. of
Trade, 412 U.S. 800, 808 (1973) (emphasis omitted).
16