Taylor v. Blakey ( 2011 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
BRENT TAYLOR, :
:
Plaintiff, :
:
v. :
:
J. RANDOLPH BABBITT, : Civil Action No.: 03-0173 (RMU)
Administrator, :
Federal Aviation Administration, : Re Document Nos.: 70, 71
:
Defendant, :
:
and :
:
THE FAIRCHILD CORPORATION, :
:
Intervenor- :
Defendant. :
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
I. INTRODUCTION
This matter is before the court on the Federal Aviation Administration’s (“FAA”) motion
for summary judgment and the plaintiff’s 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 Fairchild 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 secrets for
Exemption 4 purposes because they are neither secret nor commercially valuable. Accordingly,
the court grants the plaintiff’s motion for summary judgment, denies the defendant’s motion for
summary judgment and denies the plaintiff’s 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 certificate1 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
1
Type certification is the first stage in a process by which the FAA approves new types of aircraft.
United States v. S.A. Empresa de Viacao Area Rio Grandense (Varig Airlines), 467 U.S. 797,
805-07 (1984); see also 14 C.F.R. §§ 21 et seq. Under FAA regulations, an aircraft manufacturer
wishing to produce a new type of aircraft must apply for a type certificate and must submit to the
agency the designs, drawings, test reports and computations necessary to show that the aircraft
comports with FAA airworthiness requirements. See 14 C.F.R. §§ 21.17, 21.21.
2
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.2
The 1955 Letter states as follows:
We now wish to advise in order to avoid undue delay and unnecessary exchange
of correspondence, that you are authorized to loan data from your files for use in
making repairs or replacement parts for aircraft produced by Fairchild without
requiring the individual to obtain specific requests from us, provided, of course,
that the data being loaned is pertinent to aircraft which are no longer in
production.
As we stated in our November 19, 1951 letter, authority to loan such data to
owners of Fairchild built airplanes, however, does not permit them to
manufacture, sell, or offer for sale (as an approved Fairchild sales outlet) parts
built in accordance with these drawings.
Pangia Decl., Ex. A.
3
Despite this authorization, neither the CAA nor the FAA ever 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-45 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.
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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. See id. at 1190 n.3, 1194 n.10.
D. Procedural History of This Case
In August 2002, the plaintiff submitted his own FOIA request to the FAA, seeking copies
of the “plans, blueprints, specifications, engineering drawings and data submitted in support of
the Type Certificate for the Fairchild F 45.” Compl. ¶ 6; FAA’s Statement ¶ 1. The materials
requested were identical to those sought by Herrick. See Herrick v. Garvey, 200 F. Supp. 2d
1321, 1322 (D. Wyo. 2000) (stating that the plaintiff sought “certain technical drawings and
other data provided . . . by the Fairchild Aircraft Corporation in 1935 in connection with its
‘Application for Approved Type Certificate’ for an aircraft known as the Fairchild F-45”).
Indeed, the plaintiff brought his FOIA request after Herrick requested his assistance with repairs
to Herrick’s F-45. Pl.’s 1st Mot. for Disc. at 8.
In February 2003, after receiving no response from the FAA, the plaintiff filed a
complaint in this court. See generally Compl. The court stayed the action in April 2003 because
of a disagreement as to whether the FAA had actually received the plaintiff’s FOIA request.
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Order (Apr. 28, 2003). Thereafter, the FAA denied the plaintiff’s request and his subsequent
appeal. Joint Status Report (Nov. 14, 2003).
In January 2004, the plaintiff filed a motion for leave to conduct discovery. See
generally Pl.’s 1st Mot. for Disc. The court denied the plaintiff’s motion, concluding that
discovery was unwarranted as the FAA had not yet filed its motion for summary judgment. See
Mem. Op. (Aug. 12, 2004) at 4-6.
Fairchild intervened as a defendant in November 2004. See Mem. Order (Nov. 15, 2004)
at 2-3. In January 2005, Fairchild filed a motion for summary judgment and the FAA filed a
motion to dismiss or, in the alternative, for summary judgment, arguing inter alia that claim
preclusion barred the plaintiff’s action. See generally Fairchild’s Mot. for Summ. J.
(“Fairchild’s Mot.”); FAA’s Mot. to Dismiss or for Summ. J. (“FAA’s 1st Mot.”). More
specifically, the defendants argued that under the doctrine of “virtual representation,” the
plaintiff was in privity with Herrick and that the ruling of the district court in Wyoming barred
the plaintiff’s claims. Fairchild’s Mot. at 7-13; FAA’s 1st Mot. at 13-19. The court granted the
defendants’ motions on claim preclusion grounds, and the Circuit affirmed. See Mem. Op. (May
12, 2005) at 5-14; Taylor v. Blakey, 490 F.3d 965, 978 (D.C. Cir. 2007). The Supreme Court
granted certiorari and vacated the Circuit’s ruling on the virtual representation issue. See Taylor
v. Sturgell, 553 U.S. 880, 904-07 (2008).
Following remand, the plaintiff filed a renewed motion for discovery, which the court
again denied on the grounds that discovery was unwarranted in this FOIA action before the
government had submitted its motion for summary judgment. Taylor v. Babbitt, 673 F. Supp. 2d
20, 23-24 (D.D.C. 2009). Subsequently, the FAA filed a renewed motion for summary
judgment, see generally FAA’s Mot., and the plaintiff filed a motion for summary judgment or,
6
in the alternative, for discovery, see generally Pl.’s Mot. With both motions ripe for
adjudication, the court turns to the applicable legal standards and the parties’ arguments.
III. ANALYSIS
A. Legal Standard for Summary Judgment in a FOIA Case
Summary judgment is appropriate when “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law.” FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986);
Diamond v. Atwood, 43 F.3d 1538, 1540 (D.C. Cir. 1995). In deciding whether there is a
genuine issue of material fact, the court is to view the record in the light most favorable to the
party opposing the motion, giving the non-movant the benefit of all favorable inferences that can
reasonably be drawn from the record and the benefit of any doubt as to the existence of any
genuine issue of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-59 (1970). To
determine which facts are “material,” a court must look to the substantive law on which each
claim rests. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A “genuine issue” is
one whose resolution could establish an element of a claim or defense and, therefore, affect the
outcome of the action. Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 248.
FOIA affords the public access to virtually any federal government record that FOIA
itself does not specifically exempt from disclosure. 5 U.S.C. § 552; Vaughn v. Rosen, 484 F.2d
820, 823 (D.C. Cir. 1973). FOIA confers jurisdiction on the federal district courts to order the
release of improperly withheld or redacted information. 5 U.S.C. § 552(a)(4)(B). In a judicial
review of an agency’s response to a FOIA request, the defendant agency has the burden of
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justifying nondisclosure, and the court must ascertain whether the agency has sustained its
burden of demonstrating that the documents requested are exempt from disclosure under FOIA
and that the agency has adequately segregated exempt from non-exempt materials. 5 U.S.C. §
552(a)(4)(B); Al-Fayed v. CIA, 254 F.3d 300, 305 (D.C. Cir. 2001); Summers v. Dep’t of Justice,
140 F.3d 1077, 1080 (D.C. Cir. 1998); Mead Data Cent., Inc. v. Dep’t of Air Force, 566 F.2d
242, 260 (D.C. Cir. 1977). An agency may meet its burden by providing the requester with a
Vaughn index, adequately describing each withheld document and explaining the reason for the
withholding. Summers, 140 F.3d at 1080; King v. Dep’t of Justice, 830 F.2d 210, 224 (D.C. Cir.
1987).
B. The Court Grants the Plaintiff’s Motion for Summary Judgment
and Denies the FAA’s Motion for Summary Judgment
The FAA contends that the materials requested by the plaintiff constitute trade secrets
and are therefore not subject to disclosure pursuant to FOIA Exemption 4.3 FAA’s Mot. at 10-
13. The plaintiff counters that the materials are not trade secrets for purposes of FOIA
Exemption 4 because they are neither secret nor commercially valuable. Pl.’s Mot. at 6-12.
Exemption 4 of FOIA authorizes the government to withhold “trade secrets and
commercial or financial information obtained from a person and privileged or confidential.” 5
U.S.C. § 552(b)(4). A trade secret, for purposes of Exemption 4, is “a secret, commercially
valuable plan, formula, process, or device that is used for the making, preparing, compounding,
or processing of trade commodities and that can be said to be the end product of either
innovation or substantial effort.” Pub. Citizen Health Research Grp. v. Food & Drug Admin.,
704 F.2d 1280, 1288 (D.C. Cir. 1983). Furthermore, there must exist “a direct relationship
3
Although the FAA initially argued that the F-45 type certification materials constituted both trade
secrets and confidential commercial information under Exemption 4, see FAA’s Mot. at 13-17,
the FAA has conceded that the materials are not confidential commercial information. FAA’s
Reply at 1, 2 n.1.
8
between the information at issue and the productive process.” Id. If information qualifies as a
trade secret, it is protected from disclosure under Exemption 4 and the inquiry ends. Id. at 1283.
In this case, the parties do not dispute that the F-45 type certification materials were
directly related to the productive process of the F-45 aircraft.4 Rather, the parties’ dispute
centers on two issues: (1) whether the F-45 type certification materials are, in fact, “secret,” and
(2) whether these materials are “commercially valuable,” as required for trade secret protection
under Exemption 4. The court considers these matters in turn.
1. The Requested Materials Are Not Secret
The plaintiff contends that the F-45 type certification materials do not fall under
Exemption 4 because they are not “secret.” See Pl.’s Mot. at 6-10. Specifically, the plaintiff
asserts that the 1955 Letter from FEAC granting the CAA permission to “loan” the F-45
materials effectively eliminated their secret status. Id. at 6-8. The FAA responds that the 1955
Letter did not remove the trade secret status of the materials, as it only authorized the CAA and
the FAA to release the materials for certain specified purposes, and in any case, the materials
were never actually disclosed to the public. FAA’s Mot. at 17-20; FAA’s Reply at 2-5.
Furthermore, the FAA contends that even if the 1955 Letter removed the materials’ secret status,
4
The FAA describes the requested materials as “technical blueprints depicting the design,
materials, components, dimensions and geometry of the aircraft, engineering analyses and
engineering test reports,” which represented “plans, formulae, processes and procedures which
were used for the development, quality assurance, and manufacture of the Fairchild F-45
Aircraft.” FAA’s Statement ¶ 2; see also Miller Aff. ¶ 6 (describing the materials as “formulas
and calculations, technical and material specifications, manufacturing and assembly processes,
production standards, quality control data and engineering data”). The plaintiff does not contest
these characterizations. Pl.’s Statement of Material Facts ¶ 2. Indeed, courts have applied
Exemption 4 to similar materials involving airplane design. See, e.g., United Techs. Corp. v. Fed.
Aviation Admin., 102 F.3d 688, 692 (2d Cir. 1996) (concluding that design drawings of airplane
engines were protected under Exemption 4 as confidential commercial information); Pac. Sky
Supply, Inc. v. Dep’t of Air Force, 1987 WL 25456, at *1 (D.D.C. Nov. 20, 1987) (holding that
drawings of airplane engine parts were trade secrets under Exemption 4).
9
Fairchild effectively restored the secrecy of the materials by revoking its grant of permission in
response to Herrick’s FOIA request in 1997. FAA’s Reply at 4.
It is well established that the actual public disclosure of trade secrets eliminates the trade
secret status of such information. See, e.g., Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002
(1984) (noting that public disclosure of trade secrets “extinguishe[s]” the owner’s property right
in the information); In re Iowa Freedom of Info. Council, 724 F.2d 658, 662 (8th Cir. 1983)
(stating that if trade secrets “are disclosed or revealed, they are destroyed”).
In Herrick, the Tenth Circuit considered whether the 1955 Letter authorizing the
disclosure of the F-45 type certificate materials meant that those materials could not be
considered secret for Exemption 4 purposes. Herrick, 298 F.3d at 1193-94. Noting that the
letter placed no restrictions on the further dissemination of the type certificate materials, the
court stated that
[w]hen a submitter grants the government permission to loan or release specific
information to the public, the submitter clearly indicates that he has no further
intention to keep the information secret. It is therefore a reasonable inference that
the submitter himself would be willing to release the information to the public if
requested to do so. Thus, once a submitter grants the government permission to
loan or release the information to the public, there is no reason for Exemption 4 to
apply because the submitter no longer intends the information to be “secret.” An
examination of the plain meaning of the word “secret” leads to a similar
conclusion. Most people would agree that if a person was given a piece of
information and was told that the information could be revealed to anyone who
asked about it, the information would not constitute a “secret.”
Id. (footnote omitted).
Thus, the court concluded, “where the submitter or owner of documents held by the
government grants the government permission to loan or release those documents to the public,
those documents are no longer ‘secret’ for purposes of Exemption 4. In such a situation, FOIA
creates an obligation for the government to release the documents.” Id. at 1194.
10
Like the Tenth Circuit, this court concludes that once FEAC authorized the CAA to
disclose the F-45 type certificate materials to outside parties without any obligation to maintain
the confidentiality of the information, the materials were no longer secret for purposes of
Exemption 4. Id. at 1194 & n.8; see also Ruckelshaus, 467 U.S. at 1011-12 (observing that
“[o]nce the data that constitute a trade secret are disclosed to others, or others are allowed to use
those data, the holder of the trade secret has lost his property interest in the data”) (emphasis
added); Nova Chems., Inc. v. Sekisui Plastics Co., 579 F.3d 319, 328 (3d Cir. 2009) (holding that
information disclosed pursuant to a licensing agreement that did not require the licensee to
maintain its secrecy could not be considered a trade secret).5
The FAA contends that even if the 1955 Letter meant that the materials were no longer
secret, their secret status was restored when Fairchild revoked its authorization to the FAA’s
disclosure of the materials. FAA’s Reply at 4. The FAA has, however, offered no support for
the proposition that materials that have been authorized for public disclosure by their owner are
considered secret once more when that authorization is revoked.6 See generally FAA’s Mot.;
FAA’s Reply. Moreover, even if there are circumstances in which secret status can be restored,
5
Although the FAA asserts that only the actual disclosure of information removes its secret status,
the authorities it cites either do not support that proposition, see Nova Chems., Inc. v. Sekisui
Plastics Co., 579 F.3d 319, 328 (3d Cir. 2009), or are readily distinguishable from the present
case, see Martin Marietta Corp. v. Dalton, 974 F. Supp. 37, 40 (D.D.C. 1997) (concluding that
the limited release of information, without the owner’s knowledge or consent, did not render the
information public knowledge); Silverberg v. Dep’t of Health & Human Servs., 1991 WL
633740, at *3 (D.D.C. June 14, 1991) (observing that the public did not have a right of access to
the performance and testing information of a drug testing laboratory merely because the subject
of a drug test has the right to access those records).
6
In Herrick, the Tenth Circuit noted that in granting summary judgment to the FAA, the district
court “assumed” that where documents have lost their trade secret status because the owner of the
information granted permission for the documents to be released, the trade secret status may be
restored through the revocation of the grant of permission. Herrick, 298 F.3d at 1194 n.10.
Because the plaintiff did not raise the issue on appeal, the Tenth Circuit “assumed, without
deciding, that it was possible for the grant of permission to be revoked and the secret nature of the
documents under FOIA to be restored.” Id.11
they are not present here, where Fairchild’s predecessor authorized the public disclosure of the
records at issue in 1955, and Fairchild made no effort whatsoever to revoke that authorization
until more than forty years later, when Herrick submitted his FOIA request. Pangia Decl. ¶ 4;
Pl.’s Mot. at 9-10. Indeed, neither Fairchild nor its predecessors took any steps to maintain the
record of its ownership of the type certification materials with the FAA, despite Fairchild’s
numerous changes in corporate form over the intervening decades. Pangia Decl. ¶¶ 3-4; see also
14 C.F.R. § 21.47 (providing that when an entity transfers a type certificate to another entity, it
must provide the FAA written notice of the transfer). The court cannot conclude that Fairchild’s
denial of Herrick’s FOIA request, following a forty-year period in which it authorized the
disclosure of the materials and took no steps to maintain the secrecy of the information, restores
the secret status of the materials at issue.
Accordingly, the court concludes that the F-45 type certificate materials are not secret
and therefore do not constitute trade secrets for purposes of Exemption 4. Although this
conclusion is sufficient to resolve the parties’ cross-motions for summary judgment, the court
nonetheless proceeds to consider the second disputed issue – whether the requested materials are
commercially valuable – as the resolution of this issue also supports the court’s conclusion.
2. The F-45 Type Certification Materials Are Not Commercially Valuable
Although it is undisputed that the F-45 type certification materials were commercially
valuable when originally submitted in 1935, see Pl.’s Mot. at 11; FAA’s Mot. at 11, the parties
dispute whether the materials remain commercially valuable today. The plaintiff contends that
for purposes of Exemption 4, information protected as trade secrets must be commercially
valuable because of its use in making a trade commodity. Pl.’s Reply at 9. Thus, the plaintiff
asserts that the F-45 materials, which consist of outdated, seventy-year-old technology, are not
12
commercially valuable because they are not “valuable in manufacturing planes.” Id.; see also
Pl.’s Mot. at 11; id., Decl. of George Erdel (“Erdel Decl.”) ¶ 6. The FAA does not contend that
the materials are valuable based on their current usefulness in manufacturing aircraft. FAA’s
Reply at 8. Rather, the FAA asserts that the materials are commercially valuable in the antique
aircraft market as a result of their “obvious utility in repairing any of the few remaining F-45s.”
Id.“Very little case law exists which interprets and applies the D.C. Circuit’s definition of
‘trade secret.’” Ctr. for Auto Safety v. Nat’l Highway Traffic Safety Admin., 93 F. Supp. 2d 1, 14
n.5 (D.D.C. 2000). Indeed, this Circuit has not had occasion to consider whether trade secret
protection may be afforded to information whose value is unrelated to the present-day production
of a commodity, nor has it offered a precise definition of the term “commercially valuable.”
The Supreme Court has, however, observed that “the value of a trade secret lies in the
competitive advantage it gives its owner over competitors.” Ruckelshaus, 467 U.S. at 1011 n.15.
Accordingly, courts have routinely found that information that provides its owner an advantage
over its competitors is commercially valuable. See, e.g., Pac. Sky Supply v. Dep’t of Air Force,
1987 WL 18214, at *3 (D.D.C. Sept. 29, 1987) (concluding that design drawings of airplane
parts were commercially valuable because the manufacturer enjoyed substantial commercial
success in sales of the airplane parts covered by the drawings during the previous five years and
had orders pending for over $150,000 in the parts). On the other hand, obsolete information that
provides no competitive advantage is not commercially valuable and cannot constitute a trade
secret. See, e.g., Fox Sports Net North, LLC v. Minn. Twins P’ship, 319 F.3d 329, 336 (8th Cir.
2003) (stating that “obsolete information cannot form the basis for a trade secret claim because
the information has no economic value”); MicroStrategy, Inc. v. Business Objects, S.A., 661 F.
13Supp. 2d 548, 555 (E.D. Va. 2009) (finding that a document was not worthy of trade secret
protection because “the products it references have not been on the market for over half a
decade, and the market for these products is constantly changing”); Applied Indus. Materials
Corp. v. Brantjes, 891 F. Supp. 432, 438 (N.D. Ill. 1994) (refusing to extend trade secret
protection to information that was “so outdated that it lack[ed] current economic value”).
The FAA concedes that the F-45 type certification materials are not commercially
valuable based on their usefulness in manufacturing aircraft. FAA’s Reply at 8. After all, the
technical information in the F-45 type certificate is surely obsolete. See Erdel Decl. ¶ 3.
Moreover, although Fairchild presently engages in the distribution of aircraft and aircraft
components, Fairchild no longer manufactures aircraft. Miller Aff. ¶ 4. Accordingly, the F-45
materials are not commercially valuable vis-à-vis the aircraft manufacturing industry.
Instead, the FAA contends that the commercial value of the F-45 type certification
materials arises from their value in the antique aircraft market. FAA’s Mot. at 11-12; FAA’s
Reply at 8. The FAA has produced evidence showing that the design drawings and
specifications included in the F-45 type certification materials are valuable in restoring and
repairing F-45s and other aircraft of 1930s vintage, as well as in producing replicas. See FAA’s
Reply at 8-9; Pulera Decl. ¶¶ 13-14.
But even if the F-45 type certification materials may be valuable within the antique
aircraft market, there is no evidence that these materials are commercially valuable to Fairchild
with respect to any business interest it has in the antique airplane market. See generally FAA’s
Mot.; FAA’s Reply. Nowhere does the FAA assert that Fairchild currently competes in the
antique aircraft market or that it has any intention to do so in the future. See FAA’s Mot. at 11-
14
12; FAA’s Reply at 7-11. Indeed, the FAA cannot even assert that there exists an identifiable
market for F-45 plans. FAA’s Reply at 8.
While the FAA need not provide detailed information regarding Fairchild’s business
endeavors within the antique aircraft market, the FAA may not rely merely on broad conclusions
that the disclosure of the F-45 plans would negatively impact Fairchild’s competitive position in
that market. See Pac. Architects & Eng’rs, Inc. v. Renegotiation Bd., 505 F.2d 383, 384 (D.C.
Cir. 1974) (stating that agencies may not “thwart[] the intent of the [FOIA] by making
‘conclusory and generalized allegations of exemptions’” (quoting Vaughn v. Rosen, 484 F.2d
820, 826 (D.C. Cir. 1973)); see also Nat’l Parks & Conservation Ass’n v. Kleppe, 547 F.2d 673,
683 (D.C. Cir. 1976) (providing that under the second prong of Exemption 4, a court “need only
exercise its judgment in view of the nature of the material sought and the competitive
circumstances in which the [submitters] do business, relying at least in part on relevant and
credible opinion testimony” (emphasis added)).
Because trade secret protection is ultimately grounded in the “economic value . . . [from]
the competitive advantage over others that [the owner] enjoys by virtue of its exclusive access to
the data,” Ruckelshaus, 467 U.S. at 1012, the F-45 type certification materials are not
commercially valuable because their economic value does not derive from the competitive
advantage they confer upon Fairchild within the antique aircraft market. Thus, although the
FAA asserts that the F-45 type certification materials are valuable in the antique aircraft market,
the FAA has not shown that the F-45 materials confer a competitive advantage upon Fairchild in
the antique aircraft market. Consequently, the court concludes that the F-45 type certification
materials are not commercially valuable, and thus do not constitute trade secrets under
Exemption 4.
15
In sum, the FAA has not demonstrated that the materials sought by the plaintiff are secret
and commercially valuable, as necessary to demonstrate that they are trade secrets protected
from disclosure by Exemption 4. The court therefore grants the plaintiff’s motion for summary
for summary judgment and denies the FAA’s motion for summary judgment.7
IV. CONCLUSION
For the foregoing reasons, the court grants the plaintiff’s motion for summary judgment,
denies the FAA’s motion for summary judgment and denies the plaintiff’s motion for discovery
as moot. An Order consistent with this Memorandum Opinion is separately and
contemporaneously issued on this 19th day of January, 2011.
RICARDO M. URBINA
United States District Judge
7
Because the court grants the plaintiff’s motion for summary judgment, the court denies the
plaintiff’s motion for discovery as moot.
16