San Juan Citizens Alliance v. United States Department of Interior et al

Filing 52

ORDER Concerning Motions for Summary Judgment. Granting 42 Motion for Summary Judgment; Denying 45 Motion for Summary Judgment. By Judge Robert E. Blackburn on 09/30/2014.(athom, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 13-cv-02466-REB-KMT
SAN JUAN CITIZENS ALLIANCE,
Plaintiff,
v.
UNITED STATES DEPARTMENT OF THE INTERIOR, an agency of the United States,
UNITED STATES BUREAU OF LAND MANAGEMENT, an agency within the United
States Department of the Interior,
Defendants.

ORDER CONCERNING MOTIONS FOR SUMMARY JUDGMENT
Blackburn, J.
This matter is before me on the following: (1) the defendants’ Motion for
Summary Judgment [#42]1 filed February 26, 2014; (2) the Plaintiff’s Cross-Motion
for Summary Judgment and Response To Defendant’ Motion for Summary
Judgment [#45] filed March 24, 2014. The defendants filed a response [#47] to the
motion of the plaintiff, and both the plaintiff and the defendants filed replies [#48 & #49]
in support of their motions. I grant the motion of the defendants and deny the motion of
the plaintiff.
I. JURISDICTION
I have jurisdiction over this case under 28 U.S.C. XX 1331 (federal question)
and 5 U.S.C § 552(a)(4)(B) (Freedom of Information Act).
1

“[#42]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.

II. STANDARD OF REVIEW
Summary judgment is proper when there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.2 FED. R. CIV. P. 56(a);
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265
(1986). A dispute is “genuine” if the issue could be resolved in favor of either party.
Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586
(1986); Farthing v. City of Shawnee, 39 F.3d 1131, 1135 (10th Cir. 1994). A fact is
“material” if it might reasonably affect the outcome of the case. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986); Farthing, 39 F.3d at 1134.
A party who does not have the burden of proof at trial must show the absence of
a genuine issue of fact. Concrete Works, Inc. v. City & County of Denver, 36 F.3d
1513, 1517 (10th Cir. 1994), cert. denied, 115 S.Ct. 1315 (1995). By contrast, a movant
who bears the burden of proof must submit evidence to establish every essential
element of its claim or affirmative defense. See In re Ribozyme Pharmaceuticals, Inc.
Securities Litigation, 209 F.Supp.2d 1106, 1111 (D. Colo. 2002).
In either case, once the motion has been properly supported, the burden shifts to
the nonmovant to show by tendering depositions, affidavits, and other competent
evidence that summary judgment is not proper. Concrete Works, 36 F.3d at 1518. All
evidence must be viewed in the light most favorable to the party opposing the motion.
Simms v. Oklahoma ex rel Department of Mental Health and Substance Abuse

2

The issues raised by and inherent to the motions for summary judgment are fully briefed,
obviating the necessity for evidentiary hearing or oral argument. Thus, the motions stand submitted on the
papers. Cf. FED. R. CIV. P. 56(a). Geear v. Boulder Cmty. Hosp., 844 F.2d 764, 766 (10th Cir.1988)
(holding that any hearing requirement for summary judgment motions is satisfied by court's review of
documents submitted by parties).

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Services, 165 F.3d 1321, 1326 (10th Cir.), cert. denied, 120 S.Ct. 53 (1999). However,
conclusory statements and testimony based merely on conjecture or subjective belief
are not competent summary judgment evidence. Rice v. United States, 166 F.3d
1088, 1092 (10th Cir.), cert. denied, 120 S.Ct. 334 (1999).
III. FACTS
The plaintiff, San Juan Citizens Alliance (SJCA), submitted a request under the
Freedom of Information Act (FOIA), 5 U.S.C. § 552, to the United States Bureau of Land
Management (BLM). The Western Environmental Law Center made the submission on
behalf of SJCA. [#45-1]3. The SJCA sought documents known as expressions of
interest (EOI) submitted to the BLM as part of a sale of oil and gas leases announced
by the BLM. As part if its response to the FOIA request, the BLM released documents
related to an EOI submitted by Mark A. O’Neal and Associates (O’Neal). Out of the 38
pages produced, one of these pages was O’Neal’s cover e-mail introducing the EOI.
O’Neal’s client was copied via e-mail on the EOI, and the cover page included the email address of O’Neal’s client.
The sole issue in this case is whether the e-mail address of O’Neal’s client was
withheld properly from disclosure by the BLM under Exemption 4 of the FOIA. The
redacted document disclosed by the BLM in response to the FOIA request is shown in
Exhibit 10 [#42-10] to the BLM motion for summary judgment.
After receiving the FOIA request of SJCA and other requests, the BLM sent a
letter [#42-3] to Helen Hoffpauir, an O-Neal representative, concerning the FOIA
requests. Under regulations of the Department of Interior, the BLM must notify private

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I reference exhibits included with the motions for summary judgment by the docket number of
the exhibit, e.g., [#45-1].

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parties about potentially confidential commercial or financial information which may be
disclosed in response to a FOIA request. O’Neal responded and objected to the
release of O’Neal’s information. [#42-4]. The BLM requested more information from
O’Neal. [#42-5]. O’Neal objected to release of its client’s e-mail address, which it
equated with a release of the identity of its client. [#42-7 & #42-8]. In an e-mail sent
June 14, 2013, O’Neal noted that the “EOI in question was submitted in 2011, when the
BLM was operating under the former regulations that assured submitter confidentiality
until after a lease sale was completed.” [#42-8], p. 3. In its final response, BLM
redacted the e-mail address of O’Neal’s client under Exemption 4 of the FOIA. [#42-9 &
#42-10].
SJCA filed an administrative appeal. During that appeal, the BLM sought
additional information from O’Neal relevant to Exemption 4. SJCA sought to compel a
response to it’s appeal from the BLM. Affidavit [#45-1], ¶ 10. The BLM did not issue a
decision, and SJCA then filed this case. Id., ¶ 11. The information sought by SJCA has
not been released.
IV. FOIA & EXEMPTION 4
The FOIA was enacted “to pierce the veil of administrative secrecy and to open
agency action to the light of public scrutiny.” Dep't of Air Force v. Rose, 425 U.S. 352,
361 (1976). Congress recognized that an open government ensures accountability
through transparency, and that an informed citizenry is “vital to the functioning of a
democratic society.” N.L.R.B. v. Robbins Tire & Rubber Co., 437 U.S. 214, 242
(1978). “FOIA is . . . a means for citizens to know what their Government is up to. This
phrase should not be dismissed as a convenient formalism. It defines a structural
necessity in a real democracy.” Nat'l Archives & Records Admin. v. Favish , 541
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U.S. 157, 171 - 172 (2004) (internal citations and quotations omitted). FOIA’s plain
language requires that an agency of the federal government disclose documents and
information to any person, except when the document falls under a specifically
enumerated exemption. See 5 U.S.C. § 552(a)(3)(A) (“each agency, upon any request
for records…shall make the records promptly available to any person.”). FOIA
exemptions “must be construed narrowly, in such a way as to provide the maximum
access consonant with the overall purpose of the Act.” Vaughn v. Rosen, 484 F.2d
820, 823 (D.C. Cir. 1973), cert. denied, 415 U.S. 977 (1974).
The burden is on the government to justify its decision to withhold or redact
documents. Johnson v. United States Department of Justice, 739 F.2d 1514, 1516
(10th Cir. 1984); Lacefield v. United States, 1993 WL 268392 at *2 (D. Colo. March 10,
1993). To meet this burden, the government may not rely on conclusory assertions, but
“must prove that each document that falls within the class requested either has been
produced, is unidentifiable, or is wholly exempt from the [FOIA's] inspection
requirements.” Lacefield, 1993 WL 268392 at *2 (quoting Perry, 684 F.2d at 126). It
may do so by providing affidavits or declarations that specify “the documents and the
justifications for nondisclosure with reasonably specific detail, demonstrate that the
information withheld logically falls within the claimed exemption, and are not
controverted by either contrary evidence in the record nor by evidence of agency bad
faith.” Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981); see also
Badalamenti v. United States Department of State, 899 F.Supp. 542, 546 (D. Kan.
1995). Such affidavits are afforded a presumption of good faith, absent concrete
evidence to the contrary. See SafeCard Services, Inc. v. Securities & Exchange
Commission, 926 F.2d 1197, 1200 (D.C. Cir. 1991); Board of County
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Commissioners of Kane County v. Department of the Interior of the U.S., 2007 WL
2156613 at *6 (D. Utah July 26, 2007). In any FOIA action challenging an agency
decision to withhold records, the district court reviews de novo the agency's decision not
to disclose. Herrick v. Garvey, 298 F.3d 1184, 1189 (10th Cir. 2002).
Exemption 4 of FOIA exempts from release under FOIA “trade secrets and
commercial or financial information obtained from a person and privileged or
confidential.” 5 U.S.C. § 552(b)(4). Exemption 4 is unique because it requires the
government to account for the interests of third parties by asking for their input when it
decides to release or withhold information in response to FOIA requests. See 43 C.F.R.
Part 2, Subpart F; National Parks & Conservation Ass’n v. Morton, 498 F.2d 765,
767 (D.C. Cir. 1974) (“The exemption . . . is intended to protect interests of both the
Government and the individual.”). Information falls within Exemption 4 only of the
information is (1) a trade secret or (2) information which is (a) commercial or financial,
(b) obtained from a person, and (c) privileged or confidential. Anderson v. Department
of Health and Human Services, 907 F.2d 936, 943 - 945 (10th Cir. 1990).
V. ANALYSIS
In the present case, there is no contention that the e-mail address at issue is a
trade secret. In addition, there is no dispute that the e-mail address was obtained from
a person, Mark A. O’Neal and Associates. Thus, the dispute focuses on whether the email address is commercial or financial information and whether it is privileged or
confidential.
A. Commercial or Financial Information
A private entity may show that information is commercial or financial, for the
purpose of Exemption 4, by showing that it has a "commercial interest" in the
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information at issue. Baker & Hostetler LLP v. U.S. Dept. of Commerce, 473 F.3d
312, 319 (D.C. Cir. 2006). In its affidavit [#42-15], and in its administrative submissions
to the BLM, O’Neal maintains survigrously that the identity of its client, which can be
discerned from the e-mail address in question, is commercial information. Referring to
itself as MAO, O’Neil represents: MAO is a land services firm that is employed by oil
and gas companies as an intermediary broker for the express purpose of maintaining
the confidentiality of its client’s area of interest from the public and its competitors.
Ensuring client confidentiality by conducting its leasing efforts in a discrete manner is an
integral aspect of the services MAO provides. Affidavit [#42-15], ¶ 6. “Clients hire MAO
as a lease broker to avoid disclosure of their identity, which may have a significant
economic and competitive impact upon the lease parcels of interest to the client.
Specifically, the disclosure of this information may result in greater competition and
increased lease acquisition costs.” Id., ¶ 7.
In this context, the only reasonable conclusion is that O’Neal has a commercial
interest in the identity of its client, including the e-mail address in question. Thus, I
conclude that this information is commercial information.
B. Privileged or Confidential Information
Examining Exemption 4 in National Parks & Conservation Ass’n v. Morton,
498 F.2d 765 (D.C. Cir. 1974), the court held:
(C)ommercial or financial matter is “confidential” for purposes of the
exemption if disclosure of the information is likely to have either of the
following effects: (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.

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498 F.2d at 770 (footnote omitted). Applying the National Parks definition in Critical
Mass Energy Project v. Nuclear Regulatory Comm’n, the D.C. Circuit held that
information submitted voluntarily is confidential under Exemption 4 if it is “of a kind that
would customarily not be released to the public by the person from whom it was
obtained.” 975 F.2d 871, 879 (D.C. Cir. 1992) (en banc). This is a reduced threshold for
demonstrating that information is confidential. The Critical Mass court found that the
government has an interest in encouraging the voluntary submission of information.
975 F.2d at 879. In addition, the Critical Mass court found that when information is
submitted voluntarily, “the presumption is that [government’s] interest will be threatened
by disclosure as the persons whose confidences have been betrayed will, in all
likelihood, refuse further cooperation.” Id.
As SJCA notes, many courts have criticized the voluntary versus involuntary
distinction made in Critical Mass. See, e.g., N.Y. Public Interest Research Group v.
EPA, 249 F. Supp. 2d 327, 335-36 (S.D.N.Y. 2003) (“Adoption of the Critical Mass
standard would result in too liberal a test for confidentiality . . . There is no reason to
believe that Congress intended to distinguish between voluntary and compelled
submissions.”); Comdisco, Inc. v. Gen. Servs. Admin., 864 F. Supp. 510, 517 (E.D.
Va. 1994) (“It is doubtful that the Fourth Circuit would be persuaded to embrace the
Critical Mass standard with respect to voluntary submissions.”); Dow Jones Co., Inc.
v. F.E.R.C., 219 F.R.D. 167, 178 (C.D. Cal. 2003) (“Although defendant urges this Court
to adopt Critical Mass, the Court believes that the holding therein is not consistent with
Ninth Circuit jurisprudence, nor with the purposes of Congress in enacting FOIA, which
mandates the courts to favor disclosure to serve the public interest. The Court also
notes that the test set forth in Critical Mass has not been adopted by any Circuit other
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than the District of Columbia Circuit and has been the subject of criticism by some
courts.”).
Nevertheless, in Utah v. U.S. Dept. Of Interior, the United States Court of
Appeals for the Tenth Circuit said: “The first step in an Exemption Four analysis is
determining whether the information submitted to the government agency was given
voluntarily or involuntarily.” 256 F.3d 967, 969 (10th Cir. 2001) (citing Critical Mass,
975 F.2d at 878 - 879). In Utah, the parties agreed that the information in question was
submitted involuntarily. Thus, the court applied the National Parks test rather than the
Critical Mass test. to date, the Tenth Circuit has not applied the Critical Mass test to
information found to have been submitted voluntarily.
In the present case, O’Neal was not required to submit the e-mail address in
question with its EOI. Thus, the e-mail address was submitted voluntarily, though
possibly inadvertently. On that basis, the government argues that the relaxed standard
of Critical Mass is applicable here. The SJCA argues that the Tenth Circuit has not
explicitly adopted the Critical Mass standard and that it should not be adopted, based
on the reasons cited by the courts who have criticized Critical Mass.
Based on the record in this case, I find and conclude that the BLM has shown
that release of the e-mail address would cause substantial harm to the competitive
position of O’Neal, the person from whom the information was obtained. Thus I
conclude that BLM has satisfied the National Parks test. Of course, the result would
be the same under the relaxed standard of Critical Mass. Because the Critical Mass
standard would not lead to a different result, I need not determine if that standard
applies in this case. The government has satisfied the more stringent National Parks
test.
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Under the substantial harm prong of National Parks, the party seeking to invoke
Exemption 4 must show “actual competition and the likelihood of substantial competitive
injury” caused by the release of the information at issue. Utah v. U.S. Dept. Of
Interior, 256 F.3d at 970. Conclusory and generalized allegations of substantial
competitive harm are not sufficient. Id. “(A)ctual economic harm need not be proved;
evidence demonstrating the existence of potential economic harm is sufficient.” Id. In
Utah, affidavits from two individuals describing competitors and substantial competitive
injury were found to be sufficient. Id. at 970 - 971.
In its affidavit [#42-15], and in its administrative submissions to the BLM, O’Neal
consistently has said that disclosure of the identity of its client, which can be discerned
from the e-mail address in question, is likely to cause commercial injury to O’Neal.
Referring to itself as MAO, O’Neal says: “MAO’s business relationship with its client and
all other oil and gas companies depends upon the confidentiality afforded to each
company’s identity and business prospects by MAO.” Affidavit [#42-15], ¶ 11. “MAO is
a privately held company. The value of the company is based upon our ability to
execute according to client expectations. The release of MAO’s client identity will
permanently harm our relationship with the client and substantially undermine industry
confidence in MAO’s ability to function as a discrete and confidential professional land
services company.” Id., ¶ 12. “If BLM releases MAO’s client email address, it is
expected that MAO will suffer substantial economic and financial harm from lost
business, resulting from the client’s inability to use MAO as an intermediary to protect its
operational interests and from MAO’s severely damaged reputation as a reliable and
discrete land services broker.” Id., ¶ 13. O’Neal painted essentially the same picture

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when providing information to the BLM about the FOIA requests tied to the EOI. [#42-4,
#42-7 & #42-8].
In the view of SJCA, the O’Neal affidavit [#42-15] and related documents do not
establish substantial competitive harm. SJCA contends that the affidavit is conclusory
and fails to specify a realistic risk of competitive harm. Releasing the e-mail address,
SJCA asserts, will identify a party likely to participate in the sale of a lease, but that
information will not be of substantial assistance to the unidentified competitors of O’Neal
in the world of oil and gas leases. SJCA notes that there is no indication that this
information will permit competitors to undercut bids made by O’Neil’s client. Further,
SJCA notes that competition in bidding “advances the purpose of getting a fair price for
a lease of publicly owned minerals.” Citizens for a Healthy Community v. U.S. Dep’t
of Interior, No. 12-cv-01661-RPM (D. Colo. February 13, 2013). SJCA also notes that
O’Neal states that release of the e-mail address could result in the loss of a client, may
increase leasing costs, and would allow others to benefit from the front-end research of
its client. These contentions, SJCA contends, are vague and are not sufficient to show
substantial economic harm.
While O’Neal does address in its submissions competition for leases on
government land, the primary harm it asserts is loss if the particular client at issue here
and, possibly, other clients who learn of the breach of client confidentiality. The O’Neal
affidavit is not conclusory. It identifies specific relevant facts, specific economic harms,
and the mechanism by which release of the information in question is likely to cause
those economic harms. As in Utah, here the statements of individuals who operate the
business of O’Neal describing the competitive environment and likely substantial
competitive injury are sufficient to establish substantial economic injury. Utah, 256 F.3d
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at 970 - 971. Further, although O’Neal has not shown that it is certain to suffer
economic harm if the information is released, it has shown a significant potential for
economic harm. the showing is sufficient for the purposes of Exemption 4. Id. at 970.
VI. CONCLUSION & ORDERS
Exemption 4 of the FOIA exempts from release under FOIA “commercial or
financial information obtained from a person and privileged or confidential.” 5 U.S.C. §
552(b)(4). FOIA exemptions must be construed narrowly to provide the maximum
access to information, consistent with the overall purpose of the FOIA. The burden is
on the government to justify its decision to withhold or redact documents. In this case,
the government has met its burden to establish that Exemption 4 is applicable to the
information redacted by the BLM. The evidence in the record shows that the
information in question is confidential commercial information obtained from a person.
Under Exemption 4 of the FOIA, the BLM properly may withhold the information sought
by the SJCA.
THEREFORE, IT IS ORDERED as follows:
1. That the defendants’ Motion for Summary Judgment [#42] filed February
26, 2014, is GRANTED;
2. That the Plaintiff’s Cross-Motion for Summary Judgment and Response
To Defendant’ Motion for Summary Judgment [#45] filed March 24, 2014, is
DENIED;
3. That the claim of the plaintiff under the Freedom of Information Act, stated in
the complaint [#1], is DISMISSED with prejudice;
4. That JUDGMENT SHALL ENTER in favor of the defendants, the United
States Department of the Interior, an agency of the United States, and the United States
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Bureau of Land Management, an agency within the United States Department of the
Interior;
4. That the defendants are AWARDED their costs to be taxed by the clerk of the
court under FED. R. CIV. P. 54(d)(1) and D.C.COLO.LCivR 54.1; and
5. That this case is DISMISSED.
Dated September 30, 2014, at Denver, Colorado.
BY THE COURT:

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