Case No. VFA-0254, 26 DOE ¶ 80,149

January 14, 1997

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner:Digital City Communications, Inc.

Date of Filing:December 19, 1996

Case Number: VFA-0254

On December 19, 1996, Digital City Communications, Inc. (Digital) filed an Appeal from a determination issued to it by the Oakland Operations Office (Oakland) of the Department of Energy (DOE) on December 6, 1996. In that determination, Oakland denied a request filed by Digital on October 24, 1996, under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004. If the present Appeal were granted, the DOE would be ordered to release in its entirety the information that was withheld in the December 6, 1996 determination.

The FOIA requires that agency records which are held by a covered branch of the federal government, and which have not been made public in an authorized manner, generally be released to the public upon request. 5 U.S.C. § 552(a)(3). In addition to this requirement, the FOIA lists nine exemptions that set forth the types of information which may be withheld at the discretion of the agency. 5 U.S.C. § 552(b)(1)-(b)(9); 10 C.F.R. § 1004.10(b)(1)-(b)(9). The DOE regulations further provide that documents exempt from mandatory disclosure will nonetheless be released to the public if the DOE determines that disclosure is not contrary to federal law and is in the public interest. 10 C.F.R. § 1004.1.

I. Background

In a submission dated October 24, 1996, Digital filed a Request for Information under the FOIA (Request) requesting from Oakland a copy of the manual pertaining to software known as Network Intrusion Detector (NID) and the executable code of NID (the software). The software was developed by the University of California, a DOE contractor, at the Lawrence Livermore Laboratory. Its function is to detect and analyze intrusions from individuals not authorized to use a computer, or unauthorized or suspicious activities by authorized users. In its December 6, 1996 determination letter (Determination Letter), Oakland denied Digital's request citing Exemption 4 of the Freedom of Information Act. Oakland stated that, "[t]he NID software package is currently in a development stage. Since it is also a candidate for future technology transfer possibilities, it is not available for general release at this time." See Determination Letter.

In its December 19, 1996 Appeal, Digital argues that (i) Exemption 4 is not applicable to the information at issue, (ii) Oakland's determination was vague and unsupported, and (iii) Exemption 4's applicability had been waived due to the widespread distribution of the software.

II. Analysis

As explained below, because Oakland failed to examine whether the NID software constitutes a "record" under the FOIA, and whether the manual and the software are "agency records," we are remanding the case in order that it may make those determinations. Further, Oakland has failed to adequately justify its determination that the software and manual are exempt from release under Exemption 4, as it did not provide any analysis of whether the University of California would suffer competitive harm through its release. Nor did Oakland state whether any non-exempt material could be segregated for release. Therefore, we are remanding this matter to Oakland for a new determination, for the following reasons.

Before we can consider the applicability of Exemption 4 to the withheld information, we must first determine whether that information constitutes a "record" for FOIA purposes. If the information in question does not constitute a record, the FOIA is inapplicable and we cannot mandate the release of the software and manual. For the reasons discussed below, we are unable to render a determination on this threshold issue based on the state of the record before us and will remand the case for further review and investigation. However, we are providing additional comments which are intended to guide Oakland in its new determination in this matter.

A. Records and Agency Records

In this case, we must initially consider whether the software at issue is a record, by using the guidance laid out in John Gilmore, 24 DOE ¶ 80,117 (1994) (Gilmore) and Cleary, Gottlieb, Steen & Hamilton v. Department of Health and Human Services, 844 F. Supp. 770, 781-82 (D.D.C. 1993) (Cleary).(1) Cleary held that a computer program is a record where the program is not generic word processing or prefabricated software but instead is uniquely tailored to manipulate a database so that the program is used to actually preserve information and perpetuate knowledge. See Cleary, 844 F. Supp. at 782. In Gilmore, we found that software which merely connected several geographically distant computers, allowing each user to interact with other users, was not a record. We found the software in that case to be a tool which neither contained nor manipulated information, but instead merely provided a method of access. The software did not contain a database, was not a source of information, and did not manipulate or preserve information in a database. See Gilmore, 24 DOE at 80,544.

Oakland has not made a determination in this case regarding whether the requested software constitutes a record under the FOIA. See Record of Telephone Conversation between Dawn Goldstein, Staff Attorney, OHA, and RoseAnn Pelzner, FOIA Officer, Oakland (December 26, 1996). We are remanding it for them to make a determination regarding this issue, applying the case law described above.(2)

If Oakland determines that the NID software is a record, it must then determine whether the software is an "agency record." In a two-part test, the Supreme Court defined agency records as documents which are (1) either created or obtained by an agency, and (2) under agency control at the time of the FOIA request. U.S. Department of Justice v. Tax Analysts, 492 U.S. 136, 144-45 (1989) (Tax Analysts). The NID software and the manual appear to meet both of those criteria.

B. Adequacy of Exemption 4 Justification

Exemption 4 exempts from mandatory public disclosure "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4); 10 C.F.R. § 1004.10(b)(4). In order to qualify under Exemption 4, a document must contain either (a) trade secrets or (b) information which is (1) "commercial" or "financial," (2) "obtained from a person," and (3) "privileged or confidential." National Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 766 (D.C. Cir. 1974) (National Parks). In National Parks, the United States Court of Appeals for the District of Columbia Circuit found that commercial or financial information submitted to the federal government involuntarily is "confidential" for purposes of Exemption 4 if disclosure of the information is likely either: (i) to impair the government's ability to obtain necessary information in the future or (ii) to cause substantial harm to the competitive position of the person from whom the information was obtained. Id. at 770; see also Critical Mass Energy Project v. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992), cert. denied, 113 S. Ct. 1579 (1993) (Critical Mass). By contrast, information that is provided to an agency voluntarily is considered "confidential" if "it is of a kind that the provider would not customarily make available to the public." Critical Mass, 975 F.2d at 879. Because the information at issue in this case was submitted as part of a contract between the DOE and the University of California, this information is not considered to have been submitted voluntarily and is therefore considered "confidential" if it meets the test set out in National Parks. Cf. Nayar & Company, P.C., 23 DOE ¶ 80,185 at 80,710 (1994) (information submitted in response to request for proposal).(3)

Both the FOIA and the DOE regulations require reasonably specific justifications for the withholding of documents or portions of documents. Mead Data Central, Inc. v. Department of the Air Force, 566 F.2d 242 (D.C. Cir. 1977); National Parks & Conservation Ass'n v. Kleppe, 547 F.2d 673 (D.C. Cir. 1976); Data Technology Industries, 4 DOE ¶ 80,118 (1979). Thus, a FOIA determination that material should be withheld under Exemption 4 because its disclosure is likely to cause substantial harm must include the reasons for believing such harm will result to the competitive position of the person from whom the information is obtained. Larson Associated, Inc., 25 DOE ¶ 80,204 (1996); Milton L. Loeb, 23 DOE ¶ 80,124 (1993). In its determination letter, after Oakland explained the purpose of Exemption 4, it said simply that "[t]he NID software package is currently in a development stage. Since it is also a candidate for future technology transfer possibilities, it is not available for general release at this time." Determination Letter at 1. Thus, in this case, there was no explanation why release of the software and/or the manual would likely cause substantial harm to the competitive position of the software's creator, the University of California. (4) Alternately,

Oakland could provide an explanation why the release of specific information within the proposal would impair the government's ability to obtain necessary information in the future. See Critical Mass, 975 F.2d at 879.

Thus, we are remanding this case so that Oakland may give Digital a specific explanation as to why Exemption 4 applies to the information at issue in the present case. We also point out that the FOIA requires that "[a]ny reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt . . . ." 5 U.S.C. § 552(b) (1982). See EPA v. Mink, 410 U.S. 73, 89, 91 (1973); Mead Data Central, Inc. v. Air Force, 556 F.2d 242, 259-62 (D.C. Cir. 1977), cert. denied, 436 U.S. 927 (1978); Casson, Calligaro & Mutryn, 10 DOE ¶ 80,137 at 80,615 (1983). Segregation and release of non-exempt material is not necessary where it is "inextricably intertwined" with the exempt material so that release of the non-exempt material would "compromise" the withheld material, or where the amount of non-exempt material is small and so interspersed with exempt material that it would pose "an inordinate burden" to segregate. Lead Indus. Ass'n v. OSHA, 610 F.2d 70, 83-86 (2d Cir. 1979). Consequently, Oakland should consider whether non-exempt material can be released. (5)

Accordingly, we will remand this case to Oakland, which should promptly issue a new determination releasing any non-exempt information to the appellant. Though we are not upholding Oakland's initial determination, we still believe Oakland is in the best position to make initial determinations as to whether the information is a "record" for purposes of the FOIA. If so, Oakland should then determine whether the release of specific information within the proposal would impair the government's ability to obtain necessary information in the future or cause substantial harm to the competitive position of the software's creator. In making the latter determination, Oakland should keep in mind that conclusory allegations of harm do not suffice to protect information from disclosure under Exemption 4. Lykes Bros. S.S. Co. v. Peña, No. 92-2780, slip op. at 13 (D.D.C. Sept. 2, 1993) (Westlaw, DCT database) (submitters "required to make assertions with some level of detail as to the likelihood and the specific nature of the competitive harm they predict"). For the reasons explained above, the present Appeal will be granted.

It Is Therefore Ordered That:

(1) The Freedom of Information Act Appeal filed by Digital City Communications, Inc., Case No. VFA-0254, is hereby granted as specified in Paragraph (2) below.

(2) This matter is hereby remanded to the DOE's Oakland Operations Office, which shall promptly issue a new determination in accordance with the guidance set forth in the above Decision.

(3) This is a final order of the Department of Energy from which any aggrieved party may seek judicial review pursuant to 5 U.S.C. § 552(a)(4)(B). Judicial review may be sought in the district in which the requester resides or has a principal place of business, or in which the agency records are situated, or in the District of Columbia.

George B. Breznay

Director

Office of Hearings and Appeals

Date: January 14, 1997

(1)We note that the manual itself clearly appears to be both a record and an agency record under the FOIA. Therefore, the remaining issue with respect to the manual is whether Exemption 4 is applicable.

(2)Oakland should also be aware of the fact that in the opinion of the Department of Justice, one of the recent FOIA amendments, 5 U.S.C. § 552(f)(2), which takes effect March 31, 1997, appears to include software in the definition of a record. See FOIA Update at 2 (Fall 1996).

(3)DOE regulations set forth four additional criteria to be considered in determining whether information is exempt from mandatory disclosure pursuant to Exemption 4: (i) whether the information has been held in confidence by the person to whom it pertains; (ii) whether the information is of a type customarily held in confidence by the person to whom it pertains and whether there is a reasonable basis therefor; (iii) whether the information was transmitted to and received by the DOE in confidence; and (iv) whether the information is available in public sources. 10 C.F.R. § 1004.11(f).

(4)Oakland may also wish to determine whether other exemptions apply to the requested information. If DOE itself owns the software and could therefore suffer competitive harm through release of the requested material, Oakland may wish to consider whether the "qualified privilege" is applicable under Exemption 5. See Ball, Janik and Novack, 25 DOE ¶ 80,197 (1996). Further, it is possible, regardless of who owns the software, that it could be withheld under Exemption 2, which would prevent the release of information that could be used to circumvent a statute or agency regulations.

Moreover, the Cooperative Research and Development Agreements (CRADA) provisions of the National Competitiveness Technology Transfer Act of 1989, 15 U.S.C. § 3710a, could possibly provide additional protection to the information at issue. If that is the case, Oakland should consider the applicability of Exemptions 3 and 4 in this context.

(5)Digital also argues that because the NID software is available throughout the DOE and because DOE has released in general terms a flow-chart of how the software works, this is tantamount to public release. We do not agree. While information which is already publicly available generally may not be withheld, in this case, the software is not publicly available. DOE users must request a key from an NID client representative in order to gain access to the software. The documentation that Digital itself submitted indicates that redistribution of the software at this time is clearly limited to DOE. See Attachment to Appeal Letter. Further, release of a very general diagram of the software's workings is obviously completely different from public release of the software itself. Thus, we find that the NID software is currently not publicly available.