MEMORANDUM AND ORDER
McKENNA, District Judge.
Plaintiffs Matthew Lee, Yvonne Santana, Vielka Peguero, and Inner City Press/Community
In order to challenge effectively the OCC's approval, Plaintiffs sought disclosure under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552 (1976), of the administrative record compiled by the OCC in the course of its approval process. The OCC released a significant portion of the administrative record to Plaintiffs but denied them access to certain documents in a letter dated April 25, 1995. Plaintiffs appealed this decision to the OCC by letter dated May 4, 1995. The OCC replied to the appeal on June 28, 1995 and agreed to release more, but not all, of the information requested.
The OCC now requests that this Court issue a protective order sealing the portions of its record that it did not release to Plaintiffs on the grounds that the documents are exempt from disclosure under FOIA. Plaintiffs oppose this request.
After reviewing in camera the documents which were not disclosed to Plaintiffs and conducting de novo review of the OCC's claims to exemptions under FOIA, the Court finds that the OCC improperly withheld the documents in question. Accordingly, these documents — Documents 1, 64, 65, 66, 67, 68, and 69 of the Administrative Record — must be disclosed to Plaintiffs.
II. STANDARD OF REVIEW
The purpose of the Freedom of Information Act is to open the records of federal agencies to the public in a manner which is consistent with the "general philosophy of full agency disclosure unless information is exempted under clearly delineated statutory language." NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 136, 95 S.Ct. 1504, 1509, 44 L.Ed.2d 29 (1975) (quoting S.Rep. No. 813, 89th Cong., 1st Sess., 3 (1965)); see also EPA v. Mink, 410 U.S. 73, 79-80, 93 S.Ct. 827, 832-33, 35 L.Ed.2d 119 (1973). The Freedom of Information Act has been described as legislation which "attempt[s] to meet the demand for open government while preserving workable confidentiality in governmental decisionmaking." Chrysler Corp. v. Brown, 441 U.S. 281, 292, 99 S.Ct. 1705, 1713, 60 L.Ed.2d 208 (1973).
Under the Act, any person has a right of access to federal agency records, subject to nine enumerated exemptions to disclosure. An agency that seeks to withhold information must show that its refusal to disclose falls within one of the nine specific exemptions. 5 U.S.C. § 552(b)(2)-(9). As noted in Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 861 (D.C.Cir.1980) (Wald, J.) ("Coastal States"), the agency's burden of justification is substantial:
A person whose FOIA request has been denied in full or in part may appeal an agency's determination to a district court. See 5 U.S.C. § 552(a)(4)(B). FOIA specifies that a district court must conduct de novo review of an agency's claims to exemptions. Each exemption is to be narrowly construed with all doubts resolved in favor of disclosure. See 5 U.S.C. § 552(a)(4)(B); Department of the Air Force v. Rose, 425 U.S. 352, 361-62, 96 S.Ct. 1592, 1599-1600, 48 L.Ed.2d 11 (1976). De novo review requires the court
FOIA authorizes, but does not require, the district court to conduct in camera inspection of the documents in question. See 5 U.S.C. § 552(a)(4)(B). In camera inspection is appropriate when the number of documents to be reviewed is manageable. In the present case, the documents that were withheld are not so numerous as to make in camera review unduly burdensome. The court will examine each document in light of the objections to disclosure raised by the OCC.
III. THE SEVEN DOCUMENTS
The OCC argues that the standard for determining whether the documents it claims are exempt should be disclosed varies depending upon whether the document was a required or voluntary submission to the agency. If the submission was voluntary, the OCC argues, citing Critical Mass Energy Project v. NRC, 975 F.2d 871, 880 (D.C.Cir. 1992) and National Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C.Cir. 1974), the documents need not be disclosed if, 1) the information is customarily considered confidential; and 2) disclosure would likely impair the government's ability to obtain necessary information in the future. If the submission is mandatory, the document must be disclosed unless disclosure would cause substantial competitive harm to the submitter. See 12 C.F.R. 4.18(d)(1)(i).
The OCC acknowledges that all of the submissions it categorized as "voluntary" were required to be submitted to the Federal Reserve Board ("FRB"). These documents were not submitted to the OCC as a result of Chase's desire to help the OCC more fully understand Chase's operations; the OCC had access to these documents because they were submitted to the FRB as a mandatory submission in the FRB approval process. Since FRB approval is required as a condition precedent to OCC approval, it is unclear to the court in what real sense these submissions were voluntary as the documents must be submitted before the OCC approval process can even begin.
Even if these submissions were considered voluntary, disclosure would not be prohibited under the "voluntary submission" legal standard, as the second prong of the test — a showing of a likely chilling of future submissions to the agency — would not be satisfied since submitters would still need FRB and OCC approval of future transactions.
The question remaining then is whether disclosure of any of the documents in question would cause substantial competitive harm to Chase. The Court will consider each document in turn.
1. Document 1
The OCC denied Plaintiffs access to documents marked Document 1 — collectively entitled "Selected Pro Forma Financial and Capital Information" and the September 1994 Balance Sheets — on the ground that the documents are exempt from disclosure under exemption 4 of FOIA, 5 U.S.C. § 552(b)(4). This section exempts from disclosure "trade secrets and commercial or financial information obtained from a person and privileged or confidential." The OCC argues that Document 1 contains "confidential projections regarding the impact that the merger would have on Chase Manhattan" and "contains confidential proprietary and commercial information of Chase Manhattan Bank, disclosure of which could cause substantial competitive harm to Chase Manhattan." (OCC Reply Memo at 3)
The OCC has addressed the propriety of disclosing this document in some detail. In its reply to Plaintiffs' appeal of the OCC's denial of access to this document, the OCC agreed to release a portion of this document, specifically the historical data column. The OCC refused to release the information in the columns marked "Adjustments" and "Pro Forma." The OCC released the historical column information not upon their own determination that such information should be released but because Chase advised the OCC that they "would no longer assert that the historical data column ... should be retained as confidential." (Serino Letter at 4) The
With this in mind, the Court must determine whether the remainder of Document 1 should be disclosed to Plaintiffs. The OCC claims that Chase would suffer substantial competitive harm if the information were disclosed, asserting that:
The OCC also states that investors may be misled by the public disclosure of this information, as it is presented
Finally, the OCC asserts that Chase had demonstrated the existence of actual competition. The OCC found credible Chase's assertions that disclosure of the information would provide these competitors with "post acquisition information, about the size and profitability of the entities and business to be acquired, and therefore about the financial planning, operations and strategic plans of the Bank" and "information from which they could determine the business cycle and cash flow of the business which Chase is acquiring" and from this information competitors could decide "whether, when and how to enter the securities processing market." The OCC also found credible Chase's assertion that disclosure of "any isolated, segregated or redacted version of the information could provide competitors with a basis to engage in reverse engineering, deriving other information that is confidential." (Serino Letter at 5)
In their reply memo, the OCC argues that Plaintiffs have not rebutted the statements contained in the Serino letter. In fact, the Plaintiffs bear no burden to do so and, even if they desired to do so, have no access to the documents in question. Upon review of Document 1 and the Serino letter, the Court finds clear evidence that Chase would prefer that the information be kept confidential but does not find adequate documentation of the specific, credible, and likely reasons why disclosure of the document would actually cause substantial competitive injury to Chase.
The fact that the information in Document 1 is not available to the public in the format in which it was presented to the OCC may be true, but the substantial competitive injury likely to result from this information being available in the new format is not apparent. In addition, the financial information in question is given for the 1994 year and any potential detriment which could be caused by its disclosure would seem likely to have mitigated with the passage of time. In general, Chase's assertions of substantial competitive injury, which were adopted by the OCC, appear to the Court to be unduly speculative and conclusory.
The Court finds that the OCC has failed to carry its burden of demonstrating in a nonconclusory fashion that substantial competitive harm would be suffered by Chase as a result of the disclosure of Document 1. Accordingly, the Court orders Document 1 to be disclosed to Plaintiffs.
2. Documents 65 & 66
Documents 65 and 66 contain factladen summaries of various aspects of the proposed merger of U.S. Trust Company of New York into Chase Manhattan Bank, including a discussion of Plaintiffs' formal challenge to the transaction and the OCC's response to the challenge.
The OCC invokes the deliberative process privilege to justify withholding these documents from Plaintiffs. The OCC states that Documents 65 and 66 are
In Coastal States the court describes the deliberative process privilege as a
The OCC's legal analysis of when a document should be exempt from disclosure ends once it asserts that a document is deliberative or predecisional in nature. While such an assertion is necessary to trigger potential application of the exemption, it is not sufficient to necessitate application of the exemption. As the court in Coastal States notes, the exemption should only be invoked when the dangers which motivated the enactment of the exemption are present:
The OCC has made no showing that these documents inaccurately reflect its position on the issues discussed therein. Nor has it alleged that the documents are "so candid or personal in nature that public disclosure is likely in the future to stifle honest and frank communication within the agency...." Under these circumstances, the Court comes to the same conclusion as that reached by the court in Coastal States:
For these reasons, the Court finds that the OCC must disclose Documents 65 & 66 to Plaintiffs.
3. Documents 64 and 68
Document 64 and Document 68 are memoranda which address the legality of the acquisition of operating subsidiaries by Chase. The issues discussed in the memoranda involve aspects of the merger which do not pertain to the issues raised by Plaintiffs in their Complaint. Nevertheless, Plaintiffs have the same rights of access to non-relevant information as to relevant information under the FOIA. The government asserts that these memoranda should be exempt from disclosure, claiming that both documents are exempt under the attorney-client privilege and that Document 68 is also exempt under the deliberative process privilege.
The attorney-client privilege is analyzed under exemption § 552(b)(5) which exempts from disclosure "inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency." In Coastal States, the court discusses the attorney-client privilege in relation to exemption § 552(b)(5):
The attorney-client privilege is narrow in regard to a government agency such as the OCC. In Coastal States, the court described the exceptional circumstances in which the exception can be invoked properly by an agency:
Similarly, the Court finds that these memoranda contain standard legal analysis of the law relevant to the OCC in determining whether an employee of an operating subsidiary of a national bank can serve as an officer of an investment company, whether an operating subsidiary of a national bank can provide administrative services to open-end and closed-end investment companies, including proprietary mutual funds, and whether an operating subsidiary of a national bank can serve as an administrator for limited liability companies. There is nothing in these memoranda to suggest that they were undertaken by the government while acting in a capacity
Since the only exemption claimed by the OCC in regard to Document 64 is the attorney-client privilege, the Court's finding that the privilege is inapplicable in this context results in disclosure of Document 64 to Plaintiffs. In regard to Document 68, the OCC also asserts the deliberative process privilege. For the reasons stated in regard to Documents 65 and 66, the Court finds the invocation of the deliberative process privilege insufficient under the circumstances. The Court finds the reasoning in Coastal States instructive:
Document 68 provides an example of the type of document which the public should have access to in order to understand the OCC's interpretation of federal banking law. Nowhere in its brief does the OCC claim that the memorandum inaccurately reflects the OCC's position on laws reviewed therein. The Court finds that Document 68 is not exempt under the deliberative process privilege, or the attorney client privilege, and therefore must be turned over to Plaintiffs.
4. Document 67
The documents marked Document 67 are a short memo noting the revisions — requested by the Chief Counsel of the OCC — which were made to the opinion letter issued by the OCC regarding Chase's proposed acquisition of two operating subsidiaries of US Trust and a short note from the Chief Counsel of the OCC regarding the memo. The OCC claims Document 67 is exempt under the attorney-client, deliberative process, and draft document privileges.
For the reasons given in regard to Document 64, the OCC's invocation of the attorney-client privilege is not persuasive.
The analysis of the draft document privilege is subsumed in the analysis of the deliberative process privilege as the draft status of a document is but one of the factors to consider in determining whether a document should be exempt under the deliberative process privilege. The mere fact that a document is a draft — or in the present case that a document makes reference to the content of a draft document — is not a sufficient reason to automatically exempt it from disclosure. As noted in the analysis of the deliberative process privilege in regard to Documents 65 and 66, the policy reasons for the existence of the privilege must be implicated in order for the Court to find withholding of information necessary. The OCC has made no claim that the contents of the draft document inaccurately reflect the OCC's position on the issue discussed therein nor has it alleged that disclosure of this document would inhibit the free flow of information among members of the OCC staff. The OCC has merely reiterated the legal parameters for considering a document potentially exempt under the deliberative process privilege; it has not shown why such an exemption is required given the content of the document in question. Accordingly, Document 67 must be released to the Plaintiffs.
5. Document 69
This document contains the "Comptroller of the Currency Supervisory Monitoring System (SMS) Ratings and Examination Data Profile." The OCC invokes the bank examination privilege to justify their failure to disclose this document to Plaintiffs. This privilege is codified in § 552(b)(8), which exempts from disclosure: "[documents] contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions." The OCC states that this document is "a compilation of deliberative information garnered through the bank examination process [and thus] is subject to privilege." See In re Subpoena Served Upon the Comptroller of Currency, and Secretary of Board of Governors, 967 F.2d 630 (D.C.Cir.1992) ("Fleet").
The OCC claims that this document is not relevant to the Plaintiffs' consumer protection complaints and thus the public interest in disclosure of the document is small. However, the OCC does not show that the information contained in this document is deliberative rather than primarily factual. The OCC bears the burden of providing the Court with information sufficient for it to make an informed determination regarding what portion of the document is purely factual and what portion constitutes the OCC's own recommendations or opinions. Since the Court finds the document in question to be primarily factual, and since the OCC has not offered the court any information about the document which would dispute that finding, the OCC must disclose Document 69 to Plaintiffs.
IV. REPRESENTATION OF INNER CITY PRESS/COMMUNITY ON THE MOVE
In a related proceeding, Matthew Lee, et al. v. Board of Governors of the Federal Reserve System, et al., No. 94-4134 (November 8, 1995), the Second Circuit determined that one of the plaintiffs, Inner City Press/Community on the Move Homesteader's Association, could not be represented pro se, citing Local Rule 46(d)(2), Eagle Associates v. Bank of Montreal, 926 F.2d 1305, 1310 (2d Cir.1991), and Jones v. Niagara Frontier Transportation Authority, 722 F.2d 20, 22 (2d Cir.1983). The parties have not addressed this issue in the present proceeding. The parties should submit to the court, within fifteen days of the date hereof, briefs addressing this issue.
V. STATUS OF DOCUMENTS DEEMED "OCC PROPERTY" BY THE FRB
In Matthew Lee, et al. v. Board of Governors of the Federal Reserve System, et al., No. 94-4134 (November 8, 1995), Plaintiffs had access to the FRB's administrative record under 12 U.S.C. 1848 which provides:
Plaintiffs contend that included in the administrative record compiled in the court of the Chase/U.S. Trust merger approval process and filed with the Second Circuit by the Federal Reserve Board on July 24, 1995 are several documents upon which the FRB acknowledges that it relied but which it withholds from disclosure because the documents are "OCC property." The OCC has not included these documents in their administrative record, on the grounds that the OCC did
The Second Circuit granted Petitioners' motion to compel the Federal Reserve Board to file the Administrative record "to the extent that the Board is ordered to lodge the missing portions of the record with this Court by November 15, 1995, with, if deemed appropriate, a properly filed motion to seal." A motion to seal was submitted to the Second Circuit but has not yet been ruled on.
The question of the propriety of disclosure of these documents is not before this court. The question would be properly before this court if, for example, Plaintiffs submitted a FOIA request for these documents which was denied, appealed within the OCC, and then appealed to the district court. Since Plaintiffs had access to the FRB's administrative record under 12 U.S.C. 1848, Plaintiffs never submitted a FOIA request for these documents. Given this, and in light of the pending Second Circuit decision on this matter, the Court declines to determine whether these documents must be released to Plaintiffs.
VI. THE FDIC MOTION FOR SUMMARY JUDGMENT AND THE OCC MOTION TO DISMISS OR, ALTERNATIVELY, FOR SUMMARY JUDGMENT
The Federal Deposit Insurance Corporation has filed a motion for summary judgment and the OCC has filed a motion to dismiss or, alternatively, for summary judgment. Unless otherwise agreed by the parties, Plaintiffs' opposition briefs shall be submitted as soon as possible but not later than March 15, 1996. The FDIC and the OCC reply briefs are due not later than 45 days after receipt of Plaintiffs' opposition brief. These briefs should address all relevant issues as upon receipt of the parties' briefs the court will conduct its comprehensive review of the administrative records of the FDIC and the OCC.
For the foregoing reasons, the Court finds that all documents withheld from Plaintiffs by the OCC are not exempt from disclosure under the Freedom of Information Act. Accordingly, Documents 1, 64, 65, 66, 67, 68 and 69 of the OCC's Administrative Record must be disclosed to Plaintiffs within 10 days of the date hereof. The parties must submit to the Court, within 15 days hereof, briefs addressing the propriety of Inner City Press/Community on the Move Homesteaders' Association pro se representation. The parties are to submit briefs on review of the administrative records as indicated above.