Motion for Partial Summary Judgment_FINAL

8/2/2019 Motion for Partial Summary Judgment_FINAL

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

SOUTHERN ALLIANCE FOR CLEAN ENERGY )117 S. Gay Street )

Knoxville, TN 37902-1004 ))Plaintiff, )

v. ) Civil Action No. 10-1335 (RLW))

U.S. DEPARTMENT OF ENERGY )1000 Independence Avenue, S.W. )Washington, DC 20585-0001, )

)Defendant. )

_______________________________________________________ )

PLAINTIFFS MOTION FOR PARTIAL SUMMARY JUDGMENT

Pursuant to Rule 56 of the Federal Rules of Civil Procedure, Plaintiff hereby moves for

partial summary judgment on Count 2 of Plaintiffs first Amended Complaint. For the reasons

set forth in the accompanying memorandum, there are no genuine issues of material fact in

dispute and Plaintiff is entitled to judgment as a matter of law. In support of this motion, Plaintiff

submits the accompanying statement of material facts as to which there is no genuine issue,

memorandum of law with Exhibits A through K, and a proposed order.


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Dated: February 1, 2011 Respectfully submitted,

/s/ James B. DoughertyJames B. Dougherty709 3rd Street SWWashington, DC 20024(202) 488-1140DC Bar No. 939538

Lawrence D. Sanders /s/ Lawrence D. Sanders

Turner Environmental Law Clinic1301 Clifton RoadAtlanta, GA 30322(404) 712-8008GA Bar No. 625711Pro hac vice

Counsel for Southern Alliance for Clean Energy


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) Civil Action No. 10-1335 (RLW)v. )

)U.S. DEPARTMENT OF ENERGY )1000 Independence Avenue, S.W. )Washington, DC 20585-0001, )

)Defendant. )

_______________________________________________________

)

STATEMENT OF MATERIAL FACTS NOT IN GENUINE DISPUTE

Pursuant to Local Civil Rule 7(h)(1), Plaintiff Southern Alliance for Clean Energy

(SACE) hereby submits this statement of material facts as to which there is no genuine dispute.

1. On February 16, 2010, President Obama announced that the Department ofEnergy (DOE) had offered conditional commitments for a total of $8.33 billion in loan

guarantees for the construction and operation of two nuclear reactors at Vogtle Electric

Generating Plant (VEGP) in Burke County, Georgia (the Loan Guarantees). Exhibit A.

2. On March 25, 2010, SACE submitted a Freedom of Information Act (FOIA)request, via U.S. mail and facsimile, to DOE for records pertaining to the Loan Guarantees.

Exhibit B. Amongst other items not at issue in the Motion for Partial Summary Judgment, SACE

sought:

All records pertaining to the issuance to [Oglethorpe PowerCorporation, the Municipal Electric Authority of Georgia,Georgia Power Company, and the City of Dalton, collectively,SNC] of a term sheet, or the drafting of any final or proposedterm sheet for SNC, that sets forth the general terms and


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conditions under which DOE may issue a loan guarantee to[SNC].

Exhibit B at 2.

3.

On April 2, 2010, DOE acknowledged receipt of the FOIA request and stated,

the request has been sent to the Office of the Loan Programs Office and the Office of the

General Counsel to conduct a search of their files for responsive records. Exhibit C at 1.

4. The April 2, 2010 DOE letter did not purport to respond to SACEs FOIA request.Indeed, the letter stated that upon completion of the searches and review of any records located,

[SACE] will be provided a response. Exhibit C at 1.

Partial Response Records Requested in Paragraph 6 of the FOIA Request

5. On July 6, 2010, DOE sent SACE a determination letter providing a partialresponse to paragraph 6 of the FOIA request (as set forth in paragraph 2 of this Statement).

With the determination letter, DOE released three heavily redacted documents to SACE (the

Term Sheets). DOE asserted FOIA Exemption 4 as the legal basis for withholding the redacted

information from release. Exhibit D at 1.

Administrative Appeal of the July 6, 2010 Partial Response

6. Pursuant to 10 C.F.R. 1004.8, on July 16, 2010, SACE submitted anadministrative appeal of the July 6, 2010 determination letter to the DOE Office of Hearings and

Appeals (OHA). The administrative appeal challenged DOEs application of FOIA Exemption

4 to the Term Sheets and sought their release in unredacted form. Exhibit E.

7. On August 11, 2010, the OHA issued a Decision and Order granting SACEsadministrative appeal. According to the OHA Decision, the appeal, if granted, would require

[the Loan Guarantee Program Office] to release the withheld information to SACE. Exhibit F at

2. Notwithstanding this statement, the OHA did not order release of the withheld information,


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but rather remanded the matter to DOEs Loan Guarantee Program Office for further

explanation.Id. at 5.

8. The August 11, 2010 Decision and Order is a final order of the Department ofEnergy from which any aggrieved party may seek judicial review pursuant to 5 U.S.C.

552(a)(4)(B). Exhibit F at 5.

Withdrawal, Revised Determination Letter, and Partial Response

9. On September 1, 2010, DOE sent SACE a letter purporting to withdraw theJuly 6, 2010 determination letter. Exhibit G at 2.

10.On September 2, 2010, DOE issued a revised determination letter. The revised

determination letter was substantially similar to the July 6, 2010 determination and again

asserted FOIA Exemption 4 as the legal basis for withholding portions of the Term Sheets from

release. No responsive documents, redacted or otherwise, were released with the revised

determination letter. Exhibit H at 1-2.

Reconsideration of the Redactions

11.In an effort to resolve the matter informally, or to narrow the issues for judicialresolution, DOE agreed to reconsider the redactions of the Term Sheets.

12.On December 3, 2010, DOE re-released the Term Sheets to SACE, with fewerredactions. DOE, however, still failed to disclose substantial portions of the Term Sheets.

Further, DOE did not issue a determination letter with the Term Sheets to provide further

explanation or justification for the redactions. Exhibit I; Exhibit J; Exhibit K.

13.The Term Sheets released on December 3, 2010 contain no fewer than 273individual redactions. Exhibit I; Exhibit J; Exhibit K.


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James B. Dougherty /s/ James B. Dougherty

709 3rd Street SWWashington, DC 20024(202) 488-1140DC Bar No. 939538

Lawrence D. Sanders /s/ Lawrence D. Sanders

Turner Environmental Law Clinic1301 Clifton RoadAtlanta, GA 30322(404) 712-8008GA Bar No. 625711Pro hac vice



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) Civil Action No. 10-1335 (RLW)v. )

)U.S. DEPARTMENT OF ENERGY )1000 Independence Avenue, S.W. )Washington, DC 20585-0001, )

)Defendant. )

_______________________________________________________

)

MEMORANDUM IN SUPPORT OF PLAINTIFFS

MOTION FOR PARTIAL SUMMARY JUDGMENT

This is a case under the Freedom of Information Act, 5 U.S.C. 552, (FOIA) seeking

disclosure of information unlawfully withheld from public release by the Department of Energy

(DOE). Specifically, Plaintiff seeks disclosure of redacted portions of three documents (the

Term Sheets) setting forth terms and conditions for obtaining federal loan guarantees for the

construction and operation of two nuclear reactors at the Vogtle Electric Generating Plant

(VEGP) in Burke County, Georgia, which DOE alleges are exempt from disclosure under

FOAI Exemption 4. DOEs generalized statements are insufficient to meet the governments

heavy burden of proving that the requested information falls under a FOIA exemption. Even if

DOE had provided the necessary support for claiming an exemption, the requested information

does not qualify for protection under Exemption 4 because the information was not obtained

from a person and would not result in competitive harm to the applicant. As a result the motion


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for summary judgment should be granted and defendant ordered to release the Term Sheets in

their entirety.

I. Factual and Procedural BackgroundThe Energy Policy Act of 2005 established the federal conditional loan guarantee

program which authorized loan guarantees for new energy technologies, such as advanced

nuclear reactor designs. Pub. L. No. 109-58, Title XVII (Aug. 8, 2005). Under the program, DOE

makes a loan guarantee offer to a private company through the issuance of term sheets, which

contain the terms and conditions of the federal loan guarantee. Once signed by the company,

these term sheets become conditional commitments to provide a federal loan guarantee for the

project. This commitment is fulfilled through an executed loan guarantee agreement, once the

conditions in the term sheets are met.

Under the loan guarantee program, several companies, including Oglethorpe Power

Corporation (Oglethorpe), the Municipal Electric Authority of Georgia (MEAG), and

Georgia Power Company (Georgia Power) applied for loan guarantees with DOE for the

construction and operation of two new nuclear reactors at the VEGP After reviewing the

companies applications, DOE made offers to the three utilities in the form of three separate

Term Sheets, each dated February 13, 2010. Exhibit I at 1; Exhibit J at 1; Exhibit K at 1.

Executed by the Secretary of Energy, Steven Chu, on behalf of DOE, the Term Sheets set[]

forth the terms and conditions of DOEs offer to provide . . . a loan guarantee to each applicant

who accepts the agreement.Id. Once signed and accepted by the companies, these term sheets

constitute DOEs conditional commitment to provide the loan guarantees.

The Southern Alliance for Clean Energy (SACE) is a non-profit, non-partisan,

environmental advocacy organization operating throughout the southeastern United States.


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SACEs mission is to promote responsible energy choices that solve global warming problems

and ensure clean, safe, and healthy communities, through policy change, education, and

outreach. In an effort to promote awareness of the loan guarantee program and the expansion of

the VEGP site, and to encourage governmental accountability and transparency, on March 25,

2010 SACE submitted a FOIA request for documents pertaining to the DOEs loan guarantee

program. Exhibit B. SACE specifically sought information about the loan guarantees issued to

Oglethorpe, MEAG, and Georgia Power for construction and operation of two new nuclear

reactors at VEGP.Id. As part of the request, SACE sought the Term Sheets:

All records pertaining to the issuance to [Southern Nuclear Operating Company]SNC of a term sheet, or the drafting of any final or proposed term sheet for SNC,that sets forth the general terms and conditions under which DOE may issue aloan guarantee to VEGP.

Idat 2.

On April 2, 2010, DOE acknowledge receipt of the FOIA request and stated, the request

has been sent to the Office of the Loan Programs Office and the Office of the General Counsel to

conduct a search of their files for responsive records. Exhibit C at 1. This letter did not purport

to respond to SACEs FOIA request. Indeed, the letter stated that upon completion of the

searches and review of any records located, [SACE] will be provided a response.Id.

Months later, on July 6, 2010, DOE released three heavily redacted versions of the Term

Sheets. In its partial response letter, DOE cited FOIA Exemption 4 as its legal justification for

withholding portions of the documents. Exhibit D at 1.

On July 16, 2010, SACE appealed this partial determination to the DOE Office of

Hearings and Appeals (OHA), challenging DOEs application of Exemption 4. Exhibit E. The

OHA granted this appeal on August 11, 2010. Exhibit F. According to the OHA Decision, the

appeal, if granted, would require [the Loan Guarantee Program Office] to release the withheld


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information to SACE.Id. at 2. Notwithstanding this statement, the OHA did not order release of

the withheld information, but rather remanded the matter to DOEs Loan Guarantee Program

Office for further explanation.Id. at 5.

On September 1, 2010, DOE withdrew its July 6, 2010 determination letter and issued

a revised determination letter on September 2, 2010. Exhibit G; Exhibit H. The letter again cited

Exemption 4 and was substantially similar to the July 6, 2010 letter. Exhibit H at 1-2.

Over the next few months, DOE agreed to reconsider the redactions within the Term

Sheets in an effort to resolve the matter informally and narrow the issues for judicial review. On

December 3, 2010, DOE re-released the three Term Sheets to SACE. Exhibit I; Exhibit J; Exhibit

K. While the re-released Term Sheets contained fewer redactions, DOE continued to withhold

substantial portions of the documents from release, totaling no less than 273 individual

redactions. See Exhibit I; Exhibit J; Exhibit K.DOE did not provide further explanation or

justification to augment the September 2, 2010 revised determination letter.

On August 9, 2010, SACE brought action against Defendant DOE to compel compliance

with FOIA. On January 14, 2011, SACE amended its complaint to state a second cause of action,

challenging DOEs unlawful withholding of portions of the Term Sheets.

II. Statutory BackgroundA. An Agencys Duties Under FOIAThe Freedom of Information Act was enacted to facilitate public access to Government

documents.Dept of State v. Ray, 502 U.S. 164, 173 (1991). Congress believed the statute was

necessary to pierce the veil of administrative secrecy and to open agency action to the light of

public scrutiny.Dept of Air Force v. Rose, 425 U.S. 352, 361 (1976) (internal citations

omitted). This openness ensure[s] an informed citizenry, vital to the functioning of a democratic


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society. U.S. Dept of Justice v. Tax Analysts, 492 U.S. 136, 142 (1989) (quotingNLRB v.

Robbins Tire & Rubber Co., 437 U.S. 214, 242 (1978)). Thus, FOIA attempts to create a

judicially enforceable public right to secure information from possibly unwilling official hands.

Rose, 425 U.S. at 361 (quoting Senate Report No. 813, at 3).

Consistent with this purpose, the statute has been interpreted broadly and generally

requires that records held by federal agencies be released to the public upon request. See, e.g.,

id.;John Doe Agency v.John DoeCorp., 493 U.S. 146, 152 (1989). Once a responsive record

has been identified, it mustbe released unless it is exempt from disclosure under one of FOIAs

nine exemptions.Id.; seealso Vaughn v. Rosen, 484 F.2d 820, 824 (D.C. Cir. 1973), cert. denied,

415 U.S. 977 (1974)1

Due to the strong presumption in favor of disclosure, the agency has the burden of

proving that the requested information falls under a claimed narrow exception.Ray, 502 U.S. at

173. The agencys burden is substantial, and it is well settled that [c]onclusory and generalized

(In essence the Act provides that all documents are available to the public

unless specifically exempted by the Act itself.). FOIAs exemptions are to be narrowly

construed, with all doubts resolved in favor of disclosure. GrandCent. Pship, Inc. v.Cuomo,

166 F.3d 473, 478 (2d Cir. 1999) (citingEthyl Corp. v.EPA, 25 F.3d 1241, 1245 (4th Cir.

1994)); Soucie v. David,448 F.2d 1067, 1078-79 (D.C. Cir. 1971) (holding that Exemption 4 is

to be read narrowly, requiring only protected material to be deleted before the disclosure of the

remainder).

1 This has led the D.C. Circuit to require the government to produce a Vaughn index to properly withhold requestedmaterials. Following Vaughn index jurisprudence, for an agency to withhold records, it must provide an affidavitwith: a relatively detailed justification, specifically identifying the reasons why a particular exemption is relevantand applying such reasoning to the particular part of the withheld document to which they apply, and setting forththe search terms and type of search performed, averring that all files likely to contain responsive materials . . . weresearched. Valencia-Lucena v. U.S. Coast Guard, 180 F.3d 321, 326 (D.C. Cir. 1999); seeKing v. Dept of Justice,830 F.2d 210, 218 (D.C. Cir. 1987) (citingMead Data Cent. v. Dept of the Air Force, 566 F.2d 242, 251 (D.C. Cir.1977)). This procedure, now followed by a majority of United States Circuit Courts of Appeals, is designed tocorrect, however imperfectly, the asymmetrical distribution of knowledge that characterizes FOIA litigation. King,830 F.2d at 218.


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allegations . . . cannot support an agencys decision to withhold requested documents. Pub.

Citizen Health Research Grp. v. FDA, 185 F.3d 898, 906 (D.C. Cir. 1999); see also McDonnell

Douglas v. U.S. Dept of the Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004) ([W]e do not

defer to the agencys conclusory or unsupported suppositions.).

The agency must justify its decision to withhold each segment of information by

describ[ing] the withheld information and the justification for withholding with reasonable

specificity. Salisbury v. U.S., 690 F.2d 966, 970 (D.D.C. 1982). The description must provide

specific factual or evidentiary material to support application of an exemption. Comstock Intl,

Inc. v. Export-Import Bank, 464 F. Supp. 804, 807 (D.D.C. 1979). As such, it must show

exactly who will be injured and explain the concrete injury caused by the release.Delta Ltd.

v. U.S. Customs & Border Prot. Bureau, 393 F. Supp. 2d 15, 19 (D.D.C. 2005). Arguments

based on remote or speculative injuries do not suffice to show that information can be withheld.

Pub. Citizen Health Research Grp. v. FDA, 964 F. Supp. 413, 415 (D.C. Cir. 1997).

Due to the agencys almost exclusive knowledge of the contents of the requested

materials, the requester must rely upon these justifications and descriptions for an

understanding of the material sought to be protected. King v. Dept of Justice, 830 F.2d 210,

218 (D.C. Cir. 1987). This information asymmetry, seriously distorts the traditional adversary

nature of our legal systems form of dispute resolution. Vaughn, 484 F.2d at 824. Due to this

information distortion, the trial court may, and often does, examine the document in camera to

determine whether the Government has properly characterized the information as exempt.Id. at

824-25. Where an agency fails to meet its burden of proving that an exemption applies to the

withheld information, summary judgment should be entered for the FOIA requester.Rose, 425

U.S. at 361-62.


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To ensure compliance with FOIA, district courts may review an administrative appeal de

novo and enjoin the agency from withholding agency records and order the production of any

agency records improperly withheld. 5 U.S.C. 552(a)(4)(B).

B. The Standards for Withholding Information Under Exemption 4Under Exemption 4, an agency may withhold information that is (a) commercial or

financial, (b) obtained from a person, and (c) privileged or confidential.2

Courts have consistently held that the terms commercial and financial should be

attributed their ordinary meaning. See, e.g., Pub. CitizenHealth Research Grp. v. FDA, 704 F.2d

1280, 1290 (D.C. Cir 1983). The definition of obtained from a person is equally as

straightforward. Quite simply, any information generated by the government is not obtained

from a person. See, e.g., Grumman Aircraft Engg Corp. v. Renegotiation Bd., 425 F.2d 578,

582 (D.C. Cir. 1970). The definition of the third requirement, that the information be privileged

and confidential, ties together these first two requirements: confidential information is any

commercial or financial matter whose disclosure would likely cause substantial harm to the

competitive position of thepersonfrom whom the information was obtained.Natl Parks I, 498

F.2d at 770 (emphasis added). To establish harm to a competitive position, DOE must

5 U.S.C.

552(b)(4); Critical Mass Energy Project v. NRC, 975 F.2d 871, 873 (D.C. Cir. 1992) (en banc)

(citingNatl Parks & Conservation Assn v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974) (Natl

Parks I)).

2 An agency may also withhold information that constitutes a trade secret. However, DOE has made no trade secretclaim. Such an omission is unsurprising. For FOIA purposes, the term trade secret means a secret, commerciallyvaluable plan, formula, process, or device that is used for the making, preparing, compounding, or processing oftrade commodities and that can be said to be the end product of either innovation or substantial information. Pub.CitizenHealth Research Grp. v. FDA, 704 F.2d 1280, 1290 (D.C. Cir 1983). The general nature of the informationcontained in the Term Sheets, by definition, cannot constitute a trade secret.


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demonstrate (1) actual competition and (2) a likelihood of substantial competitive injury. Gulf W.

Induss. v. U.S., 615 F.2d 527, 530 (D.C. Cir. 1979).

Discussion

The Department of Energy has unlawfully withheld documents by failing to adhere to the

statutory requirements set forth by the Freedom of Information Act and its exemptions. First, the

agency has not adequately demonstrated that the information withheld from the Term Sheets

satisfies the requirements of any FOIA exemption, and thus has not rebutted the heavy

presumption in favor of disclosure. Second, the information sought in this case does not qualify

for exclusion under Exemption 4 because it was not obtained from a person and is not

confidential.

I. DOE Failed to Demonstrate that the Information it Withheld was Exempt fromDisclosure

DOE has not adequately demonstrated that the information it withheld satisfies the

requirements of Exemption 4. DOEs conclusory and generalized allegations are insufficient to

justify withholding information under FOIA. Specifically, DOE has failed to establish a

likelihood of substantial competitive harm.

A. DOE Failed to Adequately Justify Withholding the InformationDespite the strong presumption in favor of disclosure, DOE heavily redacted each of the

Term Sheets. DOE cited to Exemption 4 as its legal basis for the redactions and stated:

Portions deleted from the documents enclosed include sensitive commercialinformation that is maintained in confidence by the applicant and not available inpublic sources. Such proprietary information being withheld includes project cost,financing plans and business strategies, procurement plans, and marketing plansand analysis. Public disclosure of this information would cause substantial harmto applicants competitive interests. Specifically, disclosing cost and financinginformation would provide an unfair advantage to competitors by enablingcompeting power suppliers to estimate supply costs and use this information tobid against the applicant. Public disclosure of procurement plans would enable the


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applicants power vendors to compete unfairly towards providing future goodsand services to the applicant, in addition to allowing vendors unlicensed use ofapplicants original work product. Public disclosure of project costs, financinginformation and market analysis would enable potential customers to exert undueleverage with regards to purchasing applicants product. For these reasons the

information is being withheld.

Exhibit H at 2-3.3

This explanation does not to meet DOEs heavy burden. DOEs assertions provide no

more than the conclusory and generalized allegations that this circuit has rejected as

insufficient to sustain a claimed exemption from disclosure under FOIA. SeePub. Citizen Health

Research Grp., 185 F.3d 898; Pacific Architects & Engrs Inc. v. Renegotiation Bd., 505 F.2d

383, 384 (D.C. Cir. 1974); Cuneo v. Schlesinger, 484 F.2d 1086, 1092 (D.C. Cir. 1973); Govt

Accountability Project v. U.S. Dept of Health, 691 F. Supp. 2d 170, 178-79 (D.D.C. 2010)

(finding, based on an inadequate Vaughn index, that the agency did not distinguish between

categories of information withheld, the explanation lacked supporting detail demonstrating that a

competitor could, in fact, use withheld material without having to incur the time and expense

involved in developing the information itself, and the agency did not show harm flowing from a

competitors affirmative use of proprietary information).

Instead of explaining how Exemption 4 applies to each redaction, DOE made conclusory

and generalized allegations pertaining to all of the Term Sheets. DOE failed todescribe the

withheld information and the justification for withholding with reasonable specificity. Salisbury,

690 F.2d at 970. DOE generally claimed that the information was being withheld because it

included proprietary information which includes project cost, financing plans and business

strategies, procurement plans, and marketing plans and analysis. Exhibit H at 2. However, DOE

3 Because DOE did not provide a response letter with the re-released Term Sheets on December 3, 2010, SACE willreference the determination letter dated September 2, 2010, as DOEs most recent justification of the withheldredactions.


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did not distinguish between the categories of information withheld. DOE made no attempt to

explain what category of information each redacted item falls in. To the contrary, DOE claims, in

only six sentences, that all 273 redactions are project cost, financing plans and business

strategies, procurement plans, and marketing plans and analysis.Id. DOE was required to

establish that the redactions met the requirements of Exemption 4 and explain in detail which

redacted sections relate to which type of protected information. Since the agency failed to do

this, it has not met its burden of proof to properly withhold the redacted information in the Term

Sheets under Exemption 4. Therefore, DOE is unlawfully withholding the redacted information

and the information must be released.

B. DOE Failed to Establish That the Withheld Information Would Likely Cause aCompetitive Harm

DOE failed to show the information would cause any potential harm to the companies

competitive position. Under Exemption 4, to justify withholding commercial or financial

information, DOE must prove that substantial competitive injury would likely result from

disclosure of such information.Natl Parks & Conservation Assn v. Kleppe, 547 F.2d 673, 679

(D.C. Cir. 1976) (Natl Parks II). Actual harm does not need to be shown if DOE can

demonstrate (1) actual competition and (2) a likelihood of substantial competitive injury. Gulf W.

Induss., 615 F.2d at 530. The government is responsible for demonstrating the likelihood of

substantial injury by the nature of the material[s] sought and the competitiveness of the

circumstances.Natl Parks II, 547 F.2d at 683. This does not encompass every injury to a

businesss competitive position, but rather, is limited to harm stemming from the affirmative

use of proprietary information by competitors. CAN Fin. Corp. v. Donovan, 830 F.2d 1132,

1154 (D.C. Cir. 1987). DOE must provide evidence that competitive harm is imminent should

this information be disclosed . . . .Iglesias v. CIA, 525 F. Supp. 547, 559 (D.D.C. 1981).


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Here, DOE has not meet its burden of explaining how the withheld information would

likely cause substantial competitive harm. First, DOE failed to adequately explain how the

companies competitors would affirmatively use the information it withheld. CAN Fin. Corp.,

830 F.2d at 1154. DOE has only provided impermissibly vague and conclusory justifications for

how the withheld information, if released, would give competitors an unfair advantage. See

Exhibit H at 3. Second, DOE has failed to provide factual or evidentiary material to support its

application of Exemption 4. Govt Accountability Project, 691 F. Supp. at 181 (the agencys

own fear that it may be sued by the submitter of the information is irrelevant to the inquiry at

hand). Thus, DOE failed to establish a likelihood of substantial competitive harm.

In sum, DOE is unlawfully withholding the redacted portions of the Term Sheets. DOEs

conclusory and generalized allegations are insufficient to sustain a claimed exemption from

disclosure under FOIA. Accordingly, the withheld information must be released.

II. The Information Withheld Does Not Qualify For Protection Under Exemption 4Even if DOE had adequately explained how Exemption 4 applied to these Term Sheets,

the redactions themselves do not meet the requirements of Exemption 4. As noted above, to be

withheld under Exemption 4 the requested information: (1) must be commercial or "financial"

information; (2) must be obtained from a person; and (3) must be privileged or

confidential. The Term Sheets are offers for loan guarantees made by DOE to Georgia Power,

MEAG, and Oglethorpe. The information redacted in the Term Sheets was not obtained from a

person and is not the type of information likely to cause competitive harm to the companies.

A. The Information Withheld Was Not Obtained From a PersonDOE improperly withheld information in the Term Sheets which was not obtained from a

person as required under Exemption 4. Courts have consistently held that the phrase obtained


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from a person does not include information generated by the government because the

government is not a person under traditional tenets of administrative law. Grumman Aircraft

Engg Corp. v. Renegotiation Bd., 425 F.2d 578, 582 (D.C. Cir. 1970) (finding that the plain

language of Exemption 4 indicates that it was not meant to protect agency information because

an agency is not a person under the Administrative Procedure Act);Nadler v. FDIC, 92 F.3d

93, 95 (2d Cir. 1996) (person includes an individual, partnership, corporation, association, or

public or private organization other than an agency).

Recently, the Second Circuit held that under Exemption 4, certain information pertaining

to loan agreements between federal entities and independent borrowers is not exempt from

disclosure.Bloomberg, L.P. v. Bd. of Governors of the Fed. Reserve Sys ., 601 F.3d 143 (2d Cir.

2010). InBloomberg, a FOIA request called for documents involved in loan agreements between

several private banks and the Federal Reserve. 601 F.3d at 146-47. The court held that

Exemption 4 did not apply to the material because the terms of the loan could not be said to be

obtained from the borrower; rather, the information requested was generated within a Federal

Reserve Bank upon its decision to grant a loan. Id. at 148. Like the loan itself, the information

did not come into existence until a Federal Reserve Bank made the decision to approve the loan

request, and therefore was generated within the government.Id. The court acknowledged that

disclosure of loan terms allows one to back into information about the borrower . . . [including]

the other terms [that] were acceptable to the borrower.Id. However, the court held that [t]he

fact that information aboutan individual can sometimes be inferred from information generated

within an agency does not mean that such information was obtained from that person within the

meaning of FOIA.Id. (citingRose, 425 U.S. at 360-61) (emphasis in the original). Rather,

information such as the collateral securing the loan, reflected the agencys own executive


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actions, and thus was not exempt from disclosure.Id.at 147, 148-49.

In this case, as inBloomberg, the Term Sheets dictated terms and conditions of a loan

agreement and were prepared by a governmental body and offered to the utility companies for

consideration and acceptance. Executed by Secretary of Energy, Steven Chu, on behalf of DOE,

the Term Sheets set[] forth the terms and conditions of DOEs offer to provide . . . a loan

guarantee to each applicant who accepted the agreement. Exhibit I at 1; Exhibit J at 1; Exhibit K

at 1. Thus, on a whole, these documents are unequivocally DOEs terms and conditions, which

were generated within the government. Therefore, as inBloomberg, the information in the Term

Sheets cannot be said to have been obtained from a person. This conclusion is not undermined

simply because information about the companies can be inferred from the Term Sheets. See

Bloomberg, 601 F.3d at 148. Thus, the documents do not qualify for exemption and should be

released in their entirety.

A close review of the 273 individual redactions within the Term Sheets supports this

determination. The clearest example appears in Section Heading 24 of the Term Sheets under

Collateral which contains several redacted paragraphs. Exhibit I at 30; Exhibit J at 39.4

4 Oglethorpes term sheet contains a shortened Collateral section with no redactions. Exhibit K at 32.

The

Second Circuit specifically rejected withholding this type of information inBloomberg. See

Bloomberg, 601 F.3d at 147 (holding that collateral securing the loan was not obtained from

the borrowing banks). Another example of redacted DOE information appears under Section

Heading 12 pertaining to DOE Fees, which contains numerous redactions under the

subheading of DOE Maintenance Fee. Exhibit I at 11; Exhibit J at 15; Exhibit K at 11. It is

highly unlikely that DOEs maintenance fees contain information that was obtained from the

companies. A third example arises in the section pertaining to Conditions Precedent to Initial

Advance, as the Term Sheets state in the heading that [t]he funding of the initial Advance will


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be subject to the satisfaction of the following conditions . . . . Exhibit I at 14-17; Exhibit K at

15-18.5

Accordingly, because the Terms Sheets contain information generated by a federal

agency and the information was not obtained from a person, DOE is unlawfully withholding

the redacted information. This information should be released.

The section then sets forth terms that the companies must adhere to before they receive

the first installment of the loans. Again, this information was generated within DOE, and

explicitly dictates DOEs terms and conditions of the loan agreement. See Bloomberg, 601 F.3d

at 148.

B.

The Information Withheld Will Not Cause Competitive Harm

In addition to demonstrating the information was received from a person, DOE must

demonstrate that the withheld information, if disclosed, would likely to cause competitive harm.

Gulf W. Induss., 615 F.2d at 530. While DOE makes blanket assertions about the harm likely to

result from disclosure of the information, a close look at the redacted Term Sheets reveals that

the information is not what DOE claims it to be. Quite simply, the withheld information is not

likely to cause competitive harm.

As noted above, DOE claimed that the withheld information was limited to project cost,

financing plans and business strategies, procurement plans, and marketing plans and analysis.

Exhibit H at 2. Section headings themselves, however, do not contain such information and

cannot cause competitive harm; nevertheless, these headings are redacted in Georgia Power and

Oglethorpes Term Sheets. See Exhibit I at 12; Exhibit K at 12. Moreover, such information

about a company is not usually found in a section entitled, DOEFees. Exhibit I at 11; Exhibit J

at 15, and Exhibit K at 11 (emphasis added); see also Exhibit I at 21-22 and Exhibit K at 23-24

5 MEAGs term sheet does not contain this section. Instead, under the section heading Conditions Precedent toEach Advance, it contains four individual redactions. The reasoning set forth above similarly applies to theseredactions. Exhibit J at 24-26.


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(Representations and Warranties With Respect to the Project (emphasis added)); Exhibit I at

23-24 and Exhibit K at 25-26 (Affirmative Covenants With Respect to the Project (emphasis

added)); and Exhibit I at 15-16 (Conditions Precedent to Each Advance With Respect to the

Project (emphasis added)). Based on inaccurate characterizations of redacted portions of the

Term Sheets, DOE is unlawfully withholding information. This information must be released.

Conclusion

The Department of Energy has failed to comply with the requirements set forth in FOIA by

offering blanket assertions of Exemption 4 that do not adequately justify the agencys decision to

withhold substantial amounts of information from the requested documents. The agency has

erroneously withheld this information because it does not comply with Exemption 4s narrow

requirements. Accordingly, plaintiffs motion for summary judgment should be granted, and

defendant shouldbe ordered to immediately release all withheld information.


James B. Dougherty/s/ James B. Dougherty

709 3rd Street SWWashington, DC 20024(202) 488-1140DC Bar No. 939538

Lawrence D. Sanders/s/ Lawrence D. Sanders

Turner Environmental Law Clinic1301 Clifton RoadAtlanta, GA 30322

(404) 712-8008GA Bar No. 625711Pro hac vice


Documents

Motion for Partial Summary Judgment_FINAL