July 3, 1996
Richard W. Murray
President/CEO
IAG Federal Credit Union
One Interstate Terrace
600 Midland Avenue
Rye, New York 10580-3999
Re: FOIA Appeal - Notice to Requester
(Your May 22, 1996 Letter)
Dear Mr. Murray:
On March 5, 1996, you wrote to NCUA's Region I Director requesting
a copy of the accepted bid for the purchase of the liquidated
St. Agnes Employees Federal Credit Union. On March 21, 1996,
the Region I Director acknowledged receipt of your request and
forwarded it to the Office of General Counsel. Although your
letter did not frame the request under the Freedom of Information
Act (FOIA), it was treated under the FOIA as it was a request
for release of an agency record. Since the information requested
was submitted by a third party and was arguably confidential commercial
or financial information subject to exemption from disclosure,
NCUA's FOIA Officer sent the required notice to the submitter
of the information. (See Section 792.7 of NCUA's Rules
and Regulations, 12 C.F.R. 792.7.) Based upon the objections
of the submitter and concerns of NCUA's Region I Director, the
record requested was withheld pursuant to exemption 4 of the FOIA.
The FOIA Officer informed you of the denial of your request in
a May 2, 1996 letter.
We received your May 22 appeal on May 28. We now believe that
the record that you requested should be released. Since the submitter
of the record objected to its release, according to Section 792.7(f)
of the NCUA Regulations, we must give both you and the submitter
a notice of intent to disclose the record which includes a description
of the information to be disclosed, a specified disclosure date
and a statement of the reasons for which the submitter's disclosure
objection was not sustained. The information to be disclosed
is the accepted bid for the purchase of the now liquidated St.
Agnes Federal Credit Union. The document to be disclosed is only
one page in length. The bid will be disclosed seven business
days after the date of this letter. The following discussion
addresses the reasons for which the submitter's disclosure objection
was not sustained.
Exemption 4 of the FOIA (5 U.S.C. 552(b)(4)) protects "trade
secrets and commercial or financial information obtained from
a person and privileged or confidential." It is uncontested
that the accepted bid for the purchase of St. Agnes Employees
FCU is commercial/financial information obtained from a person.
The issue to be decided is whether this information is privileged
or confidential and therefore exempt from disclosure.
According to the court in Critical Mass Energy Project v. NRC,
975 F.2d 871 (D.C. Cir. 1992), cert. denied, 113 S. Ct.
1579 (1993), voluntarily submitted information is afforded broader
protection under exemption 4 of the FOIA than information that
is required by an agency to be submitted. Several cases following
the Critical Mass decision have interpreted what is meant
by "voluntarily submitted" in government contract cases.
The courts have noted in these cases that prices submitted in
conjunction with a government contract are "required"
submissions. See Chemical Waste Management, Inc. v.
O'Leary, No. 94-2230, (D.D.C. 2/28/95); CC Distribs.,
Inc. v. Kinsinger, No. 94-1330, (D.D.C. 6/28/95); Lykes
Bros. S.S. Co. v. Pena, No. 92-2780, (D.D.C. 9/2/93). The
fact that the submitting credit union voluntarily made an offer
for the now liquidated credit union (St. Agnes FCU) is not the
determining factor in whether the information was voluntarily
or required to be submitted. Rather, once a credit union voluntarily
decided to enter a bid, price information was essential in order
for a bid to be considered. Therefore the price information was
required to be submitted.
The Critical Mass court held that information required
to be submitted can be withheld pursuant to exemption 4 of the
FOIA if it meets one of the two prongs of National Parks &
Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir.
1974). The information can be withheld under National Parks
if its release would (1) impair the Government's ability to obtain
necessary information in the future; or (2) cause substantial
harm to the competitive position of the person from whom the information
was obtained. National Parks at 770. The credit union
submitter of the bid specifically requested that the information
remain confidential. However, we do not believe that either of
the two prongs of National Parks are met in this case.
The credit union submitter has not convinced us that disclosure
of the bid would cause substantial harm to its competitive position.
In addition, we do not believe that disclosure of the bid itself
will impair the NCUA's ability to obtain information in the future.
Therefore, release of the bid does not
meet either prong of the National Parks test. In light
of this analysis, we believe that the bid should be released.
Sincerely,
Robert M. Fenner
General Counsel
GC/HMU:bhs
96-0539
SSIC 3212