UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


MCDONNELL DOUGLAS

v.

NASA


98-5251a

D.C. Cir. 1999


*	*	*


Silberman, Circuit Judge: McDonnell Douglas Corporation  appeals from
the district court's grant of summary judgment  in favor of the
National Aeronautics and Space Administra- tion's (NASA) decision to
release certain contract line item  prices under the Freedom of
Information Act. We reverse.


I.


In this reverse FOIA action, McDonnell Douglas seeks to  prevent NASA
from releasing satellite launch pricing infor- mation contained in a
contract between the two, under which  the company has agreed to
provide medium-light expendable  launch vehicle services. In NASA's
solicitation of bids for the  contract, the agency requested the
submission of proposed  prices for certain contract line items,
including prices for  several launch missions and various other
launch-related ser- vices. McDonnell Douglas responded with a bid
based on its  Delta launch vehicle. No other contractors submitted
pro- posals for the contract, and after further negotiations on 
prices and terms--including an agreement to eliminate a  clause
stating that pricing information in the contract was  considered to be
in the public domain--NASA awarded the  contract to McDonnell


Several months later, "FOIA Group, Inc." submitted a  FOIA request to
NASA, seeking a copy of the contract.  NASA notified McDonnell Douglas
of the request, and of the  company's opportunity to file objections
within five days,  pursuant to its regulations. See 14 C.F.R. s
1206.610(b)-(d)  (1999). The company objected to the release of
certain  information in the contract--including launch service prices,
 cost figures for specific launch service components and over- head,
labor rates, and profit figures and percentages--on the  ground that
it was protected under FOIA Exemption 4 as  confidential commercial or
financial information.


Exemption 4 provides that an agency is not obliged to  disclose
information consisting of "trade secrets and commer-


cial or financial information obtained from a person and  privileged or
confidential." 5 U.S.C. s 552(b)(4) (1994).  Whether such information
is protected turns in part on  whether it was provided to the
government voluntarily or  under compulsion: if the financial or
commercial information  was disclosed to the government voluntarily,
it will be consid- ered confidential for purposes of Exemption 4 if it
is the kind  of information "that would customarily not be released to
the  public by the person from whom it was obtained." Critical  Mass
Energy Project v. Nuclear Regulatory Comm'n, 975  F.2d 871, 879 (D.C.
Cir. 1992) (en banc). If the information  was required, however, it
will be considered confidential only  if disclosure would be likely
either (1) to impair the govern- ment'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. See id.  at 878-80 (reaffirming test of National Parks &
Conservation  Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974), but
 confining it to cases of compelled disclosure). Although if the 
information falls within Exemption 4, the agency is not pre- cluded
from disclosing it under FOIA (an exemption simply  means that the
government is not compelled to disclose it),  see Chrysler Corp. v.
Brown, 441 U.S. 281, 290-95 (1979);  CNA Fin. Corp. v. Donovan, 830
F.2d 1132, 1133 n.1 (D.C.  Cir. 1987), we have held that the Trade
Secrets Act, 18 U.S.C.  s 1905 (1994), "is at least coextensive with
that of Exemption  4 of FOIA," id. at 1151. Accordingly, when a person
can  show that information falls within Exemption 4, then the 
government is precluded from releasing it under the Trade  Secrets
Act. See McDonnell Douglas Corp. v. Widnall, 57  F.3d 1162, 1164 (D.C.


McDonnell Douglas claimed that since its decision to enter  into the
contract was voluntary, providing bid information as  part of that
contract was also voluntary. Therefore, Critical  Mass governs, and
Exemption 4 applies because bid informa- tion is not the kind of
information that it would customarily  release to the public.
Alternatively, the company argued  that, even if it were obliged to
provide the information to  NASA, the information fell within


tional Parks because disclosure would likely impair the gov- ernment's
ability to obtain such information in the future and  would likely
cause substantial harm to McDonnell Douglas'  competitive position.
Since the information falls under Ex- emption 4--either under Critical
Mass or National Parks-- the company asserted that the Trade Secrets
Act precludes  the agency from releasing it.


NASA rejected these arguments and issued a Notice of  Intent to release
the contract's line item pricing information.  NASA determined that
the company was obliged to provide  the information in the contract,
therefore, National Parks  and not Critical Mass was the controlling
standard. Al- though NASA determined that the disclosure of certain
infor- mation--labor rates, overhead factors, profit information, and 
launch service cost figures--was likely to cause substantial 
competitive harm to McDonnell Douglas and would not be  released, NASA
regarded the line item pricing information  differently; it rejected
the contention that competitive harm  was likely, reasoning that
release of pricing information  would not allow competitors to
underbid McDonnell Douglas,  nor would it allow the company's
commercial customers to  negotiate more effectively and thereby
"ratchet down"  McDonnell Douglas' prices.


The company filed this reverse FOIA suit, alleging that  NASA's
decision to release the line item pricing information  was unlawful
under the APA. On cross motions for summary  judgment, the district
court granted summary judgment for  the agency. See McDonnell Douglas
Corp. v. NASA, 981  F. Supp. 12, 13 (D.D.C. 1997).


II.


The company not only argues that Critical Mass applies-- that its
submission of bidding information is part and parcel  of the voluntary
act of submitting a bid--but it claims that  the administration,
through the Justice Department, is unlaw- fully seeking to nullify our
recent Critical Mass decision by  taking an unduly restrictive
interpretation of "voluntary"  submissions, and by instructing
agencies to operate as if 


Critical Mass had never been decided and only National  Parks governed
Exemption 4 cases. If the government will  not make a good faith
effort to distinguish the submission of  Exemption 4-type information
that is voluntary from that  which is required, it is argued we should
use the Critical  Mass test alone to determine whether information is
confi- dential under Exemption 4 and the Trade Secrets Act. Ac-
cordingly, appellant goes so far as to ask us (presumably  through
another en banc rehearing) to flatly overrule Nation- al Parks.


Although it seems somewhat troubling that Justice, in 1993,  instructed
the agencies that they "should" treat "most" infor- mation given to
the government as "required," without any  serious effort analytically
to distinguish voluntarily supplied  information from that which is
required within the meaning of  Critical Mass, we do not think it is
even necessary in this  case to decide whether appellant's bidding
information was  voluntarily submitted--still less whether we should,
as a full  court, reconsider overruling National Parks. That is so 
because assuming arguendo that National Parks applies-- that the
bidding information was not voluntarily submitted-- we believe the
disputed line item price information is confi- dential commercial or
financial information under the Nation- al Parks test.


It is undisputed that the total price of the contract may be  made
public. But the government does not claim that it or  NASA has any
independent legal authority to release line  item pricing information.
It does point out that NASA has a  long and consistent practice of
doing so. That is of no  consequence. If commercial or financial
information is likely  to cause substantial competitive harm to the
person who  supplied it, that is the end of the matter, for the
disclosure  would violate the Trade Secrets Act. To be sure, we noted
in  a previous case that "it appeared passing strange" that the 
prices charged to the government for specific goods could be 
confidential, McDonnell Douglas v. Widnall, 57 F.3d at 1167,  but we
did not address the competitive harm issue in that  case.


Appellant claimed the release of line item pricing informa- tion would
cause it competitive harm for two reasons: it  would permit its
commercial customers to bargain down  ("ratchet down") its prices more
effectively, and it would help  its domestic and international
competitors to underbid it (the  company claimed that disclosure of
the line item pricing data  would allow competitors to calculate its
actual costs with a  high degree of precision).


NASA's response to appellant's concern that its customers'  bargaining
leverage will be enhanced is rather mystifying.  The agency said that
publication of line item prices is the  "price of doing business" with
the government, which either  assumes the conclusion, or else assumes
a legal duty or  authority on the government to publicize these
prices, which,  as we have noted, the government does not assert. NASA
 did recognize that if disclosure enabled competitors to under- bid
McDonnell Douglas that would constitute competitive  harm. See Gulf &
Western Indus., Inc. v. United States, 615  F.2d 527, 530 (D.C. Cir.
1979). But the agency "reasoned"  that underbidding due to the
disclosure would not occur  because price is only one of the many
factors used by the  government in awarding contracts. That response
seems too  silly to do other than to state it, and pass on.


Perhaps the most convoluted--even astonishing--reason  given by NASA
for claiming appellant would not be likely to  suffer competitive harm
is that "it is [McDonnell Douglas']  competitors who have suffered
competitive harm in failing to  learn the prices for [McDonnell
Douglas'] domestic launch  vehicles" since their line item prices have
become public.  (Emphasis added.)1 As should be obvious, by so
stating,  NASA implicitly recognized that it would be to the competi-
tor's advantage to receive McDonnell Douglas' line item price 
information. Of course, it follows that appellant will be 
competitively harmed by that disclosure. That appellant's 




__________

n 1 NASA also argued, inconsistently, that disclosure would not be 
harmful to the company's competitive position because competitors  can
underbid McDonnell Douglas now with information already  available.


competitors have not attempted to stop the disclosure of their  line
item prices is of no significance in determining the issue  before


* * * *


NASA's decision could either be seen as not in accordance  with law
because relesing the information would be contrary  to the Trade
Secrets Act, or as arbitrary and capricious for  its illogical
application of the competitive harm test. Under  either rubric, the
decision must be set aside. Both of the  reasons McDonnell Douglas
advanced for claiming its line  item prices were confidential
commercial or financial informa- tion are indisputable. McDonnell
Douglas has shown--as  much as anyone can show before the event--that
it is likely to  suffer substantial competitive harm. And under
present law,  whatever may be the desirable policy course, appellant
has  every right to insist that its line item prices be withheld as 




__________

n 2 We need not address McDonnell Douglas' alternative argument  that
disclosure of its pricing information would also satisfy the 
impairment prong of National Parks. Though we do note that one 
circuit has held that a submitter cannot even raise the government's 
interests on behalf of the agency in a reverse FOIA case. See 
Hercules, Inc. v. Marsh, 839 F.2d 1027, 1030 (4th Cir. 1988).