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


TRANS-PAC POLICING

v.

US CUSTOMS SVC


98-5253a

D.C. Cir. 1999


*	*	*


Edwards, Chief Judge: Trans-Pacific Policing Agreement  ("TPPA" or
"appellants"), an association of registered ocean  common carriers, is
charged by federal statute with policing  exporters who send shipments
into the United States. One  principal function of TPPA is to
investigate and take action to  prevent the mischaracterization of
cargo in sealed marine  containers. Pursuant to the Freedom of
Information Act  ("FOIA"), 5 U.S.C. s 552, TPPA sought shipping code
num- bers from the United States Customs Service ("Customs") in  order
to facilitate investigations of exporters' shipments.  Customs
rejected TPPA's request, claiming that release of  the code numbers
would result in serious competitive injury  to importers in the United
States and, thus, that the informa- tion sought was exempt from
disclosure under FOIA Exemp- tion 4, id. s 552(b)(4). TPPA filed suit
in District Court, and  the court granted summary judgment in favor of
Customs,  finding that Customs had met its burden under Exemption 4.


On appeal, TPPA claims that Customs could have disclosed  redacted
portions of the code numbers without causing com- petitive harm to
United States importers, and that the Dis- trict Court erred in not
making a segregability finding.  Customs responds that, because TPPA
made no request for  redaction before the District Court, the claims
on appeal  should not be considered by this court and the judgment of 
the District Court should be affirmed. Because the District  Court
never considered the possibility of redaction, we believe  that a
remand is warranted in this case.


There is no doubt that appellants could have helped to save  judicial
resources by presenting the full theory of their case  as effectively
before the trial court as it was presented during  the arguments
before this panel. Nonetheless, we see no  point in dismissing this
lawsuit. Both sides agree that appel- lants could and would simply
file a new lawsuit if the case  were dismissed. And counsel for
Customs concedes that  there is really nothing of substance to be


appellants to file a new FOIA request at the administrative  level; it
is also clear that a new lawsuit will be costly in terms  of
additional time, expense, and wasted judicial resources. In  these
circumstances, we believe that a remand is warranted.


I. Background


A. Factual Background


TPPA is an association of registered ocean common carri- ers. Appellant
Nippon Yusen Kaisha is an individual ocean  carrier, as well as a
member of the association. The associa- tion was formed pursuant to
the Shipping Act of 1984, 46  U.S.C. app. ss 1701-1720, and is
authorized under the Act to  investigate and take action to correct
certain trade "malprac- tices" prohibited by the Act. See id. s
1709(a)(1), (b)(1)-(4).  Among the prohibited malpractices, as
relevant here, is the  mischaracterization of cargo in sealed marine
containers,  which allows unscrupulous exporters to obtain freight
rates  below the lawful filed tariff rate applicable to a particular 
commodity. On some occasions the ocean carrier is an ac- complice in
violating the law and on other occasions the  carrier has been


Many foreign exporters shipping goods into the United  States do so via
ocean carrier. Using information provided  by the exporter, the
carrier prepares an Inward Vessel  Manifest ("IVM"), which provides a
general description of the  goods contained in each shipment. See 19
C.F.R.  s 103.31(e)(3) (1998). Customs requires the carrier to file
the  IVM upon entry into the United States, but it is usually filed 
before the vessel arrives in port. The information contained  in the
IVM is regularly released for public distribution under  Customs
regulations. See id. s 103.31(a)(3), (e). When the  carrier provides
Customs with the IVM, Customs assigns the  shipped goods one or more
entry numbers. Each individual  import transaction receives a unique
entry number, which  Customs then uses for all official purposes.


When the importer is notified that its goods have arrived,  Customs
requires that the importer--not the carrier--com-


plete an Import Declaration. On this document, the importer  must
provide detailed information about the shipment, in  order to enable
Customs to, inter alia, assess properly the  duties that may be due on
that shipment. As part of the  Import Declaration, the importer must
include a Harmonized  Tariff Number ("HTS number") applicable to the
goods. The  HTS number corresponds to a specific legal description
with- in the universe of imported merchandise. The complete list  of
HTS numbers is set forth in the Harmonized Tariff Sched- ule that the
Government publishes each year. This published  Schedule is akin to a
dictionary, in that it assigns a precise  definition to each ten-digit
HTS number. The definitions are  highly specific, and may even include
the value of the goods.  For example, Customs has over 1900 different
HTS numbers  for goods that could generally be described as "ready
made  garments." See, e.g., Appendix ("App.") 246-57. In general, 
each digit in an HTS number adds an additional layer of  specificity
to the description of the goods, in the same way  that biologists' use
of phylum, order, genus, and species  identifies living organisms to
increasing degrees of specificity.  Although the Schedule is published
annually, Customs nor- mally does not release information from Import
Declarations,  which apply HTS numbers to specific shipments of


The IVMs and the Import Declarations each contain similar 
information--a description of the goods being shipped--but,  as the
District Court noted, and as the parties agree, "they  are very
different documents, prepared by different persons,  and prepared
under different circumstances." Trans-Pacific  Policing Agreement v.
United States Customs Serv., Civ. No.  97-2188, at 3 (D.D.C. May 14,
1998) (Memorandum Opinion)  ("Memorandum"), reprinted in App. 273. The
IVM is pre- pared by the carrier, generally with details supplied by
the  exporting shipper. As noted above, the description of the  goods
contained in the IVM need only be of a general nature.  By contrast,
it is the importer who must file the Import  Declaration, using the
far more precise HTS numbers, which  provide a description of the
shipment that is significantly  more detailed than the one found on
the IVM. Moreover, an  importer completes the Import Declaration under


law and under the watchful eye of Customs. Therefore, it is  undisputed
that Import Declarations generally contain a more  accurate
description of the shipped goods than do IVMs--not  only because the
HTS numbers are more precise, but also  because the importers filling
out the Import Declarations  have less incentive and ability to
mischaracterize the ship- ment than do those filling out the IVMs.


TPPA enforces the Shipping Act by ensuring that export- ers do not
mischaracterize their cargoes in order to receive  lower tariff rates.
It is indisputable that access to the HTS  numbers would greatly
facilitate the work of TPPA officials.  According to appellants, use
of those numbers is the easiest  and cheapest method of checking the
accuracy of the descrip- tions contained in the IVMs, and is therefore
the most  efficient method of enforcing federal law and reducing com-
mercial fraud in the shipping industry. The alternative-- physically
inspecting each shipment--is, according to appel- lants, expensive,
time-consuming, and unduly intrusive of  honest shippers and
importers. See Appellants' Opening  Brief at 6-7.


B. Procedural Background


On September 25, 1996, appellants wrote to Customs, re- questing
disclosure of "Customs['s] harmonized numbers for  actual commodity
description[s]" of 68 shipments, which ap- pellants identified by
their entry numbers. See Letter from  Jay Tolentino, NYK Line, Inc.,
to Audrey Adams, Customs  (Sept. 25, 1996), reprinted in App. 15-16.
On October 8,  1996, Customs responded by refusing to release the
request- ed HTS numbers, claiming in only one sentence that such 
information fell within FOIA Exemption 4, which exempts  from
disclosure "trade secrets and commercial or financial  information
obtained from a person and privileged or confi- dential." 5 U.S.C. s
552(b)(4); see Letter from Adams to  Tolentino (Oct. 8, 1996),


On November 12, 1996, appellants appealed Customs's  initial refusal to
the Customs FOIA Appeals Officer. See  Letter from R. Frederic Fisher
et al., Counsel for Appellants,  to FOIA Appeals Officer, Customs
(Nov. 12, 1996), reprinted 


in App. 20-26. They explained that the purpose of their  FOIA request
is "to compare the commodity declaration  made ... to the ocean
carrier (as subsequently filed with  Customs on the [IVM]) with the
commodity declaration made  ... directly to Customs [on the Import
Declaration]." Id. at  2, reprinted in App. 21. They argued that the
requested  information is no different in kind than the information 
released to the public on the IVMs, but it is more likely to be 
accurate. According to appellants, then, "[i]f the two com- modity
declarations for the same shipment differ, the only  ... reason for
according confidential treatment of the com- modity declaration to
Customs would be concealment of com- mercial fraud and violations of
the Shipping Act." Id. at 4,  reprinted in App. 23. Moreover,
appellants noted that local  Customs field offices had, in the past,
provided them with the  HTS numbers for certain shipments. See id.
(citing Letter  from Alice M. Rigdon, Customs, to Dan Fetters, Hyundai
 American Shipping Agency (Aug. 14, 1996), reprinted in App. 


On January 16, 1997, the Appeals Officer affirmed the  initial
determination that the requested information fell with- in Exemption
4, explaining that "Customs has long considered  information on entry
documents to be confidential informa- tion, exempt from disclosure."
Letter from Marvin Amer- nick, Customs, to R. Frederic Fisher et al. 2
(Jan. 16, 1997),  reprinted in App. 28.


Appellants subsequently filed suit in District Court, and the  parties
filed cross motions for summary judgment. Without  acting on
appellants' request for oral argument, the court  granted summary
judgment in favor of Customs. See Memo- randum at 10, reprinted in
App. 280. The trial court deter- mined that Customs, by the submission
of detailed affidavits,  had carried its burden and demonstrated that
the release of  the HTS numbers, when linked by an entry number to a 
specific shipment of goods, presented a threat to the competi- tive
position of the importers who provide this information.  See id. The
court also determined that the isolated release of  HTS numbers in the
past by various Customs field offices did  not affect the disposition
of the instant case. See id. at 9, 


reprinted in App. 279 (citing Medina-Hincapie v. Depart- ment of State,
700 F.2d 737, 742 n.20 (D.C. Cir. 1983) (holding  that unauthorized
disclosure of documents does not constitute  a waiver of the
applicable FOIA exemption)). This appeal  followed.


II. Analysis


A. FOIA Exemption 4


The Freedom of Information Act requires that federal  agencies comply
with requests to make their records available  to the public, unless
the requested records fall within at least  one of nine categories of
exempt material. See 5 U.S.C.  s 552(a), (b). Pursuant to Exemption 4,
FOIA exempts from  disclosure "trade secrets and commercial or
financial informa- tion obtained from a person and privileged or
confidential." 5  U.S.C. s 552(b)(4). There is no dispute that the HTS
num- bers requested by appellants are "commercial" and are "ob- tained
from a person," i.e., the importer. The issue in this  case is whether
the numbers are "confidential." Where, as  here, the information is
supplied to the agency under compul- sion, it is treated as
"confidential" only if its disclosure is  likely "(1) to impair the
Government's ability to obtain neces- sary information in the future;
or (2) to cause substantial  harm to the competitive position of the
person from whom the  information was obtained." National Parks &
Conservation  Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974)
(footnote  omitted). Customs did not contend before the District
Court,  nor did it argue on appeal, that disclosure of the numbers 
would impair any Government functions. Therefore, both  parties agree
that the HTS numbers are exempt from disclo- sure only if Customs can
establish that disclosure is likely to  cause substantial harm to the
competitive position of the  importers who supplied the information.
We review de novo  the District Court's grant of summary judgment in
favor of  Customs. See Troy Corp. v. Browner, 120 F.3d 277, 281  (D.C.


B. The Merits


In their briefs to this court, appellants claim that they do  not need
all ten digits of each HTS number in order to  evaluate the accuracy
of the information contained in the  IVMs. Rather, they need only
enough digits in each number  to compare, with the same degree of
specificity, the informa- tion provided by the exporters on the IVMs.
In other words,  TPPA apparently would be satisfied if Customs
disclosed  only, say, four or six digits of each HTS number, and
segre- gated out the remaining digits that provide the highly specif-
ic, confidential information about each shipment. Customs  responds
that appellants waived this argument for redacted  disclosure by
failing to raise it before the District Court, and  that, if
appellants want to raise the issue of segregability,  they must do so
in a new FOIA petition. Appellants acknowl- edge that they did not
expressly seek a segregability finding  in their District Court
pleadings, but claim that it never  occurred to them that Customs was
treating their request as  a request for all ten digits, when it is
obvious (at least to  appellants) that only four or six digits would
serve their  purpose. Regardless, they argue, both the agency and the 
District Court had an affirmative obligation to consider seg-


As an initial matter, we note that, in their briefs to this  court and
at oral argument, appellants did not seriously  dispute the District
Court's determination, based on detailed  affidavits submitted by
experienced Customs officials, that  release of the unredacted
ten-digit HTS numbers would likely  cause importers serious
competitive harm. The affidavits  submitted by Customs explain
precisely how a knowledgeable  person can, by linking HTS numbers to
specific shipments,  uncover information concerning the nature, cost,
profit mar- gin, and origin of the shipments. As the District Court
held,  a person could then "use the HTS numbers to unlock some of  the
ambiguities and inaccuracies on the [IVM], and thereby  gain a picture
of an importer's intentions, profit margin, and  other plans."
Memorandum at 8, reprinted in App. 278.  Appellants have given us no
reason to question the District  Court's judgment in this regard. We
have no doubt that,  based on the record before the District Court,


its burden under Exemption 4, at least with respect to the  unredacted
ten-digit HTS numbers.


The issue, then, is whether we should affirm the grant of  summary
judgment and require appellants to file a new, more  specific FOIA
request, or, instead, reverse and remand to the  District Court for a
determination as to whether the HTS  numbers can be redacted in order
to avoid application of  Exemption 4. We believe that the latter
option is the more  appropriate disposition of this case.


FOIA specifically requires that, if a requested record con- tains
information that is exempt from disclosure under one of  the FOIA
exemptions, "[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. s 552(b); see Oglesby v. United
States Dep't of the  Army, 79 F.3d 1172, 1176 (D.C. Cir. 1996) ("If a
document  contains exempt information, the agency must still release 
'any reasonably segregable portion' after deletion of the 
nondisclosable portions." (quoting 5 U.S.C. s 552(b)). "It has  long
been a rule in this Circuit that non-exempt portions of a  document
must be disclosed unless they are inextricably  intertwined with
exempt portions." Mead Data Cent., Inc. v.  United States Dep't of the
Air Force, 566 F.2d 242, 260 (D.C.  Cir. 1977).


In Board of Trade v. Commodity Futures Trading  Comm'n, 627 F.2d 392,
401 (D.C. Cir. 1980), this court  described the appropriate procedure
for segregating exempt  material from non-exempt material:


Procedurally, when faced with a question of Exemption 4  coverage, the
determining body--agency or court--must  first examine the requested
documents, with details ...  not deleted, and ascertain whether they
contain protect- ed information. If, after applying the appropriate
tests,  the body concludes that all or part of the sought-after 
material is shielded by this exception to [FOIA], it must  then
determine whether suitable deletions of identifying  or exempt matter
may be made which will enable it to  reveal the remaining information.
This technique, which 


we have employed in numerous cases, derives from ex- press provisions
of [FOIA] and its legislative history as  well.


(citations, footnotes, brackets, and internal quotation marks 
omitted). Appellants argue that, because the first four or six  digits
of each HTS number contain a description of the  shipment that is no
more specific than the description already  contained in the
publicly-released IVMs, release of those  digits would not cause the
importers any competitive harm.  However, because it is undisputed
that the HTS number  descriptions are more accurate than the
descriptions con- tained in the IVMs, release of the redacted HTS
numbers  would aid appellants in their public mission and duty to 
combat ocean carrier fraud. Appellants therefore claim that  the
District Court erred in not following the Board of Trade  procedure
and in not ordering Customs to segregate out the  digits in each
requested HTS number that would provide  appellants with a greater
degree of specificity than they need.  Moreover, they assert, because
Board of Trade places respon- sibility for reasonable segregation on
the agency as well as  the court, Customs violated FOIA when it did
not release the  first four or six digits of the HTS numbers in the


Customs responds that the District Court's silence on the  issue of
segregability is perfectly appropriate: because appel- lants never
raised the prospect of redacted HTS numbers, the  court had no reason
to raise it sua sponte, and this court  should not consider it now.
See Brief for Appellee at 12-13.  Customs argues that Board of Trade
and s 552(b) do not  create an affirmative duty on the part of the
agency or the  court to come up with segregability proposals that the
FOIA  plaintiff never even asked for. Customs also suggests that  the
HTS numbers are not reasonably segregable and that it  would be unduly
burdensome for the agency to do what  TPPA seeks.


Customs concedes that each digit in an HTS number  represents a greater
degree of specificity with respect to the  description of the
commodity being imported. Agency coun-


sel further conceded at oral argument that, if the HTS  numbers were
simply translated into words, they undoubtedly  would be "records"
subject to the normal FOIA rules-- including s 552(b), which requires
reasonable segregation.  Thus, appellants have raised a plausible
claim that the HTS  numbers themselves are also "records" subject to
segregabili- ty under FOIA. The question is whether appellants were 
required to expressly suggest to the agency or the District  Court
that the agency segregate out the exempt portions of  these


In hindsight, under Board of Trade and other circuit  precedent, and
pursuant to s 552(b), we believe that the  District Court had an
affirmative duty to consider the segreg- ability issue sua sponte.
This court has remanded in numer- ous cases in which the district
court failed to make such a  finding, although we have never squarely
held that the court  must make a segregability finding even if the
issue has not  been specifically raised by the FOIA plaintiff. See,
e.g.,  Kimberlin v. Department of Justice, 139 F.3d 944, 949-50  (D.C.
Cir. 1998) (remanding to district court, because court  had not made
segregability finding); PHE, Inc. v. Depart- ment of Justice, 983 F.2d
248, 252 (D.C. Cir. 1993) ("[A]  district court clearly errs when it
approves the government's  withholding of information under [FOIA]
without making an  express finding on segregability."); Schiller v.
NLRB, 964  F.2d 1205, 1209-10 (D.C. Cir. 1992) (remanding to district 
court, where "[b]oth the [agency] and the district court  appear to
have overlooked the segregability requirement,"  and where the
"district court did not hold the [agency] to its  obligation to
disclose reasonably segregable information"); cf.  Powell v. United
States Bureau of Prisons, 927 F.2d 1239,  1242 n.4 (D.C. Cir. 1991) ("
'[I]t is error for a district court to  simply approve the withholding
of an entire document without  entering a finding on segregability, or
the lack thereof.' "  (quoting Church of Scientology v. Department of
the Army,  611 F.2d 738, 744 (9th Cir. 1979)). Moreover, appellants' 
failure to raise segregability certainly was not a knowing  waiver of
that argument. At most, it raised the possibility of  a mere
forfeiture. See University of the Dist. of Columbia 


Faculty Ass'n/NEA v. District of Columbia Fin. Responsibil- ity and
Management Assistance Auth., 163 F.3d 616, 625  (D.C. Cir. 1998)
(citing United States v. Olano, 507 U.S. 725,  733 (1993)). In short,
a remand in this case is consistent with  s 552(b) and the aforecited


Furthermore, Customs concedes that, if the case were  dismissed,
appellants could file another, more specific FOIA  request, asking for
as many digits in the HTS numbers as  Customs could release without
risking competitive harm. If  the agency chose to challenge this
hypothetical new request  under Exemption 4, the issue would then be
presented to the  district court (and possibly this court). Agency
counsel con- ceded at oral argument that Customs had nothing of sub-
stance to gain by requiring appellants to file a new FOIA  request at
the administrative level. Thus, as a matter of  judicial economy and
pursuant to our very broad remedial  authority, see 28 U.S.C. s 2106,
it makes sense to remand so  that the District Court--which is already
familiar with the  record in this case--can supplement the record and
make  factual findings in the first instance on appellants' claims. 
See Senate of the Commonwealth of Puerto Rico v. United  States Dep't
of Justice, 823 F.2d 574, 580 (D.C. Cir. 1987)  ("[T]he interests of
judicial finality and economy have special  force in the FOIA
context....") (citation and internal quota- tion marks omitted); Marks
v. CIA, 590 F.2d 997, 1004 n.5  (D.C. Cir. 1978) (Wright, C.J.,
concurring and dissenting)  (noting that "[d]elay ... is particularly
inappropriate in a  FOIA suit"). This reasoning holds especially true
where the  agency gives us no good reason not to remand.


In support of its position that appellants should be required  to file
a new FOIA request, the agency cites only American  Federation of
Government Employees, Local 2782 v. United  States Department of
Commerce, 907 F.2d 203 (D.C. Cir.  1990) ("AFGE"). In that case,
appellants, for the first time  on appeal, offered to narrow their
FOIA request. We de- clined to evaluate the newly-narrowed request de


[i]t is our office ... to review the decision of the district  court in
the case that the appellants, having duly ex- hausted their
administrative remedies, there presented  for decision; it is
distinctly not our role to pass de novo  upon a request for disclosure
that is narrower than the  request that was presented to the agency.


Id. at 208. Our decision to remand in this case is in no way 
inconsistent with the court's disposition in AFGE, because  appellants
here are not asking this court to decide de novo  whether redacted HTS
numbers fall within Exemption 4. As  the court stated in AFGE, we are
in no position to evaluate a  claim for which no record has been
established in the district  court. For example, we have no way of
knowing whether the  disclosure to appellants of only four digits
would cause sub- stantial harm to the competitive position of the
importers. It  is perfectly within our remedial authority, however, to
re- mand to the District Court so that a record can be made on  this
issue, particularly when agency counsel conceded that  nobody's
interests would be served by forcing appellants to  pursue their
request again at the administrative level.


As noted above, our disposition in this case is fully consis- tent with
previous FOIA cases in which this court has re- manded for further
development of the record in light of  matters that did not arise
until the case was in this court on  appeal. See, e.g., Sinito v.
United States Dep't of Justice, No.  98-5227, slip op. at 6, 8 (D.C.
Cir. May 18, 1999) (holding that  a cause of action under FOIA
survives the death of the  original requestor, as long as the
substitute requestor is  found to be the original requestor's legal
representative un- der Rule 25 of the Federal Rules of Civil
Procedure). In  Sinito the court noted


the government's acknowledgment in oral argument that  Rule 25
substitution would not create extra work on the  government's part or
otherwise impede its interests.  Indeed, it would seem to us more
expeditious from the  government's point of view to allow the appeal
to be  pursued on the record already made than to begin the  process
all over again with a new requestor.


Id. at 9. Similarly, in National Parks, after conclusively  defining
for the first time the term "confidential" as used in  Exemption 4, we
remanded to the district court for a determi- nation as to whether the
requested information fell within this  newly-minted definition. See
498 F.2d at 770-71; see also  Lepelletier v. FDIC, 164 F.3d 37, 48-49
(D.C. Cir. 1999)  (refining test for nondisclosure under Exemption 6,
and re- manding to district court for factual determination in accor-
dance with reformulated test); cf. Lehrfeld v. Richardson, 132  F.3d
1463, 1467 (D.C. Cir. 1998) (upholding agency's nondis- closure where
plaintiff had failed to expressly invoke FOIA in  his initial request,
and holding that "it would be futile to  require [plaintiff] to file a
new request expressly invoking  [FOIA]" where it was clear that the
documents sought were  exempt from disclosure).


In short, the decision in AFGE does not state a binding  rule of law
that forecloses remand in a case of this sort.  Quite the contrary, as
the case law shows, and as s 552(b)  requires, this court has not
hesitated to order further pro- ceedings before the district court on
remand to fairly resolve  claims under FOIA. There is certainly no
doubt that the  validity of Exemption 4 to block release of the HTS
numbers  was the issue before the District Court. Understandably, due 
to the somewhat peculiar nature of the information sought--a 
numerical code in which the numbers represent increasing  degrees of
specificity--the District Court did not make a  segregability finding,
as s 552(b) and Board of Trade require.  In any event, pursuant to s
552(b) and Board of Trade, we  exercise our authority to remand.


III. Conclusion


For the reasons stated above, the judgment on appeal is  reversed and
the matter is remanded to the District Court for  the purpose of
determining whether disclosure of redacted  HTS numbers poses a
likelihood of substantial harm to the  competitive position of the
importers from whom the numbers  were obtained.


So ordered.