Brennan Center for Justice v. United States Department of Justice

11-4599

Brennan Center for Justice v. Department of Justice

1 UNITED STATES COURT OF APPEALS

2 FOR THE SECOND CIRCUIT

3 August Term, 2012

4 (Argued: February 21, 2012 Decided: September 19, 2012)

5 Docket No. 11-4599

6 -------------------------------------

7 Brennan Center for Justice at New York University School of Law,

8 Plaintiff-Appellee,

9 - v -

10 United States Department of Justice, United States Agency for

11 International Development, United States Department of Health and

12 Human Services,

13 Defendants-Appellants.*

14 -------------------------------------

15 Before: CALABRESI, SACK, and HALL, Circuit Judges.

16 Appeal from a judgment of the United States District

17 Court for the Southern District of New York (Victor Marrero,

18 Judge) granting the plaintiff's motion for summary judgment and

19 denying the defendants' cross-motion for summary judgment. The

20 court ordered disclosure by the defendants of three memoranda

21 prepared by the Department of Justice's Office of Legal Counsel

22 because they were not covered by the deliberative process

*

The Clerk of Court is respectfully directed to amend the

caption as set forth above.

1 exemption, 5 U.S.C. § 552(b)(5), from the general requirement of

2 disclosure contained in the Freedom of Information Act. We

3 conclude that one such memorandum was incorporated by reference

4 in a USAID document such that the protection of the exemption was

5 surrendered, but that the other two were not and retain their

6 exempt status.

7 Affirmed in part; reversed and remanded in part.

8 Appearances: DOROTHY HEYL (Elizabeth M. Virga, on the

9 brief) Milbank, Tweed, Hadley & McCloy

10 LLP, New York, New York, for Plaintiff-

11 Appellee.

12 SHARON SWINGLE (Benjamin H. Torrance,

13 Sarah S. Normand, Beth S. Brinkmann,

14 Michael S. Raab, on the brief), for

15 Preet Bharara, United States Attorney

16 for the Southern District of New York,

17 New York, New York, for Defendants-

18 Appellants.

19 Melanie Sloan, Anne L. Weismann, Adam J.

20 Rappaport, Citizens for Responsibility

21 and Ethics in Washington, Washington,

22 DC; David L. Sobel, Electronic Frontier

23 Foundation, Washington, DC; Mark Rumold,

24 Electronic Frontier Foundation, San

25 Francisco, California, amici curiae.

26 SACK, Circuit Judge:

27 The defendants, the United States Department of Justice

28 ("DOJ"), the United States Department of Health and Human

29 Services ("HHS"), and the United States Agency for International

30 Development ("USAID"), appeal from a judgment of the United

31 States District Court for the Southern District of New York

2

1 (Victor Marrero, Judge) granting a motion for summary judgment by

2 the plaintiff, the Brennan Center for Justice at New York

3 University School of Law ("Brennan Center"), denying the

4 defendants' cross-motion for summary judgment, and, pursuant to

5 the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, ordering

6 the release of three memoranda prepared by the DOJ's Office of

7 Legal Counsel ("OLC"). For the reasons that follow, the judgment

8 of the district court is affirmed with respect to one of these

9 memoranda, and reversed and remanded with respect to the other

10 two.

11 BACKGROUND

12 In 2003, Congress enacted the two statutes that provide

13 the factual backdrop for this litigation: the United States

14 Leadership Against HIV/AIDS, Tuberculosis, Malaria Act, 22 U.S.C.

15 §§ 7601-7682. ("Leadership Act"), and the Trafficking Victims

16 Protection Reauthorization Act, 22 U.S.C. §§ 7101-7112.

17 ("TVPRA"). Each included what has become known as the "pledge

18 requirement," purporting to require all organizations that

19 receive funds for HIV/AIDS and anti-trafficking work pursuant to

20 the statutes to have "a policy explicitly opposing prostitution

21 and sex trafficking." 22 U.S.C. § 7631(f); see also 22 U.S.C. §

22 7110(g)(2).

23 After the Leadership Act was enacted, the

24 [OLC] . . . warned that applying the Policy

25 Requirement to U.S.-based organizations would

26 be unconstitutional. Heeding that warning,

3

1 [the government] initially refrained from

2 enforcing it against U.S.-based NGOs. OLC

3 subsequently changed course and withdrew what

4 it characterized as its prior "tentative

5 advice," asserting that "there are reasonable

6 arguments to support the constitutionality"

7 of applying the Policy Requirement to

8 U.S.-based organizations, and, starting in

9 mid-2005, the Agencies began applying the

10 Requirement to U.S.-based grantees.

11 Alliance for Open Soc'y Int'l, Inc. v. U.S. Agency for Int'l

12 Dev., 651 F.3d 218, 225 (2d Cir. 2011).1

13 On July 14, 2005, the Brennan Center submitted FOIA

14 requests to USAID, HHS, and the OLC for "any and all documents

15 containing guidance" provided by the OLC to any representatives

16 of HHS or USAID "relating to the enforcement" of the pledge

17 requirement. FOIA Request from Brennan Center to HHS at 1 (July

18 14, 2005), Brennan Center v. Dep't of Justice, No. 11-4599, Joint

19 Appendix ("J.A."), at 248 (2d Cir. Jan. 6, 2012); FOIA Request

20 from Brennan Center to OLC at 1, J.A. 270 (July 14, 2005); FOIA

21 Request from Brennan Center to USAID at 1, J.A. 302 (July 14,

22 2005). On March 7, 2007, HHS denied the request in its entirety

1

Alliance for Open Society was brought by several

organizations, including the Brennan Center, challenging the

pledge requirement on First Amendment grounds. We affirmed the

district court's decision to preliminarily enjoin that provision

of the Leadership Act concluding that it "falls well beyond what

the Supreme Court and this Court have upheld as permissible

conditions on the receipt of government funds [because it] does

not merely require recipients of Leadership Act funds to refrain

from certain conduct, but goes substantially further and compels

recipients to espouse the government's viewpoint." 651 F.3d at

223.

4

1 and referred it to USAID and the OLC, from which, it had

2 determined, many of the requested documents originated.2 The OLC

3 denied the original request in its entirety, and denied the

4 request referred from HHS except as to a nine-page letter

5 commenting on the TVPRA that was already in the public record,

6 which was sent in September 2003 from a DOJ official to

7 Representative James Sensenbrenner, then-Chairman of the House

8 Judiciary Committee. USAID did not respond to the referred

9 request, and denied the original request in its entirety. The

10 Brennan Center appealed the various denials with those agencies,

11 and the agencies affirmed their denials, leaving the Brennan

12 Center with the option of pursuing its claims in federal court.

13 See 5 U.S.C. § 552(a)(4)(B).

14 On October 15, 2009, the Brennan Center brought this

15 action in the United States District Court for the Southern

16 District of New York broadly alleging that USAID, OLC, and HHS

17 had violated FOIA by failing to identify responsive documents,

18 failing to disclose records, failing to disclose reasonably

19 segregable portions of otherwise withheld documents, and, with

20 respect to the OLC and USAID, failing to respond to FOIA

2

HHS located 231 pages of responsive documents, and

withheld 46 pages in their entirety pursuant to FOIA's

deliberative process exemption, see 5 U.S.C. 552(b)(5). It

determined that of the remaining documents, 177 pages originated

with the OLC, and 8 pages with USAID, and referred the Brennan

Center's request to those agencies.

5

1 requests. On January 15, 2010, the defendants provided the

2 plaintiff with an index of withheld documents as required by

3 Vaughn v. Rosen, 484 F.2d 820 (D.C. Cir. 1973). The Vaughn index

4 included the date of each document withheld, the author and

5 recipient(s), a brief description, the number of pages, and the

6 reason for its being withheld. The district court judge met with

7 the defendants on April 22, 2010, and May 5, 2010, and asked them

8 to consider disclosing some or all of the documents in order to

9 avoid further litigation. In response, the defendants released

10 heavily redacted versions of several documents and associated

11 emails. See Order, Brennan Center v. Dep't of Justice, No. 09

12 Civ. 8756, at 1-3 (S.D.N.Y. July 1, 2010), ECF No. 16. To the

13 extent that internal agency emails and memoranda are referenced

14 in this opinion, they are part of the record by virtue of this

15 disclosure.

16 On January 28, 2011, the plaintiff moved for summary

17 judgment seeking release of the entirety of three memoranda that

18 it alleges were improperly withheld pursuant to FOIA's "Exemption

19 5," which shields from disclosure "inter-agency or intra-agency

20 memorandums or letters which would not be available by law to a

21 party other than an agency in litigation with the agency." 5

22 U.S.C. § 552(b)(5). That exemption has been interpreted to

23 encompass traditional common law privileges against disclosure,

24 including the attorney-client and deliberative-process

6

1 privileges, and the work-product doctrine. Nat'l Council of La

2 Raza v. Dep't of Justice, 411 F.3d 350, 356 (2d Cir. 2005). The

3 three withheld documents that are the targets of the Brennan

4 Center's objections are: (1) a one-page memorandum provided by

5 the OLC to HHS and USAID on or about February 17, 2004, regarding

6 the constitutionality of the pledge requirement (the "February

7 Memorandum"); (2) a July 2, 2004, draft of a formal, but never-

8 finalized, OLC opinion addressing the constitutionality of the

9 pledge requirement (the "July 2 Memorandum"); and (3) a July 29,

10 2004, draft memorandum similar to the July 2 Memo (the "July 29

11 Memorandum").

12 The February Memorandum

13 On February 12, 2004, the General Counsel of HHS asked

14 the OLC to provide, on a "very short timeframe," "advice on the

15 constitutional issues raised by the grant restrictions under the

16 two statutes." Memorandum from Renee Lettow Lerner at 2, J.A. 55

17 (March 12, 2004) (describing HHS request).

18 In response, on February 17, Renee Lettow Lerner, an

19 OLC attorney, sent an email to HHS Deputy General Counsel Paula

20 M. Stannard and USAID employee John Gardner attaching a one-page

21 memorandum containing at least some of the requested advice.3

3

All correspondence regarding the February Memorandum

involved both USAID and HHS, although the March 12, 2004, letter

suggests the advice was provided only at the behest of HHS. We

have not found any explanation in the record for this

7

1 The memorandum explained that "[i]n the limited time available to

2 us, we have not been able to conduct a comprehensive analysis,

3 but we have reached the following tentative views, which might

4 need to be altered after further analysis." February Memorandum

5 at 1, J.A. 37. The document, the first of the three memoranda

6 that are the subject of this litigation, was supplied to the

7 plaintiff during the course of this litigation with all analysis

8 redacted.

9 In an email later that evening, Stannard conveyed

10 "draft language for the HIV/AIDS and trafficking grant

11 awards/agreements" to Lerner. Email from Stannard, "Re: OLC's

12 advice on grant announcements," J.A. 40 (Feb. 17, 2004). She

13 also sent a copy to the USAID employee. Again, a copy of the

14 email was supplied to the Brennan Center, but most of it was

15 redacted. Lerner replied to Stannard the following day, February

16 18, in an email that was, in effect, withheld from disclosure,

17 i.e., it is redacted in its entirety.

18 On February 19, a USAID employee, acting on behalf of

19 USAID employee Gardner, sent that agency's revised "Acquisition &

20 Assistance Policy Directive" ("AAPD")4 to Lerner, Stannard, and

discrepancy.

4

"AAPDs serve as official sources for the latest updates

in acquisition and assistance (A&A) policy and requirements.

AAPDs provide information of significance including, but not

limited to, advance notification of changes or implementation of

8

1 other HHS and State Department employees. Later that day,

2 Stannard and HHS employee Demetrios Kouzoukas sent "a final draft

3 of the language" to Lerner, Gardner, and other HHS, USAID, and

4 State Department employees, and thanked those on the email chain

5 for their comments. Email from Demetrios Kouzoukas, "Language in

6 HHS HIV/AIDS award instruments," J.A. 48 (Feb. 19, 2004).

7 One week later, on February 26, 2004, USAID issued an

8 AAPD intended to "provide clauses to be included as new standard

9 provisions for assistance agreements and contracts that include

10 FY 2004 HIV/AIDS funds." USAID AAPD 04-04 Revised,

11 "Implementation of the United States Leadership Against HIV/AIDS,

12 Tuberculosis and Malaria Act of 2003" at 2, J.A. 167 (Feb. 26,

13 2004) ("February 26 AAPD"). The February 26 AAPD included the

14 pledge requirement only for "Non-U.S. Non-Governmental

15 Organizations and Public International Organizations." Id. at 5.

16 That meant that any grant to a foreign organization would include

new requirements to A&A regulations and procedures." Acquisition

and Assistance Policy Directives (AAPDs) and Contract Information

Bulletins (CIBs), available at

http://transition.usaid.gov/business/business_opportunities/cib/

(last visited August 3, 2012). "Acquisition refers to obtaining

goods and services, through various types of contracts, for the

use or benefit of the Agency. Assistance refers to transferring

funds (or other valuables) from USAID to another party for the

implementation of programs which will contribute to the public

good . . . ." Doing Business with USAID, available at

http://transition.usaid.gov/business (last visited August 8,

2012). No evidence in the record of which we are aware refers to

any formal process that might exist for the creation or approval

of AAPDs.

9

1 a clause explaining that "[a]s a condition of entering into this

2 agreement, the recipient agrees that it has a policy explicitly

3 opposing, in its activities outside the United States,

4 prostitution and sex trafficking." Id. at 6. No similar

5 language would be included in the grant language required with

6 respect to U.S. organizations. An AAPD that had been issued on

7 January 15, 2004, prior to the OLC's February memorandum, did

8 include the pledge requirement language for both U.S. and non-

9 U.S. organizations. USAID AAPD 04-04, "Implementation of the

10 United States Leadership Against HIV/AIDS, Tuberculosis and

11 Malaria Act of 2003" at 3, J.A. 162 (Jan. 15, 2004).

12 On June 24, 2004, HHS issued a grant proposal that

13 required "any foreign recipient [to] have a policy explicitly

14 opposing, in its activities outside the United States,

15 prostitution and sex trafficking." HHS Funding Announcement,

16 "HIV Treatment for Research Subjects or by Researchers in Kenya"

17 at 7, J.A. 176 (June 24, 2004). A July 22, 2004, USAID document

18 contained a footnote explaining that the OLC "in a draft opinion

19 determined that this provision only may be applied to foreign

20 non-governmental organizations and public international

21 organizations because of the constitutional implications of

22 applying it to U.S. organizations." USAID FY 2004 Update,

23 "Guidance on the Definition and Use of the Child Survival and

24 Health Programs Fund and the Global HIV/AIDS Initiative Account"

10

1 at 35 n.10, J.A. 197 (July 22, 2004) ("July 22 USAID Update").

2 On August 3, 2004, USAID issued another AAPD explaining that

3 "[t]he US Government has determined that it is appropriate to

4 apply the [pledge] requirement . . . only to foreign

5 organizations, including public international organizations."

6 USAID AAPD 04-09, "Anti-Trafficking Activities –- Limitation on

7 the Use of Funds; Restriction on Organizations Promoting,

8 Supporting or Advocating Prostitution" at 3, J.A. 200 (Aug. 3,

9 2004) ("August 3 AAPD").

10 The July Memoranda

11 In a July 2, 2004 email, the OLC provided HHS with a

12 thirty-page draft opinion –- the second document the plaintiff

13 seeks. Another version of that draft, dated July 29, the third

14 document that the plaintiff contends must be disclosed, was

15 emailed to HHS on July 30. In the record on appeal, both draft

16 opinions are redacted with the exception of a date, title, and

17 introductory sentence. After an in camera review, however, the

18 district court concluded that contrary to the OLC's view conveyed

19 in February, those drafts counseled implementation of the pledge

20 requirement for both U.S.-based and foreign organizations.5

5

Despite the July 2004 memoranda that opined that the

pledge requirement could constitutionally be applied to domestic

activities, in July and August, USAID continued to advise that

the requirement would only be applied to foreign organizations,

as evidenced by the July 22 USAID Update and August 3 AAPD.

11

1 Brennan Center v. Dep't of Justice, No. 09 Civ. 8756 at 17-18,

2 2011 WL 4001146, at *7, 2011 U.S. Dist. LEXIS 99121, at *19

3 (S.D.N.Y. Aug. 30, 2011). No formal OLC opinion on the issue was

4 ever finalized or issued.

5 In September 2004, Daniel Levin, the Acting Assistant

6 Attorney General for the OLC, wrote to the general counsel of HHS

7 confirming that "earlier this year . . . [DOJ] gave its tentative

8 advice" that the pledge requirement could only be applied to

9 foreign organizations overseas, but explained that "[w]e have

10 reviewed the matter further and we are withdrawing that tentative

11 advice. . . . [T]here are reasonable arguments to support [the

12 domestic pledge requirement's] constitutionality." Letter from

13 Levin to HHS General Counsel Alex M. Azar, II at 1, J.A. 207

14 (Sept. 20, 2004)("Levin Letter"). This letter was not released

15 by either the OLC or HHS, but, according to the defendants, it

16 was "improperly leaked . . . [and] later made public by members

17 of Congress." Defs.' Br. at 13.

18 The first public discussion of the agencies'

19 deliberations concerning the pledge requirement was held during a

20 March 2005 hearing of the Foreign Operations Subcommittee of the

21 House Appropriations Committee. Randall Tobias, who was then

22 U.S. Global AIDS coordinator, testified that

23 [t]he [OLC] provided some tentative advice

24 initially that those restrictions should be

25 applied only to foreign organizations.

12

1 Sometime mid- to late- . . . September of

2 2004, [the OLC] withdrew that earlier

3 tentative advice and advised that that

4 provision was intended by the Congress to

5 apply without that limitation to both

6 domestic organizations as well as foreign

7 organizations. And so I'm simply following

8 the legislation and the advice to implement

9 that.

10 Foreign Operations, Export Financing, and Related Programs

11 Subcommittee Hearing Testimony of Randall L. Tobias, J.A. 236

12 (March 2, 2005)("Tobias Testimony").

13 In May 2005, HHS announced that it would apply the

14 pledge requirement to domestic organizations, and USAID did the

15 same in June 2005.

16 In a July 17, 2007, letter from Principal Deputy

17 Assistant Attorney General Brian Benczkowski to Congressman Henry

18 Waxman, Benczkowski further explained the OLC's positions on the

19 pledge requirement. "[I]n February 2004, the [OLC] provided

20 tentative advice [to HHS and USAID] that the [pledge

21 requirement] . . . could, under the Constitution, be applied only

22 to foreign organizations acting overseas." Letter from Brian

23 Benczkowski to Congressman Waxman at 1, J.A. 230 (July 17,

24 2007)("Benczkowski Letter"). But Benczkowski explained that the

25 OLC had thereafter changed its mind and advised in the September

26 2004 letter that the pledge requirement could be applied

27 domestically because there were "reasonable arguments to defend"

28 doing so. Id. at 1-2. The letter also noted that the OLC would

13

1 not turn over its internal documents on the issue because of

2 "substantial confidentiality interests."6 Id. at 2.

3 The District Court Opinion

4 The district court considered the foregoing evidence in

5 analyzing the question of whether the agencies had

6 "expressly . . . adopt[ed] or incorporate[d]" the memoranda

7 sufficiently to waive the protection of Exemption 5. Brennan

8 Center, 2011 WL 4001146, at *3, 2011 U.S. Dist. LEXIS 99121, at

9 *8-*9 (quoting La Raza, 411 F.3d at 356); see also discussion of

10 Exemption 5, at Part II of the Discussion section of this

11 opinion, below. In ordering disclosure of the memoranda, the

12 court concluded that the deliberative-process privilege did not

13 apply.

14 It is clear from the various AAPDs, internal

15 government letters and memoranda, public

6

Several news articles –- at least one of which was

published before the agencies themselves had spoken publicly --

also noted the OLC's advice on this issue. A February 28, 2005,

Wall Street Journal article explained that "[t]he Bush

Administration had previously applied the requirement only to

overseas groups because the Justice Department initially advised

that it would be an unconstitutional violation of free speech to

demand that American grant applicants support Mr. Bush's policy.

But the Justice Department reversed itself last fall." Michael

M. Phillips, Bush Ties Money for AIDS Work to a Policy Pledge,

WALL ST. J., Feb. 28, 2005. A May 18, 2005, Washington Post

article similarly said that "[i]nitially, the policy was applied

only to foreign organizations operating overseas. U.S.-based

charities were exempt because the Justice Department believed

that forcing them to make the declaration might infringe their

First Amendment right of free speech." David Brown, U.S. Backs

Off Stipulation on AIDS Funds, WASH. POST, May 18, 2005.

14

1 statements made by Government officials, and

2 other materials reviewed by the Court in

3 camera that, between February and September

4 2004, USAID and HHS adopted as agency policy

5 both the conclusions provided in the February

6 Memo that the Pledge Requirement should be

7 applied to foreign organizations only, as

8 well as OLC's reasoning and analysis that

9 application of the Pledge Requirement to

10 domestic organizations would violate the

11 First Amendment. Indeed, from the public

12 record alone, there can be little doubt that

13 this was the case. . . .

14 Further, the record also reveals that the

15 conclusions and analysis contained in the

16 July Memoranda, which the Court has examined

17 in camera, were the basis for the

18 Government's determination to alter its

19 policy and apply the Pledge Requirement to

20 U.S.-based organizations. . . . [A]lthough

21 the documents were never mentioned

22 specifically by name, the Government

23 incorporated the July Memoranda by reference

24 [in the relevant public statements].

25 Brennan Center, 2011 WL 4001146, at *6-*7, 2011 U.S.

26 Dist. LEXIS 99121, at *17-*19.

27 The court also concluded that because the memoranda had

28 been "incorporated . . . into HHS's and USAID's official policy"

29 they were not protected by the attorney-client privilege. Id. at

30 *7, 2011 U.S. Dist. LEXIS 99121, at *20. The court therefore

31 granted the plaintiff's motion for summary judgment, denied the

32 defendants' cross-motion for summary judgment, and ordered the

33 disclosure of all three memoranda.

34 The defendants appeal.

15

1 DISCUSSION

2 I. Standard of Review

3 "We review de novo a district court's grant of summary

4 judgment in a FOIA case," La Raza, 411 F.3d at 355, as, of

5 course, we review all such motions, see, e.g., Oneida Indian

6 Nation of N.Y. v. Madison County, 665 F.3d 408, 424 (2d Cir.

7 2011), and cross motions, for summary judgment, see, e.g.,

8 Terwilliger v. Terwilliger, 206 F.3d 240, 244 (2d Cir. 2000).

9 Summary judgment is appropriate if there is "no genuine dispute

10 as to any material fact" and the moving party is "entitled to

11 judgment as a matter of law." Fed. R. Civ. P. 56(a). The

12 parties do not dispute that this matter was properly decided on

13 cross motions for summary judgment, although, of course, they

14 differ as to which side should have prevailed.

15 II. Deliberative Process Exemption

16 A. Basic Principles.

17 1. Generally.

18 Consistent with its purpose to "promote honest and open

19 government[,] and to assure the existence of an informed

20 citizenry in order to hold the governors accountable to the

21 governed[,] FOIA strongly favors a policy of disclosure." La

22 Raza, 411 F.3d at 355 (internal quotation marks, alterations, and

23 citations omitted). It "requires the government to disclose its

24 records unless its documents fall within one of the specific,

16

1 enumerated exemptions set forth in the Act. Consistent with

2 FOIA's purposes, these statutory exemptions are narrowly

3 construed." Id. at 355-56 (citations omitted). The agency bears

4 the burden of demonstrating that an exemption applies. Id. at

5 356.

6 The memoranda being sought by the Brennan Center in

7 this case were withheld by the government defendants pursuant to

8 FOIA Exemption 5, which exempts "inter-agency or intra-agency

9 memorandums or letters which would not be available by law to a

10 party other than an agency in litigation with the agency" from

11 the disclosure otherwise required under the Act. 5 U.S.C.

12 § 552(b)(5). The privilege is based "on the policy of protecting

13 the decision making processes of government agencies." NLRB v.

14 Sears, Roebuck, & Co., 421 U.S. 132, 150 (1975) (internal

15 quotation marks omitted). Prior case law examining it "focuses

16 on documents reflecting advisory opinions, recommendations and

17 deliberations comprising part of a process by which governmental

18 decisions and policies are formulated." Id. (internal quotation

19 marks and alteration omitted).

20 "[T]here are enough incentives as it is for

21 playing it safe and listing with the wind,"

22 Ackerly v. Ley, 137 U.S. App. D.C. 133, 138,

23 420 F.2d 1336, 1341 (1969), and as [the Court

24 has] said in an analogous context, "[h]uman

25 experience teaches that those who expect

26 public dissemination of their remarks may

27 well temper candor with a concern for

28 appearances . . . to the detriment of the

17

1 decisionmaking process." United States v.

2 Nixon, 418 U.S. 683, 705 (1974) . . . .

3 Sears, 421 U.S. at 150-51 (emphasis omitted; second alteration in

4 original); see also Wolfe v. Dep't of Health & Human Servs., 839

5 F.2d 768, 773 (D.C. Cir. 1988)(en banc)("Congress adopted

6 Exemption 5 because it recognized that the quality of

7 administrative decision-making would be seriously undermined if

8 agencies were forced to operate in a fishbowl.").

9 "An inter- or intra-agency document may be withheld

10 pursuant to the deliberative process privilege [i.e.,

11 section 552(b)(5)] if it is: (1) 'predecisional,' i.e., 'prepared

12 in order to assist an agency decisionmaker in arriving at his

13 decision,' and (2) 'deliberative,' i.e., 'actually . . . related

14 to the process by which policies are formulated.'" La Raza, 411

15 F.3d at 356 (quoting Grand Cent. P'ship, Inc. v. Cuomo, 166 F.3d

16 473, 482 (2d Cir. 1999)); see also Grand Cent. P'ship, 166 F.3d

17 at 482 ("The privilege protects recommendations, draft documents,

18 proposals, suggestions, and other subjective documents which

19 reflect the personal opinions of the writer rather than the

20 policy of the agency." (internal quotation marks omitted)).

21 However, even if the documents at issue are

22 "predecisional" and "deliberative," and thereby fall under the

23 scope of Exemption 5, there are circumstances under which they

24 will be found outside the scope of that protection. As discussed

18

1 more thoroughly below, these exceptions include: (1) when the

2 contents of the document have been "adopted, formally or

3 informally, as the agency position on an issue or [are] used by

4 the agency in its dealings with the public," La Raza, 411 F.3d at

5 356-57 (quoting Coastal States Gas Corp. v. Dep't of Energy, 617

6 F.2d 854, 866 (D.C. Cir. 1980)); and (2) when the document is

7 more properly characterized as an "opinion[] [or]

8 interpretation[] which embod[ies] the agency's effective law and

9 policy," in other words, its "working law," Sears, 421 U.S. at

10 153 (internal quotation marks omitted).

11 In short, the document claimed to be exempt will be

12 found outside Exemption 5 if it closely resembles that which FOIA

13 affirmatively requires to be disclosed: "final opinions . . .

14 made in the adjudication of cases," "statements of policy and

15 interpretations which have been adopted by the agency and are not

16 published in the Federal Register," and "administrative staff

17 manuals and instructions to staff that affect a member of the

18 public." 5 U.S.C. § 552(a)(2)(A)-(C).7

19 2. The Scope of Exemption 5. Although Exemption 5 is

20 set out by statute, it is the Supreme Court's decision in Sears

7

The litigation posture of Exemption 5 cases, the present

one being no exception, focuses on the government proving the

applicability of an exemption rather than the plaintiff proving

applicability of one of the affirmative provisions because the

burden rests on the government to shield documents from

disclosure otherwise to be disclosed under FOIA.

19

1 that delineates the limits of that exemption, and which has been

2 the starting point for all of our discussions of it, as it is in

3 this case.

4 The Sears Court explained the circumstances under which

5 a document otherwise subject to Exemption 5 might lose its

6 protection. The plaintiff had submitted a FOIA request for

7 "Advice and Appeals Memoranda" prepared by the General Counsel of

8 the National Labor Relations Board ("NLRB") discussing potential

9 charges against various employers. 421 U.S. at 142-43.

10 The Court began by analyzing the process by which such

11 memoranda were created. Typically, the NLRB General Counsel

12 required certain charging decisions from its regional offices

13 first to be submitted to its central office so that the agency

14 had an "opportunity to formulate a coherent policy, and to

15 achieve some measure of uniformity, in enforcing the labor laws."

16 Id. at 141. A regional director submitted a memorandum that

17 "set[] forth the facts of the case, a statement of the issues on

18 which advice [was] sought, and a recommendation." Id. The

19 General Counsel's office then assigned the case to a staff

20 attorney who assisted in preparing the "Advice and Appeals

21 Memorandum" that "briefly summarize[d] the facts, . . . set forth

22 the . . . legal or policy issue submitted together with a

23 detailed legal rationale, and contain[ed] instructions for the

24 final processing of the case." Id. at 142 (internal quotation

20

1 marks omitted). Based on that memorandum, the regional director

2 then decided whether or not to prosecute the charge. Id.

3 The Court observed that while "the public is vitally

4 concerned with the reasons . . . [for] an agency policy actually

5 adopted," or "those communications which explain [a] decision,"

6 "[t]he public is only marginally concerned with reasons

7 supporting a policy which an agency has rejected, or with reasons

8 which might have supplied, but did not supply, the basis for a

9 policy which was actually adopted on a different ground." Id. at

10 152.

11 The reasons for a decision made by an agency, or a

12 policy actually adopted, however, "constitute the 'working law'

13 of the agency." Id. at 153. Therefore, the exemption "properly

14 construed, calls for 'disclosure of all opinions and

15 interpretations which embody the agency's effective law and

16 policy, and the withholding of all papers which reflect the

17 agency's group thinking in the process of working out its policy

18 and determining what its law shall be.'" Id. (quoting Kenneth

19 Culp Davis, The Information Act: A Preliminary Analysis, 34 U.

20 Chi. L. Rev. 761, 797 (1967)) (some internal quotation marks

21 omitted). "This conclusion is powerfully supported by . . .

22 [t]he affirmative portion of the Act, [which] expressly

23 requir[es] indexing of 'final opinions,' 'statements of policy

24 and interpretations which have been adopted by the agency,' and

21

1 'instructions to staff that affect a member of the public.'"8

2 Sears, 421 U.S. at 153 (quoting 5 U.S.C. § 552(a)(2)). Those

3 affirmative provisions, it reasoned, "represent[] a strong

4 congressional aversion to secret agency law, and represent[] an

5 affirmative congressional purpose to require disclosure of

6 documents which have the force and effect of law." Id. (internal

7 quotation marks, alterations, and citations omitted).

8 The Court concluded that NLRB memoranda that advised no

9 action be taken, and thereby ended the inquiry and left the

10 responsible regional director with "no decision to make," fell

11 outside of Exemption 5 and therefore had to be disclosed. Id. at

12 155. They "are precisely the kind of agency law in which the

13 public is so vitally interested and which Congress sought to

14 prevent the agency from keeping secret." Id. at 156.

15 After determining that these memoranda were the type of

16 "agency law" which it concluded were non-exempt, the Court then

17 explained that "[f]or essentially the same reasons, these

18 memoranda are 'final opinions' made in the 'adjudication of

8

The Sears Court subsumed into its "working law" or

"agency law" analysis all three of section 552(a)(2)'s

affirmative provisions, and did not, for example, discuss "final

opinions" separately from "statements of policy and

interpretations which have been adopted by the agency." In many

cases, as in Sears, the line between a "final opinion" and a

"statement of policy and interpretation[]" is blurry, and the

"working law" analysis therefore provides an interpretation aimed

at aiding courts when presented with documents that fall between

these categories.

22

1 cases' . . . pursuant to 5 U.S.C. § 552(a)(2)(A)," and thus must

2 be disclosed. Id. at 158. By contrast, the reasoning and

3 conclusions behind memoranda that advise prosecution "will come

4 out in the course of litigation before the Board; and . . . the

5 'law' with respect to these cases will ultimately be made not by

6 the General Counsel but by the Board or the courts." Id. at 160.

7 The Court then addressed a separate path towards the

8 loss of Exemption 5's protection –- whether predecisional and

9 deliberative documents fall outside of that exemption if

10 "adopt[ed] or incorporate[d] by reference" into "what would

11 otherwise be a final opinion," in other words, in a document that

12 has already been found to be nonexempt. The Court concluded that

13 they did.

14 The probability that an agency employee will

15 be inhibited from freely advising a

16 decisionmaker for fear that his advice if

17 adopted, will become public is slight.

18 First, when adopted, the reasoning becomes

19 that of the agency and becomes its

20 responsibility to defend. Second, agency

21 employees will generally be encouraged rather

22 than discouraged by public knowledge that

23 their policy suggestions have been adopted by

24 the agency. Moreover, the public interest in

25 knowing the reasons for a policy actually

26 adopted by an agency supports . . . [the

27 decision to order disclosure]. Thus, we hold

28 that, if an agency chooses expressly to adopt

29 or incorporate by reference an intra-agency

30 memorandum previously covered by Exemption 5

31 in what would otherwise be a final opinion,

32 that memorandum may be withheld only on the

33 ground that it falls within the coverage of

34 some exemption other than Exemption 5.

23

1 Id. at 161 (emphasis in original).

2 On the same day that the Supreme Court decided Sears,

3 it also decided Renegotiation Board v. Grumman Aircraft

4 Engineering Corp., 421 U.S. 168 (1975), a companion case further

5 exploring the limits of Exemption 5. Grumman had requested

6 documents created during the Renegotiation Board's process of

7 "deciding whether certain Government contractors have earned, and

8 must refund, 'excessive profits' on their Government contracts."

9 Id. at 170. After exhaustively reviewing the process by which

10 these documents were created, the Court explained that if a

11 "Division Report" was created recommending a course of action, it

12 would be given to the Renegotiation Board for its review. Id. at

13 176-77. But "[n]either the Board nor any of its members were

14 bound by any prior recommendations. The Board was free, after

15 discussion, to reject the proposed conclusion reached in the

16 Division Report, or to accept it for reasons other than those set

17 forth in the report." Id. at 177. Similarly, although under a

18 different process, a "Regional Board Report" could be created.

19 Id. at 178-79.

20 The Court concluded that these reports were not subject

21 to disclosure because "the evidence utterly fails to support the

22 conclusion that the reasoning in the reports is adopted by the

23 Board as its reasoning, even when it agrees with the conclusion

24 of a report." Id. at 184 (emphasis in original). The reports

25 themselves had "no operative effect," and therefore could not be

24

1 characterized as "final opinions," within the meaning of FOIA's

2 affirmative disclosure provisions. Id. at 187. "[A]bsent

3 indication that [a report's] reasoning has been adopted, there is

4 little public interest in [its] disclosure." Id. at 186. The

5 reports therefore retained their protection under Exemption 5.

6 The Grumman Court acknowledged that some agency

7 decisions may simply not have any accompanying public rationale.

8 "The effect of this decision [then] is that, in those cases in

9 which [the Renegotiation Board does not offer a summary of its

10 reasoning], the public will be largely uninformed as to the basis

11 for [its] decisions." Id. at 191.

12 The Freedom of Information Act imposes no

13 independent obligation on agencies to write

14 opinions. It simply requires them to

15 disclose the opinions which they do write.

16 If the public interest suffers by reason of

17 the failure of the Board to explain some of

18 its decisions, the remedy is for Congress to

19 require it to do so. It is not for us to

20 require disclosure of documents, under the

21 purported authority of the Act, which are not

22 final opinions, which do not accurately set

23 forth the reasons for the Board's decisions,

24 and the disclosure of which would impinge on

25 the Board's predecisional processes.

26 Id. (citation omitted).

27 Although Grumman did not explain its reasoning using

28 the same terminology as Sears, it also provided two somewhat

29 distinct paths through which Exemption 5's protections could be

30 lost: (1) if the reports had "operative effect" and were

31 therefore akin to "final opinions" –- the equivalent of "working

25

1 law" in Sears's language; or (2) if the reports' reasoning and

2 conclusions had been adopted by the Board in issuing its own

3 decision –- the equivalent of "express adoption or incorporation

4 by reference" in Sears.

5 3. Express Adoption or Incorporation by Reference. We

6 have had several occasions on which to apply the Supreme Court's

7 Exemption 5 jurisprudence, in particular Sears's "express

8 adoption" or "incorporation by reference" holding, on which the

9 district court relied. The most relevant for present purposes

10 was our decision in La Raza. There we considered whether the

11 FOIA required disclosure of an OLC memorandum prepared for the

12 DOJ on the subject of whether state and local law enforcement

13 officials could lawfully enforce certain provisions of federal

14 immigration law. La Raza, 411 F.3d at 352. The DOJ argued that

15 "it did not expressly adopt or incorporate the OLC memorandum"

16 into a final opinion, and it was therefore protected by the

17 deliberative-process exemption, or the attorney-client privilege.

18 Id.

19 Since 1996, the DOJ had been of the view that state and

20 local law enforcement could not enforce the civil provisions of

21 federal immigration law -- "such as overstaying one's visa or

22 entering the United States without proper documentation." Id. at

23 352-53 & n.1. The OLC had issued a memorandum supporting this

24 position, which it had released publicly. Id. at 353.

26

1 In 2002, under a new presidential administration, the

2 DOJ changed its policy. Id. Then-Attorney General John Ashcroft

3 announced an immigration initiative employing state and local

4 agencies to enforce specified civil provisions of federal

5 immigration law. In a June 5, 2002, press conference explaining

6 the new initiative, the Attorney General reported that "[OLC] has

7 concluded that this narrow, limited mission we are asking state

8 and local police to undertake voluntarily –- arresting aliens who

9 have violated . . . civil provisions that render an alien

10 deportable [–-] is within the inherent authority of the states."

11 Id.

12 On March 11, 2003, General Ashcroft wrote a letter to

13 an organization that had expressed an interest in the matter

14 explaining that "[OLC] previously opined that state and local law

15 enforcement officials have inherent authority to make arrests for

16 criminal immigration law violations generally." Id. At least

17 three other letters from the Attorney General and an Acting

18 Assistant Attorney General containing similar language were

19 submitted to members of Congress. Id. at 354. And in June 2003,

20 another member of the Attorney General's office, speaking to a

21 group of local and state police department officials who were

22 part of an FBI advisory board, offered a detailed explanation of

23 the policy in which he repeatedly referenced the OLC's advice.

24 Id. at 354-55.

27

1 We concluded that the "repeated references" made by the

2 Attorney General and high-ranking DOJ officials to the document

3 "demonstrate[d] that the Department regarded the [m]emorandum as

4 the exclusive statement of, and justification for, its new

5 policy . . . ." Id. at 357. The DOJ thus "made a practice of

6 using the OLC Memorandum to justify and explain the Department's

7 policy and to assure the public and the very state and local

8 government officials who would be asked to implement the new

9 policy that the policy was legally sound." Id. at 358. The

10 memorandum was, indeed, the "primary legal authority justifying

11 and driving" the change in policy.9 Id.

12 We thus concluded that the document had been expressly

13 adopted or incorporated by reference, and ordered it to be

14 released. Id.

15 Our decision in Wood v. FBI, 432 F.3d 78 (2d Cir.

16 2005), rested on a rationale similar to that employed by the

17 Supreme Court in Grumman. There, a reporter sought disclosure of

18 a memorandum prepared by DOJ trial attorneys related to an

19 investigation of FBI agents alleged to have lied in affidavits

20 supporting arrest warrant applications. Id. at 80. We affirmed

9

Referring to Grumman, we noted that "there must be

evidence that an agency has actually adopted or incorporated by

reference the document at issue; mere speculation will not

suffice." La Raza, 411 F.3d at 359 (emphasis in original). We

also observed that "a casual reference to a privileged document

does not necessarily imply that an agency agrees with the

reasoning contained in those documents." Id.

28

1 the district court's conclusion that the memorandum was properly

2 withheld under the work-product privilege pursuant to Exemption

3 5,10 and had not been incorporated by reference or expressly

4 adopted by the agency. Id. at 84.

5 The plaintiff had argued that a note on the memorandum

6 by a high-ranking DOJ official indicating that he would decline

7 prosecution constituted express adoption or incorporation by

8 reference of the memorandum itself. But, we said:

9 This brief notation does not indicate that

10 DOJ adopted the reasoning of the . . .

11 [m]emo. Neither [the endorsing official] nor

12 any other high-level DOJ officials made any

13 public references to the . . . [m]emo. There

14 is no evidence in the record from which it

15 could be inferred that DOJ adopted the

16 reasoning of the [m]emo, and, as we explained

17 in . . . La Raza, this failure is fatal.

18 Id. at 84.11

10

The court did "not reach the question of whether [the La

Raza] doctrine would require the disclosure of otherwise exempt

attorney work-product," as opposed to documents exempt under the

deliberative process exemption. Wood, 432 F.3d at 84.

11

Shermco Industries Inc. v. Secretary of Air Force, 613

F.2d 1314 (5th Cir. 1980) is similar. The court reversed a

district court's conclusion that a memorandum discussing a bid

award, which had been forwarded to the GAO as part of bid protest

proceedings, lost its deliberative character. Id. at 1320.

First, the court noted that "the decision [on to whom to award

the bid] was not yet final." Id. at 1319. Second, "even if it

were a final decision, these memoranda were not expressly

incorporated by reference into the [final decision by the Air

Force to award the contract]. They had been used by the Air

Force internally in reaching their initial conclusion that [a

Shermco competitor] was the lowest bidder, and they were produced

to the GAO in aid of their defense against Shermco's protest, but

they were never attached to any formal written decision by the

Air Force." Id. at 1320.

29

1 4. The "Working Law" Principle. While our previous

2 cases and the proceedings thus far in this one have largely

3 focused on the issue of whether a memorandum has been expressly

4 adopted or incorporated by reference, Sears also requires us to

5 ask whether the OLC opinion constitutes the "working law of the

6 agency" and therefore must be disclosed.

7 If an agency's memorandum or other document has become

8 its "effective law and policy," it will be subject to disclosure

9 as the "working law" of the agency, Sears, 421 U.S. at 153, much

10 the same as it would be if expressly adopted or incorporated by

11 reference into a nonexempt document, id. at 161-62. The Sears

12 Court explained that the purposes undergirding FOIA required

13 disclosure in either instance. Compare id. at 152 (explaining

14 that "working law" should be disclosed because "the public is

15 vitally concerned with the reasons which did supply the basis for

16 an agency policy actually adopted"), with id. at 161 (explaining

17 that documents expressly adopted or incorporated should be

18 disclosed in part because of "the public interest in knowing the

19 reasons for a policy actually adopted by an agency"). As

20 explained above, the "working law" analysis is animated by the

21 affirmative provisions of FOIA, see 5 U.S.C. § 552(a)(2)(A)-(C),

22 and documents must be disclosed if more akin to that which is

23 required by the Act to be disclosed than that which may be

30

1 withheld under Exemption 5. Sears separately analyzed each of

2 these two means by which Exemption 5 protection may be lost.12

3 Not surprisingly given the nature of much of its

4 caseload, the D.C. Circuit has become something of a specialist

5 in the "working law" exception. The circuit analyzed it at some

6 length in Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d

7 854 (D.C. Cir. 1980). There, the plaintiff sought copies of

8 Department of Energy interpretations of its regulations,

9 specifically "memoranda from regional counsel to auditors working

10 in [the Department of Energy ("DOE")]'s field offices, issued in

11 response to requests for interpretations of regulations within

12 the context of particular facts encountered while conducting an

13 audit of a firm." Id. at 858. The agency argued against

14 disclosure, contending that the memoranda were not binding on the

12

The Eleventh Circuit is one of the few courts to have

examined the link between these two elements of Sears.

[D]ata "expressly adopt[ed] or incorporate[d]

by reference" means predecisional

deliberative material which is adopted and

approved by the agency as its "effective law

and policy." By expressly adopting the

reasoning of her subordinate, the

decisionmaker has in effect converted a

rejected proposal into the rationale for the

agency's working law. As a consequence, the

documents are no longer considered

predecisional[,] for they now support and

explain the agency's position in the same

manner a postdecisional document explains an

agency decision.

Fla. House of Representatives v. Dep't of Commerce, 961 F.2d 941,

945 n.4 (11th Cir.) (citation omitted), cert. dismissed, 506 U.S.

969 (1992).

31

1 audit staff -- the staff was free to disregard the conclusions

2 reached in those memoranda. Id. at 859. The court disagreed.

3 It noted that the memoranda were "at times 'amended' or

4 'rescinded,' which would hardly be necessary if the documents

5 contained merely informal suggestions to staff which could be

6 disregarded . . . ." Id. at 860.

7 After examining the particular role that the documents

8 played in the audit process, the court concluded that they

9 were not suggestions or recommendations as to

10 what agency policy should be. . . . [T]he

11 memoranda are not advice to a superior, nor

12 are they suggested dispositions of a case, as

13 in Grumman. They are not one step of an

14 established adjudicatory process, which would

15 result in a formal opinion, as were the

16 documents held exempt in [Sears].

17

18 Id. at 868.

19 [T]hese opinions were routinely used by

20 agency staff as guidance in conducting their

21 audits, and were retained and referred to as

22 precedent. If this occurs, the agency has

23 promulgated a body of secret law which it is

24 actually applying in its dealings with the

25 public but which it is attempting to protect

26 behind a label. This we will not permit the

27 agency to do. Tentative opinions are not

28 relied on as precedent; they are considered

29 further by the decisionmaker.

30 Id. at 869.13

13

In Coastal States, there was no allegation by the

plaintiff that the memoranda had been expressly adopted or

incorporated by reference, suggesting that in some cases

disclosure is required even without public reliance on a document

otherwise exempt from disclosure under Exemption 5.

32

1 In Public Citizen, Inc. v. Office of Management and

2 Budget, 598 F.3d 865 (D.C. Cir. 2010), the court considered the

3 plaintiff's request for documents created by the White House

4 Office of Management and Budget ("OMB") describing the

5 circumstances under which an agency might "bypass" OMB and submit

6 their budget materials directly to Congress. Id. at 867. The

7 documents at issue "summariz[ed]" OMB's understanding of which

8 agencies had such bypass authority and the bases for that

9 authority. Id. at 868. The court concluded that the documents

10 did not enjoy the protection of Exemption 5 because "[d]ocuments

11 reflecting OMB's formal or informal policy on how it carries out

12 its responsibilities fit comfortably within the working law

13 framework." Id. at 875. As in Coastal States, the documents

14 were referred to as precedent, and not part of an ongoing

15 deliberative process.

16 Similarly, in Tax Analysts v. IRS, 294 F.3d 71 (D.C.

17 Cir. 2002), the court ordered release of IRS documents explaining

18 whether certain tax exemptions applied to specific taxpayers,

19 concluding that they constituted "working law" because their

20 "tone . . . indicate[d] that they simply explain[ed] and

21 appl[ied] established policy." Id. at 80-81 (internal quotation

22 marks omitted). Those documents included the phrases "It is the

23 position of the Treasury Department that" and "We conclude,"

24 while the exempt documents contained "such phrases as 'We

33

1 believe' and 'We suggest.'" Id. at 81. To qualify as working

2 law, "[i]t is not necessary that the [documents] reflect the

3 final programmatic decisions of the program officers who request

4 them. It is enough that they represent [the Office of the

5 Comptroller of the Currency]'s final legal position concerning

6 the Internal Revenue Code, tax exemptions, and proper

7 procedures." Id. (emphasis in original).

8 Our Court has relatively little case law examining the

9 "working law" principle. In La Raza, we made passing reference

10 to Sears's conclusion that the public was "vitally concerned"

11 with the reasons for a policy actually adopted, and that these

12 reasons constituted the "working law" of the agency. 411 F.3d

13 360. We did so, however, in the context of explaining the

14 relevance of the public adoption of the OLC memorandum at issue

15 to the question of whether it should be disclosed, noting that

16 "the public can only be enlightened by knowing what the [agency]

17 believes the law to be." Id. (quoting Tax Analysts v. IRS, 117

18 F.3d 607, 618 (D.C. Cir. 1997)). In that context, we agreed with

19 the district court's conclusion that "[t]he Department's view

20 that it may adopt a legal position while shielding from public

21 view the analysis that yielded that position is offensive to

22 FOIA." Id. (internal quotation marks omitted).

23 The question of whether a document constitutes "working

24 law," or has been expressly adopted or incorporated by reference,

34

1 then, are two paths to determining whether a withheld document

2 constitutes what FOIA affirmatively requires to be disclosed --

3 "'final opinions,' 'statements of policy and interpretations

4 which have been adopted by the agency,' and 'instructions to

5 staff that affect a member of the public.'" Sears, 421 U.S. at

6 153 (quoting 5 U.S.C. § 552(a)(2)). Most Exemption 5 cases are

7 not framed in this manner because it is the government's burden

8 to prove that the privilege applies, and not the plaintiff's to

9 demonstrate the documents sought fall within one of the

10 enumerated section 552(a)(2) categories. Nevertheless, the

11 appropriate analysis requires us to determine whether the

12 documents sought more closely resemble the type of internal

13 deliberative and predecisional documents that Exemption 5 allows

14 to be withheld, or the types of documents that section 552(a)(2)

15 requires be disclosed. To do that, the Supreme Court and our

16 court have asked whether the documents fit within the description

17 of "working law," in addition to whether they have been expressly

18 adopted or incorporated by reference into a nonexempt

19 communication.

20 B. Analysis

21 1. The February 2004 Memorandum. We begin our

22 analysis of the status of this document, as we must with respect

23 to all three memoranda at issue, by examining the process by

24 which the memorandum was created. See Tigue v. Dep't of Justice,

35

1 312 F.3d 70, 78 (2d Cir. 2002) ("[W]hether a particular document

2 is exempt . . . depends not only on the intrinsic character of

3 the document itself, but also on the role it played in the

4 administrative process.") (internal quotation marks omitted),

5 cert. denied, 538 U.S. 1056 (2003). We do so because "Exemption

6 5, properly construed, calls for disclosure of all opinions and

7 interpretations which embody the agency's effective law and

8 policy . . . ." Sears, 421 U.S. at 153 (internal quotation marks

9 omitted).

10 The emails in the record indicate that USAID and HHS

11 officials asked the OLC for advice on the constitutional and

12 legal propriety of the implementation of the pledge requirement.

13 They then incorporated that advice into their decision as to

14 whether the language of the grants for HIV/AIDS and anti-

15 trafficking work would in fact require "an explicit and

16 affirmative policy opposing prostitution." It also appears that

17 the OLC reviewed USAID's proposed grant language before the AAPD

18 that contained it was issued.

19 It is not disputed that the February 2004 memorandum

20 was predecisional and deliberative. See Public Citizen, 598 F.3d

21 at 874 ("We deem a document predecisional if it was generated

22 before the adoption of an agency policy and deliberative if it

23 reflects the give-and-take of the consultative process.")

24 (internal quotation marks omitted).

36

1 [A]n agency may meet its burden of proof

2 under the 'predecisional document' test by

3 demonstrating that the preparer was not the

4 final decisionmaker and that the contents

5 confirm that the document was originated to

6 facilitate an identifiable final agency

7 decision. . . . A predecisional document

8 will qualify as 'deliberative' provided

9 it . . . formed an essential link in a

10 specified consultative process, . . .

11 reflects the personal opinions of the writer

12 rather than the policy of the agency,

13 and . . . if released, would inaccurately

14 reflect or prematurely disclose the views of

15 the agency.

16 Providence Journal Co. v. Dep't of the Army, 981 F.2d 552, 559

17 (1st Cir. 1992) (citations, internal quotation marks, and

18 brackets omitted).

19 The "decision" being made by USAID and HHS was whether

20 they were constitutionally bound to disregard a duly enacted

21 statute's command that domestic organizations be subject to the

22 pledge requirement. Although this may not properly be referred

23 to as an "adjudication," it was a firm and concrete decision

24 regarding the agency's policy.14 See Cmty. Television of S.

14

In this sense, the "decision" made differs from one in

which an agency considers and rejects a policy that it was never

required to consider or implement. In Common Cause v. IRS, 646

F.2d 656 (D.C. Cir. 1981), the court considered whether documents

related to the IRS's decision not to implement a plan it had

proposed, which would have disclosed "the names of federal

officials who had approached the IRS about the tax matters of

third parties, as well as the subjects of such contacts," should

have been released per FOIA. Id. at 658. The court rejected the

plaintiffs' argument that the documents "constitute[d] the

reasons which suppl[ied] the basis for the agency policy actually

adopted." Id. at 659. "The proposed disclosure plan remained

37

1 Cal. v. Gottfried, 459 U.S. 498, 515-516 (1983) ("[H]owever broad

2 an administrative agency's discretion in implementing a

3 regulatory scheme may be, the agency may not ignore a relevant

4 Act of Congress. . . . [T]he agency cannot simply 'close its

5 eyes' to the existence of the statute." (citation omitted));

6 Lincoln v. Vigil, 508 U.S. 182, 193 (1993) ("[A]n agency is not

7 free simply to disregard statutory responsibilities . . . .");

8 see also Presidential Authority to Decline to Execute

9 Unconstitutional Statutes, 18 Op. O.L.C. 199, 200 (1994)

10 (explaining the president's ability to decline to enforce

11 statutes he views as unconstitutional); Bristol-Meyers Co. v.

12 FTC, 598 F.2d 18, 25 (D.C. Cir. 1978) (concluding that an

13 agency's decision not to proceed with rulemaking is analogous to

just that. Its rejection did not, therefore, constitute the

making of law or policy by an agency. The exchange of ideas and

proposals which took place within the Service with respect to the

proposed plan is precisely the type of communication which

Congress meant to protect in enacting Exemption 5." Id. The

court considered and rejected the argument that the memoranda

should be disclosed because they contained the "written reasons

for the agency's final decision not to implement the proposed

plan." Id. "This case differs from Sears in many important

respects. The present case involves the voluntary suggestion,

evaluation, and rejection of a proposed policy by an agency, not

the agency's final, unappealable decision not to pursue a

judicial remedy in an adversarial dispute . . . . No statute

demands that the IRS voluntarily disclose information about

third-party contacts . . . ." Id. at 659-60. The court also

considered the broader implications of the plaintiffs' argument,

concluding that it would "virtually eliminate the governmental

privilege" as "[e]very rejection of a proposal, no matter how

infeasible or insignificant, would become a 'final decision' of

an agency." Id. at 660.

38

1 the NLRB's non-charging decision in Sears, and thus would not

2 enjoy the protection of Exemption 5). We find no other evidence

3 concerning this decisionmaking process in the record.

4 No one at the OLC made the decision that the pledge

5 requirement as it pertained to domestic organizations would not

6 be implemented. As Paul Colborn, special counsel to the OLC,

7 explained to the district court by affidavit, "OLC does not

8 purport, and in fact lacks authority, to make policy decisions.

9 OLC's legal advice and analysis informs the decisionmaking of

10 Executive Branch officials on matters of policy, but OLC's legal

11 advice is not itself dispositive as to any policy adopted."

12 Decl. of Paul P. Colborn at 2, J.A. 318 (March 11, 2011). The

13 plaintiff does not submit contrary evidence suggesting that the

14 OLC's recommendation was effectively binding on the agency, as in

15 Coastal States, 617 F.2d at 869, or left it with "no decision to

16 make," as in Sears, 421 U.S. at 155. The February Memorandum

17 does not constitute "working law," or "the agency's effective law

18 and policy." Id. at 153. We nonetheless conclude that the OLC's

19 views were adopted by reference by USAID in nonexempt

20 communications, and therefore must be disclosed.

21 The first explicit reference to the OLC advice came in

22 a July 22, 2004, USAID document entitled "Guidance on the

23 Definition and Use of the Child Survival and Health Programs Fund

24 and the Global HIV/AIDS Initiative Account." There the agency

39

1 explained that the funding statute "requires non-U.S. non-

2 governmental organizations . . . receiving HIV/AIDS funds to

3 agree that they have a policy explicitly opposing, in their

4 activities outside of the United States, prostitution and sex

5 trafficking." July 22 USAID Update at 35. In a footnote, the

6 document explained that "[t]he Office of Legal Counsel, U.S.

7 Department of Justice in a draft opinion determined that this

8 provision only may be applied to foreign non-governmental

9 organizations and public international organizations because of

10 the constitutional implications of applying it to U.S.

11 organizations." Id. at 35 n.10.15

12 Then, in March 2005, after HHS and USAID had shifted

13 their positions, tentatively deciding to apply the pledge

14 requirement domestically, Randall Tobias, the USAID Global AID

15

Plaintiff urges us also to consider the September 20,

2004, letter from an OLC official to the general counsel of HHS

explaining that the "tentative advice" offered earlier was being

"withdraw[n]." Levin Letter at 1-2. Because there were

"reasonable arguments" to support the constitutionality of the

policy, the OLC official stated, "we believe that HHS may

implement these provisions." Id. at 1. Because this letter was

neither written by a decisionmaker nor released publicly by the

decisionmaking agency, its relevance is limited. It does not aid

in establishing either express adoption or incorporation by

reference, and neither does it suggest that the February 2004 OLC

opinion was considered the "working law" of the agency. Rather,

it suggests that even after the February memorandum was sent to

HHS, a deliberative process continued, and advice was later

offered again to HHS that was also non-binding. In this sense,

it supports the defendant's contention that the February

memorandum should have been considered exempt from disclosure.

40

1 Administrator, made a second reference to the February

2 Memorandum. When asked in a Congressional hearing about the

3 agency's change in positions, he explained:

4 The [OLC] . . . provided some tentative

5 advice initially that those restrictions

6 should be applied only to foreign

7 organizations. Sometime mid- to late-, I

8 think, in September of 2004, they withdrew

9 that earlier tentative advice and advised

10 that that provision was intended by the

11 Congress to apply without that limitation to

12 both domestic organizations as well as

13 foreign organizations. And so I'm simply

14 following the legislation and the advice to

15 implement that.

16 Tobias Testimony, J.A. 236.16

17 Thus, there were two public statements referencing the

18 February 2004 memorandum -- the July 22 footnote, and the Tobias

19 testimony. We conclude that these references taken together

20 establish express adoption or incorporation by reference.

16

An additional "public" reference was made to the February

2004 memorandum, in a July 2007 letter from an OLC official to

Congressman Henry Waxman. Waxman had requested an explanation

from the OLC regarding its interpretation of the pledge

requirement. The OLC wrote that in February 2004 it had provided

"tentative advice" to HHS and USAID that the pledge requirement

"could, under the Constitution, be applied only to foreign

organizations acting overseas." Benczkowski Letter at 1. The

letter then went on to explain the subsequent change in advice.

This letter is also of limited relevance in determining whether

or not the February 2004 opinion should be subject to disclosure

because it was not authored by a decisionmaker from USAID or HHS.

(Again, this would be different had plaintiff adduced evidence

that OLC opinions were essentially binding upon the agencies.)

41

1 To be sure, neither the July 22 footnote nor Tobias's

2 testimony discussed at length the rationale provided by the OLC

3 for its conclusion as to the propriety of applying the pledge

4 requirement to domestic grantees. Noting that the advice itself

5 was limited to one page in the first instance, we conclude that

6 the July 22 footnote's explanation that the pledge requirement

7 would not be enforced "because of the constitutional implications

8 of applying it to U.S. organizations," July 22 USAID Update at 35

9 n.10, at least when reenforced by the Tobias reference,

10 demonstrates sufficient reliance on both the conclusion and

11 reasoning of the OLC memorandum to remove the protection of the

12 deliberative-process exemption.17

17

In a pre-Sears case, the D.C. Circuit ordered disclosure

pursuant to Exemption 5 based on reasoning similar to what we

apply here.

We do not feel that [the agency] should be

required to 'operate in a fishbowl,' but by

the same token we do not feel that [the party

seeking disclosure] should be required to

operate in a darkroom. If the [agency] did

not want to expose its staff's memorandum to

public scrutiny it should not have stated

publicly in its April 11 ruling that its

action was based upon that memorandum, giving

no other reasons or basis for its action.

When it chose this course of action 'as a

matter of convenience' the memorandum lost

its intra-agency status and became a public

record, one which must be disclosed . . . .

Am. Mail Line, Ltd. v. Gulick, 411 F.2d 696, 703 (D.C. Cir. 1969)

(citation omitted).

42

1 Any agency faces a political or public relations

2 calculation in deciding whether or not to reference what might

3 otherwise be a protected document in explaining the course of

4 action it has decided to take. In many cases, as here, the

5 agency is not required to explain its reasons publicly.

6 Nonetheless, where it determines there is an advantage to doing

7 so by referencing a protected document as authoritative, it

8 cannot then shield the authority upon which it relies from

9 disclosure.

10 2. The July 2004 Memos. As outlined above, on July

11 2, 2004, OLC lawyer Lerner sent an email to HHS and USAID

12 officials attaching a 30-page draft memorandum with the

13 statement, "Any comments you have would be much appreciated."

14 Email from Lerner, "OLC draft opinion on Sex Trafficking, AIDS

15 Act grant restrictions." J.A. 92 (July 2, 2004). On July 30,

16 2004, another OLC lawyer sent an updated draft of the memorandum

17 to the HHS general counsel.

18 On September 20, 2004, an OLC official explained in

19 response to the original February inquiry from USAID and HHS as

20 to the constitutionality of the pledge requirement that "we

21 believe that HHS may implement these provisions. If the

22 provisions are challenged in court, the Department stands ready

23 to defend their constitutionality, in accordance with its

24 longstanding practice of defending congressional enactments under

43

1 such circumstances." Levin Letter at 1-2 (footnotes omitted).

2 That letter made no reference to the July OLC memos. It offered

3 only sparse explanation of the legal basis for OLC's conclusion

4 that the pledge requirement could be defended. Id.

5 On May 3, 2005, HHS issued a new policy outlining its

6 updated "funding restrictions," which explained that "any

7 recipient must have a policy explicitly opposing prostitution and

8 sex trafficking." HHS Funding Announcement, "Increasing Access

9 to HIV Counseling and Testing (VCT) and Enhancing HIV/AIDS

10 Communications, Prevention, and Care in Botswana, Lesotho, South

11 Africa, Swaziland and Cote d'Ivoire" at 10, J.A. 218 (May 3,

12 2005). The document does not explain the basis for that policy,

13 nor refer to it as a change in policy.

14 On June 9, 2005, USAID issued an updated AAPD that

15 required domestic grantees to "have a policy explicitly opposing

16 prostitution and sex trafficking." USAID AAPD 05-04,

17 "Implementation of the United States Leadership against HIV/AIDS

18 Tuberculosis and Malaria Act of 2003 - Eligibility Limitation on

19 the Use of Funds and Opposition to Prostitution and Sex

20 Trafficking" at 5, J.A. 225 (June 9, 2005).

21 In this AAPD, USAID did state that "[c]onsistent with

22 guidance from the U.S. Department of Justice," USAID would "now

23 apply [the pledge requirement] to U.S. organizations as well as

24 foreign organizations." June 2005 AAPD at 2, J.A. 223. Such

44

1 reference to guidance from the DOJ does not, however, indicate

2 that USAID (or HHS) adopted the reasoning of the July memoranda.

3 Nor does the fact that the agencies acted in conformity with the

4 July memoranda establish that the agencies adopted their

5 reasoning. Grumman, 421 U.S. at 184. "Mere reliance of a

6 document's conclusions does not necessarily involve reliance on a

7 document's analysis: both will ordinarily be needed before a

8 court may properly find adoption or incorporation by reference."

9 La Raza, 411 F.3d at 358.

10 When Tobias testified before Congress that USAID had

11 changed its policy, he explained that the OLC's tentative advice

12 had been withdrawn in mid- to late-September 2004. See Tobias

13 Testimony, J.A. 236. That appears to be a reference to the

14 September 2004 OLC letter, not to either of the July 2004 draft

15 memoranda.

16 On the record before us, then, Tobias's testimony

17 referenced the September 2004 letter. The lack of any specific

18 reference to the July 2004 memoranda by either USAID or HHS are

19 further indications that the July memoranda were in fact parts of

20 the predecisional and deliberative process that yielded the

21 September 2004 letter.

22 The July 2007 letter to Congressman Waxman also

23 explained the change in policy solely by reference to the

24 September 2004 letter. Although the July 2007 letter was not

45

1 written by a decisionmaker and therefore could not have served as

2 a basis for express adoption or incorporation by reference, it

3 serves as evidence that it was the September 2004 letter, and not

4 the July 2004 draft memoranda, that led to HHS and USAID's

5 decisions to implement the pledge requirement with respect to

6 U.S.-based organizations.

7 In sum, there is no evidence that the USAID or HHS

8 based its change in policy on the draft memoranda it seeks. We

9 therefore cannot conclude, as did the district court, that either

10 agency expressly adopted or incorporated by reference these

11 drafts in explaining their policy change. In such a

12 circumstance, ordering release of these never-finalized memoranda

13 would fail to "safeguard and promote agency decisionmaking

14 processes" by, for example, not "protect[ing] against confusing

15 the issues and misleading the public by dissemination of

16 documents suggesting reasons and rationales for a course of

17 action which were not in fact the ultimate reasons for the

18 agency's action," and failing to "assure that subordinates within

19 an agency will feel free to provide the decisionmaker with their

20 uninhibited opinions and recommendations without fear of later

21 being subject to public ridicule or criticism . . . ."

22 Providence Journal, 981 F.2d at 557 (quoting Coastal States, 617

23 F.2d at 866); see also Grumman, 421 U.S. at 184-85 ("[If] the

24 evidence utterly fails to support the conclusion that the

46

1 reasoning in the reports is adopted by the Board as its

2 reasoning, even when it agrees with the conclusion of a

3 report, . . . the reports are not final opinions and do fall

4 within Exemption 5.").

5 We conclude that the district court erred in ordering

6 disclosure of the July memoranda because there is insufficient

7 evidence that those memoranda were expressly adopted or

8 incorporated by reference by USAID, or became the "working law"

9 of the agency, sufficient to remove the deliberative-process

10 protection.

11 III. Attorney-Client Privilege

12 The defendants argue that even if the February 2004

13 memorandum is otherwise subject to disclosure, it is protected

14 from such disclosure by the attorney-client privilege, Defs.' Br.

15 at 51-52, which is encompassed by Exemption 5, La Raza, 411 F.3d

16 at 360.18 "The attorney-client privilege protects communications

17 (1) between a client and his or her attorney (2) that are

18

In its reply brief, the defendants for the first time

argue that the plaintiff has waived its argument that the

February 2004 document is not protected by the attorney-client

privilege because the argument was not raised below. Defs.'

Reply at 20-21. A review of the plaintiff's motion for summary

judgment establishes otherwise. See Mem. in Supp. of Pl.'s Mot.

for Summ. J., Brennan Center v. DOJ, No. 09 Civ. 8756, at 17-19

(S.D.N.Y. Jan. 28, 2011), ECF No. 21. Indeed, the district court

considered this argument, concluding that the defendants'

argument that the attorney-client privilege protected that

document from disclosure "must fail."

47

1 intended to be, and in fact were, kept confidential (3) for the

2 purpose of obtaining or providing legal assistance." United

3 States v. Mejia, 655 F.3d 126, 132 (2d Cir.), cert. denied, 132

4 S. Ct. 553 (2011). "[T]he attorney-client privilege protects

5 most confidential communications between government counsel and

6 their clients that are made for the purpose of obtaining or

7 providing legal advice." In re County of Erie, 473 F.3d 413, 418

8 (2d Cir. 2007).

9 In La Raza, we explained that "[l]ike the deliberative

10 process privilege, the attorney-client privilege may not be

11 invoked to protect a document adopted as, or incorporated by

12 reference into, an agency's policy." 411 F.3d at 360. The

13 reasons underlying the absence of Exemption 5 protection for such

14 a document otherwise covered by the deliberative-process

15 exemption also underlie the agency’s loss of the protection of

16 the attorney-client privilege.

17 [O]nce an agency adopts or incorporates [a]

18 document, frank communication will not be

19 inhibited. Indeed, once an attorney's (or

20 employee's) recommendation becomes agency

21 law, the agency is then responsible for

22 defending that policy, and the attorney (or

23 employee) 'will generally be encouraged

24 rather than discouraged' by public knowledge

25 that their policy suggestions or legal

26 analysis have been adopted by the agency."

27

28 Id. (quoting Sears, 421 U.S. at 161). As we explained, "We

29 cannot allow the Department to make public use of the Memorandum

48

1 when it serves the Department's ends but claim the attorney-

2 client privilege when it does not." Id. at 361.

3 As with respect to the lawyer-client privilege in other

4 contexts, "it is vital to [such] a claim . . . that the

5 communications between client and attorney were made in

6 confidence and have been maintained in confidence." Mejia, 655

7 F.3d at 134 (quoting In re Horowitz, 482 F.2d 72, 81-82 (2d Cir.

8 1973)). And "[c]ourts have found waiver by implication when a

9 client testifies concerning portions of the attorney-client

10 communication, . . . and when a client asserts reliance on an

11 attorney's advice as an element of a claim or defense . . . . "

12 In re County of Erie, 546 F.3d 222, 228 (2d Cir. 2008) (internal

13 quotation marks omitted). A party's reliance on an otherwise

14 privileged communication to assert a claim or defense is similar

15 to the type of express adoption or incorporation by reference

16 that vitiates Exemption 5 protection -- in either case the party

17 cannot invoke that relied-upon authority and then shield it from

18 public view. The references to the February 2004 memorandum that

19 served to remove the deliberative-process privilege thus also

20 constitute waiver of the attorney-client privilege.

21 On this score, the defendants invoke the same argument

22 as they did with regard to the deliberative-process exemption --

23 that the instances of express adoption or incorporation cited by

24 the plaintiff are not sufficient to withdraw the protection of

49

1 Exemption 5. We have concluded to the contrary with respect to

2 the deliberative process exemption for the reasons set forth

3 above.

4 The defendants urge us to revisit our holding in La

5 Raza, contending that there we misconstrued Sears. La Raza is

6 the law of this Circuit and this panel, acting as a panel cannot

7 change it. See, e.g., City of New York v. Mickalis Pawn Shop,

8 LLC, 645 F.3d 114, 131 n.18 (2d Cir. 2011) (acknowledging that we

9 are bound by the law of the Circuit as established by one or more

10 previous panel decisions); European Cmty. v. RJR Nabisco, Inc.,

11 424 F.3d 175, 179 (2d Cir. 2005) ("We are bound by the decisions

12 of prior panels until such time as they are overruled either by

13 an en banc panel of our Court or by the Supreme Court.")

14 (internal quotation marks omitted), cert. denied, 546 U.S. 1092

15 (2006).

16 We note nonetheless that the government focuses on the

17 Sears Court's statement that "[t]echnically, of course, if a

18 document could be, for example, both a 'final opinion' and an

19 intra-agency memorandum within Exemption 5, it would be

20 nondisclosable, since the Act 'does not apply' to documents

21 falling within any of the exemptions." 421 U.S. at 154 n.21.

22 That footnote was employed in the context of the Court's

23 observation that "Exemption 5 can never apply" to "working law."

24 Id. at 153-54. By prefacing its comment with the term

50

1 "technically" the Court suggested that this observation in Sears

2 left the holding of Sears undisturbed –- that when what would

3 otherwise be an exempt memorandum becomes non-exempt because of

4 its status as "working law," or through express adoption or

5 incorporation by reference, for all practical purposes it falls

6 outside of Exemption 5. We are, in other words, inclined to

7 agree with the plaintiff that "[t]he text [of Sears] makes clear

8 that the footnote is contemplating a logical impossibility."

9 Pl.'s Br. at 52.

10 The government points to Federal Open Market Committee

11 v. Merrill, 443 U.S. 340 (1979), for further support. Merrill

12 recognized an Exemption 5 privilege for "confidential commercial

13 information," but noted that "[i]t should be obvious that the

14 kind of mutually exclusive relationship between final opinions

15 and statements of policy, on one hand, and predecisional

16 communications, on the other, does not necessarily exist between

17 final statements of policy and other Exemption 5 privileges."

18 Id. at 360 n.23. But La Raza establishes that when a document

19 has been relied upon sufficiently to waive the deliberative-

20 process privilege, that reliance can have the same effect on the

21 attorney-client privilege. 411 F.3d at 360-61. We conclude that

22 it does so here.

51

1 CONCLUSION

2 For the foregoing reasons, the district court's grant

3 of summary judgment for the plaintiff is affirmed with respect to

4 the February 2004 memorandum, and reversed and remanded with

5 respect to the July memoranda with instructions to the district

6 court to enter summary judgment for the defendants as to them.

52