Am. Mgmt. Servs., LLC v. Dep't of Army, 703 F.3d 724 (4th Cir. 2013)

Re: Request for records referring to pending litigation filed by Clark Reality Capital, LLC [hereinafter Company A] and records submitted to the Department of the Army (Army) by Company A Disposition: Affirming district court's grant of summary judgment for Army

Exemption 4: The Fourth Circuit finds that "public disclosure of [certain] documents would impair the government's ability to obtain necessary information in the future." At issue are certain records prepared by Company A's outside counsel and provided to the Army to present "evidence of [American Management Services, LLC, d/b/a Pinnacle, hereinafter Company B] alleged wrongdoing in order to get the Army's approval to terminate [the contract with] and sue [Company B]." "Disclosure, in our view, would likely have a chilling effect on a company's decision to initiate litigation in the first place, or, alternatively, to provide a government agency with the same quality and quantity of information that it might otherwise receive." The Fourth Circuit rejects the plaintiff's argument that because Company A was "contractually obligated to get the Army's approval" before terminating the contract and filing suit, "public disclosure of documents would never impair the government's ability to obtain them." The court reflects that "[i]n the context of a public-private partnership, if the cost of reporting fraud and mismanagement involved public disclosure of confidential financial and business information, private companies would be less apt to report fraud, and less fraud would, therefore, be uncovered."

Exemption 5/"Inter-Agency or Intra-Agency" Threshold Requirement: The Fourth Circuit finds that the withheld records qualify as inter-or intra-agency documents by applying the common interest doctrine. For the common interest doctrine to apply the Fourth Circuit declares, "an agency must show that it had agreed to help another party prevail on its legal claims at the time of the communications at issue because doing so was in the public interest." The court then finds that the common interest doctrine applies because the Army's affidavits establish "the requisite agreement [between the Army and Company A]…to terminate [Company B's] property management contracts." The affidavits explain that "[t]he actions [Company A] has taken benefit Soldiers, and thus they are in the Army's interests." The Court concludes that "because terminating [the contract with Company B] was in the public interest according to the Army, [Company A's] self-interest in terminating [Company B] does not preclude a finding that communications between [Company A] and the Army may qualify as intra-agency communications." As a result, "Klamath is no barrier to the result we reach."

Court Decision Topic(s)

Court of Appeals opinions

Exemption 4

Exemption 5

Updated August 6, 2014