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FOIA Post (2001): Supreme Court Rules in Exemption 5 Case

Supreme Court Rules in Exemption 5 Case

The United States Supreme Court has ruled in a Freedom of Information Act case that Exemption 5 of the FOIA cannot be extended to protect all confidential communications between the Department of the Interior and the Indian Tribes that it deals with as part of the federal government's special "trust relationship" with Native American tribal organizations.

The Supreme Court ruled unanimously on March 5 in the case of Department of the Interior v. Klamath Water Users Protective Ass'n, 121 S. Ct. 1060 (2001), that the "threshold" requirement of Exemption 5 -- that the records in question first must be "inter-agency or intra-agency memorandums or letters" -- was not satisfied for seven records exchanged between the Department of the Interior and several Indian Tribes located in the Klamath River Basin. Consequently, the Court ruled that those records, which dealt with agency decisions on water allocation and had been withheld from competing water users under the attorney work-product and deliberative process privileges, must be disclosed.

In the lower courts, the Department of the Interior at first prevailed in its Exemption 5 position, but subsequently it did not. At the district court level, Exemption 5 was found satisfied in light of the agency's special "trust relationship" with the Indian Tribes involved. The Court of Appeals for the Ninth Circuit, however, ruled in a 2-1 decision that the Tribes' "direct interest" in the agency's water-allocation decisionmaking disqualified them from Exemption 5 protection as a threshold matter. See Klamath Water Users Protective Ass'n v. Department of the Interior, 189 F.3d 1034, 1038 (9th Cir. 1999); see also FOIA Update, Vol. XX, No. 1, at 3.

The Supreme Court affirmed the Ninth Circuit's decision, but it did so on a distinctly narrower ground. It began its analysis of Exemption 5's threshold requirement with the observation that it is "no less important" than the rest of the exemption. 121 S. Ct. at 1066. It then recognized that several courts of appeals have found Exemption 5's threshold to be satisfied in cases involving an "outside consultant" of one type or another, and it discussed that well-recognized basis for Exemption 5 qualification at some length. It observed that such a consultant, though it need not "be devoid of a definite point of view," typically "does not represent an interest of its own." Id. at 1067.

When it proceeded to apply this general "interested party" standard to the records before it, though, the Supreme Court found that those records (or, in effect, the Indian Tribes involved) failed to qualify on a more precise ground. Having noted that the Tribes' interests were "adverse" to those of the opposing association of water users, "owing to [the] scarcity of water" in the Klamath River Basin, 121 S. Ct. at 1064, the Court characterized the Tribes as "self-advocates at the expense of others seeking benefits inadequate to satisfy everyone," id. at 1068. Most significantly, it concluded that
the dispositive point is that the apparent object of the Tribes' communications is a decision by an agency of the Government to support a claim by the Tribe that is necessarily adverse to the interests of competitors.

Thus, the Supreme Court ultimately applied an Exemption 5 threshold test rooted in the competition between an "outside" party and other such parties -- here, between the Tribes and competing water users -- not the Ninth Circuit's more general test that disqualified an outside party due to the existence of a self-interest alone. The Court made it clear that its Klamath test necessarily went no further than excluding "an interested party [that is] seeking a Government benefit at the expense of other applicants." 121 S. Ct. at 1068 n.4. Under that test, the records (and the relationships between the parties) that were before the Court simply failed to qualify for protection under Exemption 5.

A number of further conclusions can be drawn from the Supreme Court's decision in the Klamath case:

First, the Court made it very clear that records that are exchanged between the federal government and Indian Tribes in furtherance of their special "trust relationship" may no longer be protectible under Exemption 5. It explicitly rejected that longstanding relationship as a sufficient counterweight to what it found to be the disqualifying "competitive self-interest" of such outside parties in this case. See 121 S. Ct. at 1069. Where, as in Klamath, Indian Tribes act as "self-advocates at the expense of others," id. at 1068, they no longer can expect to receive the protection of Exemption 5.

Second, the Supreme Court readily assumed for purposes of its decision, and thereby implicitly strengthened, the pragmatic "outside consultant" interpretation of Exemption 5's threshold language that has long been recognized in many FOIA cases at the appellate court level. Although the Court ultimately did not decide Klamath on this basis, such court of appeals decisions as Hoover v. Department of the Interior, 611 F.2d 1132, 1137-38 (5th Cir. 1980) (involving reports prepared by outside real estate appraisers), Lead Indus. Ass'n v. OSHA, 610 F.2d 70, 83 (2d Cir. 1979) (involving feasibility reports prepared by outside scientists), and also Formaldehyde Inst. v. HHS, 889 F.2d 1118, 1123-24 (D.C. Cir. 1984) (involving critiques of scientific articles prepared by outside peer reviewers), still stand as sound precedents for the satisfaction of Exemption 5's threshold requirement under what in the past has been termed the exemption's "functional test." See "Initial Considerations" Subsection of "Exemption 5" Section of "Justice Department Guide to the Freedom of Information Act."

Third, the Court explicitly left open the continued viability of another line of such cases -- Public Citizen, Inc. v. Department of Justice, 111 F.3d 168, 169-70 (D.C. Cir. 1997) (involving agency consultations with former presidents), and Ryan v. Department of Justice, 617 F.2d 781, 784 (D.C. Cir. 1980) (involving agency consultations with senators) -- which it recognized as being arguably in tension with, but not overturned by, its Klamath ruling. Significantly, this compelled the Court to stress that, at bottom, its new test necessarily went only so far as to exclude from Exemption 5 any "communications to or from an interested party seeking a Government benefit at the expense of other applicants." 121 S. Ct. at 1068 n.4 (emphasis added); see also id. at 1068 ("[A]gain, the dispositive point is" that the putative "consultant" has interests that are "necessarily adverse to the interests of competitors."). Thus, those decisions, and their potential progeny, stand apart from what clearly was rejected under the Court's bottom-line threshold test.

Fourth, the Klamath decision surely casts some doubt on the viability of protecting certain settlement-related records on the basis of the "settlement privilege" under Exemption 5 in the future. This basis for record protection was identified many years ago, see FOIA Update, Vol. VI, No. 4, at 3-4, and it has been applied sparingly since then, see "Initial Considerations" Subsection of "Exemption 5" Section of "Justice Department Guide to the Freedom of Information Act." The settlement privilege actually has been applied in court more readily under Exemption 4 of the FOIA than under Exemption 5, for settlement records that are sent to an agency rather than from the agency to an outside party, see id. (citing M/A-COM Info. Sys. v. HHS, 656 F. Supp. 691, 692 (D.D.C. 1986) (applying settlement privilege under "privilege" part of Exemption 4)) -- and that is something that remains entirely unaffected by the Klamath decision. As for settlement records that are sent by an agency to an outside party, they should fail to qualify at the threshold for Exemption 5 protection only if they run afoul of Klamath's ultimate test -- i.e., if they involve a self-interested outside party that is acting "at the expense of other [such parties]." 121 S. Ct. at 1068 n.4. It remains to be seen exactly how Klamath might be applied in any future FOIA case that involves the settlement privilege under Exemption 5.

Lastly, it also remains to be seen whether the Klamath decision will have such a strong impact on the government/tribal relations of agencies such as the Interior Department that it necessitates a legislative remedy, as the Supreme Court itself suggested might be the case. See 121 S. Ct. at 1069-70 & n.7. If so, then the enactment of an "Exemption 3 statute" may be seen as a most appropriate legislative response. Such remedial action by Congress would be much like the legislative response to a very comparable FOIA problem experienced by the Interior Department just a few years ago, when two appellate courts ruled that it could not protect the site locations of endangered species under FOIA Exemption 2. See Maricopa Audubon Soc'y v. United States Forest Serv., 108 F.3d 1082, 1087 (9th Cir. 1997); Audubon Soc'y v. United States Forest Serv., 104 F.3d 1201, 1204 (10th Cir. 1997); see also FOIA Update, Vol. XVI, No. 3, at 2. The legislative response to those FOIA decisions was the enactment of an Exemption 3 statute, see National Park Omnibus Management Act of 1998, 16 U.S.C. § 5937 (1994 & Supp. IV 1998), one that readily addressed the problem and already has been upheld in court. See Pease v. United States Dep't of Interior, No. 1:99CV113, slip op. at 2, 4 (D. Vt. Sept. 17, 1999).

Klamath is the first Freedom of Information Act decision that the Supreme Court has issued in more than four years, since it summarily reversed the Court of Appeals for the Ninth Circuit, and ruled in the government's favor, in Bibles v. Oregon Natural Desert Ass'n, 519 U.S. 355 (1997), an Exemption 6 case involving the protection of mailing lists. During the past four years, the only other significant action taken by the Court in a FOIA case was its nullification of a Ninth Circuit decision that had required the disclosure of classified information, in United States v. Weatherhead, 528 U.S. 1042 (1999), when that case suddenly became moot shortly before Supreme Court argument at the end of 1999. See FOIA Update, Vol. XX, No. 1, at 1.   (posted 4/4/01)

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Updated August 6, 2014