Lenahan v. HHS, No. 23-06041, 2025 WL 1159878 (N.D. Cal. Apr. 21, 2025) (Hixson, Mag. J.)

Lenahan v. HHS, No. 23-06041, 2025 WL 1159878 (N.D. Cal. Apr. 21, 2025) (Hixson, Mag. J.)

Re:  Request for records concerning acquisition of doxycycline hyclate tablets and amoxicillin trihydrate capsules, the resulting contract, and related records

Disposition:  Granting in part and denying in part plaintiff’s motion for summary judgment; granting in part and denying in part defendant’s motion for summary judgment

• Exemption 3:  “The Court denies Plaintiff’s motion for summary judgment as to the agency’s application of FOIA Exemption 3 to the Chartwell proposal and grants Defendant’s motion as to the same.”  The court explains that defendant relies on “41 U.S.C. § 4702[, which] prohibits the disclosure of certain proposals for contracts with federal government agencies.”  “Section 4702 provides that ‘[a] proposal in the possession or control of an executive agency may not be made available to any person under section 552 of title 5.’” “This prohibition does not apply, however, to ‘a proposal that is set forth or incorporated by reference in a contract entered into between the agency and the contractor that submitted the proposal.’”  “Section 4702 applies to proposals ‘submitted by a contractor in response to the requirements of a solicitation for a competitive proposal.’”  “Plaintiff argues that HHS must produce [the requested] proposal because § 4702’s prohibition on the release of contractor proposals applies only to unsuccessful proposals.”  “Plaintiff contends that because [the requested] proposal successfully resulted in the award of a contract, FOIA Exemption 3 does not apply.” “But the text of section 4702 does not distinguish between successful and unsuccessful proposals.”  “[I]f section 4702 does not apply to successful proposals (whether incorporated or not), there would be no reason for the language excluding protection for proposals incorporated by reference in a contract, since by definition they would all be successful ones.”  “In the absence of controlling authority indicating that section 4702 only bars disclosure of unsuccessful proposals, the Court declines to apply such a rule.”
  
  “Plaintiff further argues in her reply that many terms of a successful proposal are ‘effectively incorporated’ in the resulting contract, such as pricing, products, delivery dates, technical approach and key personnel.”  “She argues that this supports the conclusion that section 4702 applies only to unsuccessful proposals.”  “The Court is willing to believe that it is often the case that many terms in a successful proposal are likely contained in the resulting contract.”  “Nonetheless, section 4702(b) states that ‘[a] proposal in the possession or control of an executive agency may not be made available to any person under section 552 of title 5,’ and that language does not distinguish between successful and unsuccessful proposals.”  “Section 4702(c) states that 4702(b) ‘does not apply to a proposal that is set forth or incorporated by reference in a contract entered into between the agency and the contractor that submitted the proposal.’”  “Plaintiff does not cite any legal authority to support reading that provision other than how it is written.”  “A proposal ‘that is set forth . . . in a contract’ means that the proposal is in the contract, so if you read the contract you necessarily see the proposal.” “Here, HHS attests that ‘[the requested] proposal was not in any manner incorporated into its executed contract with HHS[.]’”  “There is no evidence to the contrary.”  “Plaintiff’s argument that ‘incorporated’ means that some of the content of the contract originated from the proposal is a legal argument about the meaning of ‘incorporated by reference,’ not an evidentiary showing that contradicts the HHS attestation.”
   
• Litigation Considerations, Evidentiary Showing, Adequacy of Search:  The court holds that “[a]lthough ‘the failure to produce or identify a few isolated documents cannot by itself prove the searches inadequate[,]’ . . . an agency is required to ‘ma[ke] a diligent search for those documents in the places in which they might be expected to be found,’ . . . .”  “[Defendant’s] Declaration states without contradiction that [the Purchase Request Information System (“PRISM”)] ‘collects the information necessary to support a procurement relationship between HHS and vendors.’” “‘This includes information related to acquisition planning, solicitation, proposal review, contract creation and approval, contract modification, contract award and award closeout.’”  “‘The records requested by Plaintiff regarding a solicitation and vendor contract, if they existed, would thus be saved in PRISM.’”  “Information concerning ‘proposal review’ sounds like it includes source selection information, as that is what source selection information is.”  “And the reference to ‘contract modification’ obviously means modifications to contracts.” “Further, when a contract is awarded, the information in PRISM is stored under the contract number, which is how HHS searched for responsive documents.”  “On this record, [the court finds that] Plaintiff’s complaints about contract modifications and source selection documents fail to raise a triable question of material fact about the adequacy of HHS’s search.”  “Accordingly, the Court grants summary judgment to Defendant as to the adequacy of HHS’s search and denies Plaintiff’s motion on that issue.”
   
• Litigation Considerations, Vaughn Index/Declaration:  “[T]he Court grants summary judgment to Plaintiff on her claim for failure to substantiate the remaining FOIA exemptions and denies summary judgment to Defendant as to the same.”  “As a preliminary matter, the agency offers no authority to support its assertion that the requester must identify a list of disputed records to be included in a Vaughn index.” “Moreover, the agency’s February 20, 2024 response fails to identify the documents withheld in full and does not explain why any of the documents fall within the claimed exemptions from FOIA.” “Defendant asserts that ‘the bases for most of Defendant’s withholdings are . . . evident from the unredacted portions of the records in which information is withheld.’”  “The Court thus finds HHS has failed to demonstrate that it has justified its withholdings.”
   
• Attorney Fees: The court relates that “Plaintiff requests attorney’s fees pursuant to 5 U.S.C. § 552(a)(4)(E)(i).”  “However, Plaintiff provides no support in her motion for summary judgment demonstrating her eligibility for or entitlement to attorney’s fees.”  “Accordingly, Plaintiff’s motion for attorney’s fees is denied without prejudice to Plaintiff bringing a separate petition for fees.”