S. Env’t L. Ctr. v. TVA, No. 22-00108, 2023 WL 2387360 (E.D. Tenn. Mar. 7, 2023) (Corker, J.)

S. Env’t L. Ctr. v. TVA, No. 22-00108, 2023 WL 2387360 (E.D. Tenn. Mar. 7, 2023) (Corker, J.)

Re:  Request for two contracts signed by the Tennessee Valley Authority (“TVA”) and two companies

Disposition:  Granting defendants’ motion for summary judgment; denying plaintiff’s motion for summary judgment

• Exemption 4:  First, the court finds that “the information contained in the withheld provisions of the Agreements constitutes commercial or financial information.”  “[The two companies] submitted declarations that describe the information contained in the withheld provisions as relating to rates, terms, pricing, and business strategy.”  “[The two companies] demonstrated that they have a “commercial interest” in the information submitted to TVA, and such information readily reveals ‘basic commercial operations’ for both companies.”
  
  Second, “[b]ecause the record does not show that TVA substantially reformulated the information provided by [the two companies] in the withheld portions of the Agreements, TVA obtained that information from [the two companies] within the meaning of Exemption 4.”  The court relates that “[plaintiff] asserts that TVA co-created the Agreements in collaboration with [the two companies].”  “[Plaintiff] characterizes the Agreements as ‘legal instruments that were negotiated at arms-length’ and, thus, not covered by Exemption 4.”  The court finds that “[one company’s] declaration shows that [it] initially submitted the language that formed the withheld provisions of the [agreement] and that TVA made no significant alterations to that language.”  “The withheld portions of the [agreement] constitute information only ‘slightly modified’ by TVA and, thus, covered under Exemption 4.”  “Similarly, [the other company] ‘customized and tailored’ [its agreement] to suit TVA’s needs using [the company’s] rates, terms, and conditions related to its experience in the natural gas transportation industry.”  “That customization shows [the company] produced the information to TVA that formed the withheld portions of the [agreement].”  “[Plaintiff] cannot show that TVA reformulated [the company’s] information such that the provisions of the [agreement] represent TVA's own analysis.”  “[The company’s] declaration also notes that the information [the company] provided in the withheld portions of the [agreement] relates to activities it must perform under the Agreement, rates that it will charge TVA, the specific process for an open season [the company] will conduct to complete part of the pipeline, and the timeframe for the Agreement.”
  
  Third, the court finds that “[plaintiff] does not dispute that the information in the withheld provisions qualifies as ‘confidential.’”  “Even if it did, the record shows that [the two companies] ‘customarily and actually treated as private’ the information in the withheld portions of the Agreements.”  “Both [companies] state as much in their declarations . . . .”  “Moreover, [the companies] do not disclose the information in the withheld portions broadly, and both companies maintain that confidentiality when submitting their precedent agreements to [the government].”  “TVA also assured both [the companies] that it would treat the information in the withheld portions as confidential . . . .”  “Thus, the information in the withheld portions of the Agreements constitutes confidential commercial or financial information.”
  
  Finally, the court finds that “TVA has met its burden under the [FOIA Improvement Act] to withhold portions of the Agreements because disclosure of those provisions would harm the interests protected by Exemption 4.”  The court finds that “TVA’s arguments that disclosure of the withheld portions of the Agreements would destroy the confidentiality of those provisions is inapposite.”  “TVA must show that disclosure of the withheld portions would cause foreseeable harm to [the two companies’] commercial or financial interests – not the confidential nature of the information withheld.”  “Further, the Court, guided by the text of the [FOIA Improvement Act], considers only whether disclosure would cause foreseeable harm to those interests and not the gravity of harm potentially caused by disclosure.”  “In this context, TVA [and the two companies] have shown that disclosure of the withheld portions of the Agreements would harm their commercial or financial interests.”  “[The two companies’] declarations set out the potential harm that they face from competitors who view the contents of the withheld portions of the Agreements.”  “Specifically, [one company] states that disclosure of the withheld portions of [its] Agreement would create unreasonable expectations from future customers, hamper [the company’s] ability to propose terms, and divulge [company’s] project development and risk allocation strategies . . . .”  “Similarly, [the second company] explains that [its] competitors would be able to underbid it on future natural gas projects or gain an advantage in future negotiations with [it] with the information contained in the withheld portions of the . . . Agreement . . . .”  “[The two companies] provide a focused demonstration of why disclosure of the withheld portions of the Agreements will harm [their] commercial or financial interests in the government-contracting context and impede TVA’s ability to enter into future precedent agreements with natural gas transporters.”