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John Doe Corp. v. John Doe Agency and John Doe Government Agency

decided: June 23, 1988.


Appeal from a decision of the United States District Court for the Eastern District of New York (Jacob Mishler, Judge) holding certain documents exempt from disclosure under the Freedom of Information Act. Because the documents were not compiled for law enforcement purposes and their disclosure would not compromise grand jury secrecy, we reverse and remand for consideration of any other exemptions claimed by appellees.

Lumbard, Meskill and Winter, Circuit Judges.

Author: Winter

WINTER, Circuit Judge:

This expedited appeal, based on sealed papers, concerns the scope of certain exemptions to the Freedom of Information Act, 5 U.S.C. § 522 (1982 & Supp. IV 1986) ("FOIA"). Judge Mishler held that defendants John Doe Agency ("Agency") and John Doe Government Agency ("Government Agency") were not required under the FOIA to turn over certain Agency documents, a Vaughn index and answers to interrogatories. He ruled that disclosure of these materials to plaintiff John Doe Corporation ("Corporation") would "jeopardize" a grand jury investigation and that the materials were therefore exempt from disclosure under the FOIA. We disagree. The documents in question were generated in routine audits and were not compiled for law enforcement purposes. We also believe that their disclosure would not compromise the secrecy of any grand jury proceeding and that the justifications proffered for denying Corporation access to the Vaughn index and answers to Corporation's interrogatories are legally insufficient. We reverse and remand.


Corporation is a government contractor. In the course of a routine audit by Agency in 1978, Corporation and Agency exchanged letters regarding the accounting treatment of certain costs incurred by Corporation. In a letter of May 2, 1978, Agency asserted that these costs, which were charged to a technical overhead account, should have been charged directly to certain government contracts. In response, on July 11, 1978, Corporation gave its justification for charging the costs to the overhead account in a lengthy letter to Agency. No further correspondence on the matter took place.

Eight years later, in 1986, the issue was revived in the context of a grand jury investigation concerning possible fraudulent activity by Corporation in connection with its contracts with the government. In the ostensible belief that Agency documents relating to the 1978 correspondence would exonerate it, and no doubt in the unstated belief that the documents would be useful in responding to the investigation or defending criminal charges, Corporation filed a request with the Agency for such documents under the FOIA on September 30, 1986. The Agency denied the request on November 18, 1986, stating that the documents were exempted from disclosure under FOIA Subsection (b)(7)(A) (production "could reasonably be expected to interfere with enforcement proceedings") and (b)(7)(E) (production would disclose techniques and procedures for law enforcement investigations). Corporation took an administrative appeal.

Before any response was received from the Agency (which eventually denied the request), Corporation learned that the documents had been transferred to Government Agency and filed an identical FOIA request with Government Agency on February 3, 1987. Government Agency denied the request, relying without elaboration on the FOIA exemption in Subsection (b)(7)(A). After an administrative appeal, the Justice Department, acting for Government Agency, summarily denied Corporation's appeal.

Corporation sought de novo review in the Eastern District under 5 U.S.C. § 552(a)(4)(B) of the Agency's and Government Agency's withholding of the documents. In their answer, Agency and Government Agency contended that the documents were exempt from disclosure under FOIA Subsections (b)(3) (matters specifically exempted by other statutes), (b)(5) (certain "inter-agency or intraagency memorandums or letters"), (b)(7) (law enforcement records that would interfere with or expose enforcement proceedings), and Fed. R. Crim. P. 6(e) ("matters occurring before the grand jury") as incorporated by FOIA Subsection (b)(3). The answer asserted that the documents were obtained by Government Agency from Agency pursuant to a grand jury subpoena.

On September 28, 1987, Corporation moved to compel the preparation of a Vaughn index*fn1 and served interrogatories seeking information concerning the transmittal of the documents to the Government Agency and the timing of the grand jury subpoena in relation to the Corporation's FOIA requests. In response, the government moved for a protective order to stay preparation of the Vaughn index and answers to interrogatories until the government had prepared a summary judgment motion. It stated that the documents had been presented to a grand jury and pertained directly to the subject matter of an investigation. It argued that disclosure of the documents might reveal the identities of witnesses, the "strategy or direction" of the investigation, and otherwise enable Corporation to construct a defense. On December 14, 1987, the district court ordered Agency and Government Agency to prepare a Vaughn index and to answer Corporation's interrogatories. The court directed that the index and answers be filed for in camera inspection. The government complied on February 16, 1988.

After an in camera review of the Vaughn index and answers, the district court issued a Memorandum of Decision and Order on March 28, 1988. Judge Mishler, relying on Hatcher v. United States Postal Service, 556 F. Supp. 331 (D.D.C. 1982), determined without elaboration that there was a "substantial risk" that disclosure of the documents, the Vaughn index, or the answers to interrogatories would "jeopardize" the grand jury proceeding. He ruled, therefore, that defendants were not required to turn over any of the documents, Vaughn index and interrogatory answers. Corporation appealed.


This appeal presents several issues. We must resolve whether the district court's decision was final and appealable, whether the documents are exempt under FOIA Subsection (b)(7) or Fed. R. Crim. P. 6(e), and whether plaintiff may ...

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