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American Management Services v. Dep’t of the Army, No. 12-1274

Decided: January 9, 2013

The Fourth Circuit affirmed the district court’s grant of summary judgment to the Army.  The Army satisfied its burden of showing that disclosure of the documents requested by Pinnacle under the Freedom of Information Act (“FOIA”) would impair the Government’s ability to obtain necessary information in the future.

The Army privatized family housing at several Army installations.  The privatization was accomplished through bids from the private sector to develop, own, manage, and maintain family housing.  The Army owned percentages of the managing entities.  One of the involved entities, Clark Realty Capital, LLC (“Clark”) discovered evidence of alleged fraud being committed by another involved entity, American Management Services, LLC, d/b/a Pinnacle (“Pinnacle”).  As a result, Clark wanted to appoint a replacement property manager and initiate litigation against Pinnacle.  Under its operating agreement, Clarke was obligated to obtain the Army’s approval.  Clark met with the Army on May 6, 2010, and provided the Army with a binder of documents prepared by Clark’s outside counsel.  The Army approved Clark’s plan of action.  Pinnacle then sought the documents shared by Clark’s counsel, among others, in discovery and then through a FOIA request to the Army.  The Army refused the request.

The court reasoned that the Army could not be compelled to share such documents because public disclosure of such documents would make entities like Clark “less willing to share information with the Army, which would aversely impact decision-making processes with regard to taking actions on behalf of a housing LLC.”  J.A. 67.  Disclosure would have a chilling effect on a company’s decision to initiate litigation or provide a government agency with the same quality and quantity information that it might otherwise receive.  Furthermore, the Army and Clark shared a common interest when the Army approved Clark’s course of action on May 14, 2010.  Thus the communications between Clark and the Army after May 14 are protected by the common interest doctrine and qualify as intra-agency communications exempt from disclosure.

Full Opinion

-Jenna Hendricks