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Navy Wins MSJ in Reverse-FOIA Case with a Trade Secrets Act Cause of Action

In Trade Secrets Act on July 31, 2010 at 1:22 am
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In a reverse-FOIA case, JCI Metal Products v. U.S. Dept. of the Navy, Slip Copy, 2010 WL 2925436 (S.D. Cal.  Jul 23, 2010) (NO. 09-CV-2139-IEG), Plaintiff JCI Metal Products (“JCI”) brought an action seeking to prevent disclosure of certain information relating to its past contract with Defendant United States Department of the Navy (“Navy”). Before the Court were Plaintiff’s and Defendant’s cross-Motions for Summary Judgment. The court granted Defendant’s Motion for Summary Judgment.

JCI’s second cause of action alleged that disclosure by the Navy of JCI’s unit prices for each contract line item (“CLIN”) information at issue would violate and contravene the Trade Secrets Act, 18 U.S.C. § 1905.

The Trade Secrets Act provides a criminal penalty for:

Whoever, being an officer or employee of the United States . . . publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties . . . which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association . . . .

The Court held that the Trade Secrets Act “cannot override the FOIA’s obligatory disclosure provisions.” Citing CNA Fin. Corp., 830 F.2d at 1141-42; Gen. Elec. Co. v. U.S. Nuclear Regulatory Comm’n, 750 F.2d 1394, 1401-02 (7th Cir.1984) (“[T]he Trade Secrets Act has no independent force in cases where the Freedom of Information Act is involved….”).  The Court concluded that the information sought was not protected by Exemption 4 of the FOIA, which exempts from disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”  Accordingly, “because the information in this case is not protected by Exemption 4, neither can it be protected by the Trade Secrets Act.”  Therefore, the Court granted the Navy’s Motion for Summary Judgment on the Trade Secrets Act cause of action.

By CHARLES H. JUNG

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