The FOIA, as strengthened by the 1974 FOIA amendments, authorized waiver of fees when it was determined that such action was "in the public interest because furnishing the information can be considered as primarily benefitting the general public." As the Court of Appeals for the District of Columbia Circuit had emphasized, this provision "was enacted to ensure that the public would benefit from any expenditure of public funds for the disclosure of public records." In January 1983, the Department of Justice issued fee waiver guidelines that set forth specific criteria, developed in numerous court decisions, for federal agencies to apply in determining whether the public interest warranted a waiver or reduction of fees.
The current fee waiver standard, which was established by the Freedom of Information Reform Act of 1986, more specifically defines the term "public interest" by providing that fees should be waived or reduced "if disclosure of the information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester." In accordance with this provision, the Department of Justice issued revised fee waiver policy guidance on April 2, 1987--which superseded its 1983 substantive fee waiver guidance, as well as that issued in November 1986 (concerning institutions and record repositories)--and it advised agencies of six analytical factors to be considered in applying this statutory fee waiver standard. These six factors were applied and implicitly approved by the Court of Appeals for the Ninth Circuit in McClellan Ecological Seepage Situation v. Carlucci.
The statutory fee waiver standard as amended in 1986 contains two basic requirements--the public interest requirement and the requirement that the requester's commercial interest in the disclosure, if any, must be less than the public interest in it. Both of these requirements must be satisfied by the requester before properly assessable fees are waived or reduced under the statutory standard. Requests for a waiver or reduction of fees must be considered on a case-by-case basis and should address both of these requirements in sufficient detail for the agency to make an informed decision as to whether it can appropriately waive or reduce the fees in question. As with disclosures made under the FOIA, agencies analyzing fee waiver requests are not bound by previous administrative decisions.
In order to determine whether the first fee waiver requirement has been met--i.e., that disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of government operations or activities--agencies should consider the following four factors in sequence:
1. First, the subject matter of the requested records, in the context of the request, must specifically concern identifiable "operations or activities of the government." As the D.C. Circuit specifically indicated in applying the predecessor fee waiver standard, "the links between furnishing the requested information and benefiting the general public" should not be "tenuous." Although in most cases records possessed by a federal agency will meet this threshold, the records must be sought for their informative value with respect to specifically identified government operations or activities; a request for access to records for their intrinsic informational content alone would not satisfy this threshold consideration.
2. Second, in order for the disclosure to be "likely to contribute" to an understanding of specific government operations or activities, the disclosable portions of the requested information must be meaningfully informative in relation to the subject matter of the request. Requests for information that is already in the public domain, either in a duplicative or a substantially identical form, may not warrant a fee waiver because the disclosure would not be likely to contribute to an understanding of government operations or activities when nothing new would be added to the public's understanding. Un-der existing case law, however, there is no clear consensus yet as to what "is and what is not" considered information in the public domain. As a further consideration, agency records that are created through a public process may not warrant a fee waiver.
3. Third, the disclosure must contribute to the understanding of the public at large, as opposed to the individual understanding of the requester or a narrow segment of interested persons. In the past, courts have generally not defined the "public-at-large" to include the prison population. More recently, courts have considered prisoners as the "public" within the meaning of the FOIA, though the issue has not yet been conclusively decided. Further, whether the "public-at-large" encompasses only the population of the United States has not been clearly resolved by the courts either. Only one case has directly raised this issue, one in which it was held that disclosure to a foreign news syndicate that publishes only in Canada satisfies the requirement that it contribute to "public understanding."
As the proper focus must be on the benefit to be derived by the public, any personal benefit to be derived by the requester, or the requester's particular financial situation, are not factors entitling him or her to a fee waiver. Indeed, it is well settled that indigence alone, without a showing of a public benefit, is insufficient to warrant a fee waiver.
Additionally, agencies should evaluate the identity and qualifications of the requester--e.g., expertise in the subject area of the request and ability and intention to disseminate the information to the public--in order to determine whether the public would benefit from disclosure to that requester. Specialized knowledge may be required to extract, synthesize, and effectively convey the information to the public and requesters vary in their ability to do so. Although established representatives of the news media, as defined in the OMB Fee Guidelines, should readily be able to meet this aspect of the statutory requirement by showing their connection to a ready means of effective dissemination, other requesters should be required to describe with greater substantiation their expertise in the subject area and their ability and intention to disseminate the information.
Some decisions under the former fee waiver standard suggested that journalists should presumptively be granted fee waivers. The Department of Justice encourages agencies to give special weight to journalistic credentials under this factor, though the statute provides no specific presumption that journalistic status alone is to be dispositive under the fee waiver standard overall and such a presumption would run counter to the 1986 amendments that set forth a special fee category for representatives of the news media. (For a discussion of news media requesters in the context of attorney fee awards under the FOIA, see Tax Analysts v. United States Department of Justice and Litigation Considerations, Attorney Fees and Litigation Costs, below.)
Further, the requirement that a requester demonstrate a contribution to the understanding of the public at large is not satisfied simply because a fee waiver request is made by a library or other record repository, or by a requester who intends merely to disseminate the information to such an institution. Requests that make no showing of how the information would be disseminated, other than through passively making it available to anyone who might seek access to it, do not meet the burden of demonstrating with particularity that the information will be communicated to the public. These requests, like those of other requesters, should be analyzed to identify a particular person who actually will use the requested information in scholarly or other analytic work and then disseminate it to the general public.
4. Lastly, the disclosure must contribute "significantly" to public understanding of government operations or activities. To warrant a waiver or reduction of fees, the public's understanding of the subject matter in question, as compared to the level of public understanding existing prior to the disclosure, must be likely to be enhanced by the disclosure to a significant extent. Such a determination must be an objective one; agencies are not permitted to make separate value judgments as to whether any information that would in fact contribute significantly to public understanding of government operations or activities is "important" enough to be made public.
Once an agency determines that the "public interest" requirement for a fee waiver has been met, the statutory standard's second requirement calls for the agency to determine whether "disclosure of the information . . . is not primarily in the commercial interest of the requester." In order to decide whether this requirement has been satisfied, agencies should consider the following two factors in sequence:
1. First, an agency must determine as a threshold matter whether the request involves any commercial interest of the requester which would be furthered by the disclosure. A "commercial interest" is one that furthers a commercial, trade, or profit interest as those terms are commonly understood. Information sought in furtherance of a tort claim for compensation or retribution for the requester is not considered to involve a "commercial interest." However, not only profit-making corporations but also individuals or other organizations may have a commercial interest to be furthered by the disclosure, depending upon the circumstances involved. Agencies may properly consider the requester's identity and the circumstances surrounding the request and draw reasonable inferences regarding the existence of a commercial interest.
When a commercial interest is found to exist and that interest would be furthered by the requested disclosure, an agency must assess the magnitude of such interest in order subsequently to compare it to the "public interest" in disclosure. In assessing the magnitude of the commercial interest, the agency should reasonably consider the extent to which the FOIA disclosure will serve the requester's identified commercial interest.
2. Then an agency must balance the requester's commercial interest against the identified public interest in disclosure and determine which interest is "primary." A fee waiver or reduction must be granted when the public interest in disclosure is greater in magnitude than the requester's commercial interest. Or, as one court phrased it when considering the balance to be struck under the predecessor fee waiver standard: "In simple terms, the public should not foot the bill unless it will be the primary beneficiary of the [disclosure]."
Although news gathering organizations ordinarily have a commercial interest in obtaining information, agencies may generally presume that when a news media requester has satisfied the "public interest" standard, that will be the primary interest served. On the other hand, disclosure to private repositories of government records or data brokers may not be presumed to primarily serve the public interest; rather, requests on behalf of such entities can more readily be considered as primarily in their commercial interest, depending upon the nature of the records and their relation to the exact circumstances of the enterprise.
When agencies analyze fee waiver requests by considering these six factors, they can rest assured that they have carried out their statutory obligation to determine whether a waiver is in the public interest. When an agency has relied on factors unrelated to the public benefit standard to deny a fee waiver request, however, courts have found an abuse of discretion. Additionally, when only some of the requested records satisfy the statutory test, a waiver should be granted for those records.
An analysis of the foregoing factors routinely requires an agency to first assess the nature of the information likely to be released in response to an access request, because the statutory standard speaks to whether "disclosure" of the responsive information will significantly contribute to public understanding. This assessment necessarily focuses on the information that would be disclosed, which in turn logically requires an estimation of the applicability of any relevant FOIA exemption(s). Yet the extent to which an agency must establish at the fee waiver determination stage the precise contours of its anticipated withholdings was raised in Project on Military Procurement v. Department of the Navy, when the district court seemed to suggest that an agency must defend the contemplated application of FOIA exemptions in the fee waiver context with an index pursuant to the requirements of Vaughn v. Rosen.
Such a requirement not only was unprecedented, it is also unworkable--as it would compel an agency to actually process responsive records at the threshold fee waiver determination stage in order to compile the Vaughn Index; it would turn the normal, longstanding procedure for responding to FOIA/fee waiver requests on its head. Until a fee waiver determination has been made and (if a full fee waiver is not granted) the requester has agreed to pay all the assessable fees, the request is not yet ripe for processing because there has been no compliance with the fee requirements of the FOIA. Because the decision on this issue in Project on Military Procurement would yield impracticable results, it should not be followed. Agencies should retain the general discretion, though, to consider the cost-effectiveness of their investment of administrative resources in their fee waiver determinations and should not impose any "unnecessary bureaucratic hurdles" in this area of FOIA administration.
The FOIA does not specifically provide for administrative appeals of denials of requests for fee waivers. Nevertheless, many agencies, either by regulation or by practice, have appropriately considered appeals of such actions. The Courts of Appeals for the Fifth and D.C. Circuits have made it clear, moreover, that administrative appeal exhaustion is required for any adverse determination, including fee waiver denials.
Prior to the 1986 FOIA amendments, the discretionary nature of the FOIA's fee waiver provision led the majority of courts to conclude that the proper standard for judicial review of an agency denial of a fee waiver is whether that decision was arbitrary and capricious, in accordance with the Administrative Procedure Act. This meant that a court could not "replace its own judgment for that of [an agency] without first concluding that the [agency's] decision was completely unreasonable and unfair."
This standard was changed, however, when a specific judicial review provision was included in the FOIA, which now provides for the review of agency fee waiver denials according to a de novo standard. Yet this provision also explicitly provides that the scope of judicial review remains limited to the administrative record established before the agency, and thus it is crucial that the agency's fee waiver denial letter create a comprehensive administrative record of all the reasons for the denial. A requester wishing to challenge an agency's denial of a fee waiver may seek judicial review of the agency's decision.