Filed: Jun. 12, 2017
Latest Update: Mar. 03, 2020
Summary: Case: 16-50976 Document: 00514026654 Page: 1 Date Filed: 06/09/2017 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED June 9, 2017 No. 16-50976 Lyle W. Cayce Clerk CF INDUSTRIES, INCORPORATED; CF INDUSTRIES SALES, L.L.C., Plaintiffs–Appellants, v. DEPARTMENT OF JUSTICE BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES, Defendant–Appellee. Appeal from the United States District Court for the Western District of Texas USDC No. 6:14-CV
Summary: Case: 16-50976 Document: 00514026654 Page: 1 Date Filed: 06/09/2017 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED June 9, 2017 No. 16-50976 Lyle W. Cayce Clerk CF INDUSTRIES, INCORPORATED; CF INDUSTRIES SALES, L.L.C., Plaintiffs–Appellants, v. DEPARTMENT OF JUSTICE BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES, Defendant–Appellee. Appeal from the United States District Court for the Western District of Texas USDC No. 6:14-CV-..
More
Case: 16-50976 Document: 00514026654 Page: 1 Date Filed: 06/09/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 9, 2017
No. 16-50976
Lyle W. Cayce
Clerk
CF INDUSTRIES, INCORPORATED; CF INDUSTRIES SALES, L.L.C.,
Plaintiffs–Appellants,
v.
DEPARTMENT OF JUSTICE BUREAU OF ALCOHOL, TOBACCO,
FIREARMS, AND EXPLOSIVES,
Defendant–Appellee.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 6:14-CV-392
Before CLEMENT, PRADO, and OWEN, Circuit Judges.
PER CURIAM:*
CF Industries, Inc. and CF Industries Sales, L.L.C. (collectively, CFI)
have been sued for damages in state court where it has been alleged that they
are responsible for the fire and massive explosion at the West Fertilizer facility
that caused the death of fifteen people, injuries to scores more, and widespread
property damage. The Department of Justice Bureau of Alcohol, Tobacco,
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 16-50976 Document: 00514026654 Page: 2 Date Filed: 06/09/2017
No. 16-50976
Firearms, and Explosives (ATF) has investigated the fire and explosion
extensively, and CFI submitted a request to ATF for information and evidence.
ATF denied that request, and CFI filed suit. The district court granted
summary judgment in favor of ATF. CFI appealed. We affirm.
I
On April 17, 2013, a fire followed by a large explosion occurred at the
West Fertilizer facility in West, Texas, resulting in the deaths of fifteen
individuals, injuries to more than 160 people, and significant property damage
in the surrounding area. ATF conducted one of its largest fire investigations
to determine the cause of the fire and explosion. Meanwhile, individuals and
businesses harmed by the incident brought suit against CFI and other
defendants in Texas state court, seeking tens of millions of dollars in damages
from CFI and alleging that the ammonium nitrate manufactured by CFI and
transported to the West Fertilizer facility was defectively designed and
unreasonably dangerous, and that it caused the fire. CFI maintains it is not
liable and has put forth alternative causation theories, including a theory that
a “John Doe” criminal actor is responsible for the fire and, therefore, that the
state court plaintiffs cannot prove CFI’s conduct or its product was the
proximate cause of their damages, a necessary element of their claims.
CFI sent a formal written request, known as a Touhy 1 request, pursuant
to federal regulations 2 to the U.S. Attorney for the Western District of Texas,
seeking evidence related to the West incident. ATF denied the request,
responding that ATF “still has an open investigation” and that disclosure
would “reveal investigatory records compiled for law enforcement purposes and
would interfere with any potential enforcement proceedings.” CFI then filed a
1 United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951).
2 28 C.F.R. §§ 16.21-.29.
2
Case: 16-50976 Document: 00514026654 Page: 3 Date Filed: 06/09/2017
No. 16-50976
complaint in the Western District of Texas, seeking a declaratory judgment
that ATF’s denial of CFI’s Touhy request was improper and an order
compelling ATF to produce the requested evidence. ATF filed a motion to
dismiss or, in the alternative, a motion for summary judgment, again asserting
that the investigation was ongoing and that the release of evidence to CFI
“could reveal law enforcement techniques, procedures, protocols, [and]
methods as well as . . . any potential targets of criminal wrongdoing.”
Prior to ruling on the matter, the district court scheduled an in camera
hearing to view the investigation materials. ATF submitted materials to the
district court ex parte before the hearing, including materials which provided
additional detail as to why ATF contended that disclosure to CFI was
inappropriate at that time. The district court canceled the in camera hearing
and stayed the case until the investigation and reports were completed. The
district court also ordered ATF to submit monthly status reports until the final
investigation report was submitted to the court.
For almost a year, ATF provided monthly status reports to the district
court ex parte. During this period, CFI also narrowed its Touhy requests to
ATF. In response, ATF provided information in response to four of the five
requests, releasing measurements of the explosion crater, photographs of the
crater before any excavation occurred, a voicemail from a plant employee, and
copies of documents recovered from the scene. ATF denied CFI’s request for a
“log of all items” ATF had recovered, asserting its law enforcement privilege.
Approximately three years after the explosion, ATF held a press
conference and publicly announced that the final ruling as to the cause of the
fire was that it was incendiary, meaning that the cause of the fire was a
criminal act. ATF explained in the press conference that it reached this
conclusion by conducting more than “400 interviews, a systematic fire scene
examination, considering witness observations, viewing both witness
3
Case: 16-50976 Document: 00514026654 Page: 4 Date Filed: 06/09/2017
No. 16-50976
photographs and video as well as extensive scientific testing” at the ATF fire
research laboratory. ATF also stated that the investigation was still “active
and ongoing.”
The federal district court subsequently lifted its prior stay, and CFI filed
a motion to reset the previously scheduled in camera hearing. ATF again filed
an ex parte, in camera court advisory, explaining that the investigation report
was in the final approval process and would be hand-delivered to the district
court. ATF also submitted a declaration by Special Agent Elder reiterating its
reasons for nondisclosure. Although never placed on the district court’s docket
or included in the initial record on appeal, ATF did in fact hand-deliver the
final report to the district court. ATF asserts that the district court reviewed
the report and “sua sponte returned the report to the custody of ATF.” The
district court granted ATF’s motion for summary judgment. CFI appealed.
This court heard oral argument and, at its conclusion, suggested that the
parties further negotiate: CFI was to submit specific, limited evidence requests
to ATF, and ATF was to reply with the production or specific reasons for
refusing. In making its requests, CFI reiterated that it needed to “determine
the cause and origin of the fire and the mechanisms that led to the explosion”
to defend against the state civil claims. CFI also explained that “[b]ecause
[ATF] had exclusive access to all relevant physical evidence and information
recovered from the site[,] . . . CFI seeks [ATF’s] cooperation in providing access
to the necessary evidence and information, either in its original form or as
summarized or depicted by [ATF].”
In response to CFI’s requests, ATF produced a partially redacted version
of its final investigative report and granted CFI’s requests for a variety of
evidence, including an evidence list and a debris field map, laboratory analyses
of samples collected from the site, results of other testing and analysis included
in the final report, the summary of a witness statement describing the facility,
4
Case: 16-50976 Document: 00514026654 Page: 5 Date Filed: 06/09/2017
No. 16-50976
a report on the electrical systems, additional information regarding the crater,
a log of all photographs taken at the scene, summaries of all witness accounts
included in the final report, and interviews of other witnesses not included in
the report. The final report, produced with partial redactions, included
analysis of possible accidental, natural, and intentional causes of the fire. It
eliminated a number of possible causes, including the storage of ammonium
nitrate and the spontaneous ignition of the ammonium nitrate. The report
specifically noted that “the Ammonium Nitrate was stored in the Ammonium
Nitrate Bin(s) located on the northwest and west side of the structure, which
is outside the area of origin of this fire.” Rather, the report concluded that
“[t]he fire migrated to the Ammonium Nitrate storage areas from the Seed
Room.”
ATF also provided CFI the declaration of Gary Orchowski, Assistant
Special Agent in Charge of ATF’s Houston Division, which responded to a
number of CFI’s “requests for admissions.” Specifically, Special Agent
Orchowski declared that (1) “ATF followed the standards set forth in the
National Fire Protection Association’s Guide for Fire and Explosion
Investigations (NFPA-921) in conducting its investigation of the origin and
cause of the event”; (2) based on available information, inspection of the
physical evidence, consideration of witness observations, photographs and
videos, and testing, “ATF has concluded that the fire was incendiary in nature,
meaning that it was the result of a criminal act”; (3) other “reasonable
accidental and natural fire scenarios” were considered and eliminated as
causes; (4) “[t]he only hypothesis that could not be eliminated, and that was
confirmed by extensive testing[,] . . . is that the cause of the fire was the result
of human intervention by the application of a competent ignition source to
available combustible materials in the area of origin”; (5) “evidence gathered
by ATF is consistent with the presence of one or more criminal actors at the
5
Case: 16-50976 Document: 00514026654 Page: 6 Date Filed: 06/09/2017
No. 16-50976
scene at or just before the time the fire began”; and (6) “[t]here is no evidence
that the ammonium nitrate was involved with the origin or cause of the fire.”
At a later date, ATF produced five DVD discs of audio and video files as
well as video recordings of field testing performed at the West facility. It also
provided CFI with LIDAR surveying data pertaining to the West facility. In a
third production, ATF produced a number of videos of experiments performed
during the course of the investigation. Some of those test videos were partially
redacted. ATF also provided CFI with additional reports of interviews with
first responders, additional photographs, and other additional reports of
witness interviews.
This court has not issued an opinion pending the many months of
discussions between CFI and ATF. However, according to CFI, the parties
have “reached an impasse,” and CFI now requests that this court determine
whether ATF may continue to withhold certain evidence.
II
Judicial review of ATF’s decision is governed by the Administrative
Procedure Act (APA). 3 Although the “reviewing court shall decide all relevant
questions of law,” an agency decision may be set aside only if it is “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law.” 4
“The scope of review under this standard is narrow, and a court is not to
substitute its judgment for that of the agency.” 5 “Nevertheless, the agency
3 5 U.S.C. § 706; see Hasie v. Office of the Comptroller of the Currency, 633 F.3d 361,
365 (5th Cir. 2011); see also COMSAT Corp. v. Nat’l Sci. Found.,
190 F.3d 269, 277 (4th Cir.
1999) (“[I]n the context of an agency’s response to a third-party subpoena, ‘the proper method
for judicial review of the agency’s final decision pursuant to its regulations is through the
Administrative Procedure Act.’” (quoting United States v. Williams,
170 F.3d 431, 434 (4th
Cir. 1999))).
4 5 U.S.C. § 706.
5 Hasie, 633 F.3d at 365.
6
Case: 16-50976 Document: 00514026654 Page: 7 Date Filed: 06/09/2017
No. 16-50976
must examine the relevant data and articulate a satisfactory explanation for
its action including a ‘rational connection between the facts found and the
choice made.’” 6 We review the district court’s grant of summary judgment de
novo. 7
III
Federal agencies are permitted to promulgate regulations, known as
Touhy regulations, governing the disclosure of information pursuant to a
request. 8 The Department of Justice’s regulations, set forth at 28 C.F.R.
§ 16.21 et seq., prohibit disclosures that “would reveal investigatory records
compiled for law enforcement purposes, and would interfere with enforcement
proceedings or disclose investigative techniques and procedures the
effectiveness of which would thereby be impaired.” 9 Section 16.26(a) also
directs Department of Justice officials to consider “[w]hether such disclosure
is appropriate under the rules of procedure governing the case or matter in
which the demand arose” and “[w]hether disclosure is appropriate under the
relevant substantive law concerning privilege.” 10
The Department of Justice’s regulations direct officials to consider the
“substantive law concerning privilege,” 11 and ATF asserts that the law
enforcement privilege applies to the withheld evidence such that nondisclosure
was proper. The scope of the law enforcement privilege, which “protect[s]
investigative files in an ongoing criminal investigation,” 12 is similar to the
6 Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)
(quoting Burlington Truck Lines v. United States,
371 U.S. 156, 168 (1962)).
7 Hasie, 633 F.3d at 365.
8 See 5 U.S.C. § 301; United States ex rel. Touhy v. Ragen, 340 U.S. 462, 468 (1951).
9 28 C.F.R. § 16.26(b)(5).
10 § 16.26(a).
11 28 C.F.R. §16.26(a)(2).
12 In re U.S. Dep’t of Homeland Sec., 459 F.3d 565, 569 (2006) (quoting Coughlin v.
Lee,
946 F.2d 1152, 1159 (5th Cir. 1991)).
7
Case: 16-50976 Document: 00514026654 Page: 8 Date Filed: 06/09/2017
No. 16-50976
language in § 16.26(b)(5) of the Department of Justice’s Touhy regulations.
CFI asserts that, because ATF is the party asserting the law enforcement
privilege, it bears the burden of demonstrating that the privilege applies. If
this burden is satisfied, CFI contends, the privilege can nevertheless be
overcome if CFI can show that its need outweighs ATF’s interest in
nondisclosure, according to a number of factors. But courts assessing the law
enforcement privilege according to the framework urged by CFI have done so
in suits that were not brought under the APA and therefore not subject to the
deferential standard that statute requires. 13 We decline to apply the
framework urged by CFI to this APA action. Rather, we assess ATF’s decision
as an agency action reviewed under the APA.
The record reflects that ATF recognized and considered the applicable
Touhy regulations in making its decision. In response to CFI’s recent requests
for information it disclosed a significant amount of investigative material and,
in denying certain requests, it articulated its reasons for doing so. ATF
explained that (1) “the release of some material requested would, in the
agency’s considered judgment, cause undue risk of harm to law enforcement
proceedings” and (2) compliance “would require excessive diversion of agency
resources away from ATF’s law enforcement mission, or [would be] unduly
burdensome or cumulative.” We cannot conclude that ATF’s decision to
withhold certain evidence because disclosure would harm or otherwise
13 See U.S. Dep’t of Homeland Sec., 459 F.3d at 570 (directing the district court on
remand to consider, when reviewing a motion to compel in pretrial discovery, the ten factors
articulated in Frankenhouser v. Rizzo,
59 F.R.D. 339, 344 (E.D. Pa. Mar. 13, 1973), in
balancing the government’s interest in confidentiality against the litigant’s need for the
documents); see also Solar Sources, Inc. v. United States,
142 F.3d 1033, 1037 (7th Cir. 1998)
(noting that when a private litigant requests disclosure under the Freedom of Information
Act (FOIA), the federal agency “bears the burden of justifying its decision to withhold the
requested information pursuant to a FOIA exemption”).
8
Case: 16-50976 Document: 00514026654 Page: 9 Date Filed: 06/09/2017
No. 16-50976
interfere with law enforcements efforts was irrational, arbitrary, capricious, or
an abuse of discretion.
We recognize that assertions of the law enforcement privilege by federal
agencies may, in certain circumstances, make it difficult for private litigants
to defend themselves in civil actions. We note, however, that in this particular
case, ATF has provided CFI with a substantial amount of information,
abandoning its prior blanket denial of CFI’s Touhy requests.
* * *
For the foregoing reasons, we AFFIRM the judgment of the district court.
9
