The opinion of the court was delivered by: Spatt, District Judge.
For the reasons that follow, this Court finds that although the
plaintiff is "eligible" for attorney's fees under the statute,
he is not "entitled" to an award since he has failed to
demonstrate that the action is of any benefit to the public
since the documents at issue were sought solely to assist the
plaintiff in the defense of a separate private civil action.
The plaintiff Richard Muffoletto ("Muffoletto"), is a defendant
in a civil action pending in the Supreme Court of the State of
New York, County of New York, entitled, Beneficial Capital
Corp. v. Dato Fields Sys. Corp., The Shepherd Agency, Inc. and
Richard Muffoletto, No. 12707/84 (Glen, J.), which is an
action to recover debts allegedly owed by Muffoletto to
Beneficial Capital Corporation ("BCC") based on certain notes
and/or guarantees. One of Muffoletto's defenses to one of the
notes is "payment", as set forth in the fourth affirmative
defense in Muffoletto's answer, as follows:
"18. The balance due on the note which is the subject of the
Complaint's first cause of action has been paid in full on
behalf of Dato Fields by Olympic Construction Corporation, a
corporation in which Defendant Richard Muffoletto had an
interest and which was, in fact, controlled by the Federal
Bureau of Investigation in connection with certain
investigations of governmental corruption, popularly known as
"ABSCAM", in which both Muffoletto and John Hoey, Plaintiff's
President, were cooperating. Said payments were made to John
Hoey personally for the account of Plaintiff."
In order to prove this defense and to defeat BCC's motion for
summary judgment in the state-court action, Muffoletto was
required to come forward with evidence of the allegations
contained in the defense, namely, that he was working with the
Federal Bureau of Investigation ("FBI"); that Olympic
Construction Corporation ("OCC") was controlled by the FBI;
that John Hoey ("Hoey"), BCC's President, was involved in the
same FBI investigation; that payments were made by OCC and/or
the FBI to Hoey; and that such payments, however denominated,
were in full repayment of one of the notes at issue.
Muffoletto's contract with the FBI concerning the OCC, dated
November 13, 1979, however, contained a "nondisclosure" clause
that provided as follows:
"22. Nondisclosure: Muffoletto agrees not to disclose
information pertaining to this contract at any time during
performance to any person or entity without the permission of
the Bureau. Following termination of this Agreement, because of
the necessity to protect confidential sources and investigative
techniques, Contractors agree to obtain prior written
permission of the Director of the Bureau before any disclosure
may be made."
On April 8, 1988, Muffoletto, through his attorneys, wrote to
request the necessary permission to disclose the details of his
relationship with the FBI. He also requested documents that
Muffoletto believed were necessary to defend the statecourt
action. The FBI failed to respond to this request, which
prompted Muffoletto to file a formal request under the Freedom
of Information Act ("FOIA"), by letter dated June 3, 1988.
The FBI responded to Muffoletto's FOIA request by letter dated
June 29, 1988, advising him that they were searching their
files and would notify Muffoletto of the results sometime in
Muffoletto next contacted the FBI by telephone on several
occasions in early August 1988. On August 23, 1988, the FBI
advised Muffoletto's attorneys that they had located some
documents that "may" pertain to Muffoletto's request, but
needed more information as to other information requested.
Accordingly, the FBI requested Muffoletto to furnish it with
additional information to assist in the processing of his
In the interim, on September 7, 1988, State Supreme Court
Justice S. Kristin Booth Glen rendered a decision denying BCC's
motion for summary judgment in the state-court action, without
prejudice to renewal after further discovery to permit
Muffoletto sufficient time to obtain the necessary documentary
evidence from the FBI.
By letter dated September 14, 1988, Muffoletto provided the FBI
with the additional information requested to enable the FBI to
comply with the FOIA request. Muffoletto's file was then
allegedly forwarded to one of the FBI's Record Management
Division's Disclosure Units for further processing. His file
was personally reviewed by supervisory Special Agent Joseph P.
Smith, III, Chief of the Disclosure Unit.
Agent Smith, then relatively new to the position of Unit Chief,
states that as of June 1988 there were approximately 10,000
FOIA requests pending, "and the normal processing time for a
request was over one year" (Smith Declaration ¶ 2, at p. 2).
During the course of reviewing Muffoletto's file, Agent Smith
"realized the request was being made on behalf of a party who
had a record of cooperation with and assistance to the FBI"
(Smith Declaration ¶ 4, at p. 4). As a result, Agent Smith
allegedly assigned the file for "accelerated processing". Smith
alleges that his initial review of Muffoletto's file occurred
"in or about early October, 1988" (Smith Declaration ¶ 4, at p.
3). In the interim, receiving no response from the FBI, on
October 11, 1988 Muffoletto commenced this action under the
FOIA. On October 3, 1989, just prior to commencing this action,
Justice Glen in the state-court action granted BCC's renewed
motion for summary judgment against Muffoletto.
Sometime between October 11 and 14, 1988, counsel for
Muffoletto and the FBI engaged in a series of telephone
conversations, during the course of which Agent Smith suggested
to counsel that in order to expedite production of the
requested records, a subpoena should be issued to the FBI in
connection with the state-court action (Smith Declaration ¶ 6,
at p. 3). According to the FBI, such a request would result in
a speedier release of the information.
On October 20, 1988, a subpoena was issued in connection with
the state-court action and served upon the FBI. On October 21,
1988, counsel for Muffoletto received numerous documents that
were responsive to the initial FOIA request and/or subpoena. By
the FBI's own account, "prior even to the actual receipt of
the subpoena by the Bureau", initial processing of documents
responsive to Muffoletto's FOIA request was undertaken (Cole
Declaration ¶ 4, at p. 3).
On October 27, 1988, the FBI requested further information from
Muffoletto in order to continue to process his request, which,
in turn, he provided on October 31, 1988. In the meantime, the
parties entered into several stipulations extending the FBI's
time to answer the Complaint in this action.
On January 17, 1989, through the Civil Litigation Unit, the FBI
released approximately 880 additional pages of documents.
According to the FBI's account, these documents were released
pursuant to the subpoena, rather than the FOIA request
(Defendant's Memorandum of Law in Opposition at p. 11). Later,
on March 10, ...