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MUFFOLETTO v. SESSIONS

March 27, 1991

RICHARD MUFFOLETTO, PLAINTIFF
v.
WILLIAM SESSIONS, AS DIRECTOR OF THE FEDERAL BUREAU OF INVESTIGATION, UNITED STATES JUSTICE DEPARTMENT, DEFENDANT.



The opinion of the court was delivered by: Spatt, District Judge.

  OPINION AND ORDER

A requester who "substantially prevails" in litigation brought to obtain information from a federal agency under the Freedom of Information Act becomes "eligible" for an award of attorney's fees under the statute. Before fees may be awarded, however, the requester bears the additional burden of demonstrating that he or she is "entitled" to the award, on the ground that such disclosure has or will result in a "benefit to the public". In this regard, the plaintiff moves pursuant to the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552(a)(4)(E), for an award of attorney's fees in the amount of $11,326.26. The defendant opposes this application in its entirety and, in turn, cross-moves to dismiss the action for lack of prosecution.

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.

I. FACTUAL BACKGROUND

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 the future.

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 request.

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, ...


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