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Small Business Agency will pay attorney fees in FOIA case

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  1. Freedom of Information
The American Small Business League will finally get to collect legal fees from the Department of Justice now that the…

The American Small Business League will finally get to collect legal fees from the Department of Justice now that the agency has dropped its appeal of a California federal court’s award.

The Court of Appeals in San Francisco (9th Cir.) was set to hear the department’s appeal early next year, the league reported in a release.

The suit stemmed from when the Small Business Administration denied the league’s request for the names of firms that received small business contracts and the amounts awarded in 2005 and 2006. The SBA claimed it kept no record of the names and that the information was stored at the General Services Administration.

In her ruling in favor of the league, U.S. District Court Judge Marilyn H. Patel found "curious" the SBA’s argument that it did not possess its own funding allocation information. Patel ordered the SBA to hand over the records and pay the league’s attorney fees in May 2008.

"SBA’s attempt to argue that the information sought by the League is not an “agency record” is the kind of bureaucratic foot-dragging that FOIA — by providing the public with free and open access to government records — was designed to avoid," Patel wrote. 

The SBA turned over the records, but appealed the award of legal fees. The agency planned to argue to the appeals court that the league’s win was not “substantial” enough, since the law requires a requester to have substantially prevailed in order to recoup litigation costs.

Before dropping the appeal, the Justice Department tried to negotiate with the league by offering to pay the preliminary legal fees but not the litigation costs incurred during the appellate process but the offer was declined. Though the most recent case will net the league less than $20,000 in fees, it estimates it has spent at least $100,000 in legal costs on matters involving the SBA.

“We end up filing suit against the government more often than not because they aren’t providing the information or are trying to provide limited information in a roundabout way,” said Christopher Gunn, the league’s communications director.

The government’s sudden abandonment of their appeal did not surprise to league President Lloyd Chapman, who said the agency has capitulated in most of the estimated 15 legal battles he has initiated.

“I’ve been suing them for over 20 years, and I only file if I know I’m going to win,” said Chapman, who has never lost a case against the government. “I actually write the FOIA requests with the idea in mind that I will have to sue.”

According to the league’s release, the records at issue in the suit revealed that the Bush administration “diverted billions of dollars in federal small business contracts to Fortune 500 firms and dozens of large businesses in Europe and Asia."

The league used the records to estimate that legitimate small businesses lost more than $100 billion a year in federal small business contracts that instead went to corporate giants including Boeing, Lockheed Martin, Northrop Grumman, Rolls-Royce and Dell Computer, among others.