The government must release a 2004 U.S. Justice Department memorandum discussing the constitutionality of a federal law that conditioned HIV/AIDS prevention grants on a pledge to oppose prostitution, a federal appeals court ruled yesterday.

The U.S. Court of Appeals for the Second Circuit said an Office of Legal Counsel February 2004 legal memorandum that plaintiffs believe cast doubt on the legality of requiring the anti-prostitution pledge was “incorporated by reference” into final policy and was not exempt from disclosure under the Freedom of Information Act.

But the circuit denied the Brennan Center for Justice at New York University School of Law access to two later draft legal memoranda by the Office of Legal Counsel in July 2004 that were not acted on, saying those drafts were exempt from disclosure under FOIA exemption 5, which is designed to protect the decision-making processes of government agencies.

Laura Able, formerly of the Brennan Center, said the release of the February 2004 memo was important because it led two government agencies to delay for 18 months implementation of the controversial law. The law has since been declared unconstitutional by the Second Circuit in a fight that may be decided by the U.S. Supreme Court.

“It’s a terrific decision, a real victory for transparency, because it orders the agencies to turn over an opinion they’ve been fighting to keep secret for seven years,” Able said. “While we would have liked to have also obtained the later memos, it’s great to get the one we’re going to get.”

The controversy over the pledge requirement in §7631(f) of the U.S. Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003 is intense.

The act contained 41 findings, including one that states it is the policy of the United States to eradicate prostitution and other sexual victimization of women and children, and that the sex industry, the trafficking of individuals and sexual violence are “additional causes of and factors in the spread of the HIV/AIDS epidemic.”

In passing the law, Congress expressed concern that some grant recipients were working to legalize prostitution or advocating that prostitutes unionize for their own protection. The act specified that no funds may be used to promote the legalization of prostitution and it required non-governmental organizations that receive funds to have an explicit policy opposing prostitution.

But in July 2011, a split panel at the Second Circuit found that conditioning tax-payer funded grants on the pledge violated the First Amendment.

Judges Barrington Parker (See Profile) and Rosemary Pooler (See Profile) found it to be a “funding condition of a speech-targeted restriction that is both affirmative and quintessentially viewpoint based” that “warrants heightened scrutiny” inAlliance of Open Society International v. U.S. Agency for International Development, 08-4917-cv (NYLJ, July 7, 2011). Judge Chester Straub (See Profile) dissented.

The decision divided the active judges on the circuit, which voted to deny rehearing en banc in February 2012. The vote was not disclosed but three judges, Jose Cabranes (See Profile), Reena Raggi (See Profile) and Debra Ann Livingston (See Profile), publicly dissented from the denial of en banc rehearing (NYLJ, Feb. 3).

The Justice Department is now seeking a writ of certiorari from the U.S. Supreme Court and Able said the February memo will help the Brennan Center’s argument should the high court hear the dispute.

Intra-Agency Memoranda

In the FOIA case, Southern District Judge Victor Marrero in 2011 ordered that the February 2004 memo sent to the U.S. Department of Health and Human Services and the U.S. Agency for International Development be disclosed to the Brennan Center because it was incorporated by reference into the final policy. Marrero also ordered the July 2004 draft memoranda be released to the Brennan Center because the deliberative process-privilege did not apply.

Second Circuit Judges Guido Calabresi (See Profile), Robert Sack (See Profile) and Peter Hall (See Profile) upheld Marrero yesterday on the February 2004 memo and reversed him on the July memos in a 52-page opinion by Sack. Oral argument in Brennan Center for Justice at New York University of Law v. Department of Justice, 11-4599, was heard on Feb. 21.

Sack discussed FOIA’s exemption 5, which protects “inter-agency or intra-agency memoranda or letters which would not be available by law to a party other than an agency in litigation with the agency. 5 U.S.C. 552(b)(5).”

Sack said the analysis is guided by the U.S. Supreme Court’s decision in NLRB v. Sears, Roebuck, 421 U.S. 132 (1975), where the court quoted a Chicago Law Review article by Kenneth Culp Davis called “The Information Act: A Preliminary Analysis.

The Sears court said the exemption “properly construed, calls for ‘disclosure of all opinions and interpretations’ which embody the agency’s effective law and policy, and the withholding of all papers which reflect the agency’s group thinking in the process of working out its policy and determining what its law should be.”

Sack said there was no doubt the February memo was “predecisional and deliberative,” but it was nonetheless incorporated by reference in the decision of USAID and HHS to delay implementation of the requirement.

“The ‘decision’ being made by USAID and HHS was whether they were constitutionally bound to disregard a duly enacted statute’s command that domestic organizations be subject to the pledge requirement,” Sack said. “Although this may not properly be referred to as an ‘adjudication,’ it was a firm and concrete decision regarding the agency’s policy.”

Because there were two public statements referencing the February memorandum—a footnote in a 2004 USAID document saying the pledge requirement could only be applied to foreign grant recipients, and the 2005 testimony of a USAID official at a Congressional hearing—the government could not claim the exemption.

But the same was not the case with the two later documents the circuit found exempt.

The first was a 30-page, never-finalized opinion by Renee Lettow Lerner of the Office of Legal Counsel sent on July 2, 2004, discussing whether the pledge requirement would apply only to foreign, and not domestic-based, groups.

The second document was another draft of the first and was sent by a second lawyer on July 29, 2004.

Judge Marrero found after in camera review that, contrary to the view conveyed by the government, the drafts counseled requiring the pledge for domestic as well as foreign grant recipients and therefore the agency either expressly adopted or incorporated by reference the policy change—that domestic organizations could be required to sign the pledge.

But Sack disagreed with the district court yesterday, saying there was “no evidence” the U.S. Agency for International Development “based its change in policy on the draft memoranda.”

“In such a circumstance, ordering release of these never-finalized memoranda would fail to ‘safeguard and promote agency decisionmaking processes’ by, for example, not ‘protect[ing] against confusing the issues and misleading the public by dissemination of documents suggesting reasons and rationales for a course of action which were not in fact the ultimate reasons for the agencies action,’” Sack said, and failing to assure agency employees felt free to offer uninhibited opinions “‘without fear of later being subjected to public ridicule or criticism,’” Providence Journal Co. Dept. of the Army, 981 F.2d 552 (1st Cir. 1992).

Dorothy Heyl and Elizabeth Virga of Milbank, Tweed, Hadley & McCloy argued for the Brennan Center.

Assistant U.S. Attorney Sharon Swingle argued for the government.

Able is now deputy director of the National Center for Access to Justice at the Benjamin N. Cardozo School of Law, which is not part of the FOIA case.