National Security Counselors v. Central Intelligence Agency
811 F.3d 22
D.C. Cir.2016Background
- National Security Counselors, Inc. (NSC) is a Virginia tax-exempt, nonstock nonprofit corporation that files FOIA requests and litigates for government transparency. It incorporated in 2011; Kelly B. McClanahan is a co‑founder, Executive Director, and the principal lawyer who handled the litigation at issue.
- NSC sued the CIA and DIA under FOIA after agency responses to several requests; the suit was later dismissed after partial disclosures and settlement discussions.
- NSC sought $14,794.90 in attorney’s fees under FOIA for McClanahan’s legal work performed after incorporation; the district court denied the fee petition, treating NSC as essentially a one‑man operation and invoking the pro se litigant exception.
- The district court relied on Kay and related D.C. Circuit precedent (Burka) that bars attorney’s‑fee awards to individuals who represent themselves, concluding NSC was equivalent to a pro se individual because McClanahan performed most of its work.
- On appeal the D.C. Circuit held NSC is a bona fide corporation distinct from its principal attorney and reversed the denial of fee eligibility, explaining that bona fide organizations remain eligible for FOIA attorney’s fees even when represented by in‑house or founder‑counsel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a small nonprofit corporation that represents itself is ineligible for FOIA attorney’s fees under the pro se exception | NSC: corporate form is legally distinct; organizations (even small ones) remain eligible for fees when they substantially prevail | Government: McClanahan’s dominance made NSC effectively a pro se litigant; the attorney‑client relationship lacked sufficient independence | Held: NSC is a bona fide corporation distinct from its lawyer and is not barred by the pro se exception; eligible for fees if it substantially prevailed |
| Whether the record supported disregarding NSC’s corporate status (alter‑ego) | NSC: presented incorporation documents, 501(c)(3) status, board/officer structure; no evidence of alter‑ego domination | Government: pointed to McClanahan’s central role (including statements in another case) to argue lack of arm’s‑length relationship | Held: Government failed to prove alter‑ego or that NSC’s separate legal identity should be disregarded; district court applied wrong legal standard and lacked factual basis to treat NSC as pro se |
Key Cases Cited
- Kay v. Ehrler, 499 U.S. 432 (Sup. Ct. 1991) (pro se individuals are ineligible for fee awards under statutes awarding "attorney" fees because the statute presupposes an attorney‑client relationship)
- Baker & Hostetler LLP v. U.S. Dep’t of Commerce, 473 F.3d 312 (D.C. Cir. 2006) (organizations that represent themselves remain eligible for FOIA fees; Kay’s pro se exception targets individuals)
- Burka v. U.S. Dep’t of Health & Human Servs., 142 F.3d 1286 (D.C. Cir. 1998) (attorneys proceeding pro se are ineligible for FOIA fee awards)
- Bond v. Blum, 317 F.3d 385 (4th Cir. 2003) (entities represented by in‑house counsel are eligible for fee awards; Kay does not apply to organizational litigants)
- Gold, Weems, Bruser, Sues & Rundell v. Metal Sales Mfg. Corp., 236 F.3d 214 (5th Cir. 2000) (when an organization is represented by its own attorney, the attorney has a status separate from the client for fee‑eligibility purposes)
- Rowland v. California Men's Colony, 506 U.S. 194 (Sup. Ct. 1993) (a corporation may appear in federal court only through licensed counsel; corporate form creates distinct legal personality)