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ORAL ARGUMENT SCHEDULED - MARCH 2, 2012 UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT ) ) ) ) App. No. 11 - 5111 ) Civil No.: 06 CV 1023 (JDB) ) ) ) ) ) ) ) )
UNITED AMERICA FINANCIAL, INCORPORATED, Appellant. v. PATRICK R. DONAHOE, Postmaster General U.S. Postal Service, Appellee.
BRIEF OF APPELLANT UNITED AMERICA FINANCIAL, INC. William P. Farley, Esquire Law Office of William P. Farley, P.C. 717 D Street, N.W Washington, D.C. 20004 John F. Karl, Jr. McDonald & Karl 1150 Connecticut Ave., N.W. Ninth floor Washington, D.C. 20036
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Noah A. Clements* THE CLEMENTS FIRM 1250 Connecticut Avenue NW, Suite 200 Washington, DC 20036 (202) 630-0544 [email protected] * Counsel of Record
Counsel for Appellant United America Financial, Inc.
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CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES Pursuant to Federal Rule of Appellate Procedure 28(a)(1) and Circuit Rule 28(a)(1), counsel for Appellant United America Financial, Inc. (“United America”) submit this certificate as to parties, rulings and related cases. a. Parties. Appellant is United America. Appellee is Patrick R. Donahoe, Postmaster General of the United States Postal Service. b. Corporate Disclosure. Appellant United America is a privately held corporation. No publicly held company owns more than 10% of United America’s common stock. c. Rulings Under Review. The district court denied United America’s Motion for Attorneys’ Fees, published at United Am. Fin., Inc. v. Potter, 770 F.Supp.2d 252 (D.D.C. 2011). d. Related Cases. This case has previously been before the Court in docket number 10-5002. There are no related cases.
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TABLE OF CONTENTS CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES ............................................................................................... i! TABLE OF CONTENTS ................................................................ ii! TABLE OF AUTHORITIES ......................................................... iv! JURISDICTIONAL STATEMENT .............................................. 1! ISSUES PRESENTED ................................................................... 2! 1)! United America sought information related to an article published by the United States Postal Service (“USPS”) that called United America insurance agents “Nigerian Identity Thieves.” The parties agree that United America is eligible for FOIA attorneys’ fees. In determining whether United America was entitled to attorneys’ fees, the district court ignored the strong public interest in uncovering illegal discrimination. Did the district court err? ..................................................................... 2! 2)! Although United America undoubtedly had a private interest in the possible discriminatory labeling of its salespeople, there was no evidence that it sought the documents requested for any commercial benefit. Did the district court err in failing to consider United America’s lack of commercial interest in the information? ................................................................................... 2! 3)! The district court found the USPS justifications for many withholdings through three rounds of briefing to be “conclusory,” “untenable,” and non-sensical. Nevertheless the district court found that the USPS had “articulated a reasonable legal position” in denying attorneys’ fees. Did the district court err?.. 2! STATEMENT OF THE CASE ....................................................... 3! STATEMENT OF FACTS .............................................................. 6! SUMMARY OF THE ARGUMENT ............................................ 12!
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ARGUMENT .................................................................................. 15! I.! Standard Of Review. .............................................................. 15! II.! The District Court Erred By Failing To Consider The Strong Public Interest In Uncovering Governmental Discrimination Based On Race Or National Origin. ........................................... 16! III.!The District Court Erred By Failing To Consider That United America Sought No Commercial Benefit From The Information Requested. ............................................................... 22! IV.!The District Court Erred By Failing To Hold The USPS To Its Burden Of Showing That Its FOIA Denials Had A Reasonable Basis In Law. ........................................................... 25! A.! Simply Stating The Correct Legal Standard Without Showing The Standard Is Applicable Does Not Constitute A Reasonable Basis In Law. ........................................................ 27! B.! The USPS Did Not Meet Its Burden To Justify Its Withholding of Documents “Voluntarily” Disclosed. .............. 32! CONCLUSION .............................................................................. 37! CERTIFICATE OF WORD COUNT .......................................... 39! CERTIFICATE OF SERVICE .................................................... 39!
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TABLE OF AUTHORITIES Cases! Blue v. Bureau of Prisons, 570 F.2d 529 (5th Cir. 1978) .............. 17 * Brayton v. Office of the U.S. Trade Rep., 641 F.3d 521 (D.C. Cir. 2011) ....................................................................................... 15, 35 Burka v. U.S. Dept. of Health & Human Servs., 142 F.3d 1286 (D.C. Cir. 1998) ............................................................................ 13 * Cazalas v. Dep’t of Justice, 709 F.2d 1051 (5th Cir. 1983)... 18, 24 Cuneo v. Rumsfeld, 553 F.2d 1360 (D.C. Cir. 1977) ................ 13, 36 * Davy v. CIA, 550 F.3d 1155 (D.C. Cir 2008) ....... 21, 34, 35, 37, 38 Fenster v. Brown, 617 F.2d 740 (D.C. Cir. 1979) ........................... 17 Fullilove v. Klutznick, 448 U.S. 448 (1980) ............................. 19, 21 Herbert v. Nat’l Acad. of Sci., 974 F. 2d 192 (D.C. Cir. 1992)....... 16 Judicial Watch, Inc. v. Bureau of Land Mgmt., 562 F. Supp. 2d 159 (D.D.C. 2008). ........................................................................ 31 Judicial Watch, Inc. v. FDA, 449 F.3d 141 (D.C. Cir. 2006) ......... 32 Kickapoo Tribe v. Babbitt, 43 F.3d 1491 (D.C. Cir. 1995)....... 15, 16 Nationwide Bldg. Maintenance, Inc. v. Sampson, 559 F.2d 704 (D.C. Cir. 1977). .................................................................... 13, 37 Tax Analysts v. Dep’t of Justice, 965 F.2d 1155 (D.C. Cir. 1992) 23, 24 Tax Analysts v. IRS, 294 F.3d 71 (D.C. Cir. 2002) ........................ 29 United Am. Fin., Inc. v. Potter, 531 F. Supp. 2d 29 (D.D.C. 2008) 4, 16, 28, 34 United Am. Fin., Inc. v. Potter, 667 F. Supp. 2d 49 (D.D.C. 2009) 5, 16, 30, 31 United Am. Fin., Inc. v. Potter, 770 F. Supp. 2d 252 (D.D.C. 2011) .................................................................... 3, 20, 23, 26, 30, 32, 33 Authorities upon which we chiefly rely are marked with asterisks.
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United Ass’n of Journeymen and Apprentices v. Army Corps of Eng’rs, 841 F.2d 1459 (9th Cir. 1988) ......................................... 18 Vermont Low Income Advocacy Council v. Usery, 546 F.2d 509 (2d Cir. 1976) ...................................................................................... 37 Statutes! 28 U.S.C. § 1291. ............................................................................... 1 Freedom of Information Act (“FOIA”), 5 U.S.C. § 552 .................... 1
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JURISDICTIONAL STATEMENT This Court has jurisdiction over this appeal of the district court’s final order denying FOIA attorney fees under 28 U.S.C. § 1291. The district court had jurisdiction over the underlying action under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552. The district court likewise had jurisdiction over United America’s request for FOIA attorney fees under 5 U.S.C. § 552(a)(4)(E). The district court issued its decision denying FOIA attorney fees on March 18, 2011, and United America filed its timely Notice of Appeal on May 6, 2011 pursuant to Fed. R. App. P. 4(a)(1)(B).
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ISSUES PRESENTED 1) United America sought information related to an article published by the United States Postal Service (“USPS”) that called United America insurance agents “Nigerian Identity Thieves.” The parties agree that United America is eligible for FOIA attorneys’ fees. In determining whether United America was entitled to attorneys’ fees, the district court ignored the strong public interest in uncovering illegal discrimination. Did the district court err? 2) Although United America undoubtedly had a private interest in the possible discriminatory labeling of its salespeople, there was no evidence that it sought the documents requested for any commercial benefit. Did the district court err in failing to consider United America’s lack of commercial interest in the information? 3) The district court found the USPS justifications for many withholdings through three rounds of briefing to be “conclusory,” “untenable,” and non-sensical. Nevertheless the district court found that the USPS had “articulated a reasonable legal position” in denying attorneys’ fees. Did the district court err?
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STATEMENT OF THE CASE This case is before the Court on an appeal of the district court’s denial of FOIA attorneys’ fees.1 Appellant United America Financial, Inc. (“United America”) filed a complaint under the Freedom of Information Act (“FOIA”) against United States Postal Service (“USPS”) then-Postmaster General John Potter on June 2, 2006.2 The USPS answered on August 9, 2006. After United America filed its first motion for summary judgment, the USPS released an additional 47 redacted pages of documents on October 30, 2006 while it prepared its own motion for summary judgment.3 After both parties filed motions for summary judgment, the district court granted the USPS motion with respect to a few documents, granted the United America motion for some others. The district court denied the USPS motion
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United Am. Fin., Inc. v. Potter, 770 F. Supp. 2d 252 (D.D.C. 2011) (“Attorney Fees Opinion”), JA 105; March 18, 2011 Order, JA 109. Complaint (June 2, 2006), JA 12. Decl. of Mildred R. Baxter, USPS Inspection Service, at 14 (Oct. 30, 2006), JA __.
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without prejudice for the bulk of the withheld documents. 4 The district court ordered further briefing to “provide defendant a chance to submit more detailed declarations in support of the withholdings under Exemption 7(A)” 5 and to “provide defendant a further opportunity to submit more detailed declarations justifying the withholding of the names under Exemptions 6 and 7(C).”6 The district court had found many of the USPS justifications to be “conclusory.”7 The district court instructed the USPS to “be mindful of the standards applicable in this Circuit”8 and expressed “some skepticism” as to whether the USPS could justify its withholding of the names of USPS employees involved in responding to the allegations of identity theft.9
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United Am. Fin., Inc. v. Potter, 531 F. Supp. 2d 29 (D.D.C. 2008) (“First FOIA Opinion”), JA 127. Id. at 40, JA 130. Id. at 47, JA 135. Id. at 38-39, 41, 44, 47. Id. at 40. Id. at 47.
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After the USPS and United America filed their second motions for summary judgment, the USPS delivered 200 additional pages of information to United America on June 10, 2008.10 Because the district court found it “difficult, if not impossible, to discern from the parties’ submissions precisely what documents, or portions of documents, remain[ed] at issue, based on what exemption claims,” the district court dismissed both parties’ second motions for summary judgment without prejudice. The court ordered the parties to brief a narrowed case focusing on the documents which remained at issue.11 The parties then filed their third cross motions for summary judgment regarding the 17 remaining documents at issue. The district court ordered the release of ten of these remaining documents.12 The district court found that the USPS justifications for withholding the names of postal investigators under
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Order of March 9, 2009 at 3, JA 125. Id. at 3-4, JA 125-26. United Am. Fin., Inc. v. Potter, 667 F. Supp. 2d 49 (D.D.C. 2009) (“Second FOIA Opinion”), JA 110; Attorney Fees Opinion, 770 F. Supp. 2d at 254, JA 105.
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Exemption 7(C) to be “far too conclusory to support a finding that these employees have a privacy interest.”13 With regard to the names of the editorial staff involved in creating the offensive article, the court likewise stated that the USPS “has not offered anything more than conclusory statements as to why this information should not be public.”14 United America thereafter filed a motion for attorneys’ fees, which the district court denied on March 18, 2011.15 United America appeals this denial. STATEMENT OF FACTS United America, one of the few minority-owned insurance companies in the nation,16 provides financial services to more than
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Second FOIA Opinion, 667 F. Supp. 2d at 60, JA 115; see also id. at 63-65, JA 117-120. Id. at 62. Attorney Fees Opinion, JA 105. See Independent Agency Population Holds Steady as Start-ups Keep Pace with Mergers, INS. J. (Dec. 20, 2010), http://www.insurancejournal.com/magazines/features/2010/12/2 0/160587.htm; Kevin B. O’Reilly, Minority & Women Agents Look to Tap Emerging Markets, INS. J. (June 23, 2003), http://www.insurancejournal.com/magazines/features/2003/06/2 3/30101.htm.
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25,000 federal employees. Although many United America employees are of African descent, most were born in the United States or are otherwise U.S. citizens. After receiving complaints of aggressive sales tactics on USPS property by some of United America’s insurance salespeople, the USPS published an article on its website warning its employees not to do business with United America, labeling United America agents “Nigerian identity thieves.”17 The article did not limit its characterization to particular salespeople or state how the USPS had made this determination. When it discovered the USPS web article, United America requested documents from the USPS and the USPS Inspection Service related to the creation of this article and any investigations related to it.18 In its first response, the USPS Inspection Service claimed that there was no investigation of United America and that its personnel were not involved in
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USPS News Link, A Dropped PIN: Nigerian Identity Thieves Target USPS Employees, Jan. 27, 2006 (“Article”), JA 146. FOIA Request Letter of William P. Farley (Feb. 1, 2006), JA 143.
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creation of the article.19 United America responded to the Inspection Service FOIA technician that inspectors in Cleveland, Ohio likely had some of the information requested and provided the names of several USPS employees to contact.20 Shortly thereafter, the USPS Compensation Division replied, stating that it had found eleven pages of responsive records.21 At that time, the USPS released six pages, one with significant redactions, and withheld five pages in their entirety.22 That same day, United America appealed the USPS’s “decision not to search for documents, interview their employees and provide the documents to [United America] as is required under the FOIA.”23 United America explained that it was aware that “the documents obviously exist, including emails and
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FOIA Response Letter of M. R. Baxter, USPS Inspection Service, to William P. Farley (March 9, 2006), JA 192. Letter of William P. Farley to M. R. Baxter, USPS Inspection Service (March 15, 2006), JA 158. FOIA Response Letter of Julie S. Moore to William P. Farley (March 22, 2006), JA 194. Id. FOIA Appeal Letter of William P. Farley to Anthony Alvano at 4 (March 22, 2006), JA 166.
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supporting letters.”24 United America sent a more detailed appeals letter two days later, including an appeal of the redactions and withheld documents.25 This appeal was denied on April 6, 2006.26 Among the reasons stated for non-disclosure, the USPS stated that disclosure of “internal communications regarding a suspected identity theft scam” would not be a good business practice, and was therefore covered under Exemption 3(B) and 39 U.S.C. § 410(c)(2).27 United America’s FOIA request was forwarded to the USPS Office of the Inspector General (“OIG”), which stated that there was in fact an on-going investigation.28 The OIG denied the FOIA request, however, claiming that the records were exempt from
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Id. at 2, JA 164. Second FOIA Appeal Letter of William P. Farley to Anthony Alvano (March 24, 2006), JA 168. FOIA Appeal Denial Letter of Anthony Alvano to William P. Farley (April 6, 2006), JA 202. Id. at 3, JA 204. FOIA Response Letter of Betsy Cuthbertson, USPS OIG, to William P. Farley (March 27, 2006), JA 201.
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disclosure under 5 U.S.C. § 552(b)(7)(A).29 The OIG provided no factual detail to show how it believed the release of requested information “could reasonably be expected to interfere with enforcement proceedings.”30 United America’s appeals were also forwarded to the USPS Inspection Service, which stated that it had found 132 pages responsive to United America’s FOIA request.31 The Inspection Service released five of these pages with redactions, but withheld the remainder under FOIA exemptions 2, 5, 6, 7(C), 7(D), and 7(E).32 There was no justification provided for these exemptions. United America appealed these withholdings on April 12, 2006.33 United America explained that “disclosure of the information would shed light on the Postal Service’s performance
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Id. Id. FOIA Response Letter of T. A. Warner, USPS Inspection Service, to William P. Farley (April 6, 2006), JA 207. Id. Third FOIA Appeal Letter of William P. Farley to Anthony Alvano (April 12, 2006), JA 175.
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of its duties and let citizens know what the government is up to.”34 United America again asked that “all documents supporting the [USPS] statement on [its] website that [United America] is composed of Nigerian identity thieves be provided immediately.” Id. The USPS denied this last administrative appeal on May 2, 2006.35 This denial provided only general legal explanations of the exemptions claimed, without any specific justifications for applying these exemptions to the documents withheld. Id. The OIG sent a separate appeal denial letter on May 8, 2006, stating there was an on-going investigation and Exemption 7(A) therefore exempted all the documents in its possession.36 Documents subsequently released by the OIG have shown that this statement was false: the OIG investigation was dropped on May 4, 2006.37
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Id. at 2, JA 176. Second FOIA Appeal Denial Letter of Anthony Alvano to William P. Farley (May 2, 2006), JA 215. FOIA Appeal Denial Letter of Gladis C. Griffith, USPS OIG, to William P. Farley (May 8, 2006), JA 221. USPS OIG Report, Exhibit 4 to USPS Third Mot. For Summ. J, R. 42-5, JA 224.
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United America then filed suit in district court, seeking to uncover the extent of the USPS discrimination against people of African origin.38 SUMMARY OF THE ARGUMENT The Freedom of Information Act (“FOIA”) allows a district court to “assess against the United States reasonable attorney fees and other litigation costs reasonably incurred in any case under this section in which the complainant has substantially prevailed.” 5 U.S.C. § 552(a)(4)(E). This Court has imposed additional “entitlement” criteria, gleaned from the conference report as part of the unenacted Senate version of the bill: 39 (1) the benefit to the public, if any, derived from the case; (2) the commercial benefit to the complainant;
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Complaint (June 2, 2006), JA 12. There has been some discussion in this Court as to the propriety of imposing these criteria, which “were weeded out of the original Senate version of FOIA — where they would have had the binding force of law — and transplanted to the conference report — where they do not.” Burka v. U.S. Dept. of Health & Human Servs., 142 F.3d 1286, 1293 (D.C. Cir. 1998) (Randolph, J., concurring).
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(3) the nature of the complainant’s interest in the records sought; and (4) whether the government’s withholding of the records had a reasonable basis in law.40 This Court has also urged consideration of “whether the prosecution of the plaintiff's action could reasonably have been regarded as necessary” in determining whether to award attorney fees.41 In this case, there was no question that United America was eligible for attorneys’ fees, having substantially prevailed in the FOIA litigation and forcing the release of 237 pages of information previously withheld.42 However, the district court found that United America was not entitled to attorneys’ fees under the fourfactor test this Court has adopted for application of 5 U.S.C. § 552(a)(4)(E).
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Cuneo v. Rumsfeld, 553 F.2d 1360, 1364 (D.C. Cir. 1977). Nationwide Bldg. Maintenance, Inc. v. Sampson, 559 F.2d 704, 714 (D.C. Cir. 1977). See Def. Opp’n to Mot. for Atty Fees at 2 (“USPS does not argue that [United America] fails to meet the eligibility requirement for attorney’s fees and costs.”), Docket R. 65.
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The district court’s findings were rooted in legal error. First, the district court failed to consider the public interest in uncovering possible racial discrimination and bias against people of African origin on the part of its public officials, instead imposing its own beliefs on how many people would be interested and making a post-hoc determination of how many documents were ordered released. The district court also erred in failing to consider that United America sought no commercial benefit from the information requested. Furthermore, the district court erred in finding that the government had a reasonable basis in law. In its view, the reasonable basis standard was met as long as the government stated the correct legal standard for a claimed FOIA exception, regardless of whether the government made the showing required to make that standard applicable, and notwithstanding the fact that the USPS forced United America to litigate for over four years to gain access to information to which it was entitled under FOIA. These errors of law support reversal.
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ARGUMENT I. Standard Of Review. This Court reviews a district court’s denial of attorneys’ fees under FOIA for abuse of discretion.43 A “district court abuses its discretion if it did not apply the correct legal standard or if it misapprehended the underlying substantive law.”44 This Court has further explained that it must consider whether the district court “failed to consider a relevant factor, whether [it] relied on an improper factor, and whether the reasons given reasonably support the conclusion.”45 This Court reviews all questions of law de novo.46
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Brayton v. Office of the U.S. Trade Rep., 641 F.3d 521, 524 (D.C. Cir. 2011). Id. (quoting Kickapoo Tribe v. Babbitt, 43 F.3d 1491, 1497 (D.C. Cir. 1995)). Kickapoo Tribe, 43 F.3d at 1497 (internal quotation omitted). Herbert v. Nat’l Acad. of Sci., 974 F. 2d 192, 197 (D.C. Cir. 1992).
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II.
The District Court Erred By Failing To Consider The Strong Public Interest In Uncovering Governmental Discrimination Based On Race Or National Origin. In considering the “public interest” factor for entitlement to
FOIA attorney fees, the district court focused on what it considered to be the limited number of documents it ordered disclosed47 and the capability of United America to disseminate the information disclosed48 to the exclusion of virtually any other issue that might weigh on the public interest. The district court’s failure to consider the strong public interest in rooting out possible illegal discrimination based on race and national origin reflects an erroneously constrained view of the public interest.
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In fact, hundreds of pages of documents were released as a result of this FOIA litigation. See United Am. Fin., Inc. v. Potter, 531 F. Supp. 2d 29, 36 (D.D.C. 2008) (“First FOIA Opinion”) (“Defendant has disclosed roughly 50 pages in full or redacted form.”) ; United Am. Fin., Inc. v. Potter, 667 F. Supp. 2d 49, 53 (D.D.C. 2009) (“Second FOIA Opinion”) (“The USPS invoked several FOIA exemptions to withhold hundreds of pages of documents in whole or in part but subsequently reevaluated those decisions and made additional disclosures.”). The district court ignored the fact that as a result of this litigation, the USPS made the released documents publicly available on the court’s own website, where anyone with an interest in governmental practices can find them.
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While the public interest criterion is concerned with whether the release of information “is likely to add to the fund of information that citizens may use in making vital political choices,”49 a concern for which the plaintiff’s ability to disseminate information is relevant, that is not the only public interest involved. There is also a strong public interest in uncovering possible racial and national origin discrimination on the part of public officials. Courts have held that “[a] strong public interest is served where, as here, the underlying purpose of disclosure is the enforcement of federal laws embodying important congressional policies.”50 An attempt to determine whether government officials are illegally discriminating against individuals on the basis of race or national origin serves that strong public interest. “Surely it is in the ‘public interest’ to discover, if true, that the [government] is
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Fenster v. Brown, 617 F.2d 740, 744 (D.C. Cir. 1979) (quoting Blue v. Bureau of Prisons, 570 F.2d 529, 534 (5th Cir. 1978)). United Ass’n of Journeymen and Apprentices v. Army Corps of Eng’rs, 841 F.2d 1459, 1461 (9th Cir. 1988).
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less than entirely just in its dealings.”51 For example, the court in Cazalas held that the request of documents to determine whether DOJ engaged in “a conspiracy to propagate a policy of sex discrimination by high public officials” was in the public interest. Id. Similarly, United America’s request to determine whether government agents are engaging in racial or ethnic discrimination is likewise in the public interest. Unlike in days past, government agents rarely practice racial and ethnic discrimination openly. But such discrimination persists. While the popular attention seems to have turned elsewhere, the public interest is still served by rooting discrimination out like a straggler weed, in order that it does not multiply and strangle the garden. “The time cannot come too soon when no governmental decision will be based upon immutable characteristics of pigmentation or origin.”52 Inexplicably, the USPS defended its discrimination as merely “descriptive language.” Def. Opp’n to Mot. for Atty Fees at
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Cazalas v. Dep’t of Justice, 709 F.2d 1051, 1053 (5th Cir. 1983). Fullilove v. Klutznick, 448 U.S. 448, 516 (1980).
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15 (“This is, at the very least, an impermissible leap from the use of descriptive language to discrimination based on race and national origin.”). In this case, the offensive language speaks for itself. It presupposes that financial services salespeople of African origin are inherently suspect, and are in fact “Nigerian identity thieves.” This Court should not condone such use of offensive “descriptive language” rooted in prejudice. In this case, the district court failed to consider the public interest in rooting out discrimination, but denied the motion for attorney fees based on its determination that “there is little evidence that there is a large interested group or even that plaintiff is able to disseminate the disclosed information to the allegedly interested public.”53 The public interest in uncovering and publicizing illegal discrimination is not so limited; the district court articulated a legal standard that states if there is no widespread outcry over government discrimination against a small-enough disfavored minority, then there is no public interest
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Attorney Fees Opinion, 770 F. Supp. 2d at 256, JA 107.
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served by uncovering that discrimination. Such a conclusion cannot be a correct statement of the law. The fact that today there are relatively few people of Nigerian or other African origin in financial services does not mean that people of African origin would not want such business in a more race-blind society. “[I]n our quest to achieve a society free from racial classification, we cannot ignore the claims of those who still suffer from the effects of identifiable discrimination.”54 The principles behind the district court’s decision would greatly impede ordinary citizens from asserting their rights to request government information. As long as the FOIA requesters are not media or academic entities, the district court’s flawed rule would deny attorney fees if the requesters cannot widely disseminate the information ultimately received. Indeed, “the only kinds of FOIA requesters who can prove that they almost immediately circulate the information they obtain belong to ‘the group that is in the business of profiting from the information
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Fullilove, 448 U.S. at 516.
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when it winds up in their newspapers and magazines and TV shows.’”55 This position relies on a post-hoc inquiry into whether the information sought grabbed the public’s attention after its release. As recognized by Judge Tatel in responding to the dissent in Davy v. CIA, the district court's decision: would force requesters to bear the risk that the revealed documents might ultimately be boring, but since no one in [United America’s] position can know before suing what the requested documents say or even whether they exist, the [district court’s] rule would in fact chill all FOIA suits, preventing the discovery of important and unimportant content alike. So long as the information sought was of a type the public might want to know, we should consider the objective underlying this element of our test met.56 This Court should resist the attempts by the USPS and the district court to narrow the applicability of the public interest factor to media, academics and others who have their own
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Davy v. CIA, 550 F.3d 1155, 1165 (D.C. Cir 2008) (Tatel, J., concurring) (quoting id. at 1166 n.1). Id. at 1164.
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sufficient private interests and resources to seek information from the government. In this case, the request sought documents regarding the USPS’s published assertion that United America employees were “Nigerian identity thieves” and why the USPS stated the African origin of such employees was relevant to an accusation of identity theft. The release of this information was in the public interest. The district court’s refusal to properly consider this public interest was legal error. III. The District Court Erred By Failing To Consider That United America Sought No Commercial Benefit From The Information Requested. The district court relied on this Court’s statements that the second and third eligibility criteria, the commercial benefit to the complainant and the nature of the complainant’s interest in the records sought, are “closely related and often considered together” to ignore the fact that there has been no showing or finding that United America sought any commercial benefit in requesting the
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information.57 While there is no question that United America did have a private interest as well as a public-minded interest in the documents, since its salespeople were the ones discriminated against, it has disclaimed any intent to seek monetary benefit from the information. A requester's strong personal interest in securing the documents is not inconsistent with a broader public interest.58 In Tax Analysts v. Dep’t of Justice, the requesters sought a direct financial benefit from obtaining the document requested even though its interest may not have been “strictly commercial.”59 Tax Analysts was in the business of publishing tax decisions to its customers.60 The commercial benefit envisioned by this factor is “[c]ommercial profit pursued by a business firm
57
Attorney Fees Opinion, 770 F. Supp. 2d at 257, JA 107 (quoting Tax Analysts v. Dep’t of Justice, 965 F.2d 1155, 1095 (D.C. Cir. 1992) (“Tax Analysts I”)). Cazalas, 709 F.2d at 1054. Tax Analysts I, 965 F.2d at 1095. Id. at 1094.
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seeking trade information.”61 Unlike in Tax Analysts I, United America’s private interest is not aligned with a financial incentive in seeking information from the government. As with the district court’s constrained view of the public interest, shortcutting any inquiry into the second criterion for attorney fee entitlement serves to hamper the efforts of those Congress sought to protect. As Senator Strom Thurmond stated at hearings on the 1974 FOIA amendments regarding the proposed second criterion: We must insure that the average citizen can take advantage of the law to the same extent as the giant corporations with large legal staffs. Often the average citizen has foregone the legal remedies supplied by the Act because he has had neither the financial nor legal resources to pursue litigation when his Administrative remedies have been exhausted.62
61
Cazalas, 709 F.2d at 1054; Fenster v. Brown, 617 F.2d 740, 74344 (D.C. Cir. 1979). S.Rep. No. 93-854, at 18 (quoting 1 Senate Hr’gs on Exec. Privilege, Secrecy in Gov’t and Freedom of Info. Before the Subcomm. on Inter-Gov’tl Relations of the Senate Comm. on Gov’t Ops. & the Subcomm. on Admin. Practice & Proc. of the Senate Comm. on the Judiciary, 93d Cong., at 174 (1973)), quoted in Sampson, 559 F.2d at 712.
24
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United America is a small, minority-owned business. There has been no argument that it is one of the “giant corporations” not entitled to attorney fees. Rather United America is precisely the type of small company with limited resources which Congress tried to ensure would not be dissuaded from asserting its FOIA rights when the USPS tried to bury United America in costly litigation. IV. The District Court Erred By Failing To Hold The USPS To Its Burden Of Showing That Its FOIA Denials Had A Reasonable Basis In Law. In denying United America’s motion for attorney fees under FOIA, the district court found that the USPS had a reasonable basis for refusing the information requested because it was not “recalcitrant or obdurate” and made a “claim based on sound legal theory” for withholding certain information under exemption 7(C) even though it failed “to make the required showing of harm.”63 The USPS had initially withheld documents under exemptions 2, 5, 6, 7 (A), (B), (D), and (E) as well, and had “voluntarily” released 200 pages of documents after the second round of summary
63
Attorney Fees Opinion, 770 F. Supp. 2d at 258, JA 108.
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judgment motions. The district court failed to consider whether the USPS had a reasonable basis for withholding these documents. The district court has set out a template for risk-free resistance to FOIA requests by small companies and individuals. As long as the government agencies are not “recalcitrant or obdurate”64 in their conduct of litigation and cite the correct law, the government would not have to pay attorney fees, regardless of whether there were valid grounds for withholding the information. This standard encourages government agencies to stubbornly resist valid FOIA requests in the hopes of outlasting small entities and individuals in FOIA litigation and holds them harmless when they fail to comply with FOIA by offering conclusory justifications. The district court erred in finding that the government had a reasonable basis in law as long as it stated the correct legal standard for a claimed FOIA exception regardless of whether the
64
“Recalcitrant” is commonly defined as “obstinately defiant of authority” or “difficult or impossible to handle.” Webster's Third New Int’l Dictionary. “Obdurate” is commonly defined as “stubbornly persistent in wrongdoing” or “unyielding.” Id.
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government made the evidentiary showing required. Furthermore, the district court erred by holding that as long as the USPS was not “recalcitrant or obdurate” in forcing United America to litigate for almost four years to gain access to information to which it was entitled under FOIA, attorney fees would not be available. A. Simply Stating The Correct Legal Standard Without Showing The Standard Is Applicable Does Not Constitute A Reasonable Basis In Law.
This Court need look no further than the district court’s own words to see that the USPS did not have a reasonable basis for withholding the documents sought. In its first summary judgment opinion, the district court used the word “conclusory” no fewer than 12 times in denying USPS claims for exemption.65 The district court also held that the reason proffered by the USPS to withhold investigation documents under Exemption 7(A) “makes no sense.”66 Furthermore, the district court held that the government’s position that mere involvement of the Inspection Service serves to make information sought exempt under 7(C) “is
65 66
See First FOIA Opinion, 531 F. Supp. 2d at 38-39, 41, 44, 47. Id. at 39, JA 129.
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an untenable reading of Exemption 7(C), for it would mean that any time there was an investigation conducted by one unit of an agency, all agency records touching on the subject matter of the investigation may be deemed ‘compiled for law enforcement purposes.’”67 Yet the district court gave the USPS a mulligan.68 When the court below gave the USPS another chance to attempt to justify its withholdings under exemption 7(A), it felt compelled to instruct the USPS to “be mindful of the standards applicable in this Circuit.”69 In particular, the district court instructed, “the declarations must explain with some specificity how disclosure could reasonably be expected to interfere with enforcement
67
Id. at 46 (quoting Tax Analysts v. IRS, 294 F.3d 71, 77 (D.C. Cir. 2002) (“Tax Analysts II”)), JA 134. Giving government agencies a second and third bite at the apple to try to justify withholding documents under FOIA, as was done in this case, creates an uneven playing field. If this practice were to become widespread, it would contravene the policies behind FOIA by encouraging agencies to withhold requested information without sufficient justification. Id. at 40, JA 130.
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68
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proceedings.”70 Furthermore, the district court admonished the USPS to “indicate whether enforcement proceedings are reasonably anticipated — not just possible — and must make that assessment as of the time of the submission of its renewed motion for summary judgment.”71 If the district court hoped for a better second or third shot by the USPS, it must surely have been disappointed. In the third round of summary judgment motions, even after being warned against conclusory statements of privacy interests, the USPS failed to offer anything specific to justify continued withholding. Indeed, in some cases, the USPS even withheld documents that had once been in the public domain.72 The district court noted: [A USPS official’s] supplemental declaration contains no factual proffer that might bolster this conclusory statement. She adds only that she applied a balancing test that assessed the public interest, and then makes another conclusory statement that redactions were necessary to protect the employees involved in the investigation from harassment. . . . like the
70 71 72
Id. (internal quotation omitted) (emphasis in original). Id. (internal quotation omitted). Second FOIA Opinion, 667 F. Supp. 2d at 63, JA 117.
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names of postal inspectors discussed earlier, defendant has not offered anything more than conclusory statements as to why this information should not be public.73 The district court further noted that the USPS “offer[ed] no explanation whatsoever as to why this case presents one of those identified circumstances of a risk of harassment or animosity.”74 That the USPS released documents after being informed by the court that its claims for withholding were unsupported or untenable does not confer a reasonable basis in law on those claims. “Courts have generally required that defendants, at a minimum, provide meaningful justification for inactivity or refusal to turn over requested information.”75 In considering United America’s motion for attorneys’ fees, however, the district court ignored all of USPS’s repeated failures to justify its withholdings. The district court focused only on whether the USPS had stated a claim under Exemption 7(C)
73 74 75
Id. at 60, 62. Id. at 64 (internal quotation omitted), JA 118. Judicial Watch, Inc. v. Bureau of Land Mgmt., 562 F. Supp. 2d 159, 174 (D.D.C. 2008), overruled on other grounds, 610 F.3d 47 (D.C. Cir. 2010).
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“based on sound legal theory” for continuing to withhold the documents remaining in the third round of cross-summary judgment motions.76 A sound legal theory is not sufficient; to have a reasonable basis in law, an agency must support its Exemption 7(C) claims with “some factual basis for the claim that harassment, intimidation, or physical harm will result from disclosure of individuals’ names.”77 The USPS failed to provide any factual basis to show that the legal standards cited actually applied to the documents it withheld. The district court failed to consider that the USPS had presented no viable support for its assertions that the exemptions claimed were actually applicable to the documents withheld. This failure requires reversal of the district court’s denial of attorneys’ fees under FOIA.
76 77
Attorney Fees Opinion, 770 F. Supp. 2d at 258, JA 108. Id. (internal quotation omitted) (citing Judicial Watch, Inc. v. FDA, 449 F.3d 141, 153 (D.C. Cir. 2006)).
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B.
The USPS Did Not Meet Its Burden To Justify Its Withholding of Documents “Voluntarily” Disclosed.
The district court denied United America’s motion for attorneys’ fees in part because it found that the USPS’s conduct in litigation was not “recalcitrant or obdurate.”78 The district court ignored the fact that the USPS forced United America to litigate through three rounds of summary judgment motions but found that the USPS’s numerous requests for extension over four years of litigation was “([]perhaps unfortunately) fairly commonplace with the federal government in this Court's experience.”79!By that standard, any opposition to FOIA requests that fall short of blatantly ignoring court orders would not be unreasonable. Such a standard would lead to increased governmental resistance to valid FOIA requests. The district court failed to consider the fact that this longrunning FOIA litigation was necessary only because the USPS forced United America to petition the federal courts for documents
78 79
Attorney Fees Opinion, 770 F. Supp. 2d at 258, JA 108. Id.
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to which it was entitled. Nor did the district court consider whether the USPS had a reasonable basis for withholding documents that it ultimately “voluntarily” disclosed after this litigation was initiated. For example, although it claimed exemptions under 7(A), the USPS never even attempted to show how the information it withheld “could reasonably be expected to interfere with enforcement proceedings.” 5 U.S.C. § 552(b)(7)(A).80 In Davy v. CIA, this Court overturned a similar denial of attorney fees when the district court found no basis to conclude that the government unreasonably withheld requested documents.81 This Court held that this standard mistakenly shifted the burden to the requester.82!The district court has made the same mistake in this case, inquiring only whether the USPS unreasonably withheld the information ultimately ordered released. As in Davy, “[t]he question is not whether [United America] has affirmatively shown that the agency was
80 81 82
First FOIA Opinion, 531 F. Supp. 2d at 38, JA 129. Davy v. CIA, 550 F.3d 1155, 1163 (D.C. Cir. 2008). Id.
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unreasonable, but rather whether the agency has shown that it had any colorable or reasonable basis for not disclosing the material until after [United America] filed suit.”83 Under the fee-entitlement rule affirmed by this Court in Brayton, if the government cannot carry its burden to show that it “was justified as a matter of law in refusing a plaintiff’s FOIA request,” a substantially prevailing plaintiff may receive attorney fees “as long as his claim was ‘not insubstantial.’”84 The USPS did not even try to meet this burden. The USPS offered no argument that it had a reasonable basis for withholding the documents it “voluntarily” disclosed after the district court informed it that its justifications were conclusory. The district court was quite adamant in its first summary judgment opinion that the USPS justifications with regard to these documents were unreasonable, but failed to recall these determinations in considering the motion for attorney fees.
83 84
See id. Brayton v. Office of the U.S. Trade Rep., 641 F.3d 521, 526 (D.C. Cir. 2011) (emphasis added).
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Furthermore, the issue of whether a government agency has forced the person seeking information under FOIA to litigate is one of central concern when determining whether to award attorney fees. In enacting the attorney fees provision, “Congress realized that too often the insurmountable barriers presented by court costs and attorney fees to the average person requesting information under the FOIA enabled the government to escape compliance with the law.”85 In this case, the USPS pressed every legal lever, forcing United America to litigate through three rounds of cross summary judgment motions and an appeal by the government (that was ultimately withdrawn), forcing over four years of expensive federal court litigation. Congress enacted the attorney fees provision in order to ensure that individuals and small entities who could not otherwise afford expensive federal court litigation are able to assert their rights to information from government agencies. “A grudging application of [the attorney fees] provision, which would dissuade
85
Cuneo, 553 F.2d at 1363-64 (citing S.Rep.No.93-854, 93d Cong., 2d Sess. 17 (1974)).
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those who have been denied information from invoking their right to judicial review, would be clearly contrary to congressional intent.”86 As this Court recognized in Davy, “[i]f the government could defeat an award of fees by citing a lack of resistance after the requester files a lawsuit to obtain requested documents, then it could force plaintiffs to bear the costs of litigation.”87 This was not a situation like that in Vermont Low Income Advocacy Council v. Usery where the government agency was taking extra time to try to comply with FOIA obligations.88 Rather, unlike in Sampson, this case is one “of absolute resistance to disclosure before the plaintiff sought judicial review.”89 The district court erred in failing to consider that the USPS imposed this avoidable expense on United America and its attorneys in denying attorneys’ fees. Because there was no
86 87 88
Sampson, 559 F.2d at 715. Davy, 550 F.3d at 1163. Vermont Low Income Advocacy Council v. Usery, 546 F.2d 509, 513 (2d Cir. 1976). Sampson, 559 F.2d at 716.
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89
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evidence that the USPS had a reasonable basis for withholding the overwhelming majority of documents ultimately released in the course of this litigation, “the district court abused its discretion in determining that the fourth factor weighed in the agency's favor.”90 CONCLUSION If the term “public interest” does not encompass attempts to root out discrimination by government agents, then the term has lost all meaning. The rule set forth by the district court would limit FOIA attorney fees to media companies and those in academic pursuits. Congress did not intend to limit attorney fees so. Congress intended attorney fees to be available to individuals and small businesses without sufficient commercial resources or incentive to engage in the costly effort of asserting their rights to governmental information in federal courts. It is because Congress recognized that government agencies had been denying information requests with no reasonable basis in law,
90
See Davy, 550 F.3d at 1163.
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forcing requesters to look to the courts to enforce these rights, that the FOIA attorney fees provisions were enacted. Because the district court’s order denying attorney fees in this case frustrates these Congressional policies, United America respectfully requests that this Court reverse the district court’s decision denying FOIA attorney fees. Respectfully submitted, December 9, 2011 William P. Farley, Esquire Law Office of William P. Farley, P.C. 717 D Street, N.W Washington, D.C. 20004 John F. Karl, Jr. McDonald & Karl 1150 Connecticut Ave., N.W. Ninth floor Washington, D.C. 20036
! !
/s/ Noah A. Clements Noah A. Clements* THE CLEMENTS FIRM 1250 Connecticut Avenue NW, Suite 200 Washington, DC 20036 (202) 630-0544 [email protected] * Counsel of Record
Counsel for Appellant United America Financial, Inc.
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CERTIFICATE OF WORD COUNT I hereby certify that the attached Appellant’s Brief in Century Schoolbook, 14-point font conforms to the 14,000 word limit imposed by FRAP 32(a)(7)(B). This Brief, including footnotes, contains 6,409 words. /s/ Noah A. Clements Noah A. Clements
CERTIFICATE OF SERVICE I hereby certify that I caused the attached Appellant’s Brief and accompanying Joint Appendix to be served on all parties electronically via the Court’s CM/ECF system on December 9, 2011. A paper copy will be also be mailed first class to:
CLAIRE WHITAKER Assistant United States Attorney 555 Fourth Street, NW, Room E-4204 Washington, DC 20530 /s/ Noah A. Clements Noah A. Clements
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ORAL ARGUMENT SCHEDULED - MARCH 2, 2012 UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT ) ) ) ) App. No. 11 - 5111 ) Civil No.: 06 CV 1023 (JDB) ) ) ) ) ) ) ) )
UNITED AMERICA FINANCIAL, INCORPORATED, Appellant. v. PATRICK R. DONAHOE, Postmaster General U.S. Postal Service, Appellee.
BRIEF OF APPELLANT UNITED AMERICA FINANCIAL, INC. William P. Farley, Esquire Law Office of William P. Farley, P.C. 717 D Street, N.W Washington, D.C. 20004 John F. Karl, Jr. McDonald & Karl 1150 Connecticut Ave., N.W. Ninth floor Washington, D.C. 20036
! !
Noah A. Clements* THE CLEMENTS FIRM 1250 Connecticut Avenue NW, Suite 200 Washington, DC 20036 (202) 630-0544 [email protected] * Counsel of Record
Counsel for Appellant United America Financial, Inc.
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CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES Pursuant to Federal Rule of Appellate Procedure 28(a)(1) and Circuit Rule 28(a)(1), counsel for Appellant United America Financial, Inc. (“United America”) submit this certificate as to parties, rulings and related cases. a. Parties. Appellant is United America. Appellee is Patrick R. Donahoe, Postmaster General of the United States Postal Service. b. Corporate Disclosure. Appellant United America is a privately held corporation. No publicly held company owns more than 10% of United America’s common stock. c. Rulings Under Review. The district court denied United America’s Motion for Attorneys’ Fees, published at United Am. Fin., Inc. v. Potter, 770 F.Supp.2d 252 (D.D.C. 2011). d. Related Cases. This case has previously been before the Court in docket number 10-5002. There are no related cases.
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TABLE OF CONTENTS CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES ............................................................................................... i! TABLE OF CONTENTS ................................................................ ii! TABLE OF AUTHORITIES ......................................................... iv! JURISDICTIONAL STATEMENT .............................................. 1! ISSUES PRESENTED ................................................................... 2! 1)! United America sought information related to an article published by the United States Postal Service (“USPS”) that called United America insurance agents “Nigerian Identity Thieves.” The parties agree that United America is eligible for FOIA attorneys’ fees. In determining whether United America was entitled to attorneys’ fees, the district court ignored the strong public interest in uncovering illegal discrimination. Did the district court err? ..................................................................... 2! 2)! Although United America undoubtedly had a private interest in the possible discriminatory labeling of its salespeople, there was no evidence that it sought the documents requested for any commercial benefit. Did the district court err in failing to consider United America’s lack of commercial interest in the information? ................................................................................... 2! 3)! The district court found the USPS justifications for many withholdings through three rounds of briefing to be “conclusory,” “untenable,” and non-sensical. Nevertheless the district court found that the USPS had “articulated a reasonable legal position” in denying attorneys’ fees. Did the district court err?.. 2! STATEMENT OF THE CASE ....................................................... 3! STATEMENT OF FACTS .............................................................. 6! SUMMARY OF THE ARGUMENT ............................................ 12!
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ARGUMENT .................................................................................. 15! I.! Standard Of Review. .............................................................. 15! II.! The District Court Erred By Failing To Consider The Strong Public Interest In Uncovering Governmental Discrimination Based On Race Or National Origin. ........................................... 16! III.!The District Court Erred By Failing To Consider That United America Sought No Commercial Benefit From The Information Requested. ............................................................... 22! IV.!The District Court Erred By Failing To Hold The USPS To Its Burden Of Showing That Its FOIA Denials Had A Reasonable Basis In Law. ........................................................... 25! A.! Simply Stating The Correct Legal Standard Without Showing The Standard Is Applicable Does Not Constitute A Reasonable Basis In Law. ........................................................ 27! B.! The USPS Did Not Meet Its Burden To Justify Its Withholding of Documents “Voluntarily” Disclosed. .............. 32! CONCLUSION .............................................................................. 37! CERTIFICATE OF WORD COUNT .......................................... 39! CERTIFICATE OF SERVICE .................................................... 39!
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TABLE OF AUTHORITIES Cases! Blue v. Bureau of Prisons, 570 F.2d 529 (5th Cir. 1978) .............. 17 * Brayton v. Office of the U.S. Trade Rep., 641 F.3d 521 (D.C. Cir. 2011) ....................................................................................... 15, 35 Burka v. U.S. Dept. of Health & Human Servs., 142 F.3d 1286 (D.C. Cir. 1998) ............................................................................ 13 * Cazalas v. Dep’t of Justice, 709 F.2d 1051 (5th Cir. 1983)... 18, 24 Cuneo v. Rumsfeld, 553 F.2d 1360 (D.C. Cir. 1977) ................ 13, 36 * Davy v. CIA, 550 F.3d 1155 (D.C. Cir 2008) ....... 21, 34, 35, 37, 38 Fenster v. Brown, 617 F.2d 740 (D.C. Cir. 1979) ........................... 17 Fullilove v. Klutznick, 448 U.S. 448 (1980) ............................. 19, 21 Herbert v. Nat’l Acad. of Sci., 974 F. 2d 192 (D.C. Cir. 1992)....... 16 Judicial Watch, Inc. v. Bureau of Land Mgmt., 562 F. Supp. 2d 159 (D.D.C. 2008). ........................................................................ 31 Judicial Watch, Inc. v. FDA, 449 F.3d 141 (D.C. Cir. 2006) ......... 32 Kickapoo Tribe v. Babbitt, 43 F.3d 1491 (D.C. Cir. 1995)....... 15, 16 Nationwide Bldg. Maintenance, Inc. v. Sampson, 559 F.2d 704 (D.C. Cir. 1977). .................................................................... 13, 37 Tax Analysts v. Dep’t of Justice, 965 F.2d 1155 (D.C. Cir. 1992) 23, 24 Tax Analysts v. IRS, 294 F.3d 71 (D.C. Cir. 2002) ........................ 29 United Am. Fin., Inc. v. Potter, 531 F. Supp. 2d 29 (D.D.C. 2008) 4, 16, 28, 34 United Am. Fin., Inc. v. Potter, 667 F. Supp. 2d 49 (D.D.C. 2009) 5, 16, 30, 31 United Am. Fin., Inc. v. Potter, 770 F. Supp. 2d 252 (D.D.C. 2011) .................................................................... 3, 20, 23, 26, 30, 32, 33 Authorities upon which we chiefly rely are marked with asterisks.
iv
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United Ass’n of Journeymen and Apprentices v. Army Corps of Eng’rs, 841 F.2d 1459 (9th Cir. 1988) ......................................... 18 Vermont Low Income Advocacy Council v. Usery, 546 F.2d 509 (2d Cir. 1976) ...................................................................................... 37 Statutes! 28 U.S.C. § 1291. ............................................................................... 1 Freedom of Information Act (“FOIA”), 5 U.S.C. § 552 .................... 1
v
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JURISDICTIONAL STATEMENT This Court has jurisdiction over this appeal of the district court’s final order denying FOIA attorney fees under 28 U.S.C. § 1291. The district court had jurisdiction over the underlying action under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552. The district court likewise had jurisdiction over United America’s request for FOIA attorney fees under 5 U.S.C. § 552(a)(4)(E). The district court issued its decision denying FOIA attorney fees on March 18, 2011, and United America filed its timely Notice of Appeal on May 6, 2011 pursuant to Fed. R. App. P. 4(a)(1)(B).
1
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ISSUES PRESENTED 1) United America sought information related to an article published by the United States Postal Service (“USPS”) that called United America insurance agents “Nigerian Identity Thieves.” The parties agree that United America is eligible for FOIA attorneys’ fees. In determining whether United America was entitled to attorneys’ fees, the district court ignored the strong public interest in uncovering illegal discrimination. Did the district court err? 2) Although United America undoubtedly had a private interest in the possible discriminatory labeling of its salespeople, there was no evidence that it sought the documents requested for any commercial benefit. Did the district court err in failing to consider United America’s lack of commercial interest in the information? 3) The district court found the USPS justifications for many withholdings through three rounds of briefing to be “conclusory,” “untenable,” and non-sensical. Nevertheless the district court found that the USPS had “articulated a reasonable legal position” in denying attorneys’ fees. Did the district court err?
2
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STATEMENT OF THE CASE This case is before the Court on an appeal of the district court’s denial of FOIA attorneys’ fees.1 Appellant United America Financial, Inc. (“United America”) filed a complaint under the Freedom of Information Act (“FOIA”) against United States Postal Service (“USPS”) then-Postmaster General John Potter on June 2, 2006.2 The USPS answered on August 9, 2006. After United America filed its first motion for summary judgment, the USPS released an additional 47 redacted pages of documents on October 30, 2006 while it prepared its own motion for summary judgment.3 After both parties filed motions for summary judgment, the district court granted the USPS motion with respect to a few documents, granted the United America motion for some others. The district court denied the USPS motion
1
United Am. Fin., Inc. v. Potter, 770 F. Supp. 2d 252 (D.D.C. 2011) (“Attorney Fees Opinion”), JA 105; March 18, 2011 Order, JA 109. Complaint (June 2, 2006), JA 12. Decl. of Mildred R. Baxter, USPS Inspection Service, at 14 (Oct. 30, 2006), JA __.
3
2 3
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without prejudice for the bulk of the withheld documents. 4 The district court ordered further briefing to “provide defendant a chance to submit more detailed declarations in support of the withholdings under Exemption 7(A)” 5 and to “provide defendant a further opportunity to submit more detailed declarations justifying the withholding of the names under Exemptions 6 and 7(C).”6 The district court had found many of the USPS justifications to be “conclusory.”7 The district court instructed the USPS to “be mindful of the standards applicable in this Circuit”8 and expressed “some skepticism” as to whether the USPS could justify its withholding of the names of USPS employees involved in responding to the allegations of identity theft.9
4
United Am. Fin., Inc. v. Potter, 531 F. Supp. 2d 29 (D.D.C. 2008) (“First FOIA Opinion”), JA 127. Id. at 40, JA 130. Id. at 47, JA 135. Id. at 38-39, 41, 44, 47. Id. at 40. Id. at 47.
4
5 6 7 8 9
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After the USPS and United America filed their second motions for summary judgment, the USPS delivered 200 additional pages of information to United America on June 10, 2008.10 Because the district court found it “difficult, if not impossible, to discern from the parties’ submissions precisely what documents, or portions of documents, remain[ed] at issue, based on what exemption claims,” the district court dismissed both parties’ second motions for summary judgment without prejudice. The court ordered the parties to brief a narrowed case focusing on the documents which remained at issue.11 The parties then filed their third cross motions for summary judgment regarding the 17 remaining documents at issue. The district court ordered the release of ten of these remaining documents.12 The district court found that the USPS justifications for withholding the names of postal investigators under
10 11 12
Order of March 9, 2009 at 3, JA 125. Id. at 3-4, JA 125-26. United Am. Fin., Inc. v. Potter, 667 F. Supp. 2d 49 (D.D.C. 2009) (“Second FOIA Opinion”), JA 110; Attorney Fees Opinion, 770 F. Supp. 2d at 254, JA 105.
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Exemption 7(C) to be “far too conclusory to support a finding that these employees have a privacy interest.”13 With regard to the names of the editorial staff involved in creating the offensive article, the court likewise stated that the USPS “has not offered anything more than conclusory statements as to why this information should not be public.”14 United America thereafter filed a motion for attorneys’ fees, which the district court denied on March 18, 2011.15 United America appeals this denial. STATEMENT OF FACTS United America, one of the few minority-owned insurance companies in the nation,16 provides financial services to more than
13
Second FOIA Opinion, 667 F. Supp. 2d at 60, JA 115; see also id. at 63-65, JA 117-120. Id. at 62. Attorney Fees Opinion, JA 105. See Independent Agency Population Holds Steady as Start-ups Keep Pace with Mergers, INS. J. (Dec. 20, 2010), http://www.insurancejournal.com/magazines/features/2010/12/2 0/160587.htm; Kevin B. O’Reilly, Minority & Women Agents Look to Tap Emerging Markets, INS. J. (June 23, 2003), http://www.insurancejournal.com/magazines/features/2003/06/2 3/30101.htm.
6
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25,000 federal employees. Although many United America employees are of African descent, most were born in the United States or are otherwise U.S. citizens. After receiving complaints of aggressive sales tactics on USPS property by some of United America’s insurance salespeople, the USPS published an article on its website warning its employees not to do business with United America, labeling United America agents “Nigerian identity thieves.”17 The article did not limit its characterization to particular salespeople or state how the USPS had made this determination. When it discovered the USPS web article, United America requested documents from the USPS and the USPS Inspection Service related to the creation of this article and any investigations related to it.18 In its first response, the USPS Inspection Service claimed that there was no investigation of United America and that its personnel were not involved in
17
USPS News Link, A Dropped PIN: Nigerian Identity Thieves Target USPS Employees, Jan. 27, 2006 (“Article”), JA 146. FOIA Request Letter of William P. Farley (Feb. 1, 2006), JA 143.
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creation of the article.19 United America responded to the Inspection Service FOIA technician that inspectors in Cleveland, Ohio likely had some of the information requested and provided the names of several USPS employees to contact.20 Shortly thereafter, the USPS Compensation Division replied, stating that it had found eleven pages of responsive records.21 At that time, the USPS released six pages, one with significant redactions, and withheld five pages in their entirety.22 That same day, United America appealed the USPS’s “decision not to search for documents, interview their employees and provide the documents to [United America] as is required under the FOIA.”23 United America explained that it was aware that “the documents obviously exist, including emails and
19
FOIA Response Letter of M. R. Baxter, USPS Inspection Service, to William P. Farley (March 9, 2006), JA 192. Letter of William P. Farley to M. R. Baxter, USPS Inspection Service (March 15, 2006), JA 158. FOIA Response Letter of Julie S. Moore to William P. Farley (March 22, 2006), JA 194. Id. FOIA Appeal Letter of William P. Farley to Anthony Alvano at 4 (March 22, 2006), JA 166.
8
20
21
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supporting letters.”24 United America sent a more detailed appeals letter two days later, including an appeal of the redactions and withheld documents.25 This appeal was denied on April 6, 2006.26 Among the reasons stated for non-disclosure, the USPS stated that disclosure of “internal communications regarding a suspected identity theft scam” would not be a good business practice, and was therefore covered under Exemption 3(B) and 39 U.S.C. § 410(c)(2).27 United America’s FOIA request was forwarded to the USPS Office of the Inspector General (“OIG”), which stated that there was in fact an on-going investigation.28 The OIG denied the FOIA request, however, claiming that the records were exempt from
24 25
Id. at 2, JA 164. Second FOIA Appeal Letter of William P. Farley to Anthony Alvano (March 24, 2006), JA 168. FOIA Appeal Denial Letter of Anthony Alvano to William P. Farley (April 6, 2006), JA 202. Id. at 3, JA 204. FOIA Response Letter of Betsy Cuthbertson, USPS OIG, to William P. Farley (March 27, 2006), JA 201.
9
26
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disclosure under 5 U.S.C. § 552(b)(7)(A).29 The OIG provided no factual detail to show how it believed the release of requested information “could reasonably be expected to interfere with enforcement proceedings.”30 United America’s appeals were also forwarded to the USPS Inspection Service, which stated that it had found 132 pages responsive to United America’s FOIA request.31 The Inspection Service released five of these pages with redactions, but withheld the remainder under FOIA exemptions 2, 5, 6, 7(C), 7(D), and 7(E).32 There was no justification provided for these exemptions. United America appealed these withholdings on April 12, 2006.33 United America explained that “disclosure of the information would shed light on the Postal Service’s performance
29 30 31
Id. Id. FOIA Response Letter of T. A. Warner, USPS Inspection Service, to William P. Farley (April 6, 2006), JA 207. Id. Third FOIA Appeal Letter of William P. Farley to Anthony Alvano (April 12, 2006), JA 175.
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of its duties and let citizens know what the government is up to.”34 United America again asked that “all documents supporting the [USPS] statement on [its] website that [United America] is composed of Nigerian identity thieves be provided immediately.” Id. The USPS denied this last administrative appeal on May 2, 2006.35 This denial provided only general legal explanations of the exemptions claimed, without any specific justifications for applying these exemptions to the documents withheld. Id. The OIG sent a separate appeal denial letter on May 8, 2006, stating there was an on-going investigation and Exemption 7(A) therefore exempted all the documents in its possession.36 Documents subsequently released by the OIG have shown that this statement was false: the OIG investigation was dropped on May 4, 2006.37
34 35
Id. at 2, JA 176. Second FOIA Appeal Denial Letter of Anthony Alvano to William P. Farley (May 2, 2006), JA 215. FOIA Appeal Denial Letter of Gladis C. Griffith, USPS OIG, to William P. Farley (May 8, 2006), JA 221. USPS OIG Report, Exhibit 4 to USPS Third Mot. For Summ. J, R. 42-5, JA 224.
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36
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United America then filed suit in district court, seeking to uncover the extent of the USPS discrimination against people of African origin.38 SUMMARY OF THE ARGUMENT The Freedom of Information Act (“FOIA”) allows a district court to “assess against the United States reasonable attorney fees and other litigation costs reasonably incurred in any case under this section in which the complainant has substantially prevailed.” 5 U.S.C. § 552(a)(4)(E). This Court has imposed additional “entitlement” criteria, gleaned from the conference report as part of the unenacted Senate version of the bill: 39 (1) the benefit to the public, if any, derived from the case; (2) the commercial benefit to the complainant;
38 39
Complaint (June 2, 2006), JA 12. There has been some discussion in this Court as to the propriety of imposing these criteria, which “were weeded out of the original Senate version of FOIA — where they would have had the binding force of law — and transplanted to the conference report — where they do not.” Burka v. U.S. Dept. of Health & Human Servs., 142 F.3d 1286, 1293 (D.C. Cir. 1998) (Randolph, J., concurring).
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(3) the nature of the complainant’s interest in the records sought; and (4) whether the government’s withholding of the records had a reasonable basis in law.40 This Court has also urged consideration of “whether the prosecution of the plaintiff's action could reasonably have been regarded as necessary” in determining whether to award attorney fees.41 In this case, there was no question that United America was eligible for attorneys’ fees, having substantially prevailed in the FOIA litigation and forcing the release of 237 pages of information previously withheld.42 However, the district court found that United America was not entitled to attorneys’ fees under the fourfactor test this Court has adopted for application of 5 U.S.C. § 552(a)(4)(E).
40 41
Cuneo v. Rumsfeld, 553 F.2d 1360, 1364 (D.C. Cir. 1977). Nationwide Bldg. Maintenance, Inc. v. Sampson, 559 F.2d 704, 714 (D.C. Cir. 1977). See Def. Opp’n to Mot. for Atty Fees at 2 (“USPS does not argue that [United America] fails to meet the eligibility requirement for attorney’s fees and costs.”), Docket R. 65.
13
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The district court’s findings were rooted in legal error. First, the district court failed to consider the public interest in uncovering possible racial discrimination and bias against people of African origin on the part of its public officials, instead imposing its own beliefs on how many people would be interested and making a post-hoc determination of how many documents were ordered released. The district court also erred in failing to consider that United America sought no commercial benefit from the information requested. Furthermore, the district court erred in finding that the government had a reasonable basis in law. In its view, the reasonable basis standard was met as long as the government stated the correct legal standard for a claimed FOIA exception, regardless of whether the government made the showing required to make that standard applicable, and notwithstanding the fact that the USPS forced United America to litigate for over four years to gain access to information to which it was entitled under FOIA. These errors of law support reversal.
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ARGUMENT I. Standard Of Review. This Court reviews a district court’s denial of attorneys’ fees under FOIA for abuse of discretion.43 A “district court abuses its discretion if it did not apply the correct legal standard or if it misapprehended the underlying substantive law.”44 This Court has further explained that it must consider whether the district court “failed to consider a relevant factor, whether [it] relied on an improper factor, and whether the reasons given reasonably support the conclusion.”45 This Court reviews all questions of law de novo.46
43
Brayton v. Office of the U.S. Trade Rep., 641 F.3d 521, 524 (D.C. Cir. 2011). Id. (quoting Kickapoo Tribe v. Babbitt, 43 F.3d 1491, 1497 (D.C. Cir. 1995)). Kickapoo Tribe, 43 F.3d at 1497 (internal quotation omitted). Herbert v. Nat’l Acad. of Sci., 974 F. 2d 192, 197 (D.C. Cir. 1992).
15
44
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II.
The District Court Erred By Failing To Consider The Strong Public Interest In Uncovering Governmental Discrimination Based On Race Or National Origin. In considering the “public interest” factor for entitlement to
FOIA attorney fees, the district court focused on what it considered to be the limited number of documents it ordered disclosed47 and the capability of United America to disseminate the information disclosed48 to the exclusion of virtually any other issue that might weigh on the public interest. The district court’s failure to consider the strong public interest in rooting out possible illegal discrimination based on race and national origin reflects an erroneously constrained view of the public interest.
47
In fact, hundreds of pages of documents were released as a result of this FOIA litigation. See United Am. Fin., Inc. v. Potter, 531 F. Supp. 2d 29, 36 (D.D.C. 2008) (“First FOIA Opinion”) (“Defendant has disclosed roughly 50 pages in full or redacted form.”) ; United Am. Fin., Inc. v. Potter, 667 F. Supp. 2d 49, 53 (D.D.C. 2009) (“Second FOIA Opinion”) (“The USPS invoked several FOIA exemptions to withhold hundreds of pages of documents in whole or in part but subsequently reevaluated those decisions and made additional disclosures.”). The district court ignored the fact that as a result of this litigation, the USPS made the released documents publicly available on the court’s own website, where anyone with an interest in governmental practices can find them.
16
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While the public interest criterion is concerned with whether the release of information “is likely to add to the fund of information that citizens may use in making vital political choices,”49 a concern for which the plaintiff’s ability to disseminate information is relevant, that is not the only public interest involved. There is also a strong public interest in uncovering possible racial and national origin discrimination on the part of public officials. Courts have held that “[a] strong public interest is served where, as here, the underlying purpose of disclosure is the enforcement of federal laws embodying important congressional policies.”50 An attempt to determine whether government officials are illegally discriminating against individuals on the basis of race or national origin serves that strong public interest. “Surely it is in the ‘public interest’ to discover, if true, that the [government] is
49
Fenster v. Brown, 617 F.2d 740, 744 (D.C. Cir. 1979) (quoting Blue v. Bureau of Prisons, 570 F.2d 529, 534 (5th Cir. 1978)). United Ass’n of Journeymen and Apprentices v. Army Corps of Eng’rs, 841 F.2d 1459, 1461 (9th Cir. 1988).
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less than entirely just in its dealings.”51 For example, the court in Cazalas held that the request of documents to determine whether DOJ engaged in “a conspiracy to propagate a policy of sex discrimination by high public officials” was in the public interest. Id. Similarly, United America’s request to determine whether government agents are engaging in racial or ethnic discrimination is likewise in the public interest. Unlike in days past, government agents rarely practice racial and ethnic discrimination openly. But such discrimination persists. While the popular attention seems to have turned elsewhere, the public interest is still served by rooting discrimination out like a straggler weed, in order that it does not multiply and strangle the garden. “The time cannot come too soon when no governmental decision will be based upon immutable characteristics of pigmentation or origin.”52 Inexplicably, the USPS defended its discrimination as merely “descriptive language.” Def. Opp’n to Mot. for Atty Fees at
51 52
Cazalas v. Dep’t of Justice, 709 F.2d 1051, 1053 (5th Cir. 1983). Fullilove v. Klutznick, 448 U.S. 448, 516 (1980).
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15 (“This is, at the very least, an impermissible leap from the use of descriptive language to discrimination based on race and national origin.”). In this case, the offensive language speaks for itself. It presupposes that financial services salespeople of African origin are inherently suspect, and are in fact “Nigerian identity thieves.” This Court should not condone such use of offensive “descriptive language” rooted in prejudice. In this case, the district court failed to consider the public interest in rooting out discrimination, but denied the motion for attorney fees based on its determination that “there is little evidence that there is a large interested group or even that plaintiff is able to disseminate the disclosed information to the allegedly interested public.”53 The public interest in uncovering and publicizing illegal discrimination is not so limited; the district court articulated a legal standard that states if there is no widespread outcry over government discrimination against a small-enough disfavored minority, then there is no public interest
53
Attorney Fees Opinion, 770 F. Supp. 2d at 256, JA 107.
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served by uncovering that discrimination. Such a conclusion cannot be a correct statement of the law. The fact that today there are relatively few people of Nigerian or other African origin in financial services does not mean that people of African origin would not want such business in a more race-blind society. “[I]n our quest to achieve a society free from racial classification, we cannot ignore the claims of those who still suffer from the effects of identifiable discrimination.”54 The principles behind the district court’s decision would greatly impede ordinary citizens from asserting their rights to request government information. As long as the FOIA requesters are not media or academic entities, the district court’s flawed rule would deny attorney fees if the requesters cannot widely disseminate the information ultimately received. Indeed, “the only kinds of FOIA requesters who can prove that they almost immediately circulate the information they obtain belong to ‘the group that is in the business of profiting from the information
54
Fullilove, 448 U.S. at 516.
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when it winds up in their newspapers and magazines and TV shows.’”55 This position relies on a post-hoc inquiry into whether the information sought grabbed the public’s attention after its release. As recognized by Judge Tatel in responding to the dissent in Davy v. CIA, the district court's decision: would force requesters to bear the risk that the revealed documents might ultimately be boring, but since no one in [United America’s] position can know before suing what the requested documents say or even whether they exist, the [district court’s] rule would in fact chill all FOIA suits, preventing the discovery of important and unimportant content alike. So long as the information sought was of a type the public might want to know, we should consider the objective underlying this element of our test met.56 This Court should resist the attempts by the USPS and the district court to narrow the applicability of the public interest factor to media, academics and others who have their own
55
Davy v. CIA, 550 F.3d 1155, 1165 (D.C. Cir 2008) (Tatel, J., concurring) (quoting id. at 1166 n.1). Id. at 1164.
21
56
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sufficient private interests and resources to seek information from the government. In this case, the request sought documents regarding the USPS’s published assertion that United America employees were “Nigerian identity thieves” and why the USPS stated the African origin of such employees was relevant to an accusation of identity theft. The release of this information was in the public interest. The district court’s refusal to properly consider this public interest was legal error. III. The District Court Erred By Failing To Consider That United America Sought No Commercial Benefit From The Information Requested. The district court relied on this Court’s statements that the second and third eligibility criteria, the commercial benefit to the complainant and the nature of the complainant’s interest in the records sought, are “closely related and often considered together” to ignore the fact that there has been no showing or finding that United America sought any commercial benefit in requesting the
22
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information.57 While there is no question that United America did have a private interest as well as a public-minded interest in the documents, since its salespeople were the ones discriminated against, it has disclaimed any intent to seek monetary benefit from the information. A requester's strong personal interest in securing the documents is not inconsistent with a broader public interest.58 In Tax Analysts v. Dep’t of Justice, the requesters sought a direct financial benefit from obtaining the document requested even though its interest may not have been “strictly commercial.”59 Tax Analysts was in the business of publishing tax decisions to its customers.60 The commercial benefit envisioned by this factor is “[c]ommercial profit pursued by a business firm
57
Attorney Fees Opinion, 770 F. Supp. 2d at 257, JA 107 (quoting Tax Analysts v. Dep’t of Justice, 965 F.2d 1155, 1095 (D.C. Cir. 1992) (“Tax Analysts I”)). Cazalas, 709 F.2d at 1054. Tax Analysts I, 965 F.2d at 1095. Id. at 1094.
23
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seeking trade information.”61 Unlike in Tax Analysts I, United America’s private interest is not aligned with a financial incentive in seeking information from the government. As with the district court’s constrained view of the public interest, shortcutting any inquiry into the second criterion for attorney fee entitlement serves to hamper the efforts of those Congress sought to protect. As Senator Strom Thurmond stated at hearings on the 1974 FOIA amendments regarding the proposed second criterion: We must insure that the average citizen can take advantage of the law to the same extent as the giant corporations with large legal staffs. Often the average citizen has foregone the legal remedies supplied by the Act because he has had neither the financial nor legal resources to pursue litigation when his Administrative remedies have been exhausted.62
61
Cazalas, 709 F.2d at 1054; Fenster v. Brown, 617 F.2d 740, 74344 (D.C. Cir. 1979). S.Rep. No. 93-854, at 18 (quoting 1 Senate Hr’gs on Exec. Privilege, Secrecy in Gov’t and Freedom of Info. Before the Subcomm. on Inter-Gov’tl Relations of the Senate Comm. on Gov’t Ops. & the Subcomm. on Admin. Practice & Proc. of the Senate Comm. on the Judiciary, 93d Cong., at 174 (1973)), quoted in Sampson, 559 F.2d at 712.
24
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United America is a small, minority-owned business. There has been no argument that it is one of the “giant corporations” not entitled to attorney fees. Rather United America is precisely the type of small company with limited resources which Congress tried to ensure would not be dissuaded from asserting its FOIA rights when the USPS tried to bury United America in costly litigation. IV. The District Court Erred By Failing To Hold The USPS To Its Burden Of Showing That Its FOIA Denials Had A Reasonable Basis In Law. In denying United America’s motion for attorney fees under FOIA, the district court found that the USPS had a reasonable basis for refusing the information requested because it was not “recalcitrant or obdurate” and made a “claim based on sound legal theory” for withholding certain information under exemption 7(C) even though it failed “to make the required showing of harm.”63 The USPS had initially withheld documents under exemptions 2, 5, 6, 7 (A), (B), (D), and (E) as well, and had “voluntarily” released 200 pages of documents after the second round of summary
63
Attorney Fees Opinion, 770 F. Supp. 2d at 258, JA 108.
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judgment motions. The district court failed to consider whether the USPS had a reasonable basis for withholding these documents. The district court has set out a template for risk-free resistance to FOIA requests by small companies and individuals. As long as the government agencies are not “recalcitrant or obdurate”64 in their conduct of litigation and cite the correct law, the government would not have to pay attorney fees, regardless of whether there were valid grounds for withholding the information. This standard encourages government agencies to stubbornly resist valid FOIA requests in the hopes of outlasting small entities and individuals in FOIA litigation and holds them harmless when they fail to comply with FOIA by offering conclusory justifications. The district court erred in finding that the government had a reasonable basis in law as long as it stated the correct legal standard for a claimed FOIA exception regardless of whether the
64
“Recalcitrant” is commonly defined as “obstinately defiant of authority” or “difficult or impossible to handle.” Webster's Third New Int’l Dictionary. “Obdurate” is commonly defined as “stubbornly persistent in wrongdoing” or “unyielding.” Id.
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government made the evidentiary showing required. Furthermore, the district court erred by holding that as long as the USPS was not “recalcitrant or obdurate” in forcing United America to litigate for almost four years to gain access to information to which it was entitled under FOIA, attorney fees would not be available. A. Simply Stating The Correct Legal Standard Without Showing The Standard Is Applicable Does Not Constitute A Reasonable Basis In Law.
This Court need look no further than the district court’s own words to see that the USPS did not have a reasonable basis for withholding the documents sought. In its first summary judgment opinion, the district court used the word “conclusory” no fewer than 12 times in denying USPS claims for exemption.65 The district court also held that the reason proffered by the USPS to withhold investigation documents under Exemption 7(A) “makes no sense.”66 Furthermore, the district court held that the government’s position that mere involvement of the Inspection Service serves to make information sought exempt under 7(C) “is
65 66
See First FOIA Opinion, 531 F. Supp. 2d at 38-39, 41, 44, 47. Id. at 39, JA 129.
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an untenable reading of Exemption 7(C), for it would mean that any time there was an investigation conducted by one unit of an agency, all agency records touching on the subject matter of the investigation may be deemed ‘compiled for law enforcement purposes.’”67 Yet the district court gave the USPS a mulligan.68 When the court below gave the USPS another chance to attempt to justify its withholdings under exemption 7(A), it felt compelled to instruct the USPS to “be mindful of the standards applicable in this Circuit.”69 In particular, the district court instructed, “the declarations must explain with some specificity how disclosure could reasonably be expected to interfere with enforcement
67
Id. at 46 (quoting Tax Analysts v. IRS, 294 F.3d 71, 77 (D.C. Cir. 2002) (“Tax Analysts II”)), JA 134. Giving government agencies a second and third bite at the apple to try to justify withholding documents under FOIA, as was done in this case, creates an uneven playing field. If this practice were to become widespread, it would contravene the policies behind FOIA by encouraging agencies to withhold requested information without sufficient justification. Id. at 40, JA 130.
28
68
69
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proceedings.”70 Furthermore, the district court admonished the USPS to “indicate whether enforcement proceedings are reasonably anticipated — not just possible — and must make that assessment as of the time of the submission of its renewed motion for summary judgment.”71 If the district court hoped for a better second or third shot by the USPS, it must surely have been disappointed. In the third round of summary judgment motions, even after being warned against conclusory statements of privacy interests, the USPS failed to offer anything specific to justify continued withholding. Indeed, in some cases, the USPS even withheld documents that had once been in the public domain.72 The district court noted: [A USPS official’s] supplemental declaration contains no factual proffer that might bolster this conclusory statement. She adds only that she applied a balancing test that assessed the public interest, and then makes another conclusory statement that redactions were necessary to protect the employees involved in the investigation from harassment. . . . like the
70 71 72
Id. (internal quotation omitted) (emphasis in original). Id. (internal quotation omitted). Second FOIA Opinion, 667 F. Supp. 2d at 63, JA 117.
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names of postal inspectors discussed earlier, defendant has not offered anything more than conclusory statements as to why this information should not be public.73 The district court further noted that the USPS “offer[ed] no explanation whatsoever as to why this case presents one of those identified circumstances of a risk of harassment or animosity.”74 That the USPS released documents after being informed by the court that its claims for withholding were unsupported or untenable does not confer a reasonable basis in law on those claims. “Courts have generally required that defendants, at a minimum, provide meaningful justification for inactivity or refusal to turn over requested information.”75 In considering United America’s motion for attorneys’ fees, however, the district court ignored all of USPS’s repeated failures to justify its withholdings. The district court focused only on whether the USPS had stated a claim under Exemption 7(C)
73 74 75
Id. at 60, 62. Id. at 64 (internal quotation omitted), JA 118. Judicial Watch, Inc. v. Bureau of Land Mgmt., 562 F. Supp. 2d 159, 174 (D.D.C. 2008), overruled on other grounds, 610 F.3d 47 (D.C. Cir. 2010).
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“based on sound legal theory” for continuing to withhold the documents remaining in the third round of cross-summary judgment motions.76 A sound legal theory is not sufficient; to have a reasonable basis in law, an agency must support its Exemption 7(C) claims with “some factual basis for the claim that harassment, intimidation, or physical harm will result from disclosure of individuals’ names.”77 The USPS failed to provide any factual basis to show that the legal standards cited actually applied to the documents it withheld. The district court failed to consider that the USPS had presented no viable support for its assertions that the exemptions claimed were actually applicable to the documents withheld. This failure requires reversal of the district court’s denial of attorneys’ fees under FOIA.
76 77
Attorney Fees Opinion, 770 F. Supp. 2d at 258, JA 108. Id. (internal quotation omitted) (citing Judicial Watch, Inc. v. FDA, 449 F.3d 141, 153 (D.C. Cir. 2006)).
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B.
The USPS Did Not Meet Its Burden To Justify Its Withholding of Documents “Voluntarily” Disclosed.
The district court denied United America’s motion for attorneys’ fees in part because it found that the USPS’s conduct in litigation was not “recalcitrant or obdurate.”78 The district court ignored the fact that the USPS forced United America to litigate through three rounds of summary judgment motions but found that the USPS’s numerous requests for extension over four years of litigation was “([]perhaps unfortunately) fairly commonplace with the federal government in this Court's experience.”79!By that standard, any opposition to FOIA requests that fall short of blatantly ignoring court orders would not be unreasonable. Such a standard would lead to increased governmental resistance to valid FOIA requests. The district court failed to consider the fact that this longrunning FOIA litigation was necessary only because the USPS forced United America to petition the federal courts for documents
78 79
Attorney Fees Opinion, 770 F. Supp. 2d at 258, JA 108. Id.
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to which it was entitled. Nor did the district court consider whether the USPS had a reasonable basis for withholding documents that it ultimately “voluntarily” disclosed after this litigation was initiated. For example, although it claimed exemptions under 7(A), the USPS never even attempted to show how the information it withheld “could reasonably be expected to interfere with enforcement proceedings.” 5 U.S.C. § 552(b)(7)(A).80 In Davy v. CIA, this Court overturned a similar denial of attorney fees when the district court found no basis to conclude that the government unreasonably withheld requested documents.81 This Court held that this standard mistakenly shifted the burden to the requester.82!The district court has made the same mistake in this case, inquiring only whether the USPS unreasonably withheld the information ultimately ordered released. As in Davy, “[t]he question is not whether [United America] has affirmatively shown that the agency was
80 81 82
First FOIA Opinion, 531 F. Supp. 2d at 38, JA 129. Davy v. CIA, 550 F.3d 1155, 1163 (D.C. Cir. 2008). Id.
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unreasonable, but rather whether the agency has shown that it had any colorable or reasonable basis for not disclosing the material until after [United America] filed suit.”83 Under the fee-entitlement rule affirmed by this Court in Brayton, if the government cannot carry its burden to show that it “was justified as a matter of law in refusing a plaintiff’s FOIA request,” a substantially prevailing plaintiff may receive attorney fees “as long as his claim was ‘not insubstantial.’”84 The USPS did not even try to meet this burden. The USPS offered no argument that it had a reasonable basis for withholding the documents it “voluntarily” disclosed after the district court informed it that its justifications were conclusory. The district court was quite adamant in its first summary judgment opinion that the USPS justifications with regard to these documents were unreasonable, but failed to recall these determinations in considering the motion for attorney fees.
83 84
See id. Brayton v. Office of the U.S. Trade Rep., 641 F.3d 521, 526 (D.C. Cir. 2011) (emphasis added).
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Furthermore, the issue of whether a government agency has forced the person seeking information under FOIA to litigate is one of central concern when determining whether to award attorney fees. In enacting the attorney fees provision, “Congress realized that too often the insurmountable barriers presented by court costs and attorney fees to the average person requesting information under the FOIA enabled the government to escape compliance with the law.”85 In this case, the USPS pressed every legal lever, forcing United America to litigate through three rounds of cross summary judgment motions and an appeal by the government (that was ultimately withdrawn), forcing over four years of expensive federal court litigation. Congress enacted the attorney fees provision in order to ensure that individuals and small entities who could not otherwise afford expensive federal court litigation are able to assert their rights to information from government agencies. “A grudging application of [the attorney fees] provision, which would dissuade
85
Cuneo, 553 F.2d at 1363-64 (citing S.Rep.No.93-854, 93d Cong., 2d Sess. 17 (1974)).
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those who have been denied information from invoking their right to judicial review, would be clearly contrary to congressional intent.”86 As this Court recognized in Davy, “[i]f the government could defeat an award of fees by citing a lack of resistance after the requester files a lawsuit to obtain requested documents, then it could force plaintiffs to bear the costs of litigation.”87 This was not a situation like that in Vermont Low Income Advocacy Council v. Usery where the government agency was taking extra time to try to comply with FOIA obligations.88 Rather, unlike in Sampson, this case is one “of absolute resistance to disclosure before the plaintiff sought judicial review.”89 The district court erred in failing to consider that the USPS imposed this avoidable expense on United America and its attorneys in denying attorneys’ fees. Because there was no
86 87 88
Sampson, 559 F.2d at 715. Davy, 550 F.3d at 1163. Vermont Low Income Advocacy Council v. Usery, 546 F.2d 509, 513 (2d Cir. 1976). Sampson, 559 F.2d at 716.
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evidence that the USPS had a reasonable basis for withholding the overwhelming majority of documents ultimately released in the course of this litigation, “the district court abused its discretion in determining that the fourth factor weighed in the agency's favor.”90 CONCLUSION If the term “public interest” does not encompass attempts to root out discrimination by government agents, then the term has lost all meaning. The rule set forth by the district court would limit FOIA attorney fees to media companies and those in academic pursuits. Congress did not intend to limit attorney fees so. Congress intended attorney fees to be available to individuals and small businesses without sufficient commercial resources or incentive to engage in the costly effort of asserting their rights to governmental information in federal courts. It is because Congress recognized that government agencies had been denying information requests with no reasonable basis in law,
90
See Davy, 550 F.3d at 1163.
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forcing requesters to look to the courts to enforce these rights, that the FOIA attorney fees provisions were enacted. Because the district court’s order denying attorney fees in this case frustrates these Congressional policies, United America respectfully requests that this Court reverse the district court’s decision denying FOIA attorney fees. Respectfully submitted, December 9, 2011 William P. Farley, Esquire Law Office of William P. Farley, P.C. 717 D Street, N.W Washington, D.C. 20004 John F. Karl, Jr. McDonald & Karl 1150 Connecticut Ave., N.W. Ninth floor Washington, D.C. 20036
! !
/s/ Noah A. Clements Noah A. Clements* THE CLEMENTS FIRM 1250 Connecticut Avenue NW, Suite 200 Washington, DC 20036 (202) 630-0544 [email protected] * Counsel of Record
Counsel for Appellant United America Financial, Inc.
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CERTIFICATE OF WORD COUNT I hereby certify that the attached Appellant’s Brief in Century Schoolbook, 14-point font conforms to the 14,000 word limit imposed by FRAP 32(a)(7)(B). This Brief, including footnotes, contains 6,409 words. /s/ Noah A. Clements Noah A. Clements
CERTIFICATE OF SERVICE I hereby certify that I caused the attached Appellant’s Brief and accompanying Joint Appendix to be served on all parties electronically via the Court’s CM/ECF system on December 9, 2011. A paper copy will be also be mailed first class to:
CLAIRE WHITAKER Assistant United States Attorney 555 Fourth Street, NW, Room E-4204 Washington, DC 20530 /s/ Noah A. Clements Noah A. Clements
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