Perioperative Services And Logistics, LLC v. DVA ( 2023 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 10, 2022 Decided January 17, 2023
No. 21-5223
PERIOPERATIVE SERVICES AND LOGISTICS, LLC,
APPELLANT
v.
UNITED STATES DEPARTMENT OF VETERANS AFFAIRS,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:20-cv-00095)
Edward J. Tolchin argued the cause and filed the briefs for
appellant.
Douglas C. Dreier, Assistant U.S. Attorney, argued the
cause for appellee. On the brief were R. Craig Lawrence, Jane
M. Lyons, and Michael A. Tilghman II, Assistant U.S.
Attorneys.
Before: KATSAS and PAN, Circuit Judges, and TATEL,
Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge TATEL.
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TATEL, Senior Circuit Judge: This Freedom of
Information Act case presents a recurring problem: what is a
district court to do when the government claims that a withheld
record is exempt from disclosure but the basis for that
exemption cannot be gleaned from public affidavits or the
withheld record itself? Our court has held that in such
circumstances the government may file an ex parte declaration,
which the court can read but the FOIA requester cannot, to
explain the basis for the exemption. In this case, the district
court accepted an ex parte declaration and concluded that the
requested record was exempt. For the reasons set forth below,
we affirm.
I.
Perioperative Services and Logistics, LLC, sells medical
devices to the Department of Veterans Affairs (VA). After
someone emailed the VA accusing Perioperative of selling
counterfeit implants, the VA’s National Center for Patient
Safety posted an internal recall, requiring agency facilities to
sequester Perioperative products. Forty days later, after an
investigation yielded no support for the accusation, the VA
lifted the recall.
Seeking to unmask the complainant, Perioperative filed a
FOIA request for the complaint. The VA denied the request,
relying on Exemption 6, which shields “personnel and medical
files and similar files the disclosure of which would constitute
a clearly unwarranted invasion of personal privacy.” 5 U.S.C.
§ 552(b)(6). Perioperative filed suit in district court, and the
VA moved for summary judgment. In support, it filed an ex
parte declaration by VA employee Brian P. Tierney, who
explained why the VA believes that producing the document
would invade the complainant’s privacy. But, Tierney went on,
the VA faced a catch-22: publicly filing the Tierney declaration
would itself reveal information that would unmask the
3
complainant. The district court agreed, reviewed the Tierney
declaration in camera, and granted summary judgment to the
VA. Perioperative Services & Logistics, LLC v. Department of
Veterans Affairs, No. 20-cv-00095 (ABJ), 2021 WL 4476769,
at *1 (D.D.C. Sept. 30, 2021).
On appeal, Perioperative offers a dozen arguments that
boil down to just two: that the district court improperly relied
on the Tierney declaration and that the VA failed to carry its
burden to demonstrate that the complaint is exempt from
disclosure under Exemption 6.
II.
In accepting the Tierney declaration, the district court
relied on our court’s decision in Arieff v. Department of the
Navy, 712 F.2d 1462 (D.C. Cir. 1983), where we held that “the
receipt of in camera affidavits is . . . , when necessary, part of
a trial judge’s procedural arsenal.” Id. at 1469 (internal
quotation marks and citation omitted). In Arieff, a journalist
sought to uncover lists of prescription drugs supplied to
Congress’s Office of Attending Physician. Id. at 1464–65.
The government invoked Exemption 6, arguing that
sharing these drug inventories would be “tantamount to
disclosing . . . medical diagnos[e]s” of certain members of
Congress (or others treated by the Office of Attending
Physician). Id. at 1465. In support, the government offered an
ex parte affidavit that explained how specific drugs on the list
were linked with specific diagnoses. Id. We remanded for the
district court to consider whether the inventories should be
redacted, and, crucially for present purposes, ruled that the
district court could rely on the ex parte affidavit. Id. at 1469.
Acknowledging our discomfort with ex parte affidavits,
we explained that FOIA cases as a class present an unusual
dilemma: “[the government] knows the contents of the
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withheld records while the [plaintiff] does not; and the courts
have been charged with the responsibility of deciding the
dispute without altering that unequal condition, since that
would involve disclosing the very material sought to be kept
secret.” Id. at 1471. Given this, “[t]he [judicial] task” in a FOIA
case “can often not be performed by proceeding in the
traditional fashion.” Id. Therefore, we held, a district court may
receive an ex parte affidavit if and only if “(1) the validity of
the government’s assertion of exemption cannot be evaluated
without information beyond that contained in the public
affidavits and in the records themselves, and (2) public
disclosure of that information would compromise the secrecy
asserted.” Id.These criteria were met in Arieff. Because the only way for
the government to demonstrate why a given drug was uniquely
linked to a specific disease was through the submission of
evidence that “would of necessity disclose the name of the drug
itself,” the district court properly allowed the government to
file its expert’s affidavit ex parte. Id. Of course, that meant that
the journalist’s expert had no idea which drugs were on the list,
so he resorted to “cit[ing] examples of drugs which, although
widely prescribed for particular medical conditions and often
associated with those conditions, are also used in the treatment
of other [conditions].” Id. at 1465. Ex parte presentation thus
denied the journalist’s expert the opportunity to join issue with
the government’s expert. Even so, we approved the district
court’s reliance on the ex parte submission because that was
the only way the court could evaluate the government’s
invocation of Exemption 6 without jeopardizing the very
privacy interests the government sought to protect.
More recently, we applied Arieff in Montgomery v.
Internal Revenue Service, 40 F.4th 702 (D.C. Cir. 2022), where
FOIA plaintiffs sought to obtain IRS records regarding
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potential whistleblowers. Denying the request, the IRS
explained that whether any whistleblowers even existed was a
fact protected from disclosure by FOIA Exemption 7(D). See 5
U.S.C. § 552(b)(7)(D) (exempting from FOIA’s reach “records
or information compiled for law enforcement purposes . . .
[that] could reasonably be expected to disclose the identity of
a confidential source”). Although the district court agreed, it
held that the government must still prove either that no
responsive records existed (e.g., because there were no
whistleblowers) or that all responsive records involved
whistleblowers who had been assured confidentiality. Of
course, the government had no way to reveal which of those
two things was true without also revealing whether a
whistleblower existed, so the district court authorized the filing
of in camera declarations, and we affirmed. Quoting Arieff, we
explained that “[t]his Court has previously given a test for
‘when an affidavit disclosing information assertedly exempt
from production under the FOIA is proffered,’” and “[t]he
district court properly applied this test.” Montgomery, 40 F.4th
at 713 (quoting Arieff, 712 F.2d at 1470).
In this case, the district court likewise applied Arieff. “This
is one of the rare cases,” the district court explained, “where
the ex parte submission, with its detailed description of the
nature of the withheld document and the reasons underlying the
exemption, was necessary to preserve the privacy of the third
party involved.” Perioperative, 2021 WL 4476769, at *6.
Perioperative argues that instead of relying on Arieff, the
district court should have applied the six-factor test first
articulated in United States v. Hubbard, 650 F.2d 293 (D.C.
Cir. 1980). See Cable News Network v. FBI (CNN), 984 F.3d
114, 118 (D.C. Cir. 2021) (listing the six Hubbard factors). The
“Hubbard test” is our “lodestar for evaluating motions to seal
or unseal judicial records.” Leopold v. United States, 964 F.3d
6
1121, 1127 (D.C. Cir. 2020) (internal quotation marks and
citation omitted). Invoking Hubbard, Perioperative argues that
the “VA failed to establish adequately the basis for filing the
Tierney [d]eclaration under seal, and a fortiori failed to show
why it needed to be filed ex parte in its entirety.” Appellant’s
Br. 24.
Perioperative is mistaken. The tests announced in Arieff
and Hubbard govern two distinct questions. Arieff addresses
whether a district court may rely on an ex parte declaration in
a FOIA case. Hubbard addresses whether a district court must
fully or partially unseal a judicial record to vindicate “this
country’s common law tradition of public access to records of
a judicial proceeding.” Hubbard, 650 F.2d at 314. In
Montgomery, the FOIA plaintiffs challenged “the district
court’s use of in camera declarations,” and we applied Arieff.
40 F.4th at 713. In CNN, the plaintiff sought to unseal a
declaration in a FOIA case, and we applied Hubbard. See CNN,
984 F.3d at 118–19. Here, Perioperative argues that the district
court improperly received and relied on an ex parte declaration.
This is an Arieff issue, not a Hubbard issue. When the
government’s only recourse to vindicate an interest protected
by a FOIA exemption is to file an ex parte declaration, and the
government establishes that specific need under Arieff, it need
not simultaneously justify nondisclosure under the more
general balancing test required by Hubbard.
Perioperative—or indeed any member of the public—
could move in the future to unseal the Tierney declaration
pursuant to the common-law right of access to judicial records.
At that point, a Hubbard inquiry might be appropriate. We say
“might” because it is unclear to us whether the government
could ever establish a specific need to file an ex parte
declaration under Arieff, yet be unable to prevent its disclosure
under Hubbard, at least absent some intervening change in
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circumstances. Moreover, when the government’s only
recourse to vindicate an interest protected by a FOIA
exemption is to file an ex parte declaration, FOIA might
preempt any conflicting common law right to access that
declaration. CNN, 984 F.3d at 117 n.3 (declining to decide
whether FOIA “preempt[s] the common law when a document
is filed ex parte and in camera in FOIA litigation to persuade
the Court not to release FOIA materials”). But because these
issues are unbriefed, we leave them for another day.
Perioperative insists that the district court’s application of
Arieff “defies all sense of fairness.” Appellant’s Reply Br. 2.
Given that the district court applied the proper test, we evaluate
“for abuse of discretion” its “decision to review evidence ex
parte.” Labow v. DOJ, 831 F.3d 523, 533 (D.C. Cir. 2016).
As Perioperative points out, “‘party access’” to evidence
“‘is a hallmark of our adversary system’” that “‘serves to
preserve both the appearance and the reality of fairness.’”
Appellant’s Br. 18 (quoting Abourezk v. Reagan, 785 F.2d
1043, 1060–61 (D.C. Cir. 1986), aff’d, 484 U.S. 1 (1987)).
Even in FOIA cases, we “have been vigilant to confine to a
narrow path submissions not in accord with our general mode
of open proceedings.” Abourezk, 785 F.2d at 1061. That is why
Arieff makes clear that a district court may rely on an ex parte
declaration in a FOIA case only when the government’s
asserted exemption cannot be evaluated through “public
affidavits” or “the records themselves.” 712 F.2d at 1471. To
be sure, “when a district court uses an in camera affidavit, it
must both make its reasons for doing so clear and make as
much as possible of the in camera submission available to the
opposing party.” Armstrong v. Executive Office of the
President, 97 F.3d 575, 580 (D.C. Cir. 1996) (citing Lykins v.
DOJ, 725 F.2d 1455, 1465 (D.C. Cir. 1984)). Although the
district court here failed to follow that procedure, Perioperative
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has failed to raise that issue on appeal. In its opening brief,
Perioperative cites neither Armstrong nor Lykins, and it
addresses redaction in only “the most skeletal way.” See
Schneider v. Kissinger, 412 F.3d 190, 200 n.1 (D.C. Cir. 2005)
(mentioning an argument “in the most skeletal way” will not
prevent forfeiture, as it “leav[es] the court to do counsel’s
work, create the ossature for the argument, and put flesh on its
bones”) (quoting United States v. Zannino, 895 F.2d 1, 17 (1st
Cir. 1990)).
Although Perioperative’s briefs are rife with accusations
of procedures that “made the . . . Star Chamber look tame,”
Appellant’s Reply Br. 2, none of its arguments persuades us
that the district court abused its discretion. That said, we
understand Perioperative’s frustration: the district court relied
on a declaration that the company cannot see, let alone rebut.
But that dilemma is inherent in those FOIA cases where, as
here, an ex parte declaration is the only way to “decid[e] the
dispute without . . . disclosing the very material sought to be
kept secret.” Arieff, 712 F.2d at 1471.
III.
We turn, then, to Perioperative’s challenge to the district
court’s conclusion that the requested document—the
complaint—is covered by Exemption 6. “We review de novo a
district court’s decision to grant summary judgment.” Center
for Auto Safety v. National Highway Traffic Safety
Administration, 452 F.3d 798, 805 (D.C. Cir. 2006) (internal
quotation marks and citation omitted). “In the FOIA context,”
de novo review “requires that we ascertain whether the agency
has sustained its burden of demonstrating that the documents
requested are . . . exempt from disclosure under the FOIA.”
ACLU v. DOJ, 750 F.3d 927, 931 (D.C. Cir. 2014) (alteration
in original) (internal quotation marks and citation omitted).
Where, as here, the government relies on an ex parte
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submission, we review it with extra care, recognizing that the
FOIA plaintiff has had no opportunity to challenge or rebut the
government’s evidence.
To carry its burden under Exemption 6, the VA must show
three things. First, it must demonstrate that the withheld files
are “personnel [or] medical files [or] similar files.” 5 U.S.C.
§ 552(b)(6). Perioperative acknowledges that the complaint
qualifies as a similar file, as courts construe that term.
Second, the VA must show that disclosure would
“compromise a substantial, as opposed to a de minimis, privacy
interest.” National Association of Home Builders v. Norton,
309 F.3d 26, 33 (D.C. Cir. 2002) (internal quotation marks and
citation omitted). Courts have recognized a substantial privacy
interest in avoiding “unwanted contact following a FOIA
disclosure.” ACLU v. DOJ, 655 F.3d 1, 11 (D.C. Cir. 2011)
(collecting cases); see Department of Defense v. Federal Labor
Relations Authority, 510 U.S. 487, 502 (1994) (upholding
agency’s refusal to disclose employees’ home addresses). Of
particular relevance to this case, courts have recognized that
those who file complaints with the government “have
cognizable personal privacy interests in maintaining their
anonymity.” Prudential Locations LLC v. Department of
Housing & Urban Development, 739 F.3d 424, 434 (9th Cir.
2013) (per curiam); see Horowitz v. Peace Corps, 428 F.3d
271, 279 (D.C. Cir. 2005) (sexual assault complaint); Lakin
Law Firm, P.C. v. Federal Trade Commission, 352 F.3d 1122,
1122, 1124 (7th Cir. 2003) (consumer complaint to FTC).
Here, by the same token, the person who filed the
complaint against Perioperative has a substantial privacy
interest in maintaining in confidence the fact that he or she
accused the company of wrongdoing and in avoiding unwanted
contact by it. Perioperative effectively concedes as much in its
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opening brief. Appellant’s Br. 25 (“Certainly, names and
addresses can be personal, and with respect to those matters,
the balancing of public versus private interests would be
required.”); see also Oral Arg. Rec. 7:47–7:48 (calling the
privacy interest “somewhat limited” but not arguing that it is
de minimis).
Third, the VA must show that this privacy interest
outweighs “the public interest in the release of the records”
such that “disclosure would [cause] a clearly unwarranted
invasion of personal privacy.” National Association of Home
Builders, 309 F.3d at 33 (internal quotation marks and citation
omitted). “[T]he only relevant public interest in disclosure to
be weighed in this balance is the extent to which disclosure
would serve the core purpose of the FOIA, which is
contributing significantly to public understanding of the
operations or activities of the government.” American
Immigration Lawyers Association v. Executive Office for
Immigration Review, 830 F.3d 667, 674 (D.C. Cir. 2016)
(quoting Department of Defense, 510 U.S. at 495).
Perioperative argues that disclosing the complaint would
contribute to an understanding of the operations of the VA
because it would show “how a competitor can abuse the VA’s
investigatory processes by filing a false complaint for the
purposes of causing harm to a competitor and then how the VA
could suspend [the accused company’s] ability to do business
with the VA before it investigated the complaint.” Appellant’s
Br. 13. Knowing how the VA handles complaints from
competitors certainly qualifies as a public interest, but
Perioperative offers nothing but speculation to suggest that a
competitor filed the complaint against it. Indeed, as the VA
points out, a publicly filed declaration states that “the source of
the third-party complaint was an individual at an ‘unaffiliated
implant center.’” Appellee’s Br. 23 (quoting Baxter Decl., Joint
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Appendix 37). Given this, together with other material facts—
on which we cannot here elaborate—contained in the Tierney
declaration, we believe that the complainant’s substantial
privacy interest outweighs any public interest in disclosure.
Accordingly, the VA has demonstrated that the complaint is
exempt from disclosure under FOIA Exemption 6.
Perioperative next argues that the “VA [has] fail[ed] to
establish that the responsive records are not reasonably
segregable.” Appellant’s Br. 26. When an agency demonstrates
that a record is exempt, as the VA has done, it is “entitled to a
presumption that [it] complied with the obligation to disclose
reasonably segregable material.” Sussman v. United States
Marshals Service, 494 F.3d 1106, 1117 (D.C. Cir. 2007).
Because FOIA requesters lack access to the withheld records,
they will often be unable to “rebut[] this presumption.” See id.According to Perioperative, “it is simply impossible that
every word and punctuation mark would disclose the identity
of someone!” Appellant’s Br. 26. But this misapprehends the
VA’s FOIA obligations. It need not disclose a redacted version
of the complaint if the unredacted markings would “have
minimal or no information content.” Mead Data Center, Inc. v.
Department of the Air Force, 566 F.2d 242, 261 n.55 (D.C. Cir.
1977). The Tierney declaration says that that is exactly what
would happen here.
Finally, explaining that it needs to see the complaint
because it “want[s] to sue the[] [complainant] . . . for
defamation,” Perioperative argues that “the government has no
right to protect someone from a libel suit.” Oral Arg. Rec.
11:26–50. But Perioperative’s understandable desire to unmask
the complainant has no bearing on the outcome of its FOIA
case. The only question is whether the VA has carried its
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burden to demonstrate that the complaint is exempt under
Exemption 6. It has.
IV.
For the foregoing reasons, we affirm.
So ordered.