American Postal Workers Union, Afl-Cio v. United States Postal Service ( 2010 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
)
AMERICAN POSTAL WORKERS )
UNION, AFL-CIO, )
)
Plaintiff, )
)
v. ) Civ. Action No. 09-0237 (EGS)
)
UNITED STATES POSTAL SERVICE, )
)
Defendant. )
)
MEMORANDUM OPINION
Pending before the Court in this Freedom of Information Act
case are defendant’s motion for summary judgment and plaintiff’s
cross-motion for summary judgment. Upon consideration of the
motions, the responses and replies thereto, the applicable law,
the entire record, and for the reasons set forth below, the
defendant’s motion for summary judgment is GRANTED. Plaintiff’s
cross-motion for summary judgment is DENIED.
I. BACKGROUND
Plaintiff, the American Postal Workers Union, AFL-CIO,
requested information from the United States Postal Service (the
“Postal Service”) under the Freedom of Information Act (“FOIA”)
by letter dated September 10, 2008. In particular, plaintiff
requested “the most recent Pay for Performance bonus and/or pay
increases . . . contain[ing] the following information: finance
number, last name, first name, middle initial, level, title, PFP
lump-sum amount, PFP wage increase.” Def’s Mem. Ex. J,
Declaration of Jane Eyre (“Eyre Decl.”), Ex. 1. Defendant denied
plaintiff’s request, invoking the FOIA exemptions contained in
5 U.S.C. § 552(b)(3) (“Exemption 3”) and 5 U.S.C § 552(b)(6)
(“Exemption 6”). Eyre Decl., Ex. 2 After its administrative
appeal of the agency’s determination was denied, plaintiff filed
this action on February 6, 2009.
II. STANDARD OF REVIEW
The Court may grant a motion for summary judgment if the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with affidavits or declarations,
show that there is no genuine issue of material fact and that the
moving party is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(c). The moving party bears the burden of
demonstrating the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Factual
assertions in the moving party's affidavits or declarations may
be accepted as true unless the opposing party submits his own
affidavits or declarations or documentary evidence to the
contrary. Neal v. Kelly, 963 F.2d 453, 456 (D.C. Cir. 1992).
In a FOIA case, the Court may grant summary judgment based
on the information provided by the agency in affidavits or
declarations when the affidavits or declarations describe "the
documents and the justifications for nondisclosure with
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reasonably specific detail, demonstrate that the information
withheld logically falls within the claimed exemption, and are
not controverted by either contrary evidence in the record nor by
evidence of agency bad faith." Military Audit Project v. Casey,
656 F.2d 724, 738 (D.C. Cir. 1981); see also SafeCard Services,
Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991) (agency
affidavits must be "relatively detailed and non-conclusory").
Such affidavits or declarations are accorded "a presumption of
good faith, which cannot be rebutted by 'purely speculative
claims about the existence and discoverability of other
documents.'" SafeCard Services, Inc., 926 F.2d at 1200 (quoting
Ground Saucer Watch, Inc. v. Central Intelligence Agency, 692
F.2d 770, 771 (D.C. Cir. 1981)).
III. ANALYSIS
A. FOIA
Congress enacted FOIA to “open[] up the workings of
government to public scrutiny through the disclosure of
government records.” Stern v. FBI, 737 F.2d 84, 88 (D.C. Cir.
1984) (quotation omitted). Although FOIA is aimed toward
“open[ness] . . . of government,” id., Congress acknowledged that
“legitimate governmental and private interests could be harmed by
release of certain types of information.” Critical Mass Energy
Project v. Nuclear Regulatory Comm'n, 975 F.2d 871, 872 (D.C.
Cir. 1992) (citations and quotations omitted). As such, pursuant
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to FOIA's nine exemptions, an agency may withhold requested
information. 5 U.S.C. § 552(a)(4)(B); 5 U.S.C. § 552(b)(1)-(9).
However, “[b]ecause FOIA establishes a strong presumption in
favor of disclosure . . . requested material must be disclosed
unless it falls squarely within one of the nine exemptions carved
out in the Act.” Burka v. U.S. Dep't of Health and Human Servs.,
87 F.3d 508, 515 (D.C. Cir. 1996) (citations omitted).
B. Defendant’s Invocation of Exemption 3
Exemption 3 permits an agency to withhold information that
is “specifically exempted from disclosure by statute,” provided
that the statute either (i) “requires that the matters be
withheld from the public in such a manner as to leave no
discretion on the issue”; or (ii) “establishes particular
criteria for withholding or refers to particular types of matters
to be withheld[.]” 5 U.S.C. § 552(b)(3). Determining whether
Exemption 3 has been properly invoked requires a two-step
analysis. First, the Court must determine whether “the statute
in question [is] a statute of exemption as contemplated by
exemption 3” and, second, whether “the withheld material
satisf[ies] the criteria of the exemption statute[.]” Fitzgibbon
v. CIA, 911 F.2d 755, 761 (D.C. Cir. 1990) (citing CIA v. Sims,
471 U.S. 159, 167 (1985)); see also Larson v. Dep't of State, 565
F.3d 857, 868 (D.C. Cir. 2009) (“under Exemption 3 the [agency]
need only show that the statute claimed is one of exemption as
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contemplated by Exemption 3 and that the withheld material falls
within the statute.”)
Under Exemption 3, “only explicit nondisclosure statutes
that evidence a congressional determination that certain
materials ought to be kept in confidence will be sufficient to
qualify[.]” Irons & Sears v. Dann, 606 F.2d 1215, 1220 (D.C.
Cir. 1979). In the instant case, defendant relies upon 39 U.S.C.
§ 410(c)(2) in support of its claim that it is permitted to
withhhold the information requested by plaintiff. Under
§ 410(c)(2) the Postal Service is not required to disclose
“information of a commercial nature, including trade secrets,
whether or not obtained from a person outside the Postal Service,
which under good business practice would not be publicly
disclosed.” 39 U.S.C. § 410(c)(2).
As a threshold matter, the parties agree that § 410(c)(2) is
a statute of exemption as contemplated by Exemption 3. The
parties disagree, however, on whether the requested information
falls within the scope of § 410(c)(2). In support of its
position that the requested information is covered by
§ 410(c)(2), defendant has submitted the declaration of Jane
Eyre, the Manager of the Records Office of the Postal Service.
Ms. Eyre explains that the Pay for Performance (“PFP”) program is
a “merit program” in which salary increases and/or lump sum
bonuses are awarded to individuals using “a wide range of scores
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based on an individual’s performance and corporate/unit
indicators.” Eyre Decl. ¶ 10. According to Ms. Eyre, the PFP
program is “unlike most other government programs, where salary
increases are based in large part on cost of living allowance
(COLA) and time in service. The PFP program is grounded in the
USPS mandate to provide service in a competitive marketplace and
create a performance based culture.” Eyre Decl. ¶ 10.
Plaintiff makes two arguments against the application of
Exemption 3 to the information it has requested. First, it
argues that the requested information is not “of a commercial
nature” within the meaning of § 410(c)(2). Second, plaintiff
argues that “good business practices” would not prevent the
disclosure of the requested information. The Court will address
each argument in turn.
i. Information of a Commercial Nature
Defendant asserts that the PFP information is “of a
commercial nature” within the meaning of § 410(c)(2) because the
information “is used to place a numeric value on employees for
purposes of making employee staffing decisions, which in effect
are labor decisions with underlying commercial and financial
implications.” Def’s Reply Mem. at 4 (citing to Second
Declaration of Jane Eyre, hereinafter “Second Eyre Decl.”, ¶ 3).
Plaintiff finds fault with this analysis, asserting that
“[n]owhere does the [Postal Service] demonstrate that the PFP
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information actually has financial implications; nowhere does it
explain who faces the purported financial implications; and
nowhere does it detail how the financial implications could
arise.” Pl.’s Reply Mem. at 5. The Court finds this assertion
unpersuasive.
The Postal Service has promulgated regulations containing a
non-exhaustive list of information that is to be considered
commercial in nature. Among other types of information, the
regulations state that “[r]ecords compiled within the Postal
Service which would be of potential benefit to persons or firms
in economic competition with the Postal Service” are commercial
in nature and therefore exempt from mandatory disclosure. 29
C.F.R. § 265.6(b)(3)(vi).
Under § 410(c)(2) and its accompanying regulation, courts
have allowed the Postal Service to withhold various types of
information using Exemption 3. See, e.g., Wickwire Gavin, P.C.
v. U.S. Postal Serv., 356 F.3d 588 (4th Cir. 2004) (agency
properly withheld portions of a contract between the Postal
Service and a supplier of packing supplies that contained
quantity and pricing information); Reid v. U.S. Postal Serv., No.
05-294, 2006 U.S. Dist. LEXIS 45538 (S.D. Ill. July 5, 2006)
(agency properly withheld the financial reports of the Postal
Service, as well as the postage statements – containing
information related to the sender, the category of mail, the
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weight of the package, the total postage amount, etc. – of a
third party to whom the Postal Service granted a permit); Airline
Pilots Ass’n, Int’l v. U.S. Postal Serv., No. 03-2384, 2004 U.S.
Dist. LEXIS 26067 (D.D.C. June 24, 2004) (agency properly
withheld redacted portions of an agreement between the Postal
Service and the Federal Express Corporation relating to the
shipment of certain items); Robinett v. U.S. Postal Serv., No.
02-1094, 2002 U.S. Dist. LEXIS 13779 (E.D. La. July 24, 2002)
(agency properly withheld material reflecting the Postal
Service’s evaluation of plaintiff’s employment application).1
Not only does the type of information requested by plaintiff
fall within the scope of 29 CFR § 265.6(b)(3)(vi) because it is
information that “would be of potential benefit to persons or
firms in economic competition with the Postal Service,” the Court
also concludes that the information is commercial under a common
understanding of the word. See e.g., Carlson, 504 F.3d at 1129
(holding that “information is commercial if it relates to
commerce, trade, or profit”) (citation omitted); Merriam-
1
By comparison, the Ninth Circuit in Carlson v. U.S.
Postal Serv., 504 F.3d 1123, 1128 (9th Cir. 2007), held that
“[p]ost office names, addresses, telephone numbers, hours of
operation and final collection times are not ‘information of a
commercial nature,’ and, therefore, are not within the scope of §
410(c)(2).” Similarly, the District Court of the Northern
District of Texas held that the Postal Service improperly
withheld the names and duty stations of employees of the Postal
Service. Nat’l Western Life Ins. Co. v. U.S., 512 F. Supp. 454,
462 (N.D. Tex. 1980)
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Webster’s Collegiate Dictionary, Tenth Ed. (1998) (defining the
word “commercial”, in part, as “occupied with or engaged in
commerce or work intended for commerce;” “viewed with regard to
profit;” or “emphasizing skills and subjects useful in
business.”)
Plaintiff has requested that the Postal Service disclose
information containing the agency’s decisions regarding bonuses
and salary increases for its employees. The Postal Service’s
decisions regarding lump-sum bonus and salary increases are based
on individual, unit and corporate performance indicators devised
by the Postal Service and reflecting the agency’s efforts to
“improve customer service, generate revenue, manage costs and
enhance a performance-based culture.” Second Eyre Decl. Ex. 1 at
1. The Court, therefore, agrees with defendant that such data is
properly considered commercial information.
ii. Good Business Practice
Plaintiff also argues that the fact that defendant “presents
no evidence that the aforementioned disclosures have ever placed
[the Postal Service] at a competitive disadvantage or caused
private companies to hire away [Postal Service] workers creates
the presumption that disclosing the requested information meets
the good-business-practice standard.” Pl.’s Opp’n at 12.
Plaintiff, however, by focusing on the question of
competitive disadvantage, fails to apply the correct analysis to
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the question of whether good business practice would prevent the
disclosure of the information. The existing case law that
addresses this issue makes clear that a determination of whether
the disclosure of particular information would be a “good
business practice” does not rest on a conclusion of competitive
disadvantage to the Postal Service; instead, courts look to the
common practices of other businesses. See, e.g., Wickwire Gavin,
356 F.3d at 594 (“In determining whether Exemption 3 applies, it
is uncontroverted that the statutory term ‘good business
practice’ should be decided with reference to what businesses
normally do”); Airline Pilots Ass’n, No. 03-2384, 2004 U.S.
Dist. LEXIS 26067, at *19 (“The contours of the good business
practice exemption are to be gleaned by looking to the commercial
world, management techniques, and business law, as well as to the
standards of practice adhered to by large corporations.”
(internal quotations omitted)); Robinett, No. 02-1094, 2002 U.S.
Dist. LEXIS 13779, at *15-16 (“to determine what constitutes
‘good business practice,’ the agency can refer to business law
and recommended management techniques in the commercial world”);
Reid, No. 05-294, 2006 U.S. Dist. LEXIS 45538, at *17 (“Whether
an action is considered a good business practice can be
‘ascertain[ed] by looking to the commercial world, management
techniques, and business law, as well as to the standards of
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practice adhered to by large corporations.’” (citing Nat'l
Western, 512 F. Supp. at 459)).
Indeed, even plaintiff recognizes that § 410(c)(2) was
adopted as part of the Postal Reorganization Act, a statute that
was designed, in part, to “eliminate outmoded legislative,
budgetary, financial and personnel policies so that [the Postal
Service] could employ modern management and business
practices[.]” Pl.’s Mem. at 6 (citing Carlson, 504 F.3d at
1127); see also Franchise Tax Bd. v. U.S. Postal Serv., 467 U.S.
512, 519-520 (1984) (“In passing the Postal Reorganization Act of
1970. . . . Congress also indicated that it wished the Postal
Service to be run more like a business than had its predecessor,
the Post Office Department.”) Therefore, in determining whether
it would be good business practice to disclose requested
commercial information, the Postal Service should be expected to
evaluate the information in the same manner as a corporation in
the commercial world.
The statements of defendant’s declarant, Ms. Eyre, provide
sufficient, non-conclusory support for defendant’s position that
the information requested is not generally released by businesses
in the private sector. In particular, Ms. Eyre states that:
The PFP program is grounded in the Postal Service
mandate to provide service in a competitive marketplace
and create a performance-based culture. The PFP
program helps the Postal Service attract applicants and
retain employees through performance-based incentives.
Disclosing details about, and the amounts paid in
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connection with, the PFP program would allow
competitors to mirror these incentives and draw away
talented employees, thereby harming the Postal
Service’s ability to remain competitive. . . . With the
exception of the top level executives of publicly
traded firms, private businesses do not routinely
disclose detailed salary information to the public.
Eyre Decl. ¶¶ 13-14.
The Court finds this statement persuasive, and plaintiff
offers no evidence contradicting the agency’s contention that
private sector delivery firms would not disclose this
information. See Wickwire Gavin, 356 F.3d at 594 (“[Plaintiff’s]
failure to build any record whatsoever concerning the business
practice of [the Postal Service’s] competitors is fatal.”).
Moreover, even accepting plaintiff’s position that commercial
information must be disclosed unless it places the Postal Service
at a competitive disadvantage, the outcome would be the same.
Finally, to the extent that plaintiff argues that the
release by the Postal Service in prior years of similar
information requires the disclosure of the currently requested
information, the Court also disagrees. Defendant has
persuasively demonstrated that the content of previously released
materials was substantively different than the information
plaintiff now requests. See Second Eyre Decl. ¶¶ 7-8 (“While
[the Postal Service] has previously released Economic Value Added
(“EVA”) information, it has not previously released PFP
information for the performance system now in place. EVA differs
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from PFP in that while EVA was a performance-based pay program,
it was team-based whereas PFP is an individual incentive
program.”)
Furthermore, “while it is generally true that the government
bears the burden of proving that its withholding of information
is justified by one or more of the [FOIA] exemptions, a plaintiff
asserting a claim of prior disclosure must bear the initial
burden of pointing to specific information in the public domain
that appears to duplicate that being withheld.” Afshar v. Dep’t
of State, 702 F.2d 1125, 1130 (D.C. Cir. 1983) (citing Casey, 656
F.2d at 741-45). For the reasons set forth above, plaintiff has
failed to demonstrate that the information requested is the
“duplicate” of information that is already in the public domain.
C. Defendant’s Invocation of Exemption 6
Because defendant properly withheld the requested documents
under Exemption 3, the Court declines to address whether
Exemption 6, permitting an agency to withhold “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), would also apply.
D. Segregability
An agency claiming an exemption is required to provide "any
reasonably segregable portion of a record . . . after deletion of
the portions which are exempt." 5 U.S.C. § 552(b); see also Mead
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Data Cent., Inc. v. U.S. Dep't of the Air Force, 566 F.2d 242,
260 (D.C. Cir. 1977) ("[I]t has long been a rule in this Circuit
that non-exempt portions of a document must be disclosed unless
they are inextricably intertwined with exempt portions.")
Defendant has asserted that there is no reasonably
segregable material in the PFP information. Def.’s Mem. at 8.
Although plaintiff has not challenged this determination, “it is
error for a district court to simply approve the withholding of
an entire document without entering a finding on segregability.”
Kimberlin v. DOJ, 139 F.3d 944, 950 (D.C. Cir. 1998) (quoting
Schiller v. NLRB, 964 F.2d 1205, 1210 (D.C. Cir. 1992)); see also
Trans-Pacific Policing Agreement v. U.S. Customs Serv., 177 F.3d
1022, 1028 (D.C. Cir. 1999) (“[T]he District Court had an
affirmative duty to consider the segregability issue sua
sponte.”)
In light of plaintiff’s lack of objection to defendant’s
assertion of non-segregability and the narrow category of
information requested by plaintiff, namely records containing a
list of lump-sum bonuses and salary increases for employees of
the Postal Service, the Court agrees with the agency that there
is no segregable portion of the records.
IV. CONCLUSION
For the foregoing reasons, it is hereby ordered that
defendant’s motion for summary judgment is GRANTED; and
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plaintiff’s cross-motion for summary judgment is DENIED. An
appropriate Order accompanies this Memorandum Opinion.
SIGNED: Emmet G. Sullivan
United States District Court Judge
September 30, 2010
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