Frank LLP v. Consumer Financial Protection Bureau ( 2020 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
FRANK LLP, )
)
Plaintiff, )
)
v. ) Case No. 19-cv-01197 (APM)
)
CONSUMER FINANCIAL PROTECTION )
BUREAU, )
)
Defendant. )
_________________________________________ )
MEMORANDUM OPINION
I. INTRODUCTION
Plaintiff Frank LLP brings this action against the Consumer Financial Protection Bureau
(“CFPB” or “Bureau”) pursuant to the Freedom of Information Act (“FOIA”) to challenge the
agency’s response to Plaintiff’s 2018 FOIA request. The request asked for certain investigational
transcripts, compiled by CFPB in advance of its civil enforcement action against the National
Collegiate Master Loan Trust (“NCSLT”) and its administrative enforcement action against
Transworld Systems, Inc. (“Transworld”), a national debt-collection coordinator. After
identifying 557 responsive pages, CFPB denied the request in full, and this action ensued. Before
the court are the parties’ cross-motions for summary judgment. Plaintiff alleges that CFPB
improperly withheld the transcripts and failed to conduct an appropriate segregability analysis as
required by FOIA. CFPB, on the other hand, contends that the responsive documents were
properly withheld in full under Exemption 7(A), and that portions of the transcripts are also exempt
from disclosure under Exemptions 6, 7(C), and 7(E).
The court concludes that CFPB has appropriately withheld all transcripts under Exemption
7(A). Portions of the transcripts are also protected under Exemptions 7(C) and (E). Lastly, the
court finds that none of the withheld information was reasonably segregable. Therefore, and for
the reasons stated in greater detail below, the court grants CFPB’s Motion for Summary Judgment
and denies Plaintiff’s Cross-Motion for Summary Judgment.
II. BACKGROUND
A. Factual Background
Plaintiff is a law firm that represents a class of consumers in two consolidated civil actions
against NCSLT, Transworld, and a debt-collection law firm, Forster & Garbus LLP. Pl.’s Compl.,
ECF No. 1 [hereinafter Pl.’s Compl.], ¶ 5. The plaintiffs in those actions allege that, with the
assistance of Forster & Garbus and other debt-collection law firms, NCSLT used false affidavits
signed by Transworld employees to file unlawful student loan debt-collection lawsuits. Compl.,
¶¶ 1, 12, 15, 16, Bifulco v. Nat’l Collegiate Student Loan Tr. 2004-2, No. 1:18-cv-07692-PGG
(S.D.N.Y. Aug. 28, 2018), ECF No. 1; Compl., ¶¶ 1, 12, 15, 16, Michelo v. Nat’l Collegiate
Student Loan Tr. 2007-2, No. 1:18-cv-01781-PGG (S.D.N.Y. Feb. 27, 2018), ECF No. 1. The
parties in those actions are currently proceeding with discovery. Pl.’s Compl. ¶ 10.
The claims in Bifulco and Michelo—that Transworld and NCSLT engaged in illegal debt-
collection practices for several years—mirror the allegations in two separate actions filed by
CFPB: one administrative enforcement action against Transworld, and one civil enforcement
action against NCSLT in the District of Delaware. Transworld Sys., Admin. Proc. No. 2017-
CFPB-0018 (Transworld) (Consumer Fin. Prot. Bureau Sept. 18, 2017) 1; Consumer Fin. Prot.
Bureau v. Nat’l Collegiate Master Student Loan Tr. (NCSLT), No. 1:17-cv-01323 (D. Del. May
1
Case Docket, Transworld (Sept. 18, 2017), available at https://www.consumerfinance.gov/administrative-
adjudication-proceedings/administrative-adjudication-docket/transworld-systems-inc/.
2
31, 2020). CFPB settled the Transworld action via an administrative consent order. Decl. of
Deborah Morris, ECF No. 11-1 [hereinafter Morris Decl.], ¶ 24. The order confirmed that
Transworld hired law firms to file student loan actions on behalf of NCSLT, many based on false
affidavits. Id. Meanwhile, in the NCSLT action, seven parties—including Transworld—
intervened to challenge a proposed consent judgment. Id. ¶¶ 23, 25. The district court rejected
the proposed judgment on May 31, 2020, see Mem. Op., ECF No. 272, NCSLT (May 31, 2020),
and is currently considering CFPB’s Request for Default Judgment, ECF No. 295, NCSLT (July 2,
2020), as well as Transworld’s Motion to Dismiss, ECF No. 242, NCSLT (Mar. 19, 2020).
In addition, CFPB initiated a separate enforcement action in the Eastern District of New
York against the Forster & Garbus law firm for its role in prosecuting unlawful debt-collection
lawsuits. Bureau of Consumer Fin. Prot. v. Forster & Garbus, LLP (Forster & Garbus), No. 2:19-
cv-2928 (E.D.N.Y). The district court stayed that matter for several months pending a decision by
the Supreme Court in Selia Law LLC v. Consumer Financial Protection Bureau. See Order
Extending Deadline for Parties to Seek Leave to Restore Case, ECF No. 28, Forster & Garbus
(June 29, 2020). Following the Supreme Court’s decision in late June 2020, Selia Law LLC v.
Consumer Fin. Prot. Bureau, 140 S. Ct. 2183 (2020), the Bureau moved to reopen the case. Letter
Mot. to Reopen Case, ECF No. 29, Forster & Garbus (July 6, 2020). That request is pending.
In summary, the cases that bear on this opinion are the Transworld administrative action,
the NCSLT action, the Forster & Garbus lawsuit, and Plaintiff’s two class actions.
B. Procedural Background
Plaintiff filed this FOIA request in September 2018. The request asked CFPB to produce
documents pertaining to (1) the Bureau’s enforcement action resulting in the Transworld consent
order, and (2) the Bureau’s enforcement action against NCSLT. Compl. ¶ 15. The request
3
included but was not limited to the investigational-hearing testimony—akin to depositions—of
nine Transworld employees who had signed or notarized state-court affidavits against the plaintiffs
in the Bifulco and Michelo cases. Id. ¶ 16. Plaintiff later agreed to narrow its FOIA request to
only the investigation-hearing transcripts of the nine affiants. Id. ¶ 17. The Bureau identified
557 pages of responsive transcript pages, but it declined to disclose any of them, citing Exemptions
4, 7(A), and 7(E). Morris Decl. ¶ 11; id., Ex. B [PDF pp. 18–20].
Plaintiff then filed an administrative appeal. There, the Bureau concluded that the
documents were exempt from disclosure under Exemptions 7(A) and 7(E). Id., Ex. D [PDF p. 40].
The Bureau explained that disclosure could be reasonably expected to interfere with the agency’s
active litigation and would reveal techniques the agency uses to uncover specific facts for those
investigations. Id.
Plaintiff filed this action on September 19, 2018. Pl.’s Compl. ¶ 15. Both parties
subsequently filed motions for summary judgment. CFPB maintains that it properly withheld the
transcripts in full under Exemption 7(A). Def.’s Mot. for Summ. J., ECF No. 11 [hereinafter Def.’s
Mot.], at 8. It also invokes Exemptions 7(C) and 6 on the grounds that disclosing certain transcript
portions would constitute an unwarranted invasion of personal privacy, and additionally maintains
that certain transcript portions are protected by Exemption 7(E). Id. Plaintiff counters that the
exemptions do not apply, and that even if some exemptions do apply, CFPB failed to conduct an
adequate segregability review of the 557 pages. Pl.’s Opp’n to Def.’s Mot. for Summ. J. & Cross-
Mot. for Summ. J., ECF No. 13 [hereinafter Pl.’s Mot.], at 2–3, 18; Pl.’s Compl. at 8.
III. LEGAL STANDARD
FOIA’s purpose is to “ensure an informed citizenry, vital to the functioning of a democratic
society.” NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242 (1978). FOIA “mandates
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disclosure of government records unless the requested information falls within one of the nine
enumerated exemptions.” Ctr. for Nat’l Sec. Studies v. U.S. Dep’t of Justice, 331 F.3d 918, 925
(D.C. Cir. 2003). Because of FOIA’s “goal of broad disclosure,” courts are to give the exemptions
“a narrow compass.” Citizens for Responsibility & Ethics in Wash. v. U.S. Dep’t of Justice (CREW
I), 746 F.3d 1082, 1088 (D.C. Cir. 2014) (quoting Milner v. Dep't of Navy, 562 U.S. 562, 571
(2011)). However, courts must not fail to give the exemptions “meaningful reach and application.”
John Doe Agency v. John Doe Corp., 493 U.S. 146, 152 (1989). FOIA expressly “places the
burden of justifying nondisclosure on the agency seeking to withhold information.” Mead Data
Cent., Inc. v. U.S. Dep’t of Air Force, 566 F.2d 242, 260 (D.C. Cir. 1977); see 5 U.S.C
§ 552(a)(4)(B).
The “vast majority” of FOIA actions are resolved on summary judgment. Brayton v. Office
of the U.S. Trade Rep., 641 F.3d 521, 527 (D.C. Cir. 2011). When presented with a motion for
summary judgment in a FOIA action, the district court conducts a de novo review, “which requires
the court to ‘ascertain whether the agency has sustained its burden of demonstrating that the
documents requested . . . are exempt from disclosure under the FOIA.’” Rosenberg v. U.S. Dep’t
of Immigration & Customs Enf’t, 13 F. Supp. 3d 92, 101 (D.D.C. 2014) (alterations in original)
(quoting Multi Ag. Media LLC v. Dep’t of Agric., 515 F.3d 1224, 1227 (D.C. Cir. 2008)).
Thus, the court may grant summary judgment only where an agency can “prove that each
document that falls within the class requested either has been produced, is unidentifiable, or is
wholly exempt from FOIA’s inspection requirements.” Cudzich v. U.S. Immigration &
Naturalization Serv., 886 F. Supp. 101, 104 (D.D.C. 1995) (cleaned up) (quoting Nat’l Cable
Television Ass’n v. FCC, 479 F.2d 183 (D.C. Cir. 1973)). The agency meets this burden by
providing “a relatively detailed justification, specifically identifying the reasons why a particular
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exemption is relevant and correlating those claims with the particular part of a withheld document
to which they apply.” Mead Data, 566 F.2d at 251. Motions for summary judgment may be
granted based on agency affidavits and declarations if they “contain reasonable specificity of detail
. . . and if they are not called into question by contradictory evidence in the record or by evidence
of agency bad faith.” Frank LLP v. Consumer Fin. Prot. Bureau (Frank II), 327 F. Supp. 3d 179,
182 (D.D.C. 2018) (quoting Judicial Watch, Inc. v. U.S. Secret Serv., 726 F.3d 208, 215 (D.C. Cir.
2013)). The agency does not meet its burden, however, if it provides mere “conclusory and
generalized allegations of exemptions.” Bloche v. Dep’t of Def., 414 F. Supp. 3d 6, 25 (D.D.C.
2019) (cleaned up).
IV. DISCUSSION
CFPB invokes Exemptions 7(A), 7(C), 6, and 7(E) as the basis for its withholdings. Thus,
the transcripts or relevant portions are properly withheld if they: (1) “could reasonably be expected
to interfere with enforcement proceedings” under Exemption 7(A); (2) could constitute “a clearly
unwarranted invasion of personal privacy” under Exemption 6, or could “reasonably be expected
to constitute an unwarranted invasion of personal privacy” under Exemption 7(C); or (3) “would
disclose techniques and procedures for law enforcement investigations or prosecutions . . . if such
disclosure could reasonably be expected to risk circumvention of law” under Exemption 7(E). 5
U.S.C § 552(b). Even when an exemption applies, however, an agency must disclose “any
reasonably segregable portion of” the withheld records. Id.
A. Exemption 7(A)
Plaintiff first challenges the Bureau’s claim that Exemption 7(A) justifies withholding the
transcripts entirely. See Pls.’ Mot. at 9–10. Exemption 7(A) protects documents “compiled for
law enforcement purposes” that “could reasonably be expected to interfere with enforcement
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proceedings.” 5 U.S.C § 552(b)(7)(A). To qualify for protection, an agency must demonstrate
that (1) “a law enforcement proceeding is pending or prospective,” and (2) “some distinct harm is
likely to result if the record or information requested is disclosed.” Cudzich, 886 F. Supp. at 106;
see Mapother v. U.S. Dep’t of Justice, 3 F.3d 1533, 1540 (D.C. Cir. 1993). Plaintiff challenges
both elements.
1. CFPB-initiated legal proceedings
Exemption 7(A) applies when law enforcement proceedings are “pending or
contemplated.” Mapother, 3 F.3d at 1541 (quoting Coastal States Gas Corp. v. Dep’t of Energy,
617 F.2d 854, 870 (D.C. Cir. 1980)). This includes proceedings that are active, cases in which the
agency “must be prepared to respond to a third party’s challenge,” or proceedings that are
“reasonably anticipated.” Id. at 1540–41; CREW I, 746 F.3d at 1097. Disclosure, on the other
hand, is appropriate when the documents relate to parts of the enforcement proceedings that have
already concluded. CREW I, 746 F.3d at 1097.
Plaintiff challenges the “pending or contemplated” nature of the various actions brought
by CFPB. It contends that the Transworld action has been resolved; the NCSLT action though
active is limited to contractual matters, in which case releasing the transcripts has no impact on
those proceedings; and the Forster & Garbus action is either “closed” or “on the cusp of being
resolved.” Pl.’s Mot. at 11. Plaintiff is correct that the Transworld action is resolved, but it
misstates the present posture of other two proceedings.
The NCSLT matter is in active litigation. Pending in that case is CFPB’s Application for
Entry of Default, as well as Transworld’s Motion to Dismiss for lack of subject-matter jurisdiction.
See Pl.’s Appl. for Entry of Default, ECF No. 295, NCSLT (July 2, 2020); Opening Br. in Supp.
of Intervenor Transworld Inc.’s Mot. to Dismiss for Lack of Subject Matter Jurisdiction, ECF No.
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243, NCSLT (Mar. 19, 2020); Intervenors’ Mot. to Dismiss, ECF No. 301, NCSLT (Jul. 10, 2020).
Depending on how the court disposes of these motions, the NCSLT action may proceed to an
adjudication of the merits of NCSLT’s alleged Fair Debt Collection Practices Act violations.
NCSLT thus does not solely involve “contractual issues,” as Plaintiff claims, but may involve
discovery and a trial on the merits. Pl.’s Mot. at 10.
As for Forster & Garbus, following the Supreme Court’s decision in Selia Law LLC, the
parties are currently debating when to re-open the case. See Order Extending Deadline for Parties
to Seek Leave to Restore Case, ECF No. 28, Forster & Garbus (June 29, 2020). Thus, contrary
to Plaintiff’s characterization, that case is neither “closed” nor on the “cusp of being resolved.”
Moreover, the fact that the Forster & Garbus complaint does not mention Transworld’s “affidavit-
execution procedure” is of no moment. Pl.’s Mot. at 11. The Forster & Garbus complaint
explicitly mentions NCSLT, Compl. ¶ 33, ECF No. 1, Forster & Garbus (May 17, 2019), and,
given the intertwined relationship between NCSLT, Transworld, and Forster & Garbus, the
transcripts may be implicated in future discovery.
CFPB therefore has identified two “concrete prospective law enforcement proceeding[s]”
to which the investigative transcripts relate. Juarez v. Dep’t of Justice, 518 F.3d 54, 58 (D.C. Cir.
2008) (quoting Bevis v. Dep’t of State, 801 F.2d 1386, 1389 (D.C. Cir. 1986)).
2. Likelihood of Interference with Law Enforcement Actions
Next, CFPB must demonstrate that release of the transcripts is reasonably expected to
interfere with its pending law enforcement proceedings. An agency meets this burden by showing
“how the particular kinds of investigatory records requested would interfere with a pending
enforcement proceeding.” Campbell v. Dep’t of Health & Human Servs., 682 F.2d 256, 259 (D.C.
Cir. 1982). Interference covers a wide range of consequences, including prematurely revealing
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the government’s “evidence and strategies, or the nature, scope, direction, and focus of its
investigations,” Maydak v. U.S. Dep’t of Justice, 218 F.3d 760, 762 (D.C. Cir. 2000); see also
Swan v. SEC, 96 F.3d 498, 499 (D.C. Cir. 1996); Alyeska Pipeline Serv. Co. v. EPA, 856 F.2d 309,
314 (D.C. Cir. 1988), and allowing law enforcement subjects to establish defenses, create
fraudulent alibis, destroy evidence or intimidate witnesses, North v. Walsh, 881 F.2d 1088, 1097–
98 (D.C. Cir. 1989). An agency may justify Exemption 7(A) categorically so long as “definitions
of relevant categories are sufficiently distinct to allow a court to determine whether the specific
claimed” exemption is “properly applied.” CREW I, 746 F.3d at 1088 (quoting Gallant v. NLRB,
26 F.3d 168, 173 (D.C. Cir. 1994)). However, categorical justification is available only when “the
range of circumstances included in the category characteristically support an inference that the
statutory requirements for exemption are satisfied.” Id. at 1089 (cleaned up).
Categorical withholding of Exemption 7(A) material finds its roots in NLRB v. Robbins
Tire & Rubber Co., 437 U.S. 214 (1978). There, the Supreme Court held that prehearing witness
statements may be withheld categorically. Id. at 241. The Court reasoned that disclosing witness
statements would involve “the kind of harm that Congress believed would constitute an
‘interference’ with [agency] enforcement proceedings: that of giving a party litigant earlier and
greater access to the [agency’s] case than he would otherwise have.” Id. Since Robbins, the D.C.
Circuit has allowed agencies to categorically withhold witness statements. See, e.g., Swan 96 F.3d
at 499, Alyeska 856 F.2d at 312. In Swan, for instance, the D.C. Circuit allowed categorical
withholding of records that contained statements made by the plaintiffs’ attorney to the agency.
Swan, 96 F.3d at 498–99. Even though “some of” the attorney’s statements may have been known
by the plaintiffs, the records still might have “reveal[ed] much about the focus and scope of the
[agency’s] investigation, and [were] thus precisely the sort of information Exemption 7(A) allows
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an agency to keep secret.” Id. at 500. In Alyeska, the court upheld categorical withholding of
documents—including an interview transcript—because releasing the documents could have
resulted in disclosure of the “specific knowledge of the particular activities being investigated and
the direction being pursued” by the agency. 856 F.2d at 312, 314. A categorical approach is
permitted even if the FOIA requester is not an active litigant in an enforcement proceeding, as
courts “must evaluate the risk of disclosing records to some particular FOIA requester . . . in terms
of what anyone else might do” with the requested information. Swan, 96 F.3d at 500.
CFPB in this case categorically withheld the investigative transcripts, claiming that the
investigative transcripts are a type of witness statement. Def.’s Mot at 13. In support of its
categorical withholding, Deborah Morris—a Deputy Director of CFPB’s Office of Enforcement—
states that disclosing the responsive documents creates several risks, including witness
intimidation, identification of evidence likely to be relied upon by the government, and premature
disclosure of government strategy. Morris Decl. ¶¶ 1, 27. She also identifies a list of current
private actions between various NCSLT agents, and asserts that disclosing the documents could
invite “disruptive collateral litigation” that “risks prematurely putting the Bureau’s enforcement
cases at issue through collateral litigation in a federal court or a different forum.” Id. ¶ 28.
Plaintiff responds that the transcripts are so widely publicized that their release could not
interfere with any law enforcement proceedings. Pl.’s Mot. at 12. In support of its argument,
Plaintiff cites CFPB orders that identify two of the nine affiants named in its original FOIA request.
Id. at 11–12. Plaintiff also claims that, due to the close-knit contractual relationship between
NCSLT, Transworld and other entities, it is presumed that the multiple parties know about the
existence and substance of the affiants’ testimony. Id. at 13. Finally, Plaintiff asserts that after
the Bureau issued the Transworld consent order, it was clear that the evidence detailing the false
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affidavit scheme came from the affiants. Id. As nothing would come as a surprise to any of the
relevant parties, Plaintiff argues, the transcripts should be released. Id.
Plaintiff’s contentions are unconvincing. Nothing about the nature of the investigation
transcripts or the circumstances of disclosure warrants deviating from established precedent
recognizing such statements as protected under Exemption 7(A). See Swan, 96 F.3d at 499;
Alyeska, 856 F.2d at 312. The withheld investigational transcripts are witness statements in the
traditional sense. CFPB prepared them as part of an investigation and in anticipation of possible
law enforcement actions, which CFPB ultimately filed. Morris Decl. ¶¶ 21, 23. The Bureau
explains that, among other consequences, releasing the transcripts would reveal “the direction of
the government so far” and “the activity under continuing investigation during the litigation.” Id.
¶ 27. Implicit in CFPB’s arguments is the concern that release of the transcripts would reveal the
“focus and scope” of the proceedings and result in premature disclosures. Those are legitimate,
protectable interests under Exemption 7(A). See Swan, 96 F.3d at 499; Aleyska, 856 F.2d at 311.
It matters not that Plaintiff knows some of the information in the investigational interviews. See
Swan, 96 F.3d at 500. Releasing the transcripts would still expose the scope and focus of the
Bureau’s investigation in greater detail and do so prematurely, and thus CFPB rightfully invoked
Exemption 7(A).
Nor has Plaintiff supplied specific evidence to support its broad assertion that “nothing in
the transcripts will come as a surprise to anyone familiar with the CFPB investigations at issue
here.” Pl.’s Mot. at 13. Plaintiff is correct in that there are a limited number of potential affiants
who might have been interviewed by the Bureau, and two of those affiants were publicly identified
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during the Bureau’s debt-collection investigations. 2 Thus, it may be reasonable to assume that
some information about the debt-collection schemes came from some Transworld affiants. For
example, pages six through eleven of the Transworld consent order—which address the false
affidavit scheme 3—may have come, at least in part, from the interviews. However, Plaintiff offers
no concrete evidence to establish that fact, let alone its broader proposition that “nothing will come
as a surprise.” Pl.’s Mot. at 13. A similar deficiency arises with Plaintiff’s claim about the
potential witness identities. Although CFPB identified two Transworld employees that may have
testified, the public record confirms only that one of those employees in fact testified before
CFPB. 4 Whether any of the other eight employees named in Plaintiff’s request testified is unclear,
despite Plaintiff’s speculation: the identities of the individual(s) who testified before CFPB
remains confidential. See Morris Decl. ¶¶ 18, 29. CFPB therefore has met its burden for
categorically invoking Exemption 7(A).
B. Exemptions 6 and 7(C)
Although the court upholds CFPB’s categorical withholding of all transcripts under
Exemption 7(A), in the interest of completeness, the court addresses the agency’s other asserted
exemptions. CFPB contends that the names, financial information and other identifying
2
See Decision & Order on Francesca Giampiccolo’s Pet. to Set Aside Civil Investigative Dem., In Re. Francesca
Giampiccolo, No. 2015-CFPB-Giampiccolo-0001 (Consumer Fin. Prot. Bureau Aug. 1, 2015) (“Giampiccolo Order”),
available at https://files.consumerfinance.gov/f/201508_cfpb_decision-and-order-on-francesca-giamiccolo-petition-
to-set-aside-civil-investigative-demand.pdf; Decision & Order on Pet. by Transworld Systems Inc. to Appear at the
Oral Exam. Of Chandra Alphabet, In re Transworld Sys. Inc., No. 2015-Misc-Transworld Systems Inc-0001
(Consumer Fin. Prot. Bureau May 29, 2015) (“Alphabet Order”), available at
https://files.consumerfinance.gov/f/201506_cfpb_decision-and-order-on-petition-by-transworld-systems-inc-to-
appear-at-examination-of-chandra-alphabet.pdf.
3
Consent Order, Transworld (Sept. 18, 2017), available at
https://files.consumerfinance.gov/f/documents/201709_cfpb_transworld-systems_consent-order.pdf.
4
The conclusion that the public record only confirms the identity of one affiant stems from the nature of the released
documents. One document—the Decision and Order on Petition by Transworld Systems Inc. to Appear at the Oral
Examination of Chandra Alphabet—implicitly confirms that there was an oral examination. Alphabet Order at 1. The
other document—the Decision and Order on Francesca Giampiccolo’s Petition to Set Aside Civil Investigative
Demand—does not confirm whether Ms. Giampiccolo in fact testified after having her petition rejected. See generally
Giampiccolo Order.
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information of the witness(es) are properly withheld pursuant to Exemptions 6 and 7(C).
Exemption 6 protects documents such as medical or personnel files, for which disclosure “would
constitute a clearly unwarranted invasion of personal privacy,” 5 U.S.C. § 552(b)(6), while
Exemption 7(C) protects “records or information compiled for law enforcement purposes, but only
to the extent that the production of such” records “could reasonably be expected to constitute an
unwarranted invasion of personal privacy,” 5 U.S.C. § 552(b)(7)(C). When an agency claims that
documents are exempt under both provisions, a court begins its analysis with Exemption 7(C)
because “it provides broader privacy protection than Exemption 6 and thus establishes a lower bar
for withholding material.” Citizens for Responsibility & Ethics in Wash. v. U.S. Dep’t of Justice
(CREW II), 854 F.3d 675, 681 (D.C. Cir. 2017) (quoting CREW I, 746 F.3d at 1091 n.2).
The Exemption 7(C) analysis requires “balanc[ing] the public interest in disclosure against
the [privacy] interest Congress intended the Exemption to protect.” U.S. Dep’t of Justice v.
Reporters Comm. For Freedom of Press, 489 U.S. 749, 776 (1989)). As with Exemption 7(A),
categorical decisions on withholding documents pursuant to Exemption 7(C) “may be appropriate
and individual circumstances and individualized circumstances disregarded when a case fits into
a genus in which the balance characteristically tips in one direction.” Id.
1. Privacy Interests
The first question is “whether there is any privacy interest at stake” when releasing the
investigational transcript portions withheld under Exemption 7(C). Am. Civil Liberties Union v.
U.S. Dep’t of Justice, 655 F.3d 1, 6 (D.C. Cir. 2011). Individuals “have an obvious privacy interest
cognizable under Exemption 7(C) in keeping secret the fact that they were subjects of a law
enforcement investigation.” Nation Magazine v. U.S. Customs Serv., 71 F.3d 885, 894 (D.C. Cir.
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1995). That interest “extends to third parties who may be mentioned in investigatory files, as well
as witnesses and informants who provided information during the course of an investigation.” Id.The D.C. Circuit held in SafeCard Services v. SEC that private identifying information is
categorically exempt under Exemption 7(C), unless that information is “necessary in order to
confirm or refute compelling evidence that the agency is engaged in illegal activity.” 926 F.2d
1197, 1206 (D.C. Cir. 1991). However, “individuals who have already been publicly identified
. . . as having been . . . otherwise implicated” in an agency investigation hold a “diminished privacy
interest,” CREW II, 854 F.3d at 682, and therefore the categorical rule does not apply, District of
Columbia v. U.S. Immigration & Customs Enf’t, No. 18-CV-2410 (TSC), 2020 WL 2527207, at
*3 (D.D.C. May 18, 2020).
The individual(s) who testified in front of CFPB are “witnesses.” See Morris Decl. at ¶ 23.
They have an “obvious,” strong privacy interest in the non-disclosure of their names and
identifying information. Nation Magazine, 71 F.3d at 894. Furthermore, most of the witnesses’
identifying information is not public. Morris Decl. ¶ 18. Accordingly, the information about the
nonpublic witnesses is “presumptively exempt from disclosure under the SafeCard rule,”
Schrecker v. U.S. Dep’t of Justice, 349 F.3d 657, 666 (D.C. Cir. 2003), absent “probative . . .
allegations of official misconduct,” Aguirre v. U.S. Sec. & Exch. Comm’n, 551 F. Supp. 2d 33, 56
(D.D.C. 2008). 5
Plaintiff argues that since the investigation is well-known, and there are only a handful of
Transworld employees who sign affidavits, the witnesses’ identities are readily apparent and thus
5
Since public records confirm that one of the affiants identified by Plaintiff did in fact testify before the CFPB in the
Transworld proceeding, that individual’s information is not entitled to categorical withholding under SafeCard.
CREW II, 854 F.3d at 682. However, she retains a “second, distinct privacy interest in the contents of the investigative
files.” CREW I, 746 F.3d at 1092. Because the transcripts may contain her “medical, financial, employment and other
personal” information, Morris Decl. ¶ 30, the affiant retains a more than a de minimis, and therefore substantial,
privacy interest in the contents of the documents, see Multi Ag Media LLC, 515 F.3d at 1229–30.
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releasing the transcripts will not invade the witnesses’ personal privacy. Pl.’s Mot. at 13, 15–16.
Plaintiff also claims that due to the transcripts’ publicity via the facts in the Transworld consent
order, the affiants have a diminished privacy interest. Id. at 13, 15. These arguments, however,
run into the same wall as Plaintiff’s Exemption 7(A) argument. A short list of nine potential
witnesses is not equivalent to public disclosure. Although Plaintiff infers that the nine Transworld
employees named in its FOIA request participated in the Bureau’s investigation, the public record
confirms Plaintiff’s hypothesis for only one of those affiants. Informed speculation is not the same
as official disclosure. See Aleyska, 856 F.2d at 314. Accordingly, the court rejects Plaintiff’s
characterization of the affiants having a “diminished privacy interest.”
2. Public Interest
Under SafeCard’s categorical rule, the sole public interest that would warrant overcoming
a person’s privacy interests is that disclosure “is necessary in order to confirm or refute compelling
evidence that the agency is engaged in illegal activity.” 926 F.2d at 1206. Plaintiff, however,
offers no “compelling evidence” of agency misconduct. Id. at 1205. At most, it asserts that
disclosure will help the public “understand whether the CFPB ‘pulled its punches’ in one of its
highest-profile investigations in recent years,” Pl.’s Mot. at 16 (quoting CREW II, 854 F.3d at 683),
observing that “consumers subjected to the very false-affidavit violations identified by the CFPB
against Transworld, have failed to receive any compensation or equitable relief,” id.; see also Decl.
of Gregory A. Frank, ECF No. 14-2, ¶ 3. Although records that potentially show an agency “pulled
its punches” are no doubt of some public interest, see CREW I, 746 F.3d at 1093, such an assertion
does not rise to the level of “compelling evidence” of “illegal activity” required by SafeCard.
CFPB therefore properly invoked Exemption 7(C) categorically, except as to the one publicly
identified witness, see supra p. 12, note 4, which the court discusses in the next section.
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3. Balancing
Because the Bureau publicly released the name of one witness, information pertaining to
her must be considered under the traditional balancing test. See CREW II, 854 F.3d at 682. As
previously discussed, see supra p. 14, note 5, disclosing her identifying information would
implicate a substantial privacy interest. On the other side of the scale, Plaintiff does not explain
how disclosure of the witness’s information would advance the claimed public interest. See Nat’l
Archives & Records Admin. v. Favish, 541 U.S. 157, 172 (2004) (holding that, “[w]here the privacy
concerns addressed by Exemption 7(C) are present,” the plaintiff must show that the requested
information “is likely to advance” a “significant” public interest). Accordingly, CFPB
appropriately withheld portions of the requested documents under Exemption 7(C), and the court
need not consider the Exemption 6 argument.
C. Exemption 7(E)
Finally, the Bureau invokes Exemption 7(E) for portions of the transcripts containing
“techniques and procedures for law enforcement.” Def.’s Mot. at 18. Exemption 7(E) protects
records compiled for law enforcement purposes, “to the extent that the production of such law
enforcement records or information . . . would disclose techniques and procedures for law
enforcement investigations or prosecutions, or would disclose guidelines for law enforcement
investigations or prosecutions if such disclosure could reasonably be expected to risk
circumvention of the law.” 5 U.S.C. § 552(b)(7); see also Frank II, 327 F. Supp. 3d at 184–85;
Shapiro v. U.S. Dep’t of Justice, 239 F. Supp. 3d 100, 112 (D.D.C. 2017).
1. Techniques and Procedures
Exemption 7(E) normally protects “investigative techniques and procedures generally
unknown to the public.” Albuquerque Publ’g Co. v. U.S. Dep’t of Justice, 726 F. Supp. 851, 857
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(D.D.C. 1989). However, “even commonly known procedures may be protected from disclosure
if the disclosure could reduce or nullify their effectiveness.” Judicial Watch, Inc. v. FBI, No. 00-
745 (TFH), 2001 WL 35612541, at *8 (D.D.C. Apr. 20, 2001) (emphasis added). Courts in this
district recognize that specific interviewing techniques are protected under the exemption. Allen
v. Fed. Bureau of Prisons, No. 16-cv-0708, 2019 WL 498804, at *7 (D.D.C. Feb. 8, 2019); Frank
II, 327 F. Supp. 3d at 183–84.
The court does not write on a clean slate regarding CFPB’s invocation of Exemption 7(E).
Plaintiff previously brought two FOIA actions against CFPB in this District. The first, from 2016,
sought records supporting the findings in an administrative consent order against a different
organization engaged in a similar false affidavit debt-collection scheme. There, the court found
that the agency had properly withheld records under FOIA Exemption 7(E). Frank LLP v.
Consumer Fin. Prot. Bureau (Frank I), 288 F. Supp. 3d 46, 54 (D.D.C. 2017). The second action
involved a request, much like in this case, for investigational hearing transcripts related to false-
affidavit debt-collection schemes. The Bureau produced several documents, including partially
redacted transcripts from its interviews. The court upheld the redactions, holding that CFPB’s
questioning techniques for debt-collection scheme lawsuits constituted “techniques and
procedures” under Exemption 7(E). Frank II, 327 F. Supp. 3d at 183–34. The court explained
that the redacted documents contained “the specific questions asked by Bureau investigators of
two . . . affiants, including the specific information and types of information sought, the manner
of questioning [and] sequencing of questioning,” among other details. Id. at 183.
There is no material difference between the issue decided in Frank II and the issue here.
CFPB in this case redacted certain portions of the investigational transcripts that contain specific
information about how the Bureau conducts official investigations, including the sequence and
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manner of questioning. Morris Decl. ¶¶ 39–42. Although it is well-known that CFPB engages in
interviews when investigating debt-collection violations, the agency’s strategy and specific
questions are confidential, and therefore not public or well-known. Id. ¶ 36. Thus, the
investigation transcripts contain protected “techniques and procedures” for the purpose of
Exemption 7(E).
Plaintiff argues that the Bureau’s interview techniques are “obvious,” and therefore not
techniques and procedures entitled to protection under Exemption 7(E). Pl.’s Mot. at 17–18 n.18.
Plaintiff advanced a near-identical argument in Frank II; it is no more persuasive here. See 327
F. Supp. 3d at 184–85. Although general interviewing methods might be “obvious” in some
respects, Pl.’s Mot. at 17 n.18, the specific interview methods used to investigate Consumer
Financial Protection Act and Fair Debt Collection Practices Act violations are confidential, Morris
Decl. ¶¶ 36, 39. This court therefore joins Frank II in finding that CFPB’s interview techniques
qualify as protected techniques and procedures under Exemption 7(E).
2. Risk of Circumvention of Law
The circumvention-of-law requirement sets a “relatively low bar.” Jett v. Fed. Bureau of
Investigation, 139 F. Supp. 3d 352, 363 (D.D.C. 2015). An agency must only show “a chance of
a reasonably expected risk” to qualify for the exemption. Mayer Brown LLP v. IRS, 562 F.3d
1190, 1193 (D.C. Cir. 2009); Jett, 139 F. Supp. 3d at 362. In other words, “[E]xemption 7(E) only
requires that the [agency] demonstrate logically how the release of the requested information might
create a risk of circumvention of the law.” Barouch v. U.S. Dep’t of Justice, 87 F. Supp. 3d 10,
29 (D.D.C. 2015) (alterations in original) (quoting Blackwell v. FBI, 646 F.3d 37, 42 (D.C. Cir.
2011)).
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CFPB reports that the transcripts contain specific questions and questioning sequences that
would reveal which facts are particularly important for prosecuting unlawful debt collection
practices. Morris Decl. ¶ 41. Release of this information would allow entities engaging in similar
conduct to “coach witnesses in these and similar cases on how to avoid providing incriminating
information.” Id. Although revealing the transcripts may not provide a “‘how to’ manual for law-
breakers,” a detailed understanding of the way the Bureau conducts investigational interviews in
false-affidavit debt collection schemes “could encourage decisions to violate the law or evade
punishment.” Mayer Brown LLP, 562 F.3d at 1193. It is logical to infer that releasing CFPB’s
investigational process, which could be revealed in part through the transcripts, would increase the
risk that a violator would alter his or her behavior to avoid prosecution. Accordingly, CFPB
satisfies Exemption 7(E)’s “low bar” for the relevant transcript pages, and properly invoked
Exemption 7(E).
D. Segregability
Finally, the court must consider whether CFPB complied with FOIA’s mandate that “[a]ny
reasonably segregable portion of a record shall be provided to any person requesting such record
after deletion of the portions which are exempt.” 5 U.S.C § 552(b). When claiming a generic
exclusion “dependent upon the category of records rather than the subject matter which each
individual record contains,” an agency need not provide a document-by-document segregability
analysis so long as it supplies an affidavit that is “sufficiently detailed to establish that the
document or group of documents in question actually falls into the exempted category.” Church
of Scientology v. Internal Revenue Serv., 792 F.2d 146, 152 (D.C. Cir. 1986); see also Robbins,
437 U.S. at 224 (stating that although FOIA requires that agencies disclose “segregable portions
of records,” the Act does not “necessarily contemplate[] that the [agency] must specifically
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demonstrate in each case that disclosure of the particular witness’ statement would interfere with
a pending enforcement proceeding”).
In this case, CFPB has established, based on the Morris Declaration, that the investigational
transcripts all fit into the category of protected witness statements. Accordingly, although the
Bureau did not address in its declaration whether any of the withheld information could be
segregated, see generally Morris Decl., the court independently concludes that there are no
reasonably segregable portions of responsive records, see Ferranti v. Bureau of Alcohol, Tobacco
& Firearms, 177 F. Supp. 2d 41, 47 (D.D.C. 2001) (finding that the “scope of the [agency’s]
categorical withholdings” enabled the court to conclude that all reasonably segregable information
had been released, notwithstanding the agency’s failure to address segregability in its
declaration); see also Robbins, Geller, Rudman & Dowd, LLP v. U. S. Sec. & Exch. Comm’n, No.
3:14-CV-2197, 2016 WL 950995, at *9 (M.D. Tenn. Mar. 12, 2016) (holding that “it is permissible
for the government to assert that an entire category of documents is exempt from disclosure and
therefore not reasonably segregable”).
V. CONCLUSION
For the reasons discussed in this Memorandum Opinion, the court grants the CFPB’s
Motion for Summary Judgment, ECF No. 11, and denies Plaintiff’s Cross-Motion for Summary
Judgment, ECF No. 14. The court also grants the CFPB’s Motion for Leave to File an Under Seal,
Ex Parte and In Camera Declaration, ECF No. 12, for the reasons set forth in that motion. A
separate Order accompanies this Memorandum Opinion.
Dated: August 5, 2020 Amit P. Mehta
United States District Court Judge
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