Citizens for Responsibility and Ethics in Washington v. U.S. Department of Commerce ( 2020 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CITIZENS FOR RESPONSIBILITY AND
ETHICS IN WASHINGTON,
Plaintiff,
v. Civil Action No. 1:18-cv-03022 (CJN)
U.S. DEPARTMENT OF COMMERCE,
Defendant.
MEMORANDUM OPINION
Citizens for Responsibility and Ethics in Washington (“CREW”) requested pursuant to
the Freedom of Information Act two categories of records from the U.S. Department of
Commerce: “[a]ll communication between former White House advisor to the Commerce
Department Eric Branstad and former Trump campaign official Rick Gates from January 20,
2017[,] to March 1, 2018,” and “[a]ll communication[s] sent or received by Branstad that
mention[ ] the defense firm Circinus.” See generally Pl.’s Statement of Undisputed Material
Facts in Supp. of Cross-Mot. for Summ. J. (“Pl.’s SOMF”) ¶¶ 1–2, ECF No. 15-4 at 2.
Commerce withheld certain information under FOIA Exemptions 4, 5, and 6, id. ¶ 4, and both
Parties have moved for summary judgment, see generally Def.’s Mot. for Summ. J., ECF No. 14;
Pl.’s Cross-Mot. for Summ. J., ECF No. 15. For the reasons stated below, the Court grants in
part and denies in part both Cross-Motions.
I. Background
On August 2, 2018, CREW submitted a FOIA request to Commerce seeking the two
categories of information identified above. CREW states that it is interested in the requested
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communications because, CREW claims, Gates contacted Branstad on behalf of the defense firm
Circinus while Branstad worked at Commerce. Compl. ¶ 8, ECF No. 1. And CREW notes that
“Gates reportedly considered Branstad a ‘contact’ at Commerce who could help secure the
agency’s endorsement of lucrative defense work by Circinus for the Romanian government.”
Pl.’s Mem. in Supp. of Cross-Mot. (“Pl.’s Mem.”) at 2 (citing id.), ECF No. 15-1.
Commerce produced 165 pages of responsive records and withheld other responsive
records under FOIA Exemptions 4, 5, and 6. See Pl.’s SOMF ¶¶ 3–4. Commerce argues that its
searches were adequate; that its withholdings are lawful; and that it complied with FOIA’s
segregability requirement. See generally Def.’s Mem. of P. & A. in Supp. of Def.’s Mot.
(“Def.’s Mem.”), ECF No. 14 at 6. CREW challenges only Commerce’s assertion of
Exemptions 4 and 5 regarding specific documents. See generally Pl.’s Mem. Because CREW
does not oppose summary judgment on the adequacy of the search, Commerce’s decision to
withhold of certain information under Exemption 6, or whether Commerce complied with
FOIA’s segregability requirement, the Court grants judgment in favor of Commerce on those
grounds.
II. Analysis
“FOIA . . . [requires] that an agency disclose records on request, unless they fall within
one of nine [narrow] exemptions.” Milner v. Dep’t of the Navy, 562 U.S. 562, 565 (2011).
“FOIA mandates a ‘strong presumption in favor of disclosure,’” Nat’l Ass’n of Home Builders v.
Norton, 309 F.3d 26, 32 (D.C. Cir. 2002) (quoting U.S. Dep’t of State v. Ray, 502 U.S. 164, 173
(1991))—so much so that, unlike Administrative Procedure Act lawsuits, in which agency
actions are subject to arbitrary and capricious review, FOIA “expressly places the burden ‘on the
agency to sustain its action’ and directs district courts to ‘determine the matter de novo,’” U.S.
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Dep’t of Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749, 756 (1989)
(quoting 5 U.S.C. § 552(a)(4)(B)).
A. Deliberative Process Privilege
Commerce has withheld two records as covered by the deliberative process privilege
recognized under Exemption 5: (1) a May 1, 2017 email in which a Commerce official discusses
draft congressional testimony of the Director of the Census Bureau John Thompson; and (2) the
draft congressional testimony itself, which was attached to the email. Decl. of Brian D.
Lieberman (“Lieberman Decl.”) ¶ 23, ECF No. 14-1. CREW does not dispute that these
documents might normally fit within the deliberative process privilege, which “protects
‘documents reflecting advisory opinions, recommendations[,] and deliberations comprising part
of a process by which governmental decisions and policies are formulated.’” Abtew v. U.S.
Dep’t of Homeland Sec., 808 F.3d 895, 898 (D.C. Cir. 2015) (quoting NLRB v. Sears,
Roebuck & Co., 421 U.S. 132, 150 (1975)). But, CREW argues, Commerce waived the privilege
after Branstad forwarded the email to Gates, a third party outside of the government, and asked
him to print the email and attachment for Commerce Secretary Wilbur Ross at the home of Tom
Barrack, another non-governmental third party. Pl.’s Mem. at 5. In particular, Branstad asked
Gates, “Can we print this at Tom[ Barrack’s] house for [Secretary] Ross – almost there.” Pl.’s
Ex. 1 at 00137, ECF No. 15-2. Gates responded, “Yes. Will do now.” Id. And then he added,
“Got them all for you.” Id.
A “voluntary disclosure . . . to unnecessary third parties” waives the “deliberative process
privilege” as to “the document or information specifically released.” In re Sealed Case, 121 F.3d
729, 741 (D.C. Cir. 1997). Commerce argues, however, that “[t]here was no intentional,
voluntary disclosure to unnecessary third parties on the part of [Commerce].” Def.’s Reply at 9,
ECF No. 18. According to Commerce, “there has been no disclosure at all, since there is no
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evidence that Mr. Gates looked at anything in the email beyond Mr. Branstad’s request at the top
of the email that he print it out, along with the attachment.” Id. The Court disagrees. When
analyzing waiver, the focus is not whether the recipient reviewed the disclosed information;
instead, it is whether a disclosure occurred in the first place. See In re Sealed Case, 121 F.3d
at 741. As a result, whether Gates reviewed or looked at the email and the draft testimony is
irrelevant.
Commerce next argues that “to the extent there was a disclosure,” Branstad’s sending of
the documents to Gates did not constitute a voluntary disclosure to an unnecessary third party
because “Gates became a necessary person to be the conduit to receive the information.” Def.’s
Reply at 9. But even assuming that Gates was a necessary third party (i.e., that it was necessary
to send Gates the email and testimony in order for those documents to be printed for Secretary
Ross), the government has failed to demonstrate that it attempted to protect the information after
its disclosure. An agency must take steps to protect privileged material that is commensurate
with the breadth of the privilege it seeks to claim.1 Commerce has ushered no facts exhibiting
that it took any action whatsoever to remedy Branstad’s disclosure to Gates (who again was not a
government employee at the time)—including investigating the disclosure, contacting the
individuals involved, or otherwise attempting to ensure that the privileged materials were not
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Some courts have looked to Federal Rule of Evidence 502 for guidance over waiver in the
deliberative process privilege context, see, e.g., Bayliss v. N.J. State Police, 622 F. App’x 182,
186 (3d Cir. 2015) (holding that the deliberative process privilege was not waived “because the
disclosure was inadvertent, and the State took reasonable steps in preventing and rectifying the
disclosure” (citing Fed. R. Evid. 502(b)); however, as other judges have noted, the text of Rule
502 is expressly limited to the attorney-client privilege and work-product protection and should
not be extended to the deliberative process privilege, see, e.g., Mannina v. District of Columbia,
No. 15-cv-931, 2019 WL 1993780, at *8 (D.D.C. May 6, 2019); see also Fed. R. Evid. R. 502
advisory committee notes (subdiv. g) (“The rule’s coverage is limited to attorney-client privilege
and work product. The operation of waiver by disclosure, as applied to other evidentiary
privileges, remains a question of federal common law.”).
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further disclosed. As the D.C. Circuit has repeatedly held in the attorney-client privilege context,
“[t]he courts will grant no greater protection to those who assert the privilege than their own
precautions warrant.” In re Grand Jury, 475 F.3d 1299, 1305 (D.C. Cir. 2007) (citation
omitted).2 The present record reflects that Commerce took no precautions.
In the alternative, Commerce argues that the disclosure by Branstad was unauthorized,
e.g., Lieberman Decl. ¶ 24, and thus Commerce “should not be prejudiced by the actions of an
employee engaged in an unauthorized act, especially in light of the well established recognition
of the importance of protecting the government’s decision-making process,” Def.’s Reply
at 10–11 (citing NLRB, 421 U.S. at 148–51). While that may be true, Commerce has presented
no evidence that it attempted to remedy the unauthorized disclosure once it was discovered.
Indeed, even if Commerce discovered Branstad’s disclosure only as a result of its search for
records responsive to CREW’s FOIA request, Commerce apparently took no steps to rectify the
unauthorized disclosure. Commerce has thus waived any claim to deliberative process privilege
over the May 1, 2017 email and the attached draft congressional testimony.
B. Confidential Business Information
Commerce has also withheld under Exemption 4 information that it contends is protected
confidential business information about Circinus. Lieberman Decl. ¶¶ 17–21. “Exemption 4
shields from mandatory disclosure ‘commercial or financial information obtained from a person
and privilege or confidential.’” Food Mktg Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2362
(2019) (quoting 5 U.S.C. § 552(b)(4)). In Argus Leader, the Supreme Court identified “two
2
While the scope of potential waiver is narrower in the deliberative process context, the same
general principles of privilege apply. See In re Sealed Case, 121 F.3d at 741 (discussing the
differences between the scope of waiver in the attorney-client and deliberative process privilege
contexts).
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conditions that might be required for information communicated to another to be considered
confidential” under Exemption 4, id. at 2363: the information is “[1] customarily and actually
treated as private by its owner and [2] provided to the government under an assurance of
privacy.” Id. at 2366. The Court held that the first is a necessary condition but left unresolved
whether the second is also necessary. Id. at 2363 (“[T]here’s no need to resolve that question in
this case because the retailers before us clearly satisfy this condition too.”).
Here, CREW concedes that the first condition is met and challenges only whether
Commerce meets the second. See Pl.’s Mem. at 8–11. CREW argues that Exemption 4
“requires a governmental assurance of confidentiality” because “the [Supreme] Court favorably
cited several . . . cases that do support such a requirement, including two from this Circuit.” Id.
at 9. Commerce contests whether such an assurance is required, but also argues that the
assurance can be express or implied, and that here an implied assurance was made to Circinus.
Def.’s Reply at 4–7.
In the Court’s view, Commerce has established that its withholding was proper.
Assuming that Exemption 4 can be satisfied here only if Commerce gave Circinus some
assurance of confidential treatment, Argus Leader, 139 S. Ct. at 2366, that assurance of
confidentiality could have been either express or implied. In U.S. Department of Justice v.
Landano, the Supreme Court interpreted the term “confidentiality” as used in Exemption 7(D),
which in certain circumstances protects the identity of confidential sources used in law
enforcement, and held that “the question is not whether the requested document is of the type
that the agency usually treats as confidential, but whether the particular source spoke with an
understanding that the communication would remain confidential.” 508 U.S. 165, 171–72
(1993) (emphasis altered). As a result, the Supreme Court noted, “[t]he precise question before
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us, then, is how the Government can meet its burden of showing that a source provided
information on an implied assurance of confidentiality.” Id. at 172 (emphasis added). Implied
assurances of confidentiality can therefore satisfy Exemption 7(D), and the same idea should
apply here. See Law v. Siegel, 571 U.S. 415, 422 (2014) (stating the “‘normal rule of statutory
construction’ that words repeated in different parts of the same statute generally have the same
meaning.” (citations omitted)); Sorenson v. Secretary of the Treasury, 475 U.S. 851, 860 (1986)
(“The normal rule of statutory construction assumes that ‘identical words used in different parts
of the same act are intended to have the same meaning.’” (citation omitted)). Recent guidance
issued by the Department of Justice’s Office of Information Policy came to the same conclusion,
explaining that, “in the context of Exemption 4, agencies can look to the context in which the
information was provided to the government to determine if there was an implied assurance of
confidentiality.” Office of Information Policy, Exemption 4 After the Supreme Court’s Ruling in
Food Marking Institute v. Argus Leader Media, U.S. Dep’t of Justice, https://www.justice.gov/
oip/exemption-4-after-supreme-courts-ruling-food-marketing-institute-v-argus-leader-media (last
updated Oct. 4, 2019).
Here, Commerce states that “the information withheld consists of confidential
commercial information Circinus used in its commercial and business activities to provide
defense/military contracting and related services on an international basis.” Def.’s Reply at 6
(citing Lieberman Decl. ¶ 19). It further notes that “public dissemination of the information
withheld would give insight to competitors of Circinus’s pursuit of opportunities with a
particular foreign government, its capabilities[,] and the manner in which it markets its
capabilities.” Suppl. Decl. of Brian D. Lieberman ¶ 6, ECF No. 17-2. And in Commerce’s view,
[i]f Circinus or any other business could not be assured that
[Commerce] would treat as confidential information about its
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commercial plans and operations submitted to [Commerce] to
support the business in its efforts, then [Commerce] would not be
able to sustain the trust of the American business community, which
is vital to [Commerce’s] mission to facilitate the growth of
American commerce domestically and abroad. [Commerce] has
been able to sustain this trust because businesses understand that
[Commerce] carefully guards sensitive commercial information and
only uses it to further [Commerce] efforts to help these businesses
expand their reach.
Id. ¶ 7. The context in which Circinus provided Commerce information—to grow its business in
foreign markets—supports the notion that it did so under an implied assurance of confidentiality.
Without such an assurance, companies like Circinus would not seek Commerce’s assistance
because the information they provided could be revealed by simply submitting a FOIA request.
The information thus could easily fall into the hands of competitors or other entities that sought
it.
CREW disagrees and argues that “Commerce has failed to demonstrate that the ‘specific
circumstances’ here warrant finding an implied assurance of confidentiality.” Pl.’s Reply at 7.
In its view, Commerce has failed to justify the withholding based on the specific factors laid out
by the Office of Information Policy guidance. E.g. id. (arguing that Commerce did not provide
details about its historical “treatment of similar information” and “its broader treatment of
information related to the program or initiative to which the information relates” (quoting Office
of Information Policy, Exemption 4, supra)). But the guidance issued by the Office of
Information Policy on Exemption 4 is just that—guidance. In the Court’s view, Commerce has
demonstrated that the documents were provided by Circinus under and implied assurance of
confidentiality.
CREW is correct, however, that Commerce must provide any information to CREW that
it withheld under Exemption 4 yet has elsewhere disclosed to CREW or is otherwise available in
the public domain. As CREW states, “[i]nsofar as the identity of the foreign government, as well
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as Commerce’s endorsement of Circinus to provide defense work for that government, are
already in the public domain, the identity cannot be deemed confidential under Exemption 4.”
Id. at 8. Beyond this specific information, the record does not reflect that other information that
Commerce has withheld under Exemption 4 has been disclosed elsewhere, and CREW does not
argue to the contrary.
III. Conclusion
For the reasons discussed above, Commerce’s Motion for Summary Judgment is
GRANTED IN PART and DENIED IN PART and CREW’s Cross-Motion is GRANTED IN
PART and DENIED IN PART. An Order consistent with this Memorandum Opinion will be
issued contemporaneously.
DATE: August 14, 2020
CARL J. NICHOLS
United States District Judge
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