Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—D.D.C.: FTC properly denied FOIA fee requests and withheld memoranda, but improperly withheld screenshots, (Aug 22, 2013)

By Tobias J. Gillett, J.D., LL.M.

The FTC appropriately denied a public interest organization fee waivers on two Freedom of Information Act (FOIA) requests the organization made, properly declared moot the organization’s request for a fee waiver with respect to a third request, and properly withheld memoranda from two of the requests, but improperly withheld screenshots of the organization’s website, the federal district court in Washington, D.C. has ruled (Cause of Action v. FTC, August 19, 2013, Sullivan, E.).

Cause of Action (COA) is a nonpartisan, nonprofit organization that “uses public advocacy and legal reform strategies to ensure greater transparency in government and protect taxpayer interest and economic freedom.” In 2011 and 2012, COA filed three FOIA requests for information related to the FTC’s “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

In its first FOIA request, COA sought “(1) all records relating to the drafting, formulation, and revision of the Guides; (2) all records concerning the results of investigations into conduct by bloggers or social media authors that allegedly violated the Guides; (3) all records concerning the results of investigations into conduct by companies that related to alleged violations of the Guides; and (4) copies of any other requests for information made by outside groups through FOIA during the last two years regarding revisions to the Guides.” The FTC denied COA’s requests for public interest and “representative of the news media” fee waivers associated with this request.

In its second FOIA request, COA sought “(1) all FOIA requests where the FTC granted fee waivers under the public interest exception since January 1, 2009 and (2) documents referring or relating to the process in which the FTC determined the FOIA requests identified in (1) were within the fee waiver exception.” Again, the FTC denied COA public interest and “representative of the news media” fee waivers for this request. The FTC also withheld eight documents under FOIA’s Exemption 5, which allows agencies to withhold “inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.”

COA’s third FOIA request asked for “(1) all records relating to the drafting, formulation, and revision of the Guides Concerning Use of Endorsements and Testimonials in Advertising concerning social media authors and bloggers between January 1, 2009 and November 6, 2011; (2) all documents, including e-mail communications, referring or relating to FTC orders, decisions, memoranda, interpretations, instructions, statements of policy, or guidelines to staff for the purposes of evaluating fee waiver requests under the public interest exception; and (3) all documents, including e-mail communications, referring to or relating to the process the FTC used to deny Plaintiff a fee waiver.” The FTC declared the COA’s fee waiver requests with respect to this request to be moot, since the FTC only located 95 pages of responsive information, which was below the 100-page limit that COA could receive free of charge without a fee waiver. The FTC also withheld five documents under FOIA’s Exemption 5.

Public Interest Fee Waivers

First FOIA request. The court found the FTC properly denied COA a public interest fee waiver for its first FOIA request. The court explained that fee waivers are granted under FOIA if the requested information is “In the public interest because it is likely to contribute significantly to public understanding of the operations or activities of government and is not primarily in the commercial interest of the requestor.” Under FTC regulations a party must demonstrate that its requests satisfy four conditions for information to be considered to be “in the public interest”: the information must concern “the operations or activities of government,” disclosure of the information must be “likely to contribute to an understanding of the operations or activities of government,” disclosure must “contribute to an understanding of the subject by the public at large,” and the information must “contribute significantly to such understanding.”

Here, the requested information involved the operations or activities of government “because it would provide insight into the FTC’s decision-making process regarding the enforcement of the Guides; it concerns government investigations; and it involves communications between the government and other outside agencies.” It would also be likely to contribute to public understanding of the Guides’ effects on the activities of social media authors and bloggers, and could inform the public about how government action impacts First Amendment rights. It would “contribute significantly” to such understanding, even though the FTC had already published synthesized information on the Guides’ enforcement, because “there exists some significant benefit to public understanding if the plaintiff requests raw information from the agency to synthesize it and perform a public oversight function.”

However, COA did not sufficiently demonstrate that its requested information would increase understanding of “the public at large,” according to the court. COA only identified two methods of dissemination, through its website and through articles published by news media that had previously relied on COA’s information on other issues, but “did not provide any estimate of the number of people likely to view its website,” or “demonstrate other ways in which it would disseminate the information itself, without relying on another source.” Moreover, although COA identified past articles published by other outlets using COA’s information, it did not specify any “organization which would disseminate this information.” Finally, although COA claimed in its opposition that it would “disseminate the information through its media contacts, on its website, via its newsletter, and through its social media sites,” COA did not provide most of that information during the administrative process, and judicial review was limited to the administrative record.

Second FOIA request. The FTC also correctly denied COA a public interest fee waiver for its second request. The request involved the operations or activities of government because it concerned the FTC’s decision-making process on fee waivers, and would be likely to contribute to public understanding “on how to obtain public interest fee waivers for FOIA requests.” However, COA failed to satisfy the “public at large” element for the same reason it failed to satisfy it for its first FOIA request. Moreover, COA’s request was unlikely to “contribute significantly” to public understanding because the primary beneficiary of the requested information was COA. Because COA “only wanted to pursue this second request if the FTC found it was not entitled to a public interest fee waiver on the first request,” it was “clear that [COA’s] primary interest in the second request was its desire to better prepare itself for an appeal of its fee waiver denial.” Moreover, COA “never expressly indicated in this second request that it had plans to use the information to inform the public.”

Third FOIA request. The court also approved the FTC’s decision to declare COA’s public interest and “representative of the news media” fee waiver requests with respect to the third FOIA request to be moot. The FTC had declared the issue moot not on the basis of the number of pages it declared exempt, but on the number of responsive pages, and therefore “the FTC could not have been discouraging [COA] from testing the bounds of FOIA’s exemptions.” Moreover, it was “inappropriate to speculate about the existence of other responsive documents for [COA’s] request that may have entitled [COA] to more than 100 pages,” and COA did not challenge the adequacy of the FTC’s search.

Representative of the News Media Fee Waivers

The court also determined that COA was not entitled to “representative of the news media” fee waivers with respect to its first and second FOIA requests. The “representative of the news media” waiver applied to records that were “not sought for commercial use” and were requested by “a representative of the news media.” A “representative of the news media” was defined as “a person or entity that (1) gathers information of potential interest to a segment of the public; (2) uses its editorial skills to turn the raw materials into a distinct work; and (3) distributes that work to an audience.”

Here, COA’s first request satisfied the first element of the definition “because the request involve[d] gathering information on social media authors and bloggers’ First Amendment rights,” and its second request met the first element “because it involve[d] gathering information on government decisions that can affect parts of the population.”

However, COA did not satisfy the second element, according to the court. The only information COA identified that it published was “unspecified information it posts on its website, social media sites such as Facebook and Twitter, and through an email newsletter it began publishing to subscribers beginning in September 2011, after it made its first FOIA request and just one month before it filed its second request.” COA also did not identify any particular distinct work that it planned to create with the requested information.

Moreover, COA did not satisfy the third element as well. COA would have to have shown “that it has the interest and ability to disseminate the requested information to the public rather than merely make it available,” and “that its operational activities are especially organized around doing so.” COA had not estimated how many people would view its website or social media, and had not indicated whether its media contacts would write about the requested information. Further, even if the media contacts would write about the information, COA could not “simply borrow” the contacts’ “credentials for purposes of proving its own entitlement to a ‘representative of the news media’ fee limitation.” Finally, COA was not “especially organized” around disseminating the information, and was instead “more like a middleman for dissemination to the media.”

Exemption 5

Second FOIA request. The court found that it could not review the FTC’s withholding of documents from COA’s second FOIA request because COA failed to exhaust its administrative remedies. COA “did not specifically object to the FTC’s withholding of documents responsive to its second request,” and therefore “the FTC did not have a chance to address the exemptions relating to the second request before [COA] filed this suit.”

Third FOIA request. However, the court found COA did exhaust its administrative remedies with respect to its third FOIA request, and therefore evaluated the FTC’s decision to withhold under Exemption 5 (1) two screenshots of COA’s website, and (2) three legal memoranda prepared by paralegals for FTC counsel regarding COA’s FOIA requests.

Exemption 5’s “deliberative process privilege” protects documents that “precede an identifiable agency decision,” “have been used in the decision making process,” and “reflect the give-and-take of the consultative process.” The court found the memoranda were properly withheld pursuant to this privilege “because they contain legal advice and recommendations from a subordinate paralegal to a supervising attorney on how the FTC should make a complex decision, [COA’s] qualification for fee waivers for its FOIA requests,” and the facts cited in the memoranda reflected “the author’s judgment and assessment of the relevant data.” Moreover, the court found the FTC had shown that “any nonexempt portions are so intertwined with exempt portions that no portion can be disclosed.”

However, the court determined that the FTC did not properly withhold the screenshots. Since the deliberative process privilege only protected factual material to the extent it was “inextricably intertwined” with the deliberative material, the screenshots could not be properly withheld, according to the court.

Moreover, to the extent Exemption 5 could be construed to incorporate the attorney work product privilege, the memoranda were protected under that privilege as well. The FTC demonstrated that the memoranda were prepared under the direction of an attorney in anticipation of litigation with COA, particularly since one memorandum had been prepared after COA had “explicitly threatened the agency with litigation.” Further, a document protected by the work product privilege did not require a segregability analysis.

However, the attorney work product privilege did not protect the screenshots because they were “purely factual material that contain[ed] no opinions or strategic thinking of the paralegal who prepared them, or the attorney for whom they were prepared.”

The case is Civil Action No. 1:12-cv-00850-EGS.

Attorneys: Karen Marie Groen for Cause of Action. Mitchell P. Zeff, U.S. Attorney’s Office, for FTC.

Companies: Cause of Action

Cases: ConsumerProtection FederalTradeCommissionNews DistrictofColumbiaNews