Case Detail
| Case Title | CENTER FOR PUBLIC INTEGRITY v. U.S. SMALL BUSINESS ADMINISTRATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| District | District of Columbia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| City | Washington, DC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Case Number | 1:2020cv01614 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Date Filed | 2020-06-19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Date Closed | Open | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Judge | Judge James E. Boasberg | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Plaintiff | CENTER FOR PUBLIC INTEGRITY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Case Description | The Center for Public Integrity submitted a FOIA request to U.S. Small Business Administration for records concerning recipients of the Paycheck Protection Program. CPI also requested expedited processing. The agency acknowledged receipt of the request. The agency denied CPI's request for expedited processing. The agency also told CPI that it would disclose records. However, after hearing nothing further from the agency, CPI filed suit. Complaint issues: Failure to respond within statutory time limit, Litigation - Attorney's fees | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Defendant | U.S. SMALL BUSINESS ADMINISTRATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Documents | Docket Complaint Complaint attachment 1 Complaint attachment 2 Complaint attachment 3 Complaint attachment 4 Complaint attachment 5 Complaint attachment 6 Complaint attachment 7 Opinion/Order [21] Opinion/Order [27] FOIA Project Annotation: Ruling in a consolidated case brought by the Washington Post and the Center for Public Integrity for records identifying companies that received loans as part of the Paycheck Protection Program, part of the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, Judge James Boasberg has rejected the claims by the Small Business Administration that most identifying information is protected by Exemption 4 (confidential business information) or Exemption 6 (invasion of privacy). In so ruling, Boasberg provided some continued coloration further fleshing out the confidentiality requirements contained in Food Market Institute v. Argus Leader Media, 139 S. Ct 2356 (2019), as well as the still unclear parameters of when information related to the identity of companies may qualify for protection under Exemption 6. In this case, Boasberg found neither exemption applied. When the government failed to provide much information about the specifics of the payouts, the Post and other media organizations filed FOIA requests. The media organizations, with the Post as their lead plaintiff, filed suit. CPI subsequently filed suit as well. That action prompted the SBA to release some information. However, Boasberg pointed out that "the data contained glaring gaps: the agency did not provide both dollar figures and borrower names and addresses for any of the PPP loans, but rather withheld the precise amounts of all loans of $150,000 or more, as well as recipients' identities for loan figures under that figure." He explained that "SBA adopted an 'either/or' approach: for loans of $150,000 or more, it released the recipient's name and address, but withheld the actual loan amount and instead provided 'loan amount ranges' of $150,000 to $350,000; $350,000 to $1 million; $1 million to $2 million; $2 million to $5 million; and $5 million to $10 million. For loans of less than $150,000, on the other hand, the agency released the precise dollar amounts, but withheld the borrower's name and street address." The agency told the requesters that the withheld data was protected by Exemption 4 and Exemption 6. Reviewing the Exemption 4 claims, Boasberg began by first addressing the impact of Food Marketing Institute, particularly its requirements for finding that business-related records had been submitted to the government in confidence. In Food Marketing Institute, the Supreme rejected the substantial competitive harm test originally established by the D.C. Circuit in National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974), as being contrary to the plain language of Exemption 4. Instead, the Court opted for a customarily confidential standard as the basis for assessing Exemption 4 claims. In determining whether information was provided in confidence, the Court declined to address whether clear promises of confidentiality were required but explained that "where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is 'confidential' within the meaning of Exemption 4." Boasberg noted that "after Food Marketing, it is an open question in this Circuit whether government assurance that information will remain private is necessary for such information to qualify as 'confidential' under Exemption 4. Regardless of whether such an additional condition is required in every case, it is clear that the government must show that the commercial or financial information is 'both customary and actually treated as private' in order to withhold it." Applying that standard here, he noted that the SBA "still may not withhold the loan data under the [confidentiality] prong, as disclosure would not reveal any information 'that has "customarily" and "actually" been treated as private.' And because SBA flunks this requirement, the Court need not tackle the question left open after Food Marketing �" namely, whether the government must also establish that it provided assurances that the information will remain private." The crux of the SBA's argument was not that the loan data was per se confidential, but that disclosure of more details would allow others to determine the payroll of businesses, which was clearly customarily confidential. Boasberg faulted the SBA's assumption that businesses applying for loans would always ask for the maximum amount allowed, and that data could be used to calculate their payrolls. Instead, he noted that "without knowledge of whether a borrower sought and received the maximum possible loan and pays its employees more than $100,000 annually (and, if so, how many and by how much) third parties are in the dark about payroll." He indicated that "the government 'bears the burden of proving the applicability of any statutory exemption it asserts in denying a FOIA request' and it must furnish 'detailed and specific information' to justify its withholding. SBA has not met that obligation here. As a result, even assuming that a business's payroll qualifies as 'confidential' under Exemption 4, the agency may not withhold borrowers' names, addresses, and loan amounts pursuant to such provision and disclosure would not reveal any commercial information that is 'customarily and actually treated as private.'" The SBA fared no better on the Exemption 6 claim, where the agency focused on caselaw finding that identifying data on small family-owned businesses could be protected. Instead, Boasberg pointed to cases like Alliance for Wild Rockies v. Dept of Interior, 53 F. Supp. 2d 32 (D.D.C. 1999) and Prechtel v. FCC, 330 F. Supp. 3d 320 (D.D.C. 2018), in which the courts concluded that individuals who made public comments in rulemaking procedures had no expectation of privacy. Boasberg pointed out that "the import of these cases for the present one is evident: where SBA explicitly and unambiguously told loan applicants that their names and approval loan amounts would not remain private, such notification substantially 'mitigates' any individual privacy interest in the withheld information." The agency argued that the loan disclosure requirements only applied to another type of loan. However, Boasberg rejected that claim, noting that "the Court finds that the far more 'natural' reading' is also the far simpler one: the application's promise of name and loan amount disclosure means what it says." Boasberg found the public interest in disclosure was clear. He pointed out that "in light of SBA's awesome statutory responsibility to administer the federal government's effort at keeping the nation's small businesses afloat amidst an economic and health crisis of unprecedented proportions, the public interest in learning how well the agency fulfilled its charge is particularly pronounced." He further observed that "even more critical �" and particularly relevant to the substantial public interest at hand �" are the well-documented allegations of fraud related to the disbursement and receipt of CARES Act funds." He added that "without the information withheld under Exemption 6, 'the public would have great difficulty' determining whether SBA has fairly and equitably apportioned a staggering sum of taxpayer money to the smallest of businesses, in a fashion that minimizes the potential for fraud. That reality reflects a powerful public interest in disclosure."
Issues: Exemption 6 - Invasion of privacy, Exemption 4 - Confidential business information | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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