Cause Action v. Fed. Trade Comm'n

• Decision Date: 25 August 2015
• Docket Number: No. 13–5335.,13–5335.
• Citation: 799 F.3d 1108
• Parties: CAUSE OF ACTION, Appellant v. FEDERAL TRADE COMMISSION, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

799 F.3d 1108

CAUSE OF ACTION, Appellant

v.FEDERAL TRADE COMMISSION, Appellee.

No. 13–5335.

United States Court of Appeals, District of Columbia Circuit.

Argued Jan. 13, 2015.

Decided Aug. 25, 2015.

Aram A. Gavoor argued the cause for appellant. With him on the briefs were Patrick J. Massari, Allan L. Blutstein, R. James Valvo III, and Marie Allison Connelly. Daniel Z. Epstein and Reed D. Rubinstein entered appearances.

Katie Townsend argued the cause for amici curiae Reporters Committee for Freedom of the Press, et al. On the brief were Bruce D. Brown, Gregg P. Leslie, Peter E. Scheer, and Greg Lewis.

Victoria Toensing, Joseph E. diGenova, and Brady Toensing were on the brief for amicus curiae The Daily Caller News Foundation in support of appellant.

Peter R. Maier, Assistant U.S. Attorney, argued the cause for appellee. On the brief were Ronald C. Machen, Jr., U.S. Attorney, and R. Craig Lawrence and Alan Burch, Assistant U.S. Attorneys. Mitchell P. Zeff, Assistant U.S. Attorney, entered an appearance.

Before: GARLAND, Chief Judge, BROWN, Circuit Judge, and SENTELLE, Senior Circuit Judge.

Opinion

Opinion for the Court filed by Chief Judge GARLAND.

GARLAND, Chief Judge:

Cause of Action (“Action”), a nonprofit organization, filed a series of three Freedom of Information Act (FOIA) requests with the Federal Trade Commission. The question presented is who should pay the costs of satisfying those requests. Action contends that FOIA entitles it to a complete waiver of the customary fees because “disclosure of the information is in the public interest,” 5 U.S.C. § 552(a)(4)(A)(iii). In the alternative, Action contends that it is entitled to a waiver of all but duplication costs because it is “a representative of the news media,” id. § 552(a)(4)(A)(ii)(II).

The Commission and the district court rejected Action's claims for fee waivers regarding its first and second FOIA requests, and then concluded that Action's claims regarding its third request were moot. We conclude that Action's claims regarding its third request were not moot, and that the case must be remanded for reconsideration in light of the entire administrative record and our clarification of the standards for FOIA fee waivers.

I

FOIA permits an agency to exact a reasonable charge for “document search, duplication, and review, when records are requested for commercial use.” 5 U.S.C. § 552(a)(4)(A)(ii)(I). Certain categories of requests and requesters, however, are entitled to more favorable treatment. Two such categories are at issue in this case. First, an agency must furnish records without any charge or at a reduced charge “if disclosure of the information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester.” Id. § 552(a)(4)(A)(iii) (emphasis added). Second, an agency may charge only for duplication costs “when records are not sought for commercial use and the request is made by ... a representative of the news media. ” Id. § 552(a)(4)(A)(ii)(II) (emphasis added). Action asked the Federal Trade Commission (FTC) for fee waivers under both categories.

A

Action is a nonprofit organization that “advocates for economic freedom and opportunity by educating the public about the threat posed by improvident federal regulations, spending, and cronyism.” Action Br. 6. It began operations on August 15, 2011. Two weeks later, Action submitted its first FOIA request to the FTC, seeking all records relating to the Commission's guides for the use of product endorsements in advertising. The request covered, inter alia, records relating to the drafting of the guides and to investigations of alleged violations of the guides. Action later agreed to limit its request to records relating to “changes to the Guides concerning social media authors,” FTC Letter of 9/22/2011 (App. 24), and said that it was interested in using the requested information to inform the public about a threat to the First Amendment rights of such authors. Action also asserted that, as a nonprofit educational organization with no commercial purpose, it was entitled to a public-interest fee waiver.

The FTC denied Action's public-interest waiver application, stating that the statute provides for such a waiver only if disclosure is “ ‘likely to contribute significantly to public understanding of the operations or activities of the government.’ ” FTC Letter of 9/22/2011 (App. 25) (quoting 5 U.S.C. § 552(a)(4)(A)(iii) ). Action responded by asserting that disclosure of the records was in fact likely to make such a contribution. Action also asserted, in the alternative, that it was entitled to a fee waiver as a representative of the news media. Action Letter of 9/26/2011 at 1 (App. 26) (citing 5 U.S.C. § 552(a)(4)(A)(ii)(II) ). In reply, the FTC said that Action was not entitled to either form of relief because, inter alia, “you have not demonstrated your ability [to] disseminate information.” FTC Letter of 10/7/2011 (App. 28). Pursuant to its rules for “general public” requesters, the Commission provided Action with 100 pages of records free of charge. See 16 C.F.R. § 4.8(b)(3) ; see also 5 U.S.C. § 552(a)(4)(A)(iv)(II). It retained the additional responsive pages pending receipt of payment from Action. Action then filed an administrative appeal within the agency, which the agency denied, reiterating that “you have failed to provide adequate information about your dissemination plans.” FTC Letter of 11/29/2011 at 1 (App. 35).

In tandem with the administrative appeal of its fee-waiver applications regarding its first request, Action made a second FOIA request, this time for all records concerning prior cases in which the FTC granted public-interest fee waivers and the process by which the Commission made those determinations. Action applied for public-interest and news-media fee waivers for this second request as well. Once again, the FTC denied the fee-waiver applications, designated Action as a “general public” requester, provided it with 100 pages without charge, and retained the remaining responsive pages pending payment. The Commission also withheld portions of eight documents under various statutory exemptions to FOIA. Action again filed an administrative appeal of the denial of its applications for fee waivers, which the FTC again denied, stating that Action had “failed to provide any meaningful level of detail regarding [its] dissemination efforts or ability,” FTC Letter of 2/27/2012 at 1 (App. 161), and failed to provide “sufficient information to establish [its] status as a news media representative,” id. at 3.

On January 27, 2012, Action made its third and final FOIA request. This request “perfected,” repeated, and expanded the subject matter of Action's earlier requests. Action Letter of 1/27/2012 at 8 (App. 159). It also made an entirely new request: for all records relating to the process by which the FTC had determined that Action, in particular, was not entitled to a fee waiver for its earlier requests. The FTC disregarded the part of Action's submission that merely renewed its prior requests on the ground that it was a “duplicate” of those requests. FTC Letter of 3/19/2012 at 1 n. 1 (App. 174). The Commission identified 95 pages of records responsive to the other parts. It withheld 16 of those pages under a FOIA exemption and released the remaining pages without charge under its 100–free–pages rule. Having done so, the FTC declined to decide whether Action qualified for a public-interest or news-media waiver for the third request. Action filed another administrative appeal, which the FTC again denied, stating that the fee-waiver question was now moot.

Although Action's initial FOIA request simply asserted that Action was entitled to a fee waiver because it was a nonprofit organization, the agency record expanded significantly over the course of Action's dialogue with the FTC. All told, Action sent seven letters to the Commission in support of its fee-waiver applications. By the time of its appeal from the agency's denial of the fee-waiver applications for its third request, a much fuller picture of Action's activities and intentions had come into view. Action said that it planned to analyze the responsive records, use its editorial skills to create distinct works, and share the resulting analysis with the public through a variety of channels, including its “regularly published online newsletter,” its “regular periodicals” (“Agency Check” and “Cause of Action News”), its “frequently visited” website, and its Twitter and Facebook followings. Action Letter of 4/4/2012 at 6–7 (App. 181–82). Action also stated its intention to write two specific reports within two weeks of receiving the documents: one entitled “How the FTC Denies Fee Waivers to Organizations That Seek Information About FTC Operations,” and the other entitled “The FTC and the Guides Concerning Endorsements: Why the Change?” Id. at 6. Finally, Action pointed the Commission to its history of “extensive publication activities,” id. at 7, including examples of nearly twenty online articles published by other media outlets that “feature [Action's] work,” Action Letter of 1/27/2012 at 3–4 & n. 7 (App. 154–55); see Action Letter of 4/4/2012 at 7–8 & n. 25 (App. 182–83).

B

On May 25, 2012, Action filed suit in the United States District Court for the District of Columbia, challenging both the Commission's decision to withhold some of the responsive records as exempt from disclosure and its denial of Action's applications for fee waivers. With respect to the withheld documents, the district court granted summary judgment for the Commission regarding most of the documents. Neither party has appealed that decision. With respect to the fee-waiver applications, the district court also granted summary judgment for the Commission. The court concluded that Action was not entitled to either category of fee...