Citizens for Responsibility & Ethics in Wash. v. U.S. Postal Serv.

• Decision Date: 17 August 2021
• Docket Number: Civil Action No. 20-2927 (JDB)
• Citation: 557 F.Supp.3d 145
• Parties: CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant.
• Court: U.S. District Court — District of Columbia

557 F.Supp.3d 145

CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Plaintiff,

v.UNITED STATES POSTAL SERVICE, Defendant.

Civil Action No. 20-2927 (JDB)

United States District Court, District of Columbia.

Signed August 17, 2021

Nikhel Sus, Citizens for Responsibility and Ethics in Washington, Washington, DC, for Plaintiff.

Jeremy S. Simon, Kristin Brudy-Everett, U.S. Attorney's Office for the District of Columbia, Civil Division, Washington, DC, for Defendant.

MEMORANDUM OPINION

JOHN D. BATES, United States District Judge This case arises out of a request by plaintiff Citizens for Responsibility and Ethics in Washington ("CREW") to defendant United States Postal Service ("USPS") under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, for records relating to Postmaster General Louis DeJoy's potential conflicts of interest. USPS identified seven documents as responsive to CREW's request but withheld them all in full, citing various FOIA exemptions. CREW then filed suit to challenge USPS's withholding decisions as to three of the responsive documents and to seek any reasonably segregable material from documents over which a FOIA exemption has been properly asserted. Both parties have now moved for summary judgment. Because the FOIA exemptions invoked by USPS do not apply to the requested documents, the Court will grant plaintiff's motion.

Background

Louis DeJoy was appointed Postmaster General in June 2020. Compl. [ECF No. 1] ¶ 7. From the outset of his tenure, plaintiff asserts, DeJoy drew scrutiny over potential conflicts of interest arising out of his investments in USPS contractors and competitors. Id. ¶¶ 8–9. For example, DeJoy's publicly available financial disclosures made at the time of his appointment show that he owned stock in USPS contractor XPO Logistics valued between $30 and $75 million, as well as between $100,000 and $250,000 of stock and stock options in USPS contractor/competitor Amazon. See Mem. in Supp. of Pl.’s Cross-Mot. for Summ. J. & Opp'n to Def.’s Mot. for Summ. J. ("Pl.’s Mem.") [ECF No. 12-1] at 4–5; Pl.’s Mem. Ex. 2, Office of Gov't Ethics ("OGE") Form 278e [ECF No. 12-4] at 19–20, 37, 77.

Federal law and regulations prohibit federal employees from participating on behalf of the government in any matter or decision that would directly bear on their personal financial interests or call into question their impartiality. See 18 U.S.C. § 208 ; 5 C.F.R. §§ 2635.501 – 502. Pursuant to 5 C.F.R. § 2635.502, employees may elevate potential conflicts issues to ethics officials to determine whether recusal is required. See OGE Memo DO-99-018 (Apr. 26, 1999), https://www2.oge.gov/web/oge.nsf/0/2BB7EADB68DA 97ED852585BA 005BEDC1/$FILE/do-99-018.pdf. Ethics officials, in turn, assist with conflict-of-interest compliance "by counseling employees regarding the significance of screening arrangements and recusal obligations." OGE Memo DO-04-05 at 1 (June 1, 2004), https://www.oge.gov/Web/oge.nsf/Legal% 20Docs/F8A7059769D BCC6F852585 BA005BED3C/$FILE/04x5.pdf?open.

CREW is a nonprofit government accountability organization that seeks to share information about public officials’ activities and decision-making processes with citizens to promote integrity. Compl. ¶ 5. On August 11, 2020, CREW sent a FOIA request to USPS regarding DeJoy's financial holdings and conflict-of-interest obligations as the new Postmaster General, seeking:

1. All ethics agreements, records of recusals and screening arrangements pertaining to Postmaster General Louis DeJoy.

2. All other records identifying matters from which Mr. DeJoy must recuse.

3. All records of guidance provided to Mr. DeJoy regarding his recusal obligations by USPS ethics officials.

4. All other records identifying financial interests from which Mr. DeJoy or his spouse must divest.

5. All records of communications between Mr. DeJoy and USPS officials regarding his reported purchase of a "call option" for Amazon stock on June 24, 2020.

Id. ¶ 11. USPS denied the request on September 9, 2020, explaining that it had searched the Ethics Office and Postmaster General's Office and found seven responsive documents—comprising thirteen pages—corresponding to items 1, 3, and 4 of CREW's request, but would withhold them all under FOIA Exemptions 3, 5, and 6. Id. ¶¶ 14–16; Vaughn Index [ECF No. 11-4]; Def.’s Statement of Material Facts as to Which There Is No Genuine Issue ("Def.’s SMF") [ECF No. 11-1] ¶¶ 4–12; Def.’s Mem. of P. & A. in Supp. of Def.’s Mot. for Summ. J. ("Def.’s Mem.") [ECF No. 11-2] at 8; Decl. of Janine Castorina ("Castorina Decl.") [ECF No. 11-3] ¶¶ 11–28; Pl.’s Resp. to Def.’s SMF & Statement of Undisputed Material Facts in Supp. Of Pl.’s Cross-Mot. for Summ. J. ("Pl.’s SMF") [ECF No. 12-2] ¶¶ 4–12. As detailed further below, those exemptions shield materials from disclosure where they are protected by statute or legal privilege, or where they contain personal information for which the individual's privacy interest outweighs the public's interest in disclosure.

The responsive records fall generally into two categories. Four of the documents, spanning nine pages, pertain to a request for a certificate of divestiture filed on DeJoy's behalf. Vaughn Index at 1–8; Compl. ¶ 5; Def.’s SMF ¶ 11. Federal regulations governing financial conflicts of interest for executive branch employees may require an employee to divest from certain assets and, if the divestiture results in capital gains for the employee, he or she may obtain a certificate of divestiture "to minimize the [tax] burden" of complying with conflict-of-interest requirements. See 5 C.F.R. § 2634.1001. As part of this process, a request was submitted to the Office of Government Ethics ("OGE") via email attaching a list of DeJoy's holdings, a completed Request for Certificate of Divestiture Form filled out by DeJoy, and a memorandum from DeJoy regarding the request. Vaughn Index at 1–8. The remaining three documents relate to DeJoy's recusal from USPS matters for which he had a conflict of interest. The recusal documents consist of three pages of memoranda establishing recusal and screening arrangements between DeJoy and the USPS Ethics Office and Katherine Sigler, Acting Secretary of the Board of Governors, and one page of guidance provided by USPS ethics attorney Natalie Bonanno to DeJoy regarding his recusal obligations. Id. at 1, 9–13; see also Compl. ¶ 15; Def.’s SMF ¶ 11; Pl.’s SMF ¶ 11; Pl.’s Mem. at 6.

On September 10, 2020, CREW filed an administrative appeal challenging USPS's withholding decision, asserting that the original search was inadequate and that the records in question were improperly withheld. Compl. ¶ 18; Def.’s SMF ¶ 13. USPS affirmed its initial decision. Pl.’s Mem. at 7 (citing Castorina Decl. ¶ 9). Meanwhile, on October 9, the OGE issued and published a final Certificate of Disclosure for XPO Logistics and certain other stock in response to DeJoy's request, reflecting his divestment from some but not all of the assets identified in the withheld materials. See Pl.’s Mem. at 6 & n.2 (noting the non-XPO Logistics Certificate was issued October 14); Def.’s Mem. at 18–19 (noting that "there are items listed in the request [for divestiture] that are not reflected in the final version as approved by OGE"); Castorina Decl. ¶ 27.

Nevertheless, CREW filed the instant action on October 13, challenging the adequacy of USPS's search and seeking an order from this Court directing USPS to disclose all seven documents identified as responsive. Compl. at 5. To the extent any portions of the challenged records were properly exempt from disclosure, CREW asserts that USPS must segregate and release all nonexempt portions rather than withholding the documents in full. Pl.’s Mem. at 29–30. CREW's complaint also seeks costs and attorneys’ fees for this action. Compl. at 5.

On February 3, 2021, USPS moved for summary judgment, arguing that it had met its obligation to locate responsive records and apply relevant FOIA exemptions. Def.’s Mot. for Summ. J. [ECF No. 11] at 1. On March 4, 2021, CREW cross-moved for summary judgment as to the three recusal-related documents on the basis that USPS misapplied Exemptions 3 and 5 and undervalued the public interest in disclosure while overvaluing DeJoy's privacy interest in applying Exemption 6. See Pl.’s Cross-Mot. for Summ. J. [ECF No. 12]; Pl.’s Mem. At 1–2. Through its motion, CREW dropped its challenge to the adequacy of USPS's search. Pl.’s Mem. at 8 & n.3. And regarding the documents pertaining to DeJoy's request for a certificate of divestiture, CREW concedes that some material was properly withheld pursuant to the deliberative process privilege but insists that USPS has not complied with its obligation to segregate and produce non-exempt portions of those documents. Id. The parties’ cross-motions have now been fully briefed and are ripe for this Court's review.

Legal Standard

"FOIA cases typically and appropriately are decided on motions for summary judgment." Georgacarakos v. Fed. Bureau of Investigation, 908 F. Supp. 2d 176, 180 (D.D.C. 2012) (citation omitted). To prevail on summary judgment, a party must show that there is no genuine dispute as to any material fact and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).

FOIA gives citizens the opportunity to review "an agency's performance of its statutory duties," and to know "what their government is up to." U.S. Dep't of Just. v. Reps. Comm. for Freedom of the Press, 489 U.S. 749, 772–73, 109 S.Ct. 1468, 103 L.Ed.2d 774 (1989). "It is the agency's burden to prove that it has complied with its obligations under FOIA." Democracy Forward Found. v. Ctrs. for Medicare & Medicaid Servs., Civ. No. 18-635 (JDB), 2019 WL 6344935, at *1 (D.D.C. Nov. 27, 2019) (citing Dep't of Just. v. Tax Analysts, 492 U.S. 136, 142 n.3, 109 S.Ct. 2841, 106 L.Ed.2d 112 (1989)). The statute requires agencies to release records responsive to a request for production, see 5 U.S.C. § 552(a)(3)(A),...