Ameriquest Mortg. Co. v. Office of the Attorney Gen. of Wash.

• Decision Date: 09 May 2013
• Docket Number: No. 87661–4.,87661–4.
• Citation: 177 Wash.2d 467,300 P.3d 799
• Court: Washington Supreme Court
• Parties: AMERIQUEST MORTGAGE COMPANY, a Delaware corporation, Appellant, v. OFFICE OF THE ATTORNEY GENERAL OF WASHINGTON, Respondent, Law Offices of Melissa A. Huelsman, Respondent/Intervenor.

177 Wash.2d 467

300 P.3d 799

AMERIQUEST MORTGAGE COMPANY, a Delaware corporation, Appellant,

v. OFFICE OF THE ATTORNEY GENERAL OF WASHINGTON, Respondent,Law Offices of Melissa A. Huelsman, Respondent/Intervenor.

No. 87661–4.

Supreme Court of Washington, En Banc.

May 9, 2013.

Erik Dupen Price, Attorney at Law, Olympia, WA, Laura Therese Morse, Lane Powell PC, Seattle, WA, Joanne N. Davies, Buchalter Nemer Fields & Younger, Irvine, CA, for Appellant.

Shannon E. Smith, Office of the Attorney General, Seattle, WA, David W. Huey, Office of the Attorney General, Tacoma, WA, for Respondent.

Melissa Ann Huelsman, Law Offices of Melissa A. Huelsman, Seattle, WA, for Respondent/Intervenor.

J.M. JOHNSON, J.

[177 Wash.2d 473]¶ 1 This is the second time we have considered this controversy over records Ameriquest Mortgage Company disclosed to the Washington State Office of the Attorney General (AGO). During its investigation of Ameriquest's lending practices, the AGO obtained a number of e-mail messages from Ameriquest that Ameriquest employees had created while processing consumer loans. The AGO wants to disclose redacted versions of a subset of these e-mails to Melissa A. Huelsman, an attorney who has requested the records in accordance with the Public Records Act (PRA), chapter 42.56 RCW. Ameriquest claims that we decided in Ameriquest Mortgage Co. v. Washington State Office of Attorney General, 170 Wash.2d 418, 241 P.3d 1245 (2010), that the Gramm–Leach–Bliley Act of 1999 (GLBA), 15 U.S.C. §§ 6801–6809, and its accompanying regulations, prohibit the disclosure of any e-mails containing nonpublic personal information, even after redaction. Ameriquest also claims that the e-mails are shielded by the PRA's investigative records exemption, RCW 42.56.240, and the Consumer Protection Act (CPA), chapter 19.86 RCW, which shields materials produced in response to a civil investigative demand (CID). Additionally, Ameriquest claims it should be afforded the opportunity to conduct discovery into why the AGO is not invoking the investigative records exemption.

¶ 2 The trial court held that the GLBA did not prevent disclosure, that the PRA exemption and CPA shield were inapplicable, and that Ameriquest does not get discovery. We reverse the trial court in part, holding that the GLBA prevents the AGO from newly redacting and disclosing those e-mails that contain nonpublic personal information, even when the redaction process removes all of the nonpublic personal information. We affirm the trial court's holding that the PRA investigative records exemption and the CPA's shield do not apply and that Ameriquest does not get discovery.

Facts and Procedural History

¶ 3 In 2003, the AGO began its investigation under the CPA into Ameriquest's lending practices. In early 2004, the AGO joined together with attorneys general and financial regulators from a handful of other states in its investigation, which eventually expanded to include 49 states and the District of Columbia (Multistate).

¶ 4 In May 2004, Minnesota Assistant Attorney General Prentiss Cox, on behalf of the Multistate, sent a letter to Ameriquest seeking information regarding Ameriquest's operations. Attached to this letter, Cox sent interrogatories and document requests. Cox wrote that the Multistate was sending this letter “in lieu” of a formal CID in anticipation of Ameriquest's voluntary cooperation. Clerk's Papers (CP) at 178. Cox further stated that if Ameriquest preferred a formal CID, Multistate would reissue its demand “under ... [its] formal investigative authority.” Id. The letter gave Ameriquest 30 days to respond and identified a contact person in each state to whom Ameriquest was to produce the requested information. In response, Ameriquest produced roughly 314,000 employee e-mails and 181,000 e-mail attachments.¹ The e-mails vary in form and content but as a whole contain information about Ameriquest's customers.

¶ 5 In March 2006, the parties reached a settlement and entered a consent decree in King County Superior Court. Ameriquest, 170 Wash.2d at 427, 241 P.3d 1245. The decree contained a provision relating to the PRA: “ ‘If the State receives a request for documents provided by an Ameriquest Party ..., the State shall comply with applicable public disclosure laws and promptly provide notice to the Ameriquest Parties ...,’ ” Id. (alteration in original) (quoting clerk's papers).

¶ 6 In February 2007, Huelsman filed a PRA request for “ ‘[a]ll records relating to [the] investigation of Ameriquest.’ ” Id. (alterations in original). In discussion with the AGO, Huelsman agreed to narrow her initial request with the expectation that she would seek and receive additional information. The AGO notified Ameriquest of its intention to produce the documents.

[177 Wash.2d 476]¶ 7 After receiving notice, Ameriquest sought to enjoin disclosure and Huelsman joined the suit as an intervenor. The trial court denied the motion, concluding that the federal GLBA did not preempt the PRA and ordered the AGO to redact exempt personal and confidential information from the records before releasing them. The Court of Appeals reversed the trial court, holding that the GLBA did preempt the PRA and prohibited disclosure. Ameriquest Mortg. Co. v. State Att'y Gen., 148 Wash.App. 145, 159, 199 P.3d 468 (2009), aff'd on other grounds,170 Wash.2d 418, 241 P.3d 1245 (2010). We granted the AGO's petition for review only on the issue of whether the GLBA preempted or precluded the AGO's proposed disclosure. Ameriquest, 170 Wash.2d at 428–29, 241 P.3d 1245.

¶ 8 We held that the GLBA and its accompanying regulations applied to the AGO's proposed disclosure of nonpublic personal information to Huelsman and do not preempt the PRA because they fall within the PRA's “other statute” exemption. Id. at 440, 241 P.3d 1245. We remanded the case to the trial court with the instruction that the trial court apply the GLBA, as we had interpreted it, to determine what records the AGO could disclose. Id. at 441, 241 P.3d 1245.

¶ 9 On remand, the AGO notified Ameriquest that it would still be disclosing a redacted version of a small subset of the documents. This subset consists of 49 pages of e-mail messages, created by Ameriquest employees processing consumer loans, specifically relating to income falsification and the Blackstone Title Company (E-mails). Ameriquest objected and moved that the disclosure be prohibited on the grounds that (1) the GLBA prohibits disclosure of the aggregated ² and redacted E-mails, (2) the E-mails are covered by the PRA's investigative record exemption, and (3) the CPA shields the E-mails from disclosure because Ameriquest produced them in response to a CID. Ameriquestalso argued it was entitled to discovery to probe the AGO's rationale behind its decision not to assert the PRA's investigative records exemption.

¶ 10 After reviewing the E-mails in camera, with the proposed redactions highlighted for its review, the trial court ordered the AGO to produce the E-mails. The trial court held that the GLBA did not prohibit redaction or disclosure in this case, that Ameriquest did not produce the E-mails in response to a CID, and that the PRA's investigative record exemption did not apply because there was “no law enforcement or investigative function to be protected” by prohibiting disclosure. CP at 378. The trial court stayed its order for 60 days to allow Ameriquest the opportunity to obtain a stay from the Court of Appeals. The Court of Appeals issued its stay and the parties stipulated to filing the E-mails with the Court of Appeals under seal.

¶ 11 In July 2012, the Court of Appeals certified the case to us pursuant to RAP 4.4 and RCW 2.06.030. We accepted the certification. Ruling Accepting Certification, Ameriquest Mortg. Co. v. Office of Att'y Gen., No. 87661–4 (July 26, 2012).

Issues

¶ 12 (1) Whether the GLBA prevents the AGO from redacting the nonpublic personal information in the E-mails that the Ameriquest employees created while processing loans and then producing them for public disclosure pursuant to a PRA request.

¶ 13 (2) Whether Ameriquest can enjoin disclosure because the E-mails are covered by the PRA's investigative records exemption and Ameriquest has shown that either it or a vital government function would be substantially and irreparably harmed by disclosure.

¶ 14 (3) Whether Ameriquest is entitled to discovery to probe the rationale behind the AGO's decision not to invoke the PRA's investigative records exemption.

[177 Wash.2d 478]¶ 15 (4) Whether Ameriquest's voluntary production of materials in response to the Multistate's letter should be deemed a response to a CID, thereby exempting the E-mails from disclosure.

Standard of Review

¶ 16 The application of a statute to a fact pattern is a question of law fully reviewable on appeal. Lobdell v. Sugar ‘N Spice, Inc., 33 Wash.App. 881, 887, 658 P.2d 1267 (1983). The interpretation of case law is reviewed de novo. State v. Willis, 151 Wash.2d 255, 261, 87 P.3d 1164 (2004). Agency action taken or challenged under the PRA is reviewed de novo. RCW 42.56.550(3). Appellate courts stand in the shoes of the trial court when reviewing declarations, memoranda of law, and other documentary evidence. See Spokane Police Guild v. Wash. State Liquor Control Bd., 112 Wash.2d 30, 35–36, 769 P.2d 283 (1989).

¶ 17 Trial court discovery rulings are subject to review for abuse of discretion. In re Det. of Halgren, 156 Wash.2d 795, 802, 132 P.3d 714 (2006). A trial court abuses its discretion if its decision is manifestly unreasonable or based on untenable grounds or untenable reasons. In re Marriage of Littlefield, 133 Wash.2d 39, 46–47, 940 P.2d 1362 (1997).

Analysis

A. The GLBA Prevents the AGO from Redacting and Producing the E-mails

1. Brief Overview of the GLBA

¶ 18 The policy of Congress is that “each financial institution has an affirmative and continuing obligation to respect the privacy of its customers and to...