Ayuda, Inc. v. Fed. Trade Comm'n

• Decision Date: 30 September 2014
• Docket Number: Civil Action No. 13–1266 RC
• Citation: 70 F.Supp.3d 247
• Parties: Ayuda, Inc., et al., Plaintiffs, v. Federal Trade Commission, Defendant.
• Court: U.S. District Court — District of Columbia

70 F.Supp.3d 247

Ayuda, Inc., et al., Plaintiffs

v.Federal Trade Commission, Defendant.

Civil Action No. 13–1266 RC

United States District Court, District of Columbia.

Signed September 30, 2014

David Alan Zetoony, Bryan Cave, LLP, Boulder, CO, Joshua James, Bryan Cave LLP, Washington, DC, for Plaintiffs.

John G. Interrante, U.S. Attorney's Office, Washington, DC, for Defendant.

Re Document No.: 16, 20

MEMORANDUM OPINION

Granting in Part and Denying in Part Defendant's Motion for Summary Judgment; and Denying Plaintiffs' Motion for Partial Summary Judgment

RUDOLPH CONTRERAS, United States District Judge

I. INTRODUCTION

Ayuda, Inc., Catholic Charities of the Archdiocese of Washington, D.C., Catholic Legal Immigration Network, Inc., and Legal Aid Justice Center (collectively, “Plaintiffs”) bring this action under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552 et seq., against the Federal Trade Commission (“FTC”) seeking information from the FTC's Consumer Sentinel database, which is an online repository containing millions of consumer complaints about alleged illegal business activity. The FTC moves for summary judgment on all four of Plaintiffs' FOIA causes of action, as well as for dismissal based on failure to exhaust administrative remedies as to Plaintiffs' request for information contained in the “Company Address, Zip Code Extension” data field. Plaintiffs cross-move for partial summary judgment on the FOIA claims in Counts I, II, and III as to the release of Consumer Sentinel database complaints that were received by the FTC through its telephone complaint line. Upon consideration of the parties' motions, the memoranda in support thereof and opposition thereto, and the evidentiary record submitted by both parties to supplement their summary judgment filings, the Court will grant in part and deny in part the FTC's motion, and deny Plaintiffs' motion.

II. BACKGROUND

A. The FTC and the Consumer Sentinel Database

The FTC is the federal agency with principal responsibility for protecting consumers from deceptive and unfair trade practices. See Stearns II Decl. ¶ 3. The agency's responsibilities include enforcing the FTC Act, the federal antitrust laws, and dozens of other federal statutes. See id . This litigation arose following three FOIA requests from Plaintiffs, a collection of nonprofit entities,¹ to the FTC seeking the release of information contained in the agency's Consumer Sentinel database, which is a secure online repository containing roughly twenty million consumer complaints about alleged illegal business activity. See id . ¶ 4. The Consumer Sentinel database is maintained by a contractor, Lockheed Martin, see Rushen Decl. ¶ 2, and it is composed of three separate databases: (1) identity theft complaints; (2) complaints regarding the Do Not Call Registry; and (3) complaints regarding fraud and other consumer issues. See Stearns Decl. ¶ 4. There are two types of data fields within the Consumer Sentinel database: “free-form” fields, in which there is no limit on the type of information that can be entered; and “non-free-form” fields, in which the type of information is limited by pre-set options. See id . ¶ 11.

Complaints enter the Consumer Sentinel database in several different ways. Of note for purposes of this case, complaints are either submitted directly by consumers through the FTC's website, entered by an FTC operator in response to calls from consumers on the FTC's telephone complaint line, or transferred from independent online services provided by other governmental and private entities, including the Canadian Anti–Fraud Centre and the Econsumer.gov website. See id. ¶¶ 4, 18– 19; James II Decl. ¶¶ 2–3. In 2013, approximately 60% of complaints filed directly with the FTC were submitted by consumers contacting the FTC's telephone complaint line and speaking with an operator, who then transcribes the information into the database.See James II Decl. ¶¶ 2–4. The remaining 40% of complaints submitted directly to the FTC were entered by consumers through a link on the agency's website. See id . ¶ 3

B. FOIA Request No. 2013–00680

On March 27, 2013, the FTC received a FOIA request, Request No. 2013–00680, from an attorney representing Plaintiffs. See Stearns Decl. ¶ 5 & Ex. A. This request sought “a copy of all complaints that are recorded in the Consumer Sentinel database,” with “only the information” contained in seventeen specified free-form and non-free-form data fields:

Table 1

The FTC's FOIA Unit originally granted the request on May 2, 2013, see Admin. Record, Am. Compl., ECF No. 11, Ex. E (“AR”) at 12, but two weeks later the agency reversed its position and denied the request. See id. at 14. The agency explained that it denied the request because (1) the data might reveal patterns of FTC procedures that would divulge the agency's deliberative process; (2) the data would reveal “FTC codes” used in the Consumer Sentinel database; and (3) certain FOIA exemptions may apply to the information in the complaints. See id.

Regarding the third point, the FTC explained that it had determined that a number of the requested free-form data fields contain, or might contain, information that could, standing alone or in combination with other information, identify the consumer who submitted the complaint or another individual mentioned in the complaint, such as the alleged wrongdoer. See Stearns Decl. ¶¶ 11–12. The FTC therefore concluded that these data fields must be reviewed manually to avoid disclosure of personal identifying information, and the agency estimated that this review would take more than 8,000 hours to complete given the size of the Consumer Sentinel database. See id . ¶¶ 11, 22. Separately, the FTC's contractor estimated that it would cost $3,982.40 to export data for the requested fields that the agency had not rejected. See id . ¶ 9 & Ex. C; Rushen Decl. ¶ 6. On June 10, 2013, the FTC denied Request No. 2013–00680 when counsel for Plaintiffs did not pre-pay the estimated processing cost. See Stearns Decl. ¶ 25 & Ex. F.

C. FOIA Request No. 2013–00949

On May 24, 2013, the FTC received a second request, Request No. 2013–00949, from another attorney representing Plaintiffs. See id . ¶ 26 & Ex. G. In addition to the seventeen data fields in the first request, the second request sought sixteen more fields across the three Consumer Sentinel subdatabases:

Table 2

The FOIA Unit determined that processing Request No. 2013–00949 would entail an “even greater burden” than the first request because it sought “comment” fields in addition to the free-form data fields included in the original request. See id. ¶ 28. Accordingly, the FTC denied the request after informing Plaintiffs' counsel that complying would be overly burdensome. See id . ¶¶ 29–31 & Exs. H, I.

D. First Appeal: Request Nos. 2013–00680 and 2013–00949

On July 10, 2013, counsel for Plaintiffs appealed the denial of Request Nos.2013–00680 and 2013–00949. See Am. Compl., Ex. A. A month later, FTC Acting General Counsel David Shonka granted in part and denied in part the appeal. See Stearns Decl. ¶ 34 & Ex. J. Specifically, Mr. Shonka granted Plaintiffs' request for the data fields “that do not elicit free-form responses, excluding any zip code fields,” but he denied the request as to the remaining free-form fields because they actually or potentially contain information exempt from disclosure under FOIA Exemption 6, and a review to segregate the exempt material would place an inordinate burden on the agency's resources.See id .

Mr. Shonka remanded the case to the FOIA Unit to identify and process the requests for the data fields for which the appeal was granted. See id. ¶ 35 & Ex. J. On remand, the FOIA Unit reviewed the requests and identified for processing the data fields that did not elicit free-form responses. See id . ¶¶ 36–38. The FOIA Unit, however, determined that the following free-form data and zip code fields should not be produced under Mr. Shonka's decision:

Table 3The FTC then sent the fields that could be produced to the contractor for a cost estimate, and the contractor quoted a fee of $8,581.95 “to develop the custom scripts, extract from reporting [database], format, validate and complete this FOIA” request.² See id . ¶ 39 & Ex. K; Rushen Decl. ¶ 10. Lockheed Martin arrived at this estimate by predicting sixty-five hours of labor at $132.03 per hour, which is the “Information Systems Analyst III” labor category rate established under the FTC's agreement with the contractor. See Stearns Decl. ¶ 39.

On September 9, 2013, the FTC provided Plaintiffs' counsel with the contractor's estimate for processing the remaining portions of Request Nos. 2013–00680 and 2013–00949, and the agency advised counsel that an advanced payment of the full amount was required within ten days or the requests would be closed. See id . ¶ 40 & Ex. L. In response, counsel asked that “[FTC] Staff not commence the search and production of the requested data until a resolution has been reached concerning some, or all, of the Contested Fields,” and he stated that Plaintiffs intended to appeal the cost estimate. See id . ¶¶ 41–42 & Ex. M. On September 23, the agency closed both requests because it did not receive timely payment. See id . ¶ 43 & Ex. N.

E. FOIA Request No. 2013–01305

On August 26, 2013, Plaintiffs' counsel filed a third FOIA request, Request No. 2013–01305, which sought the following eight fields for all complaints in the Consumer Sentinel database:

Table 4

This request, like the first two requests, did not include the “Company Address, Zip Code Extension” field. See id . Again, the FTC determined that it would produce only the data fields that did not elicit free-form responses. See id . ¶ 45 & Ex. Q. The FTC also requested another estimate from the contractor for processing the remaining fields in Request No. 2013–01305, see id . ¶¶ 46–47 & Ex. R, and the contractor provided a quote of $8,581.95. See id . ¶ 48 & Ex. S; Rushen Decl. ¶ 12. On September 18,...