Cowan v. Fed. Commc'n Comm'n
| Decision Date | 15 September 2022 |
| Docket Number | 21-cv-895-RMM |
| Parties | SUSAN WILSON COWAN, Plaintiff, v. FEDERAL COMMUNICATIONS COMMISSION, Defendant. |
| Court | U.S. District Court — District of Columbia |
This is a FOIA action brought by journalist Susan Wilson Cowan (“Ms. Wilson”) against the Federal Communications Commission (“FCC”). Ms. Wilson seeks documents that the FCC obtained from Sinclair Broadcast Group (“Sinclair”) after the company's proposed acquisition of another television broadcast company, Tribune Media Company (“Tribune”), drew significant scrutiny from both the FCC and the public at large. The documents Sinclair sent to the FCC ultimately formed the basis of a consent decree, in which the FCC determined that Sinclair had structured its planned transactions based on a good faith interpretation of FCC rules. Ms. Wilson believes the documents will tell a different story. The FCC agreed to produce some of the documents requested but withheld others under FOIA Exemption 4. The parties have crossmoved for summary judgment; the FCC also requests a protective order to shield from further disclosure information the agency inadvertently disclosed.[1] For the reasons set forth below, the Court DENIES Ms. Wilson's first motion for summary judgment (ECF No. 15), as moot, DENIES WITHOUT PREJUDICE Ms Wilson's amended motion for summary judgment (ECF No. 25) and the FCC's cross-motion for summary judgment (ECF No 26), and GRANTS IN PART the FCC's Motion for Protective Order (ECF No. 21).
In 2017, Sinclair and Tribune announced their intent to transfer control of Tribune's television stations to Sinclair for $3.9 billion. See FCC Fact Stmt. ¶ 1; Pl. Mem. at 4. The transaction would have made Sinclair “the nation's largest broadcaster, with [control of] as many as 233 stations across the country.” In the Matter of Sinclair Broad. Grp., 35 FCC Rcd. 5877, 5897 (2020) (hereafter “Consent Decree”) (Statement of Commissioner Rosenworcel, dissenting).
FCC approval was required to complete the transfer, so on June 28, 2017, Sinclair and Tribune filed applications with the agency. See FCC Fact Stmt. ¶ 1. The applications were later amended to include divestiture proposals for three Tribune stations. Id. ¶¶ 2-4. The divestitures made economic sense to Sinclair, see Shapiro Decl. ¶ 3(b), and were also likely influenced by the FCC's multiple ownership rules, which govern the number of stations a company can control in a market as well as the total number of stations a company can control nationwide. See Pl. Mem. at 4-5; Nov. Santini Decl. ¶ 10. Under the divestiture proposal, Sinclair would have sold KDAF (a Dallas station) and KIAH (a Houston station) to Cunningham Broadcast Corporation for $60 million. See FCC Fact Stmt ¶ 3; Pl. Mem. at 4. Sinclair would have sold WGN-TV (a Chicago station) to WGN-TV LLC, a company owned by Steven Fader, for $60 million. See FCC Fact Stmt. ¶ 4; Pl. Mem. at 4.
The proposed deals attracted significant public scrutiny. Journalists, including Ms. Wilson, reported on Sinclair's plans, suggesting that Sinclair was attempting to use “front companies” to circumvent FCC ownership rules. See Pl. Mem. at 4-5. Among other things, Ms. Wilson pointed out the close relationships between Sinclair executives and the company's proposed divestiture partners, Cunningham Broadcast and Steven Fader. See id. In response to these and similar allegations, the FCC designated the Sinclair-Tribune transfer applications for hearing before an administrative law judge. See FCC Fact Stmt. ¶¶ 5-6; July Santini Decl. ¶ 7. The purpose of the hearing was to determine whether Sinclair was the real party-in-interest in the proposed KDAF, KIAH, and WGN-TV divestitures and whether Sinclair had made misrepresentations or lacked candor in its communications to the FCC. Id.; see also Consent Decree at 5877 ¶ 2, 5882-83 ¶ 4. The agency also expressed concerns about the proposed divestiture sales prices, which appeared to be below market value. See Pl. Mem. at 5-6 .
Seeking to resolve the agency's concerns outside the context of the (public) hearing, on July 31, 2018, Sinclair voluntarily submitted to the FCC's Enforcement Bureau information and documents related to the proposed deals and divestitures. See July Santini Decl. ¶ 8; FCC Fact Stmt. ¶ 7; Pl. Fact Stmt. ¶ 3. Sinclair requested that the information be treated as confidential, because its communication was prepared for settlement negotiations and the supporting documents included commercially sensitive financial information, including about how Sinclair valued stations. See July Santini Decl. ¶ 8; FCC Fact Stmt. ¶¶ 8-9. Sinclair supplemented its communication on May 3, 2019, again requesting that the submitted documents be treated as confidential to protect commercially sensitive financial information. See July Santini Decl. ¶ 8; FCC Fact Stmt. ¶¶ 10-11; Pl. Fact Stmt. ¶ 3. Through a letter of inquiry (“LOI”), the FCC in June 2019 requested additional information and documents about Sinclair's commercial dealings and station valuations. See July Santini Decl. ¶ 9; FCC Fact Stmt. ¶¶ 12-13; see also Ex. 1 to Pl. Mem., ECF No. 25-2 at *3-11 (copy of the LOI). Sinclair responded with additional documents on July 11 and August 6, 2019, again requesting confidential treatment because the documents contained commercially sensitive financial information. See July Santini Decl. ¶ 10; FCC Fact Stmt. ¶¶ 15-16; Pl. Fact Stmt. ¶ 4.
The FCC reviewed Sinclair's submissions and, satisfied that they described in detail the company's proposed transaction agreements, agreed to enter a consent decree. See July Santini Decl. ¶ 11; FCC Fact Stmt. ¶ 18; Pl. Fact Stmt. ¶ 2. The Consent Decree concluded that Sinclair had structured its proposed transactions based on a good faith interpretation of the FCC's rules, resolved the issues designated for (public) hearing, required Sinclair to develop and implement a plan ensuring future compliance with FCC rules, and ordered Sinclair to pay a $48 million civil penalty. See July Santini Decl. ¶ 11; FCC Fact Stmt. ¶¶ 17-19; Pl. Fact Stmt. ¶ 2; Consent Decree at 5887 ¶ 20, 5892 ¶ 24. Significantly, the Consent Decree described Sinclair's submission of documents to the agency but not their precise contents. See Consent Decree at 5883 ¶ 7.
Ms. Wilson wants the documents Sinclair submitted to the FCC. She maintains that, “[h]ad the FCC followed the commands of the Communications Act [of 1934, 47 U.S.C. §§ 151 et seq.,] and its rules, Sinclair's conduct would have been probed in an evidentiary hearing and the documents in question would have been part of the hearing record.” Pl. Mem. at 3. She insists that the FCC and Sinclair “should not be permitted to hide documents by resort to a nonpublic, ex parte process, especially when [the documents] are the sole basis for the FCC's resolution of substantial and material questions of fact that it had previously said required a public hearing.” Id. She accordingly filed a request under the Freedom of Information Act (“FOIA”) on October 28, 2020, seeking:
All documents or filings Sinclair submitted to the FCC or its Bureaus, (as referenced in the Consent Decree, paragraph 7), on July 31, 2018[;] May 2, 2019[;] July 12, 2019[;] and August 6, 2019 and any supplements thereto.
Ex. 2 to Pl. Mem., ECF No. 25-2, at *14; see also Pl. Fact Stmt. ¶ 5; FCC Fact Stmt. ¶¶ 20-21; Citrin Decl. ¶¶ 3-5; July Santini Decl. ¶¶ 12-13. Pursuant to FOIA, upon a reasonably descriptive request for records submitted in compliance with agency procedures, the agency “shall make the records promptly available” except in certain circumstances or if an exemption applies. 5 U.S.C. § 522(a)(3)(A), (b). To fulfill this obligation, the FCC delegated the task of responding to Ms. Wilson's request to its Media Bureau. See Citrin Decl. ¶ 3; July Santini Decl. ¶ 12.
The Media Bureau then began the work of identifying responsive records and determining whether they should be released or withheld under any of FOIA's exemptions. See Citrin Decl. ¶ 6. After locating some responsive records, in January 2021, the FCC notified Sinclair of Ms. Wilson's FOIA request and asked the company to state its objections, if any, to disclosure of responsive records. Id. ¶ 8. Sinclair promptly informed the agency that it objected to disclosure of all but seven of the documents and asserted that those seven documents were exempt from disclosure under FOIA Exemption 4. Id. ¶ 9. Exemption 4 permits the agency to withhold from public disclosure documents that reflect “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4). Ms. Wilson responded to the objection, prompting the Media Bureau to independently review the materials. See Citrin Decl. ¶¶ 10-11.
Two months later, the FCC had not completed its review and Ms Wilson had not received any substantive agency response to her FOIA request. See Compl., ECF No. 1, ¶¶ 813. She accordingly filed this suit under 5 U.S.C. § 552(a)(4)(B) and requested an order commanding the FCC to “process immediately” her request and make available to her copies of responsive records. Id. ¶¶ 4, Prayer for Relief. The summons and complaint were served on May 5, 2021, see ECF No. 9 at *2, and, the same day, the FCC's Media Bureau released to Ms. Wilson 261 pages of documents it determined were responsive to her request and not confidential. See Citrin Decl. ¶ 11. The agency withheld the remainder of the discovered responsive materials under FOIA Exemption 4. Id. The...
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