DBW Partners, LLC v. U.S. Postal Serv.

• Decision Date: 28 April 2020
• Docket Number: Civil Action No.: 18-3127 (RC)
• Parties: DBW PARTNERS, LLC d/b/a THE CAPITOL FORUM Plaintiff, v. UNITED STATES POSTAL SERVICE and UNITED STATES POSTAL SERVICE OFFICE OF INSPECTOR GENERAL Defendant.
• Court: U.S. District Court — District of Columbia

DBW PARTNERS, LLC d/b/a THE CAPITOL FORUM Plaintiff, v. UNITED STATES POSTAL SERVICEand UNITED STATES POSTAL SERVICE OFFICE OF INSPECTOR GENERAL Defendant.

Civil Action No.: 18-3127 (RC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

April 28, 2020

Re Document Nos.: 19, 20

MEMORANDUM OPINION

GRANTING IN PART AND DENYING IN PART THE PARTIES' RENEWED CROSS-MOTIONS FOR SUMMARY JUDGMENT

This case concerns Freedom of Information Act ("FOIA") requests by DBW Partners, LLC, which does business as "the Capitol Forum." The requests were directed at the United States Postal Service ("USPS") and the USPS Office of Inspector General ("OIG") (collectively "the Government" or "the Postal Service"). Last year, both parties moved for summary judgment. See Defs.' Mot. for Summ. J. ("MSJ"), ECF No. 11; Pl.'s Cross-Mot. for Summ. J. ("Cross-MSJ"), ECF No. 12. On October 28, 2019, the Court issued an Order Denying Defendant's Motion for Summary Judgment and Granting in Part and Denying in Part Plaintiff's Motion for Summary Judgment ("MSJ Order"), ECF No. 17, along with an accompanying Memorandum Opinion, DBW Partners, LLC v. United States Postal Service, No. 18-3127, 2019 WL 5549623 (D.D.C. Oct. 28, 2019), ECF No. 18. The Court ordered that USPS search for and produce documents responsive to one request and that USPS OIG produce for in camera review an unredacted copy of a report at issue in the other request. See MSJ Order 2. USPS OIG was also ordered to file updated justifications for withholding any portions of the report. Id. After USPS and USPS OIG made their productions and filings, the Capitol Forum responded. See Pl.'s Resp. Pursuant to this Court's Oct. 28, 2019 Order ("Pl.'s Resp."), ECF No. 20. The Capitol Forum challenges the revised withholdings and production, and asks the Court "to order the release of the [report] in unredacted form, or, in the alternative to release those portions of the [report] that do not contain confidential information." Id. at 3. The Court construes the Defendants' updated production and justifications as amounting to a renewal of its Motion for Summary Judgment, ECF No. 11, and likewise construes Capitol Forum's Response as a partial renewal of its own Cross-Motion for Summary Judgment, ECF No. 12. The Court therefore evaluates USPS OIG's filings and production for compliance with FOIA and ultimately concludes that the agency's updated justifications are generally sufficient to carry its burden under FOIA. However, the Court also finds, based on its in camera review, that USPS OIG failed to segregate certain non-exempt reasonably segregable portions of its production, and will order their production. Accordingly, each party is entitled to partial summary judgment.

I. BACKGROUND

The Capitol Forum is a self-described "subscription news service providing comprehensive coverage of competition policy and in-depth market and political analysis of specific transactions and investigations." Compl. ¶ 7, ECF No. 7. Two FOIA requests that it submitted in 2018 form the basis for this litigation. Both relate generally to the USPS's Postage Reseller Program and Negotiated Service Agreements ("NSAs")—which allow companies to resell USPS services at discount prices—and to the USPS's relationship with Stamps.com, a private company whose business model relied on participating in the Postage Reseller Program. See id. ¶¶ 1-2.

The first request only warrants a brief discussion here as it is no longer the subject of any dispute. It was submitted to USPS on October 23, 2018 and sought "[a]ny documents or communications related to an ethics investigation and/or ethics review of former [USPS] Chief Customer and Marketing Officer James Cochrane" between July 1, 2017 and October 23, 2018. Williams Decl., Ex. A, ECF No. 12-3 at 7-9. USPS responded with a Glomar response. Id., Ex. B., ECF No. 12-3 at 11-13. The Court held that USPS "did not meet is burden and [did] not establish[]" that a Glomar response was justified. DBW Partners, 2019 WL 5549623 at *7. The Court therefore granted summary judgment to the Capitol Forum on this issue and Ordered USPS to search for responsive documents, produce them, and explain any withholdings. See MSJ Order. USPS later represented that it had diligently searched for responsive records and found none. See Defs.' Notice of Filing of Updated Justifications ("Defs.' Update") at 2, ECF No. 19. The Court had afforded the Capitol Forum the opportunity to respond to the Government's production or response regarding the ethics records, see MSJ Order at 2, but the Capitol Forum only addressed its other FOIA request in its response, see Pl.'s Resp. The Court therefore does not understand the Capitol Forum to be further challenging USPS's response regarding the ethics records, or the adequacy of the search therefor, and does not need to address that request further.

The Capitol Forum's other FOIA request, sent on July 25, 2018, sought a copy of a USPS OIG report, titled "Postal Partnerships: The Complex Role of Middlemen and Discounts in the USPS Package Business" (the "OIG Whitepaper" or the "Whitepaper"). Williams Decl., Ex. U, ECF No. 12-3 at 257-58. According to reporting by the Capitol Forum, the Whitepaper criticized the USPS's lack of oversight of its contracts with its partners and estimated that reseller programs and NSAs were costing the USPS over $1 billion annually. Id., Ex. R (October2018 Capitol Forum Article), ECF No. 12-3 at 247. The agency withheld the Whitepaper, citing Exemption 3 to FOIA, which allows an agency to withhold records "exempted from disclosure by statute [if that statute] 'establishes particular criteria for withholding or refers to particular types of matters to be withheld.'" Id., Ex. V, ECF No. 12-3 at 260 n.1, (quoting 5 U.S.C. § 552(b)(3)); see also id. at 260-61. The agency pointed to a provision of the Postal Reorganization Act establishing that the USPS was not obligated to disclose "information of a commercial nature, including trade secrets, whether or not obtained from a person outside the Postal Service, which under good business practice would not be publicly disclosed." Id. at 260 n.1 (quoting 39 U.S.C. § 410(c)(2)). The Capitol Forum appealed the denial of this FOIA request as well, and the appeal was denied on September 10, 2018. See Compl., Ex. B, ECF No. 1-2.

DBW Partners brought this FOIA suit against the USPS and the USPS OIG on December 28, 2018. See Compl. After this suit was filed but before moving for summary judgment, USPS produced to the Capitol Forum a heavily redacted version of the Whitepaper. Nickoski Decl., Ex. H at 41-82, ECF No. 11-3. Both parties then moved for summary judgment. See MSJ; Cross-MSJ. Defendants filed two declarations supporting their motion. See Nicoski Decl., ECF No. 11-3; Martin Decl., ECF No. 11-4.

The Court rejected the Capitol Forum's initial argument that the Whitepaper had to be disclosed. DBW Partners, 2019 WL 5549623 at *7. It was clear that the Postal Reorganization Act exempted at least some of its contents from disclosure. Id. The Court agreed, however, that the USPS OIG had not adequately justified the heavily redacted document that was produced to the Plaintiff. Id. at *8-9; see id. at *8 (describing the redactions). "Considering that the existence of USPS Reseller Programs and NSAs are already public knowledge," the Courtconcluded, "it [was] implausible that the OIG Whitepaper [did] not contain at least somewhat more segregable non-exempt information than what the USPS OIG ha[d] already revealed." Id. at *9. The declarations produced by the Government established that at least some of the redacted material was exempt from disclosure, but they failed to explain how so much could be. Id. In addition, the Court noted that the redactions were internally inconsistent. Id. at *10. The Court ordered in camera review of an unredacted version of the document, along with "updated justifications" from USPS OIG. Id.

USPS OIG's updated justifications were filed on November 27, 2019, and came in the form of a declaration filed by Sharon Owens, USPS Vice President for Pricing and Costing. See Owens Decl., ECF No. 19-1. USPS OIG explained that Owens's declaration would "explain[] in detail why the redacted portions of the document constitute 'information of a commercial nature . . . which under good business practice would not be publicly disclosed'" pursuant to the Postal Reorganization Act and FOIA Exemption 3. Defs.' Update at 1. A new redacted version of the Whitepaper, "reflecting the correction of inadvertent errors and the release of additional non-exempt, segregable material," id., was also produced based on USPS's determination "that additional segregable, non-exempt information [could] be released," Owens Decl. ¶ 23. The Court will review the substance of the declaration below. As for the new version of the Whitepaper, USPS has identified and disclosed "somewhat more segregable non-exempt information." See DBW Partners, 2019 WL 5549623 at *9. There are now only twenty pages redacted in their entirety (down from thirty). See Owens Decl., Ex. 1 ("Whitepaper"), ECF No. 19-1 at 25-66;¹ DBW Partners, 2019 WL 5549623 at *8. The agency has also resolved theinternal inconsistencies the Court noted in its prior opinion. See DBW Partners, 2019 WL 5549623 at *10. In general, though, the document remains quite heavily redacted, with only section headings revealed on many pages. See Whitepaper.

The Capitol Forum filed a response on December 18, 2019, objecting that the new version of the Whitepaper "remains almost entirely redacted" and that "[t]he new Owens declaration fails woefully to comply with this Court's directive." Pl.'s Resp. at 2. The Capitol Forum states that "it does not explain how it is remotely plausible that virtually no information can be segregated and released; it fails to describe in any sufficient detail its review for segregable information; and it fails to explain that it had...