Greenspan v. Bd. of Governors of the Fed. Reserve Sys.

• Decision Date: 01 December 2022
• Docket Number: 1:21-cv-01968 (TNM)
• Parties: AARON GREENSPAN, Plaintiff, v. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Defendant.
• Court: U.S. District Court — District of Columbia

AARON GREENSPAN, Plaintiff,
v.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Defendant.

No. 1:21-cv-01968 (TNM)

United States District Court, District of Columbia

December 1, 2022

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

One word from the mouth of a Federal Reserve Board Member can move markets. One word can determine whether investors gain or lose millions of dollars. Consider the outcry over the Board's removal of “patient” from a 2015 policy statement. Eliminating this seemingly innocuous word dramatically drove down the Dow Jones until the Board backtracked.^[1]

This case raises the sensitive question of whether a journalist may obtain certain communications sent and received by Federal Reserve Board Chairman Jerome H. Powell under the Freedom of Information Act. The journalist requested emails from Powell containing the keywords “bubble” and “tantrum” in specific contexts. After reviewing over 1,600 responsive records, the Board produced only a few. It withheld the lion's share under FOIA Exemption 5, explaining that the documents are predecisional, deliberative, and their release would foreseeably cause harm. The Board also withheld a few responsive records under FOIA Exemption 4,

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arguing that they contain confidential commercial or financial information. Before the Court are the parties' cross-motions for summary judgment. Because the Court finds that the Board properly asserted Exemptions 4 and 5, it will grant the Board's motion and deny the journalist's motion.

I.

Data journalist Aaron Greenspan runs the website PlainSite. See Compl. ¶ 4, ECF No. 1. Greenspan filed two FOIA requests with the Board seeking emails and text messages to or from Powell containing the words “bubble” or “tantrum” from January 2018 to February 2021. Id. ¶¶ 12, 18. After consulting with the Board, Greenspan narrowed his first request to emails using the word “bubble” in the context of the “housing market, stock market, debt, dot-com, asset, and credit bubbles.” Decl. of David G. Caperton (Caperton Decl.) ¶ 6, Ex. C (quoting first request), ECF No. 11-4; see also Compl. ¶ 15. And Greenspan narrowed his second request to emails using the word “tantrum” in the context of “any previous or future ‘taper tantrum' (referring to the tapering of bond purchases, otherwise known as ‘Quantitative Easing' or ‘QE').” Caperton Decl. ¶ 10, Ex. G (quoting second request).

The Board then began searching for responsive information. It uncovered hundreds of pages of “high-level internal, deliberative emails and attachments to and from Chair Powell and the staffs of the Board and Federal Reserve Banks.” Def.'s Mot. for Summ. J. (Def.'s MSJ) at 2, ECF No. 11-1. The Board began processing these pages and provided periodic updates to Greenspan. See Caperton Decl. ¶ 7.

Greenspan sued soon after asking this Court to compel production of responsive records and to order the Board to grant him a fee waiver. See Compl. at 4. After Greenspan sued, the Board granted his request for a fee waiver and released 14 records responsive to his “bubble”

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request, with redactions. See Caperton Decl. ¶ 8. The Board also informed Greenspan that it would be withholding about 963 pages of responsive information under FOIA Exemptions 4 and 5. See id. The Board also released three records responsive to Greenspan's “tantrum” request and withheld around 693 pages under FOIA Exemptions 4, 5, and 6. See id. ¶ 12. After further review and consultation, the Board produced another four pages in full and 21 pages with redactions under FOIA Exemptions 5 and 6. See id. ¶ 14.

In total, the Board claims Exemption 5 for over 1600 pages and Exemption 4 for ten pages. See Def.'s MSJ at 7 n.5; Caperton Decl. ¶ 17, Exs. K, L (Vaughn Indices). The Board also invokes Exemption 5 for three of the ten pages it withheld under Exemption 4. See Def.'s MSJ at 7 n.5; Caperton Decl. ¶ 17. The Board withheld all these documents in full. See Caperton Decl. ¶ 17; see also Vaughn Indices.

The parties cross-moved for summary judgment. The Board argues that it properly withheld information under FOIA Exemptions 4 and 5 and that it released all reasonably segregable non-exempt information. See generally Def.'s MSJ. Greenspan challenges some of the Board's Exemption 5 withholdings and all of its Exemption 4 withholdings. See generally Pl.'s Cross-Mot. for Summ. J. (Pl.'s MSJ), ECF No. 12-1. Greenspan does not challenge the adequacy of the Board's searches or its withholdings under Exemption 6, see Third Joint Status Report at 1, ECF No. 8; Caperton Decl. ¶ 13, or the Board's representations about segregability, see generally Pl.'s MSJ; see also Def.'s Reply at 1, ECF No. 14. These cross-motions for summary judgment are now ripe. This Court has jurisdiction under 5 U.S.C. § 552(a)(4)(B) and 28 U.S.C. § 1331.

II.

Courts resolve the “vast majority” of FOIA cases at summary judgment.

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See AARC v. CIA, 317 F.Supp.3d 394, 399 (D.D.C. 2018), aff'd, 781 Fed. App'x 11 (D.C. Cir. 2019) (per curiam). To prevail on a motion for summary judgment, a party must show that “there is no genuine dispute as to any material fact.” Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. at 248. And a factual dispute is material if it could alter the outcome of the suit under the substantive governing law. See id.

FOIA requires “disclosure of documents held by a federal agency unless the documents fall within one of nine enumerated exemptions[.]” U.S. Fish & Wildlife Serv. v. Sierra Club, Inc., 141 S.Ct. 777, 785 (2021). To obtain summary judgment, the agency bears the burden to show that any claimed exemptions apply. See ACLU v. DOD, 628 F.3d 612, 619 (D.C. Cir. 2011). This burden does not shift even when the requester cross-moves for summary judgment. See Hardy v. ATF, 243 F.Supp.3d 155, 162 (D.D.C. 2017). Courts construe FOIA exemptions narrowly, see Milner v. Dep't of Navy, 562 U.S. 562, 565 (2011), and consider their applicability de novo, see King v. DOJ, 830 F.2d 210, 217 (D.C. Cir. 1987).

To meet its burden, an agency may rely on declarations describing the applicability of a FOIA exemption to information that the agency has withheld. See Shapiro v. DOJ, 893 F.3d 796, 799 (D.C. Cir. 2018). Such declarations receive “a presumption of good faith.” SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991). The Court may grant summary judgment based solely on the agency's declarations if neither record evidence nor evidence of the agency's bad faith contradicts them. See Aguiar v. DEA, 865 F.3d 730, 734-35 (D.C. Cir. 2017).

Greenspan challenges all of the Board's Exemption 4 withholdings and some of its Exemption 5 withholdings. See Def.'s MSJ at 7; Pl.'s MSJ at 2-6. Exemption 4 shields from

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disclosure privileged or confidential commercial or financial information obtained from a person. See 5 U.S.C. § 552(b)(4). And Exemption 5 protects records from disclosure “that would not be available by law to a party other than . . . in litigation with the agency.” 5 U.S.C. § 552(b)(5). In other words, a FOIA requester cannot obtain by FOIA what he could only obtain by suing the agency. See NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149 (1975).

But an agency must demonstrate more than the bare applicability of an exemption. Congress amended FOIA in 2016 to add a “foreseeable harm” requirement. See 5 U.S.C. § 552(a)(8)(A)(i)(I). To withhold exempt records, an agency must “reasonably foresee[] that [their] disclosure would harm an interest protected by” a FOIA exemption. Id. Though agencies could previously articulate a mere link between the withheld information and some foreseeable harm, the D.C. Circuit has explained that this is no longer enough. See Reps. Comm. for Freedom of the Press v. CBP, 567 F.Supp.3d 97, 109 (D.D.C. 2021) (describing this shift).

An agency must now make two showings. First, as always, the agency must show that a FOIA exemption applies to withheld information. See, e.g., Judicial Watch, Inc. v. Dep't of Treasury, 802 F.Supp.2d 185, 193 (D.D.C. 2011). Second, the agency must provide a “focused and concrete demonstration of why disclosure of the particular type of material” will cause foreseeable harm “in the specific context of the agency action at issue.” See Reps. Comm. for Freedom of the Press v. FBI, 3 F.4th 350, 370 (D.C. Cir. 2021). In other words, the agency cannot merely state that disclosure “could . . . adversely impair internal deliberations” or chill inter-agency speech; it must argue that disclosure would have that effect. Id. at 369-70; see also Machado Amadis v. DOS, 971 F.3d 364, 371 (D.C. Cir. 2020) (upholding an assertion of the deliberative process privilege where an agency “specifically focused on the information at issue” in the responsive records and “concluded that disclosure of that information ‘would' chill future

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internal discussions”). Finally, in some cases, “the sensitivity of the context in which [the responsive] conversations arose as well as their subject matter” may support a finding of foreseeable harm. Reps. Comm., 3 F.4th at 372.

III.

The Court considers: (A) the Board's withholdings under Exemption 4; (B) the Board's withholdings under Exemption 5; and (C) whether the Board satisfied FOIA's segregability requirement.^[2]

A.

The Board withheld a few documents that it received from two private firms under Exemption 4.^[3]Greenspan challenges all of its withholdings under this exemption. See Pl.'s MSJ at 5-6. To properly assert Exemption 4, the Board must show that the withheld information is (1) obtained from a person, (2) commercial or financial, and (3) confidential or privileged. See 5 U.S.C. § 552(b)(4); see also WP Co. LLC v. SBA, 502 F.Supp.3d 1, 12 (D.D.C. 2020). FOIA defines “person” to include...