Jurewicz v. U.S. Dep't of Agric. & Humane Soc'y of the United States

• Citation: 741 F.3d 1326
• Decision Date: 04 February 2014
• Docket Number: No. 12–5331.,12–5331.
• Parties: Carolyn JUREWICZ, et al., Appellants v. UNITED STATES DEPARTMENT OF AGRICULTURE and Humane Society of the United States, Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

741 F.3d 1326

Carolyn JUREWICZ, et al., Appellants

v.UNITED STATES DEPARTMENT OF AGRICULTURE and Humane Society of the United States, Appellees.

No. 12–5331.

United States Court of Appeals,District of Columbia Circuit.

Argued Nov. 15, 2013.

Decided Feb. 4, 2014.

Appeal from the United States District Court for the District of Columbia (No. 1:10–cv–01683).

Ira T. Kasdan argued the cause for appellants. With him on the brief was Elizabeth C. Johnson.

Alan Burch, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Ronald C. Machen Jr., U.S. Attorney, and R. Craig Lawrence, Assistant U.S. Attorney.

Aaron D. Green and Jonathan R. Lovvorn were on the brief for intervenor The Humane Society of the United States in support of appellee.

Before: GARLAND, Chief Judge, ROGERS, Circuit Judge, and SENTELLE, Senior Circuit Judge.

Opinion for the court by Circuit Judge ROGERS.

ROGERS, Circuit Judge:

In this reverse-FOIA case, dog breeders and dealers in Missouri challenge the Department of Agriculture's decision to release information in their annual reports relating to their gross revenue and business volume. They contend the information requested by the Humane Society of the United States under the Freedom of Information Act (“FOIA”) is covered by Exemptions 4 and 6, which protect confidential commercial or financial information and personal privacy, respectively, and that the Department's reasoning was arbitrary and capricious. For the following reasons, we affirm the grant of summary judgment to the Department and the Humane Society.

I.

The Animal Welfare Act requires dealers of animals, including dogs, to obtain an annual license from the Department of Agriculture. 7 U.S.C. § 2134. The Department must charge a licensing fee that is “reasonable” and “adjusted on an equitable basis taking into consideration the type and nature of the operations to be licensed.” Id. § 2153. Under Department regulations, dealers renew their licenses by paying the required fee and filing an application and annual report, Form 7003, with the Animal and Plant Health Inspection Service (“the Service”). 9 C.F.R. § 2.5(b). Block 8 (or Block 10 in some versions) of Form 7003 asks for (1) the total number of animals purchased and sold in the last year; (2) the gross revenue from regulated activities; and (3) for dealers that are not breeders, the difference between the purchase price and sale price of the animals sold. In addition, the Service conducts on-site inspections of licensed breeders and dealers and publishes the inspection reports on its website; those reports include the number of dogs counted at the time of the inspection.

In 2009, the Humane Society submitted three FOIA requests for copies of Form 7003s received by the Service. The first two named specific licensees; the third requested Form 7003s for “all dog breeders and dealers” in Missouri. Initially, the Department determined that Block 8 information was covered by Exemptions 4 and 6, and redacted it before releasing the forms to the Humane Society. The Humane Society appealed in May 2010, and when it failed to receive a response, it filed suit in October 2010. While this lawsuit was pending, the Department solicited comments from the affected licensees on whether they thought releasing Block 8 information would cause substantial competitive harm. Upon reviewing the responses, the Department concluded the information should be released and notified the licensees in March 2011.

In April 2011, appellants, who are (or whose members are) licensed dog breeders and dealers in Missouri, sued to prevent release of the Block 8 information. The Department moved for a voluntary remand upon discovering an error in the March 2011 decision letter, which was granted. On remand, the Department solicited additional comments. After review of these comments, the Department again concluded that no FOIA exemption applied to the Block 8 information and that the information should be released. Appellants filed a second amended complaint, and the parties filed cross motions for summary judgment. The district court granted summary judgment to the Department and the Humane Society. Appellants appeal, and this court directly reviews the Department's decision under the Administrative Procedure Act, 5 U.S.C. § 701 ff. See Enterprise Nat'l Bank v. Vilsack, 568 F.3d 229, 233 (D.C.Cir.2009).

II.

Under FOIA, “each agency, upon any request for records which (i) reasonably describes such records and (ii) is made in accordance with published rules ..., shall make the records promptly available to any person.” 5 U.S.C. § 552(a)(3)(A). Certain categories of information are exempt from this general disclosure requirement, but the exemptions are to be “narrowly construed.” Dep't of the Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 48 L.Ed.2d 11 (1976). Appellants contend the Department's decision to release the Block 8 information is arbitrary and capricious in concluding release of the total number of animals bought and sold by appellants, and their gross revenues, would not cause them substantial competitive harm. They rely on Exemption 4, which covers “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4). Likewise, appellants contend that the public interests identified by the Department would not be served by release and, alternatively, the Department failed to give appropriate weight to their private interests in balancing the public and private interests. They rely on Exemption 6, which covers “personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” Id. § 552(b)(6).

In a reverse-FOIA case, the court must uphold the Department's decision to release the Block 8 information in appellants' Form 7003s unless it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); see United Techs. Corp. v. Dep't of Def., 601 F.3d 557, 562 (D.C.Cir.2010). Unlike a typical FOIA case, in which the court would undertake its own analysis of the interests at stake, see, e.g., Multi Ag Media LLC v. Dep't of Agric., 515 F.3d 1224 (D.C.Cir.2008); Consumers' Checkbook Ctr. for the Study of Servs. v. Dep't of Health and Human Servs., 554 F.3d 1046 (D.C.Cir.2009), under this deferential standard of review, the court does not substitute its judgment for that of the Department, but the Department must “examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made,’ ” Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) (internal citation omitted). The court does not defer to “ conclusory or unsupported suppositions.” United Techs., 601 F.3d at 562 (quoting McDonnell Douglas Corp. v. Dep't of the Air Force, 375 F.3d 1182, 1187 (D.C.Cir.2004)).

A.

Exemption 4 protects “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4). The only question here is whether the Block 8 information, which is “commercial or financial information” and not “privileged,” is “confidential.” Here, “confidential” means that “disclosure would be likely either ‘(1) to impair the Government's ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.’ ” Critical Mass Energy Project v. Nuclear Regulatory Comm'n, 975 F.2d 871, 878 (D.C.Cir.1992) (en banc) (quoting Nat'l Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C.Cir.1974)). This requires a showing of both actual competition and a likelihood of substantial competitive injury. CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1152 (D.C.Cir.1987). The court will “generally defer to the agency's predictive judgments as to ‘the repercussions of disclosure.’ ” United Techs., 601 F.3d at 563 (quoting McDonnell Douglas, 375 F.3d at 1191 n. 4).

The Department determined Exemption 4 did not apply because the Block 8 information was unlikely to cause substantial competitive harm to appellants. Decision of Feb. 17, 2012 at 12. It reasoned that competitors would not be able to use gross revenue and inventory data to undercut licensees' pricing because there were too many variables, such as breed, age, quality, and market demands, to make a price per dog calculation feasible. See id. at 9. Further, even if the price could be calculated, the information would be stale. Id. The Department also determined that release would not significantly assist competitors in gauging the scale of a licensee's operation because similar information is already in the public domain. Id. at 11–12.

Appellants contend that the Department's analysis improperly ignored the Humane Society's intended use of this information in “its crusade to destroy [appellants'] businesses,” Appellants' Br. 53. Exemption 4, however, “does not guard against mere embarrassment in the marketplace or reputational injury” of the kind appellants describe. United Techs., 601 F.3d at 564. Additionally, substantial competitive harm must “flow from the affirmative use of proprietary information by competitors.” Id. at 563 (quoting CNA Fin. Corp., 830 F.2d at 1154). In asking the court to hold that the competitor rule should not apply in their case, see Appellants' Br. 57, appellants seem to recognize that the Humane Society is not a competitor of commercial dog breeders and dealers and that this court's precedent is against them. This court is bound by the law of the circuit. See LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C.Cir.1996) (en banc).

Appellants' suggestion that the Department's conclusion on substantial competitive harm impermissibly relied on the...