Welby, Brady & Greenblatt, LLP v. U.S. Dep't of Health & Human Servs. & Sylvia Matthews Burwell

WELBY, BRADY & GREENBLATT, LLP, Plaintiff, v. THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES and SYLVIA MATTHEWS BURWELL, Secretary, Defendants.

No. 15-cv-195 (NSR)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

April 27, 2016

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

This action arises out of Plaintiff Welby, Brady & Greenblatt, LLP's Freedom of Information Act ("FOIA") request to Defendant the Department of Health and Human Services ("HHS") for certain documents within HHS's possession relating to a money judgment entered against the Equal Opportunity Commission of Nassau County, Inc. ("EOC Nassau"), an entity that receives federal funds. Before this Court is the summary judgment motion of HHS and the Secretary of Health and Human Services (collectively, "Defendants" or the "Government") and Plaintiff's cross-motion for summary judgment. For the reasons that follow, Defendants' motion is GRANTED and Plaintiff's cross-motion is DENIED.

BACKGROUND

I. The Class Action Litigation and HHS Intervention

Plaintiff represents certain creditors (the "Judgment Creditors") in a class action litigation against EOC Nassau and other defendants for violations of the Employee Retirement Income Security Act ("ERISA Violations").¹ (Declaration of Gregory J. Spaun in Opposition to Motionand In Support of Cross Motion ("Spaun Decl."), ECF No. 20, ¶ 1); (Declaration of Nathaniel A. Cohen ("Cohen Decl."), ECF No. 15, ¶ 7.) On April 25, 2012, the Judgment Creditors obtained a judgment against EOC Nassau in the Class Action Litigation (the "Judgment"). (Spaun Decl., ¶ 4, Ex. D.); (Declaration of Michael Marquis ("Marquis Decl."), ECF No. 17, ¶ 16.) On May 21, 2012, the defendants in the Class Action Litigation, including EOC Nassau, filed a notice of appeal to the United States Court of Appeals for the Second Circuit. (Marquis Decl., ¶ 16.) Thereafter, on June 5, 2012, the Judgment Creditors sought to enforce the Judgment and restraining notices were placed on EOC Nassau's bank accounts at City National Bank. (Id.)

Between June 11, 2012 and June 19, 2012, attorneys from HHS's Office of General Counsel ("OGC"), officials from the Administration for Children and Families ("ACF"), HHS's counsel from the United States Department of Justice ("DOJ"), counsel for EOC Nassau, and counsel for the New York State Department of State ("DOS") exchanged emails regarding the possibility of HHS's intervention in the Class Action Litigation to prevent the use of funds from federal grants to satisfy the Judgment.² (Marquis Decl., ¶ 18.) On June 19, 2012, HHS moved to intervene in the Class Action Litigation. (Spaun Decl., ¶ 6, Ex. E.) On June 25, 2012, the district court vacated the restraining notices and stayed enforcement of the Judgment pending resolution of the appeal. (Spaun Decl., ¶ 6.) The Second Circuit affirmed the Judgment on March 13, 2013. (Id., Ex. F.) Between March 14, 2013 and August 29, 2013, OGC attorneys, ACF officials, DOJ counsel, counsel for EOC Nassau, and DOS counsel again communicated viaemail regarding preventing the satisfaction of the Judgment with federal grant funds. (Marquis Decl., ¶ 20.)

II. The FOIA Request

To ascertain which assets of EOC Nassau originated from federal grants and which assets originated from state, local or private funds, counsel for Plaintiff, via a letter from partner Alexander A. Miuccio dated March 21, 2014, requested that EOC Nassau, pursuant to FOIA, make available documents concerning the Judgment and certain meetings between HHS and EOC Nassau regarding the Judgment (the "FOIA Request"). (Spaun Decl., ¶ 8.) In particular, the FOIA Request seeks the following:

• Documents from August 10, 1981 to date that contain information related to federal grants awarded to EOC Nassau in the form of financial assistance used for the purchase and/or of capital improvement of a commercial building located at 134 Jackson Street, Hempstead, New York ("Premises"). The Premises was purchased by EOC Nassau on August 10, 1981. ("FOIA Request 1")

• Documents that contain any information that relate to the conveyance of the above-described Premises on January 4, 1993 from EOC Nassau to CEDC Incorporated, including the terms of the contract of the conveyance, and its ancillary papers. ("FOIA Request 2")

• Documents from April 26, 2012 to date that contains [sic] information that relate to the money judgment entered on April 26, 2012 by plaintiffs, L.I. Head Start Child Development Services, Inc. and Paul Adams, derivatively on behalf of Community Action Agencies Group in a class action against defendants EOC Nassau, Economic Opportunity Council of Suffolk, Inc., Yonkers Community Action Program, Inc. and Stella B. Kearse, as representative of the Estate of John L. Kearse, Deceased in the U.S. District Court for the Eastern District of New York under Case Number 00-CV-7394 (ADS) ("Judgment"). Such documents include, but are not limited to the enforcement of the Judgment against EOC Nassau. ("FOIA Request 3")

• Documents that contain information that relate to Risk Management meetings held at the Region II Office, 26 Federal Plaza, New York, New York between EOC Nassau representatives and Ivan Rodriquez, Head Start Program Manager and/or his representatives during the year 2013 to date including, but not limited to, responses by EOC Nassau to a series of requests by the Department of Health andHuman Services, Region II Office with regard to the enforcement of above-described Judgment and the funding to satisfy the Judgment. ("FOIA Request 4")

(Id. ¶ 9, Ex. G.)

III. Responses to the FOIA Request

On or about September 2, 2014, ACF made an interim release responsive to Plaintiff's FOIA request, which consisted of thirteen documents produced in their entirety from the ACF Office of Head Start. (Declaration of Kimberly N. Epstein ("Epstein Decl."), ECF No. 16, ¶ 13, Ex. 3.) Subsequently, ACF referred the FOIA Request to the HHS Office of the Secretary's ("OS") Freedom of Information Officer to conduct a search for and process HHS OGC records responsive to the FOIA Request. (Marquis Decl., ¶ 7.)

On January 12, 2015, Plaintiff initiated the instant action, contending that HHS was unlawfully withholding documents responsive to the FOIA Request. (Complaint, ECF No. 1, ¶ 14.) Thereafter, on January 16, 2015, ACF made a second interim release of documents responsive to the FOIA Request, which consisted of four documents. (Epstein Decl., ¶13.) ACF withheld portions of the documents in the second interim release under Exemption 4 to the FOIA, 5 U.S.C. § 552(b)(4), which permits withholding of trade secrets and privileged and confidential commercial or financial information. (Id., Ex. 4.) On March 3, 2015, ACF made a third interim release of documents responsive to the FOIA Request—six documents released in full and fifteen documents released with redactions. (Id., Ex. 5.) The fifteen documents not released in full were redacted pursuant to Exemptions 4 and 5 of the FOIA. Exemption 5, 5 U.S.C. § 552(b)(5), permits withholding of inter-agency or intra-agency communications that would normally be privileged in the civil discovery context. (Id.)

On April 1, 2015, counsel for the Government, on behalf of HHS OS, released an additional 141 pages of documents to Plaintiff. (Declaration of Elizabeth Tulis ("Tulis Decl."),ECF No. 18, ¶ 3.) Of those 141 pages, 54 pages were released in full and 87 pages were redacted. (Id.) On May 4, 2015, another 27 pages were produced—13 pages in full and 14 pages redacted. (Id. ¶ 4.) On May 18, 2015, counsel for the Government, on behalf of HHS OS, produced revised versions of the releases initially made on April 1, 2015 and May 4, 2015. (Id. 5.) Additionally, counsel for the Government produced to Plaintiff a draft Vaughn index³ documenting and describing HHS's withholdings. (Id.)

Plaintiff responded to HHS's draft Vaughn index by letter dated June 8, 2015, objecting to certain withholdings made on the basis of FOIA Exemption 5. (Id. ¶ 6, Ex. A.) Plaintiff subsequently confirmed that its objections were limited to certain FOIA Exemption 5 withholdings and that it was not objecting to the adequacy of the Government's search for documents responsive to the FOIA Request. (Id. ¶ 7, Ex. B.)

LEGAL STANDARD

"Summary judgment is 'the preferred procedural vehicle for resolving FOIA disputes.'" Estate of Ghais Abduljaami, 2016 WL 94140, at *3 (quoting Bloomberg L.P. v. Board of Governors of Fed. Reserve Sys., 649 F. Supp. 2d 262, 270 (S.D.N.Y. 2009)). "Summary judgment in the FOIA context, as in any other, is appropriate if the record 'show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.'" Nat'l Day Laborer Org. Network, 811 F. Supp. 2d at 732-33 (quoting Fed. R. Civ. P. 56(c)).

"In order to prevail on a motion for summary judgment in a FOIA case, the defending agency has the burden of showing that its search was adequate and that any withheld documents fall within an exemption to the FOIA." Carney v. U.S. Dep't of Justice, 19 F.3d 807, 812 (2d Cir. 1994) (citing 5 U.S.C. § 552(a)(4)(B); EPA v. Mink, 410 U.S. 73, 79 (1973)).⁴ "Affidavits or declarations . . . giving reasonably detailed explanations why any withheld documents fall within an exemption are sufficient to sustain the agency's burden." Carney, 19 F.3d at 812 (citing Maynard v. CIA, 986 F.2d 547, 560 (1st Cir. 1993); Perry v. Block, 684 F.2d 121, 127 (D.C. Cir. 1982) (per curiam); Malizia v. United States Dep't of Justice, 519 F. Supp. 338, 342 (S.D.N.Y. 1981)). "Affidavits submitted by an agency are accorded a presumption of good faith; accordingly, discovery relating to the agency's search and the exemptions it claims for withholding records generally is unnecessary if the agency's submissions are adequate on their face." Carney, 19 F.3d at 812 (internal quotation and citation omitted). However, "[a]n agency's determination that the...