WP Co. v. U.S. Small Bus. Admin.

WP COMPANY LLC d/b/a THE WASHINGTON POST, et al., Plaintiffs, v. U.S. SMALL BUSINESS ADMINISTRATION, Defendant.

Civil Action No. 20-1240 (JEB)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

July 15, 2021

MEMORANDUM OPINION

Six months ago, this Freedom of Information Act case — brought by a host of national news organizations against the Small Business Administration — seemed a thing of the past. This Court, after all, had granted judgment to Plaintiffs and ordered SBA to release a trove of data concerning the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL) program — specifically, the names, addresses, and precise loan amounts for millions of successful borrowers. The agency eventually did so, the Court awarded Plaintiffs attorney fees, and the matter was put to bed.

Or not. Less than two months after this Court's summary-judgment ruling, SBA discovered that it possessed additional data responsive to the news organizations' FOIA requests not addressed in the prior round of litigation. Although the agency eventually released much of that information, it once again determined that select portions were exempt from disclosure — this time, information reflecting the current payment status of individual loans, unique numerical identifiers for each PPP borrower known as DUNS numbers, and borrower tax-identification numbers. Dissatisfied with those withholdings, Plaintiffs registered an intent to challenge their propriety, and the parties submitted supplemental Cross-Motions for Summary Judgment. The Court now delivers a mixed verdict: while SBA properly reserved the DUNS numbers, a remand is warranted for the agency to more fully support its withholdings with respect to interim loan-status information and borrower tax-identification numbers.

I. Background

The Court need only briefly summarize the history of this litigation in order to set the stage for the present round of motions. Throughout April and May 2020, the eleven Plaintiffs in this case submitted FOIA requests seeking data regarding loans approved pursuant to the PPP and EIDL program. WP Co. LLC v. U.S. Small Bus. Admin. (WP I), 502 F. Supp. 3d 1, 9 (D.D.C. 2020). Administered by SBA, those programs constituted the primary means by which the federal government assisted small businesses adversely affected by the COVID-19 crisis. As of May 31, 2021, the agency had processed and approved nearly $800 billion in more than 11.8 million individual PPP loans, along with an additional $217 billion in COVID-related EIDL loans as of July 8, 2021. See SBA, Paycheck Protection Program (PPP) Report at 2, https://bit.ly/3wB3e04 (5/31/21 PPP Report); SBA, Disaster Assistance Update: Nationwide COVID EIDL, Targeted EIDL Advances, Supplemental Targeted Advances at 2, https://bit.ly/3APeUQp (7/8/21 EIDL Report).

Plaintiffs brought suit in this Court after SBA declined to fulfill their FOIA requests. WP I, 502 F. Supp. 3d at 9. Although the agency eventually published some loan-level information in July 2020, it refused to release both dollar figures and borrower names and addresses for any PPP loan. Id. at 9-10 (describing similar partial-disclosure approach for EIDL data). According to the Government, its withholdings were based on FOIA Exemptions 4 and 6, which protect, respectively, confidential commercial information and information the disclosure of whichwould constitute a clearly unwarranted invasion of personal privacy. Id. (citing 5 U.S.C. § 552(b)(4), (6)).

Believing those withholdings lacked merit, the news organizations moved for summary judgment, and this Court ultimately agreed that neither of SBA's claimed exemptions covered the requested information. Id. at 10, 16, 27. It accordingly ordered the agency to release the "names, addresses, and precise loan amounts" for all individuals and entities that had received PPP or EIDL loans during the COVID-19 pandemic. See ECF No. 22 (11/5/20 Order) at 2. On December 1, 2020 — shortly after the Court denied the Government's bid to stay that Order, see WP Co. LLC v. U.S. Small Bus. Admin. (WP II), 2020 WL 6887623, at *5 (D.D.C. Nov. 24, 2020) — SBA did just that, publicly producing the full dataset containing the names, addresses, and precise loan amounts for millions of recipients of PPP and EIDL COVID-related loans totaling hundreds of billions of dollars. WP Co. LLC v. U.S. Small Bus. Admin. (WP III), 2021 WL 214375, at *1 (D.D.C. Jan. 21, 2021). The Court subsequently awarded Plaintiffs $122,347 in attorney fees and costs early this year. Id. at *9.

As it turned out, however, that disposition — and the three Memorandum Opinions it entailed — did not mark the terminus of this litigation. Instead, on December 23, 2020, SBA notified Plaintiffs that it had located in its electronic systems additional PPP loan-level information responsive to their FOIA requests. See ECF No. 36 (Mot. for Briefing Sched.) at 2. Although the agency soon released the majority of the newly uncovered data fields, see ECF No. 37-1 (Declaration of Eric S. Benderson), ¶ 12 (cataloging released data), it informed the news organizations that it was — once again — withholding certain information pursuant to FOIA Exemptions 4 and 6. See Mot. for Briefing Sched. at 2. Invoking the former exemption, SBA reserved 1) "[i]nformation that would reveal whether a PPP loan is in default," including "thestatus of certain loans, the date associated with that loan status, the outstanding balance of all PPP loans, and internal codes that identify the SBA offices servicing and processing the PPP loans"; and 2) Data Universal Numbering System (DUNS) numbers provided by the private company Dun & Bradstreet to SBA for individual PPP borrowers. See ECF No. 36-1 (1/25/21 Ltr. from SBA to Plaintiffs) at ECF p. 2. Although SBA also later invoked Exemption 8 in support of its withholding that first batch of information, see ECF No. 37 (Def. Suppl. MSJ) at 21-25, as the Court subsequently explains, that exemption is no longer relevant.

As to Exemption 6, the agency withheld individual borrowers' tax-identification numbers — viz., Social Security Numbers and Employer Identification Numbers. See 1/25/21 Ltr. from SBA to Plaintiffs at ECF p. 2. Although SBA admitted that EINs are not themselves exempt from disclosure, it nonetheless reserved those numbers because they "are stored in the same data field as [SSNs]" — which are protected under Exemption 6 — "and cannot be reliably segregated from them in a dataset this large." Id.

Plaintiffs objected to these additional withholdings and successfully sought entry of a renewed briefing schedule to resolve their propriety. See Mot. for Briefing Sched. at 3; Min. Order of 2/11/2021. Having now received dueling supplemental Cross-Motions for Summary Judgment, see Def. Suppl. MSJ; ECF No. 42 (Pl. Suppl. Cross-Mot. & Opp.), the Court turns to resolving them.

II. Legal Standard

Summary judgment may be granted if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, 477 U.S. 242, 247-48 (1986); Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). A fact is "material" if it is capable of affecting thesubstantive outcome of the litigation. See Liberty Lobby, 477 U.S. at 248; Holcomb, 433 F.3d at 895. A dispute is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Scott v. Harris, 550 U.S. 372, 380 (2007); Holcomb, 433 F.3d at 895. "A party asserting that a fact cannot be or is genuinely disputed must support the assertion" by "citing to particular parts of materials in the record" or "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1).

FOIA cases typically and appropriately are decided on motions for summary judgment. See Brayton v. Off. of the U.S. Trade Representative, 641 F.3d 521, 527 (D.C. Cir. 2011). In a FOIA case, a court may grant summary judgment based solely on information provided in an agency's affidavits or declarations when they "describe the justifications for nondisclosure with reasonably specific detail, demonstrate that the information withheld logically falls within the claimed exemption, and are not controverted by either contrary evidence in the record nor by evidence of agency bad faith." Larson v. Dep't of State, 565 F.3d 857, 862 (D.C. Cir. 2009) (citation omitted). Such affidavits or declarations "are accorded a presumption of good faith." SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991). "Unlike the review of other agency action that must be upheld if supported by substantial evidence and not arbitrary or capricious," FOIA "expressly places the burden 'on the agency to sustain its action' and directs the district courts to 'determine the matter de novo.'" U.S. Dep't of Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 749, 755 (1989) (quoting 5 U.S.C. § 552(a)(4)(B)).

III. Analysis

Congress enacted FOIA "to pierce the veil of administrative secrecy and to open agency action to the light of public scrutiny." Dep't of Air Force v. Rose, 425 U.S. 352, 361 (1976)(citation omitted). "The basic purpose of FOIA is to ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed." John Doe Agency v. John Doe Corp., 493 U.S. 146, 152 (1989) (citation omitted).

In order to further that purpose, the statute provides that "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). The Government need not, however, turn over requested...