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

575 F.Supp.3d 114

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, District of Columbia.

Signed December 13, 2021

Charles D. Tobin, Ballard Spahr LLP, Washington, DC, for Plaintiffs.

Indraneel Sur, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

JAMES E. BOASBERG, United States District Judge

Now before this Court for a fifth time, this Freedom of Information Act case asks whether the Small Business Administration has properly withheld certain information related to recipients of loans under its Paycheck Protection Program (PPP). Two types of records remain at issue: 1) information reflecting the payment status of individual loans and 2) borrower tax-identification numbers. Last time around, the Court found that SBA had not sufficiently supported its withholdings of these data, but it gave the agency another chance to bolster its positions. Believing SBA's efforts on remand sufficient, the Court now finds in its favor, concluding that the agency has properly reserved this under FOIA Exemptions 4 and 6. It will thus grant summary judgment to Defendant.

I. Background

As the Court has confronted this case many times before, it summarizes only briefly the history of the litigation. Interested readers may refer to the Court's prior Opinions for a fuller recounting. See, e.g., WP Co. LLC v. U.S. Small Business Administration (WP I ), 502 F. Supp. 3d 1, 7–10 (D.D.C. 2020) ; WP Co. LLC v. U.S. Small Business Administration (WP IV ), No. 20-1240, 2021 WL 2982173, at *1–2 (D.D.C. July 15, 2021).

In April and May 2020, Plaintiffs, eleven national-news organizations, submitted FOIA requests to SBA seeking information about loan recipients under SBA's PPP and Economic Injury Disaster Loans (EIDL) program. WP IV, 2021 WL 2982173, at *1. After Plaintiffs brought suit to enforce their requests, the agency published "some loan-level information," but refused to provide "both dollar figures and borrower names and addresses for any PPP loan." Id. This Court agreed with the news organizations that neither FOIA Exemption 4 nor Exemption 6 covered the requested information and ordered the agency to release "names, addresses, and precise loan amounts," which SBA did shortly thereafter. Id. at *2.

On December 23, 2020, after this Court had awarded Plaintiffs attorney fees and closed the matter, SBA notified the news organizations that it had identified additional PPP loan-level information responsive to the FOIA requests. Id. The agency once again withheld certain information under Exemptions 4 and 6 — namely, 1) " ‘[i]nformation that would reveal whether a PPP loan is in default,’ including ‘the status 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’ "; 2) "Data Universal Numbering System (DUNS) numbers provided by the private company Dun & Bradstreet to SBA for individual PPP borrowers"; and 3) "individual borrowers’ tax-identification numbers — viz. , Social Security Numbers and Employer Identification Numbers." Id. (citing ECF No. 36-1 (1/25/21 Ltr. from SBA to Plaintiffs) at 2). This Court, considering Cross-Motions for Summary Judgment, granted SBA's Motion as to the DUNS numbers but denied the Motion as to the other sets of data, instead allowing SBA the opportunity to provide more information about its withholding of these records. Id. at *7, 9, 11.

As to the first category, the primary component of which the Court will refer to as "interim loan-status information," the Court required evidence that would shed light on whether "PPP lenders customarily and actually" refrain from disclosing this information, such as "statements from PPP lenders themselves." Id. at *5–7 (emphasis omitted). With regard to the tax-identification numbers, the Court instructed SBA to "explain[ ] why it cannot reasonably segregate EINs from SSNs," including by assessing Plaintiffs’ suggestion to seek assistance from the Social Security Administration and Internal Revenue Service. Id. at *11 (emphasis deleted).

Having accomplished its tasks, SBA now returns with additional material in hand, along with a new Motion for Summary Judgment. See ECF No. 51 (Def. Second Supplemental MSJ).

II. Legal Standard

Summary judgment must 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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006). A fact is "material" if it is capable of affecting the substantive outcome of the litigation. See Liberty Lobby, 477 U.S. at 248, 106 S.Ct. 2505 ; 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 Liberty Lobby, 477 U.S. at 248, 106 S.Ct. 2505 ; 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. Office 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. Department 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 Services., 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. Department of Justice v. Reporters Committee for Freedom of the Press, 489 U.S. 749, 755, 109 S.Ct. 1468, 103 L.Ed.2d 774 (1989) (quoting 5 U.S.C. § 552(a)(4)(B) ).

III. Analysis

FOIA 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 information that falls into one of nine statutorily created exemptions from FOIA's broad directive. See id. § 552(b)(1)–(9). When it withholds records, the Government bears the burden of providing a "relatively detailed justification" for its withholding, "specifically identifying the reasons why a particular exemption is relevant." Morley v. CIA, 508 F.3d 1108, 1122 (D.C. Cir. 2007) (quoting King v. U.S. Department of Justice, 830 F.2d 210, 219 (D.C. Cir. 1987) ). Courts can compel the release of any records that do not satisfy the requirements of at least one exemption. See Reporters Committee, 489 U.S. at 755, 109 S.Ct. 1468.

Here, SBA once again seeks to withhold two categories of information: 1) the interim payment status of individual PPP loans (along with additional data that would reveal that status) under Exemption 4 and 2) tax identification numbers under Exemption 6. The Court considers each in turn.

A. Exemption 4

Exemption 4 shields from disclosure "commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4). To demonstrate that this exemption shelters the information withheld, SBA must show that it is "(1) commercial or financial, (2) obtained from a person, and (3) privileged or confidential." Public Citizen Health Research Group v. FDA, 704 F.2d 1280, 1290 (D.C. Cir. 1983). In the previous round of briefing, only the third element was in dispute. The Court concluded that SBA had not canvassed the actual lenders, and so it instructed the agency to come back with data that would allow the Court to assess "whether PPP lenders customarily and actually treat interim loan status as confidential." WP IV, 2021 WL 2982173, at *6.

Plaintiffs wisely concede that SBA has done just that and that its submissions are now sufficient; indeed, SBA's research went above and beyond what is required. See ECF No. 53 (Pl. Opp.) at 6. Since it was last before this Court, SBA has "contact[ed] the top 300 PPP lenders, seeking their position on whether PPP loan status information is customarily and actually kept confidential" and "found no lender or trade association for lenders that stated a PPP lender discloses interim financial status of their SBA loans to the public." Def. 2d Suppl. MSJ at 7–8 (citing ECF No. 51-1 (3d Declaration of Eric Benderson), ¶¶ 6–7). The agency also filed a declaration from 24 lenders stating that "they customarily and actually treat interim PPP loan status as confidential." Id. (citing 3d Benderson Decl., ¶¶ 8–11). This evidence, especially when considered alongside SBA's earlier submissions, is more than sufficient to allow the Court to conclude that "PPP lenders customarily and actually treat interim loan status as confidential." WP IV, 2021 WL 2982173, at *6. The additional data fields and internal coding that would necessarily reveal that confidential status also fall within the scope of...