United States District Court, District of Columbia
July 13, 1999
A. BRUCE ROZET, PLAINTIFF,
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, DEFENDANT.
The opinion of the court was delivered by: Robertson, District Judge.
Plaintiff submitted three document requests to HUD, pursuant to
the Freedom of Information Act, 5 U.S.C. § 552(a). When HUD did
not respond, he filed this action. Now before the Court are
plaintiff's motion to require HUD to process the FOIA requests as
for "non-commercial use" requests and HUD's motion for a partial
summary judgment approving its finding that plaintiff's requests
"commercial use," as defined by 24 C.F.R. § 15.15(a)(2).*fn1 The
resolution of the "commercial use" issue will determine whether
plaintiff will be required to pay for HUD's search for, and its
review and duplication of, documents responsive to his requests.
HUD's motion for partial summary judgment must be denied because
plaintiff has not challenged HUD's finding with an amended
complaint, nor has HUD counterclaimed for a declaratory judgment.
Plaintiff's motion to require "non-commercial" use processing
will be denied, because HUD properly classified plaintiff's
requests as for "commercial use."
Plaintiff A. Bruce Rozet is one of the largest owners of
HUD-assisted housing in the United States. On May 9, 1997, HUD
sued Rozet and his corporations in the United States District
Court for the Northern District of California, alleging civil
fraud. On October 10, 1997, Rozet submitted two FOIA requests to
HUD — one for information about one of his corporations and one
for information about himself. On March 16, 1998, Rozet's
counsel, Jon W. Van Horne, submitted a third FOIA request, this
one for press releases about plaintiff and his corporations. On
June 5, 1998, Rozet filed this lawsuit. On June 25, 1998, the
district court in California granted Rozet's motion for an order
prohibiting all parties to the fraud suit from speaking to the
press about Rozet's "character and credibility," about the
evidence in the case, and about the merits of claims or defenses
in the case. This action was then stayed for several months,
while the parties were negotiating a possible settlement.
On December 9, 1998, plaintiff moved to lift the stay in this
case and for an order requiring HUD to process the documents as
"non-commercial use" requests. On January 12, 1999, HUD moved for
partial summary judgment, asserting that plaintiff's requests are
for a "commercial use," as defined by 24 C.F.R. § 15.15(a)(2). At
the conclusion of a motions hearing on March 15, 1999, I granted
Rozet's motion to lift the stay and took the summary judgment
motion under advisement, inviting supplemental briefing on the
issue of the appropriate standard of review for a fee status
An important question presented by this motion — what is the
appropriate standard of review for an agency determination of fee
status under FOIA — has not been decided in this Circuit. Denials
of requests for fee waivers must be reviewed de novo, see
5 U.S.C. § 552(a)(4)(A)(vii) ("[i]n any action by a requester
regarding the waiver of fees under this section, the court shall
determine the matter de novo provided that the court's review of
the matter shall be limited to the record before the
agency").*fn2 HUD asserts that challenges to fee status
determinations must be reviewed using the Administrative
Procedure Act's familiar "arbitrary, capricious, not in
accordance with law" standard, 5 U.S.C. § 701-706. But, like the
Court of Appeals in National Security Archive v. U.S. Department
of Defense, 880 F.2d 1381, 1383 (D.C.Cir. 1989), I "need not
resolve this dispute . . . [because] [e]ven viewing the matter
de novo," I find that
plaintiff's use is properly classified as for "commercial use."
The APA requires each agency to "promulgate regulations,
pursuant to notice and receipt of public comment, specifying the
schedule of fees applicable to the processing of [information]
requests." 5 U.S.C. § 552(a)(4)(A)(i). "[A]gency regulations
shall provide that fees shall be limited to reasonable standard
charges for document search, duplication, and review, when
records are requested for commercial use."
5 U.S.C. § 552(a)(4)(A)(ii)(I) (emphasis added). When records "are not
sought for commercial use and the request is made by an
educational or noncommercial scientific institution . . . or a
representative of the news media," the requester must pay only
for document duplication. 5 U.S.C. § 552(a)(4)(A)(ii)(II). A
requester not described by the above two categories must pay for
document search and duplication.
5 U.S.C. § 552(a)(4)(A)(ii)(III).
HUD has defined "commercial use" in 24 C.F.R. § 15.15(2):
"Commercial use refers to a request from or on behalf
of one who seeks information for a use or purpose
that furthers the commercial, trade, or profit
interests of the requester or the person on whose
behalf the request is made. In determining whether a
requester properly belongs in the category, HUD must
determine the use to which a requester will put the
documents requested. Moreover, where HUD has
reasonable cause to doubt the use to which a
requester will put the records sought, or where that
use is not clear from the request itself, HUD will
seek additional clarification before assigning the
request to a specific category."
The public interest is the statutory touchstone for no-fee or
reduced fee production under FOIA. "Documents shall be furnished
without any charge or at a [reduced] charge if disclosure of the
information is in the public interest because it is likely to
contribute significantly to public interest in the operations or
activities of the government and is not primarily in the
commercial interest of the requester."
5 U.S.C. § 552(a)(4)(A)(iii).
Mr. Rozet filed his initial FOIA requests five months after HUD
had brought its lawsuit against him and his corporations. The
nexus with the lawsuit established by the timing of the FOIA
requests and their content demonstrates conclusively that the
FOIA requests advance Mr. Rozet's commercial interest, rather
than the public interest. Plaintiff's assertion that he will not
put the information to a commercial use cannot be credited. See
S.A. Ludsin & Co. v. Small Business Admin., 1998 WL 355394
(E.D.N.Y. April 2, 1998) (party seeking a contract from SBA would
not be heard to deny its commercial interest in FOIA request for
The cases cited by plaintiff are all distinguishable. In
Larson v. CIA, 843 F.2d 1481 (D.C.Cir. 1988), the court held
that information sought about a KGB agent was in the public
interest, but there was no evidence that the information there
was of any commercial benefit to plaintiff. Nor is this case like
Muffoletto v. Sessions, 760 F. Supp. 268 (E.D.N.Y. 1991), or
McClain v. U.S. Department of Justice, 1992 WL 358898 (N.D.Ill.
Nov.27, 1992), where defendants sought documents to defend
themselves solely in an individual capacity — for failure to pay
a debt and to gain credibility with a sentencing court,
respectively. Rozet's interest is not merely private because he
and his corporations are being sued. Unlike in Seegull
Manufacturing v. NLRB, 741 F.2d 882 (6th Cir. 1984), plaintiff
has not demonstrated that the material he requested is otherwise
An appropriate order accompanies this memorandum.
Upon a review of the record, it is this 13th day of July 1999
ORDERED that defendant's motion for a partial summary
judgment [# 21] is denied. It is
FURTHER ORDERED that plaintiff's motion to require
"non-commercial use" processing [# 18] is denied. And it is
FURTHER ORDERED that plaintiff's motion to hold defendant in
contempt for failing to comply with the Court's March 15 order [#
34] is denied.