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Gilda Industries, Inc. v. United States Customs and Border Protection Bureau

October 19, 2006


The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge


This case presents an interesting question under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552: can the U.S. Customs & Border Protection Bureau ("CBP") refuse to release the names and addresses of certain importers when that information, combined with other publicly available data, might be used to cause the importers substantial commercial harm? Concluding that CBP has properly relied on Exemption 4 of the FOIA, 5 U.S.C. § 552(b)(4), the Court answers the question in the affirmative and will grant summary judgment to the United States.


The material facts are not in dispute. Plaintiff Gilda Industries, Inc. is an importer of toasted breads from Spain. Compl. ¶ 3. Gilda's imports are subject to 100% duty pursuant to their classification under the Harmonized Tariff Schedule of the United States ("HTSUS") subheading 9903.02,*fn1 executed by CBP. Id.; see also Declaration of Shari Suziki ("Suziki Decl.") ¶ 15. The 100% duty to which Gilda's imports are subject has its origins in a trade dispute between the European Community and the United States. The dispute arose after the European Community decided to ban imports of U.S. beef products that have been treated with hormones. In accordance with a World Trade Organization Appellate Body Decision in the dispute, HTSUS subheading 9903.02 was enacted to impose duties on certain European products in retaliation for the ban on American beef. Suziki Decl. ¶ 15. The products that fall within HTSUS subheading 9903.02 include "'[r]usks, toasted bread and similar toasted products (provided for in subheading 1905.40)' classifiable under subheading 9903.02.35, HTSUS." Id.

On January 5, 2004, Gilda submitted a FOIA request to CBP for "[t]he names and addresses of all importers for the quarter ending September 30, 2003 that paid 100% duties pursuant to HTSUS subheading 9903.02." Suziki Decl. Ex. A. The information that Gilda requested is submitted on Import Declarations that importers of merchandise into the United States are required to file with CPB. Suziki Decl. ¶¶ 11-12. CPB maintains the information in a database called the Automated Commercial System ("ACS"). Id. ¶ 9. ACS is "the comprehensive compilation of several CBP electronic database systems which accommodates the numerous transactions involved in CBP business" and contains "all of the commercial entry information submitted to CBP at over 300 ports nationwide." Id. Pursuant to Gilda's FOIA request, CPB searched the ACS by using the HTSUS subheading 9903.02 and the date range of July through September 2003. Id. This search revealed identifying information for 212 importers. Id.

In a remarkably rapid turn-around, CBP notified Gilda, by letter dated January 13, 2004, that it had located records on 212 importers but that it was withholding the identifying information on the grounds that its association with the cited HTSUS subheading would reveal confidential commercial information that is exempt from disclosure under FOIA Exemption 4.*fn2 Suzuki Decl. Ex. B. Gilda promptly appealed the decision to withhold the information, id. Ex. C, which was affirmed by the Chief of CBP's Disclosure Law Branch on September 10, 2004. Id. Ex. E.

Gilda sued on September 24, 2004. The case sat quiescent until the Court, sua sponte, issued an order on April 12, 2006, ordering the parties to file dispositive motions or a joint status report by May 11, 2006. Thus reminded of the pending case, the parties filed cross motions for summary judgment which have now been fully briefed.


FOIA requires agencies of the federal government to release records to the public upon request, unless one of nine statutory exemptions applies. See NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 136 (1975). "[D]isclosure, not secrecy, is the dominant purpose of the Act." Dep't of the Air Force v. Rose, 425 U.S. 352, 361 (1976); DOI v. Klamath Water Users Protective Ass'n, 532 U.S. 1, 8 (2001). Because this case arises under FOIA, the Court has subject matter jurisdiction. See 5 U.S.C. § 552(a)(4)(B); see also Sweetland v. Walters, 60 F.3d 852, 855 (D.C. Cir. 1995). And because its request for information under FOIA was denied, Gilda has standing to sue. See Zivotofsky v. Sec'y of State, 444 F.3d 614, 617 (D.C. Cir. 2006) ("Anyone whose request for specific information [under FOIA] has been denied has standing to bring an action").

A. FOIA Exemption 4

FOIA Exemption 4 protects from public disclosure information that is "(1) commercial or financial, (2) obtained from a person, and (3) privileged or confidential." Pub. Citizen Health Research Group v. FDA, 704 F.2d 1280, 1290 (D.C. Cir. 1983); see also 5 U.S.C. § 552(b)(4). Records are deemed to be "commercial" as long as the submitter has a "commercial interest" in them. See FDA, 704 F.2d at 1290. And records are considered to be "obtained from a person" as long as they were submitted by a "partnership, corporation, association, or public or private organization other than an agency." 5 U.S.C. § 551(2).

Whether information qualifies as "confidential" under Exemption 4 is a more complex question. The first step in the analysis focuses on whether the information was submitted involuntarily; that is, whether the submitter was required to provide the information to the Government. See Pub. Citizen Health Research Group v. FDA, 185 F.3d 898, 903 (D.C. Cir. 1999). If so, the information is deemed confidential if its disclosure is "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.'" Id. (quoting Nat'l Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974)). The second element of this test "has been interpreted to require both a showing of actual competition and a likelihood of substantial competitive injury." CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1152 (D.C. Cir. 1987). A "competitive injury" is one "flowing from the affirmative use of proprietary information by competitors." FDA, 704 F.2d at 1291 n. 30. In assessing whether the second element is met, "the Court need only 'exercise its judgment in view of the nature of the material sought and competitive circumstances in which the submitter does business,' but 'no actual adverse effect on competition need be shown.'" Changzhou Laosan Group v. U. S. Customs & Border Prot. Bureau, No. 04-1919, 2005 WL 913268, at *5 (D.D.C. Apr. 20, 2005) (quoting Nat'l Parks & Conservation Ass'n v. Kleppe, 547 F.2d 673, 675 (D.C. Cir. 1976)).

B. Summary Judgment

Summary judgment is the routine method for resolving most FOIA actions when there are no material facts genuinely at issue. See Alyeska Pipeline Serv. Co. v. EPA, 856 F.2d 309, 313-14 (D.C. Cir. 1988); Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981). "In a suit brought to compel production [of records], an agency is entitled to summary judgment if no material facts are in dispute and if it demonstrates 'that each document that falls within the class requested either has been produced . . . or is wholly exempt from [FOIA's] inspection requirements.'" Students Against Genocide v. Dep't of State, 257 F.3d 828, 833 (D.C. Cir. 2001) (quoting Goland v. CIA, 607 F.2d 339, 352 (D.C. Cir. ...

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