United States District Court, District of Columbia
CHRISTOPHER R. COOPER, UNITED STATES DISTRICT JUDGE.
LLP, a New York law firm specializing in consumer class
actions, seeks records from the Consumer Financial Protection
Bureau (“CFPB” or “Bureau”) related
to the Bureau's enforcement action against a debt
collector. The firm made two requests under the Freedom of
Information Act (“FOIA”), which the Bureau denied
based on several of FOIA's nine exemptions. Frank
challenges those denials and, in addition, seeks to
invalidate two of the Bureau's policies with respect to
withholding documents under FOIA Exemptions 4 and 8. In its
motion seeking dismissal or summary judgment, the Bureau
defends its decision to withhold documents, it contends that
Frank lacks standing to challenge its FOIA policies, and it
claims that, in any event, the challenged policies are valid
on the merits.
respect to all except one of Frank's claims, the Court
will grant summary judgment in the Bureau's favor and
deny Frank's cross-motion. The Court agrees that the
Bureau properly withheld the documents Frank sought in its
first request under FOIA Exemptions 5 and 7(E). As for the
second FOIA request, Frank has not properly exhausted its
administrative remedies because the request was remanded to
the Bureau's FOIA Office after an administrative appeal
and Frank has yet to pay the Bureau's processing fees.
The Court finds that Frank has standing to challenge the
Bureau's FOIA policies with respect to Exemptions 4 and
8. And it finds that, while the challenged Exemption 8 policy
is valid, Frank is entitled to summary judgment on its
Exemption 4 policy claim.
First FOIA Request
CFPB filed a consent order in September 2015 concluding that
Encore Capital Group-one of the nation's largest
purchasers and collectors of consumer debt-filed misleading
affidavits in hundreds of thousands of debt-collection
lawsuits claiming ownership of certain debts, despite having
not substantiated those claims. See Consent Order
¶¶ 78-79, In re Encore Capital Group,
Inc., No. 2015-CFPB-0022 (Sept. 9, 2015),
https://perma.cc/VB3F-58NQ. The order also cited
“approximately 35, 600 identified Consumers” who
paid on debts after Encore filed such an affidavit.
Id. ¶ 145.
after the Bureau publicized the consent order, Frank filed
its first FOIA request, seeking documents “that the
Bureau relied on in identifying these approximately 35, 600
lawsuits.” Decl. Raynell Lazier Supp. Def.'s Mot.
Summ. J. (“Lazier Decl.”) Ex. A, at 1 (ECF No.
19). In reply, the Bureau's FOIA Office informed Frank
that it had located responsive documents but was withholding
them under Exemption 4 of FOIA, which protects confidential
commercial information. Id. Ex. B, at 1;
see 5 U.S.C. § 552(b)(4). Frank appealed to the
Bureau. Lazier Decl. Ex. C. The Bureau denied the appeal, but
relied on a different FOIA exemption than the FOIA Office. It
concluded that the documents were properly withheld under
Exemption 7(E), which covers certain “records or
information compiled for law enforcement purposes.” 5
U.S.C. § 552(b)(7)(E); see Lazier Decl. Ex. D.
Frank filed suit in April 2016 challenging the Bureau's
Second FOIA Request
the parties sought to resolve Frank's first suit through
mediation, the firm filed a second FOIA request with the
Bureau in July 2016. Suppl. Compl. ¶¶ 34-35 (ECF
No. 13 Ex. 1). This second request sought (1) records
supporting the Bureau's findings in its consent order
regarding Encore's litigation practices and (2) records
related to the compliance requirements imposed on Encore by
the consent order. See Lazier Decl. Ex. E. The
Bureau's FOIA Office denied Frank's second request,
invoking Exemptions 4 and 7(E), as well as Exemption 8, which
protects information “contained in or related to
examination, operating, or condition reports prepared by, on
behalf of, or for the use of an agency responsible for the
regulation or supervision of financial institutions.” 5
U.S.C. § 552(b)(8); see Lazier Decl. Ex. F.
then filed an administrative appeal, which the Bureau
granted. Lazier Decl. Exs. G, H. In remanding Frank's
request to the FOIA Office, the Bureau explained that it was
unclear from the denial determination whether the FOIA Office
had properly assessed the responsive records to determine if
any “non-exempt” and “reasonably segregable
portion” of those records could be produced, 5 U.S.C.
§ 552(b); see Lazier Decl. Ex. H, at 3.
“To guide the FOIA Office's analysis on remand,
” the appellate decision also analyzed the
applicability of Exemptions 4, 7(E), and 8 to the information
Frank requested, and suggested that at least some of the
information sought was properly withheld under those
exemptions. Lazier Decl. Ex. H, at 3-5.
then filed a supplemental complaint challenging both the
Bureau's denial of his second FOIA request and its
administrative policies with respect to Exemptions 4 and 8.
Specifically, Frank alleged that the Bureau improperly treats
records produced by third parties in response to the
Bureau's civil investigative demands as
“voluntarily submitted” for purposes of Exemption
4, a treatment that would allow the Bureau to withhold those
records more liberally.
claims that the Bureau unlawfully treats debt buyers with at
least $10 million in annual receipts (such as Encore) as
“financial institutions” whose examination
reports and related documents are thereby shielded from
disclosure under Exemption 8. According to Frank, both of
these policies conflict with FOIA and violate the
Administrative Procedures Act (“APA”). Suppl.
Compl. ¶¶ 55-76.
Bureau has moved for summary judgment on Frank's claims,
raised in both its original and supplemental complaints, that
the Bureau improperly withheld records sought in the FOIA
requests. The Bureau also has moved to dismiss Frank's
claims, raised in its supplemental complaint, that the
Bureau's FOIA policies are unlawful, contending that the
firm lacks Article III standing to challenge them and that,
in any event, the policies are lawful on the merits. In the
alternative, the Bureau seeks summary judgment on the
policy-based claims. Frank has filed a cross-motion for
Standard of Review
requires federal executive agencies to produce their records
upon request unless one of the Act's nine exemptions
applies. See 5 U.S.C. § 552(b). The exemptions
aim “to balance the public's interest in
governmental transparency against the ‘legitimate
governmental and private interests [that] could be harmed by
release of certain types of information.'”
United Techs. Corp. v. DOD, 601 F.3d 557 (D.C. Cir.
2012) (quoting Critical Mass. Energy Project v. Nuclear
Regulatory Comm'n, 975 F.2d 871, 872 (D.C. Cir.
1992)). “But these limited exemptions do not obscure
the basic policy that disclosure, not secrecy, is the
dominant objective of the Act.” Dep't of Air
Force v. Rose, 425 U.S. 352, 361 (1976). Thus, where a
plaintiff challenges an agency's withholding of records,
the agency bears the burden of showing that one of FOIA's
exemptions applies. Am. Civil Liberties Union v.
DOD, 628 F.3d 612, 619 (D.C. Cir. 2011).
disputes are generally resolved on cross-motions for summary
judgment. In evaluating each motion, the Court must view the
record in the light most favorable to the non-movant. The
agency may satisfy its burden of showing that a FOIA
exemption applies through an affidavit that “describes
the justifications for withholding the information with
specific detail, demonstrates that the information withheld
logically falls within the claimed exemption, and is not
contradicted by contrary evidence in the record or by
evidence of the agency's bad faith.” Am. Civil
Liberties Union, 628 F.3d at 619.
addition to seeking summary judgment, the Bureau moves to
dismiss the challenges to its FOIA policies raised in
Frank's supplemental complaint. A plaintiff may challenge
an agency policy or practice as violating FOIA. See Payne
Enters., Inc. v. United States, 837 F.2d 486, 494-95
(D.C. Cir. 1988). Dismissal of such a challenge is proper if
the plaintiff lacks standing, Fed.R.Civ.P. 12(b)(1), or if
the allegations, accepted as true, do not show that the
agency policy or practice violates FOIA, Fed.R.Civ.P.
12(b)(6). But where an agency's policy or practice
conflicts with FOIA's dictates, the statute gives the
Court equitable power to enjoin enforcement of that policy or
practice. See Citizens for Responsibility & Ethics in
Wash. (“CREW”) v. DOJ, 846 F.3d 1235, 1242
(D.C. Cir. 2017) (“This circuit's case law reflects
the wide latitude courts possess to fashion remedies under
FOIA, including the power to issue prospective injunctive
relief.”); Payne Enters., 837 F.2d at 494-95.
First FOIA Request
Bureau contends that the documents responsive to Frank's
first request-those used to identify the 35, 600 lawsuits
referenced in the Consent Order in which Encore filed
improper affidavits-fall within FOIA Exemption 7(E). That
exemption covers “records or information compiled for
law enforcement purposes” that “would disclose
techniques and procedures for law enforcement investigations
or prosecutions, or would disclose guidelines for law
enforcement investigations or prosecutions if such disclosure
could reasonably be expected to risk circumvention of the
law.” 5 U.S.C. § 552(7).
reviewing the Bureau's description of the responsive
documents, the Court agrees that they were properly withheld
under Exemption 7(E). First, the documents were
“compiled for law enforcement purposes.” To
satisfy this aspect of Exemption 7(E), the agency need only
show “a rational nexus between the investigation and
one of the agency's law enforcement duties, and a
connection between an individual or incident and a possible
security risk or violation of federal law.”
Campbell v. DOJ, 164 F.3d 20, 32 (D.C. Cir. 1998)
(quotation omitted)); see also Tax Analysts v. IRS,
294 F.3d 71, 77 (D.C. Cir. 2002) (“Exemption 7 includes
both civil and criminal matters within its ...