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Am. Small Bus. League v. DOD, No. 18-01979, 2019 WL 6255353 (N.D. Cal. Nov. 24, 2019) (Alsup, J.)


Am. Small Bus. League v. DOD, No. 18-01979, 2019 WL 6255353 (N.D. Cal. Nov. 24, 2019) (Alsup, J.)

Re:  Request for records concerning DOD's Comprehensive Subcontracting Plan Test Program ("Test Program")

Disposition:  Granting in part and denying in part defendant's and submitter/intervenor's motion for summary judgment

  • Exemption 4 & Reverse FOIA:  Regarding whether the information is customarily and actually treated as private, the court holds that "[a]s an initial matter, only information originating from the companies themselves can be considered information that they customarily and actually treated as private during their ordinary course of business."  "In the instant action, that means that government assessments and evaluations cannot be considered 'confidential' information for purposes of Exemption 4."  "On the other hand, information originating from the companies may qualify as 'confidential' information under Food Marketing."  The court relates that "[t]he 'bulk' of documents defendants seek to withhold are the companies' comprehensive subcontracting plans, program reports, and related correspondence . . . ."  The court also relates that "[b]oth [submitters] swear that they customarily and actually kept all of the aforementioned commercial information within the withheld documents confidential in the ordinary course of business because, for example, competitors would 'obtain substantial insights into the specific [company] business unit with whom they compete on major contract awards' . . . ."  "They used various methods to protect the information, such as (1) requiring employees and business partners to enter into confidentiality agreements; (2) using restrictive markings on documents and communications; (3) using secure, password-protected IT networks for the information at issue; and/or (4) limiting access to the information at issue on a 'need to know' basis . . . ."  "[One company] kept all documents related to the 640 audits on SharePoint, a protected site only accessible to its supplier diversity leadership . . . ."  "Defendants further point to the fact that these various protective measures 'have proven effective in preventing the information . . . from becoming publicly available . . . anywhere outside' of the companies, as they are 'not aware' of the public availability of any of the information at issue . . . ."  "And, plaintiff does not offer evidence, with respect to most of the aforementioned information, to create a genuine issue of fact as to the information's confidentiality."  "The Court is sympathetic to plaintiff's steep uphill battle under the new Exemption 4 standard."  "Under Food Marketing, it appears that defendants need merely invoke the magic words – 'customarily and actually kept confidential' – to prevail."  "And, unless plaintiff can show that the information is in fact publicly available or possibly point to other competitors who release the information, defendants can readily ward off disclosure."  "Nevertheless, [the court is] not writing on a clean slate."  "Food Marketing mandates this result."

    Regarding whether the government provided an assurance of privacy, the court holds that "[a]ssuming without deciding that the 'assurance of privacy' requirement applies here, . . . defendants have sufficiently shown that the government made an implied assurance."  "First, . . . a former [company] employee who was asked beginning in 2007 to review and respond to the DCMA's requests to provide more details in [the company's] small business subcontracting plans, states that she is 'personally aware of the assurances DOD and DCMA gave' to [the company], 'namely, that the agencies would treat [its] proprietary information as confidential' . . . ."  "Second, as defendants point out, the 'pattern and practice of behavior on the part of both [the companies] and the [g]overnment for the duration of the Test Program' further evidence an implied assurance of privacy . . . ."  "Third, . . . a former Associate Director at the DOD Office of Small Business Programs from 2010 to September 2018 who oversaw the Test Program . . . state[d] [that] she gave such assurances 'because without this level of detail, [the DOD] would not have been able to determine whether or not they were successful in reaching their proposed target industry and initiative goals' . . . ."  The court relates that "[p]laintiff essentially wants written proof of assurances of privacy, a not unreasonable proposal given how easily the agency could have supplied a letter of assurance in advance."  "This order, however, does not find that Exemption 4 requires such written documentation or express assurances by the government."  "An implied assurance suffices."  "Such inference of assurance is reasonable where, as discussed above, the context involved [the companies'] voluntary participation in the Test Program and the DOD's increasing requests for more detailed commercial information."  "The government provided secure portals to transmit documents."  "The companies placed restrictive markings on their submissions."  "Over the many years of the companies' participation in the Test Program, there is no evidence that the government ever suggested that it would not treat the companies' information confidentially."  "The DOD understood the companies' confidential treatment of the information at issue."  "It anonymized the relevant information in public settings, such as during congressional hearings."  "These nonexhaustive examples sufficiently show that the companies provided the documents at issue under the implied assurance of privacy by the government."

    The court also addresses that "Plaintiff and amicus point to the 2016 FOIA amendment to effectively reinstate the competitive harm test for Exemption 4."  "Ultimately, under Food Marketing, the plain and ordinary meaning of Exemption 4 indicates that the relevant protected interest is that of the information's confidentiality – that is, its private nature."  "Disclosure would necessarily destroy the private nature of the information, no matter the circumstance."  "This order may not use the FOIA amendment to circumvent the Supreme Court's rejection of National Parks's reliance on the legislative history in determining the scope of the term 'confidential.'"
  • Litigation Considerations, "Reasonably Segregable" Requirements:  The court holds that "Defendants do not . . . offer any evidence in the record, such as a declaration or deposition testimony, to support this conclusory assertion of de minimis, inextricably intertwined non-exempt information for these twelve documents."  "And, the Court's in camera review of the thirty documents selected by plaintiff [and the companies] confirms that such information is not de minimis or inextricably intertwined with exempt material – particularly in light of the ruling above that information originating from the government is not 'confidential' within the meaning of Exemption 4."  "Defendants therefore must release redacted versions of those twelve documents currently withheld in full."
Court Decision Topic(s)
District Court opinions
Exemption 4
Litigation Considerations, “Reasonably Segregable” Requirements
Reverse FOIA
Updated December 9, 2021