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Am. Small Bus. League v. SBA, No. 21-02877, 2022 WL 2047557 (N.D. Cal. June 7, 2022) (Ryu, Mag.)

Date

Am. Small Bus. League v. SBA, No. 21-02877, 2022 WL 2047557 (N.D. Cal. June 7, 2022) (Ryu, Mag.)

Re:  Three requests for records concerning certain SBA employees, certain SBA communications, SBA’s Regional Regulatory Fairness Board, and correspondence related to particular members of SBA’s advisory boards

Disposition:  Granting in part and denying in part defendant’s motion for summary judgment; granting in part and denying in part plaintiff’s motion for summary judgment

  • Fees and Fee Waivers, Fee Waivers:  The court holds that “[plaintiff] does not qualify for a public interest fee waiver for the FOIA requests at issue in this case.”  “However, [plaintiff] qualifies for a fee reduction limited to the cost of duplication of documents responsive to each of these requests.”  The court relates that “[plaintiff] seeks to waive all fees for the three FOIA requests in accordance with the public interest fee provision, 5 U.S.C. § 552(a)(4)(A)(iii), because the requested information served the public interest and did not primarily serve its commercial interests.”  “Alternatively, it seeks to limit the charges to duplication costs and exclude review and search fees under the second category of fee reductions . . . because it qualifies as a representative of the news media and it did not make the requests for a commercial purpose.”  “Finally, [plaintiff] contends that if it is not entitled to a full fee waiver, SBA should not charge search fees under 5 U.S.C. § 552(a)(4)(A)(viii) because the agency failed to timely process [plaintiff’s] administrative appeals of the fee charges.”  “The court evaluates [plaintiff’s] grounds for a fee waiver before analyzing the request for a fee reduction.” 

    The court notes that “[t]he first question is whether the information sought by [plaintiff] in each of its three FOIA requests is in the public interest because it is likely to contribute significantly to public understanding of SBA’s operations or activities.”  The court finds that “the undisputed evidence in the administrative record shows that [plaintiff] did not sufficiently justify why disclosure of the information sought by Request Nos. 565, 1532, and 1953 served the public interest by significantly contributing to public understanding of SBA’s operations or activities.”  “The court concludes that [plaintiff] is not entitled to a public fee waiver and grants summary judgment to SBA on this issue.”

    “First, [the court finds that] the record establishes that SBA provided a public interest fee waiver for part of Request No. 565.”  “[Plaintiff] disingenuously omitted from its motion – but does not dispute – that SBA reversed its initial decision and agreed to waive fees for information that arguably was related to the [Paycheck Protection Program (“PPP”)].”  “That issue is now moot.”  “As for the remaining items in Request No. 565, the court concludes that [plaintiff] failed to establish with reasonable specificity that the disclosure would contribute to the public’s understanding of SBA’s operations.”  “The fact that [plaintiff] self-identifies as a ‘policy advocacy group’ is not conclusive.”  “The remainder of [plaintiff’s] response is circular, conclusory, and a mere restatement of the legal standard.”  “[Plaintiff’s] administrative appeal only explains in broad, general terms about how the requests would ‘shed light’ on the SBA’s press office’s activities, statements, and sources of influence.”  “These generic statements are not enough to meet [plaintiff’s] initial burden to show that a fee waiver is justified.”  “[Plaintiff] fails to describe specific connections between the requested information and SBA’s operations and activities; its materials simply ask for all communications between SBA’s press office and third parties over a seven-month period.”  “[Plaintiff] does not satisfactorily explain why this disclosure of documents would supply meaningful information about SBA’s media and team.”  “Based on the record before it, the court concludes that [plaintiff] failed to satisfy its burden to show that disclosure of the information sought in Request No. 565 for which SBA did not grant a fee waiver is in the public interest.”

    “Next, the court evaluates whether [plaintiff] made a sufficient showing that the information sought in Request No. 1532 about SBA’s Regional Regulatory Fairness Board would lead to greater public understanding about the SBA.”  “The record does not contain any evidence that [plaintiff] initially sought a fee waiver or reduction for this request.”  “[Plaintiff] raised the waiver issue for the first time in its administrative appeal.”  “For the same reasons set forth above, the non-specific, conclusory arguments are insufficient to satisfy [plaintiff’s] initial burden to show that Request No. 1532 sought information in the public interest.”

    The court relates that “Request No. 1953 seeks correspondence related to particular members of SBA’s advisory boards.”  The court finds that “[plaintiff] similarly fails to establish that this information would lead to greater public understanding about the SBA.”  “The court concludes that [plaintiff’s] explanations related to Request No. 1953 do not suffice to show that the information is in the public interest.”  “[Plaintiff’s] request for communications with members of specific groups over an undefined time period bears no express connection to the PPP.”  “Nor does [plaintiff] characterize how it will use the disclosed information to shed light on SBA’s practices with respect to the PPP.”
     
  • Fees and Fee Waivers, Requester Categories:  Regarding a fee reduction, “the court concludes that [plaintiff] adequately demonstrated that all three requests were for non-commercial use.”  Regarding Request No. 565, the court relates that “SBA first argues that it did not address noncommercial interest in its denial letters because [plaintiff] did not raise the issue in its initial requests.”  “Nevertheless, the court is required to review the whole administrative record before the agency.”  The court then finds that “in its appeal decision, SBA represented that after reviewing [plaintiff’s] website, it concluded that [plaintiff’s] policy advocacy is done ‘for the commercial and profit interest of its members.’”  “SBA does not offer any explanation or evidence to substantiate this conclusion or that [plaintiff’s] advocacy work primarily furthers its own profit or trade motives.”  “At the hearing, SBA’s counsel pointed to the fact that [plaintiff] admits to using litigation as a tool to advance its members’ interests and referred the court to provisions cited in its briefing.”  “While SBA’s regulations define a commercial use request as one that ‘can include furthering those interests through litigation,’ 13 C.F.R. § 102.8(c), nevertheless, SBA fails to show how [plaintiff’s] litigation furthers any profit or trade motive.”  “Construing the record as a whole, the court concludes that [plaintiff] sufficiently established that Request No. 565 was not made for its own commercial use.”

    "Next, the court relates that “[plaintiff] provided a similar explanation of non-commercial purpose for Request No. 1532.”  “For its part, the SBA declined at the administrative appeal level to ‘examine if the requested information would primarily serve [a] commercial interest of the Appellant since [plaintiff] has not shown that [a] fee waiver would be in the public interest.’”  “The court cannot consider SBA’s new arguments that were not raised at the administrative level.”  “Even if it could, SBA’s briefing largely reiterates its unsuccessful arguments discussed above with respect to Request No. 565.”  “Accordingly, [plaintiff] has established non-commercial use for this request.”

    The court finds that “[plaintiff] similarly explained the non-commercial purpose of Request No. 1953.”  “[Plaintiff] also asserted that the ‘sole purpose of filing the subject FOIA request is to disseminate the information in online press releases in an effort to assist and advocate for small businesses.’”  “‘[Plaintiff] will not receive a commercial benefit through the use of the requested information.’”  “SBA asserts arguments similar to those it made regarding Request No. 565, based in part on its review of [plaintiff’s] website.”  “For the same reasons set forth above, [plaintiff] sufficiently established . . . non-commercial use for this request.”

    Finally, the court finds that “[t]he undisputed record establishes that ASBL is a representative of the news media, as that term is defined for FOIA purposes.”  “[Plaintiff] gathers information of current interest to the general public, turns raw materials into a distinct work, and disseminates that work.”  “In multiple letters to SBA, [plaintiff] established that it gathers information it gleans from agencies or other sources and disseminates the material through multiple public-facing strategies.”  “While its individual requests lack the specificity to show a sufficient connection to the PPP to warrant a public interest fee waiver, the record as a whole indicates that the purpose of [plaintiff’s] requests at least in part was to gather information about this important government program that was prominent in the media in 2020 and is of interest to the public.”  The court also finds that “SBA’s counterarguments are unavailing.”  “SBA argues that [plaintiff] only offered ‘general statements about its past activities,’ and its ‘contemporaneous statements’ about ‘making information available to the public,’ and did not express a ‘firm intention to publish the information.’”  The court finds that “[plaintiff] explained to SBA that it regularly gathers information from FOIA requests and publicizes the findings from its investigations in press releases and media appearances.”  “[Plaintiff] intended to use the material derived from these requests in a similar fashion.”  “That is sufficient to show that [plaintiff] meets the characteristics of a representative of the news media for FOIA purposes.”  “[Plaintiff] was not required to provide a specific gameplan about how it intended to publish the information disclosed from these particular requests.”  The court also finds that “SBA’s argument that [plaintiff] is a public advocacy organization and not ‘organized and operated to publish or broadcast news’ is irrelevant.”  “Multiple courts have held that non-profit organizations that conduct investigations and publish press release and other articles about their findings amount to news media representatives for the purposes of FOIA.”  “The undisputed record therefore establishes that [plaintiff] is a representative of the news media as defined under FOIA.”  “In light of the court’s earlier conclusion that [plaintiff] requested records for non-commercial use, the court finds that [plaintiff] is entitled to a fee reduction limited to duplication fees as provided . . . .”  “Summary judgment is therefore granted to [plaintiff] on the question of a fee reduction for all three requests.”
     
  • Fees and Fee Waivers, Fees:  Finally, [the court relates that] [plaintiff] argued that it should not be charged search fees because the SBA failed to timely process its administrative appeals.”  “SBA counters that exceptional circumstances related to the COVID-19 pandemic justified its delay.”  “At the hearing, [plaintiff] clarified that ‘with respect to the delay issue and the consequences of delay, we're not saying that delay means they can't charge us anything.’”  “‘We’re simply saying that their delay means they can’t charge us search fees.’”  “The court does not reach this issue because of its ruling . . .  that [plaintiff] may only be charged duplication fees and not search or review fees, and because [plaintiff] does not challenge assessment of duplication fees as untimely.”
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District Court opinions
Fees and Fee Waivers
Updated August 23, 2022