Block & Leviton LLP v. FTC, No. 19-12539, 2020 WL 6082657 (D. Mass. Oct. 15, 2020) (Saris, J.)
Block & Leviton LLP v. FTC, No. 19-12539, 2020 WL 6082657 (D. Mass. Oct. 15, 2020) (Saris, J.)
Re: Request for records involving litigation between Facebook and FTC
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
- Exemptions 3 & 4: "The Court orders the FTC to provide a more detailed explanation in its Vaughn index." The court relates that "[r]elying on Exemptions 3 and 4, the FTC withheld '(1) Facebook's responses to the FTC's demands for information in its investigation of Facebook's 2012 order violations, and (2) documents revealing the substantive settlement negotiations between the FTC and Facebook, principally concerning the contents of a proposed federal court complaint, a stipulated federal court order, an administrative order, and associated documents.'" The court notes that, here, "[Exemption 3] applies to Section 6(f) of the Federal Trade Commission Act, which prohibits the FTC from 'mak[ing] public any trade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential.'" "As Section 6(f) largely mirrors Exemption 4, these provisions are 'coextensive,' and Exemption 4's legal standards control."
Regarding Exemption 4 and the commercial nature of the documents at issue, the court relates that, "Facebook and the FTC argue that the withheld settlement documents are 'commercial' because they reveal Facebook’s commercial priorities and business strategies." "Yet the FTC fails to explain document-by-document why each draft contains 'commercial' information as commonly understood, which does not necessarily include all documents which hurt a company’s reputation or the reputation of an executive." The court finds that "[defendant's] description does not provide sufficient detail for the Court to independently determine whether the withheld information 'reveal[s] basic commercial operations,' 'relate[s] to the income-producing aspects of [Facebook's] business,' or bears upon Facebook's 'commercial fortunes.'"
Regarding the 'obtained from a person' consideration, the court finds that "[s]ettlement documents sent from Facebook to the FTC plainly satisfy the 'from a person' prong." "Settlement documents originating from the FTC and sent to Facebook, however, may qualify as 'from a person' only where Facebook is the source of commercial information contained within them." "Facebook's argument that readers could reverse-engineer Facebook's commercial priorities by tracking changes in the settlement terms from draft to draft likely stretches Exemption 4 too far." "Where similar specific commercial information from Facebook is included in settlement proposals, redaction may be appropriate." "But to the extent the FTC's proposals simply capture changes that are based on the content of negotiations with Facebook, those documents do not qualify as 'from a person.'" "[T]he Vaughn index does not provide sufficient detail for the Court to determine which documents originated by the FTC may contain sufficiently specific or quoted information from Facebook to meet this standard."
- Exemptions 6 & 7(C): First, the court notes that "[t]he FTC applied Exemptions 6 and 7(C) to redact 'portions of records containing third party names, of Facebook employees who are not executives (i.e., Director level and below) . . . email addresses and phone numbers of Facebook employees . . . [, and] phone numbers and information identifying the conference rooms used for meetings and calls.'" "Plaintiff does not oppose limited redactions for those purposes." Second, the court relates that "[t]he FTC also withheld names and identifying information of 'individuals of investigative interest' because 'disclosure of that information could cause harm to personal reputation.'" "Plaintiff argues that to the extent the FTC redacted the name of Facebook's Chief Executive Officer, Mark Zuckerberg, as an individual of investigative interest, such redaction was improper because the FTC's investigation of Zuckerberg is public knowledge and was officially acknowledged in the dissenting statements of [two] FTC Commissioners . . . ." "[The] Court finds that the dissenting statements of [the Commissioner] constitute official acknowledgement that the FTC was investigating Mr. Zuckerberg." "[One] Commissioner . . . stated in his dissent, 'We should have continued the investigation to obtain more data and evidence on what Facebook and its executives knew and how they profited.'" "'If Facebook failed to cooperate, the Commission had enough evidence to take Facebook and Zuckerberg to trial.'" "Similarly, [the other] Commissioner . . . stated in her dissent, 'The evidence the Commission amassed in its investigation more than justified initiating litigation against Facebook and Mr. Zuckerberg alleging violations of the Commission's order.'" "The official acknowledgment doctrine thus precludes the FTC from redacting Mr. Zuckerberg's name from the settlement documents under Exemption 7(C)."