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Bloomberg L.P. v. USPS, No. 23-1005, 2024 WL 4293872 (2d Cir. Sept. 26, 2024) (Pérez, J.)

Date

Bloomberg L.P. v. USPS, No. 23-1005, 2024 WL 4293872 (2d Cir. Sept. 26, 2024) (Pérez, J.)

Re:  Request for aggregated, anonymized change-of-address data

Disposition:  Affirming district court’s grant of government’s motion for summary judgment

  • Exemption 3:  The Court of Appeals for the Second Circuit holds that “[t]he withholding statute incorporated into FOIA [Exemption 3] in this case is a provision of the Postal Reorganization Act exempting USPS from FOIA disclosure of six different categories of documents.”  “Only one of those categories of documents is at issue in this case:  the ‘information of a commercial nature’ exemption.”  “The text of the exempting provision reads in relevant part that ‘[FOIA] shall not require the disclosure of . . . information of a commercial nature, including trade secrets, whether or not obtained from a person outside the Postal Service, which under good business practice would not be publicly disclosed.’”  “This ‘information of a commercial nature’ exception can be broken down into two elements:  the requested information must be ‘of a commercial nature’ and must be something ‘which under good business practice would not be publicly disclosed.’”  “[The court] affirm[s] the judgment of the district court.”  At issue is the “disclosure of aggregated, anonymized change-of-address (“COA”) data” which defendant “intended to incorporate the data into a commercial product called ‘Population Mobility Trends.’”  The court finds that “[t]he requested COA data is a valuable monetizable commodity generated as part of USPS’s core ‘commercial’ activity – the delivery of the mail.”  “Pursuant to its statutory mandate under the Postal Reorganization Act, USPS has chosen to sell this monetizable commodity to generate revenue.”  “USPS has satisfied its burden of proof for withholding the COA data pursuant to FOIA Exemption []3 and the Postal Reorganization Act.”

    “The only dispute before [the court] is whether the requested COA data is ‘of a commercial nature,’ . . . and thus ‘fall[s] within that statute’s scope[]’ . . . .”  “[The court] agree[s] with the Ninth Circuit that merely having monetary value ‘is too broad a definition of commercial[.]’”  “[The court] find[s] that the requested COA data is ‘of a commercial nature’ for a narrower reason – not only does it have monetary value, but that value is derived from and related to USPS’s core ‘commercial’ activity of delivering the mail.”  “At the time the Postal Reorganization Act was enacted, Black’s Law Dictionary defined ‘commercial’ as ‘[r]elating to or connected with trade and traffic or commerce in general,’ and defined ‘commerce’ as ‘[t]he exchange of goods, productions, or property of any kind.’”  “In today’s information-driven economy, the requested COA data is undoubtedly related to the trade, traffic, and exchange of goods in which USPS engages.”  “As the [government’s] Declarations explain, through the process of operating a nationwide mail network, ‘USPS generates intellectual property in the form of data that competes directly with data assets and services offered by other data creators and data brokers in the marketplace.’” “Private businesses ‘commonly monetize data assets, particularly those that generate unique value in the marketplace.’”  “The requested COA data is exactly this type of “‘data asset.’”  “As a data asset, the requested COA data undoubtedly has great economic value.”  “As the [government’s] Declarations explain, ‘location data sources are critical inputs used . . . to process and/or visualize real world population movement trends.”  “Location data intelligence is leveraged in many markets and use cases, including placement or staging of services (retail, real estate, construction, marketing, etc.).’” “Monetization of data assets is a common practice among large businesses today, and there is no doubt that a data asset as large and robust as the USPS COA database has significant potential value.” “As stated above, it would be insufficient to say the requested COA data is ‘commercial’ merely because it has potential economic value.”  “The value needs to have some relation to the ‘commerce’ in which USPS engages – the delivery of the mail.”  “The requested COA data, however, is not something kept in the ordinary course of governmental business that merely happens to have economic value.”  “COA data is a specific, monetizable data asset that USPS generates through carrying out its statutorily mandated commercial activity of delivering the mail.”  “This data is ‘commercial’ in every sense of the word.”  “[The requesters] are certainly correct that the Postal Service is late to the game in realizing that the COA data has commercial value – after all, the record indicates that USPS had granted similar FOIA requests mere months before denying the requests at issue in this case.”  “However, nothing in FOIA or the Postal Reorganization Act precludes the Postal Service from changing how it treats certain information as it adapts to shifts in the broader economy.”

    “In addition to demonstrating that requested documents are ‘of a commercial nature,’ USPS must demonstrate that the requested documents ‘under good business practice would not be publicly disclosed.’”  “[The court] find[s] the Fourth Circuit’s analysis of ‘good business practice’ to be compelling – whether release of the documents would be good business practice ‘should be decided with reference to what businesses normally do.’”  “[The government’s] Declarations establish that as a valuable, monetizable data asset that USPS intended to sell through Population Mobility Trends, the requested COA data would not ordinarily be disclosed ‘under good business practice.’”  “Put simply, a private business would not give away for free the information that it was also attempting to sell.”  “The policies invoked by the Postal Reorganization Act are entirely about ‘making the United States Postal Service more businesslike, similar in function and management to its competitors.’”  “Through the Postal Reorganization Act and FOIA [Exemption 3], Congress has granted the Postal Service a relatively broad FOIA exemption that is substantially different from exemptions available to other agencies.”  “The public interest in data-informed journalism that Appellants present is certainly compelling.”  “However, Congress has made a policy choice not to require USPS, or a reviewing court, to weigh that public interest when determining whether to withhold commercial information.”

    Circuit Judge Maria Araújo Kahn, writes separately to concur in part and dissent in part.  Judge Araújo Kahn notes that “[certain] data is not included for sale in the Population Mobility Trends product” and, while “[i]t may be that providing this subset of omitted data would undermine the commercial viability of Population Mobility Trends[,]” “[i]t is unclear . . . that the record supports that conclusion.”
Court Decision Topic(s)
Court of Appeals opinions
Exemption 3
Updated November 5, 2024