Energy Pol’y Advocs. v. SEC, No. 23-507, 2024 WL 4512386 (D.D.C. Oct. 17, 2024) (Contreras, J.)
Energy Pol’y Advocs. v. SEC, No. 23-507, 2024 WL 4512386 (D.D.C. Oct. 17, 2024) (Contreras, J.)
Re: Request for communications between then-SEC Senior Counsel and a climate management and accounting platform company as well as a sustainability consultancy firm
Disposition: Granting defendant’s motion for summary judgment
- Litigation Considerations, Adequacy of Search: The court relates that “Plaintiff does not dispute that the SEC conducted an adequate search for records responsive to its FOIA Request.” “However, the Court still considers the adequacy of the SEC’s search by bearing in mind the individual circumstances of the case and by using the reasonableness standard.” The court finds that “[t]hrough [its] declarations, which include the SEC personnel that were knowledgeable about and responsible for the searches conducted in connection with Plaintiff’s FOIA request, the SEC has shown that it conducted a reasonable search to uncover all relevant documents in response to [plaintiff’s] request.” “[Plaintiff] has also cited no contrary evidence, nor has it submitted evidence of bad faith, so the Court holds that the SEC has satisfied this burden.”
- Exemption 4: The court relates that defendant withholds “‘notes taken by SEC staff during a meeting between [the two outside entities’] staff as well as slides that [one of the entities] prepared and presented to SEC staff during that meeting’” and “‘confidential information about [one outside company’s] strategic development goals and plans concerning costs for its products.’” “Plaintiff does not dispute that the withheld information is commercial or financial.” “Plaintiff also does not question whether the information was ‘obtained from a person.’” “However, Plaintiff argues that the SEC’s justification for the exemption does not include sufficient evidence to determine that the information is ‘confidential.’”
“First, although Plaintiff does not challenge whether the SEC’s withholdings are commercial or financial and whether the records were obtained from a person, the Court nonetheless briefly considers these issues to confirm that the agency has satisfied its burden.” “Here, the Court holds that [the withheld information] is such that [the two outside entities] have established a ‘commercial interest,’ as their economic or business interests would be harmed if the information were released.” “Second, the Court also concludes that the information in question was obtained from a person.” “Because the information in question was obtained from . . . [two] outside organizations and non-governmental entities . . . the Court holds that the SEC has satisfied this burden.” “Lastly, information is confidential for the purpose of Exemption 4 when it is ‘treated as private by its owner.’” “[T]he SEC is correct that it has satisfied this burden because both [outside entities] ‘. . . stated in their declarations that they ‘expected that under the SEC’s statutes, regulations, and practices regarding the treatment of non-public information, the SEC would not disclose’ the withheld information.” “This demonstrates that the information was treated as private by its owners . . . .” “[One of the entities] also explicitly ‘asked SEC staff not to disclose the information that [it] had provided’ . . . which further satisfies this burden.” “[The] Court has previously held that there are two conditions that satisfy the ‘confidential’ requirement for the purpose of Exemption 4 – that information is confidential when it is ‘“treated as private by its owner,” and “provided to the government under an assurance of privacy.”’” “The SEC is right that the second prong of the requirement – the government’s assurance of privacy – is no longer necessary to satisfy this requirement.” “If anything, courts here have taken the position that privately held information is generally confidential absent an express statement by the agency that it would not keep information private, or a clear implication to that effect (for example, a history of releasing the information at issue).” “Therefore, because [the outside entities] treated the withheld information as private and expected that the SEC would not disclose it, the Court holds that these withholdings should be considered confidential.”
“Though [plaintiff] contests the SEC’s foreseeable harm assertion, the Court finds that the SEC has satisfied its burden.” “For [one of the entities], the SEC argues that it is reasonably foreseeable that releasing information about its ‘pricing strategy, labor categories, and project structure information’ would cause foreseeable harm because it is ‘proprietary and confidential, and disclosure of such pricing and project information would give an advantage to competitors’ because they ‘could use this information to undercut [the entity] in the bidding process and to entice away [the entity’s] staff.’” “Similarly, for [the other entity], the SEC also asserts that releasing its ‘strategic development goals and plans concerning product costs’ would cause foreseeable harm because it is ‘proprietary and confidential, and disclosure of such information would give an advantage to competitors.’” “For both companies, the SEC explains how the disclosure of the withheld information would have a direct impact on its business and financial interests.” “The SEC ‘concretely explain[s] how disclosure would cause harm’ to what Exemption 4 protects by explaining a ‘link between the specified harm and the specified information contained in the material withheld.’” “Additionally, and with respect to a government agency disclosing pricing data and similar information specifically, the Circuit has previously held that information such as pricing and business strategies are exactly the type of confidential information that are meant to be protected by FOIA Exemption 4.” “The Court agrees, and disclosing such information should continue to be protected by Exemption 4.” “The SEC adequately explains the link between the withheld pricing and project information and the foreseeable harm that it would cause – giving an advantage to competitors by allowing them the opportunity to use it in the bidding process and to lure away [one of the entity’s] staff.” “Therefore, the Court finds that the SEC has satisfied the foreseeable harm requirement, and its Exemption 4 withholdings are proper.”
- Litigation Considerations, Vaughn Index/Declaration: “[T]he Court concludes that the SEC’s Vaughn Index includes the sufficient detail necessary for withholding information under the deliberative process privilege.” “[T]he fact that there are repeat phrases and similar explanations to characterize the information is not sufficient to claim that there was a lack of specificity in the Vaughn Index, as repetitive language is expected if the withheld records relate to the same subject matter.” “Courts have previously held that there is good reason for similar language to be included in Vaughn indices if they pertain to the same types of records.”
- Exemption 5, Deliberative Process Privilege & Foreseeable Harm and Other Considerations: “The Court holds that the predecisional requirement was met by the SEC.” “The deliberations included in the withheld documents occurred before the SEC announced its proposed rules in March and May 2022, and the documents encompassing those discussions are therefore predecisional.” “The Court also holds that the deliberative requirement has been met because it is clear that the withheld information is ‘part of the agency give-and-take’ of the decision that was ultimately made with respect to the rulemaking.” “‘The withheld information includes opinions and questions about data and information provided by a third party; discussion of the use of particular data and information in the development of the proposed rule; discussion about SEC staff attending meetings with external parties; draft language for the proposed rule and accompanying release, including the Paperwork Reduction Act section; issues, analysis, and potential next steps relating to the climate rulemaking; discussion about a draft meeting memorandum and the memorandum itself; discussion about reporting, consulting, and assurance costs; and discussion about components of climate policy development.’” “All of these conversations were part of the agency give-and-take by which the agency decisions regarding the proposed rules were made.”
Regarding foreseeable harm, the court relates that “[t]he SEC argues that disclosing information that it withheld regarding the SEC’s climate-related rulemaking and policy ‘would chill discussions in connection with the formulation of policy proposals for the Commission’s consideration’ and ‘could adversely affect rulemaking because good solutions are often found as staff share all possible approaches, even those that are ultimately dismissed.’” “The SEC explains that such a chilling effect would have a negative impact on the rulemaking process because it would ‘prevent robust discussions among SEC staff and other federal government agencies’ staff in developing policies.’” “The SEC’s explanation of foreseeable harm is not ‘generalized’ nor ‘conclusory’ because it contains focused and concrete explanations that have been found adequate in this Circuit.” “[T]he SEC has satisfied its burden.” “‘[T]he D.C. Circuit has long recognized that the risk of public confusion “has a special force with respect to disclosures of agency positions or reasoning concerning proposed policies.”’”
- Litigation Considerations, Evidentiary Showing, “Reasonably Segregable” Showing: “[T]he Court concludes that the SEC’s ‘sworn statements sufficiently establish that “no portions of the [fully] withheld documents may be segregated and released.”’” “Plaintiff has not raised any issues that call that assertion into question.” “[T]he fact that a large portion of the documents the SEC disclosed were redacted, rather than withheld in full . . . is indicative of the SEC’s effort to carefully segregate exempt information from non-exempt information.”