Frank LLP v. CFPB, No. 16-00670, 2017 WL 6403095 (D.D.C. Dec. 14, 2017) (Cooper, J.)
Re: Request for records concerning action against a debt collector
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
- Exemption 7(E): "[T]he Court agrees that they were properly withheld under Exemption 7(E)." "First, the documents were 'compiled for law enforcement purposes.'" The court explains that "the responsive documents were generated as part of the Bureau's enforcement action . . . for potential violations of federal law." Second, "the Court is persuaded that the Bureau's technique is not so obvious." "If it were disclosed, targets of the Bureau's investigations might be able to complicate enforcement, if not outright evade it." "The technique is admittedly not proprietary or especially complex." "But, again, an agency is justified in withholding records based on a mere 'chance of a reasonably expected risk' of circumvention."
- Exemption 5, Attorney Work-Product Privilege: The court holds that "[handwritten attorney] notes here fall within Exemption 5." "Attorney interview notes are generally protected as work product because their content reveals the lawyer's mental processes and the threat of their disclosure could discourage open discussion." Responding to plaintiff's argument that factual notes are different than deliberative notes, the court finds that "because '[t]he test under Exemption 5 is whether the documents would be "routinely" or "normally" disclosed upon a showing of relevance,' . . . 'factual materials prepared in anticipation of litigation' receive the same protection as 'deliberative materials[.]'" Responding to plaintiff's argument concerning settlement negotiations, the court finds that "[i]t is well established that attorney notes made during settlement discussions are protected work product so long as 'litigation was fairly foreseeable' at the time the notes were created."
- Litigation Considerations, Exhaustion of Administrative Remedies: The court holds that "the Bureau is permitted to impose reasonable fees before processing a remanded FOIA request." "Assuming that the remanded request could be granted, the requester may not seek judicial review of the appellate determination remanding it." "If, after paying the fees or narrowing its request, [plaintiff's] second request is denied in whole or in part, it may seek administrative review of that decision and, if the Bureau upholds the withholding, it may seek judicial review of that decision." In response to plaintiff's argument "that the Bureau should be estopped from arguing that [plaintiff] has failed to exhaust administrative remedies because its appellate determination ended with a sentence instructing [plaintiff] that it 'may seek judicial review of this determination[,]'" the court finds that "[plaintiff], while disagreeing with the Bureau's legal position on exhaustion, does not assert that the Bureau included this boilerplate language to purposefully thwart it from obtaining relief" and, "[m]oreover, [plaintiff] has not pointed to any significant consequences stemming from the Bureau's inclusion of the language."
- Litigation Considerations, Jurisdiction: The court holds that "[plaintiff] has standing to seek prospective relief." "In a declaration accompanying its motion, [plaintiff] establishes, through concrete assertions, that it will likely be imminently injured by the two allegedly unlawful FOIA policies it challenges." "As to the Exemption 4 policy: [plaintiff] contends that the Bureau improperly treats records produced in response to [Civil Investigative Demands ("CIDs")] as being voluntarily produced." "As of the time the motions ripened in this case, [plaintiff] had two pending FOIA requests unrelated to the current litigation, each of which the Bureau denied in part based on Exemption 4." "For similar reasons, [plaintiff] has standing to bring its Exemption 8 policy challenge – namely, that the Board improperly includes debt collectors . . . within the definition of 'financial institutions' whose records are protected under the exemption." "True, [plaintiff] does not point to any pending FOIA requests that implicate the Bureau's allegedly unlawful policy." "But [plaintiff] avers that, as of the filing of its declaration, the parties were negotiating the scope of a FOIA request related to the Encore consent order, and that they have discussed the possibility of [plaintiff] filing of 'a series of new FOIA requests targeting narrow informational aspects of [a] consent order.'" "[Plaintiff] expects that any such requests would be met with an invocation of Exemption 8."
- Exemption 4: The court holds that "Exemption 4 does not allow the Bureau to treat information produced in response to a CID issued by the Bureau pursuant to 12 U.S.C. § 5562(c)(1) as disclosed voluntarily." "Any Bureau policy to that effect violates FOIA." "The Court agrees that the Bureau's formal authority to issue CIDs and, if need be, to obtain judicial enforcement, means that the submissions it receives in response to a CID should be treated as mandatory." "The Bureau's power to issue CIDs is rooted in statute." Further, the court finds that "voluntariness does not turn on the recipient's perception of whether it must comply with the demand – it instead turns on the agency's power to induce compliance."
- Exemption 8: "The Court finds that the Bureau's interpretation [that "'financial institutions' . . . cover[s] entities that buy and collect on debts"] accords with Exemption 8." "The term 'financial institution' is inherently broad." "Debt collectors – as a link in the credit-management chain – fit comfortably within that scope."