The Humane Soc'y of the U.S. v. U.S. Dep't of Agric., No. 17-02570, 2021 WL 2652336 (D.D.C. June 28, 2021) (McFadden, J.)

The Humane Soc'y of the U.S. v. U.S. Dep't of Agric., No. 17-02570, 2021 WL 2652336 (D.D.C. June 28, 2021) (McFadden, J.)

Re:  Request for records concerning loans issued to food animal production facilities in certain California counties

Disposition:  Granting plaintiff's motion for summary judgment; denying defendant's motion for summary judgment

• Exemption 3:  The court relates that "[t]he Agency relies on the Food, Conservation and Energy Act, 7 U.S.C. § 8791 ("Section 8791")."  "This statute [covers] in relevant part . . . information provided by an agricultural producer or owner of agricultural land concerning the agricultural operation, farming or conservation practices, or the land itself, in order to participate in programs of the Department."  "The parties agree . . . [that] Section 8791 is an exemption statute under Exemption 3."  "So does the Court."  The court relates that "[plaintiff] cites an exception to Section 8791, which authorizes “disclosure of payment information (including payment information and the names and addresses of recipients of payments) under any [Agency] program that is otherwise authorized by law.'"  The court notes that "[t]he main question is whether an [Farm Loan Program ("FLP")] loan or loan guarantee is a 'payment.'"  "If it is, Section 8791's 'payment information' exception governs here."  "The statute does not define 'payment.'"  "With no statutory definition, the Court chooses an interpretation that tracks the term's plain meaning and other federal statutes" and finds that "FLP loans and loan guarantees thus constitute 'payments' because they involve transfers of money from one entity (the government or private lender) to another (the borrower)."  "The Agency suggests that an FLP loan or loan guarantee cannot be a 'payment' because borrowers 'only have the temporary use of the money' and 'have to repay loans with interest.'  But a repayment presumes there has already been a payment."  "But the 'payment information' exception does not cover loan applications and their supporting documentation."  "No such 'payment' – or transfer or disbursement of funds – has occurred yet."  "So the Agency need not disclose loan application materials under Section 8791."  "With this distinction in mind, the Court turns to whether the 'payment information' exception allows disclosure of the material [plaintiff] seeks here."  The court finds that "[i]t does."  "The Agency now agrees to provide names and addresses of loan recipients that appear in promissory notes."  "This information is plainly disclosable under the 'payment information' exception."  "The NAICS number is also disclosable."  "The NAICS number provides comparable information to a name or address."  "It is a business classification 'for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.'"  "Here, the NAICS number would 'describ[e] the primary farming/ranching operation type.'"  "The Court finds that an NAICS number is 'payment information' that the Agency can provide under Section 8791's exception."  "So too for a loan's intended use."  "If the Agency has 'earmarked' or 'circumscribe[d]' the loan proceeds for a specific purpose, that information is 'payment information' that the public can access."  "Finally, [plaintiff] seeks the 'environmental checklist pertaining to the land use or environmental resource.'"  "Rather than falling into Section 8791's payment information exception, this information is not covered by Section 8791 at all."  "[T]he Agency, not the borrower, generates these documents."  "Even if they rely on information from loan applicants – which is not clear from the Agency's declarations – the Environmental Worksheets are not 'provided by' farmers and ranchers because they reflect Agency analysis and work."  "Section 8791 does not bar production of these worksheets, meaning that Exemption 3 does not apply."
   
• Exemption 4:  The court relates that "[a]lthough not mentioned in its briefs, the Agency did invoke Exemption 4 to redact the 'funds purpose' or 'type of assistance' in some documents."  "But at least some of this information appears only in loan applications."  "Despite the parties' extensive briefing . . ., the Court's inquiry is limited."  "It need only decide whether the Agency correctly applied Exemption 4 to withhold the loan purpose or intended use of loan proceeds in documents other than loan application materials."  The court finds that "[t]he Agency has not met its burden under Exemption 4."  "First, its declarations do not establish that borrowers customarily and actually treat their loan's purpose as privileged and confidential."  The court notes that "the record shows [the one farm] discloses its ostensibly confidential street address – with a handy Google maps link – on the farm's public website."  Additionally, "evidence shows that borrowers do disclose receipt of an FLP loan and its purpose."  The court relates that "[defendant] says that 'simply revealing that [farmers] have loans reveals information about their financial viability.'"  "But successful loan candidates must have 'acceptable credit history,' 'not be delinquent on a federal debt,' 'not have any outstanding unpaid judgments,' and 'not have received debt forgiveness from FSA.'"  "Receipt of an FLP loan thus may not 'bear as direct a relationship to the value of [borrowers'] land or their financial situation.'"
   
  "[S]econd, [the court finds that] the Agency disclaimed any assurance of confidentiality over this information."  The court relates that "[t]he Agency also disclaimed that it would maintain confidentiality over the intended use of an FLP loan or loan guarantee."  "True, 'it is an open question in this Circuit whether government assurance that information will remain private is necessary for such information to qualify as "confidential" under Exemption 4.'"  "But 'that does not mean that representations the government makes in connection with obtaining information cannot inform the court's determination about how the [borrowers] customarily and actually treat it, or whether it is confidential, for purposes of Exemption 4.'"  "The Agency admits that there are a 'limited range of authorized disclosures to which a participant’s information can be subjected.'"  "It refers to a statement in the loan application 'made in accordance with the Privacy Act of 1974.'"  "This statement provides that 'information collected on this form may be disclosed to other Federal, State, Local government agencies, Tribal agencies, and nongovernmental entities that have been authorized access to the information by statute or regulation and/or as described in applicable Routine Uses Identified in the System of Records Notice for USDA/FSA-14.'"  "The Agency asserts that '[b]y identifying who might have access to a borrower's information, [it has] also identified who does not have access to a borrower's information:  anyone not on the list.'"  "To the Agency, its disclosure 'communicate[s] to the agricultural producers that their submitted information is protected by the Privacy Act.'"  "Not so [finds the court]."  "For starters, [plaintiff] is on the list of those who might have access to a borrower's information,' . . . ."  "[Plaintiff] is a nongovernmental entity."  "The Agency also points to its System of Records Notice, which 'identifies a limited range of authorized disclosures to which a participant's information can be subjected.'"  "The Agency says that '[u]nless one of those routine uses is at play,' borrowers would not expect the Agency to disclose their information."  "Some of these 'routine uses,' though, contemplate disclosure to the public."  "Routine Use X grants the media and public access to information provided by borrowers 'when there exists a legitimate public interest in the disclosure of the information . . . except to the extent it is determined that release of the specific information in the context of a particular case would constitute an unwarranted invasion of personal privacy.'"  "And Routine Use W allows the Agency to share 'information about individual[s]' under enumerated federal statutes 'or similar laws requiring agencies to make available publicly names, locations, and other information concerning federal assistance, including grants, subgrants, loan awards, cooperative agreements and other financial assistance.'"  The court finds that "[plaintiff's] FOIA request fits either (or both) of these routine uses."  "Finally, the Agency contends that it need not 'show in each and every instance that it offered assurances of confidentiality.'"  "Fair enough."  "But here, the Agency 'warn[ed] that under some circumstances, information will be disclosed.'"
   
• Exemption 6:  The court holds that " [t]he Agency cannot rely on Exemption 6 to withhold a loan recipient's names, address, and NAICS number, or the intended use of the loan proceeds."  The court first holds that "[a] loan applicant 'must be the operator or owner/operator of a family sized farm.'"  "'Based on [the Agency's] experience in handling the documents at issue, the financial interests of closely held businesses whose information are redacted under Exemption 6 are traceable to individuals.'"  "The Agency considers a business to be 'individually owned' or 'closely held' if that business 'is owned, directly or indirectly, by 5 or fewer individual persons holding more than 50 percent ownership interest in the legal entity structure.'"  "And the Agency 'ensured that the information at issue here was provided by closely held businesses according to this formula.'"  "On the whole, it is reasonable to infer that the records are traceable to individuals and covered by Exemption 6."  Regarding the privacy interests, the court finds that "[a]s [plaintiff] points out, 'the amount of information that can be gleaned about the individual owner's finances through disclosure of her status as an FLP participant is limited.'"  "Successful loan applicants must have 'acceptable credit history,' 'not be delinquent on a federal debt,' 'not have any outstanding unpaid judgments,' and 'not have received debt forgiveness from FSA.'"  "So participation in the FLP does not necessarily convey poor financial health, as the Agency suggests."  "Yet the 'standard at this stage is not very demanding.'"  "The Court is 'willing to engage in the balancing inquiry by concluding that disclosure of the information would constitute more than minimal invasion[ ] of personal privacy.'"  Regarding the public interest, the court finds that "[t]he information involves farmers and closely held entities, but it helps ensure the Agency's compliance with [National Environmental Policy Act ("NEPA")] and the ESA."  "More, 'there is a special need for public scrutiny of agency action that distributes excessive amounts of public funds in the form of subsidies and other financial benefits.'"  "In 2020, the Agency made loan decisions involving a record $7.5 billion of taxpayer funds."  "'The public cannot understand the loan program without knowing . . . names and addresses of recipients, and earmarks for those federal funds.'"  The court finds that "[w]ith these loan details, [plaintiff] can 'evaluate whether these and other environmental risks were properly assessed by [the Agency] in a way that satisfied its duties under NEPA.'"  "[Plaintiff] can 'assess whether FSA identified risks at all, let alone whether [it] identified them properly,' before issuing the loans."  "The court holds that "[t]he Agency's 'rather tepid showing' of a privacy interest does not outweigh the strong public interest in monitoring the Agency's statutory compliance and use of public funds."