N.Y. Times Co. v. DOJ, No. 19-1424, 2021 WL 371784 (S.D.N.Y. Feb. 3, 2021) (Failla, J.)

N.Y. Times Co. v. DOJ, No. 19-1424, 2021 WL 371784 (S.D.N.Y. Feb. 3, 2021) (Failla, J.)

Re:  Request for records concerning DOJ's supervision of Volkswagen AG's ("VW") compliance with a 2018 plea agreement arising out of VW's scheme to evade emissions requirements

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

• Exemption 4:  "[T]he Court agrees with Plaintiffs that Defendant and Intervenor have failed to establish that any significant portion of [a single report and associated appendices produced by the independent monitor tasked with overseeing VW's compliance with the Plea Agreement] is comprised of 'commercial' information within the meaning of Exemption 4."  "The Court rejects Intervenor's and Defendant's argument that all information about VW's compliance program is itself commercial and exempt under Exemption 4."  "However, Defendant and Intervenor have sufficiently established that the Report likely contains some commercial information and that such information is 'confidential.'"  "Thus, the Court denies Plaintiffs' cross-motion for summary judgment on Exemption 4 as well, and orders in camera review." 
   
  First, regarding the commercial nature of the information, "the Court concludes that the only information Defendant has listed above that can fairly be construed as commercial is information related to 'VW's internal sales goals.'"  The court relates that "[t]he Second Circuit has not yet addressed whether information about the implementation of a company's compliance program is itself 'commercial' within the meaning of Exemption 4."  "[T]he Court declines to find that information about the design, implementation, and remediation of VW's compliance program is commercial in and of itself, even under the arguably more expansive interpretation of 'commercial' employed in the D.C. Circuit."  "Defendant and Intervenor have not provided any detailed explanation that suggests that information about VW's compliance program is intertwined with commercial information, such as 'sales statistics, profits and losses, and inventories,' . . . or 'extensive information about the [company's] marketing and sales programs and contracting processes' . . . ."  The court finds that "[defendant's] description suggests that the Report is focused primarily on compliance without reference to any specific information that 'relate[s] to the income-producing aspects of a business.'"  "These activities and processes may indeed convey commercial information; however, mere incantations that such information is itself commercial or contains commercial information do not suffice."
   
  Second, "[t]he Court agrees with Defendant and Intervenor that the plain language of the Plea Agreement and evidence in . . . Declarations establish that the information here meets the confidentiality requirements as articulated in Argus Leader."  The court finds that "the . . . Declarations adequately establish that the Report contains information that VW 'customarily and actually treated as private.'"  "All . . . declarations list categories of information that VW customarily keeps confidential."  The court also finds that "the information in the Report was 'provided to the government under an assurance of privacy.'"  "Additionally, the Monitor assured VW that information shared would be kept confidential by entering a non-disclosure agreement."  The court relates that "Plaintiffs argue that the Plea Agreement does not provide any assurance of confidentiality because it allows Defendant to 'determine in [its] sole discretion that disclosure would be in furtherance of the [DOJ’s] discharge of [its] duties and responsibilities or is otherwise required by law.'"  "However, the Court does not accept Plaintiffs' reading, which would render the Plea Agreement's assurance of confidentiality superfluous."  "Nor does the release of portions of the Report by Defendant after determining that withholding was improper under FOIA undermine assurances of confidentiality with respect to commercial information provided by Intervenor, because the portions of the Report that were released plainly contained no commercial information."  "Releasing portions of the Report not subject to withholding under FOIA is precisely what the law requires."
   
  Finally, the court finds that "as discussed above, for nearly all of the information withheld pursuant to Exemption 4, Defendant and Intervenor 'have not established that the withheld information falls within the scope of Exemption 4 in the first instance.'"  "As such, 'they have, a fortiori, failed to satisfy the "heightened" foreseeable-harm requirement as well.'"  "Accordingly, the Court need not resolve any potential dispute over the type of foreseeable harm required under the [FOIA Improvement Act] at this time."
   
• Litigation Considerations, In Camera Inspection:  "[T]he Court exercises its discretion to order in camera review of the Report."  "As noted above, Defendant has established that there is likely some commercial information in the Report that may be properly redacted pursuant to Exemption 4, but has not established where and to what extent this information appears."
   
• Exemption 5, "Inter-Agency or Intra-Agency" Threshold Requirement:  "[T]he Court agrees with Defendant that the consultant corollary applies."  "[T]he Court believes that because the Monitor consults closely with DOJ in enforcing the Plea Agreement by 'assess[ing] and monitor[ing] the company's implementation of its responsibilities under the [A]greement' . . . the Monitor is 'enough like the agency's own personnel to justify' the application of Exemption 5."  The court then responds to plaintiff's argument that "that the Monitor is an “interested party.'"  The court finds that, "[f]irst, although VW does pay the Monitor's salary, that is one of VW's obligations under the Plea Agreement, and failure to abide by it would constitute a breach of the Plea Agreement."  "Second, DOJ – not VW – selected the Monitor."  "Third, as Defendant explains, the Plea Agreement was constructed to maintain the Monitor's independence and objectivity."
   
• Exemption 5, Deliberative Process Privilege:  "[T]he Court agrees with Defendant . . . that the Report is predecisional, and that the Report is deliberative."  "However, after reviewing the Redacted Report and Defendant's submissions, the Court concludes that Defendant has redacted information more properly considered factual than deliberative, and orders in camera review of the Redacted Report to determine whether additional purely factual material can be properly released."  The court relates that "Defendant explains that it used the Report in deliberations about several major decisions, as well as a series of subsidiary and related sub-decisions."  The court relates that "[defendant's] Supplemental . . . Declaration provides a chronology of Defendant's consultation of the Report in relation to these specific decisions."  "These showings are sufficient for the Court to '"to pinpoint an agency decision or policy to which the document contributed," or was intended to contribute.'"  "These showings are also sufficient for the Court to determine that at least some portions of the Report '"reflect[ ] the give-and-take of the consultative process."'"  However, the court relates that "Defendant has withheld a significant amount of purely factual information because it claims that the factual information is 'intertwined' with deliberative material."  "While the Monitor's recommendations are certainly protected from disclosure pursuant to Exemption 5, the Court's careful review of the Redacted Report suggests that the Monitor's recommendations are not so closely intertwined with purely factual information to justify such extensive withholding."  "The evidence in the record suggests that Defendant's withholding is overbroad, and accordingly the Court exercises its discretion to order in camera review."