N.Y. Times Co. v. FDA, No. 19-4740, 2021 WL 1178126 (S.D.N.Y. Mar. 29, 2021) (Caproni, J.)

N.Y. Times Co. v. FDA, No. 19-4740, 2021 WL 1178126 (S.D.N.Y. Mar. 29, 2021) (Caproni, J.)

Re:  Request for records company submitted to FDA in response to document request and during on-site inspection of company's headquarters

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

• Litigation Considerations:  "[T]he Court agrees with FDA that Plaintiffs waived the right to challenge FDA's decision to withhold these four sets of documents, notwithstanding its mistaken inclusion of the documents in the original Vaughn index."  The court relates that "[defendant] erroneously included documents in the original Vaughn index that Plaintiffs had agreed not to pursue, and it mislabeled the erroneously-included documents as falling within the 'Consumer Experience' category when, as categorized by [the company], they should have been categorized as 'Consumer Research and Strategy' records."  "Plaintiffs opted to contest FDA's decision to withhold only five categories of documents and communicated that decision to the Court by way of stipulation in January 2020, before FDA had produced a Vaughn index and before Plaintiffs had access to any specific record descriptions."  "Thus, at the time Plaintiffs agreed not to seek disclosure of Consumer Research and Strategy documents, Plaintiffs had no knowledge of any specific documents within that category beyond [the company's] one-sentence description."  "Plaintiffs cannot now argue that they did not intentionally relinquish their right to contest the FDA's decision to withhold the four sets of documents just because they learned more about those documents when FDA filed its Vaughn index."  "By agreeing not to seek entire categories of records before knowing more about the specific records included within each category, Plaintiffs knowingly and voluntarily risked foregoing their opportunity to challenge FDA's decision to withhold specific records that fell into those categories, as determined by [the company]."  "That analysis notwithstanding, the Court agrees with Plaintiffs that FDA has waived Plaintiffs' waiver of their right to challenge its decision to withhold the four sets of documents at issue."  "When one party opts to address an issue on the merits rather than assert a procedural argument that its opponent waived a claim or argument, that party can be deemed to have 'waived the waiver.'"  "[T]he Court finds that by supporting on the merits its decision to withhold the four sets of records at issue, FDA waived Plaintiffs' waiver."  "Unfortunately, however, the Court does not believe that there is an adequate basis on which to rule on summary judgment as to these four sets of documents; FDA addressed them in a cursory fashion in its opening memorandum and not at all on the merits in its reply."  "The FDA's description of the documents in the amended Vaughn index is similarly sparse."  "The Court thus grants FDA's request for an opportunity to submit 'further evidence' concerning these four sets of documents."  "In addition to enhancements to the Vaughn index necessitated by the Court's holdings below, FDA must also provide more detail on these four sets of records to the extent it still seeks to withhold them under Exemption 4."
   
• Exemption 4:  The court relates that "[t]wo sets of records remain at issue:  (1) 'consumer product complaint summary reports,' and (2) 'other records reflecting communications between [the company] and third parties, as well as internal [company] analysis and communications.'"  "FDA has provided minimal, if any, detail on these records beyond the bare minimum necessary to provide Plaintiffs and the Court with some vague, general sense of their content."  "FDA states that the consumer product complaint summary reports can be generally categorized into five sub-categories:  (1) customer complaints about the physical characteristics of a [company] product; (2) customer complaints about the effects of a [company] product; (3) non-customer complaints about the effects of a [company] product; (4) non-customer complaints about the distribution of [the company's] products; and (5) non-customer complaints about retailers of [the company's] products."
   
  First, the court holds that "FDA has failed to demonstrate the commercial nature of these records."  "Neither customer nor non-customer complaints are properly classified as commercial information under Exemption 4, at least as described in this case."  "[the company's] internal classifications and analysis of these complaints may, however, be appropriately described as commercial and therefore entitled to protection under Exemption 4."  "[B]ased on the descriptions provided by FDA, there is nothing about the customer complaints that suggests that they are commercial information within the scope of Exemption 4."  "Customer complaints to [the company] about its products' physical characteristics, viewable to all sighted individuals, or its products' effects, potentially experienced by all users, are qualitatively different from interactions between salespeople and customers."  "Further, unsolicited customer complaints submitted to [the company] are even more distinct from the quintessential examples of commercial information in this circuit, such as sales statistics or inventories, and do not threaten to reveal anything about [the company's] internal operations. [The company's] conclusory assertion that customer complaints reflect 'ongoing commercial strategy' does nothing to change the Court's analysis."  "Non-customer complaints are even farther from that which has been classified as commercial under Exemption 4."  "FDA provided no information about the source of these complaints, disclosing only that they pertain to the effects, distribution, and retailers of [the company's] products."  "Given FDA's initial request to [the company], however, and FDA's admission that at least some of these non-customer complaints relate to use of [the company] products by youths, it seems safe to assume that these complaints derive from parents, concerned citizens, and the like."  "The Court finds laughable [the company's] assertion that non-customer complaints about [the company's] distribution and retailers threaten to reveal confidential commercial information about the operation of [the company's] devices and the company's distribution channels."  "These complaints reflect outsiders' – and not even [the company] customers' – views of [the company's] products, their distribution, and retailers that sell [the company] products."  "It is absurd to contend that these non-customer complaints contain intrinsically valuable commercial information that threatens to reveal something about [the company's] internal operations or provide [the company's] competitors with sensitive information about [the company] that can be used to their advantage."  Regarding internal communications and analysis, the court finds that "FDA has failed to provide sufficiently detailed descriptions of the withheld records to permit the Court to make a reasoned decision whether the documents have been legitimately withheld under Exemption 4."  "Neither FDA's amended Vaughn index nor . . . Declaration, separately or in conjunction, provide sufficient detail to permit the Court to independently determine whether the withheld information 'would "jeopardize [[the company's]] commercial interests or reveal information about [its] ongoing operations."'"  "[The company's] internal classification and analysis of customer and non-customer complaints could qualify as commercial information, but the Court is unwilling to decide on this undeveloped record that this information is necessarily commercial under Exemption 4."
   
  Second, "[e]ven if the Court had determined that the complaints are commercial in nature, the Court still would deem FDA's decision to withhold the documents to be overbroad, as the complaints and any response from [the company] cannot reasonably be deemed confidential."  "Although the Court finds that internal [company] communications and analysis of these complaints meet the threshold for confidentiality, and, therefore, to the extent any of this information can properly be deemed commercial, it may be subject to protection under Exemption 4, the fact that some portion of these records may be confidential does not warrant withholding the records in their entirety."  Regarding complaints and the company's responses, the court finds that "[i]t strains credulity to believe that [the company] treats customer and non-customer complaints and [the company's] responses as highly protected, confidential information."  "Although [the company] may keep close guard over the summary reports aggregating the complaints as well as any internal [company] analysis and discussion of them, the same cannot be said for the complaints themselves or [the company's] responses."  "[N]either FDA nor [the company] has pointed to anything that would persuade the Court that the complaints and [the company's] responses were kept confidential despite their origination and subsequent dissemination outside of the company."  "There is no reason to believe that the complainants themselves had an expectation of privacy or confidentiality in submitting their complaints to [the company], nor is there any reason to believe that the complainants did not thereafter publicize their complaints or share their contents more broadly."  "FDA has an even weaker claim of confidentiality over [the company's] responses."  "Although FDA has provided virtually no detail on the mode or substance of [the company's] responses, there is no indication that [the company] responded to complainants only pursuant to a guarantee of confidentiality or secrecy, or that [the company] took efforts to ensure complainants would keep [the company's] responses private."  "As to the internal [company] analysis and communications contained with the complaint summary reports and other internal [company] documents, the Court agrees with FDA that, by virtue of [its] Declaration, it has established that those portions of the records are confidential under Argus Leader."  The court explains that "[defendant's] Declaration adequately demonstrates that [the company] 'both customarily and actually treated [the records] as private.'"  "[Defendant's] Declaration clearly states that all of the records at issue are “treated as highly confidential within the Company and are stored on secure IT networks that are password-protected and/or encrypted conditions designed to ensure their confidentiality.'"  "Similarly, [the company] attests that the records 'are not customarily shared with individuals who are not employees of the Company, and access is granted to employees only [on] a need-to-know basis.'"  "Further, [defendant's] Declaration confirms that, to the extent any of the records have been produced in other ongoing legal matters, '[i]n each instance, [the company] produced the documents strictly on a confidential basis by including appropriate confidentiality language in the cover letter for each production and/or producing the documents under a confidentiality agreement.'"  Regarding an assurance of confidentiality, the court notes that "FDA's April 24, 2018 letter to [the company] pursuant to Section 904(b) explicitly stated that, '[c]onsistent with applicable statutes and regulations, the confidentiality of trade secret[s] and confidential commercial information submitted to FDA pursuant to this request will be preserved.'"  "As the Court reads it, this is an unambiguous statement by FDA that it would keep confidential [the company's] information that qualifies for protection under FOIA Exemption 4."  "Further, pursuant to section 906(c) of the [the Federal Food, Drug, and Cosmetic Act ("FDCA")], any information obtained by FDA pursuant to a 904(b) request 'which is exempt from disclosure under [FOIA Exemption 4] shall be considered confidential and shall not be disclosed, except that the information may be disclosed to other [FDA] officers or employees.'"  "Similarly, FDA's regulations implementing both FOIA and FDCA dictate that '[d]ata and information submitted or divulged to the Food and Drug Administration which fall within the definitions of a trade secret or confidential commercial or financial information are not available for public disclosure.'"
   
  Third, regarding foreseeable harm, the court finds that "[a]t least with respect to the complaints and [the company's] responses, FDA 'ha[s] not established that the withheld information falls within the scope of Exemption 4 in the first instance, [and a]s such, [it has], a fortiori, failed to satisfy the heightened foreseeable-harm requirement as well.'"  "As for any internal [company] analysis and communications in these records, without adequately detailed descriptions of the information at issue, the Court cannot yet determine whether harm would be foreseeable to an exemption-protected interest as a result of disclosure, regardless of what that interest may be."  "Should FDA continue to seek to withhold some material in these records, the Court will address the issue on a more developed record."
   
  Finally, the court finds that "FDA has failed to present sufficient evidence to permit the Court to find that it has released all segregable, non-exempt information in the withheld records."  "In light of the Court's findings above with respect to Exemption 4, FDA must now conduct a closer review of the complaint summary reports and the other records documenting complaints to assess whether the complaints themselves and [the company's] responses can be reasonably segregated and released, to the extent the other information contained in the records is eligible for protection under Exemption 4."  "To the extent this information is not 'inextricably intertwined,' at the very least, the consumer and non-consumer complaints and any [company] responses must be disclosed to Plaintiffs."