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Org. for Competitive Mkts. v. OIG, USDA, No. 14-1902, 2024 WL 4753818 (D.D.C. Nov. 12, 2024) (Sullivan, J.)

Date

Org. for Competitive Mkts. v. OIG, USDA, No. 14-1902, 2024 WL 4753818 (D.D.C. Nov. 12, 2024) (Sullivan, J.)

Re:  Request for records concerning OIG’s 2011 audit of USDA’s Agricultural Marketing Service (“AMS”) regarding AMS’ oversight of USDA’s beef promotion program entitled “Agricultural Marketing Service Oversight of the Beef Research and Promotion Board’s Activities”

Disposition:  Granting defendants’ motion for summary judgment; denying plaintiff’s motion for summary judgment

  • Litigation Considerations, Adequacy of Search:  “Plaintiff does not question the adequacy of USDA-OIG’s search, and the Court concludes that the searches conducted by OIG were sufficient to meet USDA-OIG’s FOIA obligations.”  “After identifying the individuals on the audit team and other personnel who might have relevant records, as well as gaining an understanding of where the audit team’s records and communications were maintained, USDA-OIG conducted searches of both hard copy and electric files in the relevant field offices and various personnel email records.”  “USDA-OIG [then] conducted a second search . . . .”  “Reasonable search terms were identified . . . and searches were conducted of the audit team email, regional field office electronic and hard copy files, the audit SharePoint site, and the Office of Counsel email and records . . . .”
     
  • Litigation Considerations, Vaughn Index/Declaration:  Regarding Exemption 4, the court relates that, “[f]irst, OCM argues that the declarations and Vaughn indexes are conclusory and do not meet the agency’s burden of proof because they ‘are replete with buzzwords . . . but they all lack meaningful substance.’”  “The Court agrees with USDA-OIG and is persuaded that the declarations and Vaughn indexes provide sufficient details about the content of the withheld information.”  “The Vaughn indexes in this case provide document-specific and exemption-specific descriptions for all documents that were withheld pursuant to Exemption 4.”  “The Vaughn indexes contain a document-by-document list asserting the basis and explanation for the withholding and a document description, including the date of the document, the agency that authored it, and the contents.” Similarly, “the Court concludes that the Vaughn Index and declarations are adequate to withhold the documents under Exemption 5.”  “The Supplemental Vaughn Index for Draft Reports provides the document date, the author(s) of the document (including the author’s agency and role in the audit), the part of the deliberative process the document was part of, and the role of the document in that process.”  “Moreover, the Vaughn index and declarations clearly establish the deliberative, give-and-take nature of the communications and exchanged drafts.”
     
  • Exemption 4:  The court relates that “[plaintiff] does not dispute that the withheld information constitutes commercial or financial information obtained from a person, but disputes that the information is confidential.” “The Court is persuaded that USDA-OIG has met its burden of showing that the redacted information is generally treated as private by the owner of the records.”  “The withheld contents include information such as financial reports, accounting ledgers, budgets, and vendor contact information.”  “USDA-OIG provided declarations from each [of two outside submitters] specifically stating for each document at issue that the entities have ‘never publicly disclosed such information.’”  “[Plaintiff] does not offer any contradictory evidence of public disclosure or bad faith that would call the declarations into question.” “Rather, [plaintiff] argues that the second condition in [Food Mktg. Inst. v. Argus Leader Media, 588 U.S. 427, 434 (2019)] – government assurance of privacy – is a necessary condition which is absent from the Beef Act.”  “[Plaintiff] also argues that the ‘contractors do not have an expectation of privacy in information that, by law, they have no right to keep secret and that they are required to keep and provide the government . . . .’”  “However, as discussed above, the D.C. Circuit has not extended the confidentiality test to require an explicit government assurance of privacy, leaving the only required condition for confidentiality whether the information is customarily released to the public.”  “Accordingly, the Court concludes that the financial and commercial records from the [outside] Contractors are confidential under Exemption 4.”

    Additionally, “[t]he Court is persuaded that USDA-OIG and [the submitter] have sufficiently established the foreseeable harm that could occur if the withheld information regarding the [outside entities] are released to the public.”  “Not only do the withheld documents contain information on [the submitter’s] relationship with vendors, but they also contain detailed information on [the submitter’s] ‘business operations, budgeting, strategies, and operational efficiencies.’”  “In the hands of [the submitter’s] competitors or the public, [the submitter] has adequately shown that any of this information alone could foreseeably cause financial and competitive harm.”
     
  • Exemption 5, Deliberative Process Privilege:  “The Court first addresses [plaintiff’s] argument that government misconduct in conducting the audit triggers the government misconduct exception to the deliberative process privilege, and therefore, USDA-OIG cannot invoke the privilege with regard to certain records at issue in this case.”  “[Plaintiff] claims that there are two categories of misconduct here.”  “First, [Plaintiff] asserts that USDA-OIG failed to act independently in [an] audit . . . .”  “Second, [plaintiff] contends that USDA-OIG misled the public . . . .”  “Assuming arguendo that the exception applies to FOIA cases, . . . OCM has not . . . met the high bar required to invoke the exception.”  “Here, the evidence does not reach the egregiousness required to trigger the exception.”  “While the evidence shows that USDA-OIG communicated and collaborated with [USDA’s Agricultural Marketing Service (“AMS”)] regarding the audit report and that AMS was potentially concerned about the audit findings, the combination of these does not equate to evidence that USDA-OIG lost its objectivity and independence during the audit or that USDA-OIG had a nefarious intent.”  “The same is true for Plaintiff's second theory of government misconduct – misleading the public.”  “[Plaintiff] offered no evidence that USDA-OIG intended to mislead the public.”  “For these reasons, the Court concludes that there is no basis to invoke the government-misconduct exception to the deliberative process privilege to certain documents at issue in this case.”

    Next, the court relates that “[plaintiff] takes issue with USDA-OIG invoking the deliberative process privilege only for the records listed in OIG’s Supplemental Vaughn Index for Draft Audit Reports.”  “These withheld documents consist of email exchanges between USDA-OIG and AMS and ‘discussion drafts’ attached thereto.”  “[T]he Court concludes that the withheld documents are pre-decisional and deliberative.”  “The Court is persuaded that USDA-OIG has established that the withheld documents are pre-decisional because the Vaughn index and declarations clearly establish that the communications and exchanged drafts at issue were part of USDA-OIG’s deliberative process in determining the audit findings, were created prior to a final decision, and do not reflect the agency’s final decision.”  “The Court is persuaded that USDA-OIG has established that the withheld documents are deliberative.”  “The record establishes that USDA-OIG communicated with AMS as part of an iterative process to ‘obtain necessary information, clarify audit issues, and discuss possible resolution of the audit findings and recommendations.’” “Clearly, this ‘give-and-take’ between the agencies supported USDA-OIG’s efforts in conducting audits and is deliberative in nature.”

    Additionally, “[t]he Court is persuaded that USDA-OIG has sufficiently established the foreseeable harm that could occur if these communications and ‘discussion drafts’ were released to the public.”  “Not only would it hinder the ability for AMS and USDA-OIG to openly communicate in the future, but it would also confuse the public as to what the final audit findings were or why certain suggestions were not implemented.”  “This type of inter-agency reflection and collaboration is exactly what the deliberative process privilege was designed to protect.”
     
  • Exemption 5, Deliberative Process Privilege; Waiver and Discretionary Disclosure, Waiver:  The court relates that “[f]inally, OCM argues that ‘[e]xemption 5 is inapplicable to communications between an auditing OIG and agencies under audit[]’ . . . .”  “The Court disagrees.”  “By communicating with AMS throughout the audit and providing AMS with draft reports for comment, USDA-OIG is fulfilling its responsibility of ‘develop[ing] a report that is fair, complete, and objective,’ by including the ‘perspective of the audited entity’s responsible officials and corrective actions they plan to take.’”  “[Plaintiff] does not cite to, nor can the Court find, any authority suggesting that there is or should be an exception to the deliberative process privilege to allow disclosure of the agencies’ encouraged collaboration.”

    “[Plaintiff] also argues the exchanged drafts lost any protection under Exemption 5 when USDA-OIG shared the documents with AMS.” “Asserting that AMS was a self-interested party for the purposes of the audit, OCM relies on – but fails to cite any authority supporting – a ‘Congressional recognition’ that ‘agency heads are not disinterested deliberators when evaluating their own programs[]’ . . . .” “Here, drafts here were exchanged between two government agencies as required by auditing standards.”  “Accordingly, the Court concludes that sharing the draft reports with AMS does not rid them of their protection under Exemption 5.”
     
  • Litigation Considerations, Evidentiary Showing, “Reasonably Segregable” Showing:  “The Court concludes that USDA-OIG’s Vaughn Indexes and declarations demonstrate that all reasonably segregable, non-exempt information has been released to [plaintiff].” “[Plaintiff] offered no evidence demonstrating that segregable information exists.”  “Given that the Court has concluded that all financial records from the [outside entities] are ‘confidential’ under Exemption 4, [plaintiff’s] argument is unpersuasive.”  “With regard to the Exemption 5 withholdings, [defendant’s] declaration together with the Court’s determination that the information has been properly withheld under the exemption, are sufficient to trigger the presumption that the agencies satisfied their FOIA obligations with respect to segregability.”
Court Decision Topic(s)
District Court opinions
Exemption 4
Exemption 5, Deliberative Process Privilege
Litigation Considerations, Adequacy of Search
Litigation Considerations, Vaughn Index/Declarations
Litigation Considerations, “Reasonably Segregable” Requirements
Waiver and Discretionary Disclosure
Updated January 6, 2025