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Smolen v. FAA, No. 22-44, 2023 WL 3818105 (S.D.N.Y. June 2, 2023) (Liman, J.)


Smolen v. FAA, No. 22-44, 2023 WL 3818105 (S.D.N.Y. June 2, 2023) (Liman, J.)

Re:  Request for records concerning decision to realign responsibility for Newark sector airspace from New York Terminal Radar Approach Control Facility to Philadelphia Air Traffic Control Tower

Disposition:  Granting defendant’s motion for summary judgment; denying plaintiff’s cross-motion for summary judgment

  • Exemption 4:  The court holds that defendant appropriately withheld portions of two draft memoranda of understanding (“MOUs”) “relat[ing] to [National Air Traffic Controllers Association (“NATCA”)] bargaining unit employees’ pay and other conditions of employment.”

    First, the court finds that “Defendant has established that the withheld information is commercial or financial in character.”  “The Draft MOUs contain NATCA’s proposals and FAA’s counterproposals with respect to the Realignment Determination.”  “Each of the proposals and counterproposals related to the pay and other conditions of employment of the business unit employees represented by NATCA.”  “Plaintiff argues that NATCA’s information cannot constitute ‘commercial or financial information’ because NATCA is a non-commercial tax-exempt organization and the Draft MOUs do not contain quintessential commercial information such as ‘sales statistics, inventories’ or information instrumental to a commercial entity’s operations.”  “Plaintiff further argues that the information cannot be ‘commercial or financial’ because NATCA has the exclusive right to represent all federally employed air traffic controllers and thus does not face competition from another labor organization.”  “Those arguments disregard the rules of statutory interpretation.”  “[A]n association need not generate taxable profits for its information be ‘commercial or financial . . . .”  “There is no qualifier that the association or organization be for profit or generate taxable income; public organizations, for example, frequently do not generate taxable income.”  “It is sufficient that it be an association and that the character of the information pertains to commerce.”  “Non-profit organizations as well, just like public or private organizations, engage in commerce and have commercial and financial information which is protected by FOIA Exemption 4.”  “Likewise, the protection afforded by FOIA Exemption 4 is not limited to sales statistics or inventories.”  “It extends to all ‘commercial or financial information’ obtained from a person.”  “Whatever the outer reaches of Exemption 4 may be, they would encompass the information at issue here.”  “It is not disputed that the terms under which an individual employee would be prepared to offer his or her services to an employer would be ‘commercial’ or ‘financial.’”  “It makes no difference that the terms being exchanged here related to groups of employees.”  “NATCA is the exclusive representative of the air traffic controllers and the Draft MOUs contain information regarding the terms it was demanding for the services of those whom it represented and who also in turn were engaged in commerce.”  “Plaintiff also argues that NATCA's information cannot be protected under Exemption 4 because disclosure of the withheld documents would not result in competitive injury.”  Citing Food Marketing Institute v. Argus Leader Media, the court finds that “‘competitive harm’ to NATCA is irrelevant to the ‘confidentiality’ inquiry and, by parity of reasoning and because courts are limited to the plain meaning of Exemption 4, it is also not necessary for information to be considered ‘commercial or financial.’”  “Even a monopolist may have commercial or financial information.”

    Second, the court relates that “Plaintiff does not dispute that the Draft MOUs contain information ‘obtained from a person.’”  “The Draft MOUs submitted by NATCA to the FAA self-evidently contain information ‘obtained from a person.’”  “NATCA is a ‘person’ under FOIA.”  “It is ‘an association of workers who have combined to protect or promote the interests of the members by bargaining collectively with their employers to secure better working conditions, wages, and similar benefits.’”  “The Draft MOUs submitted by NATCA contain only information obtain from a person.”  “The Draft MOUs containing the FAA’s counterproposals are not as obviously ‘obtained from a person.’”  “They were generated by the FAA and contain the FAA’s counterproposals.”  “However, ‘Exemption 4 uses the term “information” as opposed to document, memorandum, paper, file record, contract, or provision.’”  “Accordingly, ‘[t]he key inquiry is who “the source of the information [was] in the first instance,” and not necessarily who created the particular document.’”  The court finds that “[a]lthough [the Draft MOUs with the FAA’s counterproposals] contain comments from the FAA, the comments address information provided directly from NATCA in the Draft MOUs.”  “Specifically, they follow NATCA’s draft MOU formatting and contain NATCA’s bargaining positions because the FAA proposed different language in response to NATCA proposals by using track changes in a Microsoft Word document and tentatively agreed to other portions of NATCA proposals, pending final agreement.”  “Each of the proposed changes were part of the give-and-take of negotiation containing and reflecting NATCA’s negotiating positions.”  “In addition, the Draft MOUs memorialize oral proposals proffered, accepted, and/or accepted with compromise by both teams during a negotiation session, making it difficult if not impossible to segregate NATCA proposals from FAA proposals."

    Third, the court finds that “[defendant] has offered evidence that NATCA treats its draft MOUs and negotiation positions as confidential and does not share them with its members in order to avoid setting unrealistic expectations.”  “It also has offered evidence that NATCA ‘actually’ treated the Draft MOUs at issue here as private and confidential.”  “NATCA only shared its proposals and FAA’s counterproposals ‘with those individuals who were responsible for negotiating the agreement and subject matter experts who were brought into the Union-side caucus to help draft the proposals and counterproposals’ and ‘[a]ll proposals from both parties were treated as confidential, close-hold.’”  “For its part, the FAA confirms that it ‘and NATCA have an understanding that the FAA will protect draft negotiating proposals from public disclosure,’ that ‘NATCA submitted to [the FAA] the information at issue . . . consistent with its past practices of confidentiality,’ and that the FAA ‘treated NATCA's draft negotiation proposals as confidential,’ which is the ‘customary practice in ATO and union negotiations.’”

    Regarding foreseeable harm, the court holds that “‘[t]he interests protected by Exemption 4 of FOIA are the commercial or financial interests of the submitter in information that is of a type held in confidence and not disclosed to any member of the public by the person to whom it belongs.’”  “Accordingly, the FAA must show ‘foreseeable commercial or financial harm to the submitter upon release of the confidential information.’”  “Defendant has established that the disclosure of NATCA’s proposals and negotiating positions would cause foreseeable commercial harm to it both as a general matter and in this particular case.”  “‘NATCA represents a broad range of members whose interests and opinions can vary significantly across and within different facilities and/or areas of the country.’”  “Moreover, the effectiveness of collective bargaining depends on the assurance that each party to the negotiation will keep the proposals confidential.”  “Public negotiations lead parties to take more hardline positions, unlikely to be accepted by the other side, thus undermining both the purpose of collective bargaining and the commercial interests of each side to reach an agreement to protect the interests of its members or constituents.”  “As a result, the disclosure of the proposals and counterproposals in this case would undermine NATCA’s future collective bargaining efforts and would cause foreseeable harm to NATCA’s commercial interest.”  “It would limit NATCA’s ability to be flexible in future negotiations over other topics, complicate NATCA’s relationship with the FAA by forcing NATCA to publicly take hardline stances on future negotiation topics, and hinder NATCA’s ability to effectively advocate in the best interest of the entire bargaining unit rather than managing the opinions and expectations of individual members.”
  • Litigation Considerations, In Camera Inspection:  The court relates that “Plaintiff argues that Defendant has acted in bad faith, justifying in camera review.”  “It argues that NATCA engaged in unfair labor practices, that the FAA violated Section 804 of the FAA Modernization and Reform Act of 2012, and that the FAA was delinquent both in responding to Plaintiff’s appeal and in producing documents.”  The court finds that “[n]one of those arguments is sufficient to raise a genuine issue of material fact or to impugn the credibility of the evidence upon which the FAA relies.”  “The relevant question in a FOIA case . . . is whether there is ‘evidence suggesting bad faith on the part of the [agency].’”  “It does not turn upon the good faith or bad faith of the ‘person’ whose information is at stake and whether that person has treated the requesting party fairly.”  “Indeed, FOIA generally is indifferent to the identity of the requestor.”  “This FOIA lawsuit does not provide the proper forum for Plaintiff to air his grievances with the fairness of NATCA’s representation.”  “Similarly, the claim that the FAA should have engaged in the process set out in Section 804 of the FAA Modernization and Reform Act of 2012 for certain realignments does not provide support for an order requiring in camera review.”  “The Court’s jurisdiction under FOIA is limited to action ‘to enjoin the agency from withholding agency records and to order the production of any agency records improperly withheld.’”  “‘[A] violation of an agency’s own regulations (even if those regulations are related to the FOIA) are not violations of the FOIA itself and “are properly addressed under the APA,” not the FOIA.’”  “Finally, a long line of cases holds that ‘without more, an agency's delay does not render that agency’s response one that should be treated as made in bad faith or impugn the credibility of the agency’s affiants, at least where the agency ultimately performs an adequate and reasonable search for records.’”
  • Litigation Considerations, Exhaustion of Administrative Remedies:  The court holds that “Plaintiff’s challenge to the adequacy of Defendant’s search is barred because he has failed to exhaust administrative remedies.”  “Plaintiff took an administrative appeal of the FAA’s May 17, 2021 response to Plaintiff’s FOIA request to the FAA’s FOIA Program Management Division.”  “The appeal challenged the FAA’s withholdings under Exemption 2 and Exemption 4.”  “However, it did not challenge the adequacy of the FAA’s search for documents responsive to Plaintiff’s FOIA request.”  The court finds that “[t]o the extent that Plaintiff’s argument is based on Defendant’s failure to produce records that he claims must have existed, that argument could have been made just as easily in an administrative appeal as it is made now.”  “His failure to have done so, and to have given the FAA the opportunity to address his complaint administratively, bars him from obtaining judicial review of that issue.”  Additionally, the court finds that “[t]here is no merit to Plaintiff’s argument that he should be deemed to have exhausted his administrative remedies with respect to his adequacy challenge because the FAA failed to respond to his administrative appeal within the statutory time limits.”  “[T]he doctrine of constructive exhaustion applies with respect to issues that have been administratively appealed.”  “Plaintiff has not cited a single case that supports the proposition that, based on exhaustion of some other issue, he should be deemed to have constructively exhausted a separate issue he could have raised administratively but did not.”
Court Decision Topic(s)
District Court opinions
Exemption 4
Litigation Considerations, Exhaustion of Administrative Remedies
Litigation Considerations, In Camera Inspection
Updated June 29, 2023