WP Co. LLC v. SBA, No. 20-1240, 2021 WL 5881972 (D.D.C. Dec. 13, 2021) (Boasberg, J.)

WP Co. LLC v. SBA, No. 20-1240, 2021 WL 5881972 (D.D.C. Dec. 13, 2021) (Boasberg, J.)

Re:  Request for records concerning recipients of loans under Paycheck Protection Program ("PPP")

Disposition:  Granting defendant's motion for summary judgment

• Exemption 4:  The court relates that at issue are "the interim payment status of individual PPP loans (along with additional data that would reveal that status) under Exemption 4."  Previously, "[t]he Court concluded that SBA had not canvassed the actual lenders, and so it instructed the agency to come back with data that would allow the Court to assess 'whether PPP lenders customarily and actually treat interim loan status as confidential.'"  "Plaintiffs wisely concede that SBA has done just that and that its submissions are now sufficient; indeed, SBA's research went above and beyond what is required."  "Since it was last before this Court, SBA has 'contact[ed] the top 300 PPP lenders, seeking their position on whether PPP loan status information is customarily and actually kept confidential' and 'found no lender or trade association for lenders that stated a PPP lender discloses interim financial status of their SBA loans to the public.'"  "The agency also filed a declaration from 24 lenders stating that 'they customarily and actually treat interim PPP loan status as confidential.'"  "This evidence, especially when considered alongside SBA's earlier submissions, is more than sufficient to allow the Court to conclude that 'PPP lenders customarily and actually treat interim loan status as confidential.'"  "The additional data fields and internal coding that would necessarily reveal that confidential status also fall within the scope of Exemption 4."  "That leaves only one issue for the Court to address:  whether SBA has satisfied the foreseeable-harm requirement."  The court relates that "SBA's declarations . . . 'concretely explain how disclosure "would"' cause harm to an interest protected by the exemption."  "In those declarations, [defendant] explains that disclosure of the withheld information 'would harm the interests of (1) PPP borrowers, (2) PPP lenders, and (3) SBA itself.'"  "[Defendant] asserts that disclosure of interim loan-status information – which may identify a borrower as delinquent on its loan, even if that status is temporary or ultimately irrelevant – could 'negatively impact the borrower's reputation or creditworthiness, or adversely affect its survivability and growth.'"  "As to lenders, '[r]elease of interim loan status information could lead to an adversarial relationship with a lender's own borrowers or allegations that the lender negligently released information that caused the borrower financial harm.'"  "Disclosure would also 'create significant and unprecedented opportunity for business competitors of PPP lenders to target their local or regional marketing efforts at PPP borrowers not designated as being in default,' thus putting PPP lenders at a competitive disadvantage."  "Finally, as to SBA, disclosure would cause 'regulated lenders [to] lose confidence in the agency's future ability to protect confidential information . . . creat[ing] an incentive not to participate in the agency's programs.'"  "Despite Plaintiffs' protests that such harms are too 'attenuated and conjectural' to satisfy the foreseeable-harm standard, . . . the Court finds that these declarations have 'directly articulated "[a] link between the specified harm and the specific information contained in the material withheld."'"
   
• Exemption 6 & Procedural Requirements, "Reasonably Segregable" Obligation:  The court relates that at issue is "tax identification numbers under Exemption 6."  The court further notes that "[a]ll agree that [social security numbers ("SSNs")] are properly withheld under Exemption 6 . . . and that [employer identification numbers ("EINs")] are not."  "SBA has nonetheless withheld the EINs because it asserts that it cannot reasonably segregate them from the SSNs."  The court finds that "SBA has now proffered a sufficiently detailed explanation of its inability to segregate."  "At the Court's prompting, the agency contacted the IRS and SSA to determine whether their assistance might make segregation of the EINs possible."  "Both agencies concluded that they were 'prohibited by law from providing SBA with results of a comparison between SBA's PPP data and the data possessed by those agencies, which would be a critical step for the segregation of EINs from SSNs according to the strategy as proposed by Plaintiffs.'"  "That is because the IRS determined that EINs and SSNs are 'tax return information' that it may not disclose except as allowed by regulation, and there is no regulation allowing disclosure here."  "'Without an accurate database of EINs or SSNs from IRS or SSA against which to compare SBA's data,' SBA asserts, 'it is impossible to segregate the EINs from the SSNs' and so Plaintiffs' proposed strategy offers no solution."  The court notes that "SBA could, in theory, segregate the EINs by asking the borrowers of each of the approximately 12 million PPP loans to indicate whether the number they provided was an EIN or an SSN, but it understandably 'lacks the means or resources' to do so."  "Doing so, furthermore, would generate new records, . . . and it is well established that FOIA does not require agencies to create documents that do not already exist."
  
  "Finally, [the court finds that] to the extent that SBA must demonstrate foreseeable harm for the Exemption 6 withholdings, any argument that they have not done so has been forfeited."  "In any event, it is not difficult to note how people would be injured by the release of their SSNs."