People for the Ethical Treatment of Animals v. U.S. Dep't of Health & Human Servs.
People for the Ethical Treatment of Animals v. U.S. Dep't of Health & Human Servs.
Opinion
Pursuant to the Freedom of Information Act (FOIA),
I
A
On May 16, 2014, PETA submitted a FOIA request to HHS for information about the importation of nonhuman primates from May 1, 2013, until the request was processed. PETA asked for information collected under two agency regulations: The first requires importers to register with HHS and submit a statement describing "the number and types of [nonhuman primates] intended for import during the registration period" and "the intended permitted purposes for which the [nonhuman primates] will be imported."
HHS identified relevant information collected from ten importers and, as required by Executive Order No. 12600 and HHS regulations, notified them of the impending release.
See
Predisclosure Notification Procedures for Confidential Commercial Information, Exec. Order No. 12600,
Seven importers 1 responded, objecting to the disclosure of various information *348 and requesting redactions. Three importers 2 did not respond. HHS then released 1,575 pages of redacted documents.
B
Before HHS released the documents, PETA filed suit in district court after waiting the requisite period prescribed by FOIA.
See
The district court granted partial summary judgment to both parties. It began by rejecting HHS's argument that information about the particular species being shipped was confidential. Although the importers had made that claim to HHS, they had not requested redactions of that information from many of the disclosed documents. As a result, those documents "contain[ed] extensive disclosures of the names of the animal species imported ... during the twelve-month time period at issue."
PETA v. HHS
("
PETA I
"),
Next, as to the seven importers who objected to disclosure, the district court agreed with HHS that information about the number of animals shipped and their crate sizes would provide "valuable, detailed business data concerning each importer's capacity to import specific species and each importer's volume of business on a shipment-by-shipment basis."
*349
and business relationships.' "
But the district court reached a different conclusion regarding the three nonresponding importers. Although HHS had decided itself to redact their information to the same extent as the other importers, the district court explained there was a "reasonable assumption" that silence meant disclosure would not cause the nonresponding importers substantial competitive harm. Id. at 44-45. The district court ordered HHS to disclose their information.
C
After the district court entered judgment, the three nonresponding importers contacted HHS to explain they never received notice that their information might be released. They provided declarations to HHS, later filed with the district court, alleging they would be harmed by the disclosure just like the other importers. HHS moved under Federal Rule of Civil Procedure 60(b)(6) for reconsideration of the judgment regarding these three importers, which the district court granted because it had mistakenly assumed their silence was intentional.
PETA v. HHS
("
PETA II
"),
On appeal, PETA argues that information about the number of nonhuman primates in each shipment, the size of their crates, and the airline carrier used is not confidential, and that the district court erred when granting relief to HHS under Rule 60(b)(6).
II
The district court had subject-matter jurisdiction under
III
FOIA "requires federal agencies to disclose information to the public upon reasonable request unless the records at issue fall within specifically delineated exemptions."
Judicial Watch, Inc. v. FBI
,
Exemption 4 protects from disclosure "trade secrets and commercial or financial information obtained from a person and privileged or confidential."
*350
When, as here, a statute or regulation requires a person to submit information to the government, we determine whether that information is confidential for purposes of Exemption 4 using the two-part test from
National Parks & Conservation Ass'n v. Morton
,
HHS argues that disclosure of shipment-by-shipment quantity, crate size, and airline carrier information would cause substantial harm to the competitive position of the importers. This requires HHS to provide "both a showing of actual competition and a likelihood of substantial competitive injury."
CNA Fin. Corp. v. Donovan
,
IV
A
At the summary judgment stage, PETA conceded that the market for nonhuman primates is competitive and thus waived its contrary argument on appeal.
See
PETA II
,
B
Competition among the importers turns in part on their ability to obtain nonhuman primates at low cost and in large enough quantities to meet the demands of their clients.
See
Worthington Compressors, Inc. v. Costle
,
For example, in
Trans-Pacific Policing Agreement v. U.S. Customs Service
,
Because "[a]ny reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt," we discuss animal quantity, crate size, and airline carrier information in turn.
1
HHS determined that disclosing shipment-by-shipment quantity information would harm each importer by revealing its importation pattern and capacity to obtain nonhuman primates. We agree that disclosing this information would likely cause substantial competitive injury.
As WWP explained, revealing the number of each species of animal in its shipments would "allow [its] competition to determine [its] volume of business and possibly interfere with [its] supply of such species." Block Decl. ¶ 10, J.A. 111; see id. ¶ 5, J.A. 110 (explaining that quantity information "could allow competitors to learn a company's capacity to obtain, house and transport" nonhuman primates). PPI added that competitors with the ability to import larger numbers of certain nonhuman primates could leverage and "promote this fact to [buyers] and claim that they had a greater capacity to provide this species," thereby gaining a competitive advantage in negotiations. Rowell Decl. ¶ 6, J.A. 114. The importers operate in a limited *352 market where "even relatively small increases or decreases in the success of a particular importer can have an outsized impact [on] competitors." Id.
Shipment-by-shipment quantity information would also reveal the percentage of business by volume each importer devotes to a particular species. Block Decl. ¶ 10, J.A. 111. If a competitor knew that a large percentage of another importer's business was from a particular species of nonhuman primate, the competitor might try to drive up the other importer's costs or cut off its supply by offering higher prices to purchase that species from exporters.
Id.
;
see
Gilda Indus.
,
PETA responds that the U.S. Department of Agriculture (USDA) "already posts detailed inventories of the exact number of species and quantities that each importer possesses." PETA Br. 27. If these inventory snapshots are already public, PETA reasons, disclosure cannot cause competitive injury.
PETA is correct that information already available to the public cannot cause competitive injury and is not protected from disclosure by Exemption 4.
See
Niagara Mohawk Power Corp. v. U.S. Dep't of Energy
,
We see a material difference between inventory snapshots, posted periodically as part of inspection reports by the USDA, and the number of nonhuman primates obtained in various shipments. While an inventory snapshot might reveal the ability of an importer to satisfy the immediate market demand for nonhuman primates at the time of the inspection, it says nothing about the ability of each importer to obtain additional nonhuman primates and meet long-term or increased demand. Nor does it say anything about the importer's inventory the day before or after the inspection. Shipment-by-shipment quantity information is a far more accurate measure of business volume than the inventory each importer has at given points in time, which are often many months apart. The inventory snapshots of a particular importer might remain steady over multiple years regardless of whether that importer obtained 50 or 5,000 nonhuman primates for its clients between inspections.
Moving on, PETA points out that the two importers who provided declarations, WWP and PPI, did not request specific redactions of quantity information from the majority of their documents despite saying such information was confidential. PETA views this as a tacit admission that disclosing quantity information will not cause these or any other importers substantial competitive injury. Moreover, *353 PETA argues, the omission undermines the validity of their declarations.
Whether WWP and PPI failed to request specific redactions of their quantity information out of inadvertence or a subjective belief that their particular information would not cause substantial competitive injury does not negate that such information is objectively confidential. Indeed, those two importers could have requested the redactions and HHS would have been justified in withholding their quantity information. Their failure to do so does not prevent HHS, the district court, or us from finding their reasoning persuasive, nor does it compromise the confidentiality interests of the other importers, all of whom objected to release of the same information and requested specific redactions.
See
Pub. Citizen Health Research Grp. v. Nat'l Insts. of Health
,
2
HHS next argues that crate sizes are tantamount to quantity information and therefore confidential. This is so because "the size and dimension of crates ... reveal[ ] the capacity of the crates and can provide insight into the size or type of [nonhuman primate] imported." Rowell Decl. ¶ 6 & n.1, J.A. 114 & n.1. PETA disputes this assertion, arguing that crates come in all shapes and sizes and can hold any number or type of nonhuman primates. Therefore, PETA reasons, crate sizes cannot be used to estimate the number or type of imported nonhuman primates.
Even a cursory review of the importation documents reveals that crate sizes indicate corresponding quantity information. Certain size crates are routinely used to transport certain numbers of nonhuman primates. In fact, many of the sizes actually include the number of individual compartments or quantity of nonhuman primates each can accommodate, and we have no indication that shipments contain empty crates. PETA's insistence that crate sizes do not reveal the number of nonhuman primates in each shipment is unconvincing.
PETA otherwise repeats the same objections it raised regarding quantity information, but we are persuaded that HHS was justified in withholding crate sizes for the same reasons it could redact quantity information over those objections. Summary judgment was therefore appropriate on this issue and we need not consider whether crate sizes also reveal individual details about the nonhuman primates inside.
3
Finally, HHS explains that airline carriers willing to transport nonhuman primates are scarce and constitute another integral aspect of each importer's supply chain. WWP asserts that "the ability to locate airlines willing to transport research animals [is] the single most time consuming aspect of the logistical portion of this business which also consumes an extensive *354 amount of effort and expense." Block Decl. ¶ 7, J.A. 110; see Rowell Decl. ¶ 7, J.A. 114 ("[M]uch time, expense and effort is involved in locating airlines."). And "when a viable transport route is able to be established, [nonhuman primate importers] seek to guard this information vigorously." Block Decl. ¶ 7, J.A. 110. Airline carriers also "signal to ... competition the country from where the import is being received, thereby giving [competitors] valuable trade information regarding species that are available, supplier names, and means or methods of transport." Rowell Decl. ¶ 8, J.A. 115; see Norris Decl. ¶ 29, J.A. 19.
A competitor could easily use this information to target and disrupt, whether by outbidding or other means, a specific supply chain in an effort to drive an importer from the market or steal importation capacity.
See
Gilda Indus.
,
PETA argues that airlines willing to carry nonhuman primates are commonly known and so disclosing their identities would not cause substantial competitive injury. But, as the district court properly noted, PETA overlooks the essential distinction between general industry data and particular business relationships or shipment-by-shipment supply chain information.
PETA I
,
* * *
We conclude this discussion by noting that the likelihood of substantial competitive injury can increase disproportionately as more information is released. Requiring disclosure of multiple types of information provides a more comprehensive picture of each importer's supply chains, importation patterns and capacity, and business relationships. As the district court observed, "[T]he record evidence ... indicates that [nonhuman primate] importers have taken considerable efforts to develop and protect business models effectuating the cost-effective transport of nonhuman primates into the United States through strategic relationships with exporters and airlines."
PETA I
,
Because the market for nonhuman primates is competitive and disclosure would likely cause substantial competitive injury, releasing shipment-by-shipment quantity, crate size, and airline carrier information would cause substantial harm to the competitive position of each importer. The information is therefore confidential and protected from disclosure by Exemption 4.
V
We now turn to the district court's decision to grant HHS's Rule 60(b)(6) motion. In considering a Rule 60(b) motion, the district court "must
*355
strike a 'delicate balance between the sanctity of final judgments ... and the incessant command of a court's conscience that justice be done in light of
all
the facts.' "
Twelve John Does
,
We have held that "[w]hen a party timely presents a previously undisclosed fact so central to the litigation that it shows the initial judgment to have been manifestly unjust, reconsideration under [R]ule 60(b)(6) is proper."
Good Luck
,
The district court granted the Rule 60(b)(6) motion because it had assumed that silence on behalf of the nonresponding importers indicated they did not object to disclosure of their information. The district court did not reconsider whether the various types of information were confidential, but instead whether the nonresponding importers somehow conceded that disclosing their particular information was harmless. In addition, the district court explained that HHS's failure to timely present this evidence was not due to neglect, and the prejudice that would otherwise result to the third-party importers was "inherently unfair" and weighed in favor of reconsideration.
PETA II
,
We are mindful that "the district judge, who is in the best position to discern and assess all the facts, is vested with a large measure of discretion in deciding whether to grant a Rule 60(b) motion."
Twelve John Does
,
PETA argues that Exemption 4 is an objective inquiry that should not turn on subjective assertions of competitive harm by the importers.
See
Nat'l Parks
,
In response to the Rule 60(b)(6) motion, PETA produced new evidence to refute or undermine the alleged likelihood of substantial competitive injury that each of the nonresponding importers would experience from disclosure of the relevant information. The district court refused to consider this evidence because PETA failed to timely submit it for consideration during the summary judgment proceeding. This was not an abuse of discretion, either.
See
Good Luck
,
Moreover, PETA now tries to raise additional arguments it did not make in connection with the Rule 60(b)(6) motion below. Those arguments were forfeited.
Keepseagle v. Perdue
,
VI
We affirm the judgment of the district court.
So ordered.
Bartons West End Farms, Inc.; Buckshire Corporation; Charles River Laboratories; Covance Research Products, Inc.; PTLC/Primate Products, Inc.; Valley Biosystems; and Worldwide Primates, Inc.
Central State Primates; Dallas Zoo Management; and SNBL USA.
HHS filed declarations from WWP and PPI as representative of the objections to disclosure raised by the importers. HHS explained that certain other importers claimed their predisclosure responses to the agency contained information that was also subject to FOIA exemptions and should not be shared, although HHS offered to make the correspondence available for the district court to review
in camera
. The district court concluded such review was unnecessary at the summary judgment stage because HHS had already provided sufficient evidence to justify applying Exemption 4.
PETA v. HHS
("
PETA I
"),
In ruling on another motion, the district court actually ordered HHS to disclose the number of animals in each shipment, along with their crate sizes, for WWP and PPI because those two importers failed to request redactions for much of that information. HHS does not appeal that decision.
Reference
- Full Case Name
- PEOPLE FOR THE ETHICAL TREATMENT OF ANIMALS, Appellant v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Appellee
- Cited By
- 25 cases
- Status
- Published