GOVERNMENT ACCOUNTABILITY PROJECT, Plaintiff, v. FOOD & DRUG ADMINISTRATION, Defendant.
No. 12-cv-1954 (KBJ)
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
August 26, 2016
Plaintiff Government Accountability Project (“GAP“) is a non-profit organization whose mission includes “enhanc[ing] overall food integrity by facilitating truth-telling and transparency.” (Compl., ECF No. 1, ¶ 3.) To that end, GAP has requested documents from the Food and Drug Administration (“FDA” or “Defendant“) under the Freedom of Information Act (“FOIA“),
As explained below, this Court concludes that FOIA Exemption 3, which protects information “specifically exempted from disclosure by statute[,]”
A. Basic Facts
Antimicrobial drugs are used in food-producing animals for a variety of purposes, including to treat and prevent disease and to promote growth and weight gain. (See Decl. of Michael J. Blackwell (“Blackwell Decl.“), Ex. 1 to Pl.‘s Mot., ECF No. 41-2, ¶ 9.) Some members of the public are concerned that the overuse of such drugs may harm public health by creating antimicrobial-resistant bacteria that might subsequently infect humans. (See id.) But data on the use of antimicrobial drugs in food-producing animals is hard to come by, making it difficult to study the link between such drugs and antimicrobial resistance. (See id. ¶ 10.)
The Animal Drug and User Fee Amendments of 2008 (“ADUFA“), 110 Pub. L. 316, 122 Stat. 3509, codified at
As part of its mission to promote food quality through transparency, GAP filed a FOIA request in February of 2011, seeking certain data that were not included in the summary reports. This initial FOIA request sought
(1) printed copies of all educational and outreach materials that FDA has prepared in order to inform and assist antimicrobial drug sponsors in fulfilling their duty to report the amount of antimicrobial active ingredient in their drugs that have been sold or distributed for use in food-producing animals pursuant to [Section] 105 of the Animal Drug User Fee Amendments of 2008; (2) FDA‘s data for use of antimicrobial drugs in food-producing animals in 2009 as broken down by container size, strength, and dosage form; and (3) FDA‘s data for use of antimicrobial drugs in food-producing animals in 2009 as broken down by class of animal.
(Pl.‘s SMF ¶ 2.) The FDA produced documents in response to the first part of GAP‘s request in May of 2011; one month later, in June, the agency notified GAP that it was withholding documents with respect to the remaining parts of the request on the basis of Exemption 4. (See Garcia-Malene Decl. ¶¶ 6-7; Pls.’ Mem. at 2.) GAP appealed that determination in July of 2011, and the FDA denied the appeal one year later. (See Compl. ¶ 23.) GAP then filed the instant complaint, in December of 2012, seeking to challenge the FDA‘s withholding determination. (See id. ¶¶ 33-36.)
Meanwhile, GAP modified portions of its FOIA request. (See Compl. ¶ 21; Garcia-Malene Decl. ¶ 8.) Most notably, GAP altered the second and third parts of the request to indicate that it desired ”aggregated data concerning the amount of antimicrobial active ingredient sold for each class of antimicrobial drugs, rather than data concerning sales or distribution by each individual sponsor[.]” (Compl. ¶ 21 (emphasis added); see also Pl.‘s SMF ¶ 4.) The FDA conducted a search based on this
Document 2 lists the volume (in kilograms) of the active ingredients for all antimicrobial drugs sold and distributed in 2009, broken down based on three characteristics: the market within which the drug is distributed (e.g., domestic or export); the route of the drug‘s administration (e.g., injection or topical); and the drug‘s antimicrobial class (e.g., aminoglycosides or tetracyclines). (See Ex. to Notice of Filing (“Doc. 2“), ECF No. 21-1; AHI‘s Mem. at 24.) The document also indicates, for each particular antimicrobial class within a route and a market, whether the drugs in that class had one, two, or three or more sponsors in 2009. (See Doc. 2 at 1.) Finally, the document records the total volume of active ingredients for antimicrobial drugs sold or distributed by the type of market, and the route of administration within that market. (See id.) For example, according to the document, 22,957 kilograms of macrolides designed for injection were sold or distributed domestically in 2009, coming from three or more distinct sponsors. (See id.) And, overall, there were 388,518 total kilograms of antimicrobial drugs designed for injection sold or distributed domestically in 2009. (See id.)
Significantly for present purposes, the FDA has invoked FOIA Exemptions 3 and 4 to redact many of the data points in Document 2. To be specific, the FDA asserts that
As a practical matter, the FDA‘s redaction analysis appears to have worked as follows. As noted above, the FDA first redacted all data from a single specific sponsor. There was only one sponsor in 2009 for domestic sulfas designed for injection, for example (see Doc. 2 at 1), and in the agency‘s view, if that data point was released, anyone who knew the identity of the sole sponsor would necessarily also know that sponsor‘s sales or distribution total for domestic, injection-administered sulfa drugs in 2009. (See Def.‘s Mem. at 22-23.) The FDA also redacted all data that were aggregated from just two distinct sponsors. For example, two sponsors provided all of the aminoglycosides designed for injection that were sold or distributed in 2009. (See Doc. 2 at 1.) The FDA asserts that, if that data point was released, each sponsor would know the volume that was attributable to its rival simply by subtracting its own volume from the aggregated figure. (See Def.‘s Mem. at 24, 40.) Finally, the FDA redacted any data that were aggregated from three or more distinct sponsors where other publicly
B. Procedural History
The FDA and GAP filed cross-motions for summary judgment on the issue of whether Exemptions 3 and 4 justified Document 2‘s redactions in 2013, and the Court held a hearing on those motions on June 5, 2014. This case was then stayed at the request of both parties while the FDA determined whether or not the figures in Document 2 were accurate. (See Consent Mot. to Stay Litigation, ECF No. 19; Minute Order of August 5, 2014.) The FDA disclosed an updated and revised version of
In its motion for summary judgment, the FDA argues that Section 105 of ADUFA is a withholding statute within the meaning of Exemption 3, and that its language prohibits the disclosure of the information that the FDA has withheld. (See Def.‘s Mem. at 16-27.) With respect to Exemption 4, the FDA contends that the redacted information is confidential commercial data, the disclosure of which would cause substantial competitive injury. (See id. at 27-43.) For its part, GAP argues that Section 105 of ADUFA is not a withholding statute under Exemption 3 (see Pl.‘s Mem. at 11-20), and that even if it were a withholding statute, the FDA has applied it too broadly here (see id. at 20-25). GAP also urges the Court to conclude that Exemption 4 does not cover the redacted information because Defendants have not shown that the information would cause substantial competitive harm. (See id. at 24-40.)
On January 5, 2015, the Animal Health Institute, a trade association of companies that develop and manufacture animal medications, moved to intervene in this action in order to protect its members from the “substantial competitive harm” that would allegedly accompany “public disclosure of the annual sales volume of [their] medications[.]” (Mem. in Supp. of AHI‘s Mot. to Intervene, ECF No. 23-1, at 2.) The Court granted AHI‘s motion (see Mem. Op. & Order, ECF No. 37), and AHI subsequently filed its own motion for summary judgment, supporting the FDA‘s redactions on the basis of Exemption 4 (see AHI‘s Mot.; AHI‘s Mem. at 29-45.)
II. LEGAL STANDARDS
FOIA “generally requires the disclosure, upon request, of records held by a federal government agency[.]” Sciacca v. Fed. Bureau of Investigation, 23 F. Supp. 3d 17, 25 (D.D.C. 2014) (alteration in original) (internal quotation marks omitted) (quoting Judicial Watch, Inc. v. U.S. Dep‘t of the Treasury, 796 F. Supp. 2d 13, 18 (D.D.C. 2011)); see
A. FOIA Exemption 3
Under Exemption 3, an agency may withhold information “specifically exempted from disclosure by statute[,]” provided that the statute either (1) “requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue,” or (2) “establishes particular criteria for withholding or refers to particular types of matters to be withheld[.]”
To determine whether a statute qualifies as a withholding statute as required, courts look to “the language of the statute on its face[,]” Zanoni v. U.S. Dep‘t of Agric., 605 F. Supp. 2d 230, 236 (D.D.C. 2009), and they do not defer to an agency‘s interpretation of the statute, see Reporters Comm., 816 F.2d at 735, rev‘d on other grounds, 489 U.S. 749 (1989); cf. Rubber Mfrs. Ass‘n, 533 F.3d at 814 (noting that all parties, including the Department of Transportation, had agreed that “[j]udicial deference is neither sought nor owed to the agency‘s interpretation” of a statute‘s nature under Exemption 3 (alteration in original) (citation omitted)). Only if a statute meets the threshold requirement must a court consider whether either of the two conditions articulated in
B. FOIA Exemption 4
FOIA Exemption 4 protects from disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential[.]”
Notably, “an agency opposing disclosure based on Exemption 4 is not required to provide detailed economic analysis of the competitive environment[.]” Gilda Indus., Inc. v. U.S. Customs & Border Prot. Bureau, 457 F. Supp. 2d 6, 10 (D.D.C. 2006) (citation omitted). However, the agency “must provide affidavits that contain more
C. Summary Judgment In FOIA Cases
Courts routinely resolve FOIA disputes in the summary judgment context. See AquAlliance v. U.S. Bureau of Reclamation, 139 F. Supp. 3d 203, 207 (D.D.C. 2015); Wheeler v. Dep‘t of Justice, 403 F. Supp. 2d 1, 5 (D.D.C. 2005) (explaining that summary judgment is the “routine vehicle” for resolution of a FOIA dispute). According to
The defending agency “bears the burden of proving that it has complied with its obligations under the FOIA[.]” AquAlliance, 139 F. Supp. 3d at 207 (citing, inter alia,
However, summary judgment cannot be granted if dueling affidavits create a genuine dispute over issues of material fact. See Wash. Post Co. v. U.S. Dep‘t of Health & Human Servs., 865 F.2d 320, 326 (D.C. Cir. 1989); Sears, Roebuck & Co. v. Gen. Servs. Admin., 553 F.2d 1378, 1382 (D.C. Cir. 1977); Pub. Citizen Health Research Grp. v. Food & Drug Admin., 953 F. Supp. 400, 403 (D.D.C. 1996).
III. ANALYSIS
As explained, the FDA has produced two partially redacted documents in response to GAP‘s amended FOIA request, only one of which is currently in dispute. (See Pl.‘s Mem. at 3; Def.‘s Mem. at 13.) Document 2 is a responsive record that contains data on the volume of antimicrobial drugs sold or distributed for use in food-producing animals in 2009, and although the agency has produced much of this document, it has withheld certain data on the grounds that the redacted information is exempt from disclosure under FOIA Exemption 3 or FOIA Exemption 4 (or both). For the reasons explained below, this Court agrees with GAP that the information the agency has redacted cannot be withheld pursuant to Exemption 3; however, the Court has also concluded that a dispute of material fact that is essential to determining whether or not Exemption 4 permits the challenged withholdings exists. Accordingly, all three pending summary judgment motions must be denied.
This case is, in part, a tale of two statutes: FOIA and ADUFA. As explained above, FOIA‘s Exemption 3 allows an agency to withhold information that is “specifically exempted from disclosure by [another] statute” under certain conditions,
As usual, the Court begins its analysis by examining the pertinent statutory text. Section 105 of ADUFA requires sponsors of new animal drugs that contain an antimicrobial active ingredient to submit annual reports to the FDA “on the amount of each antimicrobial ingredient in the drug that is sold or distributed for use in food-producing animals[.]”
(E) The Secretary shall make summaries of the information reported under this paragraph publicly available, except that—
(i) the summary data shall be reported by antimicrobial class, and no class with fewer than 3 distinct sponsors of approved applications shall be independently reported; and
(ii) the data shall be reported in a manner consistent with protecting both national security and confidential business information.
GAP reads
This Court agrees with GAP that Section 105 of ADUFA is not a withholding statute under Exemption 3, for the following reasons.
To determine whether a statute “specifically exempt[s] matters from disclosure” and thus qualifies as a withholding statute that is within the purview of Exemption 3,
Specifically, and stepping back to examine the necessary context, subdivision 3(A) of subsection l requires “the sponsor of [an animal] drug [to] submit an annual report to the Secretary on the amount of each antimicrobial active ingredient in the drug that is sold or distributed for use in food-producing animals[.]”
The repetition of key language further confirms that subdivisions (E)(i) and (E)(ii) are not general withholding mandates. It is a well-established principle of statutory interpretation that repeated phrases are presumed to have the same meaning, especially when they appear in close proximity. See Brown v. Gardner, 513 U.S. 115, 118 (1994); Jarecki v. G. D. Searle & Co., 367 U.S. 303, 307 (1961). With that in mind, the Court notes that
The fact that Congress certainly knows how to create a clear withholding mandate when it wants to also bolsters the conclusion that Section 105 of ADUFA is not intended to be construed as such. In other contexts, Congress has crafted statutory terms that unambiguously prohibit disclosure in all circumstances. See, e.g.,
2. The FDA‘s Exemption 3 Arguments Are Unpersuasive
The FDA attempts to advance several arguments in support of its invocation of Exemption 3 based on Section 105 of ADUFA, none of which succeeds. For example, regarding the text of subdivision (E)(i), the FDA contends that the language “no class with fewer than 3 distinct sponsors of approved applications shall be independently reported,”
The FDA also argues that “the presence of a disclosure requirement in Section 105 of ADUFA does not mean that the prohibitions on disclosure are restricted to disclosures made in the Summary Reports.” (Def.‘s Mem. at 19; see id. at 19-20.) This is true enough, as far as it goes; there is no a priori reason that a statute cannot both mandate disclosure in one context and restrict disclosure in another. But the FDA‘s task here is to make a persuasive argument that, whatever the scope of the disclosure requirement in Section 105 of ADUFA, Congress intended the restrictions in subdivisions (E)(i) and (E)(ii) to extend beyond the mandated summary reports. And this Court believes that the best reading of the statute‘s text is that the restrictions in
Undaunted, the FDA points to the case of John Doe #1 v. Veneman, 380 F.3d 807 (5th Cir. 2004); ironically, in this Court‘s view, that case supports the Court‘s conclusion, not the FDA‘s. (See Def.‘s Mem. at 19-20.) In Veneman, the Fifth Circuit considered whether or not a provision of the
[r]ecords maintained under [the statute] shall be made available to any Federal or State agency that deals with pesticide use or any health or environmental issue related to the use of pesticides, on the request of such agency. Each such Federal agency shall conduct surveys and record the data from individual applicators to facilitate statistical analysis for environmental and agronomic purposes, but in no case may a government agency release data . . . that would directly or indirectly reveal the identity of individual producers.
The D.C. Circuit has addressed the Exemption 3 status of a statute with an affirmative disclosure requirement in a manner that is instructive here. See Pub. Citizen, Inc. v. Rubber Mfrs. Ass‘n, 533 F.3d 810 (D.C. Cir. 2008). The Public Citizen case involved the
Although the explicit cross-reference between the disclosure restriction and the affirmative reporting requirement makes the TREAD Act somewhat clearer than ADUFA, the logic of Rubber Manufacturers Ass‘n compels the conclusion that ADUFA is, likewise, not a withholding statute. This is because, as explained above, the text and structure of ADUFA plainly indicate that the restrictions of
Finally, this Court rejects the FDA‘s suggestion that the legislative history of Section 105 of ADUFA demands a different result. (See Def.‘s Mem. at 21-22.) The
Moreover, and in any event, just as in Rubber Manufacturers Ass‘n, “there is no text to which such support [i.e., the legislative history] may be attached in this case[,]” 533 F.3d at 818 n.4, because the enacted text of ADUFA does not contain any express restriction on who may ultimately access the information collected under the statute. And the FDA‘s suggestion that Congress implicitly intended for Section 105 of ADUFA to be read in conjunction with Exemption 3 to prohibit disclosure of the referenced information to members of the public in the FOIA context, as a means of shielding
In the final analysis, then, this Court disagrees with the agency‘s assertions regarding the nature of Section 105 of ADUFA, and it concludes that that statute is not a withholding statute for Exemption 3 purposes. Consequently, the Court “do[es] not need to consider whether the statute meets the additional conditions of
B. No Party Is Entitled To Summary Judgment At This Time
Although the FDA cannot base the redactions at issue in this case on FOIA Exemption 3 for the reasons explained above, the agency also seeks to justify its withholdings on the basis of FOIA Exemption 4, which allows agencies to withhold “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”
But, unfortunately, the parties’ agreement ends there. The FDA and Defendant-Intervenor AHI assert that there are myriad ways that the sponsors of antimicrobial animal drugs face competition and would be harmed by the disclosure of the information that the agency has redacted from Document 2, and they have provided a bevy of affidavits to this effect from industry members and experts. (See Def.‘s Mem. at 29-44; AHI‘s Mem. at 29-45.) GAP retorts that these arguments are all speculative, and it provides its own experts’ affidavits to support this contention. (See Pl.‘s Mem. at 27-40.) This Court has carefully considered each side‘s arguments and evidence, and it concludes that, although Defendants have carried their burden of showing that antimicrobial animal drug sponsors face actual competition, there is a genuine dispute of material fact regarding whether or not the drug sponsors whose information is reflected in Document 2 would be likely to face substantial competitive injury as a
1. Defendants Have Demonstrated That There Is Actual Competition In The Antimicrobial Animal Drug Market
With respect to the requirement of actual competition, the FDA and AHI have provided various affidavits attesting to the fact that the antimicrobial animal drug market “is very competitive and highly price sensitive” (Def.‘s Mem. at 30), and that competition exists “both among the different classes of antimicrobial drugs and among drugs with different routes of administration” (Def.‘s Reply in Supp. of Def.‘s Mot., ECF No. 44, at 19). For example, Dr. Thomas Elam, the president of FarmEcon LLC, which is an agricultural and food industry consulting firm, avers that “[t]he market for animal drugs containing an antimicrobial active ingredient for use in food-producing animals is highly competitive[,]” and lists 27 different competing companies. (Decl. of Thomas Elam (“Elam Decl.“), Ex. C to Def.‘s Mot., ECF No. 35-1, 1-20, ¶ 15.) Dr. Elam also states that “[t]hese drug products compete head-to-head across routes of administration . . . and across drug classes[,]” explaining that different drugs across different classes and routes of administration can be in competition because they are used to treat the same conditions (e.g., pig diarrhea). (Id. ¶ 16; see also AHI‘s Mem. at 31 (“In other words, although certain animal health companies may only sell products using certain classes of antimicrobial active ingredients, two companies with products in entirely different classes can still compete against one another, as their two different products (using different active ingredients) may be indicated to treat the same ailment.“).)
GAP offers no evidence to rebut the Defendants’ contention that the antimicrobial animal drug market is competitive; and, indeed, GAP‘s expert witness, Dr. Michael J. Blackwell, admits in his declaration that “there is considerable overlap in the purposes for which these drugs are used in practice, even among drugs in different classes and routes of administration[]” (Decl. of Michael J. Blackwell, Ex. 1 to Pl.‘s Mot., ECF No. 41-2, ¶ 22), which is a statement that strongly implies that actual competition between various drug sponsors exists. GAP‘s only response to the evidence of competition that the FDA and AHI have offered is to argue that the dozens of statements these parties have presented are “conclusory” (Pl.‘s Mem. at 28) and do not contain “specific examples of drugs that face actual competition” (Pl.‘s Reply in Supp. of Pl.‘s Mot., ECF No. 49, at 12).
This Court disagrees. It is hard to imagine what more information the FDA and AHI could have provided to demonstrate that antimicrobial animal drug sponsors face actual competition: their many affidavits are comprehensive, and contain far more than the mere ipse dixit that the market is competitive. The affiants name specific competitors, explain the structure of the market, and/or provide specific examples of instances in which products across drug classes and routes of administration compete because they address identical conditions. (See e.g., Elam Decl. ¶ 15; Bataller Decl.
Consequently, this Court concludes that Defendants have provided sufficient evidence to demonstrate actual competition. See id. (finding actual competition in the puppy distribution industry where an industry member‘s affidavit described “the number of competitors in the . . . industry and . . . the nature of the competition,” and was “based on . . . thirteen years of experience in the . . . industry“); see also In Def. of Animals v. U.S. Dep‘t of Agric., 656 F. Supp. 2d 68, 80 (D.D.C. 2009) (finding actual competition in the human pharmaceutical industry because, like in the antimicrobial animal drug industry, there exists a race “to be the first to get a particular type of drug to market[]“).
In addition to establishing actual competition, the FDA must also show that disclosure of the withheld sales and distribution data would cause substantial competitive injury to the drug sponsors who submitted the data, if it plans to rely on Exemption 4 to justify the challenged withholdings. To this end, the FDA and AHI assert that release of the data that have been redacted from Document 2 would permit competitors to determine the volume of specific antimicrobial medications that certain sponsors sold in 2009 in a manner that would be harmful those sponsors. (See AHI‘s Mem. at 32.) And they maintain that their legion of affiants have provided testimony that establishes the potential competitive injury in at least four respects.
For one thing, according to the FDA and AHI, the data would reveal to competitors a sponsor‘s market share with respect to particular products, thereby exposing which products are worthwhile to target for competition. (See Def.‘s Mem. at 31-33; AHI‘s Mem. at 33.) Many of Defendants’ affidavits support this claim. (See, e.g., Elam Decl. ¶ 21 (“Because the animal drug market is highly competitive and drug manufacturers’ profitability is driven primarily by their ability to capture market share (rather than by intellectual property rights), accurate data regarding the sales of, and demand for, certain products manufactured by competitors is highly valuable and could be used by a manufacturer to capture business from a competitor, thereby reducing its sales and profitability.“); Uppal Decl. ¶ 19 (“Competitors that possess reliable estimates of the sales volume of Zoetis’ drugs are likely to use that information in determining whether to enter a particular market segment. Competitors will be incentivized to bring new products to market to capture market share from Zoetis where the data reveals a
Second, the FDA and the AHI contend that the data would reveal to competitors which markets are ripe for re-entry, allowing them to put back into circulation any products that have been approved but that they are not currently distributing. (See Def.‘s Mem. at 33-34; AHI‘s Mem. at 36-37.) In other words, a competitor could use the data to determine if there is high demand in a market segment for which it already has an approved product, and, if so, put that product back into circulation to capture market share. Again, the affiants affirm this possibility. (See Bataller Decl. ¶ 16 (“[M]any drugs . . . are the subject of approved [new animal drug applications] but . . . are not currently being marketed. . . . [M]any competitors with approved [applications] can decide to actively market again and provide additional competition.“); Elam Decl. ¶ 31 (“[C]ompetitors [who] already hold an approved application for products that are not currently marketed . . . could use the information regarding market segment profitability to decide to market those dormant products, thereby capturing market share from, and causing financial harm to, companies that already sell products in those market segments.“); see also Bormann Decl. ¶ 12; Martin Decl. ¶ 15; Mlodzik Decl. ¶ 20.) A particularly harmful reentry circumstance could arise if the data reveal that a sponsor has made a significant investment in discovering and funding the production line for a profitable sub-market; its competitors could be emboldened to free ride off
Third, the FDA also argues that the release of this data could eliminate the need for competitors to perform market research for certain products, thereby conferring an unearned advantage on those sponsors who do not pay for market intelligence reports and predictive models. (See Def.‘s Mem. at 35.) For example, Dr. Elam attests that animal drug manufacturers undertake “considerable efforts, at substantial cost . . . to obtain . . . market information by, for example, purchasing market intelligence reports prepared by third party vendors[.]” (Elam Decl. ¶ 38; see Uppal Decl. ¶ 26.) But these third-party reports are mere estimates, and their value pales in comparison to that of the precise and accurate information in Document 2. (See Elam Decl. ¶ 39; Harper Decl. ¶ 26.) Thus, industry members report that the release of that data would “allow[] [their] competitors to make more accurate projections and trending analyses . . . all at lower cost[,]” thereby conferring “a very real competitive advantage” on those industry participants who did not pay for market evaluations or whose data would not be disclosed. (Beers Decl. ¶ 6; see Martin Decl. ¶ 20.)
Finally, Defendants and affiants contend that the disclosed data would allow competitors to estimate a slew of sensitive information about their rivals more accurately, which would allow them to better poach market share and cause substantial competitive injury to sponsors who submitted data to the FDA. This sensitive
GAP further contends that it is unlikely, if not impossible, to develop any reliable contemporary market analysis from a single year of data. (See id. at 32; see also Levins Decl. ¶ 7 (“It is clear enough that a single observation, or even multiple observations from a single point in time . . . cannot be useful in any type of forecasting model. . . . As I understand that only data from 2009 are disputed in this lawsuit, and that same data for other years are not publicly available, there is no way to develop a model or trend based solely on the 2009 data.“).) And it has offered a declaration in which an expert avers that sales volume alone does not reveal production capacity or production cost (see Decl. of John E. Ikerd, Ex. 5 to Pl.‘s Mot., ECF No. 41-6, ¶ 19 (stating that “it would be naïve to assume that a drug‘s annual sales, which is largely a
These competing arguments and evidence regarding the effect of the disclosure of the redacted information in Document 2 create a genuine issue of fact that is material to the question of whether disclosure would cause substantial competitive injury, and that question must be resolved before this Court can determine whether the FDA is entitled to invoke Exemption 4 to withhold the data at issue in this case. To be sure, federal courts have recognized that the competitive injury that Exemption 4 is designed to prevent can be significantly mitigated if the disclosed information is stale. See, e.g., Lee v. FDIC, 923 F. Supp. 451, 455 (S.D.N.Y. 1996) (finding that agency had failed to carry its burden of demonstrating substantial competitive harm in party because “the financial information in question is given for the 1994 year and any potential detriment caused by its disclosure would seem likely to have mitigated with the passage of time[]“). But assessing the likelihood of substantial competitive injury is a fact-intensive inquiry, and information that is several years old is not necessarily harmless. See, e.g., Braintree Elec. Light Dep‘t v. U.S. Dep‘t of Energy, 494 F. Supp. 287, 291 (D.D.C. 1980) (finding that data from 1973 and 1974 “retain[ed] its importance in the 1980 market” and was protected under Exemption 4); Zenith Radio Corp. v. Matsushita Elec. Corp., 529 F. Supp. 866, 891-92 (E.D. Pa. 1981) (“While at first blush one might doubt that harm could be caused by the disclosure of stale information, . . . old business data may be extrapolated and interpreted to reveal a business’ current strategy, strengths, and weaknesses. It would appear that, in the hands of an able and shrewd
In short, both sides have presented credible arguments regarding a material issue—i.e., whether disclosure of the redacted data likely will cause substantial competitive injury to the sponsors who submitted the information—and both have submitted evidence in support of their respective positions. Thus, this genuinely disputed remaining question of fact precludes the granting of summary judgment with respect to the Exemption 4 issue that is presented in this case. See, e.g., Washington Post, 865 F.2d at 326 (holding, in the FOIA context, that there was “a genuinely controverted factual issue in the case which is not ripe for disposition by summary judgment” because “[t]o resolve this case the judge must pick and choose between
IV. CONCLUSION
The structure and text of Section 105 of ADUFA demonstrate that this statutory provision is not a withholding statute for the purpose of FOIA Exemption 3 and, therefore, the FDA cannot seek to justify the redactions from Document 2 on Exemption 3 grounds. Exemption 4 might well justify those same withholdings, but the parties here have a genuine dispute of fact regarding the material issue of whether the disclosure of the redacted information would be likely to cause substantial competitive injury to the sponsors whose data are disclosed. Thus, as set forth in the accompanying Order, no party has demonstrated that it is entitled to judgment as a matter of law.
DATE: August 26, 2016
KETANJI BROWN JACKSON
United States District Judge