American Transparency v. U.S. Department of Health and Human Services

District Court, District of Columbia·Decided September 30, 2025·No. Civil Action No. 2021-2821·Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

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AMERICAN TRANSPARENCY, ) d/b/a OpenTheBooks.com, )

)

Plaintiff, )

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v. ) Civil No. 21-cv-02821 (APM)

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U.S. DEPARTMENT OF HEALTH AND ) HUMAN SERVICES, )

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Defendant. )

_________________________________________ )

MEMORANDUM OPINION AND ORDER I.

Plaintiff in this case is American Transparency, d/b/a OpenTheBooks.com, whose “mission is to post online all publicly available government spending.” Compl., ECF No. 1, ¶ 3. Plaintiff submitted a Freedom of Information Act (FOIA) request to the National Institutes of Health (NIH), a component of Defendant U.S. Department of Health and Human Services, seeking information about the royalties paid to its employees. After Plaintiff filed the instant action to compel production, Defendant released records of most of the information Plaintiff sought. But Defendant withheld the amounts of individual royalty distributions paid to NIH-employed inventors pursuant to Exemptions 3, 4, and 6.

Before the court are Defendant’s Motion for Summary Judgment, ECF No. 24 [hereinafter Def.’s Mot.], and Plaintiff’s Cross-Motion for Summary Judgment, ECF No. 28 [hereinafter Pl.’s Mot.]. The court denies both motions. The court agrees with Plaintiff that Defendant may not withhold the requested information pursuant to Exemption 6. However, there is a genuine dispute

of material fact as to whether Defendant properly withheld the requested information pursuant to Exemptions 3 and 4.

II.

On September 15, 2021, Plaintiff submitted a FOIA request to NIH, seeking:

A complete list/database of all personal royalties paid (including, but not limited to, FY2020) to current and former National Institutes of Health employees for work done while they were federally employed. The list/database should include, but not be limited to, the royalty recipient’s name, the amount of the royalty, the reason for the royalty, the date the royalty was paid, and the name of the entity paying the royalty.

Def.’s Mot., Ex. 2, ECF No. 24-4. Approximately one month later, having received only an acknowledgment letter, Plaintiff filed this action to compel production. Compl. By September 2022, Defendant had provided Plaintiff with nine productions and a final response to its request. Def.’s Mot., Def.’s Stmt. of Material Facts Not in Genuine Dispute, ECF No. 24-2 [hereinafter Def.’s Stmt.], ¶ 5. After Plaintiff inquired about some of the information Defendant withheld, Defendant re-released 2,945 pages to Plaintiff with additional information included. Id. ¶¶ 7–8. This largely satisfied Plaintiff’s request. Pl.’s Mot., Pl.’s Stmt. of Material Facts, ECF No. 28-2 [hereinafter Pl.’s Stmt.], ¶ 10. But Defendant continued to withhold the information at issue here— the royalty distributions paid to inventors—under Exemptions 3, 4, and 6. Id. ¶ 9.

These so-called “inventor awards” are the amounts NIH pays its scientists after a private company licenses NIH-owned technology. Def.’s Stmt. ¶ 9; Def.’s Reply in Supp. of Summ. J. & Resp. to Pl.’s Mot., ECF No. 33 [hereinafter Def.’s Reply], Def.’s Suppl. Stmt. of Material Facts, ECF No. 33-1 [hereinafter Def.’s Suppl. Stmt.], at 11, ¶ 14. When a private company seeks to license NIH-owned technology, it must propose and then negotiate how much it will pay NIH in royalties. Def.’s Suppl. Stmt. at 11, ¶ 11. NIH then distributes a portion of those royalties to its

scientist(s) who invented the technology. Id. at 10, ¶ 6. The governing statute mandates that NIH pay the inventor(s) “the first $2,000, and thereafter at least 15 percent, of the royalties” received from the licensee each year. 15 U.S.C. § 3710c(a)(1)(A)(i). NIH represents that it pays its inventors the first $2,000, 15% of the royalties above $2,000 and up to $50,000, and 25% of the royalties above $50,000. Def.’s Suppl. Stmt. at 13, ¶ 27. An inventor may not receive more than $150,000 in aggregate royalty distributions annually. 15 U.S.C. § 3710c(a)(3).

From 2006 to 2022, NIH scientists collectively received anywhere from $7.6 million to $15 million in royalty distributions each year. Pl.’s Stmt. ¶ 20. These royalty payments have received attention from both the press and political officials. Id. ¶¶ 21, 23.

The court first ordered the parties to meet and confer about Plaintiff’s request in November 2021. Order, ECF No. 9. After two years of periodically updating the court on Defendant’s progress in responding to it, the parties filed these cross-motions for summary judgment.

III.

The court will grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A “material” fact is one “that might affect the outcome of the suit.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

In FOIA cases, the burden is on the agency to show that an exemption applies. Alyeska Pipeline Serv. v. EPA, 856 F.2d 309, 311 (D.C. Cir. 1988). The agency must show that (1) the requested materials fall within the scope of the exemption, and (2) “it is reasonably foreseeable that release of those materials would cause harm to an interest protected by” the exemption. Reps. Comm. for Freedom of the Press v. FBI, 3 F.4th 350, 361 (D.C. Cir. 2021) (citing 5 U.S.C. § 552(a)(8)(A)(i)(I)). Where, as here, the agency has attempted to support its invocation of the

exemption by affidavit, the court will grant the agency summary judgment “when the affidavits describe the justifications for nondisclosure with reasonably specific detail, demonstrate that the information withheld logically falls within the claimed exemption, and are not controverted by either contrary evidence in the record nor by evidence of agency bad faith.” Larson v. U.S. Dep’t of State, 565 F.3d 857, 862 (D.C. Cir. 2009) (internal quotation marks omitted).1 Summary judgment is inappropriate, however, when the plaintiff provides “specific facts demonstrating that there is a genuine issue with respect to whether the agency has improperly withheld extant agency records” under the claimed exemption. Span v. U.S. Dep’t of Just., 696 F. Supp. 2d 113, 119 (D.D.C. 2010) (internal quotation marks omitted). When that is the case, the court must hold an evidentiary hearing or bench trial to resolve the outstanding dispute. Scudder v. CIA, 25 F. Supp. 3d 19, 29 (D.D.C. 2014).

The court begins with Exemption 6. The court then discusses Exemptions 3 and 4, which rise and fall together.

A.

Exemption 6 allows an agency to withhold “personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” 5 U.S.C. § 552(b)(6). “Similar files” includes “[g]overnment records on an individual which can be identified as applying to that individual.” U.S. Dep’t of State v. Washington Post Co., 456 U.S.

1 Plaintiff contends that Defendant’s affidavits are deficient. Pl.’s Mot., Mem. of P. & A. in Opp’n to Def.’s Mot. and in Supp. of Pl.’s Mot., ECF No. 28-1, at 3–6. Plaintiff argues that Mr. Garcia-Malene’s declaration is unsigned, contains impermissible legal conclusions, and offers factual assertions that go beyond his personal knowledge. Id. at 3–5. Plaintiff also argues that Dr. Freire’s declaration is outdated and relies on hearsay. Id. at 5–6. On the first objection, the court observes that Mr. Garcia-Malene’s declaration is affixed with a digital signature. Decl. of Gorka Garcia-Malene, ECF No. 24-3, at 9. As to the remaining objections, the court need not take them up now. There is enough evidence in the record—both from Mr. Garcia-Malene’s statements that are clearly within his personal knowledge and elsewhere—to create a genuine dispute of material fact as to whether Defendant properly withheld the requested information. That suffices for now, and the court will resolve the outstanding objections in future proceedings.

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