Frank LLP v. Consumer Financial Protection Bureau

• Court: District Court, District of Columbia
• Decided: August 5, 2020
• Docket: Civil Action No. 2019-1197
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

_________________________________________ ) FRANK LLP, ) ) Plaintiff, ) ) v. ) Case No. 19-cv-01197 (APM) ) CONSUMER FINANCIAL PROTECTION ) BUREAU, ) ) Defendant. ) _________________________________________ )

MEMORANDUM OPINION

I. INTRODUCTION

Plaintiff Frank LLP brings this action against the Consumer Financial Protection Bureau

(“CFPB” or “Bureau”) pursuant to the Freedom of Information Act (“FOIA”) to challenge the

agency’s response to Plaintiff’s 2018 FOIA request. The request asked for certain investigational

transcripts, compiled by CFPB in advance of its civil enforcement action against the National

Collegiate Master Loan Trust (“NCSLT”) and its administrative enforcement action against

Transworld Systems, Inc. (“Transworld”), a national debt-collection coordinator. After

identifying 557 responsive pages, CFPB denied the request in full, and this action ensued. Before

the court are the parties’ cross-motions for summary judgment. Plaintiff alleges that CFPB

improperly withheld the transcripts and failed to conduct an appropriate segregability analysis as

required by FOIA. CFPB, on the other hand, contends that the responsive documents were

properly withheld in full under Exemption 7(A), and that portions of the transcripts are also exempt

from disclosure under Exemptions 6, 7(C), and 7(E). The court concludes that CFPB has appropriately withheld all transcripts under Exemption

7(A). Portions of the transcripts are also protected under Exemptions 7(C) and (E). Lastly, the

court finds that none of the withheld information was reasonably segregable. Therefore, and for

the reasons stated in greater detail below, the court grants CFPB’s Motion for Summary Judgment

and denies Plaintiff’s Cross-Motion for Summary Judgment.

II. BACKGROUND

A. Factual Background

Plaintiff is a law firm that represents a class of consumers in two consolidated civil actions

against NCSLT, Transworld, and a debt-collection law firm, Forster & Garbus LLP. Pl.’s Compl.,

ECF No. 1 [hereinafter Pl.’s Compl.], ¶ 5. The plaintiffs in those actions allege that, with the

assistance of Forster & Garbus and other debt-collection law firms, NCSLT used false affidavits

signed by Transworld employees to file unlawful student loan debt-collection lawsuits. Compl.,

¶¶ 1, 12, 15, 16, Bifulco v. Nat’l Collegiate Student Loan Tr. 2004-2, No. 1:18-cv-07692-PGG

(S.D.N.Y. Aug. 28, 2018), ECF No. 1; Compl., ¶¶ 1, 12, 15, 16, Michelo v. Nat’l Collegiate

Student Loan Tr. 2007-2, No. 1:18-cv-01781-PGG (S.D.N.Y. Feb. 27, 2018), ECF No. 1. The

parties in those actions are currently proceeding with discovery. Pl.’s Compl. ¶ 10.

The claims in Bifulco and Michelo—that Transworld and NCSLT engaged in illegal debt-

collection practices for several years—mirror the allegations in two separate actions filed by

CFPB: one administrative enforcement action against Transworld, and one civil enforcement

action against NCSLT in the District of Delaware. Transworld Sys., Admin. Proc. No. 2017-

CFPB-0018 (Transworld) (Consumer Fin. Prot. Bureau Sept. 18, 2017) 1; Consumer Fin. Prot.

Bureau v. Nat’l Collegiate Master Student Loan Tr. (NCSLT), No. 1:17-cv-01323 (D. Del. May

1 Case Docket, Transworld (Sept. 18, 2017), available at https://www.consumerfinance.gov/administrative- adjudication-proceedings/administrative-adjudication-docket/transworld-systems-inc/.

2 31, 2020). CFPB settled the Transworld action via an administrative consent order. Decl. of

Deborah Morris, ECF No. 11-1 [hereinafter Morris Decl.], ¶ 24. The order confirmed that

Transworld hired law firms to file student loan actions on behalf of NCSLT, many based on false

affidavits. Id. Meanwhile, in the NCSLT action, seven parties—including Transworld—

intervened to challenge a proposed consent judgment. Id. ¶¶ 23, 25. The district court rejected

the proposed judgment on May 31, 2020, see Mem. Op., ECF No. 272, NCSLT (May 31, 2020),

and is currently considering CFPB’s Request for Default Judgment, ECF No. 295, NCSLT (July 2,

2020), as well as Transworld’s Motion to Dismiss, ECF No. 242, NCSLT (Mar. 19, 2020).

In addition, CFPB initiated a separate enforcement action in the Eastern District of New

York against the Forster & Garbus law firm for its role in prosecuting unlawful debt-collection

lawsuits. Bureau of Consumer Fin. Prot. v. Forster & Garbus, LLP (Forster & Garbus), No. 2:19-

cv-2928 (E.D.N.Y). The district court stayed that matter for several months pending a decision by

the Supreme Court in Selia Law LLC v. Consumer Financial Protection Bureau. See Order

Extending Deadline for Parties to Seek Leave to Restore Case, ECF No. 28, Forster & Garbus

(June 29, 2020). Following the Supreme Court’s decision in late June 2020, Selia Law LLC v.

Consumer Fin. Prot. Bureau, 140 S. Ct. 2183 (2020), the Bureau moved to reopen the case. Letter

Mot. to Reopen Case, ECF No. 29, Forster & Garbus (July 6, 2020). That request is pending.

In summary, the cases that bear on this opinion are the Transworld administrative action,

the NCSLT action, the Forster & Garbus lawsuit, and Plaintiff’s two class actions.

B. Procedural Background

Plaintiff filed this FOIA request in September 2018. The request asked CFPB to produce

documents pertaining to (1) the Bureau’s enforcement action resulting in the Transworld consent

order, and (2) the Bureau’s enforcement action against NCSLT. Compl. ¶ 15. The request

3 included but was not limited to the investigational-hearing testimony—akin to depositions—of

nine Transworld employees who had signed or notarized state-court affidavits against the plaintiffs

in the Bifulco and Michelo cases. Id. ¶ 16. Plaintiff later agreed to narrow its FOIA request to

only the investigation-hearing transcripts of the nine affiants. Id. ¶ 17. The Bureau identified

557 pages of responsive transcript pages, but it declined to disclose any of them, citing Exemptions

4, 7(A), and 7(E). Morris Decl. ¶ 11; id., Ex. B [PDF pp. 18–20].

Plaintiff then filed an administrative appeal. There, the Bureau concluded that the

documents were exempt from disclosure under Exemptions 7(A) and 7(E). Id., Ex. D [PDF p. 40].

The Bureau explained that disclosure could be reasonably expected to interfere with the agency’s

active litigation and would reveal techniques the agency uses to uncover specific facts for those

investigations. Id.

Plaintiff filed this action on September 19, 2018. Pl.’s Compl. ¶ 15. Both parties

subsequently filed motions for summary judgment. CFPB maintains that it properly withheld the

transcripts in full under Exemption 7(A). Def.’s Mot. for Summ. J., ECF No. 11 [hereinafter Def.’s

Mot.], at 8. It also invokes Exemptions 7(C) and 6 on the grounds that disclosing certain transcript

portions would constitute an unwarranted invasion of personal privacy, and additionally maintains

that certain transcript portions are protected by Exemption 7(E). Id. Plaintiff counters that the

exemptions do not apply, and that even if some exemptions do apply, CFPB failed to conduct an

adequate segregability review of the 557 pages. Pl.’s Opp’n to Def.’s Mot. for Summ. J. & Cross-

Mot. for Summ. J., ECF No. 13 [hereinafter Pl.’s Mot.], at 2–3, 18; Pl.’s Compl. at 8.

III. LEGAL STANDARD

FOIA’s purpose is to “ensure an informed citizenry, vital to the functioning of a democratic

society.” NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242 (1978). FOIA “mandates

4 disclosure of government records unless the requested information falls within one of the nine

enumerated exemptions.” Ctr. for Nat’l Sec. Studies v. U.S. Dep’t of Justice, 331 F.3d 918, 925

(D.C. Cir. 2003). Because of FOIA’s “goal of broad disclosure,” courts are to give the exemptions

“a narrow compass.” Citizens for Responsibility & Ethics in Wash. v. U.S. Dep’t of Justice (CREW

I), 746 F.3d 1082, 1088 (D.C. Cir. 2014) (quoting Milner v. Dep't of Navy, 562 U.S. 562, 571

(2011)). However, courts must not fail to give the exemptions “meaningful reach and application.”

John Doe Agency v. John Doe Corp., 493 U.S. 146, 152 (1989). FOIA expressly “places the

burden of justifying nondisclosure on the agency seeking to withhold information.” Mead Data

Cent., Inc. v. U.S. Dep’t of Air Force, 566 F.2d 242, 260 (D.C. Cir. 1977); see 5 U.S.C

§ 552(a)(4)(B).

The “vast majority” of FOIA actions are resolved on summary judgment. Brayton v. Office

of the U.S. Trade Rep., 641 F.3d 521, 527 (D.C. Cir. 2011). When presented with a motion for

summary judgment in a FOIA action, the district court conducts a de novo review, “which requires

the court to ‘ascertain whether the agency has sustained its burden of demonstrating that the

documents requested . . . are exempt from disclosure under the FOIA.’” Rosenberg v. U.S. Dep’t

of Immigration & Customs Enf’t, 13 F. Supp. 3d 92, 101 (D.D.C. 2014) (alterations in original)

(quoting Multi Ag. Media LLC v. Dep’t of Agric., 515 F.3d 1224, 1227 (D.C. Cir. 2008)).

Thus, the court may grant summary judgment only where an agency can “prove that each

document that falls within the class requested either has been produced, is unidentifiable, or is

wholly exempt from FOIA’s inspection requirements.” Cudzich v. U.S. Immigration &

Naturalization Serv., 886 F. Supp. 101, 104 (D.D.C. 1995) (cleaned up) (quoting Nat’l Cable

Television Ass’n v. FCC, 479 F.2d 183 (D.C. Cir. 1973)). The agency meets this burden by

providing “a relatively detailed justification, specifically identifying the reasons why a particular

5 exemption is relevant and correlating those claims with the particular part of a withheld document

to which they apply.” Mead Data, 566 F.2d at 251. Motions for summary judgment may be

granted based on agency affidavits and declarations if they “contain reasonable specificity of detail

. . . and if they are not called into question by contradictory evidence in the record or by evidence

of agency bad faith.” Frank LLP v. Consumer Fin. Prot. Bureau (Frank II), 327 F. Supp. 3d 179,

182 (D.D.C. 2018) (quoting Judicial Watch, Inc. v. U.S. Secret Serv., 726 F.3d 208, 215 (D.C. Cir.

2013)). The agency does not meet its burden, however, if it provides mere “conclusory and

generalized allegations of exemptions.” Bloche v. Dep’t of Def., 414 F. Supp. 3d 6, 25 (D.D.C.

2019) (cleaned up).

IV. DISCUSSION

CFPB invokes Exemptions 7(A), 7(C), 6, and 7(E) as the basis for its withholdings. Thus,

the transcripts or relevant portions are properly withheld if they: (1) “could reasonably be expected

to interfere with enforcement proceedings” under Exemption 7(A); (2) could constitute “a clearly

unwarranted invasion of personal privacy” under Exemption 6, or could “reasonably be expected

to constitute an unwarranted invasion of personal privacy” under Exemption 7(C); or (3) “would

disclose techniques and procedures for law enforcement investigations or prosecutions . . . if such

disclosure could reasonably be expected to risk circumvention of law” under Exemption 7(E). 5

U.S.C § 552(b). Even when an exemption applies, however, an agency must disclose “any

reasonably segregable portion of” the withheld records. Id.

A. Exemption 7(A)

Plaintiff first challenges the Bureau’s claim that Exemption 7(A) justifies withholding the

transcripts entirely. See Pls.’ Mot. at 9–10. Exemption 7(A) protects documents “compiled for

law enforcement purposes” that “could reasonably be expected to interfere with enforcement

6 proceedings.” 5 U.S.C § 552(b)(7)(A). To qualify for protection, an agency must demonstrate

that (1) “a law enforcement proceeding is pending or prospective,” and (2) “some distinct harm is

likely to result if the record or information requested is disclosed.” Cudzich, 886 F. Supp. at 106;

see Mapother v. U.S. Dep’t of Justice, 3 F.3d 1533, 1540 (D.C. Cir. 1993). Plaintiff challenges

both elements.

1. CFPB-initiated legal proceedings

Exemption 7(A) applies when law enforcement proceedings are “pending or

contemplated.” Mapother, 3 F.3d at 1541 (quoting Coastal States Gas Corp. v. Dep’t of Energy,

617 F.2d 854, 870 (D.C. Cir. 1980)). This includes proceedings that are active, cases in which the

agency “must be prepared to respond to a third party’s challenge,” or proceedings that are

“reasonably anticipated.” Id. at 1540–41; CREW I, 746 F.3d at 1097. Disclosure, on the other

hand, is appropriate when the documents relate to parts of the enforcement proceedings that have

already concluded. CREW I, 746 F.3d at 1097.

Plaintiff challenges the “pending or contemplated” nature of the various actions brought

by CFPB. It contends that the Transworld action has been resolved; the NCSLT action though

active is limited to contractual matters, in which case releasing the transcripts has no impact on

those proceedings; and the Forster & Garbus action is either “closed” or “on the cusp of being

resolved.” Pl.’s Mot. at 11. Plaintiff is correct that the Transworld action is resolved, but it

misstates the present posture of other two proceedings.

The NCSLT matter is in active litigation. Pending in that case is CFPB’s Application for

Entry of Default, as well as Transworld’s Motion to Dismiss for lack of subject-matter jurisdiction.

See Pl.’s Appl. for Entry of Default, ECF No. 295, NCSLT (July 2, 2020); Opening Br. in Supp.

of Intervenor Transworld Inc.’s Mot. to Dismiss for Lack of Subject Matter Jurisdiction, ECF No.

7 243, NCSLT (Mar. 19, 2020); Intervenors’ Mot. to Dismiss, ECF No. 301, NCSLT (Jul. 10, 2020).

Depending on how the court disposes of these motions, the NCSLT action may proceed to an

adjudication of the merits of NCSLT’s alleged Fair Debt Collection Practices Act violations.

NCSLT thus does not solely involve “contractual issues,” as Plaintiff claims, but may involve

discovery and a trial on the merits. Pl.’s Mot. at 10.

As for Forster & Garbus, following the Supreme Court’s decision in Selia Law LLC, the

parties are currently debating when to re-open the case. See Order Extending Deadline for Parties

to Seek Leave to Restore Case, ECF No. 28, Forster & Garbus (June 29, 2020). Thus, contrary

to Plaintiff’s characterization, that case is neither “closed” nor on the “cusp of being resolved.”

Moreover, the fact that the Forster & Garbus complaint does not mention Transworld’s “affidavit-

execution procedure” is of no moment. Pl.’s Mot. at 11. The Forster & Garbus complaint

explicitly mentions NCSLT, Compl. ¶ 33, ECF No. 1, Forster & Garbus (May 17, 2019), and,

given the intertwined relationship between NCSLT, Transworld, and Forster & Garbus, the

transcripts may be implicated in future discovery.

CFPB therefore has identified two “concrete prospective law enforcement proceeding[s]”

to which the investigative transcripts relate. Juarez v. Dep’t of Justice, 518 F.3d 54, 58 (D.C. Cir.

2008) (quoting Bevis v. Dep’t of State, 801 F.2d 1386, 1389 (D.C. Cir. 1986)).

2. Likelihood of Interference with Law Enforcement Actions

Next, CFPB must demonstrate that release of the transcripts is reasonably expected to

interfere with its pending law enforcement proceedings. An agency meets this burden by showing

“how the particular kinds of investigatory records requested would interfere with a pending

enforcement proceeding.” Campbell v. Dep’t of Health & Human Servs., 682 F.2d 256, 259 (D.C.

Cir. 1982). Interference covers a wide range of consequences, including prematurely revealing

8 the government’s “evidence and strategies, or the nature, scope, direction, and focus of its

investigations,” Maydak v. U.S. Dep’t of Justice, 218 F.3d 760, 762 (D.C. Cir. 2000); see also

Swan v. SEC, 96 F.3d 498, 499 (D.C. Cir. 1996); Alyeska Pipeline Serv. Co. v. EPA, 856 F.2d 309,

314 (D.C. Cir. 1988), and allowing law enforcement subjects to establish defenses, create

fraudulent alibis, destroy evidence or intimidate witnesses, North v. Walsh, 881 F.2d 1088, 1097–

98 (D.C. Cir. 1989). An agency may justify Exemption 7(A) categorically so long as “definitions

of relevant categories are sufficiently distinct to allow a court to determine whether the specific

claimed” exemption is “properly applied.” CREW I, 746 F.3d at 1088 (quoting Gallant v. NLRB,

26 F.3d 168, 173 (D.C. Cir. 1994)). However, categorical justification is available only when “the

range of circumstances included in the category characteristically support an inference that the

statutory requirements for exemption are satisfied.” Id. at 1089 (cleaned up).

Categorical withholding of Exemption 7(A) material finds its roots in NLRB v. Robbins

Tire & Rubber Co., 437 U.S. 214 (1978). There, the Supreme Court held that prehearing witness

statements may be withheld categorically. Id. at 241. The Court reasoned that disclosing witness

statements would involve “the kind of harm that Congress believed would constitute an

‘interference’ with [agency] enforcement proceedings: that of giving a party litigant earlier and

greater access to the [agency’s] case than he would otherwise have.” Id. Since Robbins, the D.C.

Circuit has allowed agencies to categorically withhold witness statements. See, e.g., Swan 96 F.3d

at 499, Alyeska 856 F.2d at 312. In Swan, for instance, the D.C. Circuit allowed categorical

withholding of records that contained statements made by the plaintiffs’ attorney to the agency.

Swan, 96 F.3d at 498–99. Even though “some of” the attorney’s statements may have been known

by the plaintiffs, the records still might have “reveal[ed] much about the focus and scope of the

[agency’s] investigation, and [were] thus precisely the sort of information Exemption 7(A) allows

9 an agency to keep secret.” Id. at 500. In Alyeska, the court upheld categorical withholding of

documents—including an interview transcript—because releasing the documents could have

resulted in disclosure of the “specific knowledge of the particular activities being investigated and

the direction being pursued” by the agency. 856 F.2d at 312, 314. A categorical approach is

permitted even if the FOIA requester is not an active litigant in an enforcement proceeding, as

courts “must evaluate the risk of disclosing records to some particular FOIA requester . . . in terms

of what anyone else might do” with the requested information. Swan, 96 F.3d at 500.

CFPB in this case categorically withheld the investigative transcripts, claiming that the

investigative transcripts are a type of witness statement. Def.’s Mot at 13. In support of its

categorical withholding, Deborah Morris—a Deputy Director of CFPB’s Office of Enforcement—

states that disclosing the responsive documents creates several risks, including witness

intimidation, identification of evidence likely to be relied upon by the government, and premature

disclosure of government strategy. Morris Decl. ¶¶ 1, 27. She also identifies a list of current

private actions between various NCSLT agents, and asserts that disclosing the documents could

invite “disruptive collateral litigation” that “risks prematurely putting the Bureau’s enforcement

cases at issue through collateral litigation in a federal court or a different forum.” Id. ¶ 28.

Plaintiff responds that the transcripts are so widely publicized that their release could not

interfere with any law enforcement proceedings. Pl.’s Mot. at 12. In support of its argument,

Plaintiff cites CFPB orders that identify two of the nine affiants named in its original FOIA request.

Id. at 11–12. Plaintiff also claims that, due to the close-knit contractual relationship between

NCSLT, Transworld and other entities, it is presumed that the multiple parties know about the

existence and substance of the affiants’ testimony. Id. at 13. Finally, Plaintiff asserts that after

the Bureau issued the Transworld consent order, it was clear that the evidence detailing the false

10 affidavit scheme came from the affiants. Id. As nothing would come as a surprise to any of the

relevant parties, Plaintiff argues, the transcripts should be released. Id.

Plaintiff’s contentions are unconvincing. Nothing about the nature of the investigation

transcripts or the circumstances of disclosure warrants deviating from established precedent

recognizing such statements as protected under Exemption 7(A). See Swan, 96 F.3d at 499;

Alyeska, 856 F.2d at 312. The withheld investigational transcripts are witness statements in the

traditional sense. CFPB prepared them as part of an investigation and in anticipation of possible

law enforcement actions, which CFPB ultimately filed. Morris Decl. ¶¶ 21, 23. The Bureau

explains that, among other consequences, releasing the transcripts would reveal “the direction of

the government so far” and “the activity under continuing investigation during the litigation.” Id.

¶ 27. Implicit in CFPB’s arguments is the concern that release of the transcripts would reveal the

“focus and scope” of the proceedings and result in premature disclosures. Those are legitimate,

protectable interests under Exemption 7(A). See Swan, 96 F.3d at 499; Aleyska, 856 F.2d at 311.

It matters not that Plaintiff knows some of the information in the investigational interviews. See

Swan, 96 F.3d at 500. Releasing the transcripts would still expose the scope and focus of the

Bureau’s investigation in greater detail and do so prematurely, and thus CFPB rightfully invoked

Exemption 7(A).

Nor has Plaintiff supplied specific evidence to support its broad assertion that “nothing in

the transcripts will come as a surprise to anyone familiar with the CFPB investigations at issue

here.” Pl.’s Mot. at 13. Plaintiff is correct in that there are a limited number of potential affiants

who might have been interviewed by the Bureau, and two of those affiants were publicly identified

11 during the Bureau’s debt-collection investigations. 2 Thus, it may be reasonable to assume that

some information about the debt-collection schemes came from some Transworld affiants. For

example, pages six through eleven of the Transworld consent order—which address the false

affidavit scheme 3—may have come, at least in part, from the interviews. However, Plaintiff offers

no concrete evidence to establish that fact, let alone its broader proposition that “nothing will come

as a surprise.” Pl.’s Mot. at 13. A similar deficiency arises with Plaintiff’s claim about the

potential witness identities. Although CFPB identified two Transworld employees that may have

testified, the public record confirms only that one of those employees in fact testified before

CFPB. 4 Whether any of the other eight employees named in Plaintiff’s request testified is unclear,

despite Plaintiff’s speculation: the identities of the individual(s) who testified before CFPB

remains confidential. See Morris Decl. ¶¶ 18, 29. CFPB therefore has met its burden for

categorically invoking Exemption 7(A).

B. Exemptions 6 and 7(C)

Although the court upholds CFPB’s categorical withholding of all transcripts under

Exemption 7(A), in the interest of completeness, the court addresses the agency’s other asserted

exemptions. CFPB contends that the names, financial information and other identifying

2 See Decision & Order on Francesca Giampiccolo’s Pet. to Set Aside Civil Investigative Dem., In Re. Francesca Giampiccolo, No. 2015-CFPB-Giampiccolo-0001 (Consumer Fin. Prot. Bureau Aug. 1, 2015) (“Giampiccolo Order”), available at https://files.consumerfinance.gov/f/201508_cfpb_decision-and-order-on-francesca-giamiccolo-petition- to-set-aside-civil-investigative-demand.pdf; Decision & Order on Pet. by Transworld Systems Inc. to Appear at the Oral Exam. Of Chandra Alphabet, In re Transworld Sys. Inc., No. 2015-Misc-Transworld Systems Inc-0001 (Consumer Fin. Prot. Bureau May 29, 2015) (“Alphabet Order”), available at https://files.consumerfinance.gov/f/201506_cfpb_decision-and-order-on-petition-by-transworld-systems-inc-to- appear-at-examination-of-chandra-alphabet.pdf. 3 Consent Order, Transworld (Sept. 18, 2017), available at https://files.consumerfinance.gov/f/documents/201709_cfpb_transworld-systems_consent-order.pdf. 4 The conclusion that the public record only confirms the identity of one affiant stems from the nature of the released documents. One document—the Decision and Order on Petition by Transworld Systems Inc. to Appear at the Oral Examination of Chandra Alphabet—implicitly confirms that there was an oral examination. Alphabet Order at 1. The other document—the Decision and Order on Francesca Giampiccolo’s Petition to Set Aside Civil Investigative Demand—does not confirm whether Ms. Giampiccolo in fact testified after having her petition rejected. See generally Giampiccolo Order.

12 information of the witness(es) are properly withheld pursuant to Exemptions 6 and 7(C).

Exemption 6 protects documents such as medical or personnel files, for which disclosure “would

constitute a clearly unwarranted invasion of personal privacy,” 5 U.S.C. § 552(b)(6), while

Exemption 7(C) protects “records or information compiled for law enforcement purposes, but only

to the extent that the production of such” records “could reasonably be expected to constitute an

unwarranted invasion of personal privacy,” 5 U.S.C. § 552(b)(7)(C). When an agency claims that

documents are exempt under both provisions, a court begins its analysis with Exemption 7(C)

because “it provides broader privacy protection than Exemption 6 and thus establishes a lower bar

for withholding material.” Citizens for Responsibility & Ethics in Wash. v. U.S. Dep’t of Justice

(CREW II), 854 F.3d 675, 681 (D.C. Cir. 2017) (quoting CREW I, 746 F.3d at 1091 n.2).

The Exemption 7(C) analysis requires “balanc[ing] the public interest in disclosure against

the [privacy] interest Congress intended the Exemption to protect.” U.S. Dep’t of Justice v.

Reporters Comm. For Freedom of Press, 489 U.S. 749, 776 (1989)). As with Exemption 7(A),

categorical decisions on withholding documents pursuant to Exemption 7(C) “may be appropriate

and individual circumstances and individualized circumstances disregarded when a case fits into

a genus in which the balance characteristically tips in one direction.” Id.

1. Privacy Interests

The first question is “whether there is any privacy interest at stake” when releasing the

investigational transcript portions withheld under Exemption 7(C). Am. Civil Liberties Union v.

U.S. Dep’t of Justice, 655 F.3d 1, 6 (D.C. Cir. 2011). Individuals “have an obvious privacy interest

cognizable under Exemption 7(C) in keeping secret the fact that they were subjects of a law

enforcement investigation.” Nation Magazine v. U.S. Customs Serv., 71 F.3d 885, 894 (D.C. Cir.

13 1995). That interest “extends to third parties who may be mentioned in investigatory files, as well

as witnesses and informants who provided information during the course of an investigation.” Id.

The D.C. Circuit held in SafeCard Services v. SEC that private identifying information is

categorically exempt under Exemption 7(C), unless that information is “necessary in order to

confirm or refute compelling evidence that the agency is engaged in illegal activity.” 926 F.2d

1197, 1206 (D.C. Cir. 1991). However, “individuals who have already been publicly identified

. . . as having been . . . otherwise implicated” in an agency investigation hold a “diminished privacy

interest,” CREW II, 854 F.3d at 682, and therefore the categorical rule does not apply, District of

Columbia v. U.S. Immigration & Customs Enf’t, No. 18-CV-2410 (TSC), 2020 WL 2527207, at

*3 (D.D.C. May 18, 2020).

The individual(s) who testified in front of CFPB are “witnesses.” See Morris Decl. at ¶ 23.

They have an “obvious,” strong privacy interest in the non-disclosure of their names and

identifying information. Nation Magazine, 71 F.3d at 894. Furthermore, most of the witnesses’

identifying information is not public. Morris Decl. ¶ 18. Accordingly, the information about the

nonpublic witnesses is “presumptively exempt from disclosure under the SafeCard rule,”

Schrecker v. U.S. Dep’t of Justice, 349 F.3d 657, 666 (D.C. Cir. 2003), absent “probative . . .

allegations of official misconduct,” Aguirre v. U.S. Sec. & Exch. Comm’n, 551 F. Supp. 2d 33, 56

(D.D.C. 2008). 5

Plaintiff argues that since the investigation is well-known, and there are only a handful of

Transworld employees who sign affidavits, the witnesses’ identities are readily apparent and thus

5 Since public records confirm that one of the affiants identified by Plaintiff did in fact testify before the CFPB in the Transworld proceeding, that individual’s information is not entitled to categorical withholding under SafeCard. CREW II, 854 F.3d at 682. However, she retains a “second, distinct privacy interest in the contents of the investigative files.” CREW I, 746 F.3d at 1092. Because the transcripts may contain her “medical, financial, employment and other personal” information, Morris Decl. ¶ 30, the affiant retains a more than a de minimis, and therefore substantial, privacy interest in the contents of the documents, see Multi Ag Media LLC, 515 F.3d at 1229–30.

14 releasing the transcripts will not invade the witnesses’ personal privacy. Pl.’s Mot. at 13, 15–16.

Plaintiff also claims that due to the transcripts’ publicity via the facts in the Transworld consent

order, the affiants have a diminished privacy interest. Id. at 13, 15. These arguments, however,

run into the same wall as Plaintiff’s Exemption 7(A) argument. A short list of nine potential

witnesses is not equivalent to public disclosure. Although Plaintiff infers that the nine Transworld

employees named in its FOIA request participated in the Bureau’s investigation, the public record

confirms Plaintiff’s hypothesis for only one of those affiants. Informed speculation is not the same

as official disclosure. See Aleyska, 856 F.2d at 314. Accordingly, the court rejects Plaintiff’s

characterization of the affiants having a “diminished privacy interest.”

2. Public Interest

Under SafeCard’s categorical rule, the sole public interest that would warrant overcoming

a person’s privacy interests is that disclosure “is necessary in order to confirm or refute compelling

evidence that the agency is engaged in illegal activity.” 926 F.2d at 1206. Plaintiff, however,

offers no “compelling evidence” of agency misconduct. Id. at 1205. At most, it asserts that

disclosure will help the public “understand whether the CFPB ‘pulled its punches’ in one of its

highest-profile investigations in recent years,” Pl.’s Mot. at 16 (quoting CREW II, 854 F.3d at 683),

observing that “consumers subjected to the very false-affidavit violations identified by the CFPB

against Transworld, have failed to receive any compensation or equitable relief,” id.; see also Decl.

of Gregory A. Frank, ECF No. 14-2, ¶ 3. Although records that potentially show an agency “pulled

its punches” are no doubt of some public interest, see CREW I, 746 F.3d at 1093, such an assertion

does not rise to the level of “compelling evidence” of “illegal activity” required by SafeCard.

CFPB therefore properly invoked Exemption 7(C) categorically, except as to the one publicly

identified witness, see supra p. 12, note 4, which the court discusses in the next section.

15 3. Balancing

Because the Bureau publicly released the name of one witness, information pertaining to

her must be considered under the traditional balancing test. See CREW II, 854 F.3d at 682. As

previously discussed, see supra p. 14, note 5, disclosing her identifying information would

implicate a substantial privacy interest. On the other side of the scale, Plaintiff does not explain

how disclosure of the witness’s information would advance the claimed public interest. See Nat’l

Archives & Records Admin. v. Favish, 541 U.S. 157, 172 (2004) (holding that, “[w]here the privacy

concerns addressed by Exemption 7(C) are present,” the plaintiff must show that the requested

information “is likely to advance” a “significant” public interest). Accordingly, CFPB

appropriately withheld portions of the requested documents under Exemption 7(C), and the court

need not consider the Exemption 6 argument.

C. Exemption 7(E)

Finally, the Bureau invokes Exemption 7(E) for portions of the transcripts containing

“techniques and procedures for law enforcement.” Def.’s Mot. at 18. Exemption 7(E) protects

records compiled for law enforcement purposes, “to the extent that the production of such law

enforcement records or information . . . would disclose techniques and procedures for law

enforcement investigations or prosecutions, or would disclose guidelines for law enforcement

investigations or prosecutions if such disclosure could reasonably be expected to risk

circumvention of the law.” 5 U.S.C. § 552(b)(7); see also Frank II, 327 F. Supp. 3d at 184–85;

Shapiro v. U.S. Dep’t of Justice, 239 F. Supp. 3d 100, 112 (D.D.C. 2017).

1. Techniques and Procedures

Exemption 7(E) normally protects “investigative techniques and procedures generally

unknown to the public.” Albuquerque Publ’g Co. v. U.S. Dep’t of Justice, 726 F. Supp. 851, 857

16 (D.D.C. 1989). However, “even commonly known procedures may be protected from disclosure

if the disclosure could reduce or nullify their effectiveness.” Judicial Watch, Inc. v. FBI, No. 00-

745 (TFH), 2001 WL 35612541, at *8 (D.D.C. Apr. 20, 2001) (emphasis added). Courts in this

district recognize that specific interviewing techniques are protected under the exemption. Allen

v. Fed. Bureau of Prisons, No. 16-cv-0708, 2019 WL 498804, at *7 (D.D.C. Feb. 8, 2019); Frank

II, 327 F. Supp. 3d at 183–84.

The court does not write on a clean slate regarding CFPB’s invocation of Exemption 7(E).

Plaintiff previously brought two FOIA actions against CFPB in this District. The first, from 2016,

sought records supporting the findings in an administrative consent order against a different

organization engaged in a similar false affidavit debt-collection scheme. There, the court found

that the agency had properly withheld records under FOIA Exemption 7(E). Frank LLP v.

Consumer Fin. Prot. Bureau (Frank I), 288 F. Supp. 3d 46, 54 (D.D.C. 2017). The second action

involved a request, much like in this case, for investigational hearing transcripts related to false-

affidavit debt-collection schemes. The Bureau produced several documents, including partially

redacted transcripts from its interviews. The court upheld the redactions, holding that CFPB’s

questioning techniques for debt-collection scheme lawsuits constituted “techniques and

procedures” under Exemption 7(E). Frank II, 327 F. Supp. 3d at 183–34. The court explained

that the redacted documents contained “the specific questions asked by Bureau investigators of

two . . . affiants, including the specific information and types of information sought, the manner

of questioning [and] sequencing of questioning,” among other details. Id. at 183.

There is no material difference between the issue decided in Frank II and the issue here.

CFPB in this case redacted certain portions of the investigational transcripts that contain specific

information about how the Bureau conducts official investigations, including the sequence and

17 manner of questioning. Morris Decl. ¶¶ 39–42. Although it is well-known that CFPB engages in

interviews when investigating debt-collection violations, the agency’s strategy and specific

questions are confidential, and therefore not public or well-known. Id. ¶ 36. Thus, the

investigation transcripts contain protected “techniques and procedures” for the purpose of

Exemption 7(E).

Plaintiff argues that the Bureau’s interview techniques are “obvious,” and therefore not

techniques and procedures entitled to protection under Exemption 7(E). Pl.’s Mot. at 17–18 n.18.

Plaintiff advanced a near-identical argument in Frank II; it is no more persuasive here. See 327

F. Supp. 3d at 184–85. Although general interviewing methods might be “obvious” in some

respects, Pl.’s Mot. at 17 n.18, the specific interview methods used to investigate Consumer

Financial Protection Act and Fair Debt Collection Practices Act violations are confidential, Morris

Decl. ¶¶ 36, 39. This court therefore joins Frank II in finding that CFPB’s interview techniques

qualify as protected techniques and procedures under Exemption 7(E).

2. Risk of Circumvention of Law

The circumvention-of-law requirement sets a “relatively low bar.” Jett v. Fed. Bureau of

Investigation, 139 F. Supp. 3d 352, 363 (D.D.C. 2015). An agency must only show “a chance of

a reasonably expected risk” to qualify for the exemption. Mayer Brown LLP v. IRS, 562 F.3d

1190, 1193 (D.C. Cir. 2009); Jett, 139 F. Supp. 3d at 362. In other words, “[E]xemption 7(E) only

requires that the [agency] demonstrate logically how the release of the requested information might

create a risk of circumvention of the law.” Barouch v. U.S. Dep’t of Justice, 87 F. Supp. 3d 10,

29 (D.D.C. 2015) (alterations in original) (quoting Blackwell v. FBI, 646 F.3d 37, 42 (D.C. Cir.

2011)).

18 CFPB reports that the transcripts contain specific questions and questioning sequences that

would reveal which facts are particularly important for prosecuting unlawful debt collection

practices. Morris Decl. ¶ 41. Release of this information would allow entities engaging in similar

conduct to “coach witnesses in these and similar cases on how to avoid providing incriminating

information.” Id. Although revealing the transcripts may not provide a “‘how to’ manual for law-

breakers,” a detailed understanding of the way the Bureau conducts investigational interviews in

false-affidavit debt collection schemes “could encourage decisions to violate the law or evade

punishment.” Mayer Brown LLP, 562 F.3d at 1193. It is logical to infer that releasing CFPB’s

investigational process, which could be revealed in part through the transcripts, would increase the

risk that a violator would alter his or her behavior to avoid prosecution. Accordingly, CFPB

satisfies Exemption 7(E)’s “low bar” for the relevant transcript pages, and properly invoked

D. Segregability

Finally, the court must consider whether CFPB complied with FOIA’s mandate that “[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.” 5 U.S.C § 552(b). When claiming a generic

exclusion “dependent upon the category of records rather than the subject matter which each

individual record contains,” an agency need not provide a document-by-document segregability

analysis so long as it supplies an affidavit that is “sufficiently detailed to establish that the

document or group of documents in question actually falls into the exempted category.” Church

of Scientology v. Internal Revenue Serv., 792 F.2d 146, 152 (D.C. Cir. 1986); see also Robbins,

437 U.S. at 224 (stating that although FOIA requires that agencies disclose “segregable portions

of records,” the Act does not “necessarily contemplate[] that the [agency] must specifically

19 demonstrate in each case that disclosure of the particular witness’ statement would interfere with

a pending enforcement proceeding”).

In this case, CFPB has established, based on the Morris Declaration, that the investigational

transcripts all fit into the category of protected witness statements. Accordingly, although the

Bureau did not address in its declaration whether any of the withheld information could be

segregated, see generally Morris Decl., the court independently concludes that there are no

reasonably segregable portions of responsive records, see Ferranti v. Bureau of Alcohol, Tobacco

& Firearms, 177 F. Supp. 2d 41, 47 (D.D.C. 2001) (finding that the “scope of the [agency’s]

categorical withholdings” enabled the court to conclude that all reasonably segregable information

had been released, notwithstanding the agency’s failure to address segregability in its

declaration); see also Robbins, Geller, Rudman & Dowd, LLP v. U. S. Sec. & Exch. Comm’n, No.

3:14-CV-2197, 2016 WL 950995, at *9 (M.D. Tenn. Mar. 12, 2016) (holding that “it is permissible

for the government to assert that an entire category of documents is exempt from disclosure and

therefore not reasonably segregable”).

V. CONCLUSION

For the reasons discussed in this Memorandum Opinion, the court grants the CFPB’s

Motion for Summary Judgment, ECF No. 11, and denies Plaintiff’s Cross-Motion for Summary

Judgment, ECF No. 14. The court also grants the CFPB’s Motion for Leave to File an Under Seal,

Ex Parte and In Camera Declaration, ECF No. 12, for the reasons set forth in that motion. A

separate Order accompanies this Memorandum Opinion.

Dated: August 5, 2020 Amit P. Mehta United States District Court Judge