UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
IRA NIKELSBERG, : : Plaintiff, : : v. : Civil Action No. 08-1899 (JR) : FEDERAL DEPOSIT INSURANCE : CORPORATION, : : Defendant. :
MEMORANDUM
Pro se plaintiff Ira Nikelsberg sues the Federal
Deposit Insurance Corporation under the Freedom of Information
Act, 5 U.S.C. § 552, as amended, to obtain the names and contact
information of the under-insured depositors of two failed banks
for which the FDIC acts as receiver. The parties have cross
moved for summary judgment. Because the information requested
falls under the exceptions to FOIA found in 5 U.S.C. §§ 552(b)(4)
and (b)(6), defendant's motion will be granted.
Background
Pursuant to its duties as receiver for ANB Financial
and Net Bank, the FDIC issued receiver's certificates to
depositors for the portions of their accounts greater than the
federally insured limit of $100,000. See, 12 U.S.C.
§ 1821(d)(2); Def. MSJ at 2-3. These certificates have a “second
level” priority, meaning that they will be honored at a portion
of their face value, that portion to be determined on the basis
of the assets that remain after secured creditors and administrative expenses are paid. See, 12 U.S.C. § 1821(d)(11);
Def. MSJ at 3.
Plaintiff, whose asserted purpose is to solicit the
purchase of those receiver certificates, made a FOIA request for
a variety of information pertaining to the FDIC’s receivership of
Net Bank and ANB Financial. He was provided most of what he
asked for, but the FDIC invoked FOIA Exemptions 4 and 6 to
withhold the names, physical addresses, email addresses, phone
numbers, and other contact information of under-insured
depositors who were given receiver's certificates. Pl. MSJ at 3;
5 U.S.C. § 552(b)(4) and (b)(6).
Analysis
A district court’s review of an agency's denial of a
FOIA request is de novo. 5 U.S.C. § 552(a)(4)(B). Summary
judgment is appropriate when, taking the evidence in the light
most favorable to the requester, there is no genuine issue of
material fact and the agency has demonstrated that the
information is exempt from disclosure. See, Assassination
Archives & Research Ctr. v. Cent. Intelligence Agency, 334 F.3d
55, 57 (D.C. Cir. 2003) (internal quotation omitted); Fed. R.
Civ. P. 56(c).
1. FOIA Exemption 6
Section 552(b)(6) exempts from disclosure “personnel
and medical files and similar files the disclosure of which would
- 2 - constitute a clearly unwarranted invasion of personal privacy[.]”
5 U.S.C. § 552(b)(6). It is conceded that the requested
information is kept in covered files, but that concession does
not end the inquiry. There is a “second inquiry” which “requires
the court to balance the individual's right of privacy against
the basic policy of opening agency action to the light of public
scrutiny.” National Ass'n of Home Builders v. Norton, 309 F.3d
26, 32 (D.C. Cir. 2002) (internal quotation omitted).
Individual account holders have a privacy interest here
because disclosure would allow public scrutiny of their financial
information. See, Consumers' Checkbook Center for the Study of
Services v. U.S. Dept. of Health and Human Services, 554 F.3d
1046 (D.C. Cir. 2009) (“We have consistently held that an
individual has a substantial privacy interest under FOIA in his
financial information, including income.”); Multi Ag Media LLC v.
Department of Agriculture, 515 F.3d 1224 (D.C. Cir. 2008);
National Ass'n of Retired Federal Employees v. Horner, 879 F.2d
873, 875-77 (D.C. Cir. 1989). The Court of Appeals has been
“particularly concerned when the information may be used for
solicitation purposes.” Lepelletier v. F.D.I.C., 164 F.3d 37, 47
(D.C. Cir. 1999). For the owners of “individually owned or
closely held” businesses, disclosure “would necessarily reveal at
least a portion of the owner's personal finances.” Multi Ag
Media, 515 F.3d at 1229. While some individuals and businesses
- 3 - might be interested to learn that there is a potential buyer of
receiver’s certificates, that interest is not nearly as “clear”
as that of the holders of unclaimed accounts, for whom release of
contact information would “greatly increase the probability that
they (or their heirs) will be reunited with their funds.”
Lepelletier, 164 F.3d at 48.
Plaintiff’s assertion that disclosing the requested
contact information would in some way “she[d] light on [the
FDIC's] performance of its statutory duties . . . ,” United
States Dep't of Defense v. FLRA, 510 U.S. 487, 495-6 (1994)
(internal quotation omitted), seems to rely on the highly
implausible suggestions that FDIC’s roles as regulator, insurer,
and receiver are in conflict with one another, and that the
agency makes its receivership determinations via a “secret
process.” But plaintiff makes no effort to explain how the
requested names and contact information could possibly shed any
light on his suggestions. See, Lepelletier, 164 F.3d at 48; cf.,
National Ass'n of Retired Fed. Employees v. Horner, 879 F.2d 873
(D.C. Cir. 1989). The “secret process” to which he refers is
spelled out comprehensively in the FDIC manual, a substantial
portion of which is attached to plaintiff's reply brief.
2. FOIA Exemption 4
Defendant argues that FOIA Exemption 4, which exempts
from disclosure “trade secrets and commercial or financial
- 4 - information obtained from a person and privileged or
confidential,” applies to the contact information of all other
businesses that are not closely held or individually owned. 5
U.S.C. § 552(b)(4). Plaintiff concedes, as he must, that the
information he seeks is commercial and/or financial. And it was
clearly provided to the government by the banks, which in turn
received it from the business account holders -- all “persons”
under Exemption 4. See, Gulf & Western Industries, Inc. V. U.S.,
615 F.2d 527 (D.C. Cir. 1979); OSHA Data/C.I.H., Inc. V. U.S.
Dept. Of Labor, 220 F.3d 153, 162 n.23 (3rd Cir. 2000). The
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
IRA NIKELSBERG, : : Plaintiff, : : v. : Civil Action No. 08-1899 (JR) : FEDERAL DEPOSIT INSURANCE : CORPORATION, : : Defendant. :
MEMORANDUM
Pro se plaintiff Ira Nikelsberg sues the Federal
Deposit Insurance Corporation under the Freedom of Information
Act, 5 U.S.C. § 552, as amended, to obtain the names and contact
information of the under-insured depositors of two failed banks
for which the FDIC acts as receiver. The parties have cross
moved for summary judgment. Because the information requested
falls under the exceptions to FOIA found in 5 U.S.C. §§ 552(b)(4)
and (b)(6), defendant's motion will be granted.
Background
Pursuant to its duties as receiver for ANB Financial
and Net Bank, the FDIC issued receiver's certificates to
depositors for the portions of their accounts greater than the
federally insured limit of $100,000. See, 12 U.S.C.
§ 1821(d)(2); Def. MSJ at 2-3. These certificates have a “second
level” priority, meaning that they will be honored at a portion
of their face value, that portion to be determined on the basis
of the assets that remain after secured creditors and administrative expenses are paid. See, 12 U.S.C. § 1821(d)(11);
Def. MSJ at 3.
Plaintiff, whose asserted purpose is to solicit the
purchase of those receiver certificates, made a FOIA request for
a variety of information pertaining to the FDIC’s receivership of
Net Bank and ANB Financial. He was provided most of what he
asked for, but the FDIC invoked FOIA Exemptions 4 and 6 to
withhold the names, physical addresses, email addresses, phone
numbers, and other contact information of under-insured
depositors who were given receiver's certificates. Pl. MSJ at 3;
5 U.S.C. § 552(b)(4) and (b)(6).
Analysis
A district court’s review of an agency's denial of a
FOIA request is de novo. 5 U.S.C. § 552(a)(4)(B). Summary
judgment is appropriate when, taking the evidence in the light
most favorable to the requester, there is no genuine issue of
material fact and the agency has demonstrated that the
information is exempt from disclosure. See, Assassination
Archives & Research Ctr. v. Cent. Intelligence Agency, 334 F.3d
55, 57 (D.C. Cir. 2003) (internal quotation omitted); Fed. R.
Civ. P. 56(c).
1. FOIA Exemption 6
Section 552(b)(6) exempts from disclosure “personnel
and medical files and similar files the disclosure of which would
- 2 - constitute a clearly unwarranted invasion of personal privacy[.]”
5 U.S.C. § 552(b)(6). It is conceded that the requested
information is kept in covered files, but that concession does
not end the inquiry. There is a “second inquiry” which “requires
the court to balance the individual's right of privacy against
the basic policy of opening agency action to the light of public
scrutiny.” National Ass'n of Home Builders v. Norton, 309 F.3d
26, 32 (D.C. Cir. 2002) (internal quotation omitted).
Individual account holders have a privacy interest here
because disclosure would allow public scrutiny of their financial
information. See, Consumers' Checkbook Center for the Study of
Services v. U.S. Dept. of Health and Human Services, 554 F.3d
1046 (D.C. Cir. 2009) (“We have consistently held that an
individual has a substantial privacy interest under FOIA in his
financial information, including income.”); Multi Ag Media LLC v.
Department of Agriculture, 515 F.3d 1224 (D.C. Cir. 2008);
National Ass'n of Retired Federal Employees v. Horner, 879 F.2d
873, 875-77 (D.C. Cir. 1989). The Court of Appeals has been
“particularly concerned when the information may be used for
solicitation purposes.” Lepelletier v. F.D.I.C., 164 F.3d 37, 47
(D.C. Cir. 1999). For the owners of “individually owned or
closely held” businesses, disclosure “would necessarily reveal at
least a portion of the owner's personal finances.” Multi Ag
Media, 515 F.3d at 1229. While some individuals and businesses
- 3 - might be interested to learn that there is a potential buyer of
receiver’s certificates, that interest is not nearly as “clear”
as that of the holders of unclaimed accounts, for whom release of
contact information would “greatly increase the probability that
they (or their heirs) will be reunited with their funds.”
Lepelletier, 164 F.3d at 48.
Plaintiff’s assertion that disclosing the requested
contact information would in some way “she[d] light on [the
FDIC's] performance of its statutory duties . . . ,” United
States Dep't of Defense v. FLRA, 510 U.S. 487, 495-6 (1994)
(internal quotation omitted), seems to rely on the highly
implausible suggestions that FDIC’s roles as regulator, insurer,
and receiver are in conflict with one another, and that the
agency makes its receivership determinations via a “secret
process.” But plaintiff makes no effort to explain how the
requested names and contact information could possibly shed any
light on his suggestions. See, Lepelletier, 164 F.3d at 48; cf.,
National Ass'n of Retired Fed. Employees v. Horner, 879 F.2d 873
(D.C. Cir. 1989). The “secret process” to which he refers is
spelled out comprehensively in the FDIC manual, a substantial
portion of which is attached to plaintiff's reply brief.
2. FOIA Exemption 4
Defendant argues that FOIA Exemption 4, which exempts
from disclosure “trade secrets and commercial or financial
- 4 - information obtained from a person and privileged or
confidential,” applies to the contact information of all other
businesses that are not closely held or individually owned. 5
U.S.C. § 552(b)(4). Plaintiff concedes, as he must, that the
information he seeks is commercial and/or financial. And it was
clearly provided to the government by the banks, which in turn
received it from the business account holders -- all “persons”
under Exemption 4. See, Gulf & Western Industries, Inc. V. U.S.,
615 F.2d 527 (D.C. Cir. 1979); OSHA Data/C.I.H., Inc. V. U.S.
Dept. Of Labor, 220 F.3d 153, 162 n.23 (3rd Cir. 2000). The
question is whether the contact information for such businesses
is “privileged or confidential.” 5 U.S.C. § 552(b)(4).
The required analysis of whether commercial or
financial information is “confidential” first asks whether the
information was provided to the government voluntarily or
involuntarily. Compare, National Parks & Conservation Ass'n v.
Morton, 498 F.2d 765 (D.C. Cir. 1974) (involuntary), with,
Critical Mass Energy Project v. NRC, 975 F.2d 871 (D.C. Cir.
1992)(voluntary). The release of contact information to FDIC as
part of the receivership laws was involuntary, of course, but
when the businesses provided the information to the banks they
were entitled to expect that their account information would be
kept in confidence. Plaintiff concedes that the information
(i.e., deposit information coupled with contact information) is
- 5 - of a type “customarily not be released to the public.” Critical
Mass Energy Project, 975 F.2d at 879. It is thus unnecessary to
analyze the “competitive disadvantages” to banks and account
holders that might result from disclosure of information
involuntarily provided to the government. See, National Parks &
Conservation Ass'n, 498 F.2d at 768.
Even if the contact information of businesses is not
“confidential,” to require FDIC to sort through depositor records
trying to decide which businesses are closely held or
individually owned and which are not might well compromise its
efficiency and effectiveness. See, Critical Mass Energy Project,
975 F.2d at 879; National Parks & Conservation Ass'n, 498 F.2d at
770 n. 17; 9 to 5 Org. for Women Office Workers v. Bd. of
Governors of the Fed. Res. System, 721 F.2d 1, 7-11 (1st
Cir.1983); Public Citizen Health Research Group v. National
Institutes of Health, 209 F. Supp.2d 37 (D.D.C. 2002).
* * *
An appropriate order accompanies this memorandum.
JAMES ROBERTSON United States District Judge
- 6 -