Am. Small Bus. League v. SBA, No. 20-04619, 2024 WL 3678001 (N.D. Cal. Aug. 6, 2024) (Chesney, J.)

Am. Small Bus. League v. SBA, No. 20-04619, 2024 WL 3678001 (N.D. Cal. Aug. 6, 2024) (Chesney, J.)

Re:  Requests for records concerning SBA’s administration of Paycheck Protection Program (“PPP”)

Disposition:  Granting in part and denying in part plaintiff’s motion for attorney fees and costs; awarding plaintiff $203,596.40 in fees and $2,691.40 in costs

• Attorney Fees, Eligibility:  First, the court holds that, “[i]n light of the Court’s production-rate order . . . , the parties agree [plaintiff] is eligible for fees for work performed in connection with [plaintiff’s] request for non-[Regional Regulatory Fairness Board (“RRFB”)] documents.”
  
  Second, the court relates that “[plaintiff] argues it is eligible for fees for work performed in connection with the SBA’s production of the PPP loan data, for two reasons:  first, because [a court in a different case, WP Co. LLC v. SBA, No. 20-cv-1240 (D.D.C. filed May 12, 2020) (“Washington Post case”)] entered an order directing the SBA to produce responsive data, and second, because the SBA produced additional data in January 2021 after investigating [plaintiff’s] request.” 
  
  Regarding plaintiff’s first argument, the court relates that “[plaintiff] . . . contends [that] the Washington Post court’s order requiring production of PPP loan data ‘qualifies as a judicial order through which [plaintiff] obtained relief in this case,’ because the ‘plain text’ of FOIA does not require the order to be issued in the complainant’s case.”  The court finds that “[i]n First Amend. Coalition, the Ninth Circuit held that a plaintiff, in order to meet the ‘substantially prevailed’ requirement, must demonstrate ‘a causal nexus between the litigation and the voluntary disclosure or change in position by the Government.’””  “[The concurring judge] disagreed, noting ‘the text of the fees provision . . . plainly does not require a causal nexus between the litigation and the agency’s disclosure.’”  The court finds that “[the concurring judge’s] . . . position was rejected by the majority’s holding that, despite the lack of statutory text requiring it, ‘there must still be a causal nexus between the litigation and the voluntary disclosure.’”  “With the majority’s opinion in mind, the Court concludes litigation in one case does not ‘cause’ disclosure in another.”
  
  “[Plaintiff] next argues it is eligible fees for this portion of its request based on the SBA’s January 25, 2021, production of supplemental PPP loan data, which took place after SBA produced data in the Washington Post case.”  “Although SBA maintains the release ‘was triggered by SBA’s conclusion that the records should have been produced in response to certain FOIA requests litigated in the Washington Post case,’ and continues to argue [plaintiff] was not entitled to the data under the terms of its request . . . , the SBA admits it looked for the ‘additional information’ as a result of [plaintiff’s] request . . . , and, as [plaintiff’s] initial request sought data on ‘how’ PPP loans were distributed . . . , at least some of the supplemental data was responsive to such request.”  “Accordingly, the Court finds [plaintiff] is eligible for fees incurred in obtaining the supplemental data.”
  
  Finally, the court relates that “[plaintiff] contends it ‘substantially prevailed’ on its request for interbranch communications because the SBA ‘ultimately [produced records] totaling more than 17,000 pages’ in response to negotiated search terms . . . , and the Court issued an order ‘setting the production rate’ for these searches . . . .”  “Although the Court accepts SBA’s assertion that many of the resulting emails were outside the scope of [plaintiff’s] request, the limitation of the search to communications between the SBA, the White House, and the houses of Congress demonstrates that [plaintiff] was seeking documents within [plaintiff’s] Amended Request, even if the results were overinclusive.”  “Accordingly, the Court finds that, given its issuance of a scheduling order, [plaintiff] is eligible for fees incurred in obtaining the production of interbranch communications documents.”
   
• Attorney Fees, Entitlement:  “The Court, having weighed the relevant factors, finds [plaintiff] is entitled to fees incurred in obtaining the supplemental PPP loan data and the interbranch communications documents pertaining to the Health Care Enhancement search, but not to the fees incurred in obtaining the non-RRFB documents or the Specific PPP Recipients search pursuant to the interbranch communications request.”  Regarding the public benefit, the court finds that “[a]s to all the categories of documents as to which the Court has found eligibility, namely, the non-RRFB documents, the supplemental PPP data, and the interbranch communications, the SBA, noting [plaintiff] has not specified the content of the records it received, argues [plaintiff] has failed to show there was a public interest in those records.”  “The Court, however, finds the public interest factor weighs in favor of an award of fees as to all three categories of documents, as [plaintiff] sought and received previously non-public documents regarding a highly publicized spending program.”  “Accordingly, this factor weighs in favor of an award of fees.”
  
  Regarding the commercial benefit and nature of plaintiff’s interests, the court finds that “[plaintiff] lacks any commercial interest in most of the documents it obtained in this litigation, including the PPP supplemental documents and the White House and Congressional communications documents, as well as those related to Raytheon Technologies, Lloyd Austin, and the Advisory Committee on Veterans Affairs (approximately half of the non-RRFB records).”  “The SBA makes no argument as to [plaintiff’s] interest in the supplemental PPP loan data and interbranch communications.”  “As the SBA notes, however, a portion of the non-RRFB records [plaintiff] sought as part of its narrowed initial FOIA request related to [plaintiff] itself and its president, . . . suggesting ‘a degree of self-interest.’”  “Although [plaintiff] argues even these records are in the public interest because ‘it is in the public’s interest to know if the SBA is properly addressing small business concerns, including those raised by [plaintiff] and its [p]resident’ . . . , the Court is not persuaded.”  “Accordingly, as to the supplemental PPP loan data and the interbranch communications documents, as well as the portion of the non-RRFB documents that do not pertain to [plaintiff], the Court finds this favor weighs in favor of an award of fees.”
  
  Regarding the “basis for withholding” eligibility element, the court relates that, “[a]s to the non-RRFB documents, [the] SBA states it ‘did not withhold’ those records but was ‘merely ordered to produce them at a faster pace than it had proposed.’”  “The Court finds this factor weighs against an award of fees for work performed in connection with the non-RRFB documents.”  “In particular, given the broad nature of the Initial Request and large number of documents that would be responsive thereto, the Court finds it was not unreasonable for the SBA to delay production until the searches were narrowed.”  “As to the supplemental PPP loan data, . . . the Court has found [plaintiff’s] Amended Request did encompass at least some of the responsive production.”  “Accordingly, as to the supplemental PPP data, the Court finds this factor weighs in favor of an award of fees.”  “As to the interbranch communications documents, . . . the Court finds the disparity between the original request and the eventual search terms supports the SBA’s argument as to the initial withholding of some of the records.”  “In that regard, of the two searches ultimately run, only the Health Care Enhancement Act search appears to seek documents responsive to [plaintiff’s] Amended Request for communications regarding the SBA’s ‘requests for additional funding.’”  “[Plaintiff] provides no explanation as to why it expected the Specific PPP Recipients search to return documents responsive to such request, and the Court finds SBA had a reasonable justification for the delay in initially running that search.”  “Accordingly, as to the interbranch communications request, the Court finds this factor weighs in favor of an award of fees, but only as to the Health Care Enhancement Act search.”
   
• Attorney Fees, Calculations:  The court awards plaintiff $203,596.40 in fees and $2,691.40 in costs.  Regarding pre-litigation work, the court finds that “[b]ecause roughly two-thirds of the described activities in the entries for work performed from April through June 2020 reflect work that is not recoverable under FOIA . . . , the Court will award fees for only one-third of the time billed during this period, or $14,890.”  The court then considers plaintiff’s requested amount for work done during the course of the litigation and reduces the requested award in accordance with its findings on eligibility and entitlement [to a total of $179,826].  Also, the court notes that “[plaintiff] seeks $83,047 for work done after January 2023, the majority of which includes $74,957.50 in fees-on-fees.”  “The SBA does not dispute any of this request.”  Additionally, the court notes that “[plaintiff] has voluntarily reduced its fee request by $23,267.50, or $14,957.50 of its request for fees-on-fees, and $8,310 for fees based on a FOIA request not at issue in this litigation.”
  
  “Lastly, because the plaintiff has the burden to prove their fees were reasonably incurred, the Court may ‘reduce hours that are billed in block format’ because such format ‘makes it more difficult to determine how much time was spent on particular activities.’”  “In the instant case, [plaintiff] has submitted, for the months April 2020 through May 2023, a ‘summary of major tasks’ performed by all attorneys and paralegals on a monthly basis.”  “The descriptions provided do not identify which employee performed which task, nor how much time was spent on each task.”  “Although, at the hearing on its motion, [plaintiff] offered to provide more detailed billing records to the Court, [plaintiff] failed to do so upon receiving the SBA’s opposition, wherein the SBA clearly raised a challenge to [plaintiff’s] block billing.”  “As a result, the SBA was denied the opportunity to review, assess, and potentially challenge the records in a more meaningful manner.”  “Accordingly, as to the hours awarded that were block billed, the Court reduces its award by 20%, resulting in a fee award of $203,596.40.”