Pub. Citizen v. HHS, No. 11-1681, 2014 WL 4388062 (D.D.C. Sept. 5, 2014) (Howell, J.)

Pub. Citizen v. HHS, No. 11-1681, 2014 WL 4388062 (D.D.C. Sept. 5, 2014) (Howell, J.)

Re: Request for annual reports submitted to OIG by Purdue Pharma L.P.

Disposition: Granting defendant and defendant-intervenors' renewed motions for summary judgment; denying plaintiff's renewed motion for summary judgment

• Exemption 4, Commercial or Financial Information:  The court notes that "plaintiff offers no arguments as to why the Reportable Event summaries and Disclosure Log summaries should not be considered 'commercial' within the meaning of Exemption 4." And "[c]onsequently, the defendant-intervenors' arguments as to the commercial nature of the documents may be accepted as conceded."  Moreover, the court finds that "[b]oth declarants make clear that the information contained within the Disclosure Log Summaries is sufficiently 'instrumental' to the companies' operations to qualify as 'commercial' within the meaning of Exemption 4."  The court explains that "[b]oth declarants state that the documents in question contain information about interactions between the companies' salespeople and customers, how the companies promote their products, and the way the companies implement their compliance programs."
   
• Exemption 4, "Confidential Information"  The court holds that "[w]hile the plaintiff is correct to discount the merits of several of the defendant-intervenors' arguments regarding the competitive harm posed by the release of the Disclosure Log summaries and the Reportable Event summaries, the plaintiff is unable to overcome the substantial competitive advantage to be gained by the defendant-intervenors' competitors to be able to learn from [defendant-intervenor's] mistakes at little or no cost in capital or exposure to risk."  The court explains that "plaintiff correctly points out that merely because the defendant-intervenors 'marked [the Reportable Event summaries] as "FOIA confidential"' . . . does not mean these documents were properly withheld under the FOIA."  However, the court finds that "[s]ince the cognizable competitive harm under Exemption 4 is limited to that which 'flow[s] from the affirmative use of proprietary information by competitors,' . . . it is highly unlikely that [plaintiff's argument concerning] any internal chilling of potential whistleblowers employed by [defendant-intervenor] could be used affirmatively by their competitors to wreak substantial harm."  The court holds that "[t]he information contained in the Reportable Event and Disclosure Log summaries, according to the declarants, provides competitors with two valuable pieces of information: what [defendant-intervenors] have determined is a legally and, presumably, profitable, compliant manner of operating and what these companies have determined is illegal, particularly where 'the line between lawfulness and unlawfulness is not clearly drawn.'" 

As to other records at issue, the court similarly finds that given that "'[defendant-intervenor] pays a substantial fee for [these records]'" and "'the content of [these records] reflects precisely targeted customers' recall of the company's marketing approach," those factors are "sufficient to show that [these records] are 'confidential' within the meaning of Exemption 4."  The court explains that "[a]s this detailed explanation indicates, a competitor could use the content of [these records] affirmatively to wreak competitive harm on [defendant-intervenor] by acquiring records that, according to [defendant-intervenor] and undisputed by the plaintiff, show what is and is not working in companies' marketing from the perspective of its customers." 

Concerning "the actions the companies took in response to the discovery of [an] Ineligible Person[]," the court finds that "this Responsive Action information is similarly protected" "[f]or substantially the same reasons that the Court found information pertaining to the changes in process the companies used to screen for Ineligible Persons was protected by Exemption 4."  The court explains that "just as the information about changes in process 'involve[d] the process by which the companies make decisions about managing and conducting their business operations,' . . . so too is the process used by the companies if and when they discover such a person."  Additionally, "revealing the actions a company took in response to the discovery of an Ineligible Person would 'reflect the companies' views of effective ways in which to ferret out Ineligible Persons, in the context of the companies' particular organizational structure and operations.'"

• Litigation Considerations, "Reasonably Segregable" Requirements:  "In reviewing the supplemental Vaughn indices . . . the Court is satisfied that any reasonably segregable portions of the records at issue have already been released."