Memorandum opinion (WP V) — WP Co. v. SBA

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UNITED STATES DISTRICT COURT · No. 1:20-cv-01240-JEB · Doc. 57 · 2021-12-13 · Docket on CourtListener

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UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF COLUMBIA 
 
WP COMPANY LLC d/b/a THE 
WASHINGTON POST, et al., 
 
Plaintiffs, 
 
 
v. 
       Civil Action No. 20-1240 (JEB) 
U.S. SMALL BUSINESS 
ADMINISTRATION, 
 
 
Defendant. 
 
 
MEMORANDUM OPINION 
Now before this Court for a fifth time, this Freedom of Information Act case asks 
whether the Small Business Administration has properly withheld certain information related to 
recipients of loans under its Paycheck Protection Program (PPP).  Two types of records remain at 
issue: 1) information reflecting the payment status of individual loans and 2) borrower tax-
identification numbers.  Last time around, the Court found that SBA had not sufficiently 
supported its withholdings of these data, but it gave the agency another chance to bolster its 
positions.  Believing SBA’s efforts on remand sufficient, the Court now finds in its favor, 
concluding that the agency has properly reserved this under FOIA Exemptions 4 and 6.  It will 
thus grant summary judgment to Defendant. 
I. 
Background 
As the Court has confronted this case many times before, it summarizes only briefly the 
history of the litigation.  Interested readers may refer to the Court’s prior Opinions for a fuller 
recounting.  See, e.g., WP Co. LLC v. U.S. Small Business Administration (WP I), 502 F. Supp. 
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3d 1, 7–10 (D.D.C. 2020); WP Co. LLC v. U.S. Small Business Administration (WP IV), No. 
20-1240, 2021 WL 2982173, at *1–2 (D.D.C. July 15, 2021). 
In April and May 2020, Plaintiffs, eleven national-news organizations, submitted FOIA 
requests to SBA seeking information about loan recipients under SBA’s PPP and Economic 
Injury Disaster Loans (EIDL) program.  WP IV, 2021 WL 2982173, at *1.  After Plaintiffs 
brought suit to enforce their requests, the agency published “some loan-level information,” but 
refused to provide “both dollar figures and borrower names and addresses for any PPP loan.”  Id.  
This Court agreed with the news organizations that neither FOIA Exemption 4 nor Exemption 6 
covered the requested information and ordered the agency to release “names, addresses, and 
precise loan amounts,” which SBA did shortly thereafter.  Id. at *2.   
On December 23, 2020, after this Court had awarded Plaintiffs attorney fees and closed 
the matter, SBA notified the news organizations that it had identified additional PPP loan-level 
information responsive to the FOIA requests.  Id.  The agency once again withheld certain 
information under Exemptions 4 and 6 — namely, 1) “‘[i]nformation that would reveal whether 
a PPP loan is in default,’ including ‘the status of certain loans, the date associated with that loan 
status, the outstanding balance of all PPP loans, and internal codes that identify the SBA offices 
servicing and processing the PPP loans’”; 2) “Data Universal Numbering System (DUNS) 
numbers provided by the private company Dun & Bradstreet to SBA for individual PPP 
borrowers”; and 3) “individual borrowers’ tax-identification numbers — viz., Social Security 
Numbers and Employer Identification Numbers.”  Id. (citing ECF No. 36-1 (1/25/21 Ltr. from 
SBA to Plaintiffs) at 2).  This Court, considering Cross-Motions for Summary Judgment, granted 
SBA’s Motion as to the DUNS numbers but denied the Motion as to the other sets of data, 
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instead allowing SBA the opportunity to provide more information about its withholding of these 
records.  Id. at *7, 9, 11.   
As to the first category, the primary component of which the Court will refer to as 
“interim loan-status information,” the Court required evidence that would shed light on whether 
“PPP lenders customarily and actually” refrain from disclosing this information, such as 
“statements from PPP lenders themselves.”  Id. at *5–7 (emphasis omitted).  With regard to the 
tax-identification numbers, the Court instructed SBA to “explain[] why it cannot reasonably 
segregate EINs from SSNs,” including by assessing Plaintiffs’ suggestion to seek assistance from 
the Social Security Administration and Internal Revenue Service.  Id. at *11 (emphasis deleted). 
Having accomplished its tasks, SBA now returns with additional material in hand, along 
with a new Motion for Summary Judgment.  See ECF No. 51 (Def. Second Supplemental MSJ).  
II. 
Legal Standard 
Summary judgment must be granted 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); see also Anderson v. Liberty Lobby, 477 U.S. 242, 247–48 (1986); Holcomb v. 
Powell, 433 F.3d 889, 895 (D.C. Cir. 2006).  A fact is “material” if it is capable of affecting the 
substantive outcome of the litigation.  See Liberty Lobby, 477 U.S. at 248; Holcomb, 433 F.3d at 
895.  A dispute is “genuine” if the evidence is such that a reasonable jury could return a verdict 
for the nonmoving party.  See Liberty Lobby, 477 U.S. at 248; Holcomb, 433 F.3d at 895.  “A 
party asserting that a fact cannot be or is genuinely disputed must support the assertion” by 
“citing to particular parts of materials in the record” or “showing that the materials cited do not 
establish the absence or presence of a genuine dispute, or that an adverse party cannot produce 
admissible evidence to support the fact.”  Fed. R. Civ. P. 56(c)(1). 
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FOIA cases typically and appropriately are decided on motions for summary judgment.  
See Brayton v. Office of the U.S. Trade Representative, 641 F.3d 521, 527 (D.C. Cir. 2011).  In a 
FOIA case, a court may grant summary judgment based solely on information provided in an 
agency’s affidavits or declarations when they “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. Department of State, 565 F.3d 857, 862 (D.C. Cir. 
2009) (citation omitted).  Such affidavits or declarations “are accorded a presumption of good 
faith.”  SafeCard Services., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991).  “Unlike the 
review of other agency action that must be upheld if supported by substantial evidence and not 
arbitrary or capricious,” FOIA “expressly places the burden ‘on the agency to sustain its action’ 
and directs the district courts to ‘determine the matter de novo.’”  U.S. Department of Justice v. 
Reporters Committee for Freedom of the Press, 489 U.S. 749, 755 (1989) (quoting 5 U.S.C. 
§ 552(a)(4)(B)). 
III. 
Analysis 
FOIA provides that “each agency, upon any request for records which (i) reasonably 
describes such records and (ii) is made in accordance with published rules[,] . . . shall make the 
records promptly available to any person.”  5 U.S.C. § 552(a)(3)(A).  The Government need not, 
however, turn over requested information that falls into one of nine statutorily created 
exemptions from FOIA’s broad directive.  See id. § 552(b)(1)–(9).  When it withholds records, 
the Government bears the burden of providing a “relatively detailed justification” for its 
withholding, “specifically identifying the reasons why a particular exemption is relevant.”  
Morley v. CIA, 508 F.3d 1108, 1122 (D.C. Cir. 2007) (quoting King v. U.S. Department of 
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Justice, 830 F.2d 210, 219 (D.C. Cir. 1987)).  Courts can compel the release of any records that 
do not satisfy the requirements of at least one exemption.  See Reporters Committee, 489 U.S. at 
755. 
Here, SBA once again seeks to withhold two categories of information: 1) the interim 
payment status of individual PPP loans (along with additional data that would reveal that status) 
under Exemption 4 and 2) tax identification numbers under Exemption 6.  The Court considers 
each in turn. 
A. Exemption 4 
Exemption 4 shields from disclosure “commercial or financial information obtained from 
a person and privileged or confidential.”  5 U.S.C. § 552(b)(4).  To demonstrate that this 
exemption shelters the information withheld, SBA must show that it is “(1) commercial or 
financial, (2) obtained from a person, and (3) privileged or confidential.”  Public Citizen Health 
Research Group v. FDA, 704 F.2d 1280, 1290 (D.C. Cir. 1983).  In the previous round of 
briefing, only the third element was in dispute.  The Court concluded that SBA had not 
canvassed the actual lenders, and so it instructed the agency to come back with data that would 
allow the Court to assess “whether PPP lenders customarily and actually treat interim loan status 
as confidential.”  WP IV, 2021 WL 2982173, at *6. 
Plaintiffs wisely concede that SBA has done just that and that its submissions are now 
sufficient; indeed, SBA’s research went above and beyond what is required.  See ECF No. 53 
(Pl. Opp.) at 6.  Since it was last before this Court, SBA has “contact[ed] the top 300 PPP 
lenders, seeking their position on whether PPP loan status information is customarily and 
actually kept confidential” and “found no lender or trade association for lenders that stated a PPP 
lender discloses interim financial status of their SBA loans to the public.”  Def. 2d Suppl. MSJ at 
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7–8 (citing ECF No. 51-1 (3d Declaration of Eric Benderson), ¶¶ 6–7).  The agency also filed a 
declaration from 24 lenders stating that “they customarily and actually treat interim PPP loan 
status as confidential.”  Id. (citing 3d Benderson Decl., ¶¶ 8–11).  This evidence, especially when 
considered alongside SBA’s earlier submissions, is more than sufficient to allow the Court to 
conclude that “PPP lenders customarily and actually treat interim loan status as confidential.”  
WP IV, 2021 WL 2982173, at *6.  The additional data fields and internal coding that would 
necessarily reveal that confidential status also fall within the scope of Exemption 4.  See id. at *5 
(citing Renewable Fuels Association v. U.S. EPA, 519 F. Supp. 3d 1, 7 (D.D.C. 2021)). 
That leaves only one issue for the Court to address: whether SBA has satisfied the 
foreseeable-harm requirement set out in 5 U.S.C. § 552(a)(8)(A)(i).  Assuming this requirement 
applies to Exemption 4, as the parties do, SBA “must explain how disclosing, in whole or in part, 
the specific information withheld under Exemption 4 would harm an interest protected by this 
exemption, such as by causing genuine harm to [the submitter’s] economic or business interests.”  
Center for Investigative Reporting v. U.S. Customs and Border Protection, 436 F. Supp. 3d 90, 
113 (D.D.C. 2019) (citations and internal quotation marks omitted); cf. Reporters Committee for 
Freedom of the Press v. FBI, 3 F.4th 350, 369 (D.C. Cir. 2021) (noting concern with “abuse of 
Exemption 5” drove adoption of foreseeable-harm requirement).  As the Government points out, 
the same documents that establish that the withheld information is “privileged or confidential” 
provide the requisite explanation of foreseeable harm.  See Def. 2d Suppl. MSJ at 18–19; ECF 
No. 55 (Def. Reply) at 4–8.   
In particular, SBA’s declarations from Eric Benderson, Associate General Counsel for 
Litigation and Chief FOIA Officer at SBA, “concretely explain how disclosure ‘would’” cause 
harm to an interest protected by the exemption.  Reporters Committee, 3 F.4th at 370–71.  In 
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those declarations, Benderson explains that disclosure of the withheld information “would harm 
the interests of (1) PPP borrowers, (2) PPP lenders, and (3) SBA itself.”  ECF No. 55-1 (4th 
Declaration of Eric Benderson), ¶ 9.  Drawing on input collected from lenders, Benderson asserts 
that disclosure of interim loan-status information — which may identify a borrower as 
delinquent on its loan, even if that status is temporary or ultimately irrelevant — could 
“negatively impact the borrower’s reputation or creditworthiness, or adversely affect its 
survivability and growth.”  Id., ¶ 10 (citing 3d Benderson Decl., ¶ 14).  As to lenders, “[r]elease 
of interim loan status information could lead to an adversarial relationship with a lender’s own 
borrowers or allegations that the lender negligently released information that caused the 
borrower financial harm.”  Id., ¶ 13 (citing ECF No. 37-1 (1st Declaration of Eric Benderson), 
¶¶ 23, 40, 42 and ECF No. 44-1 (2d Declaration of Eric Benderson), ¶¶ 14–16).  Disclosure 
would also “create significant and unprecedented opportunity for business competitors of PPP 
lenders to target their local or regional marketing efforts at PPP borrowers not designated as 
being in default,” thus putting PPP lenders at a competitive disadvantage.  Id.  Finally, as to 
SBA, disclosure would cause “regulated lenders [to] lose confidence in the agency’s future 
ability to protect confidential information . . . creat[ing] an incentive not to participate in the 
agency’s programs.”  Id., ¶ 14.   
Despite Plaintiffs’ protests that such harms are too “attenuated and conjectural” to satisfy 
the foreseeable-harm standard, see Pl. Opp. at 7, the Court finds that these declarations have 
“directly articulated ‘[a] link between the specified harm and the specific information contained 
in the material withheld.’”  Reporters Committee, 3 F.4th at 371 (citing H.R. Rep. No. 391, 
114th Cong., 2d Sess. 1, 9 (2016)).  SBA has thus satisfied the foreseeable-harm requirement and 
has properly withheld the interim loan-status information under Exemption 4. 
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B. Exemption 6 
The other set of information at issue is PPP borrowers’ tax-identification numbers, which 
include both SSNs for individual borrowers and EINs for businesses.  See Def. 2d Suppl. MSJ at 
13.  All agree that SSNs are properly withheld under Exemption 6 — which covers information 
“the disclosure of which would constitute a clearly unwarranted invasion of personal privacy,” 5 
U.S.C. § 552(b)(6) — and that EINs are not.  See id. at 13–14; Pl. Opp. at 9.  SBA has 
nonetheless withheld the EINs because it asserts that it cannot reasonably segregate them from 
the SSNs.  See Def. 2d Suppl. MSJ at 14; WP IV, 2021 WL 2982173, at *10 (explaining how 
SSNs and EINs are collected and why a reader would not be able to tell in which category a 
particular number belongs).   
FOIA requires 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).  While the Government is “entitled to a presumption that [it] complied with the 
obligation to disclose reasonably segregable material,” Hodge v. FBI, 703 F.3d 575, 582 (D.C. 
Cir. 2013) (citation omitted), such presumption of compliance does not obviate its obligation to 
carry its evidentiary burden and fully explain its decisions on segregability.  See Mead Data 
Central, Inc. v. U.S. Department of Air Force, 566 F.2d 242, 261–62 (D.C. Cir. 1977).  In the 
previous round of summary-judgment motions, this Court found that SBA had not met its 
obligation to provide “a detailed justification and not just conclusory statements to demonstrate 
that all reasonably segregable information has been released.”  WP IV, 2021 WL 2982173, at 
*10 (quoting Valfells v. CIA, 717 F. Supp. 2d 110, 120 (D.D.C. 2010)) (internal quotation marks 
omitted); see also Mead, 566 F.2d at 261.  The Court instructed the Government to return with a 
more detailed explanation of why it could not segregate SSNs from EINs and, in particular, to 
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explore the option of seeking assistance from the SSA and IRS.  WP IV, 2021 WL 2982173, at 
*10–11.   
SBA has now proffered a sufficiently detailed explanation of its inability to segregate.  At 
the Court’s prompting, the agency contacted the IRS and SSA to determine whether their 
assistance might make segregation of the EINs possible.  See 3d Benderson Decl., ¶ 24.  Both 
agencies concluded that they were “prohibited by law from providing SBA with results of a 
comparison between SBA’s PPP data and the data possessed by those agencies, which would be 
a critical step for the segregation of EINs from SSNs according to the strategy as proposed by 
Plaintiffs.”  Id.; see also ECF No. 51-34 (1st Declaration of Sarah Tate); ECF No. 51-33 
(Declaration of Linda Frye).  That is because the IRS determined that EINs and SSNs are “tax 
return information” that it may not disclose except as allowed by regulation, and there is no 
regulation allowing disclosure here.  See 3d Benderson Decl., ¶¶ 25–27 (citing Tate Decl., ¶¶ 15, 
18–19, 22, 30 & n.3; Frye Decl., ¶¶ 4–12).  “Without an accurate database of EINs or SSNs from 
IRS or SSA against which to compare SBA’s data,” SBA asserts, “it is impossible to segregate 
the EINs from the SSNs” and so Plaintiffs’ proposed strategy offers no solution.  Id., ¶ 28.   
SBA could, in theory, segregate the EINs by asking the borrowers of each of the 
approximately 12 million PPP loans to indicate whether the number they provided was an EIN or 
an SSN, but it understandably “lacks the means or resources” to do so.  Id., ¶ 29.  Doing so, 
furthermore, would generate new records, see Def. 2d Suppl. MSJ at 17, and it is well 
established that FOIA does not require agencies to create documents that do not already exist.  
See, e.g., Kissinger v. Reporters Committee For Freedom of the Press, 445 U.S. 136, 152 (1980); 
Yeager v. DEA, 678 F.2d 315, 321 (D.C. Cir. 1982) (“It is well settled that an agency is not 
required by FOIA to create a document that does not exist in order to satisfy a request.”). 
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This explanation is sufficient to fulfill SBA’s obligation to “show with ‘reasonable 
specificity’ why the [data] cannot be further segregated or why the [data] is not reasonably 
segregable.”  Electronic Privacy Information Center v. U.S. Department of Homeland Security, 
926 F. Supp. 2d 311, 315 (D.D.C. 2013) (quoting Johnson v. Executive Office for U.S. 
Attorneys, 310 F.3d 771, 776 (D.C. Cir. 2002)) (emphasis in original).  The question before this 
Court is not whether the IRS’s and SSA’s reading of the tax statutes is the best one, cf. Pl. Opp. 
at 10–11; rather, the Court is tasked only with ensuring that the agency claiming the exemption 
— SBA — has made a good-faith effort to segregate the data and has clearly explained why it 
cannot reasonably do so.  SBA has done that here.   
Finally, to the extent that SBA must demonstrate foreseeable harm for the Exemption 6 
withholdings, any argument that they have not done so has been forfeited.  See Citizens for 
Responsibility and Ethics in Washington v. U.S. Department of Justice, No. 19-3626, 2021 WL 
4502039, at *6 n.4 (D.D.C. Sept. 30, 2021) (finding foreseeable-harm challenge forfeited where 
plaintiff argued as to other claimed exemptions but not as to exemption at issue and did not argue 
release would be harmless).  In any event, it is not difficult to note how people would be injured 
by the release of their SSNs.  
IV. 
Conclusion 
For the foregoing reasons, the Court will grant Defendant’s Motion for Summary 
Judgment.  A separate Order so stating shall issue this day.  
/s/ James E. Boasberg 
JAMES E. BOASBERG 
United States District Judge 
Date:  December 13, 2021 
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