Dorsey & Whitney LLP v. United States Postal Service

Background

Dorsey & Whitney LLP submitted a Freedom of Information Act (FOIA) request to the United States Postal Service seeking information about negotiated service agreements between the Postal Service and three entities: Fujian Zongteng Network Technology Co., Limited; Enumber, Inc.; and US Elogistics Service Corporation. The Postal Service issued a “Glomar response,” meaning it refused to confirm or deny whether responsive records existed. After the Postal Service denied Dorsey’s administrative appeal, Dorsey filed this lawsuit.

The parties filed cross-motions for summary judgment. Summary judgment is a decision entered when there is no genuine dispute about a material fact and the moving party is entitled to judgment under the law. A magistrate judge recommended granting Dorsey’s motion and denying the Postal Service’s motion. The Postal Service objected to that recommendation.

Court’s Analysis

The court reviewed the challenged portions of the magistrate judge’s recommendation independently, as required when specific objections are made. It overruled the Postal Service’s objection to the standard of review, concluding that the court had to conduct de novo review because the parties disagreed about whether the requested information was covered by the relevant statute.

The Postal Service relied on FOIA Exemption 3, which covers information specifically protected from disclosure by another statute. The Postal Service invoked the “good business” exception in 39 U.S.C. § 410(c)(2), which allows it to withhold commercial information that would not be publicly disclosed under good business practices. The Postal Service argued that even acknowledging the existence of negotiated service agreements could violate nondisclosure agreements, reduce revenue, or reveal valuable information to competitors.

The court rejected that argument. It concluded that the question was whether the existence of negotiated service agreements is publicly disclosed under good business practices, not whether the agreements’ specific prices or terms are disclosed. The record included evidence that the Postal Service had publicly discussed the availability or existence of negotiated service agreements and other customer partnerships. The record also included publicly available information about Postal Service agreements and partnerships, including information submitted to the Postal Regulatory Commission, an inspector general audit report, news coverage, and a private company’s press release.

The court held that the Postal Service’s conclusory distinction between competitive and noncompetitive markets did not meet its burden to establish that a narrow FOIA exemption applied. It therefore concluded that the Postal Service had not shown that its Glomar response was justified under the good business exception as incorporated by FOIA Exemption 3. Because this conclusion resolved the cross-motions, the court did not address the Postal Service’s objection to the recommendation’s analysis of actual harm.

Disposition

Judge Wilhelmina M. Wright overruled the Postal Service’s objections, adopted the May 9, 2019 report and recommendation, denied the Postal Service’s motion for summary judgment, and granted Dorsey & Whitney LLP’s motion for summary judgment as to the Postal Service’s Glomar response.