Harkonen v. United States Department of Justice et al

Filing 32

ORDER GRANTING DEFENDANTS 8 MOTION TO DISMISS AND DENYING PLAINTIFFS 21 MOTION FOR SUMMARY JUDGMENT. Signed by Judge Claudia Wilken on 12/3/2012. (ndr, COURT STAFF) (Filed on 12/3/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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W. SCOTT HARKONEN, M.D.,

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Plaintiff,

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v.
UNITED STATES DEPARTMENT OF
JUSTICE; and UNITED STATES OFFICE
OF MANAGEMENT AND BUDGET,

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United States District Court
For the Northern District of California

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No. C 12-629 CW
ORDER GRANTING
DEFENDANTS’ MOTION
TO DISMISS (Docket
No. 8) AND DENYING
PLAINTIFF’S MOTION
FOR SUMMARY
JUDGMENT (Docket
No. 21)

Defendants.
________________________________/

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This case arises out of Defendant United States Department of

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Justice (DOJ)’s denial of Plaintiff W. Scott Harkonen’s multiple

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requests for correction of a press release that DOJ disseminated

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announcing Plaintiff’s criminal conviction for wire fraud.

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Plaintiff seeks review of these denials and brings facial and as-

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applied challenges to the information quality guidelines

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promulgated by DOJ and co-Defendant United States Office of

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Management and Budget (OMB).

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Plaintiff’s complaint pursuant to Federal Rule of Civil Procedure

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12(b)(6).

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Having considered the papers filed by the parties and their

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arguments at the hearing, the Court GRANTS Defendants’ motion to

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dismiss and DENIES Plaintiff’s motion for summary judgment.

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Defendants move to dismiss

Plaintiff opposes and cross-moves for summary judgment.

BACKGROUND
I.

Statutory and Administrative Framework

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A. The Information Quality Act (IQA)

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The IQA, which was enacted in 2000, provides in full:

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United States District Court
For the Northern District of California

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(a) In general. The Director of the Office of
Management and Budget shall, by not later than September
30, 2001, and with public and Federal agency
involvement, issue guidelines under sections 3504(d)(1)
and 3516 of title 44, United States Code, that provide
policy and procedural guidance to Federal agencies for
ensuring and maximizing the quality, objectivity,
utility, and integrity of information (including
statistical information) disseminated by Federal
agencies in fulfillment of the purposes and provisions
of chapter 35 of title 44, United States Code, commonly
referred to as the Paperwork Reduction Act.
(b) Content of guidelines.
subsection (a) shall--

The guidelines under

(1) apply to the sharing by Federal agencies of,
and access to, information disseminated by Federal
agencies; and
(2) require that each Federal agency to which the
guidelines apply-(A) issue guidelines ensuring and maximizing
the quality, objectivity, utility, and
integrity of information (including
statistical information) disseminated by the
agency, by not later than 1 year after the
date of issuance of the guidelines under
subsection (a);
(B) establish administrative mechanisms
allowing affected persons to seek and obtain
correction of information maintained and
disseminated by the agency that does not
comply with the guidelines issued under
subsection (a); and
(C) report periodically to the Director-(i) the number and nature of complaints
received by the agency regarding the
accuracy of information disseminated by
the agency; and
(ii) how such complaints were handled by
the agency.
44 U.S.C. § 3516, note.

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Title 44 U.S.C. § 3504(d)(1), in turn, provides, “With
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respect to information dissemination, the Director [of the OMB]
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shall develop and oversee the implementation of policies,
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2

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principles, standards, and guidelines to . . . apply to Federal

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agency dissemination of public information, regardless of the form

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or format in which such information is disseminated.”

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B. OMB Guidelines

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On June 28, 2001, the OMB issued proposed guidelines

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implementing the IQA and requesting public comment.

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34489.

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66 Fed. Reg.

On September 28, 2001, the OMB issued final guidelines
implementing the IQA.

66 Fed. Reg. 49718.

At that time, the OMB

United States District Court
For the Northern District of California

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requested additional comments on a provision not relevant to the

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case at hand and, after receiving further comments, issued updated

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final guidelines on February 22, 2002.

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(hereinafter, the OMB guidelines).

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See 67 Fed. Reg. 8452

The OMB guidelines require agencies to “adopt a basic

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standard of quality (including objectivity, utility, and

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integrity) as a performance goal,” including “specific standards

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of quality that are appropriate for the various categories of

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information they disseminate.”

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to be ensured and established at levels appropriate to the nature

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and timeliness of the information to be disseminated.”

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8458.

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being presented in an accurate, clear, complete, and unbiased

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manner.”

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“develop a process to review the quality . . . of information

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before it is disseminated,” and “administrative mechanisms

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allowing affected persons to seek and obtain, where appropriate,

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timely correction of information maintained and disseminated by

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the agency that does not comply with OMB or agency guidelines.”

67 Fed. Reg. 8458-59.

“Quality is

Id. at

“‘Objectivity’ includes whether disseminated information is

Id. at 8460.

The guidelines also require agencies to

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Id. at 8459.

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providing the agency’s information quality guidelines and

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information regarding the number and nature of the complaints

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received by the agency and how they were resolved.

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Finally, agencies are required to prepare reports

Id.

By their terms, the OMB guidelines apply to “information”

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that is “disseminated by Federal agencies.”

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guidelines define information to mean “any communication or

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representation of knowledge such as facts or data, in any medium

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or form,” including “information that an agency disseminates from

Id. at 8458.

The

United States District Court
For the Northern District of California

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a web page,” but not “opinions, where the agency’s presentation

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makes it clear that what is being offered is someone’s opinion

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rather than fact or the agency’s views.”

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guidelines define dissemination as “agency initiated or sponsored

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distribution of information to the public,” but states that this

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definition “does not include distribution limited to

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correspondence with individuals or persons, press releases,

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archival records, public filings, subpoenas or adjudicative

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processes.”

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Id. at 8460.

The

Id.

The guidelines direct that the administrative correction

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process “shall be flexible” and “appropriate to the nature and

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timeliness of the disseminated information.”

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OMB commentary provided when the guidelines were published states

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that it “does not envision administrative mechanisms that would

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burden agencies with frivolous claims,” and that “[a]gencies, in

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making their determination of whether or not to correct

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information, may reject claims made in bad faith or without

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justification, and are required to undertake only the degree of

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correction that they conclude is appropriate for the nature and
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Id. at 8459.

The

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timeliness of the information involved.”

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that “an objective process will ensure that the office that

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originally disseminates the information does not have

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responsibility for both the initial response and resolution of a

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disagreement.”

Id. at 8458.

It notes

Id.

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C. DOJ Guidelines

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On May 14, 2002, DOJ published notice in the Federal Register

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that its draft guidelines had been posted to its public web site

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and requested public comments.

67 Fed. Reg. 34475.

On October 4,

United States District Court
For the Northern District of California

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2002, DOJ published notice in the Federal Register that its final

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guidelines were available on its public website.

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6266.

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http://www.justice.gov/iqpr/iqpr.html.

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(hereinafter, the DOJ guidelines).

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67 Fed. Reg.

The final guidelines are currently available at
See also Pl.’s Ex. E

The introduction to the DOJ guidelines notes that the DOJ

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produces “a variety of information which is provided to the

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public,” including “Departmental briefs in major cases,

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regulations, business review letters, memoranda, press releases,

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opinions, research, statistical and special reports, newsletters,

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and general publications,” although “[n]ot all of this information

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falls within these guidelines.”

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guidelines focus on three areas: (1) the basic standard of

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quality, including objectivity, utility and integrity; (2) the

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process for reviewing the quality of information; and (3) the

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process for citizen complaint.

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guidelines state that “DOJ components will ensure disseminated

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information, as a matter of substance and presentation, is

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accurate, reliable, and unbiased.”

DOJ guidelines.

Id.

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The DOJ

As to objectivity, the

Id.

As to objectivity, the

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guidelines provide that “DOJ components will ensure disseminated

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information, as a matter of substance and presentation, is

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accurate, reliable, and unbiased.”

Id.

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The guidelines provide that “DOJ will correct information

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that does not meet its guidelines or those of OMB based on the

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significance and impact of the correction.”

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state, “Except for those categories of information that are

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specifically exempt from coverage . . ., these guidelines apply to

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all information disseminated by DOJ,” including “information that

Id.

They further

United States District Court
For the Northern District of California

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an agency disseminates from a web page.”

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exceptions include “information disseminated in the following

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contexts: . . . press releases, fact sheets, press conferences or

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similar communications (in any medium) that announce, support or

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give public notice of information in DOJ.”

Id.

The stated

Id.

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As required by the IQA and OMB guidelines, the DOJ guidelines

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set forth procedures for submitting requests for correction of DOJ

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information.

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requests for correction of information within 60 calendar days of

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receipt.”

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to change, or in any way alter, the content or status of

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information simply based on the receipt of a request for

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correction,” and that “[a]ny corrective action will be determined

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by the nature and timeliness of the information involved and such

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factors as the significance of the error on the use of the

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information and the magnitude of the error.”

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the guidelines, DOJ “need not respond substantively to frivolous

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or repetitive requests for correction,” or “to requests that

Under the guidelines, “DOJ will normally respond to

Id.

The guidelines provide that “DOJ is not required

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Id.

Further, under

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concern information not covered by the guidelines or from a person

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whom the information does not affect.”

Id.

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“If the requestor disagrees with DOJ’s denial of the request

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or with the corrective action the Department intends to take, the

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requestor may file a request for reconsideration with the

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disseminating DOJ component” within forty-five days of DOJ’s

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decision on the original request for correction.

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generally provide that the official conducting the second level

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review is not the same official that responded to the initial

Id.

United States District Court
For the Northern District of California

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request.”

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reconsideration within 45 calendar days of receipt.”

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Id.

DOJ “should

“DOJ will respond to all requests for
Id.

The DOJ guidelines also specify, “These guidelines are not a

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regulation.

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any legal rights or impose any legally binding requirements or

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obligations on the agency or the public.

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guidelines affects any otherwise available judicial review of

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agency action.”

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II.

They are not legally enforceable and do not create

Nothing in these

Id.

The Underlying Criminal Case

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In March 2008, Plaintiff was indicted for wire fraud in

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violation of 18 U.S.C. § 1343 and felony misbranding of a drug in

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violation of 21 U.S.C. §§ 331(k), 333(a)(2) and 352(a).

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No. 1, United States v. Harkonen, Case No. 08-CR-164 (N.D. Cal.)

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(Patel, J.).1

Docket

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1

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The Court takes judicial notice of the allegations made in
the indictment but not the truth of these allegations. The Court
provides these allegations as context to understand the factual
background presented by the parties, particularly by Plaintiff,
but notes that these allegations were not relevant to the
determination of the instant motions.
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In relevant part, the indictment made the following

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allegations: Plaintiff was the Chief Executive Officer of

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InterMune, Inc. from February 1998 through at least June 30, 2003

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and was a member of its Board of Directors from February 1998

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through September 2003.

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drugs, including a drug sold under the brand name Actimmune.

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Actimmune was approved by the FDA to treat two rare disorders that

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primarily affect children, chronic granulomatous disease and

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severe, malignant osteopetrosis.

InterMune developed, marketed and sold

It was not approved by the FDA

United States District Court
For the Northern District of California

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to treat idiopathic pulmonary fibrosis (IPF), a fatal lung disease

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that mainly affects middle-aged people.

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In October 2000, InterMune began a Phase III clinical trial,

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named the GIPF-001 trial, to determine whether treating IPF

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patients with Actimmune was effective.

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In August 2002, data from that clinical trial failed to show

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that Actimmune was effective in treating IPF.

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the results of the trial with his staff at InterMune and directed

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them to conduct additional analyses on subgroups of patients.

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This after-the-fact analysis suggested a survival trend for

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patients whose IPF was described by InterMune as “mild to

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moderate.”

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Plaintiff discussed

On August 27, 2002, Plaintiff and some InterMune employees

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spoke with the FDA about the results of the GIPF-001 Phase III

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trial and additional subgroup analyses of patient deaths.

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medical reviewer staff advised Plaintiff that the trial data were

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not sufficient to gain FDA approval for Actimmune to treat IPF and

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that further clinical testing would be required to determine

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whether Actimmune could delay death for IPF patients.
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The FDA

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On August 28, 2002, InterMune issued a nationwide press

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release publicly announcing the results of the GIPF-001 Phase III

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clinical trial.

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controlled the content of the entire press release.

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caused the press release to be posted on InterMune’s website and

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to be sent to a wire service for release to news outlets

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nationwide.

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Data Demonstrating Survival Benefit of Actimmune in IPF,” with the

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subheading “Reduces Mortality by 70% in Patients With Mild to

United States District Court
For the Northern District of California

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Plaintiff wrote the headline and subheading and
Plaintiff

The headline stated, “InterMune Announces Phase III

Moderate Disease.”
This press release, which is attached to Plaintiff’s

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complaint in the instant case and was offered by him as evidence

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in support of his motion for summary judgment, also stated:

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InterMune, Inc. (Nasdaq: ITMN) announced today that
preliminary data from its Phase III clinical trial of
Actimmune® (Interferon gamma-1b) injection for the
treatment of idiopathic pulmonary fibrosis (IPF), a
debilitating and usually fatal disease for which there
are no effective treatment options, demonstrate a
significant survival benefit in patients with mild to
moderate disease randomly assigned to Actimmune versus
control treatment (p = 0.004). . . .

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Importantly, Actimmune also demonstrated a strong
positive trend in increased survival in the overall
patient population, and a statistically significant
survival benefit in patients with mild to moderate IPF.
. . .
Haddad Decl. ¶ 3, Compl., Ex. 2.
The wire fraud count alleged that the press release

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“contained materially false and misleading information regarding

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Actimmune and falsely portrayed the results of a GIPF-001 Phase

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III trial as establishing that Actimmune reduces mortality in

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patients with IPF.”

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9

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At a pretrial conference in the criminal case, the prosecutor

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acknowledged that the allegations in the indictment were not that

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the data in the study were “transposed or changed in any way,” but

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rather challenged the interpretation and presentation of the data.

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See Haddad Decl. ¶ 4, Compl., Ex. 3G, 28.

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During closing arguments, when discussing the press release,

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the prosecutor stated, “I don’t need to spend any time on the

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numbers in there.

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3698:20-21.

United States District Court
For the Northern District of California

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We all know the numbers are correct.”

Id. at

On September 29, 2009, the jury convicted Plaintiff of wire

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fraud and acquitted him of felony misbranding.

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United States v. Harkonen, No. 08-CR-164.

Docket No. 240,

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On November 17, 2010, at the first sentencing hearing, the

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prosecutor stated, “The Government has always agreed that there

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was no falsification of data here, so that fact is not in dispute,

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and there’s no need to have anyone testify on that.

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to whether there was a falsification of the conclusions that could

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be drawn from the data, that was what the trial was all about.

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That was the central issue in the trial . . .”

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Compl., Ex. 7; see also Docket No. 301, 9:1-8, United States v.

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Harkonen, No. 08-CR-164.

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With respect

Haddad Decl. ¶ 8,

Similar statements were made at the second sentencing hearing

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on April 13, 2011.

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there, that the data that’s actually referred to in the press

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release is accurately reflected?

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¶ 9, Compl., Ex. 8; Docket No. 373, 12:1-3, United States v.

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Harkonen, No. 08-CR-164.

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The government says the conclusions were inaccurate” and “were

The court stated that “there’s no dispute, is

Is that correct?”

Haddad Decl.

The prosecutor responded, “No dispute.

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false.”

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interpretation thereof, et cetera.

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at 12:9-10.

Id. at 12:4-8.

The court replied, “It’s the
Is that correct?

Okay.”

Id.

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At the April 13, 2011 hearing, Judge Patel declined to impose

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a sentence enhancement based on proof that an actual loss had been

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suffered by victims, stating:

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United States District Court
For the Northern District of California

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The Court finds . . . that whichever burden of proof the
Court would use, that it is unable to determine with a
sufficient degree of accuracy that . . . there is a loss
as a result of the conduct reflected in the wire fraud
count . . . there just isn’t enough evidence in the
record under either burden of proof to satisfy the Court
that there is a loss as a result of the press release.
Id. at 116:14-25.
Plaintiff’s appeal from the criminal conviction and the

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government’s cross-appeal of his sentence are currently pending

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before the Ninth Circuit.

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Nos. 11-10209 & 11-10242 (9th Cir.).

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III. The DOJ Press Release and Requests for Correction

See United States v. Harkonen, Case

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On September 29, 2009, the same day that the jury returned

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the verdict in the criminal trial, the United States Attorney’s

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Office in this district issued a press release announcing the

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verdict.

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are the following two paragraphs of the press release, and

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particularly the underlined sections:

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Haddad Decl. ¶ 2, Compl., Ex. 1.

At issue in this case

“Mr. Harkonen lied to the public about the results of a
clinical trial and offered false hope to people stricken
with a deadly disease. Manipulating scientific research
and falsifying test results damages the foundation of
the clinical trial process and undermines public trust
in our system for drug approval,” said FBI Special Agent
in Charge Stephanie Douglas.
Douglas J. Carver, Special Agent in Charge of the U.S.
Department of Veterans Affairs, Office of Inspector
General, Western Field Office, stated “today’s verdict,
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which resulted from a complex and labor-intensive
investigation and trial, demonstrates our commitment to
work with our law enforcement partners to aggressively
pursue all individuals that would jeopardize the
integrity and safety of the VA’s health care system.
The actions of this defendant served to divert precious
financial resources from the VA’s critical mission of
providing healthcare to this nation’s military veterans.
. . .”
Id. at 2 (emphasis added).

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On February 11, 2010, Plaintiff submitted his first request
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for correction of the press release to the United States
8
Attorney’s Office, under the DOJ guidelines.

Haddad Decl. ¶ 4,

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Compl., Ex. 3.

Plaintiff requested that the government correct

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United States District Court
For the Northern District of California

its description of the charges against him, and stated, “The
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Government's assertion in the DOJ press release that Dr. Harkonen
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‘falsif[ied] test results’ thus misrepresents what the Government
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sought to prove in the case and misleads the public as to what the
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jury actually found, and as to why Dr. Harkonen was convicted.”
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Id. at 1-3.
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On March 15, 2010, H. Marshall Jarrett, Director of the DOJ’s
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Executive Office for United States Attorneys sent Plaintiff a
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letter denying his request on two bases.

Haddad Decl. ¶ 5,

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Compl., Ex. 4.

First, he stated that, because the complained-of

20
statement was disseminated in a press release, it was not covered
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by the OMB or DOJ guidelines, which expressly exclude press
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releases from their coverage.

Id. at 1.

Second, he asserted,

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“Even if the guidelines applied, no retraction is necessary
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because the statement at issue is correct.”

Id.

He explained,

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While we agree that Mr. Harkonen did not change the
data, he nevertheless used it to support his false and
misleading conclusions. Because data alone is
meaningless without analysis and conclusions, Mr.
Harkonen’s false statements regarding the data’s meaning
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were part and parcel of the results. Thus, it was
accurate to say that he falsified the results.
Id. at 2.
On April 20, 2010, Plaintiff submitted a request for

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reconsideration.

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request, he argued that the DOJ guidelines did apply to the press

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release, because it was posted on a web page and because it did

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not “announce, support or give public notice of information in

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DOJ,” but rather “announced the verdict of a criminal trial in

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federal court.”

Haddad Decl. ¶ 6, Compl., Ex. 5.

Id. at 2-3.

In the

He further contended that, when an

United States District Court
For the Northern District of California

10

agency’s “guidelines address an issue that is treated only more

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generally in the OMB guidelines, the agency’s own, more specific

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guidelines control,” and thus that the OMB guidelines could not be

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used to limit coverage under the DOJ guidelines.

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also argued that the press release did fall within the OMB

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guidelines, in part because a 2003 U.S. Attorneys’ Manual stated,

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“The use of a press release . . . is the usual method to release

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public information to the media by Department of Justice

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components and investigative agencies.”

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maintained that the DOJ’s defense of the merits of the statement

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was “nonsensical” and “ignores the well-recognized distinction

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between scientific data and scientific analysis.”

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(emphasis in original).

23

Id. at 3.

Id. at 3-4.

He

Finally, he

Id. at 4-5

On July 2, 2010, Jarrett responded, rejecting Plaintiff’s

24

request for reconsideration.

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stated that “a press release that announces a successful

26

prosecution is clearly public information in the Department of

27

Justice,” and thus that the press release falls within the

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exception.

Id. at 1.

Haddad Decl. ¶ 7, Compl., Ex. 6.

He

He also stated that the “guidelines make no
13

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distinction between a press release that is posted on the Internet

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and one that is issued any other way (e.g., fax or mail),” and

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that “the very fact that the information is contained in a press

4

release . . . exempts it from the guidelines.”

5

address directly Plaintiff’s argument on the merits of the

6

statement, but noted, “Because the guidelines do not apply to

7

press releases, the Department was not required to respond

8

substantively to your initial request for a retraction.”

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Id.

He did not

Id.

On June 8, 2011, Plaintiff submitted to the United States

United States District Court
For the Northern District of California

10

Attorney’s Office his second request for correction of the press

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release.

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argued that the statement in the press release that his actions

13

“served to divert precious financial resources from the VA’s

14

critical mission of providing healthcare to this nation’s military

15

veterans” was inaccurate and violated the DOJ and OMB guidelines,

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because the government had been unable to prove during the

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sentencing phase of his criminal case that the Actimmune press

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release had caused a loss to any victim, including to the VA.

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at 1-3.

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the applicability of the DOJ and OMB guidelines to press releases.

21

Haddad Decl. ¶ 10, Compl., Ex. 9.

In this request, he

Id.

He also repeated many of his earlier arguments regarding

On August 4, 2011, Jarrett rejected Plaintiff’s second

22

request for two reasons.

23

again stated that the press release was not covered by either the

24

OMB or DOJ guidelines.

25

the guidelines applied, no retraction is necessary because the

26

statement accurately described the government’s position.”

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2.

Haddad Decl. ¶ 11, Compl., Ex. 10.

Id. at 1-2.

He explained,

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14

He

He also asserted, “Even if

Id. at

As you know, the government has consistently maintained
that Dr. Harkonen’s false and misleading press release
fraudulently caused patients to seek and doctors to
prescribe Actimmune as a treatment for idiopathic
pulmonary fibrosis, thereby leading to increased sales
of Actimmune. Although the district court found that
the government did not meet its burden of proving actual
loss for purposes of Dr. Harkonen’s sentencing, this
does not mean the press release did not have any effect
on Actimmune’s sales. The district court simply held
that it was not possible to determine with the degree of
certainty necessary for Dr. Harkonen’s sentencing, the
role the press release played in the increased sales of
Actimmune that followed after the press release over
eight years ago.

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Moreover, the statement that Dr. Harkonen’s actions
“served to divert precious financial resources from the
VA’s critical mission of providing health care to this
nation’s military veterans” can reasonably be
interpreted to mean that Dr. Harkonen’s wrongdoing
necessitated an investigation into the matter by the
Veterans Administration. As the investigation into this
matter was comprehensive, it was accurate to say that it
diverted precious financial resources from the VA’s
primary mission.

9

United States District Court
For the Northern District of California

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Id. at 2.

15

On August 22, 2011, Plaintiff submitted a request for

16

reconsideration of the August 4 decision.

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Compl., Ex. 10.

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someone other than Jarrett.

19

release was covered by the OMB and DOJ guidelines, that this

20

statement did not concern “information in DOJ” and that the

21

government was unable to provide any evidence in support of the

22

assertion that the VA had lost money that would have been devoted

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to health care for veterans.

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that the argument that the VA investigation used financial

25

resources that could otherwise have been devoted to the VA’s

26

central mission of health care for veterans was incorrect.

27

6.

28

chose to allocate funds that already were designated for the

Haddad Decl. ¶ 11,

Plaintiff asked that his request be reviewed by
Plaintiff argued again that the press

Id. at 1-5.

He further contended

Id. at

He argued that “a reasonable reader would assume that the VA

15

1

investigation of potential health care fraud to the investigation

2

of this case” because the VA’s Office of Inspector General “is

3

‘independent" from the VA and is considered ‘a separate Federal

4

agency with annual budgetary submission requirements.’”

5

(quoting VA 2010 Organizational Briefing Book 42).

6

Id.

On October 7, 2011, Jarrett sent a response, stating that the

7

second request for reconsideration would “not be accommodated.”

8

Haddad Decl. ¶ 13, Compl., Ex. 12, 1.

9

As we have previously explained, the Guidelines do not
apply to press releases. Moreover, because the
Guidelines do not apply to press releases, the
Department was not required to respond substantively to
your June 8, 2011 request for a retraction and,
similarly, is not required to respond substantively to
your most recent request for reconsideration. The
Guidelines provide that “[t]he Department need not
respond substantively . . . to repetitive requests for
correction . . . [nor to] requests that concern
information not covered by the guidelines.

United States District Court
For the Northern District of California

10
11
12
13
14
15

He explained,

Id.

16

On February 8, 2012, Plaintiff initiated the instant case

17

against DOJ and the OMB under the IQA and the Administrative

18

Procedure Act (APA), 5 U.S.C. § 701, et seq.

19

the first count, asserted against DOJ only, Plaintiff asserts that

20

DOJ’s denial of his first and second requests for correction was

21

arbitrary and capricious, an abuse of discretion and contrary to

22

law.

23

Plaintiff asserts that the exclusion of press releases from the

24

DOJ guidelines is arbitrary and capricious, an abuse of

25

discretion, and contrary to law.

26

against the OMB only, Plaintiff asserts that the exclusion of

27

press releases from the OMB guidelines is arbitrary and

28

capricious, an abuse of discretion, and contrary to law.

Docket No. 1.

In

In the second count, also asserted against DOJ only,

In the third count, asserted

16

1
2

On April 9, 2012, the government filed this motion to
dismiss.

3

Docket No. 8.

On July 2, 2012, Plaintiff filed his cross-motion for summary

4

judgment and opposition to the government’s motion to dismiss.

5

Docket No. 21.

6
7

DISCUSSION
I.

Defendants’ Motion to Dismiss
Defendants argue that Plaintiff’s complaint should be

9

dismissed because there is no private right of action under the

10
United States District Court
For the Northern District of California

8

IQA and his claims are not subject to judicial review under the

11

APA.

12

of action under the IQA and seeks review under the APA only.

13

contends that the APA does provide for judicial review of the

14

DOJ’s denial of his requests for correction.

Plaintiff responds that he has not asserted a private right
He

15

A. Legal Standard

16

A complaint must contain a “short and plain statement of the

17

claim showing that the pleader is entitled to relief.”

18

Civ. P. 8(a).

19

state a claim, dismissal is appropriate only when the complaint

20

does not give the defendant fair notice of a legally cognizable

21

claim and the grounds on which it rests.

22

Twombly, 550 U.S. 544, 555 (2007).

23

complaint is sufficient to state a claim, the court will take all

24

material allegations as true and construe them in the light most

25

favorable to the plaintiff.

26

896, 898 (9th Cir. 1986).

27

to legal conclusions; “threadbare recitals of the elements of a

28

cause of action, supported by mere conclusory statements,” are not

Fed. R.

On a motion under Rule 12(b)(6) for failure to

Bell Atl. Corp. v.

In considering whether the

NL Indus., Inc. v. Kaplan, 792 F.2d

However, this principle is inapplicable

17

1

taken as true.

2

(citing Twombly, 550 U.S. at 555).

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

3

When granting a motion to dismiss, the court is generally

4

required to grant the plaintiff leave to amend, even if no request

5

to amend the pleading was made, unless amendment would be futile.

6

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911

7

F.2d 242, 246-47 (9th Cir. 1990).

8

amendment would be futile, the court examines whether the

9

complaint could be amended to cure the defect requiring dismissal

In determining whether

United States District Court
For the Northern District of California

10

“without contradicting any of the allegations of [the] original

11

complaint.”

12

Cir. 1990).

13

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th

Although the court is generally confined to consideration of

14

the allegations in the pleadings, when the complaint is

15

accompanied by attached documents, such documents are deemed part

16

of the complaint and may be considered in evaluating the merits of

17

a Rule 12(b)(6) motion.

18

1265, 1267 (9th Cir. 1987).

19

B. Final Agency Action

20

The APA provides judicial review for “final agency action for

Durning v. First Boston Corp., 815 F.2d

21

which there is no other adequate remedy in a court.”

22

§ 704.

23

be ‘final’: First, the action must mark the ‘consummation’ of the

24

agency’s decisionmaking process, . . .

25

must be one by which ‘rights or obligations have been determined,’

26

or from which ‘legal consequences will flow.’”

27

520 U.S. 154, 177-78 (1997) (internal citations omitted).

28

Supreme Court has stated, ‘[t]he core question is whether the

5 U.S.C.

“[T]wo conditions must be satisfied for agency action to

18

And second, the action

Bennett v. Spear,
“As the

1

agency has completed its decisionmaking process, and whether the

2

result of that process is one that will directly affect the

3

parties.’”

4

Admin., 408 F.3d 638, 646 (9th Cir. 2005) (quoting Franklin v.

5

Massachusetts, 505 U.S. 788, 797 (1992)).

6

dispute that the first requirement is met.

7

centers on the second requirement.

8
9

Indus. Customers of Nw. Utilities v. Bonneville Power

Defendants do not
Instead, their dispute

Defendants argue that the IQA does not create any right to
correct information and thus that there was no right affected by,

United States District Court
For the Northern District of California

10

and no legal consequence to, the denial of Plaintiff’s requests

11

for correction.

12

confers legal rights on persons who are affected by an agency’s

13

dissemination of incorrect information and that the denial of his

14

requests for correction interferes with these rights.

Plaintiff responds that the text of the statute

15

“The general rule is that administrative orders are not final

16

and reviewable ‘unless and until they impose an obligation, deny a

17

right, or fix some legal relationship as a consummation of the

18

administrative process.’”

19

261, 264 (9th Cir. 1990) (quoting Chicago & S. Air Lines, Inc. v.

20

Waterman S.S. Corp., 333 U.S. 103, 113 (1948)).

21

is not a ‘definitive’ statement of the” agency’s “position and

22

does not have a ‘direct and immediate . . . effect on the day-to-

23

day business’ of the subject party, it is not ‘final.’”

24

(quoting FTC v. Standard Oil Co., 449 U.S. 232, 239 (1980)).

25

“Other relevant factors include whether the order has the status

26

of law or comparable legal force, and whether immediate compliance

27

with its terms is expected.”

Ukiah Valley Med. Ctr. v. FTC, 911 F.2d

Id.

28
19

“When an action

Id.

1

Courts that have reviewed the IQA have uniformly found that
it “does not create any legal right to information or its

3

correctness.”

4

2006); see also Habitat for Horses v. Salazar, 2011 WL 4343306, at

5

*7 (S.D.N.Y.); Single Stick, Inc. v. Johanns, 601 F. Supp. 2d 307,

6

317 (D.D.C. 2009), rev’d in part on other grounds sub nom. Prime

7

Time Int’l Co. v. Vilsack, 599 F.3d 678 (D.C. Cir. 2010); Wood ex

8

rel. U.S. v. Applied Research Associates, Inc., 2008 WL 2566728,

9

at *6 (S.D.N.Y.); Haas v. Gutierrez, 2008 U.S. Dist. LEXIS 48762,

10
United States District Court
For the Northern District of California

2

at *25 (S.D.N.Y.); Ams. for Safe Access v. U.S. Dept. of Health &

11

Human Services, 2007 WL 2141289, at *4 (N.D. Cal.), aff’d on other

12

grounds, 399 F. App’x 314 (9th Cir. 2010).

13

courts have held that, as a result, the agencies’ actions did not

14

determine the plaintiff’s rights or cause any legal consequence,

15

and thus that there was no final agency action.

16

F. Supp. 2d at 317 (“Because the IQA does not vest any party with

17

a right to information or to correction of information, . . . the

18

USDA’s actions under the IQA did not determine Single Stick’s

19

rights or cause any legal consequence.”); Salt Inst. v. Thompson,

20

345 F. Supp. 2d 589, 602 (E.D. Va. 2004) (“Agency dissemination of

21

advisory information that has no legal impact has consistently

22

been found inadequate to constitute final agency action and thus

23

is unreviewable by federal courts under the APA.”), aff’d on

24

alternate grounds sub nom., Salt Inst. v. Leavitt, 440 F.3d 156

25

(4th Cir. 2006); see also Ams. for Safe Access, 2007 WL 2141289,

26

at *4 (rejecting plaintiff’s argument that “the legal consequence

27

of HHS’s final decision denying ASA’s [p]etition and appeal is

28

that ASA has been deprived of its right under the IQA to seek and

Salt Inst. v. Leavitt, 440 F.3d 156, 159 (4th Cir.

20

Several district

Single Stick, 601

1

obtain the timely correction of incorrect information” because

2

plaintiff “failed to plead that the IQA grants any legal right to

3

the correction of information”).2

4

Plaintiff offers no cases in which a court has held to the

5

contrary.

6

the district court cases by pointing out that, on appeal, the

7

appellate courts did not directly address this issue and affirmed

8

the decisions on other grounds.

9

Safe Access, the district court granted the plaintiff leave to

Instead, Plaintiff seeks to diminish the importance of

For example, in Americans for

United States District Court
For the Northern District of California

10

amend to “proceed on a theory that defendants unlawfully withheld

11

or delayed agency action by not giving a substantive response to

12

plaintiff’s petition.”

13

plaintiff amended its complaint and the defendants moved again for

14

dismissal, the district court dismissed the case, finding that the

15

IQA and OMB guidelines did not create a duty for agencies to

16

perform actions that are legally required.

17

v. U.S. Dept. of Health & Human Services, 2007 WL 4168511, at *1-4

18

(N.D. Cal.).

19

court’s dismissal of the action on the basis that the agency had

20

made only an “interlocutory decision” on the IQA petition at issue

21

and deferred its final decision; thus, there had been no

2007 WL 2141289, at *5.

After the

Ams. for Safe Access

On appeal, the Ninth Circuit affirmed the district

22
23
24
25
26
27
28

2

On December 2, 2011, the House of Representatives passed
H.R. 3010, which would, among other things, amend 5 U.S.C. § 704
of the APA to specify, “Denial by an agency of a correction
request or, where administrative appeal is provided for, denial of
an appeal, under an administrative mechanism described in
subsection (b)(2)(B) of the Information Quality Act, or the
failure of an agency within 90 days to grant or deny such request
or appeal, shall be final action for purposes of this section.”
On December 5, 2011, the Senate referred the bill to the Committee
on Homeland Security and Governmental Affairs; since then, no
further action has been taken. 2011 H.R. 3010.
21

“consummation of the agency’s decision making process,” as

2

required by the first Bennett criterion.

3

Dept. of Health & Human Services, 399 F. App’x 314, 315-16 (9th

4

Cir. 2010) (internal quotation marks omitted).

5

reach the second Bennett criterion and thus did not address

6

whether the action was one by which rights or obligations were

7

determined or from which legal consequences flowed.

8

Time, the D.C. Circuit upheld the OMB’s decision to exclude

9

documents prepared and distributed in the context of adjudicative

10
United States District Court
For the Northern District of California

1

proceedings as a reasonable interpretation of the IQA, worthy of

11

deference.

12

appellate court directly question the district court’s holding

13

that the agency action did not determine the plaintiff’s rights or

14

cause any legal consequence.

15

599 F.3d at 685-86.

Ams. for Safe Access v.

The court did not

In Prime

In neither decision did the

Plaintiff suggests that, because the D.C. Circuit reached the

16

merits of the IQA claim in Prime Time--the only case to do so--a

17

contrary finding was implicit, because the court had to find first

18

that it had jurisdiction under the APA to review the merits of the

19

IQA claim before it could proceed to do so.

20

court specifically concluded the underlying agency action--USDA’s

21

determination of manufacturer’s assessments under the Fair and

22

Equitable Tobacco Reform Act (‘FETRA’)--was an adjudicatory

23

proceeding subject to judicial review directly under FETRA” and

24

thus there was no need to, and the appellate court did not,

25

consider whether judicial review was also available under the APA.

26

Family Farm Alliance v. Salazar, 749 F. Supp. 2d 1083, 1096-1100

27

(E.D. Cal. 2010); see Prime Time, 599 F.3d at 686 (“USDA's

28

determination of Prime Time’s assessments for three quarters of FY
22

However, “the appeals

1

2005 was an adjudication, attendant to which Prime Time had rights

2

to an administrative appeal and judicial review” under 7 U.S.C.

3

§ 518d(i), (j)).

4

reaching the substantive question, the court found there was a

5

right to review under the APA.

6

Thus, Prime Time does not support that, by

Plaintiff also tries to distinguish Salt Institute because

7

the plaintiffs in that case sought the release of information, not

8

correction of it, and the appellate court held that the plaintiffs

9

lacked standing, instead of addressing the APA requirements.

United States District Court
For the Northern District of California

10

Pl.’s Cross-Mot. for Summ. J. and Opp. to Defs.’ Mot. to Dismiss

11

(Pl.’s Cross-Mot.), 15.

12

limited; in it, the court discussed the IQA in detail and broadly

13

stated that “this statute creates no legal rights in any third

14

parties” and “does not create any legal right to information or

15

its correctness.”

However, the appellate decision is not so

Salt Inst. v. Leavitt, 440 F.3d at 158-59.

16

Further, this result is concordant with the IQA.

17

does not, as Plaintiff contends, state that the guidelines

18

“‘shall’ give ‘affected persons’ such as Dr. Harkonen an

19

opportunity ‘to seek and obtain correction of information

20

maintaining and disseminated by the agency . . .’”

21

Mot. at 13.

22

guidelines about information quality within a certain time frame

23

and sets forth particular requirements about the content of those

24

guidelines, including that the guidelines address the

25

establishment of administrative mechanisms for requests for

26

correction.

27

correct information.

28

correction did not deny him a legal right.

The IQA

Pl.’s Cross-

Instead, the IQA requires that the OMB draft

It does not provide that individuals have a right to
Thus, the denial of Plaintiff’s request for

23

1

Plaintiff also contends that DOJ’s denials of his requests

2

for correction “have the ‘legal consequence’ that [he] did not

3

obtain the press release corrections that he sought under the DOJ

4

Guidelines.”

5

practical consequence that Plaintiff has not obtained what he

6

wanted, it does not have any legal consequence for him.

7

example, DOJ’s denial has no direct or immediate effect on his

8

day-to-day activities, nor is he required to take any action

9

because of it.

Pl.’s Cross-Mot. at 13.

Although this may have the

For

United States District Court
For the Northern District of California

10

Plaintiff cites several cases that he states establish, “When

11

a statute gives a person the right to request an agency to take an

12

action, the agency’s decision not to take the requested action is

13

‘final agency action,’ regardless of whether the agency had

14

discretion to deny the request.”

15

here does not give Plaintiff the right to request that DOJ correct

16

information nor the right to obtain a correction; instead, it

17

requires the OMB to promulgate guidelines by which agencies must

18

create procedures for such requests.

19

Id. at 14.

However, the statute

Further, the cases that Plaintiff cites on this point are

20

inapposite.

21

v. FCC, 280 F.3d 1027, 1037 (D.C. Cir. 2002), for the “general

22

proposition” that “‘an agency’s denial of a petition to initiate a

23

rulemaking for the repeal or modification of a rule is a final

24

agency action subject to judicial review.’”

25

However, the present case does not deal with Defendants’ refusal

26

to embark on formal rulemaking; instead, Plaintiff seeks to

27

address DOJ’s refusal to change a press release.

28

Transp. Co. v. United States, 737 F.2d 103 (D.C. Cir. 1984), the

Plaintiff states that he cites Fox TV Stations, Inc.

24

Pl.’s Reply, 7.

In Intercity

1

Interstate Commerce Commission refused to institute a declaratory

2

order proceeding, which the D.C. Circuit found had legal

3

consequence because it “had the potential of infringing upon

4

petitioners’ statutory right to a reasoned agency disposition of

5

its request,” as provided under a separate section of the APA, 5

6

U.S.C. § 554(e), which is inapplicable here.

7

separate legal right that Defendants’ refusal has infringed, as

8

discussed above.

9

regarding the statute under which members of the Armed Forces can

Here, there is no

Finally, the cases that Plaintiff offers

United States District Court
For the Northern District of California

10

seek correction of their records are inapplicable.

11

motion, Plaintiff cites Barber v. Widnall, 78 F.3d 1419 (9th Cir.

12

1996), but this decision does not address final agency action or

13

whether an action is reviewable under the APA.

14

Plaintiff cites Clinton v. Goldsmith, 526 U.S. 529 (1999); in

15

Clinton, the Court collects cases to support the proposition that

16

a servicemember can challenge an agency’s decision to drop him

17

from the rolls, or otherwise dismiss him, as final agency action.

18

Id. at 539.

19

the case at hand but fails to explain why.

20

is dropped from the rolls, he forfeits his military pay.”

21

532 n.1.

22

legal rights.

23
24

In his cross-

In his reply,

Plaintiff argues that these are “clearly parallel” to
“When a servicemember
Id. at

This, unlike the denial in the case at hand, affects

Accordingly, the Court holds that there has been no final
agency action in the case at hand.

25

C. Committed to Agency Discretion by Law

26

Under 5 U.S.C. § 701(a)(2), judicial review is foreclosed

27

when the challenged “agency action is committed to agency

28

discretion by law.”

One instance in which agency action is exempt
25

1

from judicial review under this provision is when “‘a court would

2

have no meaningful standard against which to judge the agency’s

3

exercise of discretion’ and there thus ‘is no law to apply.’”

4

Newman v. Apfel, 223 F.3d 937, 943 (9th Cir. 2000) (quoting

5

Heckler v. Chaney, 470 U.S. 821, 830 (1985)).

6

has emphasized that this “is a very narrow exception” and

7

“applicable in those rare instances where statutes are drawn in

8

such broad terms that in a given case there is no law to apply.”

9

Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402,

The Supreme Court

United States District Court
For the Northern District of California

10

410 (1971) (internal quotation marks and citations omitted),

11

overruled on other grounds, Califano v. Sanders, 430 U.S. 99, 105

12

(1977).

13

Defendants contend that both agencies’ decisions to exclude

14

press releases from their IQA guidelines and DOJ’s decision not to

15

issue a correction were committed to their discretion by law.

16

“In determining whether judicial review is precluded on

17

§ 701(a)(2) grounds,” the Ninth Circuit considers “‘the language

18

of the statute and whether the general purposes of the statute

19

would be endangered by judicial review.’”

20

United States, 648 F.3d 708, 719 (9th Cir. 2011) (quoting Cnty. of

21

Esmeralda v. Dep’t of Energy, 925 F.2d 1216, 1218 (9th Cir.

22

1991)).

23

discretionary language does not make agency action unreviewable.’”

24

Id. (quoting Beno v. Shalala, 30 F.3d 1057, 1066 (9th Cir. 1994)).

25

In addition to the relevant statute, courts also look to

26

“regulations, established agency policies, or judicial decisions”

27

for a meaningful standard against which to review the agency’s

28

exercise of discretion.

Pinnacle Armor, Inc. v.

“Therefore, ‘the mere fact that a statute contains

Id. (citing Mendez-Gutierrez v. Ashcroft,
26

1

340 F.3d 865, 868 (9th Cir. 2003)); see also Padula v. Webster,

2

822 F.2d 97, 100 (9th Cir. 1987) (“Judicially manageable standards

3

may be found in formal and informal policy statements and

4

regulations as well as in statutes, but if a court examines all

5

these possible sources and concludes that there is, in fact, no

6

law to apply, judicial review will be precluded.”) (internal

7

quotation marks and citations omitted).

8
9

Several courts have considered whether the judicial review of
various agency decisions under the IQA is prohibited on

United States District Court
For the Northern District of California

10

§ 701(a)(2) grounds.

11

System Litigation, 363 F. Supp. 2d 1145, 1174 (D. Minn. 2004), the

12

plaintiffs challenged the defendants’ failure to comply with their

13

request for “information and science” regarding proposed flow

14

plans for the Missouri River.

15

meaningful standard against which to evaluate the agency’s

16

decision to deny the information quality request.

17

conclusion because, “[a]lthough the IQA directs the [OMB] to issue

18

guidelines that provide policy and procedural guidance to Federal

19

agencies for ensuring and maximizing the quality, objectivity,

20

utility, and integrity of information disseminated by the agency,

21

the plain language of the legislation fails to define these

22

terms,” and “the history of the legislation fails to provide any

23

indication as to the scope of these terms.”

24

In In re Operation of the Missouri River

The court found that there was no

It reached this

Id. at 1174-75.

In Salt Institute, the plaintiffs challenged the National

25

Heart, Lung and Blood Institute (NHLBI)’s denial of their request

26

for disclosure of all data and methods connected with a clinical

27

trial.

28

NHLBI’s decisions was not available under the APA “because the IQA

The district court held that judicial review of the

27

1

and OMB guidelines at issue insulate the agency’s determinations

2

of when correction of information contained in informal agency

3

statements is warranted.”

4

holding, it stated,

5

7
8
9

United States District Court
For the Northern District of California

10
11
12

14

In so

Neither the IQA nor the OMB Guidelines provide
judicially manageable standards that would allow
meaningful judicial review to determine whether an
agency properly exercised its discretion in deciding a
request to correct a prior communication. In fact, the
guidelines provide that “agencies, in making their
determination of whether or not to correct information,
may reject claims made in bad faith or without
justification, and are required to undertake only the
degree of correction that they conclude is appropriate
for the nature and timeliness of the information
involved.” 67 Fed. Reg. at 8458. Courts have
determined that regulations containing similar language
granted sufficient discretion to agencies to preclude
judicial review under the APA.

6

13

345 F. Supp. 2d at 602-03.

Id.
In Family Farm Alliance, a court of the Eastern District of

15

California considered whether the IQA and its implementing

16

guidelines committed to agency discretion the agency actions that

17

the plaintiff challenged, which were the timing of the Fish and

18

Wildlife Service (FWS)’s responses to requests for correction and

19

appeals and the makeup of peer review panels.

20

address the agency’s regulations in relation to each of these, the

21

court noted that “the IQA itself contains absolutely no

22

substantive standards, let alone any standards relevant to the

23

claims brought in this case . . . .”

24

also concluded that the OMB and FWS guidelines did preserve the

25

agency’s discretion regarding these matters.

26

Before going on to

Id. at 1092.

The court then

Id. at 1093-1100.

Here, in his second and third claims, Plaintiff challenges

27

the decisions of the OMB and DOJ to exempt from their guidelines

28

information disseminated in a press release.
28

The IQA mandates

1

that the OMB “issue guidelines . . . that provide policy and

2

procedural guidance to Federal agencies for ensuring and

3

maximizing the quality, objectivity, utility, and integrity of

4

information . . . disseminated by Federal agencies.”

5

§ 3516, note.

6

provide that the agencies also shall “issue guidelines ensuring

7

and maximizing the quality, objectivity, utility, and integrity of

8

information . . . disseminated by the agency.”

9

the District of Minnesota held in Missouri River, the plain

44 U.S.C.

It further requires that the OMB’s guidelines

Id.

However, as

United States District Court
For the Northern District of California

10

language of the IQA does not define these terms, and its history

11

does not provide any indication as to their scope.

12

terms in fact direct the OMB itself to establish policy to guide

13

the agencies.

14

The IQA’s

Plaintiff argues that the direction that the OMB’s

15

regulations provide guidance to agencies to maximize the quality,

16

objectivity, utility, and integrity of information disseminated is

17

a sufficiently meaningful standard by which to review the contents

18

of the regulations of the OMB and DOJ.

19

which the Ninth Circuit has found that regulations and statutes

20

are sufficiently meaningful for review and argues that the

21

standards in the IQA have more content than the ones addressed in

22

those cases.

23

He points to cases in

However, Plaintiff is incorrect; the statute and regulations

24

examined in those cases provide significantly more meaningful

25

standards for review than the IQA does.

26

208 F.3d 838 (9th Cir. 2000), the Ninth Circuit found that the

27

Board of Immigration Appeal (BIA)’s regulations, which provided

28

that it could reopen proceedings sua sponte “in exceptional
29

In Socop-Gonzalez v. INS,

situations,” provided a meaningful standard for review of agency

2

actions where the “exceptional situations” standard is used

3

throughout federal immigration law and courts routinely decide

4

challenges to the BIA’s exercise of discretion under that

5

standard.

6

the statute allowing the Secretary of Health and Human Services to

7

waive certain federal laws related to California’s Medicaid plain

8

provided “a meaningful standard by which to judge the Secretary’s

9

waiver,” where it allowed “waivers only for the period and extent

10
United States District Court
For the Northern District of California

1

necessary to implement experimental projects which are ‘likely to

11

assist in promoting the objectives’ of the AFDC program,”

12

objectives that were set out with specificity elsewhere in federal

13

law.

14

F.2d 611 (9th Cir. 1980), the Ninth Circuit considered a statute

15

that provided that the Federal Aviation Administration (FAA)

16

administrator “may grant exemptions” to pilots excusing compliance

17

with certain regulations “if he finds that such action would be in

18

the public interest.”

19

‘public interest’ standard provides law to be applied by the

20

administrator sufficient to permit judicial review.”

21

Id. at 844-45.

30 F.3d at 1067.

In Beno, the Ninth Circuit found that

In Keating v. Federal Aviation Admin., 610

Id. at 612.

The court held “that the

Id.

Here, as noted, the IQA requires the OMB to issue guidelines

22

that “provide policy and procedural guidance” on “ensuring and

23

maximizing the quality, objectivity, utility, and integrity of

24

information” disseminated by agencies.

25

However, it provides no standard by which the content of the

26

guidelines is to be measured.

27

the court in Missouri River, that the IQA provides no substantive

28

standards by which to evaluate whether the OMB and DOJ regulations

44 U.S.C. § 3516, note.

Accordingly, the Court holds, like

30

1

could exclude press releases from the covered dissemination of

2

information.

3

Further, the IQA and agency guidelines do not create a

4

meaningful standard by which to review DOJ’s denial of Plaintiff’s

5

requests for correction.

6

which an affected person’s request for correction should be

7

judged.

8

undertake only the degree of correction that they conclude is

9

appropriate for the nature and timeliness of the information

The IQA is silent on the standards by

The OMB guidelines provide that agencies “are required to

United States District Court
For the Northern District of California

10

involved,” which is akin to saying that the decision is committed

11

to the agency’s discretion.

12

the agency wide discretion in how to respond to a request for

13

correction and repeats language similar to the OMB guidelines.

14

also provides that DOJ “is not required to change, or in any way

15

alter, the content or status of information simply based on the

16

receipt of a request for correction.”

17

district court in Salt Institute, this Court holds that the IQA

18

and agency guidelines grant sufficient discretion to the DOJ to

19

preclude judicial review under the APA.

20

The DOJ guidelines also reserve to

It

Accordingly, like the

Thus, because there was no final agency action and the denial

21

was committed to agency discretion by law, the Court GRANTS

22

Defendants’ motion to dismiss in its entirety.3

23

would be futile, the Court does not grant Plaintiff leave to

24

amend.

Because amendment

25
26
27
28

3

Because the Court grants Defendants’ motion in full on
other grounds, it does not reach their implied preclusion
argument, in which they contend that the IQA’s statutory scheme
demonstrates that Congress intended to preclude judicial review
through its creation of an alternative review procedure.
31

1
2

II.

Plaintiff’s Motion for Summary Judgment
Because the Court grants Defendants’ motion to dismiss,

3

Plaintiff’s cross-motion for summary judgment is moot.

4

because the parties have briefed the issues extensively, the

5

Court briefly remarks on several arguments made by the parties

6

and notes that, had it reached the merits of Plaintiff’s motion,

7

it would have denied it.

However,

8

A. Legal Standard

9

Summary judgment is properly granted when no genuine and

United States District Court
For the Northern District of California

10

disputed issues of material fact remain, and when, viewing the

11

evidence most favorably to the non-moving party, the movant is

12

clearly entitled to prevail as a matter of law.

13

56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);

14

Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.

15

1987).

16

Fed. R. Civ. P.

The moving party bears the burden of showing that there is no

17

material factual dispute.

18

true the opposing party’s evidence, if supported by affidavits or

19

other evidentiary material.

20

815 F.2d at 1289.

21

in favor of the party against whom summary judgment is sought.

22

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

23

587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952

24

F.2d 1551, 1558 (9th Cir. 1991).

Therefore, the court must regard as

Celotex, 477 U.S. at 324; Eisenberg,

The court must draw all reasonable inferences

25

B. Statute of Limitations

26

Defendants contend that Plaintiff’s motion for summary

27

judgment on his second and third claims, facial challenges to the

28

lawfulness of the OMB and DOJ guidelines, must be denied because
32

1

they are time-barred.

2

motion to dismiss.

3

This argument was not raised in their

The Ninth Circuit has held that, if a “person wishes to bring

4

a policy-based facial challenge” to a government decision, the

5

challenge “must be brought within six years of the decision.”

6

Wind River Mining Corp. v. United States, 946 F.2d 710, 715 (9th

7

Cir. 1991) (holding that the general six-year statute of

8

limitations for civil actions brought against the United States,

9

28 U.S.C. § 2401(a), applies to actions for judicial review

United States District Court
For the Northern District of California

10

brought under the APA).

11

substance of an agency decision as exceeding constitutional or

12

statutory authority, the challenger may do so later than six years

13

following the decision by filing a complaint for review of the

14

adverse application of the decision to the particular challenger.”

15

Id.

16

“If, however, a challenger contests the

The OMB and DOJ guidelines were both issued in 2002, more

17

than nine years before Plaintiff initiated this suit.

18

conceded at oral argument that his second and third claims are

19

time-barred.

20

which presents an as-applied challenge based on the denial of his

21

requests for correction, is timely because the denials took place

22

in 2010 and 2011, less than six years before he initiated this

23

action.

Plaintiff

The parties agree that Plaintiff’s first claim,

24

C. Accuracy of the Press Release

25

Plaintiff claims that DOJ “abandoned” its reliance on the

26

accuracy of the press release when Jarrett denied his requests for

27

reconsideration.

28

the requests for reconsideration, Jarrett did not explicitly

The Court finds it did not.

33

In the responses to

1

repudiate the position that the challenged statements in the press

2

release were accurate.

3

for reconsideration had not persuaded him to change the

4

determination that the information was not covered by the

5

guidelines and the guidelines did not require any substantive

6

response to such requests, even though he had provided one.

7

he did not repeat the reasons that he determined that the press

8

release was accurate did not mean that DOJ abandoned the

9

reasoning.

Instead, he explained that the requests

That

United States District Court
For the Northern District of California

10

Under the APA, DOJ’s denial of the petitions for correction

11

“may be set aside only if it is ‘arbitrary, capricious, an abuse

12

of discretion, or otherwise not in accordance with law.’”

13

the Peaks Coal. v. United States Forest Serv., 669 F.3d 1025, 1035

14

(2012) (quoting Se. Alaska Conservation Council v. Fed. Highway

15

Admin., 649 F.3d 1050, 1056 (9th Cir. 2011)).

16

arbitrary and capricious standard is narrow, and we do not

17

substitute our judgment for the agency’s judgment.”

18

(citations omitted).

19

Save

“Review under the

Id.

In the first request for correction, Plaintiff attacked what

20

he believed to be a suggestion in the press release that he

21

“falsif[ied] test results,” arguing that the government had always

22

conceded that he had not falsified the data from the study.

23

DOJ’s response to the request for correction, it explained that,

24

although it agreed that he did not change the data, the press

25

release did not say that he falsified the data, but rather the

26

results.

27

data’s meaning and the conclusions to be drawn from the data “were

28

part and parcel of the results,” and thus it was accurate to say

In

It explained that Plaintiff’s false statements about the

34

1

that he falsified the results.

2

guidelines had encompassed press releases, Plaintiff has not

3

established that DOJ’s conclusion that this statement was accurate

4

and did not warrant correction was arbitrary, capricious, an abuse

5

of discretion, or otherwise not in accordance with law.

6

Thus, even if the agency

In the second request for correction, Plaintiff challenged

7

the statement that his conduct “served to divert precious

8

financial resources from the VA’s critical mission of providing

9

healthcare to this nation’s military veterans.”

DOJ denied this

United States District Court
For the Northern District of California

10

request, noting that this “accurately described the government’s

11

position.”

12

court subsequently found, more than a year and a half after the

13

challenged press release was issued, that the prosecution had not

14

introduced evidence sufficient to meet its burden to prove for

15

sentencing enhancement purposes that an actual loss had occurred,

16

this does not mean that no financial resources were diverted.

17

Plaintiff points to no authority that requires the government to

18

establish the truth of anything that it puts into a press release

19

at the same standard at which it must prove sentencing

20

enhancements in court.

21

encompassed press releases, Plaintiff has not established that the

22

denial of his second request for correction was an abuse of

23

discretion, arbitrary, capricious or contrary to the law.

Haddad Decl. ¶ 11, Compl., Ex. 10, 2.

Although the

Accordingly, even if the agency guidelines

24
25
26
27
28
35

1
2

CONCLUSION
For the reasons set forth above, the Court GRANTS Defendants’

3

motion to dismiss (Docket No. 8) and DENIES as moot Plaintiff’s

4

motion for summary judgment (Docket No. 21).

5
6
7

The Clerk shall enter judgment and close the file.
Defendants shall recover their costs from Plaintiff.
IT IS SO ORDERED.

8
9

United States District Court
For the Northern District of California

10

Dated: 12/3/2012

CLAUDIA WILKEN
United States District Judge

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