Madel v. United States Department of Justice et al
ORDER denying 89 Motion for Summary Judgment (Written Opinion). Signed by Judge Paul A. Magnuson on January 11, 2017. (ALT)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Christopher W. Madel,
Civ. No. 13-2832 (PAM/FLN)
MEMORANDUM AND ORDER
United States Department of
Justice, and Drug Enforcement
This matter is before the Court on Defendants’ Motion for Summary Judgment.
For the reasons that follow, the Motion is denied.
In late 2012 and early 2013, Plaintiff Christopher Madel sent requests under the
Freedom of Information Act to the U.S. Department of Justice and the Drug Enforcement
Administration. These requests sought information regarding the sales and distribution of
oxycodone in the state of Georgia by five different entities: Cardinal Health, Inc., CVS
Caremark, Walgreen Company, AmerisourceBergen Corp., and McKesson Corp. In
particular, Madel sought, for each month or quarter since January 1, 2006, the identity of
each person/pharmacy to whom each company had distributed oxycodone and the quantity
distributed. Madel’s requests also sought specific reports from the DEA’s ARCOS 1
ARCOS stands for “Automation of Reports and Consolidated Orders System.”
After months of delays in responding to his requests, Madel filed this lawsuit
seeking to force a response on October 15, 2013. On December 20, 2013, Defendants
finally produced some records—reports 2, 3, 4, 5 and 7 from the ARCOS database. 2
Defendants eventually also told Madel that they found nothing in ARCOS report 6, and
that CVS does not do business in Georgia. Defendants did not produce either ARCOS
report 1, which lists quarterly retail drug distribution by zip code, or specific
sales/distribution records for the other four entities.
After briefing on the original
cross-motions for summary judgment had begun, Defendants denied the remaining
portions of his requests under FOIA exemption (b)(4), which exempts from disclosure
“trade secrets and commercial or financial information obtained from a person and
privileged or confidential.” 5 U.S.C. § 552(b)(4). In particular, Defendants contended
that the information in report 1 “contains information traceable to individual manufacturers
and distributors, such as market shares in specific geographic areas, estimates of
inventories, and sales.” Madel v. U.S. Dep’t of Justice, 784 F.3d 448, 452 (8th Cir. 2015).
The companies objected to the disclosure of the company-specific spreadsheets, arguing
that the information “could be used to determine the companies’ market shares, inventory
levels, and sales trends in particular areas.” Id. at 453.
Madel challenged the application of exemption (b)(4), and this Court granted
summary judgment to Defendants, finding that Defendants had met their burden to
These reports contain information on drug distribution by state and by grams per
establish that the information Madel sought was subject to exemption (b)(4). (Docket No.
Madel appealed, and the Eighth Circuit Court of Appeals reversed on a narrow
issue: whether the reports contain any information not subject to exemption (b)(4) that is
reasonably segregable from exempt information. Madel, 784 F.3d at 453-54. The court
of appeals did not overturn this Court’s finding that Defendants had established that the
spreadsheets in general were exempt from disclosure under (b)(4), see id. at 453 (“DEA
shows substantial competitive harm is likely.”), but instead determined that, because no
finding on segregability had been made, a reversal and remand was required so that this
Court could determine segregability. In particular, it noted that it was Defendants’ burden
to show “with reasonable specificity why documents withheld pursuant to a valid
exemption cannot be further segregated.” Id. at 454 (quoting Juarez v. U.S. Dept’ of
Justice, 518 F.3d 54, 61 (D.C. Cir. 2008)).
The parties then attempted to resolve their differences without Court involvement.
In the fall of 2015, Defendants informed Madel that none of the information he sought was
segregable, including any information from ARCOS report 1. However, in February
2016, the DEA publicly released ARCOS report 1 in its entirety.
contains quarterly drug-distribution totals by zip code for every drug and every state in the
United States, for the period 2006 to 2015.
Madel’s FOIA requests sought
information only for 2006 to 2012. The Government did not inform Madel that report 1
was publicly available until days before filing the instant Motion in November 2016.
Because report 1 is now publicly available, the only information still at issue
between the parties is oxycodone distribution information specific to the four companies
from 2006 to 2012.
To determine whether summary judgment in favor of a FOIA defendant is
appropriate, the Court must construe the facts in the light most favorable to the FOIA
requester. Miller v. U.S. Dep’t of State, 779 F.2d 1378, 1382 (8th Cir. 1985). The
agency “must prove that each document that falls within the class requested either has been
produced, is unidentifiable, or is wholly exempt from the Act’s inspection requirements.”
Nat’l Cable Television Ass’n, Inc., v. Fed. Commc’ns Comm’n, 479 F.2d 183, 186 (D.C.
An agency may not automatically withhold an entire document when some
information is exempt, but rather must provide “‘[a]ny reasonably
segregable portion.’” Missouri Coal. for Env’t Found. v. U.S. Army Corps
of Eng’rs, 542 F.3d 1204, 1212 (8th Cir. 2008), quoting 5 U.S.C. § 552(b).
Non-exempt portions must be disclosed unless they are “inextricably
intertwined” with exempt portions. Id. (internal quotation marks omitted).
The agency has the burden to show that exempt portions are not segregable
from non-exempt portions. Id. (noting court may require a more specific
affidavit if agency justification is inadequate).
Madel, 784 F.3d 448, 453 (8th Cir. 2015).
Defendants claim an exemption from disclosure for spreadsheets that list
oxycodone distribution levels for each of the four companies at issue. Each spreadsheet’s
headings include the name, county, city, state, zip code and business activity for suppliers,
similar information for buyers, the drug type, the transaction date, total dosage units, and
total grams. (Myrick Decl. I (Docket No. 23) ¶ 35.) The spreadsheets at issue are very
large, containing anywhere from nearly 250,000 lines of data for one company to more
than 690,000 lines of data for another. (Id.) However, although Defendants rely in part
on the large amount of information in each spreadsheet for their segregability arguments,
they do not supply the Court with any information about how many lines of data contain
information that is relevant to Madel’s specific FOIA requests in each spreadsheet.
Moreover, on appeal Madel attempted to compromise with Defendants and limited his
requests to distributions of over 100,000 or 200,000 units per year. Defendants continue
to insist that, even with this limitation, the information is completely exempt from
disclosure and the information in the company-specific spreadsheets is non-segregable.
In support of their contentions regarding segregability, Defendants rely almost
solely on the four companies’ objections to the spreadsheets’ disclosure. These objections
are stated in broad terms without any specific detail, or even specific justification that the
release of any portion of the data will cause the companies competitive harm. The claims
of competitive harm are undermined by the fact that the information Madel seeks is at least
five years, and up to 11 years, old. Neither the Government nor the companies credibly
explain how the release of distribution levels from 2006, for example, would cause any
And as Madel points out, there is no indication whether Defendants sought
additional comments from the companies after the release of ARCOS report 1, which
contains much of the information the companies initially objected to producing, albeit not
in company-specific form. It is noteworthy that Defendants insisted throughout this
litigation that ARCOS report 1 should not be released because the drug amounts reported
by zip code could be “reverse engineered” by competitors to determine suppliers’ and
buyers’ identities, sales, inventory levels, and market share in specific areas. (Myrick
Decl. I ¶ 45.) Defendants do not explain how this harm, which did not suffice to prevent
the release of report 1 in February 2016, is any different from, or less harmful than, the
harm claimed with respect to redacted company-specific spreadsheets.
Nor is there any indication that Defendants discussed with the companies whether
they considered if any information in the company-specific spreadsheets was segregable.
And Defendants have refused to engage in serious discussions with Madel to attempt to
find a solution, such as producing redacted reports for certain years or for certain amounts
The Court of Appeals took issue with Defendants’ overly general responses to
Madel’s FOIA requests, but Defendants have continued to repeat the same general
objections they have offered throughout this matter. In addition, the Eighth Circuit
specifically noted that the companies’ claims of competitive harm were undermined by the
public release of “charts showing total dosage units sold per month by Cardinal Health to
four named buyers in Florida over four years.” Madel, 784 F.3d at 454. Defendants
argue that this information was released in a different sort of litigation, not through a FOIA
request, but the type of litigation precipitating the information’s release is irrelevant. If
releasing the same information for Cardinal Health in Florida did not pose an unreasonable
risk of competitive harm, why would releasing that information for Georgia cause such
Defendants have ignored the Eighth Circuit’s requirement that they explain
themselves further in this regard.
In an effort to narrow the issues, at the hearing on the Motion the Court asked
Defendants to provide under seal a single page from one of the spreadsheets, so that the
Court and Madel could examine the information in light of Defendants’ contentions about
Rather than providing a single page from a spreadsheet, Defendants
provided a “filtered” excerpt from several spreadsheets regarding distribution levels over
1,000 dosage units for a single company. (See Docket No. 101 (affiant “filtered the data
to include the years 2006, 2009, and 2012 and further filtered it by Dosage Units to obtain
a representative subset”); see also Docket No. 101-1 (“filtered” spreadsheet excerpt).) As
Madel notes, the “filtering” Defendants performed in providing the excerpt rebuts
Defendants’ claim that it is not possible or practicable to filter the spreadsheets to remove
competitively sensitive data.
The Government argues that the only information on the spreadsheets that can be
provided without causing competitive harm is the name and locations of the supplier
companies, something Madel already knows. The Government does not explain how a
spreadsheet containing information only by the buyer’s county (which is less specific than
the zip-code specific data in ARCOS report 1) that includes dosage units and total grams,
along with a transaction year, would cause any competitive harm whatsoever.
The Court has given Defendants the benefit of the doubt throughout this litigation,
and Defendants have time and again failed to establish that they deserve that benefit.
Whether by refusing to negotiate with Madel in good faith, or by publicly releasing data
that they had mere months before insisted was too sensitive to ever make public,
Defendants have lost their credibility with this Court. The Eighth Circuit was clear: it is
Defendants’ burden to show that information responsive to Madel’s requests is not
reasonably segregable from information not subject to disclosure. Broad pronouncements
and general explanations will not suffice to meet this burden, and Defendants have offered
nothing more than that here.
Defendants have failed to establish that there is no
non-exempt information responsive to Madel’s requests that is not segregable from exempt
information. Summary judgment in favor of the Government is inappropriate.
It is the Court’s view that company-specific information by the buyer’s county,
business activity, drug type, transaction date, dosage units, and total grams for the years
Madel requests is not exempt from disclosure under (b)(4) and is reasonably segregable
from exempt information in these spreadsheets. In addition, in light of the release of
report 1, buyer zip codes might also be reasonably segregable and not exempt from
disclosure. The Court once again urges the parties to negotiate the release of information
from the company-specific reports that will satisfy the dictates of FOIA, Madel’s requests,
and the companies’ interests. Should the parties be unable to resolve their differences, the
Court will order the disclosure of redacted spreadsheets consistent with the above
Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion for Summary
Judgment (Docket No. 89) is DENIED.
Dated: January 11, 2017
s/Paul A. Magnuson
Paul A. Magnuson
United States District Court Judge
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