Argus Leader Media v. United States Department of Agriculture
ORDER denying 58 Motion for Summary Judgment. Signed by U.S. District Judge Karen E. Schreier on 9/30/15. (DJP)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
ARGUS LEADER MEDIA,
d/b/a Argus Leader
DEFENDANT’S MOTION FOR
UNITED STATES DEPARTMENT OF
Plaintiff, Argus Leader Media, d/b/a Argus Leader, brought this action
under the Freedom of Information Act (FOIA) against defendant, United States
Department of Agriculture (USDA), seeking disclosure of information related to
the Supplemental Nutrition Assistance Program (SNAP), formerly known as the
food stamp program. Docket 1. USDA moves for summary judgment and
argues that its decision to withhold information is supported by exemptions 4
and 6 to the FOIA. Docket 61. Argus Leader resists USDA’s motion and argues
neither exemption applies. Docket 73. For the following reasons, USDA’s
motion for summary judgment is denied.
The facts viewed in the light most favorable to Argus Leader are as
On February 1, 2011, Argus Leader made a FOIA request for documents
from the Food and Nutrition Service (FNS), which is an agency of the USDA.
FNS administers the Food and Nutrition Act of 2008 and other federal statutes
designed to facilitate the operation of SNAP. Argus Leader’s request for
information sought SNAP retail store records from 2005 through 2010 that
included: each store’s identifier or unique ID number, the store name, the store
address, the store type, and the yearly redemption amounts or Electronic
Benefit Transfer (EBT1) sales figures for each participating store. Docket 60 at
3. At this point in the litigation, Argus Leader only seeks information about the
yearly redemption amounts paid to each participating store. All other data was
either provided to Argus Leader or deemed nonessential by Argus Leader.
The Benefit Redemption Division (BRD), a component within FNS,
oversees an EBT system which allows SNAP beneficiaries to use their SNAP
benefits at participating retailers. Through the EBT system, BRD is able to
track each SNAP beneficiary’s account and ensure that each retailer is paid for
SNAP purchases. The EBT system functions like other debit cards. A SNAP
beneficiary is given an EBT card. At checkout, the SNAP beneficiary swipes his
or her EBT card on the store’s point-of-sale device. The device then
communicates with a processor and electronically verifies that the retailer is a
SNAP participant and that the SNAP beneficiary has a sufficient balance in his
The term food stamps is the label for SNAP benefits that is most familiar to
the public. Docket 21 ¶ 7. Many store owners or clients also know or
understand their benefits as “EBT,” and FNS often uses SNAP-EBT in its
publications and information. Food stamps, SNAP, and SNAP-EBT all mean the
same thing. Docket 21 ¶ 7.
or her account to cover the purchase. If the retailer is not a SNAP participant
or there are insufficient funds in the beneficiary’s account, the transaction is
denied at the point-of-sale.
All of the SNAP payment information that is generated is stored in a
technology system overseen by BRD called the Store Tracking and Redemption
System (STARS). Redemption data is obtained only when a retailer is
authorized to accept SNAP cards and processes a SNAP transaction.
Redemption data is generated for each retailer only during the time frame that
the retailer would be authorized to participate in SNAP. The STARS system
keeps track of the total amount of EBT dollars spent at a participating SNAP
retailer in a given year. For instance, if a SNAP retailer is authorized to
participate in the program but makes no EBT sales, then the redemption data
amount is $0. Argus Leader seeks to recover this store specific data.
On February 1, 2011, Argus Leader made its request for documents from
FNS. After receiving Argus Leader’s request, FNS contacted BRD to collect the
data that Argus Leader sought. BRD conducted a search within the STARS
database and gathered records that were pertinent to the request but not
subject to a FOIA exemption. BRD produced a CD that contained 321,988
SNAP files viewable on a Microsoft Excel worksheet. FNS sent that CD and a
letter to Argus Leader and explained that the agency was not including some of
the requested information (like redemption data) because those records were
exempt from disclosure pursuant to the FOIA exemptions 3 and 4, codified at 5
U.S.C. § 552(b)(3) and (b)(4). Docket 22 ¶ 15. FNS also informed Argus Leader
of its right to appeal. Argus Leader contacted a representative for FNS and
stated that it had received the letter, but the CD only contained 65,536 retailer
records. Argus Leader also requested that FNS resend the information in a text
On March 3, 2011, Argus Leader appealed FNS’s decision to withhold the
redemption data to the FNS Freedom of Information Act Service Center within
the Information Management Branch. The appeal worked its way through
internal departments and eventually was submitted for legal review on April 13,
2011. On June 13, 2011, FNS received a letter from Argus Leader stating that
it would initiate legal action under FOIA if it did not receive a response to its
appeal within ten days. Docket 22 ¶ 26. On July 19, 2011, Argus Leader
received an unofficial response from FNS via email that attempted to clarify
why the requested information was withheld. Meanwhile, the appeal denial was
prepared for final signatures from those who could officially deny the appeal.
Argus Leader filed its complaint in this court on August 26, 2011, and
the denial of Argus Leader’s administrative appeal was never sent. Docket 1.
USDA moved for summary judgment on the issue of whether it needed to
provide FNS numbers and redemption totals to Argus Leader. Docket 18. The
parties stipulated that the issue of FNS numbers was no longer relevant and
the only issue remaining before the court was whether USDA had to provide
Argus Leader with the redemption data for the five years requested. Docket 31.
The court approved the stipulation. Docket 32. On May 23, 2012, Argus Leader
filed its opposition to the motion for summary judgment with regard to the
remaining issue and claimed that the redemption data was not the type of
information that was intended to be withheld under exemption 3 to the FOIA.
Docket 33. The court ruled in favor of USDA and found that exemption 3
applied to the requested data. On March 25, 2014, the Eighth Circuit Court of
Appeals reversed and held that exemption 3 did not apply. Docket 44.
After the Court of Appeals’ ruling, the USDA published a request for
information in the Federal Register on August 4, 2014. FNS contacted SNAP
retailers to determine whether SNAP retailers thought disclosure of aggregated
SNAP redemption data for individual stores should be disclosed. Of the
321,988 potential SNAP retailers contacted, only 323 responded, and 73
percent of respondents were opposed to disclosing individual store redemption
USDA followed up with fifteen SNAP retailers that filed affidavits stating
why individual store redemption amounts should not be disclosed. Affiants
stated the disclosure of individual store data could cause predatory
competition, put a stigma on SNAP retailers, and cause other commercial
harms. After receiving this data, USDA filed its second motion for summary
judgment arguing that exemptions 4 and 6 to the FOIA applied to the
requested information. Docket 58; Docket 61.
STANDARD OF REVIEW
“One of the principal purposes of the summary judgment rule is to
isolate and dispose of factually unsupported claims or defenses[.]” Celotex Corp.
v. Catrett, 477 U.S. 317, 323-24 (1986). Summary judgment is proper “if the
movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Celotex
Corp., 477 U.S. at 323 (“[A] party seeking summary judgment always bears the
initial responsibility of . . . demonstrat[ing] the absence of a genuine issue of
material fact.” (internal quotations omitted)). The moving party must inform the
court of the basis for its motion and also identify the portion of the record that
shows that there is no genuine issue in dispute. Hartnagel v. Norman, 953 F.2d
394, 395 (8th Cir. 1992) (citation omitted).
Once the moving party has met its initial burden, the nonmoving party
must establish “that a fact . . . is genuinely disputed” either by “citing to
particular parts of materials in the record,” or by “showing that the materials
cited do not establish the absence . . . of a genuine dispute.” Fed. R. Civ. P.
56(c). “The nonmoving party may not ‘rest on mere allegations or denials, but
must demonstrate on the record the existence of specific facts which create a
genuine issue for trial.’ ” Mosley v. City of Northwoods, Mo., 415 F.3d 908, 910
(8th Cir. 2005) (quoting Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir.
1995)). For purposes of summary judgment, the facts and inferences drawn
from those facts are “viewed in the light most favorable to the party opposing
the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).
On a motion for summary judgment in a FOIA case, the record is still
viewed in the light most favorable to the nonmoving party to determine if issues
of material fact remain in dispute and to determine if “the moving party is
entitled to judgment as a matter of law.” Mo. Coal. for the Env’t Found. v. U.S.
Army Corps of Eng’rs, 542 F.3d 1204, 1209 (8th Cir. 2008) (citations omitted).
In FOIA cases, the agency has the burden to prove “ ‘that it has fully
discharged its obligations under FOIA.’ ” Id. (quoting Miller v. U.S. Dep’t of
State, 779 F.2d 1378, 1382 (8th Cir. 1985)).
“ ‘Congress intended FOIA to permit access to official information long
shielded unnecessarily from public view.’ ” Hulstein v. Drug Enf’t Admin., 671
F.3d 690, 694 (8th Cir. 2012) (quoting Milner v. Dep’t of Navy, 562 U.S. 562,
565 (2011)). “FOIA generally mandates broad disclosure of government
records.” Cent. Platte Nat. Res. Dist. v. U.S. Dep’t of Agric., 643 F.3d 1142, 1146
(8th Cir. 2011) (citations omitted). FOIA requires that an agency offer records
upon request unless they are the sort of records protected by one of the nine
exemptions under the Act. Milner, 562 U.S. at 565. The exemptions “are to be
narrowly construed to ensure that disclosure, rather than secrecy, remains the
primary objective of the Act.” Mo. Coalition, 542 F.3d at 1208 (citations
omitted). The district court engages in a de novo review of an agency’s decision
to deny a request for information under FOIA, and the burden2 is upon the
agency to show that the specific exemption applies. 5 U.S.C. § 552(a)(4)(B); In
re Dep’t of Justice, 999 F.2d 1302, 1305 (8th Cir. 1993).
The agency retains the burden of justifying its decision to withhold any
documents in light of the purposes of FOIA and to promote public access to
government documents. U.S. Dep’t of State v. Ray, 502 U.S. 164, 173 (1991)
USDA argues it is not required to disclose yearly redemption amounts for
individual SNAP retailers because such information would be “commercial or
financial information obtained from a person [that is] privileged or
confidential.” 5 U.S.C. § 552(b)(4). The Eighth Circuit Court of Appeals has
explained that exemption 4 applies to “information which is (a) commercial or
financial, (b) obtained from a person, and (c) privileged or confidential.”
Brockway v. Dep’t of Air Force, 518 F.2d 1184, 1188 (8th Cir. 1975).
Information is confidential if “disclosure of the information is likely to have
either of the following effects: (1) to impair the Government’s ability to obtain
necessary information in the future; or (2) to cause substantial harm to the
competitive position of the person from whom the information was obtained.”
Contract Freighters, Inc. v. Sec'y of U.S. Dep't of Transp., 260 F.3d 858, 861 (8th
Cir. 2001) (quoting Nat’l Parks & Conservation Ass’n v. Morton, 498 F.2d 765,
770 (D.C. Cir. 1974)).3 This test, which the Eighth Circuit Court of Appeals
adopted, is commonly known as the National Parks test. This test “has been
widely recognized and applied by the circuit courts when construing Exemption
Another test is used if the person or entity submitting information is doing so
voluntarily. That test is inapplicable here, however, because SNAP retailers are
required to disclose EBT data if they want to be compensated. See Martin
Marietta Corp. v. Dalton, 974 F. Supp. 37 (D.D.C. 1997) (holding a bid to do
government work is not voluntary under exemption 4 because the bid must be
submitted in order to win the contract).
In its most recent opinion about exemption 4, the Eighth Circuit Court of
Appeals stated, “To claim an exemption [under exemption 4], an agency must
‘provide affidavits which justify the claimed exclusion of each document by
correlating the purpose for exemption with the actual portion of the document
which is alleged to be exempt.’ ” Madel v. U.S. Dep't of Justice, 784 F.3d 448,
452 (8th Cir. 2015) (quoting Miller, 779 F.2d at 1387 (8th Cir. 1985)).
“[G]eneralized allegations cannot establish that disclosure of financial reports
would cause substantial competitive harm.” Contract Freighters, 260 F.3d at
863. If each element of the exemption is not met, then the exemption does not
When viewing the facts in a light most favorable to Argus Leader,
summary judgment must be denied. Under the National Parks test, USDA must
show that disclosure of an individual store’s yearly redemption data is likely “to
cause substantial harm to the competitive position” of the individual store.
Because USDA received a small percentage of responses from SNAP retailers,
there is evidence that supports the inference that the majority of SNAP retailers
are not concerned about any competitive harm that might stem from the
disclosure of individual store data. A reasonable fact-finder could also find that
a number of factors influence marketplace competition and that simply
disclosing the amount of EBT dollars spent at a particular location is not
sufficient to influence the marketplace. Because there is a reasonable dispute
as to whether the disclosure of individual store redemption data is likely to
cause substantial competitive harm to SNAP retailers, summary judgment is
USDA further argues that exemption 6 applies to at least “individual
retailer redemption data of sole proprietor and closely held corporations . . . .”
Docket 61 at 31. Under 5 U.S.C. § 552(b), government agencies may decline to
disclose “personnel and medical files and similar files the disclosure of which
would constitute a clearly unwarranted invasion of personal privacy.” As
explained by the Eighth Circuit Court of Appeals, the heart of the analysis is a
balancing test between “the privacy interest of the individual against the public
interest in disclosure.” Campaign for Family Farms v. Glickman, 200 F.3d 1180,
1185 (8th Cir. 2000); see also Multi Ag Media LLC v. Dep’t of Agric., 515 F.3d
1224, 1229-33 (D.C. Cir. 2008) (using a four step analysis that balances the
individual’s privacy interest against the public’s interest in disclosure). USDA
argues disclosure of individual store redemption data could reveal private
information about “at least a portion of the owner’s personal finances” and that
disclosure could also cause competitive harm to these businesses. Docket 61 at
33 (quoting Multi Ag Media, 515 F.3d at 1229-30). USDA also argues that such
disclosure outweighs the public’s interest because the public already has
It should be noted that the disclosure of individual store redemption data
may not affect each store in the same way. For example, disclosing individual
store data to the public could benefit certain SNAP retailers. Therefore, USDA
must specifically state how the disclosure of SNAP data could adversely affect
access to redemption data broken down into region, state, county, and zip code
(when available). Id. at 35.
When viewing the facts in the light most favorable to Argus Leader,
summary judgment cannot be granted. There is evidence that the public’s
interest in disclosure outweighs the individual’s privacy. For example,
disclosure of individual store redemption data does not disclose individual
finances because the data would not disclose what percentage of the retailer’s
sales are credited to SNAP or how much the retailer profits after deducting
expenses. See Multi Ag Media, 515 F.3d at 1229-33. Additionally, as stated
above, a reasonable fact-finder could conclude that there is no threat of
competitive harm with the disclosure of individual store data. Also, there is a
great public interest in full disclosure of the parameters of the SNAP program.
When weighing the interests of retailers against the public’s interest in a
transparent government, the latter prevails. Thus, summary judgment is
denied as to exemption 6.
Because questions of fact remain on the issues of whether substantial
competitive harm is likely if individual store redemption data is disclosed and
whether individual privacy interests outweigh the public’s interest in a
transparent government, summary judgment is denied. Accordingly it is
ORDERED that USDA’s motion for summary judgment (Docket 58) is
Dated September 30th, 2015
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE
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