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Center for Study of Services v. United States Department of Health and Human Services

United States Court of Appeals, District of Columbia Circuit

October 24, 2017

Center for the Study of Services, d/b/a Consumers' Checkbook, Appellee
United States Department of Health and Human Services and Centers for Medicare and Medicaid Services, Appellants

          Argued September 7, 2017

         Appeal from the United States District Court for the District of Columbia (No. 1:14-cv-00498)

          Karen Schoen, Attorney, U.S. Department of Justice, argued the cause for appellants. With her on the briefs was Mark B. Stern, Attorney. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

          Paige M. Jennings argued the cause for appellee. With her on the brief was Caroline M. Brown.

          Before: Rogers and Millett, Circuit Judges, and Randolph, Senior Circuit Judge.


          Rogers, Circuit Judge.

         The government appeals the order of the district court, in response to requests pursuant to the Freedom of Information Act by the Center for the Study of Services ("Consumers' Checkbook"), directing the government to release health insurance plans to be offered "each year" on the federal exchanges under the Affordable Care Act once their terms are effectively final, or "locked down." The government contends that the order is contrary to the statutory scheme and unwarranted absent a finding the government had been and was likely to continue to be delinquent in responding to Consumers' Checkbook's requests. For the following reasons, we reverse the order granting prospective relief.


         The Freedom of Information Act ("FOIA") provides that upon receiving a request for release of records, an agency shall release the information "promptly" to the requester. 5 U.S.C. § 552(a)(3)(A). A request that "reasonably describes" the records sought, id., triggers the agency's obligation to search for and disclose all responsive records, Morley v. CIA, 508 F.3d 1108, 1114 (D.C. Cir. 2007), unless the records fall within one of the statutory exemptions. The burden is on the agency to demonstrate that the records have not been "improperly withheld." U.S. Dep't of Justice v. Tax Analysts, 492 U.S. 136, 142 & n.3 (1989) (citing S. Rep. No. 89-813, 2d Sess., 8 (1965); H. R. Rep. No. 89-1497, 2d Sess., 9 (1966)). District courts are authorized "to enjoin the agency from withholding agency records and to order the production of any agency records improperly withheld." 5 U.S.C. § 552(a)(4)(B).

         Under the Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010) ("ACA"), entities seeking to offer insurance plans on federally-funded healthcare exchanges must submit their proposals to the Centers for Medicare and Medicaid Services ("CMS"). Through an iterative process over several months, CMS determines which plans can be certified as a "Qualified Health Plan" and included on a federal healthcare exchange. Pub. L. No. 111-148, 124 Stat. 119 §§ 1301, 1302; 45 C.F.R. pt. 156. For example, entities seeking to offer plans in 2016 were required to submit data in May 2015 describing their proposed plans. CMS discovered deficiencies in the data for all proposals in 2015 and sent "correction notices." Corrected data in support of a revised plan was to be submitted by August 25, 2015. After that date, the data was "locked down" for final CMS review. Changes thereafter required CMS approval and were limited to technical changes, such as those "necessary to correct data display errors." In October 2015, CMS published the final plan lists and the eligible plans on the healthcare exchange website,

         Consumers' Checkbook is a nonprofit organization "dedicated to conducting and supporting studies of consumer services . . . and providing public benefit by publishing magazines, books, reports, and websites that educate and inform consumers." Letter of Nov. 29, 2013 to CMS from Robert Krughoff, President of Consumers' Checkbook. In November 2013, as healthcare exchanges were launching under the ACA, Consumers' Checkbook submitted a FOIA request to CMS for data related to the insurance plans that would be offered on the new healthcare exchanges. It requested that data as soon as it was initially provided to CMS. Having received no records, Consumers' Checkbook sued CMS and the Department of Health and Human Services (collectively, "the agency") in March 2014, alleging they failed to "release any of the requested information or even to set a schedule for production of the information, " Cmpt. ¶ 4, and that this delay prevented it "from establishing online consumer-help tools it sought to establish prior to the expiration of the ACA's initial open enrollment period, " id. ¶ 5. It further alleged that "CMS's failure to respond raises doubts about whether the agency can be relied on to release similar information to Consumers' C[heckbook] for future plan years, " when it intended to "provide up-to-date online tools for consumers during each annual, health plan enrollment period." Id. Consumers' Checkbook sought a declaration the agency had violated FOIA and an injunction against withholding the requested records, as well as a permanent injunction against "refusing to disclose or delaying the disclosure of substantially the same information sought for future plan years"; alternatively, it asked the district court to retain jurisdiction to ensure the agency "promptly disclose[s]" this information in the future. Id. 11.

         Consumers' Checkbook submitted FOIA requests to the agency in June 2014, May 2015, and August 2016, each seeking the same type of data for the upcoming ACA open enrollment period. In 2013, 2014, and 2015, it sought the data as soon as it was submitted to CMS. In its 2016 request, Consumers' Checkbook sought records only after the data had been "locked down." The several FOIA requests were consolidated in the litigation pending in the district court. The basic dispute in the district court centered on the agency's invocation of Exemption 4, which permits agencies to withhold "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4). The agency maintained that all of the requested information is "confidential" and thus exempt from release under FOIA, while Consumers' Checkbook argued Exemption 4 did not apply or did not apply to all of the requested information. See Mem. Order 6 (Aug. 16, 2016).

         The district court initially denied the parties' cross motions for summary judgment. The court rejected the agency's position that the case was moot in light of release of the 2014 and 2015 requested information. Consumers' Checkbook had alleged that the delays in receiving the requested 2014 and 2015information had interfered with its ability "to provide up-to-date online tools for consumers during each annual, health plan enrollment period." Cmpt. ¶ 5. As for the agency's reliance on Exemption 4, the court found, based on letters from insurers, that "one could conclude" actual competitive harm could arise from releasing plan benefits data prior to the open enrollment period. Mem. Op. 17, 21 (July 1, 2015) (citing Niagara Mohawk Power Corp. v. U.S. Dep't of Energy, 169 F.3d 16, 18 (D.C. Cir. 1999)). The district court adopted, by order, the parties' proposed schedule that called for the release to Consumers' Checkbook of the requested information for the 2016plan year by September 15, 2015.

         On August 16, 2016, the district court issued the challenged order. The district court concluded that Consumers' Checkbook's most recent FOIA request in 2016, seeking data after the "lock down" date, was "an extremely significant change, " Mem. Order 8 (Aug. 16, 2016), which would do two things. First, it would allow Consumers' Checkbook more than a month to prepare its informational materials before the ACA open enrollment period began. Second, "no reliable evidentiary support" indicated that release of information after the "lock down" date would cause "substantial competitive harm" to any insurer. See id. 10-11. The court noted that plan changes allowed by CMS after the "lock down" date are limited and, moreover, that fluctuations occur even to final plans and plan lists. Further, it noted that Consumers' Checkbook was not seeking any sensitive data or underlying actuarial or business assumptions. Accordingly, the court ruled that the requested information was not protected from disclosure under Exemption 4. See id. 9, 11. Because there was no reason to deny Consumers' Checkbook "what it is entitled to, " id. 13, the district court rejected the agency's argument that no order of any kind should be entered, and denied its motion for summary judgment. Upon declaring the agency violated FOIA by withholding the requested benefits data after the lock down/final data submission deadline, the ...

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