UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
GOVERNMENT ACCOUNTABILITY )
PROJECT, )
)
Plaintiff, )
)
v. ) No. 12-cv-1954 (KBJ)
)
FOOD & DRUG ADMINISTRATION, )
)
Defendant. )
)
MEMORANDUM OPINION
Plaintiff Government Accountability Project (“GAP”) is a non-profit
organization whose mission includes “enhanc[ing] overall food integrity by facilitating
truth-telling and transparency.” (Compl., ECF No. 1, ¶ 3.) To that end, GAP has
requested documents from the Food and Drug Administration (“FDA” or “Defendant”)
under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552 et seq., concerning
total sales of antimicrobial drugs labeled for use in food-producing animals during the
year 2009. (See Pl.’s Statement of Material Facts (“Pl.’s SMF”), ECF No. 41-1, ¶¶ 1–
2.) In response, the FDA eventually turned over two responsive documents, with
certain redactions. (See id. ¶¶ 5–6.) The only remaining dispute is whether the
information redacted from the second document was properly withheld pursuant to one
of FOIA’s exemptions. (See Pl.’s Mem. in Opp. to Defs.’ Mots. for Summ. J. & in
Supp. of Cross-Mot. for Summ. J. (“Pl.’s Mem.”), ECF No. 41, 2–40, at 3.) 1
1
Citations to the documents the parties have filed refer to the page numbers that the Court’s electronic
filing system assigns.
Before this Court at present are the parties’ cross-motions for summary
judgment, as well as a motion for summary judgment from Intervenor-Defendant
Animal Health Institute (“AHI”). (See Def.’s Renewed Mot. for Summ. J. (“Def.’s
Mot.”), ECF No. 32, 1–3; Intervenor-Def. Animal Health Institute’s Mot. for Summ. J.
(“AHI’s Mot.”), ECF No. 40, 1–2; Pl.’s Cross-Mot. for Summ. J. (“Pl.’s Mot.”), ECF
No. 41, 1.) GAP asserts that the redactions are improper (see generally Pl.’s Mem.),
but the FDA maintains that the redacted information properly falls under FOIA
Exemptions 3 and 4. (See generally Def.’s Mem. in Supp. of Def.’s Mot. (“Def.’s
Mem.”), ECF No. 32, 9–45.) AHI agrees with the FDA, and offers its own arguments
that Exemption 4 applies. (See generally Intervenor-Def. Animal Health Institute’s
Mem. in Supp. of Mot. for Summ. J. (“AHI’s Mem.”), ECF No. 40, 14–46.)
As explained below, this Court concludes that FOIA Exemption 3, which protects
information “specifically exempted from disclosure by statute[,]” 5 U.S.C. § 552(b)(3),
does not cover the redacted information because Section 105 of the Animal Drug and
User Fee Amendments of 2008—the statute that the FDA invokes—is not an exemption
statute. See 21 U.S.C. § 360b(l)(3). Exemption 4, which protects “trade secrets and
commercial or financial information obtained from a person and privileged or
confidential[,]” 5 U.S.C. § 552(b)(4), may well cover the information at issue, but there
is a dispute of material fact regarding whether the release of the information would
cause substantial competitive harm, as that exemption requires. Therefore, at this stage,
summary judgment is not warranted in favor of any party, and all three motions must be
DENIED. A separate order consistent with this Memorandum Opinion will follow.
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I. BACKGROUND
A. Basic Facts
Antimicrobial drugs are used in food-producing animals for a variety of
purposes, including to treat and prevent disease and to promote growth and weight gain.
(See Decl. of Michael J. Blackwell (“Blackwell Decl.”), Ex. 1 to Pl.’s Mot., ECF No.
41-2, ¶ 9.) Some members of the public are concerned that the overuse of such drugs
may harm public health by creating antimicrobial-resistant bacteria that might
subsequently infect humans. (See id.) But data on the use of antimicrobial drugs in
food-producing animals is hard to come by, making it difficult to study the link between
such drugs and antimicrobial resistance. (See id. ¶ 10.)
The Animal Drug and User Fee Amendments of 2008 (“ADUFA”), 110 Pub. L.
316, 122 Stat. 3509, codified at 21 U.S.C. § 360b(l)(3), requires that sponsors of
antimicrobial drugs used in animals submit an annual report to the Secretary of Health
and Human Services containing “the amount of each antimicrobial active ingredient in
the drug that is sold or distributed for use in food-producing animals.” 21 U.S.C.
§ 360b(l)(3)(A). This report must include, among other things, the amount of each
antimicrobial active ingredient sold or distributed, and this information must reflect
certain specified variables: (1) “container size, strength, and dosage form”;
(2) “quantities distributed domestically and . . . exported”; and (3) “dosage form,
including, for each such dosage form, a listing of the target animals, indications, and
production classes that are specified on the approved label of the product.” Id.
§ 360b(l)(3)(B). A portion of this data is made available to the public in the form of
annual summary reports, subject to certain statutory restrictions. See id.
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§ 360b(l)(3)(E); (2009 Summary Report, Ex. 5 to Decl. of Gorka Garcia-Malene
(“Garcia-Malene Decl.”), ECF No. 32-1, 33–60; Def.’s Mem. at 11 n.1).
As part of its mission to promote food quality through transparency, GAP filed a
FOIA request in February of 2011, seeking certain data that were not included in the
summary reports. This initial FOIA request sought
(1) printed copies of all educational and outreach materials that FDA
has prepared in order to inform and assist antimicrobial drug sponsors
in fulfilling their duty to report the amount of antimicrobial active
ingredient in their drugs that have been sold or distributed for use in
food-producing animals pursuant to [Section] 105 of the Animal Drug
User Fee Amendments of 2008; (2) FDA’s data for use of antimicrobial
drugs in food-producing animals in 2009 as broken down by container
size, strength, and dosage form; and (3) FDA’s data for use of
antimicrobial drugs in food-producing animals in 2009 as broken down
by class of animal.
(Pl.’s SMF ¶ 2.) The FDA produced documents in response to the first part of GAP’s
request in May of 2011; one month later, in June, the agency notified GAP that it was
withholding documents with respect to the remaining parts of the request on the basis of
Exemption 4. (See Garcia-Malene Decl. ¶¶ 6–7; Pls.’ Mem. at 2.) GAP appealed that
determination in July of 2011, and the FDA denied the appeal one year later. (See
Compl. ¶ 23.) GAP then filed the instant complaint, in December of 2012, seeking to
challenge the FDA’s withholding determination. (See id. ¶¶ 33–36.)
Meanwhile, GAP modified portions of its FOIA request. (See Compl. ¶ 21;
Garcia-Malene Decl. ¶ 8.) Most notably, GAP altered the second and third parts of the
request to indicate that it desired “aggregated data concerning the amount of
antimicrobial active ingredient sold for each class of antimicrobial drugs, rather than
data concerning sales or distribution by each individual sponsor[.]” (Compl. ¶ 21
(emphasis added); see also Pl.’s SMF ¶ 4.) The FDA conducted a search based on this
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new request and located two responsive documents, known for the purposes of this case
as “Document 1” and “Document 2.” (Pl.’s SMF ¶ 5.) The agency produced both
documents with redactions (id. ¶ 6), and at this point, GAP is not challenging the scope
or adequacy of the FDA’s search, nor the redactions that the agency made to
Document 1 (see Pl.’s Mem. at 3). Rather, the only remaining dispute between the
parties is the legitimacy of the redactions in Document 2. (See id.)
Document 2 lists the volume (in kilograms) of the active ingredients for all
antimicrobial drugs sold and distributed in 2009, broken down based on three
characteristics: the market within which the drug is distributed (e.g., domestic or
export); the route of the drug’s administration (e.g., injection or topical); and the drug’s
antimicrobial class (e.g., aminoglycosides or tetracyclines). (See Ex. to Notice of
Filing (“Doc. 2”), ECF No. 21-1; AHI’s Mem. at 24.) The document also indicates, for
each particular antimicrobial class within a route and a market, whether the drugs in
that class had one, two, or three or more sponsors in 2009. (See Doc. 2 at 1.) Finally,
the document records the total volume of active ingredients for antimicrobial drugs sold
or distributed by the type of market, and the route of administration within that market.
(See id.) For example, according to the document, 22,957 kilograms of macrolides
designed for injection were sold or distributed domestically in 2009, coming from three
or more distinct sponsors. (See id.) And, overall, there were 388,518 total kilograms of
antimicrobial drugs designed for injection sold or distributed domestically in 2009.
(See id.)
Significantly for present purposes, the FDA has invoked FOIA Exemptions 3 and
4 to redact many of the data points in Document 2. To be specific, the FDA asserts that
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it has redacted: (1) “all individualized sales and distribution data (i.e., data from a
single, distinct sponsor)”; (2) “all sales and distribution data comprised of aggregated
data of two distinct sponsors”; and (3) “sales and distribution data comprised of
aggregated data of three of more distinct sponsors” if, through simple arithmetic using
public data the agency has already released, such data could reveal aggregated sales and
distribution data of one or two distinct sponsors. (Def.’s Mem. at 13.) According to
the FDA, these redactions reflect the agency’s concern about potential revelations to
industry competitors regarding the sales/distribution volume of a particular
class/route/market combination that is attributable to a particular sponsor. (See id. at
22–27; 39–41.)
As a practical matter, the FDA’s redaction analysis appears to have worked as
follows. As noted above, the FDA first redacted all data from a single specific sponsor.
There was only one sponsor in 2009 for domestic sulfas designed for injection, for
example (see Doc. 2 at 1), and in the agency’s view, if that data point was released,
anyone who knew the identity of the sole sponsor would necessarily also know that
sponsor’s sales or distribution total for domestic, injection-administered sulfa drugs in
2009. (See Def.’s Mem. at 22–23.) The FDA also redacted all data that were
aggregated from just two distinct sponsors. For example, two sponsors provided all of
the aminoglycosides designed for injection that were sold or distributed in 2009. (See
Doc. 2 at 1.) The FDA asserts that, if that data point was released, each sponsor would
know the volume that was attributable to its rival simply by subtracting its own volume
from the aggregated figure. (See Def.’s Mem. at 24, 40.) Finally, the FDA redacted
any data that were aggregated from three or more distinct sponsors where other publicly
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available data would reveal the sales and distribution data of two or fewer distinct
sponsors. For example, while two routes of administration for domestic lincosamides
(intramammary and feed) had just one sponsor and were redacted on that basis (see
Doc. 2 at 1), two other routes for domestic lincosamides (injection and water) had three
or more sponsors (see id.), which meant that, on the fact of the document, the data
related to the injection and water routes should have been publicly released. However,
according to the FDA, other publicly available information (specifically, the 2009
Revised Summary Report) includes a grand total for domestic sales and distribution of
lincosamides. (See 2009 Summary Report at 33–60.) Thus, the agency reasoned, if the
lincosamide injection and water totals in Document 2 are released, a competitor could
take the grand total from the Summary Report, subtract from it the injection and water
totals as revealed in Document 2, and discover the total for lincosamides designed for
intramammary and feed, which stem from a single sponsor. (See Garcia-Malene Decl. ¶
34(a).)
B. Procedural History
The FDA and GAP filed cross-motions for summary judgment on the issue of
whether Exemptions 3 and 4 justified Document 2’s redactions in 2013, and the Court
held a hearing on those motions on June 5, 2014. This case was then stayed at the
request of both parties while the FDA determined whether or not the figures in
Document 2 were accurate. (See Consent Mot. to Stay Litigation, ECF No. 19; Minute
Order of August 5, 2014.) The FDA disclosed an updated and revised version of
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Document 2 (see Joint Status Report, ECF No. 22, at 1), the stay was lifted, and the
parties re-filed cross-motions for summary judgment in early 2015. 2
In its motion for summary judgment, the FDA argues that Section 105 of
ADUFA is a withholding statute within the meaning of Exemption 3, and that its
language prohibits the disclosure of the information that the FDA has withheld. (See
Def.’s Mem. at 16–27.) With respect to Exemption 4, the FDA contends that the
redacted information is confidential commercial data, the disclosure of which would
cause substantial competitive injury. (See id. at 27–43.) For its part, GAP argues that
Section 105 of ADUFA is not a withholding statute under Exemption 3 (see Pl.’s Mem.
at 11–20), and that even if it were a withholding statute, the FDA has applied it too
broadly here (see id. at 20–25). GAP also urges the Court to conclude that Exemption 4
does not cover the redacted information because Defendants have not shown that the
information would cause substantial competitive harm. (See id. at 24–40.)
On January 5, 2015, the Animal Health Institute, a trade association of
companies that develop and manufacture animal medications, moved to intervene in this
action in order to protect its members from the “substantial competitive harm” that
would allegedly accompany “public disclosure of the annual sales volume of [their]
medications[.]” (Mem. in Supp. of AHI’s Mot. to Intervene, ECF No. 23-1, at 2.) The
Court granted AHI’s motion (see Mem. Op. & Order, ECF No. 37), and AHI
subsequently filed its own motion for summary judgment, supporting the FDA’s
redactions on the basis of Exemption 4 (see AHI’s Mot.; AHI’s Mem. at 29–45.)
2
Both parties agree that only this revised version of Document 2 is at issue in this case. (See Joint
Status Report, ECF No. 22, at 1.)
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All three parties’ cross-motions have now been fully briefed and are ripe for this
Court’s review.
II. LEGAL STANDARDS
FOIA “generally requires the disclosure, upon request, of records held by a
federal government agency[.]” Sciacca v. Fed. Bureau of Investigation, 23 F. Supp. 3d
17, 25 (D.D.C. 2014) (alteration in original) (internal quotation marks omitted) (quoting
Judicial Watch, Inc. v. U.S. Dep’t of the Treasury, 796 F.Supp.2d 13, 18 (D.D.C.
2011)); see 5 U.S.C. § 552(a)(3)(A). However, FOIA also includes nine exemptions
that permit agencies to withhold information from disclosure. See Judicial Watch, 796
F. Supp. 3d at 23. These exemptions are to be construed narrowly, see Dep’t of the Air
Force v. Rose, 425 U.S. 352, 361 (1976), and the government bears the burden of
demonstrating that any withheld information falls within the claimed exemptions, see
Maydak v. Dep’t of Justice, 218 F.3d 760, 764 (D.C. Cir. 2000).
A. FOIA Exemption 3
Under Exemption 3, an agency may withhold information “specifically exempted
from disclosure by statute[,]” provided that the statute either (1) “requires that the
matters be withheld from the public in such a manner as to leave no discretion on the
issue,” or (2) “establishes particular criteria for withholding or refers to particular types
of matters to be withheld[.]” 5 U.S.C. § 552(b)(3). 3 These conditions are disjunctive; a
3
The text of Exemption 3 also requires that a purported withholding statute “specifically cite[]” to the
FOIA provision that authorizes the withholding. See 5 U.S.C. § 552(b)(3). But this requirement
applies only with respect to withholding statutes that are “enacted after the date of enactment of the
OPEN FOIA Act of 2009,” which was October 28, 2009. Id. § 552(b)(3)(B) (emphasis added); see
OPEN FOIA Act of 2009, Pub. L. No. 111-83, § 564, 123 Stat. 2142, 2184 (2009). Therefore, it is not
relevant here. See Animal Drug User Fee Program—Revision and Extension, Pub. L. No. 110-316, 122
Stat. 3509 (establishing that Section 105 of ADUFA was enacted on August 14, 2008).
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statute need satisfy only one of them to qualify under Exemption 3. See Pub. Citizen,
Inc. v. Rubber Mfrs. Ass’n, 533 F.3d 810, 813 (D.C. Cir. 2008). However, “[b]efore a
court inquires into whether any of the [two statutory] conditions [for withholding
information] are met . . . it must first determine whether the statute is a withholding
statute at all by deciding whether it satisfies ‘the threshold requirement that it
specifically exempt matters from disclosure.’” Id. at 813–14 (emphasis in original)
(quoting Reporters Comm. for Freedom of the Press v. U.S. Dep’t of Justice, 816 F.2d
730, 734 (D.C. Cir. 1987)).
To determine whether a statute qualifies as a withholding statute as required,
courts look to “the language of the statute on its face[,]” Zanoni v. U.S. Dep’t of Agric.,
605 F. Supp. 2d 230, 236 (D.D.C. 2009), and they do not defer to an agency’s
interpretation of the statute, see Reporters Comm., 816 F.2d at 735, rev’d on other
grounds, 489 U.S. 749 (1989); cf. Rubber Mfrs. Ass’n, 533 F.3d at 814 (noting that all
parties, including the Department of Transportation, had agreed that “[j]udicial
deference is neither sought nor owed to the agency’s interpretation” of a statute’s nature
under Exemption 3 (alteration in original) (citation omitted)). Only if a statute meets
the threshold requirement must a court consider whether either of the two conditions
articulated in 5 U.S.C. § 552(b)(3)(A) is satisfied. See Rubbers Mfrs. Ass’n, 533 F.3d
at 815; Zanoni, 605 F. Supp. 2d at 236.
B. FOIA Exemption 4
FOIA Exemption 4 protects from disclosure “trade secrets and commercial or
financial information obtained from a person and privileged or confidential[.]” 5
U.S.C. § 552(b)(4). No party in the instant case argues that this case involves trade
secrets, and GAP does not contest that the information in Document 2 is commercial
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and obtained from a person—the sole dispute is whether the information is “privileged
or confidential.” (See Pl.’s Mem. at 25–26; Def.’s Mem. at 27 & n.18.) Courts employ
different tests to determine whether information is confidential, depending in part on
whether the initial disclosure of the information was voluntary or compulsory. Where a
party is required to submit the information to the government, such information is
confidential under Exemption 4 “if disclosure of the information is likely . . . (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.” Nat’l Parks & Conservation Ass’n v. Morton (Nat’l Parks
I), 498 F.2d 765, 770 (D.C. Cir. 1974) (footnote omitted). “[F]or the government to
preclude disclosure based on a competitive injury claim, it must prove that the
submitters ‘(1) actually face competition, and (2) substantial competitive injury would
likely result from disclosure.’” Niagara Mohawk Power Corp. v. U.S. Dep’t of Energy,
169 F.3d 16, 18 (D.C. Cir. 1999) (quoting Nat’l Parks & Conservation Ass’n v. Kleppe
(Nat’l Parks II), 547 F.2d 673, 679 (D.C. Cir. 1976). And this competitive injury must
“flow[] from the affirmative use of proprietary information by competitors.” Pub.
Citizen v. U.S. Dep’t of Health & Human Servs., 975 F. Supp. 2d 81, 114 (D.D.C. 2013)
(emphasis omitted) (internal quotation marks omitted) (quoting Pub. Citizen Health
Research Grp. v. Food & Drug Admin., 704 F.2d 1280, 1291 n.30 (D.C. Cir. 1983)).
Notably, “an agency opposing disclosure based on Exemption 4 is not required to
provide detailed economic analysis of the competitive environment[.]” Gilda Indus.,
Inc. v. U.S. Customs & Border Prot. Bureau, 457 F. Supp. 2d 6, 10 (D.D.C. 2006)
(citation omitted). However, the agency “must provide affidavits that contain more
11
than mere conclusory statements of competitive harm.” Id. (citation omitted).
Moreover, when invoking Exemption 4, the agency is not required “to prove disclosure
certainly would cause it substantial competitive harm, but only that disclosure would
‘likely’ do so.” McDonnell Douglas Corp. v. U.S. Dep’t of Air Force, 375 F.3d 1182,
1187 (D.C. Cir. 2004) (citation omitted).
C. Summary Judgment In FOIA Cases
Courts routinely resolve FOIA disputes in the summary judgment context. See
AquAlliance v. U.S. Bureau of Reclamation, 139 F. Supp. 3d 203, 207 (D.D.C. 2015);
Wheeler v. Dep’t of Justice, 403 F. Supp. 2d 1, 5 (D.D.C. 2005) (explaining that
summary judgment is the “routine vehicle” for resolution of a FOIA dispute).
According to Federal Rule of Civil Procedure 56, summary judgment must be granted
when the “movant shows that there is no genuine dispute as to any material fact and
[that] the movant is entitled to judgment as a matter of law[,]” Fed. R. Civ. P. 56(a),
and a material fact is a fact “that might affect the outcome of the suit,” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The defending agency “bears the burden of proving that it has complied with its
obligations under the FOIA[.]” AquAlliance, 139 F. Supp. 3d at 207 (citing, inter alia,
5 U.S.C. § 552(a)(4)(b)). This means that, to be entitled to summary judgment, the
agency must demonstrate that “each document that falls within the class requested
either has been produced . . . or is wholly exempt from [FOIA’s] inspection
requirements,” Gilda Indus., 457 F. Supp. 2d at 9 (alterations in original) (quoting
Students Against Genocide v. Dep’t of State, 257 F.3d 828, 833 (D.C. Cir. 2001))
(internal quotation marks omitted). The agency can carry this burden by submitting
affidavits or declarations, so long as the sworn statements “describe the justifications
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for nondisclosure with reasonably specific detail, demonstrate that the information
withheld logically falls within the claimed exemption, and are not controverted by
either contrary evidence in the record nor by evidence of agency bad faith.” Sciacca,
23 F. Supp. 3d at 27 (quoting Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C.
Cir. 1981)) (internal quotation marks omitted).
However, summary judgment cannot be granted if dueling affidavits create a
genuine dispute over issues of material fact. See Wash. Post Co. v. U.S. Dep't of Health
& Human Servs., 865 F.2d 320, 326 (D.C. Cir. 1989); Sears, Roebuck & Co. v. Gen.
Servs. Admin., 553 F.2d 1378, 1382 (D.C. Cir. 1977); Pub. Citizen Health Research
Grp. v. Food & Drug Admin., 953 F. Supp. 400, 403 (D.D.C. 1996).
III. ANALYSIS
As explained, the FDA has produced two partially redacted documents in
response to GAP’s amended FOIA request, only one of which is currently in dispute.
(See Pl.’s Mem. at 3; Def.’s Mem. at 13.) Document 2 is a responsive record that
contains data on the volume of antimicrobial drugs sold or distributed for use in food-
producing animals in 2009, and although the agency has produced much of this
document, it has withheld certain data on the grounds that the redacted information is
exempt from disclosure under FOIA Exemption 3 or FOIA Exemption 4 (or both). For
the reasons explained below, this Court agrees with GAP that the information the
agency has redacted cannot be withheld pursuant to Exemption 3; however, the Court
has also concluded that a dispute of material fact that is essential to determining
whether or not Exemption 4 permits the challenged withholdings exists. Accordingly,
all three pending summary judgment motions must be denied.
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A. The FDA Cannot Invoke FOIA Exemption 3 To Withhold The Redacted
Information In Document 2
This case is, in part, a tale of two statutes: FOIA and ADUFA. As explained
above, FOIA’s Exemption 3 allows an agency to withhold information that is
“specifically exempted from disclosure by [another] statute” under certain conditions,
5 U.S.C. § 552(b)(3), and here, the FDA insists that the redacted portions of
Document 2 are specifically exempt from disclosure under Section 105 of ADUFA, 21
U.S.C. § 360b(l)(3). (See Def.’s Mem. at 16–27; Garcia-Malene Decl. ¶¶ 27–34.)
Thus, the key questions are whether Section 105 of ADUFA qualifies as a withholding
statute for the purpose of Exemption 3, see Pub. Citizen, Inc., 533 F.3d at 813–14, and
if so, whether the information that the FDA has withheld in this case is exempted from
disclosure under that statute.
As usual, the Court begins its analysis by examining the pertinent statutory text.
Section 105 of ADUFA requires sponsors of new animal drugs that contain an
antimicrobial active ingredient to submit annual reports to the FDA “on the amount of
each antimicrobial ingredient in the drug that is sold or distributed for use in food-
producing animals[.]” 21 U.S.C. § 360b(l)(3)(A). The key provision for the purpose of
the agency’s Exemption 3 argument is § 360b(l)(3)(E), which reads:
(E) The Secretary shall make summaries of the information reported under
this paragraph publicly available, except that—
(i) the summary data shall be reported by antimicrobial class, and no
class with fewer than 3 distinct sponsors of approved applications
shall be independently reported; and
(ii) the data shall be reported in a manner consistent with protecting
both national security and confidential business information.
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Id. § 360b(l)(3)(E). The FDA contends that this provision prohibits disclosure of
information in all contexts, including in response to a FOIA request, and thus Section
105 qualifies as a withholding statute under Exemption 3. (See Def.’s Mem. at 17–19.)
Moreover, it argues that subsections (E)(i) and (E)(ii) specifically preclude the
disclosure of the information that the agency has redacted from Document 2, because
the withheld information would allow industry participants to calculate the
sales/distribution data of individual drug sponsors for the year 2009, either directly or
by comparing the withheld information to other publicly available information. (See id.
at 23 (arguing that these statutory provisions “prohibit[] from disclosure” the
information that the FDA redacted); see also id. at 22–27.)
GAP reads 21 U.S.C. § 360b(l)(3)(E) more narrowly. It construes that section as
restricting only the content of the Secretary’s mandatory annual summary reports, and
not as a limitation on the disclosure of the referenced information in other contexts,
such as in response to FOIA requests. (See Pl.’s Mem. at 11–16.) Thus, in GAPs view,
Section 105 of ADUFA does not explicitly exempt the information from public
disclosure, as is required if this statutory provision is to qualify as an Exemption 3
withholding statute. (See id. at 12–13.) GAP also argues that, even if Section 105 is a
withholding statute, its disclosure prohibitions are not broad enough to cover all of the
information that the FDA has redacted from Document 2. (See id. at 20–25.)
This Court agrees with GAP that Section 105 of ADUFA is not a withholding
statute under Exemption 3, for the following reasons.
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1. Section 105 Of ADUFA Is Not A Withholding Statute For The
Purpose Of FOIA Exemption 3 Because It Does Not Specifically
Exempt Matters From Disclosure
To determine whether a statute “specifically exempt[s] matters from disclosure”
and thus qualifies as a withholding statute that is within the purview of Exemption 3,
5 U.S.C. § 552(b)(3), courts begin by scrutinizing “the language of the statute on its
face[,]” Zanoni, 605 F. Supp. 2d at 236 (citation omitted), and in this regard, the Court
observes that § 360b(l)(3)(E) does contain language that limits the ability of the
Secretary of HHS to disclose certain information. (See Def.’s Mem. at 17.) But this
restriction is part of a broader provision that relates to the collection and reporting of
certain drug-related data provided by drug sponsors (subsection l), and when one homes
in on the telescoping structure of the statute, it becomes clear that Congress has not
specifically directed the withholding of the information under all circumstances.
Specifically, and stepping back to examine the necessary context, subdivision
3(A) of subsection l requires “the sponsor of [an animal] drug [to] submit an annual
report to the Secretary on the amount of each antimicrobial active ingredient in the drug
that is sold or distributed for use in food-producing animals[.]” 21 U.S.C.
§ 360b(l)(3)(A). Subdivisions 3(B) and 3(C) expound further on the content of the
mandated reports that sponsors must provide to the Secretary, see id. §§ 360b(l)(3)(B),
(C), and subdivision 3(D) authorizes the Secretary to “share information reported [to
the agency] under this paragraph with the Antimicrobial Resistance Task Force[,]” id. §
360b(l)(3)(D). Subdivision 3(E)—the provision at issue here—then proceeds to require
the Secretary to make summaries of the antimicrobial data that she collects “under this
paragraph” and to make those summaries “publicly available,” with two exceptions: that
“the summary data shall be reported by antimicrobial class, and no class with fewer
16
than 3 distinct sponsors . . . shall be independently reported[,]” id. § 360b(l)(3)(E)(i),
and that “the data shall be reported in a manner consistent with protecting both national
security and confidential business information[,]” id. § 360b(l)(3)(E)(ii). Thus, when
viewed in context, the limiting provisions on which the FDA relies are most naturally
read to relate specifically to the required annual summary reports, and they do not
constitute blanket restrictions on the disclosure of information in all circumstances, as
the agency maintains. Cf. Univ. of Tex. Sw. Med. Ctr. v. Nassar, 133 S. Ct. 2517, 2529
(2013) (“Just as Congress’ choice of words is presumed to be deliberate, so too are its
structural choices.” (citation omitted)). 4
The repetition of key language further confirms that subdivisions (E)(i) and
(E)(ii) are not general withholding mandates. It is a well-established principle of
statutory interpretation that repeated phrases are presumed to have the same meaning,
especially when they appear in close proximity. See Brown v. Gardner, 513 U.S. 115,
118 (1994); Jarecki v. G. D. Searle & Co., 367 U.S. 303, 307 (1961). With that in
mind, the Court notes that § 360b(l)(3)(E) begins with the requirement that the
Secretary “make summaries of the information reported under this paragraph publicly
available,” and subdivision (E)(i) picks up this thread when it establishes a limitation
that, as expressed in the statute, pertains to “the summary data[.]” 21 U.S.C. §
360(l)(3)(E) (emphasis added). The natural, contextual reading of this subsection is
that the “summary data” subdivision (E)(i) refers to and restricts are the same as the
4
The fact that Congress introduces the restrictions with the phrase “except that”—i.e., the statute
requires the Secretary to make certain summaries publicly available, except that those summaries must
abide by the restrictions of subdivisions (E)(i) and (E)(ii), 21 U.S.C. § 360b(l)(3)(E)—underscores this
point, insofar as that phrase clearly frames the listed conditions as limitations only on the public
summaries that the Secretary must produce.
17
“summaries” § 360(b)(l)(3)(E) requires, and reading subdivisions (E)(i) and (E)(ii) to
apply to all possible disclosures, as the FDA does, extracts these provisions from the
“summary” context and gives them a life of their own, without any indication that
Congress actually meant for these restrictions to have such unbounded significance.
The fact that Congress certainly knows how to create a clear withholding
mandate when it wants to also bolsters the conclusion that Section 105 of ADUFA is
not intended to be construed as such. In other contexts, Congress has crafted statutory
terms that unambiguously prohibit disclosure in all circumstances. See, e.g., 52 U.S.C.
§ 30109(a)(12)(A) (“Any notification or investigation made under this section shall not
be made public by the Commission or by any person without the written consent of the
person receiving such notification or the person with respect to whom such
investigation is made.” (emphasis added)); see also 7 U.S.C. § 8791(b)(2)(A) (“[A]ny
officer or employee of the Department of Agriculture . . . shall not disclose . . .
information provided by an agricultural producer . . . in order to participate in programs
of the Department.” (emphasis added)); 50 U.S.C. § 4614(c)(1) (“[I]nformation
obtained for the purpose of consideration of, or concerning, license applications under
this Act shall be withheld from public disclosure unless the release of such information
is determined by the Secretary [of Commerce] to be in the national interest.” (emphasis
added)). And Congress has also seen fit to reference FOIA explicitly when it seeks to
mandate that the specific information be exempt from disclosure. See, e.g., 39 U.S.C.
§ 3016(d) (“Any documentary material provided pursuant to any subpoena issued under
this section shall be exempt from disclosure under section 552 of title 5, United States
Code.”).
18
Section 105 of ADUFA does not likewise prohibit all public disclosure in
unambiguous terms, nor does it mention FOIA; so it is reasonable to infer that Congress
did not intend this section to serve as an all-purpose anti-disclosure statute within the
meaning of FOIA Exemption 3. Cf. Rubber Mfrs. Ass’n, 533 F.3d at 817 (“Congress
knows well how to say that disclosures may be made only under specified provisions or
circumstances, but it did not do so here.” (footnote and emphasis omitted)). When one
also considers the fact that reading Section 105 of ADUFA narrowly is in keeping with
FOIA’s “strong presumption in favor of disclosure,” Rubber Mfrs. Ass’n, 533 F.3d at
813 (internal quotation marks omitted) (quoting U.S. Dep’t of State v. Ray, 502 U.S.
164, 173 (1991)), the FDA has a difficult row to hoe in order to argue successfully that
this Court should find that it can withhold the redacted information under FOIA
Exemption 3 on the basis of Section 105 of ADUFA.
2. The FDA’s Exemption 3 Arguments Are Unpersuasive
The FDA attempts to advance several arguments in support of its invocation of
Exemption 3 based on Section 105 of ADUFA, none of which succeeds. For example,
regarding the text of subdivision (E)(i), the FDA contends that the language “no class
with fewer than 3 distinct sponsors of approved applications shall be independently
reported,” § 360b(l)(3)(E)(i) (emphasis added), reaches beyond the Secretary’s annual
summary reports and acts as a restriction on disclosing this information generally. (See
Def.’s Mem. at 18 n.9.) But this interpretation removes the all-important context of
subdivision (E)(i), and does so in a manner that is not supported by the text. That is,
although “independently reported” might conceivably mean “independent from the
Secretary’s summary reports” when considered in a vacuum, the most natural reading of
this phrase as it appears in the statute is that it relates to, and restricts, the content and
19
format of the summary reports themselves—i.e., within the Secretary’s summary report,
the agency cannot provide an independent representation of the data on any
antimicrobial class with fewer than three sponsors (in contrast to a data point that has
been aggregated with other classes, where such data would not be independently
presented). And the repetition of the term “reported” in the subsection clearly supports
this narrow construction. See 21 U.S.C. § 360b(l)(3)(E)(i) (“[T]he summary data shall
be reported by antimicrobial class, and no class with fewer than 3 distinct sponsors of
approved applications shall be independently reported.” (emphasis added)). The first
use of the word “reported” unquestionably refers to the formatting of the Secretary’s
annual summaries, and it makes eminent sense to infer that Congress intended to
reference the same when it used the word “reported” again later in the same sentence.
See Brown, 513 U.S. at 118. Thus, the Court is not persuaded that the phrase
“independently reported” transforms subsection (E)(i) into a universal restriction on
disclosure, as the FDA maintains.
The FDA also argues that “the presence of a disclosure requirement in Section
105 of ADUFA does not mean that the prohibitions on disclosure are restricted to
disclosures made in the Summary Reports.” (Def.’s Mem. at 19; see id. at 19–20.) This
is true enough, as far as it goes; there is no a priori reason that a statute cannot both
mandate disclosure in one context and restrict disclosure in another. But the FDA’s
task here is to make a persuasive argument that, whatever the scope of the disclosure
requirement in Section 105 of ADUFA, Congress intended the restrictions in
subdivisions (E)(i) and (E)(ii) to extend beyond the mandated summary reports. And
this Court believes that the best reading of the statute’s text is that the restrictions in
20
Section 105 are limitations on the Secretary’s mandatory disclosures rather than all
disclosures, for the reasons already stated.
Undaunted, the FDA points to the case of John Doe #1 v. Veneman, 380 F.3d 807
(5th Cir. 2004); ironically, in this Court’s view, that case supports the Court’s
conclusion, not the FDA’s. (See Def.’s Mem. at 19–20.) In Veneman, the Fifth Circuit
considered whether or not a provision of the Federal Insecticide, Fungicide and
Rodenticide Act (“FIFRA”), 7 U.S.C. §§ 136–136y, qualified as a withholding statute
under Exemption 3. Similar to ADUFA, FIFRA requires users of certain types of
pesticides to submit information on the scope of the use of these chemicals to both the
EPA and the USDA, and required those agencies to “publish annual comprehensive
reports” based on that information. 7 U.S.C. § 136i-1(f). FIFRA also instructs that
[r]ecords maintained under [the statute] shall be made available to any
Federal or State agency that deals with pesticide use or any health or
environmental issue related to the use of pesticides, on the request of such
agency. Each such Federal agency shall conduct surveys and record the
data from individual applicators to facilitate statistical analysis for
environmental and agronomic purposes, but in no case may a government
agency release data . . . that would directly or indirectly reveal the identity
of individual producers.
Id. § 136i-1(b) (emphasis added). The Fifth Circuit had no difficulty concluding that
this statute fell within Exemption 3’s purview. See Veneman, 380 F.3d at 816–17. But
in this Court’s judgment, the clarity of FIFRA only highlights the weaknesses of the
FDA’s interpretation of ADUFA. As quoted above, FIFRA plainly states that “in no
case may a government agency release” certain specified data, 7 U.S.C. § 136i-1(b)
(emphasis added); by contrast, ADUFA’s restrictions are at all times couched solely in
terms of the information that is to be “reported” to the public by the Secretary, see 21
U.S.C. § 360b(l)(3)(E). Moreover, whereas FIFRA’s disclosure requirement and non-
21
disclosure provision are housed in separate sections, compare 7 U.S.C. § 136i-1(b),
with id. § 136i-1(f), ADUFA’s purported non-disclosure provisions are nested within its
disclosure requirement, see 21 U.S.C. § 360b(l)(3)(E); id. at §§ 360b(l)(3)(E)(i)–(E)(2),
which creates a clear nexus between what must be “reported” and what must be
withheld as the Secretary undertakes that reporting obligation. Thus, far from making
the FDA’s case, Veneman only serves to underscore the gap between a true Exemption 3
withholding statute and the provisions at issue in this case. 5
The D.C. Circuit has addressed the Exemption 3 status of a statute with an
affirmative disclosure requirement in a manner that is instructive here. See Pub.
Citizen, Inc. v. Rubber Mfrs. Ass’n, 533 F.3d 810 (D.C. Cir. 2008). The Public Citizen
case involved the National Traffic and Motor Vehicle Safety Act of 1966 (the “Safety
Act”), 42 U.S.C. §§ 30101–30183, and a subsequent amendment to that statute known
as the Transportation Recall Enhancement, Accountability, and Documentation Act
(“the TREAD Act”), Pub. L. No. 106-414, 114 Stat. 1800 (2000). Section 30167(b) of
the Safety Act requires the Secretary of Transportation “to disclose information
obtained under this chapter related to a defect or noncompliance that the Secretary
decides will assist [manufacturers] in carrying out” specified provisions of that Act. 49
5
The FDA also relies on Consumer Product Safety Commission v. GTE Sylvania, Inc. (CPSC), 447 U.S.
102 (1980), a case in which the Supreme Court held that a provision of the Consumer Product Safety
Act (“CPSA”) fell within the scope of Exemption 3. (See Def.’s Mem. at 21 (citing CPSC, 447 U.S. at
107–08, 122).) A unanimous Court affirmed the Third Circuit’s conclusion that the disclosure
restriction applied not only to the Commission’s “affirmative disclosure[s]” but also to FOIA requests,
see id. at 109 n.4; id. at 107 (quoting GTE Sylvania, Inc. v. Consumer Prod. Safety Comm’n, 598 F.2d
790, 811 (3d Cir. 1979)); however, just as with FIFRA, the language and structure of the CPSA was
markedly different than that of ADUFA. The CPSA (at that time) required the agency to take certain
steps “prior to its public disclosure” of any information obtained under the Act, 15 U.S.C. § 2055(b)(1)
(1980), and neither the text nor structure of the Act limited that mandate to circumstances in which the
agency made affirmative disclosures (such as press releases or news conferences). Thus, CPSC is
distinguishable from this case insofar as ADUFA contains textual and structural indicators of
congressional intent to cabin the statute’s disclosure restrictions to the Secretary’s mandatory reports.
22
U.S.C. § 30167(b). The TREAD Act requires car manufacturers to report to NHTSA
certain data that may assist in the early identification of motor vehicle safety defects,
see id. § 30166(m)(3)(B); 49 C.F.R. §§ 579.5, 579.21–.26, but the Act also provides
that “[n]one of the information collected . . . shall be disclosed pursuant to
section 30167(b) unless the Secretary” makes a particular determination about its
usefulness, id. § 30166(m)(4)(C) (emphasis added). Thus, the TREAD Act disclosure
restriction expressly references the Safety Act’s affirmative reporting requirement, and
as a result, the D.C. Circuit concluded that the restriction impacted only disclosures
made “pursuant to section 30167(b)[.]” Rubber Mfrs. Ass’n, 533 F.3d at 820.
Accordingly, the Circuit held that the TREAD Act merely “exempts [early warning
reporting data] from disclosure under § 30167(b)” and thus does not “specifically
exempt certain matters from disclosure” in a manner that makes it a withholding statute
for Exemption 3 purposes. Id. at 815 (internal quotation marks and citation omitted).
Although the explicit cross-reference between the disclosure restriction and the
affirmative reporting requirement makes the TREAD Act somewhat clearer than
ADUFA, the logic of Rubber Manufacturers Ass’n compels the conclusion that ADUFA
is, likewise, not a withholding statute. This is because, as explained above, the text and
structure of ADUFA plainly indicate that the restrictions of 21 U.S.C.
§§ 360b(l)(3)(E)(i) and (E)(ii) are limited to the disclosures required by
§ 360b(l)(3)(E); consequently, the statute at issue here must not be read to “specifically
exempt certain matters from disclosure,” as Exemption 3 requires.
Finally, this Court rejects the FDA’s suggestion that the legislative history of
Section 105 of ADUFA demands a different result. (See Def.’s Mem. at 21–22.) The
23
agency points to a statement in the House Report that says: “It is the intention of this
Committee that the information reported under this section be available only to
representatives of Federal agencies.” Animal Drug User Fee Program-Revision and
Extension, H.R. Rep. 110-804, at 15 (2008), reprinted in 2008 U.S.C.C.A.N. at 1295.
However, although federal courts sometimes look to legislative history in the
Exemption 3 context (at least to “support [their] textual conclusions”), Rubber Mfrs.
Ass’n, 533 F.3d at 818 n.4, it is not entirely clear that legislative history should be
consulted where, as here, that statute’s language is “plain on its face,” id. at 818; see
also id. (noting that, in such circumstances, “courts do not ordinarily resort to
legislative history” and explaining that the D.C. Circuit “has long disfavored the use of
legislative history to determine whether a statute qualifies as a withholding statute
under Exemption 3” (internal quotation marks and citation omitted)); Nat’l Ass’n of
Home Builders v. Norton, 309 F.3d 26, 38 (D.C. Cir. 2002) (“We must find a
congressional purpose [to] exempt matters from disclosure in the actual words of the
statute . . . not in the legislative history of the claimed withholding statute[.]” (quoting
Reporters Comm., 816 F.2d at 735) (internal quotation marks omitted)).
Moreover, and in any event, just as in Rubber Manufacturers Ass’n, “there is no
text to which such support [i.e., the legislative history] may be attached in this case[,]”
533 F.3d at 818 n.4, because the enacted text of ADUFA does not contain any express
restriction on who may ultimately access the information collected under the statute.
And the FDA’s suggestion that Congress implicitly intended for Section 105 of ADUFA
to be read in conjunction with Exemption 3 to prohibit disclosure of the referenced
information to members of the public in the FOIA context, as a means of shielding
24
antimicrobial drug sponsors from “the harmful effects of public disclosure of their
individualized information” (Def.’s Mem. at 21), appears to be overblown, all things
considered. Congress has provided protection for national security and confidential
business information—the same categories safeguarded by § 360b(l)(3)(E)(ii)—via
FOIA Exemptions 1 and 4. See 5 U.S.C. § 552(b)(1); id. § 552(b)(4). Thus, the
agency’s insistence that Exemption 3 must be invoked to do the work of protecting
confidential antimicrobial data (otherwise, the sponsors are doomed) is unpersuasive.
In the final analysis, then, this Court disagrees with the agency’s assertions
regarding the nature of Section 105 of ADUFA, and it concludes that that statute is not
a withholding statute for Exemption 3 purposes. Consequently, the Court “do[es] not
need to consider whether the statute meets the additional conditions of 5 U.S.C.
§ 552(b)(3)(A) or (B),” Rubber Mfrs. Ass’n, 533 F.3d at 815, nor must it address
whether the FDA has read § 360b(l)(E) too broadly in withholding on Exemption 3
grounds the particular information it redacted from Document 2. (See Pl.’s Mem. at
20–25.)
B. No Party Is Entitled To Summary Judgment At This Time
Although the FDA cannot base the redactions at issue in this case on FOIA
Exemption 3 for the reasons explained above, the agency also seeks to justify its
withholdings on the basis of FOIA Exemption 4, which allows 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). Everyone agrees that this case does
not involve trade secrets, and that the information redacted from Document 2 is
commercial and obtained from a person. Thus, the sole dispute regarding the agency’s
invocation of Exemption 4 is whether the withheld information is “privileged or
25
confidential.” (See Pl.’s Mem. at 25–27; Def.’s Mem. at 27 & n.18; AHI’s Mem. at 27.)
In this regard, the parties also agree that the governing standard for confidentiality in
this circumstance is whether disclosure is “likely to cause . . . substantial harm to the
competitive position of the person from whom the information was obtained,” Nat’l
Parks I, 498 F.3d at 770; (see Pl.’s Mem. at 26; Def.’s Mem. at 29; AHI’s Mem. at 27–
29), and that to clear this hurdle, the government must prove that the people who
submitted the information to the government “(1) actually face competition, and [that]
(2) substantial competitive injury would likely result from disclosure,” Niagara
Mohawk, 169 F.3d at 18 (quoting Nat’l Parks II, 547 F.2d. at 679) (internal quotation
marks omitted); (see Pl.’s Mem. at 27; Def.’s Mem. at 29; AHI’s Mem. at 28).
But, unfortunately, the parties’ agreement ends there. The FDA and Defendant-
Intervenor AHI assert that there are myriad ways that the sponsors of antimicrobial
animal drugs face competition and would be harmed by the disclosure of the
information that the agency has redacted from Document 2, and they have provided a
bevy of affidavits to this effect from industry members and experts. (See Def.’s Mem.
at 29–44; AHI’s Mem. at 29–45.) GAP retorts that these arguments are all speculative,
and it provides its own experts’ affidavits to support this contention. (See Pl.’s Mem. at
27–40.) This Court has carefully considered each side’s arguments and evidence, and it
concludes that, although Defendants have carried their burden of showing that
antimicrobial animal drug sponsors face actual competition, there is a genuine dispute
of material fact regarding whether or not the drug sponsors whose information is
reflected in Document 2 would be likely to face substantial competitive injury as a
26
result of the government’s disclosure of the redacted data. Therefore, summary
judgment cannot be granted in favor of any party.
1. Defendants Have Demonstrated That There Is Actual Competition In
The Antimicrobial Animal Drug Market
With respect to the requirement of actual competition, the FDA and AHI have
provided various affidavits attesting to the fact that the antimicrobial animal drug
market “is very competitive and highly price sensitive” (Def.’s Mem. at 30), and that
competition exists “both among the different classes of antimicrobial drugs and among
drugs with different routes of administration” (Def.’s Reply in Supp. of Def.’s Mot.,
ECF No. 44, at 19). For example, Dr. Thomas Elam, the president of FarmEcon LLC,
which is an agricultural and food industry consulting firm, avers that “[t]he market for
animal drugs containing an antimicrobial active ingredient for use in food-producing
animals is highly competitive[,]” and lists 27 different competing companies. (Decl. of
Thomas Elam (“Elam Decl.”), Ex. C to Def.’s Mot., ECF No. 35-1, 1–20, ¶ 15.) Dr.
Elam also states that “[t]hese drug products compete head-to-head across routes of
administration . . . and across drug classes[,]” explaining that different drugs across
different classes and routes of administration can be in competition because they are
used to treat the same conditions (e.g., pig diarrhea). (Id. ¶ 16; see also AHI’s Mem. at
31 (“In other words, although certain animal health companies may only sell products
using certain classes of antimicrobial active ingredients, two companies with products
in entirely different classes can still compete against one another, as their two different
products (using different active ingredients) may be indicated to treat the same
ailment.”).)
27
Dr. Elam further explains that the customer base for these products is highly
concentrated, leading to intense price competition. (See id. ¶ 19 (“[A]ntimicrobial drug
manufacturers compete fiercely for the business of a few large distributors and
customers.”).) And many of the other affidavits Defendants have submitted corroborate
Dr. Elam’s general conclusions. (See, e.g., Decl. of Neal Bataller, Ex. B to Def.’s Mot.,
ECF No. 32-2, ¶¶ 10 (“Because different animal products may be used to treat the same
disease or condition, competition exists among the different classes of antimicrobial
drugs and among different routes of administration,”); id. ¶¶ 11–16; Decl. of Jeet
Uppal, Ex. D to Def.’s Mot., ECF No. 35-1, 21–31, ¶ 18 (“Animal drug manufacturers
compete against companies producing drugs in the same route of administration and
class of antimicrobial drugs as well as companies producing drugs in other classes and
routes of administration. Companies compete across routes of administration and
classes in part because drugs in different classes can be indicated for the same disease
in the same animal.”); Decl. of Scott Bormann, Ex. F to Def.’s Mot., ECF No. 35-1, 46–
57, ¶ 12 (“The market for animal drugs containing an antimicrobial active ingredient for
use in food-producing animals is highly competitive. . . . The products listed in
Document 1 and revised Document 2 compete head-to-head across routes of
administration and antimicrobial classes. Thus Merck [Animal Health] competes
directly with both manufacturers of products in the same class as Merck and in other
classes.”); Decl. of Cathy Martin, Ex. G to Def.’s Mot., ECF No. 35-1, 58–65, ¶ 11
(“Elanco competes with many animal health companies, and there is heavy competition
across classes of antimicrobial drugs. . . . The [animal health business] competitors
have annual revenues of one (1) to almost five (5) billion dollars, and the competition is
28
vigorous . . . Many hundreds of millions of dollars are spent annually on research and
development . . . to win market share.”).) 6
GAP offers no evidence to rebut the Defendants’ contention that the
antimicrobial animal drug market is competitive; and, indeed, GAP’s expert witness,
Dr. Michael J. Blackwell, admits in his declaration that “there is considerable overlap
in the purposes for which these drugs are used in practice, even among drugs in
different classes and routes of administration[]” (Decl. of Michael J. Blackwell, Ex. 1 to
Pl.’s Mot., ECF No. 41-2, ¶ 22), which is a statement that strongly implies that actual
competition between various drug sponsors exists. GAP’s only response to the
evidence of competition that the FDA and AHI have offered is to argue that the dozens
of statements these parties have presented are “conclusory” (Pl.’s Mem. at 28) and do
not contain “specific examples of drugs that face actual competition” (Pl.’s Reply in
Supp. of Pl.’s Mot., ECF No. 49, at 12).
This Court disagrees. It is hard to imagine what more information the FDA and
AHI could have provided to demonstrate that antimicrobial animal drug sponsors face
actual competition: their many affidavits are comprehensive, and contain far more than
the mere ipse dixit that the market is competitive. The affiants name specific
competitors, explain the structure of the market, and/or provide specific examples of
instances in which products across drug classes and routes of administration compete
because they address identical conditions. (See e.g., Elam Decl. ¶ 15; Bataller Decl.
6
(See also Decl. of Warren M. Harper, Ex. E to Def.’s Mot., ECF No. 35-1, 32–44, ¶¶ 15–16; Decl. of
Michael Mlodzik, Ex. H to Def.’s Mot., ECF No. 35-1, 66–74, ¶¶ 16–17; Suppl. Decl. of Kelly W.
Beers, Ex. I to Def.’s Mot., ECF No. 35-1, 75–79, ¶ 4; Decl. of Robert Solynas, Ex. J to Def.’s Mot.,
ECF No. 35-1, 80–85, ¶ 10; Decl. of S. Lee Whaley, Ex. K to Def.’s Mot., ECF No. 35-1, 86–89, ¶ 6;
Decl. of Douglas Rupp, Ex. L to Def.’s Mot., ECF No. 35-1, 90–93, ¶¶ 9–10.)
29
¶ 14; Bormann Decl. ¶ 12; Martin Decl. ¶ 11; Mlodzik Decl. ¶ 17; Rupp. Decl. ¶ 9.)
Thus, Defendants have thoroughly “list[ed] the number of competitors in the . . .
industry and describe[d] the nature of the competition.” People for Ethical Treatment
of Animals v. U.S. Dep’t of Agric., No. 03-195, 2005 WL 1241141, at *6 (D.D.C. May
24, 2005). What is more, GAP “has not offered [its own] evidence to contradict
[Defendants’] testimony.” Id. 7
Consequently, this Court concludes that Defendants have provided sufficient
evidence to demonstrate actual competition. See id. (finding actual competition in the
puppy distribution industry where an industry member’s affidavit described “the
number of competitors in the . . . industry and . . . the nature of the competition,” and
was “based on . . . thirteen years of experience in the . . . industry”); see also In Def. of
Animals v. U.S. Dep’t of Agric., 656 F. Supp. 2d 68, 80 (D.D.C. 2009) (finding actual
competition in the human pharmaceutical industry because, like in the antimicrobial
animal drug industry, there exists a race “to be the first to get a particular type of drug
to market[]”).
7
Apparently, GAP believes that the most fruitful way to rebut its opponents’ testimony is to seek to
have some of it stricken on the ground that particular statements within the affidavits are “conclusory,
lack foundation, lack personal knowledge, and/or state a legal conclusion[.]” (Pl.’s Mem. at 37–40.)
GAP’s effort is unavailing, in part because it has moved to strike all of the identified statements
without attempting to articulate the specific flaws with each; moreover, the myriad problems to which
GAP alludes are not apparent on the face of the affidavits: most of the statements are made by
independent experts or industry participants who are providing their informed opinions on the
antimicrobial animal drug market and how competitors in that market might use 2009 sales volume
data. (See id. at 38–39.) In any event, motions to strike are generally disfavored, see Canady v. Erbe
Elektromedizin GmbH, 384 F. Supp. 2d 176, 180 (D.D.C. 2005), and GAP’s conclusory allegations are
insufficient to carry its “heavy burden” of showing that each of the statements was not based on
personal knowledge, did not set forth facts that would be admissible in evidence, or was made by an
affiant who is not competent to testify to the matters stated therein, id. (citing Fed. R. Civ. P. 56(e)).
30
2. A Genuine Dispute Of Material Fact Exists As To Whether
Disclosure Of The Withheld Information Would Cause Substantial
Competitive Injury
In addition to establishing actual competition, the FDA must also show that
disclosure of the withheld sales and distribution data would cause substantial
competitive injury to the drug sponsors who submitted the data, if it plans to rely on
Exemption 4 to justify the challenged withholdings. To this end, the FDA and AHI
assert that release of the data that have been redacted from Document 2 would permit
competitors to determine the volume of specific antimicrobial medications that certain
sponsors sold in 2009 in a manner that would be harmful those sponsors. (See AHI’s
Mem. at 32.) And they maintain that their legion of affiants have provided testimony
that establishes the potential competitive injury in at least four respects.
For one thing, according to the FDA and AHI, the data would reveal to
competitors a sponsor’s market share with respect to particular products, thereby
exposing which products are worthwhile to target for competition. (See Def.’s Mem. at
31–33; AHI’s Mem. at 33.) Many of Defendants’ affidavits support this claim. (See,
e.g., Elam Decl. ¶ 21 (“Because the animal drug market is highly competitive and drug
manufacturers’ profitability is driven primarily by their ability to capture market share
(rather than by intellectual property rights), accurate data regarding the sales of, and
demand for, certain products manufactured by competitors is highly valuable and could
be used by a manufacturer to capture business from a competitor, thereby reducing its
sales and profitability.”); Uppal Decl. ¶ 19 (“Competitors that possess reliable estimates
of the sales volume of Zoetis’ drugs are likely to use that information in determining
whether to enter a particular market segment. Competitors will be incentivized to bring
new products to market to capture market share from Zoetis where the data reveals a
31
relatively high volume of sales for a Zoetis product.”); Harper Decl. ¶ 16 (“Phibro’s
competitors seek to determine whether there are market segments into which they could
profitably introduce new generic drugs or market segments from which they should
withdraw (shifting their resources to other market segments) based on their assessment
of market trends.”).)
Second, the FDA and the AHI contend that the data would reveal to competitors
which markets are ripe for re-entry, allowing them to put back into circulation any
products that have been approved but that they are not currently distributing. (See
Def.’s Mem. at 33–34; AHI’s Mem. at 36–37.) In other words, a competitor could use
the data to determine if there is high demand in a market segment for which it already
has an approved product, and, if so, put that product back into circulation to capture
market share. Again, the affiants affirm this possibility. (See Bataller Decl. ¶ 16
(“[M]any drugs . . . are the subject of approved [new animal drug applications] but . . .
are not currently being marketed. . . . [M]any competitors with approved [applications]
can decide to actively market again and provide additional competition.”); Elam Decl.
¶ 31 (“[C]ompetitors [who] already hold an approved application for products that are
not currently marketed . . . could use the information regarding market segment
profitability to decide to market those dormant products, thereby capturing market share
from, and causing financial harm to, companies that already sell products in those
market segments.”); see also Bormann Decl. ¶ 12; Martin Decl. ¶ 15; Mlodzik Decl.
¶ 20.) A particularly harmful reentry circumstance could arise if the data reveal that a
sponsor has made a significant investment in discovering and funding the production
line for a profitable sub-market; its competitors could be emboldened to free ride off
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that investment by contacting a third-party manufacturer to initiate production on the
same line, thus swooping into the newly revealed sub-market. (See Def.’s Mem. at 33–
34; Mlodzik Decl. ¶ 23; see also Def.’s Mem. at 31–33 (arguing that a competitor may
also decide to enter a revealed sub-market with a new product); AHI’s Mem. at 34–36;
Elam Decl. ¶ 30; Uppal Decl. ¶ 19.)
Third, the FDA also argues that the release of this data could eliminate the need
for competitors to perform market research for certain products, thereby conferring an
unearned advantage on those sponsors who do not pay for market intelligence reports
and predictive models. (See Def.’s Mem. at 35.) For example, Dr. Elam attests that
animal drug manufacturers undertake “considerable efforts, at substantial cost . . . to
obtain . . . market information by, for example, purchasing market intelligence reports
prepared by third party vendors[.]” (Elam Decl. ¶ 38; see Uppal Decl. ¶ 26.) But these
third-party reports are mere estimates, and their value pales in comparison to that of the
precise and accurate information in Document 2. (See Elam Decl. ¶ 39; Harper Decl.
¶ 26.) Thus, industry members report that the release of that data would “allow[] [their]
competitors to make more accurate projections and trending analyses . . . all at lower
cost[,]” thereby conferring “a very real competitive advantage” on those industry
participants who did not pay for market evaluations or whose data would not be
disclosed. (Beers Decl. ¶ 6; see Martin Decl. ¶ 20.)
Finally, Defendants and affiants contend that the disclosed data would allow
competitors to estimate a slew of sensitive information about their rivals more
accurately, which would allow them to better poach market share and cause substantial
competitive injury to sponsors who submitted data to the FDA. This sensitive
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information includes a company’s production and manufacturing capacity. (See Def.’s
Mem. at 35–36; Bormann Decl. ¶ 17 (“A competitor could use the Redacted Information
to determine Merck’s baseline production capacity” and “harm Merck competitively.
For example, if a competitor determined that Merck was operating at its maximum
capacity and could not fulfill any additional demand in the market, the competitor could
use that information in determining whether to enter that market segment and compete
with Merck.”); Whaley Decl. ¶ 7.) The costs other sponsors face and their price
sensitivity are also sensitive matters that the affiants say the data might reveal. (See
Def.’s Mem. 37–38; Harper Decl. ¶ 23 (“Because volume and costs are often
interrelated . . . a sponsor’s ability to reduce the price for a given product depends on
the volume of the product that it sells. Knowing the sales volume for Phibro’s products
would provide a competitor with insight into Phibro’s price sensitivity and as to how
Phibro may respond to price changes by a competitor.”).) The FDA, AHI, and the
affiants maintain that the data could also disclose the current sales volume of particular
products (see AHI’s Mem. at 41–45); the identities of sponsors’ customers (see id. at
41); and the revenue and profit generated by specific products (see AHI’s Mem. at 35;
Beers Decl. ¶ 5 (“A competitor’s ability to undercut another sponsor’s prices depends
on more than knowledge of publicly available prices. The amount of potential revenue
gain cannot be estimated based on price alone. The competitor would also need to
know estimate sales distribution to accurately estimate revenue. This is exactly the
information that Huvepharma considers . . . confidential and that is redacted in
Document 2.”).
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For its part, GAP insists that none of the litany of harms that the FDA and AHI
highlight is a realistic possibility because the data at issue are from 2009—seven years
ago—and thus is far too stale to pose a substantial risk to drug sponsors today. (See
Pl.’s Mem. at 29–32.) Indeed, according to at least one of GAP’s expert witnesses,
there have been many changes in market conditions since 2009 (see Decl. of Richard A.
Levins, Ex. 6 to Pl.’s Mot., ECF No. 41-7, ¶ 9), and such changes “would be difficult to
incorporate into a forecasting model,” which makes it “difficult to see how 2009 sales
data would be useful in validating a model in 2015 and subsequent years” (id. ¶ 10).
And to underscore this point, GAP cites to a table from the 2012 Summary Report on
Antimicrobials Sold or Distributed for Use in Food-Producing Animals, which indicates
significant variation in the total amounts of certain active ingredients sold or distributed
between 2009 and 2012. (See Pl.’s Mem. at 31 (citing 2012 Summary Report, Ex. 4 to
Pl.’s Mot., ECF No. 41-5 at 39 tbl.9).)
GAP further contends that it is unlikely, if not impossible, to develop any
reliable contemporary market analysis from a single year of data. (See id. at 32; see
also Levins Decl. ¶ 7 (“It is clear enough that a single observation, or even multiple
observations from a single point in time . . . cannot be useful in any type of forecasting
model. . . . As I understand that only data from 2009 are disputed in this lawsuit, and
that same data for other years are not publicly available, there is no way to develop a
model or trend based solely on the 2009 data.”).) And it has offered a declaration in
which an expert avers that sales volume alone does not reveal production capacity or
production cost (see Decl. of John E. Ikerd, Ex. 5 to Pl.’s Mot., ECF No. 41-6, ¶ 19
(stating that “it would be naïve to assume that a drug’s annual sales, which is largely a
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function of consumer demand for the drug, is identical to the manufacturer’s production
capacity”), and that those factors have likely changed significantly as drug sales have
fluctuated during the past seven years (id. ¶ 20; see also Pl.’s Mem. at 33).
These competing arguments and evidence regarding the effect of the disclosure
of the redacted information in Document 2 create a genuine issue of fact that is material
to the question of whether disclosure would cause substantial competitive injury, and
that question must be resolved before this Court can determine whether the FDA is
entitled to invoke Exemption 4 to withhold the data at issue in this case. To be sure,
federal courts have recognized that the competitive injury that Exemption 4 is designed
to prevent can be significantly mitigated if the disclosed information is stale. See, e.g.,
Lee v. FDIC, 923 F. Supp. 451, 455 (S.D.N.Y. 1996) (finding that agency had failed to
carry its burden of demonstrating substantial competitive harm in party because “the
financial information in question is given for the 1994 year and any potential detriment
caused by its disclosure would seem likely to have mitigated with the passage of
time[]”). But assessing the likelihood of substantial competitive injury is a fact-
intensive inquiry, and information that is several years old is not necessarily harmless.
See, e.g., Braintree Elec. Light Dep’t v. U.S. Dep’t of Energy, 494 F. Supp. 287, 291
(D.D.C. 1980) (finding that data from 1973 and 1974 “retain[ed] its importance in the
1980 market” and was protected under Exemption 4); Zenith Radio Corp. v. Matsushita
Elec. Corp., 529 F. Supp. 866, 891–92 (E.D. Pa. 1981) (“While at first blush one might
doubt that harm could be caused by the disclosure of stale information, . . . old business
data may be extrapolated and interpreted to reveal a business’ current strategy,
strengths, and weaknesses. It would appear that, in the hands of an able and shrewd
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competitor, old data could indeed be used for competitive purposes.”). Furthermore,
here, the battle lines regarding the significance of the passage of time have been sharply
drawn: GAP and its experts maintain that revelation of the 2009 data will not injure
drug sponsors because the market has changed significantly since then (see Pl.’s Mem.
at 31), while Defendants and their experts contend that the 2009 data are still highly
relevant because the market has not changed dramatically (see Def.’s Mem. at 41;
AHI’s Mem. at 42–44; Elam Decl. ¶ 41; Bataller Decl. ¶ 18 (“[M]any animal drug
products have not experienced much of a change in sales and distribution volume or
market share over these past few years.”)), and also because competitors can couple the
2009 information with their internal predictive models to generate better estimates of
contemporary data and improve the accuracy of their models (see Def.’s Mem. at 41–
42; Uppal Decl. ¶ 16 (“With the combination of predictive analytics and an accurate
baseline dataset from 2009, an industry competitor . . . could generate more accurate
estimates of current sales for each class of drugs identified in Revised Document 2.”).
In short, both sides have presented credible arguments regarding a material
issue—i.e., whether disclosure of the redacted data likely will cause substantial
competitive injury to the sponsors who submitted the information—and both have
submitted evidence in support of their respective positions. Thus, this genuinely
disputed remaining question of fact precludes the granting of summary judgment with
respect to the Exemption 4 issue that is presented in this case. See, e.g., Washington
Post, 865 F.2d at 326 (holding, in the FOIA context, that there was “a genuinely
controverted factual issue in the case which is not ripe for disposition by summary
judgment” because “[t]o resolve this case the judge must pick and choose between
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competing experts’ affidavits as to the effect of disclosure”); Sears, Roebuck & Co.,
553 F.2d at 1382 (“Where there is a conflict in the affidavits as to what adverse
consequences will flow from the revelation of the facts contained in the documents
sought to be disclosed, then it appears that there is indeed a conflict regarding very
material facts which [precludes summary judgement].”); In Def. of Animals v. U.S.
Dep’t of Agr., 501 F. Supp. 2d 1, 7 (D.D.C. 2007) (finding that “direct contradictions”
among affiants “preclude[d] summary judgment” as to the applicability of
Exemption 4); Pub. Citizen Health Research Grp., 953 F. Supp. at 403 (holding that
because the parties had submitted conflicting affidavits regarding the potential
competitive harm stemming from disclosure, “summary judgment is presently an
inappropriate vehicle for the resolution of this matter”).
IV. CONCLUSION
The structure and text of Section 105 of ADUFA demonstrate that this statutory
provision is not a withholding statute for the purpose of FOIA Exemption 3 and,
therefore, the FDA cannot seek to justify the redactions from Document 2 on Exemption
3 grounds. Exemption 4 might well justify those same withholdings, but the parties
here have a genuine dispute of fact regarding the material issue of whether the
disclosure of the redacted information would be likely to cause substantial competitive
injury to the sponsors whose data are disclosed. Thus, as set forth in the accompanying
Order, no party has demonstrated that it is entitled to judgment as a matter of law.
DATE: August 26, 2016 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
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