Janine R. Menhennet, Esq.
Ott & Horowitz
700 North Central Avenue
8th Floor
Glendale, CA 91203
Re: Freedom of Information Act Appeal -
(Your letter dated November 15, 1995)
Dear Ms. Menhennet:
On September 1, 1995, Patrick Carey of your lawfirm filed a Freedom
of Information Act (FOIA) request with Daniel Murphy, NCUA Region
VI Director. The request was forwarded to NCUA's Central Office.
Richard Schulman, NCUA's FOIA Officer, responded to the request
on October 26, 1995. Mr. Schulman denied the request in full
pursuant to exemptions 2, 5, 6, 7(C), 7(D), and 8 of the FOIA.
The denial was also made pursuant to the "no disclosure
without consent" rule of the Privacy Act (12 USC 552a(b)).
We received your November 15 appeal on November 22, 1995. Your
appeal is granted in part and denied in part. Mr. Schulman's
October 26 denial is affirmed in part and reversed in part. Documents
are withheld pursuant to exemptions 5, 6, 7, and 8 of the FOIA
and redacted documents are enclosed as explained below.
Background
The request was for "all records in the possession of the
NCUA regarding any complaints or allegations regarding
, Federal Credit Union in Burbank, that
have been received between January 1, 1994 and the present"
(September 1, 1995). Included with your appeal was a Privacy
Act Request from for all such records. Documents responding
to the FOIA request include an NCUA routing slip (exemption 2),
internal memoranda, an internal report and a draft document (exemptions
5, 6, and 7), and a follow-up examination report (exemption 8).
Exemption 2
An NCUA routing slip was withheld pursuant to exemption 2 of the
FOIA, 5 USC 552(b)(2). Exemption 2 exempts from mandatory disclosure
records "related solely to internal personnel rules and practices
of an agency." The courts have interpreted exemption 2 to
encompass two distinct categories of information: trivial matters
referred to as "low 2" information; and more substantial
internal matters referred to as "high 2" information.
The routing slip was withheld under the low 2 interpretation
of the exemption. Low 2 information includes file numbers, mail
routing stamps and data processing notations. Although the routing
slip does include some low 2 information, we have decided to
use our discretionary authority and release it. Handwritten notes
on the route slip are withheld pursuant to exemption 5 (see
discussion below). A redacted copy of the route slip is enclosed.
Exemption 5
Exemption 5 of the FOIA protects "inter-agency or intra-agency memorandums or letters which would not be available by law to a party ... in litigation with the agency."
5 U.S.C. 552(b)(5). The documents withheld pursuant to exemption
5 include several internal memoranda, a draft letter which was
never sent and the handwritten notes on the route slip referred
to above. Except for the handwritten notes on the route slip,
portions of these exemption 5 documents are also exempt pursuant
to exemptions 6 and 7 of the FOIA (see discussion below).
Included within exemption 5 is information subject to the deliberative
process privilege. The purpose of this privilege is "to
prevent injury to the quality of agency decisions." NLRB
v. Sears, Roebuck & Co., 421 U.S. 132, 151 (1975). Three
policy purposes have been held to constitute the bases for the
deliberative process privilege: (1) to encourage open, frank
discussions on matters of policy between subordinates and superiors;
(2) to protect against premature disclosure of proposed policies
before they are finally adopted; and (3) to protect against public
confusion that might result from disclosure of reasons and rationales
that were not in fact ultimately the grounds for an agency's action.
Russell v. Department of the Air Force, 682 F.2d 1045
(D.C. Cir. 1982).
The courts have established two fundamental requirements for the
deliberative process privilege to be invoked. The information
must be predecisional and it must be deliberative. Mapother
v. Department of Justice, 3 F.3d 1533 (D. C. 1993). The handwritten
notes and most of the information contained in the memoranda are
withheld pursuant to the deliberative process privilege. The
draft letter continues to be withheld in full. Exemption 5 does
not always allow for entire documents to be withheld (factual
information that is not deliberative in nature must be disclosed,
see Mapother at 1538 - 40). Portions of the memorandum
dated July 24, 1994 are factual rather than deliberative. In
addition, some of the information concerns personally
(see discussion of exemption 6 below) and should be disclosed
to her. The exempt portions of this memorandum as well as those
portions that are not responsive to the FOIA request have been
redacted. A copy of the redacted memorandum is enclosed. The
other documents continue to be withheld pursuant to exemption
5 of the FOIA.
Exemption 6
Exemption 6 permits the government to withhold all information
about individuals in "personnel, medical and similar files"
where the disclosure of such information "would constitute
a clearly unwarranted invasion of personal privacy." 5 USC
552(b)(6). There is exemption 6 information concerning
as well as several other individuals in internal memoranda
as well as the follow-up examination report. All of the exemption
6 information is also withheld pursuant to exemption 7(C). Exemption
7(C) provides a broader privacy exemption (see discussion
below). Therefore, only a limited discussion of exemption 6
is provided. Application of exemption 6 requires a balancing
of the public's right to disclosure against the individual's right
to privacy. Department of the Air Force v. Rose, 425 U.S.
352, 372 (1976). According to the courts, the public interest
in the information is to "shed light on an agency's performance
of its statutory duties." Department of Justice v. Reporter
Committee for Freedom of the Press, 489 U.S. 749, 773 (1989).
The information on individuals other than is clearly
personal, it concerns employment, loans and other personal finances.
The public interest in this information is minimal. This information
continues to be withheld pursuant to exemption 6 (and exemption
7(C)).
Enclosed with your appeal was a Privacy Act Request signed by
for all information concerning her. The September
1, 1995 FOIA request did not identify as the requester.
We will consider as the requester for purposes of
this appeal. Generally, exemption 6 (and 7(C)) does not apply
to the individual about whom the requested information concerns.
Therefore, we are releasing a redacted copy of the memorandum
containing information concerning . This is the same
memorandum (dated July 24, 1994) that is partially released as
discussed under exemption 5 above.
Exemption 7
Exemptions 7(C) and (D) of the FOIA protect from disclosure "records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information ... (C) could reasonably be expected to constitute an unwarranted invasion of personal privacy... [or] could reasonably be expected to disclose the identity of a confidential source ..." 5 U.S.C. 552(b)(7).
The exemption 7 information requested is contained in internal
NCUA memoranda, a draft letter and a follow-up NCUA examination
report.
Courts have held that the "law" to be enforced includes
both civil and criminal statutes, as well as statutes authorizing
administrative (regulatory) proceedings. See Cappabianca
v. Commissioner, United States Customs Service, 847 F. Supp.
1558 (M.D. Fla. 1994) and Center for National Policy Review
on Race & Urban Issues v. Weinberger, 502 F.2d 370 (D.C.
Cir. 1974). NCUA has all three types of authority pursuant to
various provisions of the Federal Credit Union Act (see e.g.
Sections 120, 202, 205, & 206 of the Federal Credit Union
Act, 12 U.S.C. 1766, 1782, 1785 & 1786). The documents withheld
were part of NCUA's law enforcement function.
Exemption 7(C) protects privacy interests. Release of these documents
could constitute an unwarranted invasion of personal privacy.
As noted above, a privacy interest exists in the financial and
other personal records of individuals other than Courts have
held that in recognition of the strong privacy interests inherent
in law enforcement records, categorical withholding of information
that identifies third parties in law enforcement records will
be appropriate under exemption 7(C). SafeCard Services v.
SEC, 863 F.2d 96 (D.C. Cir. 1988). As discussed under exemption
6, personal information concerning is now released
because is the requester. It would not be released
to another requester.
Exemption 7(D) protects against disclosure of information pertaining
to confidential sources. No balancing of the public interest
is involved under exemption 7(D). See Jones v. FBI,
41 F.3d 238 (6th Cir. 1994). More than the name and address of
a confidential source may be withheld. Courts have held that
an agency may withhold any portion of a document that would reveal
the identity of the confidential source. Church of Scientology
v. IRS, 816 F. Supp. 1138 (W.D. Tex. 1993). Much of the information
found in the internal memoranda could be used by to
identify the source of the information. This information is therefore
withheld pursuant to exemption 7(D).
Exemption 8
Some of the information requested is found in an NCUA examination
follow-up report. Exemption 8 of the FOIA exempts information:
Contained in or related to examination, operating, or condition
reports prepared by, on behalf of, or for the use of an agency
responsible for the regulation or supervision of financial institutions.
5 U.S.C. 552(b)(8).
The courts have discerned two major purposes for exemption 8 from
its legislative history: 1) to protect the security of financial
institutions by withholding from the public reports that contain
frank evaluations of a bank's stability; and 2) to promote cooperation
and communication between employees and examiners. See
Atkinson v. FDIC, 1 GDS 80,034, at 80,102 (D.D.C. 1980).
Either purpose is sufficient reason to withhold examination information.
The NCUA regulation implementing exemption 8 of the FOIA is found
at 12 C.F.R. 792.3(a)(8). Sections 792.3(a)(8) repeats exemption
8 and states:
This includes all information, whether in formal or informal report
form, the disclosure of which would harm the financial security of
credit unions or would interfere with the relationship between
NCUA and credit unions.
Courts have interpreted exemption 8 broadly and have declined
to restrict its all- inclusive scope. Consumers Union of United
States, Inc. v. Heimann, 589 F.2d 531 (D.C. Cir. 1978). Examination
reports as well as matters that are related to such reports (the
findings of an examination and its follow-up and internal memoranda)
have been withheld from disclosure. (See Atkinson
at 80,102.) In addition, courts have generally not required agencies
to segregate and disclose portions of documents unrelated to the
financial condition of the institution. See Atkinson
at 80,103. It is appropriate to withhold entire documents pursuant
to this exemption.
We believe that the purposes of exemption 8 are met, therefore
information contained in the examination follow-up continues to
be withheld pursuant to exemption (8).
Privacy Act
Mr. Schulman's October 26 letter included the "no disclosure
without consent" rule of the Privacy Act as an additional
basis of denial of your FOIA request. The Privacy Act is only
triggered when information is found in a system of records, that
is "a group of any records under the control of any agency
from which information is retrieved by the name of the individual
or by some identifying number, symbol, or other identifying particular
assigned to the individual." 5 USC 552(a)(5). None of the
documents responding to the FOIA request are found within a system
of records. Therefore the Privacy Act is not triggered. We note
that the "no disclosure without consent" provision of
the Privacy Act is found at 5 USC 552a(b) rather than 5 USC 552(a)(2)
as cited in Mr. Schulman's letter.
Pursuant to 5 U.S.C. 552(a)(4)(B), you may seek judicial review of this determination by filing suit to enjoin NCUA from withholding the documents you requested and to order production of the documents. Such a suit may be filed in the United States District
Court in the district where you reside, where your principal place of business is located,
the District of Columbia, or where the documents are located (the
Eastern District of Virginia).
Sincerely,
Robert M. Fenner
General Counsel
Enclosures
GC/HMU:bhs
95-1132
SSIC 3212