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NADLER v. FDIC

September 19, 1995

JERROLD NADLER, TRIBECA COMMUNITY ASSOCIATION, and 67 VESTRY STREET TENANTS ASSOCIATION, Plaintiffs, against FEDERAL DEPOSIT INSURANCE CORPORATION, Defendant.


The opinion of the court was delivered by: MICHAEL B. MUKASEY

 MICHAEL B. MUKASEY, U.S.D.J.

 Plaintiffs Congressman Jerrold Nadler, the Tribeca Community Association, and the 67 Vestry Street Tenants Association have sued for declaratory and injunctive relief under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552 (1994), seeking to compel defendant Federal Deposit Insurance Corporation ("FDIC") to disclose information withheld by the FDIC from its responses to plaintiffs' FOIA requests. Subject matter jurisdiction and venue are based on 5 U.S.C. § 552(a)(4)(B). Both parties have moved for summary judgment under Fed. R. Civ. P. 56. For the reasons set forth below, defendant's motion is granted, plaintiffs' cross-motion is denied, and the complaint is dismissed.

 I.

 The relevant facts are undisputed. The FDIC was appointed receiver for the failed American Savings Bank ("ASB") in June of 1992. (Compl. P 8) At the time of ASB's failure, its asset portfolio included the wholly-owned subsidiary Amore Holdings, Inc. ("Amore"). (Compl. P 9) Amore owns a parcel of land in lower Manhattan's Tribeca neighborhood that is the subject of a 1991 joint venture agreement (the "Agreement") entered into between Amore and Brewran West Associates ("Brewran"), the owner of an adjacent parcel of land. (Compl. PP 11, 13) Sixty-seven Vestry Street is the address of a neighboring apartment building. (Compl. P 11) These properties are located within Nadler's Eighth Congressional District. (Compl. P 11)

 Plaintiffs submitted a total of three FOIA requests to the FDIC between October and December of 1993 seeking disclosure of various documents including the Agreement. (Compl. PP 18-19) Plaintiffs previously learned from records held by the City of New York that Amore and Brewran intend to combine their land and construct a 21-story hotel on the site. (Compl. P 14) Plaintiffs, as well as some non-party community groups, fear that a hotel on the site would have an adverse impact on Tribeca's historic and architectural identity and would increase automobile traffic in the neighborhood and near the Holland Tunnel. (Compl. P 16)

 On March 24, 1994, the FDIC granted plaintiffs' FOIA requests in part and released a redacted copy of the Agreement. The deleted portions of the Agreement, the FDIC claimed, were not subject to disclosure because of 5 U.S.C. § 552(b)(4) ("Exemption Four"), which exempts from the requirements of the FOIA "trade secrets and commercial or financial information obtained from a person and privileged or confidential." (Compl. PP 20-22) Plaintiffs filed for administrative review under 5 U.S.C. § 552(a)(6)(A) in April and May of 1994. The FDIC issued final denials of plaintiffs' requests on May 12 and May 25, 1994, again on the authority of Exemption Four. (Compl. PP 31-32) Plaintiffs filed this action on September 12, 1994.

 II.

 Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Each party's motion here must be considered separately, with the evidence viewed in the light most favorable to the non-movant and "all justifiable inferences" drawn in favor of the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Here the essential facts are not disputed, so the case may be resolved as a matter of law; the decisive issue is the construction and application of Exemption Four.

 The FOIA "sets forth a policy of broad disclosure of Government documents in order 'to ensure an informed citizenry, vital to the functioning of a democratic society.'" Federal Bureau of Investigation v. Abramson, 456 U.S. 615, 621, 72 L. Ed. 2d 376, 102 S. Ct. 2054 (1982) (quoting National Labor Relations Bd. v. Robbins Tire & Rubber Co., 437 U.S. 214, 242, 57 L. Ed. 2d 159, 98 S. Ct. 2311 (1978)). Several exceptions to the rule of mandatory disclosure -- one of which is Exemption Four -- are recognized within the statute, but these exceptions are construed narrowly. Abramson, 456 U.S. at 630. The court conducts a de novo review of the applicability of Exemption Four, which the FDIC must prove by a preponderance of the evidence. 5 U.S.C. § 552(a)(4)(B). The FDIC can meet this obligation with an affidavit specifying the factual basis for the exemption. National Broadcasting Co. v. United States Small Business Admin., 836 F. Supp. 121, 124 n.3 (S.D.N.Y. 1993) (sworn declaration of company president justified FOIA exemption even though Court agreed with plaintiff that agency "should have provided more details regarding the likely harm").

 Exemption Four properly may be invoked only if three conditions are met. First, the requested information must be a trade secret or "commercial or financial information." 5 U.S.C. § 552(b)(4). This issue is not in dispute. Plaintiffs do not contend that the redacted information is non-commercial and have not challenged the FDIC's assertion that the information is commercial. (See Chancy Aff. P 17)

 Second, the statute requires that the requested information be "obtained from a person." This issue also is not in dispute. "Person" is defined broadly in 5 U.S.C. § 551(2) to include "an individual, partnership, corporation, association, or public or private organization other than an agency." The FDIC obtained the Agreement from Amore, a corporation, when the FDIC became receiver for ASB in June of 1992. (See Chancy Aff. PP 2, 5)

 Third, the requested information must be "privileged or confidential." 5 U.S.C. § 552(b)(4). This issue is at ...


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