FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SAMUEL R. WATKINS, 

Plaintiff-Appellant, No. 09-35996

v. D.C. No.  2:08-CV-01679-JLR UNITED STATES BUREAU OF CUSTOMS

AND BORDER PROTECTION, OPINION

Defendant-Appellees. 

Appeal from the United States District Court

for the Western District of Washington

James L. Robart, District Judge, Presiding

Argued and Submitted

July 13, 2010—Seattle, Washington

Filed May 6, 2011

Before: Pamela Ann Rymer and N. Randy Smith,

Circuit Judges, and Donald E. Walter, District Judge.*

Opinion by Judge Walter;

Partial Concurrence and Partial Dissent by Judge Rymer;

Partial Concurrence and Partial Dissent by

Judge N.R. Smith

*The Honorable Donald E. Walter, Senior United States District Judge

for the Western District of Louisiana, sitting by designation. 

6011
COUNSEL

Samuel R. Watkins, Fall City, Washington, proceeding pro se

as plaintiff-appellee. 

Kayla C. Stahman, Assistant United States Attorney, Western

District of Washington, for defendant-appellee United States

Bureau of Customs and Border Protection. 

OPINION

WALTER, District Judge:

Appellant, Samuel Watkins (“Watkins”), a copyright and

trademark attorney, appeals pro se the district court’s sum6014 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
mary judgment in favor of the United States Bureau of Customs and Border Protection (“CBP”) in his eight Freedom of

Information Act (“FOIA”), 5 U.S.C. § 552, requests for 19

C.F.R. § 133.21(c) Notices of Seizure of Infringing Merchandise (“Notices of Seizure” or “Notices”) from the Ports of San

Francisco, Miami, El Paso, Seattle, Newark/New York, Los

Angeles/Long Beach, and Boston. Watkins’s FOIA request to

the Port of Seattle sought “[a]ll notices to trademark owners

required to be made pursuant to 19 C.F.R. Section 133.21(c),

dated during the period January 1, 2005 through July 31,

2007, regarding merchandise seized at the Port of Seattle as

being counterfeit, as defined in 19 C.F.R. Section 133.21(a).”

Watkins made almost identical requests to the remaining six

ports identified above. 

According to Watkins, he did not receive any response or

acknowledgment of the FOIA requests he sent to the Ports of

San Francisco and Miami, as well as a second request to the

Port of Seattle. He further contends that the Port of El Paso

only informed him that his request had been sent to the FOIA

division in Washington D.C., without providing any further

information on the status of the request. The Ports of Newark/New York, Los Angeles/Long Beach, and Boston

demanded, as a prerequisite to responding to Watkins’s

request, that he make an advance payment to cover the processing fees for his FOIA request. The Ports required advance

processing fees ranged from $500 to almost $30,000. In order

to avoid paying what he deemed to be exorbitant processing

fees for his various FOIA requests, Watkins limited the

breadth of his FOIA requests to cover a shorter time-period.

Commercial importers provide the information revealed in

the Notices of Seizure to the Agency when they “make entry”

into the United States. “Making entry” consists of providing

information to the Agency, including the port of entry,

description of the merchandise, the quantity of merchandise,

and the name and address of both the exporter and the

importer. The Agency largely maintains the confidentiality of

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6015
this information because it is important that it receive accurate

information from importers. The Agency gives this information in the Notices of Seizure only to notify trademark owners

upon the seizure of goods bearing a counterfeit mark “that

infringe upon their trademark that has been recorded with [the

Agency].”

The Notices of Seizure include the following information:

(1) the date the merchandise was imported; (2) the port of

entry; (3) description of the merchandise; (4) quantity of the

merchandise; (5) country of origin of the merchandise; (6)

name and address of the exporter; (7) name and address of the

importer; and (8) the name and address of the manufacturer.

The eighth item of information is not always known to the

Agency and is therefore sometimes excluded from the Notice

of Seizure. In addition to the above information, the Notices

of Seizure also include the name of the individual responsible

for receiving the Notices on behalf of the trademark holder.

After considerable back and forth between Watkins and the

Ports, the Ports provided Watkins heavily redacted Notices of

Seizure sent during the relevant time periods, citing FOIA

exemptions 5 U.S.C. § 552(b)(2), (b)(4), (b)(6), and (b)(7)(A)

and (C).

The district court first addressed Watkins’s claim that the

Agency improperly relied on the DHS’s FOIA fee regulations

instead of its own in order to increase Watkins’s costs.

According to the court, upon becoming a component of DHS,

CBP needed DHS’s approval to maintain its previouslypromulgated FOIA regulations. Because CBP did not seek

DHS’s approval, DHS’s FOIA regulations properly governed

Watkins’s requests. The district court discounted the amendments CBP made to its FOIA fee regulations after becoming

a component as merely technical amendments, which were

not enough “evidence that the Agency reviewed its FOIA fee

schedule and affirmatively determined that they would remain

in the regulations.” 

6016 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
The district court next addressed the Agency’s redaction of

the Notices of Seizure pursuant to 5 U.S.C. § 552(b)(4), or

Exemption 4. First, the court found “that information redacted

in the Notices does constitute ‘confidential’ information.” The

court was persuaded that Notices of Seizure do not always

pertain to counterfeit goods, and it noted that the issuance of

a Notice does not by itself demonstrate the importer was (1)

liable for trademark infringement and (2) aware of the counterfeit nature of the goods. As a result, importers of goods

seized are not “unworthy of protection from competitive

harm.” Second, the court noted that although an agency ordinarily provides “affidavits from the submitters of the information objecting to disclosure, . . . the Ninth Circuit has carved

out exceptions in cases where the Agency submits a declaration from a declarant that is ‘very familiar’ with the industry

at issue.” The court concluded that this exception was met

because the Agency’s declarants had “extensive knowledge of

commercial enforcement and intellectual property affecting

the nation’s borders.” Third, the court found that the Agency’s release of the Notices to affected trademark holders did

not waive Exemption 4. The Agency was statutorily obligated

to provide such “limited disclosure[s] to interested thirdparties.” Fourth, the court found that the Agency “c[ame]

forth with more than adequate information detailing the various harms that could befall importers if the Notices of Seizure

were disclosed.” Consequently, the court granted the Agency’s Motion for Summary Judgment and its request for a Protective Order.

STANDARD OF REVIEW 

As we recently held in Electronic Frontier Foundation v.

Office of the Director of National Intelligence, ___ F.3d ___,

2010 WL 1407955 (9th Cir. Apr. 9, 2010), FOIA was enacted

to create a “judicially enforceable public right to secure” government documents. EPA v. Mink, 410 U.S. 73, 80, 93 S.Ct.

827, 35 L.Ed.2d 119 (1973); see also U.S. Dep’t of State v.

Ray, 502 U.S. 164, 173, 112 S.Ct. 541, 116 L.Ed.2d 526

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6017
(1991) (FOIA “was enacted to facilitate public access to Government documents.”). The statutory scheme provides public

access to government information “shielded unnecessarily”

from the public and establishes a “judicially enforceable public right to secure such information from possibly unwilling

official hands.” Dep’t of Air Force v. Rose, 425 U.S. 352,

361, 96 S.Ct. 1592, 48 L.Ed.2d 11 (1976) (internal quotation

marks omitted). FOIA’s purpose was thus to “ensure an

informed citizenry, vital to the functioning of a democratic

society, needed to check against corruption and to hold the

governors accountable to the governed.” John Doe Agency v.

John Doe Corp., 493 U.S. 146, 152, 110 S.Ct. 471, 107

L.Ed.2d 462 (1989) (internal quotation marks omitted).

“At the same time, FOIA contemplates that some information may legitimately be kept from the public.” Lahr v. NTSB,

569 F.3d 964, 973 (9th Cir. 2009). The statute contains nine

exemptions, pursuant to which the government can withhold

information otherwise available for disclosure. See 5 U.S.C.

§ 552(b)(1)-(9) (2006). “FOIA’s ‘strong presumption in favor

of disclosure’ means that an agency that invokes one of the

statutory exemptions to justify the withholding of any

requested documents or portions of documents bears the burden of demonstrating that the exemption properly applies to

the documents.” Lahr, 569 F.3d at 973 (quoting Ray, 502 U.S.

at 173). Because of its overarching goal of public disclosure,

FOIA “exemptions are to be interpreted narrowly.” Id.

On summary judgment, we employ a two-step standard of

review in FOIA cases. Lion Raisins Inc. v. U.S. Dep’t of

Agric., 354 F.3d 1072, 1078 (9th Cir. 2004). First, whether,

de novo, “an adequate factual basis exists to support the district court’s decisions.” Milner v. U.S. Dep’t of the Navy, 575

F.3d 959, 963 (9th Cir. 2009). If so, “ ‘then we review the district court’s conclusions of fact for clear error, while legal rulings, including its decision that a particular exemption

applies, are reviewed de novo.’ ” Id. (quoting Lane v. Dep’t

of Interior, 523 F.3d 1128, 1135 (9th Cir. 2008)). The burden

6018 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
rests on the government to justify its decision to exclude disclosures under FOIA. U.S. Dep’t of Justice v. Reporters

Comm. for Freedom of the Press, 489 U.S. 749, 755, 109

S.Ct. 1468, 103 L.Ed.2d 774 (1989).

A. FOIA Exemption Four

[1] The trade secret exemption to FOIA states, “[t]his section does not apply to matters that are (4) trade secrets and

commercial or financial information obtained from a person

and privileged and confidential.” 5 U.S.C. § 552(b). In order

to invoke Exemption 4 in the Ninth Circuit, the government

agency must demonstrate that the information it sought to

protect is “(1) commercial and financial information, (2)

obtained from a person or by the government, (3) that is privileged or confidential.” GC Micro Corp. v. Defense Logistics

Agency, 33 F.3d 1109, 1112 (9th Cir. 1994).

The terms “commercial or financial” are given their ordinary meanings. See Pub. Citizen Health Research Group v.

FDA, 704 F.2d 1280, 1290 (D.C. Cir. 1983). 

“To summarize, commercial or financial matter is ‘confidential’ for purposes of the exemption if disclosure of the

information is likely to have either of the following effects:

(1) to impair the Government’s ability to obtain necessary

information in the future; or (2) to cause substantial harm to

the competitive position of the person from whom the information was obtained.” G.C. Micro Corp., 33 F.3d at 1112

(adopting the standard from National Parks and Conservation

Ass’n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974)). The

only issue before this court is the second prong “substantial

harm.” 

[2] Information is “confidential” for the purposes of the

“trade secrets” exemption where disclosure of that information could cause “substantial harm to the competitive position

of the person from whom the information was obtained.” G.C.

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6019
Micro Corp., 33 F.3d at 1112-13 (9th Cir. 1994) (citing Nat’l

Parks & Conservation Ass’n v. Morton, 498 F.2d 765

(D.C.Cir. 1974)). The government need not show that releasing the documents would cause “actual competitive harm.” Id.

at 1113. Rather, the government need only show that there is

(1) actual competition in the relevant market, and (2) a likelihood of substantial competitive injury if the information were

released. Id.

“This Court must first determine whether the district court

had an adequate factual basis for its decision. Courts can rely

solely on government affidavits so long as the affiants are

knowledgeable about the information sought and the affidavits are detailed enough to allow the court to make an independent assessment of the government’s claim.” Lions Raisins

v. U.S. Dept. Of Agriculture, 354 F.3d 1072, 1079 (9th Cir.

2004) (citing Church of Scientology v. United States Dept of

the Army, 611 F.2d 738, 742 (9th Cir. 1979)) (“If the agency

supplies a reasonably detailed affidavit describing the document and facts sufficient to establish an exemption, then the

district court need look no further in determining whether an

exemption applies.”). See Bowen v. U.S. Food & Drug

Admin., 925 F.2d 1225, 1227 (9th Cir. 1991) (holding that

affidavits that described documents withheld, the statutory

exemptions claimed, and the specific reasons for the agency’s

withholding provided adequate factual basis for application of

“trade secrets” exemption). Lions Raisins, 354 F.3d at 1080.

If the district court had adequate factual basis for its decision then this court must decide whether the district court

clearly erred in determining that the Notices of Seizure fell

within the “trade secrets” exemption to FOIA.

Competitive harm analysis “is . . . limited to harm flowing

from the affirmative use of proprietary information by competitors. Competitive harm should not be taken to mean simply any injury to competitive position . . . .” Pub. Citizen

Health Research Group, 704 F.2d at 1291-92 & n. 30 (quota6020 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
tion omitted; emphasis in original). Although “the court need

not conduct a sophisticated economic analysis of the likely

effects of disclosure[,] . . . [c]onclusory and generalized allegations of substantial competitive harm . . . are unacceptable

and cannot support an agency’s decision to withhold

requested documents.” Id. at 1291 (internal citation omitted).

1.

[3] Watkins argues that the information contained in

Notices of Seizure cannot be commercial because it pertains

to “the unlawful importation of counterfeit goods, and not any

sort of legitimate commercial activity.” The district correctly

rejected this argument because Notices of Seizure are not

final determinations that goods seized are counterfeit. Instead,

the issuance of a Notice is akin to a finding of probable cause.

See generally United States v. 10,510 Packaged Computer

Towers, 152 F. Supp. 2d 1189 (N.D. Cal. 2001) (concluding

the government properly seized and forfeited merchandise

under 19 U.S.C. § 1526(e) because it had probable cause to

believe the merchandise was counterfeit). As the Agency’s

declarations demonstrate, an importer whose merchandise is

seized can challenge the seizure both administratively and in

court. Further, importers sometimes acquiesce in the Agency’s seizure and forfeiture of legitimate goods. As a result, we

cannot conclude that information contained in a Notice of Seizure is non-commercial just because it’s likely — perhaps

even very likely — that the merchandise seized is counterfeit.

[4] In short, the district court’s finding that the Notices

contain plainly commercial information, which discloses intimate aspects of an importers business such as supply chains

and fluctuations of demand for merchandise, is well supported.

2.

[5] The major area of dispute is whether or not the information contained in the Notices of Seizure is privileged or

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6021
confidential. Since the government conceded that importers

are mandated to provide the information to them (AR 93), the

only issue before the court is whether the disclosure would

cause substantial harm to the competitive position of the providers of the information.

To satisfy the harm element, the government needs to show

there is actual competition in the relevant market and a likelihood of substantial injury. 

We must ensure the district court had an adequate factual

basis for its ruling. As Lion Raisins demonstrates, a district

court can satisfy this burden with only affidavits from knowledgeable Agency personnel. In this instance, the Agency provided two affidavits from knowledgeable agency employees,

as well as declarations from major trade organizations representing a range of legitimate importers. 

[6] Despite Watkins’s arguments that the Agency did not

specify a relevant market, Watkins specified the relevant market by requesting all Notices of Seizure. Therefore, Watkins

established the relevant market as the entire market for

imported goods. There is no set test for determining actual

competition in a relevant market. We embrace a common

sense approach to this issue. The United States import market

exceeds $1 trillion annually. See U.S. Census Bureau U.S.

Bureau of Economic Analysis <http://www.census.gov/

foreigntrade/Press-Release/2009pr/final_revisions/09final.

pdf> (last visited July 20, 2010). This leaves little doubt that

there is actual competition. Recognizing “the law does not

require the [Agency] to engage in a sophisticated economic

analysis of the substantial competitive harm to [the importers]

that might result,” GC Micro Corp., 33 F.3d at 1115, the

Agency’s affidavits provide a sufficient factual basis for the

district court to conclude that the disclosure of the information in the Notices of Seizure poses a substantial likelihood of

competitive injury to importers of non-counterfeit goods who

zealously guard their supply chains. Combine this information

6022 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
with already public information and importers’ entire distribution network and demand trends could be revealed. See Gilda

Indus., Inc. v. U.S. Customs & Border Prot. Bureau, 457 F.

Supp. 2d. 6, 10-11 (D.D.C. 2006). The district court was not

clearly erroneous in its finding that the information was confidential and privileged. Exemption 4 applies to Notices of Seizure.

3.

[7] Although Exemption 4 applies to Notices of Seizure,

shielding them from public disclosure, CBP waived the confidentiality of the Notices by disclosing them to trademark

owners without any limits on further dissemination. The government “waives” protection under Exemption 4 when it

releases purportedly confidential information to the public.

See Herrick v. Garvey, 298 F.3d 1184, 1193 (10th Cir. 2002)

(“[W]hether ‘information is already in the public domain,’

i.e., waiver of an exemption, is a ‘proposition that if true

would give victory [to plaintiff] independent’ of whether

Exemption 4 properly applies.” (quoting Niagara Mohawk

Power Corp. v. United States Dep’t of Energy, 169 F.3d 16,

19 (D.C. Cir. 1999)); CNA Fin. Corp. v. Donovan, 830 F.2d

1132, 1154 (D.C. Cir. 1987) (“To the extent that any data

requested under FOIA are in the public domain, the [government] is unable to make any claim to confidentiality—a sine

qua non of Exemption 4.” (alteration added)). Indeed, the

“purpose of Exemption 4 is ‘to protect the confidentiality of

information which is obtained by the Government . . . but

which would customarily not be released to the public by the

person from whom it was obtained.’ ” Herrick , 298 F.3d at

1193 (citation omitted).

[8] Here, disclosure of the Notices of Seizure to an

aggrieved trademark owner is mandated by statute. 19 U.S.C.

§ 1526(e). When disclosure is made to a trademark owner, the

government imposes no restrictions on the owner’s use of the

information in the Notice. He can freely disseminate the

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6023
Notice to his attorneys, business affiliates, trade organizations, the importer’s competitors, or the media in a way that

would compromise the purportedly sensitive information

about an offending importer’s trade operations. This nostrings-attached disclosure thus voids any claim to confidentiality and constitutes a waiver of Exemption 4. FOIA accordingly creates an obligation for the government to disclose the

requested documents. 

While the “public domain” test articulated by the D.C. Circuit is one persuasive way of determining when the government has waived confidentiality under FOIA, see, e.g.,

Students Against Genocide v. Dep’t of State, 257 F.3d 828,

836 (D.C. Cir. 2001) (requiring information to be “preserved

in a permanent public record” to effectuate waiver), it should

not be the only test for government waiver. 

Most cases applying the public domain test have grappled

with requests for sensitive information involving high-level

criminal investigations or matters of national security. See id.

at 35-36 (seeking disclosure of classified CIA documents and

aerial photographs); Cottone v. Reno, 193 F.3d 550 (D.C. Cir.

1999) (seeking FBI wiretap recordings relating to a criminal

investigation of the Colombian and Sicilian Mafia); Fitzgibbon v. C.I.A., 911 F.2d 755 (D.C. Cir. 1990) (seeking disclosure of various CIA documents and the location of a certain

CIA station); Afshar v. Dep’t of State, 702 F.2d 1125 (D.C.

Cir. 1983) (seeking disclosure of CIA and FBI investigation

documents). In such cases, the presumption in favor of disclosure must yield to overriding concerns for public safety and

national security—concerns not relevant to the case at bar. 

Moreover, none of these cases presented a scenario in

which the government had already provided a no-stringsattached disclosure of the confidential information to a private

third party.1 In the closest case, Students Against Genocide,

1Even a case applying the public domain test to Exemption 4 concerned

publicly available SEC forms and a request for Federal Reserve docu6024 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
the government revealed certain classified photos documenting Bosnian Serb atrocities committed in 1995 to the U.N.

Security Council. 257 F.3d at 836. The photos were displayed

for Council members, but were neither distributed to nor

turned over to members’ possession for further analysis. Id. at

837. This careful procedure prevented Council members from

learning about the highly-classified technical capabilities of

U.S. reconnaissance systems (the basis for the government’s

exemption claim). Id. By contrast, an aggrieved trademark

owner (who receives a Notice of Seizure) can freely disseminate that information in ways that would compromise the purportedly sensitive information about an offending importer’s

trade operations. 

[9] Taken to its logical extreme, the “public domain” test

would still shield commercial information under Exemption 4

even if CBP or an aggrieved trademark owner opened up the

phonebook and faxed a copy of the seizure notice to every

importer in the region, provided the disclosures were not preserved in some public record. Therefore, it should make no

difference that the disclosure was not preserved in a “permanent public record” in this case. While the public domain test

will be persuasive in most cases, it does not reach the concerns of confidentiality in circumstances like those presented

in this case. Therefore, when an agency freely discloses to a

third party confidential information covered by a FOIA

exemption without limiting the third-party’s ability to further

disseminate the information then the agency waives the ability

to claim an exemption to a FOIA request for the disclosed

information. 

4.

Watkins’s argument that CBP could not assert a claim of

competitive harm without presenting affidavits from entities

ments on a bank merger application, see Inner City Press/Community on

the Move v. Board of Governors of the Federal Reserve System, 463 F.3d

239 (2d Cir. 2006), not a direct disclosure by an agency to a third party.

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6025
named in the Notices of Seizure is foreclosed by Lion Raisins.

See 354 F.3d at 1079. 

B. CBP FOIA Fee Calculations

The CBP’s FOIA fee decision is reviewed for arbitrariness

and capriciousness. Citizens to Preserve Overton Park, Inc. v.

Volpe sets out the standard of review for “arbitrary and capricious” and holds that the reviewing court “must consider

whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” 401 U.S. 402, 416, 91 S.Ct. 814, 823 (1971). The

Court further stated that the inquiry must “be searching and

careful,” but “the ultimate standard of review is a narrow

one.” Id.

CBP’s regulations that set out their FOIA fee schedule can

be found at 19 C.F.R. Part 103.10. According to that section,

“[i]n general, [t]he fees prescribed in this section are for

search and duplication and under no circumstances is there a

fee for determining whether an exemption can or should be

asserted, for deleting exempt matter being withheld from

records to be furnished, or for monitoring a requestor’s

inspection of records made available in this matter.” 19

C.F.R. § 103.10(a)(1). On the other hand, DHS’s fee regulations state a fee must be charged for “the examination of a

record located in response to a request in order to determine

whether any portion of it is exempt from disclosure.” 6 C.F.R.

§ 5.11(b)(7). In addition, DHS’s regulations allow for this fee

to be collected “before sending copies of requested records to

a requestor.” 6 C.F.R. § 5.11(a). 

According to 6 C.F.R. § 5.1(a)(2) these fees apply to all

components of DHS (which includes CBP). However, an

exemption to these fees exists, and it states:

[t]he provisions established by this subpart shall

apply to all Department components that are trans6026 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
ferred to the Department. Except to the extent a

Department component has adopted separate guidance under FOIA, the provisions of this subpart shall

apply to each component of the Department. Departmental components may issue their own guidance

under this subpart pursuant to approval by the

Department.

6 C.F.R. § 5.1(a)(2) (emphasis added).

[10] “It is a familiar rule of administrative law that an

agency must abide by its own regulations.” Fort Stewart

Schools v. Fed. Labor Relations Auth., 495 U.S. 641, 654

(1990) (citing Vitarelli v. Seaton, 359 U.S. 535, 547 (1959)).

The CBP stated in its reply brief, “the better and cleaner practice may have been to repeal the obsolete fee provisions . . .

,” but it failed to do so. (RB 44-45). The history of the CBP’s

fee regulations demonstrate that they have not been repealed.

They are in effect. The DHS exemption to its fee regulations

states “[e]xcept to the extent a Department component has

adopted separate guidance under FOIA” DHS’s fee regulations will control. 6 C.F.R. § 5.1(a)(2). CBP’s FOIA fee regulation was promulgated in 1981. (GB 18). Since that time,

including the incorporation of CBP into DHS, CBP has continued to keep these regulations active by amending them and

never repealing them. Regardless of the district court’s assertion that the revisions were merely technical (ER 12), they

were revisions that demonstrate that the fee regulations are

still valid. CBP’s website even directs individuals to 19

C.F.R. § 103, and not to DHS’s fee provisions, which are

located at 6 C.F.R. § 5.11. 

Until CBP repeals the FOIA fee provisions found at 19

C.F.R. § 103, they remain valid, and CBP must follow them.

[11] The district court’s ruling is affirmed as it regards

FOIA Exemption 4. However, the district court’s conclusion

as to the fees charged to Watkins is reversed. We remand for

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6027
the district court to determine the appropriate relief. The parties will bear their own costs. 

AFFIRMED IN PART, and REVERSED IN PART.

RYMER, Circuit Judge, concurring in part and dissenting in

part:

I part company only with respect to whether we should

adopt the “public domain” test for waiver embraced by the

D.C. Circuit and the Second Circuit. See Students Against

Genocide v. Dep’t of State, 257 F.3d 828, 836 (D.C. Cir.

2001); Cottone v. Reno, 193 F.3d 550, 554-55 (D.C. Cir.

1999); Fitzgibbon v. CIA, 911 F.2d 755,765-66 (D.C. Cir.

1990); Afshar v. Dep’t of State, 702 F.2d 1125, 1130-31 (D.C.

Cir. 1983); Inner City Press/Cmty. on the Move v. Bd. of Governors of Fed. Reserve Sys., 463 F.3d 239, 244 (2d Cir. 2006).

I think we should. Not only would adopting this test put us in

line with other circuits, but unlike the majority’s retreat from

the public domain test, it is a clear rule that can be applied

without guesswork. 

For the public domain doctrine to apply, the specific information sought must have already been “disclosed and preserved in a permanent public record.” Cottone, 193 F.3d at

554; see Davis v. U.S. Dep’t of Justice, 968 F.2d 1276, 1279-

80 (D.C. Cir. 1992). “[W]e must be confident that the information sought is truly public and that the requester receive no

more than what is publicly available before we find a waiver.”

Cottone, 193 F.3d at 555. In other words, the information

must be “freely available.” U.S. Dep’t of Justice v. Reporters

Comm. for Freedom of the Press, 489 U.S. 749, 764 (1989).

Although the agency is statutorily required to disclose

information contained in the Notices of Seizure to affected

trademark holders, this limited disclosure to interested third6028 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
parties is not otherwise in the “public domain” or “freely

available.” Thus, in my view, the CBP did not waive Exemption 4.

N.R. SMITH, Circuit Judge, concurring in part and dissenting

in part:

I respectfully dissent from Part A.2 of the majority opinion,

because the government has not borne its burden of showing

that the Notices of Seizure fall within the “trade secrets”

exemption, 5 U.S.C. § 552(b)(4) (“Exemption 4”). Otherwise,

I concur in the majority opinion.

I.

Although FOIA provides nine enumerated exemptions

allowing the government to withhold certain information from

the public, 5 U.S.C. § 552(b), there is a “ ‘strong presumption

in favor of disclosure,’ ” Lahr v. Nat’l Transp. Safety Bd., 569

F.3d 964, 973 (9th Cir. 2009) (quoting U.S. Dept. of State v.

Ray, 502 U.S. 164, 173 (1991)). Consistent with the presumption in favor of disclosure, we must construe the exemptions

narrowly. Id. (citation omitted). “An agency that invokes one

of the statutory exemptions to justify the withholding of any

requested documents or portions of documents bears the burden of demonstrating that the exemption properly applies to

the documents.” Id.; see U.S. Dep’t of Justice v. Reporters

Comm. for Freedom of the Press, 489 U.S. 749, 755 (1989).

Here, the parties dispute whether the commercial information in the Notices of Seizure is “confidential” within the

meaning of Exemption 4. The exemption “prevents disclosure

of (1) commercial and financial information, (2) obtained

from a person or by the government, (3) that is privileged or

confidential.”

1 G.C. Micro Corp. v. Def. Logistics Agency, 33

1The Act specifically provides: “(b) This section [requiring disclosure

of information] does not apply to matters that are– 

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6029
F.3d 1109, 1112 (9th Cir. 1994). “Confidential” material

means information whose disclosure is “likely to . . . cause

substantial harm to the competitive position of the person

from whom the information was obtained.” Id. Substantial

harm “should not be taken to mean simply any injury to competitive position . . . .” Pub. Citizen Health Research Group

v. F.D.A., 704 F.2d 1280, 1291 n.30 (D.C. Cir. 1983) (quotation marks and citation omitted). Instead, substantial harm is

determined by the “harm flowing from the affirmative use of

proprietary information by competitors.” Id. Although “the

court need not conduct a sophisticated economic analysis of

the likely effects of disclosure[,] . . . [c]onclusory and generalized allegations of substantial competitive harm . . . are unacceptable and cannot support an agency’s decision to withhold

requested documents.” Id. at 1291 (citations omitted); see

G.C. Micro Corp., 33 F.3d at 1115. The parties opposing disclosure need not show actual competitive harm, but must produce “evidence revealing (1) actual competition [in the

relevant market] and (2) a likelihood of substantial competitive injury . . . .” G.C. Micro Corp., 33 F.3d at 1113 (citation

omitted; alteration added). 

CBP failed to meet this burden. Even assuming CBP can

establish, a priori, that the markets for all products imported

into the United States are “actually competitive,” it did not

demonstrate in this record a likelihood of substantial competitive injury to importers whose products have been seized as

counterfeit. The Agency asserted in its affidavits to the district

court that disclosure of the Notices of Seizure would:

(1) “provide competitors, presumably other importers, with valuable insight into importers’ supply

. . . . 

(4) trade secrets and commercial or financial information

obtained from a person and privileged or confidential . . . .” 5

U.S.C. § 552(b)(4). 

6030 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
chains, patterns of importation and distribution,

assessments of customer demands and business relationships”; (2) be unfair to importers who “expend

considerable sums of money to locate and establish

business relationships with manufacturers and suppliers of merchandise in the overseas market place”

because “the importer could be cut out entirely of

various business transactions, as consignees or distributors seek to deal directly with the manufacturer,

without the importer’s participation”; and (3) “may

lead consumers to believe that the importer identified in the Notice does business in counterfeit

goods.”

A.

On de novo review, allegations (1) and (2) are meritless,

because they make only speculative and generalized statements about the potential consequences of disclosure. First,

the information in the Notices of Seizure provides questionable added utility to competitors. The Notices include: (1) the

date of importation; (2) the port of entry; (3) a description of

the merchandise; (4) the quantity involved; (5) the name and

address of the manufacturer; (6) the country of origin; (7) the

name and address of the exporter; and (8) the name and

address of the importer. See 19 C.F.R. § 133.21(c). The only

information in the Notice that has not already been publicly

disclosed in the carrier manifest is the name and address of

the importer’s manufacturer and exporter.2 Thus, assuming a

2Carriers must file manifests with the CBP (which are publicly disclosed) that provide descriptive details of their cargo, including: (1) the

name and address of the importer and the name and address of the shipper;

(2) the general character of the cargo; (3) the number of packages and

gross weight; (4) the name of the vessel; (5) the seaport of loading; (6) the

seaport of discharge; (7) the country of origin of the shipment; and (8) the

trademarks appearing on the goods or packages. See 19 U.S.C. § 1431(c).

Although carriers or importers can file for an exemption to the public disclosure requirements under 19 U.S.C. § 1431(c)(2), or apply for confidential treatment with CBP under § 1431(c)(1)(A), this was apparently not an

issue for any of the shipments in this case. 

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6031
competitor could actually discover “patterns of importation

and distribution and assessments of customer demands” from

a single Notice of Seizure, the Notice reveals little information that could not already be gleaned from public shipping

manifests. 

Further, CBP fails to explain how revealing an importer’s

supplier of illicit goods creates a “likelihood of substantial

competitive harm.” Notices of Seizure are issued only after

CBP officials discover and detain items with a “spurious

trademark that is identical to, or substantially indistinguishable from, a registered trademark.” 19 C.F.R. § 133.21(a)-(c);

see id. § 133.22(a). If an importer cannot obtain written permission from the trademark owner to import counterfeit articles during the detention period, the articles are forfeited, see

id. § 133.21(b), § 133.22(b)-(c), and the importer incurs substantial civil fines, see 19 U.S.C. § 1526(f).3

 The Agency also

makes samples of the counterfeit articles available to the

trademark owner “for examination, testing, or other use in

pursuit of a related private civil remedy for trademark

infringement.” Id. § 133.21(d). 

Thus, competitors have a significant incentive not to work

with manufacturers and other supply chain entities implicated

in a counterfeiting seizure. The last supply network a reputable importer would want to mirror is one involving manufacturers and exporters either suspected of or implicated in a

counterfeiting operation, because future shipments from those

entities will be subjected to additional scrutiny from the U.S.

government. The mere suspicion of counterfeiting risks costly

delays and legal entanglements that could jeopardize an

3The fine for “any person who directs, assists financially or otherwise,

or aids and abets the importation of [counterfeit] merchandise . . . that is

seized” may be up to “value that the merchandise would have had it if

were genuine, according to the manufacturer’s suggested retail price . . . .”

19 U.S.C. § 1526(f)(1)-(2). The fine for a second seizure may be up to

“twice the value that the merchandise would have had if it were genuine

. . . .” Id. § 1526(f)(3). 

6032 WATKINS v. U.S. BUREAU CUSTOMS & BORDER
importer’s reputation and future business with aggrieved clients. If manufacturers implicated in a Notice of Seizure are

indeed involved in counterfeiting—as most of them presumably are—developing a business relationship with them would

only invite investigations and set importers up for crushing

civil penalties and shipment forfeiture. The notion, then, that

competitors will rush to exploit information about manufacturers and exporters implicated in a Notice of Seizure is, at

best, doubtful. 

In the minority of cases where a shipment is seized by mistake, the situation is decidedly different. Disclosing the Notice

of Seizure could plausibly reveal valuable information about

an importer’s legitimate supply chain network. However,

here, the Agency failed to inform us if any of the Notices

requested by Watkins involved mistaken seizures. It simply

explained that “a seizure notice reflects only a suspicion that

the goods at issue are counterfeit.” This explanation ignores

the fact that seizure involves mandatory detention of the

goods, and the importer then bears the burden of proving the

goods are not illicit contraband at the risk of forfeiting the

shipment, incurring substantial fines, and subjecting itself to

civil counterfeiting liability to the rightful trademark owner.

As such, a Notice of Seizure represents much more than mere

“suspicion” of counterfeiting—it creates a rebuttable presumption of counterfeiting liability. 

Even if a case could be made for exempting from disclosure those Notices of Seizure that involve mistaken detainment, CBP did not identify which of the Notices would meet

such description. Indeed, the Agency’s affidavits and briefs

provide no details about the specific Notices requested by

Watkins, averring rather that because some of the Notices

might reveal trade secrets, all of the Notices should be

exempted from disclosure. Yet, as even the majority acknowledges, “generalized allegations of substantial competitive

harm . . . are unacceptable and cannot support an agency’s

decision to withhold requested documents.” Public Citizen,

WATKINS v. U.S. BUREAU CUSTOMS & BORDER 6033
704 F.2d at 1291 (emphasis added). Therefore, on de novo

review, the Agency failed to rebut the “strong presumption in

favor of disclosure,” see Lahr, 569 F.3d at 973, because its

allegations do not “demonstrat[e] that the exemption properly

applies to [all] the documents” requested by Watkins, id. (citing Ray, 502 U.S. at 173) (alteration added); see Public Citizen, 704 F.2d at 1291 n.30.

B.

Finally, allegation (3)—which complains that consumers

may be led “to believe that the importer identified in the

Notice does business in counterfeit goods”—does not address

a competitive injury cognizable under Exemption 4. It focuses

on the revelation of potentially embarrassing information to

consumers, not the revelation of proprietary information to

competitors. See 5 U.S.C. 552(b)(4); Pub. Citizen Health, 704

F.2d 1280, 1291 n.30 (“We emphasize that . . . competitive

harm in the FOIA context . . . [is] limited to harm flowing

from the affirmative use of proprietary information by competitors.’ ” (citation omitted)). 

6034 WATKINS v. U.S. BUREAU CUSTOMS & BORDER