Opinion ID: 3192861
Heading Depth: 2
Heading Rank: 2

Heading: Adequate Factual Basis

Text: As noted above, we first must determine whether the district court had an adequate factual basis to reach its decision. Lion Raisins, 354 F.3d at 1079. “In making this determination, we may 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.” Kowack v. U.S. Forest Serv., 766 F.3d 1130, 1132 (9th Cir. 2014) (internal quotation marks omitted). That threshold is met here. Several of the declarations by the FDA’s experts stated that the egg-production industry was “highly” or “extremely competitive.” One emphasized that “anything that changes costs by even a penny can make a huge difference.” According to the experts, the redacted information was likely to cause substantial competitive harm because the competitors of the egg producers in question could use the information to form accurate estimates of each farm’s or producer’s rate of production and use those estimates to underbid. For example, one declarant stated that, once a competitor knows the production rate at an egg farm, the competitor is able to “enter the farm’s regional market and offer to produce the same number of eggs per day for a lower price or a greater number of eggs per day for the same price and thereby lure away the farm’s customers.” As in Lion Raisins, 354 F.3d at 1079–80, the declarations in this case ALDF V. FDA 9 established an adequate factual basis. The declarations provided the district court with the identity of the information sought and the claimed exemption, and provided the necessary detail about the specific competitive harm that could arise from the release of the redacted information. See also Bowen v. FDA, 925 F.2d 1225, 1227–28 (9th Cir. 1991) (holding that government affidavits that described the documents withheld, the statutory exemptions claimed, and the specific reasons for the agency’s withholding provided an adequate factual basis for application of Exemption 4). C. Review of District Court’s Analysis for Clear Error We next must decide whether the district court clearly erred in determining that the redacted information fell within Exemption 4’s protection. “[The clear error] standard is significantly deferential, and we will accept the lower court’s findings of fact unless we are left with the definite and firm conviction that a mistake has been committed.” Lentini v. Cal. Ctr. for the Arts, 370 F.3d 837, 848–49 (9th Cir. 2004) (internal quotation marks omitted). “An agency seeking to withhold information under an exemption to FOIA has the burden of proving that the information falls under the claimed exemption.” GC Micro Corp., 33 F.3d at 1113. “While conclusory and generalized allegations of competitive harm are insufficient to show that requested information is ‘confidential,’” the government need not show that releasing the documents would cause “actual competitive harm.” Id. “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.” Lion Raisins, 354 F.3d at 1079. 10 ALDF V. FDA Plaintiff does not contest that there is actual competition in the egg-production market, and it also concedes that the redacted information could be used to estimate an egg farm’s production capacity. The parties disagree, however, as to whether releasing the redacted information would likely cause “substantial competitive harm” to the affected egg producers and farmers. Whether or not releasing the requested data would create a likelihood of substantial competitive harm was subject to dispute. But, on this record, the district court did not clearly err in finding that disclosure of the information was likely to cause commercial undercutting. The FDA provided declarations that explained how the information would facilitate accurate estimates of a farm’s egg-production capacities and how those estimates could facilitate undercutting. For example, one declarant explained that the egg-production industry has a “tight profit margin”; industry experts estimate that an average profit is approximately 6.7 cents per dozen eggs sold. If a national egg producer were able to determine the production rates of its smaller competitors, it could direct its resources toward that market; and if the national producer were able to offer lower prices, “even a penny can make a huge difference” in the local company’s ability to keep its customers. Although the information sought may not provide a national egg producer with every piece of information that it would consider before entering a new market, knowing the production capacity of potential competitors could make the decision of whether or not to enter a competitor’s market easier. By becoming aware of potential limitations in its competitors’ production capabilities, a national producer could decide to focus all its resources on egg markets in ALDF V. FDA 11 which it could out-produce local competitors—whether in terms of efficiency, price, or total quantity. See Lion Raisins, 354 F.3d at 1081 (holding that releasing information that allows a raisin farmer to “infer the volume of its competitors’ raisin sales” could facilitate undercutting and, therefore, create a likelihood of substantial competitive harm). Plaintiff submitted its own declarations, which asserted that the production information it seeks is insufficient to affect the market. Nevertheless, under our special standard of review for FOIA cases, and in view of the extensive FDA affidavits, we see no clear error. The incomplete data could allow egg producers to make more accurate—if imperfect—estimates of their competitors’ production capabilities and sales than they could without the redacted information. Due to the competitiveness of the eggproduction industry, where “even a penny can make a huge difference,” even a slight upgrade in the accuracy of projections might have a large effect on competition. Although the information may not afford egg producers their competitors’ exact profit-per-egg statistics, the FDA need only establish, as the district court correctly noted, “a likelihood of substantial competitive harm, not a certainty.”2 2 We are likewise unpersuaded by Plaintiff’s argument that the redacted information is already publicly available and, therefore, cannot be considered likely to cause substantial competitive harm. The sought-after data is more detailed and more specific than anything currently available in the public domain. For that reason, Plaintiff’s argument fails. See Wolf v. CIA, 473 F.3d 370, 378 (D.C. Cir. 2007) (“Prior disclosure of similar information does not suffice; instead, the specific information sought by the plaintiff must already be in the public domain by official disclosure.”); Fitzgibbon v. CIA, 911 F.2d 755, 765 (D.C. Cir. 1990) (“[T]he information requested must be as specific as the information previously released.”). 12 ALDF V. FDA D. Third-Party Discovery The district court did not abuse its discretion by denying third-party discovery. In response to a summary judgment motion, a non-moving party may obtain relief pursuant to Federal Rule of Civil Procedure 56(d) if it “shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition.” A party seeking further discovery must show that there is “some basis for believing that the information sought actually exists.” Blough v. Holland Realty, Inc., 574 F.3d 1084, 1091 n.5 (9th Cir. 2009) (internal quotation marks omitted). Further, a party seeking discovery must show that it lacks the “essential facts” to resist the summary judgment motion. Cal. Union Ins. Co. v. Am. Diversified Sav. Bank, 914 F.2d 1271, 1278 (9th Cir. 1990). Plaintiff here sought additional discovery to show that the sought-after information was already publicly available. The district court ruled that the evidence Plaintiff sought was not sufficiently similar to the information requested through discovery; Plaintiff’s request was grounded in speculation; and allowing discovery of “an individual farm’s egg production could improperly give Plaintiff information that it could not obtain through its FOIA request.” That ruling fell within the district court’s range of discretion. AFFIRMED. ALDF V. FDA 13