Court Opinion

ID: 2666893
Source: CourtListenerOpinion
Date Created: 2014-04-04 12:48:01.163259+00
Date Added: 2024-06-11T13:02:43.742655
License: Public Domain

UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA
_____________________________
                               )
CITIZENS FOR RESPONSIBILITY    )
AND ETHICS IN WASHINGTON,      )
                               )
     Plaintiff,                )
                               )
     v.                        )    Civil Action No. 09-633 (RWR)
                               )
BOARD OF GOVERNORS OF THE      )
FEDERAL RESERVE SYSTEM,        )
                               )
     Defendant.                )
_____________________________ )

                        MEMORANDUM OPINION

     Plaintiff Citizens for Responsibility and Ethics in

Washington (“CREW”) filed a complaint under the Freedom of

Information Act, 5 U.S.C. § 552 (“FOIA”), alleging that the Board

of Governors of the Federal Reserve System (“the Board”)

wrongfully failed to produce any agency records that the

plaintiff requested.   The Board has moved under Federal Rule of

Civil Procedure 12(b)(6) to dismiss the complaint for failure to

state a claim.   Because CREW did not exhaust its administrative

remedies, the defendant’s motion to dismiss, treated in part as a

motion for summary judgment, will be granted.1

     1
       The complaint also alleged that the Board improperly
failed to respond to plaintiff’s request for expedited processing
of its FOIA request. The Board has moved to dismiss that claim
as moot. CREW acknowledges that the claim is now moot, and it
will be dismissed.
                               -2-

                           BACKGROUND

     On March 3, 2009, CREW submitted a FOIA request to the Board

seeking expedited disclosure of records identifying each

business, individual, or entity to which the Board had provided

loans or other financial assistance from March 2008 to the

present under Section 13 of the Federal Reserve Act, 12 U.S.C.

§ 343, or any other authority of the Board.    (Compl. ¶¶ 1-2, 24;

Def.’s Mem. in Supp. of Mot. to Dismiss (“Def.’s Mem.”) at 2.)

The Board sent a letter to CREW dated March 6, 2009 acknowledging

receipt of the request, though not informing CREW whether the

Board approved CREW’s request for expedited processing.    Crew

received the letter on March 9, 2009.    (Pl.’s Opp’n to Def.’s

Mot. to Dismiss (“Pl.’s Opp’n”) at 5.)    The Board alleges that

around the same time it acknowledged receiving the FOIA request,

the Board approved CREW’s requests to waive the fee associated

with FOIA requests and to expedite processing, but did not then

inform CREW of this decision, expecting that it could respond to

the request for expedition within the required ten calendar days

under 5 U.S.C. § 552(a)(6)(E)(ii)(I).    (Def.’s Mem. at 2, n. 1.)

CREW states that because it had not received a substantive

response to the document request by what it considered the 20th

business day, Tuesday, March 31, 2009, it filed the instant
                                -3-

action on Monday, April 6, 2009.2     However, the Board states that

on March 31, 2009, it notified CREW that it was going to extend

its period of response by ten days, as is allowed under 5 U.S.C.

§ 552(a)(6)(B)(i), because it needed to consult with another

agency and/or other components of the Board.     CREW acknowledges

that it received a letter from the Board informing CREW about the

ten-day extension, but CREW alleges that the letter was

postmarked Thursday, April 2, 2009.     (See Def.’s Mem. at 2-3;

Pl.’s Opp’n at 6-7.)   The Board mailed a letter substantively

responding to CREW on April 14, 2009, stating that the Board

would provide some of the requested information, but that it

would withhold approximately 11,054 pages of responsive

information under FOIA exemptions 4 and 5.     The letter notified

CREW of its right to file an administrative appeal under the

Board’s rules.   The Board sent the responsive documents to CREW

on April 17, 2009.   (Def.’s Mem. at 3.)    CREW filed no appeal.

(Id. at 2.)

     This action, filed on April 6, 2009, alleges that the Board

failed to produce any records within the statutory time limit for

processing CREW’s request.   (Compl. ¶ 38.)    The Board moves to

dismiss under Federal Rule of Civil Procedure Rule 12(b)(6)

     2
       The Board’s March 6, 2009 letter to CREW provided a phone
number to call to obtain information about the status of CREW’s
request, but CREW made no inquiry between Tuesday, March 31 and
Friday, April 3, 2009. (Def.’s Reply at 5.)
                                -4-

because CREW failed to exhaust its administrative remedies before

filing suit.   (See Def.’s Mem. at 4-5.)   CREW argues that it

constructively exhausted its administrative remedies because the

Board did not respond to its request within 20 business days of

March 3, 2009, the date that CREW submitted its request.     (Pl.’s

Opp’n at 5.)

                            DISCUSSION

     Generally, “motions to dismiss for failure to exhaust

administrative remedies are . . . appropriately analyzed under

Rule 12(b)(6)[,]” which applies to a failure to state a claim for

which relief can be granted.   Marshall v. Honeywell Tech.

Solutions, Inc., 536 F. Supp. 2d 59, 64 n.6 (D.D.C. 2008)

(quoting Hazel v. Wash. Metro. Transit Auth., Civil Action No.

02-1375 (RWR), 2006 WL 2024966, at *3 (D.D.C. Dec. 4, 2006)); see

also Lewis v. United States Dep’t of Justice, 609 F. Supp. 2d 80,

83 (D.D.C. 2009).   “In order to survive a motion to dismiss under

Rule 12(b)(6), the allegations stated in the contested portion of

the plaintiff’s complaint ‘must be enough to raise a right to

relief above the speculative level[.]’”    Demery v. Montgomery

County, 602 F. Supp. 2d 206, 212 (D.D.C. 2009) (quoting Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 555 (2007)).    However, “when

‘matters outside the pleadings are presented to and not excluded

by the court’ on a motion to dismiss under Rule 12(b)(6), ‘the

motion must be treated as one for summary judgment[.]’”    Highland
                                -5-

Renovation Corp. v. Hanover Ins. Group, 620 F. Supp. 2d 79, 82

(D.D.C. 2009) (quoting Fed. R. Civ. P. 12(d)).   “In particular

. . . where both parties submit material outside the pleadings

and ‘the parties are not taken by surprise or deprived of a

reasonable opportunity to contest facts averred outside the

pleadings and the issues involved are discrete’ legal issues, the

court may convert [a motion to dismiss] to a motion for summary

judgment ‘without providing notice or the opportunity for

discovery to the parties.’”   Highland Renovation Corp., 620 F.

Supp. 2d at 82 (quoting Tunica-Biloxi Tribe of La. v. United

States, 577 F. Supp. 2d 382, 405 (D.D.C. 2008) and Smith v.

United States, 518 F. Supp. 2d 139, 145, 155 (D.D.C. 2007)).

Because both parties have submitted declarations outside of the

pleadings that have not been excluded, the Board has completed

its document production, and CREW has taken no appeal from it,

the motion will be treated as one for summary judgment.

     Summary judgment is appropriately granted when the moving

party demonstrates that there is no genuine issue as to any

material fact and that moving party is entitled to judgment as a

matter of law.   Fed. R. Civ. P. 56(c).   “In considering a motion

for summary judgment, [a court is to draw] all ‘justifiable

inferences' from the evidence . . . in favor of the nonmovant.”

Cruz-Packer v. Dist. of Columbia, 539 F. Supp. 2d 181, 189

(D.D.C. 2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
                                -6-

242, 255 (1986)); Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 587 (1986).   “The relevant inquiry ‘is the

threshold inquiry of determining whether there is a need for a

trial - - whether, in other words, there are any genuine factual

issues that properly can be resolved only by a finder of fact

because they may reasonably be resolved in favor of either

party.’”   Single Stick, Inc. v. Johanns, 601 F. Supp. 2d 307, 312

(D.D.C. 2009) (quoting Anderson, 477 U.S. at 250).   A genuine

issue is present where the “evidence is such that a reasonable

jury could return a verdict for the non-moving party,” in

contrast to a situation where the evidence is “so one-sided that

one party must prevail as a matter of law.”   Anderson, 477 U.S.

at 248, 252.

     “[E]xhaustion of administrative remedies is a mandatory

prerequisite to a lawsuit under FOIA[.]”   Wilbur v. CIA, 355 F.3d
675, 676 (D.C. Cir. 2004) (internal quotations omitted).    While

exhaustion is not properly referred to as a “jurisdictional”

issue, FOIA’s “administrative scheme favors treating failure to

exhaust as a bar to judicial review.”   Id. at 677 (internal

quotations omitted).   When an agency fails to answer a request

for information within 20 days, the requester has constructively

exhausted its administrative remedies and judicial review is

allowed.   See 5 U.S.C. § 552(a)(6)(C); Judicial Watch, Inc. v.

Rossotti, 326 F.3d 1309, 1310 (D.C. Cir. 2003) (citing Oglesby v.
                                 -7-

U.S. Dep’t of Army, 920 F.2d 57, 64-65 (D.C. Cir. 1990)).

However, when an agency responds to the request after the

twenty-day statutory window but before the requester initiates a

lawsuit, the administrative exhaustion requirement still applies

and judicial review is barred.   Judicial Watch, 326 F.3d at 1310.

The constructive exhaustion principle is not designed to

encourage a requestor to file a lawsuit in order to replace an

agency’s authority with judicial oversight.      See Lowe v. Drug

Enforcement Agency, Civil Action No. 06-1133 (CKK), 2007 WL
2104309, at *4 (D.D.C. July 22, 2007) (citing Oglesby, 920 F.2d

at 64 n.8).   “Thus, a finding of constructive exhaustion is not

appropriate where it would be ‘contrary to orderly procedure and

good administration and unfair to those who are engaged in the

tasks of administration to decide an issue which [an agency]

never had a fair opportunity to resolve prior to being ushered

into litigation.’”   Lowe, 2007 WL 2104309 at *4 (quoting Dettmann

v. U.S. Dep't of Justice, 802 F.2d 1472, 1476 (D.C. Cir. 1986))

(internal quotations omitted).   An agency is allowed to extend

the deadline for its response by an additional ten-days in

“unusual circumstances,” including, as the Board relied upon

here, “the need for consultation . . . with another agency having

a substantial interest in the determination of the request or

among two or more components of the agency having substantial

subject-matter interest therein.”      5 U.S.C. § 552(a)(6)(B)(i).
                                 -8-

The Board asserts that on March 31, 2009, it notified CREW that

it was going to extend its period of response by ten days because

it needed to consult with another agency and/or other components

of the Board.    CREW acknowledges that it received a letter from

the Board of Governors informing CREW about the ten-day

extension, but CREW alleges that the letter was postmarked

April 2, 2009, and that it did not receive the Board’s letter

until April 6, 2009, the same date it filed this action.     (See

Def.’s Mem. at 2-3; Pl.’s Opp’n at 6-7.)

     As an initial matter, CREW does not provide any authority

for the proposition that the operative date of the Board’s

response should be determined by the date that CREW received it,

as opposed to the date that the Board sent it.   Regardless

whether the date of March 31, 2009, or the date of April 2, 2009,

is used as the date that the Board is deemed to have sent the

letter, the Board “responded” by placing in the mail written

notice regarding its ten-day working extension of its deadline to

respond to CREW’s request before CREW filed this action.     (See

Def.’s Mem. Ex. 1, Thro Decl. at ¶ 9; Pl.’s Opp’n Ex. 3, Weismann

Decl. at ¶ 5.)   Administrative exhaustion, then, was still a

prerequisite to maintaining a suit.    Judicial Watch, 326 F.3d at

1310.   It would be contrary to orderly procedure and good

administration of FOIA cases to entertain a suit filed

prematurely and to excuse CREW from having to exhaust its
                                -9-

administrative remedies in this case.     Since CREW did not exhaust

its administrative remedies before filing this suit, and chose

not to do so after the Board completed its responsive document

production, the Board’s motion to dismiss for failure to exhaust

administrative remedies, treated as a motion for summary

judgment, will be granted.

                             CONCLUSION

     Because this court lacks jurisdiction over the claim

regarding expedited processing,3 and because the plaintiff failed

to exhaust its administrative remedies, the defendant’s motion

[4] to dismiss, treated in part as a motion for summary judgment,

will be granted.   A final order accompanies this memorandum

opinion.

     SIGNED this 19th day of November, 2009.

                                        /s/
                               RICHARD W. ROBERTS
                               United States District Judge

     3
        While CREW seeks in a footnote attorneys’ fees associated
with the claim (see Pl.’s Opp’n at 12 n.10), CREW provides no
legal support for such relief, nor does it explain why it did not
call the Board using the phone number the Board provided to check
the status of its request before incurring the expenses of filing
the claim. By that point, expedition had been granted.