Court Opinion

ID: 2813668
Source: CourtListenerOpinion
Date Created: 2015-07-01 17:01:28.819085+00
Date Added: 2024-06-11T12:18:15.903361
License: Public Domain

UNITED STATES DISTRICT COURT
                    FOR THE DISTRICT OF COLUMBIA

CENTER FOR THE STUDY OF
SERVICES, ALSO DBA CONSUMERS'
CHECKBOOK,

            Plaintiff,

     v.                                Civil Action No. 14-498 (GK)

UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES,
     et al.,

           Defendants.

                         MEMORANDUM OPINION

     Plaintiff Center for the Study of Services              ("Plaintiff" or

"CSS"), which is also known as "Consumers' CHECKBOOK," brings this

action against Defendants the U.S. Department of Health and Human

Services ("HHS") and the Centers for Medicare and Medicaid Services

("CMS")   (collectively, "Defendants" or "the Government") under the

Freedom of Information Act     ( "FOIA") ,   5 U.S. C.   §   552.   Plaintiff

seeks certain information related to health plans offered pursuant

to the Patient Protection and Affordable Care Act ("ACA"), Pub. L.

No. 111-148, 124 Stat. 119 (2010). The Government has withheld the

requested information under FOIA Exemption 4, which exempts from

disclosure "trade secrets and commercial or financial information

obtained from a person and privileged or confidential." 5 U.S.C.
§   552 (b) (4).    Plaintiff        initially    asked   this   Court    to     enjoin

Defendants from withholding health plan benefits data for the 2014

plan year, which the Government subsequently released. Plaintiff

has since requested substantially similar data for the 2015 and

2016 plan years and asks the Court to permanently enjoin Defendants

from failing to disclose this type of information in future years.

       On October 31, 2014, Plaintiff filed its Motion for Summary

Judgment      ("Pl. 's Mot.")        [Dkt. No. 28]. On December 15, 2014, the

Government filed a Combined Cross-Motion for Summary Judgment and

Opposition to Plaintiff's Motion for Summary Judgment                         ("Gov' t' s

Mot . " )   [Dkt . No.   3 2]   On December 30,       2014,   Plaintiff filed its

Combined      Opposition        to    Defendants'     Cross-Motion      for     Summary

Judgment and Reply in Support of Plaintiff's Motion for Summary

Judgment      ("Pl. 's Opp'n")        [Dkt. No.   36]. Finally,       on January 20,

2015, the Government filed its Reply in Support of Its Motion for

Summary Judgment ("Gov't's Reply")                [Dkt. No. 40] . 1

       Upon consideration of the Motions, Oppositions, Replies, the

entire record herein, and for the reasons stated below, Plaintiff's

1 The Government refers to its Reply as its Combined Reply in
Support of Its Motion for Summary Judgment and Opposition to
Plaintiff's   Cross-Motion   for Summary  Judgment,   but  the
Government's Combined Cross-Motion and Opposition, of course,
serves as the Government's Opposition. Therefore, the Reply is
cited herein as Gov't's Reply.
                                           -2-
Motion for Summary Judgment is hereby denied, and the Government's

Motion for Summary Judgement is hereby denied.

I .     BACKGROUND

        A.   FOIA

        FOIA allows individuals to request the disclosure of records

from government agencies.             §       552 (a) (3) . The Act is "a means for

citizens to know what their Government is up to." Nat'l Archives

&     Records Admin.    v.   Favish,          541 U.S. 157,      171    (2004)    (internal

citations     and    quotation marks             omitted) .        FOIA   thus      "creates   a

liberal      disclosure          requirement,          limited       only     by      specific

exemptions which are to be narrowly construed." Bristol-Myers Co.

v. F.T.C., 424 F.2d 935, 938 (D.C. Cir. 1970).

        When an agency receives a request that "reasonably describes"

the records sought,          §   552(a) (3) (A),       it must "conduct[]             a search

reasonably calculated to uncover all relevant documents." Morely

v. CIA, 508 F.3d 1108, 1114               (D.C. Cir. 2007)              (internal quotation

marks omitted) . The agency must then disclose any responsive agency

records it locates, except to the extent that any such records are

protected     from     disclosure         by     one     of    FOIA's       nine     statutory

exemptions.     See    5     U.S.C.       §     552(b).       If   an     agency     withholds

responsive records not covered by one of FOIA's exemptions,                                the

requester may,       after exhausting administrative remedies,                          file a

lawsuit in district court to challenge the agency's decision to

                                               -3-
withhold. See id.        §   552(a) (4) (B).   "Under FOIA, an agency has the

burden to demonstrate that the withheld documents are exempt from

disclosure, which it may meet by submitting affidavits that show,

with reasonable specificity,            why the documents fall within the

exemption. The affidavits will not suffice if the agency's claims

are conclusory, merely reciting statutory standards,                     or if they

are too vague or sweeping."             Biles v.      Dep' t   of Health    &    Human

Servs., 931 F. Supp. 2d 211, 223 (D.D.C. 2013)                 (internal quotation

marks, citation, and brackets omitted).

       B.     FFM Data Submission Process

       Under the ACA,        individuals and families may purchase health

care     insurance plans during         the    annual     Open Enrollment       Period

through      on-line     marketplaces      called       "exchanges,"     which     are

operated by the federal or state governments. The exchange created

by the federal government -- the Federally-Facilitated Marketplace

("FFM")            is administered by CMS and its Center for Consumer

Information and        Insurance Oversight          ("CCI IO") .   See   Plaintiff's

Statement of Material Facts a t , 3 ("Pl.'s SMF")                  [Dkt. No. 28-2).

       Insurers who choose to offer Qualified Health Plans ("QHPs")

through the FFM must submit plan benefits information to CMS each

year during the Initial FFM QHP Application Submission Window. See

CCIIO,      2015    Letter    to   Issuers     in   the    Federally-facilitated

Marketplaces        (Mar. 14, 2014)    ("2015 CCIIO Letter")         [Dkt. No. 28-

                                         -4-
7] .      Insurers in 36 states offered QHPs through the FFM for the

2015 plan year. Pl.'s SMF           at~    4.

          Once the Government has received insurers'                 QHP data for an

upcoming plan year, it begins a lengthy, multi-step review process

that may result in a number of changes to the initially-submitted

data. 2015 CCIIO Letter at 6-11. "CCIIO reviews the data to ensure

it        meets     federal   regulatory        requirements     and   will     display

correctly on HealthCare.gov [the FFM's website]." Gov't's Mot. at

7.     For plans offered in certain states,               state officials work in

concert with the federal Government to review and approve submitted

QHP data. 2015 CCIIO Letter at 9-10; Pl.'s SMF at ~ 4.                         Insurers

are limited in the changes they may make to submitted QHP data

during the submission cycle.              Id.    at 10.   In the final stages of

review, CMS (and if relevant, the state involved) must approve any

proposed changes. Id.

          For the 2015 plan year, CMS required insurers to submit their

initial QHP applications by June 27,                  2014.    Id.   at 8,    10. After

June 27,          2014,   insurers could not change their proposed service

areas or add new insurance plans but were otherwise permitted by

CCIIO to amend their data. Gov't's Statement of Material Facts at

~    14    ("Gov't's SMF")     [Dkt. No. 32-1]. Following the initial data

submission, CMS completed two rounds of review which ended about

August 25, 2014. 2015 CCIIO Letter at 10.

                                           -5-
        September 4, 2014, marked the deadline to submit "final" QHP

application data and the beginning of the Limited Data Correction

Window.       Id.   After      the   September       4th   deadline,     insurers      were

permitted to make changes only with "pre-approv[al] by CMS and [if

relevant for the particular state] the state." Id. 2

        On October 6, 2014, the Limited Data Correction Window closed,

further restraining the scope of permissible amendments to QHP

data.    Gov't's      SMF a t '      14.    Although limited in terms            of plan

amendments,         insurers    remained      free    to   withdraw    QHPs     they    had

planned to offer, and at least some insurers did so. Gov't's SMF

at '    11.
        In October 2014, the Government provided insurers with final

certifications of their ability to participate in the FFM. Pl.'s

SMF at '      32.    Insurers were then required to sign FFM agreements

before the beginning of the Open Enrollment Period on November 15,

2015.    Gov't' s     SMF at     '   8-9.    The   Government     does    not   consider

" [d] ata related to plan offerings                [to be]    final until agreement

signing and plan confirmation                 [which occurs]      approximately two

weeks prior to [O]pen [E]nrollment." Id. at '                    9.

2 The Parties do not agree as to the scope of permissible changes
to QHP data following the initial and final QHP application data
deadlines. See e.g., Pl.'s SMF a t ' 27; Gov't's Resp. to Pl.'s SMF
a t ' 27. They do agree, however, that changes made after September
4, 2014 required CMS approval. Gov't's Resp. to Pl.'s SMF a t ' 27.
                                             -6-
      Insurers planning to offer QHPs through the FFM for the 2016

plan year were required to submit plan benefits data by May 15,

2015. See CCIIO,    FINAL 2016 Letter to Issuers in the Federally-

facilitated Marketplaces     ("2016 CCIIO Letter"),     at 7   (Feb.    20,

2015),    [Dkt. No. 42-2] . 3 The 2016 CCIIO Letter sets forth a data

review process for the 2016 plan year similar to the one described

above for the 2015 plan year.

     C.     Factual Background

     Plaintiff CSS is a non-profit 501 (c) (3)     corporation located

in   Washington,    D.C.   whose   mission   includes   conducting      and

supporting studies of consumer services (including those provided

by government programs)     and publishing materials to educate and

inform consumers about such services. Pl.'s Compl. at ~ 10             [Dkt.

No. 1]. It seeks certain information about the QHPs that insurers

will offer on the FFM in order to create an online tool to help

consumers compare health plans. Id. If Plaintiff's tool is to serve

its purpose of assisting consumers       in the   selection of heal th

plans, Plaintiff must obtain health plan benefits data each year

substantially before the beginning of the Open Enrollment Period.

Id. at ~ 5.

3Available at http://www.cms.gov/CCIIO/Resources/Regulations-and-
Guidance/Downloads/2016-Letter-to-Issuers-2-20-2015-R.pdf.
                               -7-
             On November 29, 2013, pursuant to FOIA, Plaintiff submitted

    a request for health plan benefits data provided to CMS by all

    insurers planning to offer QHPs through the FFM for plan year 2014.

    Pl.' s    SMF    ~   6.   Specifically,    Plaintiff's           letter requested the

    "complete set of insurance carrier-submitted facts on the benefits

    (deductibles, coinsurance rates, copayment amounts, out-of-pocket

    limits,         etc.)        offered      by         each        Federally-Facilitated

!   Exchange/Marketplace-eligible plan [QHP]                    [delivered in particular

    template        formats]."     Letter     from       Robert      Krughoff,       President,

    Consumers' CHECKBOOK, to Freedom of Information Officer, Ctrs. for

    Medicare & Medicaid Servs.              (Nov. 29, 2013) at 1 [Dkt. No. 11-4].

    Noting the time-sensitive nature of its request,                            Plaintiff asked

    CMS for "a very quick response." Id. at 2.

             On December 2,        2013,    CMS granted Plaintiff's                request   for

    expedited processing but did not release the requested 2014 data

    or set a production schedule. Pl.'s SMF                    at~    7.

             On March 24,       2014,   nearly four months after submitting its

    request,        Plaintiff       filed     its        Complaint         challenging       the

    Government's failure to produce the requested information. Among

    other things,         the   Complaint     asks      this    Court      to    " [p] ermanently

    enjoin     Defendants       from    refusing        to   disclose       or    delaying   the

    disclosure of substantially the same information sought for future

    plan years[.]" Pl.'s Compl.             at~    D.

                                               -8-
:·.

             On May 2,         2 014,    Plaintiff filed a Motion for Preliminary

      Injunction       [Dkt.     No.     11].    On May     20,    2014,   the    Court   denied

      Plaintiff's Motion,              holding that        Plaintiff failed to establish

      that it or the public would suffer an irreparable injury from the

      Government's failure to produce the requested data.                            Memorandum

      Opinion and Order [Dkt. No. 17]. The Court also ordered Defendants

      to file a detailed, written Status Report concerning production of

      the requested information. Id.

             On June 25,         2014,    the Government filed its Status Report,

      stating that it would provide Plaintiff with the 2014 plan year

      data before July 1, 2014                 [Dkt. No.    20]. However,        the Government

      did not complete production of the data identified in Plaintiff's

      initial FOIA request until August 28,                       2014. Joint Status Report

      [Dkt. No. 27]

            On June 30, 2014, Plaintiff submitted a second FOIA request,

      which called for 2015 plan year data substantially similar to the

      2014 plan year data that were the subject of the first request.

      Letter from Robert           Krughof f,      President,       Ctr.   for the Study of

      Servs.,    to Olen Clybourn,              Acting Freedom of Info.           Officer,   CMS

      (June 30,    2014)        [Dkt.    No.    28-4].     On July 30,     2014,    CMS denied

      Plaintiff's second FOIA request, invoking FOIA Exemptions 4 and 5,

      §   552(b) (4)-(5). Letter from Hugh Gilmore, Dir., Div. Freedom of

      Info.,    CMS,   to Robert Krughoff,               Center for the Study of Servs.

                                                   -9-
(July 30,        2014)   [Dkt.    No.    28-5].         On August 26,    2014,    Plaintiff

requested an administrative appeal. Pl.'s SMF                        at~   18-20.

        On September 24, 2014, CMS issued its Appeal Decision, which

upheld     the    denial    of     Plaintiff's            request.   Letter   from Andrew

Slavitt,    Principal Deputy Adm'r,                     CMS,   to Caroline M.     Brown and

Paige M. Jennings, Covington                 &    Burling LLP (Sept. 24, 2014)           ("CMS

Appeal    Decision")       [Dkt.       No.       28-7].    CMS   overturned its      initial

reliance on Exemption 5. However,                       it reaffirmed its finding that

the requested data were exempt from FOIA under Exemption 4 because

release     would        cause     substantial             competitive     harm     to   FFM-

participating insurers and would otherwise harm the FFM program.

Id. at 3-4. The Appeal Decision also noted that CMS would release

the requested data once it had been "finalized" -- just before the

beginning of the Open Enrollment Period on November 15, 2014. Id.

at 5.

        On October 31, 2014, Plaintiff filed the present Motion for

Summary Judgment seeking a "declaration that CMS's invocation of

Exemption 4 to withhold the requested data is improper, as well as

an order that        [CMS] produce the requested 2015 data." Pl.'s Mot.

at 2.

        On November 14,          2014,   CMS released the requested 2015 plan

benefits data, and the Open Enrollment Period began the following

day. Gov't's SMF at         ~    19.

                                                 -10-
        On November 24, 2014, pursuant to Executive Order 12,600 and

45 C.F.R.       §   5.65(d), Defendants sent a letter to FFM-participating

insurers     requesting their views                 on release       of    QHP application

information in future years before data finalization and insurer

agreement execution. Id. at               ~   6. Defendants received letters from

78    insurers        generally       objecting      to    the     release      of   QHP   data

("insurer letters") . Id. at ~7.

        On May 21, 2015, Plaintiff submitted a third FOIA request for

the 2016 plan year benefits data. On May 22, 2015, Plaintiff filed

a Status Report            [Dkt. No. 42] notifying the Court of its pending

FOIA request for the 2016 data.

II.     STANDARD OF REVIEW

        Summary judgment should be granted only if the moving party

has shown that there is no genuine dispute of material fact and

that the moving party is entitled to judgment as a matter of law.

See Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317,

325     (1986);     Waterhouse v.        Dist.      of Columbia,      298 F.3d 989,        991

(D.C.    Cir.       2002).    "A fact    is material        if it     'might affect the

outcome of the suit under the governing law,' and a dispute about

a    material       fact     is    genuine    'if    the   evidence        is   such    that   a

reasonable jury could return a verdict for the nonmoving party.'"

Steele v.       Schafer,          535 F.3d 689,      692   (D.C.    Cir.     2008)     (quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

                                              -11-
:'.

             The moving party bears the initial burden of demonstrating

      the absence of genuine issues of material fact.                See Celotex, 477
U.S. at 323.        In determining whether a genuine issue of material

      fact   exists,      the Court must view all        facts     in the   light most

      favorable to the non-moving party. See Matsushita Elec. Indus. Co.

      v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Keyes v. Dist. of

      Columbia, 372 F.3d 434, 436 (D.C. Cir. 2004).

             In deciding a motion for summary judgment,              "the court must

      draw all reasonable inferences in favor of the nonmoving party,

      and    it   may    not   make    credibility   determinations    or     weigh   the

      evidence."        Reeves v.     Sanderson Plumbing Prods.,      Inc.,    530 U.S.
133, 150 (2000). Ultimately, the court must determine "whether the

      evidence presents a sufficient disagreement to require submission

      to a jury or whether it is so one-sided that one party must prevail

      as a matter of law." Liberty Lobby, 477 U.S. at 251-52.

      III. ANALYSIS

             A.    Mootness

             The Government contends that Plaintiff's action is moot. It

      argues that because it has released the 2014 and 2015 plan year

      data that     Plaintiff       requested,   Plaintiff   has    received all      the

      relief it seeks.

             Our Court of Appeals has made clear, however, that the release

      of records following a "specific request under the FOIA . . . will

                                              -12-
not moot a claim that an agency policy or practice will impair the

party's lawful access to information in the future." Payne Enters.

v. U.S., 837 F.2d 486, 491 (D.C. Cir. 1988) . 4 Plaintiff intends to

request substantially the same information from Defendants every

year and has requested an injunction barring the Government from

withholding        it   under    Exemption   4.   Since     filing   this   Motion,

Plaintiff has also provided notice that it has already requested

benefits data for the 2016 plan year. Status Report [Dkt. No. 42].

The Government has made clear that, in future years, it plans to

withhold the requested information under Exemption 4 until the

beginning     of    the   Open    Enrollment      Period.    Gov't's   Mot.   at   3

("Defendants .            have no objection to releasing such information

for future plan years once the [O]pen [E]nrollment [P]eriod begins.

Defendants,    however object to prematurely releasing proprietary

and commercial information .             . prior to the [O]pen [E]nrollment

4 The Government attempts to distinguish Payne by arguing that the
challenge presented in Payne was not moot only because the agency
had unlawfully withheld documents under FOIA Exemptions 4 and 5,
whereas in this case, the Government is right to withhold the
requested information under Exemption 4. Gov't's Reply at 10-11.
The Government's argument rests entirely upon the presumption that
it will prevail on the merits, and thus, puts the cart before the
horse. "[M] ootness should not be confused with the merits. An
argument that an action is moot because the plaintiff is not
entitled to the requested relief, for example, is no more than an
argument on the merits that should be decided on the merits." 13B
Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 3533.1 (3d ed. 2015).
                               -13-
[P] eriod [.] ") .    Thus,   the    controversy      described          in   Plaintiff's

Complaint is not moot but ongoing.

        Moreover, the time-sensitive nature of annually-updated plan

benefits     data      renders      the    Government's         allegedly        unlawful

withholding "capable of repetition yet evading review." Friends of

the Earth,     Inc.    v.   Laidlaw Envtl.        Servs.    (TOC) ,      Inc.,   528 U.S.
167, 190 (2000). Challenges to such conduct are not moot if "(1)

the challenged action [is]           in its duration too short to be fully

litigated prior to its cessation or expiration, and (2) there [is]

a reasonable expectation that the same complaining party would be

subjected to the same action again.'" McDonnell Douglas Corp. v.

Nat'l Aeronautics & Space Admin., 102 F. Supp. 2d 21, 23                          (D.D.C.

2000)    (quoting Weinstein v. Bradford, 423 U.S. 147, 149                       (1975));

see also Newport Aeronautical Sales v.                 Dep' t      of Air Force,      684
F.3d 160, 164 (D.C. Cir. 2012)            (FOIA action not moot because agency

had "no intention of abandoning              []   policy because it d [id]            not

believe the policy violate[d] FOIA"). Given the time required for

a FOIA case to fully ripen and the Government's statement that,

upon future     requests      for plan benefits            data,    it    will   rely on

Exemption 4 to withhold the data until the beginning of the annual

Open Enrollment Period, Gov't's Mot.                at 3,    the Court has little

difficulty concluding that this action is not moot.

                                          -14-
:'.

             B.    FOIA Exemption 4

             Exemption 4 of FOIA permits agencies to withhold "[1] trade

      secrets and commercial or financial information [2] obtained from

      a person     [that is]        [3]    privileged or confidential[.]"           5 U.S.C.

      §   552 (b) ( 4) . The Parties agree that the information Plaintiff seeks

      is "commercial or financial" and was "obtained from a person." See

      Pub. Citizen Health Research Group v. Nat'l Insts. of Health, 209
F. Supp. 2d 37,      44   (D.D.C.   2002)      ("Public Citizen v. NIH")         ("no

      doubt that a corporation may be .                     . a person" under Exemption

      4); Pub. Citizen Health Research Group v. FDA, 704 F.2d 1280 (D.C.

      Cir. 1983)        ("Public Citizen v. FDA")           (information is "commercial

      or financial" when it relates to commerce). Furthermore, neither

      Party asserts that the requested information is "privileged" or

      constitutes "trade secrets[.]" Accordingly,                  the only question is

      whether     the    requested        information     qualifies     as   "confidential"

      under 5 U.S.C.       §   552 (b) (4).

             The Government contends that all of the information Plaintiff

      requested is confidential and thus exempt from FOIA.                        Plaintiff

      disagrees,    arguing that all of the requested information falls

      outside of Exemption 4, or in the alternative,                     that some of the

      requested     information           falls   outside    of   the   Exemption    and    is

      reasonably segregable from any exempt information.

                                                  -15-
      The appropriate test for determining whether information is

confidential          depends     on     whether   the     Government      obtained    the

information by way of voluntary or compelled submission. Critical

Mass Energy Project v. Nuclear Regulatory Comm'n,                          975 F.2d 871,

872 (D.C. Cir. 1992)            ("Critical Mass III"). When "the information

sought is given to the Government voluntarily, it will be treated

as confidential under Exemption 4 if it is of a kind that the

provider would not customarily make available to the public." Id.

      However,          when the Government possesses the                information at

issue by way of compulsion,                Courts must apply the two-part test

initially set forth in Nat'l Parks & Conservation Ass'n v. Morton,

498 F.2d 765,      770    (D. C.   Cir.   1974) .    The    National     Parks   test

"define [s]        as     'confidential'         any      financial      or     commercial

information whose disclosure would be likely either (1) to impair

the Government's ability to obtain necessary information in the

future; 5     or   (2)    to    cause     substantial      harm    to   the    competitive

position of the person from whom the information was obtained."

Critical Mass III, 975 F.2d at 878                  (citing Nat'l Parks, 498 F.2d

at 770)     (internal citations omitted).

      Information provided to the Government                       "as a      condition of

doing business" is generally considered to have been coerced rather

5The Government does not directly address the first prong of the
National Parks test in its briefs.
                               -16-
than provided voluntarily. Biles v. Dep't of Health & Human Servs.,

931 F.      Supp.    2d 211,      220   (D.D.C.     2013).      In order to offer QHPs

through the FFM, insurers must submit plan benefits data to CMS.

Accordingly, the Parties agree that the latter test, applicable to

involuntary         submissions         of   information,         governs      the    Court's

analysis in this case. Gov't's Mot. at 13; Pl.'s Mot. at 12-13.

              1.      Competitive Harm

       Defendants' chief argument against disclosure is that release

of    the   requested       plan     benefits       data   at     any   time    before       the

beginning of the Open Enrollment Period will cause participating

insurers to suffer competitive harm. In order "for the [G] overnment

to preclude disclosure based on a competitive injury claim,                                   it

must prove that the submitters ' (1) actually face competition, and

(2)    substantial         competitive         injury    would     likely      result    from

disclosure.'" Niagara Mohawk Power Corp. v. U.S. Dep't of Energy,

169 F.3d 16,     18    (D.C.      Cir.     1999)     (quoting      Nat'l       Parks     &

Conservation Ass'n v. Kleppe, 547 F.2d 673, 679 (D.C. Cir. 1976).

                     a.      Actual Competition

       The Government argues that insurers submitting QHPs on the

FFM face actual competition both from each other and from insurers

offering plans outside of the FFM.

      According       to    the    Government,          several    sources      demonstrate

competition among insurers offering QHPs on the exchanges.                                   The

                                             -17-
Government     cites       78   letters    from       insurers     (or   their     parent

companies)    stating that disclosure of plan benefits information

would likely cause competitive harm. Gov't's Mot. at 14-15; Gov't's

Reply at 2     (citing      [Dkt. No.     32-4, 5]). Although the content of

these    letters     is    most   relevant       to     the   second     prong    of    the

competitive    harm       test,   the   Government        relies    on    the    letters'

descriptions of competitive harm to suggest that the insurers are

engaged in actual competition.

        The Government also contends that the "one-stop-shop" nature

of the FFM "increas[es] competition between insurance companies."

Gov't's Reply at 2-3 (citing CMS, Creating a New Competitive Health

Insurance    Marketplace 6 ) .     Finally,       the    Government       points       to   a

Bloomberg    Government         article    that       states,    "Competition       among

insurers offering coverage through federal exchanges established

under the Affordable Care Act is driving down the premiums charged

in the new marketplaces by as much as one third [.]" Peter Gosselin,

Exchange Competition Cuts Health Insruance Costs:                        BGov Insight,

Bloomberg Government (October 8, 2013) . 7 The Bloomberg article is

not evidence and is certainly no substitute for affidavits, expert

6 Available     at        http://www.cms.gov/CCIIO/Resources/Marketplace-
Grants/.

7  Available     at    http://about.bgov.com/2013-10-08/exchange-
competition-cuts-health-insurance-costs-bgov-insight/.

                                          -18-
reports, or deposition testimony -- evidentiary sources that the

Government has not brought to bear.

        Viewed     in    the     light      most       favorable        to    Plaintiffs,          the

Government has put forth no reliable evidence of actual competition

between insurers participating in the FFM. The authors of the 78

letters      HHS       relies     on    were     sent     a     carefully-worded                letter

presenting HHS'          legal        interpretation of Exemption 4 and asking

whether each insurer's application information for a given plan

year may be protected by Exemption 4. HHS, Letter to Insurers at

34-35    [Dkt. No.       32-3]        (setting forth the Government's theory of

Exemption 4's application to plan benefits data). Therefore, it is

not surprising that many of the letters describing the potential

for competitive harm agree with the Government's position.

        In response,       Plaintiffs cite the Government's own estimate

"that at least 95 percent of consumers will be automatically re-

enrolled     in    a    plan     in     2015,    and     will     not    have       to    make     any

affirmative choice," Pl.'s Mot. at 13-14, as evidence of a lack of

competition among FFM-participating insurers.

        In sum,     because       there are material              facts       in dispute,          the

Government        has    failed        to   demonstrate         that         FFM-participating

insurers are engaged in actual competition with each other.

        In   addition,          the    Government         fails     to       show        that     FFM-

participating insurers are in competition with insurers who offer

                                                -19-
plans outside of the FFM.          The Government points to the same 78

letters   describing   the    competitive    harm   that   may    befall   FFM

insurers if off-FFM insurers obtain the requested plan benefits

data. Gov't's Reply at 2 (citing [Dkt. Nos. 32-4, 33-5)). Although

these letters suggest that FFM-participating insurers compete with

insurers who offer plans outside of the FFM,           they could just as

easily suggest hypothetical or potential competition rather than

actual competition. Thus, with respect to competition between FFM-

participating   insurers     and    non-FFM-participating      insurers,   the

Government also fails to prove actual competition. 8

      Given the inadequacies of the Government's evidence, it has

not   established   that     FFM-participating      insurers     face   actual

competition from any source. Thus,         its Motion cannot prevail on

grounds of competitive harm.

      Plaintiff has also submitted a Motion for Summary Judgment.

Therefore,   as to its arguments,       the Court must now consider the

evidentiary record in the light most favorable to the Government.

As discussed above, the insurer letters provide weak support for

the Government's allegation of actual competition. However, when

8  Plaintiff also notes that "an estimated 85% of Exchange enrollees
depend on subsidies to purchase coverage. Given that unsubsidized
coverage in the non-[FFM] market is not significantly cheaper than
 [FFM] coverage, it seems unlikely that [FFM] enrollees could afford
to purchase coverage outside of the [FFM] or that off-[FFM] plans
are competing for those same customers." Pl.'s Opp'n at 4.
                                 -20-
viewing Plaintiff's Motion in the                   light most        favorable   to the

Government,    one could conclude that there is actual competition

from the letters' descriptions of competitive harm that would arise

from    pre-Open    Enrollment            disclosure    of     plan    benefits    data.

Moreover,    Plaintiff has not countered the Government's evidence

(weak as it is) of actual competition with any documentary evidence

of its own. Thus, there is a genuine issue of fact as to whether

FFM-participating insurers face actual competition.

       However,    this    factual        dispute     does    not   entirely preclude

Summary     Judgment9          because:      1)     Plaintiff       may    prevail    by

demonstrating      that    even      if    insurers    faced    actual     competition,

early disclosure would not give rise to a likelihood of substantial

competitive harm and would do no harm to the FFM program; and, on

the other hand, 2)        the Government may prevail on its alternative

"program effectiveness" ground for withholding the data sought.

See infra Section 2.

                   b.      Likelihood of Substantial Competitive Harm

       In   addition      to     a   demonstration       of     actual     competition,

Exemption 4 requires a showing that a "likelihood of substantial

competitive injury" would arise from release of the data Plaintiff

has requested. Niagara Mohawk Power Corp., 169 F.3d at 18. "[W] hi le

9 Thus, neither Party has submitted sufficient convincing evidence
to prevail on its Motion for Summary Judgment.
                                            -21-
the parties cannot rest on a 'conclusory and generalized allegation

of substantial competitive harm,' the court need not engage in a

sophisticated economic analysis to determine whether there is a

likelihood of substantial competitive injury." Public Citizen v.

NIH, 209 F.Supp.2d at46      (quoting Public Citizen v. FDA, 704 F.2d

at 1291) . 10 However, the harm alleged is relevant only if it arises

from    the   "affirmative    use    of    proprietary   information    by

competitors." Public Citizen v. FDA, 704 F.2d at 1291 n.30.

       The Government argues that several forms of competitive harm

would arise from compliance with Plaintiff's request:           1)   early

disclosure would allow insurers to learn about the rates and plan

specifications of    their competitors      in order to undercut       each

other; 2) pre-Open Enrollment release of plan benefits data would

cause harm to innovative insurers by allowing competitors to amend

their plans in order to produce more appealing innovations; and 3)

because plan information may change up to the beginning of the

Open Enrollment Period,      early disclosure would make conflicting

10 The Government contends that courts "generally defer to the
agency's     predictive judgment  as  to   the  repercussions   of
disclosure." Gov't's Mot. at 13 (quoting United Techs. Corp. v.
Dep't of Defense, 601 F.3d 557, 563 (D.C. Cir. 2010)). The passage
the Government quotes, however, concerned a "reverse FOIA" case
brought under the Administrative Procedure Act ("APA"). Id. Such
cases are reviewed under the APA' s deferential "arbitrary and
capricious" standard. Id. Agency determinations in direct FOIA
challenges, like the case at hand, are reviewed de novo. 5 U.S.C.
§ 552 (a) (4) (B).

                                    -22-
data sets available to the public and lead to consumer confusion,

which might harm some insurers to the benefit of others.

       The Government bases its argument almost exclusively on the

78 insurer letters objecting to disclosure, id. at 14-15; see also

[Dkt. Nos. 32-3, -4 , -5], which the Court has already found to be

less than compelling. The Government also refers to a Declaration

by CCIIO Director Kevin Counihan.          ("Counihan Deel.")          [Dkt. No. 32-

2] .

       To   counter the Government's position,               Plaintiff primarily

cites letters that the Government has sent (or plans to send) to

insurers,    which detail the process for submitting and reviewing

plan benefits data in order to offer health insurance plans on the

FFM    ("process   letters")     E.g.,     2015      CCIIO   Letter;    2016   CCIIO

Letter.     Plaintiff    also   makes    reference      to   publicly     available

information on     the    Government's         and   insurers'   websites.     E.g.,

Website Screen Shots [Dkt. Nos. 28-11, 37-2].

       Importantly,     the Parties disagree about when the                insurer-

submi t ted QHP data becomes "final" during the review process. The

Government contends that the data for any particular insurer is

not final until the insurer and the Government have executed an

agreement for the plan year -- a step that occurs just before the

beginning of the Open Enrollment Period.

                                        -23-
        Plaintiff   argues    that    after   the    initial   data   submission

deadline,     insurers are greatly limited in their ability to alter

their submitted data, and that after the next deadline for "final

QHP data submissions," insurers can make almost no changes at all.

Thus, Plaintiffs contend that, as a practical matter, data should

be considered final after its initial submission or, at the very

latest, after the final data submission deadline. Accordingly, the

ultimate resolution of this case will almost certainly require an

answer to the question of when QHP data may be considered final.

                        i)        Undercutting

        The Government argues that "[d]isclosing the proposed health

plans    prior to approval         and clearance by HHS would allow the

submitters' competitors to 'learn about rates and plan information

that the submitters were planning to market,' and those competitors

could use the information to their advantage,              i.e. by developing

competing plans and rates." Gov't's Mot. at 15 (source of quoted

material not indicated in original); see also Gov't's Reply at 4

(citing numerous insurer letters) .

        Plaintiff objects on several grounds. First, citing a letter

from    the   Government     to    FFM-participating     insurers,     Plaintiff

asserts that once insurers have submitted their plan data,                  they

have    "very little   ability to       change      their plan benefits"     and

                                       -24-
accordingly,      could not undercut their competitors.            Pl.'s Mot at

14-15.

     The Government responds by describing a variety of scenarios

in which insurers could significantly charige their data after the

deadlines Plaintiff has cited. Gov't's Reply at 4 (citing insurer

letters) . But the Government also admits that it currently "reviews

the data submitted by the issuers mainly for regulatory compliance

and accuracy of data[,]" Gov't's Mot. at 17, thereby suggesting,

as Plaintiff argues, that there will be no substantive changes.

     Plaintiff also contends that release of all FFM-participating

insurers'    data         not   just    particular     insurers'   data        will

mitigate    any   possible      harm    by   placing   all   insurers     on   equal

footing.    Pl.' s Mot.    at 20.      The Government responds that "larger

entities who will have the staff and resources to quickly change

their products based on competitors'              information"     will gain an

advantage over smaller insurers through the early release of plan

data. Gov't's Mot. at 20.

     Plaintiff responds that, to a large extent, FFM-participating

insurers already know' the details of the plans competitors submit

at the first deadline. As noted above, CMS expects 95 percent of

consumers to automatically re-enroll in their current plans. Under

CMS regulations, automatic re-enrollment can only occur if plans

retain roughly the same benefits and cost-sharing structure. See

                                         -25-
...

      45   C.F.R.   §§    147 .106 (a),   (b) (4),   (c),    (e).     Accordingly,   plans

      covering the vast majority of consumers are not expected to undergo

      significant changes,         severely blunting any competitive advantage

      that might be gained from early access to plan benefits data.

            However,      CMS's    prediction of     general         stability among   the

      plans offered presumes the status quo                 (i.e.,    that plan benefits

      data will not be released until Open Enrollment). The Government's

      declarant     states that      if   insurers had earlier access           to their

      competitors'       data,    "CCIIO expects that competitors would change

      plan designs or prices[.]" Counihan Deel.              at~      6 (emphasis added).

            The Government also contends that even if the information

      that Plaintiff requests would not lead to competitive harm,                      the

      requested     information could be         paired with publicly available

      information,       and together the requested and publicly available

      information would likely lead to substantial                     competitive harm.

      Gov't's Mot. at 18. The Government fails, however, to identify the

      relevant public information, the relevant requested information,

      or the type of harm that might occur if the two were combined. The

      Government simply cannot rely on such "conclusory and generalized

      allegation[s]" to defeat disclosure. Public Citizen v. NIH, 209 F.

      Supp. 2d at 46.

            In essence, the Parties again present a factual disagreement.

      Whether one concludes that early release of the requested data

                                             -26-
could lead to undercutting depends                on the   light   in which the

evidence is examined.          Thus,   summary judgement is inappropriate.

The record presented by the Parties is so incomplete and confusing

on the issue of undercutting,              that it alone precludes granting

either Motion for Summary Judgment on this issue. 11

                         ii)       Innovation

      According to the Government,              release of plan benefits data

before the Open Enrollment Period would "degrade[]" the "incentive

for innovation" and thereby subject some insurers to competitive

harm. Counihan Deel. at        ~   8. Plaintiff notes that the Government's

sole source for this claim is the affidavit of CCIIO Director Kevin

Counihan and contends that such a '"bald assertion' by an agency

declarant . . . is insufficient to support summary judgment.              11
                                                                               Pl.' s

Resp. to Gov't's SMF at        ~   12 (quoting Ancient Coin Collectors Guild

v. U.S. Dep't of State, 641 F.3d 504, 512              (D.C. Cir. 2011)). The

Court agrees.

      Moreover,    Plaintiff notes that the ACA's requirements limit

the aspects of insurance plans that               insurers may manipulate in

order to produce innovation. For example, the ACA requires health

plans to cover specific,           identified "essential health benefits,"

42   U.S.C.   §   300gg-6 (a);      meet   certain minimum    actuarial        value

11 Of course, the Government has to prevail at both steps of the
National Parks test but has already failed to meet its burden at
step one.
                              -27-
requirements, see id.             §   18022(d); comply with maximum annual cost-

sharing limits,           id.     §   300gg-6(b);      not    discriminate    in benefit

design,      45   C. F. R.    §   156 .125;     and    "[n] ot employ             benefit

designs that will                     discourage the enrollment of individuals

with significant health needs," id.                    §   156.225(b).

        In   light    of     these         statutory   and    regulatory     limitations,

Plaintiff is correct that the ACA "has made it more difficult for

[insurers] to compete on the basis of plan benefit design." Pl.'s

Resp.    to Gov't's SMF at             ~    12. However,     the existence of genuine

issues of material fact regarding the Government's other grounds

for withholding precludes a grant of summary judgment to Plaintiff.

                                iii) Consumer Confusion

        The Government argues that "[p]ublic release of                       [non-final]

information to consumers misinforms them of their benefits for a

particular plan, leading to competitive harm to the issuers whose

inaccurate, non-final information has been released." Gov't's Mot.

at 21 (citing Gov't's Att.3 at 41 [Dkt. No. 32-4]). The Government

notes    that     until      insurers       have   signed    their plan confirmation

agreements,       they remain free to withdraw health plan offerings.

Consequently,        consumers reviewing early-released data might find

plan offerings that are not actually included in the FFM.

                                               -28-
        Plaintiff, again citing the Government's process letters 12 to

the insurers, argues that the Government exaggerates the extent to

which insurers may change their data late in the review process.

It also contends that the Government's argument                  that release of

information will      confuse the public             runs    counter to FOIA' s

purpose, which is to provide "a means for citizens to know what

their Government is up to." Favish, 541 U.S. at 171.

        The   Government   fails   to    respond     to    any   of   Plaintiff's

arguments in its Reply. Moreover, the insurer letter the Government

cites for the proposition that consumer confusion will lead to

competitive harm, Gov't's Ex.           3 at 41    [Dkt. No.     32-4], does not

even mention consumer confusion. Finally, our Court of Appeals has

"emphasize[d] that     [t]he important point for competitive harm in

the FOIA context           . is that it be 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,       as   might    flow    from    customer or employee

disgruntlement [.]" Public Citizen v. FDA, 704 F.2d at 1291. Even

viewed in the light most favorable to the Government, it has failed

to show that the harm it claims will arise from consumer confusion

would be caused by competitors' use of proprietary information as

Exemption 4 requires.

12   See p. 23.
                                     -29-
'·

                   2.      Program Effectiveness

           The Government also argues that it may withhold the requested

     data because early release would damage the effectiveness of the

     FFM program. Plaintiff denies that harm to "program effectiveness"

     is a valid basis for withholding under Exemption 4. Even if harm

     to   program        effectiveness       is    properly        considered        grounds      for

     withholding, the Government has failed to demonstrate that release

     of the requested benefits data at any point before the beginning

     of   the     Open    Enrollment        Period       would     harm      the    FFM     program.

     Consequently, summary judgment for the Government must be denied

     on this claim for the following reasons.

           As described above, our Court of Appeals has adopted the two-

     pronged National          Parks      test,   which considers             the    Government's

     interest      in    obtaining        information       from      private       entities      and

     private parties'          interest in avoiding competitive harm. National

     Parks, 498 F.2d   at   770.    In    that     case,      the    Court     of    Appeals

     mentioned, for the first time, program effectiveness in connection

     with Exemption 4. National Parks, 498 F.2d at 770 n.17 ("We express

     no opinion as to whether other governmental interests are embodied

     in   this    exemption.        Cf.    1963   Hearings       at    200     [sic]      where   the

     problems of compliance and program effectiveness are mentioned as

     governmental interests possibly served by this exemption.").

                                                  -30-
        Following that decision,    the U.S.   Court of Appeals for the

First      Circuit    interpreted   National    Parks   to     contemplate

application of Exemption 4 to information that, if released, would

harm government programs:

         [The National Parks test does not impose] a limitation
        on the number of legitimate interests which are
        protected by Exemption 4.             [I] n view of the
        legitimate governmental interest of efficient operation,
        it would do violence to the statutory purpose of
        Exemption 4 were the Government to be disadvantaged by
        disclosing information which serves a valuable purpose
        and is useful for the effective execution of its
        statutory responsibilities.

9 to 5 Org. for Women Office Workers v. Bd. of Governors of Fed.

Reserve Sys., 721 F.2d 1, 9-10 (1st Cir. 1983).

        Thereafter,   out Court of Appeals expressed support for the

First Circuit's ruling.      Critical Mass Energy Project v. Nuclear

Regulatory Comm'n,      830 F.2d 278, 286   (D.C. Cir. 1987)    ("Critical

Mass I")    (agreeing with the First Circuit's reasoning but holding

that the Government had not shown how disclosure would harm the

effective performance of the agency's responsibilities). Sitting

en bane in Critical Mass III, our Court of Appeals later explained

that while the National Parks test is not exclusive,             the Court

agreed with the       "First Circuit's conclusion that       the exemption

also protects a governmental interest in administrative efficiency

                                    -31-
and effectiveness."        Critical Mass III, 975 F.2d at 879         (citing

Critical Mass I, 830 F.2d at 286) . 1 3

     The Government, of course, bears the burden of demonstrating

with specific      factual    and evidentiary material              that disclosure

would cause the cited harm.           5 U.S.C.      §   552   (a) (4) (B); Comstock,
464 F. Supp. at 807. The Government contends that maintaining the

confidentiality of plan benefits data until the Open Enrollment

Period begins is central to the FFM program's operation. Gov't's

Mot. at 18. However, the Government has failed to show concretely

how it   (including the ACA and FFM)              would be harmed through the

release of information prior to the Open Enrollment Period,                         and

instead relies on conclusory statements that are insufficient to

carry the Government's burden. See Comstock, 464 F. Supp. at 807.

     Returning     to   its       concern   about       consumer    confusion,      the

Government   contends      that     pre-Open   Enrollment          disclosure    would

cause confusion and harm the effectiveness of the FFM as a "one

stop shopping tool" for consumers to identify and purchase health

plans.   Gov't's    Mot.     at    18-19.   The     Government       has   failed    to

13   The Second Circuit has criticized the Government's assertion
of a right to withhold information that, if released, would harm
Government programs. Bloomberg, L.P. v. Bd. of Governors of the
Fed. Reserve Sys., 601 F.3d 143, 150 (2d Cir. 2010) ("The 'program
effectiveness' test, if applied as the [Government] invokes it,
would give impermissible deference to the agency, and would be
analogous to the 'public interest' standard rejected by the Supreme
Court in the context of Exemption Five.") (citing Fed. Open Market
Comm. of Fed. Reserve Sys. v. Merrill, 443 U.S. 340, 354 (1979)).
                               -32-
substantiate its claim that disclosure would result in consumer

confusion       with     specific     factual     and    evidentiary         material.

Moreover,       the Government does not explain why public release of

data after the beginning of the Open Enrollment Period would not

be    equally      confusing    to    consumers    given       that   such    data   is

"regularly" updated after its release. See CCIIO, Health Insurance

Marketplace Public Use Files (Marketplace PUF), CMS.GOV. 14

        The Government also fails to explain how consumer confusion

would result        in harm to the FFM program sufficient to warrant

withholding.       Consumers choosing to enroll in a health insurance

plan through the FFM must complete CMS' s application during the

Open Enrollment Period whether by using HealthCare.gov, by calling

the Marketplace Call Center,            or by meeting with a professional.

See      Federal       Marketplace      Progress        Fact     Sheet,       CMS.gov,

http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/ffe.html

(updated May 31,         2013). The Government offers no reason why any

confusion would not be cured upon a consumer's first interaction

with the FFM itself.

        The Government also contends               improperly,        for the first

time in its Reply, Am. Wildlands v. Kempthorne, 530 F.3d 991, 1001

(D.C.    Cir.    2008)         that   early release      of     information     "would

14   Available    at     http://www. ems. gov/CCIIO/Resources/Data-
Resources/marketplace-puf. html (last visited June 18, 2015).
                                -33-
...

      likely"      lead insurers         to     initially provide the Government with

      false data and make last minute changes before plan finalization.

      Gov' t' s    Reply     at    9.    This        is    pure    speculation.     Moreover,      the

      Government's concern hardly seems plausible in light of its own

      statement       that   after       the    initial          submission period significant

      changes may not be made to benefit plans except with permission

      from CCIIO. Gov't's SMF at ~14; 2015 CCIIO Letter at 10.

              Thus,    the     Government        has        failed    to   carry    its   burden    to

      demonstrate harm to program effectiveness. Because the Government

      has     failed to show either competitive harm or harm to program

      effectiveness, its Motion for Summary Judgment must be denied.

              C.      Segregability

              As Plaintiff points out,                     the Government     has an obligation

      under FOIA to consider whether any portion of the requested data

      falls    outside of Exemption 4 and is reasonably segregable from

      exempt data.       See 5 U.S. C.           §    552 (b)      ("Any reasonably segregable

      portion of a         record shall be provided to any person requesting

      such record after deletion of the portions which are exempt under

      this subsection.");            Powell v.            U.S.    Bureau of Prisons,       927 F.2d
1239,    1242    (D.C.      Cir.   1991)        ("[T]his court has           long recognized

      that agencies                     are obliged to determine whether nonexempt

      material     can reasonably be                 segregated from exempt           material.") ;

      Mead Data Cent. v.          u.s:   Dep't of Air Force, 566 F.2d 242, 261 (D.C.

                                                          -34-
Cir. 1977)     ("[U]nless the segregability provision of the FOIA is

to be nothing more than a precatory precept,                  agencies must be

required to provide the reasons behind their conclusions in order

that they may be challenged by FOIA plaintiffs and reviewed by the

courts.") .

     In its Reply,         the Government contends that release of any

plan benefits data before the beginning of the Open Enrollment

Period would cause FFM-participating insurers competitive harm and

that therefore, none of the requested data is reasonably segregable

from data covered by Exemption 4. Because both Parties' Motions

for Summary Judgment are being denied, the Court need not at this

time assess the merits of the Government's position.

     IV.      CONCLUSION

     For the     foregoing reasons,           Plaintiffs'   Motion for Summary

Judgment   shall    be     denied    and   Defendants'      Motion   for   Summary

Judgment shall be denied.

     The Court warns the            Parties    that   any future     filings   must

contain clearer presentation of the facts underlying this case.

July 1, 2015                                   Gladys Kessle~
                                               United States District Judge

Copies to: attorneys on record via ECF

                                       -35-