Carlson v. United States Postal Service ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DOUGLAS FRED CARLSON,  No. 05-16159
Plaintiff-Appellant,
v.  D.C. No.
CV-03-04113-RMW
US POSTAL SERVICE,
OPINION
Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of California
Ronald M. Whyte, District Judge, Presiding
Submitted December 26, 2006
Filed October 15, 2007
Before: Jerome Farris, Robert Boochever, and
Edward Leavy, Circuit Judges.
Opinion by Judge Leavy
14021
CARLSON v. USPS 14023
COUNSEL
Douglas F. Carlson, Pro Se, San Francisco, California,
plaintiff-appellant.
Leonard Schaitman and Anthony A. Yang, United States
Department of Justice, Civil Division, Washington, D.C., for
the defendant-appellee.
OPINION
LEAVY, Circuit Judge:
Douglas F. Carlson appeals pro se the district court’s grant
of summary judgment in favor of the United States Postal Ser-
vice (USPS) in Carlson’s action under the Freedom of Infor-
mation Act (FOIA), 5 U.S.C. § 552 et seq., which sought
public disclosure of the names, addresses, telephone numbers,
regular business hours and final collection times for outgoing
mail for every United States post office. The district court
determined that the records sought were exempt from FOIA
disclosure as “information of a commercial nature, . . . which
under good business practice would not be publicly dis-
closed.” 39 U.S.C. § 410(c)(2).
We have jurisdiction over this timely appeal under 28
U.S.C. § 1291. Because the requested records are not “infor-
mation of a commercial nature,” we reverse.
FACTS AND PRIOR PROCEEDINGS
On June 7, 2003, Carlson submitted a FOIA request to
USPS requesting:
an electronic version of records from the database
that serves the Find MyPostOffice™ search option
14024 CARLSON v. USPS
in the Post Office Locator application under the “Lo-
cate a Post Office” link at www.usps.com that will
show, at a minimum, the following information for
every Postal Service post office, station, branch, or
other postal facility in the database:
1. Facility Name (e.g., Walnut Creek
Main Office)
2. Facility Address
3. Facility Telephone Number
4. Regular Business Hours (for all days of
the week)
5. Last Collection at Post Office (for all
days of the week)
USPS denied Carlson’s request, asserting, in part, that the
information was exempt from disclosure under “FOIA
exemption 3 in conjunction with 39 U.S.C. § 410(c)(2)”
because it was information of a commercial nature which
under good business practice would not be publicly disclosed:
The information you requested concerning the Postal
Service’s retail sales operations constitutes “infor-
mation of a commercial nature” within the meaning
of section 410(c)(2). The web page to which you
refer is one of the most popular pages on the Postal
Service’s web site, attracting approximately 750,000
hits monthly. In internet commerce, the ability to
draw hits is a measure of the success of the web site.
Thousands of users are drawn to Postal Service’s
web site by the Post Office Locator web page, and
the Postal Service would prefer to retain customers
at its web site.
CARLSON v. USPS 14025
USPS asserted that release of the requested information
could cause “mirror” websites, which could (1) reduce USPS
product sales, (2) redirect delivery business to other carriers,
(3) cause customer confusion, and (4) increase USPS costs
because the mirror website would generate more calls from
confused customers to the USPS call center or local facilities.
In addition, USPS asserted that its business relationship with
the company, Switchboard, Inc., which maintains and oper-
ates the Post Office Locator website, would be undermined by
release of the information.
Thereafter, Carlson brought an action in United States Dis-
trict Court for the Northern District of California seeking an
order requiring USPS to provide the requested records. The
parties filed cross motions for summary judgment. USPS sub-
mitted two declarations in support of its motion for summary
judgment, one from the Senior Web Specialist for USPS.com,
and the other from an attorney in the USPS Law Department.
These declarations supported USPS’s assertions in its letter
denying Carlson’s FOIA request. In addition, the Web Spe-
cialist’s declaration explained that USPS pays nothing to
Switchboard, Inc., for its web services, but permits Switch-
board to redirect Post Office Locator users to other Switch-
board client sites.
Carlson also submitted a declaration in support of his
motion for summary judgment stating that the information he
sought was already available to the public through the USPS
website or call center or by visiting local post offices.
On March 31, 2005, the district court granted summary
judgment in favor of USPS. First, the court held that 39
U.S.C. § 410(c)(2) is a statute within the scope of Exemption
3 of FOIA, 5 U.S.C. § 552(b)(3)(B), which makes FOIA inap-
plicable to matters exempted from disclosure by another stat-
ute, provided that the statute “establishes particular criteria for
withholding or refers to particular types of matters to be with-
held.” 5 U.S.C. § 552(b)(3)(B). The district court held that
14026 CARLSON v. USPS
§ 410(c)(2)’s “good business practice” limitation satisfied
subsection (B)’s requirement of particularized criteria.
The district court then held that the information sought by
Carlson fell under § 410(c)(2), because it was information of
a commercial nature which would not be publicly disclosed
under good business practice. While the district court recog-
nized that “post office names, locations, and hours of opera-
tion are not intrinsically commercial information,” it looked
to USPS regulations, 39 C.F.R. § 265.6(b)(3)(vi) & (vii),
which identify two categories of information subject to
§ 410(c)(2): (1) “[r]ecords compiled within the Postal Service
which would be of potential benefit to persons or firms in
economic competition with the Postal Service” and (2)
“[i]nformation which, if publicly disclosed, could materially
increase procurement costs.” The district court held that the
requested information was commercial in nature because “it
may be of a potential benefit to defendant’s competitors.” For
the same reason, the district court also held that it would not
be a “good business practice” to release the information.
Carlson filed a timely notice of appeal on May 2, 2005.
STANDARD OF REVIEW
We employ a two-step standard to review summary judg-
ment in FOIA cases. If the factual basis of the district court’s
decision is in dispute, we determine whether the district court
had an adequate factual basis for its decision using a clearly
erroneous standard. See Lion Raisins v. U.S. Dep’t of Agric.,
354 F.3d 1072, 1078 (9th Cir. 2004). If, as here, an adequate
factual foundation exists, we review de novo the district
court’s legal rulings, including its conclusion that a FOIA
exemption applies. See Minier v. CIA, 88 F.3d 796, 800 (9th
Cir. 1996).
USPS asserts that we should apply a more deferential,
administrative law standard of review when determining
CARLSON v. USPS 14027
whether the requested information falls within the scope of
§ 410(c)(2). In Aronson v. IRS, 973 F.2d 962, 966-67 (1st Cir.
1992), the First Circuit applied this deferential standard of
review to the IRS’s determination that taxpayer information
fell within the scope of another Exemption 3 statute, I.R.C.
§ 6103. However, we have not adopted the First Circuit’s
approach and, when considering the interplay of FOIA and
§ 6103, we specifically stated:
[I]f section 6103 is subject to FOIA, the court will
proceed de novo and the agency bears the burden of
establishing the exempt status of the information.
Long v. U.S. IRS, 742 F.2d 1173, 1178 n.12 (9th Cir. 1984)
(citations omitted). We have also noted:
A basic policy of FOIA is to ensure that Congress
and not administrative agencies determines what
information is confidential. Given the court’s
responsibility to ensure that agencies do not interpret
the exemptions too broadly, deference appears inap-
propriate in the FOIA context.
Lessner v. U.S. Dep’t of Commerce, 827 F.2d 1333, 1335 (9th
Cir. 1987) (citation omitted). Therefore, we do not give defer-
ence to the USPS’s determination that the requested informa-
tion was “information of a commercial nature” and review de
novo.
ANALYSIS
As a general rule, we employ a two-part inquiry to deter-
mine whether Exemption 3 applies to a particular FOIA
request. See Minier, 88 F.3d at 801. First, we determine
whether the withholding statute meets the requirements of
Exemption 3. Then, we determine whether the requested
information falls within the scope of the withholding statute.
See id. However, neither party to this appeal contests the dis-
14028 CARLSON v. USPS
trict court’s ruling that 39 U.S.C. § 410(c)(2) meets the
requirements of Exemption 3. Therefore, we assume without
deciding that 39 U.S.C. § 410(c)(2) qualifies as an Exemption
3 statute for purposes of this appeal and proceed directly to
the question whether the requested records fall within the
scope of § 410(c)(2).
USPS asserts that the requested information is commercial
because its Post Office locator database has commercial value
and attracts customers to the Post Office website for market-
ing and advertising. It also argues that the Postal Reorganiza-
tion Act (PRA) gave the Postal Service the status of a private
commercial enterprise, such that its website is commercial,
and the locator database, which attracts people to the website,
is commercial information. However, USPS’s argument is
undermined by the position and purpose of the United States
Postal Service, common understanding of the definition of
“commercial,” and case law interpreting the phrase “informa-
tion of a commercial nature.”
United States Postal Service Purpose. As we noted in
Church of Scientology v. U.S. Postal Serv., 633 F.2d 1327,
1332-33 (9th Cir. 1980), the PRA sought to eliminate out-
moded “legislative, budgetary, financial, and personnel poli-
cies” so that USPS could employ “modern management and
business practices” to provide the American public with “effi-
cient and economical postal service.” (quoting H.R. Rep. No.
91-1104, 91st Cong., 2d Sess., at 2 (1970), reprinted in 1970
U.S.C.C.A.N. 3649, 3650). Under the PRA, the Postal Service
is to operate in a more “businesslike way” but with “appropri-
ate safeguards” against abuse of its responsibility for manag-
ing the postal system and “appropriate assurances of
continued congressional surveillance.” H.R. Rep. No. 91-
1104 at 5, reprinted in 1970 U.S.C.C.A.N. at 3653.
As stated in the PRA:
The United States Postal Service shall be operated
as a basic and fundamental service provided to the
CARLSON v. USPS 14029
people by the Government of the United States,
authorized by the Constitution, created by Act of
Congress, and supported by the people. The Postal
Service shall have as its basic function the obligation
to provide postal services to bind the Nation together
through the personal, educational, literary, and busi-
ness correspondence of the people.
39 U.S.C. § 101(a) (Postal Policy).
Thus, USPS is not a private business, but
has different goals, obligations, and powers from pri-
vate corporations. Its goals are not those of private
enterprise. The most important difference is that it
does not seek profits, but only to break even, which
is consistent with its public character. It also has
broader obligations . . . . Finally, the Postal Service
has many powers more characteristic of Government
than of private enterprise, including its state-
conferred monopoly on mail delivery, the power of
eminent domain, and the power to conclude interna-
tional postal agreements.
U.S. Postal Serv. v. Flamingo Indus. (USA) Ltd., 540 U.S.
736, 747 (2004) (citation omitted).
[1] Thus, under the PRA, USPS is a government entity, not
a business, which provides a service, mail delivery, to the
public. Post offices are a primary means of public access to
mail service. Basic information concerning these access
points, such as the location of post offices and their phone
number, hours of operation and time of mail pick-up is not
information that is commercial in nature.
[2] Definition of Commercial. Because the PRA and USPS
do not define the term, “commercial,”1 we apply the common
1
USPS regulations list eight categories of “information of a commercial
nature . . . which under good business practice would not be disclosed.”
14030 CARLSON v. USPS
meaning of the term. See Lands Council v. Martin, 479 F.3d
636, 642 (9th Cir. 2007). We have previously surveyed the
common definitions of commercial:
Webster’s defines “commercial” as “occupied with
or engaged in commerce or work intended for com-
merce; of or relating to commerce.” The American
Heritage Dictionary of the English Language pro-
vides a strikingly similar definition, viewing “com-
mercial” as meaning “1.a. of or relating to
commerce, b. engaged in commerce, c. involved in
work that is intended for the mass market.” Black’s
Law Dictionary adds that “commercial” may be
defined as “relates to or is connected with trade and
traffic or commerce in general; is occupied with
business or commerce.”
39 C.F.R. § 265.6(b)(3)(2005). The regulations do not define commercial.
The eight categories are:
(i) Information pertaining to methods of handling valuable registered
mail.
(ii) Records of money orders, except as provided in R900 of the
Domestic Mail Manual (DMM).
(iii) Technical information concerning postage meters and prototypes
submitted for Postal Service approval prior to leasing to mailers.
(iv) Reports of market surveys conducted by or under contract in
behalf of the Postal Service.
(v) Records indicating rural carrier lines of travel.
(vi) Records compiled within the Postal Service which would be of
potential benefit to persons or firms in economic competition with the
Postal Service.
(vii) Information which, if publicly disclosed, could materially
increase procurement costs.
(viii) Information which, if publicly disclosed, could compromise test-
ing or examination materials.
Id..
CARLSON v. USPS 14031
The Wilderness Soc’y v. U.S. Fish & Wildlife Serv., 353 F.3d
1051, 1061 (9th Cir. 2003) (en banc) (citations omitted).
Thus, “[i]nformation is commercial if it relates to commerce,
trade, or profit.” McClellan Ecological Seepage Situation v.
Carlucci, 835 F.2d 1282, 1285 (9th Cir. 1987) (interpreting
“commercial” as used in FOIA fee waiver provision).
[3] Mail service may be essential to commerce and trade,
but information concerning the names, addresses, telephone
numbers, and regular business hours of post offices, is not
commercial information. While the Postal Service argues the
requested information concerning post offices is commercial
because it has value, this is too broad a definition of commer-
cial, particularly given our prior admonition that an Exemp-
tion 3 statute’s “identified class of nondisclosable matters
[must be] narrow” to meet the requirements of Exemption 3.
Lessner, 827 F.2d at 1336.
[4] USPS also relies on two of its regulations, 39 C.F.R.
§ 265.6(b)(3)(vi) & (vii), to support its argument that the
information requested by Carlson is commercial. These regu-
lations provide in relevant part:
(b) Records not subject to mandatory public disclo-
sure. . . .
....
(3) Information of a commercial nature,
including trade secrets, whether or not
obtained from a person outside the Postal
Service, which under good business prac-
tice would not be publicly disclosed. This
class includes, but is not limited to:
....
(vi) Records compiled within the Postal
Service which would be of potential benefit
14032 CARLSON v. USPS
to persons or firms in economic competi-
tion with the Postal Service.
(vii) Information which, if publicly dis-
closed, could materially increase procure-
ment costs.
39 C.F.R. § 265.6(b)(3)(vi) & (vii). USPS’ interpretation of
these regulations to encompass the location, phone numbers
and hours of its post offices is inconsistent with the regulation
and with the statute, because both require that the information
be of “a commercial nature” in the first instance. See 39
U.S.C. § 410(c)(2); 39 C.F.R. § 265.6(b)(3). Because USPS’s
interpretation is inconsistent with its own regulations and
based on an impermissible construction of the governing
statue, it is not entitled to deference. See Auer v. Robbins, 519
U.S. 452, 457 & 461 (1997); League of Wilderness Defenders
v. Forsgren, 309 F.3d 1181, 1183 (9th Cir. 2002).
[5] Case Law. The majority of cases which have upheld
USPS’s withholding of information under § 410(c)(2) have
concerned proprietary information. See, e.g., Wickwire Gavin,
P.C. v. U.S. Postal Serv., 356 F.3d 589, 589 (spreadsheets
detailing quantity and pricing information in contract between
USPS and the successful bidder for the mailing supplies con-
tract); Piper & Marbury LLP v. U.S. Postal Serv., 2001 WL
214217, at *4-5 (D.D.C. Mar. 6, 2001) (figures and data in a
contract between USPS and DHL); Reid v. U.S. Postal Serv.,
No. 05-cv-294-DRH, 2006 WL 1876682, at *7-8 (S.D. Ill.
July 5, 2006) (information in USPS mailing permits for a pri-
vate marketing firm which would reveal the firm’s clients,
mailing agents, and charges by USPS); Airline Pilots Ass’n
Int’l v. U.S. Postal Serv., Civil Action No. 03-2384, 2004 WL
5050900 (D.D.C. June 24, 2004) (redacted information in
delivery agreements between USPS and FedEx including
pricing and rates).
[6] In contrast, in Nat’l Western Life Ins. Co. v. United
States, 512 F. Supp. 454, 462 (N.D. Tex. 1980), the names
CARLSON v. USPS 14033
and duty stations of USPS employees in two cities did not
constitute commercial information and was not within the
scope of § 401(c)(2) even though “it may not be good busi-
ness practice for a private company to disclose names and
addresses of its employees.” Here, the records requested are
not proprietary, and, in fact, are already publicly available.
That it may not be good business practice to disclose the
information requested does not, by itself, make it commercial
in nature.
[7] Post office names, addresses, telephone numbers, hours
of operation and final collection times are not “information of
a commercial nature,” and, therefore, are not within the scope
of § 401(c)(2). We do not decide whether the complete USPS
database from which Carlson requested an electronic version
of this particular information is commercial nor whether the
USPS database may be exempt from disclosure. In so ruling
we do not preclude further consideration by the district court
nor do we preclude consideration of reasonable conditions.
[8] Litigation Costs. Carlson has requested an award of his
district court litigation costs and his costs on appeal. Under 5
U.S.C. § 552(a)(4)(E) a court may award a substantially pre-
vailing plaintiff in a FOIA action litigation costs that are rea-
sonably incurred. Carlson’s request for district court litigation
costs is remanded to the district court for its consideration in
the first instance. See Lissner v. U.S. Customs Serv., 241 F.3d
1220, 1224 (9th Cir. 2001). Carlson is awarded costs on
appeal.
REVERSED AND REMANDED.