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WBK Industry News - Litigation Developments

District Court Rejects Preliminary Injunction to Force BCFP to Respond to FOIA Request

On November 1, 2018, the District Court for the District of Columbia denied a motion for a preliminary injunction to have the BCFP turn over documents related to a 2015 Civil Investigative Demand (CID) issued to a real estate website company.  The Court refused the preliminary injunction request because it concluded that the plaintiff had failed to establish a likelihood of success on the merits, show irreparable harm, or demonstrate that the balance of hardship and the public interest weigh in favor of injunctive relief.

The plaintiff in this case is lead counsel in a class action, where he represents purchasers of the real estate website company securities that was subject to a BCFP CID in 2015.  In the class action, the purchasers alleged the real estate company violated the Securities Exchange Act of 1934. However, that case was dismissed without prejudice with leave to amend.  The judge in that case directed the purchasers to file a second amended complaint by November 16, 2018.  As a result, the attorney submitted a FOIA request to the BCFP for records concerning the 2015 CID, but the Bureau did not provide the records within the 20-day statutory time frame set to respond to a FOIA request.  The attorney asked the court in the current case to issue a preliminary injunction ordering the Bureau to release all responsive records to the FOIA request, as he argued that these documents were critical to supporting the allegations in the second amended complaint.

The Court, however, found that the Bureau’s failure to meet a FOIA deadline was not enough to establish a high likelihood that the attorney’s case would succeed.  The attorney argued that he had an “extremely high” likelihood of success on the merits because the BCFP did not comply with the statutory time limits imposed by FOIA.  The Court, unpersuaded by the plaintiff’s argument, clarified that an agency failing to meet its statutory time limit does not mean that a plaintiff is entitled to immediate processing of his or her FOIA request, but instead may seek judicial supervision over an agency’s response to that FOIA request.  Further, the Court concluded that the BCFP was acting under “exceptional circumstances” given an increase in FOIA requests and an insufficient number of employees to deal with every FOIA request within the statutory time frame.

The Court also found that the attorney had not sufficiently showed he would suffer irreparable harm if the preliminary injunction was not issued.  First, the attorney argued that if he was not granted swift access to the requested material, he would not be able to include certain allegations in the second amended complaint for the securities class action against the real estate company and would cause irreparable injury to public shareholders.  The Court, however, concluded that this is not the type of harm FOIA was created to address and that the harm was theoretical since it was not clear that obtaining the requested documents would actually help the attorney craft a more successful complaint in the class action.  Second, the attorney argued that any further delay in processing the FOIA request would irreparably harm the public’s ability to obtain important information in a timely fashion.  The attorney, however, failed to demonstrate that the public required the requested documents by a certain date.

Finally, the Court concluded that the balance of hardships or the public interest weigh in favor of granting injunctive relief.  The Court reasoned that asking the government to expand resources to process the attorney’s FOIA request before processing other requests would harm the other requesters and that there was nothing distinguishing the attorney’s request so as to warrant the preliminary injunction.

The case is Baker v. Consumer Financial Protection Bureau, No. 18-cv-2403 (D.D.C.).