HRDC FCC comment on prison phone provider transparency issues July 2015
Download original document:
This text is machine-read, and may contain errors. Check the original document to verify accuracy.
Human Rights Defense Center DEDICATED TO PROTECTING HUMAN RIGHTS July 14, 2015 The Honorable Tom Wheeler, Chairman Federal Communications Commission 445 12th St. S.W. Washington, D.C. 20554 Re: Comment for WC Docket 12-375 Dear Chairman Wheeler: The Human Rights Defense Center (HRDC) respectfully submits this comment for WC Docket No. 12-375 regarding the lack of transparency by Inmate Calling Service (ICS) providers and the critical need for the Commission to address this issue as part of comprehensive ICS reform. Specifically, HRDC requests that the Commission require all ICS providers to publicly post on their websites all of their contracts to provide telephone services at detention facilities, and to also publicly disclose on their websites all payments, goods and in-kind services they provide to detention facility agencies to secure monopoly contracts for ICS and other services, including services bundled with telecom services. ICS Contracts As the thousands of submissions in this docket have illustrated over the past decade, the ICS industry is shrouded in secrecy and characterized by an almost total lack of transparency on the part of both ICS providers and the government agencies from which they secure their monopoly contracts. Moreover, the stunning amount of commission kickbacks that ICS providers give to detention facility agencies has been largely undisclosed, especially at the local level. To facilitate the democratic process and to protect consumers (as it is readily admitted by ICS providers that they view their “customers” as the prisons and jails that award them the monopoly contracts for telephone services, not the people who actually pay the inflated phone bills and hand over their hard-earned money), all ICS contracts and payments made to secure those contracts must be made publicly available and disclosed to the actual consumers of ICS services. Contracts between ICS providers and detention facilities are public documents and should be accessible to consumers through each state’s public records laws. Yet ICS providers frustrate the disclosure of these contracts – which typically include details about commission kickbacks – to prevent transparency of the terms under which they contract with government agencies. P.O. Box 1151 Lake Worth, FL 33460 Phone: 561-360-2523 Fax: 866-735-7136 email@example.com Page |2 Since 2009, HRDC has devoted a significant amount of time and effort to obtain ICS contracts from all 50 state DOCs as well as the federal Bureau of Prisons and a sampling of jails. Data from those documents has been published in our monthly publication, Prison Legal News, and is maintained by HRDC on our prison phone justice website (www.prisonphonejustice.org). As the Commission is aware, our data is utilized by many organizations and individuals working on issues related to the prison phone industry. While we understood that a project of this size would tax our limited resources, unnecessary and questionable opposition from ICS providers has only increased the amount of staff time devoted to repeated follow-ups and, in some cases, litigation. For example, when Global Tel*Link (GTL) and the Mississippi Department of Corrections refused to produce ICS contracts and related records under the guise of a protective order, HRDC was forced to file a lawsuit in order to obtain the records. 1 The case settled in May 2009 and the records were finally produced. See Attachment 1. GTL, now joined by Securus, is currently trying to block the release of public documents in Pennsylvania. The Pennsylvania DOC produced a heavily redacted ICS contract with GTL in response to a public records request made by HRDC in April 2015. HRDC filed a formal appeal for the unredacted contract and we were informed last month that GTL’s request to participate in our appeal as “a direct interest participant” had been granted. In addition to its own lack of transparency, GTL has a practice of partnering with government agencies, citing “proprietary information,” to improperly block the production of public documents – at least with respect to public records requests made by HRDC. Securus has also intervened in our Pennsylvania public records appeal, seeking to prevent disclosure of the ICS records we are seeking. GTL’s and Securus’s actions demonstrate not only a lack of transparency but also intentional interference with the production of documents under state public records laws, including ICS contracts. See Attachment 2. The integrity and transparency of the telecom industry in general and ICS providers in particular are too important to be entrusted to the vagaries of public records laws. Even if HRDC litigates and prevails in such cases, the delay in disclosure harms our advocacy efforts and impedes public and regulatory understanding of the underlying issues. It is also a drain on the resources of a small non-profit organization confronting the secrecy and vast resources of the ICS industry. We are experiencing the same type of interference with a pending ICS public records request filed with the Ohio DOC. At the present time, the Ohio DOC is refusing to produce GTL’s response to its Request for Proposal upon which the DOC’s current ICS contract is based. The Ohio DOC is claiming GTL’s response is protected by “copyright.” See Attachment 3. Further, in a letter dated April 6, 2015, the Illinois DOC summarily rejected our request for public records including ICS contracts and documents related to commission kickbacks as being “unduly burdensome.” See Attachment 4. The Alabama DOC requires that HRDC send someone to their office in Montgomery, Alabama to photocopy the records in person (See Attachment 5), and Tennessee’s public records law limits the ability to request documents to Tennessee citizens. See: T.C.A. § 10-7-503 (a)(2). Some government agencies do not provide the requested records in electronic format, meaning we must pay copy and postage fees – and such fees are used to eliminate or discourage access to public records. These barriers make it 1 Prison Legal News v. Mississippi Department of Corrections and Global Tel*Link Corporation, Hinds County, Mississippi, Civil Action No. G2009-391 T/1. Page |3 impossible for consumers in some states, particularly at the local level, to obtain access to ICS contracts, rates, and fee and commission data. Lack of transparency by governmental officials who oversee correctional institutions is not limited to state agencies. We were required to retain counsel and file suit against the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) for failure to timely produce an ICS contract under the Freedom of Information Act (FOIA), and for relying on improper exemptions. 2 In a ruling granting HRDC’s summary judgment motion, U.S. District Court Judge Marsha Pechman found that DHS and ICE “violated FOIA by failing to respond to Plaintiff’s requests and have failed to prove that [ICS provider] Talton’s performance incentive falls within one of FOIA’s exemptions.” See Attachment 6, at 11. In theory, state public records laws and FOIA should provide the means necessary to obtain ICS contracts and data related to commission kickbacks, and while about 40 state DOCs have responded to HRDC’s requests in accordance with the law, the remaining 20% have not. The failure of these state DOCs to produce ICS-related documents requires us to expend yet more of our limited resources, sometimes to the level of litigation. This, coupled with the lack of transparency by ICS providers, makes ICS data in some states practically unattainable. Darrell Baker notes in his most recent filing on this Docket that “The lack of transparency in the ICS industry is problematic.” 3 ICS Ancillary Fees HRDC continues to support the elimination of all ICS-related ancillary fees. There is significant data in the record documenting the excessive fees prisoners and their families have been required to pay for decades to stay in touch during times of incarceration. One only needs to look at the 28 different fees listed in the Joint Provider Proposal 4 to see how out of hand this particular form of price gouging has been allowed to become. HRDC has reported on and been actively involved with all aspects of the prison telephone industry for over 25 years, yet we were not aware that many of these fees were being charged. Absent the elimination of ancillary fees, ICS providers should be required to disclose any and all fees 1) in terms and conditions provided to customers; 2) on their websites; and 3) prior to the connection of every call. Disclosure of Kickbacks As HRDC has noted in our prior filings with the Commission, the payment of ICS commission kickbacks to detention facilities in exchange for monopoly ICS contracts deeply subverts our democracy by giving prison and jail administrators the ability to externalize their costs and avoid the democratic process by affording them their own cash spigot by selling phone access to their captive population. Until HRDC began collecting and publicizing the data on kickbacks in 2009 very little was known about the extent or amount of money at stake. While we have fairly good documentation of ICS commissions at the DOC level, we know relatively little about the extent at the local level with more than 3,100 city and county jails profiting from giving ICS providers exclusive access to their prisoners and detainees in exchange for kickbacks. 2 Prison Legal News v. United States Department of Homeland Security, et al., U.S. District Court, Western District of Washington, Case No. 2:14-cs-00479-MJP. 3 Darrell Baker, Notice of Ex Parte Presentation, WC Docket No. 12-375, July 13, 2015 4 Attachment to Joint Provider Proposal, WC Docket No. 12-375, September 15, 2014. Page |4 While HRDC is hopeful that the Commission will end kickbacks in their entirety, we are not so naïve as to believe that government agencies that have grown fat off ICS commissions paid by prisoners’ families will be quick to obey any restrictions on kickbacks for monopoly contracts. We are already seeing examples of signing bonuses and payments based on Average Daily Population counts in correctional facilities, and in the past ICS providers have acted as a police supply catalog for jails in particular. For the last 25 years ICS has been a pay-to-play business, yet the public, legislators and regulators are largely in the dark about how much ICS providers are paying to play. As noted above, the kickbacks subvert the democratic process and we are unaware of any other government agencies that receive hundreds of millions of dollars annually from corporations in exchange for monopoly contracts to exploit a captive market. Taxpayers and ICS consumers alike have a right to know the price they are paying for their elected officials – especially the sheriffs and jailers at the local level – to sell monopoly ICS contracts. If that information was widely known it could spur the democratic process to include election discussion, debate and dialogue by other government officials, and empower voters to take action. None of this can or does occur when the kickbacks are negotiated in secret and the information is not made readily available to the public. Regardless of whether or not the FCC has the legal authority to ban kickbacks, it does have the authority to mandate the public disclosure of kickback payments by ICS providers. It is beyond dispute that nothing requires monopoly ICS contracts or kickbacks, and the legislative and executive branches have the ability to end the practice of commission kickbacks as they have done in New York, New Mexico, California and several other states at the state prison system level. It is telling that while there has been modest ICS reform at the state DOC level, to the best of our knowledge not a single jail or sheriff in America is refusing to accept commission kickbacks from ICS providers. Instead, sheriffs have threatened to end telephone access if their kickbacks are eliminated. The concept of bidding contracts based on the lowest phone rate to the person actually paying for the call is as alien to these officials as thermodynamics is to a mole. In addition, HRDC has specifically asked both Securus and GTL to provide us with copies of their ICS contracts and kickback amounts so we do not have to expend our limited resources by filing public records requests – which, as noted above, can be problematic. Both refused. To the extent that these two largest ICS providers are privately-held companies owned by hedge funds, they are even less transparent than publicly-traded telecom companies like AT&T or Verizon, which must at least file reports with the SEC and are answerable to their shareholders. To remedy these shortcomings, we request that the Commission require all ICS providers to post their contracts with detention facilities on their websites where they are publicly available. They should also be required to post the annual itemized amounts they pay to government agencies as well as related law enforcement and corrections associations such as the National Sheriffs’ Association, American Correctional Association, American Jail Association, etc. in exchange for monopoly ICS contracts. This includes money paid as commissions, donations, campaign contributions, in-kind equipment or services, and related payments. These disclosures should be made within 30 days of each payment made. Even if the Commission eliminates ICS kickbacks or commissions, this is still necessary to bring much-needed light and transparency to the ICS industry, which for far too long has languished in darkness and secrecy. Page |5 Attempts to Chill HRDC’s Speech HRDC received a cease and desist letter from GTL’s legal counsel, dated June 16, 2015. See Attachment 7. The letter accuses HRDC of posting “false and misleading rates” for calls made in North Carolina and goes on to say that our use of the term “kickback” is damaging GTL’s reputation and business. As noted in the response from our counsel dated June 26, 2015, the rate posted on our website for North Carolina at the time we received GTL’s letter had been provided to us by the North Carolina DOC in April 2015. See Attachment 8. We contacted the North Carolina DOC immediately upon receipt of GTL’s letter, notified them of the error in their records production and corrected the rate on our website. Accuracy is our top priority and we appreciate GTL bringing this issue to our attention. We note, however, that their cease and desist letter simply informed us we had posted incorrect rates while failing to provide us with the correct ICS rates. This demonstrates, yet again, that ICS providers are non-transparent with respect to providing details about ICS-related issues – in this case the rates charged by the North Carolina DOC. This further illustrates that corrections officials are sometimes incapable of providing accurate information about the rates consumers are charged for ICS services, since the North Carolina DOC had provided us with incorrect rates. Equally important is HRDC’s First Amendment right to express our opinion about the prison phone industry and the practices of ICS providers, as detailed in our counsel’s response to GTL. Id. While we understand that GTL is tired of HRDC standing up for the rights of prisoners and their families, and demanding an end to the price gouging and financial exploitation of this very marginalized group of consumers that has gone on for decades, attempting to intimidate us into silence is yet another example of the need for comprehensive ICS reform. GTL General Counsel David Silverman and I have each other’s cell phone numbers and email addresses, and we have communicated about issues related to ICS during the pendency of this proceeding. Mr. Silverman could have easily picked up the phone and called me to correct the North Carolina rates as opposed to trying to intimidate us by sending a cease and desist letter from counsel. Which in turn required HRDC to retain counsel to respond. We note that GTL has not yet responded to our reply letter and has yet to provide us with correct ICS rates for the North Carolina DOC. GTL also objected to our use of the term “kickback” to describe their business practice of giving money to government officials in exchange for monopoly ICS contracts that allow them to financially exploit prisoners and their families. In the 23 years HRDC has been advocating on this issue, no one has expressed confusion about the use of the term “kickback” to refer to ICS commissions. We also have yet to meet a single consumer who would voluntarily agree to such kickbacks, which serve to inflate ICS phone rates. GTL is very clear that it views the government officials to whom it provides the kickbacks as its real customers, not the poor working people who actually pay for GTL’s high-priced ICS services. Nor does anyone think that such practices are illegal or unlawful. Indeed, that is the crux of the problem: They are perfectly legal. When GTL stops giving kickbacks to government officials, we will stop referring to them as such. As another example of efforts to chill speech with respect to ICS-related issues by those profiting from the status quo, HRDC associate director Alex Friedmann attended the National Sheriffs’ Association (NSA) annual conference in Baltimore, Maryland from June 30 to July 1, 2015, having pre-registered and paid in advance. He was attending the conference in his capacity as president of the Private Corrections Institute, a non-profit organization that advocates on issues related to the privatization of correctional services. Mr. Friedmann attended the first day of the Page |6 conference and participated in sessions without incident. On the second day of the conference he attended a session on FCC updates related to prison/jail phone issues led by Breanna BockNielsen, Director of Government Affairs for the NSA. When Mr. Friedmann returned to attend the last session of the day he was stopped by an NSA staffer and told the NSA would not allow him to attend any more sessions because they were limiting attendance to law enforcement only. When Mr. Friedmann noted that other non-law enforcement personnel were being allowed to attend the sessions, he was told the restriction applied to “only you,” and that the NSA had received reports that Mr. Friedmann was being “disruptive.” He was also accused of using a false name – although the name “Alex Friedmann” was clearly displayed on his conference name tag. Mr. Friedmann then spoke with Fred Wilson, the NSA’s Director of Outreach and Law Enforcement Relations. Mr. Wilson reiterated that Mr. Friedmann was being disruptive and did not share the interests of the NSA. Mr. Friedmann was asked to produce his ID, which, when provided, again confirmed that he was not attending the conference under a false name. Notably, there was no problem with Mr. Friedmann attending the NSA conference until he attended the FCC update session and commented on the use of commission payments for costs unrelated to inmate welfare in response to a question from the presenter. One of the sheriffs who attended that same session complained he wanted the NSA to stop “prostituting” itself to corporate sponsors (such as ICS companies like GTL) that provide funding to the NSA through sponsorship fees. That sheriff was not barred from attending other sessions, even though his comments could be considered “disruptive” and not sharing the interests of the NSA. Only Mr. Friedmann was barred from attending other sessions after he commented during the FCC update session. In closing, I would point out that I have personally requested copies of all ICS contracts and commission-related data from both David Silverman (as noted in our response letter to GTL) and Richard Smith with Securus, and both declined to produce those documents, which are public records. The two largest ICS providers have thus clearly demonstrated that they will not provide any transparency in this process unless required to do so, and it is therefore critical that any action taken by the FCC with respect to comprehensive ICS reform include regulations specific to transparency requirements by ICS providers. Accordingly, we ask that the FCC, as part of its next order on ICS regulation and reform, require all ICS providers to post their ICS contracts on their websites and disclose, at least annually, all payments made to detention facility agencies and related agencies or organizations in exchange for monopoly ICS contracts. Sincerely, Paul Wright Executive Director, HRDC Enclosures: Attachments 1-8 Attachment 1 PLN v GTL and Mississippi DOC • Complaint • Release and Settlement Agreement PLN v GTL and Mississippi DOC • Release and Settlement Agreement Attachment 2 Response to HRDC Public Records Request to Pennsylvania DOC • Page 1 of Pennsylvania DOC Response • GTL Request to Participate in Appeal • Securus Request to Participate in Appeal GTL Request to Participate in Appeal Securus Request to Participate in Appeal Attachment 3 From: Young, Stephen Sent: Thursday, April 02, 2015 6:27 PM To: 'firstname.lastname@example.org' Subject: Ohio Inmate Telephone Contract Per your record request dated April 2, 2015, I have attached a copy of the following records which are completely responsive to your requests #1 and #4. The records are partially responsive to your requests #5 - #8, inclusive. As indicated by attached Contract Amendment #1, Global Tel Link (GTL) ceased providing video visitation services and another provider took over. Thus, responses on that other provider responsive to your requests #5 - #8, inclusive, will be provided by other DRC staff. Attached Contract Amendment #2 is partially responsive to your request #3. I will soon be supplementing my response as it applies to completing DRC’s response to your request #3. The following records are attached: Inmate Call-Out Program Contract with GTL Effective 02-29-2010; Final Request For Proposal (RFP) 07-27-09; Four RFP Addendums; Revised RFP Attachment B; and Contract Amendments #1 & #2. However, GTL’s proposal to the RFP is not included given that it is copyrighted. If you want to review said proposal it is available for inspection by contacting my office for an appointment. The fees are waived relative to these attached records. I hope you find this information helpful to your organization. Other DRC staff will be responding to the remainder of your record request dated April 2, 2015. Thanks Stephen A. Young Legal Counsel Dept. of Rehabilitation & Correction 770 West Broad St. Columbus, OH 43222 (614) 752-1784 phone (614) 752-1034 fax Please note that this message and/or any attachments may contain confidential attorney work product and/or may otherwise be privileged or confidential and/or protected from disclosure by applicable law. If you are not the intended recipient, you are hereby notified that you have received this message in error. Any review, dissemination, distribution or copying of this message is strictly prohibited. If you have received this message in error, please notify the sender by reply or by telephone at 614-752-1784 and immediately delete this message and any attachments. Attachment 4 Attachment 5 From: Carpenter, Jerry [mailto:Jerry.Carpenter@finance.alabama.gov] Sent: Monday, June 08, 2015 7:52 AM To: Paul Wright Cc: Ryan Barrett Subject: Public Records Request The inmate pay telephone contract is TA497, ITB#12-X-2238645. It is available for viewing by appointment between 8:00 a.m. and 5:00 p.m., CDT, Monday through Friday, except holidays, at the office of the Department of Finance’s Division of Purchasing. You may arrange an appointment by emailing Shirley Jackson at email@example.com. The division does not provide copies but will accommodate your bringing your own copier, or you may photograph the documents with a cell phone or other hand-held device. Jerry Carpenter Deputy Attorney General Department of Finance, Legal Division E-309 State Capitol Montgomery, AL 36130 334-242-4520 CONFIDENTIALITY NOTICE AND DISCLAIMER: This electronic mail transmission may contain information that is confidential, privileged, proprietary in nature, or is otherwise legally exempt from disclosure. If you are not the intended recipient, you are hereby notified that you are not authorized to read, print, retain, copy or disseminate this message, in whole or in part, including any attachments thereto. If you have received this transmission in error, please delete it and any attachments thereto and notify the sender immediately of the inadvertent transmission. There is no intent on the part of the sender to waive any privilege, including attorney-client privilege, that may attach to this communication. Attachment 6 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 1 of 12 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 PRISON LEGAL NEWS, 11 12 13 CASE NO. C14-479 MJP Plaintiff, v. UNITED STATES DEPARTMENT OF HOMELAND SECURITY, et al., ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT 14 Defendants. 15 16 17 18 19 THIS MATTER comes before the Court on the Parties‟ cross-motions for summary judgment. (Dkt. Nos. 24, 28.) Having considered the Parties‟ briefing and the related record, the Court hereby GRANTS Plaintiff‟s Motion for Summary Judgment (Dkt. No. 24) and DENIES Defendants‟ Cross-Motion for Summary Judgment (Dkt. No. 28). 20 Background 21 Plaintiff Prison Legal News, a monthly news magazine dedicated to reporting and 22 advocacy concerning the elevated telephone rates that prisons and contractors charge 23 24 incarcerated people, brings suit against the Department of Homeland Security (“DHS”) and ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 1 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 2 of 12 1 Immigration and Customs Enforcement (“ICE”) alleging that various actions taken by 2 Defendants have violated the Freedom of Information Act (“FOIA”). (Dkt. No. 33.) 3 Prison Legal News is a project of the Human Rights Defense Center (“HRDC”), a 4 nonprofit charitable organization that focuses on “public education, prisoner education, advocacy 5 and outreach in support of the rights of prisoners and in furtherance of basic human rights.” 6 (Dkt. Nos. 24 at 7, 25 at 1-3.) For several years, Plaintiff and HRDC have been gathering 7 information through public records requests about prison phone policies and practices, with 8 special focus on identifying where prisoners are charged high rates for basic telephone services. 9 (Dkt. No. 25 at 1-3.) In 2013, HRDC staff members testified before the Federal 10 Communications Commission (“FCC”) about capping prison phone rates, and the FCC cited 11 Plaintiff and HRDC more than forty-five times in its report and order implementing new 12 regulations of prison telecommunications companies. (Dkt. No. 25 at 59-189.) Plaintiff‟s FOIA 13 records requests in this case also sought information related to telephone practices and policies as 14 part of the same investigative project, this time targeted towards ICE‟s federal immigration 15 detention centers. (Dkt. Nos. 24 at 7-9, 25 at 1-3.) 16 Plaintiff‟s first FOIA request was mailed to Defendants on July 30, 2013, and was signed 17 for by Defendants on August 5, 2013. (Dkt. No. 25 at 3, 213-17.) Plaintiff asserts that it never 18 received a response to this request. (Id. at 3.) Defendants assert that they issued a request 19 acknowledgment letter on August 7, 2013, and have produced evidence that a responsive letter 20 was generated, though not that it was mailed. (Dkt. Nos. 29 at 4, 29-1.) Regardless of whether 21 the response letter was sent or not, Plaintiff informed Defendants by letter dated December 21, 22 2013, that Plaintiff had not received any response but remained interested in the information. 23 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 2 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 3 of 12 1 (Dkt. No. 25 at 3, 219.) It is uncontested that Defendants received but did not respond to the 2 second letter. (Id.) 3 On April 2, 2014, Plaintiff filed this suit, alleging that Defendants were violating FOIA 4 by failing to respond to its two requests. (Dkt. No. 1.) Plaintiff then received the first round of 5 responsive records from ICE on August 1, 2014. (Dkt. Nos. 25 at 3-4, 29.) In the months 6 between September 2014 and February 2015, ICE produced several additional rounds of records 7 and several rounds of reprocessed and corrected records. (Id.) 8 Portions of the produced records were redacted pursuant to FOIA Exemptions 4 9 (confidential commercial information), 6 (personal privacy), 7(C) (law enforcement personal 10 privacy), and 7(E) (law enforcement techniques and procedures). (Dkt. Nos. 25 at 3-4, 29 at 12.) 11 In January 2015, Plaintiff amended its complaint to clarify that it sought to challenge not only 12 ICE‟s failure to timely respond to its FOIA requests (the only disputed issue at the time the suit 13 was filed), but also ICE‟s Exemption 4 and 7(E) redactions in the documents produced by ICE 14 between August and December 2014. (Dkt. Nos. 24 at 11, 33.) 15 After Plaintiff amended its complaint and filed its motion for summary judgment arguing 16 that Defendants had failed to properly respond to its FOIA requests and had improperly redacted 17 non-exempt public information under Exemptions 4 and 7(E), ICE determined that information 18 redacted pursuant to Exemption 7(E) “had previously been publicly disclosed,” and thus 19 produced the unredacted documents in full. (Dkt. No. 28 at 2 n.1.) 20 Accordingly, the only remaining issue regarding redactions involves ICE‟s Exemption 4 21 redaction of Talton Communications, Inc.‟s performance incentive rate, which reflects a 22 percentage of revenue earned by the phone services contractor that is set aside in escrow and 23 only paid to the contractor upon ICE‟s determination that Talton has performed the contract 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 3 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 4 of 12 1 successfully. (Dkt. Nos. 28, 36.) ICE redacted the incentive rate used by Talton in its successful 2 2009 contract bid because it determined that disclosing the rate would result in competitive harm 3 to Talton when it bids for subsequent contracts, including the contract to be bid for in 2015. 4 (Dkt. Nos. 28, 37.) Plaintiff contends the rate was improperly redacted because this information 5 is not exempt under proper application of Exemption 4. (Dkt. Nos. 24, 36.) 6 Discussion 7 I. 8 Summary judgment is proper where “the movant shows that there is no genuine issue as Legal Standard 9 to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 10 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue 11 of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In assessing whether a party has met 12 its burden, the underlying evidence must be viewed in the light most favorable to the non13 moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). 14 The Court conducts a de novo review of an agency's response to a FOIA request. 5 15 U.S.C. § 552(a)(4)(B); U.S. Dep't of Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 16 749, 755 (1989). When presented with a summary judgment motion in a FOIA case, courts 17 follow a two-step inquiry. See, e.g., Los Angeles Times Commc'ns, LLC v. U.S. Dep't of the 18 Army, 442 F. Supp. 2d 880, 892-94 (C.D. Cal. 2006). First, courts evaluate whether the agency 19 has met its burden of proving that it fully discharged its obligations under FOIA. Zemansky v. 20 EPA, 767 F.2d 569, 571 (9th Cir. 1985) (citing Weisberg v. U.S. Dep't of Justice, 705 F.2d 1344, 21 1350-1351 (D.C. Cir. 1983)). To do this, the agency must demonstrate that it has conducted a 22 search reasonably calculated to uncover all relevant documents. Id. Second, if the agency 23 satisfies its initial burden, courts determine whether the agency has proven that the information 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 4 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 5 of 12 1 that it did not disclose falls within one of the nine FOIA exemptions. Dobronski v. FCC, 17 F.3d 2 275, 277 (9th Cir. 1994). In meeting its burden, the government may not rely on conclusory and 3 generalized allegations of exemptions. Church of Scientology of Cal. v. U.S. Dep't of the Army, 4 611 F.2d 738, 742 (9th Cir. 1980) (citing Vaughn v. Rosen, 484 F.2d 820, 826 (D.C. Cir. 1973)). 5 Furthermore, these exemptions “must be narrowly construed” so as not to undermine FOIA's 6 basic purpose: “to ensure an informed citizenry, vital to the functioning of a democratic society, 7 needed to check against corruption and to hold the governors accountable to the governed.” John 8 Doe Agency v. John Doe Corp., 493 U.S. 146, 152 (1989) (internal quotation marks and citations 9 omitted). 10 In sum, in order to prevail on summary judgment, the agency must prove “it has fully 11 discharged [these burdens] under FOIA, after the underlying facts and the inferences to be drawn 12 from them are construed in the light most favorable to the FOIA requester.” Miller v. U.S. Dep't 13 of State, 779 F.2d 1378, 1382 (8th Cir. 1985) (citing Weisberg, 705 F.2d at 1350); see also 14 Zemansky, 767 F.2d at 571. 15 II. 16 Plaintiff argues that Defendants cannot meet their burden of proving that Talton Redactions Pursuant to Exemption 4 17 Communications is likely to suffer substantial competitive harm if the performance incentive rate 18 from its successful 2009 detainee telephone services contract bid is disclosed, and therefore that 19 the performance incentive rate is not exempt from disclosure. (Dkt. Nos. 24 at 16, 36 at 5-8.) 20 The trade secret exemption to FOIA states, “[t]his section does not apply to matters that 21 are (4) trade secrets and commercial or financial information obtained from a person and 22 privileged and confidential.” 5 U.S.C. § 552(b). “In order to invoke Exemption 4 in the Ninth 23 Circuit, the government agency must demonstrate that the information it sought to protect is (1) 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 5 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 6 of 12 1 commercial and financial information, (2) obtained from a person or by the government, (3) that 2 is privileged or confidential.” Watkins v. U.S. Bureau of Customs & Border Prot., 643 F.3d 3 1189, 1194 (9th Cir. 2011) (internal quotations marks omitted). Commercial or financial 4 information is “confidential” for purposes of the exemption if disclosure of the information is 5 likely to have either of the following effects: “(1) to impair the Government's ability to obtain 6 necessary information in the future; or (2) to cause substantial harm to the competitive position 7 of the person from whom the information was obtained.” Id. 8 Where, as here, resolution of the issue before the Court turns on the “substantial harm” 9 prong, the government need not show that releasing the information would cause “actual 10 competitive harm.” Watkins, 643 F.3d at 1194. Rather, the government need only show that 11 there is: “(1) actual competition in the relevant market, and (2) a likelihood of substantial 12 competitive injury if the information were released.” Id. “Competitive harm analysis is ... 13 limited to harm flowing from the affirmative use of proprietary information by competitors. 14 Competitive harm should not be taken to mean simply any injury to competitive position.... 15 Although the court need not conduct a sophisticated economic analysis of the likely effects of 16 disclosure[,] ... [c]onclusory and generalized allegations of substantial competitive harm ... are 17 unacceptable and cannot support an agency's decision to withhold requested documents.” Id. at 18 1195 (internal quotation marks and citations omitted). 19 Defendants argue that disclosure of the performance incentive rate would result in 20 substantial competitive harm to Talton Communications and would undermine the integrity of 21 the bidding process for ICE‟s future telephone services contracts because Talton‟s competitors 22 could use the information to underbid Talton. (Dkt. No. 28 at 13-16.) Defendants contend that 23 ICE considered three factors in awarding the 2009 telecommunications contract—(1) technical 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 6 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 7 of 12 1 and management capabilities, (2) past performance, and (3) price—and that Talton was 2 successful in securing the 2009 contract because it offered the lowest price proposal that was 3 technically acceptable. (Dkt. Nos. 28 at 14, 32 at 2-7, 38 at 6-8.) Included in the price proposal 4 were the telephone rates to be charged to detainees—which are now posted publicly at ICE‟s 5 Northwest Detention Center and which were already disclosed to Plaintiff—and the performance 6 incentive rate. (Id.) Defendants submit that because Talton‟s telephone rates are available to its 7 competitors, the “only competitive edge Talton still has over its competitors in future bids is its 8 strategy regarding the percentage of the revenue the company agreed to set aside as a 9 performance incentive in order to win the current Detainee Telephone System contract.” (Dkt. 10 No. 32 at 7.) Defendants also note that Talton invested considerable resources, including hiring 11 an outside consultant, to develop an attractive bid for the 2009 contract, which included 12 developing a “risk allocation approach” that Defendants contend would be revealed if the 13 performance incentive rate were disclosed. (Dkt. Nos. 28 at 14-15, 31 at 1-6.) 14 Defendants have not met their burden of demonstrating a likelihood of substantial 15 competitive injury to Talton upon disclosure of its 2009 performance incentive rate, and 16 therefore the performance incentive rate is not exempt from disclosure under FOIA. Defendants 17 base their arguments on the theory that disclosing Talton‟s 2009 performance incentive rate 18 would expose Talton‟s current risk tolerance, without reciprocal disclosures from its competitors, 19 therefore providing competitors with an unfair advantage in the bidding process for upcoming 20 contracts by allowing them to estimate and undercut Talton‟s bids. (Dkt. Nos. 28 at 14, 31 at 321 6, 32 at 5-7, 37 at 4, 38 at 6-8). But the performance incentive rate to be disclosed would reveal 22 only Talton‟s risk tolerance in 2009, based on the state of the company then, as evaluated by a 23 consultant hired to craft a bid specifically for the 2009 contract. (See Dkt. No. 31.) There is no 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 7 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 8 of 12 1 indication in the record that Talton Communications in 2015 is in exactly the same financial 2 position as it was in 2009; Talton today may have a higher or lower risk tolerance than it did in 3 2009. Because Talton is free to determine its current risk tolerance separate from its 2009 risk 4 tolerance, disclosure of the 2009 rate will not provide Talton‟s competitors with insight into its 5 future bids for future contracts. In other words, disclosure of the 2009 rate, without more, does 6 not allow competitors to “estimate and undercut” Talton‟s 2015 bid because there is no 7 indication that Talton will use the same rate in 2015.1 Furthermore, Defendants have provided 8 neither evidence nor argument to explain how disclosure of the 2009 rate would allow 9 competitors to reverse engineer Talton‟s entire business strategy or its current or future risk 10 tolerance. 11 Moreover, the record does not support Defendants‟ contentions that the performance 12 incentive rate was the “single distinguishing and important element of Talton‟s 2009 [detainee 13 telephone services] proposal which allowed Talton to win the award and will likely be just as 14 significant should Talton choose to compete for the follow-on [detainee telephone services] 15 contract.” (Dkt. No. 37 at 4.) Rather, the record shows that price was the deciding factor in 16 2009, and that the performance incentive rate was one piece of Talton‟s price proposal. (Dkt. 17 Nos. 32 at 2-7, 38 at 6-8.) The record also shows that ICE evaluates a variety of factors when 18 choosing between proposals, and that the importance of any one of the factors fluctuates 19 according to ICE‟s evaluation of the proposal‟s other factors and sub-factors. (Id.) ICE has 20 identified eight sub-factors for the technical and management capabilities category alone. (Dkt. 21 22 1 Furthermore, it is unclear from the record when bidding for the 2015 contract is expected to take place, and in fact it may have already occurred. The Parties have specified that 23 Talton‟s 2009 contract expired on May 12, 2015, (Dkt. No. 38 at 5), but have not specified when 24 a new contract will be bid for or will enter into effect. ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 8 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 9 of 12 1 No. 32 at 4.) That a contractor‟s performance incentive rate will be the single determinative 2 factor in a future bidding process is pure speculation, and, in light of “the strong public interest 3 in favor of disclosure,” GC Micro Corp. v. Defense Logistics Agency, 33 F.3d 1109, 1115 (9th 4 Cir. 1994), cannot support a finding that Talton is likely to sustain substantial competitive harm 5 from disclosure of the performance incentive rate. 6 In sum, the Court finds that Talton‟s performance incentive rate is not exempt from 7 disclosure under FOIA because Defendants have not demonstrated a likelihood of substantial 8 competitive injury to Talton if the rate were disclosed. Defendants must therefore disclose the 9 rate to Plaintiff. 10 III. 11 Plaintiff argues that, in addition to improperly redacting documents, Defendants violated Excessive Delay in Responding to Requests 12 FOIA by failing to timely respond to its FOIA requests. (Dkt. Nos. 24 at 11-13, 36 at 3-5.) 13 Plaintiff requests that the Court declare that ICE‟s delay in responding has violated the letter and 14 spirit of FOIA. (Id.) Defendants admit that they failed to timely respond to Plaintiff‟s requests, 15 but argue that that failure was inadvertent and that Plaintiff has already availed itself of the 16 proper remedy for that failure—filing suit for immediate judicial review without having to 17 exhaust administrative remedies. (Dkt. Nos. 28 at 16-17, 37 at 7-8.) 18 FOIA requires an agency to, within twenty days of receiving a record request, (1) 19 determine whether it will comply with a record request, and (2) notify the requester of its 20 determination and its reasoning. 5 U.S.C. § 552(a)(6)(A)(i). The determination response must 21 include: (1) a statement of what the agency will and will not release; (2) the agency‟s rationale 22 for any withholdings; and (3) notice of the requester‟s right to appeal. Id. Where “unusual 23 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 9 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 10 of 12 1 circumstances” exist, the Act allows agencies to extend that deadline by as many as ten days. 5 2 U.S.C. § 552(a)(6)(B)(i). 3 Declaratory judgment, the granting of which is within the discretion of the Court, is 4 proper when there are purely legal questions at issue and if the judgment will clarify the legal 5 issues and provide clarity to the parties and the public. Natural Res. Def. Council, Inc. v. EPA, 6 966 F.2d 1292, 1299 (9th Cir. 1992) (granting declaratory relief because the agency “does not 7 have the authority to ignore unambiguous deadlines set by Congress” in Clean Water Act case). 8 Defendants correctly note that where an agency fails to respond within the statutory time 9 period, the requestor is deemed to have constructively exhausted his or her administrative 10 remedies and may file suit in federal court. (Dkt. No. 37 at 7) (citing 5 U.S.C. § 552(a)(6)(C) 11 and Citizens for Responsibility and Ethics in Wash. v. FEC, 711 F.3d 180, 188 (D.C. Cir. 2013).) 12 Exhaustion of administrative remedies aside, “[i]t seems fair to say that in the Ninth Circuit, 13 courts sometimes enforce FOIA's timeliness requirements independent of the underlying 14 disclosure issues, at least when the violation is „egregious‟ or when there is a „pattern or practice‟ 15 of delay.” Munger, Tolles & Olson LLP ex rel. Am. Mgmt. Servs. LLC v. U.S. Dep't of Army, 16 58 F. Supp. 3d 1050, 1054-55 (C.D. Cal. 2014) (collecting cases). See, e.g., Oregon Natural 17 Desert Ass'n v. Gutierrez, 409 F. Supp. 2d 1237, 1247-48 (D. Or. 2006) (holding that an eight 18 month delay was “a violation of FOIA, regardless of the final outcome of the request”). 19 The Court finds the delay in responding to Plaintiff‟s requests to be egregious. It is 20 uncontested that Plaintiff did not receive ICE‟s first production of documents (or any other 21 determination) until 361 days after mailing its first FOIA request letter, seven months after 22 mailing its second request letter, and almost four months after filing this lawsuit. (Dkt. Nos. 25 23 at 2-4, 29 at 12-14.) Production of the remainder of the requested documents was not completed 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 10 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 11 of 12 1 for several additional months. (Id.) Response times of this sort clearly exceed the unambiguous 2 time allowance contemplated by Congress. See 5 U.S.C. § 552(a)(6)(A)(i). Consequently, the 3 Court hereby declares that, independent of the exemption issues, Defendants violated FOIA by 4 failing to make a timely determination on Plaintiff‟s requests. Attorney‟s Fees 5 IV. 6 As the prevailing party, Plaintiff is eligible for reasonable attorney‟s fees and costs. 5 7 U.S.C. § 552(a)(4)(E); Church of Scientology of Cal. v. U.S. Postal Serv., 700 F.2d 486, 489 8 (9th Cir. 1983). The Court finds that an award of fees and costs is appropriate in this case, and 9 that Plaintiff is entitled to such an award. See Church of Scientology of Cal., 700 F.2d at 49210 93. Therefore, Plaintiff is hereby awarded reasonable attorney‟s fees and costs, and must 11 petition the Court for a determination of fees and costs within thirty (30) days of the date of this 12 order, if the Parties are unable to agree on a determination. 13 Conclusion 14 Because Defendants have violated FOIA by failing to timely respond to Plaintiff‟s 15 requests and have failed to prove that Talton‟s performance incentive rate falls within one of 16 FOIA‟s exemptions, the Court GRANTS Plaintiff‟s Motion for Summary Judgment and 17 DENIES Defendants‟ Cross-Motion for Summary Judgment. Plaintiff is awarded reasonable 18 attorney‟s fees and costs, in an amount to be determined later should the Parties be unable to 19 agree on a determination. 20 / 21 / 22 / 23 / 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 11 Case 2:14-cv-00479-MJP Document 39 Filed 06/18/15 Page 12 of 12 1 The clerk is ordered to provide copies of this order to all counsel. 2 3 Dated this 18th day of June, 2015. 4 A 5 6 Marsha J. Pechman Chief United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 ORDER GRANTING PLAINTIFF‟S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANTS‟ MOTION FOR SUMMARY JUDGMENT- 12 Attachment 7 Attachment 8