A public interest law firm has filed suit against the Consumer Financial Protection Bureau over a recent Freedom of Information Act (FOIA) request. The request, filed by the Cause of Action Institute, sought access to CFB files pertaining to its proposed arbitration rule. The proposed CFPB rule would eliminate mandatory arbitration rules for most consumer contracts. In its complaint filed in D.C. federal district court, the Institute described itself as “a non-profit strategic oversight group committed to ensuring that government decision-making is open, honest and fair.”
In April 2016, the Institute sent a FOIA request to the CFPB that included a request for “all records by or between CFPB employees regarding the Arbitration Study and/or the Proposed Ban.” After consultation with the CFPB, the Institute filed a new FOIA request in June 2016 that included the same request but limited the request to records that contained certain search terms. The CFPB response was meager, and the Institute appealed the bureau’s response, demanding more documents. That request, considered by CFPB Director Richard Cordray, was denied. Cordray, relying upon four legal exemptions in the FOIA, withheld 1,877 pages of the 3,554 requested. According to the complaint, only 1,549 pages were ever produced.
The CFPB thereafter issued a final determination on the FOIA indicating that what it had produced was all that would be forthcoming, and what was being withheld was subject to certain exemptions. In its determination, the CFPB specified the FOIA exemptions on which it was relying to withhold responsive records. The bureau cited “exception 4,” which covers financial information not generally released to the public, as well as exceptions 5 and 6 that deal with attorney work, attorney-client privilege, and “the deliberative process.”
In the complaint, the Institute alleges that the CFPB violated FOIA by withholding materials by improperly applying the various FOIA exemptions on which it relied. The Institute argued that for the attorney work-product privilege to apply, there must be “some articulable claim, likely to lead to litigation.” An agency cannot withhold documents “simply because litigation might someday occur.” In regard to exemptions 5 and 6, the FOIA refers to information in “personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” The Institute claimed that the documents they sought were not of this kind.
The comment period on the proposed arbitration rule closed in August, and the final rule is expected before January 20, 2017. It is unlikely that the district court would rule before then.