The opinion
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
OCTOBER 5, 2007
No. 06-11774
THOMAS K. KAHN
________________________
CLERK
D.C. Docket No. 04-00552 CV-FTM-29-SPC
ROBERT SHARKEY,
MRS. ROBERT SHARKEY, on behalf of
Ryan Reid Sharkey, a minor,
Plaintiffs-Appellants,
versus
FOOD & DRUG ADMINISTRATION,
MERCK & CO., INC.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(October 5, 2007)
Before ANDERSON and COX, Circuit Judges, and KING,* District Judge.
PER CURIAM:
*
The Honorable James Lawrence King, United States District Judge for the Southern District
of Florida, sitting by designation.
We must determine in this appeal whether the district court properly granted
summary judgment on the ground that records requested under the Freedom of
Information Act, 5 U.S.C. § 552 (2000) (“FOIA”), are protected from disclosure
under Exemption 4 of the FOIA. We are convinced that the Defendants have carried
their burden of proving the applicability of Exception 4 and affirm summary
judgment in their favor.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs, Dr. and Mrs. Sharkey, filed a FOIA request with the Food and Drug
Administration (“FDA”) seeking “records reflecting the net number of doses in each
lot of Recombivax HB and Engerix-B hepatitis B vaccine[s] distributed in the United
States.” (R.1-39, Attach. 1, Ex. A.) The request defined “net number of doses” as
“the number of doses distributed less the number of doses returned to the
manufacturer.” (R.1-39, Attach. 1, Ex. A.) The Sharkeys, whose son had experienced
an adverse reaction to a hepatitis B vaccine, alleged they needed these records to
determine whether an adverse reaction was in fact the cause of his medical problems.
(R.1-1 ¶¶ 5-6.)
The FDA identified nineteen responsive documents filed by Merck & Co., Inc.
(“Merck”) and GlaxoSmithKline, Inc. (“Glaxo”) pursuant to federal regulations
mandating periodic reporting of vaccine distributions. 21 C.F.R. § 600.81 (2007).
2
The FDA refused to disclose all nineteen of the documents, citing Exemption 4 of the
FOIA, which exempts from disclosure records containing trade secrets and
confidential commercial information. 5 U.S.C. § 552(b)(4).
The Sharkeys filed an administrative appeal with the United States Department
of Health and Human Services (“DHHS”). While this appeal was pending, the
Sharkeys filed a lawsuit in federal district court seeking an order compelling the FDA
to disclose the records. The DHHS then notified the Sharkeys that its response to the
their lawsuit would address issues raised in their appeal and it would therefore take
no further administrative action on it. (R.1-39, Attach. 1, Ex. H.)
The FDA filed an answer, as did Merck, who intervened as a defendant.1 The
FDA and Merck then filed motions for summary judgment supported by a Vaughn
index2 and sworn declarations detailing the competitive harm that Merck and Glaxo
would suffer if the FDA released the requested records.
1
Merck is one of two companies licensed in the United States to manufacture hepatitis B
vaccine; Glaxo is the other. Glaxo is not a party in this lawsuit, although it submitted affidavits in
support of the FDA’s decision to withhold the requested records. The FDA relied on the potential
harm to both Merck and Glaxo in refusing to disclose the requested records; therefore, we will also
consider the potential harm to Glaxo.
2
A Vaughn index, somewhat like a privilege log, allows courts to consider whether an
exemption bars disclosure of withheld documents, without necessitating release of the documents.
See Vaughn v. Rosen, 484 F.2d 820 (D.C. Cir. 1973).
3
The Sharkeys opposed the FDA’s and Merck’s motions for summary judgment
and filed a cross-motion for summary judgment or, in the alternative, for leave to
conduct discovery pursuant to Fed. R. Civ. P. 56(f) (permitting limited discovery
where the party opposing a motion for summary judgment cannot by affidavit present
facts essential to justify its opposition). The Sharkeys supported their motions and
opposition to the Defendants’ motions with the affidavits of Donald Marks, M.D.,
Ph.D, and their attorney. Dr. Marks opined that release of the requested information
would not cause Merck and Glaxo any competitive harm (Marks Aff., R.1-45, Ex. B
¶ 13) and the Sharkeys’ attorney stated that he expected discovery would produce
facts supporting their position that no competitive harm will result from disclosure
(Maglio Aff., R.1-45, Ex. D ¶ 6).
The district court adopted the amended report and recommendation of the
magistrate judge to whom the case had been referred and granted the Defendants’
motions for summary judgment. (R.2-64.) The magistrate judge found that the
declarations submitted by the Defendants were sufficient to demonstrate that “there
is actual competition in the hepatitis B vaccine market[;] . . . that the release of the net
number of doses per lot would in fact cause competitive harm” to Merck and Glaxo;
and that the evidence presented by the Sharkeys did not raise a genuine issue of
material fact regarding competitive harm. (R.2-60 at 10-12.) The district court
4
denied the Sharkeys’ motion for discovery, based on the magistrate judge’s finding
that the Sharkeys’ attorney’s affidavit was conclusory and “that the factual basis
provided by the Defendants [was] sufficient to make an informed decision on the
Motion without further discovery.” (R.2-60 at 13.) The Sharkeys appeal.
II. CONTENTIONS OF THE PARTIES
The Sharkeys argue that the Defendants have not carried their burden of
proving that the withheld information falls within a FOIA exemption. More
specifically, the Sharkeys maintain that the declarations submitted by the Defendants
fail to explain how release of the requested information would cause substantial
competitive harm to Merck or Glaxo, and the Sharkeys also maintain that even if the
declarations adequately explain how release of the information would cause
substantial competitive harm, the Defendants were not entitled to summary judgment
because the Sharkeys’ affidavits create a genuine issue of material fact regarding the
likelihood of substantial competitive harm. Accordingly, they argue, the district court
should have permitted limited discovery before ruling on whether Exemption 4 barred
release of the records.
The Defendants respond that summary judgment in their favor was proper
because their declarations contain factual evidence detailing the competitive harm
likely to result from release of the withheld records. By contrast, the Defendants
5
argue, the Sharkeys’ affidavits are conclusory as they merely deny the assertions
made in the Defendants’ declarations without offering contradictory evidence
sufficient to create a genuine issue of material fact. Finally, the Defendants argue the
Sharkeys did not put forth sufficient evidence to justify their discovery request under
Rule 56(f).
III. STANDARDS OF REVIEW
The parties dispute what standard of review we apply in reviewing summary
judgment in a FOIA claim. The Sharkeys argue that we should apply de novo review,
as we typically do on appeals from summary judgment. Times Publ’g Co. v. U.S.
Dep’t of Commerce, 236 F.3d 1286, 1288 n.1 (11th Cir. 2001). Defendants, on the
other hand, argue that assessing the applicability of Exemption 4 involves factual
determinations, and therefore, we should review only for clear error. Miscavige v.
IRS, 2 F.3d 366, 367 (11th Cir. 1993). Because we determine that summary judgment
should be affirmed under either standard, we need not resolve this dispute. See
Marecek v. BellSouth Servs., Inc., 49 F.3d 702, 707 (11th Cir. 1995) (declining to
decide which standard of review applies where the parties dispute the applicable
standard and the district court’s opinion can be affirmed under either).
We review denial of a discovery motion under Rule 56(f) for abuse of
discretion. Jackson v. Cintas Corp., 425 F.3d 1313, 1316 (11th Cir. 2005).
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IV. DISCUSSION
A. FOIA and Exemption 4
The FOIA generally requires federal agencies to disclose records in their
possession upon request. 5 U.S.C. § 552(a)(3)(A). The FOIA “evidences a ‘strong
public policy in favor of public access to information in the possession of federal
agencies.’” Cochran v. United States, 770 F.2d 949, 954 (11th Cir. 1985) (quoting
Brown v. FBI, 658 F.2d 71, 73 (2d Cir. 1981)). Recognizing, however, that entities
submitting records to the government will at times reserve a strong interest in
ensuring the confidentiality of the information submitted, Congress included in the
FOIA exemptions by which the responding agency may withhold records. It is clear
that the FOIA’s disclosure provisions are construed broadly and its exemptions
narrowly, with the burden “squarely on the government” to prove an exemption
applies. Ely v. FBI, 781 F.2d 1487, 1489 (11th Cir. 1986).
In withholding the requested information in this case, the FDA cited Exemption
4, which permits the government to withhold “trade secrets and commercial or
financial information obtained from a person and privileged or confidential.” 5 U.S.C.
§ 552(b)(4). The Defendants do not contend that the requested information
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constitutes trade secrets.3 Instead, they contend the requested information contains
the net number of doses of the hepatitis B vaccine in each lot of hepatitis B vaccine
distributed in the United States. This information, they contend, is confidential
commercial information. Thus, the issue on appeal is whether the Defendants have
carried their burden of proving the requested information is “confidential” within the
meaning of Exemption 4.
Vaccine manufacturers are required by FDA regulations to submit information
regarding the quantity of vaccines they distribute. 21 C.F.R. § 600.81. Information
in a mandatory submission is considered confidential within the meaning of
Exemption 4 if its disclosure would either “impair the Government's ability to obtain
necessary information in the future; or . . . cause substantial harm to the competitive
position of the person from whom the information was obtained.” Nat’l Parks &
Conservation Ass’n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974) (footnote omitted).
The Defendants do not argue that disclosure will impair the Government’s ability to
obtain future information from Merck and Glaxo; rather, they argue that Merck and
Glaxo will suffer substantial competitive harm from disclosure. In order to prove
substantial competitive harm, the Defendants must demonstrate (1) that there is a
3
It is undisputed that Merck and Glaxo are “person[s]” under the FOIA. See 5 U.S.C. § 551(2)
(defining “person” to include corporations).
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competitive market for the hepatitis B vaccine and (2) that substantial competitive
injury will result from disclosure. See Miami Herald Publ’g Co. v. U.S. Small Bus.
Admin., 670 F.2d 610, 613-14 (5th Cir. Unit B 1982).4
The district court found, and we agree, that the declarations submitted by the
Defendants in support of their motions for summary judgment establish that Merck
and Glaxo are engaged in actual competition for sales of hepatitis B vaccine. The
evidence submitted by the Sharkeys does not raise a material issue of fact to the
contrary. Consequently, we must only determine whether the Defendants’
submissions establish without dispute that Merck and Glaxo would suffer substantial
competitive injury if the FDA disclosed the requested records.
In order to succeed, the Defendants “need not ‘show actual competitive harm.’”
Pub. Citizen Health Research Group v. FDA, 704 F.2d 1280, 1291 (D.C. Cir. 1983)
(quoting Gulf & W. Indus., Inc. v. United States, 615 F.2d 527, 530 (D.C. Cir. 1979)).
“No actual adverse effect on competition need be shown . . . . The court need only
exercise its judgment in light of the nature of the material sought and the competitive
circumstances in which the [submitter] does business . . . .” Miami Herald, 670 F.2d
at 614 (quoting Nat’l Parks & Conservation Ass’n v. Kleppe, 547 F.2d 673, 683 (D.C.
4
Cases decided by Unit B of the former Fifth Circuit are binding precedent in this circuit. Stein
v. Reynolds Sec., Inc., 667 F.2d 33, 34 (11th Cir. 1982).
9
Cir. 1976)) (internal quotation marks omitted). The Defendants must prove that
disclosure of the requested records will reveal otherwise non-public information and
that release of that information will result in competitive injury.
The Defendants maintain that release of the requested records will make public
two categories of otherwise non-public information. First, the Defendants argue that
release of the net number of doses distributed per lot would reveal the manufacturers’
domestic market shares and sales volume. Second, the Defendants argue that release
of the net number of doses distributed per lot would reveal each manufacturers’
production capacity.
The district court relied on numerous declarations offered by the Defendants
in holding that substantial competitive harm would result from disclosure. After
reviewing the declarations, we conclude that disclosure of the net number of doses
distributed per lot will, at a minimum, reveal the manufacturers’ market shares and
sales volume for the hepatitis B vaccine. Given this conclusion, we need not decide
whether release of the records will reveal production capacity.
The Defendants’ declarations assert that the requested information would allow
competitors to “make determinations” regarding and “provide insight into” the
manufacturers’ respective market shares and sales volume. (Thomas Decl., R.1-39,
Attach. 2 ¶ 5; Ryan Decl., R.1-39, Attach. 1 ¶ 27.) This is somewhat intuitive.
10
Because Merck and Glaxo are the only two domestic sellers of the hepatitis B
vaccine, disclosure of the net number of doses per lot per manufacturer would clearly
allow a competitor to better estimate Merck’s and Glaxo’s market share. And,
contrary to the Sharkeys’ suggestion, this information was not made publicly
available in a report produced by the Centers for Disease Control and Prevention.
(R.1-39, Attach. 1, Ex. J.) 5 As the FDA’s declaration explains, this report provides
only the total net number of doses distributed for hepatitis B vaccines in the United
States during the period from 1991-2001. (Ryan Decl., R.1-39, Attach. 1 ¶ 26 n.4.)
This report does not provide distribution data by manufacturer (which would be
publicized under Plaintiffs’ request), nor does it include the net number of does per
lot by specific manufacturer (which would also be publicized under Plaintiffs’
request). (Ryan Decl., R.1-39, Attach. 1 ¶ 26 n.4.) Even if the report revealed the
information the Sharkeys claim it does, it does not account for the number of doses
distributed between 2001 and March 10, 2003 (the date of the Sharkeys’ first
request), numbers which would certainly be made public for the first time if the
records were disclosed. Therefore, we find that the Defendants have demonstrated
5
The report is CDC, Surveillance for Safety After Immunization: Vaccine Adverse Event
Reporting System (VAERS)–United States, 1991-2001, 52 Morbidity & Mortality Wkly. Rep., No.
SS-01 (Jan. 24, 2003).
11
that disclosure of the withheld information will reveal their market shares and sales
volume of the hepatitis B vaccine in the United States.
Our inquiry does not end here, however. Having determined that disclosure of
the net number of doses per lot of each manufacturers’ hepatitis B vaccine will reveal
market share and sales volume, we now must decide whether the district court
correctly found that Merck’s and Glaxo’s competitors’ knowledge of this information
would likely result in substantial competitive harm to the manufacturers. While some
of the Defendants’ declarations are conclusory in explaining how release of the
records will result in competitive harm, others contain explanations beyond
“conclusory and generalized allegations” of competitive injury that are sufficient to
support a finding of substantial competitive harm. See Pub. Citizen, 704 F.2d at
1291.
The Defendants argue that knowledge of their market share will allow a
competitor to better estimate even more confidential information, such as production
capacity and manufacturing specifics. (Ryan Decl., R.1-39, Attach. 1 ¶¶ 27-28;
Twyman Decl., R.2-52, Ex. B ¶ 7.) The Defendants contend that with this
information, a competitor can estimate Merck’s and Glaxo’s ability to fill large orders
for bid and price its bid to exploit this knowledge. (Twyman Decl., R.2-52, Ex. B ¶
7.) For example, if the World Health Organization submitted bids for a large order
12
of vaccine, international competitors, with knowledge of the above information, could
price their bids in order to take advantage of Merck’s and Glaxo’s inability to fill the
order. Additionally, competitors with knowledge of sales volume will know the
optimum volume of doses per lot of vaccine distributed by Merck and Glaxo,
information that the Defendants maintain is kept highly confidential. (Ryan Decl.,
R.1-39, Attach. 1 ¶ 28.) Consequently, release of the withheld records would result
in a very real, competitive harm that we believe is protected by Exemption 4. Cf.
Lion Raisins Inc. v. U.S. Dep’t of Agric., 354 F.3d 1072, 1081 (9th Cir. 2004)
(affirming “substantial competitive harm” finding where disclosure would allow
competitor to infer production volume, thus allowing it to underbid produce
distributor).
Our conclusion that market share and sales volume qualifies as confidential
information is supported by Merck’s declaration detailing the drastic measures it
takes to ensure this information remains confidential. (See Turner Decl., R.1-39,
Attach. 3 ¶ 4.) Both the efforts to keep this information confidential and the highly
sensitive information that may be gleaned from it leads us to conclude that public
knowledge of Merck’s and Glaxo’s domestic market shares and sales volume of the
hepatitis B vaccine will likely result in substantial competitive harm.
13
Even so, the Defendants are not entitled to summary judgment if the Sharkeys’
affidavits create a genuine issue of material fact. But, we agree with the district court
that they do not. The only evidence presented by the Sharkeys that disclosure of the
withheld records will not cause competitive harm is the affidavit of Dr. Marks, who
states that no harm will result because Merck and Glaxo already know each other’s
respective market share. (Marks Aff., R.1-45, Ex. B ¶ 14.) While this may be true,
Dr. Marks fails to account for the competitive harm that may result if an international
competitor or third-party considering entry into the hepatitis B vaccine market6 learns
the market shares of Merck and Glaxo. Nor does Dr. Marks convince us that
knowledge of Merck’s or Glaxo’s sales volume will not be advantageous to an
international competitor or third-party entrant.
The Defendants have offered evidence showing that disclosure of the net
number of doses per lot per manufacturer of hepatitis B vaccine will likely result in
substantial competitive harm. Because the Sharkeys have failed to create a genuine
issue of material fact otherwise, the district court correctly granted summary
judgment in favor of the Defendants.
6
While Merck and Glaxo are currently the only hepatitis B manufacturers licensed to distribute
in the United States, the field may one day become more occupied. See, e.g., Press Release,
Dynavax, Dynavax Initiates Pivotal Phase 3 Trial for Hepatitis B Vaccine (June 23, 2005). (R.2-53,
Attach. 3.)
14
B. Rule 56(f) Motion
Even if the Sharkeys failed to create a genuine issue of material fact on the
issue of competitive harm resulting from disclosure, the district court had within its
discretion the power to postpone ruling on the summary judgment motions and permit
limited discovery. Fed. R. Civ. P. 56(f).
In support of their motion for discovery, the Sharkeys submitted the affidavit
of their attorney, Altom Maglio. He believed that through discovery, the Sharkeys
would be able to find facts showing that the hepatitis B vaccine market is not
competitive and that Merck and Glaxo will not suffer competitive harm from release
of the withheld information. (Maglio Aff., R.1-45, Ex. D ¶ 6.) He also explains the
efforts already undertaken to counter the factual allegations in the Defendants’
declarations, including talking to vaccine experts. (Maglio Aff., R.1-45, Ex. D ¶ 5.)
The district court denied the motion for discovery. On this record, we cannot
say the district court abused its discretion. “A Rule 56(f) motion must be supported
by an affidavit which sets forth with particularity the facts the moving party expects
to discover and how those facts would create a genuine issue of material fact
precluding summary judgment.” Harbert Int’l, Inc. v. James, 157 F.3d 1271, 1280
(11th Cir. 1998). Mr. Maglio’s affidavit fails this standard. Instead, his affidavit
merely criticizes all of the Defendants’ declarations as conclusory and fails to state
15
with particularity the facts he believes discovery will reveal sufficient to create a
genuine issue of material fact.
V. CONCLUSION
For the above reasons, the Defendants’ motions for summary judgment were
properly granted and we find no abuse of discretion in the denial of the motion for
discovery.
AFFIRMED.
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