Appeal from the United States District Court for the District of Hawai'i Susan Oki Mollway, Chief District Judge, Presiding D.C. No.1:09-cv-00128- SOM-KSC
The opinion of the court was delivered by: Berzon, Circuit Judge:
Argued and Submitted February 15, 2011-Honolulu, Hawaii
Before: A. Wallace Tashima, William A. Fletcher, and Marsha S. Berzon, Circuit Judges.
This is a Freedom of Information Act ("FOIA") case concerning a request for documents about individuals who reported to the U.S. Department of Housing and Urban Development ("HUD") their suspicions that Prudential Locations LLC ("Prudential"), a real estate company, was violating the law. HUD produced the documents, but redacted the two of them at issue here to conceal information that identified the complaining individuals. In defense of the redactions, HUD asserted, and the district court agreed, that the redactions were justified pursuant to FOIA Exemption 6, which allows an agency to withhold "personnel and medical files and similar files the disclosure of which would constitute a clearly unwar-ranted invasion of personal privacy." 5 U.S.C. § 552(b)(6); see Prudential Locations LLC v. HUD, 646 F. Supp. 2d 1221, 1228 (D. Haw. 2009).
Under the case law, Exemption 6 requires courts to balance the personal privacy interests protected by the exemption against the public interest furthered by disclosure. See Lahr v. Nat'l Transp. Safety Bd., 569 F.3d 964, 973 (9th Cir. 2009). That inquiry requires assessing the magnitude of the privacy interests at stake and the severity of the invasion of those interests that would be occasioned by disclosure. Here, we are faced with an additional, different question: How likely is it that disclosure would result in any privacy invasion at all? We remand because HUD has not provided a factual basis sufficient to answer any of those three questions. See Fiduccia v. U.S. Dep't of Justice, 185 F.3d 1035, 1040 (9th Cir. 1999); Wiener v. FBI, 943 F.2d 972, 979 (9th Cir. 1991). In light of the FOIA's strong presumption in favor of disclosure, and the narrow reach of the FOIA exemptions, see, e.g., Milner v. Dep't of Navy, 131 S. Ct. 1259, 1265 (2011), we cannot affirm the grant of summary judgment on the current record. While HUD has conjured the specter of privacy interests, it has not adduced evidence establishing such interests are actually at stake, or if they are, how much weight they should be accorded.
I HUD is responsible for administering and enforcing the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617. One of the purposes of RESPA is to "eliminat[e] . . . kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services." 12 U.S.C. § 2601(b)(2). To achieve that purpose, the act prohibits, among other things, giving or accepting "fee[s], kick-back[s] or thing[s] of value" for referring "business incident to or a part of a real estate settlement service involving a federally related mortgage loan." Id. § 2607(a). The documents at issue here are two communications notifying HUD of suspected violations of RESPA's prohibitions on kickbacks and referral fees.
The first document is a short letter dated July 7, 2003 (the "2003 Letter"). The letter averred that "Prudential Locations Real Estate Salespersons get monetary kickbacks ($$,$$$) for the amount of business that is referred to Wells Fargo." Attached to the letter was an article from the Honolulu Star-Bulletin purportedly supporting the allegations. The informant did not expressly request an investigation, but did ask: "Is it a violation of RESPA for real estate agents to receive compensation for steering business to a specific Lender?" The author of the letter neither requested anonymity nor affirmatively authorized release of his name.
Based on that letter, HUD initiated an investigation into Prudential's business practices, ultimately confirming the informant's allegations. HUD found Prudential had violated RESPA by giving valuable things, including expensive vacation packages and a lease on a Mercedes-Benz, to its sales-people in return for referral of business to Wells Fargo Home Mortgage Hawaii, LLC, a company in which Prudential had a financial interest. After the investigation, Prudential entered into a settlement agreement with HUD in 2005, consenting to a $48,000 penalty and promising not to violate RESPA in the future.
The second document at issue is an email, dated January 19, 2008 (the "2008 Email"), alleging that Prudential was continuing to violate RESPA even after the settlement. The author of the email claimed to know about the continued violations because "an agent from Prudential . . . expressed concern that his company was violating RESPA laws again." The sender urged HUD to "interview [Prudential's] agents [to] confirm there was a direct violation of RESPA again and be very strict on them." Unlike the first complainant, this author specifically requested anonymity in his communication to HUD.
After receiving this email, HUD initiated a second investigation of Prudential. That investigation did not reveal any RESPA violations, and it was closed in March 2009.
In June 2008, while the second investigation was in progress, Prudential filed a FOIA request with HUD, seeking "[d]ocuments sufficient to show the identity of all parties who provided information to HUD relating to the initiation" of the two investigations. HUD ...