source: Caselaw Access Project

author: RANDOLPH, Senior Circuit Judge:

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. Jeffrey Norman JACKSON, Appellant.
    No. 15-3053
    United States Court of Appeals, District of Columbia Circuit.
    Argued November 8, 2016
    Decided February 14, 2017

      Sandra G. Roland, Assistant Federal Public Defender, argued the cause for appellant. With her on the brief was A.J. Kramer, Federal Public Defender. Tony Axam, Jr., Assistant Federal Public Defender, entered an appearance.
    Elissa Hart-Mahan, Attorney, U.S. Department of Justice, argued the cause for appellee. With her on the brief was Gregory Victor Davis, Attorney. Frank P. Cihlar, Attorney, U.S. Department of Justice, entered an appearance.
    Before: KAVANAUGH and PILLARD, Circuit Judges, and RANDOLPH, Senior Circuit Judge.
   RANDOLPH, Senior Circuit Judge:

Jeffrey Norman Jackson appeals his above-Guidelines sentence of imprisonment on the grounds that the district court failed to give valid reasons for his sentence and that the reasons the court did mention were invalid.

Jackson began committing his crime in this case while he was pleading guilty and being sentenced for a nearly identical crime. After being sentenced for his first offense, Jackson continued his criminal activity, despite the district court’s leniency in giving him probation rather than imprisonment.

Jackson’s earlier crime involved Unlimited Security, Inc., a company he founded and co-owned. The company provided security services to the local and federal government. At one time, Unlimited Security employed as many as 500 people. In 2002, his company filed for Chapter 11 bankruptcy protection. Unlimited Security had collected federal tax withholdings from the wages of its employees. Jackson’s company was obligated to pay these tax with-holdings to the U.S. Treasury. Instead, while his company was in bankruptcy, Jackson — as the company’s chief executive officer — diverted $373,000 to another one of his businesses. In 2006, Judge Urbina of the United States District Court for the District of Columbia sentenced him to five years’ probation.

While on probation for that crime, and before his sentencing in October 2006, Jackson began committing the offense for which he was sentenced in this case. In 2005 he formed Innovative Security Services, LLC. For the next four years, he failed to pay a total of nearly $600,000 in federal payroll taxes that his company had withheld from the wages of its employees. Jackson used these funds for personal items such as jewelry, clothing, furniture, and rent. After entering into an agreement with the government, Jackson again pleaded guilty, this time to a violation of 26 U.S.C. § 7202 — willful failure to pay over federal employment taxes. A violation of § 7202 carries a five-year maximum sentence of imprisonment. Jackson’s plea agreement placed his Sentencing Guidelines range at 27-33 months; his plea agreement stated that this sentencing range was not binding on the district court. The district court sentenced Jackson to 42 months’ imprisonment — 9 months more than the top of the Guidelines range. The sentence included an order for Jackson to make restitution and to serve a term of supervised release.

I.

Jackson wants his sentence set aside because, at the hearing, the district court did not sufficiently explain the reasons for it. At sentencing, a district court must provide “the specific reason” for a sentence outside the Guidelines range. 18 U.S.C. § 3553(c)(2); see Gall v. United States, 552 U.S. 38, 50, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007). When the court announced Jackson’s sentence of 42 months, his attorney did not object. To prevail in his appeal, Jackson must therefore convince us that the district court (1) “committed error”; (2) that the error was “plain or obvious”; (3) that it affected “his substantial rights”; and (4) that it “seriously” affected “the fairness, integrity, or public reputation of judicial proceedings.” United States v. Hunt, 843 F.3d 1022, 1029 (D.C. Cir. 2016) (alterations and quotation marks omitted). An error affects “substantial rights” only if the defendant establishes with “a reasonable probability that, but for the error, the outcome of the proceeding would have been different.” United States v. Mack, 841 F.3d 514, 522 (D.C. Cir. 2016) (quoting Molina-Martinez v. United States, — U.S.-, 136 S.Ct. 1338, 1343, 194 L.Ed.2d 444 (2016)).

It is little wonder that Jackson’s attorney did not interpose the objection now raised on appeal. Jackson, and anyone else present at his sentencing hearing, must have understood why the district court imposed an above-Guidelines sentence of 42 months. A central, uncontested consideration at. the hearing was Jackson’s commission of this crime while he was being sentenced and placed on probation for committing a crime with a common element — namely, stealing his employees’ withholding taxes to use for his personal benefit.

The prosecutor stated that this was “the second time that this defendant has appeared in this courthouse to be sentenced for stealing employment taxes.” Sentencing Transcript 3. The prosecutor added that Jackson obviously knew about his “duty to truthfully account for and pay over payroll taxes.” Id. at 4. Jackson’s past offense not only demonstrated willfulness, but also proved that despite a lenient sentence, he continued to commit a neárly identical offense. Id. at 6. Jackson’s attorney acknowledged that Jackson “ended up on a very, very, very slippery slope twice,” a revealing metaphor with no exonerating force. Id. at 20.

In committing both of these offenses, Jackson had no regard for the law or for the extreme distress he inflicted on his employees. Taking all of this into account, the district court summed up that Jackson had “been given [a] break ... by Judge Urbina on the bankruptcy fraud,” but rather than rehabilitating himself after committing that offense, he committed another and wound up “creating a nightmare for [himself] and a lot of other folks in the process.” Sentencing Transcript 22-23. Stating that Jackson was “obviously not deterred by Judge Urbina’s sentence” and that a Guidelines range “sentence is not adequate in this case,” the court sentenced Jackson to 42 months’ imprisonment. Id. at 23.

We believe the court adequately explained why it was giving Jackson that sentence. We have sustained other above-Guidelines sentences imposed in light of the similarity of the defendant’s past offense. In United States v. Ransom, 756 F.3d 770, 774-75 (D.C. Cir. 2014), for instance, we upheld an above-Guidelines sentence based on the district court’s explanation that the defendant had committed his latest offense while on probation for a “substantially similar” one. This explanation, we added, “makes it plain” that the sentencing court “did not deem the Guidelines calculation in the report to have fully accounted for Ransom’s criminal history.” Id. at 775. See also U.S. Sentencing Guidelines Manual § 4A1.1. The district court in Ransom also referred to the defendant’s “abuse of trust,” as the district court did here. Ransom, 756 F.3d at 774; see Sentencing Transcript 22.

II.

Jackson argues that whatever the adequacy of the district court’s statements at the sentencing hearing, the court’s written report of the sentence was.deficient.

His argument raises a recurring issue in appellate review of sentences. The issue is whether the “Statement of Reasons” each sentencing court prepares and submits to the Sentencing Commission pursuant to 28 U.S.C. § 994(w) has any bearing on the validity of the court’s sentence. Although the issue was not briefed in this case (but was a topic of oral argument), we have discretion to consider it. See U.S. National Bank of Oregon v. Independent Insurance Agents of America, Inc., 508 U.S. 439, 445-47, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993).

By the time of Jackson’s sentencing, one of the two statutes relating to the Statement of Reasons required that within 30 days “following entry of judgment in every criminal case,” the sentencing court had to submit to the Sentencing Commission “a written report of the sentence, the offense for which it is imposed, the age, race, sex of the offender, and information regarding factors made relevant by the guidelines.” 28 U.S.C. § 994(w)(1). Under the other statute, if the sentence was outside the Guidelines range, the court had to state “with specificity” on the form the reasons for the variance. 18 U.S.C. § 3553(c)(2). The form, which the Commission approved, stated that it was “Not for Public Disclosure.” The Chief Judge of each district court was charged with the duty of ensuring that the judges of the court comply with this reporting requirement. 28 U.S.C. § 994(w)(1). These requirements remain today.

A different system had been in effect before 2010. Between 2003 and 2010, 18 U.S.C. § 3553(c)(2) required a sentencing court not only to state the reasons for its sentence in open court, but also to state in its order of judgment and commitment the reason for not imposing a sentence within the Guidelines range. Congress amended § 3553(c)(2) by eliminating the requirement that sentencing courts state their reasons in. the judgment and commitment order. In its place, Congress inserted language requiring the court to state the reason for a variance in the court’s § 994(w)(1)(B) report to the Sentencing Commission. See Pub. L. No. 111-174, § 4, 124 Stat. 1216, 1216 (May 27, 2010).

Our court has not addressed the effect of the 2010 amendment. See United States v. Godoy, 706 F.3d 493, 497 (D.C. Cir. 2013) (declining to “wade into that murky water”). But the First Circuit has. In light of this “decoupling” of the judgment and the Statement of Reasons, plus the Sentencing Commission’s “control over the content of the form as part of its reporting duties to Congress,” the First Circuit doubted that after 2010 the completed form did anything more than facilitate data collection. United States v. Vazquez-Martinez, 812 F.3d 18, 25-26 (1st Cir. 2016). Other courts of appeals have concluded that a district court’s § 994(w)(1)(B) Statement of Reasons has no bearing on the validity of its sentence. See United States v. Shakbazyan, 841 F.3d 286, 292 (5th Cir. 2016), petition for cert. filed (Jan. 24, 2017) (No. 16-929) (“Moreover, the Statement of Reasons form is intended ‘to serve a record-keeping function’ and not to provide ‘a procedural safeguard for any particular defendant.’ ”); United States v. Sinkler, 555 Fed.Appx. 217, 222 (3d Cir. 2014) (“Congress imposed § 3553(e)(2)’s written statement requirement to improve data collection for use in reports to Congress. See 28 U.S.C. § 994(w)(1).”); United States v. Denny, 653 F.3d 415, 422 (6th Cir. 2011) (the Statement of Reasons form “was merely intended to serve a record-keeping function” and the forms “have not always been crafted with the same precision that judges heed during the oral sentence”). See also United States v. Gracesqui, 512 Fed.Appx. 97, 99 (2d Cir. 2013) (relying on Denny).

There are good reasons for concluding that the Statements of Reasons district judges submit to the Sentencing Commission are purely administrative, to assist the Commission’s data-gathering function, not to confer on a sentenced defendant some after-the-fact procedural protection. On its face § 994(w) contemplates that each district court’s report will be sent after the court’s announcement of the sentence in open court and after entry of the judgment and commitment order — in other words, after sentencing is completed. The statute thus provides that the sentencing court will submit its report to the Commission “within 30 days following” — the word “following” is significant — “entry of judgment in every criminal case.” 28 U.S.C. § 994(w)(1).

This 30-day post-judgment deadline would make little sense if the Statement of Reasons determined the validity of a sentence already imposed. Defendants wishing to appeal their sentence must file a notice of appeal within 14 days of the entry of judgment. Fed. R. App. P. 4(b)(1). See also Fed. R. Crim. P. 35(a) (allowing the district court to correct clear sentencing errors within 14 days). Yet the general rule is that after a defendant notices an appeal, the district court loses jurisdiction over the case. Federal Rule of Criminal Procedure 37(a) recognizes as much, as have we. See United States v. Hallford, 816 F.3d 850, 855 n.4 (D.C. Cir. 2016) (citing Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982) (per curiam)). That the defendant must file a notice of appeal before the written statement is even due strongly suggests that the completed forms are for the Sentencing Commission’s benefit in compiling sentencing data and in providing Congress with annual reports. See 28 U.S.C. § 994(w)(2) & (3).

Consider also the requirement, added in 2003, see Ray, 273 F.Supp.2d at 1162, that the “Chief Judge of each district court” ensure that district judges submit the written Statement of Reasons to the Commission. 28 U.S.C. § 994(w)(1). This is consistent with the view of the courts of appeals, cited above, that the Statement of Reasons — “issued by the Judicial Conference and approved by the United States Sentencing Commission,” 28 U.S.C. § 994(w)(1)(B) — is merely an information-gathering device. See Vazquez-Martinez, 812 F.3d at 25-26. The same may be said of the notation on the form that it is “Not for Public Disclosure.”

Despite these considerations, we do not decide today whether a deficient Statement of Reasons submitted to the Sentencing Commission could ever affect the validity of an otherwise valid sentence. As we have said, the parties did not brief the issue and we recognize that the effect of the 2010 amendment could be viewed differently. In United States v. Brown, 808 F.3d 865, 873-74 (D.C. Cir. 2015), for example, we treated an inadequate § 994(w)(1)(B) Statement of Reasons as if it had some bearing on the legality of an above-Guidelines sentence — albeit without any briefing on or attention to § 3553(c)’s reference to § 994(w)(1)(B).

III.

In this case, the court dated its completed form three days after the sentencing hearing and filed it on the criminal docket, with access restricted to counsel of record and the court, ten days before Jackson filed his notice of appeal. See Criminal Docket Sheet, United States v. Jackson, No. 1:14-cr-00222-RJL-1 (D.D.C.). (It is not entirely clear when the court submitted the completed form to the Sentencing Commission.) On the form, the court checked the reasons for the variance in Jackson’s sentence: (1) “the nature and circumstances of the offense and the history and characteristics of the defendant”; (2) “to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense”; (3) and “to afford adequate deterrence to criminal conduct.” Because the court did not give any further explanation on the form, Jackson claims that this constitutes reversible error. Jackson failed to lodge this objection with the district court, so we again review for plain error.

Even if the district court’s completion of the report were deficient, this would not warrant remanding the case or setting Jackson’s sentence aside. Our court has never decided a case in which the oral statement was sufficient but the written statement was not. But every other circuit with jurisdiction over criminal appeals has affirmed the sentence in that situation, even when the statute required the Statement of Reasons to be set forth in the judgment. See United States v. Vazquez-Martinez, 812 F.3d 18, 25 (1st Cir. 2016); United States v. Verkhoglyad, 516 F.3d 122, 133, 137 (2d Cir. 2008); United States v. Cooper, 394 F.3d 172, 176 (3d Cir. 2005); United States v. Tyler, 614 Fed.Appx. 108, 110 (4th Cir. 2015) (per curiam); United States v. Comeaux, 371 Fed.Appx. 468, 470-71 (5th Cir. 2010) (per curiam); United States v. Williams, 396 Fed.Appx. 212, 220 (6th Cir. 2010); United States v. Baker, 445 F.3d 987, 991-93 (7th Cir. 2006); United States v. Orchard, 332 F.3d 1133, 1141 n.7 (8th Cir. 2003); United States v. Daychild, 357 F.3d 1082, 1107-08 (9th Cir. 2004); United States v. Hunter, 464 Fed.Appx. 754, 764 (10th Cir. 2012); United States v. Claiborne, 626 Fed.Appx. 848, 851 (11th Cir. 2015) (per curiam). That makes perfect sense. What would make no sense is for us to remand the case to the district court to redo the form and repeat what it said in open court. The decisions just cited are also consistent with the settled law in this and other circuits that “the oral sentence controls,” United States v. Weathers, 631 F.3d 560, 562 (D.C. Cir. 2011), and that “the written judgment form is a nullity to the extent it conflicts with the previously pronounced sentence.” United States v. Booker, 436 F.3d 238, 245 (D.C. Cir. 2006); see Fed. R. Crim. P. 35(c) (“As used in this rule, ‘sentencing’ means the oral announcement of the sentence.”).

When we have discovered deficiencies in a sentencing court’s Statement of Reasons we have focused on whether this had any impact on our duty to review the sentence. In two decisions, for instance, we held that a written Statement of Reasons was sufficient because it incorporated the district court’s oral explanation by reference. See United States v. Warren, 700 F.3d 528, 532 (D.C. Cir. 2012); United States v. Wilson, 605 F.3d 985, 1035 (D.C. Cir. 2010). When the sentencing court’s oral explanation allowed us “to conduct appellate review” of the sentence, we decided that “a remand is unnecessary.” Wilson, 605 F.3d at 1035. In Brown, 808 F.3d at 873, we stated that a written deficiency was “a serious problem because the trial judge’s in-court statement is, itself, insufficient.” The combination of the deficient oral and written statement precluded “appellate review of the substantive reasonableness of the sentence.” Id. at 874 (quoting United States v. Akhigbe, 642 F.3d 1078, 1087-88 (D.C. Cir. 2011), and In re Sealed Case, 527 F.3d 188, 193 (D.C. Cir. 2008)). A sufficient oral explanation, which is what we have here, eliminates this problem.

We therefore join every other circuit in holding that because the district court’s oral explanation sufficed, any written deficiency did not affect Jackson’s substantial rights and therefore does not warrant vacating Jackson’s sentence or remanding the case.

IV.

Jackson also claims that his sentence should be set aside for two other reasons. The first stems from the district court’s comment during the hearing that Jackson deserved “not only an adequate punishment but a punishment that’ll deter you and others.” Sentencing Transcript 22. Jackson claims that the court therefore failed to impose a sentence “sufficient, but not greater than necessary” to achieve certain statutory sentencing goals. 18 U.S.C. § 3553(a).

Jackson’s interpretation ignores the context of the court’s remark. Sentencing courts are required to consider the need to deter others and the need to deter the defendant. 18 U.S.C. § 3553(a)(2)(B) & (C). When the district court made the statement Jackson quotes, it had just heard the prosecution and the defense refer to the similarity of Jackson’s current and past offense. It is clear enough that the court meant that the sentence must be sufficiently stiff to deter Jackson and others from committing similar crimes in the future. The court’s remark therefore did not render the sentence unlawful. See United States v. Brinson-Scott, 714 F.3d 616, 625 (D.C. Cir. 2013); United States v. Schiradelly, 617 F.3d 979, 982-83 (8th Cir. 2010) (per curiam).

Jackson’s second claim is that his sentence was too severe. As he sees it, the court improperly gave him an above-Guidelines sentence as punishment for his past business success. Jackson misunderstands the district court’s statements during the hearing. The court said that this was “a sad case” because Jackson “had the potential to have a successful story.” Sentencing Transcript 22. That observation was not a justification for the sentence. Instead, the court was focusing on deterrence principles and did so reasonably. See supra 3-4. The district court’s sentencing decisions are entitled to deference. See United States v. Gardellini, 545 F.3d 1089, 1093, 1096 (D.C. Cir. 2008). Given Jackson’s commission of an. offense while he was on probation for a similar offense, the district court’s sentence was not an abuse of discretion.

Affirmed.

      . The history of § 994(w)(1) is set forth in United States v. Ray, 273 F.Supp.2d 1160 (D. Mont. 2003), aff'd 375 F.3d 980 (9th Cir. 2004). For background on the Sentencing Commission, see Mistretta v. United States, 488 U.S. 361, 363-370, 109 S.Ct. 647, 102 L.Ed.2d 714 (1989).

      . This requirement, in effect from 2003 until 2010, stemmed from the Prosecutorial Remedies and Other Tools to end the Exploitation of Children Today Act of 2003, Pub. L. No. 108-21, § 401(c)(1), 117 Stat. 650, 669-70 (2003).

      .In what appears to be an oversight, Congress neglected to delete the same language in the corresponding appellate review provision, 18 U.S.C. § 3742(f)(2), which continues to speak of “the required statement of reasons in the order of judgment and commitment.”

      . Quoting United States v. Akhigbe, 642 F.3d 1078, 1087-88 (D.C. Cir. 2011), and In re Sealed Case, 527 F.3d 188, 193 (D.C. Cir. 2008), in which sentencing occurred before the amendment to § 3553(c)(2), our opinion in Brown, 808 F.3d at 874 — a case in which sentencing occurred after the amendment to § 3553(c)(2) — stated that insufficient oral and written explanations of a sentence prevent the public from "learning] why the defendant received a particular sentence.” But that sort of harm cannot be caused by deficiencies in the written report to the Commission because the report is not part of the public record. See United States v. Pedroza-Orengo, 817 F.3d 829, 837 (1st Cir. 2016). As we have mentioned, the form approved by the Sentencing Commission states that it is "Not for Public Disclosure.”

      . See In re Sealed Case, 527 F.3d at 198 n.3 (Kavanaugh, J., dissenting). Without contradiction in the majority opinion, Judge Kava-naugh wrote that the "failure to memorialize in writing the reasons the court gave orally cannot constitute plain error: Failing to do so could not possibly 'affect the outcome of the district court proceedings’ or ‘seriously affect the fairness, integrity, or public reputation of judicial proceedings. ” Id. (alterations omitted). See United States v. Pruitt, 813 F.3d 90, 92-93 (2d Cir. 2016).


author: SRINIVASAN, Circuit Judge:

text:
    NATIONAL SECURITY COUNSELORS and Jeffrey Stein, Appellants, v. UNITED STATES DEPARTMENT OF JUSTICE, Appellee.
    No. 15-5117
    United States Court of Appeals, District of Columbia Circuit.
    Argued September 6, 2016
    Decided February 14, 2017

      Kelly B. McClanahan argued the cause and filed the briefs for appellants.
    Brian P. Hudak, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief was R. Craig Lawrence, Assistant U.S. Attorney.

      Before: BROWN, SRINIVASAN, and WILKINS, Circuit Judges.
   SRINIVASAN, Circuit Judge:

The Freedom of Information Act generally provides for persons to request the disclosure of records retained by administrative agencies. FOIA also addresses the charging of fees by agencies to process the release of records.

This case involves challenges raised by two separate FOIA requesters to the fees assessed against them by the Department of Justice for processing their requests for records. One requester argues that the fees assessed against him exceed the amounts permitted by the statute. The other contends that its request falls within a statutory waiver of fees for certain disclosures furthering the public’s understanding of government operations. The district court denied both claims and awarded summary judgment to the Department. We affirm the district court’s rejection of the second requester’s argument for a statutory waiver of fees, but we vacate and remand for further proceedings with regard to the first requester’s challenge to the amount of fees assessed against him.

I.

The first fee dispute involved in this case concerns a September 13, 2011, FOIA request submitted to the Federal Bureau of Investigation by appellant Jeffrey Stein. Stein is a columnist and blogger who writes about national security issues. He sought disclosure of “all pages on the internal Federal Bureau of Investigation (‘FBI’) Records Management Division (‘RMD’) website, ... as well as all documents, images, audio and video files, and any other files posted on the RMD website.” FOIA Request from Jeff Stein to David M. Hardy, Chief, FBI Record/Info. Dissemination Section (Sept. 13, 2011). The FBI, a component of the Department of Justice, responded to Stein’s request by releasing, free of charge, a CD containing an initial 567 pages of responsive material. The agency further conveyed that it had located an additional 21,753 responsive pages, which the agency would produce for Stein on multiple CDs if he paid a fee of $665. The FBI calculated that fee pursuant to its interim release policy, under which it responds to large document requests by burning a series of CDs, each of which contains a maximum of 500 pages of responsive documents. The agency charges requesters $15 per CD.

Stein did not pursue any administrative appeal of that initial fee determination within the agency. Instead, he brought an action in district court, claiming that the FBI’s fee policies, at least as they apply to large requests like his own, are inconsistent with FOIA.

The second fee dispute involved in this case arises out of two September 19, 2011, FOIA requests submitted to the Department of Justice by appellant National Security Counselors (NSC), a non-profit law firm. One of NSC’s requests asked for documents concerning all FOIA cases handled by the Federal Programs Branch of the Department of Justice from 2000 to the present. The other request sought “all sworn declarations made by agency representatives as part of certain FOIA or Privacy Act litigation between 2002-2006, inclusive.” FOIA Request from NSC to James M. Kovakas, FOIA/Privacy Act Officer, Dep’t of Justice Civil Div. (Sept. 19, 2011). In conjunction with both requests, NSC asked for a waiver of charges under a FOIA provision mandating waiver or reduction of fees for certain disclosures deemed to be in the public interest. 5 U.S.C. § 552(a)(4)(A)(iii). The agency denied NSC’s requests for a public-interest fee waiver.

Stein and NSC brought an action under FOIA against the Department of Justice, contesting the fees assessed against them by the agency. The district court granted summary judgment in favor of the Department. Stein and NSC then brought this appeal.

II.

We first consider Stein’s challenge to the fees assessed by the FBI under its interim release policy for production of multiple CDs containing responsive documents. We review the district court’s grant of summary judgment de novo. See, e.g., Judicial Watch, Inc. v. U.S. Dep’t of Justice, 813 F.3d 380, 383 (D.C. Cir. 2016). We vacate the grant of summary judgment against Stein and remand for further proceedings.

A.

As a threshold matter, the agency contends that Stein’s failure to exhaust administrative remedies precludes judicial review of his challenge to the interim release policy. We are unpersuaded. Because a FOIA requester’s failure to exhaust administrative remedies “is not [a] jurisdictional” bar to review, it is within our discretion to entertain Stein’s arguments. Hidalgo v. FBI, 344 F.3d 1256, 1258 (D.C. Cir. 2003). Although “FOIA’s administrative scheme favors treating failure to exhaust as a bar to judicial review,” id. at 1259, we conclude that, in the specific circumstances of this case, the purposes of the exhaustion doctrine would not be served by declining to hear Stein’s claim.

Stein filed this suit along with two other plaintiffs, NSC and an organization called Truthout (which did not join this appeal). While NSC asserted multiple claims, Stein and Truthout raised only one, in which they (together with NSC) contested the FBI’s fees under its interim release policy. Stein did not pursue any administrative appeal of the agency’s assessment of fees under that policy, but both NSC and Truthout exhausted their administrative remedies.

We have previously elected to consider the claim of a party who failed to exhaust agency remedies when that party’s claim and the claim of someone who did personally exhaust “are so similar that it can fairly be said that no conciliatory purpose would be served” by requiring exhaustion from both parties. Foster v. Gueory, 655 F.2d 1319, 1322 (D.C. Cir. 1981); see also Cellnet Commc’n, Inc. v. FCC, 965 F.2d 1106, 1109 (D.C. Cir. 1992). Here, when two co-plaintiffs jointly asserting precisely the same claim in the same action did exhaust, we elect to consider Stein’s challenge notwithstanding his own failure to exhaust.

To be sure, neither of the co-plaintiffs presently stands alongside Stein in challenging the agency’s fees for producing multiple CDs under the FBI’s interim release policy: Truthout is not a party to the appeal at all, and NSC, while appealing on other grounds (see Part III, infra), retains no further stake as to this particular challenge because the FBI has disclosed, free of charge, the documents NSC requested in connection with the claim. Still, the fact remains that both Truthout and NSC exhausted administrative remedies with regard to the same claim brought jointly with Stein’s in the same case. In the circumstances, denying review of Stein’s companion claim on grounds of his own non-exhaustion would not serve the purposes of requiring administrative exhaustion — i.e., enabling the agency to “function efficiently” and to “have an opportunity to correct its own errors,” “affording] the parties and the courts the benefit of its experience and expertise,” and “compiling] a record which is adequate for judicial review.” Weinberger v. Salfi, 422 U.S. 749, 765, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). We therefore proceed to the merits of Stein’s challenge.

B.

The agency submitted a declaration by David Hardy, the Chief of the Record/Information Dissemination Section at the FBI, in which it explained the basis for the $665 fee assessment against Stein. Hardy Decl. ¶26 (Sept. 17, 2013). Under the FBI’s interim release policy for large document requests, the FBI includes up to 500 pages of responsive documents on a single CD. Due to the confidential nature of many of its records, the FBI, before burning each CD, runs what it refers to as the “Integrity” protocol, a computer program that scans for “exempt words, names, confidential sources, or classified techniques” in responsive documents. Id. ¶ 38(c). For each 500-page CD, the Integrity protocol takes approximately 50 minutes to complete. The Hardy Declaration thus explains that, based on the applicable government pay scale for 50 minutes of operator labor, the “average operator cost for the Integrity process alone is $39.50.” Id. ¶ 33(d) n.18. The FBI releases completed CDs to requesters for $15 apiece, a rate significantly less than the FBI’s asserted labor costs for producing each CD. Because the FBI identified 21,753 pages of responsive material in addition to the initial 567-page CD of disclosures, the FBI offered to produce the remaining material on forty-four additional CDs, each containing up to 500 pages, for a total charge of $660. The final charge of $665 assessed against Stein includes a $5 fee for the initial 567-page CD, which the FBI collects only if a requester elects to pay for additional disclosures.

FOIA imposes two salient limitations on the fees an agency can charge requesters. First, fees must “be limited to reasonable standard charges.” 5 U.S.C. § 552(a)(4)(A)(ii). Second, an agency may recover “only the direct costs of search, duplication, or review.” Id. § 552(a)(4)(A)(iv). Stein asserts that the $665 fee assessed against him under the interim release policy fails both requirements.

Stein first-contends that the policy, by limiting the number of pages included on each CD to 500, produces fees exceeding “reasonable standard charges.” There is no dispute that each CD can hold far more than 500 pages of material. Stein demonstrated that the pages responsive to his request likely could have fit onto one CD rather than the forty-four CDs on which the agency proposed to disclose the documents. If the charges assessed under the interim release policy for producing forty-four CDs (rather than one) amounted to an improper inflation of fees “with a view to effectively denying access,” the policy would infringe FOIA. Nat’l Treasury Emp’s Union v. Griffin, 811 F.2d 644, 650 (D.C. Cir. 1987).

That is not the case here. The FBI regularly receives FOIA requests encompassing a massive number of responsive documents. Due to the time it takes the agency to run the Integrity protocol, the processing of a large request, if not divided into segments, could substantially delay disclosure to other requesters who seek a smaller number of documents. As explained in the Hardy Declaration, the interim release policy thus aims to enable the FBI “to develop multi-track processing with the goal of responding to more requests.” Hardy Decl. ¶ 33(a). By processing requests in 500-page increments, the policy ultimately “provides more pages to more requesters,” avoiding situations in which “a few, large queue requests monopolize finite processing resources.” Id. Far from giving rise to an improper inflation of fees that effectively denies access to re-questers, the FBI’s interim release policy serves to promote efficient responses to a larger number of requesters.

Because the agency has come forward with a reasonable, non-obstructionist explanation for the interim release policy’s 500-page-per-CD limitation, that limitation does not result in a violation of FOIA’s mandate that agencies recover only “reasonable standard charges.” That is true even though the policy may, to some degree, increase the cost of disclosure for large requests. FOIA’s reasonable-charge mandate, as Stein concedes, does not require an agency to adopt the lowest-cost method of responding to requests. Nor, relatedly, does that statutory mandate require the FBI to waive its interim release policy on request in individual cases. FOIA does not stand in the way of an agency’s formulation and application of a reasonable, generally applicable release protocol. Because the FBI’s justifications for its interim release policy relate to the efficient processing of requests, it can permissibly adhere to the standard 500-page limit in the face of a case-specific waiver request even if, as Stein observes, it occasionally exercises its discretion to release CDs containing more than 500 pages (as with the initial 567-page CD released to Stein).

Stein alternatively contends that the fees assessed under the interim release policy exceed the agency’s “direct costs of search, duplication, or review.” 5 U.S.C. § 552(a)(4)(A)(iv). His argument begins with the proposition that the FBI’s estimation of its direct labor costs at $39.50 per CD rests on an assumption that running the Integrity program requires 50 minutes of employee labor. Stein questions that assumption, arguing that it is unclear how much of the 50-minute time period needed to run the Integrity protocol in fact requires the actual involvement of an FBI operator. For instance, Stein submits, the agency’s description of the Integrity program is consistent with a scenario in which an operator initially activates the software but then sits idly by while the program processes documents with little or no ongoing employee engagement. If that were so, the FBI’s labor costs associated with the Integrity program might fall well below the $15-per-CD charge under the interim release policy. Because the FBI’s account of its direct production expenses rests on the labor costs ostensibly associated with running the Integrity program, Stein argues that there remains a genuine issue, precluding the entry of summary judgment against him, concerning whether the agency’s fees exceed its direct costs.

We agree with Stein that the Hardy Declaration’s explanation of the Integrity program lacks adequate specificity to determine whether, and to what extent, the 50-minute period for running the program involves employee engagement rather than idle time. Of course, FOIA does not require an agency to document its labor or other production costs with the exactitude of minute-by-minute detail. But here, after the agency initially submitted its explanation of labor costs in the Hardy Declaration, which were grounded in its assertion that the Integrity program generally takes 50 minutes to run, Stein raised questions about whether that period involves any meaningful employee engagement. The FBI, despite its awareness of Stein’s argument, gave no supplemental information addressing whether the operation of the Integrity program in fact entails any ongoing employee interaction. Given those circumstances, we conclude that there remained a genuine issue, foreclosing the entry of summary judgment, concerning whether the fees assessed by the agency exceeded its direct costs.

The agency notes that Stein’s (and his co-plaintiffs’) briefing in the district court at one point stated that it “is true” that “running Integrity on a single CD costs more than $15.” We do not read that statement to constitute a binding and irrevocable concession that the direct costs of producing a single CD exceed the FBI’s per-CD charge of $15. Rather, we understand the statement, considered in context, to come into play only if one assumes that the Integrity process involves no idle time on the part of the operator. Otherwise, Stein’s argument to the effect that the Integrity process might involve employee idle time — which Stein repeatedly urged in the district court (including on the next page of the same brief), and which necessarily calls into question whether the direct costs of producing a CD exceed the per-CD charge of $15 — would have been an entirely self-defeating one. Consequently, there remains a genuine issue of material fact concerning whether the direct costs of producing a CD exceed $15.

In so ruling, we in no way mean to call into question the possibility that the agency will adequately demonstrate on remand that the FBI’s labor (or other direct) costs under the interim release policy in fact equal or exceed $15 per CD. Indeed, the agency might be able to do so in short order. We require only that the agency provide a sufficient factual basis upon which the district court can make the determination that the fees assessed under the interim release policy do not exceed direct costs.

III.

We turn now to the second fee dispute at issue in this case, arising from NSC’s requests for records concerning (i) post-2000 FOIA cases handled by the Department of Justice’s Federal Programs Branch and (ii) sworn declarations made by Department representatives in connection with certain FOIA and Privacy Act litigation between 2002 and 2006. NSC claims entitlement to a waiver of fees for those requests pursuant to FOIA’s provision establishing a waiver or reduction of fees for certain disclosures in the public interest. 5 U.S.C. § 552(a)(4)(A)(iii).

A waiver or reduction of fees under that provision rests on satisfaction of two requirements. First, a requester must show that “disclosure of the information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government.” Id. Second, a requester must show that disclosure is not “primarily in [its] commercial interest.” Id. Because the Department here concedes that NSC lacks any overriding commercial interest, the first requirement alone is in dispute. As to that requirement, the district court agreed with the Department that disclosure to NSC was unlikely to contribute significantly to public understanding of the government’s operations or activities. Limiting ourselves “to the record before the agency,” id. § 552(a)(4)(A)(vii), we review the denial of NSC’s fee-waiver request de novo, and affirm.

While fee-waiver applications are to be “liberally construed” in favor of finding that requesters meet FOIA’s two-prong test, requesters still must justify their entitlement to a waiver of fees in “reasonably specific” and “non-conclusory” terms. See Judicial Watch, Inc. v. Rossotti, 326 F.3d 1309, 1310 (D.C. Cir. 2003). Because NSC failed to provide adequate evidence suggesting that it would effectively disseminate its requested information in furtherance of the public’s understanding of government operations, we find that NSC failed to carry its burden to demonstrate its entitlement to a waiver of fees.

As we have explained, although a fee-waiver applicant need not demonstrate its ability to reach a “wide audience,”' it must at least show that it can “disseminate the disclosed records to a reasonably broad audience of persons interested in the subject.” Cause of Action v. FTC, 799 F.3d 1108, 1116 (D.C. Cir. 2015) (quoting Carney v. U.S. Dep’t of Justice, 19 F.3d 807, 815 (2d Cir. 1994)). Here, we agree with the Department that, based on the state of NSC’s website at the time of its FOIA requests, it appeared to be “no more tha[n] ... a clearing house for the records [it] receive[d]” through FOIA. Denial Letter from James M. Kovakas, FOIA/Privaey Act Officer, Dep’t of Justice Civil Div., to Kel McClanahan, Exec. Dir., NSC (Oct. 17, 2011); see Home Page, Nat’l Sec. Counselors (Sept. 20, 2011), https://web.archive. org/web/20111104000523/http ¡//national securitylaw.org. In addition, the Department correctly noted that NSC did “not appear [to be] actively engaged in gathering information to produce” original publications, as “[t]he ‘NSC Publications’ section of [its] website contains only three publications, two of which were written ... prior to NSC’s existence.” Denial Letter on Administrative Appeal from Janice Galli McLeod, Assoc. Dir., Dep’t of Justice Office of Info. Policy, to Kel McClanahan, Exec. Dir., NSC (May 22, 2012).

NSC, moreover, produced no information about the size of its audience or the amount of traffic received by its website. NSC’s own stated plans about its intended use of the tens of thousands of pages of records encompassed by its request indicated only that it hoped to perform “unbiased analyses,” “develop a predictive model,” “or at least write a white paper.” FOIA Requests from NSC to James M. Kovakas, FOIA/Privacy Act Officer, Dep’t of Justice Civil Div. (Sept. 19, 2011). It further suggested that “the raw statistical data mined from these records ... would prove valuable to any person attempting to model the respective agencies’ FOIA implementation procedures, policies, patterns, and practices.” Id. NSC neither identified a discernible audience for the disclosures in their raw form nor demonstrated its possession of the requisite scientific or technical sophistication to analyze and convey the data in a more broadly digestible form.

We have previously upheld a denial of a fee-waiver request in circumstances in which a requester “failed to identify the newspaper company to which he intended to release the requested information, his purpose for seeking the requested material, or his professional or personal contacts with any major newspaper companies.” Larson v. CIA, 843 F.2d 1481, 1483 (D.C. Cir. 1988). Here, while NSC provided some barebones indication of how it intended to use its requested information, it similarly failed to provide sufficiently specific and non-conclusory statements demonstrating its ability to disseminate the disclosures to a “reasonably broad audience of persons interested in the subject.” Cause of Action, 799 F.3d at 1116. That deficiency “alone is a. sufficient basis for denying the fee waiver request.” Larson, 843 F.2d at 1483. We therefore affirm the denial of NSC’s request for a public-interest fee waiver.

⅜ ‡ ⅜ ⅜ ⅜

For the foregoing reasons, we vacate the district court’s grant of summary judgment with respect to Stein’s claim and remand for further proceedings consistent with our opinion. We affirm the district court’s grant of summary judgment in favor of the Department in connection with NSC’s request for a public-interest fee waiver.

So ordered.