(CN) – The 9th Circuit said Wednesday that it will reconsider a lawsuit to identify informants who spurred two investigations of a real estate kickback racket in Hawaii.
A three-judge panel in Honolulu supported such identification in June, saying that the U.S. Department of Housing and Urban Development (HUD) had failed to explain why it redacted the names of the informants on documents requested by Prudential Locations under the Freedom of Information Act.
HUD had claimed that the redactions fell under the act’s privacy exemption, but it did not properly explain why, according to the original federal appeals court decision.
The same panel vacated its ruling without comment Wednesday for a rehearing.
HUD had investigated Prudential Locations twice over the last decade for alleged violations of anti-kickback laws. The agency started both investigations based on tips from industry insiders.
In response to the company’s FOIA request, HUD turned over piles of documents, including a redacted letter and email with the names of the informants.
Prudential sued to get the names, but Chief U.S. District Judge Susan Oki Mollway sided with HUD, finding that the privacy exemption applied. Circuit Judge Marsha Berzon wrote in June, however, that HUD had merely raised the issue of privacy without showing why it should be afforded to the informants.
“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,” she wrote for the panel.