Nova Oculus Partners, LLC v. United States Securities and Exchange Commission ( 2020 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
NOVA OCULUS PARTNERS, LLC, et al.,
Plaintiffs,
v.
No. 19-cv-666 (DLF)
U.S. SECURITIES AND EXCHANGE
COMMISSION,
Defendant.
MEMORANDUM OPINION
Nova Oculus Partners, LLC, Peter Pocklington, Lantson E. Eldred, and AMC Holdings
Co., LLC (collectively, Nova Oculus) bring this suit alleging that the Securities and Exchange
Commission (SEC) unlawfully withheld various records under the Freedom of Information Act,
5 U.S.C. § 552 et seq. (FOIA). Before the Court is the SEC’s Motion for Summary Judgment,
Dkt. 12, and Nova Oculus’s Cross-Motion for Summary Judgment, Dkt. 14. For the reasons that
follow, the Court will grant the SEC’s motion and deny Nova Oculus’s cross-motion.
I. BACKGROUND
Nova Oculus is a medical device company operating in California. See Compl., Dkt. 1,
¶ 4; O’Rourke Decl., Dkt. 14-2, ¶ 3. When Nova Oculus’s predecessor, Acuity Medical, Inc.
(Acuity), went bankrupt in 2015, Peter Pocklington and Lantson E. Eldred purchased the
company’s assets and founded Nova Oculus. O’Rourke Decl. ¶¶ 5, 7; see SEC v. Pocklington,
No. 18-cv-701, 2018 WL 6843665 at *2 (C.D. Cal. 2018). Meanwhile, Acuity’s former CEO,
Blair Mowery, and its former Chief Marketing Officer, Marshall Masko, formed a competing
company called Amerivision International, Inc. (Amerivision). O’Rourke Decl. ¶¶ 5–6.
Amerivision has since engaged in years of litigation with Nova Oculus and the two companies
remain competitors to date. Id. ¶ 8.
On April 5, 2018, the SEC initiated an enforcement action against Nova Oculus in the
United States District Court for the Central District of California. James Decl., Dkt. 14-1, ¶ 2;
id. Ex. C. The SEC alleged, among other things, that Nova Oculus and its founders had raised
millions of dollars “while concealing the true identity of [the company’s] controlling leader,
misappropriating investor funds, and funneling undisclosed and excessive commissions to sales
agents.” Pocklington, 2018 WL 6843665 at *2. Publicly disclosed documents connected with
the enforcement action subsequently revealed communications between Mowery and Masko and
Kathryn Wanner, the SEC’s lead counsel in the matter. James Decl. ¶ 3; id. Ex. B.
On April 30, 2018, Nova Oculus submitted a FOIA request to the SEC. See Compl. Ex.
1, Dkt. 1-5. The plaintiffs’ initial FOIA request sought “correspondence pertaining to
investigative records relating to Nova Oculus Partners, LLC,” Compl. Ex. 4, Dkt. 1-8, and a
search of the SEC’s email server for the following criteria:
1. January 1, 2013 through the present, for the e-mail address of
Marshallmasko@amerivision.us.
2. January 1, 2013 through the present, for the e-mail address of
Marshall.ameritech@gmail.com.
3. January 1, 2013 through the present, for the e-mail address for
blairmowery@amerivision.us.
4. January 1, 2013 through the present, for the e-mail address for
blair.ameritech@gmail.com.
5. June 2011 through June 2012, “David and Casselman”
6. January 1, 2008 through the present, “Wasserman, Comden, Casselman & Esensten”
7. January 1, 2013 through the present, “Amerivision and International”
Cozza Decl., Dkt. 13-2, ¶ 4.
2
This search turned up thousands of responsive documents. Id. ¶¶ 8–9. On October 10,
2018, the SEC notified Nova Oculus that they were withholding all documents produced by the
search pursuant to FOIA Exemption 7(A), see Compl. Ex. 15, Dkt. 1-19, which protects records
compiled for law enforcement purposes where disclosure “could reasonably be expected to
interfere with enforcement proceedings,” 5 U.S.C. 552(b)(7)(A). The plaintiffs appealed this
withholding to the SEC, see Compl. Ex. 16, Dkt. 1-20, and the SEC’s Office of General Counsel
upheld the decision, see Compl. Ex. 17, Dkt. 1-21.
On March 8, 2019, the plaintiffs filed their complaint in the instant action challenging the
SEC’s decision. See Compl. The next month, while this litigation was still pending, “the SEC
determined it was no longer necessary to withhold the requested documents under Exemption
7(A).” Cozza Decl. ¶ 7. The SEC’s Office of General Counsel then worked with the plaintiffs’
counsel to further narrow the search criteria since the initial search produced many documents
unrelated to the Nova Oculus investigation. Id. ¶ 10. The parties agreed to narrow the search to
the following search terms:
1. marshallmasko@amerivision.us;
2. marshall.ameritech@gmail.com;
3. blairmowery@amerivision.us;
4. blair.ameritech@gmail.com;
5. “Wasserman, Comden, Casselman & Esensten” and (“Nova Oculus” or “Eye
Machine” or Pocklington or Eldred or “AMC Holdings”);
6. Amerivision and (“Nova Oculus” or “Eye Machine” or Pocklington or Eldred or
“AMC Holdings”); and
7. Casselman and (“Nova Oculus” or “Eye Machine” or Pocklington or Eldred or “AMC
Holdings”).
Id.After receiving Nova Oculus’s consent to remove any documents that did not pertain to
the SEC’s investigation of Nova Oculus, the SEC produced 3,883 pages of documents in
3
response to Nova Oculus’s amended search, many of them redacted in full or in part. Id. ¶¶ 11–
12. The SEC withheld various documents under FOIA Exemption 5, which protects “documents
that would normally be privileged in the civil discovery context.” Lewis v. U.S. Dep’t of the
Treasury, No. 17-cv-943, 2020 WL 1667656 at *6 (D.D.C. 2020). Under the attorney work-
product privilege, the SEC withheld: (1) “[e]mails, or portions of emails, about drafting and
filing a complaint in the Nova Oculus enforcement case, along with many versions of a draft
complaint”; (2) “[e]mails about litigation in SEC enforcement cases other than Nova Oculus”;
and (3) “[e]mails about steps being taken in the Nova Oculus investigation.” Cozza Decl. ¶ 16.
Under the attorney-client privilege, the SEC withheld part of one “email from the Office of
FOIA Services to an [Office of General Counsel] attorney . . . seeking legal advice.” Def.’s
Vaughn Index, Dkt. 13-3, No. 29; Cozza Decl. ¶ 26. Under the deliberative process privilege,
the SEC withheld: (1) “[e]mails, or portions of emails, about drafting and filing a complaint in
the Nova Oculus enforcement case, along with many versions of a draft complaint”; (2)
“[e]mails about litigation in SEC enforcement cases other than Nova Oculus”; (3) “[e]mails
about steps being taken in the Nova Oculus investigation”; and (4) “[e]mails about the
processing of and proposed responses to the Plaintiffs’ FOIA request.” Cozza Decl. ¶ 20.
The SEC partially withheld various documents under FOIA Exemption 7(C), which
“protects information compiled for law enforcement purposes that could reasonably be expected
to constitute an unwarranted invasion of personal privacy,” Elec. Frontier Found. v. DOJ, 384 F.
Supp. 3d 1, 15 (D.D.C. 2019) (internal quotation marks omitted), and FOIA Exemption 6, which
“protects personnel and medical files and similar files the disclosure of which would constitute a
clearly unwarranted invasion of personal privacy,” id. (internal quotation marks omitted). Citing
both exemptions, the SEC withheld portions of responsive documents containing:
4
(1) “[i]dentifying information relating to persons, other than defendants in the SEC’s
enforcement action, who were being investigated or providing information in connection with
the investigation”; (2) “[i]dentifying information relating to SEC employees and staff who
worked on matters relating to an SEC investigation or litigation, except to the extent the
information was provided on filings in the SEC’s enforcement action”; (3) “[i]dentifying
information regarding a staff member in a foreign securities agency”; and (4) “[t]he email
address of a defendant.” Cozza Decl. ¶ 28. Citing Exemption 6 alone, the SEC additionally
withheld: (1) “[i]dentifying information for SEC staff involved in processing Plaintiffs’ FOIA
request”; and (2) “[i]nformation regarding an employee’s unavailability.” Id. ¶ 31.
In addition to the above partially-withheld documents, the SEC also withheld 672 pages
of documents in full pursuant to Exemptions 6 and 7(C) where “the documents referred to
individuals named in the FOIA request, and withholding the documents in full was the only way
to protect information about individuals’ potential involvement in a law enforcement
investigation.” Id. ¶ 35. SEC staff reviewed these 672 pages of documents and determined that
there was no way to segregate non-exempt information without revealing the nature of the
individuals’ involvement in the SEC’s enforcement matter. Id. ¶ 40.
On September 13, 2019, the SEC filed its Motion for Summary Judgment. Dkt. 12. On
October 4, 2019, Nova Oculus filed its Cross-Motion for Summary Judgment. Dkt 14. Both
motions are now ripe for decision.
II. LEGAL STANDARDS
Rule 56 of the Federal Rules of Civil Procedure mandates that “[t]he court shall grant
summary judgment if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). When a
5
federal agency moves for summary judgment in a FOIA case, the court views all facts and
inferences in the light most favorable to the requester, and the agency bears the burden of
showing that it complied with FOIA. Chambers v. U.S. Dep’t of Interior, 568 F.3d 998, 1003
(D.C. Cir. 2009).
To prevail under Rule 56, a federal agency “must prove that each document that falls
within the class requested either has been produced, is unidentifiable, or is wholly exempt from
the [FOIA’s] inspection requirements.” Perry v. Block, 684 F.2d 121, 126 (D.C. Cir. 1982) (per
curiam) (internal quotation marks omitted). The agency “must show beyond material doubt . . .
that it has conducted a search reasonably calculated to uncover all relevant documents,”
Weisberg v. DOJ, 705 F.2d 1344, 1351 (D.C. Cir. 1983) (internal quotation marks omitted), and
must also explain why any of the nine enumerated exemptions listed in 5 U.S.C. § 552(b) apply
to withheld information, Judicial Watch, Inc. v. Food & Drug Admin, 449 F.3d 141, 147 (D.C.
Cir. 2006); see also Mobley v. CIA, 806 F.3d 568, 580 (D.C. Cir. 2015) (agency bears burden of
justifying application of exemptions, “which are exclusive and must be narrowly construed”).
“The peculiarities inherent in FOIA litigation, with the responding agencies often in sole
possession of requested records and with information searches conducted only by agency
personnel, have led federal courts to rely on government affidavits to determine whether the
statutory obligations of the FOIA have been met.” Perry, 684 F.2d at 126. Agency affidavits are
entitled to a presumption of good faith, see SafeCard Servs. v. SEC, 926 F.2d 1197, 1200 (D.C.
Cir. 1991), and a court may grant summary judgment based on an affidavit if it contains
reasonably specific detail and neither contradictory record evidence nor evidence of bad faith
calls it into question, see Judicial Watch, Inc. v. U.S. Secret Serv., 726 F.3d 208, 215 (D.C. Cir.
6
2013). The “vast majority of FOIA cases can be resolved on summary judgment.” Brayton v.
Office of the U.S. Trade Representative, 641 F.3d 521, 527 (D.C. Cir. 2011).
III. ANALYSIS
Nova Oculus does not challenge the adequacy of the SEC’s search. The parties dispute
only whether the SEC properly withheld and redacted records pursuant to FOIA Exemptions 5,
6, and 7(C). As explained below, the SEC properly invoked these Exemptions to withhold and
redact records responsive to Nova Oculus’s FOIA request.
A. Exemptions 6 and 7(C)
“FOIA Exemptions 6 and 7(C) seek to protect the privacy of individuals identified in
certain agency records.” ACLU v. DOJ, 655 F.3d 1, 6 (D.C. Cir. 2011). Exemption 6 protects
“personnel and medical files and similar files the disclosure of which would constitute a clearly
unwarranted invasion of personal privacy,” 5 U.S.C. § 552(b)(6), and Exemption 7(C) protects
“records or information compiled for law enforcement purposes” that “could reasonably be
expected to constitute an unwarranted invasion of personal privacy,” id. § 552(b)(7)(C). When
an agency invokes both exemptions, courts “focus” on Exemption 7(C) because it “establishes a
lower bar for withholding material.” Citizens for Responsibility & Ethics in Washington v. DOJ ,
746 F.3d 1082, 1091 n.2 (D.C. Cir. 2014) (CREW I) (internal quotation marks omitted). The
SEC withheld the following records under both Exemption 6 and Exemption 7(C):
(1) identifying information relating to persons, other than defendants in the SEC’s enforcement
action, who were being investigated or providing information in connection with the
investigation; (2) identifying information relating to SEC employees and staff who worked on
matters relating to an SEC investigation or litigation, except to the extent that the information
7
was provided in public filings; (3) identifying information regarding an employee of a foreign
securities agency; and (4) a defendant’s email address. Cozza Decl. ¶ 28.
Under Exemption 7(C), courts balance the privacy interests implicated by the records
being sought against the public’s interest in their disclosure. Citizens for Responsibility & Ethics
in Washington v. DOJ, 854 F.3d 675, 681 (D.C. Cir. 2017) (CREW II). The government “must
account for the privacy interests at stake, recognizing that previous disclosures or admissions
may have diminished those interests.” Id. at 683. But if the withheld information implicates a
substantial privacy interest, the FOIA requester “bears the burden of showing (1) that ‘the public
interest sought to be advanced is a significant one, an interest more specific than having the
information for its own sake,’ and (2) that the information [it] seeks ‘is likely to advance that
interest.’” Roth v. DOJ, 642 F.3d 1161, 1175 (D.C. Cir. 2011) (quoting Nat’l Archives &
Records Admin. v. Favish, 541 U.S. 157, 172 (2004)). It is well established that “the only public
interest relevant for purposes of Exemption 7(C) is one that focuses on the citizens’ right to be
informed about what their government is up to.” Sussman v. U.S. Marshals Serv., 494 F.3d
1106, 1115 (D.C. Cir. 2007) (internal quotation marks omitted).
The individuals involved in the SEC’s investigation of Nova Oculus have substantial
privacy interests in the documents withheld under Exemption 7(C). See, e.g., Amuso v. Dep’t of
Justice, 600 F. Supp. 2d 78, 97 (D.D.C. 2009) (“individuals involved in law enforcement
investigations” have a “substantial interest” in “the nondisclosure of their identities and
connection to a particular investigation”). Names of private individuals in law enforcement files
are ordinarily exempt from disclosure absent “compelling evidence that the agency is engaged in
illegal activity.” SafeCard Servs. v. SEC, 926 F.2d 1197, 1206 (D.C. Cir. 1991). But individuals
who have already been “implicated in connection with [an] investigation . . . have a diminished
8
privacy interest” in the information contained in investigative documents. CREW II, 854 F.3d at
682.
Nova Oculus argues that Mowery and Masko have only minimal privacy interests against
disclosure of the records at issue because their names have already been publicly linked to the
SEC’s investigation of Nova Oculus. See James Decl., Exs. A, B. But the fact that the
individuals’ identities have been disclosed does not destroy their privacy interests in the nature
of their involvement in the SEC enforcement matter, as opposed to the mere fact of that
involvement. See CREW I, 746 F.3d at 1091 (recognizing a “second, distinct privacy interest in
the contents of the investigative files” (emphasis in original)). In other words, the fact that the
individuals’ identities have been publicly connected with a law enforcement matter does not
“waive all [] interest in keeping the contents of the [investigative] file[s] confidential” because
those individuals still have a “privacy interest . . . in avoiding disclosure of the details of the
investigation.” Kimberlin v. DOJ, 139 F.3d 944, 949 (D.C. Cir. 1998). Courts must therefore
consider whether, for example, “a responsive document could reveal new information about a
person’s conduct, going beyond the facts in the public record” regarding that person’s
involvement with law enforcement. CREW II, 854 F.3d at 682. If disclosure of the records
sought could in fact reveal additional, not-yet-public information, the relevant privacy interests
are more likely to outweigh the public interest. Id. And that is precisely the case here. While
Mowery and Masko no longer have any privacy interest in the fact of their involvement in the
SEC enforcement matter against Nova Oculus, the identifying emails that have already been
publicly disclosed do not reveal anything about the nature of their involvement in the matter.
See James Decl., Exs. A, B. Therefore, they maintain substantial privacy interests in the contents
of the investigative files on that basis. See Kimberlin, 139 F.3d at 949.
9
Moreover, Nova Oculus fails to articulate a compelling public interest in favor of
disclosure of the withheld documents. Nova Oculus alleges government impropriety in the form
of “an apparent illegal quid pro quo” based on an email sent from Mowery to Kathryn Wanner,
the SEC’s lead investigator in the Nova Oculus matter. But where “the public interest being
asserted is to show that responsible officials acted negligently or otherwise improperly in the
performance of their duties, the requester must establish more than a bare suspicion in order to
obtain disclosure.” Favish, 541 U.S. at 174. In this case, Nova Oculus’s allegation of a quid pro
quo is based entirely on Mowery’s courtesy email to Wanner. See James Decl., Ex. A (“Thank
you so much for your phone call. I sent a lot of information . . . and am attaching some of the
same. . . . Thanks for your help.”). This email does not “establish more than a bare suspicion” of
impropriety, Favish, 541 U.S. at 174, and it in no way suggests that the SEC accepted an
improper benefit or otherwise acted improperly in pursuing an enforcement action against Nova
Oculus. Even if Mowery himself acted in self-interest by offering information to the government
about a competitor, nothing in the record supports the inference that the SEC did anything other
than enforce the law. In short, Nova Oculus’s unsupported allegation of a putative quid pro quo
is not a public interest that outweighs the privacy interests of Mowery and Masko.
The SEC’s decision to withhold documents under Exemption 6 is also supported by the
record. The SEC relied on Exemption 6 to withhold identifying information for SEC staff
involved in processing Nova Oculus’s FOIA request, as well as information regarding one
employee’s unavailability. Cozza Decl. ¶ 31. As the SEC explained, SEC employees “have a
privacy interest in their identifying information and information about their personal lives so that
it is not available to individuals who might be dissatisfied with the employees’ work and thus
could seek to contact and/or criticize them.” Id. ¶ 33. No public interest is served by disclosure
10
of the “names, email and/or mailing addresses, titles, phone numbers, and other personal
information” of the employees working on the plaintiffs’ FOIA request. Id. ¶ 32. The public
does not learn anything about “what [its] government is up to” by gaining access to “information
about private citizens that is accumulated in various governmental files but that reveals little or
nothing about an agency’s own conduct.” DOJ v. Reporters Comm. For Freedom of Press, 489
U.S. 749, 773 (1989) (internal quotation marks omitted). Therefore, the SEC properly invoked
Exemption 6 to protect the privacy interests of the staff who processed Nova Oculus’s request.
Finally, the SEC has satisfied its segregability obligations. FOIA requires that “[a]ny
reasonably segregable portion of a record shall be provided to any person requesting such record
after deletion of the portions which are exempt.” 5 U.S.C. § 552(b). An agency may satisfy its
segregability obligations by “(1) providing a Vaughn index that adequately describes each
withheld document and the exemption under which it was withheld; and (2) submitting a
declaration attesting that the agency released all segregable material.” Nat’l Sec. Counselors v.
CIA, 960 F. Supp. 2d 101, 207 (D.D.C. 2013). The segregability requirement does not apply to
non-exempt material that is “inextricably intertwined” with exempt material, Mead Data Cent.,
Inc. v. Dep’t of the Air Force, 566 F.2d 242, 260 (D.C. Cir. 1977), and agencies are entitled to a
presumption that they disclosed all reasonably segregable material, Sussman, 494 F.3d at 1117.
The SEC submitted a Vaughn index outlining which documents were withheld under which
exemptions, as well as the basis for withholding each. See Def.’s Vaughn Index. The SEC also
submitted the declaration of Carin Cozza, a senior attorney in the SEC’s Office of General
Counsel, Cozza Decl. ¶ 1, representing that SEC staff reviewed all responsive documents and
“disclosed all portions of the documents that it reasonably foresees could be disclosed without
11
causing harm,” id. ¶¶ 12, 27. Together, these documents satisfied the SEC’s segregability
obligations. See Nat’l Sec. Counselors, 960 F. Supp. 2d at 207.
In the declaration, Cozza explained that 672 pages of documents were withheld in full
under Exemptions 6 and 7(C) because “withholding the documents in full was the only way to
protect information about individuals’ potential involvement in a law enforcement
investigation.” Id. ¶ 35. Cozza further explained that the documents withheld in full “refer to
individuals [Mowery and Masko] whose email addresses were provided as search terms” in the
plaintiffs’ FOIA request. Id. ¶ 37. Because of that fact, redacting information that could
personally identify Mowery and Masko “would not protect the individuals because the nature of
the FOIA request and the nature of the documents would make it clear that the redacted names
were the names of the individuals listed in the FOIA request.” Id. ¶ 37. In other words, “[i]f
Plaintiffs had even portions of the documents they would know the connection between those
individuals and the SEC’s investigation.” Id. These representations in the SEC’s declaration
adequately explain the SEC’s basis for withholding the documents in question in full. Only by
withholding the documents in full could the SEC protect Mowery and Masko’s “privacy interest
. . . in avoiding disclosure of the details of [their involvement in] the [SEC’s] investigation.”
Kimberlin, 139 F.3d at 949. Accordingly, the SEC complied with its obligation to disclose all
reasonably segregable material, notwithstanding its withholding of these documents in full. See
Sussman, 494 F.3d at 1117.
B. Exemption 5
FOIA Exemption 5 protects from disclosure “inter-agency or intra-agency memorandums
or letters that would not be available by law to a party other than an agency in litigation with the
agency.” 5 U.S.C. § 552(b)(5). This exemption “incorporates the traditional privileges that the
12
Government could assert in civil litigation against a private litigant,” including the attorney
work-product, attorney-client, and deliberative process privileges. Loving v. Dep’t of Def., 550
F.3d 32, 37 (D.C. Cir. 2008) (internal quotation marks omitted).
The attorney work-product privilege incorporated into FOIA Exemption 5 “extends to
documents and tangible things that are prepared in anticipation of litigation or for trial by an
attorney.” Ellis v. DOJ, 110 F. Supp. 3d 99, 108 (D.D.C. 2015) (internal quotation marks
omitted), aff’d, 2016 WL 3544816 (D.C. Cir. June 13, 2016). Courts apply a “because of test,
asking whether, in light of the nature of the document and the factual situation in the particular
case, the document can fairly be said to have been prepared or obtained because of the prospect
of litigation.” Nat’l Ass’n of Criminal Def. Lawyers v. Exec. Office for U.S. Attorneys, 844 F.3d
246, 251 (D.C. Cir. 2016) (internal quotation marks omitted). The SEC withheld three
categories of documents under FOIA Exemption 5 and the attorney work-product privilege: (1)
emails or portions of emails about drafting and filing a complaint in the Nova Oculus
enforcement case; (2) emails about steps being taken in the Nova Oculus investigation; and (3)
emails about litigation in other SEC enforcement cases. Cozza Decl. ¶ 16. The SEC properly
withheld these documents under FOIA Exemption 5 and the attorney work-product privilege
because all the documents were prepared by or under the direction of attorneys in anticipation of
litigation. Id. ¶¶ 17–19. The plaintiffs do not challenge the SEC’s withholdings under this
privilege. See Pl.’s Cross-Mot. at 15–16.
The attorney-client privilege incorporated into FOIA Exemption 5 “protects confidential
communications from clients to their attorneys made for the purpose of securing legal advice or
services.” Touarsi v. DOJ, 78 F. Supp. 3d 332, 345 (D.D.C. 2015) (citing In re Sealed Case, 737
F.2d 94, 98–99 (D.C. Cir. 1984)). In a governmental setting, the “client” may be the agency and
13
its “attorney” the agency lawyer. Tax Analysts v. IRS, 117 F.3d 607, 618 (D.C. Cir. 1997). The
SEC invoked the attorney-client privilege to withhold part of an email from the SEC’s FOIA
Office seeking legal counsel from the SEC’s Office of General Counsel. Because this email
sought legal advice for the agency from an agency lawyer, the SEC properly withheld it under
Exemption 5 and the attorney-client privilege. See Cozza Decl. ¶ 26. The plaintiffs also do not
challenge the SEC’s withholding under this privilege. See Pl.’s Cross Mot. at 15–16.
The deliberative process privilege incorporated into FOIA Exemption 5 allows agencies
to withhold “documents reflecting advisory opinions, recommendations and deliberations
comprising part of a process by which governmental decisions and policies are
formulated.” Petroleum Info. Corp. v. U.S. Dep’t of Interior, 976 F.2d 1429, 1433 (D.C. Cir.
1992) (internal quotation and citation omitted). To invoke the deliberative process privilege, an
agency must show that the information withheld is both “predecisional” and “deliberative.” Id.
at 1434. A document is “predecisional if ‘it was generated before the adoption of an agency
policy’ and deliberative if ‘it reflects the give-and-take of the consultative process.’” Judicial
Watch, Inc. v. Food & Drug Admin., 449 F.3d 141, 151 (D.C. Cir. 2006) (quoting Coastal States
Gas Corp. v. Dep’t of Energy, 617 F.2d 854, 866 (D.C. Cir. 1980)).
The SEC invoked the deliberative process privilege to withhold four categories of
documents: (1) emails or portions of emails about drafting and filing the complaint in the Nova
Oculus enforcement case; (2) emails about other steps being taken in the Nova Oculus
investigation; (3) emails about litigation in other SEC enforcement actions; and (4) emails
related to the processing of Nova Oculus’s FOIA request. Cozza Decl. ¶ 20. The agency’s
declaration makes clear that all the materials withheld were both predecisional and deliberative.
Id. ¶ 21 (documents “reflect analyses of what to include in the final complaint and other related
14
documents”); ¶ 23 (documents “reflect deliberations about future actions in those cases”); ¶ 24
(documents “reflect deliberations about what to include in a response to a FOIA request”). The
agency has also attested that it reviewed all documents withheld under this privilege and
“segregated and provided any portions that are not deliberative.” Id. ¶ 25. The SEC has
therefore fully justified its withholdings under the deliberative process privilege.
Nova Oculus argues that the deliberative process privilege does not apply under the
circumstances of this case because of the government misconduct exception. See In re Sealed
Case, 121 F.3d 729, 738 (D.C. Cir. 1997) (“[W]here there is reason to believe the documents
sought may shed light on government misconduct, the [deliberative process] privilege is
routinely denied, on the grounds that shielding internal government deliberations in this context
does not serve the public’s interest in honest, effective government.” (internal quotation marks
omitted)). It is an open question whether the deliberative process privilege is subject to a
government misconduct exception in the FOIA context. Compare Wright v. Admin. for Children
and Families, No. 15-cv-218, 2016 WL 5922293 at *11 (D.D.C. 2016) (“Exemption 5’s
protection of privileged materials is not subject to the same [government misconduct]
exception[] to which the common law privilege is susceptible.”), with Judicial Watch of Fla.,
Inc. v. U.S. DOJ, 102 F. Supp. 2d 6, 15 (D.D.C. 2000) (“It is true that where there is reason to
believe the documents sought may shed light on government misconduct, the deliberative
process privilege is routinely denied.” (alterations adopted and internal quotation marks
omitted)). But the Court need not answer that question here. Assuming the government
misconduct exception does apply in the FOIA context, the exception does not apply in this case
for largely the same reasons discussed above: namely, the plaintiffs have offered no “reason to
believe the documents sought may shed light on government misconduct.” See In re Sealed
15
Case, 121 F.3d at 738. As noted, the plaintiffs offer only their own speculation about a secret
quid pro quo, based on nothing more than a few words of common courtesy in an email
exchange. Therefore, even if the government misconduct exception does apply here, there is no
evidence of government misconduct. The SEC properly withheld the documents at issue under
Exemption 5 and the deliberative process privilege.
CONCLUSION
For the foregoing reasons, the Court grants the SEC’s motion for summary judgment and
denies Nova Oculus’s cross-motion for summary judgment. A separate order accompanies this
memorandum opinion.
________________________
DABNEY L. FRIEDRICH
August 28, 2020 United States District Judge
16