Cuban v. Securities and Exchange Commission

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_______________________________________
)
MARK CUBAN, )
)
Plaintiff, )
)
v. ) Civil Action No. 09-0996 (RBW)
)
SECURITIES AND EXCHANGE )
COMMISSION, )
)
Defendant. )
_______________________________________)
MEMORANDUM OPINION
The plaintiff, Mark Cuban, brings this action against the defendant, the Securities and
Exchange Commission (the "SEC"), pursuant to the Freedom of Information Act, 5 U.S.C. § 552
(2006) ("FOIA") and the Privacy Act, 5 U.S.C. § 552a (2006), challenging the adequacy of the
defendant's searches for responsive records and seeking to compel the release of several records
the defendant has completely withheld from disclosure. Complaint ("Compl.") ¶ 1. This matter
is currently before the Court on the parties' cross-motions for partial summary judgment pursuant
to Federal Rule of Civil Procedure 56 that address their respective positions concerning the
reasonableness of the searches the defendant conducted for responsive records and the disclosure
of documents made by the defendant to the plaintiff. See Defendant's Motion for Partial
Summary Judgment ("Def's. Mot."); Plaintiff’s Memorandum of Law in Opposition to Defendant
Securities and Exchange Commission’s Motion for Partial Summary Judgment and in Support of
Plaintiff's Cross-Motion for Summary Judgment ("Pl.'s Mot."). The defendant has processed
seventeen of the plaintiff's twenty requests and the summary judgment motions pertain to those
seventeen requests. As to the remaining three requests, the defendant seeks thirty-six additional
months in order to complete the processing and these requests. See Defendant's Motion to
Bifurcate and Stay Proceedings ("Def.'s Mot. to Stay"). The plaintiff opposes the defendant's
motion for a thirty-six-month extension and seeks immediate production of all responsive
records. See Plaintiff Mark Cuban's Memorandum of Law in Opposition to Defendant Securities
and Exchange Commission's Motion to Bifurcate and Stay Proceedings ("Pl.'s Opp'n to Stay").
For the reasons set forth below, the Court must grant in part and deny in part both parties' cross-
motions for partial summary judgment and deny without prejudice the motion to bifurcate and
stay these proceedings. 1 Also, for the reasons set forth below, the parties shall appear before the
Court at a hearing at which the Court will determine an appropriate timeline by which the
defendant must complete processing the plaintiff's remaining three requests. In addition, if the
defendant continues to rely upon Exemption 7(A) as grounds for refusing to produce responsive
documents, at that same hearing the defendant shall be prepared to provide representations to the
Court regarding the status of the ongoing investigation. 2
1
The Court also considered the following submissions in ruling on the motions: Defendant's Memorandum
of Law in Support of Its Motion for Partial Summary Judgment ("Def.'s Mem."); Plaintiff's Memorandum of Law in
Opposition to Defendant Securities and Exchange Commission's Motion for Partial Summary Judgment and in
Support of Plaintiff's Cross-Motion for Summary Judgment ("Pl.'s Mem."); Defendant's Reply to Plaintiff's
Response to Defendant's Motion for Partial Summary Judgment and Response to Plaintiff's Cross Motion for
Summary Judgment ("Def.'s Reply"); Plaintiff's Reply to Defendant Securities and Exchange Commission's
Response to Plaintiff's Cross-Motion for Summary Judgment ("Pl.'s Reply); Notice of Filing of Defendant's
Statement of Material Facts as to Which There is No Genuine Issue, Pursuant to Local Rule 7(h) in Support of
Defendant's Motion for Partial Summary Judgment ("Def.'s Stmt."); Plaintiff's Statement of Material Facts as to
Which There is No Genuine Issue ("Pl.'s Stmt."); Plaintiff Mark Cuban's [Proposed] Statement of Genuine Issues in
Response to the SEC's Statement of Material Facts and in Opposition to the SEC's Motion for Partial Summary
Judgment; Response of the Securities and Exchange Commission to Plaintiff's Statement of Material Facts as to
Which There is No Dispute; Memorandum of Points an Authorities in Support of Defendant's Motion to Bifurcate
and Stay Proceedings ("Def.'s Mem. re Stay"); Plaintiff Mark Cuban's Memorandum of Law in Opposition to
Defendant Securities and Exchange Commission's Motion to Bifurcate and Stay Proceedings; and Defendant's Reply
to Plaintiff's Opposition to Defendant's Motion to Bifurcate and Stay Proceedings.
2
If necessary, the Court will obviously permit government counsel to make these representations to the
Court ex parte.
2
I. BACKGROUND
On December 19, 2008, the plaintiff, through counsel, requested from the defendant the
production of twenty categories of records pursuant to the FOIA and the Privacy Act. The
plaintiff submitted this request in two letters. Specifically, in the letter pursuant to the FOIA
exclusively, the plaintiff sought thirteen categories of records relating to several businesses and
individuals, including several requests for records related to potential internal SEC
investigations. 3 Def.'s Mem., Ex. 1 (Decl. of Margaret Celia Winter) ("Winter Decl."), Attach. A
(Dec. 19, 2008 Letter from David M. Ross to SEC) ("Request Ltr. I") at 1-3. Similarly, in the
letter that requested disclosure pursuant to both the FOIA and the Privacy Act, the plaintiff
sought seven categories of records related to himself, and various businesses, persons, and
potential internal SEC investigations. Id., Ex. 1 (Winter Decl.), Attach. B (Dec. 19, 2008 Letter
from David M. Ross to SEC ("Request Ltr. II")) at 1-3. The defendant received both letters on
December 23, 2008, and assigned them a single internal tracking number. Id., Ex. 1 (Winter
Decl.), Attach. I (June 29, 2009 Letter from Richard M. Humes to David Ross) at 1, n.1.
The defendant initially informed the plaintiff that it possessed no responsive records
relating to the first four categories of Request Letter I and the third category of Request Letter II
Id., Ex. 1 (Winter Decl.), Attach. C (Jan. 30, 2009 Letter from Mark P. Siford to David Ross) at
1-3. As to categories 7 and 11-13 of Request Letter I, the defendant indicated in its initial
January 30, 2009 response that it possessed "no means to conduct a reasonable search for [that]
type of information," Id., Ex. 1 (Winter Decl.), Attach. C at 2, and as to category 6 of Request
Letter I, the defendant further stated that the only information it had included public records from
3
Although not numbered, the categories of records sought will be referred to in the order in which they were
set forth in the request letters.
3
a judicial proceeding directly available to the plaintiff from the court. Id. As to the remainder of
the plaintiff's requests, the defendant stated that it was "consulting with other Commission staff
regarding information that may be responsive," and it would "advise [the] plaintiff of [its]
findings as soon as [it] receive[d] a response" from its staff. Id., Ex. 1 (Winter Decl.), Attach. C
at 3.
A series of letters from the defendant updating the plaintiff as to the progress of its search
followed. On February 5, 2009, the defendant advised the plaintiff by letter that it did not have
any responsive records related to category 5 of Request Letter I, and that it was withholding
records responsive to categories 1, 2, 4 and 5 of Request Letter II under Exemption 7(A). Id.,
Ex. 1 (Winter Decl.), Attach. D (Feb. 5, 2009 Letter from Mark P. Siford to David Ross) at 1-2.
On March 5, 2009, the defendant informed the plaintiff that it was relying on the deliberative
process protection of Exemption 5 of the FOIA to withhold records responsive to category 3 of
Request Letter II. Id., Ex. 1 (Winter Decl.), Attach. F (Mar. 5, 2009 Letter from Mark Siford to
David Ross) at 1-2. In a March 16, 2010 letter, the defendant stated that it was withholding
records responsive related to category 6 of Request Letter I because they fell within the law
enforcement classification of Exemption 7(A). Id., Ex. 1 (Winter Decl.), Attach. G (Mar. 16,
2009 Letter from Mark Siford to David Ross) at 1-2. On July 2, 2009, the defendant indicated
that it was withholding records related to category 9 of Request Letter I under Exemption 6, and
records responsive to categories 8 and 10 of Request Letter I and 6-7 of Request Letter II under
Exemption 7(A). Id., Ex. 1 (Winter Decl.), Attach. K (July 2, 2009 Letter from Mark P. Siford
to David Ross) at 1. In a July 9, 2009 letter, the defendant informed the plaintiff that while it
once may have had records relating to categories 1-5 of Request Letter I and category 3 of
Request Letter II, any responsive records had not been retained. Id., Ex. 1 (Winter Decl.),
4
Attach. L (July 9, 2009 Letter from Richard M. Humes to David Ross) at 1; see also id., Ex. 1
(Winter Decl.), Attach. I at 3-4. The defendant also indicated in the July 9, 2009 letter that it was
the defendant's position that "internal administrative records used to track staff assignments and
inquires are not responsive to th[e] request," but even if they were responsive, the defendant was
relying on Exemption 2 to withhold these records, as well as Exemptions 6 and 7(C) to withhold
the names of any staff or other names contained within those records. Id. On September 17,
2009, the defendant wrote to the plaintiff, referencing a telephone conversation between the
parties in which the plaintiff purportedly agreed to redefine the scope of his category 6 request in
Request Letter I. Id., Ex. 1 (Winter Decl.), Attach. M (Sept. 17, 2009 Letter from Juanita C.
Hernández to Lyle Roberts) at 1. The defendant indicated that due to the narrowing of the scope
of that category, some additional records previously located were now unresponsive, but other
records located were, in fact, still responsive and would be processed for release. Id. The
defendant also suggested that if the plaintiff was willing to narrow the scope of other requests,
specifically category 10 of Request Letter I by subject matter and time frame, that it would
reduce the burden on the defendant to search for responsive records, and therefore presumably
hasten the final response time. Id. On September 22, 2009, the defendant reported that it may
have located responsive records related to one of the entities regarding which the plaintiff sought
records and sought the plaintiff's permission to incur processing costs to review and redact the
records. Pl.'s Mem., Declaration of David M. Ross in Support of Plaintiff's Opposition to
Defendant Security and Exchange Commission's Motion for Partial Summary Judgment and in
Support of Plaintiff's Cross-Motion for Summary Judgment ("Ross Decl."), Ex. 4 (Sept. 22, 2009
Letter from Mark P. Siford to David M. Ross) at 1. 4 Finally, on January 14, 2010, the defendant
4
The plaintiff promptly authorized the defendant to incur the cost of processing and reviewing the records
(continued . . . )
5
wrote to the plaintiff to state that it was no longer relying upon Exemption 7(A) as grounds for
withholding records responsive to category 10 of Request Letter I and category 1 of Request
Letter II. Def.'s Mem., Ex. 1 (Winter Decl.), Attach. N (Jan. 14, 2010 Letter from Mark P.
Siford to David Ross) at 2. The defendant also stated that, relying on Exemptions 5, 6, and 7(C),
it would be producing only redacted records responsive to category 3 of Request Letter II. Id.
The plaintiff also sent a series of communications to the defendant. In addition to
negotiating the scope of categories 6 and 10 of Request Letter I, see Def.'s Reply, Ex. 8
(Supplemental Declaration of Margaret Celia Winter) ("Winter Suppl. Decl."), Attach. B (Sept.
21, 2009 Letter from Lyle Roberts to Juanita C. Hernández) at 1; id., Ex. 8 (Winter Suppl.
Decl.), Attach. C (Sept. 25, 2009 Letter from Juanita C. Hernández to Lyle Roberts), the plaintiff
administratively appealed the adequacy of the defendant's searches with respect to the categories
of records for which the defendant stated that it had no responsive records, as well as the
defendant's reliance on Exemption 7(A) to withhold records responsive to categories 1, 2, and 4-
6 of Request Letter I, Def.'s Mem., Ex. 1 (Winter Decl.), Attach. E (Feb. 17, 2009 Letter from
David Ross to the SEC) at 1-2; id., Ex. 1 (Winter Decl.), Attach. H (Mar. 31, 2009 Letter from
David Ross to SEC) at 1-3; Exemption 5 to withhold records responsive to categories 3 of
Request Letter II, id., Ex. 1 (Winter Decl.), Attach. H (Mar. 31, 2009 Letter from David Ross to
SEC) at 1-3; and the overall failure of the defendant to respond to the plaintiff's request for
records pursuant to the Privacy Act, id.; see also Pl.'s Mem., Ross Decl., Ex. 1 (Feb. 19, 2009
Letter from Celia L. Jacoby to David M. Ross), Ex. 2 (Apr. 2, 2009 Letter from SEC to David
Ross), & Ex. 3 (Apr. 9, 2009 Letter from Celia L. Jacoby to David M. Ross).
( . . . continued)
on September 25, 2009. Pl.'s Mem., Ross Decl., Ex. 5 (Sept. 25, 2009 Letter from David M. Ross to Mark P.
Siford).
6
The defendant granted in part and denied in part the plaintiff's administrative appeals.
Def.'s Mem., Ex. 1 (Winter Decl.), Attach. I (June 29, 2009 Letter from Richard M. Humes to
David Ross) & Attach. J (June 29, 2009 Letter from Richard M. Humes to David Ross). The
administrative appeals were denied in regards to the withholding to the investigative and
enforcement records that had been withheld pursuant to the Privacy Act. Id., Ex. 1 (Winter
Decl.), Attach. I at 2-3 & Attach. J at 2. However, the defendant granted the plaintiff's appeal
with respect to the adequacy of the defendant's search for records, finding that while the initial
search was reasonable, it ultimately was determined to be incomplete and therefore additional
searches would have to be conducted. 5 Id., Ex. 1 (Winter Decl.), Attach. I at 3-5 & n.7. In
addition, the defendant concluded that the initial searches that it had conducted and its reliance
on Exemptions 2, 5, 6, 7(A) and 7(C) to withhold records it had located responsive to those
searches were adequate and statutorily compliant. 6 Id., Ex. 1 (Winter Decl.), Attach. I at 3-6 &
Attach. J at 2-5. The defendant also rejected the plaintiff's position that it needed to produce a
Vaughn index as part of the administrative process. Id., Ex. 1 (Winter Decl.), Attach. J at 3.
Meanwhile, as the correspondence between the parties was ongoing, the plaintiff filed
this action on May 28, 2009, seeking the immediate production of the records denied to him and
maintaining that the defendant's search efforts were inadequate and reliance on the exemptions
invoked by the defendant was improper. See generally Compl. The defendant answered the
complaint on July 2, 2009, denying the plaintiff's allegations that its search efforts were
5
It was the July 29, 2009 remand for further searching that prompted the additional potentially responsive
records identified by the defendant in its September 22, 2009 letter. See Pl.'s Mem., Ross Decl., Ex. 4; see also
Def.'s Mem., Ex. 1 (Winter Decl.), Attach. N.
6
Upon appeal, the defendant also concluded that its previous reliance under Exemption 7(A) to withhold
records pertaining to one investigatory matter was no longer viable given that the investigation had concluded, but
the defendant indicated that it would still review the records to determine if other Exemptions applied. Id., Ex. 1
(Winter Decl.), Attach. J at 3-4
7
inadequate and maintaining that its reliance on the identified Exemptions was proper. The filing
of the parties' cross-motions for partial summary judgment and the defendant's motion to
bifurcate and stay this action as it relates to the categories of the request that the defendant has
yet to produce followed.
II. STANDARD OF REVIEW
Under Rule 56, summary judgment is appropriate if “the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(c)(2). When ruling on a Rule 56 motion, the Court must view the evidence in the light most
favorable to the non-moving party. Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006)
(citing Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150 (2000)). The Court must
therefore draw “all justifiable inferences” in favor of the non-moving party and accept the non-
moving party's evidence as true. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
The non-moving party, however, cannot rely on “mere allegations or denials,” Burke v. Gould,
286 F.3d 513, 517 (D.C. Cir. 2002) (quoting Anderson, 477 U.S. at 248) (internal quotation
marks omitted), because “conclusory allegations unsupported by factual data will not create a
triable issue of fact,” Pub. Citizen Health Research Grp. v. FDA, 185 F.3d 898, 908 (D.C. Cir.
1999) (internal brackets and quotation marks omitted). If the Court concludes that “the
nonmoving party has failed to make a sufficient showing on an essential element of [his] case
with respect to which [he] has the burden of proof,” then the moving party is entitled to summary
judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
8
A. The Defendant's Search Obligations
An agency that is responding to a FOIA request must make “a good faith effort to
conduct a search for the requested records, using methods which can be reasonably expected to
produce the information requested.” Baker & Hostetler LLP v. U.S. Dep't of Commerce, 473
F.3d 312, 318 (D.C. Cir. 2006) (citation and internal quotation marks omitted); see also
Steinberg v. U.S. Dep't of Justice, 23 F.3d 548, 551 (D.C. Cir. 1994) (stating that “[an] agency
must demonstrate that it has conducted a search reasonably calculated to uncover all relevant
documents”) (internal quotation marks omitted). While “an agency cannot limit its search to
only one record system if there are others that are likely to turn up the information requested,”
Campbell v. U.S. Dep't of Justice, 164 F.3d 20, 28 (D.C. Cir. 1998) (internal quotation marks
omitted), the search “need not be perfect, only adequate, and adequacy is measured by the
reasonableness of the effort in light of the [plaintiff's] specific request,” Meeropol v. Meese, 790
F.2d 942, 956 (D.C. Cir. 1986); see also id. at 953 (stating that “[i]t would be unreasonable to
expect even the most exhaustive search to uncover every responsive file”).
Thus, “[t]here is no requirement that an agency search every record system” in which
responsive documents might conceivably be found. Oglesby v. U.S. Dep't of the Army, 920 F.2d
57, 68 (D.C. Cir. 1990). Rather, an agency must demonstrate the adequacy of its search by
providing a “reasonably detailed affidavit, setting forth the search terms and type of search
performed, and averring that all files likely to contain responsive materials . . . were searched.”
Id. “Once the agency has shown that its search was reasonable, the burden shifts to [the
plaintiff] to rebut [the defendant's] evidence . . . either by contradicting the defendant's account
of the search procedure or by raising evidence of the defendant's bad faith.” Moore v. Aspin,
916 F. Supp. 32, 35-36 (D.D.C. 1996) (citing Miller v. U.S. Dep't of State, 779 F.2d 1378, 1383-
9
84 (8th Cir. 1985)). “Agency affidavits are accorded a presumption of good faith, which cannot
be rebutted by purely speculative claims about the existence and discoverability of other
documents.” SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991) (internal
quotation marks omitted).
B. The Defendant's Record Production Obligations
The FOIA requires a federal agency to release all records responsive to a request for
production, 5 U.S.C. § 552(a)(3)(A), unless such records falls within one of the well-defined
exemption categories listed in § 552(b). The Court is authorized under the FOIA “to enjoin [a
federal] agency from withholding agency records or to order the production of any agency
records improperly withheld from the complainant.” § 552(a)(4)(B); see also Kissinger v.
Reporters Comm. for Freedom of the Press, 445 U.S. 136, 139 (1980). When a FOIA requester
files a civil action, the agency has the burden of proving that “each document that falls within the
class requested either has been produced, is unidentifiable, or is wholly exempt from the Act's
inspection requirements.” Goland v. CIA, 607 F.2d 339, 352 (D.C. Cir. 1978), cert. denied, 445
U.S. 927 (1980) (internal citation and quotation marks omitted); accord Maydak v. Dep't of
Justice, 218 F.3d 760, 764 (D.C. Cir. 2000) (holding that government has the burden of proving
each claimed FOIA exemption). The Court may award summary judgment to an agency solely
on the basis of information provided in affidavits or declarations when they sufficiently describe
“the documents and the justifications for nondisclosure with reasonably specific detail,
demonstrate that the information withheld logically falls within the claimed exemption, and are
not controverted by either contrary evidence in the record nor by evidence of agency bad faith.”
Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981); see also Vaughn v. Rosen,
484 F.2d 820, 826 (D.C. Cir. 1973), cert. denied, 415 U.S. 977 (1974).
10
III. LEGAL ANALYSIS
A. Adequacy of the Defendant's Searches for Responsive Records
Initially in its motion, the defendant took the position that the plaintiff had failed to
appeal the defendant's responses as to categories 7, 11, 12, and 13 of Request Letter I, and thus
by not exhausting the administrative remedies available to him, the plaintiff could not now
litigate the defendant's responses regarding those categories. Def.'s Mem. at 6-7. The plaintiff
responded that because the defendant never informed him of his right to appeal those categories,
his administrative remedies were constructively exhausted. Pl.'s Mem. at 7-9. Regardless of
these positions, it appears that before the briefing on the parties' cross-motions was complete, the
defendant did, in fact, represent that it conducted a search for records responsive to categories
11, 12, and 13 of Request Letter I, and no responsive records were found. Def.'s Reply at 4-5;
id., Ex. 13 (Supplemental Declaration of Noelle L. Frangipane) ("Frangipane Suppl. Decl.") ¶¶
3-5. As to category 7, which seeks information regarding trades in Copernic securities by any
SEC personnel, the defendant maintains that based on the manner in which it maintains its files,
a search for responsive records would be overly burdensome and unreasonable because it would
involve reviewing each file manually. Def.'s Reply at 4-5; id., Ex. 14 (Declaration of William
Lenox) ("Lenox Decl.") ¶ 5.
While the Court does not condone the defendant's delay in conducting these searches, as
timely searches might have limited or avoided altogether litigation of the adequacy of these
searches, the Court will not focus on whether those searches were untimely now that they have
11
been conducted, but will assess whether they satisfy the defendant's search obligations. 7 The
defendant's declarations do not convince the Court that it has.
The defendant was obligated to demonstrate the adequacy of its search by providing a
“reasonably detailed affidavit, setting forth the search terms and type of search performed, and
averring that all files likely to contain responsive materials . . . were searched.” Oglesby, 920
F.2d at 68. Instead, the supplemental declaration of Noelle L. Frangipane, who conducted the
search of the Office of the Inspector General ("OIG"), merely states that the declarant
"conducted a search" by reviewing "indices of investigations" based on familiarity with internal
SEC investigations and "determined that the OIG possessed no documents responsive to these
requests." 8 Def.'s Reply, Ex. 13 (Frangipane Suppl. Decl.) ¶¶ 4-5. This declaration is woefully
lacking of the detail necessary for the Court to assess the adequacy of the search; it merely
concludes that a search was conducted and it was adequate. While the Court must presume the
good faith of the declarant, the Court need not defer to the declarant on the ultimate question of
the adequacy of the search.
7
Given that the SEC's correspondence with the plaintiff are arguably vague as to whether the plaintiff was
appraised that he had the right to appeal – the plaintiff was advised that he had "the right to appeal the adequacy of
[the] search or finding of no responsive information" but not specifically that he could appeal the defendant's
determination that it "[had] no means to conduct a reasonable search for [records referenced in categories 7, 11, 12,
and 13 of Request Letter I]," Def.'s Mem., Winter Decl., Attach. C at 2—and also given that the defendant
subsequently responded to those production requests, albeit in the highly disfavored manner of responding in its
reply brief, the Court may, under these circumstances, nonetheless decide the merits of the plaintiff's FOIA claims
even though he did not appeal the defendant's initial failure to search for the records. Wilbur v. CIA, 355 F.3d 675,
677 (D.C. Cir. 2004) (indicating that exhaustion is a "prudential consideration," not "a jurisdictional prerequisite,"
and it may be excused where the case "presents no risk of undermining the purposes and policies underlying the
exhaustion requirement, namely, to prevent premature interference with agency processes, to give the parties and the
courts benefit of the agency's experience and expertise and to compile an adequate record for review").
8
Explaining why the search was limited to "whether the OIG had any documents responsive to Request Nos.
1-7, 9, 11, 12, and 13" of Request Letter II, the declarant also indicates that she was not "aware of any other source
within the OIG that is likely to contain any additional information or documents responsive to these requests."
Def.'s Reply, Ex. 13 (Frangipane Suppl. Decl.) ¶¶ 4-5.
12
Nor does the declaration of William Lenox fare any better. This declarant states that
based on his familiarity with the SEC's recordkeeping as to the security trading of its employees,
which "are not organized or categorized by security," "searching for records potentially
responsive to this request would entail performing a page-by-page review of thousands of
documents submitted by over 3,800 Commission employees to ascertain which, if any, of these
records related to Copernic securities." Def.'s Reply, Ex. 14 (Lenox Decl.) ¶ 5. The declarant
states that "it is not possible to perform an electronic search of these records for specific
securities," id., and further that it is the SEC's "policy to keep employees' reports of security
transactions confidential as they contain information in which employees have a privacy interest,
id. ¶ 6. This declaration too is not sufficient as it does not indicate with specificity how the
employee files are maintained, how they could be searched, and why an electronic search of the
files is not even feasible. The Court does not dispute that searches "impos[ing] an unreasonable
burden on [an] agency" need not be compelled, Nation Magazine v. U.S. Customs Serv., 71 F.3d
885, 892 (D.C. Cir. 1995), but it cannot conclude that the plaintiff's search request would pose
such an unreasonable burden based on the sparse representations that the defendant has
provided. 9 The defendant does not actually indicate how its files regarding securities trading by
SEC personnel are maintained, indicating simply that the records "are not organized or
categories by security, and cannot be searched electronically for specific securities." Def.'s
Reply at 4. It must be remembered that an agency's obligation is to make a good faith search
using methods reasonably anticipated to produce responsive information, Oglesby, 920 F.2d at
9
Moreover, while the Court finds the defendant's explanation concerning the adequacy of this search
insufficient and therefore need not reach the question of whether the SEC's employees' privacy interest in their
securities trades trumps the plaintiff's right to disclosure of this information, it does seem odd for the defendant to
claim that its employees have a privacy interest in their securities ownership when the SEC publishes the names of
certain shareholders of public companies through its Electronic Data Gathering, Analysis, and Retrieval System
(commonly referred to as "EDGAR"). But that explanation will be left for a later date.
13
68, even though an agency need not establish that it has searched far and wide to produce "all
responsive documents," Nation Magazine, 71 F.3d at 892 n.7 (emphasis in original). Here, the
defendant's declarations leave the Court uncertain as to whether another manner of searching for
these records could produce the records that the plaintiff seeks. Presumably, as the plaintiff
states, Pl.'s Reply at 7, the records have to be searchable in some manner to allow the defendant
to utilize them for their own recordkeeping purpose to ensure that abuse and conflicts of interest
do not occur. And based on these declarations, the Court is unable to conclude that the
defendant made "a good faith effort to conduct a search for the requested records, using methods
which can be reasonably expected to produce the information requested." Baker & Hostetler,
473 F.3d at 318 (citation and internal quotation marks omitted). Indeed, whether there are any
reasonable search methods the defendant could employ is a complete mystery, as is the manner
in which it files can, in fact, be searched. The Court therefore agrees with the plaintiff that the
defendant's post-litigation declarations are too conclusory and lack the requisite detail to merit
awarding summary judgment to the defendant, and therefore summary judgment must be
awarded to the plaintiff as to the adequacy of the defendant's search for records responsive to
categories 7, 11, 12, and 13 of Request Letter I. Whether or not the defendant determines that it
must re-conduct its search to alleviate the identified inadequacies, the defendant must provide
more detail-specific declarations in order for the Court to reassess the adequacy of the
defendant’s search efforts.
B. The Exemptions Relied Upon by the Defendant for Its Non-Production of
Responsive Documents
As indicated, because the FOIA presumes that responsive records are to be disclosed, a
government agency relying on a statutory exemption to withhold certain records or portions of
14
records from a requester bears the burden of establishing that its reliance on those exemptions is
warranted. Goland, 607 F.2d at 352 (internal citation and quotation marks omitted); accord
Maydak, 218 F.3d at 764. This burden is very important because the question for the Court
becomes whether the defendant has justified its withholding of records pursuant to the cited
exemptions, not whether the plaintiff is entitled to the records or whether the plaintiff can cite a
good reason for access to them. Here, the defendant relies upon Exemptions 2, 5, 6, 7(A) and
7(C) to withhold 80 documents withheld in their entity. Def.'s Reply, Ex. 9. Each exemption
will be addressed in turn, with an indication of the records in the defendant's Vaughn index to
which the exemptions were invoked.
1. Exemption 2
Exemption 2 of the FOIA shields from disclosure information that is “related solely to the
internal personnel rules and practices of an agency.” 5 U.S.C. § 552(b)(2). It applies if the
information in question meets two criteria: First, such information must be “used for
predominantly internal purposes,” Crooker v. Bureau of Alcohol, Tobacco and Firearms, 670
F.2d 1051, 1073 (D.C. Cir. 1981); see also Nat'l Treasury Emps. Union v. U .S. Customs Serv.,
802 F.2d 525, 528 (D.C. Cir. 1986); and second, the agency must show either that “disclosure
may risk circumvention of agency regulation,” or that “the material relates to trivial
administrative matters of no genuine public interest,” Schwaner v. Dep't of the Air Force, 898
F.2d 793, 794 (D.C. Cir. 1990) (citations and internal quotation marks omitted). "Predominantly
internal documents that deal with trivial administrative matters fall under [what is referred to as]
the 'low 2' exemption." Schiller v. NLRB, 964 F.2d 1205, 1207 (D.C. Cir. 1992); see also
Founding Church of Scientology, Inc. v. Smith, 721 F.2d 828, 830-31 n.4 (D.C. Cir. 1983)
(finding low 2 exemption automatically covers trivial administrative matters of no genuine
15
public interest). The defendant here is relying upon the low 2 exemption to withhold what it
characterizes as administrative matters. See Def.'s Mem. at 9; Def.'s Reply at 5.
The defendant maintains that it can withhold records 78-80 under Exemption 2 because
these records "concern internal SEC administrative matters that are not of any genuine public
interest and contain names of staff members involved in [SEC] investigations, and their phone
numbers and e[-]mail addresses." Def.'s Mem., Ex. 3 (Declaration of Kenneth H. Hall) ("Hall
Decl.") ¶ 6; see also Def.'s Reply, Ex. 9. One of the defendant's declarants, the Assistant Chief
Counsel in the Division of Enforcement in the Office of the Chief Counsel at the SEC, represents
that these documents "are internal records of closed [matters under inquiry] pertaining to
'Shareslueuth.com,'" one of the entities regarding which the plaintiff sought records, and are
"primarily internal tracking records" comprised of "nineteen pages, including three file covers,
four pages of internal data entry forms, five pages of . . . summaries and seven pages of e[-
]mails." Def.'s Mem., Ex. 3 (Hall Decl.) ¶¶ 6-7. According to the declarant, the summaries
consist of purely "internal reports used by Enforcement supervisory staff to administer and
manage cases," id. ¶ 8, the data entry forms "are also internal reports used by Enforcement
supervisory staff to manage and administer investigations," id. ¶ 9, and the e-mails include
"automated messages that show that a request was made to open or close a matter that has been
submitted into Enforcement's case management system," including "the name of [the] SEC staff
who submitted data and show[ing] that a request for action has been submitted and provid[ing]
the name given to the matter," id. ¶ 11. According to the declarant, the collection of e-mails
being withheld also contains one e-mail from a complainant that can be disclosed with
redactions, and several "internal e[-]mails primarily concern[ing] administrative routine matters
about the logistics of opening [an investigative matter]." Id. ¶¶ 12-13.
16
The plaintiff contends that the defendant's reliance on Exemption 2 is improper because
documents 78-80 "pertain[] to informal SEC investigations," i.e. "the core function of the
agency," and therefore the documents "cannot be [considered] 'routine housekeeping matters' in
which the public would presumably lack interest." Pl.'s Mem. at 14. The plaintiff maintains that
the type of information in the documents "is a matter of genuine public interest because it sheds
light on how the SEC conducts its activities or carries out its statutory responsibilities." Pl.'s
Reply at 9-10.
While it appears that records may be “used for predominantly internal purposes,”
Crooker, 670 F.2d at 1073, and the staff names and contact information may fall within
Exemptions 2, 6, and 7(C) and thus are shielded from disclosure, the defendant has not shown
that “the material relates to trivial administrative matters of no genuine public interest,”
Schwaner v. Dep't of the Air Force, 898 F.2d 793, 794 (D.C. Cir. 1990) (citations and internal
quotation marks omitted). "[T]he general thrust of . . . exemption [2] is simply to relieve
agencies of the burden of assembling and maintaining for public inspection matter in which the
public could not reasonably be expected to have an interest." Dep't of the Air Force v. Rose, 425
U.S. 352, 369-70 (1976). It is axiomatic that matters that the SEC determines worthy of
investigation are not trivial, especially when it is the function of the defendant to ferret out fraud.
And indeed, even trivial information may not be withheld from disclosure "simply because it
manifests an agency practice of collecting the information." Schwaner, 898 F.2d at 779
(emphasis in original). Moreover, the defendant has expressed a willingness to produce a
redacted version of an e-mail complaint (redacting the identifying information of the
complainant of course), and has provided redacted versions of similar records in response to
other FOIA requesters, see, e.g., Gavin v. SEC, Civ. No. 04-4522 (PAM/JSM), 2007 WL
17
2454156 at *6 (D. Minn. Aug. 23, 2007) (upholding administrative management related
redactions under Exemption 2, but denying reliance on Exemption 2 where full withholding
made it impossible to "discern whether the documents contain purely trivial, administrative
information"), so its position seems untenable here. Why redacted versions cannot also be
disclosed in this case is simply not clear on the basis of the defendant's representations. See
Stolt-Nielsen Transp. Grp., Ltd. v. United States, 534 F.3d 728, 734 (D.C. Cir. 2008) ("'[a]ny
reasonably segregable portion of a record shall be provided to a person requesting such record
after deletion of the portions which are exempt'" (alteration in original, citation omitted and
emphasis added)). Accordingly, the records encompassed by the defendant's Exemption 2 claim
must be redacted and produced with the following caveat.
It is unclear based on the declarant's representation whether the several "internal e[-
]mails primarily concern[ing] . . . the logistics of opening [an investigative matter]" might reveal
the defendant's internal rules and practices. Def.'s Mem., Ex. 3 (Hall Decl.) ¶¶ 12-13. To the
extent that the information contained within the records concerns internal rules and practices,
that information may be redacted, but to the extent that the tracking records include such items as
dates, requests to open and close these investigations, stock type, and case status, such
information is not necessarily trivial for purposes of Exemption 2 simply because it is factually
based and is a necessary part of carrying out the investigation. See Schwaner, 898 F.2d at 779.
Because the exemptions are information-specific and not record-type based, the defendant must
provide some rationale for distinguishing the information contained within the records – not
simply referencing the records as a whole – that truly reveals the defendant's internal rules and
practices and not just factually based information inherently collected during an investigation.
See Rose, 425 U.S. at 370 (finding that case summaries of ethics hearings are not protected by
18
Exemption 2 because they have more than internal significance, "do not concern only routine
matters," and "[t]heir disclosure entails no particular administrative burden" (emphasis added)).
Therefore, for purposes of these cross-motions for summary judgment, because the defendant has
not made the requisite showing, at this junction it is the Court's finding that these records cannot
be withheld in their entirety pursuant to Exemption 2, and, at minimum, redacted versions must
be produced pursuant to 5 U.S.C. § 552(b).
2. Exemption 5
Exemption 5 of the FOIA provides that the “inter-agency or intra-agency memorand[a] or
letters which would not be available by law to a party other than an agency in litigation with the
agency” are not subject to disclosure under the FOIA. 5 U.S.C. § 552(b)(5). “To qualify [for
non-disclosure under Exemption 5], a document must thus satisfy two conditions: its source must
be a Government agency, and it must fall within the ambit of a privilege against discovery under
judicial standards that would govern litigation against the agency that holds it.” U.S. Dep't of the
Interior & Bureau of Indian Affairs v. Klamath Water Users Protective Ass'n, 532 U.S. 1, 8
(2001). The threshold issue that must therefore be addressed when Exemption 5 is asserted is
whether the records in question qualify as “inter-agency or intra-agency memorand[a].” Judicial
Watch, Inc. v. U.S. Dep't of Commerce, 90 F. Supp. 2d 9, 13 (D.D.C. 2000).
“With respect to the secondary consideration under Exemption 5 – whether such
materials would not be ‘available by law in litigation with the agency,’” id. – “the parameters of
Exemption 5 are determined by reference to the protections available to litigants in civil
discovery . . . [,]” Burka v. U.S. Dep't of Health & Human Servs., 87 F.3d 508, 516 (D.C. Cir.
1996). Thus, if a document requested pursuant to the FOIA would normally be subject to
disclosure in the civil discovery context, it must also be disclosed under the FOIA. Id.
19
Conversely, information that is routinely not subject to disclosure in the civil discovery process
is exempt from disclosure under Exemption 5. Id. Accordingly, “to justify nondisclosure under
Exemption 5, an agency must show that the type of material it seeks to withhold is generally
protected in civil discovery for reasons similar to those asserted by the agency in the FOIA
context.” Id. at 517. Thus, courts have incorporated three traditional civil discovery privileges
into Exemption 5: (1) the deliberative process privilege; (2) the attorney-client privilege; and (3)
the attorney work-product privilege. NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 148-49
(1975); Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 862, 866 (D.C. Cir. 1980).
The defendant relies on all three aspects of Exemption 5 to withhold almost all of the 80
records on its Vaughn index, see Def.'s Mem. at 10, so the Court must evaluate each assertion of
privilege in turn.
a. Deliberative Process Privilege
The deliberative process privilege may be relied upon by an agency if the information
sought to be withheld from disclosure contains predecisional information that was part of the
deliberative process, i.e., that there was a "'deliberative process . . . involved, and the role played
by the documents at issue [was] in the course of that process,'" Heggestad v. Dep't of Justice, 182
F. Supp. 2d 1, 7 (D.D.C. 2000) (quoting Coastal States, 617 F.2d at 868), and the records contain
"'recommendations or expresse[d] opinions on legal or policy matters,'" id. (quoting Vaughn v.
Rosen, 523 F.2d 1136, 1143-44 (D.C. Cir. 1975)). "To qualify under Exemption 5, a document
must also be a direct part of the deliberative process in that it makes recommendations or
expresses opinions on legal or policy matters. A document that does nothing more than explain
an existing policy cannot be considered deliberative." Pub. Citizen, Inc. v. Office of Mgmt. &
20
Budget, 598 F.3d 865, 876 (D.C. Cir. 2010) (citation and internal quotation marks omitted).
Further, an agency may not rely on Exemption 5 to withhold records containing
existing policy . . . simply by describing the policy in a document
that as a whole is predecisional, such as a memo written in
contemplation of a change in that very policy. Only those portions
of a predecisional document that reflect the give and take of the
deliberative process may be withheld.
Id. (citations omitted). Similarly, "portions of predecisional and deliberative documents that
contain factual information that does not 'inevitably reveal the government's deliberations'" must
be produced under the FOIA. Id. (citations omitted).
The defendant asserts that records 1-3, 9, 11, 13-15, 17, 19, 21-22, 25-29, 32-35, 37-46,
48-57, 59-64, 69, 71, and 73-76 may be withheld pursuant to the deliberative process protection
of Exemption 5. Def.'s Mem. at 16. The defendant represents that the records withheld consist
of "internal e[-]mails and handwritten notes regarding an internal investigation on a personnel
matter," and the records "reflect deliberations regarding the proposed discipline of an employee
including whether the employee engaged in misconduct, what discipline is appropriate for any
misconduct, and what procedures should be followed in imposing discipline." Id.; see also Def.'s
Reply at 8; id., Ex. 10 (Supplemental Declaration of David M. Pinansky) ("Pinansky Suppl.
Decl.") ¶ 6. A declarant for the defendant, a Senior Special Counsel in the Office of the General
Counsel of the Securities and Exchange Commission, represents without elaboration that all of
the records withheld pursuant to the deliberative process privilege related a "personnel matter"
and "reflect internal agency deliberations regarding the proposed discipline of an employee."
Def.'s Reply, Ex. 10 (Pinansky Suppl. Decl.) ¶ 6. The defendant contends that the disclosure of
this information will have a "chilling effect on future predecisional discussion and debate that
21
would harm the SEC's deliberative process." Def.'s Mem. at 16; see also Def.'s Reply, Ex. 10
(Pinansky Suppl. Decl.) ¶ 7.
The plaintiff contends that through its representations the defendant has not met its
burden to withhold documents as deliberative process records under Exemption 5 because "[t]he
SEC's Vaughn Index and declarations are insufficient to determine whether any of the documents
withheld actually qualify for protection as deliberate process materials." Pl.'s Mem. at 21; see
also Pl.'s Reply at 17. According to the plaintiff, the defendant's assertions "lack sufficient detail
and contain only conclusory statements regarding alleged 'pre-decisional deliberations,'" failing
to identify any specifics that would allow the Court and the plaintiff to assess the propriety of the
defendant's claims. Pl.'s Mem. at 21-22. Moreover, the plaintiff contends that the deliberative
process privilege cannot be invoked "to cover a routine personnel matter." Pl.'s Reply at 17.
The Court agrees with the premise upon which the defendant's position is based: that its
officers must be allowed to make discretionary judgments and consider policy choices in an
environment protected from public scrutiny and unnecessary disclosures or it “would tend to
‘discourage candid discussion within an agency.’” Petroleum Info. Corp. v. U.S. Dep't of the
Interior, 976 F.2d 1429, 1434 (D.C. Cir. 1992) (quoting Access Reports v. Dep't of Justice, 926
F.2d 1192, 1195 (D.C. Cir. 1991)). However, the defendant has not made the necessary showing
to justify that its withholdings are within the protective realm in which deliberative discussions
get safe haven. Again, the defendant's declaration completely lacks any detail regarding any
particular record and does nothing more than generally state that Exemption 5 is satisfied. The
Court must be able to conclude that the defendant's position is the correct one to sustain the
defendant's withholding of these records, and summary judgment in the defendant's favor cannot
be obtained on the defendant's bare contention that it has satisfied the legal standard.
22
In making a determination of whether a record is properly withheld under Exemption 5,
"courts frequently examine whether 'the document is so candid or personal in nature that public
disclosure is likely in the future to stifle honest communication within the agency.'" Wilderness
Soc. v. U.S. Dep't of the Interior, 344 F. Supp. 2d 1, 15 (D.D.C. 2004) (quoting Coastal States,
617 F.2d at 866). "However, in cases where there is no identifying information that would link
an individual to a document, this potential is unlikely." Id. The defendant bears the burden of
demonstrating, with respect to each its records, that it was candid or personal in nature, that
individuals can be linked to the record, and that the information discussed in the record does
more than just describe existing policy. The Court cannot discern in any regard whether records
1-3, 9, 11, 13-15, 17, 19, 21-22, 25-29, 32-35, 37-46, 48-57, 59-64, 69, 71, and 73-76 contain
such candid and personal communications.
In addition, it is not disputed that the categories of records that might qualify as
predecisional and deliberative is great. See Klamath Water Users Protective Ass'n, 532 U.S. at 8
("deliberative process covers documents reflecting advisory opinions, recommendations and
deliberations comprising part of a process by which governmental decisions and policies are
formulated" (citation and internal quotation marks omitted)). But just because numerous forms
of records can qualify does not mean they do qualify in their entirety. Even if these records
indexed by the defendant contain such deliberations, which the defendant has not established
merely by its own conclusion, the Court cannot discern from the defendant's representations how
these records could be completely withheld under Exemption 5. Indeed, "agencies must disclose
those portions of predecisional and deliberative documents that contain factual information that
does not 'inevitably reveal the government's deliberations.'" Pub. Citizen, 598 F.3d at 876
(quoting In re Sealed Case, 121 F.3d 729, 737 (D.C. Cir. 1997)). And the defendant has not met
23
this burden because neither the defendant's declarations nor its descriptions in the Vaughn index
state specifically why the wholesale redaction of these records is warranted. Without a more
detailed description upon which the Court can rely, it can only conclude that any candid
communications (if, in fact, any are within these records) can be selectively redacted in a manner
that protects the confidentiality of the recommendations and individuals involved, but still allows
any factual information to be produced. Because Exemption 5 is one of the exemptions that
"covers only those portions of the documents that are both predecisional and deliberative," id. at
876 (emphasis added), the defendant, based on the information currently before the Court, must
redact and disclose these records in the manner indicated above.
b. Attorney-Client Privilege
In the context of Exemption 5, "the [attorney-client] privilege . . . functions to protect
communications between government attorneys and client agencies or departments, as evidenced
by its inclusion in the FOIA, much as it operates to protect attorney-client communications in the
private sector." In re Lindsey, 158 F.3d 1263, 1269 (D.C. Cir. 1998). "Thus, when the
Government is dealing with its attorneys as would any private party seeking advice to protect
personal interests, and needs the same assurance of confidentiality so it will not be deterred from
full and frank communications with its counselors, [Exemption 5] applies." Id. (quoting Coastal
States, 617 F.2d at 863). Accordingly, “[t]o invoke the [attorney-client] privilege, an agency
must demonstrate that the document it seeks to withhold (1) involves 'confidential
communications between an attorney and his [or her] client’ and (2) relates to 'a legal matter for
which the client has sought professional advice.'" Judicial Watch, Inc. v. U.S. Postal Serv., 297
F. Supp. 2d 252, 267 (D.D.C. 2004) (quoting Mead Data Cent., Inc. v. Dep't of the Air Force,
566 F.2d 242, 252 (D.C. Cir. 1977)). However, the attorney-client privilege does not give the
24
agency the ability "to withhold a document merely because it is a communication between the
agency and its lawyers." Id. (emphasis added) (citation omitted). The agency must show that the
information provided to its lawyers was intended to be confidential and was not disclosed to a
third party. Id. (citation omitted).
The defendant asserts that records 11, 13, 21, 25-26, 29, 32, 34-35, 37, 39, 41-44, 53, 55,
57, 59, and 61-63 may be withheld pursuant to the protection of attorney-client privilege under
Exemption 5. Def.'s Mem. at 12. The defendant's declarant, again a Senior Special Counsel in
the Office of the General Counsel, states that these records include "internal e[-]mail and other
internal communications and meetings among OGC attorneys and either one or more [Office of
Human Resources] staff members or SEC supervisors regarding [a] personnel matter," and
"include legal advice and recommendations." Id., Ex. 4 (Declaration of David M. Pinansky)
("Pinansky Decl.") ¶ 8. Specifically, the defendant maintains that the
documents are either (1) attorney communications containing legal
advice, primarily e[-]mails or memoranda, with [Human
Resources] staff and/or SEC managers regarding the handling of
an internal personnel matter, or (2) e[-]mails and handwritten notes
reflecting those communications. To the extent a document is not
to or from an attorney, it is a document that describes a
communication with an attorney on that matter.
Id., Ex. 10 (Pinansky Suppl. Decl.) ¶ 4. The defendant also submitted two additional
declarations, one from the Senior Special Counsel just referenced and the second from a non-
attorney Employee and Labor Relations Specialist in the Office of Human Resources, wherein
they represent that they "have no information that would lead [them] to believe that the
documents withheld under Exemption 5 have been released outside of the Commission." Id., Ex.
10 (Pinansky Suppl. Decl.) ¶ 3; id., Ex. 11 (Supplemental Declaration of Nancy Ellen Tyler)
("Tyler Suppl. Decl.") ¶ 4.
25
In its opposition filing, the plaintiff maintain that the defendant's representations do not
satisfy its burden of establishing that the records may be withheld pursuant to Exemption 5
because the defendant has failed to establish that the communications were confidential when
created and have since retained their confidential status. Pl.'s Mem. at 16. Nor, the plaintiff
maintains, has the defendant relied on anything more than "[n]aked assertions that documents are
covered by the [attorney-client] privilege." Id. The plaintiff points out that "e[-]mails sent to an
[Office of Human Resources] attorney are not privileged unless they convey confidential
information for the purpose of obtaining legal advice," and therefore the defendant's assertion
that the records are e-mail communications and thus shielded from disclosure is not
determinative. Id. at 17; see also Pl.'s Reply at 14. Finally, the plaintiff points out that no single
declarant can represent that the communications have not been disseminated outside of the
agency because a declarant cannot speak for everyone at the agency and therefore cannot
possibly know if such an assertion is true. Pl.'s Reply at 13.
The Court agrees with the plaintiff that the declarations submitted are too conclusory for
the Court to render summary judgment for the defendant on the basis of the attorney-client
privilege. "A blanket assertion of the privilege will not suffice." In re Lindsey, 148 F.3d 1100,
1106 (D.C. Cir. 1998). "Like all privileges . . . the attorney-client privilege is narrowly
construed and is limited to those situations in which its purposes will be served." Coastal States,
617 F.2d at 862. Simply, the defendant cannot meet its burden without "'prov[ing] that each
document that falls within the class requested either has been produced, is unidentifiable, or is
wholly exempt from the Act's inspection requirements.'" Founding Church of Scientology v.
NSA, 610 F.2d 824, 836 (D.C. Cir. 1979) (emphasis added) (citation omitted); see also Senate of
Puerto Rico v. U.S. Dep't of Justice, 823 F.2d 574, 585 (D.C. Cir. 1987) ("We have
26
simultaneously cautioned that 'conclusory assertions of privilege will not suffice to carry' the
agency's burden.") (citation omitted). The attorney-client privilege is not applicable just because
the defendant states that it applies, and a review of the defendant's declaration reveals that the
defendant offers nothing more than conclusory assertions and blanket affirmations. See Def.'s
Mem., Ex. 4 (Pinansky Decl.) ¶ 8; see also Def.'s Reply, Ex. 10 (Pinansky Suppl. Decl.) ¶¶ 3-4;
id., Ex. 11 (Tyler Suppl. Decl.) ¶¶ 3-4. Simply, the defendant must provide more information
from which the Court can assess whether the attorney-client privilege was properly asserted.
In other words, "[t]he burden is on the agency to demonstrate that confidentiality was
expected in the handling of these communications, and that it was reasonably careful to keep this
confidential information protected from general disclosure," not just within the agency, but also
among any other individuals outside the agency who needed access to the information. Coastal
States, 617 F.2d at 863. The declarants' assertions that they lack any reason to believe that the
records were "released outside of the Commission," Def.'s Reply, Ex. 10 (Pinansky Suppl. Decl.)
¶ 3 (emphasis added); see also id., Ex. 11 (Tyler Suppl. Decl.) ¶ 4, do not address the issue of
whether those communications were "circulated no further than among those members 'of the
organization who are authorized to speak or act for the organization in relation to the subject
matter of the communication.'" Coastal States, 617 F.2d at 863 (citation omitted); see Mead Data
Cent., 566 F.2d at n.24 (“Where the client is an organization, the privilege extends to those
communications between attorneys and all agents or employees of the organization who are
authorized to act or speak for the organization in relation to the subject matter of the
communication.”). To the extent that any information, including factual information contained
within the records, was relayed to anyone outside the sphere of those who needed to know the
information within the organization, that information cannot be withheld, and the records must
27
be produced completely or in a redacted form if another exemption justifies the withholding. See
Mead Data Cent., 566 F.2d at 254-55 (stating that where "the background facts provided [in the
records] could easily be information which is not restricted to the [agency] personnel directly
responsible for the negotiations . . . [that information was] therefore not confidential for purposes
of th[e attorney-client] privilege"); see also Coastal States, 617 F.2d at 863 ("If facts have been
made known to persons other than those who need to know them, there is nothing on which to
base a conclusion that they are confidential."). Accordingly, the defendant must provide more
proof that the privilege applies if it desires to shield these records from production based on an
assertion of the attorney-client privilege.
c. Attorney Work Product
"The work-product doctrine shields materials 'prepared in anticipation of litigation or for
trial by or for another party or by or for that other party's representative (including the other
party's attorney, consultant, surety, indemnitor, insurer, or agent).'" Judicial Watch, Inc. v. Dep't
of Justice ("Judicial Watch I"), 432 F.3d 366, 369 (D.C. Cir. 2005) (citation omitted). "The work
product doctrine protects such deliberative materials but it also protects factual materials
prepared in anticipation of litigation." Tax Analysts v. IRS, 117 F.3d 607, 620 (D.C. Cir. 1997).
This means that "'[a]ny part of [a document] prepared in anticipation of litigation, not just the
portions concerning opinions, legal theories, and the like, is protected by the work product
doctrine and falls under exemption 5.'" Judicial Watch I, 432 F.3d at 371 (alterations in original)
(quoting Tax Analysts, 117 F.3d at 620). Therefore, unlike the attorney-client privilege, "factual
material is itself privileged when it appears within documents that are attorney work product,"
and if a record may be withheld under the attorney work-product protection of Exemption 5,
"then segregability is not required." Id. Moreover, "Exemption 5, attorney work-product is
28
exempt from mandatory disclosure without regard to the status of the litigation for which it was
prepared." FTC v. Grolier Inc., 462 U.S. 19, 28 (1983). However, if the records were prepared
by attorneys "in the ordinary course of business or for other nonlitigation purposes," the agency
cannot rely upon the work product privilege under Exemption 5. In re Sealed Case, 146 F.3d
881, 887 (D.C. Cir. 1998) ("Of course, not all work undertaken by lawyers finds protection in the
work-product privilege.").
The defendant asserts that records 10-11, 13-15, 18-29, 31-46, 48-64, and 77 may be
withheld pursuant to the attorney work-product privilege conferred by Exemption 5. Def.'s
Mem. at 14. The declarant for the defendant on this subject, a Senior Special Counsel in the
Office of the General Counsel, states that "all of these documents for which the SEC asserts
Freedom of Information (FOIA) Exemption 5 concern internal Commission legal and personnel
matters, and I believe are privileged as attorney work product . . . . [because the documents] were
prepared in anticipation of litigation by or at the direction of an attorney." Def.'s Mem., Ex. 2
(Pinansky Decl.) ¶¶ 3, 10; see also Def.'s Reply, Ex. 10 (Pinansky Suppl. Decl.) ¶ 5 (indicating
that "[s]ome of the[] documents also include legal analysis and strategy"). The declarant also
states: "Because serious discipline of this employee was a possibility at all times we were
addressing the personnel problem, we recognized from the beginning of the process that
litigation was possible and that we needed to prepare for that situation." Def.'s Mem., Ex. 2
(Pinansky Decl.) ¶ 10. The declarant further states that he, as an attorney, "addressed litigation
issues with all of the [Office of Human Resources] staff and supervisors involved in that matter,
and to address issues [he] raised, they raised issues, gathered information and prepared
memoranda in light of these issues." Id.
29
The plaintiff counters that the defendant's assertion of the attorney work-product
privilege lacks the necessary details to support it. Pl.'s Mem. at 16. The plaintiff asserts that it
"defies logic and belief" that "every record withheld regarding this [personnel] matter was
prepared by or at the direction of an attorney in anticipation of litigation." Id. And the defendant
opines that because the defendant "has identified no litigation between it and the employee who
was the subject of the disciplinary matter," the records "appear to have been created for some
other purpose than to assist in reasonably foreseeable litigation." Id. at 17. The plaintiff notes
that the defendant's Vaughn index "entries make no reference to being prepared by or at the
direction of an attorney or that they were prepared in anticipation of litigation . . . . [and posit]
they therefore do not reflect the mental impressions of an attorney prepared in anticipation of
litigation." Pl.'s Reply at 18.
While the "[work-product] doctrine should be interpreted broadly and held largely
inviolate," and often there is no necessity to segregate information within work-product records,
Judicial Watch I, 432 F.3d at 369, 371 (indicating that "[a]ny part of [a document] prepared in
anticipation of litigation, not just the portions concerning opinions, legal theories, and the like, is
protected by the work product doctrine and falls under exemption 5" (citation omitted)), the
Court again cannot award summary judgment to the defendant based on its current
representations. The defendant's representations are simply too cursory for the Court to ensure
that it is making an accurate assessment and not just giving the defendant more deference,
beyond the good faith deference that it is due, in making withholding determinations under
Exemption 5. The defendant must submit additional evidence that establishes that all of the
communications were created with litigation in mind. The plaintiff's position that all personnel
actions do not automatically trigger the attorney work-product privilege is correct, but this reality
30
does not compel the defendant to demonstrate that litigation actually resulted from this personnel
dispute. See In re Sealed Case, 146 F.3d at 887 ("[W]here . . . lawyers claim they advised clients
regarding the risks of potential litigation, the absence of a specific claim [that the client
potentially faced litigation] represents just one factor that courts should consider in determining
whether the work-product privilege applies."). "For a document to meet this standard, the lawyer
must at least have had a subjective belief that litigation was a real possibility, and that belief
must have been objectively reasonable." Id. at 884. There are any number of tasks that an
attorney could undertake on behalf of or communications that an attorney could have with the
human-resources component of an agency – likely even in the contents of an employee's
termination – that never trigger the attorney work-product protection because litigation was not
objectively reasonable. And the converse is equally true. These determinations cannot be
assessed on the existing record, and the defendant must supply greater detail to satisfy its burden
to receive the protection of the attorney work-product privilege.
3. Exemption 6
Exemption 6 of the FOIA permits the government to withhold "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). The phrase "similar files" has been "broadly defined to
include any 'Government records on an individual which can be identified as applying to that
individual.'" Judicial Watch of Fla. v. U.S. Dep't of Justice ("Judicial Watch II"), 102 F. Supp.
2d 6, 16 (D.D.C. 2000) (citing U.S. Dep't of State v. Wash. Post Co., 456 U.S. 595, 601-02
(1982)). As construed by the District of Columbia Circuit: "Exemption 6 permits the
withholding of information only when two requirements have been met: first, the information
must be contained in personnel, medical, or 'similar' files, and second, the information must be of
31
such a nature that its disclosure would constitute a clearly unwarranted invasion of personal
privacy." Wash. Post, 456 U.S. at 598. This "exemption [was] intended to cover detailed
Government records on an individual which can be identified as applying to that individual." Id.
at 602 (alteration in original) (citation omitted). However, Exemption 6 should only be
employed when the privacy interest at stake outweighs the public interest in disclosure.
Therefore, the Court must "balance the 'individual's right of privacy' against the basic policy of
opening 'agency action to the light of public scrutiny," U.S. Dep't of State v. Ray, 502 U.S. 164,
175 (1991) (quoting Dep't of the Air Force v. Rose, 425 U.S. 352, 372 (1976)), always "tilt[ing]
the balance (of disclosure interests against privacy interests) in favor of disclosure," Wash. Post
Co. v. U.S. Dep't of Health & Human Servs., 690 F.2d 252, 261 (1982) (citation omitted).
However, "[t]he weight of the public's interest in disclosure depends on the degree to which
disclosure would shed light on an agency's performance of its statutory duties and its compliance
with the law." Judicial Watch II, 102 F. Supp. 2d at 17 (citing Reed v. NLRB, 927 F.2d 1249,
1252 (D.C. Cir. 1991)). "Information that 'reveals little or nothing about an agency's own
conduct' does not further the statutory purpose; thus the public has no cognizable interest in the
release of such information." Beck v. Dep't of Justice, 997 F.2d 1489, 1493 (D.C. Cir. 1993)
(citation omitted).
Just as it did with Exemption 5, the defendant relies on Exemption 6 to withhold almost
all of the 80 records included in the Vaughn index. Specifically, the defendant states that
Exemption 6 justifies its withholding of records 1-22, 25-57, and 59-80, see Def.'s Reply, Ex. 9,
because all but the excluded records "relate to an internal investigation of an employee and
address issues related to the potential discipline of the employee," Def.'s Mem. at 18, and
"contain names, phone numbers, and e[-]mail addresses of individuals" who "have at least some
32
privacy interest in not making public their involvement in an SEC investigation," Def.'s Mem. at
19-20; id., Ex. 3 (Hall Decl.) ¶ 6. One of the defendant's declarants, again the Senior Special
Counsel in the Office of the General Counsel, states that the records pertain to "personnel
matters and address issues in which one or more SEC employees would have a privacy interest,"
and "[i]nformation pertaining to internal personnel matters is very sensitive; especially to the
extent it concerns possible misconduct and potential discipline for that misconduct." Id., Ex. 4
(Pinansky Decl.) ¶¶ 3, 5. Another declarant, an Employee and Labor Relations Specialist, adds
that the information in records 1-77 relates to a "personnel situation [that] involved numerous
internal discussions, meetings and communications with SEC supervisors [and others within the
SEC]." Id., Ex. 5 (Declaration of Nancy Ellen Tyler) ("Tyler Decl.") ¶ 4. The defendant also
maintains that the employee's identity will not be protected by mere redactions of the employee's
name and personally identifiable information "because other information in the documents, along
with information that is publicly available, could be used to identify the employee" and thus the
individual's privacy interests would be harmed. Id., at 18; see id., Ex. 5 (Tyler Decl.) ¶ 7; Def.'s
Reply, Ex. 10 (Pinansky Suppl. Decl.) ¶ 7. The defendant also contends that the names and
personally identifiable information of other persons involved in the investigation, not just the
target of the investigation, is also subject to Exemption 6, Def.'s Mem. at 18, and that no amount
of redaction will conceal the identity of the individuals involved, in part because the plaintiff's
requests ask for records related to certain individuals, so the production of any information
would necessarily identify those individuals, Def.'s Reply at 9. The defendant states that the
plaintiff's interest in the production of these records arises from "a personal desire to conduct a
fishing expedition for information," and that he does not have "a legitimate public interest in any
information." Def.'s Reply at 11.
33
The plaintiff contends that the defendant's reliance on Exemption 6 is misplaced. He
maintains that the records are not the type of "personnel, medical, or similar files" governed by
Exemption 6, and there has been no showing that an "unwarranted invasion of personal privacy"
will result under 5 U.S.C. § 552(b)(6) from their disclosure. Pl.'s Mem. at 23. The plaintiff
opines that if the identifying information was redacted from these records, any privacy intrusion
would be mitigated. Id. He adds that in weighing the importance of public disclosure, it should
be remembered that only if the target of the investigation is identifiable in the records is
Exemption 6 applicable, and even if the target becomes identifiable after appropriate redactions
are made, the public interest in disclosure still outweighs those privacy concerns because the
person most likely to be the subject of the investigation (an individual the plaintiff identifies by
name) personally communicated with the plaintiff and accusing the plaintiff of being a "traitor"
and "unpatriotic." Id. at 25.
There appears little question that the types of files the defendant seeks to protect under
Exemption 6 fall within the scope of this exemption, as they are personnel-related and their
content – the investigation of alleged wrongdoing by an SEC employee – implicates "substantial
privacy concerns" of the subject of the investigation. Dep't of State v. Wash. Post Co., 456 U.S.
595, 602 (1982) ("[E]xemption [6] [was] intended to cover detailed Government records on an
individual which can be identified as applying to that individual." (citation and internal quotation
marks omitted)). The only question then is "whether release of the information would constitute
a clearly unwarranted invasion of that person's privacy." Id. The plaintiff contends that the
target of the investigation (an investigation which presumably relates to feisty e-mail
communications sent to the plaintiff and the then-Chairman of the SEC by one of the defendant's
trial counsel) is a public employee and his communications have been published in the press.
34
Pl.'s Mem. at 25. That being the case, posits the plaintiff, "the public has an interest in knowing
whether [that employee's] actions were in any way connected to the SEC’s investigation of [the
plaintiff]," in part considering that the employee's official government e-mail address was used.
Id. at 25-26. The defendant responds that trial counsel referenced by the plaintiff is a non-
managerial employee of the defendant, Def.'s Reply, Ex. 10 (Pinansky Suppl. Decl.) ¶ 8, and the
plaintiff has not "provide[d] any reason to believe that [the employee] made any such statements
in the context of conducting Commission business or that [the employee] ever worked on any
matter relating to [the p]laintiff," Def.'s Reply at 12.
Against this backdrop, the Court must conclude that the public has some interest in
knowing whether the defendant will take action if one of its employees, whose work is funded
from the public coffers and utilized government resources to communicate with the plaintiff and
the SEC Chairman, is utilizing his position to purportedly further private interests or harass
private citizens. This case is not a situation where a requester is merely trying to acquire
information regarding another private individual. And an important factor to bear in mind is that
the defendant appears to want to have things both ways – relying on the one hand on the
extensive media attention this litigation and the underlying basis for it have received as support
for its position that the privacy of the investigated employee warrants non-disclosure of the
documents, Def.'s Mem. at 19, while ignoring on the other hand the clear indication that the
extent of the media coverage demonstrates the public interest in these matters. There is a
compelling public interest in knowing whether the defendant conducts investigations free of
misconduct by its employees and how alleged transgressions by its employees are addressed; the
disclosure sought by the plaintiff would assuredly "shed light on an agency's performance of its
statutory duties and its compliance with the law." Judicial Watch II, 102 F. Supp. 2d at 17
35
(citation omitted). That said, the individuals involved do have privacy interests in keeping
personal details out of the public eye, which is the impetus for Exemption 6, but that is also why
redaction is used as a safeguard in such situations.
While these are the competing interests that are at play, the concern for the Court is not
whether Exemption 6 applies to information contained within these records, because even on the
scant representations of the defendant it would seem to apply to portions of the record, see Def.'s
Mem., Ex. 3 (Hall Decl.) ¶ 12; id., Ex. 4 (Pinansky Decl.) ¶ 6; id., Ex. 5 (Tyler Decl.) ¶ 6, but
whether the public interest favors disclosure of some parts of the records. And that balancing
cannot be properly conducted based upon the vague assertions provided by the defendant, as
greater detail concerning the content of each record is needed to determine whether that
information is exempted from disclosure. This particularized examination is required because
Exemption 6 is not one of the exemptions that inherently shields records in their entirety, see,
e.g., Billington v. U.S. Dep't of Justice, 233 F.3d 581, 586 (D.C. Cir. 2000) (remanding for a
segregability determination concerning records over which the agency claimed Exemption 6
protection), and information that does not pertain just to any individuals involved in an
investigation, but rather to the logistics of an investigation (such as routing numbers, dates, stock
types involved, and event dates), which the defendant acknowledges is included in these records,
see Def.'s Mem., Ex. 3 (Hall Decl.) ¶¶ 7-12, is not protected from disclosure, see Billington, 233
F.3d at 586 (remanding for inquiry as to whether Exemption 6 applied to the records in their
entirety because it was "uncertain that personal identifying information so permeates the
document that no part of it can be released"). The defendant thus far only speculates that
"[d]isclosure of such information [as is contained in records 1-77] could amount to an invasion
of privacy of the individuals identified," id., Tyler Decl. ¶ 5 (emphasis added), but the defendant,
36
who carries the burden, must do more than that to demonstrate a "clearly unwarranted invasion
of personal privacy." 5 U.S.C. § 552(b)(6).
Therefore, with respect to records 78-80, while the Court again does not dispute that the
names of the individuals involved in the investigations, as well as their contact information may
be withheld for privacy reasons, the defendant has failed to establish that the withheld records
contain exclusively such information, or that no other information in the records can be
segregated from the personally identifying information in order that redacted disclosures can be
made. Upon the representations currently before the Court, the only conclusion the Court can
reach in light of the presumption in favor of disclosure is that redacted versions of the records
must be disclosed.
4. Exemption 7(A)
Under the FOIA, agencies are authorized to withhold “records of information compiled
for law enforcement purposes, but only to the extent that production of such law enforcement
records or information could reasonably be expected to interfere with enforcement proceedings.”
5 U.S.C. § 552(b)(7)(A). In order to justify the withholding of records an agency must show that
(1) a law enforcement proceeding for which the records were compiled is pending or reasonably
prospective and (2) that the release of the information could reasonably be expected to cause
some articulable harm. In crafting this Exemption, “Congress recognized that law enforcement
agencies had legitimate needs to keep certain records confidential, lest the agencies be hindered
in their investigation or placed at a disadvantage when it came time to present their cases.”
Alyeska Pipeline Serv. Co. v. EPA, 856 F.2d 309, 313 (D.C. Cir. 1988) (quoting NLRB v.
Robbins Tire & Rubber Co., 437 U.S. 214, 224 (1978)). Nonetheless, this exemption is not
meant to be a “blanket exemption” for any files or records that are relevant to an investigation –
37
their disclosure must be reasonably expected to interfere in a “palpable, particular way” with the
investigation. North v. Walsh, 881 F.2d 1088, 1100 (D.C. Cir. 1989). And a document that is
merely “useful” to a requester who is (or was) the subject of an investigation is insufficient to
merit disclosure under the FOIA. Id. at 1099-1100.
The defendant maintains that documents 9 and 16-18 are exempt from disclosure
pursuant to Exemption 7(A). See Def.'s Reply, Ex. 9. According to the Vaughn index, these
records consist of e-mails between employees of the defendant related to employment leave
requests, an internal investigation, and a recommendation for employee discipline. Id. The
defendant contends that it is justified in withholding these records because they derive from "the
Division of Enforcement's and the OIG's active and ongoing investigations." Def.'s Mem. at 21;
see also id., Ex. 6 (Riewe Decl.) ¶¶ 5-11; id., Ex. 7 (Declaration of Noelle L. Frangipane)
("Frangipane Decl.") (Frangipane Decl.) ¶ 11. The defendant has categorized the records and
describes generally how disclosure of each category could cause harm to the defendant's
investigatory interests. Id., Ex. 7 (Frangipane Decl.) ¶ 9.
The plaintiff counters that the defendant has not carried its burden under Exemption 7(A)
because an internal audit of the defendant's practices concluded that the defendant overuses
Exemption 7(A) to withhold records from FOIA requesters. Pl.'s Mem. at 29. The plaintiff
contends that the categories of the withheld documents designated by the defendant are arbitrary,
overbroad, and lack the requisite specificity to warrant their non-production. Id. at 33. The
plaintiff asserts that the defendant has not sufficiently articulated "any potential nexus between
disclosure and any potential harm to an enforcement proceeding" sufficient to justify the
withholding of records in their entirety. Id. at 34. Finally, the plaintiff contends that because the
defendant produced documents related to him during the discovery process in ongoing litigation
38
between the parties in Texas, see SEC v. Cuban, 634 F. Supp. 2d 713 (N.D. Tex. 2009), but
those same documents have not been produced to him in this FOIA litigation based on the
defendant's claim that all records related to the plaintiff are shielded from production by 7(A),
the defendant's claims of accurate processing and its reliance on Exemption 7(A) "are, at a
minimum, incorrect and unreliable" and therefore must be rejected. Pl.'s Reply at 20-23.
Exemption 7(A) only justifies withholding records compiled for law enforcement
purposes for a limited time while an investigation is ongoing. 5 U.S.C. § 552(b)(7)(A). And it is
with respect to Exemption 7(A) that the defendant makes its most detailed submission in support
of its non-production of responsive records. Whatever the merits to the plaintiff's assertions that
the defendant has in the past overused its reliance on Exemption 7(A), it cannot be assumed that
such past practice casts doubt upon its reliance on Exemption 7(A) in this case. It also cannot be
concluded, as the plaintiff urges, that because records produced in the Texas litigation might be
the same records as those that were not produced here renders the defendant's reliance on
Exemption 7(A) irrational. As the Court indicated in its earlier discussion regarding the
adequacy of the defendant's search, the law is clear that an agency's search “need not be perfect,
only adequate, and adequacy is measured by the reasonableness of the effort in light of the
[plaintiff's] specific request,” Meeropol, 790 F.2d at 956. The Court therefore declines to reject
the defendant's reliance on Exemption 7(A) because it may be the case that records, which may
or may not be part of the defendant's investigatory file, were not produced. To do otherwise
would result in the Court acting on pure speculation, which obviously it cannot do.
Indeed, the Court finds that because the investigation is ongoing Exemption 7(A) may be
properly relied upon by the defendant to withhold records 9 and 16-18; the defendant's showing
is sufficient even though it has not specifically described the basis for the non-disclosure in each
39
instance, because extensive specificity is not required for Exemption 7(A) where providing such
detail would undermine the precise reason for the non-disclosure. Juarez v. Dep’t of Justice, 518
F.3d 54, 59 (D.C. Cir. 2008) (“‘the release of information in investigatory files prior to the
completion of an actual, contemplated enforcement proceeding was precisely the kind of
interference that Congress continued to want to protect against’” in approving Exemption 7(A)
(quoting NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 236 (1978))). The defendant has
therefore described in sufficient detail the nature of the records it has withheld and the harm that
could befall the agency if these records are prematurely released. See Def.'s Mem., Ex. 6 (Riewe
Decl.) ¶¶ 7-12; id. Ex. 7 (Frangipane Decl.) ¶ 9. The Court also accepts the defendant's
representations that release of the records 9 and 16-18 might reveal its investigative strategy and
findings concerning the investigation before they are finalized. However, this justification for
withholding the records is only temporary and the defendant must be prepared to make a
continuing showing to justify its continued withholding of the Exemption 7(A) records in full.
5. Exemption 7(C)
Exemption 7(C) is designed to protect the personal privacy interests of individuals named
or identified in “records or information compiled for law enforcement purposes,” to the extent
that their disclosure “could reasonably be expected to constitute an unwarranted invasion of
personal privacy.” 5 U.S.C. § 552(b)(7)(C); 10 see also U.S. Dep't of Justice v. Reporters Comm.
for Freedom of the Press, 489 U.S. 749, 756 (1989). In order to determine whether a
10
It bears noting that while similar, the reach of the privacy interest protected under Exemption 7(C) is much
broader that the reach of Exemption 6. See Nat'l Archives & Records Admin. v. Favish, 541 U.S. 157, 165-66
(2004) ("This provision [of Exemption 7(C)] is in marked contrast to the language in Exemption 6, pertaining to
'personnel and medical files, where withholding is required only if disclosure would constitute a clearly unwarranted
invasion of personal privacy.' The adverb 'clearly,' found in Exemption 6, is not used in Exemption 7(C). In
addition, 'whereas Exemption 6 refers to disclosures that would constitute an invasion of privacy,' Exemption 7(C)
encompasses any disclosure that 'could reasonably be expected to constitute such an invasion.'" (citations and
internal quotation marks omitted)).
40
withholding by an agency is proper, an individual's right to privacy must be weighed against the
public's right to disclosure. Sussman v. U.S. Marshals Serv., 494 F.3d 1106, 1115 (D.C. Cir.
2007); Davis v. Dep't of Justice, 968 F.2d 1276, 1281 (D.C. Cir. 1992). Where a legitimate
privacy interest is implicated, the requester must "[(1)] show 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)] show the information is likely to advance that interest." Nat'l Archives &
Records Admin. v. Favish, 541 U.S. 157, 158 (2004).
Stated in alternative terms: "[W]hether disclosure of a private document under Exemption
7(C) is warranted must turn on the nature of the requested document and its relationship to 'the
basic purpose of the Freedom of Information Act to open agency action to the light of public
scrutiny,' rather than on the particular purpose for which the document is being requested."
Reporters Comm., 489 U.S. at 772 (citation and internal quotation marks omitted). And that
purpose cannot have as its objective use of the FOIA as a means for a requester to spy on another
private citizen; rather, the request must have the objective of obtaining a response that "sheds
light on the conduct of [a] Government agency or official." Id. at 773. Thus, a request that seeks
"information that would explain how the disciplinary procedures actually functioned" is
permissible, id., but a request seeking information regarding "private citizens that happens to be
in the warehouse of the Government," such as one's criminal history, is not the proper subject for
a FOIA request. Id. at 774.
The defendant maintains that documents 9, 16-18, and 78-80 are exempt from disclosure
pursuant to Exemption 7(C). See Def.'s Reply, Ex. 9. These records consist of e-mails authored
by employees of the defendant concerning employment leave requests, an internal agency
investigation, and a recommendation for employee discipline. Id. According to the defendant, it
41
has properly withheld these records pursuant to Exemption 7(C) because the records are "law
enforcement records, either from an OIG investigation or from a securities enforcement
investigation," and the privacy interests of the persons involved outweigh any interest in public
disclosure of the records. Def.'s Mem. at 21. According to the defendant's declarant, the Deputy
Inspector General in the Office of Inspector General of the Securities and Exchange
Commission, who is familiar with these records, the internal SEC e-mail communications were
withheld because their disclosure could interfere with an ongoing investigation by informing
someone external to the investigation of the identity of individuals who have been interviewed,
what documents have been requested, what sources of information exist, and what information
the agency considers relevant to the investigation. Def.'s Mem., Ex. 7 (Frangipane Decl.) ¶ 9(B).
The declarant states that records 9 and 16-18 were withheld because they contain information
related to an ongoing OIG investigation into internal misconduct by SEC employees. 11 Id. ¶ 11.
The plaintiff contends that the defendant's reliance on Exemption 7(C) to withhold these
records in their entirety is improper because it has not shown that its investigation includes
anything other than ordinary monitoring of its employees, Pl.'s Mem. at 28, nor has the defendant
established that any resulting invasion of privacy is "clearly unwarranted" when balanced against
the public interest as required by 5 U.S.C. § 552(b)(6), Pl.'s Reply at 18. The plaintiff further
contends that the defendant has not made a showing that any information in the records exempt
from disclosure under Exemption 7(C) cannot be segregated from the remainder of the records.
Pl.'s Mem. at 28.
11
Records 9 and 16-18 do not relate to an investigation conducted by the Office of Human Resources. Def.'s
Reply, Ex. 11 (Tyler Suppl. Decl.) ¶ 4.
42
The first point to consider is that the request in this case involves one individual seeking
records regarding another individual. But what distinguishes the facts in this case from those in
Reporters Committee, where a requester sought the disclosure of the rap-sheet (the criminal
record) of another private individual, 489 U.S. at 751, and the Supreme Court concluded the
privacy interest under Exemption 7(C) in such circumstances "is in fact at its apex," 489 U.S. at
780, is that the subject of the plaintiff's request there was not a government official who
allegedly committed improper acts while performing his official duties. Here, the subject of the
plaintiff's FOIA request is a government employee who, if the plaintiff's allegations are correct,
was utilizing the government e-mail system to harass the plaintiff. Pl.'s Mem. at 25.
Accordingly, here, disclosing the information sought by the plaintiff could accord him and the
public in general insight into how the defendant addresses allegations of employee misconduct
and misuse of government resources, information of unquestionable public interest. However, it
is equally clear that the identities of the subject of the investigation and those involved in the
investigative process is not nearly as significant as the actions (or lack thereof) taken by the
defendant, and the disclosure of the identities of these individuals would likely compromise their
privacy interests. Weisberg v. U.S. Dep't of Justice, 745 F.2d 1476, 1491 (D.C. Cir. 1984)
(holding that the names of cooperators, investigators, and other "'third persons mentioned in the
documents'" were properly withheld under Exemption 7(C) (citation omitted)). But even if the
Court accepts the defendant's representations that the identify of persons connected with the
investigation should not be disclosed for the reasons the defendant offers, Def.'s Mem., Ex. 7
(Frangipane Decl.) ¶ 9(B), including "the stigma of being associated with any law enforcement
investigation," Amuso v. U.S. Dep't of Justice, 600 F. Supp. 2d 78, 97 (D.D.C. 2009) (citing
43
Reporters Comm., 489 U.S. at 773-75), the issue of whether Exemption 7(C) has been properly
relied upon can not yet be resolved on the existing record.
Simply, the defendant has not justified withholding the remainder of the information
likely contained in the records. Nothing in the defendant's proffer assists the Court in assessing
why redacting the names and any other identifying characteristics of the persons involved in the
OIG investigations will not adequately protect the privacy interests at stake, a finding that the
Court must be able to make to sanction a complete withholding. See Stolt-Nielsen Transp. Grp.
Ltd., 534 F.3d at 734 (indicating that the district court must pass on the question of the
segregability of the records withheld). The defendant's representation that its reliance on
Exemption 7(C) is justified are not convincing, and how the Exemption applies to records 9 and
16-18 is addressed in only one short paragraph in the Deputy Inspector General's statement. The
Court is essentially left to rely on the vague descriptions provided in the Vaughn index, which
are nothing more than conclusory. On these submissions, the defendant has not met its burden of
providing the Court with information from which it can confidently conclude that the privacy
rights of the individuals referenced in the records can be protected only by the non-production of
all of the records in their entirety, when weighed against the public's right to disclosure.
C. The Privacy Act
The Privacy Act authorizes individuals to bring suit to challenge an agency's refusal "to
comply with an individual request" for the production of records concerning the requester.
5 U.S.C. § 552a(b), (g)(1). The defendant's Privacy Act regulations require an agency to either
grant or deny access to the record(s) requested "within 30 days," and if a request is denied, to
communicate that denial to the requester. 17 C.F.R. § 200.304(c)-(d) (2007).
44
The defendant contends that the plaintiff "has no right of access to the documents he
seeks under the Privacy Act" because they are investigative records exempt from disclosure
pursuant to 17 C.F.R. §200.313, and therefore the defendant did not waive its right to withhold
the records even if it failed to respond to the plaintiff's request. See Def.'s Mem. at 33; Def.'s
Reply at 17. The plaintiff responds that because the defendant "never acknowledged [his]
Privacy Act request, never responded to his Privacy Act request, never informed him that access
to his records under the Privacy Act was denied or why access was denied, and never advised
him of his right to appeal the SEC’s denial of access," it cannot now for the first time and in the
midst of litigation raise its objections to production of the records requested. Pl.'s Mem. at 37.
Because the plaintiff contends that the defendant's objection to production was untimely and
therefore waived, he asks the Court to compel the defendant's compliance.
While it does appear that the defendant's compliance with the Privacy Act was less than
clear, the defendant did state that it was withholding records responsive to the categories that the
plaintiff sought in his request letter pursuant to the FOIA and the Privacy Act, see, e.g., Def.'s
Mem., Ex. 1 (Winter Decl.), Attach. D (Feb. 5, 2009 Letter from Mark P. Siford to David Ross)
at 1 (indicating the defendant was withholding records responsive to categories 2 ("[r]ecords
which mention or relate to Mr. Cuban") and 5 ("[r]ecords relating to Mr. Cuban's Wells
Submission dated September 21, 2007") of the plaintiff's Request Letter II). Although the Court
does not condone evolving positions seemingly formulated during the course of litigation that
surprises the opponent, given the state of the record the defendant's position does not appear to
vary materially from its original stance taken during the administrative process. Thus, even
though it appears that the defendant did not explicitly rely upon 17 C.F.R. §200.313, as it now
does, the agency is nonetheless entitled to refine its position. See Barnard v. Dep't of Homeland
45
Sec., 598 F. Supp. 2d 1, 25 n.16 (D.D.C. 2009) ("there is no requirement that an agency
administratively invoke [a Privacy Act] exemption in order to later rely on it in federal court");
accord Young v. CIA, 972 F.2d 536, 538 (4th Cir. 1992) ("[A]n agency does not waive FOIA
exemptions by not raising them during the administrative process."). The Court will therefore
consider the merits of any future challenges raised by the plaintiff to the defendant's assertion
that a withholding of records is sanctioned by the Privacy Act.
D. The Defendant's Request to Bifurcate and Stay the Plaintiff's Remaining Three
Requests
Under the FOIA, an agency receiving a request must determine whether to comply with
the request within 20 working days. See 5 U.S.C. § 552(a)(6)(A)(i). The Court may, however,
"allow the agency additional time to complete its review of the records" upon a showing that
"exceptional circumstances exist and that the agency is exercising due diligence in responding to
the request." § 552(a)(6)(C)(i). The defendant here seeks three additional years to respond to
the plaintiff's request, which involves the review of 107 boxes of documents. Def.'s Mot. to Stay
at 2. The plaintiff, understandably, takes the position that the request for a three-year stay is
unreasonable and unsupported by the record. Pl.'s Opp'n to Stay at 2.
The defendant has explained in great detail the extent of the demands it is experiencing
responding to the plaintiff's requests and requests like it from other requesters. See generally
Def.'s Mot. to Stay, Ex. 1 (Declaration of Margaret Celia Winter). Those demands include
thousands of requests and the resultant review of large volumes of documents, a task divided
among roughly only two dozen SEC employees and forty "FOIA Liaisons within the agency's
various offices and divisions." Id. ¶¶ 6-11, 21. Requests are generally responded on a first-in,
first-out track. Id. ¶¶ 14-15. Despite these representations, three years is an extraordinarily long
46
period of time for the plaintiff to await the production of all records responsive to his FOIA
request. Also, given the time that has elapsed since this case was initiated (over fifteen months
ago) and when the defendant's motion to stay was filed (over seven months ago); the significant
progress the defendant represents it has made over the past several years in improving its
response time to FOIA requests; and the fact that the defendant's response time hinges, at least in
part, on the duration of other litigation that may or may not remain active, id. ¶¶ 53-58, the Court
will deny the defendant's motion without prejudice and conduct a status conference to assess the
current status of the defendant's processing of the plaintiff's requests to determine whether
granting the defendant additional time to fulfill its statutory obligation is appropriate. Also at
that hearing, the defendant should be prepared to present witnesses associated with the ongoing
investigation that provides the basis for its withholding of records under Exemption 7(A) of the
FOIA. If the investigation is still active, then the defendant must submit proof that another
exemption applies that justifies the complete withholding of records 9 and 16-18. The Court
further anticipates setting a timeline for the production of the redacted records versions of these
records at the hearing or entertaining alternative proposals from the parties for expeditiously
advancing this case to its final resolution. 12
12
In the event the defendant seeks reconsideration of any ruling in this Opinion with respect to the records
not yet produced, and proffers additional declarations or other evidence upon which its position is based, the
following observations are noted. As the Court has indicated throughout this Opinion, most of the defendant's
representations were extremely limited, vague, and conclusory as to its reliance on Exemptions 2, 5 (with respect to
the attorney-client privilege, the deliberative process privilege, and the attorney work-product doctrine), 6, 7(A) and
7(C), and it was the defendant's failure to provide proper justification for its withholding of records that resulted in
summary judgment being partially entered for the plaintiff. For example, while two declarations submitted with
respect to the adequacy of the defendant's search (an issue on which the plaintiff bore the burden of proving
unreasonable) contained 157 paragraphs and 18 paragraphs respectively, the defendant's declarations with respect to
the applicability of the multiple exemptions to the 80 different records listed in its Vaughn index (issues on which
the defendant bore the burden to prove) ranged from 4 to 13 paragraphs (paragraphs that were frequently only a
sentence or two in length, inclusive of the necessary foundational information relating to the declarant's employment
status and competency). It was upon these minimally supported declarations that the defendant relied to satisfy its
burden. In no way is the Court indicating that the defendant must bury the Court and the plaintiff in paper and finite
(continued . . . )
47
IV. CONCLUSION
For the foregoing reasons, the Court finds that both parties' cross-motions for summary
judgment must be granted in part and denied in part. 13 Specifically, the Court finds that the
defendant's search for records responsive to categories 7, 11, 12, and 13 of Request Letter I was
inadequate. Also, the defendant's reliance on Exemptions 2 and 6 to withhold records 78-80, and
Exemption 7(C) to withhold records 9, 16-18, and 78-80, is not sufficiently substantiated to meet
its burden to withhold these records in their entity. The same is tr+ue in regard to the assertion
of Exemption 5. The defendant has also failed to satisfy its burden of showing that records 11,
13, 21, 25-26, 29, 32, 34-35, 37, 39, 41-44, 53, 55, 57 59, and 61-63 may be withheld under the
attorney-client privilege; records 1-3, 9, 11, 13-15, 17, 19, 21-22, 25-29, 32-35, 37-46, 48-57,
59-64, 69, 71, and 73-76 may be withheld under deliberative process protection; or records 10-
( . . . continued)
detail to justify its invocation of a FOIA exemption. At the same time, however, the defendant can hardly expect to
meet its burden with abbreviated and uninformative information that precludes the Court from independently
evaluating the merits of the defendant's positions. In many cases the defendant chose to merely group together
multiple documents into general subject areas and universally asserted the applicability of exemptions to those
records, rather than distinguishing the content of specific records, which is necessary to establish that redactions are
unwarranted or impossible. The purpose for requiring a Vaughn index is to provide courts with more than just
"conclusory and generalized allegations of exemptions," Campaign for Responsible Transplantation v. Food & Drug
Admin., 511 F.3d 187, 196 (D.C. Cir. 2007) (citation omitted), because "a withholding agency must supply a
relatively detailed justification, specifically identifying the reasons why a particular exemption is relevant and
correlating those claims with the particular part of a withheld document to which they apply." Krikorian v. Dep't of
State, 984 F.2d 461, 467 (D.C. Cir. 1993) (emphasis in original) (citation and internal quotation marks omitted).
The defendant must simply put more effort into its submission to convince the Court that it is entitled to the relief it
seeks.
It is also worth noting that while the Court at this juncture is declining to conduct in camera review of
disputed records, it may in the future decide that such review is necessary. In camera review is unnecessary at this
point not because the Court can make a determination on whether the records can be released based on the
descriptions provided, but because most of the defendant's descriptions are woefully inadequate. And the Court
cannot permit an agency to transfer the burden of conducting the review of these records to the Court by providing
inadequate descriptions of the records; that is the defendant's responsibility. It is only those situations where
descriptions provided by the agency are as detailed as possible, but nonetheless fail to provide the Court with
sufficient information upon which to base its determinations, when in camera review should be exercised. See id.
("We therefore leave it to the district court to determine on remand whether more detailed affidavits are appropriate
or whether an alternative such as in camera review would better strike the balance between protecting sensitive
foreign relations information and disclosing non-exempt information as required by the FOIA.")
13
The Court will issue an Order consistent with this Memorandum Opinion.
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11, 13-15, 18-29, 31-46, 48-64, and 77 may be withheld under the attorney work-product
privilege. On the other hand, the Court finds that the defendant has established that records 9
and 16-18 may be withheld under Exemption 7(A) during the pendency of the ongoing
investigation; however, given the passage of time since that exemption was first invoked, at the
hearing the Court will conduct in this matter the defendant should be prepared to establish by the
testimony of representatives involved in the investigation whether the investigation is still
ongoing, as well as the anticipated duration of the investigation. Moreover, to the extent that the
Court has found that the defendant cannot rely on an exemption to withhold a record in its
entirety, the defendant is obligated by the FOIA to produce a complete or redacted version of the
record to the plaintiff, and must do so forthwith. Finally, the Court finds that it must deny
without prejudice the defendant's motion for a three-year stay of this litigation pending its
production of responsive records, and that at the hearing the Court will conduct, it will determine
how much additional time, if any, the defendant is entitled to receive to complete the processing
of the plaintiff's FOIA requests.
________/s/_______________
REGGIE B. WALTON
United States District Judge
49