RUDOLPH CONTRERAS, United States District Judge.
This matter stems from the resolution of an international investigation of the corrupt practices of Siemens Aktiengesellschaft ("Siemens"). In 2008, Siemens pleaded guilty to a two-count information charging the company with violating the internal controls and books and records provisions of the Foreign Corrupt Practices Act ("FCPA"). The court imposed a fine of $448.5 million against Siemens, and imposed smaller fines against three Siemens subsidiaries that pleaded guilty to separate charges. Siemens also settled a parallel civil proceeding brought by the United States Securities and Exchange Commission ("SEC") and agreed to pay $350 million in disgorgement of profits.
Among other things, the plea agreement resolving the criminal case required the company to hire an independent corporate compliance monitor to ensure that Siemens implemented an effective corporate governance system and complied with all applicable laws and regulations. Siemens hired Dr. Theodore Waigel (the "Monitor") to serve as the corporate monitor. Over several years, the Monitor conducted extensive investigation, review, and oversight of the compliance programs at Siemens. During
In 2013, Plaintiff 100Reporters LLC, a non-profit dedicated to investigative journalism, submitted a Freedom of Information Act ("FOIA") request to the DOJ seeking records related to the monitorship. DOJ denied the request, as well as an administrative appeal. In 2014, 100Reporters brought this FOIA action before the Court. The Court later permitted Siemens and the Monitor to intervene in this case.
Relying on a number of exemptions to FOIA, DOJ has produced portions of redacted documents, while withholding others in full. 100Reporters objects to those withholdings. Now before the Court are separate motions for summary judgment filed by the Monitor, Siemens, and DOJ, and a cross-motion for summary judgment filed by 100Reporters. See generally Monitor's Mot. Summ. J. ("Monitor Mot."), ECF No. 57; Def.-Intervenor Siemens Mot. Summ. J. ("Siemens Mot."), ECF No. 58; Def. U.S. Dep't Justice Mot. Summ. J. ("DOJ Mot."), ECF No. 59; Pl.'s Mot. Summ. J. ("100Reporters Cross-Mot."), ECF No. 62.
For the reasons explained below, the Court finds that DOJ has justified the withholding of certain information pursuant to Exemption 4 and the attorney work-product privilege contained in Exemption 5. The Court will grant the motions for summary judgment filed by DOJ and Defendant-Intervenors on those issues. At this time, the Court finds that DOJ has not justified its withholdings under the deliberative process privilege contained in Exemption 5 or under Exemptions 6 and 7(C), and will thus deny summary judgment on those issues. The Court will also order DOJ to produce certain representative documents for in camera review and will deny summary judgment on the question of segregability. Finally, the Court will deny the cross-motion for summary judgment filed by 100Reporters.
The Court will begin its analysis by providing an overview of the facts giving rise to this dispute before turning to the procedural history of this litigation.
Siemens is a "global technology company focusing on the areas of electrification, automation, and digitialization." Siemens Mot., Decl. of Joel Kirsch ("Kirsch Decl.") ¶ 2, ECF No. 58-2. Siemens and its subsidiaries operate in 192 countries and employ roughly 348,000 people. Kirsch Decl. ¶ 2.
An international investigation of Siemens—led by U.S. and foreign law enforcement—revealed a range of illegal conduct, including violations of anti-corruption laws and accounting regulations committed by different Siemens business units over several years. See generally Statement of Offense, United States v. Siemens Aktiengesellschaft, No. 08-367 (D.D.C. Dec. 15, 2008), ECF No. 15 ("Statement of Offense"). In December 2008, Siemens entered into a plea agreement with the DOJ and a consent decree with the SEC to resolve criminal and civil allegations that Siemens and some of its subsidiaries committed
Under the criminal plea agreements, Siemens agreed to pay fines totaling $450 million.
As part of the universal resolution, Siemens also reached a settlement of the parallel civil complaint filed by the SEC. The SEC alleged that Siemens "engag[ed] in a widespread and systematic practice of paying bribes to foreign government officials to obtain business." Compl., SEC v. Siemens Aktiengesellschaft, No. 08-2167 (D.D.C. Dec. 15, 2008) ¶ 1, ECF No. 3 ("SEC Compl."). More specifically, the SEC alleged that Siemens made at least 4,283 payments totaling $1.4 billion to bribe foreign officials. See SEC Compl. ¶ 2. The SEC also alleged, among other things, that Siemens paid kickbacks to Iraqi ministries in connection with the sales of power equipment to Iraq under the United Nations Oil-for-Food Program. See SEC Compl. ¶ 2. Siemens settled the civil suit without admitting or denying the allegations of the complaint. See DOJ Mot., Decl. of Tracy Price ("Price Decl.") ¶ 3, ECF No. 59-8. The final judgment did, however, enjoin Siemens from violating the FCPA and ordered Siemens to disgorge $350 million in profits. See Final Judgment, SEC v. Siemens Aktiengesellschaft, No. 08-2167, §§ I, V (D.D.C. Dec. 18, 2008), ECF No. 4 ("Final Judgment"); Price Decl. ¶ 3. Siemens also agreed to engage an independent monitor, see Final Judgment § IV, and SEC staff understood that Siemens would hire the same monitor to carry out the requirements of the civil settlement and the criminal plea agreement, see Price Decl. ¶ 4.
As required by the civil settlement and the criminal plea agreement, Siemens engaged Dr. Theo Waigel to serve as the independent corporate monitor. See Plea Agreement ¶ 12; Consent ¶ 3. The terms of the plea agreement called on the Monitor to evaluate:
Statement of Offense, Attach. 2 ¶ 1.
In furtherance of the Monitor's mandate, DOJ required that Siemens provide the Monitor with broad access to Siemens' confidential and commercially-sensitive information, documents, and records. See Statement of Offense, Attach. 2 ¶ 2. DOJ also expressly authorized Siemens to share privileged information with the Monitor subject to a non-waiver of privilege arrangement. See Statement of Offense, Attach. 2 ¶ 2(b). Similarly, Siemens was obligated to ensure that the Monitor could inspect all relevant documents, conduct on-site observations of Siemens' internal controls and internal audit procedures, meet with and interview employees, officers, and directors, and analyze and test Siemens' compliance programs and controls. See Statement of Offense, Attach. 2 ¶ 7.
Further, the plea agreement directed the Monitor to conduct an initial review of Siemens' anti-corruption compliance program and to prepare an initial report, followed by up to three subsequent reviews and reports. See Statement of Offense, Attach. 2 ¶ 3. The reports would "set[] forth the Monitor's assessment and mak[e] recommendations reasonably designed to improve the effectiveness of Siemens' program for ensuring compliance with the anti-corruption laws." Statement of Offense, Attach. 2 ¶ 4. The agreement set forth a process for Siemens to adopt or contest the Monitor's recommendations. See Statement of Offense, Attach. 2 ¶ 5. The agreement also called for the Monitor to undertake up to three annual follow-up reviews, and, at the conclusion of each follow-up review, to "certify whether the compliance program of Siemens, including its policies and procedures, [was] reasonably designed and implemented to detect and prevent violations within Siemens of the anti-corruption laws." Statement of Offense, Attach. 2 ¶ 6.
Finally, the agreements directed the Monitor to provide regular communications to the DOJ and the SEC by requiring the Monitor to submit a work plan to the agencies for comment prior to each year of the monitorship, see Statement of Offense, Attach. 2 ¶ 3, to provide the agencies with the Monitor's written reports following completion of each annual review cycle, see Statement of Offense, Attach. 2 ¶ 4, and to report any significant improper activities or violations of law discovered during the monitorship, see Statement of Offense, Attach. 2 ¶ 8. Although the plea agreement contemplated a four-year term for the monitorship, the agreement also provided that the term could be shortened or lengthened at the discretion of DOJ. See Statement of Offense, Attach. 2 ¶ 6.
The Monitor ultimately conducted four annual reviews and documented his findings and recommendations in four reports dated October 5, 2009; October 13, 2010; October 7, 2011; and October 12, 2012. See Monitorship Notice ¶ 7. These written reports each reached "several hundred pages, with numerous footnotes and extensive appendices." See Monitor Mot., Decl.
The Monitor created a wide range of written submissions and communications during the monitorship. The Monitor breaks these materials into five categories:
After four years, DOJ authorized the termination of the monitorship, concluding that Siemens had "satisfied its obligations under the plea agreement with respect to the corporate compliance monitorship." Monitorship Notice ¶ 11. DOJ specifically determined that Siemens had granted the Monitor broad access to its documents, projects, and employees:
Monitorship Notice ¶ 7.
100Reporters is a non-profit news organization dedicated to investigative reporting. See Compl., Ex. D at 1-2, ECF No. 1-4. On July 23, 2013, Marjorie Valbrun, a reporter for 100Reporters, submitted a FOIA request to DOJ seeking records related to the investigation of Siemens. See Compl., Ex. D at 1. Ms. Valbrun specifically requested "copies of the Corporate Compliance statements that Siemens has filed with the DOJ under the terms of the compliance agreement outlined
DOJ responded on August 9, 2013 and stated that it would extend the time limit to respond because the request presented "unusual circumstances" as defined in 5 U.S.C. § 552(a)(6)(B)(i)-(iii). See Compl., Ex. E at 1, ECF No. 1-5. Then, in a one-page letter dated January 6, 2014, DOJ refused to produce any responsive records. See Compl., Ex. F at 1, ECF No. 1-6. DOJ explained that it had determined that "all responsive records are exempt from disclosure pursuant to Exemption 7(A), which permits withholding records or information complied for law enforcement purposes when disclosure could reasonably be expected to interfere with enforcement proceedings." Compl., Ex. F at 1. Ms. Valbrun and 100Reporters filed an administrative appeal on February 20, 2014. See generally Compl., Ex. G, ECF No. 1-7. The administrative appeal also narrowed the FOIA request to six categories of documents:
Compl., Ex. G at 2.
On April 22, 2014, DOJ affirmed the denial of the FOIA request in a brief letter. See Compl., Ex. H, ECF No. 1-8. The denial of the administrative appeal again relied on Exemption 7(A). See Compl., Ex. H at 1.
100Reporters brought this lawsuit against DOJ seeking to compel the production of documents that are responsive to its FOIA request. See generally Compl., ECF No. 1. DOJ filed an Answer to 100Reporters' Complaint. See generally
Soon after DOJ filed its Answer, Siemens and the Monitor filed separate motions to intervene in this action. See Siemens Mot. Intervene, ECF No. 13; Monitor Mot. Intervene, ECF No. 17. The Court granted both motions on December 3, 2014. See generally 100Reporters LLC v. U.S. Dep't of Justice, 307 F.R.D. 269 (D.D.C. 2014).
On March 30, 2015, DOJ produced responsive documents to 100Reporters for the first time. See DOJ Mot., Decl. of Suzanna Moberly ("Moberly Decl.") ¶ 19, ECF No. 59-3. The production included two videos and 17 pages of documents. See Moberly Decl. ¶ 19. Several months later, DOJ provided 100Reporters, Siemens, and the Monitor with a Vaughn index for the remaining withheld documents on October 15, 2015. See Def.'s Notice of Compliance, ECF No. 47. DOJ later released a second set of documents on December 4, 2015, totaling 101 pages of records released in full and 348 pages released in part. See Moberly Decl. ¶ 19; see also Status Report & Proposed Briefing Schedule at 2, ECF No. 49 ("Federal Defendant provided Plaintiff with some of the documents previously withheld entirely, largely redacted on December 4, 2015."). At that time, DOJ continued to withhold in full six video presentations and 4,293 pages of documents. See Moberly Decl. ¶ 19. DOJ submitted an Amended Vaughn Index with its motion for summary judgment filed on March 22, 2016. See Moberly Decl., Ex. F. ("Am. Vaughn Index"), ECF No. 59-4.
Now pending before the Court are four motions for summary judgment. DOJ, Siemens, and the Monitor each filed a motion for summary judgment on March 22, 2016. See Monitor Mot.; Siemens Mot.; DOJ Mot. Then, 100Reporters filed a cross-motion for summary judgment on April 22, 2016. See 100Reporters Cross-Mot.
Congress enacted FOIA so that citizens could discover "what their government is up to." U.S. Dep't of Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749, 773, 109 S.Ct. 1468, 103 L.Ed.2d 774 (1989) (quoting EPA v. Mink, 410 U.S. 73, 105, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973) (Douglas, J. dissenting)). "[D]isclosure, not secrecy, is the dominant objective of [FOIA]." U.S. Dep't of the Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 48 L.Ed.2d 11 (1976). After an agency receives a request that "reasonably describes" records being sought, 5 U.S.C. § 552(a)(3)(A), the agency must "conduct[] a search reasonably calculated to uncover all relevant documents." Weisberg v. U.S. Dep't of Justice, 705 F.2d 1344, 1351 (D.C. Cir. 1983). Then, FOIA requires the agency to disclose responsive records revealed by the search, unless one of FOIA's nine statutory exemptions apply to material in the records. See 5 U.S.C. § 552(b); see also Elliott v. U.S. Dep't of Agric., 596 F.3d 842, 845 (D.C. Cir. 2010) ("[A]gencies may withhold only those documents or portions thereof that fall under one of nine delineated statutory exemptions.").
"FOIA cases typically and appropriately are decided on motions for summary judgment." Defs. of Wildlife v. U.S. Border Patrol, 623 F.Supp.2d 83, 87 (D.D.C. 2009) (citing Bigwood v. U.S. Agency for Int'l Dev., 484 F.Supp.2d 68, 73 (D.D.C. 2007)). In general, summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A "material" fact is one capable of affecting the substantive outcome of the litigation. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is "genuine" if there is enough evidence for a reasonable jury to return a verdict for the non-movant. See Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007).
When assessing a summary judgment motion in a FOIA case, a court makes a de novo assessment of whether the agency has properly withheld the requested documents. See 5 U.S.C. § 552(a)(4)(B); Judicial Watch v. U.S. Dep't of Homeland Sec., 598 F.Supp.2d 93, 95 (D.D.C. 2009). To prevail on a motion for summary judgment, "the defending agency must prove 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." Weisberg v. U.S. Dept. of Justice, 627 F.2d 365, 368 (D.C. Cir. 1980) (quoting Nat'l Cable Television Ass'n v. FCC, 479 F.2d 183, 186 (D.C. Cir. 1973)).
To meet its burden, a defendant may rely on declarations that are "relatively detailed and non-conclusory." SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991) (quoting Ground Saucer Watch, Inc. v. CIA, 692 F.2d 770, 771 (D.C. Cir. 1981)). The agency's justification is typically contained in a declaration or affidavit, referred to as a "Vaughn index" after the case Vaughn v. Rosen, 484 F.2d 820 (D.C. Cir. 1973). A court will presume that an agency's affidavits or declarations are submitted in good faith. See SafeCard Servs., 926 F.2d at 1200. The purpose of a Vaughn index is "to permit adequate adversary testing of the agency's claimed right to an exemption," Nat'l Treasury Emps. Union v. U.S. Customs Serv., 802 F.2d 525, 527 (D.C. Cir. 1986) (citing Mead Data Cent., Inc. v. U.S. Dep't of the Air Force, 566 F.2d 242, 251 (D.C. Cir. 1977)), and therefore the index must contain "an adequate description of the records" and "a plain statement of the exemptions relied upon to withhold each record," id. at 527 n.9.
"Ultimately, an agency's justification for invoking a FOIA exemption is sufficient if it appears `logical' or `plausible.'" Wolf v. CIA, 473 F.3d 370, 374-75 (D.C. Cir. 2007) (quoting Gardels v. CIA, 689 F.2d 1100, 1105 (D.C. Cir. 1982)). Generally, a reviewing court should "respect the expertise of an agency" and not "overstep the proper limits of the judicial role in FOIA review." Hayden v. Nat'l Sec. Agency/Cent. Sec. Serv., 608 F.2d 1381, 1388 (D.C. Cir. 1979). Nonetheless, "exemptions from disclosure must be narrowly construed. . . and conclusory and generalized allegations of exemptions are unacceptable." Morley v. CIA, 508 F.3d 1108, 1114-15
As DOJ correctly notes, 100Reporters has made no objection to the sufficiency of DOJ's search for responsive documents. See Def. U.S. Dep't Justice's Combined Reply & Opp'n ("DOJ Reply") at 31 n.13, ECF No. 72; see also Mem. P. & A. Supp. U.S. Dep't Justice's Mot. Summ. J. ("DOJ Mem.") at 37-38, ECF No. 59-2 (describing DOJ's search and arguing that it was adequate).
Specifically, DOJ continues to withhold certain documents—some in part and some entirely—pursuant to FOIA Exemptions 4, 5, 6, and 7(C), and 100Reporters argues that DOJ fails to show that it properly withheld information under those provisions. For reasons explained below, the Court finds that DOJ has justified the withholding of certain information pursuant to Exemption 4 and the attorney work-product privilege contained in Exemption 5. The Court will grant the motions for summary judgment filed by DOJ and Defendant-Intervenors on those issues. At this time, the Court finds that DOJ has not justified its withholdings under the deliberative process privilege contained in Exemption 5 or under Exemptions 6 and 7(C), and will thus deny summary judgment on those issues. The Court will also order DOJ to produce certain representative documents for in camera review and will deny summary judgment on the question of segregability. Finally, the Court will deny the cross-motion for summary judgment filed by 100Reporters.
Pursuant to FOIA Exemption 4, "trade secrets and commercial or financial information obtained from a person" that are "privileged or confidential" may be withheld from disclosure.
An agency may rely on Exemption 4 if it can bear the burden of establishing that withheld materials are "(1) commercial or financial, (2) obtained from a person, and (3) privileged or confidential." Pub. Citizen Health Research Grp. v. FDA, 704 F.2d 1280, 1290 (D.C. Cir. 1983). The parties have not disputed that the
Thus, the Court's analysis will focus on the first and third prongs of the test. The Court will consider whether three categories of withheld documents described below contain information that is "commercial" and whether that information is also "privileged or confidential." The Court will address these two questions in turn.
In the context of Exemption 4, the D.C. Circuit explained that courts should give the terms "commercial" and "financial" their ordinary meanings. See Pub. Citizen Health Research Grp., 704 F.2d at 1290; see also Nat'l Ass'n of Home Builders v. Norton, 309 F.3d 26, 38 (D.C. Cir. 2002). Withheld "information is commercial under this exemption if, in and of itself, it serves a commercial function or is of a commercial nature." Nat'l Ass'n of Home Builders, 309 F.3d at 38 (internal quotation marks and citations omitted).
Therefore, "records that actually reveal basic commercial operations, such as sales statistics, profits and losses, and inventories, or relate to the income-producing aspects of a business," fall within the scope of "commercial" information. See Pub. Citizen Health Research Grp., 704 F.2d at 1290. Courts have identified a range of information that plainly falls within this scope. For example, records containing information on "revenue, net worth, income, and EBITDA" are commercial. See Kahn v. Fed. Motor Carrier Safety Admin., 648 F.Supp.2d 31, 36 (D.D.C. 2009). Courts have also upheld the withholding of loan application information, see Rural Hous. All. v. U.S. Dep't of Agric., 498 F.2d 73, 79 (D.C. Cir. 1974), and customer lists, see Greenberg v. FDA, 803 F.2d 1213, 1216 (D.C. Cir. 1986).
However, in the context of Exemption 4, the term commercial "is not confined only to records that `reveal basic commercial operations . . . or relate to the income-producing aspects of a business.'" Baker & Hostetler LLP v. U.S. Dep't of Commerce, 473 F.3d 312, 319 (D.C. Cir. 2006) (quoting Pub. Citizen Health Research Grp., 704 F.2d at 1290). Instead, the D.C. Circuit has instructed that the exemption "reaches more broadly and applies (among other situations) when the provider of the information has a commercial interest in the information submitted to the agency." Id. Using that definition, the D.C. Circuit held that letters describing market conditions for domestic lumber companies "plainly contain commercial information within the meaning of Exemption 4." Id. at 320. In another case, the D.C. Circuit found that "documentation of the health and safety experience of [a company's] products" was commercial because such documentation was "instrumental in gaining marketing approval for their products." Pub. Citizen Health Research Grp., 704 F.2d at 1290.
Siemens argues that the information at issue here is "plainly commercial." Siemens Mem. at 13, 15. Siemens particularly relies on Public Citizen v. United States Department of Health & Human Services (Public Citizen I), 975 F.Supp.2d 81
Pointing to the Public Citizen I and Public Citizen I cases, Siemens argues that (1) the Monitor's annual reports and related documents, (2) the Monitor's work plans and related documents, and (3) Siemens' internal trainings, presentations, and compliance policies all constitute commercial information. See Siemens Mem. at 15-16. DOJ states that it joins in Siemens' argument and briefly makes its own argument that the withheld materials are commercial in nature. See DOJ Mem. at 23 & n.10.
100Reporters does not dispute the standard used to analyze whether material is commercial. Instead, 100Reporters takes issue with the rationales DOJ has put forward in support of its withholdings. 100Reporters contends that "DOJ fails to carry its burden . . . because it has provided only insufficient, non-specific claims of an asserted right to withhold." 100Reporters Mem. at 12. 100Reporters argues that the Exemption 4 withholdings are not supported by "any serious explanation as to the commercial or financial character of the material [DOJ] refuses to disclose." 100Reporters Mem. at 13. Finally, 100Reporters asserts that DOJ's Amended Vaughn Index relies on boilerplate justifications for withholdings, as well as "repetitive, conclusory assertions that bear little relation to the details of the associated documents." 100Reporters Mem. at 14.
As an initial matter, 100Reporters' attack on the form of the Amended Vaughn Index and the accompanying affidavits, standing alone, is insufficient to defeat DOJ's and Siemens' claims that the materials at issue are commercial. To be sure, 100Reporters is correct that FOIA requires the government to bear the burden of establishing the applicability of an exemption. See Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 861 (D.C. Cir. 1980) ("[T]he burden is on [the agency] to establish [its] right to withhold information from the public. . . ."). To carry that burden, the agency "must provide 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." Mead Data Cent., Inc. v. U.S. Dep't of the Air Force, 566 F.2d 242, 251 (D.C. Cir. 1977). This requirement does not mean, however, that an agency can never rely on repetitive language. The D.C. Circuit has recognized that, in certain cases, "categorization and repetition provide efficient vehicles by which a court can review withholdings that implicate the same exemption for
In short, 100Reporters' challenges are not sufficient to defeat DOJ's withholdings on their face. The Court's analysis of a Vaughn index is functional in nature. See Judicial Watch, Inc., 449 F.3d at 148. The D.C. Circuit has made clear that "materials provided by the agency may take any form so long as they give the reviewing court a reasonable basis to evaluate the claim of privilege." Gallant v. NLRB, 26 F.3d 168, 173 (D.C. Cir. 1994) (quoting Delaney, Migdail & Young, Chartered v. IRS, 826 F.2d 124, 128 (D.C. Cir. 1987)). Therefore, the Court will consider DOJ's Amended Vaughn Index, the declaration provided by DOJ, and the declarations provided by Defendant-Intervenors, taken together, to determine whether the withheld materials are commercial for the purposes of Exemption 4. The Court will evaluate three categories of documents in turn.
First, the Court considers the Monitor's annual reports and associated documents, including presentations summarizing the reports and communications related to the reports. The Court finds that this category of documents contains commercial information.
DOJ's declarant, Ms. Moberly, asserts that all of the information withheld under Exemption 4 "is `commercial' . . . because it serves a commercial function and is of a commercial nature, and Siemens has a commercial interest in the information in that is helpful or instrumental to its business interests." Moberly Decl. ¶ 22. This conclusory statement, which refers to all of the Exemption 4 withholdings, is not dispositive on its own. But additional evidence does support a finding that the annual monitor reports and associated materials contain commercial information. Other declarations make clear that the Monitor's annual reports and associated documents include probing reviews of Siemens' business systems and practices. See Kirsch Decl. ¶ 17; Warin Decl. ¶ 25(c). Among other things, the reports describe and evaluate Siemens' compliance programs, including references to finance functions, mergers and acquisitions practices, and sales and marketing. See Kirsch Decl. ¶ 18. The reports also detail actual "country operations, projects, contracts, and bids." Kirsch Decl. ¶ 19. More specifically, the annual reports "include observations and assessments with respect to particular M & A transactions" and "identif[y] . . . particular Siemens business partners and provide[] Siemens' assessment of the same." Kirsch Decl. ¶ 20(d), (f).
These descriptions of the information contained in the Monitor's annual report and associated materials are sufficiently detailed to show that these materials, at the least, describe specific transactions, projects, bids, and business partners. Thus, the Court concludes that the records "actually reveal basic commercial operations" and "relate to the income-producing aspects of a business," and therefore contain "commercial" information for the purposes of Exemption 4. See Pub. Citizen Health Research Grp., 704 F.2d at 1290; see also Pub. Citizen I, 975 F.Supp.2d at 108 (finding that IRO reports are commercial because they include information on "marketing and sales programs and contracting processes").
Second, the Court considers the Monitor's work plans and related presentations
These documents set forth the steps the Monitor planned to take to evaluate Siemens' compliance programs. See Kirsch Decl. ¶ 22; Warin Decl. ¶ 25(a). Among other things, the documents set forth "Siemens' operations, contracts, projects, and bids that the Monitor intended to review." See Kirsch Decl. ¶ 22. The documents also reflect "Siemens' business operations, structure, and compliance controls." See Kirsch Decl. ¶ 24. The Amended Vaughn Index provides some additional details. For example, the Monitor's first work plan describes "the number of Siemens employees in each country, new orders, new government orders, joint ventures and business partnerships, and Siemens' business development strategy across different sectors of the economy." DOJ_0000001, Am. Vaughn Index at 18.
The description of the subject matter of this category of withheld information is sufficiently specific to demonstrate that these materials pertain to business operations, including compliance programs, business partnerships, and order data. Therefore, the Court finds that this information, which "relate[s] to the income-producing aspects of a business," is "commercial" for the purposes of Exemption 4. See Pub. Citizen Health Research Grp., 704 F.2d at 1290.
Third, the Court considers Siemens' internal compliance policies, training presentations, training modules, and other related materials. The Court finds that this category of documents also contains information that is commercial in nature.
These materials include information pertaining to internal training presentations for Siemens' employees covering the company's compliance programs and policies. See Kirsch Decl. ¶ 25. These materials also include "compliance policies and circulars," which discuss "internal regulations governing Siemens' interactions with third parties, reporting of compliance violations, and corporate discipline." Kirsch Decl. ¶ 27.
These compliance and training materials do not appear to directly "relate to the income-producing aspects of a business." See Pub. Citizen Health Research Grp., 704 F.2d at 1290. But the D.C. Circuit has instructed that the exemption "reaches more broadly and applies (among other situations) where the provider of the information has a commercial interest in the information submitted to the agency." Baker & Hostetler LLP v. U.S. Dep't of Commerce, 473 F.3d 312, 319 (D.C. Cir. 2006). Information that is "instrumental" to a commercial interest is sufficiently commercial for the purposes of Exemption 4. See Pub. Citizen Health Research Grp., 704 F.2d at 1290. In Public Citizen II, the court concluded that information about "the way the companies implement their compliance programs" was "sufficiently `instrumental' to the companies' operations to qualify as `commercial.'" 66 F.Supp.3d at 208. That logic is persuasive here. Because the compliance and training documents include information that is instrumental to Siemens' operations, the Court finds that the information is "commercial" for the purposes of Exemption 4.
Thus, the Court finds that DOJ, relying in part on the declarations provided by Siemens and the Monitor, has met its burden of showing that each of the three categories of documents withheld pursuant to Exemption 4 are "commercial." Next,
The Court previously noted that the third prong of Exemption 4 requires the agency to show that the information it has withheld is "privileged or confidential." 5 U.S.C. § 552(b)(4). DOJ and Siemens have argued that the withheld material is "confidential" not privileged. See Siemens Mem. at 16-26; DOJ Mem. at 24-35. A court's analysis of whether information is confidential turns on whether the information was provided to the government voluntarily or involuntarily. See Critical Mass Energy Project v. Nuclear Regulatory Comm'n, 975 F.2d 871, 872 (D.C. Cir. 1992) (en banc). Under this rule, information that is provided voluntarily "will be treated as confidential under Exemption 4 if it is of a kind that the provider would not customarily make available to the public." Id. In this case, however, the parties agree that the withheld information was provided involuntarily.
In a case such as this, where the agency received material through an involuntary disclosure, that information is "confidential" for purposes of FOIA Exemption 4 if disclosure is likely (1) to impair the agency's ability to obtain the information in the future or (2) to cause substantial harm to the competitive position of the source of the information. See Nat'l Parks Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974); see also Critical Mass, 975 F.2d at 877 (reaffirming the National Parks test). The agency may prevail by showing that either prong of the National Parks test applies. DOJ and Siemens argue that both prongs apply. See Siemens Mem. at 17-26; DOJ Mem. at 25-35. 100Reporters responds that disclosure would not impair the government's ability to obtain necessary information in the future and that DOJ and Siemens have not shown that disclosure would cause Siemens to suffer competitive harm. See 100Reporters Mem. at 16-28.
The Court begins its analysis with the second prong and considers whether the release of the three categories of commercial information described above would also cause competitive harm to Siemens. The relevant question is whether the agency or Siemens have sufficiently shown that release of the withheld information is likely to "cause substantial harm to the competitive position of the person from whom the information was obtained." Nat'l Parks, 498 F.2d at 770. The party invoking Exemption 4 does not need "to prove disclosure certainly would cause it substantial competitive harm, but only that disclosure would `likely' do so." McDonnell Douglas Corp. v. U.S. Dep't of the Air Force, 375 F.3d 1182, 1187 (D.C. Cir. 2004).
The likely harm must be competitive, however. In other words, the exemption
The D.C. Circuit has explained that courts "generally defer to the agency's predictive judgments as to `the repercussions of disclosure.'" United Techs. Corp. v. U.S. Dep't of Def., 601 F.3d 557, 563 (D.C. Cir. 2010) (quoting McDonnell Douglas, 375 F.3d at 1191 n.4). Nevertheless, when reviewing the sufficiency of declarations and Vaughn indices, merely conclusory statements about competitive harm are insufficient. See Occidental Petroleum, 873 F.2d at 342 (requiring more than a "conclusory statement" regarding substantial competitive harm); Pub. Citizen Health Research Grp., 704 F.2d at 1291 ("Conclusory and generalized allegations of substantial competitive harm, of course, are unacceptable and cannot support an agency's decision to withhold requested documents."). In other words, "deference does not mean blind acceptance." Mudge Rose Guthrie Alexander & Ferdon v. U.S. Int'l Trade Comm'n, 846 F.2d 1527, 1532 (D.C. Cir. 1988).
With that framework in mind, the Court turns to several arguments raised by the parties that relate to multiple categories of materials withheld pursuant to Exemption 4. After resolving those issues, the Court will consider whether the release of information contained in each of the three categories of documents is likely to cause competitive harm to Siemens.
The parties spend a significant portion of their briefing addressing whether disclosing the details of Siemens' compliance plan would cause competitive harm. The Court will address these arguments in general, because they pertain to each category of documents at issue here.
100Reporters argues that disclosure of the plan would not harm Siemens, because the "compliance program is not an `off-the-shelf' solution that could easily [be] adopted by a competitor." 100Reporters Mem. at 22. Furthermore, 100Reporters argues that Siemens' competitors must already have compliance plans of their own because of "the dominating presence that FCPA enforcement has taken on in corporate governance." 100Reporters Mem. at 23. 100Reporters includes a list of references to competitor companies' experience with anti-corruption enforcement, including guilty pleas and civil settlements with U.S. law enforcement. 100Reporters Mem. at 24. Finally, 100Reporters concludes that the costs Siemens incurred in creating its compliance and training programs are due to factors that are "presumably unique to this company" and that "there is no evidence on specific costs of designing and implementing those features of Siemens' FCPA compliance program . . . that go beyond competitors' apparently robust programs."
In response, Siemens relies heavily on the Public Citizen I and Public Citizen II opinions. See Consolidated Reply Mem. P. & A. Supp. Siemens' Mot. Summ. J. & Opp'n to Pl.'s Cross-Mot Summ. J. ("Siemens Reply") at 4, ECF No. 71. Pointing to those cases, Siemens argues that disclosing Siemens' compliance and training materials "would provide [competitors] with a `free roadmap' as to how they might efficiently comply with the laws and regulations in the highly-regulated spaces in which Siemens operates" without incurring the same costs. Siemens Reply at 4-5. Siemens argues that 100Reporters' position would "essentially undo Exemption 4" because it fails to realize that "the mere fact that competitors do similar things in slightly different ways does not diminish the competitive sensitivity of proprietary information." Siemens Reply at 5. Furthermore, Siemens contends that key parts of its compliance program could be directly copied, with minimal changes, and used by competitors.
The Court finds that Siemens has the better argument here. In the context of Exemption 4, the D.C. Circuit has stated the general principle that "competition in business turns on the relative costs and opportunities faced by members of the same industry," and thus, "there is a potential windfall for competitors to whom valuable information is released under FOIA." Worthington Compressors, Inc. v. Costle, 662 F.2d 45, 51 (D.C. Cir. 1981). The bargains available to competitors taking advantage of FOIA, "could easily have competitive consequences." Id. In a case involving some similar facts, the court held that disclosure of FDA compliance information could pose a competitive risk because the materials were, "in a sense, a free roadmap as to what works in pharmaceutical marketing without violating the legal framework of regulatory enforcement and laws that govern the industry." Pub. Citizen II, 66 F.Supp.3d at 210. In this case, Siemens' declarant similarly states that disclosure "would provide competitors with a roadmap of aspects of Siemens' best-in-class compliance system and allow those competitors to make affirmative use of the program . . . without incurring the substantial investment cost Siemens has incurred." Kirsch Decl. ¶ 28.
100Reporters' arguments that Siemens is unique or that Siemens' competitors already have compliance plans misses the mark. In fact, the court rejected a very
Pub. Citizen II, 66 F.Supp.3d at 215 n.24. That logic is equally compelling in this case. First, the Court notes that 100Reporters has not presented legal authority in support of its position. Second, 100Reporters' theory would gut Exemption 4. Of course no two companies are exactly alike, and this proposed rule would effectively make identity a requirement before disclosure of compliance materials could constitute harm. That rule seems particularly problematic in a world of constantly changing regulatory environments and business climates, where companies must continue to invest in compliance and training to address emerging risks. For these reasons, the Court finds that disclosure of Siemens' compliance plans and trainings can constitute a form of competitive harm.
100Reporters raises a number of other general arguments against DOJ's assertion that the withheld information is confidential for the purposes of Exemption 4.
First, 100Reporters repeatedly argues that the justifications for withholding information under Exemption 4 are "vague and conclusory," based on boilerplate language, and "too cursory and nonspecific." 100Reporters Mem. at 12. Specifically, 100Reporters argues that DOJ's affidavits and Amended Vaughn Index provide insufficient detail for the Court to determine whether Siemens would suffer competitive harm. See 100Reporters Mem. at 19-21. According to 100Reporters, DOJ has not shown the severity or nature of the alleged competitive harm, or how a competitor could use the withheld information. See 100Reporters Mem. at 20. Next, 100Reporters argues that Siemens also fails to establish the same information. The Court finds that a general, facial attack on the sufficiency of the withholdings is not the proper analysis. To be sure, although "parties opposing disclosure need not `show actual competitive harm,'" they must show a "likelihood of substantial competitive injury." Pub. Citizen Health Research Grp. v. FDA, 704 F.2d 1280, 1291 (D.C. Cir. 1983) (quoting Gulf & Western Indus. v. United States, 615 F.2d 527, 530 (D.C. Cir. 1979)). But the best way to test the agency's justifications is to consider specific materials at issue. Thus, the Court will bear these principles in mind when it turns to the three categories of documents withheld pursuant to Exemption 4.
Second, 100Reporters argues that neither DOJ nor 100Reporters has established that Siemens faces actual competition. See 100Reporters Mem. at 20, 27. Parties seeking withholding of information must present evidence of "[a]ctual competition." Pub. Citizen Health Research Grp., 704 F.2d at 1291 (alteration in original) (quoting Gulf & Western, 615 F.2d at 530). But the evidence of competition can be general, and does not need to list specific competitors, for example. See Gen. Elec. Co. v. Dep't of the Air Force, 648 F.Supp.2d 95, 102-03 (D.D.C. 2009) ("[E]vidence need not be of actual competition over these particular contracts."); see also Nat'l Parks Conservation Ass'n v. Morton, 498 F.2d 765, 770-71 (D.C. Cir. 1974) (noting that disclosure would be improper if
In this case, DOJ and Siemens have presented sufficient evidence of actual competition. Although DOJ and Siemens do not specifically identify any competitors, the declarations make repeated reference to Siemens' competitors. See Kirsch Decl. ¶¶ 13, 15, 16, 21, 22, 24, 26, 28; Moberly Decl. ¶ 22. 100Reporters seems to acknowledge this relatively intuitive point when it refers to "a survey of Siemens' acknowledged competitors" and cites Siemens' annual investor report. 100Reporters Mem. at 23-24. Thus, the Court finds that Siemens faces actual competition, and the risk of potential competitive harm will be considered in the context of each category of withheld materials.
Third, 100Reporters argues that "Exemption 4 does not guard against mere embarrassment in the marketplace or reputational injury." 100Reporters Mem. at 27 (quoting Pub. Citizen I, 975 F.Supp.2d 81, 107 (D.D.C. 2013)). 100Reporters is correct. The D.C. Circuit has repeatedly made clear that embarrassment is not a legitimate grounds for withholding under Exemption 4. See, e.g., United Tech. Corp. v. Dep't of Defense, 601 F.3d 557, 564 (D.C. Cir. 2010)); CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1154 (D.C. Cir. 1987). But the Court does not believe that DOJ has relied on embarrassment as a basis for withholding information. Certainly, the Court will not rely on the risk of embarrassment to Siemens when considering the categories of materials withheld under Exemption 4.
With these principles in mind, the Court turns to the three categories of documents withheld pursuant to Exemption 4.
First, the Court considers the Monitor's annual reports and associated documents, including presentations summarizing the reports and communications related to the reports. The Court finds that this type of documents contains information that is likely to cause competitive harm to Siemens and is therefore "confidential."
The Monitor's annual reports and associated documents reveal extensive details about the inner workings of Siemens' business, including its compliance program. See Kirsch Decl. ¶ 17; Warin Decl. ¶ 25(c). The materials include the Monitor's assessment of and recommendations for various functional compliance areas, including:
Kirsch Decl. ¶ 18. The reports also detail materials that do not solely pertain to compliance policies. For instance, the reports also include "observations and assessment with respect to specific Siemens' projects and customers," "observations and assessments with respect to particular M & A transactions," and "particular Siemens business partners." Kirsch Decl. ¶¶ 20(c), (d), (f).
Siemens' declarant states that the release of these materials would harm Siemens by "provid[ing] competitors with a roadmap of Siemens' system and allow those competitors to make affirmative use of the program . . . without incurring the substantial investment cost that Siemens has incurred." Kirsch Decl. ¶ 21. The Court has previously determined that this sort of harm is cognizable under Exemption 4. See supra Part IV.A.2.a. Siemens has invested resources in creating its compliance plan, see Kirsch Decl. ¶ 8, and permitting competitors to take advantage of that plan through FOIA constitutes a competitive harm. See Worthington Compressors, Inc. v. Costle, 662 F.2d 45, 51 (D.C. Cir. 1981).
The release of this information would likely cause other competitive harms. For example, these materials contain a wide range of information on Siemens' finance structure, business partners, and customers. See Kirsch Decl. ¶¶ 18, 20. This information cuts to the core of Siemens' business, and there is little doubt a competitor could rely on this information to Siemens' detriment.
The descriptions of the information contained in the Monitor's annual report and associated materials are sufficiently detailed to show that these materials relate to Siemens' compliance program, as well as other essential business interests. Thus, the Court concludes that disclosure of the information would likely cause competitive harm to Siemens, and it is therefore "confidential" for the purposes of Exemption 4. See McDonnell Douglas Corp., 375 F.3d at 1187.
Second, the Court considers the Monitor's work plans and related presentations and documents. The Court finds that disclosure of information contained in this category of documents is likely to cause competitive harm to Siemens and is therefore "confidential."
These materials set forth the process that the Monitor planned each year in order to evaluate and improve Siemens' compliance programs. See Kirsch Decl. ¶ 22; Warin Decl. ¶ 25(a). In setting forth
These materials contain information that is likely to cause competitive harm for the same reasons as the Monitor's annual reports and associated materials. See supra Part IV.A.2.c. First, disclosing information in these documents would reveal details of Siemens' compliance plan, which is likely to cause competitive harm for the reasons set forth above. Second, these materials contain extensive information related to Siemens' operations, including, for example, detailed figures about orders and customers in different parts of the world. It is likely that a competitor would use this information to Siemens' detriment.
The description of the subject matter of this category of withheld documents is sufficiently specific to demonstrate that these materials pertain to business operations, including compliance programs, business partnerships, and order data. Thus, the Court concludes that the information contained in these records would likely cause competitive harm to Siemens if disclosed, and it is therefore "confidential" for the purposes of Exemption 4. See McDonnell Douglas Corp., 375 F.3d at 1187.
Third, the Court considers Siemens' internal compliance policies, training presentations, training modules, and other related materials. The Court finds that disclosure of information contained in this category of documents is likely to cause competitive harm to Siemens and is therefore "confidential."
These materials include internal training presentations for Siemens' employees covering the company's compliance programs and policies. See Kirsch Decl. ¶ 25. Among other things, the trainings discuss global anti-corruption laws, Siemens' due diligence practices, guidelines on gifts, and Siemens' contract approval process. See Kirsch Decl. ¶ 25. Aside from trainings, this category of documents includes "compliance policies and circulars." Kirsch Decl. ¶ 27. This subset of documents discuss "internal regulations governing Siemens' interactions with third parties, reporting of compliance violations, and corporate discipline." Kirsch Decl. ¶ 27.
Thus, the Court finds that DOJ, relying in part on the declarations provided by Siemens and the Monitor, has met the burden of showing that the release of information in each of the three categories of documents withheld pursuant to Exemption 4 is likely to cause competitive harm to Siemens. Because the information satisfies the second prong of the National Parks test, it is "confidential" for the purposes of Exemption 4.
DOJ has also withheld records in this case pursuant to FOIA Exemption 5. Exemption 5 permits the withholding of "inter-agency or intra-agency memorandums or letters that would not be available by law to a party other than an agency in litigation with the agency." 5 U.S.C. § 552(b)(5). This exemption protects documents "normally privileged in the civil discovery context," Judicial Watch, Inc. v. U.S. Dep't of Justice, 365 F.3d 1108, 1113 (D.C. Cir. 2004), such as materials shielded by the attorney-client privilege, the attorney work-product privilege and "what is sometimes called the `deliberative process' privilege," Dep't of the Interior v. Klamath Water Users Protective Ass'n, 532 U.S. 1, 8, 121 S.Ct. 1060, 149 L.Ed.2d 87 (2001). In other words, Exemption 5 covers "those documents, and only those documents, normally privileged in the civil discovery context." Loving v. U.S. Dep't of Defense, 550 F.3d 32, 37 (D.C. Cir. 2008) (citations omitted). The two Exemption 5 privileges at issue in this case are the deliberative process privilege and the attorney work-product privilege.
As a threshold issue, Exemption 5 only covers records that are "inter-agency or intra-agency memorandums or letters." 5 U.S.C. § 552(b)(5). In other words, the Supreme Court has stated that, for Exemption 5 to apply to a document, the "source [of the withheld document] must be a government agency." Klamath, 532 U.S. at 2, 121 S.Ct. 1060. But that rule is not absolute. Under what has become known as the "consultant corollary," FOIA Exemption 5 can protect certain communications between an agency and an outside consultant.
The D.C. Circuit has explained that "records of communications between an agency and outside consultants qualify as `intra-agency' for purposes of Exemption 5 if they have been `created for the purpose of aiding the agency's deliberative process.'" Pub. Citizen v. Dep't of Justice, 111 F.3d 168, 170 (D.C. Cir. 1997) (emphasis in original) (quoting Dow Jones & Co., Inc. v. Dep't of Justice, 917 F.2d 571, 575 (D.C. Cir. 1990)); see also Ryan v. Dep't of Justice, 617 F.2d 781, 789-90 (D.C. Cir. 1980) ("When an agency record is submitted by outside consultants as part of the deliberative process, and it was solicited by the agency, we find it entirely reasonable to deem the resulting document to be an `intra-agency' memorandum."). The D.C. Circuit has determined that it is "`irrelevant' whether the author of the documents is `a regular agency employee or a temporary consultant.'" Pub. Citizen v. Dep't of Justice, 111 F.3d at 170 (quoting Formaldehyde Inst. v. Dep't of Health and Human Servs., 889 F.2d 1118, 1122 (D.C. Cir. 1989)).
The Supreme Court addressed the consultant corollary in Department of Interior v. Klamath Water Users Protective Association, 532 U.S. 1, 121 S.Ct. 1060, 149 L.Ed.2d 87 (2001). In a unanimous opinion, the Court noted that several circuits have adopted the consultant corollary to Exemption 5.
With that typical case in mind, the Court determined that the consultant corollary did not apply to communications between the Bureau of Indian Affairs and certain Indian Tribes. The Court's reasoning turned on the fact that the Tribes communicated "with the Bureau [of Indian Affairs] with their own, albeit entirely legitimate, interests in mind."
Following Klamath, the D.C. Circuit has continued to recognize the consultant corollary. See Nat'l Inst. of Military Justice v. U.S. Dep't of Def., 512 F.3d 677, 682 (D.C. Cir. 2008) ("Given the Supreme Court's disclaimer and its reasoning, we perceive no basis to jettison our binding Circuit precedent."). Consistent with Klamath, the D.C. Circuit has focused on whether the purported consultants were advocating for their own interests. See Nat'l Inst. of Military Justice, 512 F.3d at 683 ("Unlike the Indian tribes in Klamath, the individuals DoD consulted had no individual interests to promote in their submissions."); McKinley v. Bd. of Governors of the Fed. Reserve Sys., 647 F.3d 331, 337-38 (D.C. Cir. 2011) ("Unlike the Indian tribes, the FRBNY `[did] not represent an interest of its own, or the interest of any other client, when it advise[d] the [Board].'" (alteration in original) (quoting Klamath, 532 U.S. at 11, 121 S.Ct. 1060)).
The relevant question here is whether the Monitor falls within the parameters of the consultant corollary, as defined by the D.C. Circuit and the Supreme Court. Although the Monitor is not a classic government contractor, the Court finds that the consultant corollary applies to materials the Monitor submitted to DOJ.
A DOJ attorney states that, in general, "[a] monitor's primary responsibility is to assess and monitor the company's compliance with the terms of the settlement agreement." DOJ Mot., Decl. of Tarek Helou ("Helou Decl.") ¶ 8, ECF No. 59-6. According to the same declarant, "the Justice
The agreements gave the Monitor broad powers to request information, assess Siemens' compliance program, and suggest reforms. See Statement of Offense, Attach. 2 ¶¶ 4, 6; see also Warin Decl. ¶ 16; Price Decl. ¶¶ 5-8. Ultimately, the terms of the monitorship required the Monitor to "certify whether the compliance programs of Siemens . . . is reasonably designed and implemented to detect and prevent violations within Siemens of the anti-corruption laws." Statement of Offense, Attach. 2 ¶ 6. Crucially, the plea and settlement agreement explicitly called for the Monitor to submit both written work plans and follow-up reports to the government annually. See Statement of Offense, Attach. 2 ¶ 3; Consent ¶ 5. The undisputed evidence shows that the Monitor submitted those materials to the agencies, as required. See Monitorship Notice ¶ 7; Warin Decl. ¶¶ 20-23; Lipton Decl. ¶ 5; Price Decl. ¶¶ 7-8. The Monitor provided additional information through in person meetings, and other informal communications. See Warin Decl. ¶ 25(b), (d), (e); Lipton Decl. ¶¶ 5-6.
In Klamath, the Court's consideration of the consultant corollary focused on one critical factor: "the consultant does not represent an interest of its own, or the interest of any other client." 532 U.S. at 11, 121 S.Ct. 1060. Instead, the consultant corollary may apply where a purported consultant's "only obligations are to truth and its sense of what good judgment calls for." Id. The undisputed evidence shows that the monitorship, imposed by agreements with relevant law enforcement agencies, gave the Monitor wide-ranging authority to evaluate Siemens' compliance with the terms of the settlement agreement and with international anti-corruption laws. The terms of the monitorship also explicitly required the Monitor to report to the government regarding Siemens' compliance. The Monitor was not representing his own interests or the interests of Siemens when communicating with the government. Instead, the plea and settlement agreement tasked the Monitor with the important job of exercising independent, fact-based judgment to evaluate Siemens' compliance and submit reports to the government detailing Siemens' compliance efforts.
100Reporters makes several arguments in opposition to this application of the consultant corollary, but none are ultimately persuasive. First, 100Reporters argues that DOJ and the Monitor do not "directly argue that the Monitor is an outside expert to whom the consultant corollary clearly applies," but instead only contend that the Monitor is "akin to" a consultant
While these arguments highlight ways in which the Monitor is different from a typical government consultant, they do not address the core question, which is whether the Monitor represented the interests of himself or Siemens, or instead, exercised independent judgment. The D.C. Circuit has explained that "federal agencies occasionally will encounter problems outside their ken, and it clearly is preferable that they enlist the help of outside experts skilled at unravelling their knotty complexities.'" Nat'l Inst. of Military Justice, 512 F.3d at 683 (quoting Formaldehyde Inst. v. Dep't of Health and Human Servs., 889 F.2d 1118, 1122 (D.C. Cir. 1989)). In those situations, the information provided is "no less valuable or confidential for the lack of compensation or formal contract." Id. at 684. In fact, the court made clear that "what matters is the nature of the relationship between the consultant and the agency, not the formalities observed." Id. at 687. In other words, the formal arrangements, including payment and the structure of the agreement to provide information, are not dispositive.
Following Klamath, the D.C. Circuit has repeatedly approved of the application of the consultant corollary where the party providing information to the agency was not advocating for itself or a client. See Nat'l Inst. of Military Justice, 512 F.3d at 683; McKinley, 647 F.3d at 337-38. Because the Monitor was exercising independent judgment, not advocating on its behalf or on behalf of Siemens, the Court finds that the consultant corollary applies and the Monitor's documents are intra-agency documents within the meaning of Exemption 5.
DOJ has withheld documents pursuant to the deliberative process privilege incorporated in Exemption 5. The deliberative process privilege "covers `documents reflecting advisory opinions, recommendations, and deliberations comprising part of a process by which governmental decisions and policies are formulated.'" Klamath, 532 U.S. at 8, 121 S.Ct. 1060 (quoting NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 150, 95 S.Ct. 1504, 44 L.Ed.2d 29 (1975)). The privilege is intended "to enhance the quality of agency decisions by protecting open and frank discussion among those who make them within the Government." Id. at 9, 121 S.Ct. 1060 (internal citation and quotation marks omitted). The privilege "rests on the obvious realization that officials will not communicate candidly among themselves if each remark is a potential item of discovery and front page news." Id. at 8-9, 121 S.Ct. 1060; see also Dow Jones & Co. v. U.S. Dep't of Justice, 917 F.2d 571, 573-74 (D.C. Cir. 1990).
For the deliberative process privilege to apply, a court must first determine whether the withheld materials are both "predecisional" and "deliberative." Access Reports v. Dep't of Justice, 926 F.2d 1192, 1194 (D.C. Cir. 1991) (internal quotation marks omitted). Materials are "predecisional" if they are "generated before the adoption of an agency policy." McKinley v. FDIC, 744 F.Supp.2d 128, 138 (D.D.C. 2010) (quoting Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 866 (D.C. Cir. 1980)). Materials are "deliberative" if they reflect "the give-and-take of the consultative process," id. (quoting Coastal States, 617 F.2d at 866), "by which the decision itself is made," Jowett, Inc. v. Dep't of the Navy, 729 F.Supp. 871, 875 (D.D.C. 1989) (quoting Vaughn v. Rosen, 523 F.2d 1136, 1144 (D.C. Cir. 1975)). The "key question" in determining whether the material is deliberative in nature "is whether disclosure of the information would `discourage candid discussion within the agency.'" Access Reports, 926 F.2d at 1195 (quoting Dudman Commc'ns Corp. v. U.S. Dep't of the Air Force, 815 F.2d 1565, 1567-68 (D.C. Cir. 1987)). Furthermore, an agency withholding information, "must establish `what deliberative process is involved, and the role played by the documents in issue in the course of that process.'" Senate of P.R. v. U.S. Dep't of Justice, 823 F.2d 574, 585-86 (D.C. Cir. 1987) (quoting Coastal States, 617 F.2d at 868).
Ms. Moberly states that DOJ has withheld the following information pursuant to Exemption 5 and the deliberative process privilege:
Moberly Decl. ¶ 24.
The Court first considers which deliberative process, if any, is linked to the withheld documents. 100Reporters argues that DOJ has not only failed to identify any deliberative process, but also failed to "tie the records to the purported decision-making at issue." See 100Reporters Mem. at 29-30. 100Reporters contends that the declarations presented by DOJ are too vague, and do not provide specific claims regarding the deliberative process at issue in this case. 100Reporters Mem. at 30.
The Court is persuaded by 100Reporters' argument that DOJ has not sufficiently identified the deliberative process or processes at issue. "[T]o approve exemption of a document as predecisional, a court must be able `to pinpoint an agency decision or policy to which the document contributed.'" Senate of P.R. v. U.S. Dep't of Justice, 823 F.2d 574, 585 (D.C. Cir. 1987) (quoting Paisley v. CIA, 712 F.2d 686, 698 (D.C. Cir. 1983)). To be sure, the Supreme Court has explained that "the need to protect pre-decisional documents does not mean that the existence of the privilege turns on the ability of an agency to identify a specific decision in connection with which a memorandum is prepared." Sears, 421 U.S. at 151 n.18, 95 S.Ct. 1504. The Court recognized that some deliberate processes would not ripen into agency decisions, and did not want to interfere with that process. See id. However, an agency must establish at least what deliberative process is involved and the role that withheld documents played in that process. See Formaldehyde Inst. v. U.S. Dep't of Health & Human Servs., 889 F.2d 1118, 1123 (D.C. Cir. 1989). Furthermore, an agency must show that the document was "generated as part of a definable decision-making process." Gold Anti-Trust Action Comm., Inc. v. Bd. of Governors of the Fed. Reserve Sys., 762 F.Supp.2d 123, 135-36 (D.D.C. 2011) (emphasis added) (citing Petroleum Info. Corp. v. U.S. Dep't of the
DOJ and the Monitor present evidence that purportedly shows that the withheld materials were created over the four years of the monitorship, and the law enforcement agencies relied on them when making decisions regarding Siemens' compliance with the plea and settlement agreement and with anti-corruption laws generally. See Warin Decl. ¶¶ 11-12, 24; Lipton Decl. ¶¶ 5, 7, 9-10; Price Decl. ¶¶ 9-10. For example, Mr. Lipton stated that the documents "helped DOJ determine whether the Monitor was fulfilling his mandate to ensure that Siemens carried out its responsibilities under the plea agreement." Lipton Decl. ¶ 5. The SEC also purportedly relied on communications with the Monitor "to determine whether Siemens was complying with its obligations under the Final Judgment, including whether Siemens' compliance program was reasonably designed and implemented to detect and prevent violations of the anti-corruption laws, and that further monitoring and review pursuant to the Final Judgment were no longer warranted." Price Decl. ¶ 9. Each Amended Vaughn Index entry that invokes the deliberative process privilege includes the same boilerplate language. Among other things, each entry states:
See, e.g., DOJ_0005222, Am. Vaughn Index at 4.
The Court finds that this evidence is insufficient to define with the necessary specificity "what deliberative process is involved." Coastal States, 617 F.2d at 868. In brief, DOJ's position is that "[t]he Monitor prepared the documents and presentations that he gave to the DOJ for the purpose of helping the DOJ deliberate on whether Siemens had satisfied its obligations under the Plea Agreement." DOJ Mem. at 16. That view of the deliberative process at issue is overbroad.
The agency bears the burden of identifying the deliberative process at issue. See Coastal States, 617 F.2d at 868. This step is critical because a court can only analyze whether a record is both predecisional and deliberative in relation to the relevant deliberative process. In other words, the timing of a record in relation to the adoption of agency policy is a crucial factor. See Judicial Watch, Inc. v. FDA, 449 F.3d 141, 151 (D.C. Cir. 2006) ("We deem a document predecisional if `it was generated before the adoption of an agency policy.'" (quoting Coastal States, 617 F.2d at 866)); Nat'l Right to Work Legal Def. & Educ. Found., Inc. v. U.S. Dep't of Labor, 828 F.Supp.2d 183, 189 (D.D.C. 2011) ("The timing of a record is important in the analysis; communications made after a decision has been made and designed to explain that decision are not privileged under Exemption 5."). Similarly, materials are "deliberative" if they reflect "the give-and-take of the consultative process," McKinley, 744 F.Supp.2d at 138 (quoting Coastal States, 617 F.2d at 866), "by which the decision itself is made," Jowett, Inc., 729 F.Supp. at 875 (quoting Vaughn, 523 F.2d at 1144).
For example, instead of being part of a broader process by which DOJ reached the decision to certify that Siemens complied with the terms of the plea and settlement agreement, each of the work plans appears to implicate a separate sub-decision—with a distinct deliberative process—about what work the Monitor should undertake for the relevant year of the monitorship.
The Court also notes that DOJ has withheld "Siemens compliance policies" and "[t]raining materials for Siemens employees" pursuant to the deliberative process privilege. Moberly Decl. ¶ 24. The privilege is intended "to enhance the quality of agency decisions by protecting open and frank discussion among those who make them within the Government." Dep't of the Interior v. Klamath Water Users Protective Ass'n, 532 U.S. 1, 9, 121 S.Ct. 1060, 149 L.Ed.2d 87 (2001) (internal citation and quotation marks omitted). Although the Court does not doubt that DOJ reviewed Siemens' compliance policies and training materials, it seems unlikely that disclosure would harm the quality of agency decisions because those documents exist independently of the Monitor's work and were not created for the purpose of agency decisionmaking. In other words, the mere consideration of a document does not bring it within the privilege if it does not "reflect[] the give-and-take of the consultative process." Coastal States, 617 F.2d at 866. Without greater clarity on what deliberative process is at stake, the Court cannot determine whether a particular record reflects that process.
Federal courts have the authority to order agencies to produce any records that have been withheld improperly. See 5 U.S.C. § 552(a)(4)(B); see also Vaughn v. Rosen, 484 F.2d 820, 824 (D.C. Cir. 1973) ("If the factual nature of the documents were so clearly established on the record, then the court would inquire no further and would make the legal ruling as to whether they fit within the defined exemption or exemptions."). But, if a court finds that an "agency fails to provide a sufficiently detailed explanation to enable the district court to make a de novo determination of the agency's claims of exemption, the district court ... has several options, including inspecting the documents in camera, requesting further affidavits, or allowing the plaintiff discovery." Spirko v. U.S. Postal Serv., 147 F.3d 992, 997 (D.C. Cir. 1998). At this time, the Court will permit DOJ and Defendant-Intervenors another opportunity to present further affidavits, if the parties intend to continue to rely on the deliberative process privilege. Thus, 100Reporters' cross-motion for summary judgment will also be denied on this issue, pending possible supplementation by DOJ and Defendant-Intervenors.
Although the Court does not dictate the form of any supplemental affidavits or Vaughn indices, DOJ must show, at the least: "(1) the nature of the specific deliberative process involved" (including whether that process resulted in a decision independent of, although related to, the ultimate compliance decision), "(2) the function and significance of the document in that process, and (3) the nature of the decisionmaking authority vested in the document's author and recipient."
Although the Court finds that the withholdings pursuant to the deliberative process privilege have not been justified at this time, the Court will turn to a related issue disputed by the parties. 100Reporters also argues that "circumstances [of the monitorship] would operate as a waiver of the deliberative process privilege as to documents originating or shared with the Monitor." 100Reporters Mem. at 35. 100Reporters argues that, to the extent the Monitor was a consultant to the government, sharing records with Siemens would waive any privilege. See 100Reporters Mem. at 35. This argument is misplaced.
In this case, the Monitor's disclosures to Siemens were clearly necessary. The monitorship imposed by the plea and settlement agreement called for the Monitor to carefully analyze Siemens' business practices and provide recommendations for improvements. See Statement of Offense, Attach. 2 ¶¶ 3-4. That process would have been impossible if the Monitor could not communicate with Siemens. Furthermore, the terms of the monitorship expressly permitted Siemens, which presumably knows its business better than anyone, to comment on and object to the Monitor's recommendations, ensuring meaningful participation by Siemens, which, in turn, allowed the Monitor to make more informed decisions. See Statement of Offense, Attach. 2 ¶ 5. Thus, the Court finds that communications between the Monitor and Siemens were necessary to best effectuate the plea and settlement agreement and the monitorship.
Second, the Monitor's disclosures to Siemens were also clearly involuntary. A court will only find a waiver of the deliberative process privilege where the disclosure was voluntary. Mobil Oil Corp. v. EPA, 879 F.2d 698, 700-01 (9th Cir. 1989); Elec. Frontier Found., 890 F.Supp.2d at 46. In Florida House of Representatives, the Eleventh Circuit determined that a release was not voluntary when required by a court order. See 961 F.2d at 946. Here, the plea and settlement agreement, which were approved by the court, required the Monitor to submit his work plans and reports to Siemens. See Statement of Offense, Attach. 2 ¶ 3; Consent ¶ 5. Therefore, the Court finds that the disclosure was involuntary. Because the disclosure of information from the Monitor to Siemens was involuntary under the relevant court orders and was necessary for the purposes of the plea and settlement agreement and the monitorship, the Court concludes that the disclosures did not waive the deliberative process privilege.
Finally, the Court will consider the withholdings made pursuant to the attorney work-product doctrine. Documents "prepared in anticipation of litigation" are typically not discoverable in civil litigation and are therefore exempt from disclosure under FOIA Exemption 5. See Shapiro v. U.S. Dep't of Justice, 969 F.Supp.2d 18, 27 (D.D.C. 2013) (quoting Fed. R. Civ. P. 26(b)(3)(A)). The attorney work-product doctrine protects "the mental impressions, conclusions, opinions, or legal theories of an attorney," as well as "factual materials prepared in anticipation of litigation." Tax Analysts v. IRS, 117 F.3d 607, 620 (D.C. Cir. 1997) (quotation marks omitted). This rule is rooted in the principle that "it is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel." Hickman v. Taylor, 329 U.S. 495, 510, 67 S.Ct. 385, 91 S.Ct. 451 (1947).
The D.C. Circuit has explained that the proper test considers "whether, in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation." FTC v. Boehringer Ingelheim Pharms. Inc., 778 F.3d 142, 149 (D.C. Cir. 2015) (emphasis added) (quoting United States v. Deloitte LLP, 610 F.3d 129, 137 (D.C. Cir. 2010)). The agency must establish that the records were created with a "subjective belief that litigation was a real possibility, and that belief must have been objectively reasonable." In re Sealed Case, 146 F.3d 881, 884 (D.C. Cir. 1998). Under this test, the agency must establish the following factors to justify its withholding: "(1) provide a description of the nature of and contents of the withheld document, (2) identify the document's author or origin, (3) note the circumstances that surround the document's creation, and (4) provide some indication of the type of litigation for which the document's use is at least foreseeable." Ellis v. U.S. Dep't of Justice, 110 F.Supp.3d 99, 108 (D.D.C. 2015), aff'd, No. 15-5198, 2016 WL 3544816 (D.C. Cir. June 13, 2016).
In this case, DOJ states that it has withheld three categories of documents under the attorney work-product privilege. First, DOJ states that is has withheld "emails between DOJ attorneys that related to the monitorship." DOJ Mem. at 20. Second, DOJ has withheld "draft versions of notices to the Court about the corporate monitorship and proposed order." DOJ Mem. at 20. Third, DOJ has withheld "email messages between DOJ attorneys and SEC attorneys." DOJ Mem. at 20. In its reply, DOJ notes that 100Reporters did not address DOJ's invocation of the attorney work-product privilege, and argues that 100Reporters, "therefore, concedes the arguments." DOJ Reply at 10 n.3.
In fact, 100Reporters does not address the attorney work-product privilege in either of its briefs. See generally 100Reporters Mem.; 100Reporters Reply. Nevertheless, even if the nonmovant does not respond to a motion for summary judgment, the court cannot grant the motion for the reason that it was conceded. See Winston & Strawn, LLP v. McLean, 843 F.3d 503, 505 (D.C. Cir. 2016) ("Under the Federal Rules of Civil Procedure, a motion for summary judgment cannot be `conceded' for want of opposition. `The burden is always on the movant to demonstrate why summary judgment is warranted.'"
Based on DOJ's Amended Vaughn Index and the declaration of Ms. Moberly, the Court finds that DOJ properly withheld these records pursuant to the attorney work-product privilege. First, DOJ has provided "a description of the nature of and contents of the withheld document[s]." Ellis, 110 F.Supp.3d at 108. Ms. Moberly sets forth generally that the withheld records "reflect[] communications and exchange of work-product among DOJ attorneys (and sometimes also SEC attorneys) assigned to the Siemens monitorship concerning various aspects of the monitorship, including the Monitor's work plans and annual reports and the length of the monitorship, and a draft of DOJ's notice concerning Siemens' compliance with its plea agreement." Moberly Decl. ¶ 29. Furthermore, each entry of the Amended Vaughn Index includes a description of the document that, while brief in some cases, provides a sufficiently detailed description of its contents. See, e.g., DOJ_0005225, Am. Vaughn Index at 6 ("A draft of a letter to Dr. Theo Waigel and F. Joseph Warin designed to provide feedback on the Monitor's proposed work plan."); DOJ_005288, Am. Vaughn Index at 108 ("An email message to a DOJ trial attorney concerning the timing of the termination of the monitorship.").
Second, DOJ has sufficiently "identif[ied] the document's author or origin." Ellis, 110 F.Supp.3d at 108. Ms. Moberly states that "[e]ach of the documents was prepared by an attorney who was acting at the behest of a client (the U.S. Government)." Moberly Decl. ¶ 29. Each entry of the Amended Vaughn Index also specifies the author or authors (sometimes anonymously) of the relevant document. See, e.g., DOJ_0005288, Am. Vaughn Index at 111 ("Author(s): a DOJ trial attorney"); DOJ_0005291, Am. Vaughn Index at 120 ("Author: an SEC attorney").
Third, DOJ has sufficiently "note[d] the circumstances that surround the document's creation." Ellis, 110 F.Supp.3d at 108. Ms. Moberly explains that each of the withheld documents was created in connection with the Siemens monitorship. See Moberly Decl. ¶ 29. The Amended Vaughn Index provides additional information for each document, which permits the Court to evaluate the circumstances surrounding the creation of each document, including the document's title, author, subject matter, and, where relevant, the recipient and date or time of a communication. See, e.g., DOJ_005235, Am. Vaughn Index at 14 ("A letter [from a DOJ trial attorney] to Dr. Theo Waigel and F. Joseph Warin acknowledging receipt of the Monitor's year one work plan and providing feedback on that document. The letter discusses issues raised during the parties' April 1, 2009 meeting, including Monitor independence, Monitor recommendations to Siemens, the Monitor's engagement of a consultant, and forensic analysis of the company. The letter also contains DOJ's views on the role that Siemens' internal audit group will play in the monitorship. The letter indicates that a copy was sent to a DOJ trial attorney.");
Fourth and finally, DOJ has sufficiently "provide[d] some indication of the type of litigation for which the document's use is at least foreseeable." Ellis, 110 F.Supp.3d at 108. Here, every document related to "the prospect of continuing litigation concerning Siemens' compliance with the plea agreement, the duration of the monitorship, etc." Moberly Decl. ¶ 29. Each entry of the Amended Vaughn Index that invoked the attorney work-product privilege indicated that the "document was prepared by an attorney ... in anticipation of litigation or in connection with actual litigation, i.e., United States v. Siemens Aktiengesellschaft, 08-cr-367-RJL (D.D.C.) and the implementation of the plea agreement therein." See, e.g., DOJ_005225, Am. Vaughn Index at 7.
These documents are classic attorney work-product, and disclosure would risk putting the thoughts and strategies of agency counsel on public display. See Hickman, 329 U.S. at 510, 67 S.Ct. 385; Ellis, 110 F.Supp.3d at 108. The records include analysis, recommendations, and strategic considerations created in connection with the underlying criminal cases. And, despite the fact that the documents were created after the entry of Siemens' plea and settlement, the materials are sufficiently prospective because they relate to the government's decision to accept the termination of the monitorship or to potentially raise other issues in the enforcement action. There is no doubt that the materials were created "because of the prospect of litigation." Boehringer Ingelheim Pharms., 778 F.3d at 149 (quoting Deloitte, 610 F.3d at 137). The Court finds that DOJ has shown that the attorney work-product privilege applies to the withheld materials. Therefore, the Court grants summary judgment to DOJ with respect to its Exemption 5 withholdings under this privilege.
Exemption 6 protects "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." 5 U.S.C. § 552(b)(6). Exemption 7(C) excludes "records or information compiled for law enforcement purposes ... to the extent that the production of such law enforcement records or information ... could reasonably be expected to constitute an unwarranted invasion of personal privacy." Id. § 552(b)(7)(C). Both exemptions require agencies and reviewing courts to "balance the privacy interests that would be compromised by disclosure against the public interest in the release of the requested information." Beck v. Dep't of Justice, 997 F.2d 1489, 1491 (D.C. Cir. 1993) (quoting Davis v. Dep't of Justice, 968 F.2d 1276, 1281 (D.C. Cir. 1992)).
Although the balancing test is applied to both Exemption 6 and 7(C), "`Exemption
Accordingly, if the documents withheld and information redacted were "compiled for law enforcement purposes," the Court need engage only in an analysis of whether the defendant properly redacted information and withheld documents pursuant to Exemption 7(C). See People for the Ethical Treatment of Animals v. Nat'l Insts. of Health, 745 F.3d 535, 541 (D.C. Cir. 2014) (confining its FOIA analysis to Exemption 7(C) because its "privacy language is broader than the comparable language in Exemption 6" (quoting Reporters Comm., 489 U.S. at 756, 109 S.Ct. 1468)); Roth v. U.S. Dep't of Justice, 642 F.3d 1161, 1173 (D.C. Cir. 2011) (finding "no need to consider Exemption 6 separately [where] all information that would fall within the scope of Exemption 6 would also be immune from disclosure under Exemption 7(C)"); Rodriguez v. U.S. Dep't of the Army, 31 F.Supp.3d 218, 231 (D.D.C. 2014). Therefore, as an initial matter, the Court must determine whether Exemption 7 applies to the withholdings in this case.
"In order to withhold documents under Exemption 7, the agency must, as a preliminary matter" make a "threshold" showing demonstrating "that the records were compiled for a law enforcement purpose." Kay v. FCC, 976 F.Supp. 23, 37 (D.D.C. 1997). Agencies classified as law enforcement agencies, like the DOJ in this case, receive deference to their assertion that documents were compiled for a law enforcement purpose. See Pratt v. Webster, 673 F.2d 408, 418 (D.C. Cir. 1982) (rooting deference in "the generally accurate assumption that federal agencies act within their legislated purposes"). A court's review of this threshold question is "necessarily deferential," but the review is "not vacuous." Id. at 421.
To be sure, not every document compiled by a law enforcement agency is compiled for a law enforcement purpose. See, e.g., Am. Immigration Council v. U.S. Dep't of Homeland Sec., 950 F.Supp.2d 221, 245-46 (D.D.C. 2013) (relying on Pratt to reject ICE's argument that all of its records are compiled for a law enforcement purpose); Benavides v. Bureau of Prisons, 774 F.Supp.2d 141, 146-47 (D.D.C. 2011) (relying on Pratt to reject a
In 1986, Congress amended Exemption 7 to broaden the reach of the threshold requirement from "investigatory records compiled for law enforcement purposes," 5 U.S.C. § 552(b)(7) (1982) (emphasis added), to simply "records or information compiled for law enforcement purposes," Anti-Drug Abuse Act of 1986, § 1802(a), Pub. L. No. 99-570, 100 Stat. 3207, 3207-48 (1986); see also Tax Analysts v. IRS, 294 F.3d 71, 79 (D.C. Cir. 2002). The D.C. Circuit has made clear that, after the amendments, the Pratt test applies only "when an agency seeks to invoke Exemption 7 in a situation in which there is an ongoing law enforcement `investigation,'" but in that context, it "is still good law." Tax Analysts, 294 F.3d at 77-78. If there is no ongoing investigation, materials may still meet the threshold requirement of Exemption 7 if they are akin to "guidelines, techniques, and procedures for law enforcement investigations and prosecutions outside of the context of a specific investigation." Id. at 78.
100Reporters argues that "[t]he Monitor's review of Siemens' compliance was not a criminal investigation." 100Reporters Mem. at 47. Instead, 100Reporters contends that the investigation into Siemens closed at the time the company signed the plea agreement and civil settlement. See 100Reporters Mem. at 47. 100Reporters also points to DOJ's declarant who states that DOJ "could not conduct the kind of reviews that monitors conduct because [DOJ's] limited resources are focused on investigating and prosecuting violations of the FCPA."
DOJ's response to 100Reporters on this point is brief. DOJ argues that the records at issue were compiled "pursuant to a plea agreement in a criminal case." DOJ Reply at 26-27. DOJ also contends that the criminal "case did not conclude[] with the entry of the plea agreement, but rather remained open during the duration of the monitorship, as the plea agreement imposed continuing duties on Siemens." DOJ Reply at 26. DOJ also points to a line of
Neither party has presented any authority directly analogous to the facts of this case. Instead, the Court turns to the general principles set forth by the D.C. Circuit. First, as a law enforcement agency, DOJ's assertion that these documents were compiled for a law enforcement purpose warrants deference. See Pratt, 673 F.2d at 418. Where the purported law enforcement purpose is an investigation, the agency must "establish "(1) `a rational nexus between the investigation and one of the agency's law enforcement duties;' and (2) `a connection between an individual or incident and a possible security risk or violation of federal law.'" Ctr. for Nat'l Sec. Studies, 331 F.3d at 926. Here, there is no doubt that DOJ has a duty to enforce the FCPA and Siemens committed an actual violation of federal law. The more difficult question is whether documents compiled after the entry of a guilty plea constitute a part of the investigation. Neither party has presented authority that specifically addresses this issue. The Court finds that the post-plea compilation in this case is part of an ongoing investigation, because DOJ had an ongoing responsibility to enforce the terms of the plea agreement and could bring additional enforcement action if Siemens failed to comply.
Even if the records were not compiled as part of an investigation, the Court would still find that they were compiled for a law enforcement purpose. As the Court explained above, Congress amended Exemption 7 to broaden the reach of the threshold requirement from "investigatory records compiled for law enforcement purposes," 5 U.S.C. § 552(b)(7) (1982) (emphasis added), to simply "records or information compiled for law enforcement purposes," Anti-Drug Abuse Act of 1986, § 1802(a), Pub. L. No. 99-570, 100 Stat. 3207, 3207 (1986). In light of that change, the D.C. Circuit has applied Exemption 7 to "guidelines, techniques, and procedures for law enforcement investigations and prosecutions outside of the context of a specific investigation." Tax Analysts, 294 F.3d at 78. Here, compilation of the records at issue was necessary to DOJ and the SEC's ongoing enforcement against Siemens, which did not conclude until after the end of the monitorship. See generally Monitorship Notice.
For these reasons, and the deference owed to DOJ in this context, see Pratt, 673 F.2d at 418, the Court finds that the records compiled during the monitorship were compiled for a law enforcement purpose. Thus, the Court concludes that DOJ may rely on Exemption 7 in order to withhold information.
Under Exemption 7(C), a court first determines if there is a privacy interest
Courts have "long recognized" that a "mention of an individual's name in a law enforcement file will engender comment and speculation and carries a stigmatizing connotation." Roth v. U.S. Dep't of Justice, 642 F.3d 1161, 1174 (D.C. Cir. 2011) (quoting Schrecker v. U.S. Dep't of Justice, 349 F.3d 657, 666 (D.C. Cir. 2003)). For those reasons, substantial privacy interests are implicated under exemption 7(C) for targets of law enforcement investigations, potential defendants, witnesses, informants, and investigators. See SafeCard Servs. v. SEC, 926 F.2d 1197, 1205 (D.C. Cir. 1991). In fact, the D.C. Circuit has adopted "a categorical rule permitting an agency to withhold information identifying private citizens mentioned in law enforcement records, unless disclosure is `necessary in order to confirm or refute compelling evidence that the agency is engaged in illegal activity.'" Schrecker, 349 F.3d at 661 (quoting SafeCard Servs., 926 F.2d at 1206).
Here, DOJ has withheld "private personal information" in a range of different documents. See Moberly Decl. ¶¶ 30, 34. According to DOJ, the withheld materials include information pertaining to both law enforcement personnel and Siemens employees. See DOJ Reply at 28. DOJ explains that the withheld material includes "personal identifying information" pertaining to (1) government employees found in emails involving DOJ and SEC attorneys, (2) private individuals and government employees found in correspondence between the Siemens Board and government attorneys, (3) individuals who developed Siemens' compliance programs and training materials, and (4) various individuals identified in draft court filings. See DOJ Mem. at 35. In each instance, DOJ has withheld identical material under both Exemption 6 and Exemption 7(C). See Moberly Decl. ¶¶ 30, 34; see generally Am. Vaughn Index.
In identifying the private interests at stake, DOJ's declarant states generally that "[p]ublic identification of the DOJ and SEC personnel involved in the Siemens monitorship could subject them to harassment both in the conduct of their official duties and their private lives." Moberly Decl. ¶ 32. Ms. Moberly also states that "individuals—whether targets, suspects, or witnesses—have a strong interest in not being unfairly associated publicly with alleged criminal activity," and that "[t]he mention of a private individual's name in a law enforcement file engenders comment and speculation and could produce an unfair stigma which could expose the individual to harassment or criticism." Moberly Decl. ¶ 32. Each entry of the Amended Vaughn Index that invokes Exemption 6 and 7(C) includes identical language that states:
DOJ_0005217, Am. Vaughn Index at 1.
As 100Reporters notes, the evidence presented in support of this assertion is relatively sparse, and DOJ does little to differentiate the privacy interests of different individuals, or even different groups, such as Siemens employees and government personnel. See 100Reporters Mem. at 42. DOJ responds that it has "adequately articulated the separate interest of government personnel and Siemens employees in avoiding unwarranted invasions of their personal privacy." DOJ Reply at 28 n.12 (citing Moberly Decl. ¶¶ 32, 35). In fact, the relevant declaration merely states that identification of government personnel "could subject them to harassment both in the conduct of their official duties and their private lives," while identifying private individuals "engenders comment and speculation and could produce an unfair stigma which would expose the individual to harassment or criticism." Moberly Decl. ¶ 32. These interests are substantially similar, and DOJ has made little effort, in its Amended Vaughn Index or its declarations, to differentiate the privacy concerns at stake. DOJ's failure to justify this categorical approach is fatal to its withholdings.
The D.C. Circuit has explained that categorical withholdings may be permitted where "the FOIA litigation process threatens to reveal `the very information the agency hopes to protect.'" Citizens for Responsibility & Ethics in Wash. v. U.S. Dep't of Justice, 746 F.3d 1082, 1088 (D.C. Cir. 2014) (quoting ACLU v. CIA, 710 F.3d 422, 432 (D.C. Cir. 2013)). In Prison Legal News v. Samuels, the Bureau of Prisons ("BOP") took a categorical approach to Exemption 6 withholdings, but the D.C. Circuit determined that BOP provided insufficient explanation of the disparate privacy rights involved.
In that case, the plaintiff sought records of settlements paid by BOP, and BOP discussed the privacy interests implicated by different types of claims together, even though "the privacy interest of tort claimants will be different when they are claiming injury from a slip and fall as compared to a sexual assault." Id. at 1150. The BOP also grouped together all involved individuals, "fail[ing] to distinguish between redacting the identity of the alleged victim and the alleged perpetrator." Id. at 1150. Although the D.C. Circuit explained that categorical withholdings might be appropriate for individuals sharing similar privacy interests, such as "medical professionals
DOJ has done even less to distinguish the privacy interests at stake here. First, it may well be true that the identities of low-level Siemens employees should be withheld. To be sure, the D.C. Circuit has adopted "a categorical rule permitting an agency to withhold information identifying private citizens mentioned in law enforcement records, unless disclosure is `necessary in order to confirm or refute compelling evidence that the agency is engaged in illegal activity.'" Schrecker, 349 F.3d at 661-62 (quoting SafeCard Servs., 926 F.2d at 1206). And 100Reporters has not asserted any evidence, much less compelling evidence, that the agency is engaged in illegal activity. But DOJ has not differentiated the interests of these individuals from others (e.g., innocent third-party employees versus employees who committed illegal acts). Nor has DOJ articulated any subgroups of Siemens employees, and how their interests might differ.
Second, DOJ has not differentiated the interests of regular Siemens employees and Board Members. DOJ has withheld personal information found in correspondence between the Siemens Board and government attorneys. The Court notes that all members of both Siemens' Managing Board and Supervisory Board are listed on Siemens' website. See Siemens, Siemens Management, https://www.siemens. com/global/en/home/company/about/management.html (last visited Mar. 31, 2017). DOJ has not differentiated the privacy interests of members of the Siemens Board, who have different privacy interests based on their public, high-level positions.
Third, DOJ has not differentiated the privacy interests of government employees, including DOJ and SEC attorneys. This category of individuals appears to include a subcategory of attorneys who have entered appearances on the public docket on behalf of the government. Although public officials "do not surrender all rights to personal privacy when they accept a public appointment," courts have recognized that they "may have a somewhat diminished privacy interest." Citizens for Responsibility & Ethics in Washington v. U.S. Dep't of Justice, 746 F.3d 1082, 1092 (D.C. Cir. 2014) (quoting Quinon v. FBI, 86 F.3d 1222, 1230 (D.C. Cir. 1996). An Exemption 7(C) analysis may also take into account "the rank of the public official involved." Kimberlin v. Dep't of Justice, 139 F.3d 944, 949 (D.C. Cir. 1998). Courts have acknowledged that the "reason for generally protecting names in law enforcement records is the risk of harassment, embarrassment, and reputational damage," but explained that those risks are not applicable in the context of every government employee. See Kleinert v. Bureau of Land Mgmt., 132 F.Supp.3d 79, 93 (D.D.C. 2015). DOJ has not done enough to differentiate the interests of the various government employees in the context of this case. Nor has DOJ made clear how the interests of employees, particularly those who have publicly appeared on the record, differ from one another.
Finally, DOJ has stated that it "redacted certain personal identifying information from documents transmitted by the Monitor to attorneys at the DOJ and SEC." DOJ Mem. at 37. In support of that statement,
DOJ's failure to establish the different privacy interests at stake makes it impossible for the Court to balance the private interests with the public's interest in knowing "what their government is up to." Reporters Comm., 489 U.S. at 773, 109 S.Ct. 1468. Therefore, the Court must deny summary judgment with regard to DOJ's withholdings. If DOJ and Defendant-Intervenors intend to continue to rely on Exemption 7(C), they will have another opportunity to present further affidavits justifying the withholdings. Although DOJ is not necessarily prohibited from relying on categorical arguments, it should, at the least, "make a more particularized showing for defined subgroups." See Am. Immigration Lawyers Ass'n, 830 F.3d at 676; see also Prison Legal News, 787 F.3d at 1151-52. At this time, 100Reporters' cross-motion for summary judgment will also be denied on this issue.
The final issue that the Court must address is segregability. FOIA requires that "[a]ny reasonably segregable portion of a record ... be provided to any person requesting such record after deletion of the portions which are exempt." 5 U.S.C. § 552(b). Under FOIA, "non-exempt portions of a document must be disclosed unless they are inextricably intertwined with exempt portions." Mead Data Cent., Inc. v. U.S. Dep't of the Air Force, 566 F.2d 242, 260 (D.C. Cir. 1977). An agency is not, however, required to segregate non-exempt material if "the excision of exempt information would impose significant costs on the agency and produce an edited document with little informational value." Neufeld v. IRS, 646 F.2d 661, 666 (D.C. Cir. 1981), overruled on other grounds by Church of Scientology of Cal. v. IRS, 792 F.2d 153 (D.C. Cir. 1986) (en banc). The agency is "entitled to a presumption that [it] complied with the obligation to disclose reasonably segregable material," Hodge v. FBI, 703 F.3d 575, 582 (D.C. Cir. 2013) (alteration in original), but that does not excuse the agency from carrying its evidentiary burden to fully explain its decisions on segregability, see Army Times Pub. Co. v. U.S. Dep't of the Air Force, 998 F.2d 1067, 1068 (D.C. Cir. 1993).
Here, DOJ argues that it is impossible to further segregate and release purely factual material from withheld documents without disclosing information that is protected by FOIA exemptions. See DOJ Mem. at 38-40. DOJ relies on Ms. Moberly's declaration, which states that she has "reviewed each page of the material deemed responsive ... to determine whether there was any non-exempt information that could be reasonably segregated and released." Moberly Decl. ¶ 37. Ms. Moberly states that "some factual information" is being withheld under the deliberative process privilege because it is "inextricably intertwined with core deliberative material" and, "[m]oreover, the factual material reflects the Monitor's efforts to distill material facts from a much larger body
The adequacy of an agency's Vaughn index is a crucial factor when a district court undertakes a segregability analysis. See, e.g., Loving v. U.S. Dep't of Defense, 550 F.3d 32, 41 (D.C. Cir. 2008) (stating that "the description of the document set forth in the Vaughn index and the agency's declaration that it released all segregable material" are "`sufficient for [the segregability] determination'" (quoting Johnson v. Exec. Office for U.S. Attorneys, 310 F.3d 771, 776 (D.C. Cir. 2002))); Johnson, 310 F.3d at 776 (upholding agency's segregation efforts based on "comprehensive Vaughn index" and "the affidavits of [agency officials]"). In this case, the Court has determined that the Amended Vaughn Index and the declarations presented by DOJ and Defendant-Intervenors are sufficient to justify DOJ's decision to withhold certain categories of information pursuant to Exemption 4. See supra Part.IV.A. Whether the documents that have been withheld in total or have been redacted beyond comprehension contain only those categories of properly withheld information is a much more difficult question. Furthermore, the Court has determined that the Amended Vaughn Index and the declarations presented by DOJ and Defendant-Intervenors are not sufficient to justify withholdings pursuant to the deliberative process privilege or pursuant to Exemptions 6 and 7(C). See supra Parts IV.B.2.a, IV.C.2.
100Reporters requests the Court to "conduct in camera review of the documents to determine if ... they contain commercial or financial information, and that disclosure would impair future information gathering." 100Reporters Mem. at 28 n.17. "In making a determination as to segregability ..., a district court judge `may examine the contents of ... agency records in camera.'" Armstrong v. Executive Office of the President, 97 F.3d 575, 577 (D.C. Cir. 1996) (second alteration in original) (quoting 5 U.S.C. § 552(a)(4)(B)). The D.C. Circuit has held that district courts have "broad discretion" to decide whether in camera review is necessary to determine whether the government has met its burden. See id.
In light of the expansive withholdings in this case and the Court's denial of summary judgment with regard to the deliberative process privilege, the Court will exercise its discretion to require the production of representative documents for review in camera. See Lam Lek Chong v. U.S. Drug Enf't Admin., 929 F.2d 729, 735 (D.C. Cir. 1991) (noting that in camera review is appropriate "when agency affidavits are insufficiently detailed to permit meaningful review of exemption claims"); see also Horowitz v. Peace Corps, 428 F.3d 271, 282 (D.C. Cir. 2005) (noting that "whether to conduct an in camera review of a document is within the trial court's `broad discretion'" (quoting Spirko v. U.S. Postal Serv., 147 F.3d 992, 996 (D.C. Cir. 1998))). Specifically, DOJ shall provide the Court with one work plan and one annual report prepared by the Monitor, including all attachments to those two documents. DOJ shall present the documents in a manner that makes clear to the Court which portions of the documents were redacted. For each document presented to the Court for in camera review, DOJ shall either indicate that the document was redacted in full or identify specific portions of the document that were redacted by marking those portions with semi-transparent gray highlighting. DOJ shall also indicate which exemptions apply to all redacted
For the foregoing reasons, the Monitor's Motion for Summary Judgment (ECF No. 57) is
