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Aguirre v. Securities and Exchange Commission

December 2, 2009


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiff Gary Aguirre has sued the Securities and Exchange Commission ("SEC"), his former employer, for unlawful disclosure of his records under the Privacy Act of 1974, 5 U.S.C. § 552a, for violating the Due Process Clause of the Fifth Amendment and for injunctive relief under the Privacy Act and the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552. (Second Am. Compl. ["Compl."] ¶¶ 1, 3.) Defendant now moves to dismiss plaintiff's due process claims, his claim for damages under the Privacy Act, and for partial dismissal of plaintiff's request for injunctive relief under the Privacy Act. For the reasons stated herein, the Court will dismiss plaintiff's due process claim based on his termination, stay his due process claim based on damage to his reputation and stay his Privacy Act claim for damages. The Court will not dismiss plaintiff's requests for records under the Privacy Act, with the exception of those requests he has voluntarily withdrawn.


As the tortured backdrop to this bitter dispute has already been thoroughly discussed by this Court in plaintiff's prior suit, see Aguirre v. SEC, 551 F. Supp. 2d 33, 38-47 (D.D.C. 2008) ("Aguirre I") and the Senate Committee on the Judiciary and the Senate Committee on Finance, see S. Rep. No. 110-28, at 1 (2007), the Court will limit itself to a discussion of the relevant allegations as set forth in plaintiff's second amended complaint.


Aguirre was hired by the SEC as a Senior Counsel within its Division of Enforcement in July 2004. (Compl. ¶¶ 9(A), 11.) He received "consistently positive statements" from his supervisors, culminating in a two-step merit rating increase in July 2005. (Id. ¶¶ 9(C), 10.) Aguirre and his supervisors came into conflict, however, when he pursued an investigation of suspicious trading activity at Pequot Capital Management ("Pequot") that implicated John Mack, the CEO of Morgan Stanley. Aguirre I, 551 F. Supp. 2d at 38-40, 44-45.

In August 2005, the SEC began to "discredit, demean and disparage Plaintiff." (Id. ¶ 13.) This culminated in plaintiff's termination on September 1, "just days before the end of his one-year probationary period." Aguirre I, 551 F. Supp. 2d at 46. Defendant distributed an evaluation of Aguirre stating that he "resisted supervision, was unaware of institutional protocol, failed to share information with other staff, had difficulty explaining the significance of evidence, and resented perceived attempts to thwart his success." (Id. ¶ 13(A).) Defendant informed others that Aguirre's supervisors had inadvertently failed to produce this evaluation to those responsible for approving his merit rating increase. (Id. ¶ 13(B).) It also publicly released a notice stating that plaintiff was fired because he was unable "to work effectively with other staff members," unwilling to follow the SEC process, "engaged in 'inappropriate' conduct," clashed with staff attorneys and supervisors, "ignored the chain of command, resigned on multiple occasions, and rejected the guidance of his supervisors." (Id. ¶ 13(C).)

Later, the SEC leaked statements to the press criticizing plaintiff's "competence, knowledge of SEC rules and regulations, ethics, professionalism, integrity, character, emotional stability and personality." (Id. ¶¶ 13(D).) Defendant also leaked threats to criminally prosecute plaintiff and other information relating to a suit it filed against him, implying that he had "engaged in some type of unspecified but unlawful conduct," and told the media he had improperly accessed agency e-mails, the agency website and SEC headquarters and had unlawfully taken agency records. (Id. ¶¶ 13 (H)-(I), (K), (M).) Finally, defendant "intimidat[ed]" SEC staff members believed to have "communicated" with plaintiff and displayed an eight-by-ten inch photo of plaintiff to visitors at SEC headquarters in Washington, D.C. (Id. ¶¶ 13(G), (J).) Plaintiff compares the photo to a "wanted picture at a post office . . . suggesting to visitors that [he] had engaged in some form of misconduct." (Id. ¶ 13(G).) Plaintiff alleges that defendant damaged his reputation, "rendering [it] valueless." (Id. ¶ 14.)

In the aftermath, plaintiff filed a complaint with the SEC Chairman detailing "preferential treatment" of "Wall Street's elite" and accusing officials of firing him when he questioned the preferential treatment. He petitioned Congress to investigate, filed Privacy Act and FOIA requests to gain access to records relating to his discharge and filed a whistleblower complaint. (Id. ¶ 15.) As a result of various favorable decisions from Congress, the Equal Employment Opportunity Commission ("EEOC"), the Office of Special Counsel and the SEC's Office of the Inspector General ("OIG"), the damage to plaintiff's reputation "was substantially mitigated, lessened and minimized." (Id. ¶¶ 16-18.)

Plaintiff also states that damage was mitigated by this Court's decision in Aguirre I, filed on April 28, 2008. (Id.) Aguirre I found that the SEC had improperly claimed various FOIA exceptions to justify withholding certain documents requested by plaintiff. 551 F. Supp. 2dat 49-60. It also held that the SEC had inadequately conducted its search and ordered the agency to produce evidence proving it had searched adequately or to conduct a second search. Id. at 60.

Later in 2008, defendant appointed Brenda Murray, an SEC administrative law judge, to review the OIG's decision recommending discipline for the SEC's Director of Enforcement. (Id. ¶ 20.). On November 7, 2008, Murray issued a memorandum (the "Murray Report") that plaintiff alleges makes a variety of "false and misleading statements" designed to "distort and misstate the conclusions and findings" in the OIG's decision. (See id. ¶ 21.) Defendant's subsequent release of the memorandum to the media has "give[n] the false and misleading impression" that it was a "legitimate ruling," leading to media reports that plaintiff's allegations were groundless and that his firing had been legitimate. (Id. ¶ 22-23.)


On May 27, 2008, plaintiff submitted his first FOIA and Privacy Act request. (Compl. ¶ 40.) Under both FOIA and the Privacy Act, he sought all records prepared by the OIG after January 1, 2006, that related to its investigations of his firing and his allegations of SEC misconduct and all records relating to disclosure of information in his personnel file. (Id. ¶¶ 40(4)-(8).) Defendant has not produced any documents in response to this request. (Id. ¶ 42.)

On November 24, 2008, plaintiff submitted a second request. This time, under FOIA and the Privacy Act, he sought records relating to Murray's appointment, her communications with the SEC Chairman and any records Murray produced that related to his case. (Id. ¶¶ 43(1)-(5).) He also requested any written communications between Murray and other officials relating to him or his case, any records on the "propriety, legality, potential conflicts, or statutory limitations on the capacity of Murray," and records of conversations between John Nester and the media about Murray's memorandum. (Id. ¶¶ 43(6)-(12).) Aguirre sought any writings in which he alleged that he had been retaliated against because of his brother's comments to the media or representation of "investors in a lawsuit against" the SEC chairman's former law firm (id. ¶ 43(13)), records relating to recusal by SEC officers (id. ¶ 43(14)) and press releases relating to any decision by SEC officials to "initiate or not initiate discipline" against SEC members. (Id. ¶¶ 43(15).) Finally, he requested records of "any personnel matter" in which an ALJ for the agency ...

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