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Williams & Connolly LLP v. U.S. Securities and Exchange Commission

August 4, 2010


The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge


This is a Freedom of Information Act ("FOIA") case brought by Plaintiff Williams & Connolly LLP against the U.S. Securities and Exchange Commission ("SEC") relating to three requests for information submitted by Plaintiff to which the SEC has now responded. Presently pending before the Court is the SEC's [21] Motion for Summary Judgment, in which the agency contends that it has produced all responsive records except for those records withheld pursuant to a FOIA exemption. Plaintiff opposes the motion, arguing that the FOIA exemptions invoked by the SEC do not apply to certain records that were withheld. The SEC has filed a reply to Plaintiff's opposition, and the motion is now ripe for decision. After a thorough review of the parties' submissions and attachments thereto and applicable case law and statutory authority, the Court shall GRANT-IN-PART the SEC's Motion for Summary Judgment and DENY-IN-PART WITHOUT PREJUDICE with respect to one document withheld by the SEC under FOIA Exemption 6.


A. SEC Investigations

On June 14, 2000, the SEC filed a civil enforcement action against four former executives of Cendant Corporation ("Cendant") and its predecessor company CUC International, Inc. ("CUC") in connection with an alleged accounting fraud scheme that deprived shareholders of billions of dollars and inflated executive pay by millions. Def.'s Stmt.*fn1 ¶ 1.The defendants included Cosmo Corigliano, the former CUC chief financial officer and Cendant executive vice president, and Kevin Kearney, the former CUC director of financial reporting. Id. On June 6, 2000, Mr. Kearney consented to the entry of final judgment against him. Id. On April 16, 2004, Mr. Corigliano and his wife consented to the entry of final judgment against them; the final judgment required the Coriglianos to transfer most of their assets to a court-appointed receiver. Id. ¶ 2. Following an investigation by the SEC, the government brought a criminal prosecution against Walter A. Forbes for securities fraud, ultimately obtaining a conviction on October 31, 2006. Pl.'s Stmt. ¶ 1. Williams & Connolly LLP served as legal counsel for Mr. Forbes during these proceedings. Id. During the course of litigation leading up to the trial, the government produced thousands of documents pursuant to Federal Rule of Criminal Procedure 16. Id. Some of these documents were notes of interviews or conversations that SEC attorneys and enforcement staff had with Cosmo Corigliano, Kevin Kearney, and/or their counsel in 1999 and 2000 during the SEC's investigation of Cendant and CUC. Pl.'s Stmt. ¶ 3.

B. FOIA Requests Submitted by Plaintiff

On May 10, 2005, Plaintiff submitted a FOIA request to the SEC seeking records relating to Cosmo Corigliano and the Cendant investigation and securities enforcement action ("First Request"). Def.'s Stmt. ¶ 3. The SEC determined that it would need to review records from over 300 boxes of investigative documents to comply with the request, and the agency placed the request into its "first-in, first-out" processing system. Id. ¶¶ 4-5. At the end of 2008, the First Request came to the front of the processing queue, and the agency began collecting and processing responsive records. Id. ¶ 6.

On February 26, 2009, Plaintiff submitted a second FOIA request ("Second Request") to the SEC requesting communications with SEC Commissioners regarding a proposed settlement agreement between Mr. Corigliano and the SEC. Def.'s Stmt. ¶ 7. The same day, Plaintiff submitted a third FOIA request ("Third Request") to the SEC requesting records relating to Kevin Kearney, Crystal Journey Candles (a company owned by the Coriglianos), and the retainer that Mr. Corigliano paid his attorneys. Id. ¶ 8. The SEC's FOIA Office provided a copy of all three requests to each staff member in the SEC's Division of Enforcement who had worked on the Cendant litigation. Id. ¶ 9. The FOIA Office also contacted current and former SEC Commissioners and their staff regarding documents that may be responsive to the Second Request. Id. ¶ 12. After locating all potentially responsive records, the FOIA Office reviewed them in conjunction with the SEC's Office of General Counsel. Id. ¶ 16.

On May 19, 2009, the SEC produced to Plaintiff 2400 pages of records responsive to the First Request. Def.'s Stmt. ¶ 17. In response to the Second and Third Requests, the FOIA Office informed Plaintiff that it had already produced all nonexempt responsive records in response to Plaintiff's First Request. Id. ¶ 18.

C. The Filing of This Action

Plaintiff filed this action in the U.S. District Court for the Eastern District of Virginia on February 18, 2009. On April 1, 2009, pursuant to the parties' agreement, Judge Claude M. Hilton ordered that the case be transferred to this Court. On October 6, 2009, the SEC filed its Motion for Summary Judgment, which included an index of documents withheld by the agency under various FOIA exemptions pursuant to Vaughn v. Rosen, 484 F.2d 802, 827 (D.C. Cir. 1973). The agency's Vaughn index lists 505 documents withheld pursuant to FOIA Exemptions 5, 6, and/or 7(C), 5 U.S.C. § 552(b)(5), (6), & (7)(C). See Def.'s Mot. for Summ. J., Vaughn Index. On October 30, 2009, the SEC produced 64 additional pages of records responsive to Plaintiff's FOIA requests, along with a supplemental Vaughn index listing one additional document withheld pursuant to FOIA Exemption 7(C). See Pl.'s Opp'n, Exs. I-J.

On November 20, 2009, Plaintiff filed its Opposition to Defendant's Motion for Summary Judgment. In its Opposition, Plaintiff contends that the SEC improperly withheld documents under FOIA Exemptions 5 and 6. Specifically, Plaintiff contends that the SEC should have produced all handwritten notes of SEC enforcement staff interviews or conversations with Cosmo Corigliano, Kevin Kearney, and/or their counsel that are listed in the SEC's Vaughn index (numbers 133-35, 142-44, 160, 166-70, 175-77, 207-08, 210, 217-23, 225-26, 228-34, 241, 244, 251, 260, 263-64, 302, 332, 340, 342, 347-48, 351, 356, 361-63, 433, 437, 439, 443, 445-46, 450-56, 458-59, 461-63, 466, 469, 472-73, 475-99, 501-05). In addition, Plaintiff contends that two documents (84, 254) for which the SEC claims an exemption should be produced after redacting any personal information relating to Cosmo Corigliano. Document 84 is described in the Vaughn index as "Settlement proposal submitted to SEC by Kramer, Levin. Containing confidential, detailed financial information pertaining to the Corigliano family." See Vaughn Index at 5. After Plaintiff filed its Opposition, the SEC made a final supplemental production on December 11, 2009, producing segregable, nonexempt information as to document 254, which renders Plaintiff's objection moot as to this document. Plaintiff subsequently filed its Reply in support of its Motion for Summary Judgment.


In reviewing motions for summary judgment under FOIA, the Court must conduct a de novo reviewof the record. See 5 U.S.C. §522(a)(4)(B). In the FOIA context, "de novo review requires the court to 'ascertain whether the agency has sustained its burden of demonstrating that the documents requested... are exempt from disclosure under the FOIA.'" Assassination Archives & Research Ctr. v. Cent. Intelligence Agency, 334 F.3d 55, 57 (D.C. Cir. 2003) (quoting Summers v. Dep't of Justice, 140 F.3d 1077, 1080 (D.C. Cir. 1998)). Summary judgment is proper when "the pleadings, the discovery [if any] and disclosure materials on file, and ...

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