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Dorsen v. United States Securities & Exchange Commission

United States District Court, D. Columbia.

February 14, 2014

DAVID M. DORSEN, Plaintiff,
v.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Defendant

Page 113

DAVID M. DORSEN, Plaintiff, Pro se, Washington, DC.

For SECURITIES AND EXCHANGE COMMISSION, Defendant: Kevin Dean Solonsky, LEAD ATTORNEY, SECURITIES & EXCHANGE COMMISSION, Office of the General Counsel, Washington, DC.

OPINION

Hon. BERYL A. HOWELL, United States District Judge.

Page 114

MEMORANDUM OPINION

Pending before the Court is the plaintiff David M. Dorsen's motion for attorneys' fees and costs, pursuant to the Freedom of Information Act (" FOIA" ), 5 U.S.C. § 552(a)(4)(E)(ii)(II), and Federal Rule of Civil Procedure 54, against the defendant Securities and Exchange Commission (" SEC" ). See Pl.'s Mot. for Att'ys Fees (" Pl.'s Mot." ) at 1, ECF No. 5. The underlying FOIA request sought records which the plaintiff believed were relevant to overturn a substantial civil judgment in favor of the SEC against the plaintiff's client, Michael Lauer. See generally id. at 4-12. Less than one month after the plaintiff initiated this lawsuit, the defendant released three responsive documents, totaling five pages, tat had previously been withheld, see Pl.'s Mot. Exs. B, C,[1] prompting the plaintiff to assert that he is a prevailing party both eligible and entitled to the attorneys' fees and costs demanded. Id. at 1-3, 13-14. For the reasons set forth below, the plaintiff's motion is denied.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Protracted SEC Litigation

For over a decade, Michael Lauer and the SEC have been parties to litigation that began in 2003, when the SEC authorized a formal investigation and the filing of a civil complaint against Lauer and two companies operating as hedge fund asset managers, alleging that Lauer overstated the value of the funds and manipulated the value of the funds' securities in order to increase his fees. See Pl.'s Mot. at 4-12; Def.'s Opp'n Mot. Att'ys Fees (Def.'s Opp'n) at 2, ECF No. 8; see also SEC v. Lauer, No. 9:03-cv-80612, 2008 WL 4372896, at *2-13 (S.D. Fla. Sept. 24, 2008), aff'd, 478 F.App'x 550 (11th Cir. 2012), cert. denied, 133 S.Ct. 545, 184 L.Ed.2d 341 (2012). During the course of the SEC civil action, Lauer's assets were frozen, and as a result Lauer defended himself pro se throughout the civil litigation. Pl.'s Mot. at 5. On September

Page 115

24, 2008, the U.S. District Court for the Southern District of Florida granted summary judgment in favor of the SEC and ordered Lauer to pay $62,596,807.74 in disgorgement, prejudgment interest, and a civil penalty. See SEC v. Lauer, 2008 WL 4372896, at *26-27; Def.'s Opp'n at 2-3; Pl.'s Mot. at 10. On appeal of the judgment to the U.S. Court of Appeals for the Eleventh Circuit, Lauer retained the plaintiff for oral argument and for court-ordered supplemental briefing. Pl.'s Mot. at 10-11.

The Eleventh Circuit affirmed the district court's decision in all respects on April 19, 2012, and the Supreme Court denied his petition for certiorari on October 29, 2012 . Id. at 11. Shortly thereafter, in early 2013, the plaintiff filed two motions on Lauer's behalf to vacate the judgment and dismiss the complaint on grounds, inter alia, that the SEC had not properly authorized the filing of the suit against Lauer. Id. ; Def.'s Opp'n at 3-4.[2] Both motions were denied.[3]

B. FOIA Lawsuit

Following the Eleventh Circuit's denial of Lauer's appeal and while his petition for writ of certiorari was pending, the plaintiff filed a FOIA request on his client's behalf with the SEC on August 27, 2012, seeking disclosure of any agency records:

(1) submitted by the SEC staff to the Commissioners in the matter; and (2) that indicate that by vote the Securities and Exchange Commission authorized a formal investigation of Michael Lauer and the filing of a civil complaint against him. In particular, we seek the dates and nature of the actions taken or authorized by the Commission as reflected in the available documents.

Def.'s Opp'n Ex. A (Letter, dated August 27, 2012). On November 5, 2012, the defendant advised the plaintiff that documents responsive to his request were being withheld under FOIA Exemption 5, 5 U.S.C. § 552(b)(5), as the documents were " protected from disclosure by the attorney work-product, deliberative process and/or attorney-client privileges." Def.'s Opp'n Ex. B (Letter, dated November 5, 2012, from Dave Henshall, SEC FOIA Branch Chief, to plaintiff), at 1.

The plaintiff appealed this decision by letter to the defendant on November 13, 2012. Def.'s Opp'n Ex. C (Pl.'s Appeal Letter); see also Def.'s Opp'n at 4-5. In his appeal, the plaintiff amended the scope of the request by " narrow[ing] and limit[ing]" the request to " any and all documents that describe or reflect the collective vote of the Commissioners of the Securities and Exchange Commission that authorized both a formal investigation of Michael Lauer and the commencement of a civil action against Michael Lauer," including " just the date and the vote." See Def.'s Opp'n Ex. C, at 1. The plaintiff explained that " [a]s narrowed, the appeal does not seek to learn the votes by ...


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