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100Reporters LLC v. United States Department of Justice

United States District Court, District of Columbia

December 3, 2014

100REPORTERS LLC, Plaintiff,
v.
UNITED STATES DEPARTMENT OF JUSTICE, Defendant.

MEMORANDUM OPINION GRANTING SIEMENS'S MOTION TO INTERVENE; GRANTING DR. WAIGEL'S MOTION TO INTERVENE RE DOCUMENT NOS.: 13, 17

RUDOLPH CONTRERAS, District Judge.

I. INTRODUCTION

In this Freedom of Information Act ("FOIA") lawsuit, Plaintiff 100Reporters LLC ("100Reporters") seeks to compel the United States Department of Justice ("DOJ") to produce six categories of information related to the compliance monitoring program established by Siemens Aktiengesellschaft ("Siemens") in connection with its plea agreements in 2008 for violations of the Foreign Corrupt Practices Act ("FCPA"). Now before the Court are separate motions to intervene filed by Siemens and Dr. Theo Waigel ("Dr. Waigel" or the "Monitor"), who served for four years as the independent corporate compliance monitor to Siemens following resolution of the FCPA investigation. For the reasons set forth below, the Court will grant both motions to intervene.

II. BACKGROUND

A. The Siemens Monitorship

In December 2008, Siemens entered into a plea agreement with the DOJ and a consent decree with the U.S. Securities and Exchange Commission ("SEC") to resolve criminal and civil allegations that Siemens and three of its subsidiaries committed certain violations of the FCPA. See Notice Regarding Corporate Monitorship, United States v. Siemens Aktiengesellschaft, No. 08-367 (D.D.C. Dec. 18, 2012), ECF No. 23 ("Monitorship Notice"), at ¶¶ 1-4; Plea Agreement, id., (D.D.C. Dec. 15, 2008), ECF No. 14 ("Plea Agreement"); Consent of Defendant Siemens, SEC v. Siemens Aktiengesellschaft, No. 08-2167 (D.D.C. Dec. 12, 2008), ECF No. 1-3 ("Consent"). As required by those agreements, Siemens engaged Dr. Waigel to serve as the independent corporate monitor. See, e.g., Plea Agreement ¶ 12; Consent ¶ 3. The DOJ required that the Monitor evaluate

the effectiveness of the internal controls, record-keeping and financial reporting policies and procedures of Siemens as they relate to Siemens'[s] current and ongoing compliance with... provisions of the FCPA and other applicable anti-corruption laws... and take such reasonable steps as, in his or her view, may be necessary to fulfill the foregoing mandate.

Monitorship Notice ¶ 6; Statement of Offense as to Defendant Siemens, Attach. 2, United States v. Siemens Aktiengesellschaft, No. 08-367 (D.D.C. Dec. 15, 2008), ECF No. 15 ("Statement of Offense"), at ¶ 1.

In furtherance of the Monitor's mandate, the DOJ required that Siemens provide the Monitor with broad access to Siemens's confidential and commercially-sensitive information, documents, and records. See Statement of Offense ¶ 2. The DOJ also expressly authorized Siemens to share privileged information with the Monitor subject to a non-waiver arrangement. See id. Similarly, Siemens was obligated to ensure that the Monitor could inspect all relevant documents, conduct on-site observations of Siemens's internal controls and internal audit procedures, meet with and interview employees, officers, and directors, and analyze and test Siemens's compliance programs and controls. See id. ¶ 7.

Further, the settlement agreements directed the Monitor to conduct an initial review of Siemens's anticorruption compliance program and to prepare an initial report, followed by up to three subsequent reviews and reports. See id. ¶ 3. The agreements required that each report "set[] forth the Monitor's assessment and mak[e] recommendations reasonably designed to improve the effectiveness of Siemens'[s] program for ensuring compliance with the anti-corruption laws." Id. ¶ 4. At the conclusion of each follow-up review, the Monitor also was required 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." Id. ¶ 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 review, see id. ¶ 3, to provide the agencies with the Monitor's written reports following completion of each review, see id. ¶ 4, and to report any improper activities or violations of law discovered during the monitorship. See id. ¶ 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 the DOJ. See id. ¶ 6. After four years, the 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. The DOJ specifically determined that Siemens had granted the Monitor broad access to its documents, projects, and employees:

Over the course of those four years, the Monitor conducted on-site or remote reviews of Siemens'[s] activities in 20 countries; conducted limited or issue-specific reviews in or relating to an additional 19 countries; reviewed over 51, 000 documents...; conducted interviews of or meetings with 2, 300 Siemens employees; observed over 180 regularly scheduled company events; and spent the equivalent of over 3, 000 auditor days conducting financial studies and testing.

Id. ¶ 7. Indeed, the Monitor had incorporated this information into, among other things, the four annual reports that the Monitor submitted to the DOJ, which described Siemens's confidential business information and contained detailed findings and recommendations relating to a number of topics, including third-party risks, financial controls, and Siemens's compliance policies and programs. See id. ¶¶ 7-9.

B. 100Reporters' FOIA Request

By letter dated July 23, 2013, 100Reporters, a not-for-profit news media organization, submitted a FOIA request to the DOJ seeking all records relating to the Siemens plea agreement and monitorship. See Compl. ¶¶ 18-19. The DOJ denied this request on the basis that the materials 100Reporters sought were exempt from disclosure under FOIA Exemption 7(A), see id. ¶ 21, and the DOJ later affirmed its denial in response to 100Reporters' appeal. See id. ¶ 23. Thus, on July 24, 2014, 100Reporters commenced the instant lawsuit against the DOJ seeking to compel the production of six specific categories of information relating to the Siemens plea agreement and monitorship, including the four annual reports that the Monitor submitted to the DOJ during the course of the monitorship. See id. ¶ 22.

C. Motions To Intervene

The DOJ did not notify Siemens or the Monitor regarding 100Reporters' FOIA request during the pendency of the proceedings before the agency. See Siemens's Motion to Intervene 4; Monitor's Motion to Intervene 5. Instead, Siemens first became aware of the FOIA request when it learned of 100Reporters' lawsuit on October 1, 2014, see Siemens's Motion to Intervene 4, and the Monitor became aware of the FOIA request on October 15, 2014, when the DOJ contacted the Monitor's counsel by telephone to provide notice of the FOIA request and civil action. See Monitor's Motion to Intervene 5. On October 20, 2014, Siemens and the Monitor each filed a motion to intervene in the lawsuit as a matter of right under Federal Rule of Civil Procedure 24(a) or, alternatively, to intervene under Rule 24(b)'s permissive intervention standard.

III. ANALYSIS: INTERVENTION AS OF RIGHT

"The right of intervention conferred by Rule 24 implements the basic jurisprudential assumption that the interest of justice is best served when all parties with a real stake in a controversy are afforded an opportunity to be heard." Hodgson v. United Mine Workers of Am., 473 F.2d 118, 130 (D.C. Cir. 1972). Specifically, Rule 24(a) provides that

[u]pon timely application anyone shall be permitted to intervene in an action... when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

As the D.C. Circuit has explained, the right to intervene under Rule 24(a) depends on the applicant's ability to satisfy four factors: (1) the timeliness of the motion to intervene; (2) whether the applicant claims an interest relating to the property or transaction that is the subject of the action; (3) whether the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest; and (4) whether the applicant's interest is adequately represented by existing parties. See Fund for Animals, Inc. v. Norton, 322 F.3d 728, 731 (D.C. Cir. 2003) (citations omitted); see also Jones v. Prince George's Cnty., Md., 348 F.3d 1014, 1017 (D.C. Cir. 2003) (listing the four elements of Rule 24(a) as "timeliness, interest, impairment of interest, and adequacy of representation"). In addition, an applicant seeking to intervene as of right under Rule 24(a) must possess Article III standing to participate in the lawsuit. See Jones, 348 F.3d at 1017; Fund for Animals, 322 F.3d at 731-32. The Court addresses each of these issues below.

A. Timeliness

The timeliness of a motion to intervene must "be judged in consideration of all the circumstances.'" Smoke v. Norton, 252 F.3d 468, 471 (D.C. Cir. 2001) (quoting United States v. AT&T, 642 F.2d 1285, 1295 (D.C. Cir. 1980)). "Though the time elapsed since the inception of the suit is relevant, measuring the length of time passed is not in itself the determinative test because [courts] do not require timeliness for its own sake." Roane v. Leonhart, 741 F.3d 147, 151 (D.C. Cir. 2014) (internal citations, quotations, and alterations omitted). "Instead, the requirement of timeliness is aimed primarily at preventing potential intervenors from unduly disrupting litigation, to the unfair detriment of the existing parties." Id. (citations omitted). "Thus, even where a would-be intervenor could have intervened sooner, in assessing timeliness a court must weigh whether any delay in seeking intervention unfairly disadvantaged the original parties." Id. (internal citations, quotations, and alterations omitted).

1. Siemens

Siemens filed its motion to intervene on October 20, 2014, which was just a few weeks after it first learned of 100Reporters' lawsuit against the DOJ. See Siemens's Motion to Intervene 6. Further, though 100Reporters' complaint was filed on July 24, 2014, three months before Siemens's motion, the DOJ did not submit its first responsive pleading until October 14, 2014, which was only days before Siemens filed its motion. See generally DOJ's Answer. To date, no substantive progress has occurred in this action, and the Court finds that allowing Siemens to intervene at this time would not unduly disrupt the litigation or pose an unfair detriment to the existing parties. See Roane, 741 F.3d at 151. Indeed, this Court routinely has held that intervention applications are timely when a party seeks to intervene under circumstances similar to those here. See, e.g., Navistar, Inc. v. Jackson, 840 F.Supp.2d 357, 361 (D.D.C. 2012) (finding intervention application timely when it was filed "less than two weeks after Defendants filed their responsive pleadings, and before any discovery or substantive progress had been made in the ...


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