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Bean LLC v. Bank

United States District Court, District of Columbia

January 4, 2018

BEAN LLC d/b/a FUSION GPS, Plaintiff,
v.
JOHN DOE BANK, Defendant, and PERMANENT SELECT COMMITTEE ON INTELLIGENCE OF THE UNITED STATES HOUSE OF REPRESENTATIVES, Intervenor.

          MEMORANDUM OPINION [DKT. #23]

          RICHARD J. LEON UNITED STATES DISTRICT JUDGE

         Bean LLC, doing business as Fusion GPS ("Fusion" or "plaintiff), applies to this Court for an order enjoining the enforcement of a Congressional subpoena ("the Subpoena") that requires the production of certain financial records from Fusion's bank, Defendant Bank ("the Bank").[1] The Subpoena, issued by the Permanent Select Committee on Intelligence of the U.S. House of Representatives ("the Committee"), seeks records of Fusion's financial transactions with certain clients and contractors. The Committee issued the Subpoena in conjunction with its investigation into Russian active measures-- i.e., Russian conduct, direct and indirect in nature, calculated to advance Russia's political agenda-directed at the 2016 U.S. presidential election ("the 2016 Presidential election"). The Subpoena followed revelations in the press that Fusion had a role in compiling a series of memos-together commonly known as "the Trump Dossier" (also referred to herein as "the Dossier")-that alleges ties between President Donald Trump and the Kremlin.

         Although the Subpoena was issued to Defendant Bank-not to Fusion-Fusion filed a motion for a temporary restraining order and preliminary injunction, seeking to enjoin the Bank from complying with the Subpoena on the ground that it is overly broad, unauthorized, and requests records of Fusion's business transactions that are irrelevant to the Committee's investigative inquiry. While the Committee and Fusion were able to negotiate a narrowing of the thousands of records responsive to the Subpoena, they unfortunately could not agree as to seventy of those records. As to these, Fusion asserts that the Subpoena violates its First Amendment rights to speech and association, as well as its rights under certain financial privacy laws. This matter is now fully briefed and ripe for resolution. Upon consideration of the pleadings, oral argument, and the entire record herein, Fusion's Renewed Motion for a Temporary Restraining Order and Preliminary Injunction is DENIED.

         BACKGROUND

         The House Permanent Select Committee on Intelligence is a standing committee of the United States House of Representatives, charged with oversight of the intelligence community and intelligence-related activities and programs of the United States Government. See H.'R. Res. 658, 95th Cong. (1977). Pursuant to those oversight responsibilities, the Committee is currently conducting an investigation into Russian interference with the 2016 Presidential election. See Press Release, U.S. House of Representatives Permanent Select Coram, on Intelligence, Intelligence Committee Chairman, Ranking Member Establish Parameters for Russia Investigation (Mar. 1, 2017) ("March 1, 2017 Press Release").[2] Among other things, the Committee's investigation is seeking answers to the following questions: (1) "What Russian cyber activity and other active measures were directed against the United States and its allies?" and (2) "Did the Russian active measures include links between Russia and individuals associated with political campaigns or any other U.S. Persons?" Id.

         Fusion is a research firm that provides strategic intelligence, opposition research-including research on political candidates-and due diligence services to corporations, law firms, and investors. Peel, of Peter Fritsch ("Fritsch Decl.") [Dkt. #2-2] ¶ 6. During the 2016 Presidential election campaign, an unknown third party engaged Fusion's services to conduct political opposition research on then-candidate Donald J. Trump ("Mr. Trump"). Id. at ¶ 9; Decl. of Mark R. Stewart ("Stewart Decl.") [Dkt. #12-1] ¶ 5. In early 2016, that unknown client terminated its contract with Fusion, but another client took over the contract, seeking the same opposition research. Stewart Decl. ¶ 5. As part of this research, Fusion hired a former British intelligence officer, Christopher Steele (''Steele"), to research Mr. Trump's ties to Russia. Id. at ¶¶ 4, 6; Fritsch Decl. ¶ 9. Steele's research led to a series of memos that has become known in the press as the "Trump Dossier." Stewart Decl. ¶¶ 4, 6; Fritsch Decl. ¶ 9. The Dossier made unverified allegations of misconduct regarding Mr. Trump's relationship with Russian individuals, as well as allegations of collusion between the Trump campaign and representatives of the Russian government during the 2016 Presidential election. Stewart Decl. ¶ 6.

         It was later revealed that Steele was paid an undisclosed sum of money for work he performed on behalf of the FBI, and that the Trump Dossier was provided to the FBI in 2016. Id. at ¶¶ 4-7, 9. It also came to light that other individuals in the Intelligence Community were aware of the Trump Dossier and its contents, and that they provided briefings about the Dossier to both President Obama and President-elect Trump in January 2017. Id. at ¶ 9. As a result, the Committee is seeking to discover, inter alia, who paid Fusion for the Trump Dossier, who received it, whether steps were taken to verify its accuracy, and whether the FBI relied on the Dossier as grounds for its counterintelligence investigation into potential coordination between the Trump campaign and the Russian government to influence the 2016 Presidential election.[3] Id. at ¶¶9-10.

         After unsuccessful attempts to obtain relevant documents and testimony from Fusion itself, see, e.g., Stewart Decl. ¶¶ 12-13, Committee Chairman Devin Nunes ("Chairman Nunes") issued subpoenas for testimony and documents to each of Fusion's principals. Id. at ¶ 14. Fusion's principals objected to these subpoenas, but on October 18, 2017, two of them appeared for compelled testimony, during which they invoked constitutional privileges not to testify pursuant to the First and Fifth Amendments. Id. at ¶¶ 16-17.

         On October 5, 2017, the Committee served the Subpoena at issue in this dispute on Defendant Bank, seeking "all documents sufficient to identify Fusion GPS's banking transaction history, among other items, from August 1, 2015 to October 4, 2017." Id. at ¶ 14; Decl. of Joshua A. Levy ("Levy Decl.") Ex. A [Dkt. #2-3]. The Bank initially raised a number of objections to the Subpoena, but after the Committee rejected all of those objections, the Bank, on October 19, 2017, agreed to comply and produce all responsive documents by 9 A.M. on October 23, 2017. Stewart Decl. ¶ 18.

         In response, Fusion immediately filed the instant action on October 20, 2017, seeking to enjoin the Bank from turning over records of Fusion's financial transactions to the Committee. See Compl. ¶ 3. Curiously, Fusion did not name the Committee as a defendant, but instead listed only Defendant Bank. See Id. at ¶ 9. This case was initially assigned to my colleague, Judge Tanya Chutkan, and she held a telephonic hearing with all interested parties-including the Committee-at 5 P.M. on the day the suit was filed. See 10/20/17 Minute Entry; Telephone Conference Tr., Oct. 20, 2017 [Dkt. #18]. The Committee formally intervened in this case the following day. See Mot. to Intervene [Dkt. #7]; 10/21/17 Minute Order (granting the Committee's Motion to Intervene).

         After reviewing the pleadings, the Court again held a telephonic hearing with the parties on October 24, 2017. See 10/24/17 Minute Entry. Noting her "reluctan[ce] to wade into this dispute because it presents issues on which there is very little authority, and because it involves a congressional investigation in which [the Court does] not wish to intrude, " the Court stated that "both sides have an interest in resolving this dispute short of judicial involvement." Telephone Conference Tr. 4:16-18, 5:22-25, Oct. 24, 2017 [Dkt. #17]. The Court accordingly "strongly encourage|ed] the parties to try and arrive at an agreement, " and gave them until 6 P.M. on October 26, 2017 to do so. Id. at 5:24-25; 10/24/17 Minute Entry.

         Spurred by the Court's directive, the parties were able to find common ground, and they entered into a Confidential Agreement that provided a mutually agreeable process by which the Committee could review the requested documents. The Court entered a Stipulation and Order binding the parties to the terms of the Confidential Agreement, and it also entered a Sealed Protective Order to preserve the confidentiality of the records sought by the Subpoena. See Stipulation & Order [Dkt. #19] 1. Two days later, the Court dismissed the case, but it retained jurisdiction, should any disputes arise. Id. at 2; Order of Dismissal [Dkt. #21].

         While these events were unfolding, however, the Committee learned from a Washington Post report that the Clinton campaign and the Democratic National Committee ("DNC") had provided funding to Fusion for the research that resulted in the Trump Dossier. Decl. of Scott L. Glabe ("Glabe Decl.") [Dkt. #37-2] ¶ 11. Specifically, the Washington Post reported that Mark E. Elias, an attorney with the law firm Perkins Coic- who represented both the Clinton Campaign and the DNC-was the individual who retained Fusion for the purposes of gathering opposition research on Mr. Trump. Id. The Committee also learned from public reporting that Fusion was accused of acting as an unregistered agent of the Russian government, in violation of the Foreign Agent Registration Act, based on work it performed for Prevezon Holdings ("Prevezon"), a Russian state-owned company. Id. at ¶ 6. This same report revealed that Prevezon organized its lobbying efforts through the law firm Baker Hostetler, which was also providing litigation services for Prevezon on a criminal asset forfeiture case being brought by the U.S. Justice Department in the Southern District of New York. Id. at ¶¶ 6, 21. Together, these reports confirmed that various law firms and businesses had retained Fusion on behalf of their clients to perform Russia-related work, thus triggering the Committee's investigative interest in identifying other businesses that sought Fusion's services during the same relevant time period. Id. at ¶¶ 20-22.

         On October 27, 2017, pursuant to the terms of the parties' Confidential Agreement, the Bank produced certain responsive records, and the Committee reviewed them. Id. at ¶¶ 12-15. The Committee's review was informed, in part, by classified information in the Committee's possession. Id. at ¶ 19. On November 1, 2017, the Committee identified eighty-two transactions necessary for its investigation that had not been previously produced by the Bank. Id. at ¶ 18. The Committee also sought reproduction of thirty transactions already produced in the initial production. Id. In total, the Committee requested that Fusion instruct the Bank to produce, or re-produce, records of one hundred and twelve transactions. Id. To support its requests, the Committee also submitted a justification for each payor or payee, explaining the nexus between the records sought and the Committee's investigation. Id.

         That same day, Fusion objected to the Committee's requests, arguing that the requested records-which contained financial transactions between Fusion and certain law firms, media companies, journalists, and contractors-were irrelevant to the Russia investigation. See Reply in Supp. of Pl's. Renewed Appl. for a TRO & Mot. for Prelim. Inj. ("Pl's. Renewed Reply") Ex. C [Dkt #35-3]. On November 3, 2017, the Bank produced twelve of the requested transactions, leaving seventy previously unproduced transactions-and thirty re-productions-outstanding. Glabe Decl. ¶ 33. The parties were ultimately unable to come to an agreement on these seventy remaining transactions, so plaintiff moved to reopen this case and filed its renewed motion for a temporary restraining order and preliminary injunction on November 3, 2017. See Mot. to Reopen Case [Dkt. #22]; Pl's. Renewed Appl. for TRO & Mot. for Prelim. Inj. ("Pl's. Renewed Mot.") I Dkt. #23]. Shortly thereafter, Judge Chutkan recused herself, and this case was randomly reassigned to me on November 9, 2017. See Reassignment of Civil Case [Dkt. #29].

         On November 15, 2017, 1 held the first hearing since plaintiff filed its renewed motion. See 11/15/17 Minute Entry. During this initial hearing, I consolidated plaintiff s motion for a temporary restraining order and motion for a preliminary injunction. Motions Hr'g Tr. 6:16-24, 7:2-6, November 15, 2017 [Dkt. #41]. I also expressed concern that all of the pleadings had been filed under seal. Noting that "having public, open hearings on a matter is in the best interest of all concerned, " I ordered that the pleadings-'be reconstituted and refilled not under seal." Id. at 7:10-11, 7:16-17. Although I permitted the parties to file certain documents under seal, the bulk of the pleadings were refilled in a redacted, public format. After reviewing the filings, I held oral argument on November 30, 2017, bifurcating the hearing into a public session for legal arguments, and a sealed session to discuss any confidential issues that might need to be addressed by the parties. See 11/30/17 Minute Entry. Plaintiffs motion is now ripe for my review.

         LEGAL STANDARD

         Plaintiff is seeking a preliminary injunction, which requires compliance with the same standard as a temporary restraining order. Hall v. Johnson,599 F.Supp.2d 1, 3 n.2 (D.D.C. 2009). "A plaintiff seeking a preliminary injunction must establish [1] that he is likely to succeed on the merits, [4] [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest." Earner v. Obama,742 F.3d 1023, 1038 (D.C. Cir. 2014) (internal quotation marks omitted). Because the relief Fusion seeks is "an extraordinary remedy, " a preliminary injunction "should be granted only when the ...


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