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100REPORTERS LLC v. United States Department of Justice

United States District Court, District of Columbia

June 13, 2018

100REPORTERS LLC, Plaintiff,
v.
UNITED STATES DEPARTMENT OF JUSTICE, Defendant, and SIEMENS AKTIENGESELLSCHAFT, THEO WAIGEL, Defendant-Intervenors.

         Re Document Nos. 83, 86

          MEMORANDUM OPINION

          RUDOLPH CONTRERAS United States District Judge

         Granting in Part and Denying in Part Defendant's Motion for Summary Judgment; Granting in Part and Denying in Part Plaintiff's Cross-Motion for Summary Judgment

         I. INTRODUCTION

         This matter arises from a Foreign Corrupt Practices Act (“FCPA”) investigation of Siemens Aktiengesellschaft (“Siemens”) conducted by the United States Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”). As a result of the investigation, in 2008 Siemens pleaded guilty to violating the FCPA's internal controls and books and records provisions. The plea agreement imposed a large fine on Siemens and three subsidiaries, and it required Siemens to hire an independent compliance monitor to ensure that it implemented an effective corporate governance system and complied with all applicable anti-corruption laws and regulations.

         Siemens hired Dr. Theodore Waigel (the “Monitor”) to serve as its compliance monitor. Pursuant to his mandate under the plea agreement, the Monitor conducted a multi-year review of Siemens' compliance programs. Over four years he provided more than 150 recommendations to Siemens for ways to improve its compliance programs, and he submitted several written reports to DOJ, including work plans at the start of each year, summary reports at the end of each year, and status reports and other correspondence on an ongoing basis. Each year, he also certified that Siemens was in compliance with the plea agreement's terms.

         In 2013, Plaintiff 100Reporters LLC, a non-profit dedicated to investigative journalism, submitted a Freedom of Information Act (“FOIA”) request to the DOJ seeking records related to the monitorship. DOJ denied the request and an administrative appeal. In 2014, 100Reporters brought this FOIA action before the Court.

         DOJ has produced redacted documents falling within the scope of 100Reporters' request, while withholding others in full under certain FOIA exemptions. 100Reporters objects to those withholdings. In 2016, DOJ and 100Reporters filed cross-motions for summary judgment, and this Court granted DOJ's motion in part and denied it in part, and it denied 100Reporters' motion. The Court's ruling ratified DOJ's withholdings under FOIA Exemption 4 and the attorney work product privilege incorporated into Exemption 5, and it directed DOJ to provide additional factual support for the other exemptions on which it relied, including a representative sample of documents for in camera review. Now before the Court are DOJ's renewed motion for summary judgment and 100Reporters' opposition. See generally Mem. P. & A. Supp. U.S. Dep't Justice's Renewed Mot. Summ. J. (“DOJ Mem.”), ECF No. 83-2; Pl.'s Opp'n (“100Reporters Mem.”), ECF No. 86.

         For the reasons explained below, the Court finds that DOJ's Exemption 4 withholdings are overbroad, and that while DOJ has justified the withholding of certain information under Exemptions 5, 6, and 7(C), DOJ's withholdings under those Exemptions are also overbroad. The Court will therefore grant in part DOJ's motions for summary judgment with respect to the Exemptions, but will deny DOJ's motion for summary judgment with respect to its obligation to segregate and disclose non-exempt material. Finally, the Court will grant in part and deny in part 100Reporters' cross-motion for summary judgment.

         II. BACKGROUND[1]

         In July 2013, 100Reporters submitted a FOIA request to DOJ for records related to Aktienengesellschaft, et al., 1:08-cr-367-RJL (D.D.C.), the criminal prosecution of Siemens. See Def.'s Statement of Material Facts (“DOJ Statement”) ¶ 1, ECF No. 83-1. In February 2014, 100Reporters narrowed its request to the following records:

• “Corporate Compliance Statements” that Siemens filed with DOJ under Siemens' plea agreement;
• Documents relating to the Monitor's evaluation of the effectiveness of Siemens' anti-corruption compliance program;
• Documents relating to steps taken by the Monitor to confirm compliance by Siemens;
• Information, records, and facilities requested by the Monitor that fell within his mandate;
• The Monitor's work plans, reviews, and reports; and
• Disclosures made by Siemens to the Monitor concerning corrupt payments and related books, records, and internal controls violations.

DOJ Statement 4; Decl. of Suzanna Moberly (“Moberly Decl.”) ¶ 9, ECF No. 59-3.

         Months later, in July 2014, 100Reporters brought this suit seeking to compel the production of documents that are responsive to its request. See generally Compl., ECF No. 1. DOJ's Answer raised one affirmative defense-that the requested documents were exempt from disclosure under FOIA-and it relied on FOIA Exemption 4, Exemption 5, Exemption 6, Exemption 7(A), Exemption 7(C), and Exemption 7(D) in support of that defense. See DOJ Answer at 6, ECF No. 11.[2]

         In 2015, during the pendency of the litigation, DOJ produced two sets of responsive materials to 100Reporters totaling two videos and approximately 500 pages of documents, many of which were redacted. See Moberly Decl. ¶ 19; see also Status Report & Proposed Briefing Schedule at 2, ECF No. 49 (“Federal Defendant provided Plaintiff with some of the documents previously withheld entirely, largely redacted on December 4, 2015.”). DOJ continued to withhold in full six video presentations and 4, 293 pages of documents. See Moberly Decl. ¶ 19. These materials are encompassed in: (1) four annual Reports prepared by the Monitor setting forth the Monitor's assessment of Siemens' compliance program and his recommendations for improvement of the same, and presentations and correspondence submitted about or in conjunction with the Monitor's reports and reviews; (2) four annual Work Plans prepared by the Monitor detailing the manner in which he intended to perform his reviews (some of which were attached as exhibits to the Monitor's annual reports), and associated correspondence, documents, and presentations; (3) Siemens training materials, internal presentations, and compliance policies; and (4) additional correspondence between the Monitor, DOJ, and SEC. See DOJ Statement ¶ 27; Decl. of Joel Kirsch (“Kirsch Decl.”) ¶¶ 16, 22, 25, 27, ECF No. 58-2; Declaration of F. Joseph Warin (“Warin Decl.”) ¶ 25(a)-(e), ECF No 57-2.

         In March and April 2016, the parties filed cross-motions for summary judgment regarding relevant information that DOJ did not disclose. In their motions, the parties argued over whether DOJ was obligated to disclose four categories of information: (1) documents withheld pursuant to Exemption 4 as confidential commercial information; (2) documents withheld pursuant to Exemption 5's attorney work product privilege; (3) documents withheld pursuant to Exemption 5's deliberative process privilege; and (4) documents redacted pursuant to Exemptions 6 and 7(C) as records implicating the privacy interests of government employees, monitorship team members, Siemens employees, and third-party witnesses. See 100Reporters LLC v. DOJ, 248 F.Supp.3d 115, 133 (D.D.C. 2017). On March 31, 2017, this Court granted in part and denied in part DOJ's motion for summary judgment and denied 100Reporters' cross-motion. See Id. at 167.

         The Court granted summary judgment in favor of DOJ with regard to information withheld under Exemption 4 and information withheld under Exemption 5's attorney work product privilege. Id. at 145, 158. It held, however, that DOJ had failed to justify its withholdings under Exemption 5's deliberative process privilege, Exemption 6, and Exemption 7(C), and it denied DOJ's motion with respect to those Exemptions. Id. at 154, 165. It also held that DOJ's Amended Vaughn index[3] and declarations were inadequate in certain respects and did not permit the Court to assess whether documents were properly withheld under the Exemption 5 deliberative process privilege, nor did they permit the Court to assess whether DOJ had disclosed all reasonably segregable, nonexempt material. Id. at 154, 166-67. In its discretion, the Court directed DOJ to provide supplemental submissions in support of its Exemption 5, deliberative process withholdings showing “(1) the nature of the specific deliberative process involved, (2) the function and significance of the document in that process, and (3) the nature of the decision-making authority vested in the document's author and recipient.” Id. at 154 (quoting Nat'l Sec. Counselors v. CIA, 960 F.Supp.2d 101, 189 (D.D.C. 2013)). It also directed DOJ to provide “one work plan and one annual report prepared by the Monitor, including all attachments to those two documents” for in camera review. Id. at 166.

         DOJ has presented two new declarations and an “Amended Chronology of Events Supporting the Deliberative Process Privilege” (“Am. Chronology”), and it provided the Court with the Monitor's Year Three Work Plan, Year Three Report, and accompanying exhibits, all of which have been reviewed by the Court in camera. See Decl. of Mark F. Mendelsohn (“Mendelsohn Decl.”), ECF No. 83-3; Decl. of Charles E. Duross (“Duross Decl.”), ECF No. 83-4; Am. Chronology, ECF No. 91-1; DOJ Correspondence Regarding Ex Parte In Camera Filing, ECF No. 83-5. Now before the Court are the parties' renewed cross-motions for summary judgment.[4]

         III. LEGAL STANDARD

         FOIA “sets forth a policy of broad disclosure of Government documents in order ‘to ensure an informed citizenry, vital to the functioning of a democratic society.'” FBI v. Abramson, 456 U.S. 615, 621 (1982) (quoting NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242 (1978)). “[D]isclosure, not secrecy, is the dominant objective of [FOIA].” U.S. Dep't of Air Force v. Rose, 425 U.S. 352, 361 (1976). FOIA mandates release of properly requested federal agency records, unless the materials fall squarely within one of nine statutory exemptions. Milner v. U.S. Dep't of Navy, 562 U.S. 562, 565 (2011); Students Against Genocide v. U.S. Dep't of State, 257 F.3d 828, 833 (D.C. Cir. 2001) (citing 5 U.S.C. § 552(a)(3)(A), (b)).

         “FOIA cases typically and appropriately are decided on motions for summary judgment.” Defs. of Wildlife v. U.S. Border Patrol, 623 F.Supp.2d 83, 87 (D.D.C. 2009) (citing Bigwood v. U.S. Agency for Int'l Dev., 484 F.Supp.2d 68, 73 (D.D.C. 2007)). The agency is entitled to summary judgment if no material facts are genuinely in dispute and the agency demonstrates “that its search for responsive records was adequate, that any exemptions claimed actually apply, and that any reasonably segregable non-exempt parts of records have been disclosed after redaction of exempt information.” Competitive Enter. Instit. v. EPA, 232 F.Supp.3d 172, 181 (D.D.C. 2017). “This burden does not shift even when the requester files a cross-motion for summary judgment because ‘the Government ultimately has the onus of proving that the documents are exempt from disclosure, ' while the ‘burden upon the requester is merely to establish the absence of material factual issues before a summary disposition of the case could permissibly occur.'” Hardy v. ATF, 243 F.Supp.3d 155, 162 (D.D.C. 2017) (brackets omitted) (quoting Pub. Citizen Health Research Grp. v. FDA, 185 F.3d 898, 904-05 (D.C. Cir. 1999)).

         To carry its burden, the agency must provide “a relatively detailed justification, specifically identifying the reasons why a particular exemption is relevant and correlating those claims with the particular part of a withheld document to which they apply.” Elec. Privacy Info. Ctr. v. DEA, 192 F.Supp.3d 92, 103 (D.D.C. 2016) (quoting Mead Data Cent., Inc. v. U.S. Dep't of Air Force, 566 F.2d 242, 251 (D.C. Cir. 1977)). In conducting its review, a court may also rely on its own in camera examination of disputed documents to determine whether they were properly withheld under the claimed statutory exemptions. See 5 U.S.C. § 552(a); see also, e.g., Citizens for Responsibility & Ethics in Washington v. Nat'l Archives & Records Admin., 715 F.Supp.2d 134, 140-42 (D.D.C. 2010) (relying on the Court's in camera review to resolve whether documents had been properly withheld). This Court reviews the agency's explanations de novo, and will endorse an agency's decision to withhold information if the justification for invoking a FOIA exemption “appears ‘logical' or plausible.'” Pinson v. DOJ, 245 F.Supp.3d 225, 239 (D.D.C. 2017) (quoting Wolf v. CIA, 473 F.3d 370, 374-75 (D.C. Cir. 2007)). Nonetheless, “exemptions from disclosure must be narrowly construed . . . and conclusory and generalized allegations of exemptions are unacceptable.” Morley v. CIA, 508 F.3d 1108, 1114- 15 (D.C. Cir. 2007) (citation and internal quotation marks omitted).

         IV. ANALYSIS

         DOJ continues to withhold certain documents-some in part and some entirely- pursuant to FOIA Exemptions 4, 5, 6, and 7(C). 100Reporters argues that (1) DOJ has failed to show that it properly withheld information under Exemptions 5, 6, and 7(C); and (2) the documents at issue contain segregable non-exempt information that should be disclosed. For reasons explained below, the Court holds that DOJ withheld information under Exemption 4 that is not within the scope of that Exemption. The Court also holds that DOJ has justified the withholding of certain information pursuant to the deliberative process privilege contained in Exemption 5, and certain personal information pursuant to Exemptions 6 and 7(C), but that it similarly applied those Exemptions in an overbroad manner. Accordingly, the Court holds that DOJ failed to fulfill its obligation to segregate and disclose non-exempt information.

         A. Exemption 4

         The first issue before the Court is whether DOJ's Exemption 4 withholdings are appropriately tailored. Having completed its in camera review, the Court holds that certain withholdings are overbroad because they cover material that is not commercial in nature. Exemption 4 states that “trade secrets and commercial or financial information obtained from a person” that are “privileged or confidential” may be withheld from disclosure. 5 U.S.C. § 552(b)(4). An agency may rely on Exemption 4 if it can establish that withheld materials are “(1) commercial or financial, (2) obtained from a person, and (3) privileged or confidential.” Pub. Citizen Health Research Grp. v. FDA, 704 F.2d 1280, 1290 (D.C. Cir. 1983).

         DOJ states that it has withheld information under Exemption 4 in the following categories of documents:

• The Monitor's work plans and related documents;
• The Monitor's annual reports and exhibits;
• The Monitor's presentations to DOJ and SEC summarizing various aspects of his work;
• Emails and correspondence between the Monitor, Mr. Warin, DOJ attorneys, and SEC attorneys concerning various aspects of the monitorship;
• Correspondence between the Siemens Board, DOJ and SEC attorneys concerning various aspects of the monitorship; and
• Siemens compliance policies, descriptions of its compliance programs, and compliance program training materials.

         Moberly Decl. ¶ 20. This Court previously granted summary judgment for DOJ regarding its Exemption 4 withholdings in the following categories of documents: (1) the Monitor's Reports and associated documents; (2) the Monitor's Work Plans and associated documents; and (3) Siemens' trainings, compliance policies, and associated documents. 100Reporters, 248 F.Supp.3d at 144-45. DOJ asserts that the categories of documents covered by the prior Memorandum Opinion “encompass all of the eight enumerated categories listed above.” DOJ Mem. at 17 n.5. The Court credits DOJ's assertion, particularly because 100Reporters has not challenged it. See generally 100Reporters Mem.

         While the Court accepted DOJ's Exemption 4 rationale, it noted that “the Court's analysis does not apply to the entirety of the documents themselves.” 100Reporters, 248 F.Supp.3d at 145 n.13. It consequently ordered DOJ to produce a representative Work Plan, Report, and set of Report exhibits for in camera review. Id. Having inspected those materials, the Court evaluates whether DOJ's Exemption 4 withholdings are sufficiently narrow for each category of documents, beginning with the documents reviewed in camera.

         1. Documents Reviewed In Camera

         The Court has now reviewed the Monitor's Year Three Work Plan, Year Three Report, and the Report's associated exhibits in camera, and it has determined that DOJ's redactions to these materials were overbroad because they cover some information that is not commercial.[5]

         Withheld “information is commercial under [Exemption 4] if, in and of itself, it serves a commercial function or is of a commercial nature.” Nat'l Ass'n of Home Builders v. Norton, 309 F.3d 26, 38 (D.C. Cir. 2002) (internal quotation marks and citations omitted). Therefore, Exemption 4 covers “records that actually reveal basic commercial operations, such as sales statistics, profits and losses, and inventories, or relate to the income-producing aspects of a business.” See Pub. Citizen Health Research Grp., 704 F.2d at 1290. And in the D.C. Circuit, Exemption 4 “reaches more broadly and applies (among other situations) when the provider of the information has a commercial interest in the information submitted to the agency.” Baker & Hostetler LLP v. U.S. Dep't of Commerce, 473 F.3d 312, 319-20 (D.C. Cir. 2006) (holding that letters describing market conditions for domestic lumber companies “plainly contain commercial information within the meaning of Exemption 4”); see also Pub. Citizen Health Research Grp., 704 F.2d at 1290 (holding that “documentation of the health and safety experience of [a company's] products” was commercial because such documentation was “instrumental in gaining marketing approval for their products”). Certain material in the Work Plan, Report, and exhibits is not commercial because it does not fall within the Circuit's “commercial interest” standard.

         a. Year Three Work Plan

         DOJ and Siemens characterize the Work Plans as containing reams of information relating to Siemens' operations. For instance, Mr. Kirsch stated that the Plans detail “Siemens' operations, contracts, projects, and bids that the Monitor intended to review.” See Kirsch Decl. ¶ 22. He also stated that they reflect “Siemens' business operations, structure, and compliance controls.” Id. ¶ 24. Similarly, the Amended Vaughn Index states that the Monitor's Year One Work Plan describes “the number of Siemens employees in each country, new orders, new government orders, joint ventures and business partnerships, and Siemens' business development strategy across different sectors of the economy.” DOJ0000001, Am. Vaughn Index at 18.

         The Court's in camera review, however, has revealed that the Year Three Work Plan consists mostly of general descriptions of the Monitor's past and future activities with very few details about Siemens' business operations. The Plan is broken into eight sections, which the Court has analyzed as follows:

• Section I is the Work Plan's Introduction. It has been produced un-redacted.
• Sections II and III, entitled “The Year One Review” and “The Year Two Review, ” contain summary statistics and general descriptions of the Monitor's activities in prior years, noting, for instance, that the Monitor “collected, reviewed, and analyzed approximately 10, 000 Company documents totaling approximately 140, 000 pages, ” and that the Monitor “observed more than twenty regularly scheduled compliance-related meetings.” They contain no information about Siemens' business operations, competitive landscape, or compliance programs.
• Section IV, entitled “The Compliance Monitor's Mandate and Year Three Review, ” describes the obligations of Siemens and the Monitor under the plea agreement, and it generally describes the Monitor's “risk-based approach, ” again without providing any information about Siemens' operations or compliance programs.
• Section V, entitled “Substantive Structure of the Year Three Review, ” describes the seventeen “thematic focus areas” that guided the Monitor's evaluation. One paragraph in this Section, on page 12 of the Plan, lists Siemens' purchasing volume, number of supplier relationships, and number of supplier accounts. Aside from this business information, however, this Section lays out each thematic focus area without reference to Siemens' business operations or its compliance policies.
• Section VI, entitled “Methodology of the Year Three Review, ” describes the Monitor's tools for conducting his evaluation, including document inspection, on-site observation, informational meetings, analyses, studies, and testing. Again, while this Section describes the type of employees the Monitor planned to interview, it does not include specific employee names, nor does it list specific Siemens sectors and business units that were targeted for interviews.
• Section VII, entitled “Countries of Interest, ” describes the specific countries targeted by the Monitor for analysis. It includes, for each country, “the number of Siemens employees in each country, new orders, new government orders, joint ventures and business partnerships, and Siemens' business development strategy across different sectors of the economy.” DOJ0000001, Am. Vaughn Index at 18.
• Finally Section VIII, the Monitor's “Proposed Schedule, ” lays out specific deadlines for the Monitor's evaluation. Again, it contains no commercial information.

         Other than the “Countries of Interest” Section, the Work Plan does not reveal “basic commercial operations” that “relate[] to the income-producing aspects of [Siemens'] business.” See Pub. Citizen Health Research Grp., 704 F.2d at 1290. And unlike the types of information held to be commercial in this Circuit's more expansive reading of Exemption 4, for instance letters describing market conditions, or “documentation of the health and safety experience of [a company's products], ” the descriptions of the Monitor's activities do not elaborate on Siemens' business or describe its competitive landscape. See Baker & Hostetler LLP, 473 F.3d at 319; Pub. Citizen Health Research Grp., 704 F.2d at 1290. The Monitor's process and methodology are not “instrumental” to Siemens' commercial interests, and therefore do not fall within the scope of Exemption 4. Id. DOJ therefore may only redact Section VII, “Countries of Interest, ” under Exemption 4, and it must remove the remaining Exemption 4 redactions.

         b. Year Three Report

         To a lesser degree, the Monitor's Year Three Report also contains subsections wholly unrelated to Siemens' commercial operations. Chapter Four of the Report, entitled “The Monitor's Year Three Review and Recommendations, ” provides the Monitor's analysis, opinions, and recommendations for each thematic focus area identified in the Work Plan. Unlike in the Work Plan, much of this chapter in the Report was properly withheld under Exemption 4 because it contains detailed analyses of Siemens' business operations, and how those operations addressed each focus area. However, the chapter also includes subsections covering “General Principles and Good Practices, ” which contain analyses of industry best practices and guidance obtained from FCPA decisions involving different companies. Those subsections do not discuss Siemens' business operations. Nor do they relate to the Monitor's actions with respect to Siemens. They are summaries of third party behaviors, useful as a reference source. They do not “reveal [Siemens'] basic commercial operations, ” and DOJ has failed to demonstrate that Siemens otherwise has a commercial interest in the information related to other companies. Id. They may not be redacted under Exemption 4.

         DOJ properly redacted the remaining portions of the Report. Chapter One is an introduction describing specific Siemens compliance initiatives and business decisions. Chapter Two contains details of the Monitor's Year Three activities, with references to specific Siemens business operations. Chapter Three, entitled “Financial Controls in Times of Crisis, ” describes Siemens' response to geopolitical crises in various countries, including specific steps taken by specific business units. These Chapters “actually reveal basic commercial operations, such as sales statistics, profits and losses, and inventories, or relate to the income-producing aspects of a business.” See Pub. Citizen Health Research Grp., 704 F.2d at 1290. And Chapters Five and Six, entitled “Evaluation of Implementation of the Monitor's Year One [and Two] Recommendations, ” describe changes to Siemens' compliance policies. They document “the way [Siemens] implement[ed] [its] compliance programs, ” which in this Circuit is “sufficiently ‘instrumental' to the [company's] operations to qualify as ‘commercial.'” Pub. Citizen Health Research Grp. v. HHS, 66 F.Supp.3d 196, 208 (D.D.C. 2014). To the extent the Report contains other material that is arguably non-exempt, it is “inextricably intertwined with exempt portions” such that it need not be un-redacted. Mead Data Cent., Inc., 566 F.2d at 260.

         c. Year Three Report Exhibits

         The Year Three Report exhibits also contain non-commercial information that DOJ has improperly redacted under Exemption 4. Exhibit A is the Year Three Work Plan, which should receive the same treatment as the standalone Work Plan discussed above. Exhibit B contains the Monitor's Work Plans for his evaluations of Siemens' headquarters and specific countries. They include general descriptions of the Monitor's past and future activities that are very similar to descriptions in the primary Work Plan described above, and their redactions should be rolled back in accordance with DOJ's changes to the Work Plan redactions. To the extent that they contain Siemens' business operations information similar to the information contained in the “Countries of Interest” Section of the Work Plan, that information may remain redacted. Exhibits C, D, and E concern Siemens compliance policies and programs, and are therefore commercial information. See Public Citizen Health Research Grp. v. HHS, 66 F.Supp.3d at 208. They may remain redacted under Exemption 4.

         2. Documents Not Reviewed In Camera

         The Court's prior Memorandum Opinion established that DOJ was justified in redacting the following ...


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