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Checking In On The Siemens Monitor Case – Court Rules That The DOJ’s Withholding Of Certain Relevant Documents Is Overbroad And That Other Claimed FOIA Exemptions Are Inapplicable

Judicial Decision

Previous posts herehere, here, and here have highlighted the DOJ’s efforts (along with Siemens and its monitor) to block public release of the Monitor reports provided to the DOJ in connection with resolution of the still record-setting 2008 Siemens FCPA enforcement action.

From the beginning, I’ve had my own suspicion as to why the DOJ (and other parties) are actively seeking to block release of the Monitor reports and it has nothing to do with the issues discussed in the DOJ’s (and other parties) briefs.

In any event, in this recent 60 page opinion, Judge Rudolph Contreras (D.D.C.) ruled that the DOJ’s withholding of certain relevant documents is overbroad and that other claimed Freedom of Information Act exemptions are inapplicable.

In terms of background, the opinion notes:

“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.”

In summary fashion, the court held:

“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.”

The most pertinent part of the decision (internal citations omitted) is excerpted below starting with whether the Monitor’s Report contained commercial information.

“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.

[…]

DOJ and Siemens characterize the Work Plans as containing reams of information relating to Siemens’ operations.

[…]

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 Monitor’s process and methodology are not “instrumental” to Siemens’ commercial interests, and therefore do not fall within the scope of Exemption 4.

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. 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.” 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.’”  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.

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.”

The court next analyzed whether the DOJ properly withheld information pursuant to a FOIA’s deliberative process privilege. As stated by the court:

“DOJ contends that it has properly withheld documents and redacted information pursuant to FOIA Exemption 5’s deliberative process privilege. The Court agrees in part.

[…]

The Court first considers whether DOJ has sufficiently identified the deliberative processes at issue and the role played by the documents in the course of those processes. It then determines whether the withheld information is predecisional and deliberative. For the reasons set forth below, the Court holds that DOJ’s reliance on the deliberative process privilege is justified only in part, because certain withheld information is not predecisional or deliberative.

[…]

While much of the Year Three Report was properly redacted under Exemption 5, the “General Principles and Good Practices” subsections, which summarize industry best practices and guidance obtained from FCPA decisions involving different companies, are not deliberative. These subsections were no doubt beneficial to Siemens in crafting its policies, and helpful for DOJ as a point of comparison, but they summarize behaviors and agency decisions that were made previously and that are unrelated to Siemens. The deliberative process privilege does not protect “documents that merely state or explain agency decisions.” These subsections are therefore not covered by the deliberative process privilege and may not be redacted under Exemption 5.

Unlike the Reports and related materials, the Report exhibits reviewed by the Court in camera are not deliberative because they contain purely factual material or are too attenuated from DOJ’s decision making process to be considered deliberative. The Year Three Report exhibits A, B, and C include the Monitor’s Year Three Work Plan and final versions of certain sector-specific work plans. As discussed above, such materials may not be withheld under the deliberative process privilege. Exhibits D and E contain lists of Siemens’ compliance trainings, meetings, and walkthroughs.

[…]

Similarly, Siemens’ compliance and training materials are not deliberative because they do not reflect the “give-and-take of the consultative process.”

[…]

The Court does not doubt that DOJ reviewed Siemens’ compliance policies and training materials during its decision-making process, but again, mere consideration of a document in relation to an identified deliberative process does not automatically pull that document within the privilege’s scope.

[…]

These materials may not be redacted or withheld under Exemption 5.

[…]

For the foregoing reasons, the Court holds that DOJ has shown that certain categories of intra-agency information were both predecisional and deliberative, but it failed to make that showing with respect to other categories. The Court therefore grants in part summary judgment in favor of DOJ’s Exemption 5 withholding of this information. More specifically, DOJ has justified its Exemption 5, deliberative process withholdings within the following categories of documents:

• The Monitor’s yearly Reports—both drafts and final versions—with the exception of the “General Principles and Good Practices” subsections in the Year Three Report reviewed in camera, and similar subsections in the other Reports;

• The Monitor’s Draft Work Plans

• The Monitor’s presentations to DOJ and SEC regarding the Reports, Work Plans, and his evaluation of Siemens’ compliance with the plea agreement; and

• Emails and correspondence amongst the Monitor, Mr. Warin, DOJ attorneys, and SEC attorneys related to the Reports and Work Plans, including feedback and proposed amendments to those documents.

On the other hand, DOJ has not justified its Exemption 5, deliberative process withholdings within the following categories of documents:

• The Monitor’s final Work Plans;

• The “General Principles and Good Practices” subsections of the Year Three Report, and subsections in other Reports containing similar material;

• Exhibits to the Monitor’s Reports;

• Siemens’ compliance policies, descriptions of its compliance programs, videos related to its compliance programs, and its compliance training materials.

To the extent that DOJ’s Exemption 5 withholdings in these categories of documents are not covered by other Exemptions, DOJ may not withhold the information.”

Next, the court analyzed whether the DOJ properly withheld certain personal information. In the words of the court:

“The Court holds that DOJ properly withheld personal information related to Siemens non-executive employees and third-party witnesses, but improperly withheld such information related to the monitorship team and Siemens executives, including Board Members.

[…]

The Court is not persuaded that the monitorship team has a substantial privacy interest in nondisclosure of their names and titles. While “[i]t is easy to see why [the dangers of disclosure] often exist for investigators, suspects, witnesses, and informants… especially (though not exclusively) in the context of criminal investigations,” DOJ has failed to demonstrate why the monitorship team faces such dangers here. Private sector FCPA attorneys actively solicit monitorship business, and they advertise their participation in FCPA cases. Furthermore, DOJ has now disclosed the names and addresses of the government attorneys working hand-in-hand with the monitorship team, and it has disclosed the name of the Monitor and his U.S. counsel. DOJ’s conclusory reasoning regarding the monitorship team’s privacy interest is essentially indistinguishable from reasoning rejected in other recent cases in this District. […] Because DOJ has failed to delineate the specific harm faced by the monitorship team from the disclosure of their personal information, and because it has released the personal information of similarly-situated individuals, the privacy interests for this group are de minimis.

[…]

Siemens executives, including Board Members, have a de minimis privacy interest in the non-disclosure of their personal information. Like its argument regarding the monitorship team’s privacy interest, DOJ’s argument with respect to this category fails to describe the harm that Siemens executives would face should their personal information be unredacted, except to claim that disclosure could “engender comment and speculation and could produce an unfair stigma which could expose the individual to harassment or criticism.” Siemens’ plea and monitorship is public knowledge, as are the names of Siemens’ executives and Board members. DOJ has gone so far as to specifically identify the titles of executives participating in redacted correspondence. DOJ has failed to make a “particularized showing” of why Siemens’ executives have a privacy interest in nondisclosure of their personal information, in light of the substantial volume of publicly available personal information related to their involvement in the monitorship.

[…]

The public interest in disclosing the names of monitorship team members and Siemens executives outweighs the de minimis privacy interest in non-disclosure of that information. The public has an interest in the identities of government employees and advisers charged with overseeing a significant FCPA investigation, because the seniority and experience of those individuals is a strong indication of how seriously DOJ considered its responsibility to ensure that Siemens complied with its plea agreement. This interest outweighs the de minimis privacy interest held by the monitorship team. Similarly, the public has an interest in understanding how DOJ interacted with the key Siemens decision makers, particularly since the public already knows that such interactions occurred. This interest outweighs the de minimis privacy interest held by Siemens executives, including the Board of Directors.”

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