100reporters LLC v. U.S. Dep't of Justice

• Decision Date: 31 March 2017
• Docket Number: Civil Action No.: 14-1264 (RC).
• Citation: 248 F.Supp.3d 115
• Parties: 100REPORTERS LLC, Plaintiff, v. UNITED STATES DEPARTMENT OF JUSTICE, Defendant, and Siemens Aktiengesellschaft, Theo Waigel, Defendant–Intervenors.
• Court: U.S. District Court — District of Columbia

248 F.Supp.3d 115

100REPORTERS LLC, Plaintiff,

v. UNITED STATES DEPARTMENT OF JUSTICE, Defendant,andSiemens Aktiengesellschaft, Theo Waigel, Defendant–Intervenors.

Civil Action No.: 14-1264 (RC).

United States District Court, District of Columbia.

Signed March 31, 2017

Laura Rose Handman, Adam M. Shoemaker, Ronald G. London, Davis Wright Tremaine LLP, Washington, DC, for Plaintiff.

John Cuong Truong, U.S. Attorney's Office for the District of Columbia, Peter Claude Sprung, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

GRANTING IN PART AND DENYING IN PART DEFENDANT–INTERVENOR THEO WAIGEL'S MOTION FOR SUMMARY JUDGMENT; GRANTING IN PART AND DENYING IN PART DEFENDANT–INTERVENOR SIEMENS AKTIENGESELLSCHAFT'S MOTION FOR SUMMARY JUDGMENT; GRANTING INN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFF'S CROSS–MOTION FOR SUMMARY JUDGMENT

RUDOLPH CONTRERAS, United States District Judge

I. INTRODUCTION

This matter stems from the resolution of an international investigation of the corrupt practices of Siemens Aktiengesellschaft ("Siemens"). In 2008, Siemens pleaded guilty to a two-count information charging the company with violating the internal controls and books and records provisions of the Foreign Corrupt Practices Act ("FCPA"). The court imposed a fine of $448.5 million against Siemens, and imposed smaller fines against three Siemens subsidiaries that pleaded guilty to separate charges. Siemens also settled a parallel civil proceeding brought by the United States Securities and Exchange Commission ("SEC") and agreed to pay $350 million in disgorgement of profits.

Among other things, the plea agreement resolving the criminal case required the company to hire an independent corporate compliance monitor to ensure that Siemens implemented an effective corporate governance system and complied with all applicable laws and regulations. Siemens hired Dr. Theodore Waigel (the "Monitor") to serve as the corporate monitor. Over several years, the Monitor conducted extensive investigation, review, and oversight of the compliance programs at Siemens. During that process, the Monitor submitted a number of written reports to the United States Department of Justice ("DOJ"), including work plans at the start of each year and annual reports at the conclusion of each year. DOJ and the Monitor also exchanged other communications regarding the monitorship.

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, as well as an administrative appeal. In 2014, 100Reporters brought this FOIA action before the Court. The Court later permitted Siemens and the Monitor to intervene in this case.¹ See generally 100Reporters LLC v. U.S. Dep't of Justice , 307 F.R.D. 269 (D.D.C. 2014), ECF No. 28.

Relying on a number of exemptions to FOIA, DOJ has produced portions of redacted documents, while withholding others in full. 100Reporters objects to those withholdings. Now before the Court are separate motions for summary judgment filed by the Monitor, Siemens, and DOJ, and a cross-motion for summary judgment filed by 100Reporters. See generally Monitor's Mot. Summ. J. ("Monitor Mot."), ECF No. 57; Def.–Intervenor Siemens Mot. Summ. J. ("Siemens Mot."), ECF No. 58; Def. U.S. Dep't Justice Mot. Summ. J. ("DOJ Mot."), ECF No. 59; Pl.'s Mot. Summ. J. ("100Reporters Cross–Mot."), ECF No. 62.

For the reasons explained below, the Court finds that DOJ has justified the withholding of certain information pursuant to Exemption 4 and the attorney work-product privilege contained in Exemption 5. The Court will grant the motions for summary judgment filed by DOJ and Defendant–Intervenors on those issues. At this time, the Court finds that DOJ has not justified its withholdings under the deliberative process privilege contained in Exemption 5 or under Exemptions 6 and 7(C), and will thus deny summary judgment on those issues. The Court will also order DOJ to produce certain representative documents for in camera review and will deny summary judgment on the question of segregability. Finally, the Court will deny the cross-motion for summary judgment filed by 100Reporters.

II. BACKGROUND

The Court will begin its analysis by providing an overview of the facts giving rise to this dispute before turning to the procedural history of this litigation.

A. Siemens and the FCPA Proceedings

Siemens is a "global technology company focusing on the areas of electrification, automation, and digitialization." Siemens Mot., Decl. of Joel Kirsch ("Kirsch Decl.") ¶ 2, ECF No. 58–2. Siemens and its subsidiaries operate in 192 countries and employ roughly 348,000 people. Kirsch Decl. ¶ 2.

An international investigation of Siemens—led by U.S. and foreign law enforcement—revealed a range of illegal conduct, including violations of anti-corruption laws and accounting regulations committed by different Siemens business units over several years. See generally Statement of Offense, United States v. Siemens Aktiengesellschaft , No. 08–367 (D.D.C. Dec. 15, 2008), ECF No. 15 ("Statement of Offense"). In December 2008, Siemens entered into a plea agreement with the DOJ and a consent decree with the SEC to resolve criminal and civil allegations that Siemens and some of its subsidiaries committed certain violations of the FCPA. See Plea Agreement, United States v. Siemens Aktiengesellschaft , No. 08–367 (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. 1–2 ("Consent").² Three Siemens subsidiaries—based in Argentina, Bangladesh, and Venezuela—each separately pleaded guilty to FCPA violations. See Notice Regarding Corporate Monitorship, United States v. Siemens Aktiengesellschaft , No. 08–367 ¶¶ 1–2 (D.D.C. Dec. 18, 2012), ECF No. 23 ("Monitorship Notice").

Under the criminal plea agreements, Siemens agreed to pay fines totaling $450 million.³ See Plea Agreement ¶ 5. Siemens also agreed to cooperate with U.S. and German law enforcement agencies and to maintain compliance and ethics programs reasonably designed to detect and deter violations of anti-corruption laws, including the FCPA. Plea Agreement ¶¶ 10–11. Crucially for this case, Siemens also agreed to retain an independent monitor for a period of up to four years to ensure that the company implemented an effective system of corporate governance. See Plea Agreement ¶ 12. Similarly, Siemens agreed to engage a U.S. attorney, F. Joseph Warin, to provide independent counsel to the Monitor. Plea Agreement ¶ 12. On December 15, 2008, the court accepted Siemens' plea and issued a sentence as set forth in the plea agreement. The court's Judgment explicitly required Siemens to comply with the compliance and ethics program in the plea agreement. See Judgment, United States v. Siemens Aktiengesellschaft , No. 08–367 at 4 (D.D.C. Dec. 30, 2008), ECF No. 17.

As part of the universal resolution, Siemens also reached a settlement of the parallel civil complaint filed by the SEC. The SEC alleged that Siemens "engag[ed] in a widespread and systematic practice of paying bribes to foreign government officials to obtain business." Compl., SEC v. Siemens Aktiengesellschaft , No. 08–2167 (D.D.C. Dec. 15, 2008) ¶ 1, ECF No. 3 ("SEC Compl."). More specifically, the SEC alleged that Siemens made at least 4,283 payments totaling $1.4 billion to bribe foreign officials. See SEC Compl. ¶ 2. The SEC also alleged, among other things, that Siemens paid kickbacks to Iraqi ministries in connection with the sales of power equipment to Iraq under the United Nations Oil-for-Food Program. See SEC Compl. ¶ 2. Siemens settled the civil suit without admitting or denying the allegations of the complaint. See DOJ Mot., Decl. of Tracy Price ("Price Decl.") ¶ 3, ECF No. 59–8. The final judgment did, however, enjoin Siemens from violating the FCPA and ordered Siemens to disgorge $350 million in profits. See Final Judgment, SEC v. Siemens Aktiengesellschaft , No. 08–2167, §§ I, V (D.D.C. Dec. 18, 2008), ECF No. 4 ("Final Judgment"); Price Decl. ¶ 3. Siemens also agreed to engage an independent monitor, see Final Judgment § IV, and SEC staff understood that Siemens would hire the same monitor to carry out the requirements of the civil settlement and the criminal plea agreement, see Price Decl. ¶ 4.

B. The Monitorship

As required by the civil settlement and the criminal plea agreement, Siemens engaged Dr. Theo Waigel to serve as the independent corporate monitor. See Plea Agreement ¶ 12; Consent ¶ 3. The terms of the plea agreement called on the Monitor to evaluate:

the effectiveness of the internal controls, record-keeping and financial reporting policies and procedures of Siemens as they relate to Siemens' 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.

Statement of Offense, Attach. 2 ¶ 1.

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

Further, the plea agreement directed the Monitor to conduct an...