Cuban v. Sec.

• Decision Date: 22 September 2010
• Docket Number: Civil Action No. 09–0996 (RBW).
• Citation: 744 F.Supp.2d 60
• Parties: Mark CUBAN, Plaintiff,v.SECURITIES AND EXCHANGE COMMISSION, Defendant.
• Court: U.S. District Court — District of Columbia

744 F.Supp.2d 60

Mark CUBAN, Plaintiff,

v.SECURITIES AND EXCHANGE COMMISSION, Defendant.

Civil Action No. 09–0996 (RBW).

United States District Court, District of Columbia.

Sept. 22, 2010.

Lyle Roberts, Dewey & Leboeuf LLP, Washington, DC, for Plaintiff.Juanita C. Hernandez, U.S. Securities & Exchange Commission, Melinda Hardy, Securities & Exchange Commission, Office of General Counsel, Washington, DC, for Defendant.

MEMORANDUM OPINION

REGGIE B. WALTON, District Judge.

The plaintiff, Mark Cuban, brings this action against the defendant, the Securities and Exchange Commission (the “SEC”), pursuant to the Freedom of Information Act, 5 U.S.C. § 552 (2006) (“FOIA”) and the Privacy Act, 5 U.S.C. § 552a (2006), challenging the adequacy of the defendant's searches for responsive records and seeking to compel the release of several records the defendant has completely withheld from disclosure. Complaint (“Compl.”) ¶ 1. This matter is currently before the Court on the parties' cross-motions for partial summary judgment pursuant to Federal Rule of Civil Procedure 56 that address their respective positions concerning the reasonableness of the searches the defendant conducted for responsive records and the disclosure of documents made by the defendant to the plaintiff. See Defendant's Motion for Partial Summary Judgment (“Def's. Mot.”); Plaintiff's Memorandum of Law in Opposition to Defendant Securities and Exchange Commission's Motion for Partial Summary Judgment and in Support of Plaintiff's Cross–Motion for Summary Judgment (“Pl.'s Mot.”). The defendant has processed seventeen of the plaintiff's twenty requests and the summary judgment motions pertain to those seventeen requests. As to the remaining three requests, the defendant seeks thirty-six additional months in order to complete the processing and these requests. See Defendant's Motion to Bifurcate and Stay Proceedings (“Def.'s Mot. to Stay”). The plaintiff opposes the defendant's motion for a thirty-six-month extension and seeks immediate production of all responsive records. See Plaintiff Mark Cuban's Memorandum of Law in Opposition to Defendant Securities and Exchange Commission's Motion to Bifurcate and Stay Proceedings (“Pl.'s Opp'n to Stay”). For the reasons set forth below, the Court must grant in part and deny in part both parties' cross-motions for partial summary judgment and deny without prejudice the motion to bifurcate and stay these proceedings. ¹ Also, for the reasons set forth below, the parties shall appear before the Court at a hearing at which the Court will determine an appropriate timeline by which the defendant must complete processing the plaintiff's remaining three requests. In addition, if the defendant continues to rely upon Exemption 7(A) as grounds for refusing to produce responsive documents, at that same hearing the defendant shall be prepared to provide representations to the Court regarding the status of the ongoing investigation.²

I. BACKGROUND

On December 19, 2008, the plaintiff, through counsel, requested from the defendant the production of twenty categories of records pursuant to the FOIA and the Privacy Act. The plaintiff submitted this request in two letters. Specifically, in the letter pursuant to the FOIA exclusively, the plaintiff sought thirteen categories of records relating to several businesses and individuals, including several requests for records related to potential internal SEC investigations.³ Def.'s Mem., Ex. 1 (Decl. of Margaret Celia Winter) (“Winter Decl.”), Attach. A (Dec. 19, 2008 Letter from David M. Ross to SEC) (“Request Ltr. I”) at 1–3. Similarly, in the letter that requested disclosure pursuant to both the FOIA and the Privacy Act, the plaintiff sought seven categories of records related to himself, and various businesses, persons, and potential internal SEC investigations. Id., Ex. 1 (Winter Decl.), Attach. B (Dec. 19, 2008 Letter from David M. Ross to SEC (“Request Ltr. II”)) at 1–3. The defendant received both letters on December 23, 2008, and assigned them a single internal tracking number. Id., Ex. 1 (Winter Decl.), Attach. I (June 29, 2009 Letter from Richard M. Humes to David Ross) at 1, n. 1.

The defendant initially informed the plaintiff that it possessed no responsive records relating to the first four categories of Request Letter I and the third category of Request Letter II Id., Ex. 1 (Winter Decl.), Attach. C (Jan. 30, 2009 Letter from Mark P. Siford to David Ross) at 1–3. As to categories 7 and 11–13 of Request Letter I, the defendant indicated in its initial January 30, 2009 response that it possessed “no means to conduct a reasonable search for [that] type of information,” Id., Ex. 1 (Winter Decl.), Attach. C at 2, and as to category 6 of Request Letter I, the defendant further stated that the only information it had included public records from a judicial proceeding directly available to the plaintiff from the court. Id. As to the remainder of the plaintiff's requests, the defendant stated that it was “consulting with other Commission staff regarding information that may be responsive,” and it would “advise [the] plaintiff of [its] findings as soon as [it] receive[d] a response” from its staff. Id., Ex. 1 (Winter Decl.), Attach. C at 3.

A series of letters from the defendant updating the plaintiff as to the progress of its search followed. On February 5, 2009, the defendant advised the plaintiff by letter that it did not have any responsive records related to category 5 of Request Letter I, and that it was withholding records responsive to categories 1, 2, 4 and 5 of Request Letter II under Exemption 7(A). Id., Ex. 1 (Winter Decl.), Attach. D (Feb. 5, 2009 Letter from Mark P. Siford to David Ross) at 1–2. On March 5, 2009, the defendant informed the plaintiff that it was relying on the deliberative process protection of Exemption 5 of the FOIA to withhold records responsive to category 3 of Request Letter II. Id., Ex. 1 (Winter Decl.), Attach. F (Mar. 5, 2009 Letter from Mark Siford to David Ross) at 1–2. In a March 16, 2010 letter, the defendant stated that it was withholding records responsive related to category 6 of Request Letter I because they fell within the law enforcement classification of Exemption 7(A). Id., Ex. 1 (Winter Decl.), Attach. G (Mar. 16, 2009 Letter from Mark Siford to David Ross) at 1–2. On July 2, 2009, the defendant indicated that it was withholding records related to category 9 of Request Letter I under Exemption 6, and records responsive to categories 8 and 10 of Request Letter I and 6–7 of Request Letter II under Exemption 7(A). Id., Ex. 1 (Winter Decl.), Attach. K (July 2, 2009 Letter from Mark P. Siford to David Ross) at 1. In a July 9, 2009 letter, the defendant informed the plaintiff that while it once may have had records relating to categories 1–5 of Request Letter I and category 3 of Request Letter II, any responsive records had not been retained. Id., Ex. 1 (Winter Decl.), Attach. L (July 9, 2009 Letter from Richard M. Humes to David Ross) at 1; see also id., Ex. 1 (Winter Decl.), Attach. I at 3–4. The defendant also indicated in the July 9, 2009 letter that it was the defendant's position that “internal administrative records used to track staff assignments and inquires are not responsive to th[e] request,” but even if they were responsive, the defendant was relying on Exemption 2 to withhold these records, as well as Exemptions 6 and 7(C) to withhold the names of any staff or other names contained within those records. Id. On September 17, 2009, the defendant wrote to the plaintiff, referencing a telephone conversation between the parties in which the plaintiff purportedly agreed to redefine the scope of his category 6 request in Request Letter I. Id., Ex. 1 (Winter Decl.), Attach. M (Sept. 17, 2009 Letter from Juanita C. Hernández to Lyle Roberts) at 1. The defendant indicated that due to the narrowing of the scope of that category, some additional records previously located were now unresponsive, but other records located were, in fact, still responsive and would be processed for release. Id. The defendant also suggested that if the plaintiff was willing to narrow the scope of other requests, specifically category 10 of Request Letter I by subject matter and time frame, that it would reduce the burden on the defendant to search for responsive records, and therefore presumably hasten the final response time. Id. On September 22, 2009, the defendant reported that it may have located responsive records related to one of the entities regarding which the plaintiff sought records and sought the plaintiff's permission to incur processing costs to review and redact the records. Pl.'s Mem., Declaration of David M. Ross in Support of Plaintiff's Opposition to Defendant Security and Exchange Commission's Motion for Partial Summary Judgment and in Support of Plaintiff's Cross–Motion for Summary Judgment (“Ross Decl.”), Ex. 4 (Sept. 22, 2009 Letter from Mark P. Siford to David M. Ross) at 1.⁴ Finally, on January 14, 2010, the defendant wrote to the plaintiff to state that it was no longer relying upon Exemption 7(A) as grounds for withholding records responsive to category 10 of Request Letter I and category 1 of Request Letter II. Def.'s Mem., Ex. 1 (Winter Decl.), Attach. N (Jan. 14, 2010 Letter from Mark P. Siford to David Ross) at 2. The defendant also stated that, relying on Exemptions 5, 6, and 7(C), it would be producing only redacted records responsive to category 3 of Request Letter II. Id.

The plaintiff also sent a series of communications to the defendant. In addition to negotiating the scope of categories 6 and 10 of Request Letter I, see Def.'s Reply, Ex. 8 (Supplemental Declaration of Margaret Celia Winter) (“Winter Suppl. Decl.”), Attach. B (Sept. 21, 2009 Letter from Lyle Roberts to Juanita C. Hernández) at 1; id., Ex. 8 (Winter Suppl. Decl.), Attach. C (Sept. 25, 2009 Letter from Juanita C. Hernández to Lyle...