Dorsen v. U.S. Sec. & Exch. Comm'n

• Court: U.S. District Court — District of Columbia
• Writing for the Court: BERYL A. HOWELL, United States District Judge
• Citation: Dorsen v. U.S. Sec. & Exch. Comm'n, 15 F.Supp.3d 112 (D. D.C. 2014)
• Decision Date: 14 February 2014
• Docket Number: Civil Action No. 13–00288 BAH
• Parties: David M. Dorsen, Plaintiff, v. United States Securities and Exchange Commission, Defendant.

15 F.Supp.3d 112

David M. Dorsen, Plaintiff

v.United States Securities and Exchange Commission, Defendant.

Civil Action No. 13–00288 BAH

United States District Court, District of Columbia.

February 14, 2014

David M. Dorsen, Washington, DC, pro se.

Kevin Dean Solonsky, Securities & Exchange Commission, Washington, DC, for Defendant.

MEMORANDUM OPINION

BERYL A. HOWELL, United States District Judge

Pending before the Court is the plaintiff David M. Dorsen's motion for attorneys' fees and costs, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552(a)(4)(E)(ii)(II), and Federal Rule of Civil Procedure 54, against the defendant Securities and Exchange Commission (“SEC”). See Pl.'s Mot. for Att'ys Fees (“Pl.'s Mot.”) at 1, ECF No. 5. The underlying FOIA request sought records which the plaintiff believed were relevant to overturn a substantial civil judgment in favor of the SEC against the plaintiff's client, Michael Lauer. See generally id. at 4–12. Less than one month after the plaintiff initiated this lawsuit, the defendant released three responsive documents, totaling five pages, that had previously been withheld, see Pl.'s Mot. Exs. B, C,¹ prompting the plaintiff to assert that he is a prevailing party both eligible and entitled to the attorneys' fees and costs demanded. Id. at 1–3, 13–14. For the reasons set forth below, the plaintiff's motion is denied.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Protracted SEC Litigation

For over a decade, Michael Lauer and the SEC have been parties to litigation that began in 2003, when the SEC authorized a formal investigation and the filing of a civil complaint against Lauer and two companies operating as hedge fund asset managers, alleging that Lauer overstated the value of the funds and manipulated the value of the funds' securities in order to increase his fees. See Pl.'s Mot. at 4–12; Def.'s Opp' n Mot. Att'ys Fees (Def.'s Opp' n) at 2, ECF No. 8; see also SEC v. Lauer, No. 9:03–cv–80612, 2008 WL 4372896, at *2–13 (S.D.Fla. Sept. 24, 2008), aff'd, 478 Fed.Appx. 550 (11th Cir.2012), cert. denied, ––– U.S. ––––, 133 S.Ct. 545, 184 L.Ed.2d 341 (2012). During the course of the SEC civil action, Lauer's assets were frozen, and as a result Lauer defended himself pro se throughout the civil litigation. Pl.'s Mot. at 5. On September 24, 2008, the U.S. District Court for the Southern District of Florida granted summary judgment in favor of the SEC and ordered Lauer to pay $62,596,807.74 in disgorgement, prejudgment interest, and a civil penalty. See SEC v. Lauer, 2008 WL 4372896, at *26–27 ; Def.'s Opp'n at 2–3; Pl.'s Mot. at 10. On appeal of the judgment to the U.S. Court of Appeals for the Eleventh Circuit, Lauer retained the plaintiff for oral argument and for court-ordered supplemental briefing. Pl.'s Mot. at 10–11.

The Eleventh Circuit affirmed the district court's decision in all respects on April 19, 2012, and the Supreme Court denied his petition for certiorari on October 29, 2012. Id. at 11. Shortly thereafter, in early 2013, the plaintiff filed two motions on Lauer's behalf to vacate the judgment and dismiss the complaint on grounds, inter alia, that the SEC had not properly authorized the filing of the suit against Lauer. Id. ; Def.'s Opp'n at 3–4.² Both motions were denied.³

B. FOIA Lawsuit

Following the Eleventh Circuit's denial of Lauer's appeal and while his petition for writ of certiorari was pending, the plaintiff filed a FOIA request on his client's behalf with the SEC on August 27, 2012, seeking disclosure of any agency records:

(1) submitted by the SEC staff to the Commissioners in the matter; and (2) that indicate that by vote the Securities and Exchange Commission authorized a formal investigation of Michael Lauer and the filing of a civil complaint against him. In particular, we seek the dates and nature of the actions taken or authorized by the Commission as reflected in the available documents.

Def.'s Opp'n Ex. A (Letter, dated August 27, 2012). On November 5, 2012, the defendant advised the plaintiff that documents responsive to his request were being withheld under FOIA Exemption 5, 5 U.S.C. § 552(b)(5), as the documents were “protected from disclosure by the attorney work-product, deliberative process and/or attorney-client privileges.” Def.'s Opp'n Ex. B (Letter, dated November 5, 2012, from Dave Henshall, SEC FOIA Branch Chief, to plaintiff), at 1.

The plaintiff appealed this decision by letter to the defendant on November 13, 2012. Def.'s Opp'n Ex. C (Pl.'s Appeal Letter); see also Def.'s Opp'n at 4–5. In his appeal, the plaintiff amended the scope of the request by “narrow [ing] and limit[ing]” the request to “any and all documents that describe or reflect the collective vote of the Commissioners of the Securities and Exchange Commission that authorized both a formal investigation of Michael Lauer and the commencement of a civil action against Michael Lauer,” including “just the date and the vote.” See Def.'s Opp'n Ex. C, at 1. The plaintiff explained that “[a]s narrowed, the appeal does not seek to learn the votes by the individual Commissioners” or “memoranda, letters, or instructions that may have accompanied the Commissioners' votes.” Id.

Over three months after submitting the administrative appeal, with no response from the defendant, the plaintiff filed the instant suit on March 5, 2013, seeking disclosure of documents “[a]s narrowed during the administrative proceeding,” namely, “for documents that reflect the decision and the date of the decision of the SEC Commission or any individual (or Duty) Commissioner to authorize the filing of” the civil action against Lauer in the Southern District of Florida. See Complaint (“Compl.”) ¶ 18, ECF No. 1. On March 13 and 28, 2013, the defendant released a total of five pages of three responsive documents that the plaintiff had requested in his administrative appeal. See Pl.'s Mot. Exs. B, C. The plaintiff subsequently advised this Court that the merits of the case were resolved. See Notice of Resolution of the Merits of the Case (“Notice”) at 1, ECF No. 7. The plaintiff's motion for attorneys' fees is now before the Court. See Pl.'s Mot. at 1.

II. LEGAL STANDARD

The FOIA authorizes the award of attorneys' fees reasonably incurred by a plaintiff who is in litigation to obtain “the production of any agency records improperly withheld,” 5 U.S.C. § 552(a)(4)(B), when “the complainant has substantially prevailed,” id. at § 552(a)(4)(E)(i). The D.C. Circuit has construed this statutory provision as “naturally divid[ing] the attorney-fee inquiry into two prongs, which our case law has long described as fee ‘eligibility’ and fee ‘entitlement.’ ” Brayton v. Office of the U.S. Trade Representative, 641 F.3d 521, 524 (D.C.Cir.2011) (citing Judicial Watch, Inc. v. U.S. Dep't of Commerce, 470 F.3d 363, 368–69 (D.C.Cir.2006) ). Thus, to obtain attorneys' fees under the FOIA, the plaintiff must demonstrate both eligibility and entitlement to the award. See McKinley v. Fed. Hous. Fin. Agency, 739 F.3d 707, 710 (D.C.Cir.2014) ; see also Weisberg v. U.S. Dep't of Justice, 745 F.2d 1476, 1495 (D.C.Cir.1984) (“[E]ligibility alone is not enough .... the complainant must [also] show that he or she is ‘entitled’ to an award.”).

To satisfy the first requirement regarding eligibility for attorneys' fees, a claimant must show that he “substantially prevailed” in the underlying FOIA litigation. See 5 U.S.C. § 552(a)(4)(E)(i). The statute provides that the claimant “substantially prevail[s]” by gaining relief from either: “(I) a judicial order, or an enforceable written agreement or consent decree; or (II) a voluntary or unilateral change in position by the agency, if the complainant's claim is not insubstantial.” Id. at § 552(a)(4)(E)(ii).⁴

If the plaintiff has “substantially prevailed and thus may receive fees ... the court proceeds to the entitlement prong and considers a variety of factors to determine whether the plaintiff should receive fees.” Brayton, 641 F.3d at 524 (emphasis in original) (quotation marks and citations omitted). “This circuit has long applied a multi-factor standard” involving consideration of “[f]our non-exclusive factors:” “ ‘(1) the public benefit derived from the case; (2) the commercial benefit to the plaintiff; (3) the nature of the plaintiff's interest in the records; and (4) the reasonableness of the agency's withholding’ of the requested documents.” McKinley, 739 F.3d at 711 (quoting Tax Analysts v. U.S. Dep't of Justice, 965 F.2d 1092, 1093 (D.C.Cir.1992), superseded by statute, 5 U.S.C. § 552(a)(4)(E)(i), as recognized in Summers v. U.S. Dep't of Justice, 569 F.3d 500, 502 (D.C.Cir.2009) ); see also Cotton v. Heyman, 63 F.3d 1115, 1117 (D.C.Cir.1995). No single factor is dispositive. See Judicial Watch, Inc. v. U.S. Dep't of Justice, 878 F.Supp.2d 225, 234 (D.D.C.2012) ; Elec. Privacy Info. Ctr. v. U.S. Dep't of Homeland Sec., 811 F.Supp.2d 216, 232 (D.D.C.2011) (citing Piper v. U.S. Dep't of Justice, 339 F.Supp.2d 13, 20 (D.D.C.2004) ). “The sifting of those criteria over the facts of a case is a matter of district court discretion.” Tax Analysts, 965 F.2d at 1094 (citing Church of Scientology of California v. Harris, 653 F.2d 584, 590 (D.C.Cir.1981) ); see also Judicial Watch, Inc. v. FBI, 522 F.3d 364, 371 (D.C.Cir.2008) (“Balancing these factors is a matter for the district court.”).

III. DISCUSSION

At the outset, the Court makes clear that any evaluation of the eligibility and entitlement prerequisites for attorneys' fees in this case must be focused on the circumstances of Michael Lauer. Although Lauer's attorney made the underlying FOIA request, is named as the plaintiff in the complaint, and filed the pending motion for attorneys' fees, these actions were taken on behalf of Lauer. See Compl. ¶ 3 (“Plaintiff David M. Dorsen is an attorney at law who is the attorney for Michael Lauer [and] ... is pursuing this action on behalf of Mr. Lauer”); Pl.'s Mot. at 1 (noting that “[p]etitioner...