N.Y. Times Co. v. U.S. Dep't of Justice
| Decision Date | 03 February 2021 |
| Docket Number | 19 Civ. 1424 (KPF) |
| Parties | THE NEW YORK TIMES COMPANY and JOHN T. EWING, JR., Plaintiffs, v. UNITED STATES DEPARTMENT OF JUSTICE, Defendant, VOLKSWAGEN AG, Intervenor. |
| Court | U.S. District Court — Southern District of New York |
Plaintiffs The New York Times Company and John T. Ewing, Jr., a reporter for The New York Times, bring this action under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, against Defendant U.S. Department of Justice ("DOJ"). Plaintiffs seek documents relating to DOJ's supervision of Intervenor Volkswagen AG's ("VW") compliance with a 2018 plea agreement (the "Plea Agreement") arising out of VW's scheme to evade emissions requirements. Plaintiffs narrowed their request to a single report and associated appendices (collectively, the "Report") produced by the independent monitor (the "Monitor") tasked with overseeing VW's compliance with the Plea Agreement. Defendant disclosed a limited portion of the Report on October 1, 2019, and, after the monitorship ended on September 14, 2020, provided Plaintiffs with a heavily redacted copy of the Report on November 25, 2020. The parties dispute Defendant's withholding of the remainder of the Report. Now that the parties have had an opportunity to refine the issues, Defendant and Intervenor have moved for summary judgment, and Plaintiffs have cross-moved for summary judgment. For the reasons that follow, Defendant's motion is denied; Intervenor's motion is denied; and Plaintiffs' motion is denied. However, the Court orders Defendant to produce an unredacted copy of the Report for in camera review.
On January 11, 2017, in the United States District Court for the Eastern District of Michigan, Intervenor VW was charged with and agreed to pleadguilty to conspiracy to defraud the United States, to commit wire fraud, and to violate the Clean Air Act; obstruction of justice; and entry of goods by false statement. (Plea Agreement ¶ 1). See generally United States v. Volkswagen, No. 16 Cr. 20394 (SFC) (APP) (E.D. Mich. March 10, 2017). These charges arose from VW's use of cheating software to evade emissions requirements applicable to certain of VW's diesel vehicles. (1st Blackwell Decl. ¶ 3; see also Plea Agreement, Ex. 2 ("Statement of Facts")). DOJ and VW entered into the Plea Agreement on March 10, 2017, when VW pleaded guilty. (1st Blackwell Decl. ¶ 5).2 On April 21, 2017, at sentencing, a district judge in the United States District Court for the Eastern District of Michigan accepted the Plea Agreement and sentenced VW principally to a term of three years' organizational probation on the criminal charges. (Id. at ¶ 6).
The Plea Agreement required VW to, inter alia, pay a $2.8 billion criminal penalty, retain an independent compliance monitor to oversee the company under specified conditions for at least three years, and fully cooperate in the ongoing investigation and prosecution arising out of and related to VW's criminal activity. (1st Blackwell Decl. ¶ 5; see also Plea Agreement ¶¶ 3, 6, 7). If VW violated the Plea Agreement — including by providing "deliberately false,incomplete, or misleading information" or by failing to "implement a compliance program as set forth in the [Plea] Agreement" — the Plea Agreement provided that VW "shall thereafter be subject to prosecution." (Plea Agreement ¶ 9(A)). Specifically, the Plea Agreement stated that "[d]etermination of whether [VW] has breached the Agreement and whether to pursue prosecution of [VW] shall be in [DOJ's] sole discretion." (Id.).
Of significance here, the Plea Agreement required that VW retain an independent monitor for a period of three years. (Plea Agreement, Ex. 3 at ¶ 1). The Monitor's mandate included the responsibility to "assess, oversee, and monitor [VW's] compliance with the terms of the [Plea] Agreement, so as to specifically address and reduce the risk of any recurrence of [VW's] misconduct[.]" (Id., Ex. 3 at ¶ 2).
The Monitor's duties included the production of several reports and work plans. (See Plea Agreement, Ex. 3 at ¶¶ 10-19). One such report is referred to in the Plea Agreement as an "initial review," which "set[s] forth the Monitor's assessment and, if necessary, mak[es] recommendations reasonably designed to improve the effectiveness of the [VW's] program for ensuring compliance[.]" (Id., Ex. 3 at ¶ 12). VW was generally required to "adopt and implement" all of the Monitor's recommendations within 150 days of receiving the initial review (id., Ex. 3 at ¶ 13), and DOJ stated that it could "consider the Monitor's recommendation and [VW's] reasons for not adopting the recommendation in determining whether [VW] has fully complied with its obligations under the[Plea] Agreement" (id., Ex. 3 at ¶ 14). The Monitor was further tasked with submitting "follow-up reviews" that similarly assessed VW's compliance program and made recommendations that VW was generally obligated to adopt. (Id., Ex. 3 at ¶¶ 16-19). DOJ could also consider VW's failure to adopt these recommendations in determining whether VW was in compliance with its obligations under the Plea Agreement. (Id.). Near the end of the Monitor's term, "the Monitor shall certify whether [VW's] compliance program, including its policies and procedures, is reasonably designed and implemented to prevent and detect violations of the anti-fraud and environmental laws." (Id., Ex. 3 at ¶ 19). The Monitor was also obligated to report certain potential misconduct directly to DOJ. (Id., Ex. 3 at ¶ 20(b)).
The Plea Agreement incorporated a provision specifying that the Monitor's reports "are intended to remain and shall remain non-public, ... except to the extent [DOJ] determine[s] in [its] sole discretion that disclosure would be in furtherance of [DOJ's] discharge of [its] duties and responsibilities or is otherwise required by law." (Plea Agreement, Ex. 3 at ¶ 23). One reason enumerated in the Plea Agreement for this confidentiality provision is that "public disclosure of the reports could discourage cooperation, or impede pending or potential government investigations[.]" (Id.). Additionally, "[a]t the outset of the monitorship, [VW] and the Monitor entered into a non-disclosure agreement" that restricted the use of items designated as "protected information" for use "only in connection with the monitorship and for no other purpose." (Meiers Decl. ¶ 9).
Pursuant to the Plea Agreement, VW proposed three candidates for Monitor, from whom DOJ chose former Deputy Attorney General Larry D. Thompson. (Plea Agreement ¶ 15; 1st Blackwell Decl. ¶ 6).3 To ensure that the Monitor and his team had access to the information and personnel at VW necessary to carry out his work, while protecting sensitive commercial information, VW formed a project management office ("PMO") to serve as the Monitor's liaison within VW. (Meiers Decl. ¶¶ 8-9). Among other tasks, the PMO "collect[ed] and review[ed] each document requested by the Monitor to ensure that [VW's] confidential and privileged information [was] protected." (Id. at ¶ 9).
The Monitor's initial report was delivered to DOJ on March 30, 2018. (1st Blackwell Decl. ¶ 23). It covered the Monitor's initial period of review, beginning in October 2017. (Meiers Decl. ¶ 10). The Report consists of nine substantive sections totaling 129 pages, supported by 27 pages of footnotes, and includes five appendices totaling 44 pages. (2d Blackwell Decl. ¶ 16; see also Redacted Report). The Report "describes the Monitor's extensive interviews, meetings, and review of company policies and focuses on the Monitor's list of recommendations and observations regarding the VWcompliance program." (1st Blackwell Decl. ¶ 25). According to VW, these "detailed findings, observations, and ... recommendations" relate to VW's "global compliance systems and processes, technical development, and environmental compliance initiatives." (Meiers Decl. ¶ 11). The Report is "replete with details" about, inter alia, VW's "compliance programs at the onset of the monitorship, the Monitor's activities during the initial review, the company's remediation of its compliance programs, VW's disciplinary process, the Monitor's observations about corporate matters that could affect compliance, and the Monitor's recommendations for corporate change." (1st Blackwell Decl. ¶ 25). In addition to non-binding findings and observations, the report contains 32 recommendations that, as discussed above, VW was generally obligated to adopt. (Meiers Decl. ¶ 11).
After the Monitor delivered the Report, DOJ stakeholders "discussed internally and with the Monitor" in order to assess "whether VW was on track to meet its obligations, what additional information [DOJ] would need to determine whether [VW] had done so, and whether [DOJ] needed to take any additional steps or measures to ensure VW's continued progress under the Plea Agreement." (1st Blackwell Decl. ¶ 30). DOJ considered the Report's "recommendations and advice" in "deciding whether further actions [were] needed under the Plea Agreement," including "whether and to what extent [DOJ] would need to consider extending the term of the monitorship," and "whether VW [was] in breach with the obligations related to its retention of the Monitor and implementation of an effective compliance plan." (Id. at¶¶ 28, 30). On September 14, 2020, after briefing on the instant motions was complete, the Monitor's term ended. (See Dkt. #49; see also 1st Blackwell Decl. ¶ 31; 2d Blackwell Decl. ¶ 6).
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