Swan v. S.E.C., 95-5376

• Decision Date: 01 October 1996
• Docket Number: No. 95-5376,95-5376
• Parties: Michael G. SWAN and Teletek, Incorporated, Appellants, v. SECURITIES AND EXCHANGE COMMISSION, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 498

96 F.3d 498

321 U.S.App.D.C. 8

Michael G. SWAN and Teletek, Incorporated, Appellants, v. SECURITIES AND EXCHANGE COMMISSION, Appellee.

No. 95-5376.

United States Court of Appeals, District of Columbia Circuit.

Argued Sept. 9, 1996.

Decided Oct. 1, 1996.

Deborah Kravitz, Washington, DC, argued the cause for appellants. With her on the briefs was Frank C. Razzano.

James A. Brigagliano, Assistant General Counsel, Securities and Exchange Commission, Washington, DC, argued the cause for appellee. With him on the brief were Richard H. Walker, General Counsel, Richard M. Humes, Associate General Counsel, and Paul Gonson, Solicitor.

Before: GINSBURG, RANDOLPH, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

The staff of the Securities and Exchange Commission is conducting a formal investigation, begun in January 1994, to determine whether there have been violations of the federal securities laws. Witnesses have been interviewed, documents subpoenaed and testimony taken. Michael G. Swan, Teletek, Inc., and others are, as the Commission puts it, "involved." During the early stages of this ongoing inquiry, Herbert M. Jacobi, Esq., represented Swan and Teletek. After replacing Jacobi with other counsel Swan and Teletek sent a Freedom of Information Act (5 U.S.C. § 552) request to the Commission, asking for copies of all records relating to statements Jacobi had made to the Commission staff about them. When the Commission denied their request, Swan and Teletek sued in district court to compel production. Judge Robertson refused to permit them to conduct discovery pursuant to Federal Rule of Civil Procedure 56(f) and granted summary judgment in favor of the Commission.

The Commission's refusal to honor the FOIA request rested on exemption 7(A), 5 U.S.C. § 552(b)(7)(A), which excludes "records or information compiled for law enforcement purposes" to the extent that production "could reasonably be expected to interfere with enforcement proceedings." The declaration of an attorney in the Commission's Division of Enforcement explains why releasing these records might interfere with the investigation and any resulting enforcement proceeding. According to the declaration, Jacobi represented not only Swan and Teletek, but also six other people and entities in connection with this matter, and may himself have participated in the transactions under examination. The records encompassed within the FOIA request disclose the identities of witnesses, contain information obtained from sources other than Swan and Teletek, and reflect the Commission staff's selective recording of Jacobi's statements, revealing the scope and focus of the investigation. Producing these records would risk allowing those under Commission scrutiny to tailor their testimony, intimidate witnesses, manufacture favorable evidence, and conceal damaging evidence. On its face, the declaration seems to satisfy the burden exemption 7(A) imposes on the Commission. See, e.g., NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 239-42, 98 S.Ct. 2311, 2325-27, 57 L.Ed.2d 159 (1978); Alyeska Pipeline Serv. Co. v. EPA, 856 F.2d 309, 310-13 (D.C.Cir.1988); Willard v. IRS, 776 F.2d 100, 102-03 (4th Cir.1985).

Rather than contesting the declaration directly, Swan and Teletek insist that these records are outside exemption 7(A) because they reflect statements of their attorney while he represented them. The idea is that information their attorney conveyed to the Commission must be treated as coming from them. How, then, can giving them information they provided "interfere" with the Commission's "enforcement proceedings"? Interference, they say, could result only if the requester would wind up learning something new.

Swan and Teletek's argument contains more than a few holes. They cannot know for certain what Jacobi said to the Commission, so it is hardly correct for them to say they are merely requesting information they already possess. Also, there is no reason to suppose that everything Jacobi said amounted to a representation on their behalf. Jacobi had other clients and he appears to have a personal stake in the Commission's inquiry. At any rate, the position Swan and Teletek advance embodies a mistaken legal theory.

FOIA does not make distinctions based on who is requesting the information. Records, if not exempt, must be made "promptly available to any person." 5 U.S.C. § 552(a)(3). Whether exemption 7(A) protects against disclosure to "any person" is a judgment to be made without regard to the particular requester's identity. "Except for cases in which the objection to disclosure is based on a claim of privilege and the person requesting disclosure is the party protected by the privilege, the identity of the requesting party has no bearing on the merits of his or her FOIA request." United States Dep't of Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749, 771, 109 S.Ct. 1468, 1480-81, 103 L.Ed.2d 774 (1989). We have cited Reporters Committee for "the principle of disregarding the identity of the requester" in FOIA cases. Schwaner v. Dep't of the Air Force, 898 F.2d 793, 798 (D.C.Cir.1990). See also Reed v. NLRB, 927 F.2d 1249, 1252 (D.C.Cir.1991); North v. Walsh, 881 F.2d 1088, 1096-97 (D.C.Cir.1989). Since the exemption the Commission invoked does not rest on a claim of privilege, the Reporters Committee principle dictates that the requesters' identities are of no significance. Whether exemption 7(A) applies depends instead on the character of the records and the interference with "enforcement proceedings" one could reasonably expect to result from releasing those records to anyone, not just to Swan and Teletek. It is therefore of no moment if the agency's records reflect statements of the requesters' attorney, of some other agent of the requesters, or of the requesters themselves.

The reasons for this are not far to seek. FOIA directs agencies to make information "available to the public." 5 U.S.C. § 552(a). Federal agencies receive hundreds of thousands of these requests each year. It would be an administrative nightmare if disclosure turned on who was making the request. For one thing, the agencies may not know who ultimately will receive the information. Attorneys and agents are in the business of filing FOIA requests for others. Once records are released, nothing in FOIA prevents the requester from disclosing the information to anyone else. The statute contains no provisions requiring confidentiality agreements or similar conditions. Furthermore, agencies could hardly be expected to conduct investigations into the circumstances of individual requesters. Agencies, and hence courts, must evaluate the risk of disclosing records to some particular FOIA requester not simply in terms of what the requester might do with the information, but also in terms of what anyone else might do with it.

Neither Campbell v. Department of Health & Human Services, 682 F.2d 256 (D.C.Cir.1982), nor Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854 (D.C.Cir.1980), stands for any different proposition, as Swan and...