Several recent rulings have highlighted the uncertainty surrounding the discoverability of information provided to the government, either as a part of a government investigation or subsequent proceedings. The decisions suggest that the views of courts on such issues may vary widely, which creates uncertainty for companies interacting with the government.
On March 14, 2016, the U.S. Securities and Exchange Commission (“SEC”) was able to avoid producing documents it had collected during a foreign bribery investigation of Wal-Mart Stores, Inc. in Robbins Geller Rudman & Dowd LLP v. U.S. Securities and Exchange Commission, No. 14-cv-02197 (M.D. Tenn.). In 2014, a law firm brought an action for injunctive relief pursuant to the Freedom of Information Act, claiming that the SEC had failed to provide materials in response to a request that Wal-Mart had provided to the SEC in connection with the agency’s Foreign Corrupt Practices Act investigation into Wal-Mart. Notably, some of these materials had already been disclosed by Wal-Mart itself as well as by the New York Times. However, the SEC refused to produce any materials in response to the request, claiming that the materials were subject to exemption 7(A) of the Freedom of Information Act, which allows an agency to withhold information that was “compiled for law enforcement purposes” where its disclosure “could reasonably be expected to interfere with enforcement proceedings.” 5 U.S.C. § 552(b)(7)(A). The SEC sought summary judgment on the same issue.
District Judge Todd J. Campbell sided with the SEC and dismissed the action, holding that the SEC was not required to disclose the materials that it had compiled. Judge Campbell concluded that the information had been compiled in connection with an investigation and because the SEC asserted that the investigation was still open, the release of documents could interfere with that investigation. The Court held that “if the SEC were required to release to the Plaintiff the documents it has obtained from Wal-Mart through its investigation, those documents likely would reveal the nature, scope, direction, and strategy of the agency’s investigation.” The Court also rejected plaintiff’s arguments that the SEC’s materials should be produced because the materials were presumably the same or similar to what had been made public by Wal-Mart, the New York Times and Congress.
This decision takes a different approach as to the discoverability of materials from the approach taken earlier this year by Judge John Gleeson of the Eastern District of New York. In U.S. v. HSBC Bank, USA, N.A., No. 12-CR-763 (E.D.N.Y.), the court ordered that a corporate compliance monitor’s report be unsealed, on the basis that the report was a judicial record and that the public had a “First Amendment right to see [it].” That decision is currently being appealed to the Court of Appeals for the Second Circuit of New York by both HSBC and the Department of Justice, and the circumstances of the case are different than those in the Robbins Geller case described above. However, as decisions like these make their way through the appeal process, they have the potential to transform how companies, government agencies, and courts view the potential public disclosure of investigation and monitoring reports.