Edelman v. SEC, No. 14-1140, 2017 WL 908473 (D.D.C. Mar. 6, 2017) (Moss, J.)

Edelman v. SEC, No. 14-1140, 2017 WL 908473 (D.D.C. Mar. 6, 2017) (Moss, J.)

Re: Request for records concerning converting ownership of Empire State Building into real estate investment trust

Disposition: Granting in part and denying in part defendant's motion or summary judgment; denying plaintiff's motion for summary judgment

• Litigation Considerations, Adequacy of Search: "The Court . . . concludes that the SEC conducted an adequate search for the consumer 'complaints themselves[.]'" The court focuses on plaintiff's two arguments and first finds that "the mere fact that [plaintiff] has located complainants who assert that they made complaints that do not appear in the SEC's production does not, on its own, cast doubt on the efficacy of the SEC's search." "It 'is long settled that the failure of an agency to turn up one specific document in its search does not alone render a search inadequate.'" Second, the court rejects "[plaintiff's] second argument – that the SEC failed to search the paper files and emails of . . . staff members and attorneys – []" and finds that defendant "'was informed by . . . staff that any and all [potentially responsive] records . . . were uploaded, by . . . staff, to the Sharepoint database.'" "As a result, it was entirely reasonable for the SEC to focus its search on that database." "Although it is possible that responsive documents might have been found in the filing cabinets and email accounts of other . . . personnel, the SEC is not required to 'search every record system' in response to a FOIA request; it is only obligated to 'us[e] methods which can be reasonably expected to produce the information requested.'"
   
• Exemption 5, Deliberative Process Privilege: "The Court . . . concludes that the SEC properly withheld portions of the consumer complaints and attorney notes on the basis of the deliberative process privilege." The court focuses on plaintiff's two arguments and first rejects plaintiff's argument "that the SEC's Vaughn index lacks sufficient detail to support the invocation of the privilege[.]" The court finds that "[a]lthough [plaintiff] seeks greater detail, the Court has already explained that there is 'no basis to require the SEC to specify the decisions to which each specific [document] was antecedent' because, as the supplemental Vaughn index states, the documents were produced 'in anticipation of the SEC's determination about whether to allow the [Empire State Realty Trust] transaction to proceed.'" "Greater detail is not necessary to facilitate judicial review or to promote any other purpose embodied in FOIA." The court also finds that "[defendant's] declaration meets [the good faith] standard, and Edelman has offered no reason – beyond unsupported speculation – to question [defendant's] testimony."
   
• Exemption 6: "Given the fact-intensive nature of the required inquiry, the Court cannot accept the SEC's invitation to sustain its application of Exemption 6 to all identifying information about all of the complainants." The court finds that "because the current record lacks sufficient information for the Court to conduct the required balancing, and because the SEC (which mistakenly concluded that providing the complainants' names 'would not shed light on how the government operates,' . . . should conduct the relevant balancing in the first instance, the Court will deny summary judgment at this time." The court relates that, "[a]ccording to the SEC, releasing this information 'would not shed light on how the government operates,' and, thus, the complainants' privacy interest necessarily outweighs the public interest." The court finds "that the SEC has not correctly performed the required balancing." The court finds that defendant's "conclusion ignores the 'public interest in knowing who may be exerting influence on [SEC] officials sufficient to convince them to' approve or disapprove a transaction[,]" "the public interest in knowing whether the SEC gives 'greater weight to the comments submitted by' some complainants than others[,]" and "the public interest in understanding whether particular complaints, which were credited or rejected by the SEC, were based on personal knowledge, financial interests, or other factors."