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Leopold v. DOJ, No. 19-3192, 2022 WL 4299993 (D.D.C. Sept. 19, 2022) (Contreras, J.)


Leopold v. DOJ, No. 19-3192, 2022 WL 4299993 (D.D.C. Sept. 19, 2022) (Contreras, J.)

Re:  Request for report crafted by independent monitor pursuant to deferred prosecution agreement with bank charged with violating anti-money-laundering and sanctions compliance laws

Disposition:  Granting defendant’s renewed motion for summary judgment; denying plaintiffs’ cross-motion for summary judgment

  • Exemption 8 & Litigation Considerations, Reasonably Segregable Requirements:  The court relates that “[i]n its previous summary judgment opinion, the Court directed the government to address in greater detail whether any meaningful portion of the Monitor’s Report is segregable from that 1,000-page document.”  “In determining the applicability of Exemption 8 in its previous opinion, the Court held only that ‘at the very least, the Report contains information “related to examination, operating, or condition reports” prepared by, on behalf of, or for the use of the Federal Reserve.’”  “Now, . . . the Department . . . assert[s] that the entire Report falls within Exemption 8.”  “Upon consideration of the government's expanded evidentiary submission, the text and purposes of the exemption, and the case law, the Court agrees that the entire Report can be withheld under FOIA Exemption 8.”  “Banks, such as HSBC, clearly qualify as ‘financial institutions.”’  “Numerous cases have also decided that the Federal Reserve is an ‘agency responsible for the regulation or supervision of financial institutions.’”  “The independent Monitor’s Report is also an ‘examination’ report within the meaning of Exemption 8.”  “Here, the Federal Reserve participated in the selection of the monitor, who ‘inspected closely [and] inquir[ed] carefully’ into [the charged bank’s] systems for anti-money laundering and sanctions compliance, . . . then crafted a report for the Federal Reserve’s use in its regulatory actions against [the bank].”  “The Report itself thus qualifies, based on the plain meaning of the statute . . . , as an ‘examination report.’”  “But even if all of the information in the Report is not so fully covered by this definition, the Department has plausibly shown that all of the material at least falls under the ‘related to’ language.”  “After all, ‘the “related to” language casts a wide net of non-disclosure over any [material] that [is] logically connected to an “examination, operating, or condition report[ ].”’”  “[C]ourts in this district have consistently found comparatively less detail to be sufficient for the non-segregability showing in the context of Exemption 8 than in the context of other FOIA exemptions.”  Accordingly, the court finds that “[t]hough relatively brief and somewhat conclusory, . . . the government’s affidavits and filings establish that the Report in its entirety contains exactly the type of information that Exemption 8 exists to protect.” 

    “Furthermore, withholding the Report in its entirety would serve the two purposes of Exemption 8:  (1) the protection of financial institutions and (2) the preservation of the relationship between financial institutions and their supervising agencies.”  “The Court found in its previous opinion that those two purposes were served by applying the exemption based on the foreseeable harms both to the bank and to the relationship of the bank and its supervising agency.”  “Disclosure might undermine public confidence in the bank and undermine the regulatory effectiveness of the Monitor.”

    The court relates that “Plaintiffs contest the Department’s position that no portion is segregable based on [another Judge’s] decision that much of the Report could be released under a First Amendment right-of-access framework.”  The court notes that “[the other judge] ordered release of the Report based on a First Amendment right of access, rather than a claim made pursuant to FOIA.”  “Granting a First Amendment right of access claim lies largely within the discretion of a judge and regards documents that can be considered ‘judicial documents.’”  The court finds that “the harms that [the other judge] considered in order to redact information were not as broad as the harms that Exemption 8 seeks to avoid.”  “[The other judge’s] rejection of some of [the bank’s] proposed redactions offers a perfect example of how applying FOIA Exemption 8 would yield a different outcome than the one he reached.”
  • Litigation Considerations, In Camera Inspection:  The court finds that “the government has met its burden to show that the Report falls within the claimed exemptions.”  “The government has provided sufficient detail in the numerous affidavits it submitted both before and after this Court's previous ruling.”  “Furthermore, that information is not contradicted anywhere in the record, and there is no indication that the government has acted in bad faith.”  “Therefore, the Court declines to conduct an in camera review and finds that summary judgment is warranted.”
Court Decision Topic(s)
District Court opinions
Exemption 8
Litigation Considerations, In Camera Inspection
Litigation Considerations, “Reasonably Segregable” Requirements
Updated October 28, 2022