Court Opinion

ID: 2659776
Source: CourtListenerOpinion
Date Created: 2014-04-03 03:40:17.913007+00
Date Added: 2024-06-11T12:58:21.785155
License: Public Domain

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

CHIQUITA BRANDS
lN"rEkNArloNAL, 1NC. § I L E D
Plainrirf, NOV l 9 2013
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v_ Courts mr the Drsatricz m F:;=\:rr.')tnw

UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,

Civil Case N0. 13-435 (RJL)

Defendant.

NATIONAL SECURITY ARCHIVE,

§ \é\i`\J\J\_/SJ&J\JS\-/§S€

Intervenor.

MEMO NDUM OPINION

(November ]@2013) [Dkts. ##]4, 15, 18]

Plaintiff Chiquita Brands International Inc. ("Chiquita") filed this reverse-Freedom
of Information Act ("FOIA"’) action on April 4, 2013. See Compl. [Dkt. #l]. Chiquita
seeks to prevent the United States Securities and Exchange Commission ("SEC") from
releasing certain documents in response to a FOIA request by intervenor National
Security Archive ("Archive"). Upon review of the pleadings, the underlying record, and
relevant law, the Court concludes that the SEC’s denial of Chiquita’s request for
confidential treatment was reasonable and did not violate the Administrative Procedure
Act ("APA"). Accordingly, the Court GRANTS the SEC’s Motion for Summary

Judgment [Dl239 F. Supp. 2d 9, 17 (D.D.C. 2002) (quoting
5 U.S.C. § 706(2)(A)), Under the arbitrary and capricious standard, an agency action
"may be invalidated . . . if [it is] not rational and based on consideration of the relevant
factors." FCC v. Nat’l Cz'tizens Comm.f`or Broad., 436 U.S. 775, 803 (1978) (citing
Cz`tz`zens to Preserve Overton Park v. Volpe, 401 U.S. 402, 413-16 (1971)). So long as

the record displays a sound decision-making process, the Court shall uphold the agency

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decision. See Burlz`ngton TruckLines, Inc. v. Unz`led Stales, 371 U.S. 156, 168 (1962)
(holding that the agency must articulate a "rational connection between the facts found
and the choice made").

ANALYSIS

Chiquita’s complaint states two causes of action. First, Chiquita claims that the
SEC’s decision to disclose the Chiquita Payment Documents was arbitrary and capricious,
an abuse of discretion, or otherwise not in accordance with law. Second, Chiquita claims
that the SEC’s decision to independently assess the Overlapping Documents was arbitrary
and capricious, an abuse of discretion, or otherwise not in accordance with law. Because
there is ample evidence in the record to support both of these decisions, the SEC’s Motion
for Summary Judgment is GRANTED and Chiquita’s Motion for Summary Judgment is
DENIED.

FOIA provides that any person can request access to federal agency records or
infonnation. See 5 U.S.C. § 552 el seq. Recognizing "that public disclosure is not
always in the public interest," however, the FOIA statute "provides that agency records
may be withheld from disclosure under any one of the nine exemptions defined in 5
U.S.C. § 552(b)." Balridge v. Shapiro, 455 U.S. 345, 352 (1982). The exemption at
issue in this ease-FOIA Exemption 7(B)-protects from disclosure "records or
information compiled for law enforcement purposes" to the extent that production "would

deprive a person of a right to a fair trial or an impartial adjudication." 5 U.S.C. §

6

552(b)(7)(B) (emphasis added). Our Circuit requires a two part showing to invoke FOIA
Exemption 7(B): "(l) that a trial or adjudication is pending or truly imminent; and (2) that
it is more probable than not that disclosure of the material sought would seriously
interfere with the fairness of those proceedings." Washz`ngton Posl C0. v. DOJ, 863 F.
2d 96, 102 (D.C. Cir. 1988).

Here, OGC found that the Florida Litigation satisfied the first prong of the
Washington Post test. App. 321. With respect to the second prong, however, OGC
found that Chiquita failed to adequately demonstrate how disclosure of the Chiquita
Payment Documents would seriously interfere with the fairness of the Florida Litigation.
App. 322~25. OGC also concluded that, even if the nature of the Colombian
investigation could meet the first prong of the Washz`ngt‘on Post test, it could not satisfy
the second prong. App. 347-52. Specifically, OGC rejected Chiquita’s argument that
judicial authorities presiding over the matter in Colombia would be unable to distinguish
between proper evidence and potential negative publicity. App. 35 l.

There can be no doubt that the SEC rationally determined from the record that
disclosure of the Chiquita Payment Documents would not seriously interfere with the
fairness of the Florida Litigation. First, Chiquita failed to specifically articulate how
disclosure of the Chiquita Payment Documents would confer an unfair advantage upon
plaintiffs in the discovery process. Chiquita conceded, in fact, that it is prepared to

produce the documents if the discovery stay is lifted. App. 107. The only harm

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mentioned was that Chiquita would be disadvantaged by not having the opportunity to
obtain a protective order preventing public dissemination of these documents. App.
107~08. This is not sufficient under the Washz`ngton Post test to invoke Exemption 7(B).
Chiquita also speculates that, upon disclosure of the Chiquita Payment Documents, the
Archive-which is not a party to the Florida Litigation-might work with plaintiffs to
coordinate a public smear campaign against Chiquita. App. 108-10. Again, this does
not suffice.

Chiquita’s speculation about potential publicity and its effect on a future jury in the
Florida Litigation does not satisfy the level of certainty required by FOIA Exemption
7(B). The relevant test is not whether pretrial publicity "could" impact fairness or
impartiality. See Washz'ngton Post, 863 F.2d at 102 (noting that Exemption 7(B)
"requires that release ‘would’ deprive a person of a fair adjudication" while most other
exemptions use the word "could"). Exemption 7(B) expressly requires that disclosure
"would" compromise the fairness of a proceeding. Id. With respect to the Florida
Litigation, there is no certainty about the degree of publicity that may result from
disclosure. Furthermore, as the Suprcme Court has held, "‘pretrial publieity-even
persuasive, adverse publicity~does not inevitably lead to an unfair trial."’ Skz`llz`ng v.
Unitecz’ Sz‘ates, 130 S. Ct. 2896, 2902 (2010) (quoting Nebraska Press Assn. v. Stuart, 427
U.S. 539, 554 (1976)). Here, Chiquita has failed to show why common judicial

safeguards such as voir dire would be insufficient to ensure fairness where there is a

"large, diverse pool of potential jurors." Id. at 2915.

With respect to the Colombian Investigation, the SEC rationally determined that
there is no evidence in the record demonstrating a likelihood of harm sufficient to invoke
Exemption 7(B). The SEC properly rejected Chiquita’s argument that judicial officials
in Colombia would be unable to exclude improper inferences in reaching a decision.
judicial officials, unlike jurors, are trained and experienced in distinguishing between
proper evidence and adverse publicity.

With respect to the Overlapping Documents, the SEC reasonably declined to
blindly apply the same exemptions and redactions as D0j. Chiquita cannot cite any legal
authority for the proposition that the SEC must adhere to determinations previously made
by DOJ regarding the Overlapping Documents. Thus, it was reasonable for the SEC to
process the Overlapping Documents independently. 1n addition, Chiquita made no effort
to explain why specific exemptions should be applied to particular documents or
document categories as required by SEC regulations.3 17 C.F.R. § 200.83(d)(2)(i).
Consequently, OGC reasonably found no basis upon which to withhold or redact these
docu1nents. See App. 320, n.6.

CONCLUSION

Thus, for all of the foregoing reasons, the Court GRANTS defendant’s Motion for

3 'l`here are two exceptions where Chiquita proposed specific redactions (collectively,
"Thompson Memoranda"). The SEC is currently considering Chiquita’s arguments in
reviewing the Thompson Memoranda.

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Summary judgment and DENIES plaintiffs Motion for Summary judgment. intervenor
Archive’s Motion is additionally DENIED as MOOT. An Order consistent with this

decision accompanies this Memorandum Opinion.

///

RICHARD j .
United States District judge