Case Detail

FOIA Project Annotation: Judge Beryl Howell has ruled that Michael Lauer, who was ordered to pay the SEC $62 million in disgorgement and civil penalties for overstating and manipulating the value of his hedge funds, is eligible for attorney's fees as a result of FOIA litigation brought by his attorney, David Dorsen, but that he is not entitled to fees because of his private interest in the records released. Dorsen, who represented Lauer in his Eleventh Circuit appeal of the SEC order, requested records from the SEC showing when the agency authorized a formal investigation of Lauer and the filing of a civil complaint against him. The agency responded that the records were protected under Exemption 5 (privileges). Dorsen then filed an appeal and agreed to accept only the date and the Commissioners' collective vote. He then filed suit and the agency disclosed five pages of three responsive documents. Dorsen told the court the merits had been resolved and then filed a motion for attorney's fees, arguing that the agency's disclosure of the records made him the prevailing party. At the outset, Howell indicated that "although Lauer's attorney made the underlying FOIA request, is named as the plaintiff in the complaint, and filed the pending motion for attorney's fees, these actions were taken on behalf of Lauer. Indeed, if this motion were successful, any attorneys' fees would be awarded to Lauer, not to the plaintiff." The agency argued that Lauer was not the prevailing party because the agency might well have disclosed the records based on Dorsen's narrowed administrative appeal. Howell rejected the claim, noting that "this prediction about the plaintiff's potential success on administrative appeal implicitly suggests that the released records were not properly subject to withholding under Exemption 5. The defendant cannot simultaneously argue that the documents would have been released in response to the plaintiff's appeal, and assert that the records were exempt from disclosure and, thus, were reasonably withheld." She found that "the lawsuit did, in fact, prompt a speedier release of responsive records before resolution of the appeal, as amply confirmed by the timing of the released shortly after the initiation of this lawsuit." Howell then found that the public interest in the documents was slight. She pointed out that "the public knowledge gained by learning the date and result of SEC Commissioners' votes to investigate and sue Lauer is not a matter of significant or widespread public concern. . .and is primarily relevant to Lauer in his attempt to vacate the civil judgment against him." But she pointed out that "although scrutiny of this agency activity through FOIA requests by individual targets may, therefore, fall short of the general public benefit factor, some value attaches to the disclosure of the SEC's discrete decisions by shedding light on this enforcement activity and, in the aggregate, such information may provide significant public benefit." Howell found Lauer clearly had a personal interest in the request, noting that "the plaintiff concedes that his aim was to use the FOIA request to develop his arguments in support of his efforts to vacate the civil judgment against Lauer. The plaintiff's stated motives are primarily commercial and personal interests, thus this factor weighs against an award of attorneys' fees." She concluded the agency did have a reasonable basis in law for withholding the records. She pointed out that "the defendant has established a colorable basis in law for denying the plaintiff's FOIA request under the belief that Exemption 5 applied since the requested records contain 'attorney-client communications from Staff to the Commission' and include details of internal meetings and deliberations."
Issues: Litigation - Attorney's fees - Eligibility, Litigation - Attorney's fees - Entitlement - Personal interest

Date Filed	Doc #	Docket Text
2013-03-05	1	COMPLAINT against SECURITIES AND EXCHANGE COMMISSION ( Filing fee $ 350, receipt number 4616054782) filed by DAVID M. DORSEN. (Attachments: # 1 Civil Cover Sheet)(rdj) (Entered: 03/05/2013)
2013-03-05		Summons (1) Issued as to SECURITIES AND EXCHANGE COMMISSION. (rdj) (Entered: 03/05/2013)
2013-03-07	2	STANDING ORDER. Signed by Judge Beryl A. Howell on 03/07/2013. (lcbah2) (Entered: 03/07/2013)
2013-03-08	3	AFFIDAVIT of Mailing by DAVID M. DORSEN. (rdj) (Entered: 03/11/2013)
2013-03-08	4	WITHDRAWN PURSUANT TO NOTICE filed 4/4/2013.....MOTION for Summary Judgment by DAVID M. DORSEN (rdj) Modified on 4/15/2013 (rdj). (Entered: 03/11/2013)
2013-04-04	7	NOTICE OF Resolution of the Merits of the case and Notice of WITHDRAWAL OF MOTION by DAVID M. DORSEN re 4 MOTION for Summary Judgment (rdj) (Entered: 04/15/2013)
2013-04-10	5	MOTION for Attorney Fees by DAVID M. DORSEN (rdj) (Entered: 04/11/2013)
2013-04-11	6	NOTICE of Appearance by Kevin Dean Solonsky on behalf of SECURITIES AND EXCHANGE COMMISSION (Solonsky, Kevin) (Entered: 04/11/2013)
2013-04-23		MINUTE ORDER (paperless) Upon consideration of the 7 Notice of Resolution of the Merits of the Case, in which the plaintiff states that "the merits of the case have been resolved," this case is dismissed. The Clerk of the Court is directed to close this case. Signed by Judge Beryl A. Howell on 04/23/2013. (lcbah2) (Entered: 04/23/2013)
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