SEC v. American International Group

Filing

OPINION filed [1418329] (Pages: 7) for the Court by Judge Brown [12-5141]

USCA Case #12-5141

Document #1418329

Filed: 02/01/2013

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 10, 2012

Decided February 1, 2013

No. 12-5141
SECURITIES AND EXCHANGE COMMISSION,
APPELLEE
v.
AMERICAN INTERNATIONAL GROUP,
APPELLANT
SUE REISINGER,
APPELLEE

Appeal from the United States District Court
for the District of Columbia
(No. 1:04-cv-02070)

Alexandra M. Walsh argued the cause for appellant.
With her on the briefs was William H. Jeffress, Jr.
J. Joshua Wheeler argued the cause and filed the brief for
appellee Reisinger.
Before: BROWN and KAVANAUGH, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge BROWN.

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BROWN, Circuit Judge: Compelled by a consent decree,
American International Group, Inc. (“AIG”) promised to hire
an independent consultant to evaluate a number of internal
policies and past transactions. Appellee Sue Reisinger, a
reporter for Corporate Counsel and American Lawyer
magazines, wants to know what the consultant found, but AIG
has no interest in sharing the reports. The district court sided
with Reisinger, concluding the reports are judicial records to
which she has a common law right of access. We disagree and
reverse.
I
In 2004, after the Securities and Exchange Commission
(“SEC”) charged AIG with securities violations, the parties
entered into a consent decree, agnostic about AIG’s
culpability, that enjoined future violation and required AIG to
pay disgorgement to a victim restitution fund, establish a
committee to review transactions prospectively, and retain an
independent consultant to review transaction policies and
procedures and to examine a number of AIG’s completed
transactions. Of particular relevance to this appeal, the
consent decree required the consultant to prepare reports
documenting all findings and conclusions (“IC reports”).
The consent decree was silent on the question of
disclosure, but the parties subsequently filed a joint motion to
“clarify” that the IC reports were to be confidential. The
district court agreed, ordering that the reports “shall be
disseminated only to those persons and entities and their
agents, specified in this Consent,” or as permitted by the court
“for good cause shown.” Since then, the district court has
found good cause twice. First, it permitted disclosure to the
Office of Thrift Supervision at the request of both parties, and
second, it permitted disclosure to the House of

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Representatives Committee on Oversight and Government
Reform at the request of the SEC.
In 2011, Reisinger requested access to the IC reports,
asserting both common law and First Amendment rights of
access. The district court concluded—over the opposition of
the SEC and AIG—Reisinger has a common law right of
access and ordered public disclosure of redacted copies of the
reports. AIG appealed. Our review is de novo. United States v.
El-Sayegh, 131 F.3d 158, 160 (D.C. Cir. 1997).
II
The public has a fundamental interest in “keeping a
watchful eye on the workings of public agencies.” Wash.
Legal Found. v. U.S. Sentencing Comm’n (“WLF”), 89 F.3d
897, 905 (D.C. Cir. 1996) (internal quotation marks omitted).
Courts have accordingly recognized a common law right to
inspect and copy public records—that is, those “government
document[s] created and kept for the purpose of
memorializing or recording an official action, decision,
statement, or other matter of legal significance, broadly
conceived.” Id. This includes judicial records. Yet not all
documents filed with courts are judicial records. Just as a
document would not be a public record when it does not
“eventuate in any official action or decision,” id., whether
something is a judicial record depends on “the role it plays in
the adjudicatory process.” El-Sayegh, 131 F.3d at 163. We
have thus held that a withdrawn plea agreement the court
never ruled on is not a judicial record subject to the common
law right of access because the concept of a judicial record
“assumes a judicial decision,” and with no such decision,
there is “nothing judicial to record.” Id. at 162. Of course,
even if a document is a record of the type subject to the
common law right of access, the right is not absolute: it is

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defeated when the government’s interest in secrecy outweighs
the public’s interest in disclosure. WLF, 89 F.3d at 902. But
we need not put the parties’ competing interests on the scales
because we hold that the IC reports are neither judicial
records nor public records.
A
The IC reports are not judicial records subject to the right
of access because the district court made no decisions about
them or that otherwise relied on them.1 A judicial decision is a
function of the underlying record, El-Sayegh, 131 F.3d at 162,
and if a document was never part of that record, it cannot
have played any role in the adjudicatory process: though
filing a document with the court is not sufficient to render the
document a judicial record, it is very much a prerequisite.
Reisinger’s argument that the IC reports “played a central role
in the adjudication and the ongoing supervision of this case
and the determination of the substantive legal rights of AIG
and the SEC,” Appellee Br. at 12, misses the point. The
court’s approval of the consent decree was surely a function
of its terms (including the provision requiring IC reports), see,
e.g., Frew ex rel. Frew v. Hawkins, 540 U.S. 431, 437 (2004)
(“Consent decrees entered in federal court must be directed to
protecting federal interests.”), but the reports’ contents do not
record, explain, or justify the court’s decision in any way—
nor could they. They did not exist yet, and nothing in the
1

The district court issued an order protecting the reports’
confidentiality and ruled below that Reisinger has a right of access
to them, but neither decision is relevant to our analysis. See ElSayegh, 131 F.3d at 162 (refusing to find right of access merely
because a court examined the documents in question to determine
whether they might be filed under seal or because the court was
called upon to determine whether they were subject to a right of
access).

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record suggests the district court cared a whit about the results
of the independent consultant’s investigation as long as AIG
in fact initiated the investigation. Disclosure of the reports
would do nothing to further judicial accountability. See EEOC
v. Nat’l Children’s Ctr., Inc., 98 F.3d 1406, 1408 (D.C. Cir.
1996) (“[T]he courts are public institutions that best serve the
public when they do their business openly and in full view.”
(internal quotation marks omitted)).
Indeed, the independent consultant had no relationship
with the court. The court did not select or supervise the
consultant and had no authority to extend the consultant’s
tenure or modify his authority. The consent decree gave the
independent consultant no powers unique to individuals
possessing judicial authority, nor did it require the consultant
to file his reports with the court—and unlike the court officer
in United States v. Amodeo, 44 F.3d 141 (2d Cir. 1995), who
thought it “prudent” to file the reports with the court anyway,
the independent consultant took no such initiative. In fact, the
consent decree did not by its terms directly require anything
from the independent consultant; it simply specified the work
AIG would engage the independent consultant to perform.
Presumably, AIG complied with the consent decree merely by
hiring the independent consultant subject to the consent
decree’s terms—regardless of whether the independent
consultant in fact followed those terms, for example, by
producing the required reports.
This case is thus a far cry from Amodeo, invoked by both
the district court and Reisinger. The consent decree in that
case appointed a “Court Officer” authorized to exercise a
number of judicial powers and whose very role depended on a
relationship with the district court. See 44 F.3d at 143. In
holding that the Court Officer’s reports were judicial records,
the Second Circuit relied heavily on the Court Officer’s

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judicial authority and the district court’s obligation, when
addressing an application for enforcement of or relief from
the consent decree, to consider the record of “all
proceedings . . . to the date of the application.” Id. at 146.
This case presents no such facts, a distinction the Second
Circuit has suggested is dispositive. See Iridium India
Telecom Ltd. v. Motorola, Inc., 165 F. App’x 878, 881 (2d
Cir. 2005) (summary order). AIG concedes that if the district
court is one day called upon to enforce the consent decree,
and the IC reports’ contents are relevant, the reports may
become judicial records. But that day has not yet arrived.
Ultimately, it seems, Reisinger wants to evaluate the
performance of the SEC and the independent consultant.2 To
that end, she filed a Freedom of Information Act (FOIA)
request with the SEC before pursuing the IC reports in the
district court, but the SEC—citing the district court’s
seemingly exclusive jurisdiction over the reports—rebuffed
her request. Unfortunately for Reisinger, the value of the
reports for proper oversight of the Executive does not itself
justify disclosure under the judicial records doctrine. See ElSayegh, 131 F.3d at 163. If the agency can appropriately
refuse to disclose the reports under FOIA—we take no
position on the matter—then so be it. See Ctr. for Nat’l Sec.
Studies v. U.S. Dep’t of Justice, 331 F.3d 918, 937 (D.C. Cir.
2003).
B
Not surprisingly, Reisinger spends only two paragraphs
defending her argument that the IC reports are public records.
2

Reisinger pointed out to the district court that the
independent consultant, James Cole, eventually became a U.S.
deputy attorney general.

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Documents created by the independent consultant are not
government documents. Nor do the IC reports memorialize an
official matter of legal significance. Reisinger appears to
argue that the reports became public documents when they
were provided to the government, but such a transfer of
possession is not itself sufficient to render them public
records. See WLF, 89 F.3d at 905–06.
III
The common law right of access predates the
Constitution, El-Sayegh, 131 F.3d at 161, so it is not
surprising the Framers enshrined analogous principles in the
First Amendment, which “guarantees the press and the public
access to aspects of court proceedings, including documents,
‘if such access has historically been available, and serves an
important function of monitoring prosecutorial or judicial
misconduct,’” id. at 160 (quoting Wash. Post v. Robinson, 935
F.2d 282, 288 (D.C. Cir. 1991)). Yet even assuming the First
Amendment applies to the proceedings below, see Ctr. for
Nat’l Sec. Studies, 331 F.3d at 935 (doubting whether the
First Amendment right of access applies to anything beyond
criminal judicial proceedings), for the reasons given above,
the IC reports are not “aspects of court proceedings” and have
no bearing on monitoring judicial conduct.
IV
Because no common law or First Amendment right of
access attaches to the IC reports, the district court’s disclosure
order is
Reversed.

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