Villanueva v. United States Dep't of Justice

DANIEL VILLANUEVA, Plaintiff, v. UNITED STATES DEPARTMENT OF JUSTICE and THE FEDERAL BUREAU OF INVESTIGATION, Defendants.

No. 19-23452-CIV-CANN/OSULLIVAN

United States District Court, S.D. Florida

August 12, 2021

REPORT AND RECOMMENDATION

JOHN J O'SULLIVA CHIEF UNITED STATES MAGISTRATE JUDGE

THIS MATTER came before the Court on the Plaintiff's Motion for Summary Judgment and Supporting Memorandum of Law (DE# 34, 10/23/2020) and the Defendants' Response to Plaintiff's Motion for Summary Judgment, and Cross Motion for Summary Judgment (DE# 41, 12/7/20). These matters were referred to Chief United States Magistrate Judge John J O'Sullivan by the Honorable Aileen Cannon, United States District Judge, for a Report and Recommendation in accordance with 28 U.S.C. § 636(b). (DE# 54, 4/15/21). Having carefully considered the cross-motions for summary judgment, the parties' respective responses and replies, and the evidence in the record, it is respectfully recommended that the Plaintiff's Motion for Summary Judgment and Supporting Memorandum of Law (DE# 34, 10/23/2020) be GRANTED in part so as to require the defendants to produce responsive records or provide a more detailed affidavit or index that identifies and explains more specifically the bases for documents withheld under Exemption 7(A) and the other exemptions and be GRANTED to allow the plaintiff to pursue a claim for attorneys' fees and costs, if and when it is appropriate. Additionally, the undersigned respectfully recommends that the Defendants' Response to Plaintiff's Motion for Summary Judgment, and Cross Motion for Summary Judgment (DE# 41, 12/7/20) be GRANTED in part as to the defendants' Glomar response^[1] to preclude disclosure of responsive records of third party individuals on privacy grounds^[2] and DENIED without prejudice to renew after submitting a more detailed declaration or Vaughn index for each of the claimed exemptions.

INTRODUCTION

The parties filed cross-motions for summary judgment on the plaintiff's June 2018 Freedom of Information Act (“FOIA”) request that seeks the release of the Federal Bureau of Investigations' (“FBI”) records created in connection with an investigation into allegations of wire and securities fraud by various related entities and individuals^[3] including ArthroCare Corporation's Chief Executive Officer, Michael Baker, and Chief Financial Officer, Michael Gluk. Both were tried by a jury and convicted. The plaintiff is a licensed private investigator whose FOIA request seeks information that may help him assist attorneys with whom he is working to pursue civil claims arising out of the FBI's wire and securities fraud investigation. The plaintiff seeks summary judgment on the grounds that the defendants have failed to timely comply with their obligations under the FOIA statute and that the defendants have not provided a detailed index or adequate factual bases to justify their initial categorical denial of the plaintiff's FOIA request based on Exemption 7(A) as well as six underlying FOIA exemptions.

In their cross-motion for summary judgment, the defendants seek summary judgment on the grounds that they have met their obligations under FOIA by conducting adequate searches for responsive documents and by providing to the plaintiff all non-exempt, responsive material that they located. The defendants have invoked FOIA Exemption 7(A) to categorically deny the disclosure of approximately 20, 500 pages of responsive records in the FBI's investigative files on the ground that the responsive documents relate to an ongoing criminal prosecution and that release of such documents before Mr. Baker has exhausted his direct appeals or habeas petition could reasonably be expected to interfere with law enforcement proceedings in the event he secures a new trial. Additionally, the defendants invoke six underlying exemptions. The defendants rely on the defendants' Second Declaration of Michael G. Seidel, ^[4] Section Chief of the Record/Information Dissemination Section (“RIDS”), Information (“Second Seidel Decl.”), which adds four additional exemptions. (DE# 41-1, 12/7/20). Additionally, the defendants offer the Court the opportunity to inspect the records in camera. The defendants did not file a Vaughn index regarding the 20, 500 pages of withheld records.

In the present case, the Court must determine whether Exemption 7(A) applies to Mr. Baker's pending habeas petition and allows the defendants to categorically deny the plaintiff's FOIA request. If so, the Court must determine whether the FBI's Second Seidel Declaration satisfies the defendants burden of providing an adequate factual basis for this Court to make a de novo review and determine whether Exemption 7(A) and the six underlying exemptions apply to the defendants' categorical withholding of approximately 20 500 responsive documents.

FACTUAL/PROCEDURAL BACKGROUND

On June 22, 2018, the plaintiff, Daniel Villanueva (“Mr Villanueva” or “the plaintiff”), a licensed private investigator, working with attorneys investigating civil claims on behalf of victims injured as a result of the ArthroCare fraud scheme, filed his initial Freedom of Information Act (“FOIA”) request with the U.S Department of Justice (“DOJ”) and the Federal Bureau of Investigation (“FBI”) (collectively referred to as “defendants”). June 22, 2018 FOIA Request (DE# 34-3, 10/23/20). The plaintiff's June 22, 2018 FOIA request sought records regarding the case files and investigator reports including FBI reports known as 302s, of interviews taken during the investigation relating to the ArthroCare fraud investigation.

Specifically, the June 22, 2018 FOIA request provided:

This record request relates to the Federal Investigation conducted by the FBI into a Securities and Exchange case on Arthrocare Corporation a publicly traded corporation, its relationship with DiscoCare prior to and after Arthrocare purchased DiscoCare, Inc. The Miami Field Office of the FBI was the lead office for the Investigation into DiscoCare, Inc., a medical company associated with the Palm Beach Lakes Surgery Center ... The Miami Field office investigated DiscoCare, The Palm Beach Lakes Surgery Center and its employees and associates, not limited to but including the following persons[:] Dr. Jonathan Cutler, Mr. Michael Denker, Attorney Michael Stephen Steinger, Mr. Mark Izydore, Mr. Matthew Iscoe and Mrs. Jackie Marsh. The Arthrocare Investigation was conducted by the FBI in the Western District of Texas, and several indictments were made as a result of the investigation under court case number 12-CR-00314. We request that all 302 reports and any documents in the FBI case [file] related to the above persons and businesses be produced to us. These investigations took place sometime between 2005 and present. Additionally produce these records: Any other cases investigated by the FBI where Mr. Mark Izydore, Dr. Jonathan Cutler and/or Attorney Michael Stephen Steinger were investigated. Any and all 302 reports, Statements or Documents related to the following: Arthrocare Corporation DiscoCare, Inc. Palm Beach Lakes Surgery Center Dr. Jonathan Cutler Michael Denker Michael Stephen Steinger Mark Izydore Matthew Iscoe Jackie Marsh

June 22, 2018 FOIA Request (DE# 34-3, 10/23/20).

On June 27 and June 28, 2018, the plaintiff received acknowledgment of receipt of the request from the FBI regarding three of his requested subjects namely, DiscoCare, Inc., Palm Beach Lakes Surgery Center, and the six third party individuals, Dr. Jonathan Cutler, Michael Denker, Michael Stephen Steinger, Mark Izydore, Matthew Iscoe, and Jackie Marsh. (DE# 34-4, 10/23/20). As to DiscoCare, Inc. and Palm Beach Lakes Surgery Center, the FBI indicated that it was unable to identify “any main file records responsive to [his] request” and that, therefore, his request regarding those subjects was administratively closed. Id. As to the six third party individuals, the FBI asserted its Glomar response and refused to confirm or deny the existence of such records under FOIA Exemptions 6 and 7(C), 5 U.S.C. §§ 522(b)(6) and (b)(7)(C). (DE# 34-4, 10/23/20). On July 2, 2018, the plaintiff received an acknowledgment of receipt of FOIA request from the FBI regarding Arthrocare Corporation. (DE# 34-5, 10/23/20).

On August 23, 2018, two months after the initial request, a Public Information Officer from the Record/Dissemination Sections (“RIDS”) FBI Records Management Division sent a communication to the plaintiff in which the Officer indicated that the plaintiff's request was in the Initial Processing and that the assigned analyst was searching for, retrieving and reviewing potentially responsive records. See Ex. D (DE# 34-6, 10/23/20). The August 23, 2018 communication explained the process pursuant to which requests are processed and explained that the searcher had not yet determined what track the search was in or how long the search was expected to take. The officer estimated that the FBI would complete the action in 1, 335 days (more than three and half years) from the date the FBI opened the request. Id.

The plaintiff retained counsel to assist with his FOIA request. (DE# 34-1, 10/23/20). On September 26, 2018, the plaintiff's counsel submitted an electronic appeal through the FOIA online portal indicating that counsel had been retained to appeal the response regarding the time for compliance and the lack of information provided regarding the type and quantity of documents. (DE# 34-6, 10/23/20). The plaintiff, through counsel, made numerous attempts to obtain information regarding the appeal. (DE# 34-1, 10/23/20).

As of October 18, 2018, the search for documents was not complete. Id., Ex.1 at ¶ 13, Ex. F (DE# 34-2, 34-9 10/23/20). On October 30, 2018, the plaintiff was advised...