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D.C. Circuit Denies Reporter Access to Independent Consultant Reports from AIG Settlement with SEC

By: James W. Kraus
February 6, 2013

The D.C. Court of Appeals has reversed a district court’s findings that a news reporter had a common law right of access to reports by an independent consultant who was hired by AIG as part of a 2004 settlement with the SEC.  SEC v. American International Group, No. 12-5141 (D.C. Cir. Feb. 1, 2013).  The court’s decision was based on its findings that the records were neither judicial nor otherwise public, and therefore no right of access could be found under common law or the First Amendment of the Constitution.

In 2004, AIG and SEC entered into a consent decree to settle charges by the SEC, without any admission of wrongdoing by AIG.  Among other things, the consent decree enjoined future violations, 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.  The consent decree further required the consultant to prepare reports documenting all findings and conclusions (IC Reports).  After the entry of the consent decree, the parties filed a joint motion in order to “clarify” that the IC Reports were to be confidential.  The court granted the motion and permitted disclosure to third parties only for “good cause shown.”

In 2011, Sue Reisinger, a reporter for Corporate Counsel and American Lawyer, requested access to the IC reports, citing both common law and First Amendment rights of access.  As indicated above, the district court found that Reisinger had a common law right of access and ordered public disclosure of redacted copies of the reports.

In reviewing the district court’s ruling, the D.C. Circuit found that, while the public has a fundamental interest in keeping a watchful eye on the workings of public agencies, not all documents filed with courts are judicial records.  It further indicated that even if a document is a record of the type subject to common law right of access, the right is not absolute.  Rather, the court stated, the right is defeated when the government’s interest in secrecy outweighs the public’s interest in disclosure, citing Washington Legal Foundation v. U.S. Sentencing Commission, 89 F.3d 897, 902 (D.C. Cir. 1996).

"...while the public has a fundamental interest in keeping a watchful eye on the workings of public agencies, not all documents filed with courts are judicial records."

The court found that 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.  The court further pointed out that the independent consultant had no relationship with the court, adding that the court did not select a supervising consultant and had no authority to extend the consultant’s tenure or modify his authority.  It distinguished the terms of the consent decree in the underlying case from those where a consultant was required to file reports to the court or who otherwise may have thought it prudent to file reports with the court, citing the example of United States v. Amodeo, 44 F.3d 141 (2nd Cir. 1995).  The court went on to reason that even assuming the First Amendment applied to the court proceedings below, the First Amendment did not compel disclosure of the IC reports because the IC Reports were not “aspects of court proceedings.”

The full text of the opinion can be found here: http://www.cadc.uscourts.gov/internet/opinions.nsf/B20182A11FA4C7B785257B050052E561/$file/12-5141-1418329.pdf