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Court Denies Chiquita's Reverse-FOIA Bid To Block Release of Payment Documents

Tuesday, November 26, 2013

Nov. 22 --The U.S. District Court for the District of Columbia Nov. 18 denied Chiquita Brands International Inc.'s(CQB) reverse-Freedom of Information Act bid to prevent the Securities and Exchange Commission from releasing certain documents relating to the company's alleged payments to a Colombian paramilitary terrorist group (Chiquita Brands Int'l, Inc. v. SEC , D.D.C., Civil Case No. 13-435(RJL), 11/18/13).

Judge Richard J. Leon held that the SEC's rejection of Chiquita's request for confidential treatment of the documents was reasonable and didn't violate the Administrative Procedure Act. 

National Security Archive

The court recounted that in November 2008, the National Security Archive--an anti-government-secrecy research institute located at George Washington University--submitted two FOIA requests to the SEC for certain documents that Chiquita had produced during the course of two enforcement investigations. The commission rejected Chiquita's request for confidential treatment, and the SEC's Office of General Counsel denied its appeal.

In April, Chiquita filed the lawsuit challenging the commission's decision, alleging that the SEC violated the APA (72 SLD, 4/15/13). Specifically, Chiquita argued that the SEC's decision to disclose certain payment documents was arbitrary, and that the commission's decision not to redact or withhold certain information to the same extent that the Justice Department did in response to a similar FOIA request was an abuse of discretion.

Chiquita also asserted that such disclosure would affect the fairness of a multi-district litigation in the U.S. District Court for the Southern District of Florida, in which plaintiffs alleged Chiquita violated the Alien Tort Statute by making payments to the terrorist group.

Both parties moved for summary judgment. 

'Ample Evidence.'

The court, finding “ample evidence” to support the SEC's decisions, granted the commission's bid for summary judgment. Further, the court said that the SEC rationally determined that disclosure of the documents would not significantly interfere with the fairness of the litigation in Florida.

Particularly, the court explained that Chiquita failed to specifically show how such disclosure would give an unfair advantage to the plaintiffs.

With respect to the SEC's decision not to redact or withhold the same information as the DOJ, the court said that Chiquita did not cite any legal authority supporting the proposition that the SEC must abide by the DOJ's previous determinations. The court also rejected Chiquita's argument that judicial authorities presiding over a related matter in Colombia would not be able to distinguish between proper evidence and negative publicity.

“Judicial officials, unlike jurors, are trained and experienced in distinguishing between proper evidence and adverse publicity,” the court said.

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