UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

JASON LEOPOLD, : : BUZZFEED INC., : : Plaintiffs, : Civil Action No.: 19-3192 (RC) : v. : Re Document No.: 54, 56 : DEPARTMENT OF JUSTICE, : : Defendant. :

MEMORANDUM OPINION

DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFFS’ CROSS-

MOTION FOR SUMMARY JUDGMENT

I. INTRODUCTION

On October 24, 2019, Jason Leopold (“Leopold”) and Buzzfeed Inc. (“Buzzfeed”)

(collectively, “Plaintiffs”) filed a Freedom of Information Act (“FOIA”) suit against the

Department of Justice (“DOJ” or “Defendant” or the “Agency”). Currently, the D.C. Circuit has

remanded this case for a third round of summary judgment to resolve a remaining issue: whether

disclosing a redacted First Annual Follow-Up Review Report and appendices (“Monitor

Report”) documenting HSBC’s1 compliance with a deferred prosecution agreement (“DPA”)

would harm the interests protected by FOIA Exemption 8. Defendant argues that the redactions

shield certain law enforcement records and that their release would cause harm, while Plaintiffs

The Court uses “HSBC” to collectively refer to HSBC Holdings plc, the ultimate parent 1

company, HSBC North America Holdings, Inc., a subsidiary of HSBC Holdings plc, and HSBC Bank USA, a subsidiary of HSBC North America Holdings, Inc. seek summary judgment to force the disclosure of a redacted version of the Monitor Report.

This action has undergone multiple rounds of court rulings. For the reasons stated below, the

Court denies Defendant’s motion for summary judgment and denies Plaintiffs’ cross-motion for

summary judgment.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The Deferred Prosecution Agreement

In 2012, the U.S. Attorney’s Office for the Eastern District of New York and the Money

Laundering and Asset Recovery Section of DOJ’s Criminal Division, filed a criminal

information against HSBC and its subsidiaries, charging them with violations of the Bank

Secrecy Act, including failure to maintain an anti-money laundering program and conduct due

diligence on foreign correspondent bank accounts. Declaration of Margaret A. Moeser (“Moeser

Decl.”) ¶ 12, ECF No. 15-10. The criminal information also charged HSBC with facilitating

financial transactions for sanctioned entities, violating the International Emergency Economic

Powers Act and the Trading with the Enemy Act. Id. Along with the criminal information, the

government immediately filed a DPA, a statement of facts, and a corporate compliance monitor

agreement, requesting that the court place the prosecution in abeyance for 60 months. Id. ¶ 13.

HSBC also reached resolutions with the United Kingdom’s Financial Conduct Authority and the

Federal Reserve over the same conduct. Id. ¶ 14; Declaration of Richard Naylor (“Naylor

Decl.”) ¶¶ 12–18, ECF No. 54-5.

As part of the DPA, an independent monitor was appointed to evaluate HSBC’s

compliance with anti-money laundering and sanctions laws, and to submit progress reports. See

generally Moeser Decl. HSBC committed to “cooperate fully with the Monitor.” Declaration of

Stephen Stich Match (“Match Decl.”) Ex. 1, Attach. B at B-2, ECF 56-4. This cooperation

2 required full transparency, including by “facilitat[ing] the Monitor’s access to HSBC Group’s

documents and resources” and “provid[ing] the Monitor with access to all information,

documents, records, facilities and/or employees, as reasonably requested by the Monitor, that fall

within the scope of the Mandate of the Monitor under this Agreement.” Id. Breach of the

agreement would subject HSBC to prosecution. See Match Decl. Ex. 1 at 18–19. Per the

agreement, the Monitor would submit reports to DOJ, including annual follow-up reviews.

Match Decl. Ex. 1, Attach. B at B-8, B-10–11. Those reports were subject only to a limited

promise of confidentiality, and DOJ retained the “sole discretion” to publish the reports if it

determined that doing so would further “its duties and responsibilities.” Id. at B-11.

B. The Monitor Report

Judge John Gleeson of the U.S. District Court for the Eastern District of New York, who

approved the DPA and oversaw the initial action, ordered DOJ to file quarterly reports about its

implementation. United States v. HSBC Bank USA, N.A., No. 12-cr-763,

, at *1

(E.D.N.Y. Jan. 28, 2016) (“HSBC I”), rev’d,

(2d Cir. 2017) (“HSBC II”). In

January 2015, the Monitor issued his first report to HSBC, DOJ, the United Kingdom’s Financial

Conduct Authority, and the Federal Reserve. Moeser Decl. ¶ 15. Judge Gleeson ordered the

government to file the Monitor’s Report in June 2015, but initially kept it under seal due to

requests from both the government and HSBC.

A third party moved to unseal the Monitor

Report, and the district court ruled that a redacted version of the Monitor Report could be

unsealed, balancing public access with concerns about future law enforcement efforts.

Declaration of David K. Kessler (“1st Kessler Decl.”) ¶ 4, ECF No. 15-7. The U.S. Court of

Appeals for the Second Circuit later reversed the decision, ruling that the district court had erred

in ordering some of the report to be unsealed. Declaration of Michael P. Grady (“Grady Decl.”)

3 ¶ 17, ECF No. 54-4; HSBC II,

. The Second Circuit concluded that the

Monitor Report was not a judicial document and noted concerns that its public disclosure could

harm law enforcement efforts. HSBC II,

. It also noted that members of the

public could request the Monitor Report under FOIA, and “offer[ed] no view on whether any of

FOIA’s exemptions would apply.”

at 142 n.7.

C. The FOIA Request and Prior Proceedings

In August 2019, Leopold sent the Executive Office for U.S. Attorneys (“EOUSA”) a

request for a copy of the Monitor’s Report, which the EOUSA initially withheld based on FOIA

exemptions 4, 6, 7(A), 7(C), 7(D), and 8. Declaration of Vinay J. Jolly (“Jolly Decl.”) ¶¶ 1, 4,

ECF No. 15-3; Joint Status Rep., ECF No. 52. The parties filed cross-motions for summary

judgment, and the Court found that Exemption 8 applied to the Monitor Report in full. Mem.

Op. at 20, ECF No. 25. Nonetheless, the Court denied Defendant’s summary judgment, as it was

not satisfied that all reasonably segregable material had been released.

at 22–24. After DOJ

conducted a line-by-line review and determined that no portion was reasonably segregable, the

parties then filed a second round of summary judgment motions. This Court granted

Defendant’s motion for summary judgment and denied Plaintiff’s cross-motion for summary

judgment because it found that “Exemption 8 suffices to allow the government to withhold the

[Monitor] Report in full,” though it did not ultimately determine whether Exemption 4 or any

other exemptions also applied. Mem. Op. at 24, ECF No. 47. Plaintiffs appealed the district

court’s decision.

On March 1, 2024, the D.C. Circuit vacated the summary judgment granted to the

Defendant and remanded for further proceedings, instructing DOJ to provide a more detailed

justification for withholding the Monitor Report. Leopold v. Dep’t of Just.,

, 38–39

4 (D.C. Cir. 2024). Specifically, DOJ was required to explain how the release of any portion of the

Monitor Report could foreseeably harm an interest protected by Exemption 8.

The court

emphasized the need for a “sequential inquiry,” in which DOJ must first demonstrate that an

exemption applies to the record, then show how disclosing specific portions could foreseeably

harm an interest protected by that exemption, while also considering whether partial disclosure is

possible.

at 37–38. This process ensures that agencies do not overuse exemptions and

remain transparent about the harms justifying withholding information.

. The circuit

court found that the district court’s ruling, which held that Exemption 8 covered the entire

Monitor Report, was insufficient because it failed to adequately assess whether portions of the

Monitor Report could be disclosed without harm.

It also rejected DOJ’s reliance on vague

and conclusory declarations.

. As the circuit court pointed out, the foreseeable harm

requirement imposes a “meaningful burden on agencies” to provide concrete evidence to justify

withholding any part of the Monitor Report.

.

III. LEGAL STANDARDS

FOIA “sets forth a policy of broad disclosure of Government documents in order ‘to

ensure an informed citizenry, vital to the functioning of a democratic society.’” FBI v.

Abramson,

(1982) (quoting NLRB v. Robbins Tire & Rubber Co.,

(1978)). Accordingly, FOIA “mandates release of properly requested federal agency

records unless the materials fall squarely within one of nine statutory exemptions.” Prop. of the

People, Inc. v. Off. of Mgmt. & Budget,

(D.D.C. 2018) (citing Milner v.

Dep’t of Navy,

, 565 (2011); Students Against Genocide v. Dep’t of State,

(D.C. Cir. 2001)). “Because disclosure rather than secrecy is the dominant objective of

5 the Act, the statutory exemptions are narrowly construed.” Elec. Priv. Info. Ctr. v. U.S. Drug

Enf’t Agency,

(D.D.C. 2016) (cleaned up).

To prevail on a motion for summary judgment, a movant must show that “there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a matter of

law.” Fed. R. Civ. P. 56(a). “FOIA cases typically and appropriately are decided on motions for

summary judgment.” Def. of Wildlife v. U.S. Border Patrol,

(D.D.C.

2009). “Unlike the review of other agency action that must be upheld if supported by substantial

evidence and not arbitrary or capricious, the FOIA expressly places the burden ‘on the agency to

sustain its action’ and directs the district courts to ‘determine the matter de novo.’” U.S. Dep’t of

Just. v. Reps. Comm. for Freedom of Press,

(1989) (citing

(a)(4)(B)). To satisfy its burden, the agency must provide “a relatively detailed justification,

specifically identifying the reasons why a particular exemption is relevant and correlating those

claims with the particular part of the withheld document to which they apply.” Elec. Priv. Info.

Ctr.,

(citing Mead Data Central v. U.S. Dep’t of Air Force,

(D.C. Cir. 1977)). “This burden does not shift even when the requester files a cross-

motion for summary judgment because the Government ultimately has the onus of proving that

the documents are exempt from disclosure, while the burden upon the requester is merely to

establish the absence of material factual issues before a summary disposition of the case could

permissibly occur.” Ctr. for Investigative Reporting v. U.S. Customs & Border Prot.,

, 99 (D.D.C. 2019) (cleaned up). “At all times courts must bear in mind

that FOIA mandates a ‘strong presumption in favor of disclosure.’” Nat’l Ass’n of Home

Builders v. Norton,

(D.C. Cir. 2002) (quoting U.S. Dep’t of State v. Ray,

(1991)).

6 IV. ANALYSIS

The D.C. Circuit’s opinion emphasized that, on remand, DOJ must explain how harm

would result from disclosing each portion of the Monitor’s Report and address Judge Gleeson’s

findings regarding redactions. Leopold v. Dep’t of Just.,

. Following the D.C.

Circuit’s decision, the parties confirmed that Plaintiffs seek only the Monitor Report as redacted

by Judge Gleeson – and not the Monitor Report in full – and they agreed to a briefing schedule.

Jt. Status Rep., ECF No. 52 ¶ 1. Through the summary judgment briefing, the parties agree that

Plaintiffs have met their burden to establish their continued standing. See Combined Opp’n to

Pls.’ Cross-Mot. for Summ. J. & Reply in Further Support of Def.’s Mot. for Summ. J. (“Def.’s

Cross-MSJ Opp’n”) at 18–19, ECF No. 58. The parties are also in agreement that “Exemption 8

covers the Monitor Report in its entirety.” Id. at 19. Accordingly, the remaining issues to be

resolved by this Court are whether DOJ has satisfied the foreseeable harm requirement with

respect to the report’s disclosure, whether further redactions or in camera review can address the

concerns, and whether these factors justify withholding the redacted Monitor Report.

A. Harm from Disclosure (Exemption 8)

DOJ contends that the supplemental declarations included with its motion for summary

judgment offer a detailed description of the harm it anticipates from disclosing any portion of the

Monitor Report. See Def.’s Cross-MSJ Opp’n at 16–28. It argues that the harm from disclosure

is reasonably foreseeable to the prosecution of other financial institutions, it impairs banking

regulators’ ability to carry out their responsibilities to supervise banking organizations, and it

threatens the security of HSBC and other financial institutions. Id. at 19–39. Plaintiffs argue

that DOJ bears an independent and meaningful burden to show that disclosing any portion of the

Monitor Report would harm an interest protected by Exemption 8 and that DOJ’s evidence is

7 insufficient. Pls.’ Third Cross-Mot. Summ. J (“Pls.’ Cross-MSJ”) at 15–26, ECF No. 56. They

argue that their evidence creates a dispute of material fact, thereby precluding summary

judgment for DOJ. Id. at 12–15.

Exemption 8 of the FOIA protects from disclosure materials that are “contained in or

related to examination, operating, or condition reports” prepared by or for agencies that regulate

or supervise financial institutions.

(b)(8). This circuit has emphasized that while

FOIA exemptions should be narrowly interpreted, Congress intentionally crafted Exemption 8

with a broad, all-inclusive definition. Consumers Union of U.S., Inc. v. Heimann,

(D.C. Cir. 1978)). Many courts have recognized the broad scope of Exemption 8, including

this Court. Atkinson v. FDIC, No. 79-1113,

, at *2 (D.D.C. Feb. 13, 1980).

This broad scope extends to documents that are “related to” examination reports, making them

also exempt from disclosure. Atkinson,

at *1. Documents that “represent the

foundation of the examination process, the findings of such an examination, or its follow-up” fall

under the exemption. Atkinson,

at *1; Williams & Connolly LLP v. Off. of the

Comptroller of the Currency,

(D.D.C. 2014)). Congress created

Exemption 8 with two main purposes: (1) to protect financial institutions and (2) to preserve the

relationship between financial institutions and their supervising agencies. Consumers Union,

. The first purpose aims to prevent the release of examination reports, which

could undermine public confidence and cause “unwarranted runs on banks.”

The second

purpose seeks to maintain the full cooperation of financial institutions by ensuring that sensitive

information shared with their supervising agencies remains confidential.

8 1. Foreseeable Harm Requirement

Whether a record falls within an exemption and whether nondisclosure of that record is

permissible under the FOIA Improvement Act’s foreseeable harm standard are “distinct,

consecutive inquiries.”

Stat. 538 (2016); see also Leopold v. DOJ,

(D.C. Cir. 2024). This Court previously held that the Monitor Report may be

withheld under Exemption 8, as it qualifies it as an “examination report” related to the regulation

of financial institutions. Mem. Op. at 13–20, ECF No. 47. The parties are now in agreement

about this conclusion. However, “pursuant to the FOIA Improvement Act, an agency must

release a record—even if it falls within a FOIA exemption—if releasing the record would not

reasonably harm an exemption-protected interest and if its disclosure is not prohibited by law.”

Rosenberg v. U.S. Dep’t of Def.,

(D.D.C. 2018), on reconsideration in

part,

(D.D.C. 2020); see also Ctr. for Investigative Reporting v. U.S.

Customs & Border Prot.,

, 106 (D.D.C. 2019).

DOJ argues that the disclosure of the Monitor Report would cause foreseeable harm,

specifically regarding the security and integrity of financial institutions. See Def.’s Cross-MSJ

Opp’n at 19–39. It identifies three harms: impairing financial crime prosecutions, hindering

banking regulation, and threatening institutional security, all of which fall under Exemption 8’s

protections.

It also contends that the harm to prosecutions and deferred prosecutions of

financial institutions, such as HSBC, is crucial to maintaining financial security and integrity.

at 23–29. It explains that these concerns align with Exemption 8’s intent to safeguard both

individual financial institutions and the broader industry. Id. at 22; see generally Gregory v.

FDIC,

(D.C. Cir. 1980); Consumers Union of U.S., Inc. v. Heimann,

(D.C. Cir. 1978). In contrast, Plaintiffs argue that DOJ’s position contradicts FOIA’s mandate

9 for de novo court review. Pls.’ Reply in Supp. of Their Third Cross-Mot. for Summ. J. “Pls.’

Cross-MSJ Reply”) at 4, ECF No. 60. Although DOJ criticizes Plaintiffs for failing to provide

affirmative evidence disputing its harm claims, Plaintiffs maintain that they have presented

adequate evidence and that it is ultimately the Court’s responsibility to independently assess the

existence of harm.

Accordingly, the Court will assess whether it can grant summary

judgment to either party based on the current record alone.

a. Harm to the Prosecution of Financial Institutions

DOJ argues that disclosing the Monitor Report would harm the prosecution of financial

institutions for crimes by undermining the confidentiality of DPAs, which are essential for

obtaining cooperation from banks and their employees. Grady Decl. ¶¶ 22, 27. DOJ, supported

by declarations from the Federal Reserve, the UK Regulator, and HSBC, asserts that disclosure

would discourage financial institutions from entering into DPAs, hinder regulatory cooperation,

and discourage candid communication about compliance deficiencies. Id. ¶¶ 23, 25. DOJ

maintains that the potential harm to future enforcement and financial stability is reasonable,

given the significant reliance on confidentiality in regulatory oversight. Naylor Decl. ¶¶ 26, 27;

Declaration of Emad Aladhal (“Aladhal Decl.”) ¶ 31, ECF No. 58-2. It also emphasizes that

protecting these assurances is crucial to maintaining effective oversight and preventing future

financial crimes. Naylor Decl. ¶¶ 26, 27. Plaintiffs dispute these claims by arguing that

Exemption 8 does not apply to protect prosecutions or deferred prosecutions, see Consumers

Union,

; and even if Exemption 8 applied, DOJ has failed to demonstrate that

disclosure would harm the prosecution, especially because the redacted information is non-

sensitive. Pls.’ Cross-MSJ at 17–20. Plaintiffs further argue that restricting disclosure to the less

sensitive sections of the Monitor Report will not harm future DPAs or financial institutions.

10 at 19–20. They emphasize that the case concerns a bank that is already aware of its criminal

conduct and has no leverage to refuse a DPA. Id. at 18.

As previously held by this Court, Exemption 8 applies to the Monitor Report because it

protects “examination, operating, or condition reports” prepared by agencies that regulate

financial institutions. Mem. Op. at 18–22, ECF No. 25. The Monitor Report was prepared for

the Federal Reserve, an agency responsible for regulating financial institutions, and it provides a

detailed assessment of HSBC’s compliance with anti-money laundering and sanctions

regulations. Id. at 19–20. The Court found, and it continues to agree here, that the Monitor

Report is either directly “contained in” or “related to” such examination reports, and the broad

scope of Exemption 8 covers all information in the report. Id. at 18–20. The Court also found

that, though Judge Gleeson’s First Amendment analysis focused on judicial documents and could

allow for redactions based on narrower harms, the same approach is not taken when deciding

whether withholding is appropriate under FOIA. Id. at 20–22. As such, Exemption 8’s broader

protections against disclosure of information related to financial institutions apply. Id.

B. In Camera Review

Plaintiffs argue that the Court should resolve any dispute of fact through in camera

review of Judge Gleeson’s redactions. They assert that such review provides a preferable

method of resolving this case over the Court conducting a bench trial, which Plaintiffs believe

would be complicated by the potential testimony of a retired federal judge. Pls.’ Cross-MSJ at

34–35. In contrast, DOJ opposes in camera review, arguing that it would be inappropriate here.

Def.’s Cross-MSJ Opp’n at 40–43. DOJ further contends that in camera review is typically used

to address gaps in agency declarations, not to replace a bench trial. Id at 41–42. Defendant also

11 argues that its declarations sufficiently justify withholding the Monitor Report under Exemption

8 and demonstrate the potential harm of disclosure. Id. at 40–43.

FOIA allows for in camera review, but courts have “broad discretion” in deciding

whether it is necessary to determine if the government has met its burden. Loving v. Dep’t of

Def.,

(D.C. Cir. 2008) (quoting Armstrong v. Exec. Off. of the President,

, 577–78 (D.C. Cir. 1996)). The government typically meets its burden by providing

declarations that describe the document and explain why it falls under the claimed exemption.

If the declarations provide specific, uncontested information placing the documents within

the exemption and there is no evidence of agency bad faith, then summary judgment is

appropriate without in camera review. Hayden v. Nat’l Sec. Agency/Cent. Sec. Serv.,

(D.C. Cir. 1979); see also Ray v. Turner,

(D.C. Cir. 1978).

Courts should not routinely resort to in camera inspection, as it requires significant resources.

Ray,

; People for the Am. Way Found. v. Nat’l Park Serv.,

(D.D.C. 2007). However, in camera review may be appropriate in certain cases, such as

when agency declarations lack sufficient detail, when the number of records is small, when

discrepancies exist between an agency’s declarations and other public information, or when there

are concerns over the contents of the documents themselves.

DOJ notes that the D.C. Circuit has implied in prior cases that courts should avoid in

camera review for voluminous documents like the Monitor Report. See Juarez v. Dep’t of Just.,

(D.C. Cir. 2008) (“[D]ue to the minimal length of the documents involved, we

agree with appellant that the district court would not have abused its discretion had it chosen to

review the documents in camera.”). Additionally, it asserts that Plaintiffs have failed to provide

admissible evidence to challenge their claims of foreseeable harm from disclosure. Def.’s Cross-

12 MSJ Opp’n at 41. Considering Plaintiff’s response to that assertion, the Court disagrees. See

Pls.’ Cross-MSJ Reply at 19–22. Although the Court acknowledges that DOJ has provided

abundant evidence that disclosing any portion of the Monitor Report would result in foreseeable

harm and it is not contemplating discovery or a bench trial, the Court also finds that it will gain

important context and better understanding of the issues at play if it reviews Judge Gleeson’s

redactions itself. The Court reaches this conclusion by considering the following: Judge Gleeson

found no harm in disclosing a redacted version of the Monitor Report, indicating that much of

the information was either generalized or non-sensitive; the Monitor’s own conclusion suggested

that a redacted version could be released without damaging DOJ’s interest; and DOJ’s previous

public filings disclosed potentially similar information without objection, suggesting that

portions of the Monitor Report might be similarly released with minimal risk of harm.

Courts have recognized that in camera review can be helpful when there is a need to

assess whether the agency’s declarations or the veracity of claims about potential harm are

sufficient to withhold the records. Dickstein Shapiro LLP v. Dep’t of Defense,

(D.D.C. 2010); Lam Lek Chong v. U.S. Drug Enf’t Admin.,

(D.C. Cir.

1991); Carter v. U.S. Dep’t of Com.,

, 392–393 (D.C. Cir. 1987); Meeropol v.

Meese,

(D.C. Cir. 1986); Lesar v. U.S. Dep’t of Just.,

(D.C.

Cir. 1980). Thus, in camera review remains an essential tool in resolving complex FOIA

disputes involving sensitive government documents. Therefore, the Court is within its discretion

to use in camera review to determine whether portions of the redacted Monitor Report should be

disclosed in light of the arguments presented by the parties. Accordingly, the Court holds that,

within thirty days of this opinion, DOJ must submit the redacted Monitor Report for in camera

review. See Bloche v. Dep’t of Def.,

(D.D.C. 2019) (“Where the agencies

13 have fallen short, the Court concludes that summary judgment in neither side’s favor is

appropriate at this juncture. The Court instead orders that the agencies produce the documents at

issue for in camera review[.]”). The submission to be made must allow the Court, through

shading or otherwise, to see the actual redactions made by Judge Gleeson in order to compare the

type of information he redacted with that he found suitable to disclose. After reviewing the

submission, the Court will then make its determination on whether all or part of the redacted

Monitor Report must be produced pursuant to the FOIA.

V. CONCLUSION

For the foregoing reasons, the Court denies Defendant’s motion for summary judgment

and Plaintiffs’ cross-motion for summary judgment. Within 30 days of this opinion and order,

Defendant shall submit the redacted Monitor Report for in camera review. An order consistent

with this Memorandum Opinion is separately and contemporaneously issued.

Dated: March 20, 2025 RUDOLPH CONTRERAS

United States District Judge

14