D.C. Circuit Rules Reporter Had No Access to Report of Independent Consultant Prepared Pursuant to Consent Decree in SEC Enforcement Action

A federal appeals court panel ruled that the report of an independent consultant on a company’s internal policies and past transactions prepared pursuant to a consent decree in an SEC enforcement action was not a judicial record to which a reporter had a right of access. The report of the independent consultant was not a judicial record subject to the right of access because the district court made no decisions about it or otherwise relied on the report. Similarly, documents created by independent consultants are not government documents, reasoned the DC Circuit panel, nor do they memorialize an official matter of legal significance. SEC v. American International Group, CA D of C, Feb. 1, 2013. 

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.  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.

The consent decree was silent on the question of disclosure, but the parties subsequently filed a joint motion to clarify that the reports were to be confidential. The district court agreed, ordering that the reports could be disseminated only to those persons 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 Representatives Committee on Oversight and Government Reform at the request of the SEC. The appeals court rejected the argument that the report became a public document when it was provided to the government. Such a transfer of possession, said the panel, is not itself sufficient to render the report a public record.