Senior Executives Ass'n v. United States

891 F. Supp. 2d 745, 2012 U.S. Dist. LEXIS 130572, 2012 WL 4039814
CourtDistrict Court, D. Maryland
DecidedSeptember 13, 2012
DocketCivil Action No. 8:12-cv-02297-AW
StatusPublished
Cited by2 cases

This text of 891 F. Supp. 2d 745 (Senior Executives Ass'n v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Senior Executives Ass'n v. United States, 891 F. Supp. 2d 745, 2012 U.S. Dist. LEXIS 130572, 2012 WL 4039814 (D. Md. 2012).

Opinion

MEMORANDUM OPINION

ALEXANDER WILLIAMS, JR., District Judge.

Plaintiffs Senior Executives Association et al. bring this action against Defendants United States of America and Don W. Fox, Acting Director of the Office of Government Ethics. Plaintiffs assert the following claims: (1) violation of the constitutional right to privacy; (2) violation of due process; (3) violation of the Administrative Procedure Act (APA); and (4) declaratory relief. Several motions are outstanding. Of particular importance is Plaintiffs’ Motion for Temporary Preliminary Injunction. Doc. No. 19. The Court has carefully reviewed the record and deems a hearing unnecessary. For the following reasons, the Court GRANTS Plaintiffs’ Motion for Temporary Preliminary Injunction.

I. FACTUAL AND PROCEDURAL BACKGROUND

This case presents a challenge to the Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act), Pub.L. No. 112-105, 126 Stat. 291 (2012). As originally proposed, the STOCK Act (Act) sought to prevent members and employees of Congress from trading on the basis of nonpublic information acquired through such positions. See 15 U.S.C. § 78u-l(g)(l). The Act aims to achieve this objective partly through a system of liberal public disclosure of certain financial information of congressional members and employees. See, e.g., 5 U.S.C.App. 4 § 103. The Senate amended the Act before its passage, making its financial data disclosure demands applicable to certain senior executive officials and other high-level executives, including some military members. See 158 Cong. Rec. S297, S301 (daily ed. Feb. 2, 2012).

The Act is not the first financial disclosure scheme applicable to executive branch officials. For decades, senior executives have had to fill out financial disclosure reports under the Ethics in Government Act (EGA), 5 U.S.CApp. 4 §§ 101 et seq. Affected executives must annually file their financial disclosure reports on forms that the Office of Government Ethics (OGE) issues. OGE Form 278 is the latest version of the financial disclosure form. See Proposed Collection; Comment Request for an Unmodified OGE Form 201 [747]*747Ethics Act Access Form, 74 Fed.Reg. 59185, 59186 (Nov. 17, 2009). Form 278-in connection with the EGA and its implementing regulations — generally compels the disclosure of assets, income, financial transactions, liabilities, and other personal information. See 5 U.S.CApp. 4 § 102; 5 C.F.R. §§ 2634.301-.311.

The EGA erected several barriers to the disclosure of this financial information. See 5 U.S.CApp. 4 § 105(b). Similarly, Form 278s remained subject to the Privacy Act, which, with some exceptions, prohibits an agency from disclosing certain personal information. Compare 5 U.S.C § 552(a), with Doc. No. 3-3.

One such exception involves “routine use.” The Privacy Act defines routine use as “use of [a] record for a purpose which is compatible with the purpose for which it was collected.” 5 U.S.C. § 552a(a)(7). Generally, routine uses qualify as exceptions to the Privacy Act’s prohibition against the disclosure of financial records absent prior written consent. See id.; 5 U.S.C. § 552a(e)(3)(C); see also Venetian Casino Resort, LLC v. EEOC, 409 F.3d 359, 362 (D.C.Cir.2005) (noting that routine uses may include otherwise protected information necessary for an agency to perform its functions under a statute).

Section 11 of the Act, both directly and indirectly, erodes some of these barriers. For instance, section 11 renders section 105(b)(2) of the EGA inapplicable to its provisions mandating Internet publication of Form 278s. See 5 U.S.CApp. 4 § 105 note (Executive Branch Reporting). Similarly, in an apparent attempt to implement section ll’s Internet publication requirement, the OGE has announced modifications to its list of routine uses. This regulatory change broadly permits the OGE “to disclose on the OGE Web site and to otherwise disclose to any person ... any public filer reports required to be filed by reason of Federal employment or by the president or vice president.” See Privacy Act of 1974; Amendment to System of Records, 77 Fed.Reg. 45353 (July 31, 2012).

The Act’s disclosure regime differs from the EGA’s in other material respects. The Act contemplates nearly contemporaneous reporting of certain securities transactions. See 5 U.S.CApp. 4 § 103(i). Furthermore, in addition to its Internet publication prescription, the Act mandates the creation of a searchable OGE database to facilitate public access to the financial data subject to disclosure. See 5 U.S.CApp. 4 § 105 note (Executive Branch Reporting).

On July 19, 2012, a group of former, high-ranking federal officials in law enforcement, diplomatic, and national security positions wrote congressional leaders a letter detailing dangers that, in their opinion, the Act threatens. The Court reproduces the pertinent portion of the letter in the subsequent space:

We believe that this new uncontrolled disclosure scheme for executive branch officials will create significant threats to the national security and to the personal safety and financial security of executive branch officials and their families, especially career employees. Placing complete personal financial information of all senior officials on the Internet would be a jackpot for enemies of the United States intent on finding security vulnerabilities they can exploit. SF-278 forms include a treasure trove of personal financial information: the location and value of employees’ savings and checking accounts and certificates of deposit; a full valuation and listing of their investment portfolio; a listing of real estate assets and their value; a listing of debts, debt amounts, and creditors; and the signatures of the filers. SF-278s include financial information not only about the filing employee, but also about [748]*748the employee’s spouse and dependent children.
Posting this detailed financial information on the Internet will jeopardize the safety of executive branch officials— including military, diplomatic, law enforcement, and potentially intelligence officials — and their families who are posted or travel in dangerous areas, especially in certain countries in Asia, Africa, and Latin America. Embassy and military security officers already advise these officials to post no personal identifying information on the Internet. Publishing the financial assets of these officials will allow foreign governments, and terrorist or criminal groups to specifically target these officials or their families for kidnapping, harassment, manipulation of financial assets, and other abuse.

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Bluebook (online)
891 F. Supp. 2d 745, 2012 U.S. Dist. LEXIS 130572, 2012 WL 4039814, Counsel Stack Legal Research, https://law.counselstack.com/opinion/senior-executives-assn-v-united-states-mdd-2012.