Bioscience Advisors, Inc. v. United States Securities and Exchange Commission

Background

Bioscience Advisors, Inc. tracks Securities and Exchange Commission filings submitted with confidential-treatment requests. After those orders expire, Bioscience requests unredacted exhibits through the Freedom of Information Act and uses the information in a commercial database.

The case concerned two claims under the Administrative Procedure Act challenging the National Archives and Records Administration’s approval and the Securities and Exchange Commission’s adoption of a records-disposition schedule. The schedule authorized the destruction of certain temporary materials supporting confidential-treatment requests three years after entry of a confidential-treatment order. Bioscience also alleged that records were destroyed in violation of the Federal Records Act and that the Securities and Exchange Commission improperly withheld documents under the Freedom of Information Act.

Rulings on the Claims

The court granted summary judgment for the defendants on Bioscience’s first two claims, which challenged adoption of the schedule. Bioscience had an opportunity to comment on the proposed schedule during the published notice-and-comment period but submitted no comments. The court held that Bioscience therefore waived arguments attacking the agency action in court and had not shown exceptional circumstances excusing the waiver.

The court also granted summary judgment on Bioscience’s Federal Records Act claims. The record showed that the specific documents identified in the complaint had not been destroyed and had been provided to Bioscience. The court held that mistakenly reporting destruction and later providing the documents did not constitute unlawful destruction. The court further held that the duty to involve the Attorney General arises only when an agency knows or has reason to believe that records were unlawfully removed or destroyed. Bioscience did not identify evidence creating a genuine factual dispute about that knowledge or about unlawful destruction. The court also noted that the Federal Records Act does not create a private right of action to enforce an agency’s internal records policies directly.

As to the Freedom of Information Act claims, the court found that the defendants conducted adequate searches for responsive records. Detailed declarations explained who handled the requests, how searches were conducted, including contacts with Securities and Exchange Commission staff, and why the searches were reasonably calculated to locate relevant documents. The court concluded that Bioscience had not shown a genuine dispute requiring a trial. The opinion also notes that Bioscience did not rebut the defendants’ assertion that it failed to exhaust administrative remedies for 83 requests, but the court’s stated basis for granting summary judgment was that the searches were adequate.

Rule 56(d) Motion

Bioscience asked for additional discovery before responding to the summary-judgment motion. It said discovery could show that documents were destroyed on a different date and could identify what documents were destroyed. Rule 56(d) allows additional discovery when a party identifies specific facts that further discovery is expected to reveal, shows that those facts exist, and demonstrates that they are essential to opposing summary judgment.

The court denied the motion. It held that the proposed discovery was not essential because Bioscience did not show how the destruction date, the scope of the records, or the execution of a litigation hold would create a genuine dispute about any claim. The defendants’ declarations already described the relevant destruction dates, and the court had found those declarations adequate.

Disposition

The court granted the defendants’ motion for summary judgment in its entirety and denied Bioscience’s Rule 56(d) motion. It directed the Clerk to enter judgment for the defendants and close the case.