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ORAL ARGUMENT SCHEDULED FOR APRIL 21, 2011
No. 10-5353
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
VERN MCKINLEY,
Plaintiff-Appellant,
v.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,
Defendant-Appellee.
On Appeal from the United States District Court
For the District of Columbia, Case No. 09-1263
BRIEF FOR APPELLEE
TONY WEST
Of counsel: Assistant Attorney General
KATHERINE H. WHEATLEY BETH S. BRINKMANN
Associate General Counsel Deputy Assistant Attorney General
YVONNE F. MIZUSAWA MARK B. STERN
Senior Counsel SAMANTHA L. CHAIFETZ
(202) 514-4821
Board of Governors of the Attorneys, Appellate Staff
Federal Reserve System Civil Division, Dept. of Justice
20th and C Streets, N.W. 950 Pennsylvania Avenue, N.W.
Washington, D.C. 20551 Room 7248
Washington, D.C. 20530
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TABLE OF CONTENTS
Page
JURISDICTIONAL STATEMENT. ........................................................................ 1
STATEMENT OF THE ISSUES. ............................................................................ 2
STATUTES. ............................................................................................................. 2
STATEMENT OF THE CASE................................................................................. 2
STATEMENT OF THE FACTS. ............................................................................. 5
I. Background. ......................................................................................... 5
II. Statutory Framework . ........................................................................ 12
III. Plaintiffs FOIA Request and the Present Litigation.......................... 15
SUMMARY OF ARGUMENT. ............................................................................. 17
STANDARD OF REVIEW. ................................................................................... 20
ARGUMENT. ......................................................................................................... 21
I. THE BOARD PROPERLY WITHHELD THE RECORDS
AT ISSUE PURSUANT TO FOIA EXEMPTION 5. ....................... 21
A. The district court properly recognized that
communications between the Board and the FRBNY
should be deemed intra-agency communications
within the meaning of Exemption 5......................................... 21
B. The district court properly concluded that, because
the materials withheld were both predecisional
and deliberative, they were within the scope of
FOIA Exemption 5................................................................... 28
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II. THE BOARD ALSO PROPERLY WITHHELD CERTAIN
MATERIALS PURSUANT TO FOIA EXEMPTION 8................... 32
CONCLUSION. ...................................................................................................... 36
ii
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TABLE OF AUTHORITIES
Cases: Page
Comm. for Monetary Reform v. Bd. of Governors of Federal Reserve System,
766 F.2d 538 (D.C. Cir. 1985). ............................................................................ 5
* Consumers Union of U.S., Inc. v. Heimann,
589 F.2d 531 (D.C. Cir. 1978)............................................................... 13, 32, 35
Ctr. for Natl Sec. Studies v. U.S. Dept of Justice,
331 F.3d 918 (D.C. Cir. 2003)........................................................................... 12
* Dept of the Interior v. Klamath Water Users Protective Assn,
532 U.S. 1 (2001)....................................................................... 13, 22, 24, 25, 28
Dudman Communications Corp. v. Dept of Air Force,
815 F.2d 1565 (D.C. Cir. 1987)................................................................... 30, 31
EPA v. Mink,
410 U.S. 73 (1973). ............................................................................................ 31
FBI v. Abramson,
456 U.S. 615 (1982)........................................................................................... 12
Fasano v. Fed. Reserve Bank of New York,
457 F.3d 274 (3d Cir. 2006). ............................................................................... 6
Fed. Open Markets Comm. v. Merrill,
443 U.S. 340 (1979)............................................................................................. 5
First Agric. Natl Bank v. States Tax Commn,
392 U.S. 339 (1968)............................................................................................. 6
* Gregory v. Fed. Deposit Ins. Corp.,
631 F.2d 896 (D.C. Cir. 1980)......................................................... 13, 33, 34, 35
* Authorities upon which Appellee chiefly relies are market with astericks.
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Horwitz v. Peace Corps,
428 F.3d 271 (D.C. Cir. 2005)........................................................................... 30
Judicial Watch, Inc. v. Dept of Justice,
365 F.3d 1108 (D.C. Cir. 2004)......................................................................... 21
Mead Data Central, Inc. v. U.S. Dept of the Air Force,
566 F.2d 242 (D.C. Cir. 1977)..................................................................... 29, 30
Mead Data Central, Inc. v. U.S. Dept of the Air Force,
575 F.2d 932 (D.C. Cir. 1978)........................................................................... 30
Montrose Chemical Corp. v. Train,
491 F.2d 63 (D.C. Cir. 1974)............................................................................. 21
Morley v. C.I.A.,
508 F.3d 1108 (D.C. Cir. 2007)......................................................................... 20
NLRB v. Sears, Roebuck & Co.,
421 U.S. 132 (1975)........................................................................................... 21
* Natl Inst. of Military Justice v. Dept of Defense,
512 F.3d 677 (D.C. Cir. 2008)................................................... 13, 18, 22, 23, 27
Quarles v. Dept of Navy,
893 F.2d 390 (D.C. Cir. 1990)........................................................................... 31
Reuss v. Balles,
584 F.2d 461 (D.C. Cir. 1978). ............................................................................ 6
Russell v. Dept of the Air Force,
682 F.2d 1045 (D.C. Cir.1982).......................................................................... 21
Ryan v. Dept of Justice,617 F.2d 781 (D.C. Cir. 1980)..................................................................... 21, 22
Wolfe v. Dept of Health and Human Services,
839 F.2d 768 (D.C. Cir. 1988) .......................................................................... 30
iv
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Statutes:
5 U.S.C. 552. ........................................................................................................ 12
5 U.S.C. 552(a)(4)(B). ........................................................................................... 1
5 U.S.C. 552(b). ............................................................................................... 4, 12
*5 U.S.C. 552(b)(5). ...................................................................................... 13, 21
*5 U.S.C. 552(b)(8). .......................................................................... 13, 20, 32, 33
12 U.S.C. 222 note. ................................................................................................ 8
12 U.S.C. 241. ........................................................................................................ 6
12 U.S.C. 248(a). ............................................................................................. 8, 34
12 U.S.C. 248(a)(1)................................................................................................ 8
12 U.S.C. 248(f). .................................................................................................... 7
12 U.S.C. 248(j). .................................................................................................... 7
*12 U.S.C. 248(r)(2). ................................................................................. 7, 11, 26
12 U.S.C. 302. .................................................................................................. 7, 27
12 U.S.C. 307. ........................................................................................................ 7
12 U.S.C. 321....................................................................................................... 27
12 U.S.C. 325. ........................................................................................................ 8
12 U.S.C. 338. ........................................................................................................ 8
12 U.S.C. 341. ........................................................................................................ 6
v
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12 U.S.C. 341(5). ................................................................................................... 7
*12 U.S.C. 343..................................................................................................... 11
*12 U.S.C. 343(a). ............................................................................... 7, 26, 27, 28
12 U.S.C. 483. ........................................................................................................ 8
12 U.S.C. 485. ........................................................................................................ 7
12 U.S.C. 1844(c)(2).............................................................................................. 8
12 U.S.C. 3105(c). ................................................................................................. 8
28 U.S.C. 1291. ...................................................................................................... 1
28 U.S.C. 1331. ...................................................................................................... 1
Regulations:
12 C.F.R. 201.1. ............................................................................................... 5, 27
Rules:
Fed. R. App. P. 4(a)(1).............................................................................................. 1
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Legislative Materials:
H.R. Rep. No. 1497, 89th Cong., 2nd Sess. (1966). ............................................... 34
S. Rep. No. 813, 89th Cong., 1st Sess. (1965).................................................. 31, 34
Statement by Timothy F. Geithner, President and Chief Executive Officer
of Federal Reserve Bank of New York, Before the U.S. Senate
Committee on Banking, Housing, and Urban Affairs (Apr. 3, 2008),
available at http://banking.senate.gov/public/_files/
OpgStmtGeithner4308Testimony.pdf.................................................................. 9
Other Authorities:
Board of Governors of the Federal Reserve System, The Federal ReserveSystem Purposesand Functions (9th ed. June 2005), available at
http://www.federalreserve.gov/pf/pdf/pf_complete.pdf . ...................... 5, 6, 7, 27
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No. 10-5353
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
VERN MCKINLEY,
Plaintiff-Appellant,
v.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,
Defendant-Appellee.
On Appeal from the United States District Court
For the District of Columbia, Case No. 09-1263
BRIEF FOR APPELLEE
JURISDICTIONAL STATEMENT
Plaintiff asserted claims under the Freedom of Information Act, 5 U.S.C.
552(a)(4)(B), and invoked the jurisdiction of the district court under 28 U.S.C.
1331. Joint Appendix (JA) 9. The district court entered a judgment in favor of
the defendant on September 29, 2010. JA 146. Plaintiff noticed this appeal on
October 19, 2010, within the period specified by Fed. R. App. P. 4(a)(1). JA 147.
This court has jurisdiction under 28 U.S.C. 1291.
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STATEMENT OF THE ISSUES
1. Whether the district court correctly concluded that communications between
the Federal Reserve Board and the Federal Reserve Bank of New York were properly
withheld under Exemption 5 of the Freedom of Information Act.
2. Whether the district court correctly concluded that certain information
supplied by financial institutions regulated by the Federal Reserve Board was
properly withheld under Exemption 8 of the Freedom of Information Act.
STATUTES
The pertinent statutory provisions are reproduced in the addendum to this brief.
STATEMENT OF THE CASE
Around March 10, 2008in the midst of the recent crisis in the U.S. financial
marketsthe Board of Governors of the Federal Reserve System (Federal Reserve
Board or Board) learned that The Bear Stearns Companies Inc. (Bear Stearns)
was experiencing severe liquidity pressures. Three days later, on March 13, the
Board learned that Bear Stearns was about to file for bankruptcy protection. See
District Court Memorandum Opinion of Sept. 29, 2010 (Op.) 3 (JA 122).
In response to this rapidly evolving crisis, the Board quickly gathered
information and recommendations from various sources, including the Securities and
Exchange Commission and the Federal Reserve Bank of New York, one of the twelve
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regional banks in the Federal Reserve System. Ibid. On March 14, 2008, the Board
determined that the sudden disorderly failure of Bear Stearns threatened significant
harm to the nations economy and financial stability. Id. at 4 (JA 123). The Board
therefore authorized the Federal Reserve Bank of New York to make a short-term
emergency loan to Bear Stearns through JP Morgan Chase & Company. Ibid. The
minutes of the Boards March 14 meeting explained that this temporary emergency
financing was the best available alternative given the fragile condition of the
financial markets at the time, the prominent position of Bear Stearns in those markets,
and the expected contagion that would result from the immediate failure of Bear
Stearns. Board Minutes of March 14, 2008 (Minutes) 2 (JA 46).
In December 2008, plaintiff-appellant Vern McKinley submitted a Freedom of
Information Act (FOIA) request to the Federal Reserve Board seeking documents
related to its March 14, 2008 loan authorization decision. In particular, plaintiff
sought any supporting memos or other information that detail the expected
contagion that would result from the immediate failure of Bear Stearns and the
related conclusion that this action was necessary to prevent, correct, or mitigate
serious harm to the economy or financial stability as described in the meeting
minutes. JA 44. Further, plaintiff filed suit to compel the Board to make the
requested information immediately available. Compl. 11 (JA 17).
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Between August and September 2009, after compiling and reviewing
documents, the Board produced 195 pages of responsive materials 167 full pages
and 28 partially redacted pages and withheld 163 pages. Thro Decl. 9-10 (JA
33). The Board explained that the items withheld, in full or in part, were subject to
one or more statutory exemptions under FOIA, 5 U.S.C. 552(b) specifically,
Exemptions 4, 5, 6, or 8. Ibid.
In February 2010, the Board moved for summary judgment on the ground that
plaintiff had been given all responsive materials not subject to FOIA exemptions. In
support of its motion, the Board supplied declarations from senior personnel of the
Federal Reserve Board and Securities and Exchange Commission (SEC). Plaintiff
filed a cross-motion for summary judgment, urging that Exemptions 4, 5, and 8 were
improperly claimed.1
In September 2010, the district court granted the Boards motion and denied
plaintiffs cross-motion. The court held that the disputed materials were inter-
agency or intra-agency communications protected by either deliberative process
privilege or, in the case of one item, attorney work product privilege, and therefore
subject to FOIA Exemption 5. Op. 9-21 (JA 128-40). The court further held that the
Plaintiff did not pursue a challenge to the Boards Exemption 6 withholdings.1
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Board properly invoked FOIA Exemption 8 with regard to certain information
obtained from regulated financial institutions. Id. at 21-26 (JA 140-45).2
Plaintiff timely appealed. JA 147.
STATEMENT OF THE FACTS
I. Background
A. The Federal Reserve System was established in 1913 as the nations
central bank. Comm. for Monetary Reform v. Bd. of Governors of Federal Reserve
System, 766 F.2d 538, 539 (D.C. Cir. 1985). Its principal functions include
supervising and regulating banking institutions to ensure the safety and soundness
of the nations banking and financial system, and maintaining the stability of the
financial system and containing systemic risk that may arise in financial markets.
Board of Governors of the Federal Reserve System, The Federal Reserve System
Purposes and Functions 1 (9th ed. June 2005) (Purposes and Functions); see, e.g.,3
12 C.F.R. 201.1 (The Federal Reserve System extends credit with due regard to the
Having found that all of the materials at issue were properly withheld, the2
court did not address the Boards assertion that some materials were also subject to
FOIA Exemption 4. Op. 26 (JA 145).
The Boards Purposes and Functions publication, available at3
http://www.federalreserve.gov/pf/pdf/pf_complete.pdf, has been relied upon by courts
to explain the Federal Reserve Systems operations. See, e.g., Fed. Open Markets
Comm. v. Merrill, 443 U.S. 340, 342 n.2 (1979).
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basic objectives of monetary policy and the maintenance of a sound and orderly
financial system.).
The Federal Reserve Systems central body is the Federal Reserve Board a
government agency composed of seven members appointed by the president and
confirmed by the Senate. 12 U.S.C. 241; see Reuss v. Balles, 584 F.2d 461, 462
(D.C. Cir. 1978). Twelve regional Federal Reserve Banks and their branches serve
as the Systems operating arms,carr[ying] out a variety of System functions
subject to the supervisory authority of the Board. Purposes and Functions 10, 6; see
Op. 2 (JA 121).
Chartered by Congress, the Reserve Banks were established to be the
monetary and fiscal agents of the United States. First Agric. Natl Bank v. States
Tax Commn, 392 U.S. 339, 356 (1968) (Marshall, J., dissenting). To aid in
achieving Congresss goal of insulating them from political pressure, the Federal
Reserve Banks are formed as corporations, Fasano v. Fed. Reserve Bank of New
York, 457 F.3d 274, 277 (3d Cir. 2006), and operate under various grants of
independent authority, such as the power to sue and be sued in their own names, to
make contracts, and to hire and fire at-will employees. 12 U.S.C. 341.
At the same time, as the Reserve Banks are intimate parts of the Governments
fiscal structure, Fasano, 457 F.3d at 278, their operations and activities are
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supervised by the Federal Reserve Board. E.g., 12 U.S.C. 248(j), 485. The
Boards oversight responsibilities include, for example, appointing three of the nine
members of each Banks board of directors, id. 302; approving the selections of
Bank presidents, id. 341(5); suspending or removing Reserve Bank officers or
director, id. 248(f); and reviewing and approving the salaries paid to Reserve Bank
employees, id. 307.
The Reserve Banks are authorized to extend various types of credit to
depository institutions and have established several programs to lend to these
institutions on an ongoing basis. See Purposes and Functions 46-49. In unusual and
exigent circumstances, the Federal Reserve Board may in accordance with section
13(3) of the Federal Reserve Act authorize a Federal Reserve Bank to extend credit
to a non-depository institution. 12 U.S.C. 343(A); see id. 248(r)(2). Before4
extending the credit, the Reserve Bank must obtain evidence that the institution is
unable to secure adequate credit accommodations from other banking institutions.
12 U.S.C. 343(A).5
Section 343(A) describes the conditions in which the Board, by the4
affirmative vote of at least five members, may authorize such lending. Section248(r)(2) describes additional criteria that must be satisfied for the Board to act with
fewer than five members available.
In 2010, section 13(3) was substantially amended by section 1101 of the5
Dodd-Frank Wall Street Reform and Consumer Protection Act. These amendments
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The Board and the Reserve Banks, through examiners the Board selects or
approves, are authorized to examine certain types of banking organizations. See 12
U.S.C. 248(a), 325, 338, 1844(c)(2), 3105. For the most part, this authority is
6
carried out by examiners at the Federal Reserve Banks under the coordination and
oversight of the Board. See 12 U.S.C. 222 note (providing in the Rules of
Organization that the Board's Director of Banking Supervision and Regulation
coordinates the bank supervisory functions of the System and evaluates the
examination procedures of the Reserve Banks). In addition, the Reserve Banks must
at all times furnish to the Board of Governors of the Federal Reserve System such
information as may be demanded concerning the condition of any member bank
within the district of the said Federal reserve bank. 12 U.S.C. 483.
B. This case concerns a FOIA request for supporting memos or other
information detailing the basis for the Federal Reserve Boards decision on March
14, 2008, pursuant to section 13(3) of the Federal Reserve Act, to authorize the
to section 13(3) are not relevant to the issues in this case.
For example, 12 U.S.C. 248(a)(1) authorizes the Board [t]o examine at its6
discretion the accounts, books, and affairs of each Federal reserve bank and of each
member bank and to require such statements and reports as it may deem necessary,
and 325 provides that certain commercial banks belonging to the Federal Reserve
System, known as member banks, are subject to examination by Federal Reserve
examiners selected or approved by the Board.
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Federal Reserve Bank of New York (FRBNY) to make an emergency loan to avoid
the immediate failure of Bear Stearns. JA 44.
The Boards deliberations took place amid significant turmoil in the U.S.
financial markets. Beginning in the summer of 2007, the U.S. financial markets saw
demand for structured or securitized assets decline dramatically. As the value
of these assets dropped, various financial institutions some of which held large
positions in these assets experienced funding pressures. As uncertainty grew over
the magnitude of losses, financial institutions became increasingly unwilling to lend
to each other, even against high-quality collateral. As a result, the liquidity pressures
on financial institutions intensified, escalating rapidly between mid-January and mid-
March 2008. See Stefansson Decl. 6 (JA 100).7
Around March 10, 2008, the Federal Reserve Board began to receive
information that Bear Stearns was experiencing severe liquidity pressures and might
be forced to declare bankruptcy in the near term. Op. 3 (JA 122); see Thro Decl. 3
(JA 30). As a broker-dealer holding company, Bear Stearns was regulated by the
SEC, not by the Federal Reserve Board; and because Bear Stearns was not a
For a more detailed discussion of the dynamics of the financial crisis, see the7
Statement by Timothy F. Geithner, President and Chief Executive Officer of Federal
Reserve Bank of New York, before the U.S. Senate Committee on Banking, Housing,
and Urban Affairs (Apr. 3, 2008), available at
http://banking.senate.gov/public/_files/OpgStmtGeithner4308Testimony.pdf.
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depository institution, it was ineligible to obtain financing from a Federal Reserve
Banks regular lending program. Op. 4 (JA 123): see Winter Decl. 10 (JA 110)
(describing the make-up of Bear Stearns); 12 U.S.C. 347b(a), 461(b)(7).
Nonetheless, the threat of its collapse was of significant concern to the Board, given
the firms prominent position in various financial markets and the vulnerability of
those markets in March 2008. Stefansson Decl. 8, 10 (JA 101-02).
In weighing the Federal Reserve Systems potential responses to Bear Stearns
difficulties, the Board quickly sought to assess the gravity of the situation and the
consequences Bear Stearns bankruptcy would hold for the U.S. financial markets.
Op. 3 (JA 122). To do so, the Board and Board staff (particularly those in the
Division of Banking Supervision and Regulation) worked to understand the latest
market developments and the exposure of certain key financial institutions to Bear
Stearns. Stefansson Decl. 8-9 (JA 101-02). Consistent with the Federal Reserve
Systems structure and well-established supervisory processes, id. 9 (JA 102), the
Board relied heavily on Federal Reserve Bank staff and examiners to identify, in
real-time, information relevant to the deliberations and to make recommendations.
Op. 3 (JA 122); see Stefansson Decl. 13-14 (JA 103-104); Thro Decl. 17, 19-21
(JA 37-41). The SEC also provided input on a confidential inter-agency basis based
on its supervisory relationship (through the SEC voluntary Consolidated Supervised
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Entity program) with Bear Stearns. Danis Decl. 3-4 (JA 118); Winter Decl. 6-7,
10-12 (JA 109-10).
On March 13, Bears Stearns liquidity declined to levels that were insufficient
to meet its maturing obligations, and staff of the SEC notified the Board and the
FRBNY that Bear Stearns would have to file for bankruptcy protection the next day.
Op. 3 (JA 122).
Based on the targeted collection of information acquired by the Board with the
help of the FRBNY and the SEC, the Board concluded that the immediate failure of
Bear Stearns would have severe implications for the functioning of the financial
markets, particularly given the vulnerable state of the markets. Op. 4 (JA 123).
In addition to these unusual and exigent circumstances, required to authorize a loan
to a non-depository institution under 12 U.S.C. 343, the Board found that the other
factors that must exist to authorize such a loan on the vote of fewer than five Board
members, id. 248(r)(2), were also present. Minutes 2-3 (JA 46-47). The Board8
found that adequate credit accommodations could not be secured from other sources,
and that the Boards action was necessary to prevent, correct, or mitigate serious harm
to the economy or financial stability. Id. at 3 (JA 47).
This was necessary because one member of the Board of Governors was8
unavailable to participate in the Boards emergency meeting on March 14. Minutes
3 (JA 47).
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In light of its analysis, the Board authorized the FRBNY to extend credit to
JP Morgan Chase to provide a temporary loan to Bear Stearns to enable it to meet its
financial obligations and to avoid filing for bankruptcy. Op. 4 (JA 123). In turn, the
FRBNY approved the loan, and the transaction was completed. Ibid. Bear Stearns
did not file for bankruptcy, and, on March 16, a second loan was authorized to
facilitate JP Morgan Chases acquisition of Bear Stearns. Ibid.
II. Statutory Framework
The Freedom of Information Act, 5 U.S.C. 552, codifies a general policy of
disclosure, upon request, of records held by federal agencies, except to the extent
such records are protected by statutory exemptions. In enacting the FOIA, Congress
sought to ensure an informed citizenry but recognized that legitimate
governmental and private interests could be harmed by release of certain types of
information and provided nine specific exemptions under which disclosure could be
refused. FBI v. Abramson, 456 U.S. 615, 621 (1982) (internal quotations marks and
citation omitted); see also 5 U.S.C. 552(b) (listing exemptions). Thus, the FOIA,
with its exemptions, represents a balance struck by Congress between the publics
right to know and the governments legitimate interest in keeping certain information
confidential. Ctr. for Natl Sec. Studies v. U.S. Dept of Justice, 331 F.3d 918, 925
(D.C. Cir. 2003).
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III. Plaintiffs FOIA Request and the Present Litigation
A. In December 2008, plaintiff submitted a FOIA request for further detail on
information contained in the [March 14, 2008] minutes of the Board of Governors of
the Federal Reserve. JA 44. He asked, [i]n particular, for any supporting memos
or other information that detail the expected contagion that would result from the
immediate failure of Bear Stearns and the related conclusion that this action was
necessary to prevent, correct, or mitigate serious harm to the economy or financial
stability as described in the meeting minutes. Ibid. Plaintiff subsequently brought
this suit to compel the Board to make the requested information immediately
available. Compl. 11 (JA 17).
After searching its comprehensive repository of materials related to the March
2008 Bear Stearns loans, see Thro Decl. 3-5 (JA 30-32), the Board produced 195
pages of responsive materials (167 full pages and 28 partially redacted pages) and
withheld 163 pages, id. 9-10 (JA 33-34). Plaintiff was informed that the withheld
and redacted materials comprising 38 items in the Vaughn index were protected
from release by one or more statutory exemptions under the FOIA. Op. 5 (JA 124);
see also Thro Decl. 10 (JA 33-34); Winter Decl. 5 (JA 108).
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B. On cross-motions for summary judgment, the district court ruled in favor9
of the Board. Op. 26 (JA 145).
1. The Board maintained that all of the materials sought by the plaintiff were
subject to Exemption 5, and the court agreed holding that they were inter-agency
or intra-agency communications protected by either deliberative process privilege
or, in the case of one item, attorney work product privilege. Op. 9-21 (JA 128-40).
The court rejected plaintiffs contention that communications involving
employees of the FRBNY were outside the scope of Exemption 5. The court
acknowledged that the FRBNY is not a federal agency, but held that it was covered
in this case by the consultant corollary. See id. at 12 (JA 131). The court found
that the Board had shown, through declarations and documents, that the FRBNYs
input was solicited for the purpose of aiding the Boards deliberative process, id. at
10 (JA 129), and that the FRBNY was not representing an interest of its own when
it advised the Board, but rather it was simply assisting the Boards evaluation of the
The Boards motion was accompanied by four declarations: one from the9
Boards Senior Counsel, Thro Decl. (JA 28); one from the Associate Director of the
Boards Division of Banking Supervision and Regulation, Stefansson Decl. (JA 98);
one from the U.S. Securities and Exchange Commissions FOIA and Privacy Act
Officer, Winter Decl. (JA 107); and one from a senior financial economist in the
Broker-Dealer Risk Office of the Division of Trading and Markets at the Securities
and Exchange Commission, Danis Decl. (JA 117). The Vaughn index, describing
each of the withheld items and the basis for the withholding, was included as Exhibit
F to the Thro Declaration (JA 58).
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Bear Stearns situation, id. at 12 (JA 131).
Likewise, the court rejected plaintiffs claim that factual information had been
wrongly withheld under Exemption 5, id. at 15-17 (JA 134-36), as the court was
convinced that disclosure of the requested [information] ... would expose the
Boards decisionmaking process, id. at 17 (JA 136) (internal quotations marks
omitted). The court concluded, for example, that revealing the specific institutions
the staff of the Board and the FRBNY had reached out to and focused their attention
on, as well as the particular financial statistics that were requested and culled from
the mass of data available for the Boards consideration, would reveal the agencys
deliberations. Id. at 15-17 (JA 134-36).
The court also addressed plaintiffs suggestion that the Board had failed to
proffer evidence that each of the withheld items would, if released, cause harm to the
agencys decisionmaking process. Id. at 17-18 (JA 136-37). The court observed that
the well-established test under Exemption 5 is whether an item is predecisional and
deliberative, and that no additional demonstration of harm is required as a matter of
law. Id. at 18 (JA 137).
2. The court additionally held that FOIA Exemption 8 provided an alternate
basis for declining to release certain information gathered from financial institutions
regulated by the Federal Reserve Board (or, in the case of information gathered from
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Bear Stearns, regulated by the SEC). Id. at 21 (JA 140). The court observed that the
information at issue concerning various institutions exposure to Bear Stearns was
obtained as part of [the Boards and the SECs] continuous supervision of
institutions pursuant to the agencies undisputed regulatory responsibilities. Id.
at 23-24 (JA 142-43). Further, the court acknowledged that the information was
compiled under circumstances that demanded fast moving, real-time reporting. Id.
at 23 (JA 142). The court concluded, accordingly, that these records were properly
characterized as related to examination, operating, or condition reports, and thus
within the broad scope of Exemption 8. Id. at 24 (JA 143).10
SUMMARY OF ARGUMENT
Plaintiff seeks records pertaining to the Federal Reserve Boards decision in
March 2008 to authorize the Federal Reserve Bank of New York to make a short-
term emergency loan to Bear Stearns through JP Morgan Chase. Plaintiff seeks,
[i]n particular, any supporting memos or other information that detail the
expected contagion that would result from the immediate failure of Bear Stearns
and the related conclusion that this action was necessary to prevent, correct, or
mitigate serious harm to the economy or financial stability as described in the
As noted supra, the court did not address the applicability of Exemption 4 to10
some of the materials. Op. 26 (JA 145).
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[Federal Reserve Boards] meeting minutes. JA 44.
I. The Federal Reserve Board properly withheld all the records at issue on
this appeal under FOIA Exemption 5.
a. Plaintiff errs in asserting that the communications between the Board and
the Federal Reserve Bank of New York should not be treated as inter-agency or
intra-agency communications within the meaning of Exemption 5. The Reserve
Banks are not government agencies. They are, however, critical components of
the Federal Reserve System, and the Board relies on input from the regional
Reserve Banks in exercising its regulatory authority, including input from the
Reserve Bank examiners who carry out the field examinations and inspections of
entities regulated by the Board. In responding to the Bear Stearns crisis, the Board
thus turned to the FRBNY for assistance in the Boards consideration of potential
responses to Bear Stearns funding difficulties. Op. 10 (JA 128) (quoting
Stefansson Decl. 8). The material prepared for the Board by the FRBNY
played essentially the same part in an agencys process of deliberation as
documents prepared by agency personnel might have done, and it is common
sense that such records be treated as intra-agency communications. Natl Inst. of
Military Justice v. Dept of Defense, 512 F.3d 677, 682, 685 (D.C. Cir. 2008)
(internal quotation marks and citations omitted).
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b. After reviewing the agencys declarations and the Vaughn index, the
district court concluded that the records were pre-decisional and deliberative.
Plaintiff does not challenge that conclusion, but argues, that the district court
should have required additional detailed proof that disclosure would result in
specific harm to the agencys deliberative process. This Court has never
suggested that a standardless inquiry of this kind is necessary or appropriate.
Exemption 5 reflects a congressional determination that agencies should not be
required to disclose records that are predecisional and deliberative, as such
disclosure would chill frank discussion of policies and issues. Agencies need not,
on a case-by-case basis, proffer evidence that this congressional judgment was
correct.
In any event, the agencys declarations made quite clear that compelling
disclosure of the requested records would have the inhibiting impact to which
Exemption 5 is addressed. The district court correctly recognized that requiring
disclosure would expose [the Boards] decisionmaking process in such a way as
to discourage candid discussion within the agency and thereby undermine the
agencys ability to perform its functions. Op. 17 (JA 136) (internal quotations
marks and citation omitted).
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II. The district court correctly concluded that some of the requested records
were also protected by FOIA Exemption 8, which authorizes an agency to
withhold information that is contained in or related to the examination, operating
or condition reports prepared by, or on behalf of, or for the use of an agency
responsible for the regulation or supervision of financial institutions. 5 U.S.C.
552(b)(8). Exemption 8 plainly protects from disclosure the e-mails or tables (or
portions thereof) that contained information obtained by the Board from financial
institutions subject to its regulation. The district court rightly concluded that the
Boards ability to gather such information in furtherance of its mission to regulate
our nations banking system wouldinarguably be compromised if such
information were now released, an outcome [that] is precisely what Exemption 8
is designed to avoid[.]Op. 25 (JA 144) (internal quotation marks omitted).
STANDARD OF REVIEW
This Court reviews de novo a district courts grant of summary judgment in
a FOIA case. See Morley v. C.I.A., 508 F.3d 1108, 1114 (D.C. Cir. 2007).
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ARGUMENT
I. THE BOARD PROPERLY WITHHELD THE RECORDS AT
ISSUE PURSUANT TO FOIA EXEMPTION 5.
A. The district court properly recognized that communications
between the Board and the FRBNY should be deemed
intra-agency communications within the meaning of
Exemption 5.
1. Exemption 5 permits an agency to withhold from the public
inter-agency or intra-agency memorandums or letters which would not be
available by law to a party other than an agency in litigation with the agency. 5
U.S.C. 552(b)(5). This exemption shields documents of the type that would be
privileged in the civil discovery context, including materials protected by the
attorney-work product privilege and the executive deliberative process privilege.
NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149 (1975); see Judicial Watch,
Inc. v. Dept of Justice, 365 F.3d 1108, 1113 (D.C. Cir. 2004).
This Court has emphasized that Exemption 5 protects not only
communications which are themselves deliberative in nature, but all
communications which, if revealed, would expose to public view the deliberative
process of an agency. Russell v. Dept of the Air Force, 682 F.2d 1045, 1048
(D.C. Cir.1982) (citing Montrose Chemical Corp. v. Train, 491 F.2d 63, 71 (D.C.
Cir. 1974); see Ryan v. Dept of Justice, 617 F.2d 781, 790 (D.C. Cir. 1980)
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(explaining that factual segments are protected by Exemption 5 if the manner
of selecting or presenting those facts would reveal the deliberate process, or if the
facts are inextricably intertwined with the policy-making process) (citations
omitted).
This Court has also repeatedly recognized that Exemption 5 protects
material prepared for an agency by a non-governmental entity if that material
played essentially the same part in an agencys process of deliberation as
documents prepared by agency personnel might have done[.] Natl Inst. of
Military Justice, 512 F.3d at 682 (quoting Dept of the Interior v. Klamath Water
Users Protective Assn, 532 U.S. 1, 10 (2001)); see id. at 680-81, 684 (discussing
Circuit precedent).
2. On appeal, plaintiff renews his contention that communication[s]
between the Board and FRBNY cannot be considered inter-agency or intra-
agency exchanges within the meaning of Exemption 5. Pl. Br. 8.
It is undisputed that Federal Reserve Banks, such as the FRBNY, are not
government agencies (or components thereof) for purposes of the FOIA. Ibid. As
the district court explained, however, the records at issue play[ed] essentially the
same part in an agencys process of deliberation as documents prepared by agency
personnel might have done[.] Op. 11 (JA 130) (quoting Natl Inst. of Military
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Justice v. Dept of Defense, 512 F.3d at 682 (quoting Klamath, 532 U.S. at 10)).
In such cases it is common sense that the records be deemed intra-agency
communications. Natl Inst. of Military Justice,512 F.3d at 685 (quoting Ryan,
617 F.2d at 790).
As the district court explained, that is precisely the role of the records
provided by the FRBNY to the Board at issue in this case. Upon learning of Bear
Stearns severe funding difficulties on or around March 10, 2008, the Federal
Reserve Board was faced with the pressing question of what steps, if any, to take
in response. It was critical to the Boards decisionmaking to assess the effects that
a bankruptcy filing by Bear Stearns would have on the financial markets generally
and on certain institutions specifically. Op. 10, 17 (JA 129, 136). To that end, the
Board looked to the FRBNY to provide critical data points and recommendations.
Ibid.
Many of the banking organizations likely to be adversely affected if Bear
Stearns defaulted were subject to the examination authority of the Board, which
exercises this authority through Reserve Bank examiners who conduct the field
examinations and inspections of these organizations. See, e.g., Stefansson Decl.
4 (JA 99) (explaining that large complex banking organizations are subject to
continuous on-site supervision by Reserve Bank examiners).
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It was in accordance with [these] well-established supervisory processes
that the FRBNY surveyed financial institutions for purposes of assessing [their]
real-time exposure to Bear Stearns and conveyed its findings to the Board to
assist in the Boards consideration of potential responses to Bear Stearns funding
difficulties. Op. 10 (JA 129) (quoting Stefansson Decl. 8). As described
supra, the relevant events unfolded quickly between March 10 and March 14,
2008. In response to news of Bear Stearns rapidly deteriorating financial
condition, the Board sought to understand the gravity of the situation and the
impact Bear Stearns failure would have. Op. 3 (JA 122). The FRBNY provided
the Board with data and analyses, which were considered by the Board and staff
advising the Board as part of the ongoing process of deliberation leading up to the
decision to authorize the Temporary Loan. Thro Decl. 19 (JA 39).
3. Plaintiffs argument is premised on a mistaken analogy to Department of
the Interior v. Klamath Water Users Protective Assn, 532 U.S. 1 (2001), in which
the Supreme Court held that communications between Indian Tribes and the
Bureau of Indian Affairs regarding water rights fell outside the scope of
Exemption 5. The Court held that, in communicating their views to the Bureau of
Indian Affairs, the tribes not only had their own, albeit entirely legitimate,
interests in mind, but more specifically were seeking a Government benefit [ i.e.,
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water rights] at the expense of other applicants. Id. at 12 & n. 4. The Court
declined to extend Exemption 5 protection to documents submitted by the Indian
tribes because the [t]ribes [we]re self-advocates at the expense of others seeking
benefits inadequate to satisfy everyone. Id. at 12. The Court concluded that the
intra-agency condition excludes, at the least, communications to or from an
interested party seeking a Government benefit at the expense of other applicants,
Id. at 12 n.4. As the Court also explained, however, there is no requirement that a
consultant be devoid of a definite point of view, id. at 10, as long as the
consultant does not represent an interest of its own, or the interest of any other
client, id. at 11. Indeed, without resolving the question, the Court acknowledged
that consultants may be enough like the agencys own personnel to justify calling
their communications intra-agency. Id. at 12.
That description certainly applies here. Equally clearly, the FRBNY was
notan interested party seeking a Government benefit at the expense of other
applicants. Id. at 12 n.4. Nevertheless, in an effort to identify a divergence of
interests between the Board and FRBNY, plaintiff asserts that FRBNY had its
own interests when it communicated with the Board because Section 13(3) [of the
Federal Reserve Act] gave FRBNY, not the Board, final decision making
authority. Pl. Br. 10. By this plaintiff apparently means that the Boards March
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14, 2008 decision authorizedFRBNY to extend a temporary loan to benefit Bear
Stearns, but did not legally compelthe bank to do so. Ibid.; see 12 U.S.C.
343(A). Plaintiffs logic is unclear. That the FRBNY retained discretion as to
whether to extend a loan, even if authorized to do so, only diminishes any
potential concern that the Board might require it to extend one contrary to its own
judgment.
Similarly, plaintiff points out that before extending the loan, FRBNY was
statutorily required to make its own finding that Bear Stearns could not secure
adequate credit accommodations from other banking institutions. Pl. Br. 10
(quoting 12 U.S.C. 343(A)). Plaintiff does not explain why this would suggest
that FRBNY acted in furtherance of its own interests so as to preclude
participation in the Boards decisionmaking process. Id. at 14. Indeed, in the Bear
Stearns situation, the Board was required to, and did, make the very same
determination. See Minutes 3 (JA 47); see 12 U.S.C. 248(r)(2). .
More fundamentally, plaintiffs suggestion that the FRBNY is a private
bank, Pl. Br. 3, engaged in the business of banking, id. at 11, that makes
decisions about extending credit based on what is best for FRBNY, ibid., fails to
appreciate the FRBNYs role as part of the Federal Reserve System. As discussed
supra, Congress chartered the Federal Reserve Banks for a public purpose. ...
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[A]nd they combine both public and private elements in their makeup and
organization. Purposes and Functions 10. Like the Board, the Reserve Banks11
are key components of the Federal Reserve System, and that System extends
credit with due regard to the basic objectives of monetary policy and the
maintenance of a sound and orderly financial system. 12 C.F.R. 201.1.
Indeed, nowhere is coordination between the Federal Reserve Board and the
Reserve Banks more central and more apparent than in the extension of credit in
unusual and exigent circumstances pursuant to Section 13(3) of the Federal
Reserve Act. The statute requires the Board and Federal Reserve Bank to act
together in order to make a loan. 12 U.S.C. 343. And, indeed, as the plaintiff
notes, prior to issuing a loan authorized under Section 13(3), the Reserve Bank
must find that the borrower is unable to secure adequate credit accommodations
While Reserve Banks are corporations, their stock is available only to11
member banks, who are required by law to subscribe to it. 12 U.S.C. 321. And
holding of this stock ... does not carry with it the control and financial interest
conveyed to holders of common stock in for-profit organizations. Purposes and
Functions 12 (explaining that Reserve Bank stock, which cannot be sold or pledged
as collateral, is merely a legal obligation of Federal Reserve membership); see, e.g.,
12 U.S.C. 302 (providing that the Federal Reserve Board appoints three members
of each Banks board of directors). In any event, even if the FRBNY were a typical
private corporation, it could still come within the consultant corollary of the
deliberative process exemption. Natl Inst. of Military Justice, 512 F.3d at 681
(Exemption 5 extends to documents received from private, nongovernmental
parties.)
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from other banking institutions, 12 U.S.C. 343 effectively confirming that no
private bank would make such a loan.
In sum, there is no basis on which to conclude that the FRBNY was
advocating for any interest that differed from the interests of the Federal Reserve
Board. Even more clearly than advice provided by an outside expert or a
contractor hired by an agency, the materials contributed by the FRBNY staff
play[ed] essentially the same part in an agencys process of deliberation as
documents prepared by agency personnel might have done. Klamath, 532 U.S. at
10.
B. The district court properly concluded that, because
the materials withheld were both predecisional and
deliberative, they were within the scope of FOIA
Exemption 5.
Plaintiff does not challenge the district courts conclusion that the materials
withheld would if disclosed expose the process by which the Board formulated
its final decision. Op. 17 (JA 136). Rather, he argues that the court also should12
After reviewing the Boards declarations and the Vaughn index, the district12
court concluded that the Board had established that the disclosures plaintiff sought
would expose the agencys judgment calls and decisionmaking process. Op. 15-17
(JA 134-36). The court noted, for example, the Boards testimony that revealing the
identities of financial institutions discussed in certain communications would reveal
which institutions the Federal Reserve System staff considered to be systemically
important, id. at 15-16 (JA 134-35) (quoting Thro Decl., Ex. F, Item 8), and which
thus played an important part in the Boards deliberations. Id. at 16 (JA 135). (...
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have required additional evidence that the disclosure of the withheld material
would harm [the Boards] decision making process. Pl. Br. 15. As the district
court explained, however, once it has been shown that a document is both
predecisional and deliberative, no such showing is legally required. Op. 18 (JA
137).
Plaintiff nevertheless maintains that the Board must show by specific and
detailed proof that disclosure would defeat, rather than further, the purposes of the
FOIA. Pl. Br. 17 (quoting Mead Data Central, Inc. v. U.S. Dept of the Air
Force, 566 F.2d 242, 258 (D.C. Cir. 1977)). As the district court explained,
plaintiffs reliance on Mead Data is misplaced. The statement plaintiff quotes was
made by the Court in considering whether Exemption 5 could ever apply to an
agencys negotiation proceedings with an outside party - i.e., to material that was
indisputably not part of the agencys internal deliberative process. Op. 18 (JA
137) (citing Mead Data, 566 F.2d at 257-58). In that circumstance, the Court held
that Exemption 5 would be inapplicable unless the agency could show that the
threat of disclosure of negotiation proceedings would so inhibit private parties
from dealing with the Government that agencies must be permitted to withhold
contd ...) Plaintiff has waived any challenge to that holding by failing to raise it in
his opening brief.
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such information in order to preserve their ability to effectively arrange for
contractual agreements. Mead Data, 566 F.2d at 257-58. In contrast, the
district court observed, elsewhere in Mead Data, the Court upheld the
applicability of Exemption 5 to other documents [that were part of the agencys
internal processes] where the record established that those documents were both
predecisional and part of the deliberative process. Op. 18 (JA 137); see Mead,
566 F.2d at 257.13
In a second decision involving the same parties, the Court held that the13
material withheld in this case mainly cost comparisons, feasibility opinions, and the
data relevant to how the personnel involved arrived at those comparisons were
protected because they would reveal the process by which different members of the
decisionmaking chain arrived at their conclusions and what those predecisional
conclusions are. SeeMead Data Central, Inc. v. U.S. Dept of the Air Force , 575F.2d 932, 934 (D.C. Cir. 1978). The Court required no additional showing that
disclosure would jeopardize candor.
The same is true of cases cited by the plaintiff. See, e.g., Horwitz v. Peace
Corps, 428 F.3d 271, 277 (D.C. Cir. 2005) (holding that a remarkably candid
document was predecisional and deliberative and therefore exempt from disclosure,
without requiring the government to provide evidence of harm) (cited in Pl. Br. 15-
16); Dudman Communications Corp. v. Dept of Air Force, 815 F.2d 1565, 1569
(D.C. Cir. 1987) (Court observed that making a draft document public would provide
some insight into the Air Forces internal editing process, but did not deem proof of
harm to the deliberative process necessary). Cf. Wolfe v. Dept of Health and Human
Services, 839 F.2d 768, 773 (D.C. Cir. 1988) (declining to become enmeshed in a
continual process of estimating or, more accurately, guessing about the adverse
effects on the decisional process of a great variety of combinations of pieces of
information) (cited in Pl. Br. 16).
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Exemption 5 reflects Congresss recognition that exposing agencies
predecisional, deliberative processes would lead them to eschew frank discussion
of legal or policy matters in writing, that efficiency of Government would be
greatly hampered, and that the quality of the agency decisions would suffer as a
result. S. Rep. No. 813, 89th Cong., 1st Sess., 9 (1965); see, e.g., EPA v. Mink,
410 U.S. 73, 87 (1973) (explaining that the importance of this underlying policy
was echoed again and again during legislative analysis and discussions of
Exemption 5). Accordingly, having demonstrated that a record is pre-decisional
and deliberative, an agency need not make additional specific showings regarding
the impact of disclosure on its decisionmaking process.
In any event, after reviewing the declarations and the Vaughn index, the
district court correctly recognized that disclosure would expose [the Board's]
decisionmaking process in such a way as to discourage candid discussion within
the agency and thereby undermine the agencys ability to perform its functions.
Op. 17 (JA 136) (quoting Quarles v. Dept of Navy, 893 F.2d 390, 392 (D.C. Cir.
1990) (quoting Dudman, 815 F.2d at 1568)). No additional proof is necessary to
underscore the correctness of that conclusion.
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II. THE BOARD ALSO PROPERLY WITHHELD CERTAIN
MATERIALS PURSUANT TO FOIA EXEMPTION 8.
The district court concluded, in the alternative, that the Board properly
invoked FOIA Exemption 8 with regard to e-mails or tables (or portions thereof)
that contained information obtained pursuant to the Boards supervisory authority,
from financial institutions subject to its regulation. Op. 21-25 (JA 140-44); see
Thro Decl. 17-18 (JA 37-39). The information withheld consists of the14
following: the identity of institutions with exposure to Bear Stearns, the amount of
such exposure, and/or the activities these institutions had taken to limit their
exposure to Bear Stearns.
FOIA Exemption 8 provides that an agency may withhold information that
is contained in or related to examination, operating or condition reports prepared
by, or on behalf of, or for the use of an agency responsible for the regulation or
supervision of financial institutions. 5 U.S.C. 552(b)(8). As the district court
noted, it is well-established that Exemption 8s scope is particularly broad. Op.
22 (JA 141) (quoting Consumers Union of U.S., Inc. v. Heimann, 589 F.2d 531,
Exemption 8 was invoked with regard to thirteen items. For two of those14
items, the SEC, rather than the Board, was the regulatory body collecting the
information. Both items were records obtained in connection with the SECs
supervision and regulation of Bear Stearns. See Thro Decl., Ex. F (Items 11 and 12)
(JA 70-71); Danis Decl. 4-5 (JA 118). Plaintiffs brief does not discuss the SEC,
but the arguments here apply with equal force to the SECs two items.
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534 (D.C. Cir. 1978) (If the Congress has intentionally and unambiguously
crafted a particularly broad, all-inclusive definition, it is not our function, even in
the FOIA context, to subvert that effort.)). See Gregory v. Fed. Deposit Ins.
Corp., 631 F.2d 896, 898 (D.C. Cir. 1980).
Plaintiff does not dispute that the records at issue were prepared by, on
behalf of, or for the use of the Board, an agency responsible for the regulation or
supervision of financial institutions. 5 U.S.C. 552(b)(8). Plaintiff also does not
dispute that the information was properly obtained pursuant to the Boards
supervisory authority. Finally, plaintiff does not dispute the exigent circumstances
under which this information was gathered and reported.
Plaintiff nevertheless renews his contention that the Board failed to provide
a sufficient explanation for the applicability of this exemption. As the district
court explained, the Boards declarations establish that it obtained the documents
at issue as part of its continuous supervision of institutions it supervised, in the
hectic days and hours during which the Board and its staff strove to assess the
impact of a possible disorderly failure of Bear Stearns. Op. 23 (JA 142); see
Stefansson Decl. 4, 14-15 (JA 99-100, 104-05) (explaining that the bank
supervisory process is one of continual interaction and information-sharing by
regulation entities with their bank supervisors); Thro Decl. 17 (JA 37). These
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materials constituted part of a fast-moving, real-time effort by the Board to
monitor the possible impact of a Bear Stearns bankruptcy. Op. 23 (JA 142). The
materials at issue contain precisely the type of sensitive details collected by
Government agencies which regulate these institutions that Congress recognized
could, if indiscriminately disclosed, cause great harm. H.R. Rep. No. 1497, 89th
Cong., 2nd Sess. 11 (1966); see also S. Rep. No. 813, 89th Cong., 1st Sess. 10
(1965).
Plaintiff suggests that the emails and charts at issue cannot constitute or
relate to reports for purposes of Exemption 8, Pl. Br. 21, a proposition without
basis in the statutory text, this Courts precedent, or common sense. The Boards
broad authority includes the power to require such statements and reports as it
may deem necessary.12 U.S.C. 248(a). The Boards receipt of real-time
reports from supervised financial institutions reflected in the withheld emails
and attachments and obtained by Federal Reserve examiners as part of a well-
established supervisory process falls well within the broad protections afforded
by Exemption 8. Gregory, 631 F.2d at 898 (Congress looked to the nature and
source of the material and determined to provide absolute protection regardless of
the circumstances underlying the regulatory agencys receipt or preparation of
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examination, operating or condition reports).15
The district court explained that plaintiffs position would undermine the
frank cooperation between bank officials and regulated entities that Exemption
8 seeks to protect. Op. 25 (JA 144) (quoting Gregory, 631 F.2d at 899); see also
Heimann, 589 F.2d at 534 (If details of the bank examinations were made freely
available to the public and to banking competitors, ... banks would cooperate less
than fully with federal authorities.). The district court correctly concluded that
the Boards ability to gather information in furtherance of its mission to regulate
our nation's banking system would inarguably be compromised if such information
were now released. Op. 25 (JA144) .
Plaintiff cites no authority that supports his suggestion that the reports15
covered by Exemption 8 must adhere to a particular standardized format. More
generally, plaintiff addresses no case law pertaining to Exemption 8.
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CONCLUSION
For the foregoing reasons, the district courts ruling should be affirmed.
Respectfully submitted,
TONY WEST
Of counsel: Assistant Attorney General
KATHERINE H. WHEATLEY BETH S. BRINKMANN
Associate General Counsel Deputy Assistant Attorney General
YVONNE F. MIZUSAWA MARK B. STERN
Senior Counsel SAMANTHA L. CHAIFETZ(202) 514-4821
Board of Governors of the Attorneys, Appellate Staff
Federal Reserve System Civil Division, Dept. of Justice
20th and C Streets, N.W. 950 Pennsylvania Avenue, N.W.
Washington, D.C. 20551 Room 7248
Washington, D.C. 20530
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CERTIFICATE OF COMPLIANCE
I certify that this brief complies with the type-volume limitation of Fed. R.
App. P. 32(a)(7)(B). It has been prepared in Times New Roman, 14-point font.
The Corel WordPerfect 12 word count is 7808, excluding the parts of the brief
exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
/s/ Samantha L. Chaifetz
Samantha L. ChaifetzAttorney for Appellee
Date: March 4, 2011
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CERTIFICATE OF SERVICE
I hereby certify that on March 4, 2011 the foregoing brief was filed via the
CM/ECF system with the Court and served via the CM/ECF system to the
following counsel of record:
Paul J. Orfanedes
Michael Bekesha
Judicial Watch, Inc.
425 Third Street, S.W., Suite 800
Washington, D.C. 20024
/s/ Samantha L. Chaifetz
Samantha L. Chaifetz
Attorney for Appellee
Date: March 4, 2011
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ADDENDUM
FOIA, 5 U.S.C. 552
(b) This section does not apply to matters that are--
...
(5) inter-agency or intra-agency memorandums or letters which would
not be available by law to a party other than an agency in litigation
with the agency;
...
(8) contained in or related to examination, operating, or condition
reports prepared by, on behalf of, or for the use of an agency
responsible for the regulation or supervision of financial institutions
Federal Reserve Act 13(3), 12 U.S.C. 343
(A) In unusual and exigent circumstances, the Board of Governors of the
Federal Reserve System, by the affirmative vote of not less than five
members, may authorize any Federal reserve bank, during such periods as
the said board may determine, at rates established in accordance with the
provisions of section 357 of this title, to discount for any participant in any
program or facility with broad-based eligibility, notes, drafts, and bills of
exchange when such notes, drafts, and bills of exchange are indorsed orotherwise secured to the satisfaction of the Federal reserve bank: Provided,
That before discounting any such note, draft, or bill of exchange, the
Federal reserve bank shall obtain evidence that such participant in any
program or facility with broad-based eligibility is unable to secure adequate
credit accommodations from other banking institutions. All such discounts
for any participant in any program or facility with broad-based eligibility
shall be subject to such limitations, restrictions, and regulations as the
Board of Governors of the Federal Reserve System may prescribe.
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Federal Reserve Act 11, 12 U.S.C. 248
The Board of Governors of the Federal Reserve System shall be authorized and
empowered:
...
(r)(1) Any action that this chapter provides may be taken only upon the
affirmative vote of 5 members of the Board may be taken upon the
unanimous vote of all members then in office if there are fewer than 5
members in office at the time of the action.
(2)(A) Any action that the Board is otherwise authorized to take under the
second paragraph of section 343 of this title may be taken upon theunanimous vote of all available members then in office, if--
(I) at least 2 members are available and all available members
participate in the action;
(ii) the available members unanimously determine that--
(I) unusual and exigent circumstances exist and the borrower is
unable to secure adequate credit accommodations from other
sources;
(II) action on the matter is necessary to prevent, correct, or
mitigate serious harm to the economy or the stability of thefinancial system of the United States;
(III) despite the use of all means available (including all
available telephonic, telegraphic, and other electronic means),
the other members of the Board have not been able to be
contacted on the matter; and
(IV) action on the matter is required before the number of
Board members otherwise required to vote on the matter can be
contacted through any available means (including all available
telephonic, telegraphic, and other electronic means); and
(iii) any credit extended by a Federal reserve bank pursuant to such
action is payable upon demand of the Board.
(B) The available members of the Board shall document in writing the
determinations required by subparagraph (A)(ii), and such written findings
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