Case 1:04-cv-01639-RJL Document 1006

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ) ) In re Fannie Mae Securities Litigation ) ) ) _______________________________ ) MDL No. 1668 Consolidated Civil Action No. 1:04-cv-01639 Judge Richard J. Leon

HUD-OIGS SUPPLEMENTAL MEMORANDUM IN RESPONSE TO FEBRUARY 2, 2012 ORDER OF THE COURT As a non-party to this litigation, HUD-OIG does not wish to burden either the Court or the parties to this litigation with redundant filings. HUD-OIG has already requested that the Court maintain the seal over the identity of third parties and the content of any statements they made to HUD-OIG (either during HUD-OIGs investigation or repeated in depositions taken in this case or appearing in any expert report) in connection with the dispositive motions filed in this case. See ECF No. 1001. To the extent the title of that document was less than artful, it requested relief and HUD-OIG respectfully requests that the Court treat it, together with this supplement, as a motion for a protective order.1 In addition to the substance of that filing, HUDOIG incorporates by reference here the arguments made in the Federal Housing Finance Agencys Memorandum in Support of Motion for a Protective Order. See ECF No. 1004. To add only briefly to the existing argument, HUD-OIG respectfully submits that all six Hubbard factors, individually and in concert, weigh in favor of protecting HUD-OIGs
1

After conferring with counsel for the parties seeking public disclosure of HUD-OIGs information about HUD-OIGs response to the Courts February 2, 2012 Order, counsel agreed to forego filing any motion to strike HUD-OIGs filing (for arguably violating the Courts February 2, 2012 Order by failing to be called a motion) in exchange for HUD-OIGs raising any additional argument in support of a request for protective order by no later than February 13, 2012. This reduces the number of motions and pages of briefs before the Court, and will allow the parties seeking disclosure to respond to all arguments raised by FHFA and HUD-OIG at the same time. 1

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confidential information by granting the pending motions for protective orders. United States v. Hubbard, 650 F.2d 293, 317 (D.C. Cir. 1980). Indeed, the fourth Hubbard factor alone requires the Court to grant HUD-OIGs motion because the Privacy Act, 5 U.S.C. 552a, and the Inspector General Act of 1978, 5 U.S.C. Appx. prohibit the HUD-OIG from releasing this information and create an extraordinarily strong privacy interest in shielding from public disclosure HUD-OIGs information. In re Sealed Case, 237 F.3d 657, 666 (D.C. Cir. 2001). Moreover, 1. The first Hubbard factor, any need for public access to the exhibits (Hubbard,

650 F.2d at 317), is at a nadir because HUD-OIG has released as much information to the public as it can by making its final reports available. To the extent that this factor includes any sense of the public having a right to know what HUD-OIG is up to, HUD-OIG would not release under the Freedom of Information Act, 5 U.S.C. 552 (FOIA), the information which it seeks to maintain in a redacted form here. Because there is little, if any, legitimate need for the public to have access to the confidential and sensitive information gathered as part of HUD-OIGs investigation, the first Hubbard factor weighs heavily in favor of granting a protective order and maintaining the information under seal. The public is best served by having a robust Inspector General community able to conduct its investigations without the chilling effect created by the potential for subsequent public disclosure. 2. The second Hubbard factor, the extent of previous public disclosure of the same

information (Hubbard, 650 F.2d at 317), should be uncontested because HUD-OIG has only previously released these materials under the terms of the protective order in this case. The public has not had any access to the specific information at issue here. Thus, the second

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Hubbard factor also strongly favors granting a protective order and maintaining the information under seal. 3. The third Hubbard factor, which examines whether there has been any objection

and by whom, is fully satisfied here. Hubbard, 650 F.2d at 319. All of the witnesses who provided information during HUD-OIGs investigation have objected to disclosure of the information to the public. 4. The fifth Hubbard factor, the existence of prejudice (Hubbard, 650 F.2d at 320-

21), is absent here because the parties to this litigation have had and will continue to have full use of the information before the Court. Nothing about granting HUD-OIGs request for a protective order creates any prejudice. On the other hand, public revelation of the identifies and statements individuals made to HUD-OIG has the genuine potential to harm them and to impair HUD-OIGs ability to conduct future investigations. Consequently, the fifth Hubbard factor also militates in favor of keeping the material under seal at this time. 5. The final Hubbard factor considers the purpose for which the evidence is being

introduced. Hubbard, 650 F.2d at 321-22. Because HUD-OIG is not a party to this complex litigation, it has some difficulty assessing the purposes for which the evidence may be relevant or probative at all or even if so, to what degree and level of materiality to a question presented to the Court for resolution. Based on the nature of the cases, however, it seems plausible that the parties seeking to have this material added to the public record may have reasons for doing so other than allowing the public unfettered access to judicial proceedings at the summary judgment stage. Even were the Court to deem the sixth Hubbard factor a wash, however, is should still grant HUD-OIGs request for relief based on the totality of the analysis of the remaining Hubbard factors.

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CONCLUSION For all of these reasons and those previously stated by HUD-OIG and FHFA in support of a protective order, HUD-OIG respectfully requests that the Court enter a protective order providing that all of the material identified in FHFAs motion be redacted and not placed on the Courts ECF system pending further order of the Court. Dated: February 13, 2012. Respectfully submitted, RONALD C. MACHEN JR. United States Attorney

RUDOLPH CONTRERAS Chief, Civil Division By: /s/ Jane M. Lyons JANE M. LYONS, D.C. Bar #451737 Assistant United States Attorney 555 4th Street, N.W. Room E4104 Washington, D.C. 20530 (202) 514-7161 (phone) (202) 514-8780 (fax) Jane.Lyons@usdoj.gov

Of Counsel Richard Johnson Deputy Counsel to the Inspector General Suite 8260, 451 7th Street, SW Washington DC 20410