Case 1:09-cv-01263-ESH Document 6 Filed 08/12/2009 Page 1 of 11

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

VERN McKINLEY,

Plaintiff,

v.
No. 1:09-cv-1263-ESH
FEDERAL DEPOSIT INSURANCE
CORPORATION and

BOARD OF GOVERNORS OF THE

FEDERAL RESERVE SYSTEM,

Defendants.

ANSWER OF FEDERAL DEPOSIT INSURANCE CORPORATION

The Federal Deposit Insurance Corporation (FDIC), acting in its corporate capacity,

answers the complaint in this action as follows:

1. Admits that this action is brought by plaintiff Vern McKinley (Mr. McKinley);

that this action is purportedly brought pursuant to the Freedom of Information

Act, 5 U.S.C. § 522, as amended (FOIA); that this action seeks to obtain a

government record maintained by the FDIC; that the FDIC, acting in its corporate

capacity, is an agency of the United States government for the purposes of FOIA;

denies knowledge or information sufficient to form a belief as to the allegations

regarding the Board of Governors of the Federal Reserve System (Federal

Reserve); and denies the remaining allegations of this paragraph.

2. Admits that the FDIC has recently made efforts to stabilize the financial systems

of the United States; denies knowledge or information sufficient to form a belief

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as to the allegations relating to the Federal Reserve; and denies all remaining

allegations of this paragraph.

3. Admits that the FDIC has the power under the Federal Deposit Insurance Act to,

under certain circumstances, provide, and has provided, “open bank assistance”;

that the FDIC has provided open bank assistance to prevent federally insured

depository institutions from closing; that the FDIC may recommend the provision

of open bank assistance or other action to the Secretary of the Treasury pursuant

to 12 U.S.C. § 1823(c)(4)(G) and refers to that statute for a complete and accurate

statement of its provisions; denies knowledge or information sufficient to form a

belief as to the allegations of this paragraph relating to the Federal Reserve; and

denies the remaining allegations of this paragraph.

4. Admits that Mr. McKinley has sought access to information under FOIA; and that

the FDIC has provided a requested document to Mr. McKinley in redacted form;

denies knowledge or information sufficient to form a belief as to the “usefulness”

to Mr. McKinley of the redacted document provided to him; denies that the

information provided to Mr. McKinley does not represent requested information

from his initial FOIA request; denies knowledge or information sufficient to form

a belief as to the allegations of this paragraph relating to the Federal Reserve;

denies knowledge of Mr. McKinley’s motivation for bringing this case; and

denies the remaining allegations of this paragraph.

5. Admits that Mr. McKinley purports to base jurisdiction in this court on 28 U.S.C.

§ 1331, 5 U.S.C. § 552, and 5 U.S.C. § 552(a)(4)(B); and refers to those statutes

for complete and accurate statements of their provisions.

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6. Admits that Mr. McKinley purports to base venue in this court pursuant to 5

U.S.C. § 552(a)(4)(B) and that this Court is the United States District Court for

the District of Columbia.

7. Denies knowledge or information sufficient to form a belief with respect to the

allegations of this paragraph.

8. Admits that the FDIC, acting in its corporate capacity, is an agency of the United

States of America for the purposes of FOIA; that the FDIC has possession and

control of the document that Mr. McKinley seeks; that the FDIC insures certain

deposits in federally insured depository institutions in the United States; and that

the FDIC is an independent agency created by the Congress to maintain stability

and public confidence in the nation's financial system by insuring deposits,

examining and supervising financial institutions for safety and soundness and

consumer protection, and managing receiverships; denies knowledge or

information sufficient to form a belief as to the allegations relating to the Federal

Reserve; and denies or information sufficient to form a belief as to the remaining

allegations in this paragraph.

9. Admits that the FDIC has a “number of options under law” for dealing with

troubled depository institutions that are federally insured; that the statutory

authority for the FDIC’s options is found in the Federal Deposit Insurance Act, 12

U.S.C. §§ 1811 et seq., which statute speaks for itself; and denies knowledge or

information sufficient to form a belief as to the remaining allegations in this

paragraph.

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10. Admits that Congress provided the FDIC the authority to provide open bank

assistance in 1950; that the FDIC completed the majority of open bank assistance

agreements in 1987 and 1988; that the FDIC provided open bank assistance to

Continental Illinois National Bank and Trust Company (Continental), of Chicago,

Illinois, in 1984; and that the final resolution cost for handling Continental was

about $1.1 billion; denies that that Continental was the “largest . . . case of [open

bank assistance] prior to the current financial crisis”; and denies knowledge or

information sufficient to form a belief as to the remaining allegations of this

paragraph.

11. Admits that Congress legislated changes to the FDIC’s open bank assistance

authority in the Federal Deposit Insurance Corporation Improvements Act

(FDICIA) in 1991 and the Resolution Trust Corporation Completion Act

(RTCCA) in 1993 and refers to those statutes for a complete and accurate

statement of their provisions; denies knowledge or information sufficient to form

a belief as to the allegations of this paragraph concerning the Federal Reserve, the

Secretary of the Treasury, the President of the United States, and the Comptroller

General of the United States; and denies the remaining allegations of this

paragraph.

12. Admits that the FDIC did not participate in open bank assistance transactions

between 1992 and 2008; and that at a special meeting on September 29, 2008, the

FDIC Board of Directors approved the FDIC’s entry into a loss-sharing

arrangement with Citigroup Inc. (Citigroup) in connection with the proposed

acquisition by Citigroup of the banking operations of Wachovia Corporation,

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pursuant to which the FDIC would, inter alia, absorb losses beyond $42 billion on

a pre-identified $312 billion pool of loans (proposed Wachovia transaction); and

denies the remaining allegations of this paragraph.

13-15. Denies knowledge or information sufficient to form a belief as to the

allegations in these paragraphs, which relate solely to the Federal Reserve.

16. Admits that, via an e-mail dated November 18, 2008, Mr. McKinley sent a FOIA

request to the FDIC seeking records related to the approval by the FDIC’s Board

of Directors of the proposed Wachovia transaction; denies knowledge or

information sufficient to form a belief as to the allegations of this paragraph

relating to the Federal Reserve; and denies the remaining allegations of this

paragraph.

17. Admits that Mr. McKinley’s FOIA request to the FDIC was, in part, phrased as

set forth in this paragraph and refers to that document for a complete and accurate

statement of its provisions.

18. Denies knowledge or information sufficient to form a belief as to the allegations

of this paragraph, which relate solely to the Federal Reserve.

19. Admits that the public has an interest in the FDIC’s conduct; denies knowledge

or information sufficient to form a belief as to the allegations of this paragraph

relating to the Federal Reserve; and denies the remaining allegations of this

paragraph.

20. Admits that the FDIC has a document responding to Mr. McKinley’s FOIA

request of November 18, 2008, as subsequently clarified; and denies knowledge

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or information sufficient to form a belief as to the allegations of this paragraph

relating to the Federal Reserve.

21. Admits that FOIA, 5 U.S.C. § 552, protects federal agency records from public

disclosure by virtue of several exemptions and exclusions and refers to that statute

for a complete and accurate statement of its provisions.

22. Admits that FOIA, 5 U.S.C. § 552(a)(6)(A)(i), provides a time limit in which a

determination should be made on a request for information and refers to that

statute for a complete and accurate statement of its provisions; and denies the

remaining allegations of this paragraph.

23. Admits that Mr. McKinley clarified his FOIA request to the FDIC during a

December 18, 2008 telephone discussion with Senior FOIA Specialist Jerry

Sussman.

24. Admits that Supervisory Counsel Frederick L. Fisch of the FDIC’s FOIA/Privacy

Act Group responded to Mr. McKinley’s FOIA request by letter dated January 13,

2009; that Mr. Fisch explained that the FDIC Board meeting regarding the

proposed Wachovia transaction was closed to the public pursuant to the

Government in Sunshine Act, 5 U.S.C. § 552b, and that minutes of that FDIC

Board meeting were being withheld in full pursuant to that statute; that Mr. Fisch

notified Mr. McKinley of his right to appeal that determination to the FDIC’s

General Counsel within 30 business days following receipt of the January 13,

2009 letter; and denies the remaining allegations of this paragraph.

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25. Admits that Mr. McKinley filed an administrative appeal of Mr. Fisch’s letter

with the FDIC’s General Counsel on January 28, 2009, and refers to that

document for a complete and accurate statement of its terms.

26. Admits that FDIC Senior Counsel Charles L. Cope responded to Mr. McKinley’s

administrative appeal by letter dated January 28, 2009, and refers to that

document for a complete and accurate statement of its terms; that Mr. Cope’s

letter stated that he had determined that certain sections of the FDIC Board

minutes at issue remained exempt from disclosure pursuant to sections of the

Government in Sunshine Act and that a copy of the FDIC Board minutes at issue

would be forwarded to Mr. McKinley under separate cover; that a redacted copy

of the FDIC Board minutes at issue was forwarded to Mr. McKinley; and that Mr.

Cope’s letter informed Mr. McKinley that, because his FOIA appeal had been

denied in part, he could seek judicial review pursuant to 5 U.S.C. § 552(4)(B);

and denies the remaining allegations in this paragraph.

27. Admits that Mr. McKinley has exhausted his administrative remedies with

respect to the FDIC.

28. Denies the allegation of this paragraph.

29-35. Denies knowledge or information sufficient to form a belief as to the

allegations of these paragraphs, which relate solely to the Federal Reserve.

FIRST CAUSE OF ACTION

(“Request for declaratory judgment under 28 U.S.C. § 2201”)

36. The FDIC repeats and incorporates its responses to the foregoing paragraphs as if

fully set forth herein.

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37. Denies the allegations of this paragraph, except denies knowledge or information

sufficient to form a belief concerning the allegations of this paragraph relating to

the Federal Reserve.

38. Denies knowledge or information sufficient to form a belief as the allegations of

this paragraph, including the allegations of this paragraph relating to the Federal

Reserve.

39. Denies that this case presents an actual and justiciable controversy insofar as Mr.

McKinley purports to seek relief under the Declaratory Judgment Act; and denies

knowledge or information sufficient to form a belief as to the allegations relating

to the Federal Reserve.

40. Admits that Mr. McKinley purports to seek a declaratory judgment as set forth in

this paragraph.

SECOND CAUSE OF ACTION

(“Request the records improperly withheld in violation of FOIA”)

41. The FDIC repeats and incorporates its responses to the foregoing paragraphs as if

fully set forth herein.

42. Admits the allegations of this paragraph.

43. Denies all the allegations of this paragraph, except denies knowledge or

information sufficient to form a belief as to the allegations of this paragraph

relating to the Federal Reserve.

44. Admits the allegations of this paragraph, except denies knowledge or information

sufficient to form a belief as to the allegations of this paragraph relating to the

Federal Reserve.

45. Denies the allegations of this paragraph, except denies knowledge or information

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sufficient to form a belief as to the allegations of this paragraph relating to the

Federal Reserve.

46. Denies the allegations of this paragraph, except denies knowledge or information

sufficient to form a belief as to the allegations of this paragraph relating to the

Federal Reserve.

47. Denies the allegations of this paragraph, except denies knowledge or information

sufficient to form a belief as to the allegations of this paragraph relating to the

Federal Reserve.

PRAYER FOR RELIEF

48-49. Admits that Mr. McKinley purports to seek the relief described, except denies

knowledge or information sufficient to form a belief as to the allegations of this

paragraph relating to the Federal Reserve.

FIRST DEFENSE

50. This court lacks jurisdiction over Mr. McKinley’s claim for a declaratory

judgment.

SECOND DEFENSE

51. One or more exemptions to FOIA or the Government in Sunshine Act, 5 U.S.C. §

552b, or both, apply to any agency records withheld by the FDIC.

Respectfully submitted,

COLLEEN J. BOLES
Assistant General Counsel
____/s/ Ashley Doherty_____
D. Ashley Doherty (DC 336073)
Counsel
Daniel Kurtenbach
Counsel

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FEDERAL DEPOSIT INSURANCE

CORPORATION
3501 Fairfax Drive, VS-D7022
Arlington, VA 22226
Tel.: (703) 562-2377
Fax.: (703) 562-2477
E-mail: adoherty@fdic.gov

August 12, 2009

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CERTIFICATE OF SERVICE

I hereby certify that on this date I caused a copy of the foregoing document to be

filed via ECF, which will cause electronic notice of its filing to be served on all parties

who have appeared in this action.

/s/ Ashley Doherty

D. Ashley Doherty

August 12, 2009

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