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Case 1:09-cv-01263-ESH Document 13 Filed 09/16/2009 Page 1 of 7

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. September 16, 2009

FDIC’S MOTION TO SEVER

Pursuant to Rules 20(a)(2) and 21 of the Federal Rules of Civil Procedure,

defendant Federal Deposit Insurance Corporation (FDIC) moves to sever the claims

asserted against it from the claims asserted against defendant Board of Governors of the

Federal Reserve System (FRB).

STATEMENT OF FACTS

On November 18, 2008, Plaintiff Vern McKinley (McKinley) submitted a request

under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, to the FDIC, “seeking

certain records related to the approval of the Wachovia Bank transaction.” Complaint

(Dkt. 1) at ¶ 16. In discussions with FDIC personnel, Mr. McKinley was informed that

material responsive to his request included the minutes of a September 29, 2008 meeting

of the FDIC Board of Directors concerning the purchase of Wachovia Bank by Citigroup,

Inc. Complaint (Dkt. 1) at ¶ 23. On January 13, 2009, the FDIC denied Mr. McKinley’s

request, stating that the Board meeting had been closed to the public under the

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Case 1:09-cv-01263-ESH Document 13 Filed 09/16/2009 Page 2 of 7

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

exempt from disclosure under applicable exemptions.1 Complaint (Dkt. 1) at ¶ 24; FDIC

Answer (Dkt. 6) at ¶ 24. On January 28, 2009, Mr. McKinley filed an administrative

appeal of the FDIC’s decision. The FDIC responded on February 17, 2009, by providing

a redacted copy of the Board meeting minutes, and by stating that the redacted portions

were exempt from disclosure. Complaint (Dkt. 1) at ¶ 26. Subsequently, the FDIC

provided Mr. McKinley with a redacted memorandum which had been presented to the

FDIC Board of Directors for discussion at the closed meeting. The FDIC explained that

the redacted portions of the memorandum were exempt from disclosure under certain

FOIA exemptions.

A month after Mr. McKinley’s FOIA request to the FDIC concerning the

Wachovia/Citigroup transaction, on December 17, 2008, Mr. McKinley submitted a

FOIA request to the FRB seeking “certain records related to the approval of the Bear

Stearns transaction.” Complaint (Dkt. 1) at ¶ 16. On January 16, 2009, the FRB staff

sent a letter to Mr. McKinley to extend their response date. In May, 2009, Mr. McKinley

contacted the FRB and was given an anticipated response date of early June. On June 11,

FRB staff sent another letter to Mr. McKinley. The FRB ultimately responded to Mr.

McKinley’s FOIA request on August 11, 2009. Complaint (Dkt. 1) at ¶¶ 30-32; FRB

Answer (Dkt. 9) at ¶¶ 30-33. The Joint Status Report of Mr. McKinley and the FRB

indicates that the FRB has not yet responded in full to Mr. McKinley’s FOIA request and

is still reviewing records. FRB Joint Status Report (Dkt. 12) at ¶¶ 2-3.

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Pursuant to subsection (k) of the Sunshine Act, 5 U.S.C. § 552b(k), where a FOIA request is made for
transcripts, recordings, or minutes of closed meetings, the Sunshine Act exemptions apply rather than the
FOIA exemptions.

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STATEMENT OF POINTS OF LAW AND AUTHORITY

Under Rule 20 of the Federal Rules of Civil Procedure, multiple defendants may

be joined in the same lawsuit if a two-part test is met:

(A) any right to relief is asserted against them jointly, severally, or in the
alternative with respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences; and

(B) any question of law or fact common to all defendants will arise in the
action.

Fed. R. Civ. P. 20(a)(2). Courts consider parties to be misjoined when these

requirements are not satisfied. Montgomery v STG International, 532 F. Supp.2d 29, 35

(D.D.C. 2008); Disparte v. Corporate Executive Board, 223 F.R.D. 7, 12 (D.D.C. 2004).

The remedy for misjoinder is found in Fed. R. Civ. P. 21, which provides in relevant part:

“On motion or on its own, the court may at any time, on just terms, add or drop a party.

The court may also sever any claim against a party.” M.K. v. Tenet, 216 F.R.D. 133, 137

(D.D.C. 2002); Disparte, 223 F.R.D. at 12. The determination of a motion to sever is

within the discretion of the trial court. M.K. v. Tenet, 216 F.R.D. at 137; Disparte, 223

F.R.D. at 12. If parties or claims appear to be improperly joined, the trial court may order

such claims severed and proceeded with separately. Disparte, 223 F.R.D. at 12; Lucas v.

Barreto, 2005 WL 607923 *2 (D.D.C. 2005).

In this case, Mr. McKinley’s joinder of his claims against the FDIC and his claims

against the FRB fails to meet either prong of the Rule 20 test, and accordingly this action

should be severed under Rule 21.

First, The claim asserted against the FDIC does not arise “out of the same

transaction, occurrence, or series of transactions or occurrences,” as the claim asserted

against the FRB. From the FDIC, Mr. McKinley requested documents relating to “the

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Wachovia Bank transaction,” while he asked the FRB to produce documents relating to

“the Bears Stearns transaction,” a matter totally unrelated to the Wachovia Bank

transaction. Further, Mr. McKinley made two separate FOIA requests to two separate

agencies on two separate dates a month apart. The responses of the FDIC and the FRB to

Mr. McKinley’s requests were entirely different and totally unconnected to each other.

There is no logical relationship between the claims against the FDIC and the claims

against the FRB. See Montgomery, 532 F. Supp.2d at 35; M.K. v. Tenet, 216 F.R.D. at

142.

Second, there is no “question of law or fact common to all defendants” in this

action. As discussed above, the claims here involve two separate FOIA requests to two

separate agencies about two separate transactions on two separate occasions with two

separate outcomes. While Mr. McKinley is proceeding against both agencies under the

same statute, any questions of law arising here are inextricably tied to the actions of each

particular agency in dealing with its own documents. Thus, the question of whether the

FDIC complied with FOIA in withholding material from the Board minutes and the

memorandum is entirely separate from the question whether the FRB complied with

FOIA in whatever response it has made or will make. There are no commonalities of law

or fact between the defendants in this case. See Lucas, 2005 WL 607923 *3 (“claims in

[this case] are tied together by nothing more than the Agency’s failure to act on plaintiffs’

underlying EEO claims”).

“Permissive joinder is used to promote convenience and expedite resolution.”

Montgomery, 532 F. Supp.2d at 35. In this case, leaving these disparate claims and

defendants in the same action will promote inconvenience and delay. Mr. McKinley’s

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claim against the FDIC is narrow, involving only the minutes of the September 29, 2008

meeting of the Board of Directors and the related memorandum. The FDIC is prepared to

move promptly for summary judgment. However, with regard to Mr. McKinley’s claims

against the FRB, document production is still in progress and the actual scope of the

material at issue will necessarily require more time to identify. As the two recently filed

status reports (Dkt. 11 and 12) make clear, the claims against the FDIC and the claims

against the FRB are proceeding on two separate procedural tracks, with the agreement of

Mr. McKinley. In this case, severing the claims would promote convenience and

expedite resolution.

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CONCLUSION

For the reasons stated, all claims asserted in this action against the FDIC should

be severed from the claims asserted against the FRB and proceed separately. A proposed

order is attached.

Pursuant to the Rules of this Court, LCivR7(m), counsel for the FDIC has

discussed this motion with counsel for the other parties. Counsel for the FRB does not

oppose this motion. Counsel for Mr. McKinley opposes it.

Respectfully submitted,

COLLEEN J. BOLES
Assistant General Counsel

____/s/ Daniel Kurtenbach_____


Daniel Kurtenbach (DC 426590)
Counsel
D. Ashley Doherty
Counsel
FEDERAL DEPOSIT INSURANCE
CORPORATION
3501 Fairfax Drive, VS-D7026
Arlington, VA 22226
Tel.: (703) 562-2465
Fax.: (703) 562-2477
E-mail: dkurtenbach@fdic.gov

September 16, 2009

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CERTIFICATE OF SERVICE

I hereby certify that on September 16, 2009, the foregoing MOTION TO SEVER

was mailed to the following:

Vern McKinley
20745 Ashburn Station Place
Ashburn, VA 20147
/s/ Daniel H. Kurtenbach
Daniel H. Kurtenbach
D.C. Bar No. 426590
Counsel
Federal Deposit Insurance Corporation
3501 Fairfax Drive, Room VS-D7026
Arlington, VA 22226
703-562-2465

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Case 1:09-cv-01263-ESH Document 13-2 Filed 09/16/2009 Page 1 of 1

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 FRB


SYSTEM,

Defendants.

[PROPOSED] ORDER

It appearing to the Court that the claims against defendant Federal Deposit Insurance

Corporation (FDIC) set forth in the Complaint are improperly joined with the claims against

defendant Board of Governors of the Federal Reserve System (FRB), it is hereby ORDERED

that, pursuant to Fed. R. Civ. P. 21, the FDIC’s Motion to Sever is GRANTED. This action shall

be severed into an action against defendant FDIC and a separate action against defendant FRB.

Each matter shall proceed under the original Complaint as of the original filing date,

disregarding those pleadings and orders and portions thereof that are applicable only to the other

defendant. The Clerk shall take all appropriate actions to carry out this Order.

____________________________________
United States District Judge