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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ____________________________________ ) ) VERN McKINLEY, ) ) Plaintiff. ) ) ) Case No: 10-CV-01165 v. ) Judge Barbara Jacobs Rothstein ) ) FEDERAL HOUSING FINANCE ) AGENCY, ) ) Defendant. ) ) ____________________________________)

DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR AN AWARD OF ATTORNEYS FEES AND COSTS

TONY WEST Assistant Attorney General JOHN TYLER Assistant Branch Director, Federal Programs Branch BRADLEY H. COHEN Trial Attorney, Department of Justice, Civil Division, Federal Programs Branch Post Office Box 883 Washington, D.C. 20044 Tel: (202) 305-9855 Fax: (202) 616-8470 bradley.cohen@usdoj.gov Attorneys for Defendant Federal Housing Finance Agency

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INTRODUCTION This action arises out of a Freedom of Information Act (FOIA) request that the Plaintiff, Vern McKinley (McKinley or Plaintiff), submitted to Defendant Federal Housing Finance Agency (FHFA), seeking documents related to the September 7, 2008 announcement by FHFA and the U.S. Department of the Treasury that FHFA would be placing the Federal National Mortgage Association (Fannie Mae) and the Federal National Home Loan Mortgage Corporation (Freddie Mac) into conservatorship. FHFAs Office of General Counsel found three responsive documents, all of which are subject to privilege and were therefore properly withheld under FOIA Exemption 5. Plaintiff chose to litigate over two of these documents for a year and half, and is now seeking reimbursement from the government for over $15,000, which he alleges to have incurred in fees. In response to an order of this court on August 26, 2011, a small portion of segregable factual information has been released to Plaintiff, notwithstanding the courts conclusion that the bulk of these two documents contain privileged information that is not reasonably segregable. Plaintiff claims he is eligible for fees based on this order; however, given the marginal public benefit of the disclosure and the reasonable basis upon which Defendants withholding rested, Plaintiff is not entitled to such fees. Based on this courts discretion, the public fisc should not be raided to fund Plaintiffs decision to engage in this largely fruitless litigation. Plaintiffs fee petition should accordingly be denied. BACKGROUND In May 2010, Plaintiff submitted his FOIA request for documents relating to FHFA and Treasurys decision to place Fannie Mae and Freddie Mac into conservatorship. Memorandum Opinion and Order (Jun. 7, 2011 Mem. Op.) at 2 (ECF No. 15). Plaintiff specifically sought [A]ny and all communications and records concerning or relating to the assessment of an

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adverse impact on systemic risk in addressing Fannie Mae and Freddie Mac, and in particular how the FHFA and the Department of the Treasury determined that conservatorship was the preferred option to avoid any systemic risk of placing Fannie Mae and Freddie Mac into receivership. Id. Plaintiff later informed the agency that the timeframe to be covered by the request would be from July 1, 2008 to September 30, 2008. Id. A month later, FHFA notified Mr. McKinley that it had searched the agencys files and records and located three documents responsive to his request. Id. These three documents were withheld in their entirety on the basis of the deliberative process privilege and attorney work product doctrine under FOIA Exemption 5. Id. Mr. McKinley was notified of that conclusion in July 2010. Id. Plaintiff filed this lawsuit claiming that FHFA had violated FOIA by failing to produce any and all non-exempt records responsive to Plaintiffs FOIA request within the required time limit. See Pl. Compl., 15. FHFA filed its motion for summary judgment, demonstrating that it had conducted a reasonable search for responsive records and properly withheld the three documents at issue pursuant to FOIA Exemption 5. Def. Memo in Supp. of its Mot. for S.J. at 520 (ECF No. 9-1). Mr. McKinley did not challenge the sufficiency of FHFAs search, nor did he contest FHFAs withholding of the first of three responsive documents. Jun. 7, 2011 Mem. Op. at 3. Rather, in his cross-motion for summary judgment, McKinley challenged FHFAs withholding of two documents (labeled as Documents 2 and 3 in FHFAs Vaughn Index) as not being protected by the deliberative process and attorney work product privileges. Id. After reviewing FHFAs Vaughn index, the court concluded that the documents are protected by the deliberative-process privilege, see id. at 5. Subsequently, the court conducted an in camera review to ascertain whether these two documents were also protected by the attorney work product doctrine, and found that although

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Documents 2 or 3 mention the risk of legal action and contemplated legal action, they do so with relatively little analysis, or only within limited parts of the document. Order (Aug. 26, 2011 Order) at 2-3 (ECF No. 17). The court therefore ordered FHFA to disclose any portions of those documents that were reasonably segregable from the material therein that is protected by the deliberative-process privilege. Id. at 4. In response to the courts order, FHFA conducted a segregability analysis and released all reasonably segregable non-privileged information from the two contested documents. After FHFA produced this material, Mr. McKinley again requested the court conduct an in camera review and order Defendant to produce any additional segregable material. Joint Status Report at 1 (ECF No. 18). The court concluded that FHFA has met its burden and had appropriately disclosed all factual content that it could reasonably segregate and that is not inextricably intertwined with exempted material. Mem. Op. (Jan. 25, 2012 Mem. Op.) at 4 (ECF No. 21). Accordingly, the court granted summary judgment in FHFAs favor. Id. at 5. The released factual portions of the documents consist of eight primarily blank pages, two and half pages setting forth the provisions of the Housing and Economic Recovery Act of 2008, and eight sentences in a chart that make very brief references to the legal authority FHFA would obtain pursuant to a consent order or as a conservator. Attachment A to Joint Status Report (ECF No. 18-1). ARGUMENT I. LEGAL STANDARD FOR AN AWARD OF FEES IN FOIA CASES The FOIA permits a court to assess attorneys fees and other litigation costs where a plaintiff has substantially prevailed; however, these fees must be reasonable and reasonably incurred. See 5 U.S.C. 552(a)(4)(E)(i) ([A] court may assess against the United States

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reasonable attorney fees and other litigation costs reasonably incurred in any case in which the complainant has substantially prevailed.). An award of fees and costs was not enacted to provide a reward for any litigant who successfully forces the government to disclose information it wished to withhold. Nationwide Bldg. Maint., Inc. v. Sampson, 559 F.2d 704, 711 (D.C. Cir. 1977). Rather, the provision had a more limited purpose to remove the incentive for administrative resistance to disclosure requests based not on the merits of exemption claims, but on the knowledge that many FOIA plaintiffs do not have the financial resources or economic incentives to pursue their requests through expensive litigation. Id. The statute requires that a plaintiff seeking fees demonstrate conclusively that he is eligible to receive fees and that he is entitled to do so. Brayton v. Office of U.S. Trade Representative, 641 F.3d 521, 524 (D.C. Cir. 2011). The eligibility prong asks whether a plaintiff has substantially prevailed and thus may receive fees. If so, the court proceeds to the entitlement prong and considers a variety of factors to determine whether plaintiff should receive fees. Id. (emphasis in original). Whether Plaintiff is entitled to fees is based on four, non-exhaustive factors including: the public benefit derived from the case, the commercial benefit to the plaintiff, the nature of plaintiffs interest in the records, and whether the government has a reasonable basis for withholding the requested information. Cotton v. Heyman, 63 F.3d 1115, 1117 (D.C. Cir. 1995). Although Plaintiff claims to have prevailed on one issue, his motion for summary judgment was denied and summary judgment was granted in favor of FHFA. Perhaps more importantly, the lack of any public benefit resulting from this litigation and the reasonableness of FHFAs withholdings weigh decisively against awarding him any attorneys fees or other litigation costs.

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II.

PLAINTIFF DID NOT PREVAIL ON HIS CROSS-MOTION FOR SUMMARY JUDGMENT First, Plaintiff contends that he substantially prevailed because the court ordered FHFA

to identify and disclose any portion of Documents 2 and 3 that are reasonably segregable for material therein that is protected by the deliberative process privilege. See Pl. Mot. for Award of Atty Fees (Pl. Mot.) at 3-4 (ECF No. 24). Plaintiff neglects to mention that he was denied relief on the rest of his motion in which he argued that the documents were not protected by the deliberative process privilege. See Pl. Memo in Supp. of His Opp and Mot for S.J. at 9-11, 13 (ECF No. 11-1); Pl. Reply at 3-4 (ECF No. 14). Plaintiff was also denied relief when he argued that the government failed to perform an adequate segregability analysis of these two documents. Instead, the court held that the bulk of these two documents were protected by the deliberative process privilege and were properly withheld from disclosure under Exemption 5. See Jan. 25, 2012 Order at 4-5. This court reached this conclusion twice and ultimately granted summary judgment in favor of FHFA, not Plaintiff. Id. III. PLAINTIFF IS NOT ENTITLED TO ATTORNEYS FEES OR OTHER LITIGATION COSTS ON ANY OF HIS CLAIMS In any case, Plaintiff clearly is not entitled to fees in this case. As mentioned above, in order to make such a determination, this court must consider: (1) the public benefit derived from the case; (2) the commercial benefit to the plaintiff; (3) the nature of the plaintiffs interest in the records; and (4) whether the government has a reasonable basis for withholding the requested information. Cotton, 63 F.3d at 1117. A. The Limited Segregable Factual Information Contained in Two Documents Produced in this Litigation Did Not Benefit the Public Plaintiff spends several pages explaining why the subject of his request is a matter of public interest. See Pl. Mot. at 5-6. However, he gives little indication as to why the actual

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documents released in this litigation add to the publicly available information regarding the decision to place Fannie Mae and Freddie Mac into conservatorship. Instead, Plaintiff points to a few nebulous facts allegedly made public by this litigation, largely through this courts Aug. 26, 2011 order, including that the government conduct[ed] an analysis before entering into a conservatorship and that FHFA took into account policy, operational, and logistical considerations. Pl. Mot. at 6-7. While any response to a FOIA request could theoretically benefit the public by vaguely adding to the publics knowledge about the operation of government in some minor or technical way, such a broad definition of public benefit is not what Congress had it mind when it included this factor in the statutory definition. Rather, the public benefit factor should only weigh in favor of an award where complainants victory is likely to add to the fund of information that citizens may use in making vital political choices. Cotton, 63 F.3d at 1120 (quoting Fenster v. Brown, 617 F.2d 740, 744 (D.C. Cir. 1979)). In addition, in assessing the public benefit derived from the FOIA case, the court must evaluate the specific documents in the case at hand. Id. Other relevant considerations include the disclosures likely degree of dissemination and the public impact that can be expected. Peter S. Herricks Customs & Intl Trade Newsletter v. U.S. Customs & Border Protection, No. 04-377, 2006 WL 3060012 at *4 (D.D.C. Oct. 26, 2006) (internal citation and quotations omitted), and whether the information is already publicly available. Cotton, 63 F.3d at 1120. A more careful inspection of the released information reveals that the redacted documents do not add in any meaningful way to the fund of information publicly available concerning the governments decision to place Fannie Mae and Freddie Mac into conservatorship. Out of thirteen pages released, eight are entirely blank or contain twenty words or less. The remaining

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five pages simply describe the contents of a federal statute and general characteristics of a consent order or conservatorship, which is public information readily available in law libraries and from multiple other sources. It is no wonder then that Plaintiffs discussion of the governments consideration of conservatorship or receivership options, both on television and in print media have apparently been derived from sources other than the scant information obtained in this case. For example, Plaintiffs comments on MSNBC explicitly discuss documents obtained separate and apart from this litigation. See http://www.youtube.com/watch?v=nyYkci_tLAg at 7:12-7:28. Likewise, the article written by Plaintiff, attached to Plaintiffs Motion as Exhibit A, cites no FHFA documents, but instead a book written by Andrew Ross Sorkin, Too Big to Fail, as the source for facts surrounding the governments decision to enter into a conservatorship of Fannie Mae and Freddie Mac. See Pl. Exh. A at 1. The information produced in this litigation appears to have had no discernible effect on Plaintiffs scholarship or advocacy. Moreover, Plaintiffs dissemination of the five redacted pages produced in this case on his personal website, by itself, does not demonstrate that these pages added to information vital to the publics political decisions. This is especially true where much of this same information was already publicly available on websites publishing the contents of federal statutes. Moreover, Plaintiffs attempt to point to properly withheld portions of documents as somehow being illustrative of the governments decision-making process must also fail as a matter of law. See Morley v. CIA, Civ. No. 03-2542, 2011 WL 6257183 at *4 (D.D.C. Dec. 14, 2011) (rejecting Plaintiffs claim that the court should award attorneys fees based on the publics interest in documents that were properly withheld). It is at this point the courts analysis should end if there is no public benefit from the information released, the other factors are largely irrelevant, and the court should accordingly

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decline to exercise its discretion to award attorneys fees. See Bryant v. Central Intelligence Agency, Civ No. 09-0940, 2011 WL 4888775 at *3-4 (D.D.C. Oct. 14, 2011) (concluding that the release of two redacted documents totaling five pages as a result of the litigation were not of any public value and finding it unnecessary to review the remaining factors given that even if they were to weigh in Plaintiffs favor, they would not overcome the courts conclusion regarding the public interest factor). B. Plaintiffs Limited Interest in Publicly Disseminating the Requested Information Does Not Weigh in his Favor The second and third factors the plaintiffs commercial benefit and nature of plaintiffs interest in the information are closely related and often considered together and assess whether a plaintiff has sufficient private incentive to seek disclosure without attorneys fees. Davy v. Central Intelligence Agency, 550 F.3d 1155, 1160 (D.C. Cir. 2008) (internal quotations and citation omitted). Mr. McKinley states that he formerly worked for the federal government and now works as a consultant, legal advisor, and regulatory policy expert. See Pl. Mot. at 8. He further states that he has written a book and an article and has appeared on a television program. Id. Thus, although Plaintiff engages more broadly in policy advocacy and disseminates information that was produced to him in this case on the internet, he simultaneously has a commercial interest in the information requested in this case as well. He analogizes his interest to the Plaintiff in Davy, who was interested in private gain associated with writing a book, but in the course of doing so, had an interest in disseminating information to the public.1 550 F.3d at
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In Davy v. Central Intelligence Agency, 550 F.3d 1155 (D.C. Cir. 2008), the D.C. Circuit addressed a private individual, William Davy, who sought information in order to publish a book about the Kennedy assassination. The Court recognized that the second and third factors reflect an effort to distinguish between those who seek documents for public informational purposes and those who seek documents for private advantage. Id. at 1160. And to the extent that a private individual seeks to profit by publishing publicly valuable information in a book, this interest is quasi-commercial, but does not disqualify him or her from seeking attorneys

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1161. Unlike the Plaintiff in Davy who was like a journalist who uses [his] editorial skills to turn the raw materials into a distinct work and distributes that work to an audience, id. at 116162, McKinley made an indiscriminate internet posting of all pleadings in this case with no analysis or specific references made to the contents of the documents or why they were significant to the publics understanding of the conservatorship versus receivership options. And, in any case, to the extent Mr. McKinley intends to write a book, Davy simply stands for the proposition that his potential private gain through writing that book based on this material does not disqualify him from recovery. It does not mean that the court should credit these two factors as weigh[ing] heavily in his favor, see Pl. Mot. at 8-9, as if he were a nonprofit organization or full-time journalist. C. The Reasonableness Factor Does Not Support Plaintiffs Claim of Entitlement Plaintiff argues that FHFA did not have a reasonable basis for withholding the released information because the Court held that two documents were not protected by the attorney work product doctrine. See Pl. Mot. at 9. This final factor asks the court to consider whether the government had a reasonable or colorable basis for withholding documents and whether the government was recalcitrant or obdurate in opposing a valid claim. Davy, 550 F.3d at 1162. There must be some unreasonable action taken by the government in responding to Plaintiffs request; otherwise, Plaintiff has not satisfied th[is] fourth element [which] may foreclose a claim for attorneys fees or costs. See, e.g., Maydak v. U.S. Dept of Justice, 579 F. Supp. 2d 105, 108-09 (D.D.C. 2008) ([a]lthough the plaintiff obtained two orders compelling the release of BOP records, the BOP rightly asserts that the orders resulted from its inability to satisfy its evidentiary burden with

fees. Id. at 1161. Hence, the D.C. Circuit reversed the district court for its holding that the second and third factors weighed decisively against Davy. Id. at 1162.

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respect to reasonably asserted exemptions, rather than from evidence of agency recalcitrance or bad faith.); see also Beltranena v. U.S. Dept of State, Civ. No. 09-cv-01457, 2011 WL 5022789 at *11 (D.D.C. Oct. 21, 2011) (where the agency has performed adequate searches for [responsive] documents, properly applied exemptions, and presented evidence of carefullyconducted segregabilty analysis, an award of attorneys fees is inappropriate.); Morley, 2011 WL 6257183 at *5 (where the agency has relied on reasonable legal interpretations and acted reasonably throughout this case, this factor should weigh in the governments favor). In fact, FHFA quickly responded to Plaintiffs revised FOIA request within a month, performed adequate searches for responsive documents which Plaintiff did not challenge, and reasonably withheld all three responsive documents under Exemption 5. See supra at 2. This was most certainly not a case in which Defendant sought to procrastinate or to resist disclosure based on a meritless exemption claim. See Nationwide Bldg Maint., Inc., 559 F.2d at 711. Defendant had a reasonable or colorable basis for withholding the two contested documents as protected by the deliberative process privilege and attorney work product doctrine. Although the attorney work product claim was not ultimately upheld, FHFA had an evidentiary basis for doing so. See Aug. 26, 2011 Order at 2-3. Following the courts Aug. 26, 2011 order, FHFA undertook a carefully-conducted segregability analysis, the reasonableness of which was confirmed by the court through its own in camera review. The court concluded that FHFA appropriately disclosed all factual content that it could reasonably segregate and that is not inextricably intertwined with exempted material. Jan. 25, 2012 Mem. Op. at 4. Based on the above-mentioned facts, this fourth factor should weigh in FHFAs favor, and the court should conclude that Plaintiff is not entitled to attorneys fees and costs.

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IV.

PLAINTIFFS REQUEST FOR $15,852.50 IN ATTORNEYS FEES AND COSTS IS UNREASONABLE AND EXCESSIVE GIVEN THE EXTREMELY LIMITED SUCCESS OF PLAINTIFFS MOTION Even if the Court were to conclude that Plaintiff is entitled to attorneys fees, which he is

not, Plaintiff is not entitled to the $15,852.50 requested. An appropriate fee award is the product of the hourly rate2 and the number of attorney hours reasonably expended on the case. See Hensley v. Eckerhart, 461 U.S. 424, 411 (1983). The extent of a plaintiffs success is a crucial factor that the district court[] should consider carefully in determining the amount of fees to be awarded. Id. at 440. Indeed, the degree of Plaintiffs success is the most critical factor in determining the reasonableness of a fee award. Farrar v. Hobby, 506 U.S. 103, 114 (1992); see also Judicial Watch, Inc. v. U.S. Dept of Commerce, 470 F.3d 363, 369 (D.C. Cir. 2006) (A plaintiffs overall success on the merits also must be considered in determining the reasonableness of a fee award.); Natl Sec. Archive v. U.S. Dept of Defense, 530 F. Supp. 2d 198, 204-05 (D.D.C. 2008). In FOIA cases, in particular, the D.C. Circuit has emphasized that [f]ees are not recoverable for nonproductive time nor for time expended on issues on which plaintiff did not ultimately prevail. Natl Assn of Concerned Veterans v. U.S. Secretary of Defense, 675 F.2d 1319, 1327 (D.C. Cir. 1982). The fee application should therefore indicate whether nonproductive time or time expended on unsuccessful claims was excluded and, if time was excluded, the nature of the work and the number of hours involved should be stated. Id. at 1327-28. Plaintiffs itemization fails to distinguish between his successful and unsuccessful claims, and accordingly fails to limit his fees claim to those fees that are properly allowed. Instead, Plaintiff seeks to finance his entire litigation from the public treasury without any disallowances for his unsuccessful cross-motion for summary judgment and the Courts ultimate Although fees are not appropriate in this case, for purposes of determining what would constitute a reasonable amount of fees, FHFA does not object to this Courts use of the Laffey Matrix to determine the applicable hourly rate.
2

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decision granting summary judgment in favor of FHFA. Exhibit C to Plaintiffs motion seeks attorneys fees for time reviewing the draft Vaughn index prior to deciding to file a dispositive motion; time spent drafting Plaintiffs unsuccessful argument that the documents in question were not covered by the deliberative-process privilege; and time spent preparing a reply brief asserting that same unsuccessful argument. Plaintiff cannot recover fees for any of those activities. At most, Plaintiff can recover the $855.00 for the hours spent between July 9, 2010 and July 27, 2010, in which his attorneys worked on the complaint and proof of service, and $350.00 for the filing fee for the Complaint for a total of $1,205.00. But even that amount would be an unwarranted windfall for Plaintiff whose litigation efforts only resulted in the production of eight largely blank pages, two and half pages summarizing statutory provisions readily available on the internet, and eight sentences providing basic descriptions of the legal authority FHFA may obtain through a consent order or conservatorship.3 CONCLUSION For the foregoing reasons, this Court should deny Plaintiffs motion for attorneys fees and costs.

Dated: March 9, 2012

TONY WEST Assistant Attorney General JOHN R. TYLER Assistant Director,

Because Plaintiffs fee demands are unwarranted, if the Court awards fees, any fees on fees recovered should be reduced accordingly. See Commissioner, I.N.S. v. Jean, 496 U.S. 154, 163, n.10 (1990) ([F]ees for fees litigation should be excluded to the extent that the applicant ultimately fails to prevail in such litigation.); Natl Veterans Legal Serv. Program v. U.S. Dept of Veteran Affairs, 1999 WL 33740260, at *5-6 (D.D.C. April 13, 1999) (concluding that an award of fees on fees should be reduced by the amount of time spent unsuccessfully defending hours eliminated by the court). To date, Plaintiff seeks $2,585.00, or approximately twice the maximum fees recoverable in connection with Plaintiffs drafting and filing of the Complaint, see, supra. Clearly, if the Court awards any fees for filing this fees petition, and it should not, the requested fees on fees should be substantially reduced or disallowed entirely.

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Federal Programs Branch s/ Bradley H. Cohen BRADLEY H. COHEN (DC Bar No. 495145) Trial Attorney Federal Programs Branch U.S. Department of Justice, Civil Division Telephone: (202) 305-9855 Fax: (202) 318-0486 Email: bradley.cohen@usdoj.gov Mailing Address: Post Office Box 883 Washington, D.C. 20044 Courier Address: 20 Massachusetts Ave, N.W. Washington, D.C. 20001 ATTORNEYS FOR DEFENDANT FEDERAL HOUSING FINANCE AGENCY

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CERTIFICATE OF SERVICE I hereby certify that on March 9, 2012, a copy of the foregoing pleading, along with the Declaration of Bradley H. Cohen, and attachments; and proposed order were filed electronically via the Courts ECF system, which sent notification of such filing to counsel of record.

s/ Bradley H. Cohen BRADLEY H. COHEN Trial Attorney Federal Programs Branch U.S. Department of Justice, Civil Division Telephone: (202) 305-9855 Fax: (202) 318-0486 Email: bradley.cohen@usdoj.gov

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