Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
0Activity
0 of .
Results for:
No results containing your search query
P. 1
FHFA motion not to disclose freddie mac accounting.pdf

FHFA motion not to disclose freddie mac accounting.pdf

Ratings: (0)|Views: 1 |Likes:
Published by ny1david

More info:

Published by: ny1david on Jan 22, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

01/22/2013

pdf

text

original

 
 
UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA____________________________________|In re Federal National Mortgage | MDL No. 1668Association Securities, Derivative and |“ERISA” Litigation |____________________________________|| Consolidated Civ. No. 1:04-cv-01639In re Fannie Mae Securities Litigation || Judge Richard J. Leon____________________________________|FHFA’S RESPONSE IN OPPOSITION TO LEANNE G. SPENCER’SMOTION TO COMPEL THE PRODUCTION OF DOCUMENTSREGARDING FREDDIE MAC ACCOUNTING
 Pursuant to Fed. R. Civ. P. 45 and 26, the Federal Housing Finance Agency (“FHFA” or“agency”), respectfully requests that the Court deny Defendant Leanne G. Spencer’s Motion toCompel the Production of Documents regarding Freddie Mac Accounting (Dkt. No. 781).The Defendants’ parade of “just one more” discovery request continues. For the reasonsdiscussed below, the Court should deny the Motion because (1) the documents sought areirrelevant, (2) the documents sought are privileged, (3) the subpoena is unduly burdensome, and(4) Ms. Spencer has failed to show “good cause” for serving a subpoena for documents after thedeadlines set by the Court.
1
 
1
On September 29, 2009, KPMG filed a separate motion to compel deposition testimonyregarding the Kroll Report on Freddie Mac’s accounting (Dkt. No. 787). Specifically, KPMGseeks testimony from FHFA Chief Accountant Wanda DeLeo, formerly Chief Accountant of OFHEO, who has already completed her deposition, regarding the Kroll Report and FreddieMac’s accounting. Accordingly, the Court may wish to consider withholding a ruling on Ms.Spencer’s Motion to Compel until KPMG’s Motion to Compel similar information is fullybriefed and before the Court.
Case 1:04-cv-01639-RJL Document 792 Filed 10/02/09 Page 1 of 11
 
 2
I.
 
PERTINENT BACKGROUND
On June 5, 2009, Defendant Spencer caused a subpoena for documents to be served onFHFA. A copy of the subpoena is attached to Ms. Spencer’s Motion to Compel. FHFA objectedto the subpoena via letter dated June 18, 2009, a copy of which is also attached to Ms. Spencer’sMotion. The subpoena seeks the production of a report by Kroll Consulting prepared at thedirection of the Office of Federal Housing Enterprise Oversight (“OFHEO”) as part of OFHEO’sstatutory examinations of the Federal Home Loan Mortgage Corporation,
i.e.
,
Freddie Mac
, notFannie Mae. Kroll’s engagement resulted in a written report in which Kroll provided its opinionfor OFHEO’s consideration on certain of Freddie Mac’s accounting policies (the “KrollReport”).In addition to the Kroll Report, the subpoena seeks the production of all internal andexternal communications related to the Kroll Report or to Kroll’s findings. The subpoena alsoseeks all documents relating to a purported decision by OFHEO not to take issue with FreddieMac’s accounting or the problems purportedly identified in the Report. In other words, thesubpoena expressly seeks the agency’s privileged investigative files, internal communications,and communications with its hired contractor regarding the agency’s decisions.The Kroll Report has absolutely nothing to do with Fannie Mae’s accounting practicesunder Statement of Financial Accounting Standards No. 133 (“FAS 133”). OFHEO engagedKroll to review certain accounting practices of Freddie Mac. OFHEO did not ask Kroll toreview any accounting practices of Fannie Mae, nor did Kroll actually review any of FannieMae’s accounting practices. As alleged by Ms. Spencer, the Kroll Report addresses only FreddieMac’s accounting practices under FAS 133.
Case 1:04-cv-01639-RJL Document 792 Filed 10/02/09 Page 2 of 11
 
 3
II.
 
LEGAL STANDARD
Discovery must be “relevant” and “not privileged.” Fed. R. Civ. P. 26(b)(1) (“Partiesmay obtain discovery regarding any matter, not privileged, that is relevant to the claim ordefense of any party. . . .”); Fed. R. Civ. P. 45(c)(3)(A);
Watts v. SEC 
, 482 F.3d 501, 507-09(D.C. Cir. 2007) (permissible scope of discovery prohibits inquiry into non-relevant andprivileged matters).Rule 45 provides special protections for non-parties that are subpoenaed, as is the casehere.
See
Fed. R. Civ. P. 45(c), (d);
Watts
, 482 F.3d at 508. Rule 45’s “undue burden” standard“requires district courts supervising discovery to be generally sensitive to the costs imposed onthird parties.”
Watts
, 482 F.3d at 509. In particular, Rule 45 imposes on district courts the“responsibility to analyze privilege or undue burden assertions” and “requires that district courtsquash subpoenas that call for privileged matter or would cause an undue burden.”
 Id.
at 508;Fed. R. Civ. P. 45(c)(3)(A).
III.
 
DISCUSSIONA.
 
Ms. Spencer Has Failed to Establish that the Documents She Seeks AreRelevant to this Litigation
The burden is on Ms. Spencer to establish that the documents she seeks are relevant to avalid claim or defense.
See
Fed. R. Civ. P. 26(b)(1); Fed. R. Civ. P. 45(c)(3)(A);
Watts
, 482 F.3dat 507-09. She has failed to do so. She claims to need this information because it is relevant toshow “FHFA’s knowledge” of Fannie Mae’s accounting. However, Ms. Spencer’s subpoenaseeks, in her own words:[A] report prepared for FHFA by an outside investigative firmcalled Kroll regarding
Freddie Mac’s accounting
treatment for
certain types
of derivative instruments under FAS 133. The reportand related documents could bear directly on the nature of, and
FHFA’s knowledge
of, similar transactions undertaken by FannieMae that are at issue in this litigation. (emphasis added).
Case 1:04-cv-01639-RJL Document 792 Filed 10/02/09 Page 3 of 11

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->