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Case 1 :09-cv-01263-ESH Document 22 Filed 12/17/09 Page 1 of 18

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA



) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

-------------------------)

VERN McKINLEY,

Plaintiff,

v.

No.1:09-cv-01263-ESH

FEDERAL DEPOSIT INSURANCE CORPORA TION

and

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,

Defendants.

December 17,2009

FDIC'S COMBINED OPPOSITION TO PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND REPLY IN SUPPORT OF FDIC'S MOTION FOR SUMMARY JUDGMENT

Defendant Federal Deposit Insurance Corporation (FDIC) hereby submits its combined

memorandum in opposition to plaintiff Vern McKinley's Cross-Motion for Partial Summary

Judgment (Dkt. 19) (with a supporting declaration) and reply in support of FDIC's Motion for

Summary Judgment (Dkt. 17).

I. INTRODUCTION

Plaintiff Vern McKinley (plaintiff or McKinley), filed this action pursuant to the

Freedom ofInformation Act, 5 U.S.C. § 552 (2006), amended by OPEN Government Act of

2007, Pub. L. No. 110-175, 121 Stat. 2524 (FOIA). Plaintiff alleges that the FDIC wrongfully

redacted portions of the minutes from a special meeting of the FDIC Board of Directors (Board

Minutes) that addressed the FDIC's decision regarding the resolution ofWachovia Bank and its

affiliates (Wachovia). The Board meeting, held on September 29,2008, was closed to the public

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pursuant to sections (c)(4), (c)(6), (c)(8), (c)(9)(A)(ii) and (c)(9)(B) of the Government in the

Sunshine Act, 5 U.S.C. § 552b (Sunshine Act). Also at issue are the FDIC's redactions of a

September 29, 2008 recommendation memorandum prepared by FDIC staff to assist the FDIC

Board members in their deliberations regarding the resolution of Wachovia (Case

Memorandum).

On October 30, 2009, the FDIC filed its Motion for Summary Judgment (Dkt. 17). On

November 25,2009, McKinley filed his memorandum in opposition (Dkt. 18), and on that same

date filed his Cross-Motion for Partial Summary Judgment (Dkt. 19). McKinley combined his

opposition to the FDIC's motion and his memorandum in support of his cross-motion in the

same document.

II. ARGUMENT

A. McKinley's Cross-Motion Fails To Identify The Part or Parts Of His Claims On Which He Seeks Summary Judgment.

Plaintiff moves for "partial summary judgment" against the FDIC, but he has failed to

specify what portion or portions of his claims are contemplated by his motion. "A party

claiming relief may move, with or without supporting affidavits, for summary judgment on all or

part of the claim." Fed. R. Civ. P. 56(a).! Neither McKinley's motion, nor his proposed order

submitted to the Court, identify the issue(s) or object(s) on which he seeks judgment. See Dkts.

19, 19-2. McKinley's Memorandum of Law (McKinley Memorandum) (Dkt. 19) in support of

his Cross-Motion for Partial Summary Judgment is equally imprecise. The motion for partial

summary judgment is mentioned only at the very beginning of the McKinley Memorandum and

in the conclusion, and in neither place is there any guidance on which issues are subject to

judgment.

1 Fed. R. Civ. P. 56(a) was revised effective December 1, 2009. However, this portion of the rule was not changed.

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Accordingly, it is prudent for the FDIC to respond with argument and an additional

declaration as if any or all of the arguments raised in the McKinley Memorandum are intended to

support McKinley's Motion for Partial Summary Judgment.

B. FOIA Exemptions, Not Sunshine Act Exemptions, Apply To The Case Memorandum.

Plaintiff argues (McKinley Mem. at 7-8, 18) that it was error to apply FOIA exemptions,

rather than Sunshine Act exemptions, to the Case Memorandum. Plaintiff cites the statement in

the Board Minutes that "[d]ocuments and materials relevant to the Board's consideration of the

foregoing ... are filed in the jacket of this meeting, and, by reference, are made part of these

minutes .... " Exh. 6 to FDIC Motion at 56,409. Plaintiff misconstrues the Sunshine Act.

Subsection (k) of the Sunshine Act (5 U.S.C. § 552b(k)) provides that "the exemptions

set forth in subsection ( c) of this section shall govern in the case of any request made pursuant to

[the FOIA] to copy or inspect the transcripts, recordings, or minutes described in subsection (f)

of this section." Subsection (f), in turn, defines "minutes" for purposes of the Sunshine Act:

Such minutes shall fully and clearly describe all matters discussed and shall provide a full and accurate summary of any actions taken, and the reasons therefor, including a description of each of the views expressed on any item and the record of any rollcall vote (reflecting the vote of each member on the question). All documents considered in connection with any action shall be identified in such minutes.

5 U.S.C. § 552b(f)(1). Thus "minutes," for purposes of the Sunshine Act, are prepared

contemporaneously with or after the meeting. The Case Memorandum was prepared prior to the

meeting, and does not "provide a full and accurate summary of any actions taken." Further, the

Sunshine Act specifically provides for documents like the Case Memorandum: "All documents

considered in connection with any action shall be identified in such minutes." Even the

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statement in the Board Minutes recognizes the separate character of the Case Memorandum

when it says that the document is made a part of the minutes "by reference."

Because the Case Memorandum is a "document[] considered in connection with" the

Board's action, and is not itself "minutes" of the Board meeting, subsection (k) of the Sunshine

Act is inapplicable. FOIA exemptions, not Sunshine Act exemptions, apply to the Case

Memorandum.

c. McKinley Agreed To Limit The Scope Of His FOIA Request To The Board Minutes.

Plaintiff argues that he did not have a telephone conversation with FDIC FOIA Specialist

Jerry Sussman on December 18,2008, in which they reached an understanding that McKinley's

ForA request would be limited to the Board Minutes. Plaintiff asserts that the FDIC failed to

present any proper evidence that the December 18 conversation took place, and submits a

declaration stating that the conversation did not take place and disputing that he ever narrowed

the scope of his FOIA request. McKinley Mem. at 5-6; McKinley Decl. at,-r 11.

Interestingly, McKinley focuses on the date, December 18, asserting that such a

conversation could not have taken place that day. Plaintiff's argument is an attempt at

misdirection. The material fact is that a conversation was held in which Plaintiff agreed to limit

the scope of his request to the Board Minutes; the actual date of the conversation is immaterial to

the issues in this case.

Support for the FDIC's assertion that McKinley agreed to the limitation is ample. In his

Complaint in this case, McKinley acknowledges that he "was informed that the requested

information would be most efficiently satisfied by securing the minutes of the FDIC Board

Meeting." Complaint (Dkt. 1) at ~ 23. The Complaint never expresses disagreement with the

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FDIC's understanding of the scope of his request, and indeed the Complaint expressly agrees

that the FOIA request was limited to the Board Minutes:

• "To date, the FDIC has provided the requested documents .... " Compl. (Dkt. 1) at ~ 4

(emphasis added).

• "Mr. McKinley filed an appeal to the FDIC's General Counsel detailing his arguments

[against] the decision to withhold the minutes in their entirety .... " Compl. (Dkt. 1) at ~ 25

(emphasis added).

Further, McKinley's administrative appeal addresses only "[t]he decision to withhold the

noted minutes in their entirety." Exh. 4 to FDIC Motion at 1 (emphasis added).

In addition, the January 27, 2009 email from Mr. Sussman attached as Exhibit A to

McKinley's declaration makes clear that there was a lengthy exchange of telephone calls and

emails beginning as early as December 3,2008, in which the scope of the FOIA request was

discussed:

In particular, the case file reflects that, on December 3, 2008, you and I had a comprehensive discussion about the status of your FOIA request, including our interpretation of same, and the potential applicability ofthe Government in the Sunshine Act, 5 U.S.C. 552b. Subsequent to our December 3,2008, telephone conversation, we completed our records search and our preliminary disclosure review.

Exh. A to McKinley Decl. at 1. McKinley's own January 26, 2009 email, to which Mr. Sussman

was responding, states that he is focused on the FDIC's response to his FOIA request, but the

"error" he points out is the date of the telephone conversation, not the substance. Given

Mck inleys subsequent statements in his administrative appeal and then in his Complaint in this

lawsuit, it is clear that he did not contest the FDIC's clearly stated understanding of the scope of

his request until well after he filed this lawsuit. It is beyond dispute that plaintiff either expressly

agreed to, or acceded to without objection, the narrowing of his FOIA request to just the Board

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Minutes. This is a material fact going to the adequacy of the FDIC's search for responsive

records (see McKinley Mem. at 5-6). "An agency's search is adequate if its methods are

reasonably calculated to locate records responsive to a FOIA request." Wolfson v. u.s., --- F.

Supp. 2d ---, 2009 WL 4186045 *2 (D.D.C. Nov. 30, 2009) (internal citations omitted). Because

of McKinley's explicit or implicit agreement as to the scope of the request, all of the responsive

records (the Board Minutes) were located, and were provided to plaintiff -- to the extent that they

were not exempt from disclosure.

D. McKinley Must Present Declarations Or Other Evidence To Rebut The FDIC's Factual Assertions.

Summary judgment is appropriate when the pleadings and declarations show that there is

no genuine issue as to any material fact and that the moving party is entitled to judgment as a

matter of law. Fed. R. Civ. P. 56(c)(2); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986);

Wolfson, 2009 WL 4186045 at *2.

In a FOIA case, "[the agency's] affidavits or declarations are accorded a presumption of

good faith, which cannot be rebutted by purely speculative claims about the existence and

discoverability of other documents." Id. (internal quotations and citations omitted). "Factual

assertions in the moving party's affidavits may be accepted as true unless the opposing party

submits his own affidavits or declarations or documentary evidence to the contrary." Id., citing

Neal v. Kelly, 963 F.2d 453, 456 (D.C. Cir.1992).

Federal Rule of Civil Procedure 56(e) makes explicit the obligation of the non-moving

party to respond with actual evidence:

Opposing Party's Obligation to Respond. When a motion for summary judgment is properly made and supported, an opposing party may not rely

merely on allegations or denials in its own pleading; rather, its response must--by affidavits or as otherwise provided in this rule--set out specific facts showing a

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genuine issue for trial. If the opposing party does not so respond, summary judgment should, if appropriate, be entered against that party.

Fed. R. Civ. P. 56(e)(2). "When the moving party has carried its burden under Rule 56(c), its

opponent must do more than simply show that there is some metaphysical doubt as to the

material facts." Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corporation, 475 U.S.

574, 586 (1986).

Accordingly, in opposing plaintiffs motion for partial summary judgment, the FDIC

must come forward with specific facts to rebut plaintiffs evidence; likewise, McKinley must

come forward with specific facts to rebut the FDIC's evidence in support of its own motion for

summary judgment. As set out below, plaintiff has utterly failed to produce any specific facts or

evidence to contradict or cast into doubt the documentary evidence or the facts set out in the

declarations submitted by the FDIC in support of its motion for summary judgment and in

opposition to plaintiffs motion for partial summary judgment. Plaintiffs only evidence is his

own declaration, which largely fails to address the actual issues in contention in this case.

Time and again plaintiff makes a half-hearted, speculative argument that the FDIC

improperly applied FOIA or Sunshine Act exemptions, with no declarations or other evidentiary

support to rebut the facts put forth by the FDIC. The McKinley Memorandum makes clear again

and again that plaintiffs real agenda is not litigating whether the FDIC properly applied the

exemptions, but in getting the information he wants despite the statutory exemptions:

This case implicates the quintessential purpose behind FOIA -- piercing the veil of government secrecy and opening agency action to the light of public scrutiny.

McKinley Mem. at 1.

At issue in this litigation are Plaintiffs efforts to obtain information from the FDIC about its determination that this "open bank assistance" was necessary to

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avoid or mitigate "serious adverse effects on economic conditions or financial stability."

McKinley Mem. at 2.

A determination by the FDIC to extend billions of dollars worth of open bank assistance to a failing financial institution should be subject to news reports ....

McKinley Mem. at 16.

The taxpayer-funded bank bailouts have already cost hundreds of billions of dollars, and some experts suggest the total will reach trillions. The Minutes and Case Memorandum, and any other responsive information, are absolutely crucial to the public's understanding of what the FDIC is "up to."

McKinley Mem. at 20.

In support of this "crucial" need, plaintiff is able to muster only his own declaration. In

response to the FDIC's declarations and documentary evidence, plaintiff merely attempts to

show that there is some "metaphysical doubt" about the facts submitted by the FDIC. Plaintiff

has failed to carry his burden. Wolfson, 2009 WL 4186045 at *2.

E. The Critical Mass Test For FOIA Exemption 4 Applies Because The Bids And Financial Proposals By Citigroup, Wells Fargo, and Wachovia Were Voluntarily Submitted.

Plaintiff argues, on the basis of his own speculation/ and without factual support, that the

information submitted by Citigroup, Wells Fargo, and Wachovia was not "voluntarily" provided,

and therefore the Critical Mass test (Critical Mass Energy Project v. Nuclear Regulatory

Comm 'n, 975 F.2d 871,879 (1992), cert. denied 507 U.S. 984 (1993» for reviewing the use of

exemption 4 is inapplicable. McKinley Mem. at 8-9. Plaintiffs argument is that, in describing

receipt of the bid/assistance information from Citigroup, Wells Fargo, and Wachovia, declarants

2 "[I]t seems unlikely that a failing bank seeking financial assistance from the FDIC, or a bank seeking financial assistance from the FDIC to acquire a failing bank, submits financial information to the FDI C 'voluntarily. '" McKinley Mem. at 9. "[I]t strains credulity for the FDIC to assert that the information it claims to have received from Wachovia, Citigroup, Inc., and Wells Fargo & Co. was provided 'voluntarily.'" ld.

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Fredrick Fisch and Christopher Spoth did not expressly state that the information was provided

"voluntarily."

The Fisch and Spoth declarations, as cited in the FDIC's memorandum in support of its Motion for Summary Judgment, are very clear that this was information received from the institutions as part of their bids (or, in the case of Wachovia, its proposal for assistance). Citigroup and Wells Fargo did not have to submit bids or negotiate for the purchase of Wachovia; Wachovia did not have to submit a proposal for assistance. The record is clear that the FDIC was seeking a buyer for Wachovia, not forcing a merger. See, e.g., Case Memorandum (Exh. 8 to FDIC Motion) at 8 ("On September 28,2008, FDIC staff began discussions with Citigroup and Wells Fargo, both of which submitted bids to the FDIC on the same day"); Board Minutes (Exh. 6 to FDIC Motion) at 56,407 ("[DRR] has solicited bids from financial institutions for the resolution of the Banks ... DRR has received no closed bank proposals for the resolution of the Banks from other financial institutions"); Spoth Dec!. (Exh. 10 to FDIC Motion) at ~ 11 ("[A]s it considered possible resolution options for Wachovia, the FDIC staff received and evaluated bids from Citigroup and Wells Fargo for acquiring Wachovia"). In particular, Wachovia's subsequent rejection of the Citigroup offer and acceptance of a new offer by Wells Fargo (see FDIC Memorandum at 2 n.l) makes clear that the FDIC was not "pulling the strings." This was not a situation where the institutions were seeking to participate in a government benefit program and were required to provide information as a condition of participation. On the contrary, it was the institutions that were offering the benefit -- the rescue of Wachovia in order to avoid the serious adverse economic effects of a Wachovia failure. Without such voluntary action, Wachovia would have failed. Spoth Decl. (Exh. 10 to FDIC Motion) at ~ 24; Board Minutes (Exh. 6 to FDIC Motion) at 56,406.

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In any event, the Supplemental Declaration of Christopher J. Spoth, submitted here in

opposition to plaintiffs Motion for Partial Summary Judgment, makes clear that submission of

the bids/proposals and associated information was completely voluntary. Supp. Spoth Dec!.

(Exhibit l)at4J4J5, 11, 12, 14.

Plaintiff also argues that there is no evidence that the information submitted by the

institutions was the type of information not customarily disclosed to the public. McKinley Mem.

at 9. However, the Spoth declaration expressly states that "confidential commercial and

financial information [was] obtained from Wachovia, Citigroup, and Wells Fargo." Spoth Dec!.

at 4J4J 15,20,29 (emphasis added); see also Supp. Spoth Dec!. at 4J 9 ("[A]t the time a bid is

submitted and while it is under consideration, that information is closely held by both the FDIC

and the bidder(s) and is not disclosed to the public"). Plaintiff offers no specific facts to rebut

Spoth's testimony that the information was confidential and not of a type routinely disclosed to

the public.

F. Even If The Critical Mass Test Did Not Apply, The Information Submitted By Wachovia, Citigroup, And Wells Fargo Would Still Be Considered Confidential Under The National Parks Test For FOIA Exemption 4.

After arguing that that there is no evidence that submission of the information was

voluntary, plaintiff suggests that, likewise, there is no evidence that submission of the

information was obligatory, McKinley Mem. at 10,3 if indeed the information was submitted at

al!.4 Plaintiff does not supply any factual support whatsoever for his "metaphysical" contentions.

The FDIC, however, has demonstrated that even if submission of the information was not

3 "In order to prevail on such a claim, the FDIC would have to show [ ] that submission of the information was obligatory .... " McKinley Mem. at 10.

4 "[T]he information it claims to have received from Wachovia, Citigroup, Inc., and Wells Fargo & Co." McKinley Mem. at 9.

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voluntary (thus negating application of the Critical Mass test), the information would still meet

the criteria for Exemption 4 protection under either prong of the National Parks test:

[C]ommercial or financial matter is "confidential" for purposes of the exemption if disclosure of the information is likely to have either of the following effects: (l) to impair the Government's ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.

National Parks and Conservation Ass 'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).

In the years following the decision in National Parks, courts have, in analyzing

exemption 4, recognized the agency interest in program effectiveness. See, e.g., 9 to 5

Organization/or Women Office Workers v. Board of Governors of the Fed. Reserve Sys., 721

F.2d 1, 10 (1 st Cir. 1983) (protecting "information which would be particularly helpful to agency

officials in carrying out their mandate"); Comstock Int 'I (US.A.) v. Export-Import Bank 0/ the

United States, 464 F. Supp. 804, 808 (D.D.C. 1979) (disclosure would make borrowers reluctant

to negotiate with the agency). More recently, this Court has held that "impairment of the

effectiveness of a government program is a proper factor for consideration in conducting an

analysis under" exemption 4. Public Citizen Health Research Group v. NIH, 209 F. Supp. 2d 37,

45 (D.D.C. 2002) (alternative holding) (disclosure "obviously would hinder the agency in

fulfilling its statutory mandate"). See also Judicial Watch, Inc. v. Exp-Imp. Bank, 108 F. Supp. 2d

19,30 (D.D.C. 2000) (disclosure "would interfere with the Bank's ability to promote U.S.

exports, and result in loss of business for U.S. exporters"). In a decision issued earlier this year,

Judge Robertson -- after finding that the FDIC, under Critical Mass, properly withheld as

confidential identification and contact information for uninsured business accounts -- further

observed that even if the business account information was not "confidential," requiring the FDIC

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to SOli through depositor records to segregate business accounts records "might well compromise its efficiency and effectiveness." Nikelsberg v. FDIC, 640 F. Supp. 2d 55, 58(D.D.C. 2009).

Contrary to plaintiff's argument that the FDIC has failed to identify "any specific statutory mandates that it claims would be impaired," McKinley Mem. at 11, the FDIC has discussed in detail in the FDIC's opening brief, supported by the Spoth Declaration, the FDIC's statutory mandate and specific, legitimate interest in resolving troubled financial institutions. FDIC Memorandum at 1-3, 11 n.8, 14; Spoth Dec!. ~~ 26,28-29. Disclosure of the information withheld from the Wachovia Board Minutes and Case Memorandum that plaintiff seeks would discourage prospective acquirers and accordingly, impair the agency's ability to fulfill its statutory obligations. Indeed, McKinley himself has devoted large portions of his administrative FOIA appeal, his Complaint, and his declaration to discussing the FDIC's "systemic risk" powers that were invoked in the resolution ofWachovia. See Exh. 4 to FDIC Mem. at 2-3; Complaint (Dkt. 1) at '1l~ 2-3, 9-12; McKinley Dec!. at ~~ 7, 13-16. As noted, the Spoth Declaration details both the FDIC's "systemic risk" power and the consequences to the FDIC's programs of disclosure of the information sought. Spoth Dec!. at ~~ 23-29.

Although only one of the two prongs under the National Parks test must be satisfied to establish that the material at issue is confidential, in this case the competitive harm prong is also satisfied. Both the Spoth and Fisch Declarations describe the fact of an actual competition between Citigroup and Wells Fargo for the acquisition ofWachovia, with Wachovia competing with both of those entities to try to survive on its own. Spoth Dec!. at ~ 11; Fisch Decl. at ~'1l24, 25; see also Supp. Spoth Decl. at '1l~ 11-12. See, e.g., Gilda Industries, Inc. v. u.s. Customs & Border Protection Bureau, 457 F. Supp. 2d 6, 9 (D.D.C. 2006); Judicial Watch v. FDA, 449 F.3d 141,148 (D.C. Cir. 2006).

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Accordingly, FOIA exemption 4 was properly invoked, even under the National Parks test, because the information provided to the FDIC was confidential.

G. Exemption 8 Was Properly Applied.

Plaintiff concedes that redaction of exemption 8 material is proper. McKinley Mem. at 12. Plaintiff asserts that FDIC "seeks to withhold" (Id.) certain phrases and sentences that were redacted in the Board resolution attached to the Case Memorandum, but not redacted in the resolution appearing in the Board Minutes. Since it is obvious that those items were in fact disclosed, the FDIC expressly does NOT seek to withhold them.

Plaintiff s argument that the inconsistencies in these redactions call into question all of the exemption 8 redactions is based on a faulty premise: that the material redacted from the resolution attached to the Case Memorandum was "generic" (McKinley Mem. at 13) and therefore, presumably, not entitled to protection under exemption 8. On the contrary, the fact that certain specific named banks "are in danger of default," that FDIC has solicited bids for the resolution of those particular banks, that open bank rather than closed bank bids have been received for those named banks facing imminent failure, the costs of resolution of particular banks, and the risks posed by the failure of particular banks are all items of information that are "contained in or related to examination, operating, or condition reports" and would have been exempt from disclosure under exemption 8 had the FDIC chosen to withhold them at the time the Board Minutes were redacted and released. Accordingly, Plaintiffs suggestion that the inconsistencies place all exemption 8 redactions in doubt is baseless. Rather, this glimpse into the kind of information that the FDIC protects under exemption 8 simply validates the FDIC's use of that exemption.

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H. Plaintiff Fails To Offer Any Evidence To Rebut The Facts Supporting The Application of Sunshine Act Exemption 9(A)(ii).

In perhaps his most blatant failure to comply with Fed. R. Civ. P. 56(e) and Matsushita,

plaintiff engages in a lengthy attack on the specific facts set out in the Fisch and Spoth

Declarations with absolutely no evidence of his own to rebut those facts. McKinley Mem. at 13-

18. Plaintiff's argument is completely untenable when he suggests that, in order to prove that

Sunshine Act exemption 9(A)(ii) was properly applied in this case, the FDIC must present

evidence that release of information 25 years ago undermined the stability of a financial

institution at that time. McKinley Mem. at 18.

The Spoth Declaration is very clear and very specific in stating the likely consequences

of release of the information withheld under Sunshine Act exemption 9(A)(ii). Plaintiff must

"set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e). Plaintiff has

failed to do so, and accordingly the FDIC is entitled to summary judgment.

I. Exemption 5 Was Properly Applied To Materials That Are Pre-decisional and Deliberative.

The test for application of the deliberative process privilege under FOIA exemption 5 is a

simple one: "The deliberative process privilege protects materials that are both predecisional

and deliberative." Mapother v. Dept. of Justice, 3 F.3d 1533, 1537 (D.C. Cir. 1993).

"Predecisional" means simply that the document was prepared prior to the decision being made

to which the document relates. ld. "Deliberative" is explained as follows:

The deliberative character of agency documents can often be determined through "the simple test that factual material must be disclosed but advice and recommendations may be withheld." Nevertheless, we have noted that the fact/opinion test, while offering "a quick, clear, and predictable rule of decision," is not infallible and must not be applied mechanically .. This is so because the privilege serves to protect the deliberative process itself, not merely documents containing deliberative materia!'

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Id. (citations omitted).

To this simple test, Plaintiff seeks to engraft a "showing of harm" test, that is, "the FDIC has not even attempted to make any showing of harm to its decision-making process, much less show by specific and detailed proof that such harm would result if the redacted information were to be disclosed." McKinley Mem. at 19-20. The FDIC has not attempted to make such a showing because no such requirement exists. The case that plaintiff cites in support of his proposition, Mead Data Central v. Dept. of the Air Force, 566 F.2d 242, 258 (D.C. Cir. 1977), is inapplicable because the Court in that case found that the documents in question related to the negotiation process with an outside party and were not "deliberative." The "harm" test the Court discusses is not a test at all, but speculation by the Court about whether non-deliberative material could possibly be protected under FOIA. Id.

Plaintiff also asserts that much of the material withheld from disclosure on exemption 5 grounds is "purely factual material." However, plaintiff apparently fails to notice that some of the examples cited are pure opinion, and others contain factual material withheld under other exemptions, such as exemption 8, that protect factual material. In any event, as the Court in Mapother noted, the fact/opinion test is not mechanically applied; exemption 5 also protects the process of selecting and weighing particular facts. Mapother, 3 F.3d at 1538.

Finally, Plaintiff argues that the deliberative process privilege is a qualified privilege that can be overcome by a sufficient showing of need, citing In re Sealed Case, 121 F .3d 729, 737 (D.C. Cir. 1997). However, the Court in that case expressly states that: "This characteristic of the deliberative process privilege is not an issue in FOIA cases because the courts have held that the particular purpose for which a FOIA plaintiff seeks information is not relevant in determining whether FOIA requires disclosure." Id. at 737 n.5.

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J. FDIC Properly Segregated Non-Exempt Information.

Plaintiff's final contention is that "[n]either the FDIC's motion nor its supporting declarations state whether the FDIC has disclosed all reasonably segregable information." McKinley Mem. at 21. The FDIC has disclosed all reasonably segregable information. Even a cursory review of the documents released by the FDIC shows that, in making redactions to individual paragraphs, sentences, and even portions of sentences, the FDIC was carefully reviewing the material and releasing non-exempt portions wherever possible. Plaintiff again seeks to inject a "metaphysical" doubt with arguments such as, "[i]t appears to have failed to do so" and "it appears unlikely." ld. Given the nature of the material in question (pre-decisional analysis of confidential and supervisory bank information, and discussion of resolution strategies), it is hardly surprising that large portions are exempt from disclosure. Plaintiff offers no evidence to the contrary.

CONCLUSION

For the reasons stated, the FDIC's Motion for Summary Judgment should be granted, and plaintiff's Motion for Partial Summary Judgment should be denied.

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Respectfully submitted,

RICHARD J. OSTERMAN Deputy General Counsel

/s/ Daniel H. Kurtenbach DANIEL H. KURTENBACH Counsel

D.C. Bar No. 426590

COLLEEN J. BOLES Assistant General Counsel

BARBARA KA TRON Counsel

D.C. Bar No. 387970

Federal Deposit Insurance Corporation 3501 Fairfax Drive, Room VS-D7026 Arlington, VA 22226

703-562-2465

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CERTIFICATE OF SERVICE

I hereby certify that on December 17,2009, the foregoing COMBINED OPPOSITION TO PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND REPLY IN SUPPORT OF FDIC'S MOTION FOR SUMMARY JUDGMENT was mailed to the following:

Vern McKinley

20745 Ashburn Station Place Ashburn, VA 20147

lsi 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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EXHIBIT 1

SUPPLEMENTAL DECLARATION OF CHRISTOPHER J. SPOTH

Case 1:09-cv-01263-ESH Document 22-1 Filed 12/17/09 Page2of4

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Defendants.

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No.l:09-cv-01263-ESH

VERN McKINLEY,

Plaintiff,

v.

FEDERAL DEPOSIT INSURANCE CORPORATION

and

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,

SUPPLEMENTAL DECLARATION OF CHRISTOPHER J. SPOTH

I, Christopher J. Spoth, hereby declare as follows:

1. I am Senior Deputy Director of the Division of Supervision and Compliance (DSC) of

the Federal Deposit Insurance Corporation (FDIC).

2. A Declaration was executed by me on October 28, 2009 (Declaration) and submitted

with this Court on October 30, 2009 as Exhibit 10 to the Memorandum of Points and Authorities

to the FDIC's Motion for Summary Judgment. Paragraph 25 of my Declaration included in the

first sentence a typographical error which incorrectly stated the year of the September 29th FDIC

Board Meeting. The Board meeting referenced was held on September 29,2008.

3. I hereby incorporate by reference paragraphs 1-29 of my Declaration, as corrected.

4. When an institution is at risk of failing, DSC staff and staff in FDIC's Franchise and

Asset Marketing Branch of the Division of Resolutions and Receiverships develop a resolution

plan which includes a marketing plan for the assets and liabilities of the deposit franchise.

Case 1 :09-cv-01263-ESH Document 22-1 Filed 12/17/09 Page 3 of 4

5. As part of its marketing plan, the FDIC seeks, on a voluntary basis, bids from potential qualified purchasers.

6. Generally, qualified purchasers are financial institutions or other qualified investors who have expressed an interest in purchasing the assets and liabilities of a franchise that have characteristics (e.g., size and location) of the failing institution.

7. To protect the identity of the failing institution and to avoid adverse publicity which could further weaken the financial position of the troubled institution, information regarding the determination of how to conduct the sale and early analysis of sale structure and marketing is kept confidential by the FDIC. As a result, all potential bidders are required to sign confidentiality agreements prior to viewing marketing and due diligence materials.

8. In addition -- to encourage competition -- prior to determination of the winning bid, all bid-related information received from potential bidders is considered and required to be treated as confidential by the bidders and by the FDIC. This includes information regarding a potential bidder's qualifications as well as information that is part of or related to the bid itself.

9. While certain information relating to bids, such as bid amounts, may be disclosed at a later time, at the time a bid is submitted and while it is under consideration, that information is closely held by both the FDIC and the bidder(s) and is not disclosed to the public,

10. During September 2008, as FDIC was considering possible resolution options for Wachovia, FDIC contacted certain financial institutions, including Citigroup and Wells Fargo, to determine whether those institutions might be interested in acquiring Wachovia.

11. In response, Citigroup and Wells Fargo, decided to submit bids to acquire Wachovia and, as part of the bidding process, voluntarily submitted to the FDIC confidential financial

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Case 1 :09-cv-01263-ESH Document 22-1 Filed 12/17/09 Page 4 of 4

information, including records reflecting their financial qualifications and the details of their

acquisition plans.

12. Wachovia also submitted a resolution proposal and, as part of the bidding process,

voluntarily submitted to the FDIC confidential financial information.

13. As is the customary practice for prospective bidders, Wells Fargo, Citigroup and

Wachovia signed confidentiality agreements and, accordingly, the information voluntarily

submitted by Wells Fargo, Citigroup and Wachovia was kept confidential by the institutions and

by the FDIC.

14. All of the confidential financial information relied upon by FDIC staff and Board

members in considering resolution options for Wachovia was provided to the FDIC voluntarily

by the bidding institutions or was obtained from the institutions by the FDIC in its bank

supervisory capacity.

I declare under penalty of perjury that the foregoing is true and correct.

... th Executed this ~ day of Dece

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