Case 1:10-cv-01165-BJR Document 26

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA VERN McKINLEY, ) ) Plaintiff, ) ) v. ) ) FEDERAL HOUSING FINANCE ) AGENCY, ) ) Defendant. ) ______________________________)

Civil Action No. 10-cv-01165 (BJR)

PLAINTIFFS REPLY IN SUPPORT OF HIS MOTION FOR AN AWARD OF ATTORNEYS FEES AND OTHER LITIGATION COSTS Plaintiff Vern McKinley, by counsel and pursuant to 5 U.S.C. 552(a)(4)(E) and 28 U.S.C. 1920, respectfully submits this reply in support of his motion for an award of attorneys fees and other litigation costs in the above-captioned action. As grounds therefor, McKinley states as follows: MEMORANDUM OF LAW I. Introduction. In this case, McKinley, through the Freedom of Information Act (FOIA), sought to obtain all non-exempt records concerning the decision of Defendant Federal Housing Finance Agency (Defendant) to place the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) into conservatorship. By litigating the instant matter and compelling Defendant to satisfy its burdens under FOIA, which Defendant had failed to do prior to the commencement of this action, McKinley is eligible for and entitled to an award of attorneys fees and other litigation costs.

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McKinley has demonstrated that he is both eligible for and entitled to an award of attorneys fees and other litigation costs. On August 26, 2011, this Court ordered Defendant to conduct a segregability analysis and produce all non-exempt portions of the two records to McKinley. Once Defendant conducted the segregability analysis and produced additional information to McKinley as required by FOIA, these previously withheld portions of the records added to the fund of information available to the public concerning the placement of Fannie Mae and Freddie Mac into conservatorship. In addition, McKinley amply demonstrated that his interest in the requested records was to obtain the requested records and share such information with the public as part of his scholarship. Finally, McKinley demonstrated that had Defendant satisfied its burdens under FOIA at the outset and not waited until the Court ordered Defendant to satisfy its burdens, McKinley would not have had to initiate and pursue the entire litigation. Therefore, McKinleys request for an award of attorneys fees and other litigation costs is also reasonable. II. Argument. A. McKinley is eligible for an award of attorneys fees and other litigation costs.

As McKinley demonstrated in his opening memorandum, this Court ordered that, by no later than September 5, 2011, defendant shall identify and disclose to plaintiff any portion of Document [Numbers] 2 and 3 that is reasonably segregable from the material therein that is protected by the deliberative process. August 26, 2011 Order (Docket Entry No. 17) (Aug. 26 Order) at 2. Subsequently, pursuant to the Courts order, Defendant released previouslywithheld material contained in the two records. In other words, as ordered by this Court, Defendant performed a segregability analysis and released to Plaintiff all reasonably segregable non-privileged information from the two contested documents. September 16, 2011 Joint Status 2

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Report (Docket Entry No. 18). Simply put, McKinley obtained relief through a judicial order and therefore is eligible for an award of attorneys fees and other litigation costs. B. McKinley is entitled to an award of attorneys fees and other litigation costs.

As McKinley demonstrated in his opening memorandum, he is entitled to an award of attorneys fees and other litigation costs under a balancing of the four relevant factors. See Oil, Chemical and Atomic Workers Intl Union v. Department of Energy, 288 F.3d 452 (D.C. Cir. 2002). i. The instant matter has added to the fund of information available to the public concerning the governments decision to place Fannie Mae and Freddie Mac into conservatorship.

When assessing the public benefit derived from FOIA litigation, courts consider both the effect of the litigation for which fees are requested and the potential public value of the information sought. Bryant v. CIA, 2011 U.S. Dist. LEXIS 118841, *8 (D.D.C. Oct. 14, 2011) (citing Davy v. CIA, 550 F.3d 1155, 1159 (D.C. Cir. 2008)). In addition, the public-benefit prong speaks for an award of attorneys fees where the complainants victory is likely to add to the fund of information that citizens may use in making vital political choices. Bryant, 2011 U.S. Dist. LEXIS at *8 (quoting Cotton v. Heyman, 63 F.3d 1115, 1120 (D.C. Cir. 1995)). Similarly as important, courts assess the benefit that derives from the litigation not simply the request that is considered. Bryant, 2011 U.S. Dist. LEXIS at *8 (quoting Horsehead Industries Inc. v. EPA, 999 F. Supp. 59, 68 (D.D.C. 1998)). Defendant challenges McKinleys entitlement to an award of attorneys fees and other litigation costs by incorrectly focusing on the amount of information produced as a result of the instant action. Id. at 6-7. However, no court has held that FOIA litigation must compel the

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production of a minimum amount of information for a plaintiff to be entitled to an award of attorneys fees. In Bryant, the Court did not find that the plaintiff was not entitled to an award of attorneys fees because only two redacted documents totaling five pages were produced. See generally Bryant, 2011 U.S. Dist. LEXIS 118841. The Court instead found that the plaintiff was not entitled to an award of attorneys fees because he failed to articulate any reason the public derives any benefit from the particular information he obtained. Id. at *9. Unlike the FOIA requester in Bryant, in his opening memorandum, McKinley demonstrated that the additional information produced as a result of this lawsuit added to the fund of information available to the public about what factors the government analyzed when making its decision the governments decision to place Fannie Mae and Freddie Mac into conservatorship. For example, although Defendant had the statutory authority to place Fannie Mae and Freddie Mac under a consent order under various grounds (see generally 12 U.S.C. 4617), the previously withheld portions of Document Number 2 reveal that Defendant based its decision solely on the unsafe and unsound practices ground. This information is of great interest because it was not previously disclosed and remains relevant as Defendant may ultimately place Fannie Mae and Freddie Mac under such an order. Additionally, the public has been made aware, by the production of Document Number 2, that one of the factors the government weighed when deciding how to prevent a financial catastrophe was public perception and that the government thought the receivership option would be Labor Intensive. Similarly, with respect to Document Number 3, one of the portions of the record produced pursuant to the Courts August 26, 2011 Order reveals that the government analyzed the situation and its potential impact only three weeks before Fannie Mae and Freddie Mac were placed in conservatorship. Clearly the produced portions shed light on how the government

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made one of the most important policy decisions of the financial crisis, especially given the lack of publicly available information on Defendants decision to place Fannie Mae and Freddie Mac into conservatorship. Defendant also cites McKinleys appearance on MSNBC and the article he has written on Fannie Mae and Freddie Mac as evidence of a lack of public benefit from the records in question. However, the topic in both of these instances was forward-looking in assessing the future of Fannie Mae and Freddie Mac, not backward-looking in assessing Defendants decision to place them in conservatorship. For example, during the MSNBC appearance, the questioner asked McKinley about how to rectify the situation with Fannie Mae and Freddie Mac going forward. In other words, this does not preclude McKinley, or others who may find the information contained in the records produced pursuant to this Courts order useful, from speaking or writing about Defendants decision to place Fannie Mae and Freddie Mac into conservatorship over the other options. In addition, Defendant does not dispute that this specific information was not already available to the public. See generally Defendants Opposition to Plaintiffs Motion for an Award of Attorneys Fees and Costs (Docket Entry No. 25) (Defs Fees Opp). at 5-9. Nor does it dispute that the portions of the two records produced pursuant to the Courts August 26, 2011 Order added to the fund of information available to the public about the decision to place Fannie Mae and Freddie Mac into conservatorship. Id. Nor does Defendant dispute that McKinley disseminated the information on Scribd.com. Id. In sum, McKinley has demonstrated that the instant matter has added to the fund of information available to the public. Although the amount of information was not extensive, the substance contained in the previously withheld portions of the records are of great interest as

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they shed light on one of Defendants most important decisions in its short history. Therefore, under the current law, the first factor of whether the public derived a benefit from the case weighs heavily in favor of granting an award of attorneys fees and other litigation costs for McKinley. ii. McKinleys interest in the requested records was to obtain and disseminate the records for public consumption.

In his opening memorandum, McKinley demonstrated that his interest in the records obtained through this litigation is academic, not commercial. In addition, he demonstrated that he disseminated all obtained information to the public via Scribd.com. In response, Defendant makes the unsubstantiated claim that, because McKinley is not a nonprofit organization or fulltime journalist, he is not entitled to an award of attorneys fees. Defs Fees Opp. at 9. No court has ever held that a FOIA requester must be a nonprofit organization or full-time journalist to satisfy the non-commercial factor of entitlement to an award of attorneys fees and other litigation costs. Nor could it do so while remaining true to the spirit of the law. As Defendant correctly asserts in its opposition, many FOIA plaintiffs do not have the financial resources or economic incentives to pursue their requests through expensive litigation. Defs Fees Opp. at 4 (quoting Nationwide Bldg. Maint., Inc. v. Sampson, 559 F.2d 704, 711 (D.C. Cir. 1977)). McKinley has amply demonstrated that his objective in this litigation was to obtain information under FOIA about the governments placement of Fannie Mae and Freddie Mac into conservatorship. McKinley also has amply demonstrated that his objective was to share such information with the public as part of his scholarship. Defendant has presented no evidence to the contrary. See generally Defs Fees Opp. at 8-9. Accordingly, McKinleys substantially non-

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commercial motive and his interest in obtaining and disseminating the records at issue weigh heavily in favor of an award of attorneys fees and other litigation costs. iii. The Court found that neither document was prepared in anticipation of litigation.

Simply put, Defendant did not have a reasonable basis for withholding the released information at issue. The Court found that neither document was prepared in anticipation of litigation within the meaning of Rule 26(b)(3)(A). Aug. 26 Order at 2. Therefore, Defendant, contrary to its assertion, did not have an evidentiary basis for failing to conduct an adequate segregability analysis. Defs Fees Opp. at 10. The failure to conduct an adequate segregability analysis has been the basis for an award of attorneys fees in the past. Williams v. F.B.I., 17 F. Supp. 2d 6, 9 (D.D.C. 1997). In the instant matter, this Court specifically found that Defendant failed to satisfy its burden of demonstrating that all reasonably segregable, non-exempt material was produced. June 7, 2011 Order (Docket Entry No. 15) (June 7 Order) at 5. As a result, the Court held the parties crossmotions for summary judgment in abeyance and ordered Defendant to conduct an adequate segregability analysis and produce all non-privileged information to McKinley. Aug. 26 Order at 3. Although this Court did not rule on either partys motion, the effect of the Courts order was the same as denying Defendants motion for summary judgment. Therefore, this particular factor also weighs in favor of an award of attorneys fees for McKinley. In addition, regardless of whether Defendant may have had a reasonable basis in law for withholding the material, this factor alone does not outweigh the public benefit and noncommercial nature of McKinleys interest in the information. Tax Analysts v. United States Dep't of Justice, 965 F.2d 1092, 1096-97 (D.C. Cir. 1992); see also ACLU v. United States Department of Homeland Security, No. 08-1100, 2011 U.S. Dist. LEXIS 104264, at **25-26 7

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(D.D.C. Sep. 15, 2011) ([T]he reasonable basis in law factor is not dispositive, and can be outweighed by the public benefit and commercial benefit to the plaintiff factors.). As demonstrated in his opening memorandum and above, McKinleys litigation of his FOIA request and Defendants production of portions of the responsive records pursuant to Court order led to additional information entering the public forum concerning this issue. Because of the great public interest in the issue and McKinleys entirely non-commercial interest in obtaining and disseminating the responsive records, an award of attorneys fees and other litigation expenses is amply justified. iv. McKinleys requested award is reasonable.

Defendant does not dispute the reasonableness of the hourly rates of McKinleys counsel or the number of attorney hours expended on the case by his attorneys. Defs Fees Opp. at 1112. Defendant instead complains that McKinley seeks an award of attorneys fees and other litigation costs for the entire litigation. Yet it was Defendant who failed to satisfy its obligations under FOIA prior to the filing of the Complaint by failing to respond to McKinleys FOIA request within the statutorily allotted time period. Defs Fees Opp. at 2. It was also Defendant who improperly withheld all responsive material under the attorney work product doctrine. Aug. 26 Order at 2. In addition, it was Defendant who failed to conduct a segregability analysis. June 7 Order at 5. Had Defendant satisfied its burdens under FOIA at the outset and not waited until the Court ordered it to satisfy its burdens, McKinley would not have had to initiate and pursue the entire litigation. Therefore, McKinleys request for an award of $15,502.50 in attorneys fees is reasonable.

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III.

Conclusion. For the reasons set forth in McKinleys opening memorandum and the additional reasons

set forth above, McKinley respectfully requests that he be awarded $15,502.50 in attorneys fees and $350.00 in litigation costs pursuant to 5 U.S.C. 552(a)(4)(E) and 28 U.S.C. 1920 for a total award of $15,852.50. Dated: March 19, 2012 Respectfully submitted, /s/ Michael Bekesha Michael Bekesha (D.C. Bar No. 995749) JUDICIAL WATCH, INC. 425 Third Street S.W., Suite 800 Washington, DC 20024 (202) 646-5172 Counsel for Plaintiff