Williams & Connolly LLP v. Office of the Comptroller of the Currency

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
WILLIAMS & CONNOLLY LLP, )
)
Plaintiff, )
)
v. ) Civil Action No. 13-0396
)
OFFICE OF THE COMPTROLLER )
OF THE CURRENCY )
)
Defendant. )
____________________________________)
MEMORANDUM OPINION
The plaintiff, Williams & Connolly LLP, brings this action against the defendant, the
Office of the Comptroller of the Currency (“Comptroller”), under the Freedom of Information
Act (“FOIA”), 5 U.S.C. § 552 (2012). Complaint for Injunctive Relief (“Compl.”) ¶ 1.
Currently before the Court are the parties’ cross motions for summary judgment. After carefully
considering the parties’ submissions,1 the Court concludes for the reasons stated below that it
will grant the defendant’s motion and deny the plaintiff’s motion.
1
In addition to the filings already referenced, the Court considered the following submissions and their supporting
exhibits in resolving the parties’ motions: (1) the Defendant’s Motion for Summary Judgment (“Def.’s Mot.”); (2)
the Plaintiff’s Motion for Summary Judgment and Request for Hearing (“Pl.’s Mot.”); (3) the Memorandum of
Points and Authorities in Support of Motion for Summary Judgment of the Office of the Comptroller of the
Currency (“Def.’s Mem.”); (4) the Plaintiff’s Memorandum of Points and Authorities in Opposition to Defendant’s
Motion for Summary Judgment (“Pl.’s Opp’n”); (5) the Plaintiff’s Memorandum of Points and Authorities in
Support of Its Motion for Summary Judgment (“Pl.’s Mem.”); (6) the Defendant’s Opposition to Plaintiff Williams
& Connolly’s Motion for Summary Judgment and Points and Authorities in Further Support of Motion for Summary
Judgment of the Office of the Comptroller of the Currency (“Def.’s Opp’n”); (7) the Plaintiff’s Reply Memorandum
in Support of Its Motion for Summary Judgment and in Further Support of Its Opposition to Defendant’s Cross
Motion for Summary Judgment (“Pl.’s Reply”); (8) the Defendant’s Reply Brief in Opposition to Plaintiff Williams
& Connolly’s Motion for Summary Judgment and in Further Support of Motion for Summary Judgment of the
(continued . . .)
1
I. BACKGROUND2
The current dispute began with the submission of the plaintiff’s June 2012 FOIA request
to the Comptroller. Def.’s Mem. at 5. The Comptroller is an agency and an independent bureau
of the United States Department of Treasury and “is charged with assuring the safety and
soundness of, and compliance with laws and regulations, fair access to financial services, and
fair treatment of customers by, the [financial] institutions . . . subject to its jurisdiction.” 12
U.S.C. § 1(a) (2012). Pursuant to § 1818(b) of Title 12, the Comptroller may order banks to
cease and desist “an unsafe or unsound practice” or a violation of law and may order banks to
“take affirmative action to correct or remedy any conditions resulting from any violation or
practice.”
Exercising its enforcement powers, the Comptroller issued Consent Orders in April 2011
against several banks, including Aurora Bank, Federal Savings Bank (“Aurora”), requiring that
the banks “retain an independent consultant acceptable to the [Comptroller] to conduct an
independent review” of specific foreclosure practices.3 Pl.’s Mem. at 2 (internal quotation marks
( . . . continued)
Office of the Comptroller of the Currency (“Def.’s Reply”); (9) the Defendant’s Statement of Material Facts Not in
Dispute (“Def.’s Facts”); (10) the Plaintiff’s Statement of Material Facts as to Which It Contends There Is No
Dispute (“Pl.’s Facts”); (11) the Defendant’s Reply to Plaintiff’s Statement of Material Facts as to Which It
Contends There Is No Dispute (“Def.’s Fact Resp.”); and (12) the Plaintiff’s Response to Defendant’s Statement of
Material Facts Not in Dispute (“Pl.’s Fact Resp.”).
2
The following facts are undisputed unless otherwise noted.
3
These orders were actually issued by the Office of Thrift Supervision in April 2011. See Def.’s Mem. at 4; Pl.’s
Mem. at 2. However, the Comptroller assumed its financial institution regulatory responsibilities from the Office of
Thrift Supervision on July 21, 2011. See Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L.
No. 111-203, § 312, 124 Stat. 1376, 1521–23 (2010) (codified at 12 U.S.C. § 5412); see also id. § 316(b) (codified
at 12 U.S.C. § 5414) (continuing in effect all orders of the Office of Thrift Supervision and conferring enforcement
(continued . . .)
2
omitted); see Def.’s Mem. at 4–5. In compliance with these Consent Orders, Aurora hired the
plaintiff’s clients, Allonhill, LLC (“Allonhill”), to review its foreclosure practices. Def.’s Mem.
at 5; Pl.’s Mem. at 2. However, before the foreclosure review process was completed,
Allonhill’s services were terminated “at the direction of the [Comptroller]” because of an alleged
“conflict presented by [its] previous work and the independence requirements of the
[Comptroller].” Def.’s Mem. at 5; Pl.’s Mem. at 3.
Through its July 2012 FOIA request, the plaintiff, on behalf of Allonhill, sought
generalized information from the Comptroller relating to its third-party contractor independence
requirements. Specifically, the plaintiff requested:
1. All documents and/or records relating to the [Comptroller’s] definition of
independence, including:
a. Any documents and/or records relating to the independence requirements
for independent consultants, prescribed by the [Comptroller];
b. Any documents and/or records relating to the [Comptroller’s] standards of
independence within the meaning of the scope of the consent order
foreclosure review pursuant to the April 13, 2011 Consent Orders entered
into between 14 mortgage servicers and the [Comptroller] . . . (“Consent
Order Foreclosure Review”); and
c. Any documents and/or records relating to determining whether any
particular independent consultant participating in the Consent Order
Foreclosure Review was or was not independent within the meaning of the
scope of the Consent Order Foreclosure Review.
( . . . continued)
power of the orders to the Comptroller). Because differentiating between the agencies would be irrelevant to this
opinion, any references to the “Office of Thrift Supervision” will be identified as the Comptroller.
3
Def.’s Facts ¶ 1; see Pl.’s Fact Resp. ¶ 1.4 Approximately two months later, the defendant
denied the FOIA request in full by invoking 5 U.S.C. § 552(b)(8) (“Exemption 8”) of the FOIA.
Pl.’s Facts ¶ 10; see Def.’s Fact Resp. ¶¶ 10.
The plaintiff administratively appealed this decision by letter dated September 21, 2012,
Compl. at 3, ¶ 4, and in December 2012, the Comptroller issued a final decision letter, asserting
that most of the responsive information was properly withheld under 5 U.S.C. § 552(b)(5)
(“Exemption 5”) because the documents pertained to internal materials reflecting the
Comptroller’s deliberative process, privileged attorney work-product, and attorney-client
privilege material, or was properly withheld pursuant to Exemption 8 because the documents are
comprised of information relating to the examination, operation, or condition reports of the
banks. See Pl.’s Facts ¶¶ 11–12; Def.’s Fact Resp. ¶¶ 11–12; Def.’s Facts ¶ 8; Pl.’s Fact Resp. ¶
8; see also 5 U.S.C. § 552(b)(5), (8). Because the information sought by the plaintiff pertained to
the “enforcement actions carried out by the [Comptroller],” Def.’s Mem. at 7, the Comptroller
concluded that they “fall into the category of documents related to the [Comptroller’s]
examination of banks [and] are therefore exempt from FOIA’s disclosure requirements pursuant
to FOIA Exemption 8,” id. at 2; see also 5 U.S.C. § 552(b)(8). However, in its response the
Comptroller did disclose thirteen pages of documents, Pl.’s Facts ¶ 12; see Def.’s Fact Resp. ¶
12, eight of which were already publicly available, Pl.’s Facts ¶ 12; Def.’s Facts ¶ 9. Two of the
other five pages were partially redacted, which the Comptroller justified on the grounds that an
exemption applied to the redactions or that the information was nonresponsive. Pl.’s Facts ¶ 12;
4
Although this letter contained additional requests, the “[p]laintiff seeks relief in this action only as to the categories
identified above.” Compl. at 3 n.2.
4
Def.’s Fact Resp. ¶ 12. In response to this letter, the plaintiff filed this lawsuit on March 27,
2013, requesting a hearing and seeking an order requiring the defendant to file a Vaughn index
and to disclose all documents responsive to the plaintiff’s FOIA request.5 See Compl. at 4; see
also Pl.’s Facts ¶ 13; Def.’s Fact Resp. ¶ 13.
In lieu of a Vaughn index the Comptroller provided the plaintiff with two sworn
declarations by Monica A. Freas on June 3, 2013 (“Initial Freas Declaration”) and June 25, 2013
(“Supplemental Freas Declaration”), both with accompanying appendices, which collectively
summarized the agency’s search efforts and explained the nature of the withheld documents and
the basis for withholding those documents. Pl.’s Facts ¶¶ 14, 16; Def.’s Facts Resp. ¶¶ 15, 16,
see generally Def.’s Mem., Exhibit (“Ex.”) 3 (Declaration by Monica A. Freas in Support of
Motion by the Office of the Comptroller of the Currency for Summary Judgment (“Freas Initial
Decl.”)) (attaching “Appendix A” dated June 3, 2013 (“Freas Alt. Index”)); Def.’s Mem., Ex. 4
(Supplemental Declaration by Monica A. Freas in Support of Motion by the Office of the
Comptroller of the Currency for Summary Judgment (“Freas Supp. Decl.”)) (attaching “Revised
Appendix A” dated June 25, 2013 (“Freas Supp. Alt. Index”)). The Initial Freas Declaration
included Appendix A (“Freas Alternative Index”) which invoked Exemptions 5 and 8 as the
5
Vaughn indices are a mainstay of FOIA proceedings at the district court level in this Circuit. In Vaughn v. Rosen,
484 F.2d 820 (D.C. Cir. 1973), this Circuit “recognized the burden placed upon the district court when the
government fails to establish with sufficient specificity the basis of claimed exemption from FOIA disclosure of
specific documents. To alleviate that burden, [the Circuit] established the requirement for a Vaughn index so that a
district judge could examine and rule on each element of the itemized list.” Summers v. DOJ, 140 F.3d 1077, 1080–
81 (D.C. Cir. 1998) (internal citation omitted). The Circuit subsequently elaborated that although it “ha[s] never
required repetitive, detailed explanations for each piece of withheld information,” Morley v. CIA, 508 F.3d 1108,
1122 (D.C. Cir. 2007) (citation omitted), “[t]he Vaughn index ‘must adequately describe each withheld document or
deletion from a released document,’ and ‘must state the exemption claimed for each deletion or withheld document,
and explain why the exemption is relevant,’” Summers, 140 F.3d at 1080 (citation omitted).
5
justification for the Comptroller’s nondisclosure of the requested documents. Pl.’s Facts ¶ 14;
Def.’s Facts Resp. ¶ 14; see generally Def.’s Mem., Ex. 3 (Freas Initial Decl. and accompanying
Freas Alt. Index). The Comptroller subsequently updated its submission on June 25, 2013,
providing the plaintiff with the Supplemental Freas Declaration and accompanying Revised
Appendix (“Freas Supplemental Alternative Index”). 6 Pl.’s Facts ¶ 16; Def.’s Facts Resp. ¶ 16;
see also Def.’s Mem., Ex. 4 (Freas Supp. Decl. and accompanying Freas Supp. Alt. Index). The
Comptroller’s Alternative Index invoked Exemption 5 and 8, and added an additional exemption,
5 U.S.C. § 552(b)(4) (“Exemption 4”), as justification for the Comptroller’s nondisclosures. See
Pl.’s Mem. at 15. See generally Def.’s Mem., Ex. 4 (Comptroller’s Alternative Index).
The parties have now filed cross motions for summary judgment.
II. STANDARD OF REVIEW
A court reviews an agency’s response to a FOIA request de novo, 5 U.S.C. §
552(a)(4)(B), and “FOIA cases typically and appropriately are decided on motions for summary
judgment,” ViroPharma Inc. v. Dep’t of Health & Human Servs., 839 F. Supp. 2d 184, 189
(D.D.C. 2012). Courts will grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of
law. See Fed. R. Civ. P. 56(a). More specifically, in a FOIA action to compel production of
6
The plaintiff generally refers to the Freas Supplemental Alternative Index as the “Vaughn index.” See, e.g., Pl.’s
Mot. at 6. Despite the plaintiff’s label, the Court refers to the Freas Supplemental Alternative Index in conjunction
with both the Initial and Supplemental Freas Declarations collectively as the “Comptroller’s Alternative Index.” See
generally Def.’s Mem., Ex. 3 (Freas Initial Decl.); Def.’s Mem., Ex. 4 (Freas Supp. Decl.) (attaching Freas Supp.
Alt. Index). For ease of reference, the Court will use the citation, Def.’s Mem., Ex. 4 (Comptroller’s Alternative
Index), when jointly referencing the Freas Initial Declaration, the Freas Supplemental Declaration, and the Freas
Supplemental Alternative Index.
6
agency records, the agency “is entitled to summary judgment if no material facts are in dispute
and if it demonstrates ‘that each document that falls within the class requested either has been
produced . . . or is wholly exempt from the [FOIA’s] inspection requirements.’” Students
Against Genocide v. U.S. Dep’t of State, 257 F.3d 828, 833 (D.C. Cir.2001) (quoting Goland v.
CIA, 607 F.2d 339, 352 (D.C. Cir.1978)). “To successfully challenge an agency’s showing that
it complied with the FOIA, the plaintiff must come forward with ‘specific facts’ demonstrating
that there is a genuine issue with respect to whether the agency has improperly withheld extant
agency records.” Span v. DOJ, 696 F. Supp. 2d 113, 119 (D.D.C. 2010) (quoting DOJ v. Tax
Analysts, 492 U.S. 136, 142 (1989)).
Summary judgment in a FOIA case may be based solely on information provided in an
agency’s supporting affidavits or declarations if they are “relatively detailed and non-
conclusory,” SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991) (internal
quotations and citations omitted), and when they “describe the documents and the justifications
for nondisclosure with reasonably specific detail, demonstrate that the information withheld
logically falls within the claimed exemption, and are not controverted by either contrary
evidence in the record [or] by evidence of agency bad faith.” Military Audit Project v. Casey,
656 F.2d 724, 738 (D.C. Cir. 1981); see Beltranena v. Clinton, 770 F. Supp. 2d 175, 181–82
(D.D.C. 2011).
In determining whether the defendant agency has met its burden in support of non-
production, “the underlying facts are viewed in the light most favorable to the [FOIA] requester.”
Weisberg v. DOJ, 705 F.2d 1344, 1350 (D.C. Cir. 1983). Further, consistent with congressional
intent tilting the scales in favor of full disclosure, courts impose a substantial burden on an
7
agency seeking to avoid disclosure based on the FOIA exemptions. Morley v. CIA, 508 F.3d
1108, 1114 (D.C. Cir. 2007). Consequently, “exemptions from disclosure must be narrowly
construed, and conclusory and generalized allegations of exemptions are unacceptable.” Id. at
1114–15 (citing Founding Church of Scientology of Wash., D.C., Inc. v. Nat’l Sec. Agency, 610
F.2d 824, 830 (D.C. Cir. 1979)) (internal quotation marks and citation omitted). Nonetheless,
“[w]hen disclosure touches upon certain areas defined in the exemptions, . . . the [FOIA]
recognizes limitations that compete with the general interest in disclosure, and that, in
appropriate cases, can overcome it.” Nat’l Archives & Records Admin. v. Favish, 541 U.S. 157,
172 (2004).
III. LEGAL ANALYSIS
The FOIA requires government agencies to disclose records upon request unless the
records fall within one of the nine enumerated exemptions. Milner v. Dep’t of the Navy, 131 S.
Ct. 1259, 1261–62 (2011); see generally 5 U.S.C. § 552. The Comptroller’s Alternative Index
invokes Exemptions 4, 5, and 8 as applicable to all but one of the documents at issue,7 whose
withholding is based only on Exemption 4 and 8. See generally Def.’s Mem., Ex. 4
(Comptroller’s Alternative Index). As a threshold matter, the Court notes that because the
Comptroller asserts that all of the relevant documents fall within the ambit of Exemption 8, and
since for the reasons discussed below, the Court finds that the Comptroller properly withheld the
7
The only exception to the applicability of all three Exemptions is File No. 17. See Def.’s Mem., Ex. 4
(Comptroller’s Alternative Index) at 13 (omitting Exemption 5 as justification for nondisclosure of File No. 17,
which comprised “[l]etters dated May 11, 2012[,] from [Comptroller] supervisory employees to relevant banks and
independent consultants directing the termination of an independent consultant due to a determination of insufficient
independence” and “detail[ing] the nature of a past engagement disclosed to the [Comptroller] by [the] consultant
that led to [the] consultant’s termination from [the independent foreclosure review]”).
8
requested records pursuant to Exemption 8, it does not address Exemption 4 and 5. See Coleman
v. Lappin, 607 F. Supp. 2d 15, 23 (D.D.C. 2009) (“If the Court determines that information
properly is withheld under one exemption, it need not determine whether another exemption
applies to that same information.” (citing Simon v. DOJ, 980 F.2d 782, 785 (D.C. Cir. 1992))).
A. FOIA Exemption 8
FOIA Exemption 8 protects information “contained in or related to examination,
operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible
for the regulation or supervision of financial institutions.” 5 U.S.C. § 552(b)(8). The parties
dispute not only whether the documents at issue fall within the scope of Exemption 8, but also
whether withholding the documents produces an unreasonable result. Because the Comptroller
is only entitled to withhold the documents if they fall within the statutory protections of the
exemption, the Court begins its analysis with that assessment. See id.
1. Applicability of Exemption 8: The “Related to” Requirement
The parties dispute whether Exemption 8 applies to the requested documents,
specifically, whether the requested documents are “related to” a bank examination for purposes
of Exemption 8. The plaintiff argues that the plain language of Exemption 8 does not shield the
requested documents from disclosure because they “do not relate to a bank examination but
instead to a third-party driven independent foreclosure review.” Pl.’s Opp’n at 1–2; see Pl.’s
Mem. at 7–9. The Comptroller, on the other hand, argues:
The withheld records at issue in the instant action contain the communications
between [Comptroller] attorneys and supervisory employees and the Banks, their
proposed independent consultants, and proposed independent counsel as well as
internal [Comptroller] and inter-agency discussion of the vetting of independent
9
consultants and independent counsel . . . ‘relate to’ bank examinations and are
thus within the scope of Exemption 8.
Def.’s Mem. at 15.
Although generally “exemptions to the FOIA must be narrowly construed,” Consumers
Union of U.S., Inc. v. Heimann, 589 F.2d 531, 533 (D.C. Cir. 1978), this Circuit has repeatedly
recognized the broad scope Congress accorded Exemption 8, see, e.g., Gregory v. FDIC, 631
F.2d 896, 898 (D.C. Cir. 1980) (per curiam) (indicating that “Congress looked to the nature and
source of the material and determined to provide absolute protection regardless of the
circumstances underlying the regulatory agency’s receipt or preparation of examination,
operating or condition reports,” leaving “no room for a narrower interpretation”); Heimann, 589
F.2d at 533 (“Congress has intentionally and unambiguously crafted a particularly broad, all-
inclusive definition, [and] it is not our function, even in the FOIA context, to subvert that
effort.”); see also McKinley v. FDIC, 744 F. Supp. 2d 128, 143 (D.D.C. 2010) (“Although
generally FOIA exemptions are to be narrowly construed, it is well-established that Exemption
8’s scope is particularly broad.” (internal quotation marks and citations omitted)), aff’d sub nom,
McKinley v. Bd. of Governors of the Fed. Reserve Sys., 647 F.3d 331 (D.C. Cir. 2011).
Exemption 8’s “‘related to’ language casts a wide net of non-disclosure over any documents that
are logically connected to an ‘examination, operating, or condition report[].’” Pub. Investors
Arbitration Bar Ass’n v. SEC, 930 F. Supp. 2d 55, 62 (D.D.C. 2013) (alteration in original)
(quoting 5 U.S.C. § 552(b)(8)).
Recognizing the broad applicability of Exemption 8, this Circuit has held that
“examination reports need not pertain to an institution that is regulated or supervised by the
withholding agency.” Pub. Citizen v. Farm Credit Admin., 938 F.2d 290, 294 (D.C. Cir. 1991)
10
(per curiam). Accordingly, “agencies that do not directly regulate or supervise a particular
financial institution may still withhold information about that institution under Exemption 8, so
long as the withholding agency is one that is ‘responsible for the regulation or supervision of
financial institutions’ more generally.” Public Investors, 930 F. Supp. 2d at 62 (quoting 5 U.S.C.
§ 552(b)(8)). Furthermore, other members of this Court have held that “Exemption 8 extends to
any documents received by a financial regulatory agency in the course of exercising its
‘regulatory responsibilities in relation to the financial institutions whose information has been
withheld.’” Id. (quoting McKinley, 744 F. Supp. 2d at 144) (emphasis added).
Although the plaintiff argues that the issuance of the Consent Order terminated the bank
examination and “created a new, separate process . . . driven by independent consultants,” Pl.’s
Mem. at 7, the records generated as a result of the Consent Order certainly occurred “in the
course of” the Comptroller “exercising its regulatory responsibilities.”8 See Public Investors,
930 F. Supp. 2d at 62 (internal quotation marks omitted); see also Atkinson v. FDIC, No. 79-
1113, 1980 WL 355660, at *1 (D.D.C. Feb. 13, 1980) (finding that because “[t]he documents in
question, . . . represent the foundation of the examination process, the findings of such an
examination, or its follow-up” were “exempt as ‘related to’ examination reports” (emphasis
added)). Here, the requested documents constitute “communications between [the
Comptroller’s] attorneys and supervisory employees and the Banks, their proposed independent
consultants, and proposed independent counsel as well as internal [Comptroller] and inter-agency
8 There is no dispute that the Consent Orders was issued “in the course of” the Comptroller’s regulatory functions.
See Public Investors, 930 F. Supp. 2d at 62; see also 12 U.S.C. § 1818(b) (authorizing the Comptroller to issue cease
and desist orders or orders requiring banks to “take affirmative action to correct or remedy any conditions resulting
from any violation or practice”).
11
discussion of the vetting of independent consultants and independent counsel,” Def.’s Mem. at
15, and therefore, the Comptroller’s follow-up communications “relate to” a bank examination.
As such, under the plain language of Exemption 8, and contrary to the plaintiff’s position,
the documents withheld by the Comptroller fall within the purview of Exemption 8–regardless of
whether the documents were generated as part of a third-party driven independent foreclosure
review–so long as they were prepared in furtherance of the Comptroller’s “responsib[ility] for
the regulation or supervision of financial institutions,” reducing the pertinent question in this
case to whether the Comptroller regulates or supervises financial institutions. See 5 U.S.C. §
552(b)(8). And because the Comptroller is explicitly charged with regulating financial
institutions, based on the plain language of the statute, Exemption 8 applies to the requested
documents. See 12 U.S.C. §§ 1(a), 481, 1820(d) (charging the Comptroller with “assuring the
safety and soundness of, and compliance with laws and regulations, fair access to financial
services, and fair treatment of customers by, the institutions,” and with administering
examinations of national banks).
2. Exemption 8’s Purposes
The Circuit has articulated two purposes that underlie Exemption 8: (1) “to ensure the
security of financial institutions” and (2) “to safeguard the relationship between the banks and
their supervising agencies,” Heimann, 589 F.2d at 534, and the parties disagree as to whether
nondisclosure of the requested documents serves to safeguard the relationship between banks and
their supervising agencies. The plaintiff argues that in light of the purposes articulated by the
Circuit, “[t]he [Comptroller’s] interpretation [of Exemption 8] is unreasonable in this case
12
because it is unrelated to” Exemption 8’s underlying purposes, Pl.’s Mot. at 9–10, and has
therefore “lead to an unreasonable result,”9 Pl.’s Opp’n at 2–3.
The plaintiff argues that disclosure would not “shake the confidence in financial
institutions because the information sought is about independent consultants, not banks,” Pl.’s
Opp’n at 3; see Pl.’s Mot. at 10, and therefore, since independent consultants are not regulated by
the Comptroller, “[p]roduction of the requested documents would in no way impair the
[Comptroller’s] claimed need for candor from its regulated financial institutions,” Pl.’s Opp’n at
3. The Comptroller counters that withholding the records ensures that banks are “frank,
forthright, and open” with the Comptroller, which is necessary “to successfully fulfill its mission
to promote the safety and soundness of the national banking system and protect consumers.”
Def.’s Mot. at 16. Moreover, the Comptroller argues that “Exemption 8 . . . is not limited in the
way [the p]laintiff contends,” Def.’s Opp’n at 9, because “[t]he exemption does not contain a test
of direct relatedness to a bank or bank examination; rather it requires relatedness, which . . . is
interpreted broadly,” id.9
The plaintiff asserts that “the [Comptroller’s] refus[al] to disclose the purported standards, if any, it used to qualify
the consultants that were charged with determining whether the public was harmed by wrongful foreclosure
practices,” Pl.’s Opp’n at 4, has produced an unreasonable result because “publicly disclosing the standards . . . will
enable consultants to provide relevant information at the outset of similar engagements in the future,” id. However,
to the extent the plaintiff’s argument has merit, here the Comptroller represents that it “has granted [the p]laintiff’s
request for records ‘relating to the [Comptroller’s] standards of independence within the meaning of the scope of the
consent order foreclosure review pursuant to the April 13, 2011 Consent Orders,’” Def.’s Reply at 6, see Def.’s
Reply, Ex. 1 (Freas Second Supp. Decl.)) ¶¶ 7–9 (listing all of the documents related to the independence standards
used during the assessments and attesting that the Comptroller is “not aware of any other standards for independence
applied in any other independence determinations with respect to consultants and counsel”). Because the agency’s
representation is entitled to a presumption of good faith, see SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200
(D.C. Cir. 1991), the Court must therefore accept Ms. Freas’s representation that no other standards were applied
other than those contained in the disclosed documents, see Def.’s Reply, Ex. 1 (Freas Second Supp. Decl.) ¶¶ 7-9,
absent contradictory evidence. The argument is therefore now moot and will not be addressed. See Williams &
Connolly v. SEC, 662 F.3d 1240, 1244 (D.C. Cir. 2011) (holding that the release of requested documents to a
plaintiff renders its FOIA suit moot “with respect to those documents”).
13
As recently observed by another member of this Court, “it is clear that at least one case
from within this Circuit (and arguably more) has applied Exemption 8 to documents other than
those involving the finances or financial transactions of the institutions being examined.” Public
Investors, 930 F. Supp. 2d at 66; see, e.g., Bloomberg, L.P. v. SEC, 357 F. Supp. 2d 156, 167,
169 (D.D.C. 2004) (upholding the Security and Exchange Commission’s (“SEC”) invocation of
Exemption 8 as the basis for withholding “notes and memoranda” of SEC employees that related
to meetings where other financial institutions “report[ed] to the SEC on steps they were taking or
considering in connection with issues of concern regarding the regulation of securities analysts”).
In Public Investors, Exemption 8 was successfully invoked as to documents relating to an
agency’s process of selecting private arbitrators, because “the SEC aver[red] that all of the
potentially responsive documents were obtained pursuant to the SEC’s ongoing and continuous
oversight responsibilities, which is sufficient to bring them within the ambit of Exemption 8.”
Public Investors, 930 F. Supp. 2d at 59, 70, 72 (internal quotation marks and citation omitted).
The Court’s conclusion in Public Investors was based on its reasoning that the records pertained
to “institutional problems related to fairness and transparency, such as conflicts of interest, that
likely bear indirectly on financial matters and might require further regulation.” Id. at 66–
67(emphasis in original).
The plaintiff attempts to distinguish Public Investors from this case by arguing that the
records at issue in Public Investors related to the SEC’s supervision of an agency clearly
regulated by the SEC, and involved documents the SEC received “in the course of exercising its
regulatory responsibilities in relation to the financial institutions whose information has been
withheld,” while the documents requested in this case “relat[e] to the [Comptroller’s] standards
14
for independent consultants and the [Comptroller’s] determinations with respect to the
independent consultants—entities that are not financial institutions and that are not regulated by
the [Comptroller].” Pl.’s Opp’n at 3 n.1 (alterations in original)(internal quotation marks
omitted). The plaintiff’s attempt to distinguish this case from Public Investors is unpersuasive
because, as in Public Investors, where the records were related to the regulated agency’s
selection of non-regulated arbitrators, 930 F. Supp. 2d at 59, this case similarly involves records
concerning a non-regulated entity — independent consultants.
Although the plaintiff successfully distinguishes the facts of Bloomberg because the
records there concerned the “SEC’s discussions with the regulated entities themselves regarding
their administrative function,” Pl.’s Opp’n at 3 n.1, it fails to recognize that the underlying
principles are analogous. In Bloomberg, the Court held that Exemption 8’s “purposes would
undeniably be served by exempting documents summarizing a meeting at which financial
institutions were encouraged to engage in a candid assessment of industry problems and
discussions regarding potential self-regulatory responses,” 357 F. Supp. 2d at 170. Similarly, as
the Comptroller stated through a sworn declaration here:
[T]he [Comptroller], both in its supervisory and enforcement functions, depends
on receiving the cooperation of and forthright, frank, and open communication
with its regulated entities in order to successfully fulfill our mission to promote
the safety and soundness of the national banking system and protect consumers.
The ability to engage in the examination and supervisory process and share and
discuss examination findings in both the supervisory and enforcement context
without making communications and related documents public is crucial to the
success of the [Comptroller’s] mission of ensuring a safe and sound national
banking system.
Def.’s Mem., Ex. 3 (Freas Initial Decl.) ¶ 26 (emphasis added).
15
The Court is not persuaded by the plaintiff’s assertion that Exemption 8 does not protect
the requested documents from disclosure because “the information sought is about independent
consultants, not banks,” and therefore a literal application of Exemption 8 produces an
unreasonable result. See Pl.’s Opp’n at 3. Rather, the Court is persuaded by the defendant’s
position that withholding the requested documents furthers one of the exemption’s underlying
purposes—it encourages banks to be candid and transparent with the Comptroller regarding the
independent third-party contractors each bank was required to hire pursuant to the Consent Order
issued by the Comptroller to review the bank’s foreclosure practices. Def.’s Mem., Ex. 3 (Freas
Initial Decl.) ¶¶ 5–6, 26. The Comptroller therefore properly invoked Exemption 8 as grounds
for withholding the requested documents.10
B. The Plaintiff’s Vaughn Index Challenge
In addition to challenging the Comptroller’s invocation of Exemption 8, the plaintiff also
challenges the sufficiency of the Comptroller’s Alternative Index and seeks an order requiring
the Comptroller to produce a “proper” index. See Pl.’s Opp’n at 10–12. In lieu of a Vaughn
index, the Comptroller submitted two sworn declarations that summarize the Agency’s search
efforts and explain both the nature of the withheld documents and the factual basis for
withholding those documents under Exemption 8. See generally Def.’s Mem., Ex. 3 (Freas
Initial Decl. and accompanying Alt. Index); Def.’s Mem., Ex. 4 (Freas Supp. Decl. and
accompanying Comptroller’s Alternative Index). The plaintiff argues these submissions are
10
The plaintiff cautions that such an expansive reading of Exemption 8 would “render Exemption 8 limitless.” Pl’s
Opp’n at 2; see Pl.’s Mem. at 7–9. However, as the Court noted in Public Investors, “if that is the result, it is the
only result that comports with the current text of the FOIA and the clear intent of Congress.” Public Investors, 930
F. Supp. 2d at 70.
16
insufficient because they are “barebones,” “generic,” and “boilerplate,” Pl.’s Mem. at 6–7,
causing the plaintiff to “fly[] blind[] well into a dispositive briefing,” Pl.’s Opp’n at 10–12. The
Court does not agree.
Submission of a Vaughn index is not mandatory. See Public Investors, 930 F. Supp. 2d
at 70–72 (finding that a “sworn declaration that summarizes the agency’s search efforts and
explains both the nature of the withheld documents and the factual basis for withholding those
documents categorically under Exemption 8” is an acceptable substitution for a Vaughn Index).
In cases where a sworn declaration is sufficient to identify the applicability of an exemption,
such as Exemption 8, that protects an entire category of withheld information, there is no need
for additional clarification. Church of Scientology of Cal. v. IRS, 792 F.2d 146, 152 (D.C. Cir.
1986). Rather, an agency’s submissions suffice “so long as they give the reviewing court a
reasonable basis to evaluate the claim of privilege.” Public Investors, 930 F. Supp. 2d at 71
(internal quotation marks and citation omitted).
Because Exemption 8 categorically applies to the requested records in this case, it would
be futile to order the Comptroller to do more than what it has already done. The Court reaches
this conclusion because upon examining the Comptroller’s Supplemental Index submissions in
conjunction with the sworn declarations, the Court finds that there is a reasonable basis to
evaluate the claimed privileges. Indeed, the Comptroller’s Alternative Index provides a
description of what the documents are, the number of pages, the claimed exemptions and a brief
rationale for each withheld category of files. Thus, the plaintiff’s request that the Court order the
Comptroller to produce a Vaughn index is denied.
17
IV. CONCLUSION
Because the Court concludes that the Comptroller properly withheld the requested
documents under Exemption 8, it need not address the parties’ arguments with respect to
Exemptions 4 and 5. Moreover, because the Court is able to assess the propriety of the
Comptroller’s assertion of FOIA Exemption 8 as grounds for withholding the requested
documents based on what has already been submitted, the Comptroller will not be required to
provide a supplemental Vaughn index as demanded by the plaintiff. Accordingly, for the
foregoing reasons, the Court grants the Comptroller’s motion for summary judgment and denies
the plaintiff’s motion for summary judgment and also its request for a hearing in the matter.
SO ORDERED this 30 day of April, 2014.11
REGGIE B. WALTON
United States District Judge
11
A final order will be issued contemporaneously with this memorandum opinion.
18