Francis v. Federal Housing Finance Authority

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
MICHAEL FRANCIS, et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 14-cv-1628 (KBJ)
)
FEDERAL HOUSING FINANCE )
AGENCY, )
)
Defendant. )
)
MEMORANDUM OPINION
The Federal Housing Finance Agency (“FHFA”) is an independent agency within
the U.S. government that oversees the Federal National Mortgage Association (“Fannie
Mae”), the Federal Home Loan Mortgage Corporation (also known as Freddie Mac), the
Federal Home Loan Banks, and other components of the secondary mortgage market. 1
In 2014, plaintiffs Michael and Carmen Francis (“Plaintiffs”) submitted to FHFA a
request under the Freedom of Information Act, 5 U.S.C. § 552 (“FOIA”), seeking
documents regarding the mortgage on their residential property located at 4904 Winston
Drive, Indianapolis, IN. In particular, Plaintiffs sought documents that would show if
Fannie Mae—which has been under FHFA conservatorship since 2008—had assigned
Plaintiffs’ mortgage and the associated note to another entity. (Compl., ECF No. 1,
¶ 5.) In its response to the FOIA request, FHFA indicated that the agency was unable to
locate any responsive records. (Compl. ¶¶ 8–9.) Plaintiffs filed the instant lawsuit on
1
See http://www.fhfa.gov/SupervisionRegulation (last visited Sept. 30, 2015).
September 29, 2014, claiming that FHFA is wrongfully withholding agency records in
violation of the FOIA, and requesting an order compelling FHFA to search for, and
produce, all non-exempt, responsive records, and to provide Plaintiffs with a Vaughn
index of records that FHFA claims are subject to FOIA exemptions. (See id. at 5.)
Before this Court at present is FHFA’s Motion for Summary Judgment (ECF No.
6 at 1–2). 2 The agency argues that it conducted an adequate search for records in
response to Plaintiffs’ FOIA request (see Mem. in Supp. of Def.’s Mot. for Summ. J.,
ECF No. 6 at 4–11 (“Def.’s Br.”), at 4), and with respect to the responsive documents in
Fannie Mae’s possession, FHFA argues that it does not control Fannie Mae’s records
and, therefore, cannot be faulted for not searching those records and producing that
entity’s documents. (Id. at 9.) In response, Plaintiffs maintain that FHFA’s search was
inadequate because Plaintiffs have located documents on Fannie Mae’s website and
have received documents from Fannie Mae that they deem responsive to their FOIA
request. (Pls.’ Mem. in Opp’n to Def.’s Mot. for Summ. J., ECF No. 10 (“Pls.’ Br.”), at
6–7.)
Upon consideration of the parties’ submissions, the relevant authorities, and the
record as a whole, this Court concludes that FHFA conducted an adequate search that
satisfies the agency’s FOIA obligations. Consequently, Defendant’s motion for
summary judgment must be GRANTED. A separate order consistent with this
memorandum opinion will follow.
2
Page numbers herein refer to those the Court’s Electronic Filing System automatically assigns.
2
I. FACTUAL BACKGROUND
FHFA was established as an independent agency of the federal government on
July 30, 2008. (Decl. of Frank R. Wright, ECF No. 6-2 (“Wright Decl.”), ¶ 5.) FHFA
ensures that the entities it regulates, including Fannie Mae, “operate in a financially
safe and sound manner; remain adequately capitalized; and comply with their respective
authorizing statutes, as well as all rules, regulations, guidelines and orders issued under
law.” (Id. ¶ 6 (citing 12 U.S.C. § 4513(a).) Despite its role in overseeing the mortgage
industry, FHFA has represented that it “does not, in the ordinary course of business,
maintain any documents relating to individual mortgage loans.” (Id. ¶ 9.)
FHFA is authorized to act as a conservator for, and to oversee, certain regulated
entities, and when it operates in such a capacity, FHFA can take actions “(i) necessary
to put the regulated entity in a sound and solvent condition; and (ii) appropriate to carry
on the business of the regulated entity and preserve and conserve the assets and
property of the regulated entity.” 12 U.S.C. § 4617(b)(2)(D). FHFA placed Fannie
Mae into conservatorship in 2008; however, Fannie Mae has continued its normal
business operations since that time. (Wright Decl., ¶ 7.) Consequently, FHFA has not
“incorporated [Fannie Mae’s records] into any of [FHFA’s] systems of records” and
“does not consider the records of Fannie Mae . . . to be agency records for the purposes
of FOIA[.]” (Id. ¶ 10.) Thus, FHFA asserts that it “does not have the capability to
conduct a search of [Fannie Mae’s] records for responsive documents[.]” (Id.)
On August 1, 2014, Plaintiffs submitted a FOIA request to FHFA seeking “all
documents containing information regarding property in interest located at 4904
Winston Drive, Indianapolis, Indiana and acquired by Accubanc on October 26,
1994[,]” including “[t]he name, loan number and all mortgage pool numbers, trust, and
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other pertinent information in Fannie Mae’s possession including the legal entity name
of unknown investors from November 1, 1994 to October 2, 2002.” (Compl. ¶ 5.) On
August 7, 2014, FHFA responded to the FOIA request, informing Plaintiffs that its
search of agency files had not unearthed any responsive documents. (Id. ¶ 8.) The
agency also advised Plaintiffs “that FHFA’s temporary role as conservator of [Fannie
Mae] does not transform [Fannie Mae’s] company records into ‘agency records’ subject
to FOIA.” (Id.) Plaintiffs appealed this determination, and asked that the agency
answer the following question: “Did Fannie Mae assign the original note and mortgage
of Francis’ primary residence (subject to sell and proceeds going to the secure creditor
Chase) to EMC Mortgage Corporation/JP Morgan Chase Bank on or about September
13, 2013?” (Id. ¶ 9.) FHFA responded that while Plaintiffs’ appeal was “irregular,” the
agency had addressed it, and the search of its own records did not reveal any responsive
documents. (Id.)
Plaintiffs filed the instant action in federal court on September 29, 2014.
Plaintiffs’ complaint alleges that FHFA has violated the FOIA by failing to produce
records that are responsive to their FOIA request, and Plaintiffs ask this Court to order
FHFA to search for, and produce, all non-exempt, responsive records and, if necessary,
to provide Plaintiffs with a Vaughn index of any records that FHFA might withhold as
subject to FOIA exemptions. FHFA filed a motion for summary judgment on November
5, 2014, arguing that it is entitled to judgment as a matter of law because “FHFA
diligently searched for records responsive to plaintiffs’ request and informed the
plaintiffs that they had found no responsive records.” (Def.’s Br. at 4) In their brief in
opposition to FHFA’s motion, which was filed on January 9, 2015, Plaintiffs argue that
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FHFA’s search for records was inadequate because they themselves located responsive
documents on Fannie Mae’s website, and that they learned through calls to Fannie Mae
and Fannie Mae’s Resource Center of other responsive documents that are in Fannie
Mae’s possession. (Id. at 6–7.) 3
Defendant’s motion is now fully briefed and ripe for this Court’s review.
II. LEGAL STANDARD FOR SUMMARY JUDGMENT UNDER RULE 56
As a general matter, summary judgment under Rule 56 of the Federal Rule of
Civil Procedure is appropriate if there is “no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Only
disputes over facts that might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248-49 (1986). The “party seeking summary judgment always bears
the initial responsibility of [stating] . . . the basis for its motion, and identifying those
portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any,’ which it believes demonstrate the absence of a
genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)
(quoting Fed. R. Civ. P. 56). The nonmoving party must then go beyond the pleadings,
and with “affidavits, or by the depositions, answers to interrogatories, and admissions
on file, designate specific facts showing that there is a genuine issue for trial.” Id. at
324 (internal quotation marks omitted).
3
FHFA filed a reply to Plaintiffs’ opposition in which it asserted that Plaintiffs are confused about
FHFA’s access to and control over Fannie Mae records as a result of the conservatorship, and that “the
records of regulated companies are not incorporated into FHFA’s system of records [and that] FHFA
does not have the capability to conduct a search of the conserved records for responsive records.”
(Def.’s Reply to Pls.’ Opp’n to Def.’s Mot. for Summ. J., ECF No. 11, at 2.)
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An agency seeking summary judgment in a case challenging its response to a
request for records under FOIA must show that it conducted a search of agency
documents that was “reasonably calculated to uncover all relevant documents, and, if
challenged, must demonstrate beyond material doubt that the search was reasonable.”
Truitt v. Dep’t of State, 897 F.2d 540, 542 (D.C. Cir. 1990) (internal quotation marks
omitted). “The agency must establish through affidavits or declarations the adequacy of
both its search methods (where and how it looked for responsive records) and the scope
of its search (what it was looking for).” Looney v. Walters-Tucker, 98 F. Supp. 2d 1, 3
(D.D.C. 2000). Moreover, the agency’s affidavits must be “relatively detailed and non-
conclusory[.]” Ground Saucer Watch, Inc. v. CIA, 692 F.2d 770, 771 (D.C. Cir. 1981)
(internal quotation marks and citation omitted). And although the agency declarants
need not “set forth with meticulous documentation the details of an epic search for the
requested records,” they must show “that the search method was reasonably calculated
to uncover all relevant documents.” Looney, 98 F. Supp. 2d at 3 (internal quotation
marks and citation omitted).
Notably, “[a]gency affidavits are accorded a presumption of good faith, which
cannot be rebutted by ‘purely speculative claims about the existence and discoverability
of other documents.’” SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir.
1991) (quoting Ground Saucer Watch, 692 F.2d at 771). Furthermore, in analyzing the
reasonableness of an agency’s search, “[t]he issue is not whether any further documents
might conceivably exist but rather whether the government’s search for responsive
documents was adequate.” Truitt, 897 F.2d at 542 (internal quotation marks, emphasis,
and citation omitted).
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Significantly for present purposes, only “agency records” are subject to
disclosure under the FOIA, and to qualify as an agency record, “the agency must ‘either
create or obtain’ the requested materials” and “the agency must be in control of [them]
at the time the FOIA request is made.” U.S. Dep’t of Justice v. Tax Analysts, 492 U.S.
136, 144–45 (1989) (quoting Forsham v. Harris, 445 U.S. 169, 182 (1980)). A record
is in an agency’s “control” only if it came “into the agency’s possession in the
legitimate conduct of its official duties.” Id. at 145.
III. DISCUSSION
FHFA asks the Court to grant summary judgment in its favor because its search
for responsive records was reasonable and adequate as a matter of law, and thus, no
genuine issues of material fact remain in this case. As explained above, in a FOIA
case, “the issue to be resolved is not whether there might exist any other documents
possibly responsive to the request, but rather whether the search for those documents
was adequate.” Weisberg v. DOJ, 745 F.2d 1476, 1485 (D.C. Cir. 1984) (emphasis in
original). “FOIA requires government agencies to describe their searches in enough
detail for a court to determine whether the search was sufficiently exhaustive to satisfy
the Act.” Sennett v. DOJ, 962 F. Supp. 2d 270, 277 (D.D.C. 2013) (citations omitted);
see also Defenders of Wildlife v. U.S. Border Patrol, 623 F. Supp. 2d 83, 91 (D.D.C.
2009) (“To meet its burden, the agency may submit affidavits or declarations that
explain in reasonable detail the scope and method of the agency’s search.”).
Here, FHFA has included with its motion for summary judgment a detailed
declaration from Frank R. Wright, Senior Counsel in the Office of General Counsel of
the FHFA, in which he explains the relationship between the FHFA and entities under
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its conservatorship, as well as the steps that FHFA took to conduct the search for
records responsive to Plaintiffs’ FOIA request. (See Wright Decl.) As the following
description makes clear, the Wright declaration is sufficient to eliminate any material
questions of fact regarding the scope or adequacy of the search at issue in this case.
Wright explains that, upon receipt of Plaintiffs’ FOIA request, a FOIA officer
within the FHFA “searched the agency’s Information Management System (‘IMS’) for
files relating to the requestors and their loan” but that officer did not locate any
responsive documents. (Id. ¶ 9.) Wright further avers that, in response to Plaintiffs’
administrative appeal, the agency contacted one of the electronic discovery vendors that
FHFA relies upon to maintain the electronic files the agency has collected in litigation
unrelated to this case and requested that the vendor conduct a search for any responsive
documents that might have been stored among the agency’s electronic files. (Id. ¶ 13.)
The vendor searched using Plaintiffs’ names, the property address, the loan number, and
the mortgage pool information, but did not locate any responsive information. (Id.) In
this Court’s view, Wright’s declaration—which is presumed to have been submitted in
good faith and is entitled to great weight, see SafeCard Servs., 926 F.2d at 1200—is
sufficient to carry FHFA’s burden of showing that it conducted “a search reasonably
calculated to uncover all relevant documents[.]” Truitt, 897 F.2d at 542 (internal
quotation marks and citation omitted).
In challenging the adequacy of the searches, Plaintiffs fault FHFA for not
searching Fannie Mae’s records—presumably based on Plaintiffs’ contention that
records in Fannie Mae’s control and possession qualify as FHFA records as a result of
FHFA’s conservatorship over Fannie Mae. (See, e.g., Pls.’ Br. at 7 (“It is clear that an
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agency in possession of responsive records originating with another agency cannot
refuse to process those records merely by advising the requester to seek them directly
from the other agency.”); id. at 8 (“Mr. Wright fails to mention or search Fannie Mae’s
own website ‘Pool Talk’ where responsive request (sic) were available in
abundance[.]”).) Unfortunately for Plaintiffs, the D.C. Circuit rejected this very
argument in Judicial Watch, Inc. v. FHFA, 646 F.3d 924 (D.C. Cir. 2011).
The plaintiff in Judicial Watch had submitted a FOIA request to FHFA seeking
campaign contribution records of two entities under FHFA conservatorship, including
Fannie Mae. In finding that the district court properly held that the requested
documents were not agency records that the FHFA was required to produce under the
FOIA, the Circuit explained that the FOIA only extends to records that an agency
“controls at the time of the request,” id. at 926 (citing Tax Analysts, 492 U.S. at 144–
45), meaning that “the materials have come into the agency’s possession in the
legitimate conduct of its official duties.” Id. (internal quotation marks and citation
omitted). The Circuit emphasized that the requisite level of control over a document is
determined by consideration of a four-factor test:
(1) the intent of the document’s creator to retain or relinquish control
over the records; (2) the ability of the agency to use and dispose of the
record as it sees fit; (3) the extent to which agency personnel have read
or relied upon the document; and (4) the degree to which the document
was integrated into the agency’s record system or files.
Id. at 926–27 (quoting Burka v. U.S. Dep’t of Health & Human Servs., 87 F.3d 508, 515
(D.C. Cir. 1996)). The Circuit found in Judicial Watch that there was no question that
the entities had intended to relinquish control over the documents at issue in that case
when they agreed to the conservatorship, id. at 927, or that FHFA had the ability to use
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or dispose of the records, id. However, the Circuit found that the third factor was
“fatal” to the plaintiff’s claim because it was “uncontested that the FHFA has not used
the requested records in any way[,]” which also necessarily meant that plaintiff had
failed to satisfy the fourth factor. Id. at 927–28.
The facts of the instant case compel the same conclusion: there is no genuine
dispute regarding whether FHFA personnel have ever read or relied on Fannie Mae’s
documents, nor have Fannie Mae’s records been integrated into FHFA’s files, as the
sworn testimony of an FHFA official establishes. (Wright Decl. ¶ 9–10, 13.)
IV. CONCLUSION
Under well-established law, Fannie Mae’s records are not records of FHFA for
FOIA purposes, and therefore FHFA was not obligated to search those records for the
documents that Plaintiffs requested. See Judicial Watch, 646 F.3d at 926–28.
Moreover, this Court finds that FHFA has established that it conducted a reasonable and
adequate search of its own files for responsive records. Consequently, as set forth in
the accompanying Order, this Court will GRANT Defendant’s motion for summary
judgment and will enter judgment in Defendant’s favor.
DATE: September 30, 2015 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
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