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Judicial Watch • 2011 jw-v-fhfa-appellantbrief-02042011

2011 jw-v-fhfa-appellantbrief-02042011

2011 jw-v-fhfa-appellantbrief-02042011

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NOT YET SCHEDULED FOR ORAL ARGUMENT] 

NO. 10-5349 THE 
UNITED STATES COURT APPEALS 
FOR THE DISTRICT COLUMBIA CIRCUIT 

JUDICIAL WATCH, INC. 

Plaintiff-Appellant, 
FEDERAL HOUSING FINANCE AGENCY 

Defendants-Appellees. APPEAL FROM THE U.S. DISTRICT COURT 
FOR THE DISTRICT COLUMBIA 

BRIEF APPELLANT 

Paul Orfanedes 
James Peterson 
JUDICIAL WATCH, INC. 
425 Third Street, S.W., Suite 800 
Washington, 20024 
(202) 646-5172 

Counsel for Plaintiff-Appellant 

CERTIFICATE PARTIES, RULINGS, 
AND RELATED CASES 

Pursuant D.C. Cir. 28(a)(l), Plaintiff-Appellant Judicial Watch, Inc. ("Judicial Watch"), counsel, certifies follows: 
(A) Parties and Amici. The parties appearing the lower court and this appeal are Plaintiff-Appellant Judicial Watch and Defendant-Appellee Federal Housing Finance Agency. intervenors amici appeared before the district court, nor are any expected here. 
The ruling under review this appeal the Opinion and Order September 30, 2010 U.S. District Court Judge Paul Friedman, Joint Appendix (JA 59-70), granting defendants' motion for summary judgment and denying plaintiffs motion for partial summary judgment, available Judicial Watch, Inc. Federal Housing Finance Agency, No. 09-1537, 2010 
U.S. Dist. LEXIS 104832 (D.D.C. Sept. 30, 2010). 
(C) Related Cases. This case has not previously been before this Court. counsel's knowledge, there are related cases. 
/s/ James Peterson 

TABLE CONTENTS 
CERTIFICATE PARTIES, RULINGS, AND RELATED CASES ... ... .... .... ....
TABLE CONTENTS .......... .....ii TABLE AUTHORITIES iii 
STATEMENT JURISDICTION ... .... ..... ... ... ..... ...
STATEMENT ISSUES PRESENTED .... ... 
STATUTES AND REGULATIONS .... ..2
... ... ... ...... 
STATEMENT THE CASE ............ ... ... 

STATEMENT FACTS ....... ....... ..3 ... .... 
SUMMARY ARGUMENT 
........ ..... ......... 

STANDARD REVIEW .... ....5
..... ... ... ............. ..... 

ARGUMENT 
................................. .......... ........... The Requested Records Are Agency Records The Requested Records Were "Obtained By" and 
the Custody the Agency The FHFA Controlled the Requested Records ..... 
CONCLUSION ... .....
... .... .... ... ... ... 
CERTIFICATE COMPLIANCE 
CERTIFICATE SERVICE 

TABLE AUTHORITIES 
Cases 
BNA U.S. Dep Justice, 
742F.2d 1484 (D.C. Cir. 1984) .......................... .... 10, 

Burka U.S. Dep Health Human Servs., F.3d 508 (D.C. Cir. 1996) ............................. 10, 12, 

Consumer Fed Am. Dep Agric., 
455 F.3d 283 (D. Cir. 2006) ..... ........ ... ...... ........ 

*Department Justice Tax Analysts, 
492 U.S. 136 (1989) ....................................... 

Forsham Harris, 
445 U.S. 169 (1980) .................. ................ .... 

Kissinger Reporters Committee for Freedom the Press, 
445 U.S. 136 (1980) ............................ .............. 

Sussman United States Marshals Serv., 
494 F.3d 1106 (D.C. Cir. 2007) .................................. 

Sample Bureau Prisons, 
466 F.3d 1086 (D.C. Cir. 2006) .................................. 

Wolfe HHS, 
711 F.2d 1077 (D.C. Cir. 1983) .............. ... ............... 

*United Stand Am., Inc. IRS, 
359 F.3d 595 (D.C. Cir. 2004) ................................... Authorities chie fly relied upon are marked with asterisk. 

TABLE AUTHORITIES 
and Other Authorities u.s.c.  552 
.......... .... ............. ..................... u.s.c.  4617 .............................................. U.S.C.  4617(b)(2)(A)(i) .......................................... U.S.C.  4617(b)(2)(A)(ii) u.s.c.  1331 ................................................... u.s.c.  1291 .................................. ................. Rep. No. 813, 89th Cong., 1st Sess., (1965) .......................... 

STATEMENT JURISDICTION 
Jurisdiction the District Court was based upon the Freedom Information Act ("FOIA"). U.S.C.  552 and U.S.C.  1331. This Court has jurisdiction over this appeal pursuant U.S.C.  1291. This appeal timely because the District Court entered its final judgment September 30, 2010 (JA 59-70), and pursuant Fed. App. 4(a)(l)(B), timely notice appeal was filed October 19, 2010. 71. 
STATEMENT THE ISSUE PRESENTED 
Whether the placement two government sponsored enterprises into conservatorship, pursuant which government agency, the Federal Housing Finance Agency ("the FHF A"), obtained legal title all records the government sponsored enterprises, makes the records the government sponsored enterprises subject disclosure under FOIA. 
STATUTES AND REGULATIONS U.S.C.  4617: 
(b) Powers and duties the Agency conservator receiver. 

(2) 
General powers. 

(A) 
Successor regulated entity. The Agency shall, conservator receiver, and operation law, immediately succeed to-

(i) 
all rights, titles, powers, and privileges the regulated entity, and any stockholder, officer, director such regulated entity with respect the regulated entity and the assets the regulated entity; and 

(ii) 
title the books, records, and assets any other legal custodian such regulated entity. 

STATEMENT THE CASE issue this appeal whether the FHF must comply with FOIA request for records the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Company ("Freddie Mac"), two previously independent, government sponsored enterprises. undisputed that Fannie Mae and Freddie Mac were placed into conservatorship the FHF September 2008. also undisputed that the boards both Fannie Mae and Freddie Mac accepted conservatorship the FHF with full knowledge that the FHF would obtain all rights, titles, powers and privileges the enterprises, including legal title their books and records. Since that time, the FHF federal agency subject FOIA, has had full legal custody and control over all the records Fannie Mae and Freddie Mac. Because the FHF obtained these records and has exercised full legal control over them since placed Fannie Mae and Freddie Mac into conservatorship, the requested records became subject FOIA just like any other agency records. 
STATEMENT FACTS 
Judicial Watch seeks access records contributions made Fannie Mae and Freddie Mac political campaigns prior the government sponsored enterprises' collapse and placement into conservatorship the FHF September 2008.1 part investigation into Fannie Mae, Freddie Mac, and the broader financial crisis, Judicial Watch sent FOIA request the FHFA 
May 29, 2009, seeking access the following: 	
Any and all Freddie Mac and/or Fannie Mae records concerning political campaign contributions. 	
Any and all Fannie Mae and/or Freddie Mac records concerning policies, stipulations, and/or requirements concerning campaign contributions. 	The time frame the request was from 2005 the date the request. Id. 
The FHFA refused process Judicial Watch's request, claiming that, while possessed records Fannie Mae that are responsive Judicial Watch's request, 
the FHF was not required produce them because they allegedly were not 
"agency records." The FHFA did not respond Judicial Watch's 
request for records Freddie Mac. After the denial timely administrative 
appeal, Judicial Watch filed suit. statute, the FHF had sole discretion place Fannie Mae and Freddie Mac into conservatorship. U.S.  4617(a). Upon doing so, the powers the directors, officers, and shareholders were transferred the FHF See, e.g., Pltf. Opp. Defs Mot. for Summary Judgment and Pltfs Cross Motion for Partial Summary Judgment, Exh. ("Fact Sheet: Questions and Answers Conservatorship," Federal Housing Finance Agency, available conservator, the FHFA controls and directs operations 

Fannie Mae and Freddie Mac. Id. addition, all powers stockholders are suspended until the conservatorship terminated. Id. 
Following the parties' cross-motions for summary judgment, the district court ruled favor the FHF holding that the agency did not have comply with the FOIA request because the requested records were not "agency records." 59-70. The district court concluded that, despite the unambiguous statutory language granting legal title records Fannie Mae and Freddie Mac, the records were not under the agency's "control." Judicial Watch timely appealed the district court's ruling. 71. 
SUMMARY ARGUMENT 
The requested records this case are agency records because, consistent with the U.S. Supreme Court's definition "agency record" for the purposes FOIA and statute that plainly granted the FHF title all books and records Fannie Mae and Freddie Mac when those two government sponsored enterprises were placed into conservatorship, the records were the custody and control the agency the time Judicial Watch's FOIA request was made. 
STANDARD REVIEW 
District court decisions summary judgment motions FOIA cases are reviewed nova. Sussman United States Marshals Serv., 494 F.3d 1106, 1111-12 (D.C. Cir. 2007) (citing Sample Bureau Prisons, 466 F.3d 1086, 1087 (D.C. Cir. 2006)). 
ARGUMENT held the U.S. Supreme Court, records requested under FOIA are "agency records" they are (1) either created obtained the agency, and (2) under agency control the time the FOIA request made." Dep Justice Tax Analysts, 492 U.S. 136, 144-45 (1989) ("Tax Analysts"). The burden falls the agency establish that documents are not agency records. 492 U.S. 142 n.3 ("The burden the agency demonstrate, not the requestor disprove, that the materials sought are not 'agency records' ... (citing Rep. No. 813, 89th Cong., 1st Sess., (1965)). 
The federal statute authorizing the FHFA's takeover Fannie Mae and Freddie Mac specifically provides that the agency assumed full management and operational control over the two previously independent government sponsored enterprises upon their placement into conservatorship. See U.S.  4617. Under this same statute, the FHF also assumed "all rights, titles, powers, and privileges [Fannie Mae and Freddie Mac], and any stockholder, officer, director Id.  4617(b)(2)(A)(i). Moreover, the FHFA also obtained "title the books, records, and assets any other legal custodian of' Fannie Mae and Freddie Mac. U.S.C.  4617(b)(2)(A)(ii). Under the plain language these provisions, once the FHF placed Fannie Mae and Freddie Mac into 
conservatorship September 2008, the records these government sponsored 
enterprises were transferred the custody and control the FHF Therefore, 
the records were the custody and control the FHF the time Judicial 
Watch's FOIA request May 29, 2009. Significantly, the FHFA never disputed 
that had the capability search for and produce records responsive Judicial 
Watch's FOIA request. See Defs. Mem. Support Mot. For Summary Judgment 12-13. Based the plain language these statutes, the FHF had basis for refusing comply with the request. 	The Requested Records Were "Obtained By" and 
the Custody the Agency. the proceeding below, Judicial Watch established, and the district court 
agreed, that the requested records were "obtained" the agency, defined 
Tax Analysts. 64. This Court has explained that the key factor whether 
agency has "obtained" record whether the record the actual custody the 
agency. Wolfe HHS, 711 F.2d 1077, 1080 (D.C. Cir. 1983) (finding that the 
agency "must actually have custody the documents.") (citing Forsham 
Harris, 445 U.S. 169, 185 (1980)). Here, undisputed that the FHFA assumed 
full legal custody the requested records when Fannie Mae and Freddie Mac were placed into conservatorship September 2008. The agency clearly "obtained" all the enterprises' records pursuant the statute that plainly granted "title the books, records, and assets" Fannie Mae and Freddie Mac. U.S.C.  4617(b )(2)(A)(ii). The FHFA Controlled the Requested Records. 
The FHF also had full "control" over the requested records the time Judicial Watch's FOIA request. The Supreme Court has defined "agency control" the following way: "[b control mean that the material have come into the agency's possession the legitimate conduct its official duties." Tax Analysts, 492 U.S. 145. Again, under the plain language the statute, the FHFA has complete management control over Fannie Mae and Freddie Mac and full legal custody their records. All the powers Fannie Mae and Freddie Mac's prior directors, officers, and shareholders have been transferred the FHF statute. addition, Congress specifically transferred the "records" Fannie Mae and Freddie Mac the FHFA. Hence, the records have "come into the agency's possession" the legitimate conduct the FHFA's official duties. every meaningful way, the FHFA lawfully control the records. There nothing contingent, hypothetical, indefinite, limiting about this plain statutory language vesting the FHFA with both legal custody and lawful control over the records. other cases examining whether records are under "agency control," this Court has employed four-part test aid its inquiry. Under the test, while considering the "totality the circumstances," court balances four factors: (1) "the intent the document's creator retain relinquish control over the records," (2) "the ability the agency use and dispose the records sees fit," (3) "the extent which the agency personnel have read relied upon the document," and "the degree which the document was integrated into the agency's record system files." United Stand Am., Inc. IRS, 359 F.3d 595, 599 (D. Cir. 2004); Consumer Fed'n Am. Dep Agric., 455 F.3d 283, 287 (D.C. Cir. 2006) (noting that the court's totality the circumstances test seeks vindicate Congress' purpose "to open agency action the light public scrutiny") (internal quotation omitted). 
None these cases applying the four-part test involved records which already had been transferred agency the plain language statute. Nevertheless, under the unique circumstances this case, the four-part test confirms that the records are under the FHF A's control. the district court concluded, the first factor weighs heavily favor control the FHF light the decision the boards both Fannie Mae and Freddie Mac accept conservatorship the agency. The entities did with full knowledge that the FHF would obtain all rights, titles, powers and privileges the enterprises, well legal title their books, records, and assets. 65-66 (citing Pltfs Mot., Exh. Statement ofFHFA Director James Lockhart, Sept. 2008, 5-6); 
U.S.C.  4617(b). the district court correctly noted, this demonstrates "that they did not intend retain control them and fact intended relinquish control." Id. 
The second factor also weighs heavily favor the FHF A's control. the district court correctly held, the legal custodian Fannie Mae and Freddie Mac's records, the FHFA has unfettered ability use and dispose the records any manner may choose. (citing Burka U.S. Dep Health Human Servs., F.3d 508, 515 (D.C. Cir. 1996)). This ability compelling indicator the FHFA's control the requested records. 
The district court ruled that the third and fourth factors did not demonstrate control the FHF and concluded that they outweighed the first two factors indicating agency control. 66-67. Among other things, this conclusion overlooks the "totality the circumstances" present this case. 
Even if, the agency claims, its staff has not "read relied upon the requested documents" -the third prong the test -the importance this factor varies with the circumstances each case. For example, ENA U.S. Dep Justice, 742 F.2d 1484 (D.C. Cir. 1984), the Court observed that use requested document the employee was particularly relevant that case because was record created agency employee. Id. 1492. Nevertheless, the 
Court concluded that "use" the document alone was not dispositive and that the focus must remain the "totality the circumstances." Id. 1492-93. Hence, the third factor, not weighing favor Judicial Watch, means dispositive and must viewed the "totality the circumstances." the fourth factor, the requested records clearly are part the "agency's files" virtue the fact that the FHF has undisputed custody all the records Fannie Mae and Freddie Mac. Congress could not have been clearer its mandate that "title the books, records, and assets" Fannie Mae and Freddie Mac transferred the FHF upon placement these government sponsored enterprises into conservatorship. U.S.C.  4617(b )(2)(A)(ii). belies Congress' mandate conclude that such records, after being placed the FHF A's lawful custody and control, are somehow separate from the agency and its files. Simply put, the records Fannie Mae and Freddie Mac were transferred the custody and control the FHF Taken together, least three the four factors further demonstrate the agency's full control over the records. 
Finally, important note that the unique circumstances this case making distinct from prior cases that considered "agency control" over requested record. This case nothing like Kissinger Reporters Committee for Freedom the Press, which the records issue were asserted personal papers high-level government official. 445 U.S. 136 (1980) (transcripts telephone conversations removed from agency were not agency records). statute granted federal agency full legal title over Dr. Kissinger's papers. 
This case also very different from Consumer Federation America Dep Agric., 455 F.3d 283 (D.C. Cir. 2006), which personal appointment calendars agency officials were issue. This case not all like United Stand America, Inc. IRS, 359 F.3d 595 (D.C. Cir. 2004), which concerned document prepared for Congress the IRS and whether Congress had manifested clear intent retain control the document. issue exists this case whether Fannie Mae Freddie Mac retain any control over the records issue. 
Nor are the circumstances this case comparable Forsham Harris, 445 U.S. 169 (1980), which concerned records "created and held [an] entity that was not itself 'agency"' and which were the possession "privately controlled organization" the time the request. Id. 178. The case most heavily relied the district court, Burka US. Dep Health Human Servs., F.3d 508 (D.C. Cir. 1996), also very different, mere "constructive control" agency data tapes created government contractor was sufficient constitute control the records the agency. Fannie Mae and Freddie Mac retain interest comparable government contractor the requested records. 
The circumstances this case are distinctly different from any these cases, custody and control the requested records has been transferred statute the FHF Hence, issue exists this case whether the records belong any third party, such employee government contractor. That question was specifically answered Congress when transferred full custody and control the records the FHF This unique fact critical, and compelling, when considering the "totality the circumstances" this case. 
Based the plain language the statute, the FHF has full custody and control the requested records. The undisputed facts demonstrate that the requested records are, fact, agency records properly subject FOIA. 
CONCLUSION 
For the foregoing reasons, Judicial Watch respectfully requests that the Court reverse the district court's decision below, enter judgment favor Judicial Watch, and remand this matter for further proceedings. February 2011 Respectfully submitted, Isl Paul Orfanedes 
Isl James Peterson 
JUDICIAL WATCH, INC. 425 Third Street, S.W., Suite 800 Washington, 20024 
(202) 646-5172 
Counsel for Plaintiff-Appellant 

CERTIFICATE COMPLIANCE certify that pursuant F.R.App.P. 32(a)(7)(c) and D.C. Cir. Rule 32(a)(2), the attached principal brief proportionally spaced, has typeface points and contains 3,422 words, counted the word-processing system used prepare the brief. 
February 2011 Isl James Peterson 

CERTIFICATE SERVICE hereby certify that February 2011, the foregoing BRIEF 
APPELLANT was filed via the CM/ /ECF system and hand (original and eight 
copies) with the Court and served the CM/ECF system and first-class U.S. 
mail (two copies), postage prepaid, the following: 
Mark Freeman Mark Stem 
U.S. Department Justice Civil Division, Appellate Staff 950 Pennsylvania Avenue, Room 7228 
Washington, 20530 
/s/ James Peterson