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Judicial Watch • 2011 jw-v-fhfa-appellate-opinion-08052011

2011 jw-v-fhfa-appellate-opinion-08052011

2011 jw-v-fhfa-appellate-opinion-08052011

Page 1: 2011 jw-v-fhfa-appellate-opinion-08052011

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uiio tair Qlourt Jppalr 

Argued May 10, 2011 Decided August 2011 
No. 10-5349 

Appeal from the United States District Court 
for the District Columbia 
(No. 1:09-cv-01537) 

James Peterson argued the cause for appellant. With him the brief was Paul Orfanedes. 
Mark Freeman, Attorney, U.S. Department Justice, argued the cause for appellee. With him the brief were Tony West, Assistant Attorney General, Ronald Machen Jr., U.S. Attorney, and Mark Stern, Attorney. Craig Lawrence, Assistant U.S. Attorney, entered appearance. 
Before: TATEL and GRIFFITH, Circuit Judges, and RANDOLPH, Senior Circuit Judge. 
Opinion for the Court filed Circuit Judge GRIFFITH. 

GRIFFITH, Circuit Judge: The Federal Housing Finance Agency (FHF has been the conservator Fannie Mae and Freddie Mac since 2008. Judicial Watch filed request under the Freedom Information Act (FOIA) asking the FHF disclose records Fannie and Freddie that show how much money they gave political campaigns. But unconte:sted that one the FHF has ever read relied upon any :uch documents. The district court held that the documents are not agency records subject FOIA, and agree. 
The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) buy residential mortgages from banks, repackage them for sale mortgage-backed securities, and guarantee these securities promising make investors whole borrowers default. CONG. BUDGET OFFICE, FANNIE MAE, FREDDIE MAC, AND THE FEDERAL ROLE THE SECONDARY MORTGAGE MARKET viii (2010). Both firms are structured private corporations, but they are federally chartered and play important role the national housing market making easier for home buyers obtain loans. See U.S.C.  1452(a), 1723(b). 2009, the two companies guaranteed three-quarters new residential mortgages the United States. CONG. BUDGET OFFICE, supra, iii. 
National housing prices began sustained decline 2006 that mid-2008 had substantially eroded the value Fannie-and Freddie-held mortgages. Worried that either both Fannie and Freddie might become insolvent, Congress passed the Housing and Economic Recovery Act 2008 (HERA), Pub. No. 110-289, 122 Stat. 2654, which created the FHP and authorized this new agency place the two companies into conservatorship under specified circumstances. See U.S.C.  4511 (creating the FHFA); id.  4617 (authorizing the FHP place either company into conservatorship various scenarios, including where the firm's assets are insufficient meet its obligations and where the firm's management consents conservatorship). September 2008, with the consent management Fannie and Freddie, the FHP placed both into conservatorship. conservator, the FHP has power exercise "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." Id.  4617(b)(2)(A)(i). 

Judicial Watch asked the FHFA disclose "[a]ny and all Freddie Mac ... Fannie Mae records concerning political campaign contributions," Letter from Judicial Watch FHFA (May 29, 2009), and sued when the agency refused. FOJA gives federal courts jurisdiction "to order the production any agency records improperly withheld from the complainant." U.S.C.  552(a)(4)(B). But under FOIA, federal court may only order agency release "agency records." Id.; see US. Dep Justice Tax Analysts, 492 
U.S. 136, 142 (1989). Judicial Watch acknowledges that Fannie and Freddie are not themselves subject FOIA, but argues that the requested documents became "agency records" when the FHP took over conservator. its motion for summary judgment, the FHF acknowledged that had access responsive documents, but, accompanying affidavit, swore that one the agency had ever read them. Deel. David Felt, Deputy Gen. Counsel, FHP The FHP argued that until someone the agency uses the requested documents, they cannot "agency records" for purposes FOIA. The district court agreed and granted summary judgment for the agency. Judicial Watch, Inc. Fed. Hous. Fin. Agency, 744 Supp. 228 (D.D.C. 2010). take jurisdiction hear Judicial Watch's appeal under U.S.C.  1291 and affirm the judgment the district court. 
The Supreme Court has held that FOIA reaches only records the agency controls the time the request. Tax Analysts, 492 U.S. 144-45. Control means "the materials have come into the agency's possession the legitimate conduct its official duties." Id. look four factors determine whether agency controls document: 
(1) the intent the document's creator retain relinquish control over the records; (2) the ability the agency use and dispose the record sees fit; (3) the extent which agency personnel have read relied upon the document; and (4) the degree which the document was integrated into the agency's record system files. 
Burka US. Dep Health Human Servs., F.3d 508, 515 (D.C. Cir. 1996) (citation omitted). The district court considered these factors and determined that the FHF does not "control" the documents Judicial Watch requested because the agency had neither used the documents nor integrated them into its files. Judicial Watch, 744 Supp. 235. agree. threshold matter, Judicial Watch argues that the FHF controls the documents because holds title them and that therefore need not consider the Burka factors this case. See U.S.C.  4617(b)(2)(A)(i) (providing that conservator the FHF assumes "all rights, titles, powers, and privileges" Fannie and Freddie). But our cases have never suggested that ownership means control. the contrary, 

Consumer Federation America Department Agriculture, used the Burka test conclude document was not "agency record" even though the agency had arguable property interest it. 455 F.3d 283, 293 (D.C. Cir. 2006). that case, held that electronic calendars kept agency employees their work computers were only subject FOIA they had been distributed widely within the agency. Id. 290-93. Rather than asking whether the agency owned the calendars, used the Burka factors decide whether FOIA applied. And that the inquiry undertake 
The first Burka factor instructs consider "the intent the document's creator retain relinquish control over the records." Burka, F.3d 515. agree with Judicial Watch that Fannie and Freddie, the creators the documents, intentionally relinquished control over the records when they agreed the conservatorship. This case therefore unlike 
Kissinger Reporters Committee for Freedom the Press, 
where the Supreme Court held that the private papers the Secretary State did not become subject FOIA when stored them his State Department office without any thought that doing might transform them into "agency records." 445 U.S. 136, 157 (1980). The documents Judicial Watch seeks were transferred the FHF with full knowledge that the agency might use them the conduct its official business. 
The second Burka factor also supports Judicial Watch's claim, there question that the conservator Fannie and Freddie, and the tipeholder their documents, the FHF enjoys "the ability ... use and dispose the record[s] sees fit." Burka, F.3d 515. The FHFA does not dispute this point. 

Although the first two Burka factors help Judicial Watch, the third fatal its claim. Burka instructs consider "the extent which agency personnel have read relied upon the document," id. and here uncontested that the FHF has not used the requested records any way, Deel. David Felt, Deputy Gen. Counsel, FHFA The public cannot learn anything about agency decisionmaking from document the agency neither created nor consulted, and requiring disclosure under these circumstances would nothing further FOIA's purpose "open[ing] agency action the light public scrutiny." Dep Air Force Rose, 425 U.S. 352, 372 (1976). deciding whether agency controls document its employees created, have consistently found that "use the decisive factor." Consumer Fed Am. 455 F.3d 288; see also Gallant NLRB, F.3d 168, 172 (D.C. Cir. 1994) (holding that agency official's personal correspondence was not subject FOIA part because "lack reliance the correspondence carry out the business the agency"); Bureau Nat Affairs, Inc. US. Dep Justice, 742 F.2d 1484, 1490 
(D.C. Cir. 1984) (observing that where document cre:tted agency employee and located the agency, "use the document becomes more important determining the status the document under FOIA"). think use decisive here well. Although appreciate Judicial Watch's interest how much money Fannie and Freddie gave which politicians the years leading our current financial crisis, satisfying curiosity about the internal decisions private companies not the aim FOIA, and there question that disclosure the requested records would reveal nothing about decisionmaking the FHF therefore hold that where agency has neither created nor referenced document the "conduct its official duties," Tax Analysts, 492 U.S. 145, the agency has not exercised the degree control required subject the document disclosure under FOIA. 
The fourth Burka factor instructs consider "the degree which the document was integrated into the agency's record system files." Burka, F.3d 515. this case, the degree none all. goes without saying that agency cannot integrate into its record system document created third party that none its employees have read, and have pointed out, the undisputed testimony the FHFA's General Counsel that one the agency has relied upon these documents any way. directing look the files agency uses make decisions, the fourth Burka factor confirms what the third factor teaches: document that could not reveal anything about agency decisionmaking not "agency record." 

Although there doubt that the FHP could consult the requested records conducts its business, the problem for Judicial Watch that one from the FHFA has done so. The Supreme Court held Forsham Harris that documents agency had the right acquire would not become agency records subject FOIA "unless and until the right exercised." 445 U.S. 169, 181 (1980). the same way, the FHP A's unexercised right use and dispose the records requested this case not enough subject those records FOIA. weighing the Burka factors, are mindful that the "core purpose the FOIA" '"contribut[e] significantly public understanding the operations activities the government."' US. Dep Justice Reporters Comm. for Freedom the Press, 489 U.S. 749, 775 (1989) (quoting 
U.S.C.  552(a)(4)(A)(iii)). 

The FHF argues the alternative that even "controls" the requested documents, they are not subject disclosure because has not "obtained" them. See Tax Analysts, 492 U.S. 144-45 (holding that documents are only "agency records" within the meaning FOIA the agency both "create[ obtain[ the documents and "control[ them). Because hold that the FHF does not control the documents, not reach that argument. 
The judgment the district court