Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-12-05267/USCOURTS-caDC-12-05267-0/pdf.json

Parties Involved:
Federal Housing Finance Agency
Appellee
Vern McKinley
Appellant

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 8, 2013 Decided January 10, 2014

No. 12-5267

VERN MCKINLEY,

APPELLANT

v.

FEDERAL HOUSING FINANCE AGENCY,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 1:10-cv-01165)

Michael Bekesha argued the cause. With him on the briefs

was Paul J. Orfanedes.

Steve Frank, Attorney, U.S. Department of Justice, argued

the cause for appellee. With him on the brief were Stuart F.

Delery, Assistant Attorney General, Ronald C. Machen Jr., U.S.

Attorney, and Leonard Schaitman, Attorney.

Before: GARLAND, Chief Judge, and ROGERS and BROWN,

Circuit Judges.

Opinion for the Court filed by Chief Judge GARLAND.

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GARLAND, Chief Judge: Appellant Vern McKinley seeks

attorneys’ fees following his largely unsuccessful attempt to

obtain documents from the Federal Housing Finance Agency

under the Freedom of Information Act. Although the district

court doubted that McKinley was eligible for fees, it determined

that, even if McKinley were eligible, he was not entitled to

attorneys’ fees. We review such a determination only for an

abuse of discretion. Because we find none, we affirm the

district court’s denial of fees.

I

Vern McKinley is a “consultant, legal advisor[,] regulatory

policy expert,” and author “on financial sector issues.” 

Appellant’s Br. 3. In May 2010, he filed the Freedom of

Information Act (FOIA) request, see 5 U.S.C. § 552(a)(3)(A),

that led to the present controversy. In that request, he sought

from the Federal Housing Finance Agency (FHFA) “any and all

communications and records concerning . . . how the FHFA and

the Department of the Treasury determined that

conservatorship,” instead of receivership, “was the preferred

option” for addressing the unstable condition of the Federal

National Mortgage Association (“Fannie Mae”) and the Federal

Home Loan Mortgage Corporation (“Freddie Mac”) in early

September 2008. McKinley v. Fed. Hous. Fin. Agency, 789 F.

Supp. 2d 85, 87 (D.D.C. 2011) (citation and internal quotation

marks omitted); see also James B. Lockhart, Director, Fed.

Hous. Fin. Agency, Statement (Sept. 7, 2008) (announcing that,

in order to “address[] safety and soundness concerns,” the

agency “has placed Fannie Mae and Freddie Mac into

conservatorship”). 

In response to McKinley’s request, the FHFA searched for

and, by July 2010, identified three documents that came within

the terms McKinley had specified. McKinley, 789 F. Supp. 2d

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at 87. McKinley sought disclosure of just two of the responsive

documents. Id. at 88. According to the “Vaughn index”

prepared by the agency to describe the documents,1 the first of

these was a three-page “[u]ndated draft chart containing

discussion of the features, strengths and weaknesses” of a

receivership and a conservatorship. Declaration of Frank R.

Wright, Attachment A, Final Vaughn Index. The second was a

ten-page “August 18, 2008 draft memorandum on options for

addressing a troubled regulated entity.” Id. The FHFA did not

find final versions of either document in its files. Id. Upon

providing a description of the two documents, the agency

notified McKinley of its decision to withhold them. The

documents, the FHFA said, were protected against disclosure by

both the deliberative process privilege and the attorney workproduct privilege. See 5 U.S.C. § 552(b)(5) (authorizing the

withholding of “intra-agency memorandums or letters which

would not be available by law to a party other than an agency in

litigation with the agency”).

McKinley, who had filed suit before the FHFA completed

its search, contested the asserted exemptions in the district court. 

On June 7, 2011, the court ruled that the agency had properly

invoked the deliberative process privilege because the

documents were both “predecisional” and part of the

deliberative process, and their disclosure would necessarily

“harm an agency’s decisionmaking process” by stifling internal

agency debate. McKinley, 789 F. Supp. 2d at 88 (quoting

McKinley v. Bd. of Governors of Fed. Reserve Sys., 647 F.3d

331, 339 (D.C. Cir. 2011)) (internal quotation marks omitted). 

The court went on, however, to remind the FHFA that the

deliberative process privilege does “not protect documents in

their entirety” and that, “if the government can segregate and

disclose non-privileged factual information within a document,

1

 See Vaughn v. Rosen, 484 F.2d 820, 827 (D.C. Cir. 1973).

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it must.” Id. at 89 (quoting Loving v. Dep’t of Def., 550 F.3d 32,

38 (D.C. Cir. 2008)) (internal quotation marks omitted). This

meant that the propriety of the agency’s decision to bar

disclosure of the documents in their entirety turned on its second

assertion of privilege: the attorney work-product privilege. 

Unlike the deliberative process privilege, the latter “does not

require the segregation of disclosable material.” Id. (citing

Judicial Watch, Inc. v. Dep’t of Justice, 432 F.3d 366, 371 (D.C.

Cir. 2005)). 

After reviewing the two documents in camera, the district

court concluded that the work-product privilege did not apply to

either document because neither was “prepared in anticipation

of litigation.” McKinley v. Fed. Hous. Fin. Agency, No. 10-

1165, slip op. at 2 (Aug. 26, 2011) (quoting FED. R. CIV. P.

26(b)(3)(A)) (internal quotation marks omitted). Consequently,

the court ordered the FHFA to disclose all portions of the

documents “reasonably segregable from the material . . . 

protected by the deliberative-process privilege.” Id. at 4. The

FHFA complied, producing heavily redacted versions of both

documents. See Joint Status Report, Attachment A (Sept. 16,

2011). Thereafter, the district court granted the agency’s motion

for summary judgment, finding that the FHFA had satisfied its

obligations under FOIA. McKinley v. Fed. Hous. Fin. Agency,

No. 10-1165, 2012 WL 1415518, at *2-3 (Jan. 25, 2012).

McKinley then moved for attorneys’ fees. On June 27,

2012, the district court denied the motion. McKinley v. Fed.

Hous. Fin. Agency, No. 10-1165, slip op. at 4-6 (June 27, 2012)

(hereinafter Attorneys’ Fees Opinion). The court first expressed

“serious doubts” about whether McKinley was even eligible for

fees under FOIA. Id. at 4. FOIA permits the award of

attorneys’ fees to plaintiffs who have “substantially prevailed,”

5 U.S.C. § 552(a)(4)(E)(i), and, although the “FHFA did turn

over additional pages . . . pursuant to a court order,” the court

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doubted whether the receipt of two heavily redacted documents

“amount[ed] to ‘substantially’ prevailing.” Attorneys’ Fees

Opinion, slip op. at 4. The court found that it was unnecessary

to address that question, however, because it determined that

McKinley was not entitled to fees even if he were eligible for

them. Id. at 6. 

II

To obtain attorneys’ fees under FOIA, a plaintiff must

satisfy two requirements. First, he must be eligible for fees,

which requires that he “substantially prevail” as defined by 5

U.S.C. § 552(a)(4)(E)(ii). Second, an eligible plaintiff must

demonstrate that he is entitled to fees. See Cotton v. Heyman,

63 F.3d 1115, 1117 (D.C. Cir. 1995). On appeal, McKinley

challenges the district court's reasoning with respect to both

requirements.

We find the plaintiff’s challenge to the district court’s

treatment of the first requirement perplexing. As should be

apparent from our recitation of the district court’s opinion, the

court could not have incorrectly decided the question of

eligibility because it did not decide the issue at all. Rather, it

assumed arguendo that McKinley satisfied the eligibility

requirement and concluded that he nonetheless failed to satisfy

the entitlement requirement. The district court’s perfectly

appropriate decision not to decide a question it did not have to

decide did not disadvantage McKinley in any way. Cf. Earle v.

Dist. of Columbia, 707 F.3d 299, 304 (D.C. Cir. 2012) (“In our

circuit it is a venerable practice, and one frequently observed, to

assume arguendo the answer to one question . . . in order to

resolve a given case by answering another and equally

dispositive one.” (citation and internal quotation marks

omitted)). If McKinley has a claim on appeal, then, it is limited

to his challenge to the court’s determination that he was not

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entitled to attorneys’ fees. We therefore move directly to that

question.

This circuit has long applied a multi-factor standard for

evaluating whether a plaintiff who is eligible for attorneys’ fees

is also entitled to such fees. See, e.g., Nationwide Bldg. Maint.,

Inc. v. Sampson, 559 F.2d 704, 712, 714 (D.C. Cir. 1977). Four

non-exclusive factors typically govern the entitlement inquiry:

“(1) the public benefit derived from the case; (2) the commercial

benefit to the plaintiff; (3) the nature of the plaintiff’s interest in

the records; and (4) the reasonableness of the agency’s

withholding” of the requested documents. Tax Analysts v. U.S.

Dep’t of Justice, 965 F.2d 1092, 1093 (D.C. Cir. 1992); see

Davy v. CIA, 550 F.3d 1155, 1159 (D.C. Cir. 2008). In practice,

we have often combined the second and third factors into a

single factor assessing whether a plaintiff “has ‘sufficient

private incentive to seek disclosure’” of the documents without

expecting to be compensated for it. Davy, 550 F.3d at 1160

(quoting Tax Analysts, 965 F.2d at 1095). We review the district

court’s appraisal and balancing of those factors solely for abuse

of discretion. Id. at 1158; see Brayton v. Office of the U.S.

Trade Representative, 641 F.3d 521, 524 (D.C. Cir. 2011).

The first factor considers the significance of the

contribution that the released information makes to the fund of

public knowledge. See Cotton, 63 F.3d at 1120. The district

court found that this first factor “strongly counsels” against

awarding fees, reasoning that the two documents McKinley

ultimately obtained were so heavily redacted that they

contributed only “scant” information to the public record. 

Attorneys’ Fees Opinion, slip op. at 4. We detect no abuse of

discretion in that finding.

Of the thirteen redacted pages that the FHFA produced,

McKinley draws our attention to just three unredacted phrases

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in the first document that he claims contribute to the fund of

public knowledge: “public perception,” “unsafe or unsound

practices,” and “labor intensive.” He maintains that those

phrases publicly disclose, for the first time, the considerations

that played a role in the agency’s decision to place Fannie Mae

and Freddie Mac into conservatorships. Appellant’s Br. 16. 

But, in context, it is not at all clear what those phrases mean. 

The first document is a table with a “topic” column and two

side-by-side columns concerning receiverships and

conservatorships respectively. See Joint Status Report,

Attachment A. On the face of the document, the three phrases

appear to be nothing more than boilerplate terms used to

compare the strengths and weaknesses of any receivership and

any conservatorship in any case. Moreover, because the phrases

are contained in a document marked “draft,” it is not clear that

they played a role in the agency’s final decision. Nor does

McKinley argue that, even if “not of immediate public interest,”

the disclosed information “nevertheless enables further research

ultimately of great value and interest,” Davy, 550 F.3d at 1162

n.3.2

2

 With respect to the second document, McKinley does not draw

our attention to any unredacted text. Instead, he points to the date of

the document (August 18, 2008) as providing a public benefit,

contending it shows that the FHFA did not begin to analyze the

condition of Fannie Mae and Freddie Mac until three weeks before

they were placed into conservatorship. But the date of the document

cannot show what McKinley contends because the other two

documents identified by the FHFA in response to McKinley’s FOIA

request (the three-page draft that the FHFA produced and the third

document that the agency identified but McKinley did not request)

were undated. See Final Vaughn Index. Nor is creating a document

the only way in which an agency can begin to analyze an unstable

financial situation.

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The second and third entitlement factors, considered

together, address whether the plaintiff had a “sufficient private

incentive” to pursue his FOIA request even without the prospect

of obtaining attorneys’ fees. Davy, 550 F.3d at 1160 (citation

and internal quotation marks omitted). In the district court, the

agency argued that McKinley’s work as a regulatory policy

expert gave him a commercial incentive to seek disclosure of the

documents. Attorneys’ Fees Opinion, slip op. at 5. McKinley

argued that he had no commercial incentive and that his interest

was purely academic. Id. On appeal, he maintains that his

academic interest put him in the same position as the plaintiff in

Davy, a case in which we held that the district court abused its

discretion by concluding that the plaintiff’s “scholarly interest”

“weighed against” him in the award of fees. 550 F.3d at 1161-

62. 

Even if we assume arguendo that McKinley has the same

status as Mr. Davy -- an assumption we make to avoid deciding

a question we need not decide -- Davy does not help McKinley’s

case. Here, the district court did not conclude that the second

and third factors “weighed against” the award of fees. Davy,

550 F.3d at 1162 (emphasis added). Rather, it found that they

“neither strongly support . . . nor counsel against” the award of

fees. Attorneys’ Fees Opinion, slip op. at 5. This conclusion is

neither inconsistent with Davy nor an abuse of discretion. The

same is true of the court’s further finding that, “when viewed in

relation to the lack of a quantifiable public benefit, the [two]

factors do little to advance Plaintiff’s position.” Id. (emphasis

added).

The fourth and final factor “considers whether the agency’s

opposition to disclosure had a reasonable basis in law” and

“whether the agency had not been recalcitrant in its opposition

to a valid claim or otherwise engaged in obdurate behavior.”

Davy, 550 F.3d at 1162 (citation and internal quotation marks

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omitted). McKinley concedes, as the district court found, that

the FHFA’s opposition to disclosure was neither legally

unreasonable nor obdurate. See Appellant’s Br. 18-19

(“McKinley does not dispute that FHFA had a colorable or

reasonable basis for withholding the information.”); cf.

Chesapeake Bay Found., Inc. v. Dep’t of Agric., 11 F.3d 211,

216 (D.C. Cir. 1993) (holding that “the Government need only

have ‘a colorable basis in law’ for the court to consider the

‘reasonable basis in law’ factor in determining a FOIA

plaintiff’s entitlement to attorneys’ fees” (citation omitted)).

The district court pointed out that it had “countenanced the

[agency’s] argument that the documents were protected, either

in whole or in part, by the deliberative process privilege.” 

Attorneys’ Fees Opinion, slip op. at 5. Indeed, the court ruled

that the agency had properly invoked the deliberative process

privilege for the two documents, McKinley, 789 F. Supp. 2d at

88-89; instructed the agency to determine whether segregation

and disclosure of non-privileged factual information was

possible, McKinley, slip op. at 3-4 (Aug. 26, 2011); and then

granted summary judgment based on the determinations the

agency made, McKinley, 2012 WL 1415518, at *2-3 (Jan. 25,

2012). Moreover, although the court “ultimately found that the

work product privilege was too attenuated to justify blanket

protection of the documents,” it “noted that the assertion of the

work product privilege was not wholly untenable given the

documents’ mention of the possibility for future litigation.” 

Attorneys’ Fees Opinion, slip op. at 5. In the court’s view, “it

was not unreasonable to assert the privilege as a basis for

withholding the information.” Id. at 6. As we have noted,

McKinley does not dispute the point. 

Nor was the agency recalcitrant or obdurate. It responded

to McKinley’s FOIA request within twenty working days by

seeking clarification of the scope of the request. Just one month

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later, it reported the results of its search to McKinley. And

when the district court directed it to consider segregability with

respect to the two documents, the agency responded within three

weeks. On this record, the court’s determination that the fourth

“factor strongly favors against awarding fees and costs,” id. at

6, was well within its discretion.

Given that we have found no abuse of discretion in the

district court’s assessment of each of the factors of the

entitlement inquiry, it should come as no surprise that we

likewise find no abuse in the court’s final balancing. With the

first and fourth factors “strongly” weighing against fees, and the

remaining factors “do[ing] little to advance Plaintiff’s position,”

we could hardly find an abuse of discretion in the court’s

ultimate determination that, based on a “careful balance of the

relevant factors . . . Plaintiff is not entitled to receive an award

of fees and costs.” Attorneys’ Fees Opinion, slip op. at 5-6.

III

For the foregoing reasons, the judgment of the district court

is

Affirmed.

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