Board of Governors of The Federal Reserve Summary Judgment Motion

Case 1:09-cv-01263-ESH Document 27 Filed 02/01/10 Page 1 of 2
UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA
)
VERN McKINLEY, )
)
Plaintiff, )
)
v. ) Case. No. 1:09-CV-1263
)
FEDERAL DEPOSIT INSURANCE ) Judge Ellen S. Huvelle (ESH)
CORPORATION, )
)
and )
)
BOARD OF GOVERNORS OF )
THE FEDERAL RESERVE )
SYSTEM, )
Defendants. )
)
MOTION FOR SUMMARY JUDGMENT OF DEFENDANT BOARD OF

GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Pursuant to Rule 56(b) of the Federal Rules of Civil Procedure, defendant Board
of Governors of the Federal Reserve System hereby moves for summary judgment. A
memorandum in support of this motion, three declarations (including attachments), and a
proposed order accompany this motion.

Case 1:09-cv-01263-ESH Document 27 Filed 02/01/10 Page 2 of 2
Dated: February 1, 2010 Respectfully submitted,
KATHERINE H. WHEATLEY TONY WEST

DC Bar No. 359037 Assistant Attorney General
Associate General Counsel
JOHN L. KURAY /s/ C. Lee Reeves_________________
Senior Counsel JOHN TYLER
YVONNE F. MIZUSAWA Assistant Branch Director, Federal Programs
Senior Counsel Branch
Board of Governors of the Federal C. LEE REEVES
Reserve System Trial Attorney, Department of Justice, Civil
20th and C Streets, N.W. Division, Federal Programs Branch
Washington D.C. 20551 20 Massachusetts Avenue, N.W.
(202) 452-3789 Washington, D.C. 20530
Fax (202) 736-5615 Tel: (202) 514-4805
Fax: (202) 616-8470
lee.reeves@usdoj.gov
Attorneys for Defendant Board of

Governors of the Federal Reserve System
2
Case 1:09-cv-01263-ESH Document 27-1 Filed 02/01/10 Page 1 of 33

)
VERN McKINLEY, )
)
Plaintiff, )
)
v. ) Case. No. 1:09-CV-1263
)
CORPORATION, )
)
and )
)
SYSTEM, )
Defendants. )
)
MEMORANDUM IN SUPPORT OF SUMMARY JUDGMENT MOTION OF

DEFENDANT BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM

Associate General Counsel JOHN TYLER
JOHN L. KURAY Assistant Branch Director, Federal Programs
YVONNE F. MIZUSAWA C. LEE REEVES
Senior Counsel Trial Attorney, Department of Justice, Civil
Board of Governors of the Federal Division, Federal Programs Branch
Reserve System 20 Massachusetts Avenue, N.W.
20th and C Streets, N.W. Washington, D.C. 20530
Washington D.C. 20551 Tel: (202) 514-4805
(202) 452-3789 Fax: (202) 616-8470
Fax (202) 736-5615 lee.reeves@usdoj.gov

TABLE OF CONTENTS
PRELIMINARY STATEMENT ..................................................................................................1
BACKGROUND ............................................................................................................................2
ARGUMENT ..................................................................................................................................5
I. Statutory Background And Standard Of Review .....................................................5
II. The Board Conducted An Adequate Search For Responsive Documents ...............7
A. The Bear Stearns Document Repository ......................................................7
B. Processing of the FOIA Request ..................................................................9
III. The Board Properly Withheld Records Under Applicable FOIA Exemptions ......11
A. The Board Processed And Released All Reasonably Segregable

Information From The Responsive, Non-Exempt Records .......................11
B. The Federal Reserve Properly Withheld Pre-Decisional, Deliberative

Documents Related To Its Decision To Authorize The Temporary Loan,
As Well As Attorney Work Product, Pursuant To Exemption 5 ...............12
1. Deliberative Process Privilege ................................................12
2. Attorney Work Product ............................................................18
C. The Board Properly Withheld The Identities Of Firms With Exposure To

Bear Stearns, As Well As Data Regarding The Magnitude Of Such
Exposure, Pursuant To Exemption 4 .........................................................19
D. The Board Properly Withheld Information Pursuant To Exemption 8 ......22
CONCLUSION ............................................................................................................................26
i
TABLE OF AUTHORITIES
CASES
Bd. of Trade v. Commodity Futures Trading Comm’n.,
627 F.2d 392 (D.C. Cir. 1980) .......................................................................................... 20
Bloomberg, L.P. v. United States Securities & Exchange Comm’n.,
357 F. Supp. 2d 156 (D.D.C. 2004) .................................................................................. 25
Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena,
40 F.R.D. 318 (D.D.C. 1966)............................................................................................ 13
Chem. Mfrs. Ass’n v. Consumer Prod. Safety Comm’n,
600 F. Supp. 114 (D.D.C. 1984) ....................................................................................... 14
*Coastal States Gas Corp. v. Dep’t of Energy,
617 F.2d 854 (D.C. Cir. 1980) .................................................................................... 14, 15
*Consumers Union of U.S., Inc. v. Heimann,
589 F.2d 531 (D.C. Cir. 1978) .................................................................................... 23, 24
*Critical Mass Energy Project v. Nuclear Regulatory Comm’n,
975 F.2d 871 (D.C. Cir. 1992) .............................................................................. 20, 22, 23
Ctr. for Nat’l Sec. Studies v. U.S. Dep’t of Justice,
331 F.3d 918 (D.C. Cir. 2003) ............................................................................................ 7
Delaney, Migdail & Young v. Internal Revenue Serv.,
826 F.2d 124 (D.C. Cir. 1987) .......................................................................................... 19
Department of the Interior v. Klamath Water Users Protective Ass’n,
532 U.S. 1 (2001) .............................................................................................................. 13
Dudman Comm. Corp. v. Dep’t of the Air Force,
815 F.2d 1565 (D.C. Cir. 1987) ........................................................................................ 15
ii
EPA v. Mink,
410 U.S. 73 (1973) ............................................................................................................ 13
Elec. Priv. Info. Ctr. v. DHS,
No. 1:04cv1625 (D.D.C.) (Dec. 22, 2006)........................................................................ 17
FBI v. Abramson,
456 U.S. 615 (1982) ........................................................................................................ 6, 7
FTC v. Grolier, Inc.,
462 U.S. 19 (1983) ............................................................................................................ 19
Formaldehyde Inst. v. HHS,
889 F.2d 1118 (D.C. Cir. 1989) ........................................................................................ 14
*Gregory v. Fed. Deposit Ins. Corp.,
631 F.2d 896 (D.C. Cir. 1980) .............................................................................. 23, 25, 26
Ground Saucer Watch, Inc. v. CIA,
692 F.2d 770 (D.C. Cir. 1981) ............................................................................................ 7
Hopkins v. U.S. Dep’t of Housing and Urban Dev.,
929 F.2d 81 (2d Cir. 1991)................................................................................................ 14
John Doe Agency v. John Doe Corp.,
493 U.S. 146 (1989) ........................................................................................................ 6, 7
Judicial Watch v. Export-Import Bank,
108 F. Supp. 2d 19 (D.D.C. 2000) .................................................................................... 14
Kintera, Inc. v. Convio, Inc.,
219 F.R.D. 503 (S.D. Cal. 2003) ...................................................................................... 18
*Mead Data Cent., Inc. v. Dep’t of the Air Force,
575 F.2d 932 (D.C. Cir. 1978) .......................................................................................... 16
iii
Meeropol v. Meese,
790 F.2d 942 (D.C. Cir. 1986) ............................................................................................ 7
Mermelstein v. SEC,
629 F. Supp. 672 (D.D.C. 1986) ....................................................................................... 25
Montrose Chemical Corp. of California v. Train,
491 F.2d 63 (D.C. Cir. 1974) ............................................................................................ 15
NLRB v. Robbins Tire & Rubber Co.,
437 U.S. 214 (1978) ............................................................................................................ 6
*NLRB v. Sears, Roebuck & Co.,
421 U.S. 132 (1975) .................................................................................. 12, 13, 16, 17, 18
Nat’l Community Reinvestment Coalition v. Nat’l Credit Union Admin.,
290 F. Supp. 2d 124 (D.D.C. 2003) .................................................................................. 23
*Nat'l Parks and Conservation Ass’n v. Morton,
498 F.2d 765 (D.C. Cir. 1974) .................................................................................... 20, 22
North Dartmouth Properties, Inc. v. HUD,
984 F. Supp. 65 (D. Mass. 1997) ...................................................................................... 18
Oglesby v. U.S. Dep’t of the Army,
920 F.2d 57 (D.C. Cir. 1990) ........................................................................................ 7, 11
Pacific Fisheries, Inc. v. United States,
539 F.3d 1143 (9th Cir. 2008) .......................................................................................... 18
Perry v. Block,
684 F.2d 121 (D.C. Cir. 1982) ...................................................................................... 7, 11
Pub. Citizen Health Research Group v. FDA,
704 F.2d 1280 (D.C. Cir. 1983) ........................................................................................ 19
iv
Quarles v. Department of Navy,
893 F.2d 390 (D.C. Cir. 1990) .......................................................................................... 15
Renegotiation Bd. v. Grumman Aircraft Eng’g Corp.,
421 U.S. 168, 95 S. Ct. 1491 (1975) ................................................................................. 12
Rockwell Intern. Corp. v. DOJ,
235 F.3d 598 (D.C. Cir. 2001) .......................................................................................... 13
SafeCard Servs., Inc. v. SEC,
926 F.2d 1197 (D.C. Cir. 1991) .......................................................................................... 7
Schiller v. NLRB,
964 F.2d 1205 (D.C. Cir. 1992) ........................................................................................ 19
In re Sealed Case,
121 F.3d 729 (D.C. Cir. 1997) .......................................................................................... 13
In re Sealed Case,
146 F.3d 881 (D.C. Cir. 1998) .......................................................................................... 18
Summers v. Dep’t of Justice,
140 F.3d 1077 (D.C. Cir. 1998) .......................................................................................... 8
U.S. ex rel. Bagley v. TRW, Inc.,
212 F.R.D. 554 (C.D. Cal. 2003) ...................................................................................... 18
Vaughn v. Rosen,
523 F.2d 1136 (D.C. Cir. 1975) ........................................................................................ 14
Washington Post Co. v. U.S. Dep’t of Health & Human Servs.,
690 F.2d 252 (D.C. Cir. 1982) .......................................................................................... 19
Weisberg v. U.S. Dep’t of Justice,
745 F.2d 1476 (D.C. Cir. 1984) .......................................................................................... 7
v
Wolf v. CIA,
473 F.3d 370 (D.C. Cir. 2007) ............................................................................................ 8
STATUTES
5 U.S.C. § 551(2) .......................................................................................................................... 20
5 U.S.C. §552(a)(4)(B) ................................................................................................................... 8
5 U.S.C. § 552(b) ...................................................................................................................... 6, 11
5 U.S.C. § 552(b)(4) ............................................................................................................. 5, 6, 19
5 U.S.C. § 552(b)(5) ..................................................................................................................... 12
5 U.S.C. § 552(b)(6)………………………………………………………………………………5
5 U.S.C. § 552(b)(8) ............................................................................................................ 5,23, 24
12 U.S.C. §§ 324, 325 ................................................................................................................... 20
12 U.S.C. § 1844(c) ...................................................................................................................... 20
Fed. R. Civ. P. 26(b)(3)................................................................................................................. 18
vi
PRELIMINARY STATEMENT
This action arises out of a Freedom of Information Act (―FOIA‖) request that the
Plaintiff, Vern McKinley (―McKinley‖ or ―Plaintiff‖), submitted to Defendant Board of
Governors of the Federal Reserve System (―Federal Reserve‖ or ―Board‖), seeking
documents related to the Federal Reserve‘s March 14, 2008 decision to extend a loan to
Bear Stearns & Co. (―Bear Stearns‖) through JP Morgan Chase & Co. (―JPMC‖). In
particular, Plaintiff sought ―further detail on information contained in the . . . minutes of
the Board of Governors of the Federal Reserve dated March 14, 2008 [including] any
supporting memos or other information that detail ‗the expected contagion that would
result from the immediate failure of Bear Stearns‘ and the related conclusion that ‗this
action was necessary to prevent, correct, or mitigate serious harm to the economy or
financial stability‘ as described in the meeting minutes.‖ See Pl‘s. Compl. at ¶ 18 (Dkt.
#1). Defendant Board moves for summary judgment pursuant to Rule 56(b) of the
Federal Rules of Civil Procedure.
As outlined below and in the attached declaration of Alison M. Thro, Senior
Counsel in the Board‘s Legal Division, executed January 28, 2010 (―Thro Decl.‖), the
Board conducted a thorough search for responsive documents. The Board has released
all responsive documents to the Plaintiff except for certain documents or portions of
documents that the Federal Reserve withheld based on statutory exemptions. As
explained in the Thro declaration and in the attached declarations of Coryann Stefansson,
Associate Director of the Board‘s Division of Banking Supervision and Regulation,
executed January 29, 2010 (―Stefansson Decl.‖) and Margaret Celia Winter, Freedom of
Information Act and Privacy Act Officer, U.S. Securities and Exchange Commission,
1
executed January 21, 2010 (―Winter Decl.‖), the Board‘s application of these exemptions
was proper, and the Federal Reserve processed and released all reasonably segregable
information. Accordingly, this Court should grant summary judgment in favor of the
Federal Reserve.
BACKGROUND
The FOIA request in this case related to the basis of an emergency loan
authorized by the Federal Reserve Board in the midst of the financial crisis. The Board‘s
action took place against a backdrop of widespread uncertainty and turmoil in the U.S.
financial markets. Starting with the deterioration of U.S. housing markets in the late
summer of 2007, and accelerating throughout 2008, financial markets experienced a
sharp rise in uncertainty over the value of structured assets. Stefansson Decl., ¶ 6. As
these assets declined in value, financial institutions, some of which held large positions in
these assets, began to experience funding pressures. Id. As uncertainty grew over the
magnitude of losses, financial institutions became increasingly unwilling to lend to each
other even against good collateral, asset prices fell, and the availability of funding in
private credit markets declined significantly. Id. Financial institutions faced severe
liquidity pressures which accelerated rapidly between mid-January and mid-March 2008.
Id.
Around March 10, 2008, Board staff began to receive information and hear
rumors that Bear Stearns was experiencing severe liquidity pressures and might have to
declare bankruptcy in the near term. Thro Decl., ¶ 3; Stefansson Decl., ¶ 7. Rumors of
Bear Stearns‘ possible bankruptcy filing unnerved trading partners and institutions
worldwide, and some pulled back from doing business with Bear Stearns. Stefansson
2
Decl., ¶ 7. On Thursday, March 13, 2008, rumors of Bears Stearns‘ failing financial
health caused its liquidity to decline sharply to levels that were not adequate to meet its
maturing obligations. Id. Later that evening, staff of the Securities and Exchange
Commission (―SEC‖) notified Board and Federal Reserve Bank of New York
(―FRBNY‖) staff that Bear Stearns would file for bankruptcy protection the following
morning. Id.
Bears Stearns‘ impending bankruptcy, and the rapidity of events that preceded it,
presented the Board with difficult policy choices in an extraordinarily compressed time
period. Although Bear Stearns was a securities broker-dealer and holding company,
Winter Decl., ¶¶ 10-11, and not a bank or bank holding company regulated by the Board,
a number of large, complex banking organizations (―LCBOs‖) and smaller depository
institutions supervised by the Board, as well as other financial institutions, had exposure
to Bear Stearns and therefore could be severely impacted by a bankruptcy filing.
Stefansson Decl., ¶ 8. Moreover, the Board was concerned about the impact of a Bear
Stearns bankruptcy on the broader financial markets, which were in fragile condition and
could be subject to chaotic unwinding in the event of a bankruptcy. Id., ¶¶ 8, 10.
Accordingly, on or around March 10, 2008, the Board, in conjunction with the
FRBNY to which the Board has delegated certain supervisory authority, rapidly began
collecting real-time data on the exposure of various financial institutions to Bear Stearns,
and other information, in an effort to assess the gravity of the situation and possible
Board responses. Much of this data was collected by Board and FRBNY bank
examination staffs from supervised financial institutions through the bank examination
process, which is considered by the Board and the regulated institutions to be sensitive
3
and highly confidential. Stefansson Decl., ¶¶ 4, 13-15. Other confidential commercial
information was collected from market participants on a voluntary basis on the
understanding that the Board would maintain the data in strictest confidence. Thro Decl.,
¶ 20. The Board reached out to the SEC for additional data gathered through that
agency‘s voluntary Consolidated Supervised Entity (―CSE‖) program to gauge its
response to the mounting crisis. Winter Decl., ¶ 10-11. All of this data, together with
additional information discussed below, informed the Board‘s ultimate decision on
March 14, 2008 to extend a short-term temporary loan to Bear Stearns through JPMC
(the ―Temporary Loan‖).1
As detailed below and in the attached Thro Decl., in response to the Plaintiff‘s
FOIA request, Board staff thoroughly searched a specially-created, comprehensive
repository of all documents related to the Bear Stearns loans, and conducted multiple
reviews of potentially responsive materials. As a result of that search, by letter dated
August 11, 2009, the Secretary of the Board released in full approximately 120 pages of
responsive, non-exempt information to the Plaintiff. Thro Decl., ¶ 9 and Exh. D.
By letter dated September 30, 2009, the Associate Secretary of the Board
informed the Plaintiff that the Board had completed its review and identified 238
additional responsive pages. Thro Decl., ¶ 10 and Exh. E. Of these 238 pages, 48 pages
were produced in full to the Plaintiff (with bates numbers ending in 00002-03, 06, 10, 14-
16, 18-19, 24-28, 36-37, 40, 42, 45-50 and 215-238)); 27 pages were provided with
redactions generally consisting of the identities of financial institutions and/or their
1
The Temporary Loan, authorized on March 14, 2008, was replaced two days later by a
loan to facilitate JPMC‘s acquisition of Bear Stearns (the ―Acquisition Loan‖). Thro
Decl., ¶ 3. The plaintiff‘s request seeks documents relating only to the Temporary Loan.
Id., ¶ 6 and Exh. A.
4
exposure to Bear Stearns; and 163 pages, consisting primarily of charts and/or supporting
data and legal memoranda, were withheld in full. Thro Decl., ¶¶ 15-16. Portions of 7 of
the redacted pages, and one of the full withheld pages, were referred to the SEC for a
FOIA determination. Thro Decl., ¶ 16; Winter Decl., ¶ 4.
With respect to the information withheld in full or in part, the September 30 letter
explained to Plaintiff that the Board had determined that those documents contained
exempt information pursuant to exemptions 4, 5, 6, and 8 of the Act, respectively 5
U.S.C. §§ 552(b)(4), (b)(5), (b)(6), and (b)(8). The Board enclosed all reasonably
segregable nonexempt information and informed Plaintiff that potentially responsive
documents containing information that originated with the SEC were being referred to the
SEC, along with a copy of his FOIA request, for final disposition.
By letter dated January 7, 2010, the SEC notified Plaintiff that it would withhold
in full the materials referred to it by the Board under FOIA exemptions 5 and 8, 5 U.S.C.
§§ 552(b)(5) and (b)(8), and provided a copy of its letter to the Board. See Thro Decl., ¶
11; Winter Decl., ¶ 5 and Attach. B.
In his lawsuit, filed July 8, 2009, Plaintiff challenges the validity of the Board‘s
decision to withhold documents in full or in part pursuant to 5 U.S.C. §§ 552(b)(4),
(b)(5), and/or (b)(8).
ARGUMENT
I. STATUTORY BACKGROUND AND STANDARD OF REVIEW
The FOIA, 5 U.S.C. § 552, generally mandates disclosure, upon request, of
government records held by an agency of the federal government except to the extent
5
such records are protected from disclosure by any of nine exemptions. The ―fundamental
principle‖ that animates FOIA is ―public access to Government documents.‖ John Doe
Agency v. John Doe Corp., 493 U.S. 146, 151 (1989). ―The basic purpose of FOIA is to
ensure an informed citizenry, vital to the functioning of a democratic society, needed to
check against corruption and to hold the governors accountable to the governed.‖ NLRB
v. Robbins Tire & Rubber Co., 437 U.S. 214, 242 (1978). At the same time, Congress
recognized ―that legitimate governmental and private interests could be harmed by
release of certain types of information and provided nine specific exemptions under
which disclosure could be refused.‖ FBI v. Abramson, 456 U.S. 615, 621 (1982); see
also 5 U.S.C. § 552(b) (listing exemptions). While these exemptions are to be ―narrowly
construed,‖ Abramson, 456 U.S. at 630, courts must not fail to give the exemptions
―meaningful reach and application.‖ John Doe Agency, 493 U.S. at 152. The FOIA thus
―represents a balance struck by Congress between the public‘s right to know and the
government‘s legitimate interest in keeping certain information confidential.‖ Ctr. for
Nat’l Sec. Studies v. U.S. Dep’t of Justice, 331 F.3d 918, 925 (D.C. Cir. 2003).
Summary judgment is the procedure by which courts resolve nearly all FOIA
actions. ―In order to obtain summary judgment the agency must show that it made a
good faith effort to conduct a search for the requested records, using methods which can
be reasonably expected to produce the information requested.‖ Oglesby v. U.S. Dep’t of
the Army, 920 F.2d 57, 68 (D.C. Cir. 1990). ―There is no requirement that an agency
search every record system.‖ Id. ―[T]he 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. U.S. Dep’t of Justice, 745 F.2d
6
1476, 1485 (D.C. Cir. 1984); see also Meeropol v. Meese, 790 F.2d 942, 952- 53 (D.C.
Cir. 1986) (―A search is not unreasonable simply because it fails to produce all relevant
material.‖); Perry v. Block, 684 F.2d 121, 128 (D.C. Cir. 1982).
In evaluating the adequacy of a search, courts accord agency affidavits ―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); see also Ground Saucer Watch, Inc. v. CIA, 692 F.2d
770, 771 (D.C. Cir. 1981). The statute does not require ―meticulous documentation [of]
the details of an epic search.‖ Perry, 684 F.2d at 127. ―[A]ffidavits that explain in
reasonable detail the scope and method of the search conducted by the agency will suffice
to demonstrate compliance with the obligations imposed by the FOIA.‖ Id.
To sustain its burden of justifying nondisclosure of information, see 5 U.S.C. §
552(a)(4)(B), the agency must provide declarations that identify the information at issue
and the bases for the exemptions claimed. See Summers v. Dep’t of Justice, 140 F.3d
1077, 1080 (D.C. Cir. 1998). Courts review de novo the agency‘s use of a FOIA
exemption to withhold documents. Wolf v. CIA, 473 F.3d 370, 374 (D.C. Cir. 2007).
II. THE BOARD CONDUCTED AN ADEQUATE SEARCH FOR

RESPONSIVE DOCUMENTS
A. The Bear Stearns Document Repository
In response to public interest in the Board‘s transactions involving Bear Stearns,
the Board created a document repository to facilitate prompt and thorough responses to
FOIA and other requests for information regarding Bear Stearns. Thro Decl., ¶ 3. This
7
repository was searched to gather the documents responsive to the FOIA request. Id.,
12.
In creating the repository, members of the Board‘s Legal Division contacted
approximately 80 Board staff members in seven divisions (Monetary Affairs, Reserve
Bank Operations and Payment Systems, Office of Board Members, Office of the
Secretary, Legal, International Finance, and Bank Supervision and Regulation) who were
involved in any aspect of JPMC‘s acquisition of Bear Stearns and the Board‘s
authorization of the Temporary Loan or the Acquisition Loan. Id., ¶ 4. Board Legal
Division staff identified these Board staff members by starting with a core group of
persons who had been involved in these matters and asking them, and subsequent
interviewees, to identify any other Board staff who might have responsive documents.
Using this procedure, the Board indentified all individuals likely to have relevant
documents. All of these staff members were then asked to forward any documents
relating to the Bear Stearns transactions to the Legal Division for inclusion in the
repository. Board members were also contacted and requested to provide responsive
documents for inclusion in the repository, and Legal Division staff worked with the
various Board members to ensure that all relevant material was provided. Id., ¶ 5.
In response to its contacts with the 80 Board and Board staff members, the Legal
Division received over 28,000 pages of information. The bulk of documents related to
the JPMC/Bear Stearns matter were generated and placed into the document repository
by the end of June 2008. The Board considered its search to be broad enough to capture
all Board documents potentially responsive to any FOIA or other request for information
8
relating to the Temporary Loan or the Acquisition Loan, including the request to the
Board at issue in this case. Id., ¶¶ 4-5.
B. Processing of the FOIA Request
Upon receipt of the FOIA request, Board personnel began the process of
identifying potentially responsive documents within the document repository. Thro
Decl., ¶ 12. The repository contained all documents reasonably likely to be responsive to
the FOIA request. Id., ¶ 5. The Board‘s most senior attorney responsible for processing
FOIA requests, Alison Thro, personally searched the repository for responsive
documents. Id., ¶¶ 1, 12. Ms. Thro reviewed the documents of approximately 31 Board
members and staff whom she believed, based on her experience processing prior, similar
FOIA requests, were most likely to have responsive documents. Id., ¶ 12. After
conducting multiple reviews of the repository, she identified a large number of
documents potentially responsive to the FOIA request. She then reviewed those
documents, narrowing the focus to materials responsive to plaintiff‘s request for
evidentiary support for the Board‘s March 14, 2008 decision to authorize the Temporary
Loan. Id., ¶ 13. In general, responsive documents included: (a) e-mails (some with
attachments) among Board and FRBNY staff and officials, and between Board and SEC
staff, conveying the latest market developments along with views and analyses; (b)
memoranda (with supporting materials) prepared by Board and FRBNY staff
documenting arguments made prior to and in support of the Board‘s March 14, 2008
decision to extend the Temporary Loan; and (c) market information obtained from non-
supervised entities by the FRBNY on a voluntary and strictly confidential basis. Thro
Decl., ¶ 13. All of this information was provided to Board or Reserve Bank staff who
9
considered the issues related to Bear Stearns‘ liquidity crisis and the Board‘s potential
response to it. Id., ¶¶ 17, 19, 22; see also Stefansson Decl., ¶¶ 11, 14.
Working with at least two other attorneys in the Board‘s Legal Division, Ms. Thro
reviewed each page carefully for exempt information. Id., ¶ 14. Redactions were not
made in a wholesale manner, but on some pages consisted of only a few words or
phrases, and full pages were withheld only when they contained no reasonably segregable
non-exempt information. Id.
Certain documents responsive to the FOIA request contained information
provided to the Board by the SEC. Thro Decl., ¶¶ 10, 16. In keeping with the Board‘s
normal process in FOIA cases, Board staff forwarded these documents to the SEC along
with a copy of Plaintiff‘s FOIA request for a FOIA determination. Id.; Winter Decl., ¶ 4.
It is plain from the Thro declaration that the Board conducted an adequate search for
responsive documents and is entitled to summary judgment on the issue. The search was
reasonably calculated to yield all documents responsive to the FOIA request, Oglesby,
supra, 920 F.2d at 68, as the Board conducted not one, but multiple layers of review. The
declarations explain in sufficient detail why the scope and method of the search were
sufficient to comply with its obligations under FOIA. Perry, supra, 684 F.2d at 127.
Accordingly, the Board‘s efforts constituted an adequate search in satisfaction of the
Board‘s obligation under FOIA.
10
III. THE BOARD PROPERLY WITHHELD RECORDS UNDER

APPLICABLE FOIA EXEMPTIONS
The Board processed the responsive records in accordance with FOIA and
withheld certain information pursuant to FOIA exemptions 4, 5, 6,2 and 8, as explained in
detail below and in the attached Declarations. The Board properly invoked these
exemptions, and processed and released all reasonably segregable information from the
responsive records. Accordingly, the Board is entitled to summary judgment.
A. The Board Processed And Released All Reasonably Segregable

Information From The Responsive, Non-Exempt Records
As required by FOIA, the Board has provided all ―reasonably segregable‖
responsive information that is not exempt from disclosure. 5 U.S.C. § 552(b). The Board
provided the Plaintiff with all material in the public domain and with all reasonably
segregable portions of releasable material. Thro Decl., ¶¶ 9, 10, 12-13. No reasonably
segregable, nonexempt portions were withheld. Id.; Winter Decl., ¶ 12. As shown on the
accompanying Vaughn index, the Board has indicated where any material was withheld
in the documents it released to Plaintiff as well as an explanation of the nature of any
information withheld. Thro Decl. ¶ 15 and Exh. F. All the material the Board withheld is
exempt from disclosure pursuant to FOIA exemptions or is so intertwined with protected
material that segregation is not possible without revealing the underlying protected
material. See Thro Decl., ¶ 14; Winter Decl., ¶ 12.
2
Plaintiff has elected not to challenged the Federal Reserve‘s withholdings made
pursuant to Exemption 6. Email of Paul J. Orfanedes to Lee Reeves, December 1, 2009
(―Plaintiff has elected not to challenge the Federal Reserve‘s redactions under Exemption
6 . . . .‖) (attached). Accordingly, the Federal Reserve does not address exemption 6 in
this brief.
11
As explained more fully below and in the attached declarations, the Board
properly withheld information that fell within the ambit of one or more FOIA
exemptions.
B. The Federal Reserve Properly Withheld Pre-Decisional, Deliberative

Documents Related To Its Decision To Authorize The Temporary Loan, As
Well As Attorney Work Product, Pursuant To Exemption 5
Exemption 5 of FOIA protects ―inter-agency or intra-agency memorandums or
letters which would not be available by law to a party . . . in litigation with the agency.‖
5 U.S.C. § 552(b)(5). By this language, Congress intended to incorporate into the FOIA
all the normal civil discovery privileges. The Supreme Court has construed this language
to ―exempt those documents . . . normally privileged in the civil discovery context.‖
NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149 (1975); see also Renegotiation Bd. v.
Grumman Aircraft Eng’g Corp., 421 U.S. 168, 184, 95 S. Ct. 1491, 1500 (1975)
(―Exemption 5 incorporates the privileges which the Government enjoys under the
relevant statutory and case law in the pretrial discovery context.‖). It therefore covers
―the attorney-client privilege, the attorney work-product privilege, or the executive
deliberative process privilege,‖ Rockwell Intern. Corp. v. DOJ, 235 F.3d 598, 601 (D.C.
Cir. 2001), the latter two of which apply here.
1. Deliberative Process Privilege
All of the documents withheld in this case are protected by the deliberative
process privilege and were properly withheld under exemption 5.3 Documents covered
by the deliberative process privilege and therefore exempt from release include those
―‗reflecting advisory opinions, recommendations and deliberations comprising part of a
3
Thro Decl., ¶¶ 17, 19, 22; Steffanson Decl., ¶ 12 (detailing documents withheld under
exemption 5 on deliberative process privilege grounds).
12
process by which governmental decisions and policies are formulated.‘‖ NLRB. v. Sears,
Roebuck & Co., 421 U.S. 132, 150 (1975) (quoting Carl Zeiss Stiftung v. V.E.B. Carl
Zeiss, Jena, 40 F.R.D. 318, 324 (D.D.C. 1966)); In re Sealed Case, 121 F.3d 729, 737
(D.C. Cir. 1997) (same). As the Supreme Court has explained:
The deliberative process privilege rests on the obvious realization that

officials will not communicate candidly among themselves if each remark
is a potential item of discovery and front page news, and its object is to
enhance the quality of agency decisions by protecting open and frank
discussion among those who make them within the Government.
Department of the Interior v. Klamath Water Users Protective Ass’n, 532 U.S. 1, 8-9
(2001) (internal quotation marks and citations omitted). ―[E]fficiency of Government
would be greatly hampered if, with respect to legal and policy matters, all Government
agencies were prematurely forced to ‗operate in a fishbowl.‘‖ EPA v. Mink, 410 U.S. 73,
87 (1973).
―In deciding whether a document should be protected by the privilege [courts]
look to whether the document is ‗predecisional‘ [–] whether it was generated before the
adoption of an agency policy [–] and whether the document is ‗deliberative‘ [–] whether
it reflects the give-and-take of the consultative process.‖ Coastal States Gas Corp. v.
Dep’t of Energy, 617 F.2d 854, 866 (D.C. Cir. 1980). ―To establish that a document is
predecisional, the agency need not point to an agency final decision, but merely establish
what deliberative process is involved, and the role the documents at issue played in that
process.‖ Judicial Watch v. Export-Import Bank, 108 F. Supp. 2d 19, 35 (D.D.C. 2000)
(citing Formaldehyde Inst. v. HHS, 889 F.2d 1118, 1223 (D.C. Cir. 1989)). Documents
prepared by agency officials who ―themselves lack any authority to take final agency
13
action . . . are necessarily predecisional.‖ Hopkins v. U.S. Dep’t of Housing and Urban
Dev., 929 F.2d 81, 85 (2d Cir. 1991).
―There should be considerable deference to the [agency‘s] judgment as to what
constitutes . . . ‗part of the agency give-and-take — of the deliberative process — by
which the decision itself is made.‘‖ Chem. Mfrs. Ass’n v. Consumer Prod. Safety
Comm’n, 600 F. Supp. 114, 118 (D.D.C. 1984) (quoting Vaughn v. Rosen, 523 F.2d
1136, 1144 (D.C. Cir. 1975)). The agency is best situated ―to know what confidentiality
is needed ‗to prevent injury to the quality of agency decisions . . . .‘‖ Chem. Mfrs., 600 F.
Supp. at 118 (quoting NLRB, 421 U.S. at 151).
In this case, the vast majority of documents withheld pursuant to exemption 5
were e-mails and documents exchanged in the period of time immediately preceding the
Board‘s March 14, 2008 decision to authorize a loan to Bear Stearns. More precisely, the
Board withheld documents discussing data gathered by Board and FRBNY examiners
concerning financial institutions the Board was supervising at that time and these
institutions‘ exposure to Bear Stearns. Thro Decl., ¶ 17; Steffanson Decl., ¶¶ 11-14. As
explained more fully in the Thro declaration and the attached index, this information was
gathered for, communicated to, and discussed by Board members and Board and FRBNY
staff in the days leading up to the Board‘s decision to authorize the Temporary Loan
―because it bore on the significant issue of the potential consequences of a Bear Stearns
bankruptcy on individual financial institutions and firms and then-fragile financial
markets.‖ Thro Decl., ¶ 17. As described by Ms. Stefansson, a participant in the March
14, 2008 Board meeting and discussions that preceded it, Stefansson Decl., ¶ 11, Board
members and staff considered this information in making the decision to authorize the
14
Temporary Loan because they ―believed that a sudden, disorderly failure of Bear Stearns
would have had unpredictable, but severe, consequences on the functioning of financial
markets.‖ Id., ¶ 10. Accordingly, the withheld material is quintessentially pre-decisional
and deliberative and protected under exemption 5. Coastal States, supra, 617 F.2d at
866.
This includes certain factual material that itself is deliberative. See, e.g., Thro
Decl., Exh. F, Item 8. As the D.C. Circuit has recognized, exemption 5 ―was intended to
protect not simply deliberative material, but also the deliberative process of agencies.‖
Montrose Chem. Corp. of California v. Train, 491 F.2d 63, 71 (D.C. Cir. 1974)
(emphasis added). The D.C. Circuit has therefore held that even when requested material
is found to be factual, such material is exempt under Exemption 5 if disclosure ―would
expose an agency‘s decisionmaking process in such a way as to discourage candid
discussion within the agency and thereby undermine the agency‘s ability to perform its
functions.‖ Quarles v. Dep’t of Navy, 893 F.2d 390, 392 (D.C. Cir. 1990) (citing
Dudman Comm. Corp. v. Dep't of the Air Force, 815 F.2d 1565, 1569 (D.C. Cir. 1987)).
For example, the Board withheld in Document 8 the identities of financial institutions
about which the Board was concerned in light of Bear Stearns‘ deteriorating financial
condition. Thro Decl., Exh. F, Item 8. These are precisely the sort of facts that ―serve
primarily to reveal the ‗evaluative‘ process by which different members of the
decisionmaking chain arrive at their conclusions and what those predecisional
15
conclusions are,‖ Mead Data Cent., Inc. v. Dep't of the Air Force, 575 F.2d 932, 935
(D.C. Cir. 1978), and are thus exempt from disclosure under Exemption 5.4
The Board also withheld under exemption 5 various e-mails and their
attachments exchanged among Board and Reserve Bank staff and officials that related
to: (i) market developments and analyses related to a potential bankruptcy by Bear
Stearns; (ii) methods of obtaining information regarding financial institutions‘
exposure to Bear Stearns; (iii) proposed regulatory responses to the situation; and (iv)
arguments and considerations regarding the need for the Temporary Loan. Thro Decl.,
¶ 19; see also Stefansson Decl., ¶ 13. Because this information and these analyses
were considered by the Board, and by Board and FRBNY staff advising the Board, as
part of the ongoing process of deliberation leading up to the decision to authorize the
Temporary Loan, Thro Decl., ¶ 19, Stefansson Decl., ¶ 11, these materials were
properly withheld under exemption 5 and the deliberative process privilege. NLRB,
supra, 421 U.S. at 150 (exemption 5 protects documents ―‗comprising part of a process
by which governmental decisions and policies are formulated‘‖) (internal quotation
omitted).
As explained more fully in the Winter declaration, the Board also withheld on the
SEC‘s behalf responsive documents on deliberative process privilege grounds. These
documents contain information and communications shared on an inter-agency basis
between the staffs of the SEC and the Board and FRBNY regarding the financial
condition of Bear Stearns prior to the Board‘s authorization of the Temporary Loan.
Winter Decl., ¶ 6. These documents addressed issues that arose concerning the financial
4
The factual portions of other documents, to the degree they can be separated from the
deliberative material, were withheld pursuant to exemptions 4, 8, or both, as discussed
16
health and condition of Bear Stearns at the time, and informed the deliberations leading
up to the Board‘s decision to authorize a loan to JPMC through the discount window, and
are properly withheld under exemption 5 and the deliberative process privilege. See
Winter Decl., ¶¶ 6-8.
Last, the Board properly withheld two documents (items 35 and 36 on the Vaughn
index) under the deliberative process privilege that recount factual considerations and
legal analyses presented orally to the Board before its March 14, 2008 decision to
authorize the Temporary Loan, that were reduced to writing, and dated, after the decision.
Given the extraordinary time pressures in the days preceding the Board‘s March 14
decision, the information and analyses contained in these documents was presented orally
to the Board for its consideration in advance of the Board‘s March 14 decision regarding
Bear Stearns, and was not put into documentary form until later. See Stefansson Decl., ¶
12 (documents only created later due to ―exigencies of time‖); Thro Decl., ¶ 22 (―these
documents reflect pre-decisional, deliberative considerations‖). Because these
documents unequivocally reflect ―prior communications and the ingredients of the
decisionmaking,‖ NLRB, supra, 421 U.S. at 151, they were properly withheld as
predecisional, deliberative materials. See also Elec. Priv. Info. Ctr. v. DHS, No.
1:04cv1625 (D.D.C.) (Dec. 22, 2006) (Dkt. # 21) (e-mail generated after agency decision
that recounted deliberations preceding decision deemed pre-decisional and protected by
exemption 5); North Dartmouth Properties, Inc. v. HUD, 984 F. Supp. 65, 68 (D. Mass.
1997) (protecting under exemption 5 document ―generated after the agency‘s decision
was made, but which nonetheless reiterated the agency‘s pre-decisional deliberations‖).
infra.
17
Accordingly, this Court should sustain the Board‘s deliberative process privilege claims
pursuant to exemption 5.
2. Attorney Work Product
The attorney work product doctrine protects materials prepared by an attorney or
others in anticipation of litigation, including the materials of government attorneys
generated in litigation and prelitigation counseling. See Fed. R. Civ. P. 26(b)(3); NLRB,
supra, 421 U.S. at 154. Both ―fact‖ work product and ―opinion‖ work product are
protected. Pacific Fisheries, Inc. v. United States, 539 F.3d 1143, 1148 (9th Cir. 2008)
(citing Fed. R. Civ. P. 26(b)(3)).5 Fact work product consists of factual material that is
prepared in anticipation of litigation or trial. Kintera, Inc. v. Convio, Inc., 219 F.R.D.
503, 507 (S.D. Cal. 2003). Opinion work includes the selection, organization, and
characterization of facts that reveals the theories, opinions, or mental impressions of a
party or the party‘s representative. See id.; U.S. ex rel. Bagley v. TRW, Inc., 212 F.R.D.
554, 563 (C.D. Cal. 2003). ―Without a strong work-product privilege, lawyers would
keep their thoughts to themselves, avoid communicating with other lawyers, and hesitate
to take notes.‖ In re Sealed Case, 146 F.3d 881, 884 (D.C. Cir. 1998). The protection of
the work product doctrine continues beyond the termination of the particular situation for
which the materials were created. FTC v. Grolier, Inc., 462 U.S. 19, 28 (1983).
The phrase ―in anticipation of litigation‖ extends beyond an attorney‘s preparation
for a case in existing litigation, including as well protection for materials prepared in
anticipation of foreseeable litigation, even if no specific claim is contemplated. See
5
Importantly, ―if a document is covered by the attorney work-product privilege, the
government need not segregate and disclose its factual contents.‖ Pacific Fisheries, 539
F.3d at 1148.
18
Schiller v. NLRB, 964 F.2d 1205, 1208 (D.C. Cir. 1992); Delaney, Migdail & Young v.
Internal Revenue Serv., 826 F.2d 124, 127 (D.C. Cir. 1987).
In this case, the Board withheld a draft affidavit (item 38 of the Vaughn index)
prepared by FRBNY attorneys and conveyed to Board attorneys in anticipation of
possible litigation by Bear Stearns shareholders stemming from the Board‘s authorization
of the Temporary Loan. Thro Decl., ¶ 22 and Exh. F. Accordingly, the Board properly
declined to produce this material as attorney work product.
C. The Board Properly Withheld The Identities Of Firms With Exposure To

Bear Stearns, As Well As Data Regarding The Magnitude Of Such Exposure,
Pursuant To Exemption 4
While all of the material withheld by the Board is protected by exemption 5,
much of the factual material contained in the documents is also protected by exemption 4.
Exemption 4 applies if a tripartite test is satisfied: Records must contain information that
is (1) commercial or financial in character, (2) obtained from a person, and (3) privileged
or confidential. 5 U.S.C. § 552(b)(4).
Courts have recognized that the terms ―commercial‖ and ―financial‖ should be
given their ―ordinary meanings‖ and merely require that the submitter has a ―commercial
interest‖ in the records. See Pub. Citizen Health Research Group v. FDA, 704 F.2d 1280,
1290 (D.C. Cir. 1983) (citing Washington Post Co. v. U.S. Dep’t of Health & Human
Servs., 690 F.2d 252, 266 (D.C. Cir. 1982) and Bd. of Trade v. Commodity Futures
Trading Comm’n, 627 F.2d 392, 403 (D.C. Cir. 1980)).
Private commercial information that has been submitted to the government under
compulsion is ―confidential‖ for purposes of exemption 4 if disclosure is likely either
―(1) to impair the Government‘s ability to obtain necessary information in the future; or
19
(2) to cause substantial harm to the competitive position of the person from whom the
information was obtained.‖ Nat’l Parks and Conservation Ass’n v. Morton, 498 F.2d
765, 770 (D.C. Cir. 1974)(footnote omitted). When private commercial information is
provided to the government voluntarily, it is protected under exemption 4 ―if it is of a
kind that would customarily not be released to the public by the person from whom it was
obtained.‖ Critical Mass Energy Project v. Nuclear Regulatory Comm’n, 975 F.2d 871,
879 (D.C. Cir. 1992). These two tests recognize that exemption 4 is designed to protect
the government‘s interest in the availability and reliability of commercial and financial
information obtained from third parties as well as the interests of persons who provide
such information to the government. See id. at 877-79.
In this case, the Board withheld under exemption 4 the identities of financial
institutions and/or their exposure to Bear Stearns, as well as bid/ask spreads in select repo
markets. See Thro Decl., ¶¶ 17, 20, 21and Exh. F (items withheld under exemption 4);
Stefansson Decl., ¶ 13. There can be no question that that the institutions that provided
this information have a ―commercial interest‖ in information regarding the degree of
their exposure to Bear Stearns, or that the firms qualify as ―persons‖ under FOIA‘s broad
definition. See 5 U.S.C. § 551(2) (defining ―person‖ to include, inter alia, ―partnerships‖
and ―corporations‖). Thus, the dispositive issue for exemption 4 purposes is whether the
withheld information is ―privileged or confidential.‖
With respect to information obtained from regulated financial institutions as part
of the supervisory process, the Board is authorized by law to obtain such information.
See, e.g., 12 U.S.C. §§ 324, 325 (state member banks); 12 U.S.C. § 1844(c) (bank
holding companies). In connection with its consideration of the Bear Stearns issue, the
20
Board compelled financial entities it regulated to produce data regarding their financial
exposure to Bear Stearns. See Thro Decl., ¶ 17 (describing exemption 4 information
Board gathered on a compulsory basis); Stefansson Decl., ¶¶ 13-15. This information is
exempt under the competitive injury test of National Parks.
As explained in the Stefansson declaration, disclosure of this information would
likely cause substantial competitive harm to LCBOs because ―an LCBO‘s competitors
could use the data to assess sensitive trading relationships and credit relationships [and
thus potentially] harm the firm‘s on-going businesses activities.‖ Stefansson Decl., ¶ 15.
The declaration explains that ―[i]n an extreme case, a competitor could exploit the
information regarding exposures to weaken a specific entity and cause weaknesses in its
liquidity position, could pull or accelerate funding facilities the competitor had
outstanding to the LCBO, or could use the data to underbid the LCBO in the private
funding markets.‖ Id. A competitor also ―could inform the LCBO‘s customers and
market analysts that the LCBO faced a funding shortage, which likely would cause some
retail and commercial customers to move their business to other banks and may cause
analysts to downgrade the LCBO‘s stock.‖ Id.
Alternatively, to the degree the information obtained from supervised institutions
could be said to be provided voluntarily, it is protected under exemption 4 for two
reasons. First, the information is not customarily disclosed to the public, Stefansson
Decl. ¶ 15, so it is protected by exemption 4 under Critical Mass, supra, 975 F.2d at 879.
Second, disclosure would impair the Board‘s ability to obtain this type of information in
the future. As Ms. Stefansson attested, if the Board were to disclose this ―highly
sensitive‖ commercial information, financial institutions would be far less willing to
21
share such information with bank supervisors, including the Board, in the future.
Stefansson Decl., ¶ 15; accord Thro Decl., ¶ 17. As explained in Ms. Stefansson‘s
declaration, ―[s]upervised institutions rely on bank supervisors to protect the
confidentiality of information obtained through the supervisory process.‖ Stefansson
Decl., ¶ 15. Because disclosure would ―impair the Government‘s ability to obtain
necessary information in the future,‖ it is exempt under the first prong test of National
Parks, supra, 498 F.2d at 770.
Other firms — not supervised by the Board — voluntarily produced to the Board
information regarding their financial exposure to Bear Stearns, Thro Decl., ¶ 20, and two
institutions voluntarily provided proprietary information regarding bid/ask spreads in
select repo markets. Id., ¶ 21. This subset of information withheld under exemption 4
was furnished voluntarily on a ―strictly confidential basis,‖ id., ¶ 20, because the Board
gave assurances of confidentiality to the provider firms, either contractually or otherwise.
Id., ¶¶ 20-21 (describing exemption 4 information Board gathered on a voluntary basis);
Stefansson Decl., ¶ 15. These market participants ―do not customarily disclose this type
of information to the public.‖ Thro Decl., ¶ 20; accord Stefansson Decl., ¶ 15. Indeed,
such assurances of confidentiality would be unnecessary if the information were
―customarily released to the public.‖ Critical Mass, supra, 975 F.2d at 874. Accordingly,
this information is exempt under the test enunciated in Critical Mass, supra, and the
Board is entitled to summary judgment.
D. The Board Properly Withheld Information Pursuant To Exemption 8
Certain material withheld from disclosure, in addition to being exempt under
exemption 5 (and, in some cases, exemption 4), was also protected under FOIA
22
exemption 8.6 Pursuant to exemption 8, matters that are ―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‖ are
exempt from disclosure. 5 U.S.C. § 552(b)(8). The dual purposes of exemption 8 are to
―safeguard public confidence in [banks], which could be undermined by candid
evaluations of financial institutions . . . [and] to ensure that [banks] continue to cooperate
. . . without fear that their confidential information will be disclosed. Nat’l Community
Reinvestment Coalition v. Nat’l Credit Union Admin., 290 F.Supp.2d 124, 135-36
(D.D.C. 2003) (citing Consumers Union of U.S., Inc. v. Heimann, 589 F.2d 531, 534
(D.C. Cir. 1978)). As the D.C. Circuit has recognized for over thirty years, this
exemption is ―particularly broad‖ and ―all-inclusive;‖ it ―provides absolute protection
regardless of the circumstances underlying the regulatory agency‘s receipt or preparation
of examination, operating or condition reports.‖ Heimann, supra, 589 F.2d at 533;
Gregory v. Fed. Deposit Ins. Corp., 631 F.2d 896, 898 (D.C. Cir. 1980). Congress
therefore ―has left no room for a narrower interpretation of exemption 8.‖ Heimann, 589
F.2d at 535; accord Gregory, 631 F.2d at 898 (holding that that ―the meaning of
exemption 8 was clear and that its broad, all-inclusive scope should be applied as written
since Congress had ‗intentionally‘ and ‗unambiguously‘ so contemplated‖) (citing
Heinmann).
In this case, the Board declined to produce e-mails or tables (or portions thereof)
that contained information furnished to the Board by financial institutions regulated by
the Board. Thro Decl., ¶ 17; Stefansson Decl., ¶¶ 2, 4, 13-15. The bank supervisory
6
Unlike exemption 4, exemption 8 does not require a showing that the withheld
information was ―confidential.‖ Nor does it matter for purposes of exemption 8 whether
23
process ―is one of continual interaction and information-sharing by regulated entities with
their bank supervisors.‖ Stefansson Decl., ¶ 15. These documents constituted part of a
fast moving, real-time effort by the Board to monitor the possible impact of a Bear
Stearns bankruptcy filing on financial institutions regulated by the Board. See Stefansson
Decl., ¶¶ 4-5, 15 (discussing Board‘s ―continuous‖ monitoring of institutions it
supervised and monitoring of counterparty risk created by Bear Stearns); Thro Decl., ¶
17. As explained by Ms. Stefansson, ―Federal Reserve examiners utilizing the Board‘s
supervision authority obtained information from various LCBOs regarding their exposure
to Bear Stearns,‖ in an effort to gauge possible impact of a Bear Stearns bankruptcy on
regulated financial institutions. Stefansson Decl., ¶ 14. Accordingly, these documents
are plainly ―related to examination, operating, or condition reports‖ prepared by the
Board, a federal bank supervisory agency, 5 U.S.C. § 552(b)(8), and fall within the
―absolute protection‖ for bank examination and supervision information enunciated by
the D.C. Circuit in Heimann, supra, 589 F.2d at 533.
Similarly, the SEC withheld under exemption 8 information it gathered from Bear
Stearns ―in connection with its supervision and regulation of Bear Stearns.‖ Winter
Decl., ¶ 9; see also Thro Decl., ¶¶ 10, 11, 18 (detailing Board referral to SEC for, and
reliance upon, FOIA determination). As Ms. Winter stated, Bear Stearns was supervised
by the SEC as part of its CSE program ―that allowed the [SEC] to supervise certain
broker-dealer holding companies, including Bear Stearns, on a consolidated basis.‖
Winter Decl., ¶ 10. The CSE program ―was designed to monitor for financial or
operational weakness in a CSE holding company or its unregulated affiliates that might
place the U.S.-regulated broker-dealers and other regulated entities at risk.‖ Id. The
the disclosure to the government was ―voluntary‖ or ―mandatory.‖

24
withheld SEC materials ―relate to examination, operating, or condition reports, prepared
by, on behalf of, or for the use of the [SEC],‖ id., ¶ 12, and were properly withheld under
exemption 8. See Mermelstein v. SEC, 629 F. Supp. 672, 674 (D.D.C. 1986) (Congress
―has since given sufficient indication that it expects securities exchanges to be numbered
among [financial institutions]‖ for purposes of FOIA exemption 8).
Within these documents, the Board withheld under exemption 8 the identity of
institutions with exposure to Bear Stearns, the amount of such exposure, and/or the
activities these institutions had taken to limit their exposure to Bear Stearns. See Thro
Decl., ¶ 17; Steffanson Decl., ¶ 15. Because the withheld information is both ―contained
in and related to . . . examination, operating or condition reports‖ — namely, the very
reports and analyses the Board used to determine how it would respond to the Bear
Stearns crisis — the Board properly withheld such information pursuant to Exemption 8.
See Gregory, supra, 631 F.2d at 899 (―Financial examination into all loans and banking
relationships takes place as the agency searches for the causes of the [ ] bank‘s distress
and negotiates to protect the interests of depositors and borrowers.‖); Bloomberg, L.P. v.
United States Securities & Exchange Comm., 357 F.Supp.2d 156, 169-170 (D.D.C. 2004)
(upholding agency withholding of SEC staff notes and memoranda pursuant to exemption
8).
As noted previously, the ability of the Board to monitor and react to the Bear
Stearns crisis depended in substantial part on information furnished by financial
institutions those entities regulated — information that was provided based on strict
assurances of confidentiality. See Thro Decl., ¶ 17; Stefansson Decl., ¶¶ 14-15. The
Board‘s ability to gather such information in furtherance of its mission to regulate our
25
nation‘s banking system would inarguably be compromised if such information were now
released in breach of those assurances. Gregory, 631 F.2d 896, 899 (D.C. Cir. 1980)
(observing that exemption 8 must be construed to ensure ―frank cooperation‖ between
bank officials regulating entities); Stefansson Decl. at ¶¶ 14-15. For all of these reasons,
this Court should sustain the Board‘s exemption 8 withholdings.
CONCLUSION
For the foregoing reasons, this Court should grant the Board‘s motion for
summary judgment.
Dated: February 1, 2010 Respectfully submitted,

Associate General Counsel
JOHN L. KURAY /s/ C. Lee Reeves_________________
Senior Counsel JOHN TYLER
YVONNE F. MIZUSAWA Assistant Branch Director, Federal Programs
Board of Governors of the Federal C. LEE REEVES
Reserve System Trial Attorney, Department of Justice, Civil
20th and C Streets, N.W. Division, Federal Programs Branch
Washington D.C. 20551 20 Massachusetts Avenue, N.W.
(202) 452-3789 Washington, D.C. 20530
Fax (202) 736-5615 Tel: (202) 514-4805
Fax: (202) 616-8470
lee.reeves@usdoj.gov

26
INDEX OF WITHHELD MATERIAL
Vern McKinley FOIA Request No. 2009-164, dated Dec. 17, 2008
Responsive Documents: Information forming the basis for the Federal Reserve Board’s decision of
March 14, 2008, to authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343) the
Federal Reserve Bank of New York to extend credit to JPMorgan Chase Bank, N.A. (“JPMC”) in
connection with its acquisition of The Bear Stearns Companies, Inc. (“BS”).
Emails reflecting the collection of responsive documents by Board attorneys were redacted as non-
responsive. Duplicate emails were redacted. Some emails and other responsive material were provided
by another Federal agency; those were referred to the other agency for review and are not reflected on
this index.
References herein relate to the Board of Governors of the Federal Reserve System (“Board”); the
Federal Reserve System (“FRS”); the Federal Reserve Bank of Boston (“FRB-Boston”); the Federal
Reserve Bank of New York (“FRBNY”); the Federal Reserve Bank of Richmond (“FRB-Richmond”); the
Federal Reserve Bank of San Francisco (“FRB-San Francisco”); the Securities and Exchange Commission
(“SEC”); and Large Financial Institutions (“LFIs”).
1
Document Number: 1
Bates Range: 000001
Date: 3/10/08
Document Type: Email
From/To: FRBNY staff to FRBNY, Board, FRB-Boston, FRB-Richmond, FRB-San Francisco

staff
Subject: Priority: Bear Stearns
Exemption(s): 5
Description of withheld material: Two sentences of this email describing the method by which FRS
examiners are to obtain information from supervised institutions regarding the institutions’ exposure to
BS are redacted.
Basis for withholding: The withheld information is pre-decisional deliberative material that reveals the
Federal Reserve staff’s focus of concern as news spread of BS’s weakening financial condition, which
played a part in the Board’s deliberative process regarding how to respond to the rapidly deteriorating
financial situation at BS.
2
Document Number: 2
Bates Range: 000004
Date: 3/10/08
From/To: Board staff to Board Chairman
Subject: Bear Stearns Priority Request
Exemption(s): 6
Description of withheld material: Chairman Bernanke’s personal email address is redacted.
Basis for withholding: The Chairman has a unique email address, which is kept confidential in order to
safeguard his privacy. This reflects the Board’s procedure to protect the Chairman’s privacy interests.
3
Document Number: 3
Bates Range: 000005
Date: 3/10/08
From/To: Board staff to Board Chairman
Exemption(s): 6
4
Document Number: 4
Bates Range: 000007
Date: 3/10/08
From/To: FRBNY staff to FRBNY, FRB-Boston, Board, FRB-Richmond, FRB-San Francisco

staff
Exemption(s): 4, 5, 8
Description of withheld material: Information identifying a regulated financial institution and providing
details of its exposure to BS is redacted (portions of one paragraph and individual words in a subsequent
paragraph).
Basis for withholding: The information is confidential business information obtained from an FRS-
regulated financial institution by FRS examiners in the course of the supervisory process. Disclosure of
information such as this would likely cause substantial competitive harm to the submitter, impair the
government’s ability to obtain necessary information in the future and could chill the free flow of
information between a regulated financial institution and its supervisor. In addition, the information
was disseminated among Federal Reserve System staff as part of the Board’s pre-decisional, deliberative
process regarding how to respond to the rapidly deteriorating financial situation at BS.
5
Document Number: 5
Bates Range: 000008 (Middle)
Date: 3/11/08

staff
Subject: Priority: Bear Stearns – March 11 update
Description of withheld material: Identities of LFIs reporting their actions with respect to BS are
redacted.
Basis for withholding: The information is confidential business information obtained from FRS-regulated
financial institutions by FRS examiners in the course of the supervisory process. Disclosure of the
identities of these institutions would likely cause substantial competitive harm to the submitters, impair
the government’s ability to obtain necessary information in the future and could chill the free flow of
information between regulated financial institutions and their supervisor. In addition, the information
reveals FRS staff’s focus of concern as news spread of BS’s weakening financial condition. The
information was disseminated among FRS staff as part of the Board’s pre-decisional, deliberative
6
Document Number: 6
Bates Range: 000008-09
Date: 3/10/08

staff
Subject: Priority: Bear Stearns – March 10 update
Description of withheld material: Portions of one paragraph of text are redacted in reports from
identified supervised financial institutions regarding their activities in attempting to limit exposure to BS.
Two additional paragraphs containing supervisory information unrelated to BS were redacted.
Basis for withholding: The information concerning BS is confidential business information obtained from
FRS-regulated financial institutions by FRS examiners in the course of the supervisory process.
Disclosure of the identities of these institutions and of the types of actions they take in such
circumstances would likely cause substantial competitive harm to the submitters, impair the
information between regulated financial institutions and their supervisor. In addition, the information
reveals FRS staff’s focus of concern as news of BS’s weakening liquidity. The information was
disseminated among staff at the Board as part of the Board’s pre-decisional, deliberative process
regarding how to respond to the rapidly deteriorating financial situation at BS. The information not
concerning BS was withheld as not responsive to plaintiff’s FOIA request.
7
Document Number: 7
Date: Undated (attachment to email dated 3/13/08, Bates 000010)
Document Type: Note
From/To: N/A
Subject: BS&R’s information on Bear Stearns’ current liquidity issues as of March 13,
2008
Exemption(s): 4, 5
Description of withheld material: The identities and amount of exposure of several large mutual funds
with exposure to BS are redacted from page 000011 (3 partial lines of text).
Basis for withholding: Release of this confidential business information voluntarily obtained from a
person would likely cause substantial competitive harm to the subject companies, impair the
government’s ability to obtain necessary information in the future, or would not customarily be
disclosed to the public by the submitter. In addition, the information reveals FRS staff’s focus of concern
as news spread of BS’s weakening financial condition. The information was disseminated among staff at
the Board as part of the Board’s pre-decisional, deliberative process regarding how to respond to the
deteriorating financial situation at BS.
8
Document Number: 8
Bates Range: 000013
Date: 3/13/08
From/To: Board staff to Board staff
Subject: Bear Stearns
Exemption(s): 5
Description of withheld material: The identities of two financial firms and one regulated financial
institution are redacted.
Basis for withholding: The withheld information is pre-decisional deliberative material that reveals the
identities of institutions that FRS staff considered to be systemically important or whose failure could
have systemic consequences to the financial system as news spread of BS’s weakening financial
condition, which played a part in the Board’s deliberative process regarding how to respond to the
rapidly deteriorating financial situation at BS.
9
Document Number: 9
Bates Range: 000017
Date: 3/13/08
From/To: Board staff to Board staff
Subject: Banks’ Exposure to Bear Stearns
Description of withheld material: Identities of major banks with exposure to BS and, in one case,
amount of exposure, are redacted.
Basis for withholding: This information was obtained from FRS-regulated financial institutions by FRS
examiners as part of the supervisory process. This type of confidential commercial information, if
revealed, would likely cause substantial competitive harm to the submitter and could chill the free flow
of information between regulated financial institutions and their supervisor and impair the
government’s ability to obtain necessary information in the future. In addition, the information was
disseminated among staff at the Board as part of the Board’s pre-decisional, deliberative process
regarding how to respond to the rapidly deteriorating financial situation at BS.
10
Document Number: 10
Bates Range: 000020 and 000051 (duplicate)
Date: Undated (attached to email dated 3/13/08, Bates 000018-19)
Document Type: Table
From/To: N/A
Subject: Bear Stearns Exposure Information for LFIs
Description of withheld material: The 1-page table, which is withheld in full, identifies FRS-supervised
LFIs with exposure to BS, the amount and relative size of the each institution’s exposure, and the source
of the information.
Basis for withholding: Most of the exposure data was obtained by FRS examiners directly from
regulated financial institutions as part of the supervisory process. This type of confidential commercial
information, if revealed, would likely cause substantial competitive harm to the submitter, impair the
information between regulated financial institutions and their supervisor. The table was disseminated
among staff at the Board as part of the Board’s pre-decisional, deliberative process regarding how to
respond to the deteriorating financial situation at BS.
11
Document Number: 11
Bates Range: 000004, 21, 22, 23, 30, 31, 38 and 39
Date: 3/13/08
Document Type: Emails and attachment
From/To: Among SEC staff, FRBNY staff and Board staff
Subject: Bear Stearns Information
Exemption(s): 5, 8
Description of withheld material: Details on BS’s repo exposure to counterparties obtained on a

confidential inter-agency basis by FRS staff from SEC staff are redacted.
Basis for withholding: The withheld confidential financial information was obtained by SEC staff from BS
and communicated by SEC staff to FRS staff on a confidential inter-agency basis. The confidential
commercial information subsequently was communicated on an intra-agency basis among FRS staff as
part of the pre-decisional, deliberative process regarding how the Board would respond to the rapidly
deteriorating financial situation at BS. In addition, the SEC obtained the withheld information from BS
pursuant to its Consolidated Supervised Entity (“CSE”) program which is designed to monitor for
financial weakness in CSE holding companies. The withheld records relate to examination, operating or
condition reports prepared by, on behalf of or for the use of the SEC in connection with its supervision
and regulation of BS.
12
Document Number: 12
Bates Range: 000022 (Bottom)
Date: 3/13/08
From/To: FRBNY staff to SEC staff; FRBNY staff to Board staff; Board staff to Board staff
Subject: Bear Stearns maturity schedule
Exemption(s): 5, 8
Description of withheld material: This email seeks clarification regarding the nature and scope of BS’s
repo exposure to counterparties. One sentence revealing confidential financial information on BS
obtained on a confidential inter-agency basis by FRS staff from SEC staff is redacted.
Basis for withholding: The withheld information was communicated by SEC staff to FRS staff on a
confidential inter-agency basis and subsequently was communicated on an intra-agency basis among
FRS staff as part of the pre-decisional, deliberative process regarding how the Board would respond to
the rapidly deteriorating financial situation at BS. In addition, the SEC obtained the withheld
information from BS pursuant to its Consolidated Supervised Entity (“CSE”) program which is designed
to monitor for financial weakness in CSE holding companies. The withheld records relate to
examination, operating or condition reports prepared by, on behalf of or for the use of the SEC in
connection with its supervision and regulation of BS.
13
Document Number: 13
Bates Range: 00029
Date: 3/13/08
From/To: Board staff to Board Staff
Subject: Bear Stearns exposures
Description of withheld material: Identification of LFIs and the nature and scope of their exposure to BS
are redacted.
Basis for withholding: This confidential business information was obtained by FRS examiners from FRS-
regulated financial institutions as part of the supervisory process. Disclosure of this information would
likely cause substantial competitive harm to the submitters of the information and could chill the free
flow of information between regulated financial institutions and their supervisor. In addition, the
information was disseminated on an intra-agency basis among FRS staff as part of the pre-decisional,
deliberative process regarding how to respond to the rapidly deteriorating financial situation at BS.
14
Document Number: 14
Bates Range: 000032
Date: 3/13/08
From/To: Board staff to Board staff, including the Board’s General Counsel
Subject: Bear Stearns update
Exemption(s): 4, 5
Description of withheld material: Two sentences detailing BS’s liquidity position and Board staff’s
planned action in response are redacted.
Basis for withholding: This confidential commercial information was obtained by SEC staff from BS and
communicated on an inter-agency basis to FRS staff. The information was disseminated on an intra-
agency basis among FRS staff, including the Board’s General Counsel, as part of the pre-decisional,
deliberative process regarding how to respond to the rapidly deteriorating financial situation at BS. In
addition, release of this confidential business information obtained by SEC staff from BS would likely
cause substantial competitive harm and impair the government’s ability to obtain necessary information
in the future, and this information was not customarily released to the public by the submitter.
15
Document Number: 15
Bates Range: 000033
Date: 3/13/08
From/To: Board staff to Board members and Board staff, including the Board’s General
Counsel
Exemption(s): 4, 5
Description of withheld material: Detailed information regarding BS’s liquidity situation (5 bullet points
of text) is withheld.
Basis for withholding: This confidential commercial information was obtained by SEC staff from BS and
communicated on an inter-agency basis to FRS staff. The information was disseminated on an intra-
agency basis among FRS staff, including the Board’s General Counsel, as part of the pre-decisional,
deliberative process regarding how to respond to the rapidly deteriorating financial situation at BS. In
addition, release of this confidential business information obtained by SEC staff from BS would likely
cause substantial competitive harm and impair the government’s ability to obtain necessary information
in the future, and this information was not customarily released to the public by the submitter.
16
Document Number: 16
Bates Range: 000034 (Top)
Date: 3/13/08
From/To: Board staff to Board members and Board staff, including the Board’s General
Counsel
Exemption(s): 5
Description of withheld material: The redacted five sentences of this email describes a conversation
between Scott Alvarez, General Counsel to the Board, and a member of Board staff, regarding the
projected regulatory response to BS’s funding position, and a Board staff member’s subsequent contact
with another federal agency concerning the situation at BS.
Basis for withholding: The information consists of an intra-agency communication disseminated on an

intra-agency basis among FRS staff, including Board members and the Board’s General Counsel, as part
of the pre-decisional, deliberative process regarding how to respond to the rapidly deteriorating
financial situation at BS. A portion of the information recounts inter-agency consultations regarding the
situation at BS.
17
Document Number: 17
Date: 3/13/08
From/To: Board member to Board members and staff, including the Board’s General
Counsel
Description of withheld material: The name of a regulated LFI with exposure to BS is redacted.
18
Document Number: 18
Bates Range: 000035
Date: 3/13/08
From/To: Board member to Board member and Board staff, including the Board’s General
Counsel
Description of withheld material: The name of a regulated LFI with exposure to BS is redacted.
19
Document Number: 19
Date: 3/14/08
From/To: Board staff to Board members and staff
Subject: Bear Stearns cash flow
Exemption(s): 6
Description of withheld material: A Board staff member’s cellular telephone number is redacted.
Basis for withholding: This number is kept confidential in order to protect the staff member’s privacy
interest.
20
Document Number: 20
Bates Range: 000041
Date: Undated (attached to email dated 3/14/08, Bates 000040)
From/To: N/A
Subject: Bear Stearns projected cash flow
Exemption(s): 4, 5
Description of withheld material: This table, which is withheld in full, identifies BS’s projected cash
flows, as well as FRS-supervised LFIs with exposure to BS and the relative size of the exposure to the
institution in question.
Basis for withholding: The withheld confidential financial information was obtained by SEC staff from BS
and communicated by SEC staff to FRS staff on a confidential inter-agency basis. The confidential
commercial information subsequently was communicated on an intra-agency basis among FRS staff as
part of the pre-decisional, deliberative process regarding how to respond to the rapidly deteriorating
financial situation at BS. In addition, release of this confidential business information obtained by SEC
staff from BS would likely cause substantial competitive harm to BS’s counterparties and impair the
government’s ability to obtain necessary information in the future, and is not customarily released to
the public by the submitter.
21
Document Number: 21
Bates Range: 000043
Date: Undated (attached to email dated 3/14/08, Bates 000042)
From/To: N/A
Subject: Bear Stearns counterparty credit exposures
Description of withheld material: The table, which is withheld in full, identifies FRS-supervised LFIs and
other non-supervised, private companies with exposure to BS and the size of the exposure for each
institution in question.
Basis for withholding: A portion of the information in this table is confidential business information
obtained from FRS-regulated financial institutions by FRS examiners in the course of the supervisory
process. The remainder of this information was obtained directly or indirectly from the SEC and would
not customarily be disclosed to the public by the submitter. Disclosure of information such as this
would likely cause substantial competitive harm to the submitter or impair the government’s ability to
obtain necessary information in the future and could chill the free flow of information between a
regulated financial institution and its supervisor. In addition, the information was disseminated among
Federal Reserve System staff as part of the Board’s pre-decisional, deliberative process regarding how to
respond to the rapidly deteriorating financial situation at BS.
22
Document Number: 22
Bates Range: 000044
Date: 3/14/08
From/To: Board staff to Board member
Subject: CDS (credit default swaps)
Description of withheld material: The three lines withheld in this email identify FRS-supervised LFIs with
exposure to BS and institution-specific data regarding credit default swaps.
23
Document Number: 23
Bates Range: 000046
Date: 3/14/08
From/To: Board member to Board members and Reserve Bank Presidents
Subject: Note from Vice Chairman Kohn
Exemption(s): Redacted material released to the plaintiff in January 2010 – no exemption

claimed.
Description of withheld material: No material withheld.
24
Document Number: 24
Bates Range: 000052
Date: 3/14/08
From/To: Board staff to Board members
Subject: Quick update from LFI call
Description of withheld material: Redacted are portions of four (of five) bullet points which identify FRS-
supervised LFIs, institution-specific funding positions and institution-specific data regarding efforts to
limit the impact of exposure to BS.
25
Document Number: 25
Date: 3/14/08
From/To: FRBNY staff to Board members and FRBNY President
Subject: First draft of arguments in favor of today’s action
Exemption(s): 6
26
Document Number: 26
Date: 3/14/08
From/To: FRBNY staff to Board members and FRBNY President
Exemption(s): 5
Description of withheld material: The withheld portion of this email (all but one sentence) contains FRS
staff’s discussion recounting one of the arguments that FRS staff made in support of staff’s
recommendation that the Board authorize under section 13(3) of the Federal Reserve Act (12 U.S.C.
§ 343) FRBNY to extend credit to BS indirectly through JPMC.
Basis for withholding: The withheld information was disseminated on an intra-agency basis among
Board members and Reserve Bank staff and consists of a draft description of one aspect of the Board’s
pre-decisional, deliberative process regarding how to respond to the rapidly deteriorating financial
situation at BS.
27
Document Number: 27
Date: 3/14/08
From/To: Board member to Board members, FRBNY President and FRBNY staff
Exemption(s): 5
Description of withheld material: The withheld portion of this email (all but one sentence) was
disseminated on an intra-agency basis by a Board member to other FRS staff and consists of the Board
member’s evaluation and deliberations on FRS staff’s description recounting the arguments that were
presented by staff in support of staff’s recommendation that the Board authorize under section 13(3) of
the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend credit to BS indirectly through JPMC.
situation at BS.
28
Document Number: 28
Date: 3/14/08
From/To: FRBNY President to Board members
Exemption(s): 6
29
Document Number: 29
Date: 3/14/08
Document Type: Word document entitled “Arguments in favor of today’s action.doc” (attached
to email dated 3/14/08, Bates 000054)
From/To: N/A
Subject: Arguments in favor of today’s action by the Federal Reserve
Exemption(s): 5
Description of withheld material: This three-page document, which is withheld in full, is a draft
description of arguments FRS staff presented to the Board in support of staff’s recommendation that
the Board authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend
credit to BS indirectly through JPMC. Factual portions of the document are inextricably intertwined with
deliberative materials and there otherwise is no reasonably segregable nonexempt information.
situation at BS.
30
Document Number: 30
Date: 3/13/08
Document Type: Emails
From/To: FRBNY attorney to FRBNY General Counsel and FRBNY attorney; FRBNY General
Counsel to Board’s General Counsel; Board’s General Counsel to Board
attorneys
Subject: RMBS inquiry update
Exemption(s): 4, 5
Description of withheld material: Redacted are all but two sentences of this email which contain FRS
staff’s evaluation of certain securities pricing data used to support FRS staff’s arguments and
recommendation that the Board authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. §
343) FRBNY to extend credit to BS indirectly through JPMC. The withheld information also describes
FRBNY staff’s methods for obtaining confidential proprietary market data from financial institutions with
respect to funding positions and pricing methods.
Basis for withholding: The information contains confidential business information obtained by FRS staff
on a voluntary basis from a subset of primary dealers on the condition that the information would be
kept confidential. The information also discloses the methods FRS staff use to obtain confidential
proprietary data from financial institutions, disclosure of which would likely cause substantial
competitive injury to the submitter, impair staff’s ability to obtain this type of information in the future,
or would not customarily be disclosed to the public by the submitter. In addition, the withheld
information is pre-decisional deliberative material directly supportive of FRS staff’s recommendation
that the Board authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to
extend credit to BS indirectly through JPMC.
31
Document Number: 31
Date: 3/12/2008
Document Type: Charts (attached to email dated 3/16/08, Bates 000060)
From/To: N/A
Subject: Repo Bid/Ask Spreads; Repo Collateral Haircuts
Exemption(s): 4, 5
Description of withheld material: The charts, which are withheld in full, illustrate current and historic
pricing information in the repo market and disclose the sources of the information. Also, one page
describes how the information was obtained and the significance of the information to the Board’s
decision to authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend
credit to BS indirectly through JPMC.
Basis for withholding: The withheld information consists of confidential business data obtained on a
strictly confidential and voluntary basis by FRS staff from a subset of primary dealers, release of which
would likely cause substantial competitive injury to the submitter, impair the ability of FRS staff to
obtain this type of data in the future, or would not customarily be disclosed to the public by the
submitter. The information was transmitted on an intra-agency basis from a FRBNY attorney to a Board
attorney, and was used to support FRS staff’s arguments and recommendation that the Board authorize
under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend credit to BS indirectly
through JPMC. The factual information is inextricable from deliberative material and there otherwise is
no reasonably segregable non-exempt information.
32
Document Number: 32
Date: Undated
Document Type: Charts (attached to email dated 3/16/08, Bates 000060)
From/To: N/A
Subject: MBS price information
Exemption(s): 4, 5
Description of withheld material: Two charts and supporting data showing bid/ask liquidities in select
repo markets over a select period of time, are withheld in full.
Basis for withholding: The information was transmitted on an intra-agency basis from a FRBNY attorney
to a Board attorney, and was used to support FRS staff’s arguments and recommendation that the Board
authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend credit to BS
indirectly through JPMC. The factual information is inextricable from deliberative material and there
otherwise is no reasonably segregable non-exempt information. In addition, this information was
provided to the FRBNY pursuant to voluntary contractual arrangements which contain confidentiality
clauses, and is not customarily disclosed to the public by the submitter. Disclosure also is likely to impair
the FRBNY’s ability to obtain similar information in the future.
33
Document Number: 33
Date: 3/18/2008
From/To: FRBNY attorney to Board attorneys and FRBNY attorney
Subject: Draft affirmation
Exemption(s): 4, 5
Description of withheld material: The redacted two paragraphs (of four) describe the method by which
FRS staff obtains confidential financial information from a subset of primary dealers.
Basis for withholding: The information contains confidential business information obtained by FRS staff
on a voluntary basis from a subset of primary dealers on the condition that the information would be
kept confidential. The information also discloses the methods FRS staff use to obtain confidential
proprietary data from financial institutions, disclosure of which would likely cause substantial
competitive injury to the submitter, impair staff’s ability to obtain this type of information in the future,
or would not customarily be disclosed to the public by the submitter.
34
Document Number: 34
Date: 3/14/08
Document Type: Word document
From/To: N/A
Subject: Some arguments in favor of today’s action by the Federal Reserve
Exemption(s): 5
Description of withheld material: This three-page document, which is withheld in full, recounts FRS
staff’s arguments made in support of staff’s recommendation to the Board to authorize under section
13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend credit to BS indirectly through JPMC.
The factual information is inextricable from deliberative material and there otherwise is no reasonably
segregable non-exempt information.
Basis for withholding: The document recounts FRS staff’s pre-decisional, deliberative process directly
related to and preceding the Board’s decision. The document was distributed to Board members and
FRS staff who made recommendations to the Board on the basis of this information.
35
Document Number: 35
Date: 4/2/08
Document Type: Memorandum
From/To: Board General Counsel and Board attorneys to the Board
Subject: The authority of the Federal Reserve to provide an extension of credit to Bear
Stearns through JP Morgan Chase
Exemption(s): 5
Description of withheld material: This 16-page legal memorandum, which is withheld in full, recounts
the legal advice that was provided to the Board on and around March 14, 2008, in support of staff’s
recommendation that the Board authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. §
343) FRBNY to extend credit to BS indirectly through JPMC.
Basis for withholding: The information was legal advice provided on an intra-agency basis to the Board
by the Board’s General Counsel and Board attorneys, which presented legal arguments, made
recommendations and provided legal advice to the Board on and around March 14, 2008, as part of the
pre-decisional, deliberative process on the Board’s response to the rapidly deteriorating financial
situation at BS. The factual information is inextricable from deliberative material and there otherwise is
no reasonably segregable non-exempt information.
36
Document Number: 36
Date: 3/26/08
Document Type: Memorandum
From/To: FRBNY attorney to Board attorneys
Subject: Bear Stearns’ Illiquidity as of March 14, 2008
Exemptions: 5
Description of withheld material: This four-page memorandum, which is withheld in full, recounts the
legal advice that was provided by FRBNY legal staff to Board legal staff and was used by staff on or
around March 14, 2008, in support of staff’s recommendation that the Board authorize under section
13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend credit to BS indirectly through JPMC.
Basis for withholding: The information was legal advice shared on an intra-agency basis among legal
counsel who presented arguments, made recommendations and provided legal advice to the Board on
March 14, 2008 as part of the pre-decisional, deliberative process on the Board’s response to the rapidly
deteriorating financial situation at BS. The factual information is inextricable from deliberative material
and there otherwise is no reasonably segregable non-exempt information.
37
Document Number: 37
Date: 3/12/08
Document Type: Charts; Charts and supporting data
From/To: N/A (These materials were conveyed by a FRBNY attorney to Board attorneys
and are Annexes A and B to Document 38, below.)
Exemptions: 4, 5
Subject: Annex A: Repo Bid/Ask Spreads; Repo Collateral Haircuts; Annex B: MBS price
information
Description of withheld material: Annex A: The charts, which are withheld in full, illustrate current and
historic pricing information in the repo market and disclose the sources of the information. Also, one
page describes how the information was obtained and the significance of the information to the Board’s
decision to authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend
credit to BS indirectly through JPMC. Annex B: Two charts and supporting data showing bid/ask
liquidities in select repo markets over a select period of time, are withheld in full.
Basis for withholding: Annex A: The withheld information consists of confidential business data
obtained on a strictly confidential and voluntary basis by FRS staff from a subset of primary dealers,
release of which would likely cause substantial competitive injury to the submitter, impair the ability of
FRS staff to obtain this type of data in the future, or would not customarily be disclosed to the public by
the submitter. The information was transmitted on an intra-agency basis from a FRBNY attorney to a
Board attorney, and was used to support FRS staff’s arguments and recommendation that the Board
authorize under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend credit to BS
indirectly through JPMC. The factual information is inextricable from deliberative material and there
otherwise is no reasonably segregable non-exempt information. Annex B: The information was
transmitted on an intra-agency basis from a FRBNY attorney to a Board attorney, and was used to
support FRS staff’s arguments and recommendation that the Board authorize under section 13(3) of the
Federal Reserve Act (12 U.S.C. § 343) FRBNY to extend credit to BS indirectly through JPMC. The factual
information is inextricable from deliberative material and there otherwise is no reasonably segregable
non-exempt information.
38
Document Number: 38
Date: 3/18/08
Document Type: Draft Affidavit (This document was conveyed by a FRBNY attorney to Board
attorneys with Document 37, above.)
From/To: N/A
Subject: Repo markets
Exemptions: 4, 5
Description of withheld material: This five-page document, which is withheld in full, describes the
methods FRBNY staff used to collect confidential proprietary data from a subset of primary dealers on a
voluntary basis in order to monitor repo markets. The document also contains confidential proprietary
market data collected by FRBNY staff from primary dealers from 2007 and 2008.
Basis for withholding: The withheld information consists of confidential business data obtained on a
strictly confidential and voluntary basis by FRS staff from primary dealers, release of which would likely
cause substantial competitive injury to the submitter, impair the ability of FRS staff to obtain this type of
data in the future, or would not customarily be disclosed to the public by the submitter. In addition, it
was prepared by FRBNY attorneys in anticipation of litigation by Bear Stearns shareholders related to
the Board’s authorization to extend credit to BS indirectly through JPMC. The withheld information is
attorney work product.
39

)
VERN McKINLEY, )
)
Plaintiff, )
)
v. ) Case. No. 1:09-CV-1263
)
CORPORATION, )
)
and )
)
SYSTEM, )
Defendants. )
)
[PROPOSED] ORDER
For the reasons stated in the summary judgment memorandum and attached
declarations of Defendant Board of Governors of the Federal Reserve System, the Court
hereby GRANTS Defendant’s motion for summary judgment.
DATE: ____________________ ____________________________
UNITED STATES DISTRICT JUDGE

Board of Governors of The Federal Reserve Summary Judgment Motion

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Board of Governors of The Federal Reserve Summary Judgment Motion

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Case 1:09-cv-01263-ESH Document 27 Filed 02/01/10 Page 1 of 2

UNITED STATES DISTRICT COURT

MOTION FOR SUMMARY JUDGMENT OF DEFENDANT BOARD OF

memorandum in support of this motion, three declarations (including attachments), and a

proposed order accompany this motion.

Dated: February 1, 2010 Respectfully submitted,

KATHERINE H. WHEATLEY TONY WEST

Attorneys for Defendant Board of

UNITED STATES DISTRICT COURT

MEMORANDUM IN SUPPORT OF SUMMARY JUDGMENT MOTION OF

KATHERINE H. WHEATLEY TONY WEST

Attorneys for Defendant Board of

PRELIMINARY STATEMENT ..................................................................................................1

I. Statutory Background And Standard Of Review .....................................................5

A. The Bear Stearns Document Repository ......................................................7

B. Processing of the FOIA Request ..................................................................9

A. The Board Processed And Released All Reasonably Segregable

B. The Federal Reserve Properly Withheld Pre-Decisional, Deliberative

1. Deliberative Process Privilege ................................................12

2. Attorney Work Product ............................................................18

C. The Board Properly Withheld The Identities Of Firms With Exposure To

D. The Board Properly Withheld Information Pursuant To Exemption 8 ......22

627 F.2d 392 (D.C. Cir. 1980) .......................................................................................... 20

Bloomberg, L.P. v. United States Securities & Exchange Comm’n.,

357 F. Supp. 2d 156 (D.D.C. 2004) .................................................................................. 25

Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena,

40 F.R.D. 318 (D.D.C. 1966)............................................................................................ 13

Chem. Mfrs. Ass’n v. Consumer Prod. Safety Comm’n,

600 F. Supp. 114 (D.D.C. 1984) ....................................................................................... 14

*Coastal States Gas Corp. v. Dep’t of Energy,

617 F.2d 854 (D.C. Cir. 1980) .................................................................................... 14, 15

*Consumers Union of U.S., Inc. v. Heimann,

589 F.2d 531 (D.C. Cir. 1978) .................................................................................... 23, 24

*Critical Mass Energy Project v. Nuclear Regulatory Comm’n,

975 F.2d 871 (D.C. Cir. 1992) .............................................................................. 20, 22, 23

Ctr. for Nat’l Sec. Studies v. U.S. Dep’t of Justice,

331 F.3d 918 (D.C. Cir. 2003) ............................................................................................ 7

Delaney, Migdail & Young v. Internal Revenue Serv.,

826 F.2d 124 (D.C. Cir. 1987) .......................................................................................... 19

Department of the Interior v. Klamath Water Users Protective Ass’n,

532 U.S. 1 (2001) .............................................................................................................. 13

Dudman Comm. Corp. v. Dep’t of the Air Force,

815 F.2d 1565 (D.C. Cir. 1987) ........................................................................................ 15

410 U.S. 73 (1973) ............................................................................................................ 13

Elec. Priv. Info. Ctr. v. DHS,

No. 1:04cv1625 (D.D.C.) (Dec. 22, 2006)........................................................................ 17

456 U.S. 615 (1982) ........................................................................................................ 6, 7

FTC v. Grolier, Inc.,

462 U.S. 19 (1983) ............................................................................................................ 19

Formaldehyde Inst. v. HHS,

889 F.2d 1118 (D.C. Cir. 1989) ........................................................................................ 14

*Gregory v. Fed. Deposit Ins. Corp.,

631 F.2d 896 (D.C. Cir. 1980) .............................................................................. 23, 25, 26

Ground Saucer Watch, Inc. v. CIA,

692 F.2d 770 (D.C. Cir. 1981) ............................................................................................ 7

Hopkins v. U.S. Dep’t of Housing and Urban Dev.,

929 F.2d 81 (2d Cir. 1991)................................................................................................ 14

John Doe Agency v. John Doe Corp.,

493 U.S. 146 (1989) ........................................................................................................ 6, 7

Judicial Watch v. Export-Import Bank,

108 F. Supp. 2d 19 (D.D.C. 2000) .................................................................................... 14

Kintera, Inc. v. Convio, Inc.,

219 F.R.D. 503 (S.D. Cal. 2003) ...................................................................................... 18