Case 1:11-cv-00408-ABJ Document 85

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA __________________________________________ ) UNITED WESTERN BANK, ) ) Plaintiff, ) ) v. ) ) OFFICE OF THE COMPTROLLER, ) OF THE CURRENCY, et al., ) ) Defendants. ) __________________________________________)

CIVIL ACTION

Case No. 11-408 (ABJ)

FDIC-CORPORATES MOTION FOR RECONSIDERATION On February 24, 2012, the Court entered an order addressing the in camera submission of certain documents by the Federal Deposit Insurance Corporation in its corporate capacity (FDIC-C). The Court directed that certain FDIC Board materials unrelated to United Western be withheld, but directed the release of other documents. Specifically, the Court found that an attachment to an October 25, 2012 Case Memorandum submitted to the Board entitled Cost Test Summary was not protected by the bank examination privilege and directed its release. The FDIC-C respectfully requests reconsideration of that decision. The Court held that the Cost Test Summary document contains financial information that is purely factual and does not involve agency opinions or recommendations. The FDIC-C respectfully submits that the document contains agency opinions and analysis protected by the bank examination and deliberative process

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privileges.1 The document is prepared to aid the Boards decision on whether to authorize the FDICs Division of Resolutions and Receiverships to act as a receiver, and inform the Board regarding the likely effect of such an appointment on the FDICs Deposit Insurance Fund. Overall, the document reflects the FDICs evaluation and analysis of the estimated costs of resolving United Western in a liquidation proceeding. The document relies on estimates prepared by the FDIC that apply the FDICs confidential internal analytic models to several pieces of data, some of which were supplied by United Western and some of which were generated internally by the FDIC. That analysis, therefore, is not simply factual; rather, it represents the sort of opinion and analysis traditionally protected by the deliberative process and bank examination privileges. See, e.g., Hinckley v. United States, 140 F.3d 277, 284 (D.C. Cir. 1998) (evaluations of evidence protected by deliberative process privilege); see also Lahr v. National Transp. Safety Bd., 569 F.3d 964, 983 (9th Cir. 2009) (analysts evaluation of . . . data, their calculations, and their thought processes protected by deliberative process privilege); Trentadue v. Integrity Committee, 501 F.3d 1215, 1227-28 (10th Cir. 2007) (deliberative process privilege privilege protects evaluation and analysis); Principe v. Crossland Sav. FSB, 149 F.R.D. 444, 450 (E.D.N.Y. 1993) (bank examination privilege clearly protects from disclosure analyses, opinions and recommendations contained in internal agency documents relating to bank examinations). Most of the Cost Test Summary pertains to or derives from these loss estimates, and the document therefore constitutes opinion-driven analysis; it does not
The FDICs proposed redactions did not expressly state that both privileges applied, but the same analysis governs, as the bank examination privilege is often described as a close cousin or within the penumbra of the deliberative process privilege, See In re Subpoena, 145 F.3d 1422, 1423 (D.C. Cir. 1998); In re Midlantic Corp. Shareholder Litig., 1994 WL 750664, *2 (D.D.C. Oct. 24, 1994). We apologize for any confusion regarding which privileges are asserted.
1

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simply recount the objective facts regarding the banks status. See, e.g., Mead Data Central v. United States Dept of Air Force, 575 F.2d 932, 934-35 (D.C. Cir. 1978) (cost comparisons prepared by agency for purposes of contracting decision are part of the evaluative process and hence are protected by deliberative process privilege); Vaughn v. Rosen, 523 F.2d 1136, 1145 (D.C. Cir. 1975) (distinguishing materials embodying the deliberative process from the raw data used in that process). Just as the cost comparisons in Mead Data were part of the agencys analysis, the asset evaluations and other analyses prepared by FDIC personnel here are protected by the deliberative process and bank examination privileges and should be withheld. The Cost Test Summary is predecisional and deliberative and sets forth the FDICs opinions and analyses reflecting confidential communications with United Western, and the FDIC-C therefore respectfully submits that it is privileged. Furthermore, as Defendants filing of March 1, 2012 shows, the document was not relied on or considered by the OTS Director in his decision to appoint a receiver for United Western, and it is therefore irrelevant to this case; it addresses the likely impact of the United Western receivership on the FDICs Deposit Insurance Fund, not whether the OTS should appoint a receiver. There are therefore are no grounds for overriding those privileges for the Cost Test Summary.2 Hence, the FDIC-C respectfully requests that the Court reconsider its February
2

Plaintiff contends, see Docket No. 84 at 2-3, that the FDICs Board materials should be included in the administrative record because they were before the Director of the Office of Thrift Supervision (OTS). The relevant question, however, is whether they were before the agency at the time the decision was made, Environmental Defense Fund, Inc. v. Costle, 657 F.2d 275, 284 (D.C. Cir. 1981) (emphasis added)i.e., whether they were considered or relied upon by in the agency in its decision. Documents that are provided to a decisionmaker several months before the decision (the Case Memorandum was dated October 25, 2010; the FDIC was appointed on January 21, 2011), but not included in the package of materials reviewed at the time of the decision, need not be part of the record. See Franklin Sav. Assn v. OTS, 934 F.2d 1127, 1139-40 (10th Cir. 1991) (The director is not required to review every document arguably related to the troubled institution in question, nor is a reviewing court.).

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24, 2012 ruling directing Defendants to release that document to Plaintiff. The FDIC-C has discussed this motion with the parties. Plaintiff opposes this motion. Defendants take no position. Respectfully submitted, COLLEEN J. BOLES Assistant General Counsel BARBARA SARSHIK Senior Counsel _____/s/__________________________ DUNCAN N. STEVENS D.C. Bar No. 473550 Counsel Federal Deposit Insurance Corporation 3501 N. Fairfax Drive, D-7028 Arlington, VA 22226 dstevens@fdic.gov (703) 562-2402 (phone) (703) 562-2477 (fax) dstevens@fdic.gov Attorney for Federal Deposit Insurance Corporation in its corporate capacity March 6, 2012

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA __________________________________________ ) UNITED WESTERN BANK, et al., ) ) Plaintiffs, ) ) v. ) ) OFFICE OF THE COMPTROLLER ) OF THE CURRENCY, et al., ) ) Defendants. ) __________________________________________) ORDER The Federal Deposit Insurance Corporation, in its corporate capacity (FDIC-C), has moved for reconsideration of the portion of the Courts February 24, 2012 order directing release of an FDIC document, the Cost Test Summary. Plaintiff opposes the motion. After careful consideration, the motion is GRANTED. Defendants are directed to withhold the Cost Test Summary from production. BY THE COURT:

CIVIL ACTION

Case No. 11-408 (ABJ)

____________________________________ HON. AMY BERMAN JACKSON UNITED STATES DISTRICT JUDGE

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Copies to: Andrew L. Sandler Samuel John Buffone Liana R. Prieto BUCKLEYSANDLER LLP 1250 24th Street, NW Suite 700 Washington, DC 20037 Kirby D. Behre PAUL, HASTINGS, JANOFSKY & WALKER, LLP 875 15th Street, NW 10th Floor Washington, DC 20005-2221 Theodore J. Abariotes UNITED WESTERN BANCORP, INC. 700 17th Street Suite 750 Denver, CO 80202 Julie L. Williams Christopher A. Sterbenz OFFICE OF THE COMPTROLLER OF THE CURRENCY 250 E Street, SW Washington, DC 20219 Duncan Norman Stevens FEDERAL DEPOSIT INSURANCE CORPORATION 3501 Fairfax Drive Arlington, VA 22226 Merritt A. Pardini FEDERAL DEPOSIT INSURANCE CORPORATION 3501 Fairfax Drive Arlington, VA 22226