# Petition for Writ of Certiorari — Clearing House Ass'n v. Fox News Network, LLC > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_2760%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2011 - **Citation:** 562 U.S. 1303 ## Text Supreme Court, U.S. FILED No. TO-t 8 tar 8 08 a ac O OFFICE OF THE CLERK IN THE Supreme Court of the United States . I. History of the Federal Reserve The tension between federal power and states rights, which so fundamentally shaped our bicam eral legislature, the electoral college, the limited jurisdiction of our federal courts, and other aspects of the United States Constitution, also is reflected in the national banking system: whether to focus national monetary policy and power in one or a few national banks, or to rely on the banking systems of each state. Alexander Hamil ton. the first Secretary of the Treasury, founded the First Bank of the United States in 1791. The bank was a private Company, created to service commercial and private needs, but empowered also to Issue a national currency, recelve tax pay ments due to the United States, and monetize and manage the national debt. The wealth it possessed combined with its ties to the federal government led to the bank’s rapid growth in national wealth and power. However, the bank was opposed by Thomas Jefferson and his Democratic-Republican party who distrusted centralized federal powe1 and favored state banking systems.° Congress let the bank’s charter lapse twenty years after it was founded. A profusion of state chartered banks arose to succeed to the functions that the national bank had performed. The state banks, with their powers to lend and to issue cur reney, created a great spread of wealth, run-away inflation, financial panic, and economic chaos. In 1816. to return the nation to solvency and stabil ity, President James Madison signed into law a Second Bank of the United States with larger cap italization than the First Bank. Denounced by President Andrew Jackson and his Democrats party, the Second Bank suffered the same fate as the first when its charter was allowed to lapse in 1836, and again was succeeded by state banks casy money, multiple issues of currency, a spread of wealth, inflation that irpassed bounds, and financial chaos. which ushered in the Pantie olf See penerally Alan Brinkley, The Untinished Nation A Concise History of the American People 161-65 (2d ed MeCiraw-Hill 1997). Elarry ‘orman & Harold C. Syrett, A History of the American People 229 (Alfred \ Knopl RHYA \ 29 1837.* Again, the nation rescued itself by an increased centralization of banking functions ond tighter regulations through the National Banking Act of 1863, and its subsequent amendments in 1864 and 1865, which chartered myriad smaller national banks and created a national currency. This legislation enabled the North to fund and equip the armies that won the Civil War.’ How- ever, these measures were insufficient to establish a truly centralized banking system. Once again, the federal system declined and was eclipsed by the state-chartered banks, leading again to run- away inflation and a succession of financial pan- ics culminating in the Panic of 1907.° The fluctuations and compromises continue until today between a central national bank, a central bank mediated by partially autonomous regional banks, and numerous state banks. The current system owes its origin to the Federal Reserve Act of 1913 (“FRA”), which capped the federal reform effort that followed the Panic of 1907.° The FRA, signed into law by Woodrow Wilson, created a number of substantially See Brinkley, supra note 2, at 210-11, 222-23, 249-52, 256-57, 259; Carman & Syrett, supra note 2. at 352 See Carman & Syrett, supra note 2, at 627; Roger T. Johnson, Historical Beginnings... The Federal Reserve 10- 12 (Public and Community Affairs Department, Federal Reserve Bank of Boston 1999). See Johnson, supra note 4, at 12-15; Robert F Bruner & Sean D. Carr, The Panic of 1907: Lessons Learned from the Market's Perfect Strom 1-7 (John Wiley & Sons, Inc. 2007). f See Bruner & Carr, supra note 5, at 141 A-23 autonomous regional banks and a federal board of governors, in charge of oversight and federal pol- icy.’ The FRBs were to be “the monetary and fiscal agents of the United States.” Fasano v. Fed. Reserve Bank of N.Y., 457 F.3d 274, 277 (38rd Cir.2006) (quoting First Agric. Nat'l Bank v. State Tax Comm'n, 392 U.S. 339, 356, 88 S.Ct. 2173, 20 lL. Ed.2d 1138 (1968)). The FRA provided that three government off)- cials, the Secretaries of Treasury and Agriculture and the Comptroller of the Currency, would select the number of regional districts, draw the district boundaries, and choose the city within each dis- trict in which the bank would be located. Contro- versy surrounded the number of regional banks and the size and reach of the New York branch. Other areas were concerned that a system so firmly rooted in New York City would not be sym- pathetic or attuned to their local needs, including the financial demands peculiar to the regional manufacturing and agricultural industries. Congress instructed that “the districts shall be apportioned with due regard to the convenience and customary course of business and shall not necessarily be coterminous with any State or States.” FRA § 2(1). In the end, by selecting a rel- atively large number of regions (twelve) each with a federal bank, and by intentionally curbing the power of the New York Federal Reserve branch, the three officials insured that institutions throughout the country might have access to fed- eral funds from a receptive regional lender.® See Brinkley, supra note 2, at 621-22, 705; 2 Carman & Syrett, supra note 2, at 385, 524 S See Johnson, supra note 4, at 16-37 A-24 The 1913 House Currency and Banking Com- mittee Report, issued in conjunction with the Fed- eral Reserve Act and expressing congressional intent, comments that the FRBs are “individually organized and individually controlled, each hold- ing the fluid funds of the region in which it is organized and each ordinarily dependent upon no other part of the country for assistance.” H.R.Rep. No. 69 63rd Cong., Ist Sess. 18 (1913). The FRA requires each FRB, through its individual board of directors, to: administer the affairs of said bank fairly and impartially and without discrimination in favor of or against any member bank or banks and may, subject’ to the provisions of law and the orders of the Board of Governors of the Federal Reserve System, extend to each mem- ber bank such discounts, advancements, and accommodations as may be safely and rea- sonably made with due regard for the claims and demands of other member banks, the maintenance of sound credit conditions, and the accommodation of commerce. industry, and agriculture. 12 U.S.C. § 301. The twelve regional banks are “operating arms of the central banking system.” but at the same time substantially independent and autonomous. The Federal Reserve System Q Purposes and Functions, 6 (9th ed.. June 2005).' The Federal Reserve System Purposes and Functions is a Board publication upon which courts have relied to explain the workings of the Federal Reserve. See Fed. Open Mkt. Comm. of Fed. Reserve Sys. v. Merrill, 443 U.S. 340. ie S Bn. 2,99 S.Ct. 2800. 61 L.Ed.2d 587 (1979) >a A-25 They are charged with carrying out “system func- tions including operating a nationwide payments system, distributing the nation’s currency and coin, supervising and regulating member banks and bank holding companies, and serving as banker for the U.S. Treasury.” Jd. Each bank acts “as a depository for the banks in its own district.” “a lender to eligible institutions ..., anda clear- ing agent for checks.” Jd. at 6, 11. The FRBs turn all their profits over to the Department of Trea- sury, id., and they operate. in part, under inde- pendent grants of Congressional authority. See, e.g., 12 U.S.C. § 341 (providing the power to sue and be sued, make contracts, appoint officers, hire and fire emplovees, pre: cribe by laws). However. they are managed by their own boards of direc- tors, with two-thirds majorities elected by the banks in their regions, and enjoy considerable autonomy with regard to their lending and deposit policies, as long as they are not inconsistent with the general propositions of national policy and oversight. The Board, in contrast to the FRBs, is a gov- ernment agency composed of seven members appointed by the President and confirmed by the Senate, and a staff. 12 U.S.C. § 241. The Board mav examine and report upon the FRBs’ activi- ties, suspend or remove any FRB officer or direc- tor, require the FRBs to write off losses, oversee loans between FRBs, supervise the FRBs, and issue rules and regulations for the FRBs. 12 U.S.C. § 248(a)-(r). The Board “exercises broad responsibility over the nation’s paymenis system . and plays a major role in supervision and reg- ulation of the U.S. banking svstem.” See 12 U.S.C. A-26 § 248(j). However, the degree of supervision and control by the Beard is a function of the person- alities at play and any current issues between Congress and local banking interests. All this 1s done in a tension with local powers and practices exercised by the twelve regional banks and the member banks that they serve. Il. Procedural History On November 10, 2008, Fox's Vice President Bruce Becker submitted a FOIA request to the Board, pursuant to 5 U.S.C. § 552, seeking “the names of institutions receiving Federal Reserve lending from programs including but not limited to the following: Regular [Open Market Opera- tions (“OMQ”) |]; Single-Tranche OMO Program; Discount Window; Term Discount Window Pro- sram; Term Auction Facility; Primary Dealer Credit Facility: Transactional Credit Extensions; ABCP Money Market [Mutual Fund] Liquidity Facility; Securities Lending: Term Securities Lending Facility; Term Securities Lending Facil- ity Options Program; and any other Federal Reserve lending facility not mentioned above.” for the time period of August 8, 2007 through Novem- ber 17, 2008. On November 18, 2009, Fox’s Executive Vice President Kevin Magee filed a second FOIA request before Fox had received any response from the Board. The second request sought records from September ane October 2007 that identify the names of the institutions that had received loans under the programs listed in the first FOIA request, as well as the loan amounts and collat- eral pledged. The second request included an A-27 application for expedited processing, under 5 U.S.C. § 552(a)(6)(E) (vA. In response to the two requests, the Board con- ducted a search of its records and engaged in dis- cussions with its FRBs. The Board located 6,186 pages of agency records responsive to Fox's requests. The information contained in these pages related to the names and loan amounts of Disceunt Window borrowers and other programs mentioned in the requests. The Board found little information regarding collateral. After reviewing the responsive material, the Board determined that all the documents contained exempt material ard no reasonably segregable non-exempt infor- mation. The Board denied the requests under Exemptions 4 and 5, and, on February 19, 2009. filed two indices pursuant to Vaughn v. Rosen, 484 F.2d 820 (D.C.Cir.1973) and supporting declara- tions. The Board represented that the bulk of the documents Fox sought were records of the FRBs in New York and Boston, and that records of an FRB are not records of the Board. as defined by the Federal Reserve Act, aid do not have to be pro- duced by the Board. On March 27, 2009, the Board moved for sum- mary judgment, arguing that no records have been improperly withheld and that it 1s entitled to judg- ment as a matter of law. Fox cross-moved, arguing that (1) the Board conducted an inadequate search, in part because it failed to search FRB records, and (2) no exemptions apply to the records. Alternatively, Fox seeks discovery, assert- ing that the Board has demonstrated bad faith in conducting the search. A-28 lil. Discussion A. Relevant Law Congress enacted FOIA “to establish a general philosophy of full agency disclosure unless infor- mation is exempted under clearly delineated statutory language.” Fed. Open Mkt. Comm. of Fed. Reserve Sys. v. Merrill, 443 U.S. 340, 351-52, 99 S.Ct. 2800, 61 L.Ed.2d 587 (1979) (citing S.Rep. No. 813, 89th Cong., 1st Sess.. 3 (1965)). There are nine exclusive exemptions listed in § 552(b). “But these limited exemptions do not obscure the basic policy that disclosure, not secrecy, is the dominant objective of the Act,” and each exemption “must be narrowly construed.” Dept. of Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 48 L.Ed.2d 11 (1976). Summary Judgment is granted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). On a motion for summary judgment ina FOIA case, “the agency must demonstrate beyond material doubt that its search was reasonably cal- culated to uncover ail relevant documents.” Nation Magazine v. U.S. Customs Serv., 71 F.3d 885, 890 (D.C.Cir.1995) (internal quotations and citations omitted). The agency also “must demonstrate that each document that falls within the class requested either has been produced, 1s unidentt1- fiable, or is wholly exempt from the Act’s inspec- tion requirements.” Ruotolo v. Dep't of Justice, Tax Div., 53 F.3d 4, 9 (2d Cir.1995). A- 29 The agency will sustain its burden by showing, through “affidavits or declarations, ... that the agency has conducted a thorough search for responsive documents and has given reasonably detailed explanations why any withheld docu- ments fall within an exemption.” Carney v. U.S. Dep't of Justice, 19 F.3d 807, 812 (2d Cir.1994). The burden of proof rests with the agency on all material issues related to the search’s adequacy and the merits of exemptions. 5 U.S.C. § 552(a)(4)(B). Affidavits submitted by an agency are “accorded a presumption of good faith.” Car- ney, 19 F.3d at 812. In a FOIA case, the govern- ment agency is not entitled to the deference generally given under the Administrative Proce- dure Act, and the district court should review the agency's decision de novo. U.S. Dep't of Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 749, 755. 109 S.Ct. 1468, 103 L.Ed.2d 774 (1989). “Discovery relating to [an] agency’s search and the exemptions it claims for withholding records eenerally is unnecessary if the agency's submis- sions are adequate on their face.” Carney, 19 F.3d at 812, demonstrating “that the withheld infor- mation is clearly exempt and contains no segre- sable, nonexempt portions.” Allen v. CIA, 636 F.2d 1287, 1298 (D.C.Cir.1980), overruled on other grounds by Founding Church of Scientology of Washington D.C., Inc. v. Smith, 721 F.2d 828 (D.C.Cir.1983). “Where the agency fails to meet that burden, ... the court may employ a host of procedures that will provide it with sufficient information to make its de novo determination, including ... discovery by the plaintiff.” Zd. If the agency satisfies its burden, the plaintiff must then A-30 demonstrate the agency's bad _ faith by “impugn{[ing] the agency’s affidavits or declara- tions, or provid[ing] some tangible evidence that an exemption claimed by the agency should not apply or summary judgment is otherwise inap- propriate.” Carney, 19 F.3d at 813 (citation omit- ted). Failing that, the court has the discretion to “forgo discovery” to correborate the agency’s claims and grant summary judgment in favor of the agency. Jd. at 812 B. Adequate Search A court must determine whether an agency has adequately searched its records prior to analyzing claims of exemption. See Carney, 19 F.3d at 812. “*The factual question ...is whether the search was reasonably calculated to discover the requested documents, not whether it actually uncovered every document extant. ” Grand Cent. P’ship v. Cuomo, 166 F.3d 473, 489 (2d Cir.1999) (quoting SafeCard Serus., Inc. v. SEC, 926 F.2d 1197, 1201 (D.C.Cir.1991)). However, “if the suf- ficiency of the agency’s identification or retrieval procedure is genuinely in issue, summary judg- ment is not in order.” Founding Church of Scten- tology of Wash., D.C., Inc. v. NSA, 610 F.2d 824, 837 (D.C.Cir.1979). The Board has successfully carried its burden of showing that it performed an adequate search. Alison M. Thro, an attorney for the Board, was responsible for processing Fox’s two FOIA requests. She has ten years of experience pro- cessing FOIA requests for the Board, five of those years as its attorney in charge of such processing requests. Ms. Thro submitted a declaration detail- A-31 ing the Board’s general procedure for handling FOIA requests and outlining her processing of Fox’s requests. Not long prior to receiving Fox’s requests, the Board had received and processed nineteen dif- ferent FOIA requests regarding substantially overlapping information about Discount Window lending and Special Credit and Liquidity Facili- ties transactions, and it relied on this work in pro- cessing Fox’s requests. In processing the first nineteen requests, Thro had “contacted staff mem- bers in the two divisions of the Board most likely to have responsive records.” Thro Decl. 4 10. These two divisions, the Division of Monetary Affairs and the Division of Reserve Bank Operations and Payment Systems, are the only departments charged with overseeing the Reserve Banks’ lend- ing under the relevant facilities and supplying “data and statistics to the Board... relating to” those facilities. Thro Decl. 4 22. Thro and her staff contacted numerous senior and other staff mem- bers at each division and discussed previous FOIA requests in an effort to compile responsive docu- ments. In total, thirteen staff members cooperated with the legal team. Based on discussions with the staff members, Thro concluded that it was not rea- sonably likely that responsive documents were kept in any other divisions of the Board. Thro and her staff then had follow-up discussions with six of the staff members to confirm that all appro- priate documents had been searched. In response to Fox’s FOIA requests, the Board's legal staff reviewed documents it had compiled while processing the many earlier requests, locat- ing 6,008 pages of responsive documents. Thro made further inquiries, including to the same two departments, speaking with several — stall members, seeking any remaining responsive infor mation. These conversations led Thro to 178 addi tional pages of responsive documents. In all, Thro found 6,186 responsive pages of documents, all of which the Board believed to be exempt from dis closure under Exemptions 4 and 5 Fox argues that the Board’s submissions reveal “positive indications of overlooked materials,” pre- cluding a finding of summary judgment in the Board’s favor, Founding Church of Scientology of Wash., D.C., Inc. v. NSA, 610 F.2d at 837, and entitling Fox to summary judgment because of the inadequate search, Judicial Watch, Ine. v. U.S. Dep’t of Commerce, 34 F.Supp.2d 28, 46 (D.D.C.1998). Alternatively, fox asks for discov ery to test the competency of the Board’s search. Carney, 19 F.3d at 812. 1 hold that Thro’s methodology was reasonably calculated to identify all responsive documents 1. Federal Reserve Bank Records ox argues that the Board failed adequately to search its records because it did not search records of the New York Federal Reserve Bank (“FRBNY”) and the Boston Federal Reserve Bank (“FRBB”), the instrumentalities that made the Discount Window loans. The Board responds that it is not required to search files maintained by the FERBs. for the FRBs’ records are not the Board’s records and, thus, the Board is under no obliga tion to search them. Jone-Edwards v. NSA, 196 Med.Appx. 36. 388 (2d Cir.2006) (“An agency 1s not obliged to conduct a search of records outside its possession or control.” (citing Grand Cent, P ship, 166 I°.3d at 479)); see Dept. of Justice v. Tax Ana lysts, 492 U.S. 136, 144-45, 109 S.Ct. 2841, LOG LL.K&d.2d 112 (1989) (finding avency records are those (_) created or obtained by the agency and (2) under the agency’s control “at the time of the FOIA request’) The Board maintains that it has consistently interpreted its regulations to require search only of records generated by the Board, or by other entities performing a function on behalf of the soard. One regulation provides Records of the Board include all informa tion coming into the possession and under the control of the Board, any Board member, any Kederal Reserve fJank, or any. olficer employee or agent of the Board or any Federal Reserve Bank, in the performance of functions for or on behalf of the Board that constitute part of the Board's official file: 12 C.F.R. § 261.2(1)(1)Q). The Board interprets the words “for or on behalf of the Board” to mean “under delegated authority from the Board.’ Thro Supp. Dec!. 43. This “longstanding practice of th Board,” in interpreting its own regulations, 1d ‘becomes of controlling weight unless it 1s plainly erroneous or inconsistent with the regulation Bruh v. Bessemer Venture Partners Ill L.P., 464 F.3d 202. 207 (2d Cir.2006) (quoting Bowles | Seminole Rock & Sand Co., 325 U.S. 410, 4134-14 65 5.Ct. 1215, 89 L.Ied. 1700 (19405)) The FRA. which established the IRBs, grant independent authority to the FRBs to lend at the Discount Window and determine required collat | eral. 12 U.S.C. § 347b(a) (“Any Federal Reserve bank, undgr rules and regulations prescribed by the Board may make advances to any member hank on its time or demand notes having matur} tics of not more than four months and which ar secured to the satisfaction of such Federal Reserve bank.”). The Board promulgates general rules and regulations, but lacks the statutory authority to lend. Thus, it cannot delegate lending authority to the FRBs. Because the Ff RBs lend money pursuant to their own mandate, records of their lending are not Board records. Indeed, the five required form: that a borrower completes when applying for a loan at an FRB Discount Window indicate that the loan is from the FRB and not the Board. These forms make no mention of the Board, only of thi relevant FRB.'" The history and tructure of the Federal Reserve. the Board, and the FRBs, bolster the Board’s statutory interpretation. In the FRA Congress divided the powers of the Federal Reserve System between the Board, which 1s a federal agency, and the FRBs, which were estab lished as regional banks. Premised on this divi ion, the Board interprets the statutory definition of its record: The Federal Reserve is structured to empowet local institutions to lend, while permitting federal oversight. The Board has the authority to pro mulgate the rules and regulations to which thi MRBs must adhere Aut. this authority does not gost that loans made by an FRB. acting unde) its own authority and discretion, are done on the Roord’s behalf. “tas evident from the legislative history of the Federal Reserve Act that Congr did not intend to vive the federal government direction over the daily operation of the Reserve Banks.” Lewis v. U.S., 680 FF. Yd 1289, 1241 (Oth) Cir. 1982) CUP} he reserve bank plan retains to the (aovernment powe Over the exercise Qo] the broader banking functions, while it leaves to ind) viduals and privately owned institutions the actual direction of routine.” (citing TER. Report No. 69, 63 Cong. Ist Sess. 18-19 (19T8))) lox ArFLUCS that the hhREss act on the Board behalf when they implement the monetary policy that the Board’s regulations permit, and that records generated by the FRB in connection with the facilities are Board records. However, to read the statute as defining all FRB records as Board records voes against the fundamental importance of an FRB’s autonomy, autonomy which was the cornerstone of the Federal Reserve System Tr ese +. The Board interprets other relevant regulation consistently with this reading. ‘The record-keeping revulation for the Board provides: “Ree ords of the Board include lrecords| maintammed for admin istrative rensons in the regular course of busine in official files in any division or office of the Roard or any Federal Reserve Bank in connection with the transaction of any offieral busin Iv CoRR, § Y61.20)01)a1). lt provides that the Board may store its records of! ite nthe EFRBs only “for administrative reason ld. Vhus, not all record kept by the rMithiss are record ol the board: onl, tha ( r fleeting delog ited Pury Linh) qo? tho ( bye la at an FRB for the Board's “administrative reasons.” Section 261.3(a) provides that the Secretary of the Board is the custodian of its records, whether maintained at the Board or in an FRB. This reg- ulation provides: “The Secretary of the Board... is the official custodian of all Board records, including records that are in the possession or control of the Board, any Federal Reserve Bank, or any Board or Reserve Bank emplovee.” Plaintiff argues that this esta>dlishes that the Board’s Sec- retary, and therefore the Board. has custody or control over all records kept by all FRBs. How- ever, as the Board maintains, this provision does not extend the functions or powers of the Board's Secretary beyond the limits of § 261.2(4)(1)Q). Congress established the Board and the regional FRBs as separate entities, reflecting the tension between a centralized federal bank and generally independent state and local banks. The Board establishes national policy, but that policy is implemented by each FRB. which maintains its own banking relationship with the member banks of its region. The Board’s interpretation of which records belong to the Board and which belong to the FRBs is consistent with the overall Federal Reserve System structure established by statute. Although the Board has the power “[t]o examine at its discretion the accounts, books, and affairs of each Federal reserve bank and of each member bank and to require such statements and reports as it may deem necessary.’ 12 U.S.C. § 248(a). that oversight power does not change the balance of the record-keeping functions described above. In any event, for purposes of FOIA, what an agency has an ability to obtain, but has not obtained, is irrelevant. Forsham v. Harris, 445 U.S. 169, 182, 185, 186, 100 S.Ct. 977, 63 L.Bua.2d 293 (1980) (“FOIA applies to records which have been in fact obtained, and not to records which merely could have been obtained”): Ciba-Geigy Corp. v. Mathews, 428 F.Supp. 423, 53] (S.D.N.Y.1977) (holding that agency “should not be compelled to acquire data it neither referred to directly nor relied upon in making decisions’). It may be. as Fox argues, that no FRB has a FOIA office to which FOIA requests may be sub- mitted, that the only FOIA office for the Federal Reserve System is in the Board, and if Fox cannot obtain documents from the Board, it will be deprived of obtaining any meaningful documents enabling a public accounting of the Board's Dis- count Window loan program. Whether or not this is so, 1t does not alter the fact that Fox served its requests only upon the Board and that the defi- nition of a Board record is limited by statute. | hold that the Board's interpretations of its own regulations are reasonable and consistent. I reject Fox's argument that the interpretations are unreasonably narrow and attenuated. 2. Additional Arguments for Inadequate Search Fox argues that additional aspects of the Board’s search cause it to be inadequate. Fox argues that the Board failed to account for records obtained from the FRBNY and the FRBB in the “daily data feed” from which the Board generates its own reports; that the Board did net search deleted files for responsive material: and that the A-38 Board chose not to search an attachment to a received e-mail that the recipient of the e-mail had not and need not have opened. The daily data feeds are daily reports sent elec- tronically by the individual FRBs to the Division of Monetary Affairs containing aggregate data pertaining to FRB transactions. The Board gen- erates three different weekly reports from the data, and searched its weekly reports to respond to Fox's FOIA request. Fox charges that the daily data feeds mav have contained information that was not incorporated into the Board’s weekly reports and that t!e Board never searched the unincorporated information. Fox has no proof that any data was left out of the Board's three weekly reports. The good-faith presumption accorded to agency affidavits “cannot be rebutted by ‘purely speculative claims about the [possible] existence... of other documents. ~ Grand Cent. P’ship, 166 F.3d at 489 (quoting Safe- Card Servus., Inc., 926 F.2d at 1200): Carney, 19 F.3d at 813 (“something more than [movant's] bare allegations of ageneys concealment of records is required). The daily reports themselves are dvnamic. tne data changing with each days business, and the Board does not retain hard copies of each generation. To require the Board to reconstruct the daily data feeds as of particular dates would be unduly burdensome. Grand Cent. P’ship. 166 F.3d at 489 (“an agency's search need not be perfect. but rather need only be reason- able”): Schrecker v. Dept. of Justice. 349 F.3d 657, 663 (D.C.Cir.2003) (The “adequacy of an agency s search is measured by a standard of reasonable- ness, and is dependent upon the circumstances of the case.”); see Judicial Watch, Inc. v. Export Import Bank, 108 F.Supp.2d 19, 27 (D.D.C.2000) (“[I]t is the requester’s responsibility to frame requests with sufficient particularity to ensure that searches are not unreasonably burdensome .... The rationale for this rule is that FOIA was not intended to reduce government agencies to full-time investigators on behalf of requesters.’) (quotation and citation omitted). As to deleted material, the issue arises with regard to two Board members and one staff mem- ber who had received weekly reports via e-maul containing transaction-level ican information None of these three individuals had used the reports to perform Board duties and had routinely destroyed all copies prior to Fox's FOIA request Id. The Board's failure to use computer experts to search for these files does not render the search inadequate. Baker & Hostetler LLP v. U.S. Dept of Commerce, 473 F.3d 312. 318 (D.C.Cir.2006) (agency's FOIA response sufficient when its expla- nation as to why it was unable to recover deleted emails was adequate and unrebutted). The per- sonnel routinely deleted such emails shortly after receiving them because they did not need this information to perform Board duties. See Wilbur v. CIA, 355 F.3d 675, 678 (D.C.Cir.2004) (‘the fact that responsive documents once existed does not mean that thev remain in the jagency's] custody today or that the [agency] had a duty under FOIA to retain the records’): Yeager v. DEA. 678 F.2d 315, 321 (D.C.Cir.1982) ("A requester ts entitled h as in fact chosen only to records that an agency to create and retain.’ ) A-40 3. The Unopened Attachment In one instance, the Board did not search an attachment to an e-mail received by a number of Board staff and Board members within the rele- vant time period. The recipients had opened the e- mail which contained responsive aggregate information from the FRBNY regarding a relevant lending facility. None of the recipients opened the attachment until Thro asked them to do so as part of the search. Thro determined that because the attachment had not been opened, forwarded, used. reviewed, or relied upon in the course of the recip- icnts’ duties for the Board. it was not a Board record. I disagree. The attachment was both obtained by the agency and within the agency's control “at the time of the FOIA request.” Dept. of Justice, 492 U.S. at 144-45, 109 S.Ct. 2841. It was kept and not deleted. Yeager, 678 F.2d at 321. That no staff or Board member thought to open the attachment does not negate its status as a record. Documents, and their attachments, are records whether or not an employee's eye passed over every section or page. | hold that the attachment is an agency record and should be ineluded in the search. Thro’'s dec1- sion, however flawed. was forthrightly presented in her declaration and is not evidence of “bad faith.” Alien, 636 F.2d at 1298. Fox's submissions are “adequate on their face,” Carney, 19 F.3d at 812. regardless. and provide sufficient information on which to make a de novo determination. See id. at 813. The Board shall conduct the acditional search. turn over all responsive and non-exempt A-41 information, and submit an additional Vaughn index, 1f necessary. In spite of this deficiency. the search conducted by the Board was thorough and reasonable. The Board searched the two divisions reasonably likely to have responsive documents (based on its nine- teen prior similar FOIA requests). The Board con- tacted thirteen staff members and had follow-up discussions with six. The Board's FOIA attorney personally reviewed the information. This process vielded 6.008 pages of exempt information listed on the Feb. 19, 2009 Vaughn indicies. A later, additional search yielded 178 more pages listed on supplemental Vaughn index. I find that the search was adequate, no additional search (other than that indicated above) is required, and no discovery by Fox of the Board’s review process is warranted. C. FOIA Exemptions The Board argues that Exemptions 4 and 3d exempt the responsive documents recovered in the search. Exemption 4 applies to an agency s com- mercial, financial, or trade secret information that is obtained from a person and is privileged or con- fidential. 5 U.S.C. § 552(b)(4). Exemption 5 apphes to “inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.” 5 U.S.C. § 552(b)(5). I hold that Exemp- tion 4 apphes and, thus. do not discuss whether Exemption d applies. lInder Exemption 4. an agency must demon strate that the information sought is: (1) a “trade secret” or “commercial or financial” in character, (2) “obtained from a person.” and (3) “privileged or A-42 confidential.” 5 U.S.C. §552(b)(4); Inner City Press/Cmty. on the Move v. Bd. of Governors, 463 F.3d 239, 244 (2d Cir.2006). The parties agree that the loan information sought is “commercial or financial,” but dispute the other two elements. 1. Obtained from a Person Documents within the scope of Exemption 4 must be “obtained from a person.” 5 U.S.C. § 552(b)(4). For the purposes of FOIA, a “ ‘person’ includes an individual, partnership, corporation, association, or public or private organization other than an agency.” 5 U.S.C. § 551(2). An “agency” includes, inter alia, a “Government corporation for] Government controlled corporation.” 5 U.S.C. § 552(f)(1). Fox wants the Board to disclose docu- ments containing the borrowers names, loan amounts, and pledged collateral for all the loans made through the Discount Window and related facilities. The Board contends that the informa- tion that Fox seeks originated with and was obtained by an FRB. from a borrower, and there- fore was “obtained from a person.” Fox argues that the information is obtained by the Board from the FRBs. and that the loan information 1s generated by the federal government, and does not implicate raw information received directly from the bor- rower. See Nadler v. FDIC, 899 F.Supp. 158, 164 (S.D.N.Y.1995) (‘The thrust of the FOIA 1s to cre- ate a right of access to official information. Infor mation generally acquires an ‘official’ character either when it is generated by the agency itself or is acquired from private parties whose activit’es are substantively germane to the agency's ‘official’ miss*2n.”"). A-43 Exemption 4 aims squarely at protecting the rights of individuals over their privileged or con- fidential commercial information against FOIA’s broad sweep. In recognizing this, courts look past formalities to ensure that even indirect disclosure does not jeopardize a person’s privacy. One court exempted a “ratio calculated [by an agency] from individual components all of which are obtained from” individuals. OSHA Data/ClIH, Inc. v. U.S. Dept °f Labor, 220 F.3d 153, 162 (3rd Cir.2000): see Judicial Watch, Inc. u. Export-Import Bank, 108 F.Supp.2d 19 (D.D.C.2000) (exempting inior . mation that the “Bank obtained ... from the insurance applicants themselves”); Clarke v. U.S Dep't of Treasury, 1986 WL 1234, 1986 U.S. Dist LEXIS 29989 (E.D.Pa. Jan. 28, 1986) (holding names and addresses of holders of a certain type of bond are obtained from persons). Another held that agency summaries and reformulations of a “nerson’s” raw data are “obtained from a person.” Philadelphia Newspapers, Inc. vu. HHS, 69 F.Supp.2d 63, 67 (D.D.C.1999). Because the bor rower’s name, the amount it must borrow. and the property it volunteers to provide as collateral 1s information that originated with the borrower and is reflected in the data Fox seeks. I hold that it was “obtained from” the borrower. One court found that a borrower's loan infor mation was not “obtained from” the individual! borrower, but “generated by” the lending agency, and that, therefore, Exemption 4 did not apply Buffalo Evening News v. Small Bus. Admin., 666 F.Supp. 467, 469 (W.D.N.Y.1987). The court in Ruffalo Evening News addressed a request by aintiff newspaper that the SBA disclose infor l A-44 mation pertaining to SBA loans made in the wakes of a powerful ice storm and a blizzard that damaged a host of small businesses in the region. The SBA responded to an initial reyuest by dis- closing a complete list of borrowers’ names, cities, and states. Unsatisfied, the plaintiff requested more detailed information, pursuant to FOIA. The SBA made further disclosures, but refused to reveal individual loan amounts or dispositions, claiming that the information was obtained from individuals and covered by Exemption 4. The court in Buffalo Evening News ruled “that ‘In no way do these records implicate any financial information provided to the government by the borrower. ” /d. at 468 (citing Miami Herald Publ’g Co. v. Small Bus. Admin., 670 F.2d 610 (5th Cir.1982)). The plaintiff asserted: (T]he only connection between the information sought here and the information obtained from the borrower is that a loan was granted by the SBA presumably on the basis of the financial records submitted by the borrower and that nothing more or less is established by the release of the requested records, much less the contents of the records submitted by the borrowers. Id. at 468-69 (quotation omitted). The court held “that all of the information sought by plaintiff here has been generated by the defendant SBA in the course of its involvement with its borrowers.” Id. at 469. The court reiterated, “this information In no way implicates any of the financial infor- mation pvrovided by the borrowers to the govern ment.” Jd. A-45 The facts at issue here are markedly different from those in Buffalo Evening News. In Buffalo Evening News, the identities of the SBA borrowers were already public, whereas the identities of the Discount Window borrowers are not. The SBA loans in Buffalo Evening News were generally available to promote recovery in areas ravaged by storms or other dramatic adverse conditions; the Discount Window loans were focused on particular companies in financial distress. There was no quality of opprobrium in Buffalo Evening News; that is in the case before me. The discount window loans “implicate” poten- tially “personal” and sensitive financial informa- tion, unlike the loans in Buffalo Evening News. The Board has legitimate concern that disclosure of information about Discount Window loans can damage them and do incalculable harm to the national economy. As the Board’s economist attests, Some of these reasons, such as an unexpect- edly large loan request from a customer or a runoff in liabilities as a major depositor makes payments to third parties, may result from routine developments and may not indi- cate an underlying capital or liquidity prob- lem. However, the fact that an institution borrowed from the [Discount Window] may suggest to customers, creditors, analysts, or the news media that its liquidity shortage stems from a financial problem at the insti tution that is not known by the public at large. \-46 McLaughlin Decl. 423. The SBA borrowers, on the Other hand, clearly needed the loans because of damage sustained in the storms. The SBA loans Carried no further implications. Indeed, the court In Buffalo Evening News made sure to clarify that its holding was based in part on the fact that “this Information in no way implicates any of the finan Clal information provided by the borrowers to the fSovernment.” Buffalo Evening News, 666 F.Supp. at 469. Because disclosure by the Board implicates the borrower's financial information, and the parties agree that the individual borrowing institutions are “persons,” as defined by FOIA, it is not rele Vant whether FRBs ought to be classified as “persons” or “agencies.” 5 U.S.C. §551(2). Any responsive document qualifies as exempt because it contains information obtained from the bor rower: names, amounts, and collateral 2. Privileged or Confidential The other element of Exemption 4 1s whethe the info sought is privileged or confidential. Infor mation is “privileged or confidential” if it 1s not Ordinarily released to the public and “its disclo Sure would have the effect either (1) of impairing the sovernment’s ability to obtain necessary imformation in the future, or (2) of causing sub. Stantial harm to the competitive position of the Person from whom the information was obtained.” Continental Stock Transfer v. S.E.C., 566 F.2d 3°73. 375 (2d Cir.1977). The agency has the burden off showing that the information is privileged or COnfidential and “must identify specific dangers that disclosure will pose.” Nadler v. FDIC, A-47 899 F.Supp. 158, 162 (S.D.N.Y.1995). “Actual com petition and the likelihood of substantial] competitive injury is all that need be shown,” Gulf & W. Indus... Inc. v. U.S., 615 F.2d 527, 530 (D.C.Cir.1980), by proffering “evidence demon strating the existence of potential economic harm,” Jnner City Press, 380 F.Supp.2d at 219. In addition, many courts have recognized a third sround on which information may be found priv} leged or confidential: if disclosure would unde mine the agency’s “effective execution of its statutory responsibilities.” 9 to 5 Org. for Women Office Workers v Bd. of Governors, 721 ki2d 1, 10 (1st Cir.1983): Critical Mass Energy v. NRC, 9705 F.2d 871, 880 (D.C.Cir.1992) (en banc) The Board has shown specific and substantial harms to borrowers if the information about 11 count Window loans were disclosed. The Federal Reserve Bank of Boston’s website reads, 1} part “There will not be any public disclosure of the individual borrowers participating in |the D1 count Window] or the amounts of individual advances made to the borrowers. '' The institu tions borrowing at the Discount Window, the Term Auction Facility, and the Asset-Backed Comme: cial Paper Money Market Mutual Fund Liquidity Facility compete for retail and commercial bank ing services in the marketplace “A primary deale) would suffer competitive and reputational harm 11 its name and the relevant collateral it posted were disclosed to the public,” for the public is likely to draw inferences of its relative financial strength and viability. Logan Decl. 9 34 Anonymity 1s cru cial to primary dealers.” /d. 435 The Board’s concerns, that rumors are likely t begin and runs on banks are lkely to develop cannot be dismissed. Similarly, the Board's con Cer is real that di » Lo puUESe would reveal Ppropri etary trading information of borrowers, the trading strategies and t he size and nature of thet portfolios of asset: ‘he national economy 1s not out of danger. and the frailty of banks so different now then when their Discount Window borrowing beran. as to make the Board concern academe for all these reason that The Board rrvument of exemption based on contident baalats eritvoriou (;sovernmental BKifectivene Courts have recognized a third ground on wht nformation may be found privileged and cont dential that disclosure would undermine th iwency eTreceilve Cxecucion | it tatutol respons ibilits 910 5 Org. for Women Offi Worke) [a O] (,overnors, ¢2Z t 2d | lO ¢Ist (ur 1983): Criltcal Mass Inere. Vive O75 kk Yad 1 880 (D.C.Cir.1992) (en banc). Kxemption 4 also protect a rovernmental interest in adm) istrative elfieirency and cllectivenes: (C'riticai Mass knergey, 9d ht Yd at 8/%: see Nat'l Part A (C‘fonservation ASs nt VUorton, 498 F.2d 765, 7701 17 (D.C.Cir.1974) GQndicating kxemption 4 ma protect governmental interests) The Second O11 cult ha not affirmatively accepted this approach Ol] explie ithy rejected it Nadler ' RDIC, 92 dd 8 OG (Yd Cir. 1996) “TW Ie do not reach the 1 Li ¢ vhether the district urt properl tf led reh te the FDIC on the basi Ol thre ~proyram Clbav tiveness” exemption derived from footnote seven teen of National Parks.”). Nevertheless, judges in this and other district have adopted the analysi Africa Kund v. Mosbacher, 1998 WH 18387386 at's 1993 U.S. Dist. LEXIS 7044 at *21 (S.D.NLY. May 26. 1993) (holding confidential export mtormation exempt from disclosure by the Department of Commerce because the miormation 1 pravanluneadod in making pohiey and mamtamming ellective export controls”): Clarke vo. US. Dep tof Treasury, 1986 WI, 1234 at *1, 1986 I Dist. LEXIS 29989 at ’ (h.0.Pa. dan. 28, 1986 ln Clarke picaretill ought the name ol allown ers of a particular type of | nited Stat Preasut bond, a well a the bond Virbune mod maturit diate lhe rroney declined to release the docu nent for teat bnive tor would be biked : ourehnase vovernment DOM in) Ghee future of th knew the details of their 4 Chase Voulad be Tue mech to pub disclosure fal 1 i OO | » Dist LiexXtt MQGQGRYG at *F (citing delendant UnOpp LILIGAVIT) mat Court found ‘a if | Cmplion ipplied because i] ure Would prolate the 4 nase ( pectatro nfidentialit " i | he trea ! Depart l rbyadat ! e Don the future / it yey | Dist. Ll CVO af Ih r hed { rdict iffida tL ¢ hayn tf participa ba cc » aat ( il | ther participant ld? mil yonit ( pdivanti / Cys, | : mn IS 29989 af 1) rl A-50 requests, do so with the understanding that the loan is confidential. As in Clarke, the Board asserts that borrowers would be less likely to use their facilities, if the transactions were not con- fidential. dd. In another similar case, Comstock Int'l (U.S.A. ), Inc. v. Export-Import Bank, 464 F.Supp. 804 (D.D.C.1979), the agency, “a banking corporation that seeks to facilitate and finance exports and imports between the United States and other countries,” offers “loans, guarantees, and other forms of financial assistance.” Id. at 805. The agency withheld a loan agreement in which it was a party, “maintain|ing] that disclosure would sig- nificantly impair its ability to promote United States exports.” /d. at 808. The agency argued that it might lose applicants to foreign financial institutions that do not disclose, and “that dis- closure would ... impair its effectiveness by mak- ing it more difficult to negotiate lean agreements.” ld. It was concerned as well that disclosure “would discourage commercial bank participation with iximbank on joint loan agreements, thus impair- ing Kkximbank’s ability to control overall financing of transactions.” Jd. The court explained, “bor- rowers would be less inclined to make concessions that could be disclosed to a future lender.” /d. Disclosing details of the facilities Fox identifies would compromise the Board’s effective execution of its statutory responsibilities. The Board is charged with: (1) promoting goals of maximum employment, stable prices, and moderate long- term interest rates, 12 U.S.C. § 225a; (2) utilizing its authority to permit lending by FRBs so as to address unusual and exigent circumstances in the A-51 domestic economy, 12 U.S.C. § 3438; and (3) employing certain lending practices by FRBs as a safety valve in reheving hquidity strains for indi- vidual depository institutions and the banking system, and to complement open market opera- tions in achieving the target federal funds rate, 12 U.S.C. § 847b(b). In essence, borrowers would view taking such last-resort, publicly disclosed loans as unwise because it would stigmatize the company and lead to a, perhaps false, behef that the com- pany is in financial trouble. This would undermine the Board’s mandate to provide stability to mar- kets, especially during a financial crisis. Under this rationale, withholding information regarding even loans paid months ago is mandated by IKxemption 4. Conclusion For the reasons stated above, | hold that Kxemption 4 exempts disclosure of the responsive documents that the Board located in its search. Accordingly, I grant the Board’s motion for sum- mary judgment and deny Fox's motion, except that the Board must conduct an additional search of the unopened attachment and make appropriate disclosures. The Clerk shall mark motions Nos. 8 & 13 as terminated and close the case, subject to reopen- ing within sixty days for matters relating to the remaining search. SO ORDERED. A-52 5 U.S.C. § 552(b) (b) re Go This section does not apply to matters that (1) (A) specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and (B) are in fact properly clas- sified pursuant to such Executive order; (2) related solely to the internal personne} rules and practices of an agency; (3) specifically exempted from disclosure by statute (other than section 552b of this title), if that statute— (A)QG) requires that the matters be with- held from the public in such a manner as to leave no discretion on the issue; or (ii) establishes particular criteria for withholding or refers to particular types of matters to be withheld; and (B) if enacted after the date of enactment of the OPEN FOIA Act of 2009, specifi- cally cites to this paragraph. (4) trade secrets and commercial or financial information obtained from a person and priv- ileged or confidential: (5) inter-agency or intra-agency memoran- dums or letters which would not be avanlable by law toa party other than an agency in ht- igation with the agency; (6) personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy; (7) records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information (A) could reasonably be expected to interfere with enforcement pro- ceedings, (B) would deprive a person of a right to a fair trial or an impartial adjudication, (C) could reasonably be expected to constitute an unwarranted invasion of personal privacy, (D) could reasonably be expected to disclose the identity of a confidential source, including a State, local, or foreign agency or authority or any private institution which furnished infor- mation on a confidential basis, and, in the case of a record or information compiled by criminal law enforcement authority in the course of a criminal investigation or by an agency conducting a lawful national security intelligence investigation, information fur- nished by a confidential source, (I) would dis- close techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclo- sure could reasonably be expected to risk cir- cumvention of the law, or (I*) could reasonably be expected to endanger the life or physical safety of any individual; (8) contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency respon- A-54 sible for the regulation or supervision of financial institutions: or (9) geological and geophysical information and data, including maps, concerning wells. Any reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this subsection. The amount of information deleted, and the exemption under which the deletion is made, shall be indicated on the released portion of the record, unless includ ing that indication would harm an interest pro- tected by the exemption in this subsection under which the deletion is made. If technically feasible, the amount of the information deleted, and the exemption under which the deletion is made, shall be indicated at the place in the record where such deletion is made. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_2760%3A1. Public record. Not legal advice.