McKinley v. Board of Governors of the Federal Reserve System
396 U.S. App. D.C. 216
| D.C. Cir. | 2011Background
- Federal Reserve Board sought to disclose FOIA requests related to its March 14, 2008 Bear Stearns loan arrangement through JP Morgan.
- Bear Stearns faced liquidity problems; FRBNY provided or facilitated emergency financing while Bear Stearns was not a depository institution.
- Board and FRBNY treated as part of a unitary system with shared goals to maintain financial stability; FRBNY acted as an operating arm.
- Board withheld documents under FOIA Exemptions 4, 5, 6, and 8 after initial releases; some materials originated with the SEC.
- McKinley sought detailed minutes and supporting memos describing anticipated contagion and necessity of the Bear Stearns intervention; the district court granted summary judgment for the Board on Exemption 5/8 (and not addressed 4).
- The court analyzes whether Exemption 5 applies to intra-agency materials and whether the FRBNY qualifies as a consultant for the purpose of the “consultant corollary.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Exemption 5 protects the withheld materials | McKinley argues FRBNY materials are not intra-agency or deliberative | Board argues FRBNY material is intra-agency and deliberative under the consultant corollary | Yes; Exemption 5 applies to the withheld materials |
| Whether FRBNY acted as a consultant to the Board for Exemption 5 purposes | McKinley challenges FRBNY’s status as a consultant with potential independent interests | FRBNY acted as the Board’s operating arm and its input was part of deliberations | FRBNY qualified as a consultant under the consultant corollary; materials protected |
| Whether disclosure would undermine deliberative process and supervisory integrity | Disclosure would chill candid discussion and impede decisionmaking | Maintaining confidentiality protects deliberations and supervisory processes | Disclosures would harm deliberative process; exemption sustained |
| Whether the Board properly relied on Exemption 8 in addition to Exemption 5 | McKinley challenges reliance on Exemption 8 | Court need not reach Exemption 8 because Exemption 5 suffices | Exemption 5 suffices; Exemption 8 not reached |
| Whether the attorney work product privilege applied to the FRBNY document | McKinley argues no privilege for FRBNY in-house documents | FRBNY document prepared in anticipation of Bear Stearns litigation; consultant status supports privilege | Document properly withheld under Exemption 5 (work product) |
Key Cases Cited
- National Institute of Military Justice v. U.S. Dep’t of Defense, 512 F.3d 677 (D.C. Cir. 2008) (consultant corollary protects non-governmental input used in agency deliberations)
- Ryan v. Dep’t of Justice, 617 F.2d 790 (D.C. Cir. 1980) (outside-initiated materials can be within deliberative process protections)
- Department of Interior v. Klamath Water Users Protective Ass’n, 532 U.S. 1 (Supreme Court 2001) (limits on consultant corollary when consultant has its own interests)
- Formaledehyde Inst. v. Dep’t of Health & Human Servs., 889 F.2d 1118 (D.C. Cir. 1989) (deliberative process privilege requires predecisional and deliberative materials)
- Wolfe v. Dep’t of Health & Human Servs., 839 F.2d 768 (D.C. Cir. 1988) (en banc; supports deliberative process rationale)
- Bloomberg L.P. v. Bd. of Governors of Fed. Reserve Sys., 601 F.3d 143 (2d Cir. 2010) (disclosure of certain loan records; relevance to Exemption analysis)