McKinley v. Fed. Hous. Fin. Agency

• Decision Date: 10 January 2014
• Docket Number: No. 12–5267.,12–5267.
• Citation: 739 F.3d 707
• Parties: Vern McKINLEY, Appellant v. FEDERAL HOUSING FINANCE AGENCY, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

739 F.3d 707

Vern McKINLEY, Appellant

v.FEDERAL HOUSING FINANCE AGENCY, Appellee.

No. 12–5267.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 8, 2013.

Decided Jan. 10, 2014.

Appeal from the United States District Court for the District of Columbia (No. 1:10–cv–01165).

Michael Bekesha argued the cause. With him on the briefs was Paul J. Orfanedes.

Steve Frank, Attorney, U.S. Department of Justice, argued the cause for appellee. With him on the brief were Stuart F. Delery, Assistant Attorney General, Ronald C. Machen Jr., U.S. Attorney, and Leonard Schaitman, Attorney.

Before: GARLAND, Chief Judge, and ROGERS and BROWN, Circuit Judges.

Opinion for the Court filed by Chief Judge GARLAND.

GARLAND, Chief Judge.

Appellant Vern McKinley seeks attorneys' fees following his largely unsuccessful attempt to obtain documents from the Federal Housing Finance Agency under the Freedom of Information Act. Although the district court doubted that McKinley was eligible for fees, it determined that, even if McKinley were eligible, he was not entitled to attorneys' fees. We review such a determination only for an abuse of discretion. Because we find none, we affirm the district court's denial of fees.

I

Vern McKinley is a “consultant, legal advisor[,] regulatory policy expert,” and author “on financial sector issues.” Appellant's Br. 3. In May 2010, he filed the Freedom of Information Act (FOIA) request, see5 U.S.C. § 552(a)(3)(A), that led to the present controversy. In that request, he sought from the Federal Housing Finance Agency (FHFA) “any and all communications and records concerning ... how the FHFA and the Department of the Treasury determined that conservatorship,” instead of receivership, “was the preferred option” for addressing the unstable condition of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) in early September 2008. McKinley v. Fed. Hous. Fin. Agency, 789 F.Supp.2d 85, 87 (D.D.C.2011) (citation and internal quotation marks omitted); see also James B. Lockhart, Director, Fed. Hous. Fin. Agency, Statement (Sept. 7, 2008) (announcing that, in order to “address[ ] safety and soundness concerns,” the agency “has placed Fannie Mae and Freddie Mac into conservatorship”).

In response to McKinley's request, the FHFA searched for and, by July 2010, identified three documents that came within the terms McKinley had specified. McKinley, 789 F.Supp.2d at 87. McKinley sought disclosure of just two of the responsive documents. Id. at 88. According to the “Vaughn index” prepared by the agency to describe the documents,¹ the first of these was a three-page “[u]ndated draft chart containing discussion of the features, strengths and weaknesses” of a receivership and a conservatorship. Declaration of Frank R. Wright, Attachment A, Final Vaughn Index. The second was a ten-page “August 18, 2008 draft memorandum on options for addressing a troubled regulated entity.” Id. The FHFA did not find final versions of either document in its files. Id. Upon providing a description of the two documents, the agency notified McKinley of its decision to withhold them. The documents, the FHFA said, were protected against disclosure by both the deliberative process privilege and the attorney work-product privilege. See5 U.S.C. § 552(b)(5) (authorizing the withholding of “intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency”).

McKinley, who had filed suit before the FHFA completed its search, contested the asserted exemptions in the district court. On June 7, 2011, the court ruled that the agency had properly invoked the deliberative process privilege because the documents were both “predecisional” and part of the deliberative process, and their disclosure would necessarily “harm an agency's decisionmaking process” by stifling internal agency debate. McKinley, 789 F.Supp.2d at 88 (quoting McKinley v. Bd. of Governors of Fed. Reserve Sys., 647 F.3d 331, 339 (D.C.Cir.2011)) (internal quotation marks omitted). The court went on, however, to remind the FHFA that the deliberative process privilege does “not protect documents in their entirety” and that, “if the government can segregate and disclose non-privileged factual information within a document, it must.” Id. at 89 (quoting Loving v. Dep't of Def., 550 F.3d 32, 38 (D.C.Cir.2008)) (internal quotation marks omitted). This meant that the propriety of the agency's decision to bar disclosure of the documents in their entirety turned on its second assertion of privilege: the attorney work-product privilege. Unlike the deliberative process privilege, the latter “does not require the segregation of disclosable material.” Id. (citing Judicial Watch, Inc. v. Dep't of Justice, 432 F.3d 366, 371 (D.C.Cir.2005)).

After reviewing the two documents in camera, the district court concluded that the work-product privilege did not apply to either document because neither was “prepared in anticipation of litigation.” McKinley v. Fed. Hous. Fin. Agency, No. 10–1165, slip op. at 2 (Aug. 26, 2011) (quoting FED. R. CIV. P. 26(b)(3)(A)) (internal quotation marks omitted). Consequently, the court ordered the FHFA to disclose all portions of the documents “reasonably segregable from the material ... protected by the deliberative-process privilege.” Id. at 4. The FHFA complied, producing heavily redacted versions of both documents. See Joint Status Report, Attachment A (Sept. 16, 2011). Thereafter, the district court granted the agency's motion for summary judgment, finding that the FHFA had satisfied its obligations under FOIA. McKinley v. Fed. Hous. Fin. Agency, No. 10–1165, 2012 WL 1415518, at *2–3 (Jan. 25, 2012).

McKinley then moved for attorneys' fees. On June 27, 2012, the district court denied the motion. McKinley v. Fed. Hous. Fin. Agency, No. 10–1165, slip op. at 4–6 (June 27, 2012) (hereinafter Attorneys' Fees Opinion ). The court first expressed “serious doubts” about whether McKinley was even eligible for fees under FOIA. Id. at 4. FOIA permits the award of attorneys' fees to plaintiffs who have “substantially prevailed,” 5 U.S.C. § 552(a)(4)(E)(i), and, although the “FHFA did turn over additional pages ... pursuant to a court order,” the court doubted whether the receipt of two heavily redacted documents “amount[ed] to ‘substantially’ prevailing.” Attorneys' Fees Opinion, slip op. at 4. The court found that it was unnecessary to address that question, however, because it determined that McKinley was not entitled to fees even if he were eligible for them. Id. at 6.

II

To obtain attorneys' fees under FOIA, a plaintiff must satisfy two requirements. First, he must be eligible for fees, which requires that he “substantially prevail” as defined by 5 U.S.C. § 552(a)(4)(E)(ii). Second, an eligible plaintiff must demonstrate that he is entitled to fees. See Cotton v. Heyman, 63 F.3d 1115, 1117 (D.C.Cir.1995). On appeal, McKinley challenges the district court's reasoning with respect to both requirements.

We find the plaintiff's challenge to the district court's treatment of the first requirement perplexing. As should be apparent from our recitation of the district court's opinion, the court could not have incorrectly decided the question of eligibility because it did not decide the issue at all. Rather, it assumed arguendo that McKinley satisfied the eligibility requirement and concluded that he nonetheless failed to satisfy the entitlement requirement. The district court's perfectly appropriate decision not to decide a question it did not have to decide did not disadvantage McKinley in any way. Cf. Earle v. Dist. of Columbia, 707 F.3d 299, 304 (D.C.Cir.2012) (“In our circuit it is a venerable practice, and one frequently observed, to assume arguendo the answer to one question ... in order to resolve a given case by answering another and equally dispositive one.” (citation and internal quotation marks omitted)). If McKinley has a claim on appeal, then, it is limited to his challenge to the court's determination that he was not entitled to attorneys' fees. We therefore move directly to that question.

This circuit has long applied a multi-factor standard for evaluating whether a plaintiff who is eligible for attorneys' fees is also entitled to such fees. See, e.g., Nationwide Bldg. Maint., Inc. v. Sampson, 559 F.2d 704, 712, 714 (D.C.Cir.1977). Four non-exclusive factors typically govern the entitlement inquiry: “(1) the public benefit derived from the case; (2) the commercial benefit to the plaintiff; (3) the nature of the plaintiff's interest in the records; and (4) the reasonableness of the agency's withholding” of the requested documents. Tax Analysts v. U.S. Dep't of Justice, 965 F.2d 1092, 1093 (D.C.Cir.1992); see Davy v. CIA, 550 F.3d 1155, 1159 (D.C.Cir.2008). In practice, we have often combined the second and third factors into a single factor assessing whether a plaintiff “has ‘sufficient private incentive to seek disclosure’ ” of the documents without expecting to be compensated for it. Davy, 550 F.3d at 1160 (quoting Tax Analysts, 965 F.2d at 1095). We review the district court's appraisal and balancing of those factors solely for abuse of discretion. Id. at 1158;see Brayton v. Office of the U.S. Trade Representative, 641 F.3d 521, 524 (D.C.Cir.2011).

The first factor considers the significance of the contribution that the released information makes to the fund of public knowledge. See Cotton, 63 F.3d at 1120. The district court found that this first factor “strongly counsels” against awarding fees, reasoning that the two documents McKinley ultimately obtained were so heavily redacted that they contributed only “scant” information to the public record. Attorneys' Fees Opinion, slip op. at 4. We detect no abuse of discretion in that finding.

Of the thirteen redacted pages that the FHFA produced, McKinley draws our...