Fdic Motion To Sever
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Case 1:09-cv-01263-ESH
Document 13
Filed 09/16/2009
Page 1 of 7
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
VERN McKINLEY, Plaintiff, v. No. 1:09-cv-1263-ESH FEDERAL DEPOSIT INSURANCE CORPORATION and BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Defendants.
September 16, 2009
FDIC’S MOTION TO SEVER Pursuant to Rules 20(a)(2) and 21 of the Federal Rules of Civil Procedure, defendant Federal Deposit Insurance Corporation (FDIC) moves to sever the claims asserted against it from the claims asserted against defendant Board of Governors of the Federal Reserve System (FRB). STATEMENT OF FACTS On November 18, 2008, Plaintiff Vern McKinley (McKinley) submitted a request under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, to the FDIC, “seeking certain records related to the approval of the Wachovia Bank transaction.” Complaint (Dkt. 1) at ¶ 16. In discussions with FDIC personnel, Mr. McKinley was informed that material responsive to his request included the minutes of a September 29, 2008 meeting of the FDIC Board of Directors concerning the purchase of Wachovia Bank by Citigroup, Inc. Complaint (Dkt. 1) at ¶ 23. On January 13, 2009, the FDIC denied Mr. McKinley’s request, stating that the Board meeting had been closed to the public under the
1
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Government in the Sunshine Act, 5 U.S.C. § 552b, and the minutes of that meeting were exempt from disclosure under applicable exemptions.1 Complaint (Dkt. 1) at ¶ 24; FDIC Answer (Dkt. 6) at ¶ 24. On January 28, 2009, Mr. McKinley filed an administrative appeal of the FDIC’s decision. The FDIC responded on February 17, 2009, by providing a redacted copy of the Board meeting minutes, and by stating that the redacted portions were exempt from disclosure. Complaint (Dkt. 1) at ¶ 26. Subsequently, the FDIC provided Mr. McKinley with a redacted memorandum which had been presented to the FDIC Board of Directors for discussion at the closed meeting. The FDIC explained that the redacted portions of the memorandum were exempt from disclosure under certain FOIA exemptions. A month after Mr. McKinley’s FOIA request to the FDIC concerning the Wachovia/Citigroup transaction, on December 17, 2008, Mr. McKinley submitted a FOIA request to the FRB seeking “certain records related to the approval of the Bear Stearns transaction.” Complaint (Dkt. 1) at ¶ 16. On January 16, 2009, the FRB staff sent a letter to Mr. McKinley to extend their response date. In May, 2009, Mr. McKinley contacted the FRB and was given an anticipated response date of early June. On June 11, FRB staff sent another letter to Mr. McKinley. The FRB ultimately responded to Mr. McKinley’s FOIA request on August 11, 2009. Complaint (Dkt. 1) at ¶¶ 30-32; FRB Answer (Dkt. 9) at ¶¶ 30-33. The Joint Status Report of Mr. McKinley and the FRB indicates that the FRB has not yet responded in full to Mr. McKinley’s FOIA request and is still reviewing records. FRB Joint Status Report (Dkt. 12) at ¶¶ 2-3.
1
Pursuant to subsection (k) of the Sunshine Act, 5 U.S.C. § 552b(k), where a FOIA request is made for transcripts, recordings, or minutes of closed meetings, the Sunshine Act exemptions apply rather than the FOIA exemptions.
2
Case 1:09-cv-01263-ESH
Document 13
Filed 09/16/2009
Page 3 of 7
STATEMENT OF POINTS OF LAW AND AUTHORITY Under Rule 20 of the Federal Rules of Civil Procedure, multiple defendants may be joined in the same lawsuit if a two-part test is met: (A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action. Fed. R. Civ. P. 20(a)(2). Courts consider parties to be misjoined when these requirements are not satisfied. Montgomery v STG International, 532 F. Supp.2d 29, 35 (D.D.C. 2008); Disparte v. Corporate Executive Board, 223 F.R.D. 7, 12 (D.D.C. 2004). The remedy for misjoinder is found in Fed. R. Civ. P. 21, which provides in relevant part: “On motion or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever any claim against a party.” M.K. v. Tenet, 216 F.R.D. 133, 137 (D.D.C. 2002); Disparte, 223 F.R.D. at 12. The determination of a motion to sever is within the discretion of the trial court. M.K. v. Tenet, 216 F.R.D. at 137; Disparte, 223 F.R.D. at 12. If parties or claims appear to be improperly joined, the trial court may order such claims severed and proceeded with separately. Disparte, 223 F.R.D. at 12; Lucas v. Barreto, 2005 WL 607923 *2 (D.D.C. 2005). In this case, Mr. McKinley’s joinder of his claims against the FDIC and his claims against the FRB fails to meet either prong of the Rule 20 test, and accordingly this action should be severed under Rule 21. First, The claim asserted against the FDIC does not arise “out of the same transaction, occurrence, or series of transactions or occurrences,” as the claim asserted against the FRB. From the FDIC, Mr. McKinley requested documents relating to “the
3
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Document 13
Filed 09/16/2009
Page 4 of 7
Wachovia Bank transaction,” while he asked the FRB to produce documents relating to “the Bears Stearns transaction,” a matter totally unrelated to the Wachovia Bank transaction. Further, Mr. McKinley made two separate FOIA requests to two separate agencies on two separate dates a month apart. The responses of the FDIC and the FRB to Mr. McKinley’s requests were entirely different and totally unconnected to each other. There is no logical relationship between the claims against the FDIC and the claims against the FRB. See Montgomery, 532 F. Supp.2d at 35; M.K. v. Tenet, 216 F.R.D. at 142. Second, there is no “question of law or fact common to all defendants” in this action. As discussed above, the claims here involve two separate FOIA requests to two separate agencies about two separate transactions on two separate occasions with two separate outcomes. While Mr. McKinley is proceeding against both agencies under the same statute, any questions of law arising here are inextricably tied to the actions of each particular agency in dealing with its own documents. Thus, the question of whether the FDIC complied with FOIA in withholding material from the Board minutes and the memorandum is entirely separate from the question whether the FRB complied with FOIA in whatever response it has made or will make. There are no commonalities of law or fact between the defendants in this case. See Lucas, 2005 WL 607923 *3 (“claims in [this case] are tied together by nothing more than the Agency’s failure to act on plaintiffs’ underlying EEO claims”). “Permissive joinder is used to promote convenience and expedite resolution.” Montgomery, 532 F. Supp.2d at 35. In this case, leaving these disparate claims and defendants in the same action will promote inconvenience and delay. Mr. McKinley’s
4
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Document 13
Filed 09/16/2009
Page 5 of 7
claim against the FDIC is narrow, involving only the minutes of the September 29, 2008 meeting of the Board of Directors and the related memorandum. The FDIC is prepared to move promptly for summary judgment. However, with regard to Mr. McKinley’s claims against the FRB, document production is still in progress and the actual scope of the material at issue will necessarily require more time to identify. As the two recently filed status reports (Dkt. 11 and 12) make clear, the claims against the FDIC and the claims against the FRB are proceeding on two separate procedural tracks, with the agreement of Mr. McKinley. In this case, severing the claims would promote convenience and expedite resolution.
5
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Document 13
Filed 09/16/2009
Page 6 of 7
CONCLUSION For the reasons stated, all claims asserted in this action against the FDIC should be severed from the claims asserted against the FRB and proceed separately. A proposed order is attached. Pursuant to the Rules of this Court, LCivR7(m), counsel for the FDIC has discussed this motion with counsel for the other parties. Counsel for the FRB does not oppose this motion. Counsel for Mr. McKinley opposes it.
Respectfully submitted, COLLEEN J. BOLES Assistant General Counsel ____/s/ Daniel Kurtenbach_____ Daniel Kurtenbach (DC 426590) Counsel D. Ashley Doherty Counsel FEDERAL DEPOSIT INSURANCE CORPORATION 3501 Fairfax Drive, VS-D7026 Arlington, VA 22226 Tel.: (703) 562-2465 Fax.: (703) 562-2477 E-mail: [email protected] September 16, 2009
6
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CERTIFICATE OF SERVICE I hereby certify that on September 16, 2009, the foregoing MOTION TO SEVER was mailed to the following: Vern McKinley 20745 Ashburn Station Place Ashburn, VA 20147 /s/ Daniel H. Kurtenbach Daniel H. Kurtenbach D.C. Bar No. 426590 Counsel Federal Deposit Insurance Corporation 3501 Fairfax Drive, Room VS-D7026 Arlington, VA 22226 703-562-2465
7
Case 1:09-cv-01263-ESH
Document 13-2
Filed 09/16/2009
Page 1 of 1
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
VERN McKINLEY, Plaintiff, v. No. 1:09-cv-1263-ESH FEDERAL DEPOSIT INSURANCE CORPORATION and BOARD OF GOVERNORS OF THE FRB SYSTEM, Defendants. [PROPOSED] ORDER It appearing to the Court that the claims against defendant Federal Deposit Insurance Corporation (FDIC) set forth in the Complaint are improperly joined with the claims against defendant Board of Governors of the Federal Reserve System (FRB), it is hereby ORDERED that, pursuant to Fed. R. Civ. P. 21, the FDIC’s Motion to Sever is GRANTED. This action shall be severed into an action against defendant FDIC and a separate action against defendant FRB. Each matter shall proceed under the original Complaint as of the original filing date, disregarding those pleadings and orders and portions thereof that are applicable only to the other defendant. The Clerk shall take all appropriate actions to carry out this Order.
____________________________________ United States District Judge
Document 13
Filed 09/16/2009
Page 1 of 7
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
VERN McKINLEY, Plaintiff, v. No. 1:09-cv-1263-ESH FEDERAL DEPOSIT INSURANCE CORPORATION and BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Defendants.
September 16, 2009
FDIC’S MOTION TO SEVER Pursuant to Rules 20(a)(2) and 21 of the Federal Rules of Civil Procedure, defendant Federal Deposit Insurance Corporation (FDIC) moves to sever the claims asserted against it from the claims asserted against defendant Board of Governors of the Federal Reserve System (FRB). STATEMENT OF FACTS On November 18, 2008, Plaintiff Vern McKinley (McKinley) submitted a request under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, to the FDIC, “seeking certain records related to the approval of the Wachovia Bank transaction.” Complaint (Dkt. 1) at ¶ 16. In discussions with FDIC personnel, Mr. McKinley was informed that material responsive to his request included the minutes of a September 29, 2008 meeting of the FDIC Board of Directors concerning the purchase of Wachovia Bank by Citigroup, Inc. Complaint (Dkt. 1) at ¶ 23. On January 13, 2009, the FDIC denied Mr. McKinley’s request, stating that the Board meeting had been closed to the public under the
1
Case 1:09-cv-01263-ESH
Document 13
Filed 09/16/2009
Page 2 of 7
Government in the Sunshine Act, 5 U.S.C. § 552b, and the minutes of that meeting were exempt from disclosure under applicable exemptions.1 Complaint (Dkt. 1) at ¶ 24; FDIC Answer (Dkt. 6) at ¶ 24. On January 28, 2009, Mr. McKinley filed an administrative appeal of the FDIC’s decision. The FDIC responded on February 17, 2009, by providing a redacted copy of the Board meeting minutes, and by stating that the redacted portions were exempt from disclosure. Complaint (Dkt. 1) at ¶ 26. Subsequently, the FDIC provided Mr. McKinley with a redacted memorandum which had been presented to the FDIC Board of Directors for discussion at the closed meeting. The FDIC explained that the redacted portions of the memorandum were exempt from disclosure under certain FOIA exemptions. A month after Mr. McKinley’s FOIA request to the FDIC concerning the Wachovia/Citigroup transaction, on December 17, 2008, Mr. McKinley submitted a FOIA request to the FRB seeking “certain records related to the approval of the Bear Stearns transaction.” Complaint (Dkt. 1) at ¶ 16. On January 16, 2009, the FRB staff sent a letter to Mr. McKinley to extend their response date. In May, 2009, Mr. McKinley contacted the FRB and was given an anticipated response date of early June. On June 11, FRB staff sent another letter to Mr. McKinley. The FRB ultimately responded to Mr. McKinley’s FOIA request on August 11, 2009. Complaint (Dkt. 1) at ¶¶ 30-32; FRB Answer (Dkt. 9) at ¶¶ 30-33. The Joint Status Report of Mr. McKinley and the FRB indicates that the FRB has not yet responded in full to Mr. McKinley’s FOIA request and is still reviewing records. FRB Joint Status Report (Dkt. 12) at ¶¶ 2-3.
1
Pursuant to subsection (k) of the Sunshine Act, 5 U.S.C. § 552b(k), where a FOIA request is made for transcripts, recordings, or minutes of closed meetings, the Sunshine Act exemptions apply rather than the FOIA exemptions.
2
Case 1:09-cv-01263-ESH
Document 13
Filed 09/16/2009
Page 3 of 7
STATEMENT OF POINTS OF LAW AND AUTHORITY Under Rule 20 of the Federal Rules of Civil Procedure, multiple defendants may be joined in the same lawsuit if a two-part test is met: (A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action. Fed. R. Civ. P. 20(a)(2). Courts consider parties to be misjoined when these requirements are not satisfied. Montgomery v STG International, 532 F. Supp.2d 29, 35 (D.D.C. 2008); Disparte v. Corporate Executive Board, 223 F.R.D. 7, 12 (D.D.C. 2004). The remedy for misjoinder is found in Fed. R. Civ. P. 21, which provides in relevant part: “On motion or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever any claim against a party.” M.K. v. Tenet, 216 F.R.D. 133, 137 (D.D.C. 2002); Disparte, 223 F.R.D. at 12. The determination of a motion to sever is within the discretion of the trial court. M.K. v. Tenet, 216 F.R.D. at 137; Disparte, 223 F.R.D. at 12. If parties or claims appear to be improperly joined, the trial court may order such claims severed and proceeded with separately. Disparte, 223 F.R.D. at 12; Lucas v. Barreto, 2005 WL 607923 *2 (D.D.C. 2005). In this case, Mr. McKinley’s joinder of his claims against the FDIC and his claims against the FRB fails to meet either prong of the Rule 20 test, and accordingly this action should be severed under Rule 21. First, The claim asserted against the FDIC does not arise “out of the same transaction, occurrence, or series of transactions or occurrences,” as the claim asserted against the FRB. From the FDIC, Mr. McKinley requested documents relating to “the
3
Case 1:09-cv-01263-ESH
Document 13
Filed 09/16/2009
Page 4 of 7
Wachovia Bank transaction,” while he asked the FRB to produce documents relating to “the Bears Stearns transaction,” a matter totally unrelated to the Wachovia Bank transaction. Further, Mr. McKinley made two separate FOIA requests to two separate agencies on two separate dates a month apart. The responses of the FDIC and the FRB to Mr. McKinley’s requests were entirely different and totally unconnected to each other. There is no logical relationship between the claims against the FDIC and the claims against the FRB. See Montgomery, 532 F. Supp.2d at 35; M.K. v. Tenet, 216 F.R.D. at 142. Second, there is no “question of law or fact common to all defendants” in this action. As discussed above, the claims here involve two separate FOIA requests to two separate agencies about two separate transactions on two separate occasions with two separate outcomes. While Mr. McKinley is proceeding against both agencies under the same statute, any questions of law arising here are inextricably tied to the actions of each particular agency in dealing with its own documents. Thus, the question of whether the FDIC complied with FOIA in withholding material from the Board minutes and the memorandum is entirely separate from the question whether the FRB complied with FOIA in whatever response it has made or will make. There are no commonalities of law or fact between the defendants in this case. See Lucas, 2005 WL 607923 *3 (“claims in [this case] are tied together by nothing more than the Agency’s failure to act on plaintiffs’ underlying EEO claims”). “Permissive joinder is used to promote convenience and expedite resolution.” Montgomery, 532 F. Supp.2d at 35. In this case, leaving these disparate claims and defendants in the same action will promote inconvenience and delay. Mr. McKinley’s
4
Case 1:09-cv-01263-ESH
Document 13
Filed 09/16/2009
Page 5 of 7
claim against the FDIC is narrow, involving only the minutes of the September 29, 2008 meeting of the Board of Directors and the related memorandum. The FDIC is prepared to move promptly for summary judgment. However, with regard to Mr. McKinley’s claims against the FRB, document production is still in progress and the actual scope of the material at issue will necessarily require more time to identify. As the two recently filed status reports (Dkt. 11 and 12) make clear, the claims against the FDIC and the claims against the FRB are proceeding on two separate procedural tracks, with the agreement of Mr. McKinley. In this case, severing the claims would promote convenience and expedite resolution.
5
Case 1:09-cv-01263-ESH
Document 13
Filed 09/16/2009
Page 6 of 7
CONCLUSION For the reasons stated, all claims asserted in this action against the FDIC should be severed from the claims asserted against the FRB and proceed separately. A proposed order is attached. Pursuant to the Rules of this Court, LCivR7(m), counsel for the FDIC has discussed this motion with counsel for the other parties. Counsel for the FRB does not oppose this motion. Counsel for Mr. McKinley opposes it.
Respectfully submitted, COLLEEN J. BOLES Assistant General Counsel ____/s/ Daniel Kurtenbach_____ Daniel Kurtenbach (DC 426590) Counsel D. Ashley Doherty Counsel FEDERAL DEPOSIT INSURANCE CORPORATION 3501 Fairfax Drive, VS-D7026 Arlington, VA 22226 Tel.: (703) 562-2465 Fax.: (703) 562-2477 E-mail: [email protected] September 16, 2009
6
Case 1:09-cv-01263-ESH
Document 13
Filed 09/16/2009
Page 7 of 7
CERTIFICATE OF SERVICE I hereby certify that on September 16, 2009, the foregoing MOTION TO SEVER was mailed to the following: Vern McKinley 20745 Ashburn Station Place Ashburn, VA 20147 /s/ Daniel H. Kurtenbach Daniel H. Kurtenbach D.C. Bar No. 426590 Counsel Federal Deposit Insurance Corporation 3501 Fairfax Drive, Room VS-D7026 Arlington, VA 22226 703-562-2465
7
Case 1:09-cv-01263-ESH
Document 13-2
Filed 09/16/2009
Page 1 of 1
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
VERN McKINLEY, Plaintiff, v. No. 1:09-cv-1263-ESH FEDERAL DEPOSIT INSURANCE CORPORATION and BOARD OF GOVERNORS OF THE FRB SYSTEM, Defendants. [PROPOSED] ORDER It appearing to the Court that the claims against defendant Federal Deposit Insurance Corporation (FDIC) set forth in the Complaint are improperly joined with the claims against defendant Board of Governors of the Federal Reserve System (FRB), it is hereby ORDERED that, pursuant to Fed. R. Civ. P. 21, the FDIC’s Motion to Sever is GRANTED. This action shall be severed into an action against defendant FDIC and a separate action against defendant FRB. Each matter shall proceed under the original Complaint as of the original filing date, disregarding those pleadings and orders and portions thereof that are applicable only to the other defendant. The Clerk shall take all appropriate actions to carry out this Order.
____________________________________ United States District Judge
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