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Greenspan v. Bd. of Governors of the Fed. Rsrv. Sys., No. 21-01968, 2022 WL 17356879 (D.D.C. Dec. 1, 2022) (McFadden, J.)


Greenspan v. Bd. of Governors of the Fed. Rsrv. Sys., No. 21-01968, 2022 WL 17356879 (D.D.C. Dec. 1, 2022) (McFadden, J.)

Re:  Request for emails of Federal Reserve Board Chairman containing the keywords “‘bubble’” and “‘tantrum’” in specific contexts

Disposition:  Granting defendant’s motion for summary judgment; denying plaintiff’s motion for summary judgment

  • Exemption 4:  The court holds that “[t]he Board properly asserts Exemption 4.”  The court relates that “[t]he Board withheld a few documents that it received from two private firms under Exemption 4.”  “As a threshold matter, the Board submits affidavits from individuals who work at the relevant private firms to support its claims.”  “First, the Board explains that it obtained the withheld communications from ‘persons’ as defined in FOIA:  . . . a macroeconomic research firm, and . . . a global investment firm.”  “Second, the withheld information is ‘commercial or financial’ because [both private firms] assert a ‘commercial interest’ in it.”  The material consists of “‘internal assessment of macroeconomic financial conditions’” and “‘commercial concerns and market analysis.’”  “Third, the withheld emails are ‘confidential’ because the two firms assert they would not customarily make such information public.”  “[One of the private firms] also alleges facts going to the second part of the Food Marketing test.”  “It asserts that it voluntarily provided information to [the Federal Reserve Board Chairman] ‘under assurances’ that the Board ‘would maintain the confidentiality of the information and not disclose it publicly.’”  “Such information is ‘undoubtedly relevant to determining whether commercial information possessed by the agency is confidential.’”  “[The firm’s] declarant makes doubly sure that the withheld information is confidential.”  The court relates that “[plaintiff] attacks the Board’s claim that [one firm’s] information is confidential.”  “[Plaintiff] points to a line in [the firm’s] declaration that states, ‘there are occasions on which [the firm] chooses to disclose macroeconomic views to its investors and/or the public.’”  “But that is not the test.”  “Rather, the Board must show that the withheld communication contains information that [the firm] has ‘customarily and actually treated as private.’”  “That [the firm] sometimes discloses other macroeconomic information – which it does ‘only in limited circumstances and for strategic reasons,’ – does not defeat its claim that it customarily and actually treated the withheld information as private.”  Additionally, “the Court finds that the Board has satisfied the foreseeable harm requirement.”  “Both [of] the [private firm] declarants explain how disclosure of the withheld information would directly harm their economic or business interests.”  “[One firm] explains that if the emails at issue were disclosed ‘other traders and investment advisers might seek to replicate, or model, [the firm’s] trading [which] . . . would have a detrimental impact on [the firm’s] clients and the performance of [the firm’s] client funds.’”  “So too for [the other firm].”  “Disclosure of its macroeconomic analysis in emails to the Board ‘would undermine [the firm’s] competitiveness’ and damage its reputation because its clients rely on the firm’s discretion.”  “And [the firm] articulates one final foreseeable harm:  if its information were to be disclosed, it might be less likely to voluntarily disclose such information to the government again.”
  • Exemption 5, “Inter-Agency or Intra-Agency” Threshold Requirement:  The court holds that “[a]s a threshold matter, the Board properly shows through its declarations and Vaughn indices that the emails and attachments it withheld under Exemption 5 meet the inter- or intra-agency requirement.”  “The Board is an ‘agency’ for FOIA purposes.”  “The Board’s declarants assert that most documents the Board withheld are emails and attachments sent among Board staff, other Board members, and [the Board Chairman].”  “These communications are intra-agency because Board members and staff exchanged them and did not disclose them publicly.”  “That said, the Board exchanged some of the withheld emails with non-agency staff.”  “Certain of the withheld emails included staff members of the Federal Reserve Banks, . . . and one email string included a former Board employee . . . .”  “None are ‘agencies’ within the meaning of FOIA.”  “But the D.C. Circuit has held that under the ‘consultant corollary’ to Exemption 5, this Court may ‘interpret intra-agency to include agency records containing comments solicited from nongovernmental parties.’”  “The Board’s declarants adequately explain that that Board relied on Federal Reserve Bank staff and a former board employee as consultants in its deliberations before specific meetings, speeches, and press conferences.”
  • Exemption 5, Deliberative Process Privilege:  The court notes that “[t]his is an unusual deliberative process privilege case.”  “Many of the communications the Board withheld did not lead to a final, published agency action, such as an Executive Order or new policy.”  “But the Board has proved that each of [the Chairman’s] official statements are themselves decisions, with significant repercussions in the financial markets.”  “So it properly withheld communications preceding these statements even if the final product was merely talking points for a press conference or meeting.”  Therefore, “the Court will grant the Board’s motion for summary judgment.”

    “[T]he Court addresses each of the Board’s four categories [of information withheld].”  “Category 1 covers ‘emails and attachments preparing [the] Chair . . . and Board members for upcoming Federal Open Market Committee (FOMC) meetings, FOMC press conferences, and matters relating to monetary policy and the U.S. economy.’”  “First up are communications predating FOMC meetings.”  “The communications contain the staff’s ‘confidential analyses and forecasts regarding the condition of the U.S. economy and financial markets, likely trends in economic conditions in the U.S. and abroad, [and] risks facing the U.S. economy[.]’”  “The withheld emails and attachments also contain the staff’s ‘recommendations regarding the appropriate stance of monetary policy’ and ‘[the Chair’s] and other Board members’ comments, observations, questions, and reactions to the documents.’”  “Finally, some emails concern antecedent administrative matters to FOMC meetings, such as policy statements, calendars, and meeting minutes.”  “The Board has shown that the emails and attachments preceding the FOMC meetings fall within the deliberative process privilege.”  “These communications exchanged between subordinates and higher-ups are predecisional because they helped Powell prepare for meetings throughout the year.”  “The Board’s Vaughn index shows that the communications predated FOMC meetings.”  “And they are deliberative because they reflect ‘subordinates’ analyses and recommendations before meetings where participants hashed out decisions.’”  “That the Board’s Vaughn indices show that the vast majority of the emails flowed from subordinates to [the Chairman] and other Board members bolsters this conclusion.”  “Second are documents preceding FOMC press conferences.”  “[Plaintiff] does not challenge any withheld documents in this subcategory, and the Court is satisfied that the deliberative process privilege protects them.”  “Emails and attachments sent before the press conference are predecisional because they were generated before the Board’s final statement of its position at the press conference itself.”  “Third are ‘ad hoc emails and attachments.’”  “The Board contends that these emails and attachments involve staff and Board members, including [the Chairman], ‘mak[ing] recommendations or express[ing] opinions on legal or policy matters.’”  “Though this subcategory is a closer call than the prior two because no future meeting or decision is described, the Court finds that the Board properly asserted the deliberative process privilege.”  “The D.C. Circuit has recognized that an agency need not pinpoint an ultimate decision to which the document contributes to assert the privilege.”  “[Defendant] explains that these communications contain staff members’ confidential analyses and forecasts about the economy and form part of the ongoing cycle of preparing [the Chairman] and other Board members for upcoming decisions.”  “The Court is satisfied that these communications include the ‘give-and-take’ of the consultative process.”  “They reflect ‘internal debate over how best to promote and to preserve’ the Board’s policy prerogatives vis-à-vis the economy.”

    The court relates that “[t]he second category covers emails and attachments relating to international economic matters.”  “The Court finds that the Board properly asserted Exemption 5 as to these documents.”  The court finds that “[defendant’s] declaration adequately explains that the first document range is a series of ‘pre-decisional, deliberative periodic briefings’ from staff to [the Chariman] and Board members.”  “These briefings reflect the Federal Reserve System staff’s judgment about which items are most pressing for the Board members to address.”  “And they play a ‘critical role’ in the ‘Board’s ongoing decision-making process of monitoring and responding to international economic developments.’”  “Though factual material is typically not protected by the deliberative process privilege, factual material culled and presented to decision-makers through exercises of discretion may be.”  “The Board has adequately explained that the weekly briefings contain the type of factual information that the deliberative process privilege protects.”  Additionally, the court finds that “Exemption 5 covers . . . an email from [the Chairman] providing commentary that is part of the Board’s ongoing decision-making process ‘with regard to the specific issue . . . addressed in the email’ – financial market uncertainty.”  “It is therefore deliberative with respect to the Board’s ongoing responsibilities to ‘anticipate and respond to [ ] development[s]’ in markets.”  “That [the Chairman] sent the document to a subordinate does not defeat the privilege.”  “There is no sign that [the Chairman] ‘was providing any sort of direction or explaining the basis for a final decision to his subordinates,’ in which case the ‘privilege’s application would be more tenuous.’”  The court relates that “[plaintiff] also challenges a third document in this category by arguing that the Board’s description relates it to a previous meeting, rather than a future decision.”  “It is an email and attachment from staff to [the Chairman] and high-level Federal Reserve staff members ‘providing staff analyses regarding policy-relevant discussions at a recent meeting.’”  “As the Board explains, staff often exchange such emails with Board members ‘so that they can better anticipate and respond to’ future shifts in domestic and international financial markets.”  “And the Board claims that this challenged document played a ‘part in the Board’s ongoing decision-making process . . . on international’ economic matters.”  The court finds that “[t]his is a closer call than the other documents [plaintiff] challenges.”  “If all the Court had was the Board’s Vaughn Index description – which does seem to relate the document to a completed meeting – it would not pass muster.”  “But the combination of the Board’s Vaughn index description and its declarations just enables it to meet its burden.”  “The Board argues that this email and attachment commenting on a prior meeting will help Board members ‘better anticipate and respond’ to future market developments.”  “So the Board situates this document within its ongoing deliberative processes.”

    The court relates that “[t]he third category covers emails and attachments relating to upcoming speeches, public appearances, meetings, and congressional testimony by [the Chairman].”  “[Plaintiff] challenges one document in this category.”  “It is an ‘internal FRS email and attachment preparing [the] Chair . . . for [an] upcoming call with [a] member of the Senate.’”  The court finds that “[t]he Board has adequately explained why this email and attachment qualify for the deliberative process privilege.”  “They are predecisional because they prepared [the Chairman] for an upcoming meeting with a Senator.”  “And the communication is deliberative because it presented ideas to [the Chairman] on proposed topics, phrases, and word choices, and informed him about matters that might shape his views in preparing for the call.”  “Such advice from staff helped ensure that his final remarks were accurate and delivered with the appropriate tone.”  “The Court thus finds that the Board has properly asserted Exemption 5 as to this category."

    The court relates that “[t]he fourth category covers emails and attachments relating to financial stability and the interaction between financial stability and monetary policy.”  “[Plaintiff] challenges five batches of documents in this category.”  The court finds that “[t]he Board explained that its members considered these documents when preparing for meetings and in the ongoing process of determining financial stability or monetary policy, rendering them pre-decisional.”  “The Board has also shown that these documents are deliberative because they involve an ongoing decision-making process about financial stability and monetary policy – matters of ‘continuing, iterative assessment, analysis, and policy adjustments.’”  “As explained, the Board need not pinpoint a specific decision to which these documents relate to satisfy Exemption 5.”  “The Court thus finds that the Board has properly asserted Exemption 5 as to this category.”
  • Exemption 5, Foreseeable Harm and Other Considerations:  The court holds that “[t]he Board [satisfies its obligation] here, explaining the foreseeable harm for each of the four categories described above.”  First, the court finds that “[t]he Board has met its foreseeable harm burden for the documents related to FOMC meetings, the domestic economy, and post-Committee press conferences.”  “The Board has explained that release of the information would chill candid advice within the Federal Reserve system, which the deliberative process privilege exists to protect.”  “But beyond that semi-generic rationale, the Board has also shown that staff recommendations would be chilled because of fear that their sensitive, confidential economic analyses could be misconstrued or prematurely acted on by financial markets, market participants, government officials, or consumers.”  “The Board’s evidence is far from a ‘perfunctory statement’ that disclosure ‘would jeopardize the free exchange of information.’”  “The Board shows how deliberation would be chilled between specific decisionmakers in a particular context, and the likely result on financial markets and stakeholders.”  “The Board’s declarant also indicates that release would confuse the public, a result the D.C. Circuit has long recognized ‘has special force with respect to disclosures of agency positions or reasoning concerning proposed policies.’”  “The Board therefore says something ‘new about the harm of disclosure’ and ‘link[s] the possibility of that harm to the information in this category.’”

    Regarding the second category of information withheld under the Deliberative Process Privilege, the court relates that “[t]he Board similarly asserts that disclosing this information would make staff ‘much more circumscribed in their comments and analyses’ because they would hesitate to include things that ‘could be misinterpreted or negatively perceived by financial markets, market participants, government officials, or the public.’”  “The Board also explains that releasing this ‘sensitive, non-public information’ – some of which the Board receives on condition of confidentiality from foreign governments – ‘would foreseeably harm the Board’s ability to effectively represent the United States’ in international economic meetings.”  “This is so because other meeting participants and foreign officials ‘would be reluctant to share information that they did not want disclosed publicly.’”  “Again, the Board properly links the harm of disclosure to the specific context of international economic meetings and external discussions with foreign leaders.”  “The Court also finds that the ‘context and purpose’ of some documents within these two declarations support a finding of foreseeable harm.”  “As [plaintiff] himself acknowledges, ‘[the Chairman’s] words have the power to move markets and alter the world economy.’”  “Thus, even for documents in the . . . declarations where the Board’s description is less specific, the Court is satisfied that the information within the communications has the power to sow confusion and disrupt financial markets if disclosed.”

    Regarding the third category, the court agrees with defendant that “[c]andid observations are ‘essential to ensure that information in final speeches, remarks, public appearances and testimony by [the] Chair . . . is complete, accurate, and up-to-date.’”  “And [the Chair] himself 'would feel less free to candidly comment on or edit drafts, or praise or disregard specific ideas’ if he ‘was concerned that his candid comments or observations could possibly be misinterpreted by the public, government officials, financial markets participants, or consumers.’”

    Regarding the fourth category, the court finds that “the Board has met its foreseeable harm burden as to the emails and attachments about financial stability, bank capital, and monetary policy.”  “[T]he Board argues that premature disclosure of this information would make staff more reluctant to include a full range and robust discussion of options in its correspondence ‘to the detriment of [the Chair’s] and the Board’s ability to respond to [economic] conditions, causing harm to the U.S. economy, financial markets, market participants and consumers.’”  “And [defendant] explains that premature disclosure of the withheld information ‘would negatively impact the Board’s ability to implement measures enhancing financial stability, and address risks to the U.S. economy and financial institutions, because private financial market participants would react in advance of what they believed to be possible Board action.’”  “The Board has thus identified ‘specific harms to the relevant protected interests’ and it has ‘connect[ed] the harms in a meaningful way to the information withheld.’”

    “Finally, [the court finds that] the Board discusses a foreseeable harm that transcends all its categories:  the potential for improper ‘tea-leaf reading’ of Federal Reserve staff correspondence to divine why the Board changed or stayed its course.”  “Disclosing the Chair and his staff’s incipient views in the withheld emails and attachments thus ‘would result in tea-leaf reading by the press, public[,] and financial market analysts as to why wording was changed, certain ideas were emphasized or downplayed, or why the tone or direction of a final speech, remarks, or testimony took a different tenor than in the draft.’”  “And as [defendant] explains, release of such ‘incomplete or inchoate information that had not been fully vetted’ could result in tangible harms such as ‘stock or bond market sell-offs or speculative buying, fluctuation in asset values, [and] unexpected changes in the direction of interest rates.’”  “So [the court finds that] the Board persuasively articulates another reason why release of the information it withheld would foreseeably cause harm.”
  • ​​​​​​​Litigation Considerations, “Reasonably Segregable” Requirements:  The court notes that “[plaintiff] does not challenge the Board’s assertion that it has released all reasonably segregable portions of the relevant records.”  “And the Court finds that the Vaughn Indices and the Caperton declaration demonstrate that the Board reasonably determined which documents to disclose and which to withhold.”  “The Board ‘carefully examined’ each responsive document and determined that ‘any non-exempt information that might exist in those pages was so inextricably intertwined with exempt information’ that any release would result in disjointed words or phrases.”  “The Board has thus satisfied its segregability burden.”
Court Decision Topic(s)
District Court opinions
Exemption 4
Exemption 5, Attorney-Client Privilege
Exemption 5, Deliberative Process Privilege
Exemption 5, Inter-Agency or Intra-Agency Threshold Requirement
Litigation Considerations, Foreseeable Harm Showing
Litigation Considerations, “Reasonably Segregable” Requirements
Updated December 20, 2022