NANCY L. FOLSTAD,
Plaintiff. Case No. 1:99-cv-124
-vs- Hon. Douglas W. Hillman
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM,
Defendant.
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ORDER
In accordance with the opinion filed this date,
IT IS ORDERED that the Report and Recommendation of the Magistrate
Judge, dated September 24, 1999, is
hereby adopted as the opinion of this court and plaintiff's complaint is
DISMISSED WITH PREJUDICE.
Dated: November 16, 1999
Douglas W. Hillman
Senior District Judge
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
______________
NANCY L. FOLSTAD,
Plaintiff. Case No. 1:99-cv-124
-vs- Hon. Douglas W. Hillman
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM,
Defendant.
__________________________________/
OPINION ADOPTING REPORT & RECOMMENDATION
This is an action filed pursuant to the Freedom of Information Act
("FOIA"), 5 U.S.C. § 552. Plaintiff Nancy L.
Folstad seeks to obtain requested documents relating to a June 1994
transfer of mortgage-backed securities between the
Harris Trust and Savings Bank, Chicago, Illinois, and the holding company
of Bankmont Financial Corporation, Chicago,
Illinois, a U.S. subsidiary of the Bank of Montreal. Specifically,
plaintiff claims that the Board of Governors of the
Federal Reserve (the "Board") is withholding certain portfolio spreadsheets
in violation of FOIA.
The matter presently is before the court on plaintiff's objections to
the Report and Recommendation ("R&R")
filed by the magistrate judge recommending that the court grant defendant's
motion for summary judgment and dismiss
plaintiff's claim. I am persuaded that plaintiff's objections are without
merit. Accordingly, the R&R is adopted as the
opinion of this court and the action is dismissed with prejudice.
I. DISCUSSION
This court reviews de novo those portions of an R&R to which
objections are made. 28 U.S.C. § 636(b)(1);
Fed.R.Civ.P.72(b). The court may accept, reject or modify any or all of the
magistrate judge's findings or
recommendations. Id.
Plaintiff does not object to the legal standards applied by the
magistrate judge in reviewing a FOIA claim. Under
FOIA, this court has jurisdiction to enjoin an "agency from withholding
agency records and to order the production of
any agency records improperly withheld from the complainant." Kissinger v.
Reporters Comm. for Freedom of the Press,
445 U.S. 136, 139 (1980) (quoting 5 U.S.C. § 552(a)(4)(B)). Section
552(a)(4)(B) requires the court to exercise its
jurisdiction upon a showing that an agency (1) "improperly", (2)
"withheld"; (3) "agency records." Id. at 150.
In moving for summary judgment on the basis that it has fully
discharged its obligations under FOIA, the agency
must demonstrate that it has "thoroughly searched for the requested
documents where they might reasonably be found."
Klunzinger v. Internal Revenue Serv., 27 F. Supp. 2d 1015, 1022 (W.D.
Mich. 1998) (citing Miller v. United States Dep't
of State, 779 F.2d 1378, 1383 (8th Cir. 1985)). The adequacy of an agency's
search is judged by a standard of
reasonableness. Id. The agency must demonstrate that it has conducted a
search reasonably calculated to uncover all
relevant documents. Id. However, the agency need not exhaust every possible
location for requested documents. Id.
Further, the agency is not required by FOIA to retain records or to create
a document that does not exist in order to satisfy
a FOIA request. Id.
In order to meet its burden of proof, the agency may submit affidavits
by individuals with personal knowledge of
the agency's response to the request. Weisburg v. U. S. Dep't of Justice,
705 F.2d 1344, 1351 (D.C. Cir. 1983). Agency
affidavits are entitled to substantial weight. See Goland
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v. Central Intelligency Agency, 607 F.2d 339, 352 (D.C. Cir. 1978) (citing
S.Rep. No. 93-1200, 93rd Cong., 2d Sess. 12
(1974)), cert. denied, 445 U.S. 927 (1980). Once the agency has come
forward with affidavits that it has made a good
faith search, plaintiff must introduce evidence to rebut those affidavits
in order to withstand summary judgment. See
Jones v. Federal Bureau of Investigation, 41 F.3d 238, 242 (6th Cir. 1994).
The presumption that the Board made a good
faith search may be refuted by evidence that the Board acted in bad faith.
Id.
In the instant case, the Board submitted lengthy affidavits regarding
the comprehensive search conducted by the
agency. The scope of the search is set forth in detail in the R&R and
because plaintiff does not dispute the history of the
relevant searches, that chronology is accepted here. In addition, plaintiff
acknowledges that during the extended search,
she was in personal touch with various staff members of defendant and made
suggestions regarding the location of the
spreadsheets.
Plaintiff contends, however, that the magistrate judge erred in
concluding that she had failed to meet her burden
of rebutting the agency's affidavits. Specifically, plaintiff asserts that
because the documents in question were relevant to
a "material event" under federal securities law, i.e., an event that could
affect a company's earnings by at least three
percent, under the federal retention schedule, the documentation at issue
had a "permanent" retention designation. As a
result, plaintiff contends that the records must exist because they should
have been retained under the retention schedule.
Assuming that plaintiff is correct regarding the retention
requirements for the documents at issue in this case,
FOIA is not the source of those requirements and does not independently
impose a retention obligation on the agency.
Even if the agency failed to keep documents that it should have
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kept, that failure would create neither responsibility under FOIA to
reconstruct those documents nor liability for the
lapse. Klunzinger, 27 F. Supp. 2d at 1022; Yeager v. Drug Enforcement
Admin., 678 F.2d 315, 321 (D.C. Cir. 1982).
Plaintiff has shown no bad faith on the part of the agency. See Miller
779 F.2d at 1384 (to disprove agency
affidavits, plaintiff must contradict defendant's account of the search
procedure or raise evidence of bad faith). Indeed,
her own affidavits demonstrate extensive contacts with agency employees
suggesting alternative places to search for the
requested information, which apparently were pursued by the agency.
Plaintiff has not suggested any search of agency
records that has not been conducted.
Plaintiff next suggests that the Harris Bank presumably retains copies
of the portfolio spreadsheets and that,
because the Board "improperly" failed to keep their own copies, the Board
should be required to obtain a new copy from
the Harris Bank. As plaintiff acknowledges, however, in order to trigger
the agency obligation to produce under FOIA,
the requested documents must be in the agency's control at the time the
FOIA request is made. See United States
Department of Justice v. Tax Analysts, 492 U.S. 136, 145 (1989). Plaintiff
claims, however, that records are within the
"control" of the agency when they have been created or obtained by the
agency in its official capacity. Id. (reiterating that
not all documents possessed by agency employees are documents within the
"control" of the agency; documents in the
possession of agency employees are only within the control of the agency
when they are created or obtained by the
agency in the conduct of its official duties). As a result, plaintiff
reasons, once the agency has at some time come into
FOIA "control" of the document and later misplaced or destroyed that
document, the agency has an obligation to replace
the document to meet a FOIA request.
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Plaintiff's construction is at odds with the requirement that "the
agency must be in control of the requested
materials at the time the FOIA request is made." Id. (emphasis added). The
Supreme Court has recognized that "Congress
did not believe that an agency 'withholds a document which has been removed
from the possession of the agency prior to
the filing of the FOIA request.’" Id. at 148 (quoting Kissinger, 445 U.S.
at 150-51). "The Act does not obligate agencies
to . . . retain documents; it only obligates them to provide access to
those which it in fact has . . . retained." Kissinger, 445
U.S. at 152. If the Board is no longer in possession of the documents,
nothing in FOIA requires the agency to obtain those
documents from the private institution, regardless of plaintiff's desire
for -- or even need of -- the documents. The Board's
refusal to obtain the requested documents does not amount to "withholding
agency records" within the meaning of FOIA.
5 U.S.C. § 552(a)(4)(B).
Plaintiff next objects that the magistrate judge erred in refusing to
disclose four memorandums submitted to the
court for in camera review. Plaintiff contends that based on telephone
conversations with Board staff members Barbara
Baldwin and Robert Friedman, the four memorandums at issue specifically
referred to the portfolio spreadsheets and
therefore should have been released as responsive to the FOIA request. She
therefore contends that the magistrate judge
erroneously concluded that the portfolio spreadsheets were not referenced
in the memorandums.
This court has conducted an independent review of the in camera
documents and finds no error in the magistrate
judge's conclusions. The memorandums do not mention the portfolio
spreadsheets or in any way attest to the existence of
those spreadsheets.
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II. CONCLUSION
Having reviewed each of plaintiff's objections to the R&R and finding
them to be without merit, the R&R is
ADOPTED as the opinion of this court and plaintiff's complaint is DISMISSED
WITH PREJUDICE.
Dated: November 16, 1999
Douglas W. Hillman
Senior District Judge
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