Federal Deposit Insurance Corporation v. Bank of America, N.A.

REPLY to opposition to motion re MOTION Rule 56

D.D.C.January 8, 2018

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff, v. BANK OF AMERICA, N.A., Defendant. Case No. 1:17-cv-36-EGS REDACTED DEFENDANT’S REPLY IN SUPPORT OF RULE 56(d) MOTION TO DENY, OR DEFER CONSIDERATION OF, PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT EXPEDITED CONSIDERATION REQUESTED Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 1 of 19 i CONTENTS INTRODUCTION ......................................................................................................................... 1 ARGUMENT ................................................................................................................................ 2 A. BANA Is Entitled To Discovery. ........................................................................... 2 1. Discovery On The FDIC’s Knowledge Of And Response To BANA’s Reporting Methodology. ............................................................................ 4 2. Discovery About The Practices Of Other HCIs. ........................................ 9 3. Discovery On The FDIC’s Recognition Of Limitations To Its Prior Rules. ....................................................................................................... 10 B. A Cross-Motion For Summary Judgment By BANA On Its APA Counterclaim Would Not Preclude Rule 56(d) Relief As To The FDIC’s Claims. ................... 12 C. Judicial Economy Dictates That This Court Deny, Or Defer Ruling On, The Entire Motion For Summary Judgment Without Delay. ...................................... 13 CONCLUSION ............................................................................................................................ 14 Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 2 of 19 TABLE OF AUTHORITIES Page(s) ii Cases Archer v. Cirrincione, 772 F. Supp. 1118 (S.D.N.Y. 1989) .........................................................................................12 Boyer v. Taylor, No. 06-694, 2012 WL 1132786 (D. Del. Mar. 30, 2012) ........................................................13 Byrd v. EPA, 174 F.3d 239 (D.C. Cir. 1999) .............................................................................................6, 10 Celotex Corp. v. Catrett, 477 U.S. 317 (1986) ...................................................................................................................1 Coastal States Gas Corp. v. DOE, 617 F.2d 854 (D.C. Cir. 1980) .................................................................................................11 * Convertino v. DOJ, 684 F.3d 93 (D.C. Cir. 2012) .................................................................................................2, 3 FDIC v. Harrison, 735 F.2d 408 (11th Cir. 1984) ...................................................................................................9 Filatrault v. Comverse Tech., Inc., 275 F.3d 131 (1st Cir. 2001) ....................................................................................................12 United States ex rel. Folliard v. Gov’t Acquisitions, Inc., 880 F. Supp. 2d 36 (D.D.C. 2012) .......................................................................................3, 13 * Gen. Elec. Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995) ...................................................................................................6 Harrison v. Office of the Architect of the Capitol, 281 F.R.D. 49 (D.D.C. 2012) .....................................................................................................3 Heckler v. Cmty. Health Servs. of Crawford Cty., Inc., 467 U.S. 51 (1984) .....................................................................................................................9 Howmet Corp. v. EPA, 614 F.3d 544 (D.C. Cir. 2010) ...................................................................................................7 Jaques v. Herbert, No. 05-7197, 2006 WL 1064190 (N.D. Ohio Apr. 19, 2006) .................................................12 Jeffries v. Lynch, 217 F. Supp. 3d 214 (D.D.C. 2016) .........................................................................................14 United States ex rel. Landis v. Tailwind Sports Corp., 234 F. Supp. 3d 180 (D.D.C. 2017) ...........................................................................................8 Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 3 of 19 TABLE OF AUTHORITIES Page(s) iii Little v. Commercial Audio Assocs., Inc., 81 F. Supp. 3d 58 (D.D.C. 2015) ...............................................................................................3 Messina v. Krakower, 439 F.3d 755 (D.C. Cir. 2006) .............................................................................................3, 10 Miss. Comm’n on Envtl. Quality v. EPA, 790 F.3d 138 (D.C. Cir. 2015) ...................................................................................................7 Mitchell v. Riegel Textile, Inc., 259 F.2d 954 (D.C. Cir. 1958) ...................................................................................................8 Moore v. United States, 213 F.3d 705 (D.C. Cir. 2000) ...................................................................................................8 Peter B. v. CIA, 174 F. Supp. 3d 308 (D.D.C. 2016) .........................................................................................14 Rodriguez-Cuervos v. Wal-Mart Stores, Inc., 181 F.3d 15 (1st Cir. 1999) ......................................................................................................12 Rollins Envtl. Servs. (NJ) Inc. v. EPA, 937 F.2d 649 (D.C. Cir. 1991) ...................................................................................................7 * Salzer v. FCC, 778 F.2d 869 (D.C. Cir. 1985) ...................................................................................................9 SEIU Nat’l Indus. Pension Fund v. Castle Hill Health Care Providers, LLC, 312 F.R.D. 678 (D.D.C. 2015) ...................................................................................................3 Smith v. United States, 843 F.3d 509 (D.C. Cir. 2016) ...................................................................................................3 * United States v. Chrysler Corp., 158 F.3d 1350 (D.C. Cir. 1998) .................................................................................................6 United States v. Farley, 11 F.3d 1385 (7th Cir. 1993) .....................................................................................................7 United States v. Lambda Research, Inc., No. 10-536, 2015 WL 11120335 (S.D. Ohio May 20, 2015) ..................................................13 United States v. Navistar Int’l Corp., 236 F. Supp. 3d 1049 (N.D. Ill. 2017) .......................................................................................7 United States v. Second Nat’l Bank of N. Miami, 502 F.2d 535 (5th Cir. 1974) .....................................................................................................9 Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 4 of 19 TABLE OF AUTHORITIES Page(s) iv United States v. Wilson, 707 F.2d 304 (8th Cir. 1982) .....................................................................................................9 Wilson v. Hunam Inn, Inc., 126 F. Supp. 3d 1 (D.D.C. 2015) ...............................................................................................1 Statutes 12 U.S.C. § 1817(g)(1) ....................................................................................................................8 Rules * Rule 56(d) ...............................................................................2, 3, 4, 5, 6, 8, 9, 10, 11, 12, 13, 14 Regulations 76 Fed. Reg. 77,315 (Dec. 12, 2011) .............................................................................................11 Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 5 of 19 1 INTRODUCTION Few things are clearer under the Federal Rules than that courts generally “are reluctant to consider a motion for summary judgment prior to discovery,” Wilson v. Hunam Inn, Inc., 126 F. Supp. 3d 1, 8 (D.D.C. 2015) (Sullivan, J.), and that parties should not be “railroad[ed]” with “a premature motion for summary judgment.” Celotex Corp. v. Catrett, 477 U.S. 317, 326 (1986). Yet Plaintiff Federal Deposit Insurance Corporation (“FDIC”) is attempting just that here: It seeks summary judgment in a $1.2 billion case before Defendant Bank of America, N.A. (“BANA”) has been able to serve discovery, indeed, before it even answers the operative complaint. It is understandable why the evidence in the FDIC’s possession makes it desperate to avoid discovery. Since early 2012, BANA was making crystal clear to the agency that BANA was not reporting its “exposures” in the manner the FDIC now says was required. Rather than raising any objection at the time, the FDIC completely re-wrote the pertinent regulatory language in 2014. Then, the FDIC brought this case, claiming that the re-written 2014 regulation is actually what the regulation always meant. These facts—the FDIC’s awareness and response to BANA’s reporting methodology, and its recognition that its 2011 and 2012 Rules did not mean what it now claims—are directly relevant to BANA’s defense to the FDIC’s unjust enrichment claim, to BANA’s “fair notice” defense to all of the FDIC’s claims, and to the meaning of the rules themselves. Relevant, too, is the practice of the other largest banks, or “HCIs,” which the FDIC itself repeatedly put in issue, and which BANA has reason to believe will further illustrate that the old 2011/2012 Rules did not give “fair notice” to the regulated public of the meaning the FDIC now asserts. Oftentimes, the simple answer is the correct answer. That is the case here, where BANA has given more than enough legal and evidentiary basis for this case to proceed on the normal Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 6 of 19 2 course—discovery first, summary judgment later.1 In pressing instead for its unfair “railroading,” the FDIC distorts BANA’s arguments, the applicable law, and orderly judicial process, ultimately proposing a convoluted fallback whereby the Court would grant summary judgment on some parts of some claims, while permitting the remainder to enter discovery. This Court should instead expeditiously grant this motion, defer or deny the FDIC’s summary judgment motion in full, and place this case on the normal track.2 ARGUMENT A. BANA Is Entitled To Discovery. The parties agree that under Rule 56(d), the party opposing summary judgment “must outline the particular facts [it] intends to discover and describe why those facts are necessary to the litigation,” “explain ‘why [it] could not produce the facts in opposition to the motion,’” and “show the information is in fact discoverable.” Convertino v. DOJ, 684 F.3d 93, 99–100 (D.C. Cir. 2012) (alteration adopted) (citation omitted). In practice, a motion should be granted “almost 1 Further, BANA’s motion to dismiss is still pending before the Court. A ruling on that is appropriate before taking up summary judgment, particularly since issues fully briefed there overlap and could resolve certain issues presented in the FDIC’s summary judgment motion. 2 The FDIC suggests, FDIC’s Mem. Opp’n BANA’s Rule 56(d) Mot. (“Opp’n”) (Dkt. 48-1) at 4, that by agreeing to defer discovery for the pendency of “any and all dispositive motions filed during the pleadings stage of this case,” the parties agreed that one party could prevent the other from ever taking discovery by filing an early summary judgment motion. That is obviously wrong—summary judgment is not the “pleadings stage”—and is no less deceptive than the FDIC’s repeated insistence that in July 2017 BANA moved to allow discovery by BANA only, rather than by both parties. BANA’s motion said no such thing, as it previously has explained. Def.’s Reply Supp. Mot. Clarify or Modify Scheduling Order Regarding Disc. (Dkt. 30-1) at 2. Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 7 of 19 3 as a matter of course,” id., although—as BANA does not dispute—courts must apply the three- part test.3 BANA seeks discovery to establish three facts: (1) that “the FDIC knew of BANA’s reporting methodology and accepted, approved, and acquiesced in that methodology”; (2) that others of the largest banks, or “HCIs,” did “not aggregate exposure to their own affiliates and third parties as the FDIC now claims was required”; and (3) that “the FDIC was aware of the limitations of the counterparty-reporting instructions in the 2011 and 2012 Rules.” Decl. Jeffrey S. Rosenberg Supp. Def.’s Rule 56(d) Mot. Deny, or Defer Consideration of, Pl.’s Mot. Partial Summ. J. (“Rosenberg Decl.”) (Dkt. 47-3) ¶¶ 12–14. BANA has provided concrete reasons—not merely speculation—why such evidence is likely to exist, and why it is necessary to oppose the FDIC’s summary judgment motion.4 3 Contrary to the FDIC’s suggestion, Convertino remains good law, and its statement about granting Rule 56(d) relief “almost as a matter of course” continues to be cited by judges of this Court—including in cases the FDIC cites. See, e.g., SEIU Nat’l Indus. Pension Fund v. Castle Hill Health Care Providers, LLC, 312 F.R.D. 678, 683–84 (D.D.C. 2015); Little v. Commercial Audio Assocs., Inc., 81 F. Supp. 3d 58, 63 (D.D.C. 2015). In a number of the Rule 56(d) cases that the FDIC relies on, moreover, discovery actually had occurred. See Messina v. Krakower, 439 F.3d 755, 762 (D.C. Cir. 2006); United States ex rel. Folliard v. Gov’t Acquisitions, Inc., 880 F. Supp. 2d 36, 49 (D.D.C. 2012), aff’d, 764 F.3d 19, 26 (D.C. Cir. 2014); Harrison v. Office of the Architect of the Capitol, 281 F.R.D. 49, 50 (D.D.C. 2012); see also Smith v. United States, 843 F.3d 509, 512–13 (D.C. Cir. 2016) (plaintiff received documents in related criminal prosecution). 4 Curiously, the FDIC acts as if a principal reason BANA seeks discovery is to advance its counterclaim under the APA, dedicating the first three pages of its argument to this point, Opp’n at 8–11, even though BANA only addressed the APA counterclaim in a footnote, Def.’s Rule 56(d) Mot. Deny, or Defer Consideration of, Pl.’s Mot. Partial Summ. J. (“Rule 56(d) Mot.”) (Dkt. 47-1) at 3 n.3. By contrast, one of BANA’s principal arguments is the necessity of discovery to oppose the FDIC’s unjust enrichment claim; that receives a meager page-and- a-half (18–19) in the back of the FDIC’s Opposition. Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 8 of 19 4 1. Discovery On The FDIC’s Knowledge Of And Response To BANA’s Reporting Methodology. For every quarter at issue in this case, BANA submitted to the FDIC short, easily- understood spreadsheets that made clear BANA was not “aggregating” its exposures to affiliated companies at the level of the “top-tier” parent. Rule 56(d) Mot. at 8–12. On the basis of this specific, concrete evidence—not “generalized, speculat[ion],” Opp’n at 7—BANA seeks discovery to fully illustrate the FDIC’s awareness and acceptance of BANA’s practices. By way of illustration, in the spreadsheet excerpt below from the first quarter of 2012, the counterparties that are highlighted the same color are obviously affiliated companies—and BANA obviously was not aggregating its exposures to them: Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 9 of 19 5 When he received the first such spreadsheet from BANA, the FDIC official who had requested it wrote back, Rule 56(d) Mot. at 8–9. BANA needs discovery to develop additional evidence of FDIC officials’ understanding and reaction to the reporting methodology evident on these spreadsheets, including what this official observed, what he wrote and said to others about the information reflected in the sheets, who else reviewed them, and—potentially—whether these spreadsheets are part of the reason the FDIC realized that the 2011/2012 Rules it seeks to enforce here did not mean what the FDIC now claims, as reflected by the 2014 amendments.5 5 The FDIC seriously errs when it tells the Court that BANA “concede[d]” that “it is only the FDIC’s ‘communications with [the Bank]’ that are ‘relevant to whether the FDIC provided fair Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 10 of 19 6 The FDIC seeks to minimize the import of the official’s statement that citing the “context” in which the statement supposedly occurred. Opp’n at 12–13. That merely makes BANA’s case: BANA needs discovery to fully develop what that official saw and understood. The FDIC cannot “railroad” BANA into summary judgment by putting its own spin on officials’ actions without allowing them to be probed through discovery. Similarly, the FDIC’s assertion that the FDIC official might not have “known” or “realized” what the spreadsheets so plainly indicate, id., does not preclude discovery, it invites it, by identifying a factual dispute about what the FDIC knew, and when.6 In arguing that these facts are not legally relevant to BANA’s “fair notice” defense, the FDIC ignores the leading D.C. Circuit cases recognizing that a lack of fair notice may be demonstrated by agency officials’ confusion about their own rules. “[A]n agency is hard pressed to show fair notice when the agency itself has taken action in the past that conflicts with its current interpretation of a regulation,” United States v. Chrysler Corp., 158 F.3d 1350, 1356 (D.C. Cir. 1998), and it is “unlikely that regulations provide adequate notice when different divisions of the enforcing agency disagree about their meaning,” Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1332 (D.C. Cir. 1995). Such a disagreement is reflected in the conflict between the FDIC official’s knowledge of and reaction to BANA’s spreadsheets, and the interpretation the agency espouses here. In view of this disagreement, BANA seeks more such evidence. notice.’” Opp’n at 14 (quoting Rosenberg Decl. ¶ 12(d)). BANA expressly enumerated its need for discovery internal to the FDIC. See Rule 56(d) Mot. at 9. 6 Because BANA regularly submitted the spreadsheets at the FDIC’s request, the sheets clearly indicated BANA was not aggregating exposures in the manner the FDIC claims was required, and in view of the nature of the FDIC official’s response to this evidence, this case is different in kind from one where a Rule 56(d) movant asserts—without any supporting evidence—that “there may well be knowledge on the part of EPA employees or undisclosed documents identifying additional contacts.” Byrd v. EPA, 174 F.3d 239, 248 n.8 (D.C. Cir. 1999) (cited in Opp’n at 13). Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 11 of 19 7 The FDIC quotes out of context Howmet Corp. v. EPA, 614 F.3d 544 (D.C. Cir. 2010), but Howmet relied upon—and therefore reaffirmed—the familiar principle set forth in General Electric. The other decisions cited by the FDIC are even less relevant. In Mississippi Commission on Environmental Quality v. EPA, 790 F.3d 138 (D.C. Cir. 2015), the agency had not acted in a way that conflicted with its asserted regulatory interpretation, indeed, the agency had given the regulated entities “a precise explication of all proposed [regulatory actions] as a roadmap to use.” Id. at 186. And in Rollins Environmental Services (NJ) Inc. v. EPA, 937 F.2d 649 (D.C. Cir. 1991), the court stated that “[w]hen the agency itself is uncertain of the meaning of its regulation, when agency personnel give conflicting advice to private parties about how to comply with it, and when the agency’s chief legal officer finds the regulatory language equally supportive of one of two possible constructions, it is arbitrary to find the regulation ‘clear.’” Id. at 653. BANA advances similar arguments here.7 The FDIC distorts BANA’s fair notice argument when it suggests that the official’s handling of the BANA spreadsheets does not constitute explicit “approval” so as to estop the FDIC’s claims now. Opp’n at 12–14. Fair notice and estoppel are distinct; BANA’s point is that the FDIC’s awareness of and response to BANA’s practice—its acceptance, acquiescence in, and approval of the practice—demonstrate the agency’s own self-contradiction regarding its regulation’s requirements, and hence, shows the absence of fair notice. Formal approval is not necessary to the fair notice defense. The FDIC similarly misstates BANA’s position—and defies common sense—when it argues that the discovery BANA seeks is irrelevant to the meaning of the regulatory provision it 7 The Seventh Circuit’s 24-year-old decision in United States v. Farley, 11 F.3d 1385 (7th Cir. 1993), does not alter D.C. Circuit law on this point. And United States v. Navistar International Corp., 236 F. Supp. 3d 1049, 1057 (N.D. Ill. 2017), is not even about fair notice. Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 12 of 19 8 seeks to enforce, and consequently, to the agency’s claim under 12 U.S.C. § 1817(g)(1). Opp’n at 11. Plainly, the FDIC’s contemporaneous understanding of its rules is relevant to the rules’ meaning, including to whether the FDIC should receive deference to its (new, belated) interpretation of the 2011/2012 Rules. Once again, the FDIC fails to respond to BANA’s argument. See Rule 56(d) Mot. at 12 n.6 (addressing deference).8 In protesting that this “is essentially a case of regulatory interpretation,” Opp’n at 3, the FDIC also overlooks the litigation decisions it has made in this case, and the consequences they carry. The agency is not merely suing to enforce its regulation; it added an unjust enrichment claim in a (mistaken) bid to strong-arm BANA by doubling the limitations period, and now must offer up the discovery that such a “heavily fact-dependent” claim requires. United States ex rel. Landis v. Tailwind Sports Corp., 234 F. Supp. 3d 180, 201 (D.D.C. 2017). The FDIC cites no case where a plaintiff was granted summary judgment on a claim of unjust enrichment without the defendant getting discovery. See Opp’n at 18–19. This by itself is reason to grant BANA’s Rule 56(d) motion.9 The FDIC’s equitable claim for unjust enrichment, moreover, allows BANA to raise equitable defenses, which also require discovery. Rule 56(d) Mot. at 10–11. Here too, the FDIC cites no case where the government was permitted to bring a common-law equitable claim—for unjust enrichment or otherwise—while categorically blocking the defendant from countering with 8 The FDIC errs in asserting that the absence of fair notice can be harmless; the only authority it cites has nothing to do with fair notice. See Opp’n at 11 and Moore v. United States, 213 F.3d 705, 710 n.3 (D.C. Cir. 2000). And certainly the agency’s failure to provide fair notice cannot be judged harmless now, while salient facts remain hidden. 9 The FDIC derives no support from Mitchell v. Riegel Textile, Inc., 259 F.2d 954 (D.C. Cir. 1958), which concerned plaintiffs’ debt to defendants for underpayments during the pendency of a vacated preliminary injunction. Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 13 of 19 9 the customary equitable defenses. Cf. Opp’n at 19–20 n.8. In fact, “[i]t is well established that the United States is subject to general principles of equity when seeking an equitable remedy.” United States v. Wilson, 707 F.2d 304, 312 (8th Cir. 1982); see also United States v. Second Nat’l Bank of N. Miami, 502 F.2d 535, 548 (5th Cir. 1974) (“Certainly when seeking an equitable remedy the United States is no more immune to the general principles of equity than any other litigant.”).10 2. Discovery About The Practices Of Other HCIs. BANA also seeks discovery about how the other largest banks reported counterparty exposure under the 2011 and 2012 Rules. Evidence that other HCIs did not report exposures as the FDIC now claims was required will further establish that the FDIC failed to provide fair notice, especially given the small and ascertainable number of HCIs subject to the regulation. See Mot. at 13–14; Salzer v. FCC, 778 F.2d 869, 875 (D.C. Cir. 1985) (relevant to fair notice that 44 of 53 applicants for a license did not share the agency’s understanding of the order). This evidence also will establish that there is nothing “unjust” about BANA obtaining deposit insurance, since the FDIC also provided insurance to other HCIs that did not report exposures as the FDIC now demands. Indeed, the FDIC would be acting “unjustly” if it forced BANA to do something not required of other banks. The FDIC itself once trumpeted the relevance of other banks’ practices, twice suggesting that BANA alone failed to adhere to the Rules’ supposed plain meaning. Rule 56(d) Mot. at 12– 13. Here too the agency evidently rues its earlier litigation decisions, asserting in an about-face 10 The FDIC also errs in suggesting that equitable defenses are categorically barred in cases of governmental statutory claims. In its most recent statement on this issue, the Supreme Court refused to endorse “a flat rule that estoppel may not in any circumstances run against the Government.” Heckler v. Cmty. Health Servs. of Crawford Cty., Inc., 467 U.S. 51, 60 & n.12 (1984). Following Heckler, several courts have held that equitable defenses may be raised against the FDIC when it acts in its proprietary capacity as an insurer. See, e.g., FDIC v. Harrison, 735 F.2d 408, 412 (11th Cir. 1984). Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 14 of 19 10 that others’ practices are not material. For reasons just explained, that is incorrect. Mistaken, also, is the FDIC’s assertion that BANA has no concrete basis to suppose that discovery will show other banks to have diverged from the FDIC’s asserted interpretation of the rules. The FDIC completely re-wrote the relevant regulatory provision in 2014. Infra at 11. It did so for a reason, and whether that reason was its awareness that BANA reasonably read the rule differently than the FDIC preferred, supra at 4–5, or that other banks reasonably read the rule differently—or both—that 2014 reversal is a specific and concrete basis to discover further evidence that under the prior rules, there was not “fair notice” to the regulated community and BANA’s practices were not “unjust.” Moreover, the FDIC—having once raised other banks’ practices as a sword—still will not say that all other HCIs aggregated exposures as the FDIC now claims is required, but instead uses slippery circumlocutions to describe those practices and shield them from discovery. Rule 56(d) Mot. at 13. For these reasons, BANA has “presented [a] reason to believe” that the fact it seeks in discovery is true, unlike the plaintiff in Messina, 439 F.3d at 762. And unlike the plaintiff in Byrd, BANA has not merely alleged that “there may well be” relevant facts, 174 F.3d at 248 n.8, it has pointed to the clear implication of the 2014 rule change and the FDIC’s jesuitical phrasing about other HCIs.11 3. Discovery On The FDIC’s Recognition Of Limitations To Its Prior Rules. BANA identified a third fact relevant to its opposition to summary judgment: the FDIC’s own awareness of its rules’ limitations and that the rules do not mean what the FDIC now claims. Discovery on this is relevant, again, to BANA’s defense to the unjust enrichment claim and to fair 11 The FDIC contends that other banks’ practices are immaterial because BANA “had ample notice of the need to consolidate from the plain language of the FDIC’s regulations.” Opp’n at 15. That erroneous assertion assumes the conclusion, and neglects the FDIC’s own decision to change the rules in 2014 because the old text did not say what the FDIC now claims it does. Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 15 of 19 11 notice. If the FDIC provided deposit insurance to BANA while knowing there was (at least) ambiguity in the Rule, then BANA’s retention of that insurance is not unjust. See Rule 56(d) Mot. at 14–15 (addressing caselaw that the FDIC ignores). And if the agency knew its instructions were problematic, that is proof that the agency did not provide fair notice about their meaning, which also precludes deference to the FDIC’s interpretation of the regulation. Id. at 15. Once again, BANA has identified concrete reasons to believe that evidence about these facts exists. At some point between 2011 and 2014, the FDIC realized that the 2011/2012 Rules did not convey the meaning the FDIC now wishes they contained. Ultimately, it completely replaced the relevant text of the Rules to convey that new meaning. In addition, a comment submitted to the FDIC identifies confusion about the term “legal consolidated entity.” AR1789. BANA seeks discovery about the FDIC’s awareness of the limitations in the 2011/2012 Rules, including when and how the FDIC realized the Rules did not mean what it now claims they meant. (BANA does not merely seek discovery about the FDIC’s response in the Federal Register to the rulemaking comment, as the FDIC misleadingly suggests.12) Finally, the FDIC offers a half-hearted argument that its awareness of the limitations in the Rules are not discoverable. The deliberative process privilege does not apply to documents that are post-decisional or non-deliberative. See, e.g., Coastal States Gas Corp. v. DOE, 617 F.2d 854, 857, 868 (D.C. Cir. 1980) (memos with “agency interpretations of its regulations” are post- decisional even if “they play into an ongoing audit process”). And there is simply no general rule 12 The FDIC did not, in fact, address the comment in the December 2011 Notice, 76 Fed. Reg. 77,315 (Dec. 12, 2011), cited in its Opposition at 16. The Notice’s discussion of the technical capacity of banks, id. at 77,322, is not responsive to the commenters’ concern with “different interpretations of the term ‘legal consolidated entity.’” AR1789. Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 16 of 19 12 against discovery from an administrative agency. Cf. Archer v. Cirrincione, 772 F. Supp. 1118, 1123 (S.D.N.Y. 1989) (draft responses to comments). B. A Cross-Motion For Summary Judgment By BANA On Its APA Counterclaim Would Not Preclude Rule 56(d) Relief As To The FDIC’s Claims. The parties’ joint motion for a briefing schedule on the FDIC’s summary judgment motion provided that BANA may cross-move for summary judgment. See Joint Mot. Extension of Time to File Responsive Pleadings (Dkt. 42) (“any cross-motions for summary judgment that BANA may file”); id. at 2 (“If BANA files . . . any cross-motions for summary judgment . . .”) (emphases added). If BANA cross-moves for summary judgment, it will be on its own counterclaim under the APA, which challenges the 2011/2012 Rules. The cross-motion will not address the FDIC’s claims, and therefore, the caselaw the FDIC cites regarding Rule 56(d) and cross-motions for summary judgment is irrelevant. That caselaw concerns the perceived tension between maintaining that a claim is ready for judgment and simultaneously contending that the claim cannot properly be adjudicated without discovery, which the cases concluded “almost invariably indicates that the moving party was not prejudiced by a lack of discovery.” Filatrault v. Comverse Tech., Inc., 275 F.3d 131, 138 (1st Cir. 2001); see also Rodriguez-Cuervos v. Wal-Mart Stores, Inc., 181 F.3d 15, 23 (1st Cir. 1999); Jaques v. Herbert, No. 05-7197, 2006 WL 1064190, at *1–2 (N.D. Ohio Apr. 19, 2006). No such tension would exist here: As the foregoing discussion (and the discussion in BANA’s Rule 56(d) Motion) makes clear, BANA’s Rule 56(d) Motion seeks discovery to defend against the FDIC’s unjust enrichment claim and its attempted enforcement of its regulation. The motion does not contend that discovery is necessary on its APA counterclaims—it merely submits, in a footnote, that discovery could be informative of the rule Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 17 of 19 13 challenge and it would be sensible to defer ruling on the challenge to the Rule until discovery is complete. Rule 56(d) Mot. at 3 n.3. C. Judicial Economy Dictates That This Court Deny, Or Defer Ruling On, The Entire Motion For Summary Judgment Without Delay. Finally, the Court should reject the FDIC’s fallback proposal that it decide some parts of some claims now on summary judgment, while allowing discovery and further summary judgment briefing later on the claims’ remaining elements. Opp’n at 22–23. The FDIC has tied this case into knots enough, resisting discovery from BANA , and then seeking summary judgment while BANA has been entirely precluded from discovery. It is time for this case to be placed on the normal, proper path. Specifically, discovery should proceed and the Court should rule on BANA’s pending motion to dismiss before BANA is obligated to respond to the FDIC’s summary judgment motion. “Waiting until the close of discovery to file a single meritorious summary judgment motion that includes all relevant arguments is vastly preferable to the filing of multiple, piecemeal motions.” United States v. Lambda Research, Inc., No. 10-536, 2015 WL 11120335, at *4 (S.D. Ohio May 20, 2015), report and recommendation adopted sub nom. United States ex rel. Jacobs v. Lambda Research, Inc., No. 10-536, 2015 WL 4112114 (S.D. Ohio July 7, 2015); see also Boyer v. Taylor, No. 06-694, 2012 WL 1132786, at *5 (D. Del. Mar. 30, 2012) (denying summary judgment because “it is far from clear that discovery is complete” and “piecemeal” motions for summary judgment are “disfavored”). Unlike the separate claims in Folliard, 880 F. Supp. 2d at 49, the issues that the FDIC proposes to splice are inseparable—the FDIC asks the Court to rule on its claims without addressing BANA’s defenses, interpret the text of the regulation without deciding whether the FDIC is entitled to deference, and resolve only some elements of the claim of unjust enrichment. This confusing, slice-and-dice approach makes no sense. Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 18 of 19 14 It also would be inefficient for the Court to wait for complete briefing on summary judgment to decide this threshold question of BANA’s entitlement to discovery. Cf. Opp’n at 22. The FDIC cites no authority for this proposition; in the cases it cites, the party filed its Rule 56(d) motion simultaneously with an opposition on the merits. See Jeffries v. Lynch, 217 F. Supp. 3d 214, 219 (D.D.C. 2016); Peter B. v. CIA, 174 F. Supp. 3d 308, 313 (D.D.C. 2016); Little, No. 14- 2163 (D.D.C. Jan. 13, 2015) (Dkt. 8); Folliard, No. 07-719 (D.D.C. May 17, 2012) (Dkt. 157, 158). In this case, by contrast, BANA filed an early Rule 56(d) motion and requested expedited consideration precisely to avoid the inefficiencies of subjecting the parties and the Court to full briefing on a summary judgment motion that is a patently premature effort to “railroad” the other party in litigation. CONCLUSION The Court should deny, or in the alternative defer its consideration of, the FDIC’s Motion for Partial Summary Judgment (Dkt. 38), and allow time for discovery. Dated: December 21, 2017 Respectfully submitted, /s/ Eugene Scalia Eugene Scalia (DC Bar No. 447524) Jeffrey S. Rosenberg (DC Bar No. 995893) GIBSON, DUNN & CRUTCHER LLP 1050 Connecticut Avenue, N.W. Washington, DC 20036 Telephone: 202.955.8500 Facsimile: 202.467.0539 Gabrielle Levin (admitted pro hac vice) GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, NY 10166 Telephone: 212.351.4000 Facsimile: 212.351.4035 Attorneys for Defendant Case 1:17-cv-00036-EGS-RMM Document 52 Filed 01/08/18 Page 19 of 19