Fannie Mae, Freddie Mac: Cooper Proposal

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Fannie Mae, Freddie Mac See more on the story here, below is the Cooper proposal.

As directed by the Court’s order of June 19, 2014 (Doc. 62), Plaintiffs respectfully submit this status report proposing date ranges governing the discovery of electronically stored in-formation (ESI). Using the custodians and search terms on which the parties have agreed, Plain-tiffs believe that appropriate date ranges for ESI discovery are June 1, 2011 to March 31, 2013 and April 1, 2008 to December 31, 2008. As explained below, targeting documents created within those date ranges would reduce the burden of discovery while properly focusing the Government’s ESI search on periods likely to contain a large number of discoverable documents.

Fannie Mae, Freddie Mac protective order

In addition, the Court suggested in its June 19 order that the “first wave” of discovery may be limited to production of documents created on or before August 17, 2012, the date of the Net Worth Sweep. Plaintiffs respectfully submit that, consistent with the Government’s own proposal, as outlined in its briefing in support of its motion for protective order, the August 17, 2012 cut-off date should apply only to materials relating to the Government’s assessments of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC)’s future profitability and to whether, when, and how the Fannie Mae and Freddie Mac conservatorships might end. As discussed below, with respect to all other issues as to which discovery has been authorized, a later cut-off date should apply.

In making this ESI proposal, Plaintiffs emphasize that the purpose of restricting the date ranges within which the Government must search ESI is to reduce the burden and expense of discovery rather than to arbitrarily limit Plaintiffs’ access to discoverable materials. Accordingly, the Government should produce all responsive, non-privileged materials returned by its ESI searches. As discussed at the June 19 hearing on the Government’s motion for a protective order, the topic-specific date range proposal outlined in the Government’s recent protective order reply brief could be read to entitle the Government to withhold documents from one date range on the ground that they are responsive only to a topic associated with another date range. Such an approach, however, would make little sense because it would deny Plaintiffs access to responsive, non-privileged materials without doing anything to reduce the burden of discovery; since the Government will already be reviewing all documents returned by its ESI searches for both privilege and responsiveness, the Government will not suffer any additional burden if it is required to produce such relevant, responsive, non-privileged materials. The Government suggest-ed, at the June 19 hearing, that it might be willing to produce all such responsive documents re-turned by its date-limited ESI searches notwithstanding the date such documents were created, see Tr. 56-57 (June 19, 2014); the Court should remove all doubt on that score by making clear that the Government should produce any responsive, non-privileged documents it reviews in connection with its ESI searches.

I. The Court Should Order the Government To Search ESI Created from June 1, 2011 to March 31, 2013

The Court should authorize a search of the Government’s ESI for the period from June 1, 2011 to March 31, 2013. The Government proposes a narrower date range—from January 1, 2012 to September 30, 2012 on one topic, and from January 1, 2012 to August 17, 2012 on an-other. But the better course is to use Plaintiffs’ somewhat broader proposal.

There is good reason to believe that materials highly relevant to the topics as to which the Court has authorized discovery—including materials relating to the Government’s assessment of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC)’s future profitability (which would be directly relevant to both the Government’s ripeness argument and the reasonable investment-backed expectations issue) and materials relating to the relationship between FHFA and the Treasury (which would be directly relevant to whether FHFA should be considered the United States for purposes of the Tucker Act)—date back to the second half of 2011. Late 2011 was in many respects a pivotal period for the Companies’ future prospects, for it was then that Fannie Mae and Freddie Mac reported their final significant losses before beginning their dramatic recoveries. See Data as of Nov. 14, 2013 on Treasury and Federal Reserve Purchase Programs for Fannie Mae and Freddie Mac and Mortgage-Related Securities at 2 (T4351).

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