September 1, 2009

Court rules documents concerning Federal Reserve's emergency lending program are subject to disclosure under the Freedom of Information Act.

The August 28 edition of The Am Law Litigation Daily named partner Thomas Golden "Litigator of the Week" for his lead role in Bloomberg L.P. v. Board of Governors of the Federal Reserve System, a high-profile action challenging the Federal Reserve’s refusal to disclose certain information under the Freedom of Information Act.

On August 24, Judge Loretta Preska of the U.S. District Court for the Southern District of New York ruled that documents concerning the Federal Reserve’s emergency lending program are subject to disclosure under the FOIA, and that the Board of Governors of the Federal Reserve wrongfully withheld such documents from Willkie client Bloomberg L.P. The case was initiated last November by Bloomberg L.P. on behalf of its Bloomberg news unit. The Fed refused to identify financial institutions that received loans under the emergency lending program or disclose information on what types of collateral was involved, arguing that disclosure might set off a run by depositors and unsettle shareholders.

On behalf of Bloomberg, Mr. Golden argued that the public interest in disclosure outweighs the banks’ interest in secrecy, and that the Fed’s claims are "based on wispy speculation, lack evidentiary support, and are contradicted by economic theory." Judge Preska agreed, holding that the Fed’s attempt to withhold information under FOIA because it might damage the position of shareholders or create imbalanced competitive advantages was improper. In her 47-page opinion, she wrote, "the risk of looking weak to shareholders is an inherent risk of market participation," and that "specific evidence must show that the competitive harm will result from the affirmative use of the information by competitors of the person from whom the information was obtained, not merely injuries to that person’s competitive position in the marketplace or ‘embarrassing publicity attendant upon public revelations.’"

In naming Mr. Golden "Litigator of the Week," The Am Law wrote, "Golden's victory is all the more impressive considering that last month, Manhattan federal district court judge Alvin Hellerstein denied a similar FOIA request by Fox News network." Mr. Golden was assisted by partner Scott Rose and associates Jared Cohen, Naseem Kourosh and Jason Roth.

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