FAIRHOLME FUNDS, INC. et al v. USA
Filing
265
UNREPORTED ORDER granting 260 Saxton Plaintiffs' Counsel's Applications for Access to Protected Information. Signed by Judge Margaret M. Sweeney. (kb1)
In the United States Court of Federal Claims
No. 13-465C
(Filed: November 18, 2015)
*************************************
FAIRHOLME FUNDS, INC. et al.,
*
*
Plaintiffs,
*
*
v.
*
*
THE UNITED STATES,
*
*
Defendant.
*
*************************************
Application for Access to Protected
Information; Protective Order;
District Court Motion to Dismiss;
Net Worth Sweep; FHFA; Treasury
ORDER GRANTING CERTAIN SAXTON COUNSEL ACCESS TO PROTECTED
INFORMATION
On November 16, 2015, plaintiffs in Saxton v. FHFA (“Saxton”) filed a “Notice of Filing
of Applications of Certain Counsel Representing Plaintiffs in Saxton v. FHFA, No. 15-47 (N.D.
Iowa) for Access to Protected Information” (“motion”). The same day, the United States filed
“Defendant’s Opposition to Saxton Plaintiffs’ Applications for Access to Protected Information”
(“defendant’s opposition”). Saxton requests that three of its counsel be admitted to the
protective order entered in this case in order to gain access to protected information obtained
through jurisdictional discovery conducted by Fairholme Funds, Inc. (“Fairholme”), the lead
plaintiff in this case. The court construes Saxton’s notice as a motion for admission to the
protective order in this case on behalf of certain of its counsel. For the reasons explained below,
Saxton’s motion is granted.
Saxton’s motion relates to the litigation it instituted in the Northern District of Iowa,
which challenges the lawfulness of the Net Worth Sweep. Defendants in that case, the Federal
Housing and Finance Agency (“FHFA”) and the United States Department of the Treasury
(“Treasury”), have filed a motion to dismiss Saxton’s complaint, challenging the district court’s
subject matter jurisdiction. Fairholme filed a motion for leave to submit an amicus brief in
Saxton’s district court case, which includes protected materials produced in this litigation.
According to Fairholme’s motion for leave to file an amicus brief in the Saxton district court
litigation, the information that Fairholme wishes to provide to the district court is “directly
relevant to issues” raised by the FHFA and Treasury in their pending motion to dismiss. Mot. 1.
Saxton therefore filed the instant motion, contending that the protective order in this case bars its
counsel’s review of Fairholme’s proposed amicus brief in the district court case because its
counsel do not have access to protected information in this case.
Defendant opposes the relief sought in Saxton’s motion, arguing that Saxton seeks to use
the protected information produced by the government during jurisdictional discovery conducted
in this case to amend the complaint filed in the Iowa district court litigation. In addition,
defendant argues that the district court’s decision to delay the filing of the administrative record
in that case until it resolves the motion challenging its subject matter jurisdiction provides
adequate grounds to deny Saxton’s motion. According to defendant, because the information
sought by Saxton is not relevant to the jurisdictional challenges raised in defendants FHFA and
Treasury’s motion to dismiss currently pending before the district court, the instant motion for
admission and access should be denied.
The court rejects defendant’s arguments. As a preliminary matter, the court notes that
defendant raised a similar objection to the Fairholme plaintiffs’ request for discovery in aid of
jurisdiction as it advances here to deny Saxton’s counsel’s admission to the protective order and
access to protected information—that a motion to dismiss precludes discovery, and in this
instance, the fruits of discovery obtained in related litigation. Defendant is mistaken. Indeed,
the court finds Saxton’s request for admission and access is meritorious for several reasons.
First, by admitting Saxton’s counsel to the protective order entered in this case and thus allowing
access to protected information, Saxton’s counsel can review the proposed amicus brief filed by
Fairholme in the Saxton district court litigation to assess whether, or to what extent, the use of
the protected information will impact the outcome of that litigation. The court cannot turn a
blind eye to Saxton’s counsel’s vested interest in knowing the arguments advanced by counsel
for Fairholme in Saxton. Second, access to protected information will permit Saxton’s counsel,
if they so choose, to use on behalf of their clients whatever protected information was obtained
through discovery in this case to meet the jurisdictional challenges raised by defendants FHFA
and Treasury. Indeed, access to the protected information may permit counsel for Saxton to raise
arguments and carry their client’s burden of establishing the district court’s jurisdiction for
reasons that will become manifest once counsel gain access to the protected information.
Moreover, access to the protected information may provide grounds for Saxton to amend the
complaint. Although the ultimate outcome is unknown at this time, the court will not deny
Saxton’s counsel’s access to protected information produced in this case—information that
Fairholme’s counsel believes will help to inform the district court in ruling upon the pending
motion to dismiss.
In sum, the court declines to block Saxton’s counsel’s ability to prosecute its client’s
case. Indeed, defendant’s contention that because the motion to dismiss in Saxton raises a
subject matter jurisdiction challenge to the district court’s ability to preside over that litigation,
no fruits of discovery obtained in this case regarding the Housing and Economic Recovery Act
could or should be considered by the district court, lacks merit. It is clear that Saxton would be
prejudiced if its counsel were precluded from reviewing material that could potentially aid in
responding to the specific jurisdictional challenges raised by FHFA and Treasury, or in pursuing
their litigation strategy. In sum, without admission to the protective order and access to the
protected information in this case, Saxton would be denied the ability to fully prosecute its case
pending in the Northern District of Iowa.
In Saxton’s motion, three of its counsel seek admission to the court’s protective order,
representing that they are fully familiar with the provisions of this court’s November 9, 2015
second amended protective order and will abide by its provisions. The necessary declarations
2
from the three Saxton counsel are attached as Exhibit A to Saxton’s motion and are accepted by
the court.
Accordingly, for abundant good cause shown, Saxton’s motion is GRANTED. By this
order, the three Saxton counsel identified in the motion are admitted to the protective order and
GRANTED IMMEDIATE ACCESS to the protected information lodged with the Northern
District of Iowa in Saxton v. FHFA.
IT IS SO ORDERED.
s/ Margaret M. Sweeney
MARGARET M. SWEENEY
Judge
3
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?