*fn5,The opinion of the court was delivered by: Reggie B. Walton United States District Judge,THE FEDERAL HOUSING FINANCE AGENCY, AS CONSERVATOR, PETITIONER, v. FIRST TENNESSEE BANK NATIONAL ASSOCIATION, RESPONDENT.*FN1" />

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The Federal Housing Finance Agency, As Conservator v. First Tennessee Bank National Association

April 23, 2012 *fn5

THE FEDERAL HOUSING FINANCE AGENCY, AS CONSERVATOR, PETITIONER,
v.
FIRST TENNESSEE BANK NATIONAL ASSOCIATION, RESPONDENT.*FN1



The opinion of the court was delivered by: Reggie B. Walton United States District Judge

MEMORANDUM OPINION

The petitioner in this case, the Federal Housing Finance Agency (the "FHFA"), acting in its capacity as conservator of the Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Loan Mortgage Company, or Freddie Mac (collectively, the "Enterprises"), seeks to enforce two administrative subpoenas against the respondent, First Tennessee Bank National Association. See Conservator's Petition to Enforce Subpoenas Duces Tecum ("Pet.") at 1. The FHFA issued the administrative subpoenas pursuant to its statutory authority under the Housing and Economic Recovery Act of 2008 (the "Recovery Act"), 12

U.S.C. § 4617(b)(2)(I) (2006). Currently before the Court is the respondent's Motion to Transfer

Venue to the Southern District of New York ("Resp.'s Mot."). Upon careful consideration of the parties' submissions,*fn2 the Court concludes for the following reasons that the respondent's motion must be granted.

I. BACKGROUND

In July of 2008, Congress enacted the Recovery Act in response to the crisis in the housing and mortgage market. See 12 U.S.C. § 4501. The Recovery Act created the FHFA, id. § 4511, and grants the director of the FHFA conditional authority to place regulated entities, including the Enterprises, into conservatorship or receivership "for the purpose of reorganizing, rehabilitating, or winding up [their] affairs," id. § 4617(a). Pursuant to this statutory authority, on September 6, 2008, the FHFA placed the Enterprises into conservatorship after they suffered considerable losses in residential mortgage-backed securities and other holdings. Resp.'s Mem. at 2.

In its capacity as conservator for the Enterprises, the FHFA is "pursuing various strategies to collect monies due and owing to its [c]onservatees." FHFA Opp'n at 1. To that end, on July 8, 2010, the FHFA issued two administrative subpoenas duces tecum to the respondent, seeking production of, among other documents, "underwriting and servicing guidelines and loan origination files for the mortgage loans underlying six securitizations that the [respondent] had sponsored, underwritten or services and in which [the Enterprises] had invested." Id. at 2. Raising privacy concerns over third-party information contained in the requested documents, the respondent sought to negotiate a confidentiality agreement, which was later executed on July 22, 2011. Id. Thereafter, on August 24, 2011, the respondent made an initial production of documents, which the FHFA maintains was inadequate. Id.

On September 2, 2011, the FHFA brought a securities fraud action against the respondent and other defendants in the United States District Court for the Southern District of New York (the "Securities Action"). Resp.'s Mem., Exhibit ("Ex.") B (Complaint, FHFA v. First Horizon Nat'l Corp., Civ. No. 11-6193 (S.D.N.Y. Sep. 2, 2011)) at 1-2. Five out of the six securitizations covered by the FHFA's subpoenas are at issue in the Securities Action. Resp.'s Mem. at 3, n.4. The FHFA has filed sixteen other, similar securities lawsuits that are also currently pending in the Southern District of New York. Id. at 3.

After the FHFA filed the Securities Action, the respondent stopped producing documents responsive to the FHFA's subpoena. Id. at 3; FHFA Opp'n at 3. Noting the overlap between the securitizations at issue in the FHFA's subpoenas and the Securities Action, the respondent asserted that any production of documents would have to be sought pursuant to Federal Rule of Civil Procedure 34, and that all discovery, in any event, was stayed pursuant to the Private Securities Litigation Reform Act ("PSLRA"), 15 U.S.C. § 77z-1(b)(1) (2006). See Resp.'s Mem. at 3.

On September 16, 2011, Judge Lewis A. Kaplan of the Southern District of New York entered an order that applied to all seventeen securities lawsuits filed by the FHFA, directing the parties to file a joint report addressing, among other things, "common issues with respect to discovery" raised by the cases. Davidoff Decl., Ex. D (Order at 2, FHFA v. HSBC North America Holdings, Inc., Civ. No. 11-6189 (S.D.N.Y. Sep. 16, 2011)). In response to this order, the FHFA requested that the court set "uniform standards for discovery across the [c]ases, including provisions that no individual witness be deposed more than once, and that document discovery relevant to multiple [c]ases or parties be undertaken pursuant to a uniform set of requests and search terms." Davidoff Decl., Ex. E (FHFA's Proposal for the Efficient Administration of the Cases at 6, FHFA v. HSBC North America Holdings, Inc., Civ. No. 11-6189 (S.D.N.Y. Oct. 19, 2011)). The seventeen securities actions were then reassigned to Judge Denise Cote of the Southern District of New York on November 16, 2011. Davidoff Decl., Ex. G (Order at 4, FHFA v. UBS Americas, Inc., Civ. No. 11-5201 (S.D.N.Y. Nov. 16, 2011)).

At a hearing on December 2, 2011, Judge Cote decided to stay discovery pending her decision on a motion to dismiss in a test case selected from the seventeen securities actions. Davidoff Decl., Ex. H. (Hr'g Tr. at 21, 30-31, FHFA v. UBS Americas, Inc., Civ. No. 11-5201 (S.D.N.Y. Dec. 2, 2011)). She also ordered the parties to submit reports addressing, among other issues, "the sequencing of discovery, protective orders, e-discovery, the sampling of loan files, limits on depositions, and the timeframes regarding document production, depositions, and expert discovery." Davidoff Decl., Ex. J (Order at 5-6, FHFA v. UBS Americas, Inc., Civ. No. 11-5201 (S.D.N.Y. Dec. 5, 2011)). According to the respondent, the FHFA did not raise any issues regarding its issuance of subpoenas to the respondent at the December 2, 2011 hearing or thereafter until it filed this action on December 28, 2011. Resp.'s Mem. at 5.

In this action, the FHFA has filed a petition seeking to have this Court to enforce the subpoenas ducestecum it issued to the respondent. Pet. at 1. The FHFA has stated that it may use the subpoenaed information for several purposes, including: (1) to evaluate contractual claims against loan originators, to monitor servicer performance, and to pursue "other legal or equitable remedies," id. at 5-6; and (2) "in connection with . . . [the] investigation being conducted by [the] FHFA and any litigation or proceeding that arises from that inquiry," which would include the Securities Action, id. at 14-15 (internal quotation marks and citation omitted). The respondent thereafter filed the instant motion on January 27, 2012, to transfer the FHFA's petition to the Southern District of New York pursuant to 28 U.S.C. § 1404(a).

II. STANDARD OF REVIEW

Section 1404(a) provides that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The statute "place[s] discretion in the district court to adjudicate motions for transfer according to an 'individualized, case-by-case consideration of convenience and fairness.'" Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). "As a threshold requirement, the transferee court must be in a district where the action 'might have been brought.'" Montgomery v. STG Intern., Inc., 532 F. Supp. 2d 29, 32 (D.D.C. 2008) (quoting 28 U.S.C. ยง 1404(a)). If this requirement is satisfied, "then a court uses its ...


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