SILBERMAN, Circuit Judge:
The Trustee in Bankruptcy for the Bank of New England Corporation appeals from the district court's refusal to enforce subpoenas duces tecum against the Federal Reserve Board and the Comptroller of the Currency. We reverse, holding that the deliberative process privilege does not protect these documents, and remand to the district court.
The Bank of New England Corporation and its subsidiary, the Bank of New England, N.A., experienced serious financial trouble in the late eighties and came under the heightened supervision of the Federal Reserve Board, which regulates bank holding companies, and the Office of the Comptroller of the Currency, which oversees the national
The Trustee in Bankruptcy sued the FDIC in Massachusetts federal district court to void the Corporation's transfers to the Bank as fraudulent conveyances. He claimed that the FDIC, acting in concert with the Board and the Comptroller, realized that the Corporation and the Bank were already insolvent and pressured the Corporation's management to downstream assets to the Bank to reduce the losses that the FDIC would incur as receiver. To support his allegations, he offered evidence like the following statement that the Comptroller of the Currency gave to Congress in defense of his decision not to close the Bank sooner:
The Failure of the Bank of New England: Hearings Before the Senate Comm. on Banking, Hous., and Urban Affairs, 102d Cong. 11 (1991) (statement of Robert L. Clarke, Comptroller, Office of the Comptroller of the Currency). The Trustee's theory required him to show either that the transfers were made "with actual intent to hinder, delay, or defraud" the Corporation's creditors or that the Corporation was insolvent when the transfers were made and did not receive fair consideration in return for them. 11 U.S.C. § 548(a) (1994). If the transfers were voidable under § 548, the Trustee could recover them from the entity for whose benefit they were made. 11 U.S.C. § 550(a)(1) (1994). The FDIC moved to dismiss the suit on the ground that it was not an "entity" under the Code because of its role as regulator and insurer of banks and that, in any event, a reduction in its handling costs was not the sort of "benefit" contemplated by § 550. The district court, finding the FDIC subject to suit under § 550, denied the motion. Branch v. FDIC, 825 F.Supp. 384, 401-02 (D.Mass.1993).
The Trustee sent discovery requests to the FDIC and served the Board and the Comptroller with subpoenas duces tecum. All three turned over some documents, but asserted the deliberative process privilege with respect to others. The Trustee filed a motion to compel against the FDIC in Massachusetts and separate subpoena enforcement actions against the Board and Comptroller in District of Columbia district court. The Massachusetts court refused to apply the privilege to the FDIC documents. It said that, unless the FDIC could show a greater need for secrecy than the generalized "chilling effect" of disclosure, the privilege must give way in a case that turned on the government's intent.
Our district court, ruling subsequently, thought that the privilege could be overcome only if the Trustee introduced evidence of government "misconduct" or if he satisfied a five factor balancing test showing a superior interest in the documents. The court said that the misconduct exception only applied when a plaintiff alleged that the agency's decisionmaking process had been tainted by misconduct. Since the Trustee "attacks the goals of the regulators' policies, to downstream assets, and not the deliberative system from which these goals arose," it held the misconduct bar inapplicable. As to the five factor balancing test, the court relied on the analysis we articulated in Schreiber v. Society for Sav. Bancorp, Inc., 11 F.3d 217 (D.C.Cir.1993). There, we said that the bank examination privilege, a close cousin of the deliberative process privilege, could be overcome on a showing of good cause, as determined by the following considerations:
Schreiber, 11 F.3d at 220-21 (citations omitted). The district court appeared to apply only the second, third, and fourth factors. It said that the underlying litigation was not "serious" because there was no evidence showing that either the Board or the Comptroller had engaged in "misconduct." And since neither were named defendants in the underlying suit, the court thought their role minimal. Finally, it emphasized that the Trustee would not suffer much harm if he could not reach these documents, because all three agencies had already supplied him with a multitude of materials.
Appellant's primary argument is that the common law deliberative process privilege is not appropriately asserted — as the district court in Massachusetts appeared to recognize — when a plaintiff's cause of action turns on the government's intent. We agree. The privilege was fashioned in cases where the governmental decisionmaking process is collateral to the plaintiff's suit. See, e.g., In re Subpoena Served Upon the Comptroller of the Currency, 967 F.2d 630 (D.C.Cir.1992) (shareholders sought Comptroller's bank examination reports to prove fraud charges against corporation); Singer Sewing Machine Co. v. NLRB, 329 F.2d 200 (4th Cir. 1964) (petitioner wanted deliberative materials to establish a defense to an unfair labor practice charge). If the plaintiff's cause of action is directed at the government's intent, however, it makes no sense to permit the government to use the privilege as a shield. For instance, it seems rather obvious to us that the privilege has no place in a Title VII action
The government, to be sure, disputes that appellant has such a cause of action. It argues that however the Bankruptcy Act treats private parties, bank regulatory agencies are removed from its reach. The Federal Deposit Insurance Act requires the FDIC and presumably its fellow government regulators to resolve failing banks with the least possible cost to the bank insurance fund — and thus to the American taxpayer. Therefore, the argument goes, even if the Board and Comptroller had pressured the Corporation to downstream assets, they were only doing "the Lord's work." There may well be a question as to the relationship between these two federal statutes, but the Massachusetts
When it rejected the misconduct exception, our district court intuitively recognized that the analysis normally governing the applicability of the deliberative process privilege does not fit this situation. It pointed out that the plaintiff was attacking the actual goals of the regulators, rather than asserting that the agency's decisionmaking process was tainted with misconduct. We think that is another way of expressing our understanding that the deliberative process privilege protects against collateral attack. But the appropriate conclusion is not that the misconduct exception does not apply, but rather that the privilege does not enter the picture at all.
We therefore see no need to engage in the balancing test applied in deliberative process privilege cases. The appellant is entitled to have his subpoena enforced.