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U.S. Department of Treasury v. Pension Benefit Guaranty Corp.

United States District Court, District of Columbia

December 20, 2016

U.S. DEPARTMENT OF THE TREASURY, Petitioner,
v.
PENSION BENEFIT GUARANTY CORPORATION, Interested Party,
v.
DENNIS BLACK, et al., Respondents.

          MEMORANDUM OPINION

          Emmet G. Sullivan United States District Judge.

         Pending before the Court is Dennis Black, Charles Cunningham, Ken Hollis, and the Delphi Salaried Retirees Association's (collectively, “Respondents”) motion to compel the production, or alternatively in camera review, of documents withheld and redacted by the U.S. Department of Treasury (the “Treasury”) for privilege. Upon consideration of the motion, response and reply thereto, the relevant caselaw, and the entire record, and for the reasons set forth below, the motion is GRANTED in part.

         I. BACKGROUND

         Respondents in this miscellaneous action are plaintiffs in Black v. PBGC, Case No. 09-13616, a civil action pending in the United States District Court for the Eastern District of Michigan. Respondents are current and former salaried workers at Delphi Corporation (“Delphi”), an automotive supply company. In the civil action, Respondents allege that in July 2009, the Pension Benefit Guaranty Corporation (“PBGC”) improperly terminated Delphi's pension plan for its salaried workers (“Plan”) via an agreement with Delphi and General Motors. Treasury is not a party to the civil action.

         On July 9, 2015, Respondents filed a motion to compel the production, or alternatively in camera review, of the documents Treasury withheld or redacted under four separate claims of privilege: (1) the deliberative process privilege; (2) the presidential communications privilege; (3) the attorney-client privilege; and (4) the work product doctrine. See generally Mot. Compel, ECF No. 30. Although Treasury asserted a privilege over 1, 273 documents, Respondents only challenged 866 documents. Opp., ECF No. 35 at 1.

         In order to better evaluate Treasury's claims of privilege, the Court ordered an in camera review of a random selection of the withheld and redacted documents. Minute Entry of June 17, 2016. The Court directed Treasury to submit hard copies of every tenth document listed in its privilege log and to clearly identify the redacted material. Id.

         Upon review of the random sampling of documents that Treasury submitted, the Court concluded that it lacked sufficient information to rule on many of Treasury's privilege claims and ordered that Treasury submit all of the documents at issue for in camera inspection. Minute Entry of July 15, 2016. As part of this exercise, the Court ordered Treasury to submit an ex parte submission clearly articulating why each document, or document portion, was protected by the privilege asserted. Id. For documents over which Treasury claimed the deliberative process privilege, the Court specifically directed Treasury to inform the Court "what deliberative process is involved, and the role played by the documents in issue in the course of that process." Id. The Court warned that “should [it] determine that [Treasury's] claims of privilege are frivolous, the Court shall impose significant sanctions, mo[ne]tary and otherwise.” Id.

         On July 25, 2016, Treasury produced, in camera, hard copies of the contested documents, noting that “[i]n preparing its production, Treasury decided not to continue withholding certain documents.” See Notice of Production, ECF No. 40. Of the original 866 contested documents, Treasury revoked its claims of privilege over nearly 640 documents in light of the Court's order to produce the contested documents in camera. Treasury provided no explanation as to why it suddenly withdrew its privilege assertions over nearly 75% of the documents it had previously claimed were privileged. Id. The 221 documents over which Treasury continues to assert a claim of privilege are now at issue before the Court.

         II. THE DELIBERATIVE PROCESS PRIVILEGE

         Treasury has raised the deliberative process privilege as the sole basis for withholding 120 documents from production. For 63 documents, Treasury has asserted the deliberative process privilege in conjunction with another privilege.[1] According to Treasury, these 183 communications are protected from disclosure because they involve government deliberations regarding the 2009 bankruptcy and restructuring of Chrysler and General Motors. See Opp., ECF No. 35 at 11-12. For the following reasons, the Court will order the production of all of the documents over which Treasury has asserted the deliberative process privilege in isolation.

         a. The Legal Standard.

         The deliberative process privilege serves to preserve the “open and frank discussion” necessary for effective agency decisionmaking by protecting from disclosure “documents reflecting advisory opinions, recommendations, and deliberations that are part of a process by which Government decisions and policies are formulated.” Dep't of the Interior v. Klamath Water Users Prot. Ass'n, 532 U.S. 1, 8-9 (2001). The privilege “rests on the obvious realization that officials will not communicate candidly among themselves if each remark is a potential item of discovery and front page news.” Abtew v. U.S. Dep't of Homeland Sec., 808 F.3d 895, 898 (D.C. Cir. 2015) (quoting Klamath Water, 532 U.S. at 8-9.). As the U.S. Court of Appeals for the D.C. Circuit has noted, agency officials “should be judged by what they decided, not for matters they considered before making up their minds.” Russell v. Dep't Air Force, 682 F.2d 1045, 1048 (D.C. Cir. 1982).

         To fall within the scope of the deliberative-process privilege, withheld materials must be both “predecisional” and “deliberative.” Mapother v. Dep't of Justice, 3 F.3d 1533, 1537 (D.C. Cir. 1993). A communication is predecisional if “it was generated before the adoption of an agency policy” and deliberative if it “reflects the give-and-take of the consultative process.” Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 866 (D.C. Cir. 1980). “Even if the document is predecisional at the time it is prepared, it can lose that status if it is adopted formally or informally, as the agency position on an issue[.]” Id. The deliberative process privilege is to be construed “as narrowly as consistent with efficient Government operation.” United States v. Phillip Morris, 218 F.R.D. 312, 315 (D.D.C. 2003) (quoting Taxation with Representation Fund v. IRS, 646 F.2d 666, 667 (D.C. Cir. 1981)). To properly invoke the privilege, the agency must “make a detailed argument...in support of the privilege” because “without a specific articulation of the rationale supporting the privilege, a court cannot rule on whether the privilege applies.” Ascom Hasler Mailing Sys., Inc. v. U.S. Postal Serv., 267 F.R.D. 1, 4 (D.D.C. 2010) (internal quotation marks omitted).

         b. Treasury Has Not Properly Invoked the Deliberative ...


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