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

          MEMORANDUM OPINION

          Emmet G. Sullivan United States District Judge

         This miscellaneous action began six years ago when Petitioner, the United States Department of Treasury (“Treasury”), moved to quash Dennis Black, Charles Cunningham, Ken Hollis and the Delphi Salaried Retirees Association's (collectively, “Respondents”) subpoena requesting documents related to Treasury's involvement in the termination of Respondents' pension plan. That subpoena arose from a civil action that began nine years ago and is currently pending in the United States District Court for the Eastern District of Michigan. In the civil action, Respondents allege that the Pension Benefit Guaranty Corporation illegally terminated Delphi's pension plan for its salaried workers, via an agreement with Delphi and General Motors, because of improper pressure exerted by Treasury.

         In the last four years, the Court has evaluated Treasury's various claims of privilege and has conducted in camera review of hundreds of documents related to multiple rounds of briefing. Pending before the Court is the Respondents' renewed motion to compel the production of 61 documents withheld by Treasury under a claim of the presidential communications privilege. Upon consideration of the renewed motion, response and reply thereto, the relevant case law, and the entire record, and for the reasons set forth below, the motion is GRANTED in PART and DENIED in PART.

         I. BACKGROUND

         A. Statutory Background

         In 1974 Congress passed the Employee Retirement Income Security Act (ERISA) with the goal of safeguarding employees against the loss of expected retirement benefits. 29 U.S.C. § 1301 et. seq. In passing this law, “Congress wanted to guarantee that ‘if a worker has been promised a defined pension benefit upon retirement--and if he has fulfilled whatever conditions are required to obtain a vested benefit--he actually will receive it.'” PBGC v. R.A. Gray & Co., 467 U.S. 717, 720 (1984) (citations omitted). To that end, Title IV of ERISA created the Pension Benefit Guaranty Corporation (“PBGC”) “a mandatory Government insurance program that protects the pension benefits of over 30 million private-sector American workers who participate in plans covered by the Title.” PBGC v. LTV Corp., 496 U.S. 633, 637 (1990). The PBGC is a “wholly owned Government corporation within the Department of Labor.” R.A. Gray & Co., 467 U.S. at 720. The Board of Directors of the corporation “consists of the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Commerce.” 29 U.S.C. § 1302(d)(1).

         Title IV of ERISA expressly defines the purposes of the PBGC. These purposes are threefold and are aimed at protecting pension participants. The first enumerated purpose is to “encourage the continuation and maintenance of voluntary private pension plans for the benefit of their participants.” 29 U.S.C. § 1302(a)(1). The second purpose is to “provide for the timely and uninterrupted payment of pension benefits to participants and beneficiaries.” Id. § 1302(a)(2). The last enumerated purpose is “to maintain premiums . . . at the lowest level consistent with carrying out its obligations.” Id. § 1302(a)(3). As these purposes illustrate, the PBGC is entrusted by Congress, and by the public through its representatives, with the task of “ensur[ing] that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in the plans.” R.A. Gray & Co., 467 U.S. at 720 (citations omitted).

         Termination cannot be avoided at all costs, however. The Act recognizes that under certain circumstances a plan must be terminated in order to “protect the interests of the participants or to avoid any unreasonable deterioration of the financial condition of the plan or any unreasonable increase in the liability of the fund.” 29 U.S.C. § 1342(c)(1); see also LTV Corp., 496 U.S. at 641 (recognizing some plans must be terminated to “protect the insurance program from the unreasonable risk of large losses.”). As the Act explains, ”[the PBGC] may institute proceedings . . . to terminate a plan whenever it determines” that inter alia, the “plan has not met the minimum funding standard required, ” “the plan will be unable to pay benefits when due, ” or “the possible long-run loss of the corporation with respect to the plan may reasonably be expected to increase unreasonably if the plan is not terminated.” 29 U.S.C. § 1342(a)(1)-(4). If the PBGC has determined that the plan should be terminated, “it may, upon notice to the plan administrator, ” apply to the appropriate U.S. district court for a “decree adjudicating that the plan must be terminated in order to protect the interests of the participants or to avoid any unreasonable deterioration of the financial condition of the plan or any unreasonable increase in the liability of the fund.” Id. § 1342(c)(1).

         B. Factual Background

         Respondents in this miscellaneous action are retired salaried employees of the Delphi Corporation (“Delphi”), an automotive supply company, and an association of retired salaried employees of Delphi. Respondents are also plaintiffs in Black v. PBGC, No. 09-13616, a civil action pending in the United States District Court for the Eastern District of Michigan (“civil action”) since 2009. In that civil action, Respondents alleged that the PBGC violated Title IV of ERISA and the United States Constitution when it was forced to wrongfully terminate Respondents' pension. Respondents' theory of the case is that the “termination occurred as the result of politics, with Treasury having impermissibly pressured the PBGC to acquiesce in the Plan's termination as part of Treasury's political goals in restructuring the auto industry in general, and GM in particular.” Renewed Mot. Compel, ECF No. 70 at 10.^[1]Treasury is not a part of the civil action.

         This miscellaneous action began when Treasury moved to quash a subpoena duces tecum served by the Respondents seeking information related to its claims in the civil action. Treas. Mot. Quash, ECF No. 1. Specifically, the subpoena sought all documents and things received by, produced or reviewed by certain Treasury employees between January 1, 2009 and December 31, 2009 related to “(1) Delphi; (2) the Delphi Pension Plans; or (3) the release and discharge by the [PBGC] of liens and claims relating to the Delphi Pension Plans.” Id. at 252-53.

         In a Memorandum Opinion dated June 19, 2014, ECF No. 27, this Court ruled that Treasury had failed to meet its burden under Federal Rules of Civil Procedure 26 and 45 to quash the subpoena duces tecum and therefore denied the motion to quash. Treasury responded to the subpoena by withholding or redacting 1, 273 documents 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 privilege. See generally Mot. Compel, ECF. No. 30. Although Treasury asserted privilege for over 1, 000 documents, Respondents only challenged the claims of privilege for 866 documents. Treas. Opp'n, ECF No. 35 at 9.

         The Court ordered in camera review of all the documents at issue to better evaluate Treasury's claims of privilege. See Minute Entry of July 15, 2016. Ten days later, 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 at 1. Treasury revoked its claims of privilege over nearly 640 of the 866 contested documents without providing any explanation as to why it suddenly withdrew its claim of privilege over nearly 75% of the documents it previously claimed were protected from disclosure. See id.

         After reviewing the remaining documents in camera, in a Memorandum Opinion dated December 20, 2016, the Court concluded that Treasury failed to provide a specific articulation of the rationale supporting the deliberative process privilege and ordered Treasury to produce to Respondents all of the documents over which it asserted solely the deliberative process privilege. Mem. Op., ECF No. 42 at 6-13. The Court further ordered Treasury to submit an updated in camera production and privilege log containing the documents withheld under the other three privileges. Id. at 13.

         Treasury submitted 85 documents in response to the Court's Order. See Mem. Op., ECF No. 45 at 3. Relevant to this renewed motion to compel, Treasury asserted the presidential communications privilege as the basis for withholding 63 documents from production. Id. at 4. In a Memorandum Opinion dated April 13, 2017, the Court concluded that the documents were covered by the presidential communications privilege, but that Respondents had demonstrated a sufficient need for the documents to overcome the privilege. Id. at 3-11. Accordingly, the Court ordered production of the 63 documents over which Treasury had asserted the presidential communications privilege produced to Respondents. See Order, ECF No. 44 at 1.

         Treasury appealed the Court's Order, and the Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) remanded the case back to this Court. U.S. Dep't of Treasury v. Black, No. 17-5142, 2017 WL 6553628, (D.C. Cir. Dec. 8, 2017). Specifically, the D.C. Circuit remanded the case for this Court to “account for how the public interests in this case” differ from prior decisions in which courts have analyzed the presidential communications privilege, id. at *1, and to “thoroughly analyze whether [Respondents] demonstrated a need sufficient to overcome the privilege, ” id. at *3.

         Respondents have since filed a renewed motion to compel challenging 61 of the 63 documents over which Treasury claims the presidential communications privilege.^[2] The documents can be grouped into three categories: (1) Draft memoranda from staffers to Dr. Lawrence Summers, the Director of the National Economic Council, Assistant to the President for Economic Policy, and co-chair of the Presidential Task Force on the Auto Industry (“Auto Task Force”), providing updates regarding GM and Delphi; (2) electronic mail conversations among federal employees that supported Dr. Summers and the Auto Task Force (“Auto Team members”) concerning advice provided to President Obama regarding GM, Delphi, and the PBGC; and (3) personal requests for information by President Obama about the Delphi Salaried Plan, along with Treasury emails and a memorandum in response. Renewed Mot. Compel, ECF No. 70 at 28. Treasury filed its opposition to Respondents' motion to compel, ECF. No. 74, and Respondents subsequently filed their reply in support, ECF No. 75. The motion is now ripe for decision.

         II. LEGAL STANDARD

         The presidential communications privilege is a “presumptive privilege” necessary to “guarantee the candor of presidential advisers and to provide ‘a President and those who assist him . . . with freedom to explore alternatives in the process of shaping policies and making decisions and to do so in a way many would be unwilling to express except privately.'” In re Sealed Case, 121 F.3d 729, 743 (D.C. Cir. 1997) (alterations omitted) (quoting United States v. Nixon, 418 U.S. 683, 708 (1974)). The privilege “is rooted in the need for confidentiality to ensure that presidential decisionmaking is of the highest caliber, informed by honest advice and full knowledge.” Id. at 750. This confidentiality is important because it is “what ensures the expression of ‘candid, objective, and even blunt or harsh opinions' and the comprehensive exploration of all policy alternatives before a presidential course of action is selected.” Id. (citation omitted).

         Although entitled to great weight because of the need for confidentiality, the presidential communications privilege should be construed as “narrowly as is consistent with ensuring that the confidentiality of the President's decisionmaking process is adequately protected.” Id. at 752. Moreover, assuming arguendo a former president may assert the privilege, “such a claim carries much less weight than a claim asserted by the incumbent himself.” Dellums v. Powell, 561 F.2d 242, 247 (D.C. Cir. 1977). Ultimately, the application of the privilege “depends on a weighing of the public interest protected by the privilege against the public interests that would be served by disclosure in a particular case.” In re Sealed Case, 121 F.3d at 743 (citation omitted). In the context of civil discovery, a court must assess “the public interests at stake in determining whether the privilege should yield in a particular case, and must specifically consider the need of the party seeking privileged evidence.” See Id. at 746.

         The D.C. Circuit has had several occasions to discuss the presidential communications privilege in various circumstances. In Nixon v. Sirica, the D.C. Circuit discussed the application of the privilege in the criminal context. 487 F.2d 700 (D.C. Cir. 1973). Sirica concerned a subpoena issued by a grand jury investigating the break-in at the Watergate Hotel for certain tape recordings of telephone conversations that had taken place between President Nixon and his advisors. Id. at 704-705. Nixon refused to produce the tape recordings asserting the presidential communications privilege. Id. at 705. The D.C. Circuit explained that the claim of privilege “depend[ed] on a weighing of the public interest protected by the privilege against the public interests that would be served by disclosure in a particular case.” Id. at 716. In weighing those interests, the Court recognized that there was a great public interest in preserving “the confidentiality of conversations that take place in the President's performance of his official duties” in order to protect “the effectiveness of the executive decision-making process.” Id. at 717. The Court held, however, that the privilege was overcome because of the “showing made by the Special Prosecutor” in that case. Id. Specifically, the Special Prosecutor had made a “strong showing that the subpoenaed tapes contain[ed] evidence” necessary to the carrying out of a vital function of the grand jury which was to “indict persons when there is probable cause to believe they have committed crime, but also to protect persons from prosecution when probable cause does not exist.” Id. at 717. Accordingly, the Court held the district court could order disclosure of portions of the tapes relevant to the scope of the grand jury investigation. Id. at 721.

         The Supreme Court addressed the presidential communications privilege in the context of a criminal case a year later in United States v. Nixon, 418 U.S. 683 (1974). Nixon also concerned a subpoena by a grand jury for several tape recordings and documents relating to President Nixon's conversations with his advisors. Id. at 688. The Court noted that President Nixon did not place his “claim of privilege on the ground that [the communications were] military or diplomatic secrets.” Id. at 710. After determining that the public interest at stake was the “President's generalized interest in confidentiality” the Court weighed this “generalized interest” against “the inroads of such a privilege on the fair administration of criminal justice.” Id. at 711-12. In weighing these interests, the Court concluded that although the “interest in preserving confidentiality . . . is entitled to great respect . . . the allowance of the privilege to withhold evidence that is demonstrably relevant in a criminal trial would cut deeply into the guarantee of due process of law and gravely impair the basic function of the courts.” Id. at 712. Accordingly, the Court remanded the case for the district court to determine, via in camera review, what relevant and admissible evidence in the tapes would be released to the Special Prosecutor. Id. at 713-14.

         Of most relevance to this case, the D.C. Circuit first considered the presidential communications privilege in the civil context in Dellums v. Powell, 561 F.2d 242 (D.C. Cir. 1977). Dellums concerned a subpoena for tapes and transcripts of White House conversations in connection with claims that plaintiffs were unconstitutionally detained for protesting American military involvement in Southeast Asia. 561 F.2d at 244. Although not a party to the case, President Nixon moved to quash the subpoena under a claim of the presidential communications privilege arguing that the privilege was absolute in the civil context. Id. After taking note that President Nixon's claim of privilege did not concern “a claim of a need to protect national security, military or diplomatic secrets, ” the Court “reject[ed] Mr. Nixon's contention that a formal claim of privilege based on the generalized interest of presidential confidentiality, without more, works an absolute bar to discovery of presidential conversations in civil litigation.” Id. at 245-46.

         Rather than employing an absolute privilege, the Court again balanced the interests in confidentiality with that of disclosure. Id. at 247-48. The Court recognized that even in civil litigation there is “a constitutional value in the need for disclosure in order to provide the kind of enforcement of constitutional rights that is presented by a civil action for damages, at least where . . . the action is tantamount to a charge of civil conspiracy among high officers of government to deny a class of citizens their constitutional rights.” Id. at 247. It was of “cardinal significance” to the Court that the “claim of privilege [was] being urged solely by a former president, and there [was] no assertion of privilege by an incumbent president.” Id. at 247 (stating the “[a]bsence of support from the incumbent [president] at least indicates that ‘the risk of impairing necessary confidentiality is attenuated.'” (citation omitted)). After balancing the interests in confidentiality against the interests in disclosure, the Court found that the privilege had to yield to the plaintiffs' showing of need in the case. Id. at 248-49. Accordingly, the Court remanded the case for, among other things, in camera review of the challenged materials by the district court to determine which materials would be released. Id. at 251.

         The D.C. Circuit's most comprehensive analysis of the presidential communications privilege was perhaps in In re Sealed Case, 121 F.3d 729 (D.C. Cir. 1997). In re Sealed Case, a criminal matter, concerned a grand jury subpoena for documents pertaining to White House Counsel's investigation of a former cabinet member. Id. at 734. After surveying the Nixon cases including Nixon, Dellums, and Sirica, the Court observed that these cases “all employed a balancing methodology” in which the “opinions balanced the public interests served by protecting the President's confidentiality in a particular context with those furthered by requiring disclosure.” 121 F.3d at 753. However, since the Court's prior precedent established that ...