U.S. Department of Treasury v. Black ( 2014 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
___________________________________
)
U.S. DEPARTMENT OF THE )
TREASURY, )
)
Petitioner, )
)
v. )
)
PENSION BENEFIT GUARANTY )
CORPORATION, ) Case No. 12-mc-100 (EGS)
)
Interested Party, )
)
v. )
)
DENNIS BLACK, et al., )
)
Respondents. )
___________________________________)
MEMORANDUM OPINION
Pending before the Court is petitioner U.S. Department of
the Treasury’s (“Treasury”) renewed motion to quash a subpoena
duces tecum and motion to quash a deposition subpoena served
upon it by Dennis Black, Charles Cunningham, Kenneth Hollis, and
the Delphi Salaried Retirees Association (hereinafter
“Respondents”). Upon consideration of the motions, responses
and replies thereto, the relevant caselaw, and the entire
record, and for the reasons set forth below, the motions are
DENIED.
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 (hereinafter “civil action” or “Michigan action”).
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 (“GM”). Treasury is
not a party to the civil action.
The civil action contains four counts. Count One alleges
that the termination violated the Employee Retirement Income
Security Act (“ERISA”) because no court made findings that the
Plan was unsustainable. Plaintiffs argue that such findings are
a condition prerequisite to a valid termination under ERISA.
Black v. PBGC, ECF #145 ¶ 39. Counts Two and Three allege
additional procedural infirmities with the termination-by-
agreement. Id. ¶¶ 44, 52. Finally, and most relevant to this
miscellaneous action, Count Four alleges that the PBGC could not
have satisfied ERISA’s statutory requirements for termination
had it actually sought court approval, pursuant to 29 U.S.C. §
2
1342(c). Id. ¶ 56. Essentially, plaintiffs’ theory of the case
in the civil action, and specifically Count Four, is that PBGC
terminated the Plan “not because of anything related to its
statutory role under ERISA, but as a result of pressure imposed
by the Treasury and the related U.S. Auto Task Force to support
their efforts to restructure the auto industry in general and GM
in particular.” Resp’ts Opp’n to Renewed Mot. to Quash, ECF #19
at 3-4.
In September 2011, Judge Tarnow, who is presiding over the
civil action, ordered discovery to move forward. He instructed
the parties to focus first on Count Four, specifically:
[W]hether termination of the Salaried Plan would have been
appropriate in July 2009 if, as Plaintiffs contend,
Defendants were required under 29 U.S.C. § 1342(c) to file
before this 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.”
Black v. PBGC, ECF #193 at 3-4. Judge Tarnow explained that he
was proceeding in this fashion because:
A finding by the Court in PBGC’s favor on Count 4 after
[discovery under the Federal Rules] would render moot the
remainder of the complaint pertaining to the PBGC. In the
event that the Court finds that termination of the plan was
not supported by the factors set forth in 28 U.S.C. §
1342(c), the Court will consider the remaining issues
raised in the complaint.
Id. at 5-6.
3
The PBGC unsuccessfully moved for reconsideration of Judge
Tarnow’s order. Shortly thereafter, plaintiffs served the PBGC
with discovery requests which, they argue, are highly relevant
to § 1342(c). One of the requests directs PBGC to produce “all
documents and things you received from . . . the Treasury
Department, the Auto Task Force, the Labor Department, and the
Executive Office of the President, or produced to the Federal
Executive Branch, since January 1, 2009, related to Delphi . . .
including but not limited to, documents related to the
termination of the Delphi Pension Plans.” Pet’r’s Mot to Quash,
ECF #1, Ex. H at 8-9. The PBGC refused to produce the
documents, the plaintiffs moved to compel, and Magistrate Judge
Majzoub ordered the PBGC to produce full and complete responses.
Black v. PBGC, ECF #209 at 1. The PBGC filed objections to that
order with Judge Tarnow.
Meanwhile, in January 2012, Respondents served Treasury
with a subpoena seeking:
All documents and things (including e-mails or other
correspondence, spreadsheets, reports, analyses, snapshots,
funding estimates, proposals or offers) received, produced,
or reviewed by Matthew Feldman, [Harry Wilson, or Steven
Rattner] 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.
4
Pet’r’s Mot. to Quash, ECF #1, Ex. J at 5-6. Respondents allege
that Feldman, Wilson and Rattner were the three principal
Treasury employees who negotiated with the PBGC to terminate the
Delphi Plan. Resp’ts Opp’n to Mot. to Quash, ECF #6 at 4, 10.1
The Treasury filed this miscellaneous action to quash the
subpoena in February 2012. Treasury made the same argument to
this Court that the PBGC asserted in unsuccessfully opposing the
motion to compel before Judge Majzoub and in its objections
which were then pending before Judge Tarnow: the requested
discovery is irrelevant because it relates to § 1342(c), and §
1342(c) is irrelevant to the Michigan action. See, e.g., Pet’r’s
Reply in Support of Mot. to Quash, ECF #10 at 4-12.
Accordingly, in May 2012, this Court entered a minute order
stating, in relevant part:
[I]t appears to the Court that a threshold issue in this
matter is whether the court in the underlying action has
permitted discovery regarding the factors enunciated in 29
U.S.C. § 1342(c). In light of the fact that this precise
issue is ripe for resolution before Judge Tarnow, the judge
in the underlying action, the Court hereby STAYS this
matter pending Judge Tarnow's resolution of PBGC's
Objections to Magistrate Judge's Order of March 9, 2012
Granting Plaintiffs' Motion to Compel Discovery, Case 09-
13616 (E.D. Mich.), Doc. No. 209. Plaintiffs are directed
to notify this Court of Judge Tarnow's decision within five
calendar days after it issues. This Order is subject to
reconsideration for good cause shown.
Minute Order, May 17, 2012.
1
All three left Treasury and returned to the private sector at
some point during the summer of 2009. Pet’r’s Renewed Mot. to
Quash, ECF #15 at 10.
5
On August 13, 2013, Respondents moved to lift the stay.
They noted that although Judge Tarnow had not yet ruled on the
objections, in the interim, the PBGC “produced all documents
sought by plaintiffs” which were responsive to Judge Majzoub’s
order. Resp’ts Mot. to Lift Stay, ECF #11 at 2. Accordingly,
“it seems likely that the PBGC’s objections to Judge Tarnow are
now moot, or waived, or both.” Id. at 3.2 Respondents also
proposed a modification to their subpoena duces tecum. Id. at
6. Respondents believe that Treasury has already produced
certain documents and email correspondence relevant to the
Delphi Pension issues to the Special Inspector General for the
Troubled Asset Relief Program (SIGTARP). Id. at 7. They
suggest it would be “a reasonable compromise” to modify the
subpoena to request only those documents. Id. In proposing the
modification, Respondents tried to address Treasury’s argument
that the subpoena imposes an undue burden; “producing documents
already assembled and produced to SIGTARP involves no burden.”
Id. at 6.
A week later, on August 20, 2013, Respondents issued a
deposition subpoena, which asks Treasury to produce one or more
witnesses pursuant to Federal Rule of Civil Procedure 30(b)(6)
to testify at deposition about:
2
Indeed, on May 27, 2014 Judge Tarnow denied as moot the PBGC’s
Objections to Judge Majzoub’s March 9, 2014 order. See Resp’ts
Notice of Development in Underlying Case, ECF #25 Ex. A.
6
[Matthew Feldman’s and Harry Wilson’s] communications in
2009 relating to the GM-Delphi relationship; the Delphi
Pension Plans; and the release, waiver, or discharge by the
PBGC of liens and claims relating to the Delphi Pension
Plans. These communications include, but are not limited
to, communications with the PBGC, Delphi, GM, the Delphi
DIP leaders, Federal Mogul, Platinum Equity, the National
Economic Council, and the Executive Office of the
President.
Deposition Subpoena, ECF #13-4. Shortly thereafter, Treasury
filed a combined Renewed Motion to Quash the 2012 subpoena duces
tecum and Motion to Quash the 2013 deposition subpoena. ECF
#15. In its renewed motion, Treasury makes the same three
arguments as its initial motion – relevance, undue burden, and
cumulative/duplicative information. Id. at 16-23. It also adds
a new argument, claiming for the first time that the Respondents
lack standing to litigate the Michigan action, and thus may not
conduct any discovery, including discovery from Treasury. Id.
at 13-16. The renewed motion is ripe for review by the Court.
II. STANDARD OF REVIEW
A. Standing
In a civil action, the plaintiff has the burden of
establishing that it has Article III standing. Sierra Club v.
Jackson, 813 F. Supp. 2d 149, 154 (D.D.C. 2011) (citations
omitted). To establish standing, plaintiff must show “at an
irreducible constitutional minimum”: (1) that it has suffered an
injury in fact; (2) that the injury is fairly traceable to
defendant's conduct; and (3) that a favorable decision on the
7
merits likely will redress the injury. See Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992). “While the burden of
production to establish standing is more relaxed at the pleading
stage than at summary judgment, a plaintiff must nonetheless
allege ‘general factual allegations of injury resulting from the
defendant’s conduct.’” Nat’l Ass’n of Home Builders v. E.P.A.,
667 F.3d 6, 12 (D.C. Cir. 2011). See also NB ex rel. Peacock v.
Dist. of Columbia, 682 F.3d 77, 82 (D.C. Cir. 2012) (noting that
“at the pleadings stage, ‘the burden imposed’ on plaintiffs to
establish standing ‘is not ‘onerous’”).
B. Motion to Quash
A party “may obtain discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense . . .
[or which] appears reasonably calculated to lead to the
discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1).
Limiting discovery and quashing subpoenas pursuant to Rule 26
and/or Rule 45 “goes against courts’ general preference for a
broad scope of discovery.” North Carolina Right to Life, Inc.
v. Leake, 231 F.R.D. 49, 51 (D.D.C. 2005). “Moreover, the
general policy favoring broad discovery is particularly
applicable where, as here, the court making the relevance
determination has jurisdiction only over the discovery dispute,
and hence has less familiarity with the intricacies of the
governing substantive law than does the court overseeing the
8
underlying litigation.” Jewish War Veterans of the United
States of Am., Inc. v. Gates, 506 F. Supp. 2d 30, 42 (D.D.C.
2007) (citing Flanagan v. Wyndham Int’l, Inc., 231 F.R.D. 98,
103 (D.D.C. 2005)).3
Discovery must be limited, however, if the “discovery
sought is unreasonably cumulative or duplicative.” Fed. R. Civ.
P. 26(b)(2)(c). In addition, “[t]he court may, for good cause,
issue an order to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense.” Id. at
26(c); see also Fed. R. Civ. P. 45(d).
“The individual or entity seeking relief from subpoena
compliance bears the burden of demonstrating that a subpoena
should be modified or quashed.” Sterne Kessler Goldstein & Fox,
PLLC v. Eastman Kodak Co., 276 F.R.D. 376, 379 (D.D.C. 2011)
(citations omitted). “The quashing of a subpoena is an
extraordinary measure, and is usually inappropriate absent
extraordinary circumstances. A court should be loath to quash a
subpoena if other protection of less absolute character is
possible. Consequently, the movant's burden is greater for a
3
Treasury suggests that a more restrictive test of relevancy
applies when the subpoena is directed to a non-party, Pet’r’s
Renewed Mot. at 17, “but it seems that there is no basis for
this distinction in the rule's language.” 9A Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure § 2459
(3d ed.); see also Flanagan, 231 F.R.D. at 103 (applying
relevance standards to non-party subpoena that is at least as
broad as party subpoenas).
9
motion to quash than if she were seeking more limited
protection.” Flanagan, 231 F.R.D. at 102 (internal citations
and quotation marks omitted).
III. DISCUSSION
A. Standing
For the first time in its renewed motion to quash,
Treasury, a non-party to the underlying case, argues that
respondents have no standing to litigate the Michigan action.
Pet’r’s Renewed Mot. to Quash at 13-16. Treasury concedes that
the parties to the Michigan action have not raised standing
issues in the Michigan court. Id. at 13-14. Nevertheless, it
contends that “this Court is a proper forum in which to
challenge the standing of respondents to litigate” the Michigan
case, because “third party discovery may be permitted only to
the extent it relates to viable claims.” Id. at 14, n.11. It
then makes cursory arguments, in just four pages of its brief,
which purport to address standing issues in the highly complex
ERISA litigation which has been pending in Michigan for five
years.
This Court is deeply skeptical of Treasury’s argument that
the Court should address Article III standing in a case where
the merits are not before it, and indeed, where it “has
jurisdiction only over the discovery dispute, and hence has less
familiarity with the intricacies of the governing substantive
10
law than does the court overseeing the underlying litigation.”
Jewish War Veterans, 506 F. Supp. 2d at 42 (citations omitted)
(emphasis added). It is true, of course, that an “ancillary
discovery proceeding is, by its very terms, an extension of the
underlying proceeding and the subject matter jurisdiction of the
ancillary proceeding is derived from the jurisdiction of the
underlying case.” McCook Metals LLC v. Alcoa, Inc., 249 F.3d
330, 334 (4th Cir. 2001). However, this does not mean that in
resolving the discrete, non-party discovery issue before it, the
Court may reach into the merits of the underlying case, ongoing
in another court halfway across the country, and determine that
court’s jurisdiction over those claims. Indeed, Treasury has not
provided a single authority where a court exercising ancillary
jurisdiction over only a single discovery motion has addressed
the subject matter jurisdiction of a sister court presiding over
the underlying litigation. Asking this Court to review another
court’s jurisdiction seems particularly inappropriate because
the issue can never be waived: a standing challenge may be
raised at any time during the Michigan litigation, either by the
parties or sua sponte by that court.4
4
If the subpoenas had been issued after December 1, 2013, the
Court would have seriously considered transferring the motion to
quash to the Michigan court in light of the December 1, 2013
amendments to Rule 45. The Rule, as amended, now requires that
subpoenas be issued “from the court where the action is
pending,” Fed. R. Civ. P. 45(a)(2), and further provides that
11
Assuming arguendo it is appropriate for this court to
undertake a standing analysis, and based on the limited record
before it, the Court rejects Treasury’s arguments. In order to
demonstrate standing, a plaintiff must adequately establish an
injury-in-fact, causation and redressability. Lujan, 504 U.S.
at 560–61. At the pleading stage, where the underlying
litigation remains, “‘the burden imposed’ on plaintiffs to
establish standing ‘is not onerous’.” NB ex. rel. Peacock, 682
F.3d at 82. Treasury does not dispute that Respondents have
been injured through the termination of their pension plan, but
denies causation and redressability. Pet’r’s Renewed Mot. at 14-
16.
On the causation issue, Treasury argues that Respondents
cannot show that their injury was fairly traceable to the PBGC.
[T]he fact that respondents are not receiving the full
amount of their pension benefits is attributable to the
fact that “Delphi did not have enough money to fund its
pensions” . . . . not to the fact PBGC terminated the . . .
Plan by agreement with Delphi “to avoid any unreasonable
increase in the liability of the PBGC insurance fund.”
Id. at 14 (citations omitted). This argument is nothing more
than an assertion that the PBGC should win on the merits of the
case. In their Second Amended Complaint, plaintiffs have
alleged that their Plan was terminated by PBGC for political
“[w]hen the Court where compliance is required did not issue the
subpoena, it may transfer a motion [to quash] to the issuing
court if the person subject to the subpoena consents or if the
court finds exceptional circumstances.” Id. 45(f).
12reasons and in violation of ERISA, not because the Plan was no
longer financially viable or because PBGC had statutory
authority to terminate. See, e.g., Black v. PBGC, Second
Amended Complaint, ECF #145 ¶ 56. This is precisely the issue
in discovery in the Michigan court. This Court takes no position
whether Respondents will prevail on their claims. At the
pleading stage, however, it appears that Respondents have
alleged a causal link.
Treasury also argues that plaintiffs’ injuries are not
redressable by the Michigan Court. It claims that Respondents
are not entitled to equitable relief from the PBGC because
equitable “payments of money from the Federal Treasury are
limited to those authorized by statute,” OPM v. Richmond, 496
U.S. 414, 416 (1990), and “[r]espondents do not point to any
statute that would authorize PBGC to pay them more in pension
benefits than they now are receiving.” Pet’r’s Renewed Mot. at
16. This argument fares no better than Treasury’s causation
claims. Congress has authorized any plan participant “adversely
affected by any action of the [PBGC] . . . [to] bring an action
against the [PBGC] for appropriate equitable relief in the
appropriate court.” 29 U.S.C. § 1303(f)(1). Plaintiffs request
a variety of forms of equitable relief in their Second Amended
Complaint, not limited to an order forcing the PBGC paying
higher pensions to the salaried workers and retirees. See Black
13
v. PBGC, Sec. Am. Compl. Prayer for Relief, ECF #145 at 22-23.
Again, this Court takes no position on what relief, if any,
Respondents will obtain from the PBGC or the other defendants in
the case. However, at the pleading stage of the litigation,
this Court agrees with Judge Tarnow, who “declin[ed] to accept
[the PBGC’s] position that Plaintiffs cannot obtain any relief
in this lawsuit if the [Michigan] [c]ourt concludes that the
PBGC acted improperly.” Black v. PBGC, Order 2/17/10, ECF #122
at 3.
B. Relevance
Treasury argues that the information Plaintiffs seek is
irrelevant because 29 U.S.C. § 1342(c) authorizes the PBGC to
initiate a termination of a pension plan “in order to avoid ‘any
unreasonable increase in the liability of the [PBGC insurance]
fund.’” Pet’r’s Renewed Mot. at 18. Accordingly, Treasury
claims, it is irrelevant whether Treasury encouraged PBGC to do
anything; the PBGC acted in accordance with ERISA in seeking
termination. Id. at 18-19. Respondents counter that § 1342(a)
permits the PBGC to seek termination on this basis, but does not
permit it to actually terminate a Plan without a court’s
determination that a Plan “must” be terminated under the §
1342(c) criteria: “[I]n 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
14
the liability of the fund.” See Resp’ts Opp’n to Renewed Mot.
at 21-22. Respondents argue that a reviewing court would not
have made findings that these statutory criteria were met and
that the Plan “must” terminate; rather, the PBGC violated the
statute and improperly terminated the Plan because it was under
political pressure from Treasury. Id. They argue that discovery
from Treasury is therefore relevant. Respondents prevail.
In Judge Tarnow’s September 1, 2011 discovery order, the
U.S. District Court for the Eastern District of Michigan made a
determination that this information was relevant. Judge Tarnow
allowed discovery to move forward on Count 4 of the Complaint,
specifically:
[W]hether termination of the Salaried Plan would have been
appropriate in July 2009 if, as Plaintiffs contend,
Defendants were required under 29 U.S.C. § 1342(c) to file
before this 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.” . . . . In the
event that the Court finds that termination of the plan was
not supported by the factors set forth in 28 U.S.C. §
1342(c), the Court will consider the remaining issues
raised in the complaint.
Black v. PBGC, ECF #193 at 3-6. Following Judge Tarnow’s order,
Plaintiffs requested information from the PBGC very similar to
that it now requests from Treasury: information designed to
reveal whether the PBGC could have satisfied the § 1342(c)
factors or whether, instead, it improperly yielded to pressure
15
from other federal entities, including Treasury. Pet’r’s Mot to
Quash, ECF #1, Ex. H at 8-9. Judge Majzoub granted Plaintiffs’
motion to compel that information. Black v. PBGC, ECF #209.
Accordingly, two judges in the underlying action evaluated the
question of relevance for very similar materials, sought for
very similar reasons, and found them relevant. Although the
“law of the case” doctrine is not dispositive of Respondents’
motion, it does support this Court's decision to rely on the
relevance analysis performed by the Eastern District of
Michigan. See Flanagan, 231 F.R.D. at 103, n.2 (“While the
doctrine of the law of the case is no more than a guiding
principle and does not diminish this Court's discretion to
revisit prior decisions of a coordinate court, it ‘expresses the
practice of courts generally to refuse to reopen what has been
decided.’”) (quoting Christianson v. Colt Indus. Operating
Corp., 486 U.S. 800, 817 (1988)). In the context of Rules 26
and 45, the above considerations establish a sufficient showing
of relevance needed to permit the Respondents to obtain
documents and other items and to depose a Treasury official in
this case.
C. Burden
A trial court may quash or modify a subpoena on the ground
that the request is unreasonable or oppressive. Fed. R. Civ. P.
26(c). “What constitutes unreasonableness or oppression is, of
16
course, a matter to be decided in the light of all the
circumstances of the case. . . .” Northrop Corp. v. McDonnell
Douglas Corp., 751 F.2d 395, 403 (D.C. Cir. 1984) (citation and
internal quotation marks omitted). “[T]he burden of proving
that a subpoena . . . is oppressive is on the party moving for
relief on this ground. . . . The burden is particularly heavy to
support a motion to quash as contrasted to some more limited
protection,” such as a request for modification. Id. at 404
(quoting Westinghouse Elec. Corp. v. City of Burlington, Vt.,
351 F.2d 762, 766 (D.C. Cir. 1965)). The moving party may not
“simply allege a broad need for a protective order so as to
avoid general harm, but must demonstrate specific facts which
would justify such an order.” Flanagan, 231 F.R.D. at 102
(citations omitted). There are two subpoenas at issue in this
case. The Court examines them in turn.
1) Subpoena Duces Tecum
Respondents’ subpoena duces tecum is narrow. It seeks
documents created, received or reviewed by three Treasury
officials, over a single calendar year, relating only to Delphi.
Moreover, Respondents have expressed their willingness to modify
the subpoena to encompass only those documents Treasury already
produced to SIGTARP and to the House Oversight and Government
Reform Committee. See, e.g., Resp’ts Opp’n to Renewed Mot. at
29-30. Nevertheless, Treasury argues that the subpoena, even
17
with proposed modifications, is oppressive and must be quashed.
Treasury provides a declaration from Rachana Desai, Acting Chief
Counsel of the Treasury’s Office of Financial Stability, which
states that in responding to the subpoena duces tecum, Treasury
“could be” required to search the three officials’ email
inboxes, review over 15,000 electronic documents and 28 boxes of
files, and then review documents for responsiveness and
privilege. Desai Decl. ¶ 7, ECF #15-7. Even the modifications
offered are unacceptable, Desai asserts, because Treasury “would
need to review each responsive document” provided to SIGTARP and
the U.S. House Committee for “responsiveness” and “possible
assertion of claims of privilege.” Id. ¶¶ 9-11.
Treasury has not carried its heavy burden to show that the
subpoena duces tecum is oppressive. Although Treasury claims it
will have to search a significant number of documents to respond
to the subpoena, “volume alone is not determinative.” Northrup
Corp., 751 F.2d at 404 (citation omitted). Moreover, the number
of documents could drop significantly if Treasury agreed to
Respondents’ proposed modifications.5
5
Treasury responded negatively to Respondents’ offer to modify
the subpoena duces tecum, arguing that the modifications would
result in an equally heavy burden on the Treasury. See, e.g.,
Pet’r’s Renewed Mot. at 21-22. Accordingly, the Court does not
modify the subpoena. The parties are of course free to
negotiate modifications to the subpoena without further
litigation.
18
Treasury’s remaining claim of burdensomeness is that it
will have to make privilege determinations for the documents.
This naked assertion is insufficient to quash the subpoena for
two reasons. First, Treasury offers no support for its claim
that a substantial number of the documents will be privileged.
There is no basis for the Court to impose the “extraordinary
measure” of quashing a subpoena, Flanagan, 231 F.R.D. at 102,
based on a “purely speculative” privilege claim. Northrup, 751
F.2d at 405. Second, most subpoenas duces tecum require the
recipient to conduct a privilege review. If the “good cause”
requirement for quashing a subpoena could be met by a bare
assertion that privilege review constitutes an undue burden,
discovery under the Federal Rules would quickly grind to a halt.
2) Deposition Subpoena
Treasury argues that “[n]o one currently working at
Treasury has knowledge of the communications referenced in
respondents’ deposition subpoena to Treasury except insofar as
he or she has reviewed the record or read emails to or from Mr.
Feldman or Mr. Wilson since the time that [they] left the Auto
Team . . . . [A]ny witness designated to testify . . . would
need a substantial amount of time to prepare.” Desai Decl. ¶
12, ECF #15-7; see also Pet’r’s Reply in Support of Renewed Mot.
at 19, ECF #21 (explaining that the Auto Team had twelve
Treasury employees, none of whom still works for Treasury).
19
Respondents counter that Treasury likely has the ability to
compel Feldman and Wilson to testify; “[n]evertheless, if it is
the Treasury’s position that it cannot produce [Mr. Feldman and
Mr. Wilson], and further that it is otherwise incompetent to
testify about the communications these individuals undertook
with respect to the Delphi issues, then Respondents will
withdraw the Deposition Subpoena and reissue Rule 45 subpoenas
to Messrs. Feldman and Wilson directly.” Resp’ts Opp’n to
Renewed Mot. to Quash at 31, ECF #19. Treasury responds by
insinuating that it would move to quash such subpoenas “if and
when they are issued because such subpoenas will seek
information belonging to Treasury.” Pet’r’s Reply in Support of
Renewed Mot. at 20.6
It appears that Treasury’s principal undue burden argument
is that no one with institutional knowledge about Mr. Feldman’s
and Mr. Wilson’s role in the termination of the Delphi Plans
remains at Treasury; accordingly, someone would have to learn
the material as new in order to testify. Respondents
effectively concede that this would be burdensome by offering to
withdraw their deposition subpoenas if and only if Treasury
6
Obviously, it would be premature to speculate as to the
contents of a future, hypothetical motion to quash. Treasury is
cautioned, however, to carefully consider this Opinion before
filing any such motion.
20
cannot compel Mr. Feldman and Mr. Wilson to testify in response
to the outstanding subpoena.
The Court agrees with Respondents. Treasury has made no
showing that the deposition subpoena would be burdensome except
in the event that no one at Treasury (or from whom it has
authority to compel testimony) is competent to respond to it.
Accordingly, the parties are directed to confer and determine,
within 30 days of the date of this Order, whether Treasury can
compel Mr. Feldman and Mr. Wilson to testify in response to the
subpoena. In the event that it cannot, Respondents shall
withdraw the deposition subpoena.
D. Duplicative/Cumulative Information
Finally, Treasury argues the subpoenas should be quashed
because they are cumulative. Treasury contends that “[t]he
immensity of PBGC’s document production and the overlap between”
the document requests to PBGC “and respondents’ subpoenas to
Treasury leave little need for Treasury to respond to [the]
subpoena[].” Pet’r’s Renewed Mot. at 24. Treasury also argues
that Mr. Feldman and Mr. Wilson have testified at depositions in
other actions, and at “numerous congressional hearings at which
the Delphi Salaried Plan and its termination have been
discussed.” Id. Respondents counter that “at the time the Plan
was terminated, the Treasury was directly negotiating the future
of Delphi with a number of players besides the PBGC, including
21
GM, Delphi, Delphi’s DIP Lenders, Federal Mogul, Platinum
Equity, and various unions. Moreover the Auto Team was
deliberating amongst itself and various White House officials as
to what to do in relation to the Delphi plans. . . . In short,
while it is true that the PBGC has produced some (and hopefully
most) of the email correspondence between it and the Treasury,
such information is only a part of the relevant responsive
documents in the Treasury’s possession.” Resp’ts Opp’n to
Renewed Mot. at 34-35. Respondents also argue that Feldman and
Wilson’s testimony would not be cumulative because neither of
them has been deposed in Black v. PBGC. Id. at 36.
For the reasons discussed throughout, the motion to quash
must be denied. The subpoenas request information that has been
adjudicated as relevant to, and discoverable in, the Michigan
litigation. Although the documents requested may have some
overlap with documents already produced by PBGC, Treasury has
failed to show, as it must, that it would be “unreasonably
cumulative or duplicative.” Fed. R. Civ. P. 26(b)(2)(c)(i).
Likewise, Feldman and Wilson have access to information about
Treasury’s role in the Plan’s termination which Respondents are
unable to obtain elsewhere. Again, although their depositions
will likely overlap somewhat with Feldman and Wilson’s testimony
in other proceedings, some overlap does not justify foreclosing
discovery in this case. As this Circuit has noted,
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“[d]epositions . . . rank high in the hierarchy of pre-trial,
truth-finding mechanisms.” Founding Church of Scientology v.
Webster, 802 F.2d 1448, 1451 (D.C. Cir. 1986). Without the
opportunity to depose Mr. Feldman and Mr. Wilson in this case,
Respondents’ counsel is denied “the opportunity . . . to probe
the veracity and contours of the[ir] statements . . . [and] is
denied the opportunity to ask probative follow-up questions.”
Alexander v. FBI, 186 F.R.D. 113, 121 (D.D.C. 1998).
IV. CONCLUSION
For the foregoing reasons, the Court concludes that non-party
Department of the Treasury has failed to meet its burden under
Federal Rules of Civil Procedure 26 and 45 to quash the subpoena
duces tecum. Accordingly, the Renewed Motion to Quash is DENIED
insofar as it relates to the subpoena duces tecum.7
The Court further concludes that the Department of the
Treasury has failed to meet its burden under Federal Rules of
Civil Procedure 26 and 45 to quash the deposition subpoena
unless Treasury is unable to compel its former employees, Mr.
Feldman and Mr. Wilson, to testify in response to the subpoena.
The record before the Court is unclear on this point.
7
Respondents ask that Treasury be given 30 days to comply fully
with the subpoena, while Treasury states that it will take “far
longer” to comply. Pet’r’s Reply in Support of Renewed Mot. at
23. The parties are directed to work together in good faith to
promptly comply with the Court’s order, and avoid wasting the
parties’ and the Court’s time and resources with unnecessary
additional disputes.
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Accordingly, it is hereby ORDERED that the parties confer and
determine, within 30 days of the date of this Order, whether
Treasury can compel Mr. Feldman and Mr. Wilson to testify in
response to the subpoena. In the event that Treasury can compel
their testimony, the Renewed Motion to Quash the Deposition
Subpoena is DENIED. In the event that it cannot compel these
two individuals to testify, it is FURTHER ORDERED that
Respondents shall withdraw the deposition subpoena.
A separate order accompanies this Memorandum Opinion.
SIGNED: Emmet G. Sullivan
United States District Judge
June 19, 2014.
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