U.S. Department of the Treasury v. Pension Benefit Guaranty Corp. , 249 F. Supp. 3d 206 ( 2017 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
)
U.S. DEPARTMENT OF THE )
TREASURY, )
)
Petitioner, )
)
v. ) Case No. 12-mc-100 (EGS)
)
PENSION BENEFIT GUARANTY )
CORPORATION, )
)
Interested Party, )
)
v. )
)
DENNIS BLACK, et al., )
)
Respondents. )
______________________________)
MEMORANDUM OPINION
Pending before the Court are the U.S. Department of
Treasury’s contested privilege assertions that were not resolved
by the Court’s December 20, 2016 Opinion ordering Treasury to:
(1) produce all documents over which it asserted the
deliberative process privilege in isolation; and (2) submit a
revised privilege log and in camera production. Upon
consideration of Respondents’ motion to compel, response and
reply thereto, the relevant caselaw, the in camera production
and the entire record, and for the reasons set forth below, the
1
unresolved portion of the motion is GRANTED in part and DENIED
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. After reviewing the withheld documents in
camera, 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 the
2
deliberative process in isolation. See Op., ECF No. 42. Noting
that Treasury had withdrawn nearly 75% of its privilege
assertions when first ordered to make an in camera submission,
the Court ordered Treasury to revise its privilege log and
submit an updated in camera production containing only the
documents withheld under the presidential communications
privilege, the attorney-client privilege, or the work product
doctrine. The 85 documents over which Treasury asserts one of
these privileges are now at issue before the Court.
II. THE PRESIDENTIAL COMMUNICATIONS PRIVILEGE
The purpose of the presidential communications privilege is
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) (quoting U.S. v. Nixon, 418 U.S. 683, 708
(1974)). This privilege extends not only to communications
directly involving the President, but also “to communications
authored or received in response to a solicitation by members of
a presidential adviser's staff, since in many instances advisers
must rely on their staff to investigate and issue and formulate
the advice to be given to the President.” ACLU v. Dep’t of
Justice, Case No. 10–123, 2011 U.S. Dist. LEXIS 156267, *30
3
(D.D.C. Feb. 14, 2011) (citing In re Sealed Case, 121 F.3d at
752). “Unlike the deliberative process privilege, the
presidential communications privilege covers documents in their
entirety.” Loving v. Dep't of Def., 496 F. Supp. 2d 101, 107
(D.D.C. 2007), aff'd sub nom. Loving v. Dep't of Def., 550 F.3d
32 (D.C. Cir. 2008).
Treasury has raised the presidential communications
privilege as the basis for withholding 63 documents from
production. The documents can be grouped into four categories:
(1) drafts of presidential speeches; 1 (2) personal requests for
information by President Obama; 2 (3) 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”); 3 and (4) electronic mail
conversations among Auto Team members concerning advice to be
provided to the President. 4 O’Connor Decl., ECF No. 35-3 ¶ 7. For
the following reasons, the Court concludes that while these
documents are covered by the presidential communications
1
See Document Nos. 612 and 778.
2
See Document No. 764.
3 See Document Nos. 67, 72, 84, 94, 275, 560, 593, 596, 599, 601, 603,
605, 611, 623, 627, 629, 631, 633, 638, 668, 670, 672, 674, 676, 692,
758, 759, 760, 761, 762, 766, 770, 777, 849, 856, 859, 860, 863, 944,
948, 950, 956, 1006, 1089, 1091, 1094, 1152, 1166, 1168, 1217, 1219,
1221, and 1223.
4 See Document Nos. 358, 610, 621, 763, 765, 767, and 776.
4
privilege, Respondents have demonstrated a need sufficient to
overcome the privilege.
The Court can swiftly resolve the first two categories of
documents. With regard to the draft presidential speeches,
Respondents, in their reply brief, “concede that these two
documents are covered by the privilege” because they “would have
been seen by the President[.]” Reply, ECF No. 36 at 18. By the
same token, the draft letter containing a handwritten request
from President Obama to consult Dr. Summers regarding the Delphi
salaried pension plan is also covered by the presidential
communications privilege. 5 See Judicial Watch, Inc. v. Dep't of
Justice, 365 F.3d 1108, 1114 (D.C. Cir. 2004) (recognizing that
“communications directly involving and documents actually viewed
by the President” are privileged).
The vast bulk of the documents withheld from production
under the presidential communications privilege — i.e., 53 of
the remaining 60 documents — fall into the third category. To
justify withholding these draft memoranda from production,
Treasury submitted a declaration from Jennifer M. O’Connor, the
Deputy Counsel to the President. See O’Connor Decl., ECF No. 35-
3. Ms. O’Connor’s responsibilities in the White House Counsel’s
Office include providing legal advice to White House staff,
5
See Document No. 764.
5
including on matters involving the invocation of the
presidential communications privilege. Id. ¶ 1. Ms. O’Connor
represents that all of the withheld documents “relate to the
President’s decisions as to how the United States should address
the financial distress of several of its large automobile
corporations and protect the country from the potential
consequences of their bankruptcy.” Id. ¶ 7. Ms. O’Connor also
sheds light on the relationship between the Auto Task Force, Dr.
Lawrence Summers, and the President. During the time of the
challenged communications, Dr. Summers served as co-chair of the
Auto Task Force, the Director of the National Economic Council,
and Assistant to the President for Economic Policy. Id. ¶ 8. In
this role, Dr. Summers led the President’s daily economic
briefing and advised the President on decisions relating to the
United States’ actions in response to the bankruptcy and
restructuring of major automotive companies, including General
Motors. Id. ¶ 9. A team of federal employees (the “Auto Team”)
supported Dr. Summers and the Auto Task Force. Id. ¶ 8.
In In re Sealed Case, the Court of Appeals, determined that
“communications made by presidential advisers in the course of
preparing advice for the President come under the presidential
communications privilege, even when these communications are not
made directly to the President.” In re Sealed Case, 121 F.3d at
752. In defining the scope of the privilege, the Court reasoned
6
that “[g]iven the need to provide sufficient elbow room for
advisers to obtain information from all knowledgeable sources,
the privilege must apply both to communications which these
advisers solicited and received from others as well as those
they authored themselves.” Id.
Here, the draft memoranda from Auto Team members to Dr.
Summers concerning the Auto Task Force’s duties are clearly
protected by the presidential communications privilege.
Respondents do not seem to dispute that Dr. Summers, the co-
Chair of the Auto Task Force and Assistant to the President for
Economic Policy, qualifies as a presidential adviser for
purposes of the privilege. See Reply, ECF No. 36 at 18-19. Not
only did President Obama select Dr. Summers to helm the Auto
Task Force, a group formed to review viability plans submitted
by major automotive manufacturers, but Dr. Summers also advised
the President on economic issues on a daily basis. 6 O’Connor
Decl., ECF No. 35-3 ¶ 9. The privilege that would attach to
communications between Dr. Summers and the President also
extends to communications between Dr. Summers and his staff
members who have responsibility for formulating the advice to be
given the President concerning the government’s bankruptcy and
6
To the extent that Dr. Summers’ title leaves any room for doubt as to
his position as a presidential advisor, President Obama, in a
handwritten note on a letter regarding the Delphi pension plan,
specifically requested that Dr. Summers be consulted on the matter at
issue. See Document No. 764.
7
restructuring efforts. See In re Sealed Case, 121 F.3d at 752.
Each draft memoranda that Treasury has withheld from production
is authored by the Auto Team, addressed specifically to Dr.
Summers, and concerns the Auto Team’s efforts to provide the
Auto Task Force and the President with sufficient information to
achieve the government’s automotive restructuring objectives.
Respondents contend that the presidential communications
privilege should not apply because Treasury has not shown that
the challenged documents were solicited by Dr. Summers, rather
than merely received by him. See Reply, ECF No. 36 at 19.
According to Respondents, “if everything a presidential advisor
or his staff received was automatically covered by the
privilege, vast swaths of government communications could be
hidden from public view merely by regularly copying such people
on emails.” Id. While Respondents are correct that the
presidential communications privilege applies only to documents
that are “solicited and received by those members of an
immediate White House adviser's staff who have broad and
significant responsibility for investigating and formulating the
advice to be given the President[,]” In re Sealed Case, 121 F.3d
at 752, Respondents’ argument is unpersuasive for two reasons.
First, the White House Counsel’s Office expressly represented
that the disputed materials “were authored by or solicited and
received by the President or senior presidential advisors and
8
staff, including Lawrence H. Summers.” O’Connor Decl., ECF No.
35-3 ¶ 8. Second, upon examination of the challenged documents
in camera, it is apparent from the faces of the memoranda that
they were in fact solicited by Dr. Summers. For instance, the
Auto Team prefaced many draft memoranda with a note that the
included information was being provided “as requested” or “as
discussed” in a recent meeting with Dr. Summers. The content of
the withheld material also suggests that the drafters of the
memoranda met frequently with Dr. Summers to inform him of
research results, discuss strategy, and formulate advice to the
President. As a result, the Court is satisfied that the draft
memoranda were solicited rather than merely received by Dr.
Summers. See also In re Sealed Case, 121 F.3d at 758 (remarking
that a “review of the [challenged] documents themselves
demonstrates that from the nature of their contents and the
persons to whom they were directed there can be little question
that they had been solicited”).
For the same reasons, the seven documents in the fourth
category — i.e., emails among Auto Team members regarding the
formulation of advice to the President — are covered by the
presidential communications privilege. Although, Dr. Summers may
not be present on some of these communications, it is apparent
from the documents’ content that the Auto Team members were
responding to requests for information by Dr. Summers or the
9
President. In these communications, Auto Team members discussed
the preparation of memoranda to the President and harmonized
edits to be presented to Dr. Summers. Because the presidential
communications privilege extends “to communications authored or
solicited and received by those members of an immediate White
House adviser's staff who have broad and significant
responsibility for investigating and formulating the advice to
be given the President on the particular matter to which the
communications relate[,]” these documents are privileged. Id. at
752.
Although the Court has established that the documents in
all four categories are covered by the presidential
communications privilege, the Court’s inquiry is not complete.
The presidential communications privilege “is qualified, not
absolute, and can be overcome by an adequate showing of need.”
Id. at 745. To overcome the privilege, Respondents must
demonstrate two elements: (1) that the subpoenaed material
likely contains evidence “directly relevant to issues that are
expected to be central to the trial[;]” and (2) that the
evidence “is not available with due diligence elsewhere.” Id. at
754. Here, Respondents have satisfied both prongs. First,
Respondents assert that they need the withheld material because
it may show pressure exerted by Treasury or the White House to
terminate the Delphi Plan for impermissible or political
10
reasons, an issue at the core of the parties’ dispute in the
Michigan case. Mot. Compel, ECF No. 30 at 32. In that case,
Respondents allege that the PBGC’s termination of the Delphi
Plan was not justified by the applicable statute but instead the
result of undue pressure imposed by Treasury and the Auto Task
Force. Id. at 4. Rather than substantively engage in the needs
analysis or attempt to distinguish the cases upon which
Respondents rely, Treasury argues unconvincingly that
Respondents’ rationale for the material is “nothing but rank
speculation.” Opp’n, ECF No. 35 at 24. Nonetheless, for
substantially the same reasons advanced by Respondents, the
Court is persuaded that Respondents have made “at least a
preliminary showing of necessity for information that is not
merely demonstrably relevant but indeed substantially material
to their case.” Dellums v. Powell, 561 F.2d 242, 249 (D.C. Cir.
1977). Second, Respondents represent that the materials are
unavailable through any other means, see Mot. Compel, ECF No. 30
at 32, and Treasury does not challenge this assertion in its
opposition motion. See Opp’n, ECF No. 35 at 24. Accordingly, the
Court finds that Respondents have demonstrated a need sufficient
to overcome the presidential communications privilege.
11
III. THE ATTORNEY-CLIENT PRIVILEGE
Treasury has withheld or redacted 15 documents under the
attorney-client privilege. 7 “The attorney-client privilege
protects confidential communications made between clients and
their attorneys when the communications are for the purpose of
securing legal advice or services.” In re Lindsey, 158 F.3d
1263, 1267 (D.C. Cir. 1998). The purpose of the privilege is to
protect a client’s confidences to his or her attorney, thereby
encouraging an open and honest relationship between the client
and the attorney. Coastal States Gas Corp. v. Dep't of Energy,
617 F.2d 854, 862 (D.C. Cir. 1980). The privilege is “narrowly
construed and is limited to those situations in which its
purposes will be served.” Id. Hence, the privilege “protects
only those disclosures necessary to obtain informed legal advice
which may not have been made absent the privilege.” Id. (quoting
Fisher v. United States, 425 U.S. 391, 403 (1976)). The
privilege protects communications between the attorney and the
client, but does not shield the underlying facts contained in
those conversations from disclosure. Upjohn Co. v. United
States, 449 U.S. 383, 395 (1981).
As a threshold matter, six of the challenged documents
concern communications between Auto Team members and attorneys
7
See Document Nos. 30, 207, 210, 446, 499, 558, 570, 679, 685, 720,
789, 792, 1071, 1113, and 1204.
12
at Cadwalader, Wickersham, and Taft LLP (“Cadwalader”), one of
the law firms that served as outside counsel to the Auto Team. 8
Because Respondents have indicated that they “do not dispute the
Treasury’s invocation of attorney-client privilege for those
communications [with Cadwalader attorneys],” Mot. Compel, ECF
No. 30 at 33, the Court will not order the production of these
documents.
With regard to the remaining nine documents, each one
concerns a communication between Auto Team members and Matthew
Feldman, an Auto Team member who is also an attorney. 9
Respondents argue that these communications are not privileged
because Mr. Feldman, while an attorney, provided both legal and
non-legal advice to the Auto Team. Id. at 35. Respondents admit,
however, that “Treasury can invoke the attorney-client privilege
only for those communications of Mr. Feldman which were
primarily legal in nature[.]” Id. at 35-36. After reviewing
these documents in camera, the Court is satisfied that Mr.
Feldman acted in his legal capacity in each communication. In
some cases, Auto Team members asked Mr. Feldman a legal question
– e.g., the potential liability surrounding specific Auto Team
proposals – and Mr. Feldman provided his legal opinion. In other
instances, Mr. Feldman requested information from Treasury
8
See Document Nos. 685, 720, 792, 1071, 1113, and 1204.
9
See Document Nos. 30, 207, 210, 446, 499, 558, 570, 679, and 789.
13
employees to aid the preparation of Treasury’s response to
congressional inquiries. Nothing in these communications
suggests that their confidential nature was compromised or that
the privilege was waived. As a result, the Court concludes that
Treasury correctly withheld these 15 documents from production
under the attorney-client privilege.
IV. ATTORNEY WORK PRODUCT DOCTRINE
Treasury has raised the attorney work product doctrine over
seven documents. 10 The work product doctrine “protects written
materials lawyers prepare ‘in anticipation of litigation.’” In
re Sealed Case, 146 F.3d 881, 884 (D.C. Cir. 1998) (quoting Fed.
R. Civ. P. 26(b)(3)). In assessing whether the proponent has
carried its burden to show a document is protected as work
product, the relevant inquiry is “whether, in light of the
nature of the document and the factual situation in the
particular case, the document can fairly be said to have been
prepared ... because of the prospect of litigation.” EEOC v.
Lutheran Soc. Servs., 186 F.3d 959, 968 (D.C. Cir. 1999).
Although an agency need not have a specific claim in mind when
preparing the documents, there must exist some articulable claim
that is likely to lead to litigation in order to qualify the
documents as attorney work product. Coastal States Gas Corp.,
10
See Document Nos. 203, 792, 983, 985, 987, 989, and 1259.
14
617 F.2d at 865; Am. Immigration Council v. Dep't of Homeland
Security, 905 F. Supp. 2d 206, 221 (D.D.C. 2012) (work product
encompasses documents prepared for litigation that is
“foreseeable,” if not necessarily imminent; “documents that ...
advise the agency of the types of legal challenges likely to be
mounted to a proposed program, potential defenses available to
the agency, and the likely outcome,” are covered).
Here, there can be little doubt that the material Treasury
has withheld under the work product doctrine is protected from
disclosure. Four of the seven documents at issue are draft
memoranda authored by Cadwalader attorneys. 11 The remaining three
documents are draft letters prepared by Department of Justice
attorneys. 12 It is apparent from the face of each of the
challenged documents that they were prepared by counsel in
anticipation of the Chrysler and General Motors bankruptcy
proceedings – i.e., in anticipation of litigation. Among other
things, the documents outline potential legal approaches to
disposing of corporate assets, discuss proposed amendments to
loan agreements, and detail objectives for pending mediation
proceedings. Further, these materials constitute opinion work
product, rather than fact work product, because they reveal “the
mental impressions, conclusions, opinions, or legal theories of
11
See Document Nos. 203, 792, 983, and 1259.
12
See Document Nos. 985, 987, and 989.
15
a party's attorney” concerning potential litigation. F.T.C. v.
Boehringer Ingelheim Pharm., Inc., 778 F.3d 142, 151 (D.C. Cir.
2015).
Nonetheless, as with the presidential communications
privilege, the work product doctrine is not an absolute
privilege. Disclosure may be warranted if the party seeking the
privileged material can make a showing of substantial need and
an inability to obtain the equivalent without undue hardship.
See Upjohn, 449 U.S. at 400. Respondents, however, have not
articulated a specific need for these documents. Whereas
Respondents claim that they need the materials protected under
the presidential communications privilege because those
documents may reveal undue pressure exerted by the White House
or Treasury over the decision to cancel the Delphi Plan,
Respondents make no similar claim as to these seven documents.
Respondents simply have not made “the extraordinary showing of
necessity” required to obtain access to opinion work product. In
re Sealed Case, 676 F.2d 793, 811 (D.C. Cir. 1982). Accordingly,
the Court will not order the production of the documents
withheld under the work product doctrine.
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V. RELEVANCE
Treasury has withheld one document from production on
grounds of relevance. 13 The document consists of a weekly report
from Treasury to the White House and an email circulating the
report among Treasury personnel. Because Respondents have not
challenged Treasury’s relevance assertion, the Court will not
order the production of this document.
VI. CONCLUSION
For the foregoing reasons, the unresolved portion of
Respondents’ motion to compel the production, or alternatively
in camera review, of the documents withheld and redacted by
Treasury is GRANTED in part and DENIED in part. The 63 documents
over which Treasury has asserted the presidential communications
privilege shall be FORTHWITH PRODUCED to Respondents. The
documents over which Treasury has asserted a claim of relevance,
attorney-client privilege or work product are protected from
production. An appropriate Order accompanies this Memorandum
Opinion, filed this same day.
SO ORDERED.
Signed: Emmet G. Sullivan
United States District Judge
April 13, 2017
13
See Document No. 619.
17