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

301 F.R.D. 20, 88 Fed. R. Serv. 3d 1639, 59 Employee Benefits Cas. (BNA) 1063, 2014 WL 2767592, 2014 U.S. Dist. LEXIS 83247
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 19, 2014
DocketCase No. 12-mc-100 (EGS)
StatusPublished
Cited by7 cases

This text of 301 F.R.D. 20 (U.S. Department of the Treasury v. Pension Benefit Guaranty Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
U.S. Department of the Treasury v. Pension Benefit Guaranty Corp., 301 F.R.D. 20, 88 Fed. R. Serv. 3d 1639, 59 Employee Benefits Cas. (BNA) 1063, 2014 WL 2767592, 2014 U.S. Dist. LEXIS 83247 (D.C. Cir. 2014).

Opinion

MEMORANDUM OPINION

Emmet G. Sullivan, United States District Judge

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 sub[23]*23poena 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. § 1342(c). Id. ¶ 56. Essentially, plaintiffs’ theory of the ease 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:

[WJhether 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.

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.

[24]*24Meanwhile, in January 2012, Respondents served Treasury with a subpoena seeking:

All documents and things (including emails or other correspondence, spreadsheets, reports, analyses, snapshots, funding estimates, proposals or offers) received, produced, or reviewed by Matthew Feldman, [Harry Wilson, or Steven Rath ner] 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.

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 Tar-now’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.

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.

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Bluebook (online)
301 F.R.D. 20, 88 Fed. R. Serv. 3d 1639, 59 Employee Benefits Cas. (BNA) 1063, 2014 WL 2767592, 2014 U.S. Dist. LEXIS 83247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/us-department-of-the-treasury-v-pension-benefit-guaranty-corp-cadc-2014.