U.S. Department of Treasury v. Black

• Court: District Court, District of Columbia
• Decided: October 15, 2018
• Docket: Misc. No. 2012-0100
• Status: Published

Opinion

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

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

2 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

3 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

4 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, Case No. 09-13616, a civil action pending in the

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

1 When citing electronic filings throughout this opinion, the Court cites to the ECF header page number, not the page number of the filed document. 5 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

6 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

7 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

2 Respondents no longer seek to compel two documents relating to drafts of a March 28, 2009 Presidential speech. See Renewed Mot. Compel, ECF No. 70 at 10 n.2. Accordingly, Respondents’ motion concerns only 61 documents. 8 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

9 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

10 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

11 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

12 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

13 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

14 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 in the

criminal context the privilege “can be overcome by a sufficient

showing that subpoenaed evidence is needed for a criminal

judicial proceeding” the Court focused on that inquiry. Id.

With regard to the necessity inquiry, the Court determined

that the necessity standard has two components: (1) “each

discrete group of the subpoenaed materials [must] likely

contain[] important evidence;” and (2) “this evidence is not

available with due diligence elsewhere.” Id. at 754. The first

component requires that “the evidence sought must be directly

relevant to issues that are expected to be central to the

trial.” Id. The second component requires the person requesting

the materials to show that “this evidence, or equivalent

evidence, is not [practicably] available from another source.”

Id. at 759. Applying these standards, the Court held that the

party seeking the materials made a sufficient showing of need

for certain documents but not for others and remanded the case

back to the district court. Id. at 763–64.

15 III. DISCUSSION

The foregoing cases illustrate the difficulties presented

in evaluating a claim of presidential communications privilege

but provide a concrete framework for a Court to do so. With

these cases in mind, the Court now undertakes the “difficult

business of delineating the scope and operation of the

presidential communications privilege” in this case. See In re

Sealed Case, 121 F.3d at 762. The Court first balances the

public interests at stake by weighing the interest in

maintaining confidentiality of the information over which

Treasury claims privilege with the interest in disclosure under

the particular circumstances of the allegations in this case.

The Court next determines if the Respondents have shown

sufficient need for the materials. For the reasons stated below,

the Court holds that the interests in disclosure in this case

indeed do outweigh the general interest in confidentiality

asserted by Treasury; and Respondents have shown the requisite

need for the majority of the documents they seek.

A. Public interests at stake

1. Public interest in confidentiality

The Court’s first task is to determine the “interests

served by protecting the President’s confidentiality in [this

case’s] particular context.” In re Sealed Case, 121 F.3d at 753.

The Supreme Court has effectively recognized a continuum when

16 analyzing the public interest in maintaining confidentiality in

presidential communications. At one end of that continuum is a

claim of privilege based on a “need to protect military,

diplomatic, or sensitive national security secrets.” See Nixon,

418 U.S. at 706; see also Sirica, 487 F.2d at 716 (noting the

items over which President Nixon asserted the privilege did not

contain military or state secrets). The public interest in

maintaining confidentiality of presidential communications is at

its strongest when the claim of privilege rests on a need to

safeguard this type of information--information which implicates

international and national security interests. See Nixon, 418

U.S. at 706. Indeed, in such cases, it is difficult to imagine

any interest in disclosure which could outweigh the interest in

confidentiality. See id. (stating that such a claim based on

national security interests may be subject to absolute

privilege).

On the other end of the continuum, in which the public

interest in confidentiality is much weaker, is “when the

privilege depends solely on the broad, undifferentiated claim of

public interest in the confidentiality of [presidential]

conversations.” Id. Although claims of the presidential

communications privilege are “constitutionally based, and

entitled to great weight,” Dellums, 561 F.2d at 246,

nevertheless when the privilege is based on a generalized claim

17 of confidentiality “a confrontation with other values arises,”

and a Court must weigh the competing interests of those values.

Nixon, 418 U.S. at 706.

Like in Dellums and Nixon, the privilege asserted by

Treasury “is not premised on a claim of a need to protect

national security, military or diplomatic secrets.” See, e.g.,

Dellums, 561 F.2d at 242. Rather, Treasury’s claim of privilege

is premised on the general “needs of present and future

Presidents to maintain the confidentiality of communications

with their advisors.” See id. Moreover, in contrast with the

highly sensitive information related to national security

interests, the nature of the information Treasury seeks to

withhold is purely commercial. As explained in the declaration

filed by Treasury the “documents . . . as to which the

presidential communications privilege is being asserted consist

of [materials] that 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.”

Decl. of Jennifer M. O’Connor, ECF No. 35-3 ¶ 7.

It is also significant that in this case the President has

not personally asserted the privilege. See Dellums, 561 F.2d at

247. Several D.C. Circuit cases have considered not only the

nature of the materials claimed under the privilege but also who

18 asserts the privilege. In Dellums, for example, the Court found

that it was “of cardinal significance . . . [that] there has

been no assertion of privilege by an incumbent president.” Id.

As the D.C. Circuit has explained, “[a]bsence of support from

the incumbent at least indicates that the risk of impairing

necessary confidentiality is attenuated.” Id. (citations and

internal quotation marks omitted).

In this case, no President--past or present--has invoked

the privilege for these documents, and the incumbent has not

indicated support for this claim of privilege. 3 Rather the

former Deputy Counsel to President Obama invoked the privilege

on “behalf of the Office of the President.” Decl. of Jennifer M.

O’Connor, ECF No. 35-3 ¶ 4. This invocation stands on different

ground than the invocations made in other presidential

communications privileges cases which were expressly made either

by a President, past or current, or made on behalf of the

President, rather than one made on behalf of the Office of the

President generally. See, e.g., In re Sealed Case, 121 F.3d at

3 Whether a sitting President “must personally invoke the privilege” and whether a former President can invoke the privilege at all remain open questions. See Judicial Watch, Inc. v. Dep’t of Justice, 365 F.3d 1108, 1114 (D.C. Cir. 2004) (recognizing whether the president must personally invoke the privilege is an open question); Dellums, 561 F.2d at 245 (assuming without deciding a former president could invoke the privilege but stating that such an invocation would be entitled to less weight). 19 744–46 n.16 (noting former White House Counsel’s affidavit

stated he was specifically directed by the President to invoke

the privilege). If a former President’s invocation is entitled

to less weight than an incumbent, Dellums, 561 F.2d at 245, it

follows that an invocation by the government on behalf of the

Office of the President of a former administration, is similarly

entitled to less weight.

The Court also finds substantial the considerable amount of

time that has passed since these documents were created and the

public nature of these documents. The documents in this case are

intertwined with decisions made regarding the government’s auto

bailout--nearly 10 years ago. As the Supreme Court has

explained, “the expectation of the confidentiality of executive

communications . . . has always been limited and subject to

erosion over time after an administration leaves office.” Nixon

v. Adm’r Of Gen. Servs., 433 U.S. 425, 451 (1977).

Furthermore, the public interest in maintaining

confidentiality is also diminished by the undisputed fact that

there have been public disclosures already made on the subject

of the requested documents. The interest in maintaining the

confidentiality of conversations related to a subject,

“substantially diminishes” when there is public testimony on

that subject. Sirica, 487 F.2d at 715 (stating public testimony

given related to Watergate substantially diminished the

20 President’s interest in maintaining confidentiality of the

conversations related to the subject); cf. Comm. on Oversight &

Gov't Reform, U.S. House of Rep. v. Lynch, 156 F. Supp. 3d 101,

111-12 (D.D.C. 2016) (holding plaintiff’s need for withheld

documents under the deliberative process privilege outweighed

the need for confidentiality in part because the substance of

the documents had already been made public). In this case, there

has been considerable public testimony about Treasury’s

decision-making process for the termination of the pension plan

including testimony before Congress, see, e.g., Testimony, Oral

and Written Statement of Matthew Feldman, Oversight of the

SIGTARP Report Treasury’s Role in the Delphi Pension Bailout:

Hearing Before the H. Subcommittee on Government Operations of

the Committee on Oversight and Government Reform, ECF No. 30-6,

and at least one book written by a former member of Treasury on

the subject. 4

Faced with these facts, Treasury repeatedly argues that the

presidential communications privilege still applies. See, e.g.,

Treas. Opp’n, ECF No. 74 at 11. For example, Treasury argues

that despite the fact that the vast majority of the documents

were not viewed by the President, the privilege “applies fully .

. . to all 61 of the documents.” Id. Treasury’s response to the

4 See Steven Rattner, Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry (2010). 21 fact that none of the documents implicate national security

concerns is that “the privilege applies . . . to any

conversation that takes place in the President’s performance of

his official duties.” Id. (citation and alterations omitted).

Treasury’s arguments miss the point. Respondents have no

quarrel with the Court’s holding that the 61 documents

Respondents seek are covered by the presidential communications

privilege. See Mem. Op., ECF No. 45. The issue is the scope of

that privilege under the particular circumstances of this case.

See Black, 2017 WL 6553628 at *2. The Court finds that although

the President at all times maintains a strong interest in the

confidentiality of his or her communications, under these

circumstances--when a broad and undifferentiated claim of

confidentiality is invoked by the government on behalf of the

Office of the President to protect information of a commercial

nature--the strength of the public interest in maintaining the

confidentiality of these documents is not particularly strong.

2. Public interest in disclosure

The Court next must determine the public interest

“furthered by requiring disclosure” under the circumstances of

this case. In re Sealed Case, 121 F.3d at 753. The Supreme Court

has made clear that the interests in disclosure in a civil case

are not on equal footing as the interests in a criminal case.

See Cheney v. United States Dist. Ct., 542 U.S. 367, 384 (2004).

22 “The need for information in the criminal context is much

weightier because our historical commitment to the rule of law .

. . is nowhere more profoundly manifest than in [the Court’s]

view that the twofold aim of criminal justice is that guilt

shall not escape or innocence suffer.” Id. (citations and

internal quotation marks omitted). Therefore the “right to

production of relevant evidence in civil proceedings does not

have the same constitutional dimensions” as in a criminal case.

Id. (citation and internal quotation marks omitted).

Nevertheless, the D.C. Circuit has recognized that, although not

as weighty, “there is also a strong 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” when “the action is tantamount to a charge of civil

conspiracy . . . to deny a class of citizens their

constitutional rights. Dellums, 561 F.2d at 242; see also

Cheney, 542 U.S. at 385 (recognizing the need for information in

civil cases is “far from negligible”).

Treasury does not address the strength of the public

interest in disclosure under the circumstances of this case but

notes that “[h]ere, the underlying action is a civil case, not a

criminal proceeding.” Treas. Opp’n, ECF No. 74 at 10. It is true

that the Plaintiffs have brought a civil action, but the nature

of the case (i.e., civil or criminal), by itself, does not end a

23 court’s inquiry on the issue. Dellums, 561 F.2d at 245–46

(rejecting the argument that the presidential communications

privilege is absolute in civil litigation).

In Dellums, plaintiffs brought a civil action for damages

alleging that “a policy or plan was devised by the defendants .

. . which led to and instigated the allegedly unlawful arrest

and detention of plaintiffs” during a protest against American

military involvement in Southeast Asia. Id. at 248. In support

of their claim for unconstitutional detention, Plaintiffs sought

information related to the Nixon administration’s conversations

in which the demonstrations were discussed. Id. The defendants

in Dellums argued that, regardless of the necessity or relevance

of the information sought, a claim of the presidential

communications privilege was an absolute bar to discovery in a

civil case. Id. at 246. The D.C. Circuit rejected such a

sweeping interpretation of the privilege and made it clear that

in civil actions in which a plaintiff alleges actions

“tantamount to a charge of civil conspiracy among high officers

of government to deny a class of citizens their constitutional

rights” a government’s claim of privilege could yield to a

sufficient showing of need. 561 F.2d at 245–47.

Plaintiffs in this case have alleged in their civil action

in Michigan that their pension plans were terminated in

violation of ERISA and the United States Constitution because of

24 undue pressure exerted by Treasury to bail out the auto

industry. Renewed Mot. Compel, ECF No. 70 at 26. They have

alleged that Treasury pressured the PBGC to abandon its

statutory duty, and to terminate the pensions so that GM could

receive monetary relief in violation of the Due Process Clause

of the Constitution. Id. at 21. In other words, they allege that

a class of over 20,000 was sold out by the government simply to

bail out the corporate interests of the auto industry.

As the D.C. Circuit has explained “Congress designed ERISA

to safeguard employees against the loss of anticipated

retirement benefits, following decades of service.” Page v.

PBGC, 968 F.2d 1310, 1311 (D.C. Cir. 1992). The PBGC’s role is

“key to the congressional plan” and its function is to “meet the

problem of plans terminated without assets sufficient to cover

vested benefits” and to “provide for the timely and

uninterrupted payment of pension benefits [within specified

dollar limitations] to participants and beneficiaries under

plans [covered by Title IV].” Id. (citing 29 U.S.C. § 1302(a)).

Under these circumstances the Court concludes that the

public interest in disclosure is just as strong as in Dellums.

Like the plaintiffs in Dellums, Respondents in their civil

action have alleged a “civil conspiracy among high officers of

government to deny a class of citizens their constitutional

rights.” See Dellums, 561 F.2d at 247. As stated above, the PBGC

25 sits as a fiduciary of pension plans and is tasked to ensure

that the personal tragedy of pension termination is not

considered lightly. Respondents have alleged an abdication of

that duty for improper reasons, and a conspiracy to cover up

these improper actions at all costs. Balanced against Treasury’s

“broad, undifferentiated claim of public interest” in

confidentiality, see Nixon, 418 U.S. at 707, the Court concludes

that the interest in disclosure in this particular case

sufficiently outweighs the interest in confidentiality.

This conclusion does not mean, of course, that the

privilege must yield to any request for public disclosure

irrespective of the need. The Court only holds that in these

circumstances the proponent of a subpoena may defeat such a

broad claim of privilege with a sufficient showing of need in

the litigation. See Dellums, 561 F.2d at 248 (stating that a

balance in favor of disclosure does not open the door to

production, but “only to consideration whether the claim is

overcome by a showing of other need, here litigat[ion] need.”).

The Court therefore next turns to the issue of necessity.

B. Showing of need

As the D.C. Circuit has instructed, a showing of need in

this case entails two components: (1) Respondents “bear the

burden to demonstrate with ‘specificity’ ‘that each discrete

group of the subpoenaed materials likely contains important

26 evidence’” and (2) ”bear the further burden of demonstrating

that the subpoenaed ‘evidence is not available with due

diligence elsewhere.’” Black, 2017 WL 6553628 at *2 (quoting In

re Sealed Case, 121 F.3d 754–55, 756.) 5 The Court addresses each

issue in turn.

1. Importance of the evidence sought

Under the first component of the need inquiry, “[a] party

seeking to overcome a claim of presidential privilege must

demonstrate . . . that each discrete group of the subpoenaed

materials likely contains important evidence.” In re Sealed

Case, 121 F.3d at 754. This component means “that the evidence

sought must be directly relevant to issues that are expected to

be central to the trial.” Id. Requests for documents that are

“tangentially relevant or would relate to side issues” would not

satisfy this component of the need inquiry; the same holds true

when a “claim that subpoenaed materials will contain such

evidence represents mere speculation.” Id. (citations omitted).

Discovery in this case is limited to Count Four of

Respondents’ complaint; and was defined by the Michigan Court as

follows:

In terms of addressing the scope of discovery for purposes of entering a scheduling order – [t]he Court’s

5 The parties agree that the standard of need as identified in Dellums and rearticulated in Black should govern the showing of need in this case. See Renewed Mot. ECF No. 70 at 23; Treas. Opp’n, ECF No. 74 at 9–10. 27 initial focus, keeping the above case law in mind, is on Count 4 and whether 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, No. 09-cv-13616 (E.D. Mich. Sept. 1, 2011), ECF

No. 193 at 3–4. To that end, the Court allowed the parties to

engage in discovery related to the substantive component of

Count Four--whether the PBGC had met the statutory requirements

for termination under Section 1342(a). Accordingly, discovery is

limited to whether the PBGC terminated the plan because it had

“not met the minimum funding standard,” was “unable to pay

benefits when due,” or “the possible long-run loss of the

corporation with respect to the plan may reasonably be expected

U.S.C § 1342(a)(1)-(4).

As stated above, Respondents’ theory of the case is that

the termination of the pension plan “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.

Therefore, the issues the Respondents expect to be central at

28 trial include whether GM could have reassumed the Salaried Plan

thereby continuing the pension plan and avoiding termination,

and whether Treasury influenced the PBGC to terminate the plan

despite its viability through GM. See id. at 27–28.

Respondents’ discovery request 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 Auto Task Force; (2) electronic mail conversations among

Auto Team members concerning advice provided to President Obama;

and (3) personal requests for information by President Obama

along with Treasury emails and a memorandum in response.

The first group of documents, “[d]raft memoranda from

staffers to Dr. Lawrence Summers” providing updates regarding GM

and Delphi, comprise the majority (53 of 61) of the withheld

documents. 6 These documents are iterations of 13 memoranda from

Autoteam staffers to Dr. Summers written between the months of

February and August 2009. The memos in this group relate to

Treasury’s impressions on GM and Chrysler restructuring plans,

Treas. Original Priv. Log, ECF No. 35-5 at 140; Delphi’s

6 See Treas. Revised Privilege Log, ECF No. 51-2 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. 29 liquidity issues and possible ramifications of Delphi’s

shutdown, id. at 152-54; and plans for GM’s reorganization and

updates on GM negotiations, id. at 178.

The Court finds that Respondents have shown that the

documents requested in this first group likely contain important

evidence. These memoranda cover Treasury’s views on several

topics that are relevant to Respondents’ theory of the case.

Furthermore, Respondents’ discovery efforts have revealed that

at the time the salary plan was terminated it was a “relatively

well-funded plan.” Renewed Mot., ECF No. 70 at 25 (citing Watson

Wyatt Actuarial Certification, ECF No. 19-5 at 2). Respondents

have also discovered the fact that, prior to Treasury’s

proactive involvement, the PBGC was advocating for a

circumstance under which the pension plan remained in effect.

See, e.g., D. Cann. Dep. Tr., ECF No. 11-6, 67:6–14 (stating

PBGC was “cheerleading” for the transfer of the plan). A

critical issue in the Michigan action will be the reason for the

sudden change in strategy. The documents in the first group

which relate to Treasury’s interactions with the PBGC and its

impressions about “Delphi and its pensions liabilities” as well

as Treasury’s “impressions . . . on GM and Chrysler

restructuring plans,” ECF No. 70 at 29, are documents that go to

30 the heart of that issue and are clearly relevant to Respondents’

claim of undue influence by Treasury. 7

The second group consists of four documents which are a

series of email chains from March 28, 2009 to May 28, 2009. 8 The

emails relate to discussions between the Auto Team and Dr.

Summers about GM and Delphi (No. 621); a presidential

announcement regarding GM’s restructuring (Nos. 610 and 776);

and emails relating to the disparity between GM and Toyota’s

labor rates (No. 358). The Court holds that document numbers

610, 621 and 776 in this group likely contain important

evidence. Although not dispositive, the timing of the documents

is important: They were created at a time during which there was

a mediation with important parties including the PBGC, Delphi,

and GM relating to the bankruptcy proceedings. See House Dep.

Tr., ECF No. 11-8, at 143:9–22. Critically, these documents

relate to GM’s restructuring and there is no question that the

resolution of the pension fund was a significant issue related

to GM’s restructuring through the bankruptcy.

7 The Court notes that this conclusion is further supported by Plaintiff’s ex parte submission. Without discussing the contents of the submission, it suffices to say that discovery has revealed that this category of information is relevant to Respondents’ claims. 8 See Treas. Revised Privilege Log, ECF No. 51-2 Nos. 358, 610,

621, and 776. 31 Document number 358, however, relates to “the cost gap

between GM and Toyota labor rates;” and there is no indication,

other than the timing of these emails, that the evidence is

related to a central issue at trial. Respondents argue that the

timing of these emails, May 26 through 28, is sufficient. Under

that logic, however, Respondents would be entitled to any email

written by the Auto Team or Treasury around that time period

regardless of the email’s relevance to the issues in this case.

The issues regarding “the cost gap between GM and Toyota labor

rates” without some connection to GM’s restructuring or the

pension fund, is the sort of “tangentially relevant” request for

documents that the D.C. Circuit has instructed will not meet the

important evidence prong of the needs test. 9 See In re Sealed

Case, 121 F.3d at 754 (stating “tangentially relevant” documents

or evidence that “would relate to side issues” would not satisfy

the need requirement). Accordingly, the Court finds that only

document numbers 610, 621 and 776 in this group are likely to

contain important evidence.

9 Respondents’ ex parte submission related to this request does not change the Court’s conclusion. As it pertains to No. 358, the submission merely repeats the fact that the timing of the emails coincided with the mediation suggest the emails likely contain important evidence. The Court disagrees, timing alone cannot transform documents about “labor rates” to evidence about the issues central to Respondents’ civil action. 32 The third group consists of five documents that are related

to a draft letter from President Obama containing a request to

Dr. Summers regarding the Delphi Salaried plan. 10 The documents

at issue in this group likely relate to a “Draft memorandum

regarding [the PBGC’s] decision to take over the salaried and

hourly pension plans of Delphi.” Treas. Original Privilege Log,

ECF No. 35-5 at 140. These documents relate to the decisions

about the salaried pension fund that are significant to the

claims in the civil action. The Court finds that all the

documents in this category meet the important evidence

component.

In short, with the exception of document number 358, the

email string relating to automotive labor rates, the Court finds

the evidence sought in the three categories are “directly

trial.” In re Sealed Case, 121 F.3d at 754. And therefore,

those documents meet the first component of the need inquiry.

2. Availability of the evidence elsewhere

Under the second component of the need inquiry a party

challenging the claim of privilege must demonstrate “that [the]

evidence is not available with due diligence elsewhere.” In re

Sealed Case, 121 F.3d at 754. This component “reflects [Supreme

10See Treas. Revised Privilege Log, ECF No. 51-2 Nos. 763, 764, 765, 766, and 767. 33 Court precedent] that privileged presidential communications

should not be treated as just another source of information.”

Id. at 755. To meet this standard, “[e]fforts should first be

made to determine whether sufficient evidence can be obtained

elsewhere, and the subpoena’s proponent should be prepared to

detail these efforts and explain why evidence covered by the

presidential privilege is still needed.” Id.

Respondents argue that these documents are not “just

another source of information” but rather the only source of

information outlined above. Renewed Mot., ECF No. 70 at 39–42.

Respondents point out the fact that they have conducted

discovery from all other key parties in this case and have not

received information that speaks to the issues related to the

subjects in their discovery request. Id. at 39. Respondents also

note that the PBGC interacted with Treasury almost exclusively

through Joe House, the Director of the Department of Insurance

Supervision and Compliance at the PBGC, and Matthew Feldman, a

member of the Auto Team at Treasury. And that Mr. House failed

to recall anything of significance related to Treasury’s

involvement with the PBGC during his deposition in the civil

action. Renewed Mot., ECF No. 70, at 39–40 (citing ECF No. 11 at

19-20 and n.10 (noting approximately 60 instances in Mr. House’s

deposition transcript where he states his inability to recall

events related to Delphi’s plans)). Last, Respondents argue that

34 information related to Treasury’s Auto Team’s determination that

GM could not reassume the pension plans, an issue of critical

importance to its claims, is uniquely in the possession of

Treasury. Renewed Mot., ECF No. 70 at 41–42.

Treasury’s lone response is that Respondents have scheduled

a deposition of Mr. Feldman, a member of the Auto Team, and can

question him about Treasury’s influence into PBGC’s pension

negotiations. Treas. Opp’n, ECF No. 74 at 8–9. Therefore,

Treasury argues, the information is available from another

source. But, as Respondents point out, a deposition almost a

decade after the events that give rise to the claims in this

case is not equivalent to documentary evidence prepared at the

time of the controversy. See Dellums, 561 F.2d at 248.

(affirming district court ruling which noted that a deposition

is “far more inferior to the actual contemporaneous” documentary

evidence related to the allegations).

The Court concludes that Respondents have met their burden

in showing that the evidence they seek is “not available with

due diligence elsewhere.” See In re Sealed Case, 121 F.3d at

755. Respondents have had considerable difficulties obtaining

information related to Treasury’s interactions with the PBGC

vis-à-vis the termination decision. Deposition attempts have

failed to uncover this sort of evidence because the person who

would have this information, Mr. House, simply cannot remember.

35 Respondents have run into similar roadblocks in their attempts

to obtain this sort of information from the other key players in

this case because these parties do not have the information

Respondents seek.

Respondents have made a showing of substantial need for

overcoming the general claim of privilege asserted by Treasury.

The D.C. Circuit has explained that upon a sufficient showing of

need the Court is to review in camera the subpoenaed documents

to “identify and release specific items of evidence that might

reasonably be relevant to” the claims at issue in the case. In

re Sealed Case, 121 F.3d at 762. Therefore, this Court will

order the following documents to be filed for in camera review:

67, 72, 84, 94, 275, 560, 593, 596, 599, 601, 603, 605, 610,

611, 621, 623, 627, 629, 631, 633, 638, 668, 670, 672, 674, 676,

692, 758, 759, 760,761, 762, 763, 764, 765, 766, 767, 770, 776,

777, 849, 856, 859, 860, 863, 944, 948, 950, 956, 1006, 1089,

1091, 1094, 1152, 1166, 1168, 1217, 1219, 1221, and 1223.

Treasury should provide a justification sheet for each document

explaining why the document does not contain evidence that may

be reasonably relevant to the claims in this case.

IV. CONCLUSION

This case calls upon the Court to “strike a balance

between the twin values of transparency and accountability

of the executive branch on the one hand, and on the other

36 hand, protection of . . . the President’s ability to obtain

candid, informed advice.” See Judicial Watch, Inc. v. Dep’t

of Justice, 365 F.3d at 1112. The allegations in the civil

action in this case are grave, and the necessity for the

subpoenaed materials dire. Under these circumstances,

Treasury’s broad, undifferentiated claim of privilege must

yield to the Respondents’ showing of need for the majority

of documents Respondents seek. Accordingly, Respondents’

renewed motion to compel is GRANTED in PART and DENIED in

PART. An appropriate Order accompanies this Memorandum

Opinion.

SO ORDERED.

Signed: Emmet G. Sullivan United States District October 15, 2018