Court Opinion

ID: 4109241
Source: CourtListenerOpinion
Date Created: 2016-12-20 23:01:24.070478+00
Date Added: 2024-06-11T07:46:09.805440
License: Public Domain

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 is Dennis Black, Charles

Cunningham, Ken Hollis, and the Delphi Salaried Retirees

Association’s (collectively, “Respondents”) motion to compel the

production, or alternatively in camera review, of documents

withheld and redacted by the U.S. Department of Treasury (the

“Treasury”) for privilege. Upon consideration of the motion,

response and reply thereto, the relevant caselaw, and the entire

record, and for the reasons set forth below, the motion is

GRANTED in part.

                                1
     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. Although Treasury asserted a privilege over

1,273 documents, Respondents only challenged 866 documents.

Opp., ECF No. 35 at 1.

     In order to better evaluate Treasury’s claims of privilege,

the Court ordered an in camera review of a random selection of

the withheld and redacted documents. Minute Entry of June 17,

2016. The Court directed Treasury to submit hard copies of every

                                  2
tenth document listed in its privilege log and to clearly

identify the redacted material. Id.

     Upon review of the random sampling of documents that

Treasury submitted, the Court concluded that it lacked

sufficient information to rule on many of Treasury’s privilege

claims and ordered that Treasury submit all of the documents at

issue for in camera inspection. Minute Entry of July 15, 2016.

As part of this exercise, the Court ordered Treasury to submit

an ex parte submission clearly articulating why each document,

or document portion, was protected by the privilege asserted.

Id. For documents over which Treasury claimed the deliberative

process privilege, the Court specifically directed Treasury to

inform the Court "what deliberative process is involved, and the

role played by the documents in issue in the course of that

process." Id. The Court warned that “should [it] determine that

[Treasury’s] claims of privilege are frivolous, the Court shall

impose significant sanctions, mo[ne]tary and otherwise.” Id.

     On July 25, 2016, Treasury produced, in camera, hard copies

of the contested documents, noting that “[i]n preparing its

production, Treasury decided not to continue withholding certain

documents.” See Notice of Production, ECF No. 40. Of the

original 866 contested documents, Treasury revoked its claims of

privilege over nearly 640 documents in light of the Court’s

order to produce the contested documents in camera. Treasury

                                3
provided no explanation as to why it suddenly withdrew its

privilege assertions over nearly 75% of the documents it had

previously claimed were privileged. Id. The 221 documents over

which Treasury continues to assert a claim of privilege are now

at issue before the Court.

      II.   THE DELIBERATIVE PROCESS PRIVILEGE

      Treasury has raised the deliberative process privilege as

the sole basis for withholding 120 documents from production.

For 63 documents, Treasury has asserted the deliberative process

privilege in conjunction with another privilege. 1 According to

Treasury, these 183 communications are protected from disclosure

because they involve government deliberations regarding the 2009

bankruptcy and restructuring of Chrysler and General Motors. See

Opp., ECF No. 35 at 11-12. For the following reasons, the Court

will order the production of all of the documents over which

Treasury has asserted the deliberative process privilege in

isolation.

            a. The Legal Standard.

      The deliberative process privilege serves to preserve the

“open and frank discussion” necessary for effective agency

decisionmaking by protecting from disclosure “documents

reflecting advisory opinions, recommendations, and deliberations

1
 Because Treasury has not provided a revised privilege log reflecting only the
222 contested entries, the Court derives these figures from the cover pages
to Treasury’s July 25, 2016 in camera production.

                                      4
that are part of a process by which Government decisions and

policies are formulated.” Dep’t of the Interior v. Klamath Water

Users Prot. Ass’n, 532 U.S. 1, 8-9 (2001). The privilege “rests

on the obvious realization that officials will not communicate

candidly among themselves if each remark is a potential item of

discovery and front page news.” Abtew v. U.S. Dep’t of Homeland

Sec., 808 F.3d 895, 898 (D.C. Cir. 2015) (quoting Klamath Water,

532 U.S. at 8-9.). As the U.S. Court of Appeals for the D.C.

Circuit has noted, agency officials “should be judged by what

they decided, not for matters they considered before making up

their minds.” Russell v. Dep’t Air Force, 682 F.2d 1045, 1048

(D.C. Cir. 1982).

     To fall within the scope of the deliberative-process

privilege, withheld materials must be both “predecisional” and

“deliberative.” Mapother v. Dep’t of Justice, 3 F.3d 1533, 1537

(D.C. Cir. 1993). A communication is predecisional if “it was

generated before the adoption of an agency policy” and

deliberative if it “reflects the give-and-take of the

consultative process.” Coastal States Gas Corp. v. Dep’t of

Energy, 617 F.2d 854, 866 (D.C. Cir. 1980). “Even if the

document is predecisional at the time it is prepared, it can

lose that status if it is adopted formally or informally, as the

agency position on an issue[.]” Id. The deliberative process

privilege is to be construed “as narrowly as consistent with

                                5
efficient Government operation.” United States v. Phillip

Morris, 218 F.R.D. 312, 315 (D.D.C. 2003) (quoting Taxation with

Representation Fund v. IRS, 646 F.2d 666, 667 (D.C. Cir. 1981)).

To properly invoke the privilege, the agency must “make a

detailed argument...in support of the privilege” because

“without a specific articulation of the rationale supporting the

privilege, a court cannot rule on whether the privilege

applies.” Ascom Hasler Mailing Sys., Inc. v. U.S. Postal Serv.,

267 F.R.D. 1, 4 (D.D.C. 2010) (internal quotation marks

omitted).

            b. Treasury Has Not Properly Invoked the Deliberative

              Process Privilege.

     Respondents contend that they are entitled to the documents

that Treasury has withheld under the deliberative process

privilege because: (1) the material does not fall within the

scope of the privilege; (2) the privilege has been waived; (3)

Respondents’ need for the material overcomes the privilege; and

(4) Treasury’s alleged misconduct nullifies the privilege. See

Mot. Compel, ECF No. 30 at 6-18. As a threshold matter, the

Court need not analyze Respondents’ myriad arguments as to why

the deliberative process privilege should not apply because

Treasury has failed to comply with its basic obligation to

provide the Court with “a specific articulation of the rationale

supporting the privilege” to enable the Court to assess the

                                   6
appropriateness of the privilege. See Ascom Hasler, 267 F.R.D.

at 4; Landry v. F.D.I.C., 204 F.3d 1125, 1135 (D.C. Cir. 2000).

     A “common practice of agencies seeking to invoke the

deliberative process privilege is to establish the privilege

through a combination of privilege logs, which identify specific

documents, and declarations from agency officials explaining

what the documents are and how they relate to the agency

decision.” Ascom Hasler, 267 F.R.D. at 4 (citing N.L.R.B. v.

Jackson Hosp. Corp., 257 F.R.D. 302, 308 (D.D.C. 2009)). The

Court finds both Treasury’s privilege log and accompanying

declaration to be woefully inadequate.

     First, for the Treasury’s assertions to be adequate, the

Court “must be able to determine, from the privilege log, that

the documents withheld are (1) predecisional; (2) deliberative;

(3) do not ‘memorialize or evidence’ the agency's final policy;

(4) were not shared with the public; and (5) cannot be produced

in a redacted form.” Id. Treasury’s privilege log does not

enable the Court to assess at least three of these factors. For

context, Treasury’s log provides fields for the documents’ date,

type, author, and recipients. See generally Treasury Privilege

Log, ECF No. 35-5. The log also provides a brief description of

each document, lists the privilege asserted, and indicates

whether the document was redacted or entirely withheld from

production. Noticeably absent from the entries in which Treasury

                                7
asserts the deliberative process privilege, however, is any

indication that the documents do not “memorialize or evidence

the agency’s final policy” and “were not shared with the

public.” Ascom Hasler, 267 F.R.D. at 4. Further, the purported

predecisional nature of each entry cannot readily be discerned

from the privilege log. Treasury states that these

communications were sent before the implementation of the auto-

restructuring policies, see Opp., ECF No. 35 at 12-13, but the

mere fact that a communication is dated prior to the agency’s

adoption of a policy is insufficient to establish that it is

predecisional. Rather, the party invoking the privilege must

also demonstrate that the content was not later adopted. See

Coastal States, 617 F.2d at 866 (reasoning that a document that

“is predecisional at the time it is prepared...can lose that

status if it is adopted formally or informally, as the agency

position on an issue[.]”). Although Treasury has designated on

the privilege log which documents are drafts, the fact that a

document is in draft form does not automatically cloak it with

the deliberative process privilege. “[D]rafts are not

presumptively privileged, and the designation of documents as

‘drafts’ does not end the inquiry into whether a document is

predecisional.” Judicial Watch, Inc. v. U.S. Postal Serv., 297

F. Supp. 2d 252, 260 (D.D.C. 2004) (internal quotation marks

omitted). Treasury has not shown that these drafts do not

                                8
reflect final agency policy. For these reasons, the Court finds

Treasury’s privilege log inadequate in so far as it relates to

the assertion of the deliberative process privilege.

     Moreover, Treasury’s declaration from Lorenzo Rasetti, the

Chief Financial Officer at Treasury’s Office of Financial

Stability, does not change the result. To be adequate, an agency

declaration supporting a deliberative process privilege claim

must contain:

         1) a formal claim of privilege by the head of the
            department having control over the requested
            information;
         2) assertion of the privilege based on actual
            personal consideration by that official; and
         3) a detailed specification of the information for
            which   the  privilege   is  claimed,   with an
            explanation why it properly falls within the
            scope of the privilege.

      Landry, 204 F.3d at 1135 (internal quotation marks

omitted). The Court does not question whether Mr. Rasetti is of

sufficient rank to assert the privilege ——see id. (reasoning

that it “would be counterproductive to read ‘head of the

department’ in the narrowest possible way”)—— and recognizes

that Mr. Rasetti’s statement is based on his “personal review of

each of the entries on the Privilege Log and a review of a

sampling of the documents described on the [log].” Rasetti

Decl., ECF No. 35-1 at 4. The Court, however, finds that

Treasury has failed to present “a detailed specification of the

information for which the [deliberative process] privilege is

                                9
claimed” along with an explanation sufficient to show why the

content “properly falls within the scope of the privilege.”

Landry, 204 F.3d at 1135.

     In his declaration, Mr. Rasetti divides the documents over

which Treasury asserts the deliberative process privilege into

four categories: (A) Draft slides and presentations and related

deliberations on Chrysler and GM bankruptcy considerations; (B)

Deliberations regarding substantive responses to congressional

or press inquiries and prepared public statements; (C)

Deliberations and materials shared with or relating to PBGC

discussions; and (D) Internal deliberations regarding financing,

cash flows, or other restructuring considerations related to

Delphi. See Rasetti Decl., ECF No. 35-1 at 6-10. Nonetheless,

the rationale provided to withhold the documents under these

categories is inadequate.

     As an initial matter, Categories A and D do not establish

that Treasury “has never implemented the opinions or analyses

contained in the document, incorporated them into final agency

policy or programs, referred to them in a precedential fashion,

or otherwise treated them as if they constitute agency

protocol.” Gen. Elec. Co. v. Johnson, No. 00-2855, 2006 WL

2616187, at *5 (D.D.C. Sept. 12, 2006). To the contrary, in many

instances Mr. Rasetti notes that the documents “may have been

considered in developing...the policy positions that Treasury

                               10
may have adopted.” Rasetti Decl., ECF No. 35-1 at 7, 8. If

Treasury implemented the opinions or analyses contained in these

communications into its final policies, the documents would not

be protected from disclosure under the deliberative process

privilege. Coastal States, 617 F.2d at 866. The Court simply

lacks sufficient information to know whether or not that is the

case. Additionally, Mr. Rasetti summarily states that the

documents in Categories B, C, and D “are pre-decisional and

constitute part of the deliberative process” without offering

any support for his assessment. See Rasetti Decl., ECF No. 35-1

at 8-10. It is well-established that such conclusory assertions

made in an agency’s declaration are insufficient to establish a

deliberative-process privilege claim. See Ascom Hasler, 267

F.R.D. at 6 (finding privilege log and declaration deficient

“because the assertions in the declaration [were] conclusory”

and recognizing the court’s right “to deny the claim of

privilege on that ground”).

     Finally, the rationale Treasury offers in its ex parte

submission in support of its privilege assertions is also

deficient. Analogous to the Rasetti declaration, Treasury

summarily declares that many documents are predecisional and

deliberative without demonstrating that the guidance contained

therein hasn’t been adopted, in whole or in part, by subsequent

policies. In other instances, Treasury attaches ex parte cover

                               11
sheets concerning the same document but asserting different

privileges. For example, a cover page for Document No. 30

asserts the attorney-client and deliberative process privilege

but is immediately preceded by a separate cover page, also for

Document No. 30, that invokes only the attorney-client

privilege. Such inconsistent treatment cannot be understood to

constitute “a specific articulation of the rationale supporting

the privilege.” See Ascom Hasler, 267 F.R.D. at 4.

       Treasury has had ample opportunities to provide

sufficient detail to enable the Court to assess its deliberative

process privilege claims, including in: (1) its privilege log,

(2) the Rasetti declaration, and (3) its ex parte submission

justifying its privilege assertions on a per-document basis.

Despite receiving explicit instructions from the Court to

explain "what deliberative process is involved, and the role

played by the documents in issue in the course of that process,"

Treasury has miserably failed to do so. See Minute Entry of July

15, 2016. Indeed, Treasury has essentially wasted this Court’s

precious and limited time, notwithstanding the Court’s stern

warning in its Minute Order dated July 15, 2016. Id. (“A hint to

the wise should be sufficient.”). Accordingly, the Court ORDERS

the forthwith production of all documents withheld or redacted

solely under the deliberative process privilege. The documents

over which Treasury has raised a deliberative process claim

                               12
along with another privilege will be analyzed after Treasury

produces a revised privilege log.

     III. THE REMAINING PRIVILEGE CLAIMS

     Treasury has also raised three other privileges to

rationalize withholding responsive material from Respondents:

the presidential communications privilege, the attorney-client

privilege, and the work product doctrine. See generally Opp.,

ECF No. 35. Noting that Treasury withdrew nearly 75% of its

previous privilege assertions once ordered to make an in camera

submission, the Court is of the opinion that it will be better

positioned to assess the merits of the remaining claims after

Treasury has produced a revised privilege log and in camera

submission containing only the remaining contested documents.

     IV.   CONCLUSION

     For the foregoing reasons, Respondents’ motion to compel

the production, or alternatively in camera review, of the

documents withheld and redacted by Treasury is GRANTED in part.

The documents over which Treasury has asserted the deliberative

process privilege in isolation shall be FORTHWITH PRODUCED to

Respondents. Treasury shall also produce a revised privilege log

to both the Court and Respondents by no later than January 10,

2017. Treasury shall submit for in camera review two copies of

an updated binder containing only the documents in the revised

privilege log by January 10, 2017. The revised submission shall

                               13
follow the same production specifications as the July 25, 2016

submission. The Court will not extend the time to comply with

this order. The Court will analyze the merits of Treasury’s

remaining privilege assertions upon receipt of the revised

submission. Treasury is again reminded of the Court’s Minute

Order dated July 15, 2016.

     SO ORDERED.

Signed:   Emmet G. Sullivan
          United States District Judge
          December 20, 2016

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