U.S. Department of Treasury v. Black , 222 F. Supp. 3d 38 ( 2016 )

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.
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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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