Treasury Dept. Must Disclose Documents to Delphi Workers

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By Carmen Castro-Pagan

The U.S. Treasury Department must disclose withheld documents to Delphi Corp. workers who are challenging the termination of their retirement plan by the Pension Benefit Guaranty Corporation ( U.S. Dep’t of Treasury v. Black , 2016 BL 423008, D.D.C., No. 1:12-mc-00100-EGS, 12/20/16 ).

Treasury failed to comply with its basic obligation to provide the court with a specific rationale supporting the alleged privilege it invoked to not disclose the documents, Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia held Dec. 20. Despite receiving “explicit instructions” from the court to explain what deliberative process was involved, and the role played by the documents at issue in the course of that process, Treasury has “miserably failed to do so,” Sullivan said.

In what may be seen as a harsh opinion for the department, Sullivan further said that “Treasury has essentially wasted this Court’s precious and limited time, notwithstanding the Court’s stern warning” that if the department’s claims of privilege were “frivolous,” it would impose “significant sanctions, monetary and otherwise.”

PBGC’s Plan Termination

The controversy stems from the PBGC’s 2009 decision to take over more than $6.2 billion in new liabilities as the trustee of six pension plans covering 70,000 employees and retirees of Delphi, one of the world’s largest auto parts manufacturer. Some workers alleged that the PBGC improperly terminated Delphi’s pension plan for its salaried workers via an agreement with Delphi and General Motors Corp. The documents Sullivan ordered to be produced involve government deliberations regarding the 2009 bankruptcy and restructuring of Chrysler and GM.

The workers sought disclosure of 866 documents that Treasury withheld by claiming they fell under certain privileges. Without any explanation, the Treasury revoked its claims of privilege over nearly 75 percent of the documents it had previously claimed were privileged. As to the rest, the court said that Treasury didn’t properly invoke the deliberative process privilege.

Treasury’s privilege log and accompanying declaration were “woefully inadequate,” the court said. Treasury failed to include any indication that the documents didn’t memorialize or evidence the agency’s final policy and weren’t shared with the public, the court said.

The Civil Division of the U.S. Department of Justice represented the Treasury. The PBGC’s Office of the Chief Counsel represented the PBGC. Miller & Chevalier, Chartered represented the workers.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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