Ctr. for Auto Safety v. U.S. Dep't of Treasury

• Decision Date: 30 September 2015
• Docket Number: Civil Action No. 11–1048 (BAH)
• Citation: 133 F.Supp.3d 109
• Parties: Center for Auto Safety, Plaintiff, v. U.S. Department of Treasury, et al., Defendants.
• Court: U.S. District Court — District of Columbia

133 F.Supp.3d 109

Center for Auto Safety, Plaintiff,

v.U.S. Department of Treasury, et al., Defendants.

Civil Action No. 11–1048 (BAH)

United States District Court, District of Columbia.

Signed September 30, 2015

Katherine A. Meyer, Meyer Glitzenstein & Eubanks LLP, Washington, DC, for Plaintiff.

Marina Utgoff Braswell, U.S. Attorney's Office, Justin Aaron Savage, Hogan Lovells, Washington, DC, Andrew C. Lillie, Hogan Lovells US LLP, Denver, CO, for Defendants.

MEMORANDUM OPINION

BERYL A. HOWELL

, United States District Judge

The plaintiff, Center for Auto Safety ("CAS"), requested, under the Freedom of

Information Act ("FOIA"), 5 U.S.C. § 552

, documents related to the 2009 Chrysler and General Motors bankruptcies. The defendant, the United States Department of the Treasury ("Treasury") has released to the plaintiff over 65,000 pages of records but continues to withhold approximately 452 documents in whole and 90 documents in part at the request of the defendant-intervenor General Motors LLC ("GM") and 284 documents in whole or in part at the request of Chrysler Group LLC ("Chrysler"). Treasury contends that the withheld documents are exempt from release pursuant to Exemption 4 of the FOIA, 5 U.S.C. § 552(b)(4), because they contain confidential commercial or financial information likely to impair the government's ability to obtain necessary information in the future and likely to cause substantial competitive harm to GM and Chrysler. The plaintiff challenges the majority of the withholdings, arguing that the defendants' Vaughn indices are insufficiently descriptive and the defendants have not sufficiently shown that the information withheld is confidential.

Pending before the Court are cross-motions for summary judgment: (1) a joint motion for summary judgment brought by Treasury and GM ("Jt.Mot."), ECF No. 36, and (2) a cross-motion for summary judgment brought by CAS ("Pl.'s Mot."), ECF No. 40. For the reasons discussed below, the defendants' motion is granted in part and denied in part, and the plaintiff's cross-motion is denied without prejudice.

I. BACKGROUND

In the fall of 2008, in response to economic instability, Congress enacted the Emergency Economic Stabilization Act ("EESA"). Defs.' Mot., Ex. 1, Decl. of Kathleen Cochrane ("Cochrane Decl.") ¶ 26, ECF No. 36–1. The EESA established the Office of Financial Stability ("OFS"), which implemented the Troubled Asset Relief Program ("TARP"). Id. Pursuant to the TARP, Treasury established the Automotive Industry Financing Program ("AIFP") and, through 2009, provided billions of dollars of loans to entities associated with GM and Chrysler.¹ Id. ¶¶ 26–28; Pl.'s Statement of Material Facts as to Which There is No Genuine Issue & Pl.'s Resp. to Defs.' Statement of Material Facts ("Pl.'s SMF") ¶¶ 18–19, ECF No. 40; Defs.' Resp. to Pl.'s Statement of Material Facts as to Which There is No Genuine Issue ("Defs.' Resp. SMF") ¶¶ 18–19, ECF No. 48–1. In connection with the loans, GM and Chrysler entities were required to implement restructuring plans, see Cochrane Decl. ¶¶ 27–28; Pl.'s SMF ¶¶ 29–30; Defs.' Resp. SMF ¶¶ 29–30, and in February 2009, President Obama established the Auto Task Force ("Task Force") to review the viability of the restructuring plans, Cochrane Decl. ¶ 30.

The government provided an initial loan to General Motors Corporation ("Old GM," now known as "Motors Liquidation Company"), which filed for bankruptcy, on June 1, 2009, as part of its restructuring. Id. ¶ 27. Pursuant to Section 363 of the Bankruptcy Code

, 11 U.S.C. § 363, a newly formed entity, General Motors LLC ("GM"), the defendant-intervenor in this lawsuit, purchased most of the assets and some of the liabilities of Old GM ("GM Section 363 Sale"). Id. ; Pl.'s SMF ¶¶ 3, 11; Defs.' Resp. SMF ¶¶ 3, 11. Similarly, Chrysler LLC ("Old Chrysler," now known as "Old Carco") filed for bankruptcy in April 2009, and in June 2009, the newly formed entity, Chrysler Group LLC ("Chrysler") purchased most of the assets and some of the liabilities of Old Chrysler ("Chrysler Section 363

Sale"). Cochrane Decl. ¶ 28; Pl.'s SMF ¶¶ 4, 12; Defs.' Resp. SMF ¶ 4, 4 n. 1, 12. As part of the Section 363 Sales, GM and Chrysler were not required to assume certain liabilities that were left with Old GM and Old Chrysler. Pl.'s SMF ¶¶ 11–12; Defs.' Resp. SMF ¶¶ 11–12. This aspect of the auto industry bailout is the principal focus of the FOIA request at issue.

The plaintiff, CAS, is "a nationwide nonprofit consumer advocacy organization .... work[ing] toward improved safety, environmental responsibility, and fair dealing in the automotive industry and marketplace." Compl. ¶ 4, ECF No. 1; Pl.'s Mot., Ex. R ("FOIA Req.") at 1, ECF No. 42–10. On June 8, 2009, CAS requested under the FOIA: "All e-mail correspondence since January 1, 2009, in any way related to the Chrysler and General Motors bankruptcies, the events preceding those bankruptcies, and the federal government's roles in and deliberations concerning those matters." FOIA Req. at 1; see also Compl. ¶ 18; Defs.' Statement of Material Facts as to Which There is No Genuine Issue ("Defs.' SMF") ¶ 1, ECF No. 36; Pl.'s SMF ¶¶ A.1, B.1; Defs.' Resp. SMF ¶ 1. The request included "all ... e-mails generated and/or received by the Department of the Treasury and ... Brian Deese[,] Ed Montgomery[,] Ron Bloom[,] Steven Rattner[,] Matthew Feldman[,] [and] Timothy Geithner[.]" FOIA Req. at 1; see also Compl. ¶ 19; Defs.' SMF ¶ 1. CAS also requested a waiver of the fees and costs associated with processing its request. Compl. ¶ 20.

The plaintiff's FOIA request was prompted by concern about the liabilities left with the old, bankrupt companies, which allegedly have left consumers injured by defectively manufactured cars without recourse. See Pl.'s Mem. Supp. Mot. Summ. J. & Opp'n Defs.' Mot. Summ. J. ("Pl.'s Mem.") at 1, 16, 19, ECF No. 40. According to the plaintiff, "in exchange for the bailout funds [,]" GM and Chrysler were allowed to leave liabilities, "including the need to compensate consumers injured by defective cars manufactured by General Motors and Chrysler[,]" with the old, bankrupt companies which do not have "the necessary funds to compensate victims of such accidents and incidents and their families." Id. at 1 (emphasis omitted). The plaintiff is concerned about the government's role in allegedly "requiring the ‘new’ Chrysler and GM to leave behind potential liabilities vis-à-vis consumers who have been both physically and economically injured by defective products manufactured by the ‘old’ GM and Chrysler." Id. at 16.

Almost two years after the plaintiff made its FOIA request, around March 2011, Treasury had identified 170,000 pages of documents responsive to the plaintiff's request but denied the plaintiff's fee waiver request, which denial was appealed by CAS. Compl. ¶¶ 23–25. Then, on June 7, 2011, having received no response to its appeal, see id. ¶¶ 28–29, CAS filed the Complaint in this action requesting declaratory and injunctive relief, see id. at 10–11.

On December 16, 2011, the parties filed a Voluntary Stipulation of Partial Settlement and Proposed Order for Further Proceedings ("Stipulation"), ECF No. 12, which the Court granted, see Minute Order, Dec. 19, 2011. Per the Stipulation, Treasury agreed to waive the fees associated with the plaintiff's FOIA request and to produce, on a rolling basis for twelve months, certain records retrieved from its files that were dated between January 1, 2009 and August 27, 2009. Stipulation ¶¶ 1, 3–6; Defs.' SMF ¶ 2; Pl.'s SMF ¶ B.2. Thus, by agreement, the plaintiff's FOIA request came to include documents dated through August 27, 2009.

Pursuant to 31 C.F.R. § 1.6

,² Treasury provided GM and Chrysler with opportunities to review and object to the disclosure of documents Treasury identified as responsive to the plaintiff's FOIA request. Cochrane Decl. ¶ 34. According to the parties' opening briefs, although negotiations narrowed the scope of the parties' dispute, GM continues to object to Treasury's release of a total of 452 whole documents and 90 partially redacted documents—a total of 542 documents, Cochrane Decl. ¶ 24; Pl.'s SMF ¶ A.2; Defs.' Resp. SMF ¶ 2, and Chrysler continues to object to Treasury's release of 284 documents in whole or in part, Pl.'s SMF ¶ A.2; Defs.' Resp. SMF ¶ 2. Consequently, a total of 542 GM documents and 284 Chrysler documents may remain in dispute, see Cochrane Decl. ¶ 24, although the parties suggest slightly different numbers in the course of their briefing.³

The records withheld that remain at issue consist of email communications between Treasury and either GM or Chrysler, or between business advisors and legal representatives of Treasury, GM and Chrysler and related attachments to those emails. Defs.' SMF ¶ 6; Pl.'s SMF ¶ B.6. Some of the information pertains to Old GM and Old Chrysler and liabilities that were left with these entities as a result of the Section 363

Sales. Pl.'s SMF ¶¶ 10, 13; Defs.' Resp. SMF ¶¶ 10, 13. All of the information was generated by or provided to Treasury between January and August 2009 and most was required by Treasury when deciding whether to provide federal funding to GM and Chrysler under the TARP. Pl.'s SMF ¶¶ 16, 28; Defs.' Resp. SMF ¶¶ 16, 28. Treasury has submitted two separate Vaughn indices for the documents at issue, one for the disputed GM documents, see Jt. Mot., Ex. 2, Decl. of Laura L. Fitzpatrick ("GM Decl."), Ex. D ("GM Vaughn Index"), ECF No. 36–2, and one for the disputed Chrysler documents, see id., Ex. 3, Decl. of Chrysler Group LLC ("Chrysler Decl."), Ex. A ("Chrysler Vaughn Index"), ECF No. 36–3, each of which was initially created by GM and Chrysler, respectively, at Treasury's request, see Cochrane Decl. ¶¶ 17–24.

II. LEGAL STANDARD

Congress enacted the FOIA as a means "to open agency action to the light of public scrutiny," Am. Civil Liberties Union v. U.S. Dep't of Justice, 750 F.3d 927, 929 (D.C.Cir.2014)

(quoting Dep't of Air Force v....