U.S. District Court: Treasury Not Meeting its Obligations Under FOIA

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October 1, 2015                                                                                          More Information, Contact Michael Brooks, 202.328.7700 X113

CAS Nears Judicial Release of Emails between Treasury Department Officials & Chrysler & GM in $80 Billion Auto Bailout

The US District Court for the District of Columbia issued a memorandum opinion in Center for Auto Safety v. U.S. Department of Treasury, a lawsuit filed by CAS arising from a 2009 CAS request under the Freedom of Information Act (FOIA).  The CAS FOIA request sought emails between the Auto Task Force including Treasury Secretary Geithner and Chrysler and GM respectively related to the federal government’s role in the $80 billion GM and Chrysler bankruptcy bailouts. The memorandum opinion, issued by Judge Beryl A. Howell, finds that Treasury has failed in its obligation to provide sufficient detail on documents withheld pursuant to FOIA.  The Court completely rejected the government’s argument that disclosure under FOIA would result in less full and candid submissions in the future holding:
The alternative to full compliance with Treasury loan agreements is a potentially draconian penalty: the company’s bankruptcy. It strains credulity to believe that the specter of potential disclosure under the FOIA of certain information required to be submitted to Treasury to obtain a company-saving loan would lead a company to choose instead to go out of business.

Additionally, Judge Howell’s order determined that the withheld documents were submitted involuntarily to Treasury by Chrysler and GM which requires a showing of the likelihood of “substantial harm to the competitive position of the person from whom the information was obtained. . . .  Merely conclusory statements about competitive harm, even if repeated numerous times, are not sufficient.”

Finally, Judge Howell ruled that they cannot withhold and therefore must disclose all information relating to the Old companies, including their assets and liabilities – and in doing so relied quite heavily on former NHTSA Administrator Joan Claybrook’s Declaration.
Additionally, because of the defendants’ utter lack of response regarding documents about the old companies’ liabilities, the Court deems such arguments conceded, and to the extent withheld documents contain information about the old companies’ liabilities, that information must also be segregated and released. . . . Practices of the old companies cannot reasonably be expected to affect the competitive position of the new companies, particularly because the point of restructuring the companies was to leave such practices behind.

Judge Howell’s order gives the Treasury Department an opportunity to either release the documents or produce satisfactory support for its claims of substantial competitive hard but notes:
Given the deficiencies in the defendants’ Vaughn indices and related declarations in supporting withholdings under Exemption 4, the plaintiff urges that summary judgment should be granted to CAS. See Pl.’s Mem. at 3 (arguing plaintiff is entitled to summary judgment because “the government simply has failed to overcome FOIA’s mandate for openness”). This invitation is tempting, but the Court nonetheless will provide the defendants an opportunity to supplement their invocation of this  FOIA exemption, with the additional guidance outlined in this Memorandum Opinion.

CAS is represented by Katherine Meyer of Meyer Glitzenstein & Eubanks, Washington DC 202.588.5206

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 Memorandum Opinion, U.S. District Court for the District of Columbia – 9/30/15

Order, U.S. District Court for the District of Columbia – 9/30/15

CAS Reply Memorandum – 6/8/15

GM/Treasury Combined Opposition and Reply – 4/16/15

CAS Motion for Summary Judgment – 1/20/15

Voluntary Stipulation of Partial Settlement and Proposed Order for Further Proceedings – 12/16/11

CAS Motion for Summary Judgment – 10/11/11

– CAS Files FOIA Lawsuit re: Auto Industry Bankruptcy – 6/7/11