Athletics Investment Group, LLC v. Schnitzer Steel Industries, Inc.

Background

Athletics Investment Group, LLC (AIG) brought a citizen-enforcement action under the Clean Air Act against Schnitzer Steel Industries, Inc. AIG subpoenaed documents from the Bay Area Air Quality Management District (BAAQMD), a California state agency that regulates stationary sources of air pollution in San Francisco Bay Area counties. BAAQMD withheld approximately 9,000 documents based in part on the deliberative process privilege, which can protect certain documents created during an agency’s policy decision-making process.

In an earlier order, the court reviewed 48 sample documents and found that BAAQMD had established the privilege for approximately one-third of them. The court then directed AIG to address whether the privilege should be waived and directed BAAQMD to respond. This order addressed waiver, AIG’s request for an additional deposition, and BAAQMD’s separate assertion of the law enforcement or official information privilege.

Deliberative Process Privilege

The court applied four factors from Ninth Circuit law to decide whether BAAQMD’s privilege should be waived: the evidence’s relevance, the availability of other evidence, the government’s role in the litigation, and the risk that disclosure would hinder candid agency discussions.

The court found that the first factor favored disclosure. The documents were relevant to issues involving Schnitzer’s defenses, including whether its Title V permit application was timely, how BAAQMD made a determination about the best available control technology for the facility, and whether the facility’s stockpiles were exempt from permitting. The court also found that the second factor weighed heavily in favor of disclosure because BAAQMD conceded that no alternative source could provide information about its contemporaneous application of its rules to Schnitzer’s facility.

Although BAAQMD was not a party to the underlying lawsuit, the court found that its decision-making was central rather than merely collateral because Schnitzer’s defenses relied on BAAQMD’s permitting decisions, treatment of Schnitzer’s applications, and control-technology determination. The court also concluded that BAAQMD’s general statement that disclosure could undermine candid agency discussions was too vague to overcome AIG’s specific showing of relevance. An existing protective order would limit disclosure and address BAAQMD’s confidentiality concerns.

The court therefore concluded that AIG’s need for the documents outweighed BAAQMD’s interest in withholding them. The waiver applied to all pre-2020 documents withheld under the deliberative process privilege and to documents from 2020 onward identified through targeted search terms. BAAQMD was ordered to produce the documents covered by the ruling by June 3, 2024, under the existing protective order.

Additional Deposition

Because the withheld documents were important to the claims and defenses and their delayed production could cause prejudice, the court granted in part AIG’s request for another deposition of Carol Allen. AIG could depose Allen for up to four additional hours, but could not repeat questions from the earlier deposition unless they concerned newly produced documents.

Law Enforcement or Official Information Privilege

BAAQMD had also withheld certain documents under the law enforcement or official information privilege. The court had previously required BAAQMD to submit a detailed declaration supporting that privilege for each document. BAAQMD did not file the required declaration. The court consequently concluded that BAAQMD had withdrawn its privilege claim over documents withheld under the interagency agreements.

The court ordered BAAQMD to produce by June 3, 2024, all documents withheld solely on that basis, as well as documents withheld under both privileges where the court found waiver of the deliberative process privilege. The parties were also ordered to meet and confer about whether revised privilege logs were necessary; any revised logs were due by June 7, 2024, under their prior agreement.

Disposition

The court granted AIG’s motion to compel documents withheld by BAAQMD based on the deliberative process privilege. It ordered the specified production and allowed AIG an additional four hours to depose Allen, subject to the stated limits. This discovery order did not resolve the underlying Clean Air Act claims.