Illinois Court Orders Production of Documents By Navistar in SEC Investigation

On June 30, 2015, United States Magistrate Judge Sidney I. Schenkier issued an order requiring production of certain documents that Navistar International Corporation (Navistar) claimed to be privileged in response to investigative subpoenas issued by the Securities and Exchange Commission (SEC). The SEC filed an Application for an order Compelling Compliance with the SEC Subpoenas against Navistar in December 2014 and filed an Amended Application in January 2015.

According to the Application, the SEC is investigating possible fraud relating to statements made by Navistar regarding its efforts to obtain a certificate of conformity from the U.S Environmental Protection Agency, certifying that Navistar’s engines complied with certain provisions of the Clean Air Act. Pursuant to investigative subpoenas, Navistar was obligated to produce documents to the SEC. Navistar produced documents in response to the SEC’s subpoenas, but it also has redacted and withheld other documents on privilege grounds. In the Application, the SEC requested that the Court overrule Navistar’s privilege claims over certain documents that the SEC alleged involved lobbying and communications firms retained by Navistar, communications among only non-attorneys, and draft documents.

In response to the Application, the Court reviewed a subset of 72 documents that Navistar has redacted and withheld on privilege grounds. In the order, the Court overruled Navistar’s privilege assertions as to 46 documents in their entirety and overruled Navistar’s privilege assertions as to parts of 16 additional documents. Specifically, the Court : (1) overruled Navistar’s privilege assertions as to 33 of the documents that the SEC alleged to involve lobbying and communications firms retained by Navistar, sustained in part Navistar’s privilege assertions as to 4 of these documents, and sustained Navistar’s privilege assertions as to 2 of these documents; (2) overruled Navistar’s privilege assertions as to 9 of the documents that the SEC alleged to involve communications among only non-attorneys, sustained in part Navistar’s privilege assertions as to 12 of these documents, and sustained Navistar’s privilege assertions as to 6 of these documents; and (3) overruled Navistar’s privilege assertions over 4 of the documents that the Commission alleged to involve certain drafts, and sustained Navistar’s privilege assertions as to 2 of these documents. The Court also ordered that in addition to the documents that the Court found not to be protected from production, Navistar must produce documents that Navistar in good faith determines not to be protected under the analysis employed by the Court’s in its rulings on the subset of documents it reviewed.

The Commission noted that it is continuing to conduct a fact-finding inquiry and has not concluded that anyone has broken the law.

For further information, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real South, Suite 202 North, Boca Raton, FL, (561) 416-8956, or by email at [email protected].  This securities law Q & A is provided as a general or informational service to clients and friends of Hamilton & Associates Law Group, P.A. and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that prior results discussed herein do not guarantee similar outcomes.

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Brenda Hamilton, Going Public Attorney
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