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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23330 / September 1, 2015

Securities and Exchange Commission v. Navistar International Corp., Civil Action No. . 1:14-cv-10163 (N.D. Ill., filed Dec. 18, 2014)

Illinois Court Orders Production of Second Set of Documents Claimed to Be Privileged by Navistar International Corporation in SEC Investigation

The Commission announced that on August 31, 2015, United States Magistrate Judge Sidney I. Schenkier issued an Order (“Order”) requiring production of a second set of documents that Navistar International Corporation (“Navistar”) claimed to be privileged in response to investigative subpoenas issued by Commission staff.  The Commission filed an Application for an Order Compelling Compliance with Administrative Subpoenas against Navistar in December 2014 and filed an Amended Application in January 2015. 

According to the Application, the Commission 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 Commission. Navistar has produced many documents in response to the Commission’s subpoenas, but it also has redacted and withheld other documents on privilege grounds.  In the Application, the Commission requested that the Court overrule Navistar’s privilege claims over certain documents that the Commission alleged to involve lobbying and communications firms retained by Navistar, communications among only non-attorneys, and draft documents.

In response to the Application, the Court initially reviewed a subset of 72 documents that Navistar has redacted and withheld on privilege grounds. In a June 30, 2015 Order (the “June 30 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. 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 in the June 30 Order. In response to the June 30 Order, Navistar produced many – but not all – of the other documents from its privilege log that Navistar in good faith determined would not be protected by privilege based on the analysis employed by the Court. Subsequently, the Commission requested that the Court review a subset of 13 additional documents that Navistar had redacted on privilege grounds. In an August 31, 2015 Order (the “August 31 Order”), the Court overruled Navistar’s privilege assertions in their entirety as to five of these 13 additional documents and overruled Navistar’s privilege assertions in part as to three of these documents. In sum, in the June 30 and August 31 Orders, the Court overruled Navistar’s privilege assertions as to 51 documents in their entirety, overruled Navistar’s privilege assertions as to parts of 19 additional documents, and sustained Navistar’s privilege assertions in their entirety as to 15 documents.    

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

For further information, please see Litigation Release Numbers LR-23183 (Jan. 29, 2015) and LR-23297 (July 6, 2015).

 

http://www.sec.gov/litigation/litreleases/2015/lr23330.htm


Modified: 09/01/2015