Scout Motors threatens legal action against The Nerve

By RICK BRUNDRETT

Scout Motors is threatening to take The Nerve to court if it publishes “confidential and proprietary” information contained in an incentives wish list that the Volkswagen company submitted to the state of Mississippi, which lost out to South Carolina for an electric vehicle assembly plant.

In a Jan. 24 formal notice of intent to take legal action, Jason Fortenberry, one of the Jackson, Miss., attorneys representing Scout Motors, warned The Nerve that the company will file a protective order petition in the Hinds County Chancery Court in Jackson by tomorrow unless The Nerve “withdraws or modifies” its request for the incentives wish list.

The Nerve, however, already had obtained the wish list, known as a “request for proposal” (RFP), on Jan. 10 after initially submitting a written request to the Mississippi Development Authority on Dec. 6 under that state’s open-records law.

The Nerve plans to publish details of the RFP in a separate story tomorrow, revealing some significant differences between the taxpayer-backed incentives that Scout Motors sought in Mississippi and South Carolina.

“The Nerve is a long-standing publication that will not be intimidated by threats to impair its First Amendment right to inform policymakers and the citizens of South Carolina about matters of public interest,” wrote Alan Dye, an attorney with the Washington, D.C.-based Webster, Chamberlain & Bean law firm, which represents the South Carolina Policy Council, the parent organization of The Nerve, in response to the legal notice from Scout Motors’ attorneys.

“Our client will not be withdrawing or revising its request,” Dye continued in his letter, which was transmitted today to Scout Motors’ attorneys in Jackson. “It will be publishing stories in forthcoming editions of The Nerve which analyze, for the benefit of the South Carolina public, the terms of the Scout Motors proposal to the State of Mississippi as compared to proposals Scout Motors has made in South Carolina.

“In addition, The Nerve will be publishing stories recounting Scout Motors’ attempt to deny The Nerve’s First Amendment rights by seeking to compel it to suppress information which would be valuable to South Carolina policymakers and citizens.”

On its website, the Webster, Chamberlain & Bean law firm says it works with nonprofit organizations "on a daily basis.” The Columbia-based Policy Council is a nonprofit, nonpartisan research organization founded in 1986.

Virginia-based Scout Motors, which the German-based Volkswagen Group created in 2022 as an independent company, contended in its notice of intent that a protective order was necessary because The Nerve’s “request, if fully responded to, would require the production of documents that contain Scout Motors’ trade secrets, confidential and proprietary commercial information, and confidential and proprietary financial information.”

The notice didn’t identify specifics of that information in the Scout Motors’ document provided to The Nerve, though Fortenberry listed the following examples:

• Confidential and proprietary financial information, including costs and expenses;
• Confidential information regarding proprietary designs and processes; and
• Confidential and proprietary strategies for pricing, marketing, management, and cost-containment.

Since its launch in January 2010 with a week-long investigative series on the massive incentives deal to bring a Boeing airplane assembly plant to South Carolina, The Nerve has focused on the taxpayer costs and the lack of transparency by state and local government officials involving incentives deals with typically large corporations.

In his letter to Scout Motors’ attorneys, Dye said The Nerve obtained information about the company’s Mississippi incentives wish list through a “perfectly proper public records request,” and that after about a month of “consideration by the (Mississippi) Development Authority’s counsel, The Nerve received documents which redacted all proprietary information contained in the requested documents.”

“Therefore, it (The Nerve) is under no obligation not to disclose the information provided,” Dye continued. “In addition, since the Development Authority has already redacted all proprietary information, there is no basis for a protective order, even if such an order were to be enforceable in South Carolina, which is doubtful.”

Dye concluded that if Scout Motors requests a protective order or injunction against The Nerve to prevent it from publishing stories on the Mississippi incentives wish list, the Policy Council will “take whatever legal steps are necessary to defend against the issuance of any such order or injunction.”

Last year, The Nerve published three investigative stories (here, here and here) about the Scout Motors electric-vehicle assembly plant now under construction at the town of Blythewood in Richland County, as well as other electric-vehicle-related projects.

Among other things, The Nerve revealed that the incentives wish list that Scout Motors submitted to state and local government officials in South Carolina served as the framework for the more than $1 billion in taxpayer-backed incentives approved last year for the assembly plant. An October story noted that S.C. officials believed then that Mississippi was the other finalist state for the project.

The Nerve in a story last month cited a national incentives expert who said companies through hired consultants routinely submit incentives wish lists to states with the intent to get the best taxpayer-funded deals for the companies.

The Nerve obtained Scout Motors’ RFP for the South Carolina project as part of nearly 1,000 emails provided last year by the town of Blythewood under the S.C. Freedom of Information Act. But the S.C. Department of Commerce, which is the main state agency typically involved in major incentives deals, has declined to release the document to The Nerve for any deal.

Commerce contends that the state’s open-records law allows it to keep RFPs secret, though The Nerve has pointed out that public agencies aren’t required to do so under the law.

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-394-8273 or [email protected]. Follow The Nerve on Facebook and X (formerlyTwitter) @thenervesc.

Nerve stories are free to reprint and repost with permission by and credit to The Nerve.