Cause of Action v. Internal Revenue Serv.

• Decision Date: 28 August 2015
• Docket Number: Civil Action No. 13–0920 (ABJ)
• Citation: 125 F.Supp.3d 145
• Parties: Cause of Action, Plaintiff, v. Internal Revenue Service, Defendant.
• Court: U.S. District Court — District of Columbia

125 F.Supp.3d 145

Cause of Action, Plaintiff,

v.Internal Revenue Service, Defendant.

Civil Action No. 13–0920 (ABJ)

United States District Court, District of Columbia.

Signed August 28, 2015

Daniel Zachary Epstein, Allan Blutstein, Erica L. Marshall, Prashant Kumar Khetan, Cause of Action, Washington, DC, Robyn N. Burrows, Watt, Tieder, Hoffar & Fitzgerald, LLP, Mclean, VA, for Plaintiff.

Stephanie Ann Sasarak, Yonatan Gelblum, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge

This case arises out of a Freedom of Information Act request by plaintiff Cause of Action for records related to possible disclosures of confidential "return information" by the Internal Revenue Service ("IRS"). Compl. [Dkt. # 1] ¶ 7. The confidentiality of that information is governed by 26 U.S.C. § 6103, and that provision of the Internal Revenue Code lies at the heart of this action. "Return information" is defined in section 6103(b)(2), and section 6103(g) governs disclosures to the President and certain other Executive Branch employees.

On October 9, 2012, plaintiff requested eight categories of records from defendant, the first six of which are at issue in this lawsuit.¹ Ex. 1 to Compl. [Dkt. # 1–3] ("FOIA Req."); Pl.'s Mem. of P. & A. in Opp. to Def.'s Mot. for Summ. J. & in Supp. of its Cross–Mot. for Summ. J. [Dkt. # 21–1] ("Pl.'s Mem.") at 3. Specifically, plaintiff sought:

1) All documents, including but not limited to emails, letters, and telephone logs or other telephone records, constituting communications to and/or from any employee of the IRS concerning any FOIA request or lawsuit that relates to [26 U.S.C.] § 6103(g) ;

2) All documents, including notes and emails, referring or relating to any communication described in request # 1;

3) Any communications by or from anyone in the Executive Office of the President constituting requests for taxpayer or "return information" within the meaning of § 6103(a) that were not made pursuant to § 6103(g) ;

4) All documents, including notes and emails, referring or relating to any communication described in request # 3;

5) All requests for disclosure by any agency pursuant to [26 U.S.C. §] 6103(i)(1), (i)(2), and (i)(3)(A) ; [and]

6) All documents, including communications not limited to notes, emails, letters, memoranda and telephone logs or other telephone records, referring or relating to records described in request # 5[.]

FOIA Req. at 2. Plaintiff requested records from the time period of January 1, 2009, through the date of its FOIA request, October 9, 2012. Id. at 1.

Defendant released 793 pages responsive to categories one and two of plaintiff's request with some redactions, citing FOIA Exemptions 5 and 6. Br. in Reply to Pl.'s Opp. to Def.'s Mot. for Summ. J. & in Opp. to Pl.'s Mot. for Summ. J. [Dkt. # 26] ("Def.'s Reply") at 1. Defendant did not release any records in response to items three through six of plaintiff's FOIA request on the grounds that any records related to requests for "return information" would themselves constitute "return information" that is exempt from disclosure under FOIA Exemption 3 in conjunction with section 6103. Id. ; Br. in Supp. of Def.'s Mot. for Summ. J. [Dkt. # 16–1] ("Def.'s Mem.") at 1. The IRS also took the position that records responsive to items three through six would be shielded from disclosure by Exemption 6, and that records responsive to items five and six could also be withheld under Exemption 7(C). Def.'s Mem. at 1; Def.'s Reply at 1. Nevertheless, defendant conducted a search for records responsive to items three and four, although it did not search for records responsive to items five and six. Decl. of Denise Higley in Supp. of Def.'s Mot. [Dkt. # 16–3] ("Higley Decl.") ¶¶ 17–24.

After exhausting its administrative remedies, plaintiff filed a complaint in this Court on June 19, 2013. Compl. Defendant moved for summary judgment on April 14, 2014, Def.'s Mot. for Summ. J. [Dkt. # 16], and plaintiff filed a cross-motion combined with its opposition to defendant's motion on June 9, 2014. Pl.'s Cross–Mot. for Summ. J. [Dkt. # 21] ("Pl.'s Mot."); Pl.'s Mem. Plaintiff claims that defendant failed to conduct an adequate search for responsive records and that its reliance on most of the FOIA exemptions it claims is improper. Pl.'s Mem. The IRS filed a cross-opposition combined with a reply on July 28, 2014, Def.'s Reply, and plaintiff filed a cross-reply on August 22, 2014. Reply in Supp. of Pl.'s Mot. [Dkt. # 30] ("Pl.'s Reply").

The Court finds that defendant's search for records responsive to items one and two of the FOIA request was adequate, and that its withholdings under Exemption 5 were proper. But defendant has not described an adequate search for records responsive to items three and four of the request, and it will therefore be ordered to do more.

Defendant's response to items three and four also raises the question of whether Executive Branch requests for "return information" are themselves "return information" that cannot be disclosed. The Court finds that defendant properly deemed the "tax check" records it identified as potentially responsive to items three and four to be "return information" that should be withheld under FOIA Exemption 3 and section 6103, but the Court does not agree that any other records responsive to these requests would necessarily be exempt from disclosure. In other words, it is not at all clear that all Executive Branch requests for "return information" can be characterized as "return information" that is factual in nature and shielded from disclosure by the taxpayer confidentiality statute.

Finally, the Court finds that the failure to search for records responsive to items five and six was not justified by any FOIA exemption. Therefore, the Court will grant both parties' motions in part and deny them in part, and it will remand the case to the IRS to conduct an adequate search for records responsive to items three through six of plaintiff's FOIA request, and to release any reasonably segregable, non-exempt information to plaintiff.

STANDARD OF REVIEW

In a FOIA case, the district court reviews the agency's action de novo and "the burden is on the agency to sustain its action." 5 U.S.C. § 552(a)(4)(B) ; accord Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C.Cir.1981). "FOIA cases are typically and appropriately decided on motions for summary judgment." Moore v. Bush, 601 F.Supp.2d 6, 12 (D.D.C.2009).

On a motion for summary judgment, the Court "must view the evidence in the light most favorable to the nonmoving party, draw all reasonable inferences in his favor, and eschew making credibility determinations or weighing the evidence." Montgomery v. Chao, 546 F.3d 703, 706 (D.C.Cir.2008) ; see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). But where a plaintiff has not provided evidence that an agency acted in bad faith, "a court may award summary judgment solely on the basis of information provided by the agency in declarations." Moore, 601 F.Supp.2d at 12.

ANALYSIS

FOIA requires government agencies to release records upon request in order to "ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed." NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242, 98 S.Ct. 2311, 57 L.Ed.2d 159 (1978). But because "legitimate governmental and private interests could be harmed by [the] release of certain types of information," Congress provided nine specific exemptions to the disclosure requirements. FBI v. Abramson, 456 U.S. 615, 621, 102 S.Ct. 2054, 72 L.Ed.2d 376 (1982) ; see also Ctr. for Nat'l Sec. Studies v. DOJ, 331 F.3d 918, 925 (D.C.Cir.2003) ("FOIA represents a balance struck by Congress between the public's right to know and the government's legitimate interest in keeping certain information confidential."). These nine FOIA exemptions are to be construed narrowly. Abramson, 456 U.S. at 630, 102 S.Ct. 2054.

To prevail in a FOIA action, an agency must, first, demonstrate that it has made "a good faith effort to conduct a search for the requested records, using methods which can be reasonably expected to produce the information requested." Oglesby v. U.S. Dep't of Army, 920 F.2d 57, 68 (D.C.Cir.1990). And, second, the agency must show that "materials that are withheld ... fall within a FOIA statutory exemption." Leadership Conference on Civil Rights v. Gonzales, 404 F.Supp.2d 246, 252 (D.D.C.2005), citing Weisberg v. DOJ, 705 F.2d 1344, 1351 (D.C.Cir.1983).

The FOIA requests in this case all reference 26 U.S.C. § 6103, the provision of the Internal Revenue Code that was enacted to preserve taxpayer privacy. See Tax Analysts v. IRS, 117 F.3d 607, 611 (D.C.Cir.1997). Subsection (a) sets forth the general proposition that returns and return information shall be confidential, and subsection (b) defines the key terms in the statute. 26 U.S.C. § 6103(a) –(b). The provisions that follow delineate the exceptions to the confidentiality rule, including the disclosure of returns and return information to the designee of the taxpayer, 26 U.S.C. § 6103(c), certain disclosures to state government officials, id. § 6103(d), certain disclosures "to persons having a material interest," id. § 6103(e), disclosures pursuant to written requests by certain members of Congress, id. § 6103(f), and disclosures to the President, to executive officials, or to the heads of federal agencies. Id. § 6103(g).²

I. Defendant describes an adequate search for records responsive to items one and two of plaintiff's FOIA request, but not for records responsive to items three and four.

"An agency fulfills its obligations under FOIA if it can demonstrate beyond material doubt that its search was ‘reasonably calculated to uncover all relevant documents.’ " Valencia–Lucena v. U.S. Coast Guard, 180 F.3d 321, 325 (D.C.Cir.1999),...