Kanter v. Internal Revenue Service

• Decision Date: 27 May 1977
• Docket Number: No. 76 C 3384,76 C 4265 and 76 C 4267.,76 C 3515,76 C 4264,76 C 3384
• Citation: 433 F. Supp. 812
• Parties: Burton W. KANTER, Plaintiff, v. INTERNAL REVENUE SERVICE et al., Defendants (two cases). Alan H. HAMMERMAN, Plaintiff, v. DEPARTMENT OF JUSTICE et al., Defendants. Roger S. BASKES, Plaintiff, v. DEPARTMENT OF JUSTICE et al., Defendants. Burton W. KANTER, Plaintiff, v. DEPARTMENT OF JUSTICE et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

433 F. Supp. 812

Burton W. KANTER, Plaintiff, v. INTERNAL REVENUE SERVICE et al., Defendants (two cases).

Alan H. HAMMERMAN, Plaintiff, v. DEPARTMENT OF JUSTICE et al., Defendants.

Roger S. BASKES, Plaintiff, v. DEPARTMENT OF JUSTICE et al., Defendants.

Burton W. KANTER, Plaintiff, v. DEPARTMENT OF JUSTICE et al., Defendants.

Nos. 76 C 3384, 76 C 3515, 76 C 4264, 76 C 4265 and 76 C 4267.

United States District Court, N. D. Illinois, E. D.

May 27, 1977.

COPYRIGHT MATERIAL OMITTED

Randall G. Dick, San Francisco, Cal., Levenfeld, Kanter, Baskes & Lippitz, Harvey N. Silets and Theodore A. Sinars, Harris, Burman, & Silets, Chicago, Ill., for plaintiffs.

John J. McCarthy, Donald J. Gavin and Margaret M. McMahon, Attys., Tax Div., U. S. Dept. of Justice, Wash., D.C., for defendants.

MEMORANDUM OPINION

DECKER, District Judge.

I. Introduction

These five actions under the Freedom of Information Act (FOIA), 5 U.S.C. § 552 et seq., have been consolidated by the court for unified consideration. They are among a series of eight FOIA actions brought in this District by the defendants in the criminal prosecution, United States v. Baskes, et al., 433 F.Supp. 799, which is also pending before this court.¹

At dispute are various documents and records in the files of the Internal Revenue Service and the Department of Justice which these agencies contend would give the plaintiffs "access to virtually the entire Government's case against them."

At issue in case No. 76 C 3384 are certain deletions made from Project Haven² Status Reports which the government contends were inadvertently released to the plaintiff in edited form. The plaintiff appears particularly concerned to discover which of the deletions refer to himself or his law firm.

Case No. 76 C 3515 seeks release of all records relating to a series of specified meetings held in Reno, Nevada, and San Francisco, California, during the period extending from March, 1974, to September, 1974. These meetings apparently dealt with the transaction underlying the indictment in U. S. v. Baskes, supra.

The three remaining suits — Nos. 76 C 4264, 76 C 4265 and 76 C 4267 — seek access to all Department of Justice records "indexed or maintained" under the plaintiffs' names, and "all documents returnable by a search for documents" containing plaintiffs' names.

The government agencies maintain that they have expended substantial time and effort in examining their files pursuant to these FOIA requests. They state that they have turned over at least 187 documents to the plaintiffs,³ and now maintain that the remaining requested materials are exempt under the Act from disclosure.

The defendant agencies have moved for summary judgment on the grounds that they have now turned over all non-exempt materials covered by these requests. The parties have extensively briefed the defendants' asserted primary defense to further disclosure, Exemption 7(A), 5 U.S.C. § 552(b)(7)(A).

The Freedom of Information Act contains at § 552(b) a series of enumerated exemptions. Although the government contends that other exemptions are also applicable to the records at issue in these cases, it has chosen to initially assert the applicability of 7(A)⁴ which bars disclosure of

"investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would (A) interfere with enforcement proceedings."

The government's position is that exemption 7(A) entitles it to "protect for a temporary time until its enforcement proceedings and investigations are closed" the requested documents in dispute.

II. The Policy of the Freedom of Information Act: The Limited Scope of Exemptions

The Supreme Court in Department of the Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 1599, 48 L.Ed.2d 11 (1976), endorsed the statement of the Second Circuit in that same case, 495 F.2d 261, 263 (2d Cir. 1974), that the Freedom of Information Act was enacted "to pierce the veil of administrative secrecy and to open agency action to the light of public scrutiny." The Act was "conceived in an effort to permit access by the citizenry to most forms of government records." Vaughn v. Rosen, 157 U.S.App. D.C. 340, 484 F.2d 820, 823 (1973).

FOIA was therefore conceived in a spirit of skepticism towards facile claims of the need for complete governmental secrecy. Indeed, Congress has seen fit to pass liberalizing amendments when it appeared that the government was using the literal language of the Act to, in the words of Senator Hart, "stonewall in a manner not consistent with the intent of Congress when it passed the Act in 1966." Freedom of Information Act and Amendments of 1974 (P.L. 93-502) Source Book: Legislative History, Texts and Other Documents, (1975) ("Sourcebook") pp. 332-333.⁵

The Supreme Court has accordingly recognized that the "exemptions are explicitly made exclusive by 5 U.S.C. § 552(c)", EPA v. Mink, 410 U.S. 73, 79, 93 S.Ct. 827, 832, 35 L.Ed.2d 119 (1973), and that these exemptions "must be narrowly construed", Dept. of Air Force v. Rose, supra, 425 U.S. at 361, 96 S.Ct. 1592 at 1599. The Court stressed that "these limited exemptions do not obscure the basic policy that disclosure, not secrecy, is the dominant objective of the Act."

Consequently, exemption 7

"permits an agency to withhold investigatory records compiled for law enforcement purposes only to the extent that the production of such records would interfere with enforcement proceedings, deprive a person of a right to a fair trial or an impartial adjudication, constitute a clearly unwarranted invasion of personal privacy, disclose the identity of an informer, or disclose investigative techniques and procedures." Sourcebook at 229 (Joint Explanatory Statement of the Committee of Conference) (emphasis added).

Under FOIA, the agency which seeks to deny disclosure has the burden "to prove de novo in trial court that the information sought fits under one of the exemptions." Vaughn v. Rosen, supra, 484 F.2d at 823; Title Guarantee Co. v. NLRB, 534 F.2d 484 (2d Cir. 1976); New England Medical Center Hospital v. NLRB, 548 F.2d 377, 382 (1st Cir. 1976); Seafarers International Union v. Baldwin, 508 F.2d 125 (5th Cir. 1975). The statute specifically states that "the burden is on the agency to sustain its action in withholding materials", § 552(a)(4)(B).

As revealed by the legislative history related in footnote 5, the availability of an exemption is not to be determined by the manner in which a document is labeled or filed by the agency. It is insufficient baldly to assert that the document is part of an "investigatory" or "open investigatory" file. New England Medical Center Hospital v. NLRB, supra, 548 F.2d at 386.

Similarly, the availability of an exemption is unaffected by the identity of the plaintiff in a FOIA action. A party's

"rights under the Act are neither increased nor decreased by reason of the fact that it claims an interest in withheld materials greater than that shared by the average member of the public. The Act is fundamentally designed to inform the public about agency action and not to benefit private litigants."

NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 143 fn. 10, 95 S.Ct. 1504, 1513, 44 L.Ed.2d 29 (1975); Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1, 24, 94 S.Ct. 1028, 39 L.Ed.2d 123 (1874); U. S. v. Murdock, 548 F.2d 599 (5th Cir. 1977).

Congress has indeed eliminated the "need to know" requirement for FOIA plaintiffs; they need not justify their motivation for seeking the documents. EPA v. Mink, supra, 410 U.S. at 79, 92, 93 S.Ct. 827.

Except as circumstances may compel the utilization of one of the exemptions, Freedom of Information cases are to be treated as independent causes operating on a different plane from other litigation.⁶ For this reason courts have not allowed the staying or enjoining of civil or criminal actions in which FOIA requested information might prove useful. U. S. v. Murdock, supra; Fruehauf v. Thornton, 507 F.2d 1253 (6th Cir. 1974); Electri-flex Co. v. NLRB, 412 F.Supp. 698 (N.D.Ill.1976).⁷ Parties in other litigation are essentially only entitled to that discovery provided by the rules applying to their suit.

The applicability of an exemption therefore is not to be determined on the basis of the identity of the plaintiff, the label given to the file or document, nor the isolated fact that the information may aid a party in other litigation.⁸ The sole appropriate analysis is a consideration of "whether the exemption applies to the documents in question", Bryant v. IRS, 76-2 USTC ¶ 9613, No. 76-31 (D.Me. 7/21/76).

This involves consideration of whether production of the specific materials would actually result in the injuries contemplated by the exemption. NLRB v. Sears, 421 U.S. at 164, 95 S.Ct. 1504 (dictum), citing language found at Sourcebook p. 229. As the court stated in New England Medical Center, supra, 548 F.2d at 382 "the Government can now justify non-disclosure only by showing `that disclosure would interfere with enforcement procedures.' 120 Cong.Rec. 17033 (1974) (remarks of Sen. Hart)." If there is a likelihood of interference the exemption applies and will justify denial of release, not only to the objects of the investigation and any pending or prospective enforcement actions, but to third parties as well. National Public Radio v. Griffin B. Bell, 431 F.Supp. 509 (D.C.C. 1977). But first proof must be made of the basis for anticipating such interference.

III. The Relationship of Exemption 7(A) to Discovery in a Pending or Prospective Enforcement Action

As noted, supra at fn. 7, the existence of a pending enforcement action against these plaintiffs, and of prospective indictments against their clients and associates, is relevant to the appropriateness of exemption 7(A) to these requests. The government maintains that the plaintiffs are using their FOIA suits as a means of circumventing the restrictions on discovery in the...