Long v. Bureau of Economic Analysis
| Decision Date | 16 July 1981 |
| Docket Number | No. 81-3090,81-3090 |
| Citation | 646 F.2d 1310 |
| Parties | 81-1 USTC P 9439 Susan B. LONG and Philip H. Long, Plaintiffs-Appellees, v. BUREAU OF ECONOMIC ANALYSIS, United States Department of Commerce, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Jonathan S. Cohen, Murray S. Horwitz, Washington, D. C., for defendant-appellant.
Stephen K. Strong, Bendich, Strobaugh & Strong, Seattle, Wash., for plaintiffs-appellees.
Appeal from the United States District Court for the District of Western Washington.
Before TANG, SKOPIL and CANBY, Circuit Judges.
Ultimately at issue in this Freedom of Information Act case is whether the Bureau of Economic Analysis ("BEA") is obligated to release to Susan and Philip Long certain computer tapes, now in the BEA's possession that were prepared by the Internal Revenue Service in connection with its Taxpayer Compliance Measurement Program ("TCMP"). On the basis of the record before us, we affirm the district court's rulings that FOIA's Exemption 3 did not bar disclosure and that the BEA was not entitled subsequently to amend its answer to assert additional defenses to disclosure.
The Longs' pursuit of TCMP data tapes has encompassed three different lawsuits and a span of seven years. We begin our analysis by reviewing the tortuous history of proceedings that has led to the present appeal by the BEA.
In 1975, after exhausting administrative remedies, the Longs filed an FOIA suit against the Internal Revenue Service ("IRS") seeking TCMP data tapes for Phases II, III, and IV. 1 The IRS objected to disclosure, contending that the records were exempt under FOIA's Exemption 3 and 26 U.S.C. § 6103 and that the tapes contained taxpayer identification data, the deletion of which would be unreasonably burdensome. The district court granted summary judgment for the IRS, and the Longs appealed. See Long v. Internal Revenue Service, 596 F.2d 362 (9th Cir. 1979), cert. denied, 446 U.S. 917, 100 S.Ct. 1851, 64 L.Ed.2d 271 (1980).
While this appeal was pending, the Longs brought a second FOIA suit against the IRS to obtain documents showing the layout of TCMP tapes. Long v. IRS, No. C76-910S (W.D.Wash.1976). The IRS turned over certain documents and moved to dismiss the case as moot. The district court denied the motion to dismiss and ordered discovery into the extent of the IRS's search for records. After discovery, the Longs obtained copies of core record layouts showing that IRS had prepared for the BEA copies of TCMP tapes for Phase III, Cycles 1-5 with the taxpayers' individual identities deleted. 2
Having discovered the existence of these edited tapes, the Longs requested copies of these tapes from the BEA in September 1977. The BEA Director denied the request on the ground that FOIA's Exemption 3 and 26 U.S.C. § 6103 barred disclosure. The agency also informed the Longs that the district court's decision in the Longs' first suit against the IRS barred disclosure.
On March 22, 1978, the Longs filed the present FOIA suit against the BEA, seeking (1) a declaration that they were entitled to inspect and copy the requested records, (2) a permanent injunction against the BEA to prevent its withholding of TCMP data, (3) expedition of proceedings pursuant to 5 U.S.C. § 552(a)(4)(D), and (4) attorney fees and costs pursuant to 5 U.S.C. § 552(a)(4) (E).
The BEA's answer asserted, among other things, that plaintiffs' claims were barred by collateral estoppel, but did not specify a particular FOIA exemption as an affirmative defense.
After preliminary discovery, the Longs moved for partial summary judgment on February 20, 1979, seeking a determination that the edited tapes were disclosable and an injunction requiring the BEA to produce the Phase III, Cycle 1-5 TCMP tapes in the BEA's possession. The motion was based on the pleadings, answers to interrogatories, request for admissions, and the first declaration of Susan Long.
On March 26, 1979, the BEA filed its opposition to the motion along with two affidavits: the one of James Swartzwelder, planning officer of the IRS Research and Operations Analysis Division and chairperson of the TCMP, and the other of Robert Parker, Chief of the National Income and Wealth Division of the BEA.
On May 2, 1979, while the motion was pending, this court rendered its decision in Long v. Internal Revenue Service, 596 F.2d 362 (9th Cir. 1979), the Longs' first action. We held that the TCMP tapes were "records" under the FOIA and were not categorically exempt under FOIA's Exemption 3 and 26 U.S.C. § 6103, as amended by the 1976 Haskell Amendment. The IRS's argument that deletion of direct identifying data was an unreasonable burden was squarely rejected. The judgment of the district court was vacated and the cause remanded for a determination whether "disclosure of TCMP source data (would entail) a significant risk of indirect identification (of individual taxpayers)." Id. at 367. In a footnote, the court noted:
Some useful information which does not identify particular taxpayers may nonetheless be exempt from disclosure under the FOIA by virtue of some other exemption. For example, exception 7(E) permits withholding of investigatory records compiled for law enforcement purposes which disclose investigative techniques and procedures. However, in this case the IRS has not raised any other exemptions which might prevent disclosure of this information.
On June 7, 1979, the Longs filed a supplemental motion for summary judgment in the BEA proceedings, arguing that the Ninth Circuit's IRS decision compelled release of the BEA's edited tapes and that, although Parker's affidavit filed an opposition to their motion for summary judgment alluded to a potential indirect identifier issue, the affidavit should be stricken under Fed.R.Civ.P. 56(e) because information in the affidavit was not based on the affiant's personal knowledge of the issue. The BEA responded and again argued that the motion should be held in abeyance, this time because a petition for rehearing was likely to be filed in the IRS case.
The summary judgment motion was continued by several orders of the district court. On September 7, 1979, the court entered an order taking the motion under advisement.
In September 1979, the IRS filed a petition for rehearing, and, taking heart in footnote 6 of our IRS decision, argued that FOIA's Exemption 7(E), 5 U.S.C. § 552(b)(7)(E), should bar release of the TCMP data. This court concluded that the IRS's "law enforcement" argument was untimely and denied the petition on September 27, 1979. The IRS's suggestion for rehearing en banc was denied on November 9, 1979.
In November 1979, the Longs instituted procedures to depose Robert Parker regarding matters stated in his affidavit. The BEA countered by moving for a protective order, asserting this time that the IRS was likely to petition for certiorari in the IRS case and that the deposition would be a waste of time and money. The district court declined to act on the motion, and in March 1980, Parker was deposed. His deposition showed that he had no personal knowledge as to whether taxpayers could be indirectly identified if TCMP data were released and that he only had a general understanding or assumption that the IRS did not want to disclose the data, because "there (was) a possibility of people finding out (the) identit(ies) of individual taxpayers "
The IRS petitioned for certiorari, dropping its § 6103 defense, but seeking an order directing the Ninth Circuit to remand the case to the district court with instructions to consider Exemptions 2 and 7(E) of the FOIA, 5 U.S.C. § 552(b) (2), (7)(E). On April 28, 1980, the Supreme Court denied the petition and the matter was returned to the district court for further proceedings. See Internal Revenue Service v. Long, 446 U.S. 917, 100 S.Ct. 1851, 64 L.Ed.2d 271 (1980).
In late August 1980, the IRS moved to amend its answer in the IRS proceedings to raise three new defenses to disclosure: Exemption 2; Exemption 7(E); and the district court's inherent equity power to refuse disclosure even in the absence of a specific FOIA exemption. The motion was granted on October 17, 1980. The BEA did not move to amend its answer at this time, nor did it seek to consolidate the IRS case with the BEA proceedings.
On December 31, 1980, some 33 months after the filing of the complaint in the BEA case and 22 months after the filing of the Longs' motion for partial summary judgment, the district court granted the Longs' motion for partial summary judgment, determining that Long v. Internal Revenue Service, 596 F.2d 362 (9th Cir. 1979), was controlling. On January 12, 1981, the court entered an injunction ordering the BEA to release copies of the TCMP tapes by January 30, 1981.
On January 12, 1981, apparently before receiving notification of the district court's injunctive order, the BEA filed a "Motion for Reconsideration and for Stay of Proceedings or Amendment." By this motion, the BEA requested that the court reconsider and vacate its order of December 31, 1980 and hold further BEA proceedings in abeyance pending resolution of the IRS case then on remand to the district court. Although not submitting a proposed answer at the time, the BEA as a second alternative requested that it be permitted to amend its answer as the IRS had done previously.
On January 15, 1981, the district court entered a minute order denying the BEA's January 12 motion. The order did not directly refer to the BEA's alternative request that it be permitted to amend; however, denial of that request was implicit in view of the district court's denial of the other aspects of the BEA's motion.
The parties thereafter stipulated to a February 6, 1981 release date, thus extending the January 30 deadline imposed by the district court on January...
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