MacPherson v. I.R.S.

• Decision Date: 24 October 1986
• Docket Number: No. 85-2576,85-2576
• Parties: -6101, 86-2 USTC P 9761 Donald W. MacPHERSON, Plaintiff-Appellant, v. INTERNAL REVENUE SERVICE and Department of Justice, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 479

803 F.2d 479

58 A.F.T.R.2d 86-6101, 86-2 USTC P 9761

Donald W. MacPHERSON, Plaintiff-Appellant, v. INTERNAL REVENUE SERVICE and Department of Justice,

Defendants-Appellees.

No. 85-2576.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 14, 1986.

Decided Oct. 24, 1986.

Donald W. McPherson, MacPherson & McCarville, P.A., Phoenix, Ariz., for plaintiff-appellant.

Jonathan Cohen, U.S. Dept. of Justice, Washington, D.C., for defendants-appellees.

Appeal from the United States District Court for the District of arizona.

Before GOODWIN, HUG and WIGGINS, Circuit Judges.

WIGGINS, Circuit Judge:

Plaintiff Donald W. MacPherson (MacPherson) appeals from a summary judgment entered by the district court on his claims that the IRS violated his rights under the Privacy Act, 5 U.S.C. Sec. 552a(b), (e)(1), and (e)(7) (1982). We affirm.

FACTS

The parties have detailed their respective versions of the facts at length in their briefs. Only a few facts, however, are relevant to the issue presented in this appeal, and those are undisputed.

Over the course of several years in the early 1980's, the IRS conducted surveillance of individuals and organizations it felt were connected with the "tax protester" movement. As part of this surveillance, IRS agents anonymously attended several conferences and conventions at which MacPherson was a speaker. The agents took notes of MacPherson's speeches and purchased tapes (later transcribed) of these speeches that were for sale by the sponsoring organizations. These notes and tapes were maintained in a "Tax Protest Project File" in the Phoenix and Houston district offices of the IRS. The materials in the file were later distributed to IRS offices in Denver, Austin, and Fort Worth, to the Department of Justice, and to third parties (defendants and counsel in a criminal trial).

The surveillance was intended to identify to the IRS the leaders of the tax protest organizations and to determine current tax protester strategies. Investigation of several specific individuals has been initiated as a result of the surveillance at issue. The surveillance did not reveal any illegal conduct by MacPherson, and MacPherson is not suspected or accused of any past, present, or anticipated illegal conduct or of the advocacy of illegal acts or violence.

On learning of the IRS file materials from an unidentified third party, MacPherson filed suit alleging seven counts of violation of the Privacy Act, 5 U.S.C. Sec. 552a. After extensive discovery, MacPherson and the IRS filed cross-motions for summary judgment on three of the counts, involving maintenance of records of First Amendment activities, 5 U.S.C. Sec. 552a(e)(7), maintenance of records irrelevant to agency purposes, 5 U.S.C. Sec. 552a(e)(1), and improper disclosure of records, 5 U.S.C. Sec. 552a(b). The district court denied MacPherson's motion and granted the government's motion. MacPherson voluntarily dismissed the remaining counts and timely appealed. This court has jurisdiction under 28 U.S.C. Sec. 1291 (1982).

STANDARD OF REVIEW

This court reviews a grant of summary judgment de novo. Lojek v. Thomas, 716 F.2d 675, 677 (9th Cir.1983). We must determine whether there is any genuine issue of material fact and whether the substantive law was correctly applied. Id.

DISCUSSION

Among its various provisions, the Privacy Act prohibits government agencies from collecting and maintaining certain kinds of information about individuals except under certain circumstances. The provision involved here, section 552a(e)(7), ¹ states:

(e) Agency Requirements.--Each agency that maintains a system of records shall--

* * *

(7) maintain no record describing how any individual exercises rights guaranteed by the First Amendment unless expressly authorized by statute or by the individual about whom the record is maintained or unless pertinent to and within the scope of an authorized law enforcement activity[....]

Section 552a(a)(4) defines a record as:

any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his education, financial transactions, medical history, and criminal or employment history and that contains his name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph.

Section 552a(a)(5) defines a "system of records" as:

a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual[....]

A. Applicability of Subsection (e)(7)'s General Prohibition

Before we may address the issue of the "law enforcement activity" exception, we must determine whether the materials in question fall within the general proscription of section (e)(7): are they records kept by an agency that maintains a system of records? The materials involved here clearly constitute "records": they contain MacPherson's name and include actual tape recordings of his voice. The parties agree that the government records describe how MacPherson "exercises rights guaranteed by the First Amendment." It is also undisputed here that the IRS and the Justice Department are each an agency that maintains "a system of records."

The defendants contend, however, ² that the records do not fall within the scope of section (e)(7) because the records are not incorporated into the agencies' systems of records; that is, they are not traceable or retrievable by MacPherson's name or other identifying particular. Unlike many provisions of the Privacy Act, however, section (e)(7)'s coverage is not limited to records that are in a "system of records" traceable by the individual's name or some other characteristic. Cf., e.g., 5 U.S.C. Sec. 552a(a)(5). Section (e)(7) requires only that the record be maintained by an agency that keeps a system of records, not that the record be a part of that system. See Albright v. United States, 631 F.2d 915, 918-20 (D.C.Cir.1980); see also Clarkson v. IRS, 678 F.2d 1368, 1372-77 (11th Cir.1982). The Albright and Clarkson opinions examine the language, history, and purpose of section (e)(7) at length, and we see no need to repeat their analysis here. We agree with their reasoning and with their conclusion that records such as those involved in this case fall within the general proscription of section (e)(7) despite a lack of incorporation into an agency's system of records. A contrary conclusion would allow government agencies to evade the section's prohibition simply by keeping individual records in a collective file untraceable by name but identifiable by nature and content of First Amendment exercise. Such a practice clearly goes against the spirit of the Privacy Act in general and section (e)(7) in particular. Because this is the only disputed issue with regard to the applicability of the general proscription of section (e)(7), we conclude that the records at issue are within that proscription and we proceed to consider its exceptions.

B. Applicability of Law Enforcement Purposes Exception

The government contends that section (e)(7)'s general proscription is inapplicable to the records in question because they are "pertinent to and within the scope of an authorized law enforcement activity." ³ This presents a question of first impression in this circuit.

The district court concluded that:

the essential question with respect to the exemption, subsection (e)(7), is whether the investigation record is relevant to an authorized investigation and that there is no requirement that the investigation relate to a specific criminal act or to a specific individual.

Under this standard, the district court found that the records fall within the exception. ⁴

MacPherson argues that "law enforcement activities" within section (e)(7) must involve investigation of a specific violation of the law, and that the IRS thus should not have kept records of his speeches after it became aware that neither he nor the speeches were involved with or advocated illegal activity. He acknowledges that the IRS agents were entitled (perhaps even obligated) to attend the conferences and conventions in issue and determine whether anyone there broke the law, admitted breaking the law in the past, or advocated breaking the law in the future. Having done so and having determined that no one was doing these things, however, MacPherson argues that the agents and the agency were forbidden by section (e)(7) from collecting, maintaining, or disseminating records of the participants' exercise of their First Amendment rights.

The language of the statute itself provides little guidance in interpreting the law enforcement exception to section (e)(7). The statute's definitions do not include the term "law enforcement activities," and the phrase does not appear anywhere else in the statute. The IRS invites the court to look to the "law enforcement purposes" exception to the Freedom of Information Act (FOIA), 5 U.S.C. Sec. 552(b)(7), for help in interpreting the language in section (e)(7). Materials are exempt from compelled disclosure under the FOIA if they are "investigatory records compiled for law enforcement purposes" and meet certain other requirements. This circuit has held that an agency with a clear law enforcement mandate may invoke this FOIA exemption if it establishes a "rational nexus" between its law enforcement duties and the document for which the exemption is claimed. See, e.g., Binion v. United States Department of Justice, 695 F.2d 1189, 1194 (9th Cir.1983).

Although one court has analogized the "law enforcement" provisions of the FOIA and the Privacy Act, see Clarkson, 678 F.2d at 1374 n. 10, the different purposes of the two statutes and the two exceptions counsel against such an analogy. The FOIA is intended to promote government disclosure of...