Nosal v. Internal Revenue Serv.

• Decision Date: 03 March 2021
• Docket Number: Civil Action No. 19-1359 (RC)
• Citation: 523 F.Supp.3d 72
• Parties: Chester W. NOSAL and Natascha Nosal, Plaintiffs, v. INTERNAL REVENUE SERVICE, Defendant.
• Court: U.S. District Court — District of Columbia

523 F.Supp.3d 72

Chester W. NOSAL and Natascha Nosal, Plaintiffs,

v.INTERNAL REVENUE SERVICE, Defendant.

Civil Action No. 19-1359 (RC)

United States District Court, District of Columbia.

Signed March 3, 2021

James R. Klimaski, Klimaski & Associates, P.C., Washington, DC, for Plaintiffs.

Erin Faith Darden, Joseph E. Hunsader, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

RUDOLPH CONTRERAS, United States District Judge

I. INTRODUCTION

In this case brought under the Freedom of Information Act ("FOIA"), Plaintiffs, taxpayers Chester M. Nosal and Natascha Nosal, seek records from Defendant, the Internal Revenue Service ("IRS"), pertaining to their taxes. Plaintiffs submitted a FOIA request for three categories of records: past tax forms, audit records, and records related to any whistleblower claims raised against them. Plaintiffs take no issue with the IRS's treatment of the first two categories of records. With respect to the whistleblower claims, however, the IRS asserts a so-called Glomar response, in which it refuses to confirm or deny whether any records exist. Plaintiffs maintain that the IRS cannot justify this response. The IRS has moved for summary judgment, arguing that it has fulfilled its obligations under FOIA with respect to all three categories of documents. Should the Court wish to review more evidence, the IRS has filed a motion for leave to file documents for in camera review that would further support the agency's Glomar response. Additionally, Plaintiffs have filed a motion for a Vaughn index of any in camera submission. For the reasons stated below, the Court grants the IRS's motion for summary judgment and denies as moot the other pending motions.

II. BACKGROUND

A. Plaintiffs’ FOIA Request

Plaintiffs are individual taxpayers who reside in Florida. Compl. ¶ 3, ECF No. 1. In early 2019, they submitted a FOIA request for three categories of records, offering to pay up to $2,000 for copying costs. See id. ¶¶ 5–6. First, Plaintiffs requested "[w]histle-blower claims and Form 211s¹ ... related to alleged violations of the tax law by Chester W. Nosal ... and/or Natascha Nosal." Compl. Ex. A at 2, ECF No. 1-1.² Second, Plaintiffs asked for "1099s ... filed with the IRS for years 2000-2006 allegedly reporting alleged income by Chester W. Nosal from Capacitive Deionization Technology Systems, Inc." Id. Third, Plaintiffs requested records related to the "IRS Tax Audit Investigation ... initiated on or about January 3, 2017 concerning [Plaintiffs’] Form 1040." Id. Following the IRS's example, the Court refers to these three categories of documents as Item 1, Item 2, and Item 3 respectively.

The IRS responded to Plaintiffs’ request by advising "that such records, to the extent that they exist, would be confidential and may not be disclosed unless specifically authorized by law." Compl. Ex. B at 3, ECF No. 1-2. With respect to the requested 1099s, the IRS stated that Plaintiffs should use the "routine procedure ... used to request information returns." Id. The agency closed Plaintiffs’ request as imperfect and took no further action. Id. Plaintiffs then filed an administrative appeal, arguing that the agency failed to conduct an adequate search for responsive records and that the IRS failed to justify its withholding of responsive documents. See Compl. Ex. C, ECF No. 1-3. After receiving a response from the agency stating that it may take several weeks to evaluate the appeal, see Compl. Ex. D, ECF No. 1-4, Plaintiffs filed this lawsuit.

After Plaintiffs filed their Complaint, the IRS reevaluated its response to the FOIA request. With respect to Item 1, the IRS continues to assert a Glomar response, refusing to confirm or deny the existence or nonexistence of responsive records. IRS's Statement of Undisputed Material Facts ("IRS's Statement of Facts") ¶ 17, ECF No. 19-1. For Item 2, the IRS searched for responsive documents, but determined that due to the age of the requested 1099s, any responsive records would have been destroyed under the IRS's record retention policies. See id. ¶¶ 85–101. As for Item 3, the IRS produced 925 pages of responsive records with minor redactions applied pursuant to FOIA Exemptions 3 and 7(E). See id. ¶¶ 122–24. The IRS now moves for summary judgment based on its claimed exemptions and the adequacy of its search for responsive records. See IRS's Mem. Supp. Mot. Summ. J. ("IRS's Mot."), ECF No. 19-2. The IRS also filed a motion for leave to file documents for in camera review, in case the Court is not satisfied with the submission made on the public docket. See IRS's Mot. for Leave to File, ECF No. 20. Plaintiffs filed a motion for a Vaughn index of any materials submitted for in camera review. See Pls.’ Mot. for Vaughn Index, ECF No. 25.³

B. Materials Supporting the IRS's Motion for Summary Judgment

In support of its motion for summary judgment, the IRS submitted two declarations. First, Joshua R. Simmons, an attorney in Branch 6 of the Office of the Associate Chief Counsel, submitted a declaration outlining the administrative processing of Plaintiffs’ FOIA request, the search for responsive records, the IRS's whistleblower claim process, and the reasons underlying the IRS's Glomar response and claimed exemptions. See generally Simmons Decl. The declaration explains that the IRS makes its Glomar response for Item 1 in conjunction with FOIA Exemptions 3, 5, 6, 7(C), and 7(D). See id. ¶¶ 66–89. For Item 2, the Simmons Declaration recounts the agency's search for responsive records within the IRS's Integrated Data Retrieval System and Federal Records Center campuses, where older documents are housed. See id. ¶¶ 33–44. Mr. Simmons explains that under IRS record retention policies, the requested records would have been destroyed and that "there are no other locations likely to contain records responsive to item (2) of Plaintiffs’ request." Id. ¶ 43. Finally, with respect to Item 3, Mr. Simmons details the search for and production of records relating to the examination of Plaintiffs’ income tax return. See id. ¶¶ 19–32. His declaration explains that, of the 925 pages produced, six pages of the production were "withheld in part because those pages contain Discriminant Index Function (DIF) score information that is exempt from disclosure under FOIA exemptions 3, in conjunction with 26 U.S.C. § 6103(b)(2) and (e)(7), and 7(E)." Id. ¶ 30.

The IRS also submitted the declaration of Vikramsing R. Barad, an attorney serving as a Senior Technician Reviewer in Branch 6 of the Office of the Associate Chief Counsel. Barad Decl. ¶ 1, ECF No. 19-7. Mr. Barad provides an explanation of Discriminant Index Function ("DIF") scores, which the IRS uses to determine whether a tax return should be selected for examination, and the reasons the IRS does not publicly disclose them. See id. ¶¶ 7–9. His declaration provides support for the IRS's claims of Exemption 3, in conjunction with 26 U.S.C. § 6103(b)(2), and Exemption 7(E) related to DIF scores. See id. ¶¶ 10–15. Mr. Barad also provides further support for the Glomar response pursuant to his "delegated authority pursuant to DO 11-2 and the DO 11-2 Reference Chart under 26 U.S.C. § 6103(e)(7)⁴ to determine whether disclosure of return information ... would seriously impair tax administration." Id. ¶ 22. His declaration states that he has "determined that any whistleblower records that may exist and the existence of such records in this case may be withheld under § 6103(e)(7) (in conjunction with FOIA exemption 3)." Id.

III. LEGAL STANDARD

The purpose of FOIA "is 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). FOIA requests thus provide individuals with the opportunity to obtain access to federal agency records, except to the extent that such records are protected from public disclosure by one of nine exemptions. See 5 U.S.C. § 552(a)(3), (a)(4)(B), (b), (c) ; see also NLRB v. Sears, Roebuck & Co. , 421 U.S. 132, 136, 95 S.Ct. 1504, 44 L.Ed.2d 29 (1975) ; Judicial Watch, Inc. v. U.S. Dep't of Def. , 847 F.3d 735, 738 (D.C. Cir. 2017). Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see, e.g. , Alyeska Pipeline Serv. Co. v. U.S. EPA , 856 F.2d 309, 314 (D.C. Cir. 1988) (concluding that unsubstantiated claims of factual controversies cannot defeat a summary judgment decision in a FOIA case). FOIA cases are typically resolved through summary judgment because in FOIA cases there is rarely any factual dispute; instead, these cases center on how the law is applied to the records at issue. See Pinson v. U.S. Dep't of Justice , 236 F. Supp. 3d 338, 352 (D.D.C. 2017) ("FOIA cases typically and appropriately are decided on motions for summary judgment." (quoting Defs. of Wildlife v. U.S. Border Patrol , 623 F. Supp. 2d 83, 87 (D.D.C. 2009) )); see also Gray v. Southwest Airlines Inc. , 33 Fed. App'x 865, 868 n.1 (9th Cir. 2002) (citing Schiffer v. FBI , 78 F.3d 1405, 1409 (9th Cir. 1996) ). Accordingly, in a FOIA suit, summary judgment is appropriate "if no material facts are genuinely in dispute and the agency demonstrates ‘that its search for responsive records was adequate, that any exemptions claimed actually apply, and that any reasonably segregable non-exempt parts of records have been disclosed after redaction of exempt information.’ " Prop. of the People, Inc. v. Off. of Mgmt. and Budget , 330 F. Supp. 3d 373, 380 (D.D.C. 2018) (quoting Competitive Enter. Inst. v. EPA , 232 F. Supp. 3d 172, 181 (D.D.C. 2017) ).

IV. ANALYSIS

The three Items requested by Plaintif...