Tax Analysts v. U.S. Dept. of Justice

• Decision Date: 02 June 1992
• Docket Number: No. 91-5082,91-5082
• Parties: , 20 Media L. Rep. 1531 TAX ANALYSTS, Appellant, v. UNITED STATES DEPARTMENT OF JUSTICE, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1092

965 F.2d 1092

296 U.S.App.D.C. 130, 20 Media L. Rep. 1531

TAX ANALYSTS, Appellant, v. UNITED STATES DEPARTMENT OF JUSTICE, Appellee.

No. 91-5082

United States Court of Appeals, District of Columbia Circuit.

Argued Dec. 10, 1991.

Decided June 2, 1992.

William A. Dobrovir, Washington, D.C., for appellant.

Jonathan S. Cohen, Atty., Dept. of Justice, with whom Shirley D. Peterson, Asst. Atty. Gen., Jay B. Stephens, U.S. Atty., Gary R. Allen and Kevin M. Brown, Attys., Dept. of Justice, Washington, D.C., were on the brief, for appellee.

Before MIKVA, Chief Judge, HARRY T. EDWARDS and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Chief Judge MIKVA.

MIKVA, Chief Judge:

Under the Freedom of Information Act, district courts "may" award attorney's fees and costs to members of the public who substantially prevail in FOIA litigation against the government. 5 U.S.C. § 552(a)(4)(E). In this case, the district court denied attorney's fees to appellant Tax Analysts which, after losing its FOIA case against the Justice Department in district court, prevailed in this Court and in the Supreme Court. Finding no abuse of discretion in the district court's decision, we affirm.

I

Tax Analysts publishes a weekly magazine, Tax Notes, which reports on federal tax law to a readership of tax attorneys, accountants and economists. As one of its regular features, Tax Notes provides summaries of recent federal-court decisions on tax issues. Tax Analysts also provides the full texts of those decisions in microfiche, and it publishes Tax Notes Today, a daily electronic data base that includes summaries and full texts of the federal-court tax decisions.

Twelve years ago, Tax Analysts filed a FOIA request asking the Justice Department to make available all district court tax decisions in the files of the Department's Tax Division. As a litigant in virtually all tax cases, the Tax Division receives copies of virtually all district court tax decisions. Tax Analysts had been unable quickly and consistently to obtain the tax decisions from the near 100 district courts throughout the country.

In 1985, after six years of fruitless negotiations with the Justice Department, Tax Analysts filed suit in district court, arguing that FOIA required the Department to give Tax Analysts access to the tax decisions in its files. The district court ruled in favor of the Justice Department, holding that the Department had not "improperly withheld" the tax decisions because those decisions are publicly available from the district courts that issue them. Tax Analysts v. United States Dep't of Justice, 643 F.Supp. 740 (D.D.C.1986). We reversed, finding that the tax decisions were "improperly withheld" because none of FOIA's disclosure exemptions permitted withholding the documents; we also ruled that the district court tax decisions in the Justice Department's files are "agency records" for purposes of FOIA. Tax Analysts v. United States Dep't of Justice, 845 F.2d 1060 (D.C.Cir.1988). In United States Dep't of Justice v. Tax Analysts, 492 U.S. 136, 109 S.Ct. 2841, 106 L.Ed.2d 112 (1989), the Supreme Court affirmed, holding that the district court tax decisions are "agency records" that were "improperly withheld."

After prevailing on the merits, Tax Analysts filed a petition for attorney's fees and costs in the district court. The court denied the request for attorney's fees, and Tax Analysts appealed.

II

Under FOIA, district courts "may assess against the United States reasonable attorney fees and other litigation costs reasonably incurred in any case under this section in which the complainant has substantially prevailed." 5 U.S.C. § 552(a)(4)(E). It is undisputed that Tax Analysts substantially prevailed and that the publisher is therefore eligible for attorney's fees. But a FOIA litigant seeking attorney's fees also "must show that he or she is 'entitled ' to an award." Weisberg v. United States Dep't of Justice, 745 F.2d 1476, 1495 (D.C.Cir.1984) (emphasis added). This Court has directed the district court to consider at least four criteria in determining whether a substantially prevailing FOIA litigant is entitled to attorney's fees: (1) the public benefit derived from the case; (2) the commercial benefit to the plaintiff; (3) the nature of the plaintiff's interest in the records; and (4) the reasonableness of the agency's withholding. See Weisberg, 745 F.2d at 1498; Cuneo v. Rumsfeld, 553 F.2d 1360, 1364 (D.C.Cir.1977); see also S.Rep. No. 854, 93rd Cong., 2d Sess. 17 (1974). The sifting of those criteria over the facts of a case is a matter of district court discretion, see Church of Scientology v. Harris, 653 F.2d 584, 590 (D.C.Cir.1981), and, despite Tax Analysts' arguments, we see no abuse of discretion here.

Considering the "public benefit" factor, the district court found that "while some public benefit is derived from this case, the benefit is minimal." 759 F.Supp. 28, 30 (1991). In favor of Tax Analysts, the district court observed that Tax Notes' readers "do provide an important service to a fair percentage of taxpayers," and that FOIA's legislative history "indicates a preference for awarding fees to news organizations." Id. But "the benefit of plaintiff's scholarly publications should not be overstated," the district court said, pointing out that Tax Notes' readership "is not terribly wide" and that several other publications focus on tax issues. Id. Even more important, in the district court's view, was the fact that Tax Analysts requested information already in the public domain. Although this Court and the Supreme Court found that fact to be irrelevant on the merits, the district court found it significant in the attorney's fees context. The fact that the information obtained was previously available publicly also distinguishes this case from most other FOIA cases involving news organizations, the district court said.

The district court acknowledged an advantage in receiving information about cases soon after they are decided. "However, in reality, the benefit of more prompt reporting of 25% of the district court decisions involving tax law is the only benefit the public can derive from this case." Id. Prior to the case, "the public had the benefit of access to all or most of this information, albeit not always in the preferred timely fashion." Id. The district court concluded, therefore, that the public benefit "is less than overwhelming." Id.

Tax Analysts takes issue with the district court's public-benefit analysis on two grounds; we find merit in neither. Tax Analysts asserts that the district court erred factually when it described the public benefit of disclosure as "prompt reporting of 25%" of district court tax decisions. The benefit was greater, in Tax Analysts' view, because obtaining 25% of the district court opinions in a timely manner had been much more difficult than the district court let on. But nothing Tax Analysts puts forward shows that there is a significant difference--indeed, any difference--between the district court's description and reality. Tax Analysts quotes, for example, from this Court's previous opinion: "securing the tax decisions rendered by the ninety-odd, far-flung federal district courts from their clerks' offices on any timely or regular basis has proven impossible." Tax Analysts, 845 F.2d at 1062-63. Tax Analysts underlines the word "impossible," as if to suggest that obtaining the opinions could not be done prior to Tax Analysts' victory. But the quote itself clearly refers to the impossibility of obtaining the opinions "on any timely or regular basis." That public benefit the district court recognized when it referred to Tax Analysts' success in assuring "prompt reporting of 25%" of district court tax opinions.

Tax Analysts also argues that the district court understated the public interest by ignoring the two public benefits we identified in our decision on the merits:

by providing meaningful access to the Tax Division's enforcement record, disclosure of practically unavailable opinions in which it has been a party may actually serve Congress' intent " 'to open agency action to the light of public scrutiny.' " Disclosure also serves the subsidiary FOIA purpose of providing public access to the storehouse of information that agencies gather in the course of government business.

Tax Analysts, 845 F.2d at 1066 n. 12. The district court, however, directly acknowledged the second of the two public interests when it referred to the benefit of providing Tax Notes ' readers access to the information that had been in the Tax Division's storehouse. See Tax Analysts, 759 F.Supp. at 30. Although the district court did not specifically mention the first public interest, it did make the key countervailing point--that district court tax decisions (and thus the Tax Division's enforcement record) were already in the public domain. We see no abuse of discretion in the district court's consideration of the first attorney's fees criteria.

As the district court pointed out, the factors of "commercial benefit" and "plaintiff's interest" are closely related and often considered together. See Tax Analysts, 759 F.Supp. at 30 (citing Fenster v. Brown, 617 F.2d 740, 743 (D.C.Cir.1979)). In summarizing the law on those factors, the district court correctly observed that " 'FOIA was fundamentally designed to inform the public and not to benefit private litigants.' " Id. (quoting Cuneo, 553 F.2d at 1368). FOIA's attorney's fees provision, to put it differently, was designed to lower the "often ... insurmountable barriers presented by court costs and attorney fees to the average person requesting information under the FOIA." Cuneo, 553 F.2d at 1363-64. Accordingly, when a litigant seeks disclosure for a commercial benefit or out of other personal motives, an award of attorney's fees is generally inappropriate. See Fenster, 617 F.2d at 743; La Salle Extension University v. FTC, 627...