Tax Analysts v. US DEPT. OF JUSTICE, Civ. A. No. 85-1878 SSH.

• Decision Date: 15 March 1991
• Docket Number: Civ. A. No. 85-1878 SSH.
• Citation: 759 F. Supp. 28
• Parties: TAX ANALYSTS, Plaintiff, v. UNITED STATES DEPARTMENT OF JUSTICE, Defendant.
• Court: U.S. District Court — District of Columbia

759 F. Supp. 28

TAX ANALYSTS, Plaintiff, v. UNITED STATES DEPARTMENT OF JUSTICE, Defendant.

Civ. A. No. 85-1878 SSH.

United States District Court, District of Columbia.

March 15, 1991.

William A. Debrovir, Washington, D.C. and Thomas F. Field, Arlington, Va., for plaintiff.

Michael J. Kearns, U.S. Dept. of Justice, Washington, D.C., for defendant.

OPINION

STANLEY S. HARRIS, District Judge.

This matter is before the Court on plaintiff's motion for an award of attorney's fees, pursuant to the Freedom of Information Act (FOIA), 5 U.S.C.A. § 552(a)(4)(E). Also before the Court is defendant's motion to strike plaintiff's supplemental memoranda and for sanctions.

On July 31, 1986, this Court granted summary judgment in favor of the defendant. Tax Analysts v. United States Dept. of Justice, 643 F.Supp. 740 (D.D.C. 1986). That decision subsequently was reversed by our Court of Appeals. Tax Analysts v. United States Dept. of Justice, 845 F.2d 1060 (D.C.Cir.1988). The Supreme Court affirmed the reversal on June 23, 1989. United States Dept. of Justice v. Tax Analysts, 492 U.S. 136, 109 S.Ct. 2841, 106 L.Ed.2d 112 (1989). The facts relevant to the underlying action have been set forth in all three published opinions and need not be repeated here.

The awarding of attorney's fees in a FOIA action is not automatic. Cuneo v. Rumsfeld, 553 F.2d 1360, 1367 (D.C.Cir. 1977). Rather, a trial court must decide, first, whether a party is eligible for an award of attorney's fees and, if so, whether the party is entitled to such an award. Church of Scientology of California v. Harris, 653 F.2d 584, 587 (D.C.Cir.1981). A party is eligible for attorney's fees if it has "substantially prevailed" in the action. 5 U.S.C.A. § 552(a)(4)(E); Church of Scientology, 653 F.2d at 587. It is clear, and in fact defendant concedes, that plaintiff has substantially prevailed in this action. Thus, a detailed analysis of plaintiff's eligibility is not warranted here, and the Court moves on to the question of plaintiff's entitlement to fees.

"Courts award fees only when an award would serve FOIA's purposes of encouraging disclosures that are in the public interest and discouraging an agency's unreasonable withholding of information." Alliance for Responsible CFC Policy, Inc. v. Costle, 631 F.Supp. 1469, 1470 (D.D.C.1986). In deciding whether an award of attorney's fees is appropriate, the Court must consider at least four factors: "(1) the benefit to the public, if any, derived from the case; (2) the commercial benefit to the complainant; (3) the nature of the complainant's interest in the records sought; and (4) whether the government's withholding of the records had a reasonable basis in law." LaSalle Extension University v. Federal Trade Commission, 627 F.2d 481, 483 (D.C.Cir.1980). The Court considers each factor in turn.

"The `public benefit' criterion `speaks for an award of attorneys' fees where the complainant's victory is likely to add to the fund of information that citizens may use in making vital political choices.'" Fenster v. Brown, 617 F.2d 740, 744 (D.C. Cir.1979) (quoting Blue v. Bureau of Prisons, 570 F.2d 529 (5th Cir.1978)). After extensive reflection, the Court concludes that while some public benefit is derived from this case, the benefit is minimal. The Court has considered that Tax Analysts is a nonprofit organization that disseminates news and information in the area of federal tax law. Its principal publication, Tax Notes, has a readership of 3,000 subscribers, consisting primarily of tax lawyers, accountants, and economists. While these persons certainly are not representative of the general public per se, they, as a well-informed group, can and do provide an important service to a fair percentage of taxpayers. Indeed, our Court of Appeals has noted that the legislative history to the FOIA amendments which authorized attorney's fees indicates a preference for awarding fees to news organizations. See Fenster, 617 F.2d at 742 n. 4 (citing S.Rep. No. 854, 93d Cong., 2d Sess. 19 (1974), reprinted in House Comm. on Gov't Operations & Senate Comm. on the Judiciary, 94th Cong., 1st Sess., Legislative History of the Freedom of Information Act Amendments of 1974, pt. 1, at 171 (Joint Comm.Print 1975)), U.S.Code Cong. & Admin.News 1974, 6267. However, the public benefit of plaintiff's scholarly publications should not be overstated. Its readership is not terribly wide, and there are several other publications that focus on tax issues.

Even more importantly, this case is different from most other FOIA cases involving news organization complainants. In this case, the complainant requested copies of district court decisions, which is information already in the public domain. While the Court of Appeals found that that fact was not legally relevant to the merits of the action, it is relevant in evaluating the public benefit in the attorney's fees context. As stated above, there is a benefit to having organizations such as Tax Analysts disseminate information. It logically follows that there is also some benefit to receiving the information soon after individual courts issue their decisions. 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. There is no question that, even prior to the institution of this litigation, the public had the benefit of access to all or most of this information, albeit not always in the preferred timely fashion. Thus, the Court concludes that while the public does stand to benefit from this litigation, that benefit is less than overwhelming. Cf. Alliance for Responsible CFC Policy, 631 F.Supp. at 1471 (in discounting public benefit derived from the case, court noted that plaintiff acknowledged that no new information was disclosed).

The Court now turns to the second and third factors — the commercial benefit to the complainant and the nature of the complainant's interest in the documents sought — which are closely related. See Fenster, 617 F.2d at 743. "The FOIA was fundamentally designed to inform the public and not to benefit private litigants." Cuneo, 553 F.2d at 1368. Thus, "when a complainant seeks disclosure of information for commercial benefit, an award of fees is generally inappropriate." Fenster, 617 F.2d at 743. Moreover, even if a party was not motivated by commercial gain, the Court may consider other personal motives that would serve as an incentive "to pursue the release of documents regardless of the availability of fees under FOIA." Simon v. United States, 587 F.Supp. 1029, 1032 (D.D.C.1984). "FOIA suits which are motivated by scholarly, journalistic, or public interest concerns are the proper recipients of fee awards." Alliance for Responsible CFC Policy, 631 F.Supp. at 1471. However, "the touchstone of a court's discretionary decision under section 552(a)(4)(E) must be whether an award of attorney fees is necessary to implement the FOIA." Nationwide Bldg. Maintenance, Inc. v. Sampson, 559 F.2d 704, 715 (D.C.Cir.1977).

Tax Analysts argues that, in instituting this litigation, it had no expectation of commercial gain, and that, indeed, it made clear that it was securing easy access to the district court decisions for all tax publications. It also points out that it encouraged defendant to charge Tax Analysts the court clerks' 50 cents per copy, rather than defendant's 10 cents per copy. These factors certainly weigh in plaintiff's favor. However, plaintiff also stressed at various points during the litigation that attempting to obtain the decisions from their sources was frustrating, cumbersome, and time consuming. And, as Justice Blackmun pointed out, "the result of its now-successful effort in this litigation is to impose the cost of obtaining the court orders and opinions upon the Government and thus upon taxpayers generally." Tax Analysts, 109 S.Ct. at 2854 (Blackmun, J., dissenting).

Thus, when the Court looks more closely at this case, it is evident that plaintiff was not motivated simply by altruistic instincts, but rather by its desire for efficient, easy access to decisions. The information was already available, and would be disseminated in any event. Tax Analysts simply wished to make its job easier. Whether or not this should be considered a commercial interest, it certainly is a personal interest which could motivate plaintiff to bring this lawsuit absent the additional incentive of an award of attorney's fees.

The final factor which the Court must consider is whether the Government's withholding of the district court decisions had a reasonable basis in law. It would be rather disingenuous for this Court to hold that the Government had no reasonable basis for its position, considering that this Court, in a written opinion, decided the case in the Government's favor. The Court of Appeals, "finding no clear precedent on the issue," wrote an opinion clarifying the law for this Circuit and noting, nevertheless, that the cost shifting result sought by Tax Analysts was "not the commonly perceived purpose of the FOIA." Tax Analysts, 845 F.2d at 1065-66. Moreover, it is doubtful that the Supreme Court would have granted certiorari and written an opinion in the case if the Government's position had not been at least reasonable. Certainly Justice Blackmun opined that "the language of the statute is not that clear or conclusive on the issue and, more important, ... the result the Court reached cannot be one that was within the intent of Congress when the FOIA was enacted." Tax Analysts, 109 S.Ct. at 2853 (Blackmun, J., dissenting). Finally, the fact that the Government, in addition to making legal arguments, also appealed to the common sense of the jurists in the course of this litigation does not mean that its position lacked a reasonable basis in law, as plaintiff implies.

While the Court is required to include the four factors set forth...