Taylor v. U.S. Treasury Dept.

• Decision Date: 12 November 1997
• Docket Number: No. 97-50021,97-50021
• Citation: 127 F.3d 470
• Parties: -7721, 97-2 USTC P 50,914 Byron L. TAYLOR, Plaintiff-Appellant, v. UNITED STATES TREASURY DEPARTMENT, Internal Revenue Service, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 470

127 F.3d 470

80 A.F.T.R.2d 97-7721, 97-2 USTC P 50,914

Byron L. TAYLOR, Plaintiff-Appellant, v. UNITED STATES TREASURY DEPARTMENT, Internal Revenue Service Defendant-Appellee.

No. 97-50021.

United States Court of Appeals Fifth Circuit.

Nov. 12, 1997.

Byron L. Taylor, Church Point, LA, pro se.

Joan I. Oppenheimer, Teresa Ellen McLaughlin, U.S. Dept. of Justice, Tax Division, Appellate Section, Washington, DC, for Defendant-Appellee.

Appeal from the United States District Court for the Western District of Texas.

Before KING and JONES, Circuit Judges, and WERLEIN, ^* District Judge.

PER CURIAM:

Plaintiff-appellant Byron L. Taylor appeals the district court's dismissal of his claims for injunctive relief and declaratory judgment against defendant-appellee the United States Department of the Treasury, Internal Revenue Service. We affirm the dismissal, but remand for entry of a modified judgment dismissing Taylor's Privacy Act claims without prejudice.

I. BACKGROUND

This case arises out of the Internal Revenue Service's ("IRS") denial of a series of requests for information made by Taylor under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, and the Privacy Act of 1974, 5 U.S.C. § 552a.

In a letter to the IRS Compliance Center in Austin, Texas dated September 14, 1995, Taylor requested a number of documents pertaining to his tax liability from 1984 through 1987 under the FOIA and the Privacy Act. Taylor identified the documents requested by tax period, transaction code, document locator number, and, where applicable, date. Taylor also requested that the IRS send him copies of documents fitting the following descriptions if they were not included among the specific documents that he listed:

(1) "all documents, letters, notices, etc., and all supporting documents which activated the CAF (Centralized Authority File) code on [Taylor's] IMF Transcript Specific for the tax periods 1984, 1985, 1986, and 1987;"

(2) "all documents and supporting documents which constitute the summary record of assessment for [Taylor];" and

(3) "any documents which indicate the mailing address of [Taylor] to be 1900 Simler Ave., Box 7038, Big Spring, Texas 79720-7701."

The IRS replied with a letter dated September 26, 1995 stating that Taylor's request could not be honored under the FOIA because it did not comport with regulatory requirements promulgated under the FOIA. The IRS's letter advised that a proper FOIA request must include, among other things, proof of the requester's identity, the requester's social security number, and a firm commitment to pay search and copy costs.

Taylor resubmitted his request by way of a letter dated September 28, 1995, this time including his social security number. The IRS responded in a letter dated November 7, 1995, which stated that Taylor's request still failed to meet regulatory requirements under the FOIA because it lacked proof of the requester's identity and a firm commitment to pay search and copy costs. The IRS's letter also stated that Taylor had failed to pay $187 in search fees associated with an unrelated FOIA request that Taylor made on June 18, 1995, and that subsequent requests would not be processed until receipt of the search fees for the previous request.

In a letter dated November 10, 1995 that incorporated his September 28, 1995 request by reference, Taylor provided proof of his identity and a "firm promise to pay all costs for locating and duplicating the requested records." The letter also voiced Taylor's objection to the IRS's refusal to process his September 28 request on the basis of his refusal to prepay fees for his June 18 request. In a letter dated December 4, 1995, the IRS responded that it had expended six hours searching for the records identified in Taylor's September 28 request, and that it would provide Taylor with copies of the requested documents upon receipt of $68 in search fees. The IRS indicated that search fees were calculated at a rate of "$17.00 for each hour or fraction thereof, and the first 2 hours [were] furnished at no charge."

In a letter dated December 15, 1995, Taylor responded to the IRS's December 4 letter, claiming that no statutory authority existed for requiring him to prepay search fees and complaining that the search fees he was being charged were too high. Taylor indicated that, if the IRS "insist[ed] on assessing these excessive charges," he intended to appeal the amount of the search fees. In a letter dated January 25, 1996, the IRS responded that § 531 of subsection 1272 of the Internal Revenue Manual required prepayment of applicable fees prior to release of records, and that § 553 of the same subsection established the search fee rate of $17.00 per hour or fraction thereof. The IRS also indicated that 31 C.F.R. § 1.7(f)(2) and (g)(2)(i) provided regulatory authority for the prepayment requirement and the search fee rate charged.

Taylor appealed the IRS's refusal to provide him with copies of the requested records without prepayment of search fees to the IRS in Washington, D.C. Taylor argued that (1) the IRS may require prepayment of search fees associated with a FOIA request only when the costs associated with a request exceed $250.00, and (2) search fees may not be charged on Privacy Act requests. The IRS denied this appeal.

Taylor commenced this suit on May 20, 1996, seeking an injunction compelling the IRS to produce the requested records, declaratory judgment, ¹ and attorney's fees, and he subsequently filed a motion for summary judgment. The IRS's response to the motion for summary judgment also contained a motion to dismiss. The district court denied Taylor's motion for summary judgment and granted the IRS's motion to dismiss, in part on the ground that the court lacked subject matter jurisdiction over Taylor's Privacy Act claims because Taylor had failed to exhaust his administrative remedies. ² Taylor filed a timely notice of appeal.

II. DISCUSSION

The district court concluded that it lacked subject matter jurisdiction over Taylor's claims under the Privacy Act because Taylor had failed to exhaust his administrative remedies by making a proper request under the Act. On this basis, the court dismissed those claims with prejudice. Taylor contends that he made a proper request under the Privacy Act, and thus exhausted his administrative remedies. In the alternative, he argues that the IRS is estopped from arguing that he failed to exhaust administrative remedies because it never informed him of any deficiency in the form of his Privacy Act request.

We conclude that the district court correctly held that Taylor failed to exhaust his administrative remedies, but erred in concluding that Taylor's failure to exhaust administrative remedies divested it of jurisdiction over his claims. However, the district court nonetheless properly dismissed Taylor's claim because he has failed to state a claim upon which relief can be granted. We address in turn the distinct issues of exhaustion, jurisdiction, and the propriety of dismissal on alternative grounds.

A. Exhaustion

The district court concluded that Taylor failed to make a proper request under the Privacy Act because his request did not comport with applicable regulatory requirements. Specifically, the court concluded that Taylor's Privacy Act request failed to comply with 31 C.F.R. § 1.26(d)(1)(iii), which requires that a request for records under the Privacy Act

[g]ive the name of the system or subsystem or categories of records to which access is sought, as specified in the "Privacy Act Issuances" published by the Office of the Federal Register and referenced in the appendices to this subpart[.]

31 C.F.R. § 1.26(d)(1)(iii). ³ The IRS also argues that Taylor failed to comply with additional regulations specific to the IRS's Privacy Act compliance procedure that require a requesting party to identify the location of the systems to be searched as well as the business address of the official designated in the access section of the Notice of Systems entry for the system printed in the Privacy Act Issuances. See 31 C.F.R. pt. 1, subpt. C app. B. Taylor's Privacy Act requests plainly did not comply with the above regulations because he did not list the systems that he wished to have searched, their location, and the business address of the systems officer provided in the Notice of Systems. ⁴

Taylor contends that the above regulatory requirements are inapplicable to his request because "the documents [he requested] are not identified in the Federal Register." Taylor is correct in stating that the particular documents that he has requested are not individually listed in the Federal Register; rather, the Federal Register lists systems of documents that may be searched. See, e.g., Privacy Act of 1974: Systems of Records, 60 Fed.Reg. 56,648 (1995). Taylor may determine from the descriptions of records and persons covered by the systems contained in the Federal Register which systems may contain the types of records that he seeks and make his requests accordingly. See 1 JUSTIN D. FRANKLIN & ROBERT F. BOUCHARD, GUIDEBOOK TO THE FREEDOM OF INFORMATION AND PRIVACY ACTS § 3.04 (2d ed.1997) (discussing a variety of methods for locating records available under the Privacy Act).

Taylor also argues that his Privacy Act request was sufficient because he provided the IRS with the transaction code, locator number, and date of issuance when available for the documents that he requested. Taylor contends that this constitutes a reasonable description of the requested documents, and a reasonable description is all that the Privacy Act requires. However, the cases upon which Taylor relies for this proposition address the description of documents required for FOIA requests rather than Privacy Act requests. See Marks v. United States Dep't of Justice, 578 F.2d 261 (9th Cir.1978); Reeves v. United States, Nos. CV-S-94-1291-DFL-PAN, CV-S-94-1292-DFL-JFM, 1994 WL 782235 (E.D.C...