defendant's Notice of Compliance, the Court granted the remainder of
defendant's motion for summary judgment regarding the adequacy of the
search by order dated August 26, 1998. On September 10, 1998, LaRouche
filed a Motion to Reconsider and Vacate the Court's August 26, 1998
With respect to the withheld documents, the Court granted a Consent
Order Concerning Vaughn Index on August 3, 1998 (that order was filed on
August 13, 1998). The Consent Order stipulated that Treasury would be
relieved of its obligation to prepare a Vaughn index of the grand jury
documents which are in the possession or control of the FBI and which are
the subject of another case pending before this Court, Lyndon LaRouche,
Jr. v. United States Department of Justice, Civil Action No. 90-2753
(D.D.C.) ("LaRouche v. Justice"). The Consent Order also stipulated that
the IRS shall process and either release or index the documents it had
withheld pursuant to FOIA exemption (b)(3) and Rule 6(e) of the Federal
Rules of Criminal Procedure. On September 11, 1998, the IRS submitted the
required Vaughn Index in which it renewed its motion for summary
judgment. On November 9, 1998, LaRouche filed a cross-motion for summary
judgment, arguing for disclosure of the withheld documents described in
defendant's Vaughn Index.
This case was reassigned from Judge Harold H. Greene to the undersigned
judge on September 9, 1999. On March 31, 2000, this Court 1) denied
plaintiff's Motion to Reconsider and Vacate the Court's August 26, 1998
Order, 2) granted in part and denied in part LaRouche's November 9, 1998
cross-motion for summary judgment, and 3) granted Treasury's motion to
strike a declaration presented in support of LaRouche's cross-motion for
On May 2, 2000, Treasury filed its Motion for Relief from Judgment.
Treasury asserts that the judgment entered on March 31, 2000, contravened
two earlier Orders of the Court which were issued by Judge Greene, one in
the instant case and one in a related case, and was contrary to
established law in one respect. LaRouche filed an opposition memorandum
on May 26, 2000. Also on May 26, 2000, Treasury filed a Notice of Appeal
from the Court's March 31, 2000 Order and Judgment. The Clerk transmitted
the preliminary record on appeal to Court of Appeals for the District of
Columbia Circuit on June 1, 2000. Subsequently, Treasury filed a reply
memorandum with this Court in support of its motion for relief from
judgment. In light of Treasury's appeal and subsequent filing with this
Court, this Court requested, by order dated June 20, 2000, a supplemental
memorandum from Treasury and an optional reply from LaRouche, discussing
whether this Court still had jurisdiction to rule on Treasury's Rule 60
(b) motion for relief from judgment. Treasury and LaRouche each filed
supplemental memorandum on June 23, and July 13, respectively. The
litigants agreed that although this Court presently lacks jurisdiction to
grant Treasury's Rule 60(b) motion, a procedure exists whereby the case
could be remanded for the Court to rule on Treasury's motion, if this
Court would grant any part of the motion.
As a result of the procedural posture, the Court faces two issues.
First, in light of Treasury's Notice of Appeal, whether the Court has
jurisdiction to rule on Treasury's motion for relief from judgment, or
whether the Court could be vested with jurisdiction. Second, if the Court
has jurisdiction, or if it were vested with jurisdiction, whether the
Court would grant Treasury relief from judgment on any or all of the
three grounds that it seeks.
Rule 60(b) of the Federal Rules of Civil Procedure allows a district
court to relieve a party from a judgment for various reasons, including
surprise, or excusable neglect." Fed.R.Civ.P. 60(b). The filing of a
notice of appeal, however, "confers jurisdiction on the court of appeals
and divests the district court of control over those aspects of the case
involved in the appeal." United States v. DeFries, 129 F.3d 1293, 1302
(D.C.Cir. 1997) (citing Griggs v. Provident Consumer Discount Co.,
459 U.S. 56, 58, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982) (per curiam). When
a Rule 60(b) motion and an appeal are pending simultaneously, appellate
review may continue and "the District Court may consider the 60(b)
motion, and, if the District Court indicates that it will grant relief,
the appellant may move the appellate court for a remand in order that
relief may be granted." Hoai v. Vo, 935 F.2d 308, 312 (D.C.Cir. 1991),
cert. denied, 503 U.S. 967, 112 S.Ct. 1578, 118 L.Ed.2d 220 (1992)
(citing Reuber v. United States, 750 F.2d 1039, 1051 n. 16 (D.C.Cir.
1984) (as amended Jan. 23, 1985); Greater Boston Television Corp. v.
FCC, 463 F.2d 268, 280 n. 22 (D.C.Cir. 1971), cert. denied, 406 U.S. 950,
92 S.Ct. 2042, 32 L.Ed.2d 338 (1972)); see Smith v. Pollin, 194 F.2d 349,
350 (D.C.Cir. 1952). Further, although a district court does not have
jurisdiction to grant a Rule 60(b) motion while the appeal is pending,
it does have authority to deny such a motion while the appeal is
pending. Smith, 194 F.2d at 350
When Treasury filed its Notice of Appeal on May 26, 2000, this Court
was divested of jurisdiction. Jurisdiction was conferred on the Court of
Appeals for the District of Columbia Circuit. Under the procedure
described in Hoai, this Court may consider Treasury's Rule 60(b) motion
while Treasury's appeal is pending and determine whether it would grant
that motion assuming the Court had jurisdiction. The Court has considered
Treasury's Rule 60(b) motion and, for the reasons set forth below, has
determined that it would grant that motion, if the Court had
jurisdiction. Accordingly, Treasury may move the Court of Appeals for a
remand in order that relief may be granted.
II. Treasury's First Ground for Relief From Judgment
First, Treasury seeks relief from the portion of this Court's March
31, 2000 Order and Judgment stating that Treasury shall release certain
documents created by the Federal Bureau of Investigation ("FBI") to
LaRouche. For the following reasons, that part of Treasury's motion for
relief from judgment must be granted.
LaRouche is concurrently pursuing separate lawsuits against two federal
agencies, the Departments of Justice ("Justice") and Treasury. In this
lawsuit, LaRouche seeks documents from the IRS, a component of Treasury.
In the other lawsuit, LaRouche seeks documents from the FBI, a component
of Justice. After Judge Greene ruled on the majority of issues in this
case, the parties realized that some documents at issue were located in
the files of both the IRS and FBI. In other words, copies of documents
created by the IRS were located in both IRS and FBI files, and copies of
documents created by the FBI were located in both FBI and IRS files.
Therefore, the parties agreed to litigate LaRouche's claims pertaining to
the IRS-created documents in this lawsuit, and to litigate LaRouche's
claims pertaining to the FBI-created documents in the other lawsuit.
Judge Greene adopted this approach in his August 13, 1998 Consent Order,
which stated that Treasury "shall not be required to prepare an index of
documents in the possession or control of the FBI, and which are the
subject of the action entitled Lyndon LaRouche, Jr. v. United States
Department of Justice, Civil Action No. 90-2753 (HHG) (USDC D.C.)."
Accordingly, in this action, the IRS did not defend the FBI's decision to
withhold its own documents. Treasury understood that the FBI would defend
that decision in LaRouche's lawsuit against Justice.
With respect to the FBI-created documents contained in the IRS's
identified in the IRS's Vaughn Index by Bates stamp numbers 1-13 and
442-774, this Court's March 31, 2000 Memorandum Opinion stated:
[t]he IRS has referred those documents contained at
pages 1-13 and 442-774 to the Department of Justice.
As of this date, the Court has received no response
from the Department of Justice regarding the
withholding of the entirety of these documents. As
neither entry contains a sufficient description of the
document and the exemption, nor a justification of the
non-segregability, LaRouche is entitled to summary
judgment as to these documents.
Mem.Op., p. 23. In addition, the Court's March 31, 2000 Order and
Judgment held that Treasury shall release pages 1-13 and 442-774 to
LaRouche. In light of the parties' agreement that pages 1-13 and 442-774
are the subject of LaRouche's litigation against Justice, and Judge
Greene's Consent Order adopting that agreement, this Court's March 31,
2000 Memorandum Opinion and Order and Judgment were incorrect.
Accordingly, Treasury's motion for relief from judgment must be granted.
Treasury should not be required to release pages 1-13 and 442-774,
described on pages 10 and 51 of Treasury's Vaughn Index, to LaRouche.
Issues pertaining to those pages will be litigated in Lyndon LaRouche,
Jr. v. United States Department of Justice, Civil Action No. 90-2753
(HHG) (USDC D.C.).
III. Treasury's Second Ground for Relief from Judgment
Second, Treasury asks the Court for relief from the portion of the
judgment that requires Treasury to release to LaRouche the page Bates
stamped 150, which is described on page 19 of Treasury's Vaughn Index.
For the following reasons, Treasury must be relieved from this portion of
the judgment and may withhold page 150 in its entirety.
As a preliminary matter, it is unclear whether LaRouche understands
that page 150 is the subject of this litigation, as opposed to LaRouche
v. Justice, or whether he does not oppose this portion of Treasury's
motion for relief from judgment. None of LaRouche's memoranda in this
case discuss page 150. In addition, LaRouche's memorandum in opposition
to Treasury's motion for relief from judgment states that he does not
oppose Treasury's motion as it applies to the first two documents, because
those documents are the subject of LaRouche v. Justice and will be
litigated in that suit. Pl's Opp'n Mot., at 1. LaRouche's opposition
memorandum goes on to state that he opposes the relief sought by Treasury
with respect to the remaining two documents. Thus, LaRouche seems to
believe that Treasury's motion for relief from judgment concerns a total
of four documents. In fact, Treasury's motion concerns five documents.
They are referred to in this opinion as 1) "pages 1-13", 2) "pages
442-774", 3) "page 150", 4) the Special Agent Report ("SAR"), and 5) the
Criminal Reference Letter ("CRL"). Because LaRouche's opposition
memorandum argues only for the disclosure of the SAR and CRL, it appears
that LaRouche does not oppose this portion of Treasury's motion or he
believes that page 150 is the subject of LaRouche v. Justice and will be
Based on the following facts, it is clear that page 150 is within the
scope of the instant case. Judge Greene signed the parties' Consent Order
on August 13, 1998, stipulating that documents created by the FBI will be
litigated in LaRouche v. Justice and that documents created by the IRS
will be litigated in the instant case. Subsequently, Treasury filed its
Vaughn Index in the instant case on September 11, 1998. The Preamble to
the Vaughn Index states that Treasury identified two documents in its
files that were created by the FBI, pages 1-13 and pages 442-774. Deft's
Vaughn Index, at 1. The Preamble also states that Treasury referred those
documents to the FBI. Further, the Index's description of pages 1-13 and
on pages 10 and 51 of the Index, again notes that they are being referred
to the FBI. Def.'s Vaughn Index, at 10, 51. According to the Index, these
are the only two documents in the IRS's files that were created by the
FBI and therefore referred to the FBI. Treasury did not maintain that
page 150 was created by the FBI or was being referred to the FBI. On the
contrary, Treasury's Vaughn Index gives a detailed description of page
150. Page 150 was created by the IRS and is therefore within the scope of
the instant case. It will not be re-litigated in LaRouche v. Justice.
Page 150 is described in Treasury's Vaughn Index as follows:
Memorandum, dated August 18, 1986, to S.A. Larry Lucy
(sic), pertaining to the service of a subpoena with
respect to a grand jury investigation of a person
other than Lyndon LaRouche. Withheld in full.
Grand Jury information protected: Identity of
investigation target, scope and direction of the
investigation. Additionally, this memorandum consists
of third party return information exempt from
disclosure under FOIA exemption (b)(3) in conjunction
with I.R.C. § 6103(a). Further, the memorandum
consists of information pertaining to an individual
third party, the disclosure of which would be an
unwarranted invasion of personal privacy, which is
exempt from disclosure under FOIA exemption
Def.'s Vaughn Index, at 19. This Court's March 31, 2000 Memorandum
Opinion stated, with respect to page 150, that the IRS appropriately
redacted 1) grand jury information pursuant to Exemption 3 in connection
with Federal Rule of Criminal Procedure 6(e), and 2) third party tax
return information pursuant to Exemption 3 in connection with I.R.C.
§ 6103(a). Mem. Op., p. 19. The Court also stated that information
pertaining to a third party was protected under FOIA Exemption 7(C). Id.
However, the Court noted that once this information was redacted, the
remainder of the document should be segregated for disclosure. Id.
Further, the Court's March 31, 2000 Order and Judgment required Treasury
to disclose page 150 [in redacted form] to LaRouche. For the following
reasons, Treasury must be relieved of the portion of this Court's March
31, 2000 Memorandum Opinion and Order and Judgment requiring Treasury to
release page 150 to LaRouche.
Section 6103 of the Internal Revenue Code provides that tax returns and
"return information", as defined therein, shall be confidential and shall
not be disclosed except as authorized. 26 U.S.C. § 6103 (a)(1).
Return information is defined broadly, and includes a taxpayer's
identity, the nature, source, or amount of his or her income, net worth,
whether the taxpayer's return was, is being, or will be examined or
subject to other investigation, or any other data with respect to the
determination of the existence, or possible existence, of liability of
any person for tax, penalty, interest, or other offense.
26 U.S.C. § 6103 (b)(2)(a). "Return information" is exempt from
disclosure under FOIA Exemption 3. Tax Analysts v. IRS, 117 F.3d 607, 611
(D.C.Cir. 1997). Further, return information is not subject to the
segregation requirement of the FOIA, § 552(b), and should be
withheld in its entirety. Church of Scientology of California v. IRS,
484 U.S. 9, 11, 108 S.Ct. 271, 98 L.Ed.2d 228 (1987).
Page 150 is "return information" because it discusses a taxpayer who is
under investigation by a grand jury. Because it is "return information",
it is protected from disclosure under Internal Revenue Code Section
6103(a)(1) in connection with FOIA Exemption 3.*fn1 Further, based
on the Supreme Court's clear statement in Church of Scientology, the IRS
does not have a duty under the FOIA to redact names and other personal
identifiers from page 150 and disclose the remainder of the document to
LaRouche. See Id. at 18, 108 S.Ct. 271. Treasury must therefore be
relieved from the portion of this Court's judgment ordering the IRS to
release page 150 to LaRouche.
III. Treasury's Third Ground for Relief from Judgment
Third, Treasury seeks relief from the portion of the judgment requiring
it to disclose in full copies of two documents: 1) the Special Agent's
Report ("SAR"), described on pages 24-30 of Treasury's Vaughn Index
(Bates stamp numbers 155-369); and 2) the Criminal Reference Letter
("CRL"), described on page 31 of Treasury's Vaughn Index (Bates stamp
numbers 370-390). Treasury states that a June 25, 1993 order in LaRouche
v. Justice, presided over by Judge Greene, held that the SAR and CRL were
protected from disclosure under FOIA Exemptions 3 and 5. Treasury argues
that this Court's March 31, 2000 Order and Judgment contravenes the June
25, 1993 order and that the doctrine of collateral estoppel prohibits
disclosure of the SAR and CRL. Treasury's counsel in this case states
that, like this Court, he was unaware that the SAR and CRL had been
litigated in LaRouche v. Justice. For the following reasons, this Court
finds that the doctrine of collateral estoppel applies and Judge Greene's
June 25, 1993 order controls, to the extent that it correctly applies the
law to the facts. Accordingly, Treasury must be relieved of the portion
of this Court's judgment that requires it to disclose the SAR and CRL.
Treasury must follow Judge Greene's June 25, 1993 order, as modified by
the discussion below.
A. Collateral Estoppel
The doctrine of collateral estoppel prevents a litigant from raising
issues of fact or law that it litigated and were decided in another
case. The Supreme Court described this doctrine as follows:
Under collateral estoppel, once a court has decided an
issue of fact or law necessary to its judgment, that
decision may preclude relitigation of the issue in a
suit on a different cause of action involving a party
to the first case. As this Court and other courts have
often recognized, res judicata and collateral estoppel
relieve parties of the cost and vexation of multiple
lawsuits, conserve judicial resources, and, by
preventing inconsistent decisions, encourage reliance
Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980)
(internal citations omitted). The following three elements must be
present to establish that collateral estoppel precludes a party from
relitigating an issue of fact or law: 1) "the issue must have been
actually litigated, that is, contested by the parties and submitted for
determination by the court"; 2) "the issue must have been `actually and
necessarily determined by a court of competent jurisdiction' in the first
trial"; and 3) "preclusion in the second trial must not work an
unfairness. Preclusion is sometimes unfair if the party to be bound
lacked an incentive to litigate in the first trial, especially in
comparison to the stakes of the second trial." Otherson v. Department of
Justice, 711 F.2d 267, 273 (D.C.Cir. 1983). Because all three of these
elements are satisfied here, the Court will relieve Treasury from its
obligation to disclose the SAR and CRL to LaRouche.
First, the issues of fact and law pertaining to the SAR and CRL were
litigated in LaRouche v. Justice and submitted to the court for
determination. As in this case, the agency in LaRouche v. Justice located
the SAR and CRL in its files and withheld the documents from LaRouche
pursuant to FOIA Exemptions 3 and 5. In LaRouche v. Justice, as in the
instant case, LaRouche challenged the agency's decision to withhold the
and presented its position to the court for a decision.
Second, Judge Greene actually decided this issue in LaRouche v.
Justice. Judge Greene considered Treasury's motion for partial summary
judgment, a Vaughn Index, and a supporting declaration. The Index and
declaration explained why Treasury withheld the two documents in full. On
June 25, 1993, Judge Greene ruled that the SAR and CRL are exempt in
Third, precluding LaRouche from relitigating the SAR and CRL would not
work an unfairness to him. LaRouche had the same incentive to litigate
these documents in LaRouche v. Justice as he does here. Further, to award
LaRouche the relief that Judge Greene denied him in LaRouche v. Justice
would unfairly subject Treasury to multiple, inconsistent adjudications
of the same issues.
LaRouche opposes the portion of Treasury's motion for relief from
judgment pertaining to the SAR and CRL. He argues that Treasury should
disclose the SAR and CRL in their entirety, consistent with the March
31, 2000 Order and Judgment, because the doctrine of collateral estoppel
does not apply.
First, LaRouche contends that collateral estoppel normally applies only
where a final judgment has been entered in an action. Because Judge
Greene's June 25, 1993 order was not a final order in LaRouche v.
Justice, LaRouche asserts that collateral estoppel does not apply here.
Second, LaRouche argues that Treasury's attempt to apply the "law of the
case doctrine" must be rejected. Treasury acknowledged that the June 25,
1993 order was not a final judgment in LaRouche v. Justice, but argues
that the law of the case doctrine prohibits LaRouche from relitigating
the SAR and CRL in this action. The law of the case doctrine holds that
"a determination of an issue of law at one stage of a case becomes `the
law of the case' and will not be reexamined in a subsequent stage of the
case." Pl.'s Opp'n Mot. at 5 (quoting Louisell, David W., Geoffrey C.
Hazard, Jr., and Colin C. Tait, Pleading and Procedure, State and
Federal (Fifth Edition)) at 610-611 (emphasis added by Pl.). LaRouche
argues that the law of the case doctrine applies to issues being
litigated in the same case, but that it does not apply to issues being
litigated in another case. Therefore, according to LaRouche, the June
25, 1993 order in LaRouche v. Justice is not the law of the case in the
instant action. The Court rejects these two arguments, which ask the
Court to put aside common sense in favor of an inconsistent result which
occurred inadvertently. The Court rejects LaRouche's rigid concept of
finality. Instead, the Court agrees with Treasury that "[f]inality for
purposes of issue preclusion is a more `pliant' concept than it would be
in other contexts. Finality `may mean little more than that the
litigation of a particular issue has reached such a stage that a court
sees no really good reason for permitting it to be litigated again.'" In
re Brown, 951 F.2d 564 (3d Cir. 1991) (quoting Dyndul v. Dyndul,
620 F.2d 409, 412 (3d Cir. 1980); see also Metromedia Co. v. Fugazy,
983 F.2d 350, 366 (2d Cir. 1992), cert. denied, 508 U.S. 952, 113 S.Ct.
2445, 124 L.Ed.2d 662 (1993); Moore's Federal Practice 3d, §
132.03[b][i], and cases cited therein. There is no doubt that Judge
Greene intended his June 25, 1993 ruling pertaining to the SAR and CRL to
be "final". The parties briefed the issues pertaining to those
documents, the Court issued an opinion on those issues; and the Court
gave no indication that it intended to revisit those issues while the
parties were litigating the remainder of the case.
Two issues, concerning segregability, must be addressed. First,
LaRouche argues that Judge Greene's June 25, 1993 decision should be
revised because it did not make an express finding on segregability,
which the D.C. Circuit now requires. Second, this Court finds that
Judge Greene's ruling overlooked Circuit precedent concerning under what
circumstances the agency must segregate and disclose grand jury
information which is allegedly in the public domain.
First, Judge Greene's June 25, 1993 decision did not take into account
Davis v. U.S. Department of Justice, 968 F.2d 1276 (D.C.Cir. 1992).
Davis held that a requester who seeks access to grand jury information
allegedly within the public record must "point to `specific' information
`identical' to that being withheld." Id. at 1280. In applying Davis, this
Court's March 31, 2000 Memorandum Opinion found that "LaRouche failed
. . . to provide the requisite specificity in alleging that the information
withheld is already in the public domain. LaRouche does not provide the
necessary `match' between the documents previously disclosed and those
documents for which Exemption 3 is claimed." Mem. Op. at 14. In
contrast, Judge Greene's June 25, 1993 order ruled that "defendant must
review the [SAR and CRL] and disclose those portions withheld pursuant to
Exemption 3 and Rule 6(e) which were revealed at trial." Order at 3. The
Court has determined, based on Davis, that the March 31, 2000 Memorandum
Opinion controls this issue. Treasury does not need to disclose any
information in the SAR or CRL that is protected under Exemption 3 in
connection with Rule 6(e) because LaRouche failed to meet his burden of
Second, the D.C. Circuit has recently held that a district court has an
affirmative duty to enter a finding regarding segregability sua sponte
even if the parties themselves do not raise the issue. Trans-Pacific
Policing Agreement v. U.S. Customs, 177 F.3d 1022, 1028 (D.C.Cir. 1999).
LaRouche argues that Judge Greene's June 5, 1993 decision did not enter
an express finding on segregability, and because the law has changed and
now requires an express finding on segregability, LaRouche is not
collaterally estopped from relitigating this issue.
The Court agrees with LaRouche that in light of Trans-Pacific Policing
Agreement, LaRouche is not collaterally estopped from arguing that Judge
Greene's failure to enter a finding on segregability should be revised.
Neither the June 25, 1993 memorandum nor the order of that date make a
finding of segregability with respect to the information in the SAR and
CRL withheld under Exemption 5. The documents may contain some
information that is not protected by Exemption 5. If such information
were not protected by another exemption, it would be appropriate to
segregate information for disclosure. However, a review of the Vaughn
Index in LaRouche v. Justice and the instant case indicates that the SAR
and CRL are covered in their entirety by Exemption 3 in connection with
Federal Rule of Criminal Procedure 6(e). And as discussed above,
LaRouche failed to meet his burden of production that the information
protected under Exemption 3 in connection with Rule 6(e) is already in
the public domain. Accordingly, Treasury may withhold both the SAR and
CRL in their entirety.
This Court lacks jurisdiction because Treasury appealed the March 31,
2000 decision. If the Court of Appeals remanded this case, however, this
Court would grant Treasury's motion for relief from judgment in its
entirety. Specifically, the Court would relieve Treasury from the
following requirements: 1) disclosure of pages 1-13 and 442-774, which
are the subject of another case, LaRouche v. Justice; 2) disclosure of
page 150, which is "third party tax information" protected from disclosure
as a matter of law; 3) disclosure of the pages 155-369 (the SAR) and
pages 370-390 (the CRL), which are protected from disclosure under
Exemption 3 in connection with Rule 6(e).