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DALE v. INTERNAL REVENUE SERVICE

November 20, 2002

BILLY RAY DALE, PLAINTIFF
V.
INTERNAL REVENUE SERVICE, DEFENDANT.



The opinion of the court was delivered by: John D. Bates, United States District Judge

MEMORANDUM OPINION

Plaintiff Billy Ray Dale ("Dale") brings this action against defendant Internal Revenue Service ("IRS") under the Freedom of Information Act ("FOIA" or "the Act"), 5 U.S.C. § 552. Dale asserts that he was subjected to retalitory audits by the IRS during President Clinton's administration from January 20, 1993 through January 19, 2001, and seeks access to any documents in the possession of the IRS that he believes will establish the political nature of these actions. Compl. ¶ 6. The IRS moves to dismiss Dale's complaint for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), claiming that Dale failed to comply with certain administrative requirements of FOIA and the implementing IRS regulations.*fn1

This case is a prime example of how the unwillingness of the parties and counsel to a lawsuit to work together in managing the case may lead to an unnecessary expenditure of time and effort by the parties and hence by the federal judiciary. In this case, the fault seems to lie primarily, although perhaps not exclusively, with the plaintiff or more accurately with Judicial Watch, the public interest legal organization that represents plaintiff Had Judicial Watch responded timely to defendant's communications and proposals, the issues now before the Court likely would have been resolved long ago, without requiring briefing and judicial attention, and perhaps plaintiffs FOIA request would already have been processed and documents produced. Unfortunately, that was not to be, and the Court must therefore deal with the parties' respective positions as they now stand, even though modest compromise would appear to have been much the preferable, and more efficient, option. Be that as it may, for the reasons stated below, the motion of defendant IRS to dismiss is granted.

BACKGROUND

Dale filed his FOIA request with the IRS on July 13, 2000. Compl. ¶ 5; see Compl., Ex. 1 (letter from Dale to IRS dated July 13, 2000). In his request, Dale sought access to "[a]ny and all documents, including but not limited to files, that refer or relate in any way to Billy Ray Dale." Id. Dale stated that his request included "all Internal Revenue Service offices, departments, detachments, bureaus, operating locations, field offices, agencies, divisions, directorates, center headquarters, and/or other Internal Revenue Service organizations and entities." Id. Dale requested that the documents be sent to his attorney, Larry Klayman, General Counsel of Judicial Watch, a non-profit public interest law firm. Compl., Ex. 1.

Dale did not commit to pay the fees incurred in searching for and copying the responsive documents, nor did he request a waiver of those fees. The IRS received Dale's request on July 18, 2000, and on August 27, 2000, the IRS wrote back, informing Dale of several problems that needed to be corrected before the IRS could conduct a search. Compl. ¶ 7. The IRS letter stated in part:

A request for "all records pertaining to you" is too broad to meet the FOIA requirement to adequately describe the records sought. Please provide some additional guidance on what information you are seeking, what Internal Revenue Service function might have documents responsive to your request, what types of issues are involved, what year or time frame might be appropriate to help us focus the search.

Answer, Ex. A (letter from Summerlin to Dale dated August 27, 2000). The IRS informed Dale that in order to bring his request into compliance with FOIA and applicable IRS regulations, he would have to: 1) provide specific authorization for the IRS to release his tax records to Judicial Watch, 2) make his request for disclosure in a separate document containing his identity information and the type of information to be disclosed, 3) reasonably describe the information requested and its location within IRS with more specificity, and 4) make a firm commitment to pay the fees for search and duplication, or provide justification for waiving or reducing such fees. Answer, Ex. App. 1-2. The IRS provided Dale with Form 8821, a tax information authorization form that when properly completed would authorize release of Dale's IRS documents to Judicial Watch. Id. at p. 2.

Dale did not respond to the IRS letter. Eight months later, on April 24, 2001, claiming that he had "received no substantive response to his FOIA request from the IRS," Dale brought suit against the IRS. Compl. ¶ 7. On May 9, 2001, Judicial Watch's Klayman held a conference call with Department of Justice lawyers in an attempt to address the deficiencies in Dale's FOIA request, and the parties apparently agreed to take steps to avoid litigation. Id. As a result of the conference call, Klayman agreed to provide — within one week — a properly completed Form 8821, a request from Dale for a fee waiver and a firm commitment to pay such fees if the waiver were denied, and clarifications of Dale's search requests. The following day, counsel for the IRS memorialized this agreement in a three-page letter to Klayman. See Def. Reply, Ex. A (letter from Hubbert to Klayman dated May 10, 2001). However, Judicial Watch did not supply the agreed-upon information by May 16, 2001, and on June 5, 2001, the IRS sent Judicial Watch another letter seeking the information. See Def. Reply, Ex. B (letter from Hubbert to Klayman dated June 5, 2001). On June 11, 2001, Judicial Watch submitted a completed Form 8821 authorization and a lengthy justification of why Judicial Watch, as opposed to Dale (the plaintiff and FOIA requester), deserved a fee waiver. See Pl. Opp., Ex. 1 (letter from Farrell to Gibson dated June 11, 2001). Notwithstanding this communication, the IRS determined that this additional information still did not comply with IRS and FOIA requirements or with the parties' May 9 agreement, and hence sent another letter on July 24, 2001, detailing the deficiencies in the information provided. See Def. Reply, Ex. C (letter from Gibson to Klayman dated July 24, 2001). That letter proposed a specific settlement of the case and stated that a motion to dismiss for lack of jurisdiction would be filed if the IRS did not hear from Judicial Watch by July 27, 2001. Id. at pp. 3-4. Having received no response, on August 2, 2001, the IRS filed its motion to dismiss, claiming that Dale had failed to comply with the administrative requirements of FOIA and had failed to exhaust his administrative remedies.

DISCUSSION

The Freedom of Information Act requires the requester to exhaust administrative remedies before filing suit. Summers v. Dep't of Justice, 140 F.3d 1077, 1080 (D.C.Cir. 1998); Stebbins v. Nationwide Mutual Ins. Co., 757 F.2d 364, 366 (D.C.Cir. 1985) ("[e]xhaustion of [administrative] remedies is required under the Freedom of Information Act before a party can seek judicial review"); Judicial Watch. Inc. v. United States Naval Observatory, 160 F. Supp.2d 111, 112 (D.D.C. 2001) ("It is well settled that full and timely exhaustion of administrative remedies is a prerequisite to judicial review under FOIA."). Failure to exhaust administrative remedies subjects a FOIA requester's suit to dismissal for lack of subject matter jurisdiction. Dettmann v. Dep't of Justice, 802 F.2d 1472, 1477 (D.C. Cir. 1986); Trueblood v. Dep't of Treasury, 943 F. Supp. 64, 68-69 (D.D.C. 1996). Compliance with both FOIA and agency requirements is necessary before the agency can release the requested documents. 5 U.S.C. § 552(a)(3); 26 C.F.R. § 601.702(c)(5). Failure to comply with agency FOIA regulations amounts to a failure to exhaust administrative remedies, which warrants dismissal. See Gillin v. IRS, 980 F.2d 819 (1St Cir. 1992); Voinche v. Dep't of Air Force, 983 F.2d 667, 669 n. 5 (5th Cir. 1993). An agency's obligations commence upon receipt of a valid request; failure to file a perfected request therefore constitutes failure to exhaust administrative remedies. See Crooker v. CIA, 577 F. Supp. 1225 (D.D.C. 1984); Lilienthal v. Parks, 574 F. Supp. 14, 17 (E.D. Ark. 1983).

The requirements under FOIA are minimal: a request need only (i) "reasonably" describe the records sought and (ii) comply with any "published rules stating the time, place, fees (if any), and procedures to be followed." 5 U.S.C. § 552(a)(3)(A). Pursuant to the Act, the IRS has promulgated regulations that detail the rules and procedures that must be followed by persons requesting IRS records. See 5 U.S.C. § 552(a)(2). The IRS's obligation under FOIA begins only upon receipt of a valid request — that is, one that complies with all of the requirements set out in 26 C.F.R. § 601.702(c)(3)(i) — (viii). See 26 C.F.R. § 601.702(c)(5); see also Brumley v. Dep't of Labor, 767 F.2d 444, 445 (8th Cir. 1985) (response by an agency is required when "any request . . . is made in accordance with such rules") (quoting 5 U.S.C. § 552(a)(3)).

Here, the IRS claims that Dale has failed to exhaust his administrative remedies because he has not filed a proper request. Dale responds that in the May 9, 2001, conference call the parties agreed to "take steps to avoid having to litigate serious procedural questions involving subject matter jurisdiction." See Def. Reply, Ex. B (letter from Gibson to Klayman dated June 5, 2001). Dale maintains that he complied with the requirements outlined in this agreement when Judicial Watch submitted its June 11, 2001, letter and Dale's Form 8821. Pl. Opp., Ex. A (letter from Farrell to Gibson). The IRS counters that the June 11, 2001, letter still failed in some respects to meet Dale's commitments in the agreement and under IRS regulations. Def. Reply at 4. In particular, the IRS contends that Dale did not "provide an adequate description of what records he seeks, for what types of taxes, for what years, ...


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