United States District Court for the District of Columbia
April 12, 2005.
SECURITY FINANCIAL LIFE INSURANCE COMPANY, Plaintiff,
DEPARTMENT OF TREASURY, Defendant.
The opinion of the court was delivered by: SUZANNE CONLON, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Security Financial Life Insurance Company requested
documents relating to a line item on the 2000 and 2001 federal
budgets from the Department of Treasury under the Freedom of
Information Act, 5 U.S.C. § 552 ("FOIA"). As a result of the
Department's failure to respond to its request, First Security
sued the Department for declaratory and injunctive relief under
FOIA.*fn1 After First Security initiated this action, the
Department produced some documents and withheld others, claiming
exemption from disclosure under FOIA. Security Financial moves
for summary judgment with respect to a limited number of withheld
documents. The Department moves for summary judgment with respect
to all withheld documents.*fn2 BACKGROUND
Both parties filed statements of undisputed material facts in
support of their summary judgment motions. The Department's
statement of facts ("Facts") is supported by citations to the
record as required by Local Rule 7.1(h). Security Financial's
statement of facts is not. Accordingly, the court disregards
Security Financial's statement of facts. See Local Rule 7.1(h).
Moreover, Security Financial failed to respond to the
Department's statement of facts. Local Rule 7.1(h) provides:
"[i]n determining a motion for summary judgment, the court may
assume that facts identified by the moving party in its statement
of material facts are admitted, unless such a fact is
controverted in the statement of genuine issues filed in
opposition to the motion." The Department's statement of facts is
deemed admitted. See Local Rule 7.1(h); Ramey v. Darkside
Productions, Inc., 2004 U.S. Dist. LEXIS 10107, at *3 (D.D.C.
May 17, 2004).
I. Security Financial's FOIA Request
On May 13, 2002, Security Financial sent the Department a FOIA
request seeking agency records related to a $1.359 billion
estimate for the line item in the FY 2000 and FY 2001 federal
budgets for the proposal to limit pre-funding of welfare benefits
of ten or more employer plans. Facts ¶ 1. Security Financial's
FOIA request was assigned an internal tracking number and
forwarded for processing to the office determined most likely to
have responsive records, the Office of Tax Policy ("OTP"). Id.
at ¶ 2. On June 19, 2002, the Department sent Security Financial
a letter acknowledging receipt of its FOIA request. Id. at ¶ 3.
The Department's June 19, 2002 letter explained that OTP was
experiencing a backlog of FOIA requests and that Security
Financial's request would be processed as soon as possible. Id. OTP interviewed Department employees to identify the possible
locations of responsive documents. Id. at ¶ 4. Based on
information from those interviews, OTP conducted manual searches
of the office files of current and former employees in the Office
of Tax Legislative Counsel ("TLC"), the Office of Benefits Tax
Counsel ("BTC"), and the Office of Tax Analysis ("OTA") (which
includes the Revenue Estimating Division). Id. OTP also
conducted various keyword searches on individual employees'
hard-drives and email files and BTC's CD-ROM files. Id. at ¶ 5.
OTP's searches yielded 268 pages of agency records with
responsive material, including 23 pages that originated either in
the Office of Management and Budget or the Internal Revenue
Service. Id. at ¶ 6. The Department reviewed the materials for
responsiveness, privilege and segregability. Id.
II. The Department's Response
On January 16, 2004, the Department produced 108 pages of
agency records. Id. at ¶ 7. Thirty-three pages were redacted to
protect information the Department claimed was exempt from
disclosure under FOIA. Id. The Department withheld an
additional 149 pages of agency records claiming they fell under
FOIA exemptions 3 and 5. Id.
The Department withheld 55 agency records in whole or in part,
claiming exemption from disclosure under the deliberative process
privilege. Id. at ¶ 8. The Department produced a Vaughn index
to Security Financial that lists the date, document type,
author/recipient, number of pages, and a description of each
document withheld.*fn3 Security Financial Motion, Ex. 1. The
Department served a revised Vaughn index with its summary judgment motion.
Department Motion, Ex. A. The revised index provides titles for
each author and recipient of a document.*fn4 Id.
The withheld documents fall into the following categories:
revenue estimates; drafts/draft comments; emails; notes; and
talking points. Id. Forty-four documents were withheld in their
entirety under a claim of deliberative process privilege. Id.
at ¶ 16. Of those 44 documents, 25 were also claimed exempt under
the attorney-client privilege.*fn5 Id. Security Financial
concedes some of the documents were properly withheld. Security
Financial Motion at 3, n. 1.
III. The Documents at Issue
Security Financial only seeks a limited category of documents:
those that contain the Department's calculations and assumptions
underlying the budget line item entitled "Limit prefunding of
welfare benefits for 10 or more employer plans" ("budget line
item") for fiscal years 2000 and 2001. Security Financial Motion
at 3, 11; Security Financial Opposition at 5, 6, 8. More
specifically, Security Financial seeks production of Vaughn
index entries A1-A6, A8-A10, A12, A13, A15-A19, A24, A28-A34,
A36-A43, C5-C9, C11 ("the withheld documents") on the Vaughn
index. The revised Vaughn index contains the following
descriptions of the withheld documents:*fn6
Index No. Description
A1 This document contains notes of an internal meeting between OTP staff
(including Louis Epstein-Associate Tax Legislative Counsel, OTP) and IRS
staff (including James Holland, Mark Schwimmer, and Mike Roach) relating to
TOLI, COLI, and VEBAs.
A2 This document contains handwritten notes outlining a meeting between Louis
Epstein (Associate Tax Legislative Counsel, OTP) and Mike Pincus, a private
sector attorney, about his suggestions for additional pension benefits.
A3 This document is an email from Sonia Conly (Financial Economist. Office of
Tax Analysis ("OTA")) to Platt (Director of Revenue Estimates, OTA) copied
to Amy Null (Attorney-Advisor, Office of Benefits Tax Counsel ("OTB")
concerning a phone call Conly received from member of Congress relating to
the development of OTP's revenue estimates for the Section 419A proposal for
the FY 2001 budget.
A4 This draft document written by an unknown OTP staff person outlines possible
revenue raisers or limitations of benefits under I.R.C. Section 419A(f)(6) for
the FY 2000 budget.
A5 This document entitled "Revenue Estimates: Revenue Raising Options
Preliminary" is an internal working paper written by an OTA staff member
listing preliminary revenue estimates for a ten-year period from FY 2000 to FY
2009 for possible revenue raisers for the FY 2001 budget. Only one line item
in this document is responsive to Plaintiff's FOIA request.
A6 This document consists of the following drafts of the description of the Section
419A(f)(6) proposal for the "General Explanations of the Administration's
Revenue Proposals for FY 2000." Document was written by Null (Attorney-Advisor,
BTC) to Mark Iwry (Benefits Tax Counsel, BTC).
A8 This document contains a draft description of the Section 419A(f)(6) proposal
for the "General Explanations of the Administration's FY 2000 Revenue
Proposals" and an analysis of the "Reasons for Change" section. It was written
by Null (Attorney-Advisor).
A9 This document contains Q&As on the Section 419A(f)(6) proposal for the FY
2000 budget that was used in preparation for congressional testimony regarding
the FY 2000 budget. It was written by Donald Lubick (Assistant Secretary of
Tax Policy). A10 This draft document contains preliminary revenue estimates for the Section
419A(f)(6) proposal for the FY 2000 budget as well as handwritten and
typewritten assumptions. Conly (Financial Economist, OTA) typed
"Corrected" in the upper left corner of the document.
A12 This document consists of the following drafts of the one-paragraph description
of the Section 419A(f)(6) proposal for the FY 2000 budget:
a) Draft 1:40 p.m. 1/12/99
b) January 14, 1999 draft
c) Undated draft; Last modified March 5, 1999
d) Draft 4:45 1/11/99
Only one paragraph in each draft is responsive to Plaintiff's FOIA request.
(Note: the final published version was produced). Document was written by
unknown BTC staff member.
A13 This email discusses a proposed revision to language in the description of the
Section 419A proposal and its possible effect on the revenue estimate. Null
(Attorney-Advisor, BTC) wrote email to Iwry (Benefits Tax Counsel, BTC) and
other BTC counsel, discussing and analyzes a potential conflict between the
current Section 419A proposal and another proposal for the FY 2000 budget
then under development by OTP staff.
A15 This email by Null (Attorney-Advisor) to Iwry (Benefits Tax Counsel), and
other counsel, discusses proposed revisions to the description of the Section
419A proposal and analyzes two drafts (one by IRS staff and one by OTP staff)
of the Section 419A language and the implications of those revisions.
A16 This draft document contains preliminary revenue estimates tables for the
President's FY 2000 budget that span the 11 year period FY 1999 to FY 2009.
Only the line item related to the Section 419A(f)(6) proposal is responsive to
Plaintiff's FOIA request. The document was prepared in connection with
providing advice and recommendations to Administration decision makers as to
the contents of the President's FY 2000 budget.
A17 This working document intermingles assumptions from both FY 2000 and 2001
with preliminary estimates spanning the ten-year period from FY 2001 through
FY 2010 that were used by Conly in preparing revenue estimates for the I.R.C.
Section 419A(f)(6) proposal for the FY 2001 budget. The document was
prepared for Conly's supervisor Joel Platt's (Director of Revenue Estimates,
OTA) review and approval.
A18 This document compares the I.R.C. Section 419A(f)(6) proposal with the small
business health plan proposal in the FY 2000 budget. The document was used
in preparation for congressional testimony and was prepared by David Brazell
(Financial Economist, OTA). A19 This email from Conly to Null entitled "Pre-funding of certain employee
benefits" requests a comparison and analysis of the Administration's FY 2000
budget proposal and a legislative amendment to H.R. 984.
A24 This document prepared by Null for Talisman in preparation for congressional
testimony on the FY 2000 budget contains a description of the I.R.C. Section
419A(f)(6) proposal as well as talking points for discussing the
A28 This document contains talking points concerning the Administration's I.R.C.
Section 419A(f)(6) proposal for the President's FY 2000 budget and outlines
two alternative legislative proposals. The document was created in preparation
for testimony before the Senate Finance Committee.
A29 This working document prepared by OTA staff contains preliminary revenue
estimates that span FY 2000 to FY 2009 for possible revenue offset options for
the President's FY 2001 budget. Only the line item "Impose Limitations on
Pre-funding of Certain Employee Benefits" is responsive to Plaintiff's FOIA
request. The document was prepared in connection with providing advice and
recommendations to Administration decision makers as to the contents of the
President's FY 2001 budget.
A30 This document consists of two draft descriptions of the I.R.C. Section
419A(f)(6) proposal for the "General Explanations of the Administration's FY
2001 Revenue Proposals." One draft contains a handwritten comment in the
margin by Conly. (Note: the final version of the description was produced).
A31 This email by Conly to Platt entitled "Section 419A(f)(6) and Section
419A(f)(5)" attaches a draft description of the Administration's FY 2001
budget proposal dated January 5, 2000 and a working document that contains
assumptions and preliminary estimates for the FY 2000 and FY 2001 budgets.
Only the first paragraph of the transmittal email is responsive to plaintiff's
A32 This document contains a draft description of revenue raisers for the FY 2001
budget. "AAN draft of 1/13" is typed in the upper right-hand corner of the first
is responsive to Plaintiff's request. (Note: the final version of the Section
419A(f)(6) proposal was published in the "Federal Receipts" chapter of the
"Analytical Perspective" volume of the Administration's FY 2001 budget. A
copy was produced). Null prepared the document. A33 This document entitled "Revenue Estimates: FY 2001 Proposals Affecting
Receipts" contains estimates over an 11 year period and handwritten comments.
Only one line item is responsive to plaintiff's FOIA request. The document was
prepared by OTA staff in connection with providing advice and
recommendations to the Administration's decision makers as to the contents of
the President's FY 2000 budget.
A34 This document contains a draft description of the Administration's I.R.C.
Section 419A(f)(6) proposal and attaches Q&A in preparation for testimony
before a congressional committee on the Administration's FY 2001 budget.
A36 This document prepared by Joel Platt to Mary Barth ("OMB") attaches draft
preliminary revenue estimates that span the 11 year period FY 1999 to FY 2009
and contains OMB proposals for the President's FY 2000 budget. Only the line
item relating to Section 419A(f)(6) is responsive to Plaintiff's FOIA request.
This document was prepared in connection with providing advice and
recommendations to the Administration's decision makers as to the contents of
the President's FY 2000 budget.
A37 This document contains draft revenue estimates that span the 11 year period for
the President's FY 2000 budget. The document contains handwritten revisions
by Joseph Mikrut, the Tax Legislative Counsel. Only the line item showing the
revenue estimates for the I.R.C. Section 419A(f)(6) proposal is responsive to
plaintiff's FOIA request. The document was prepared in connection with
providing advice and recommendations to the Administration's decision
makers as to the contents of the President's FY 2000 budget.
A38 This document contains draft versions of "Table 303 Effect of Proposals on
Receipts" which contains estimates that span the six-year period FY 1999-FY
2004. The document also contains draft OMB proposals. Only one line item in
the document is responsive to plaintiff's FOIA request. The document was
prepared in connection with providing advice and recommendations to the
Administration's decision makers as to the contents of the President's FY 2000
budget and was exchanged between OMB and OTP staff during the
development of the President's FY 2000 budget. (Note: the final published
version of the table was produced). Document contains Mikrut's handwritten
A39 This document prepared by Conly is entitled "Estimate of Denial of Deduction
for Prefunding Severance and Whole Life Insurance Benefits Under 419(f)
exception" contains calculations and assumptions for the FY 2000 budget and
OMB projections for FY 2000 to FY 2009. The document was prepared in
connection with providing advice and recommendations to the Administration's
decision makers as to the President's FY 2000 budget. A40 This document contains draft revenue estimate tables that span the 11 year
period FY 2000 to FY 2000 for the FY 2001 budget. Only the line item for the
estimates of the Section 419A(f)(6) proposal is responsive to plaintiff's FOIA
request. The document was prepared in connection with providing advice and
recommendations to the Administration's decision makers as to the contents of
the President's FY 2001 budget. Fax from Platt to Barth; margin notations by
A41 This draft document contains calculations and assumptions that span the period
FY 2001 to 2010 for the Section 419A(f)(6) proposal for the FY 2001 budget.
The document also contains forecasts of OMB and OTP assumptions and
estimates for FY 2000 and FY 2001 for an alternative legislative proposal. This
document was prepared in connection with providing advice and
recommendations to the Administration's decision makers as to the President's
FY 2001 budget. Document prepared by Conly.
A42 This email from Tim Hanford (Tax Counsel to Ways and Means Committee) to
Brigen Winters (Ways and Means Committee staff person) is entitled
"Springing Cash Value" and suggests clarifying language for the I.R.C. Section
419A report and contains handwritten comments by Epstein expressing her
opinion and suggestions on the legislative proposal for I.R.C. Section 419A.
A43 This document consists of draft pages from the "Federal Receipts" chapter of
the "Analytical Perspectives" volume of the Administration's FY 2000 budget.
Joseph Mikrut's (Tax Legislative Counsel) handwritten comments appear on
the only portions of this document that are responsive to plaintiff's FOIA
request. The comments are dated January 20 and 21, 1999. OMB originated
B1 This document contains data Sonia Conly received from James Holland (IRS)
and Ed Sypher (IRS) in response to an inquiry from OTA for information to
estimate the effect of a law change. The information was used to estimate the
line item "Limit the Prefunding of Welfare Benefits for 10 or More Employer
Plans" in the President's FY 2000 and FY 2001 budgets. The document
contains calculations, assumptions and opinions by Conly.
C5 This draft document authored by Conly contains assumptions and preliminary
revenue estimates for the period FY 2000 through FY 2009 for the I.R.C.
Section 419A(f)(6) proposal in the FY 2000 budget that show the revenue
impact of the Administration's I.R.C. Section 419A(f)(6) proposal. One copy
of the document has handwritten margin notes as well as the notations "99/01"
and "used." The document was prepared for Conly's supervisor's (Joel Platt)
review and approval. C6 This document compares three revenue estimates spanning the 10-year period
FY 2000 to FY 2009:
a) preliminary, unpublished revenue estimates and assumptions by the Office of
Tax Analysis relating to the provision in "The Financial Freedom Act of 1999"
(H.R. 2488) entitled "Impose Limitation on Prefunding of Certain Employee
b) preliminary estimates from the Office of Tax Analysis for I.R.C. Section
419A(f)(6) for FY 2000 to FY 2009. (Note: The estimates for FY 2000-FY
2004 were published in the FY 2000 budget).
c) Joint Tax Committee revenue estimates from JCX-43-99 (for H.R. 2488).
The document was prepared in connection with providing advice to Treasury
and Administration decision makers on whether to support the proposed
C7 This document drafted by Null contains descriptions of various proposals for
the Administration's FY 2001 budget. Only one paragraph in the document is
responsive to plaintiff's FOIA request. (Note: a redacted copy of the Section
419A(f)(6) description and final published version were produced).
C8 This document contains notations and legal opinions by Epstein related to the
welfare benefit fund plans sent to Epstein by Pincus, a private sector attorney.
(Note: a redacted copy was produced).
C9 This document consists of Mikrut's notes and legal opinions on the published
and a draft copy of JCX-99. The draft copy was faxed to Mikrut on June 10,
1999 from the Joint Tax Committee. (Note: redacted copies of the document
C11 This document contains Jonathan Talisman's (Deputy Assistant Secretary)
comments on JCX-20-00. (Note: a redacted copy was produced).
Security Financial Motion, Ex. A; Department Motion, Ex. A.
The Department claims each document is exempted from FOIA
production in whole or in part under the deliberative process
privilege embodied in FOIA Exemption 5. Facts ¶ 8. After each
document description, the Vaughn index contains an explanation
why the Department believes the document is exempted by the
deliberative process privilege. Security Financial Motion, Ex. A.
The Department submits a declaration of Gregory F. Jenner, the
Acting Assistant Secretary of the Treasury (Tax Policy), in
support of its motion. Jenner is in charge of the Office of Tax
Policy for the Department. Jenner Decl. ¶ 1. Jenner's declaration
attests that each withheld document contains predecisional and
deliberative agency records that reveal preliminary estimates,
opinions, recommendations, or mental impressions formulated
during the development of the Administration's FY 2000 and FY
2001 federal budget. Jenner Decl. ¶ 12, 22 a-e. Jenner's
declaration also attests that the withheld documents were created
in connection with the deliberative process that produced the
federal budgets for fiscal years 2000 and 2001. Id. at ¶ 12.
Jenner attests none of the withheld documents represents a
statement of agency policy or a final agency decision. Id. at ¶
IV. The Budgetmaking Process
The federal budget is generally released each year on the first
Monday of February. Facts ¶ 11. Potential tax policy proposals to
be included in the federal budget may be identified at any time
during the preceding year. Id. The process of considering,
refining, and deciding budget proposals is most intense during
the several months before the budget's release. Id. The
development of budget proposals is an iterative process. Id. at
¶ 12. Proposals are suggested, analyzed, and often revised
depending on their impact on the overall budget. Id. The
Assistant Secretary of the Department of Treasury or one of the
Deputy Assistant Secretaries determines which proposal revisions
are studied. Id. This process continues until a decision is
made either to include or exclude the proposal in the budget.
Jenner Decl. ¶ 15. The final decision to include a budget
proposal ultimately is made by the President, although his
decision-making authority may be delegated to others.*fn7
Id. The Department's role in the budgetmaking process is advisory
to the Office of Budget and Management ("OMB"), which in turn,
has an advisory role to the President on the federal budget.
Jenner Second Decl. ¶ 3.*fn8 In connection with the study of
a particular budget proposal, OTP might create written analyses
and materials, including but not limited to revenue estimates,
explanations, descriptions, legislative histories for budget
proposals, and talking points. Facts ¶ 13. Only final revenue
estimates, Treasury Blue Book write-ups, and budget proposal
explanations are ever published. Id. OTP generally does not
prepare statutory language for budget proposals. Jenner Decl. ¶
17. However if a member of Congress or congressional committee
decides to include a budget proposal in legislation, OTP is
typically involved in several ways. Id. The Assistant
Secretary, the Deputy Assistant Secretaries, and/or OTP staff
members may be consulted as the legislation is developed and
drafted. Id. OTP staff members may generate revenue estimates,
analyze revenue estimates, and compare and analyze proposals.
Id. If a budget proposal progresses beyond introduction in
Congress, the proposal may be revised in congressional committee
and on the floor of both houses of Congress. Facts ¶ 14. OTP's
involvement at this stage of the process might include preparing
analyses and other written materials similar to those created
during the Department's study of a budget proposal. Id. The
process continues until a determination is made to include the
proposal in the budget. Id.
If Congress ultimately passes the budget proposal, OTP might be
asked to analyze it for use during the President's consideration
of the legislation. Id. at ¶ 15. If the President signs the
legislation into law, OTP might be asked to prepare written
materials on the new law for public release or for use in
congressional testimony or to facilitate the development of
regulations pursuant to the new law. Id. The long-standing policy of the President
and OMB is to keep confidential such written materials exchanged
within agencies and between agencies and OMB and the President in
connection with the budgetmaking process. Id. at ¶ 13.
I. Standard of Review
Summary judgment is appropriate when the moving papers and
affidavits show there is no genuine issue of material fact and
the movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986); Kaempe v. Myers, 367 F.3d 958, 966 (D.C. Cir. 2004). A
party seeking summary judgment bears the initial responsibility
of informing the court of the basis for its motion, and
identifying evidence that demonstrates the absence of a genuine
issue of material fact. The non-moving party must then come
forward with evidence and designate specific facts that establish
there is a genuine triable issue. Kingman Park Civic Ass'n. v.
Williams, 348 F.3d 1033, 1041 (D.C. Cir. 2003). A genuine issue
of material fact exists when the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.
Waterhouse v. District of Columbia, 298 F.3d 989, 992 (D.C.
Security Financial moved for summary judgment with respect to
the withheld documents only. Its motion makes clear that it is
not challenging the Department's asserted exemptions for any of
the other documents on the Vaughn Index ("the unchallenged
documents"). The Department moved for summary judgment with
respect to all documents on its Vaughn Index. In its
opposition, Security Financial makes clear that it is only
seeking a limited category of documents: those that reflect the
basis for the budget line item. Opposition at 5, 6, 8. Because
the same documents are at issue in both motions, the court
addresses the motions together. II. Sufficiency of the Department's Search for Documents
The Department contends it conducted a reasonable search for
documents responsive to Security Financial's FOIA request.
Security Financial fails to respond to this argument and, thus,
concedes the reasonableness of the Department's search. See
Local Rule 7.1 (b); Buggs v. Powell, 293 F. Supp. 2d 135, 141
(D.D.C. 2003). In any event, the Department has established that
it conducted a reasonable search for documents in response to
Financial Security's FOIA request. In deciding whether an
agency's document search is adequate, the issue is not whether
other responsive records might possibly exist, but whether the
search was adequate, judged by a reasonableness standard. Wilbur
v. Central Intelligence Agency, 273 F. Supp. 2d 119, 124 (D.D.C.
2003). An agency may rely on affidavits to demonstrate the
reasonableness of its search. Ferranti v. Bureau of Alcohol,
Tobacco & Firearms, 177 F.Supp. 2d 41, 45 (D.D.C. 2001).
As set forth in Jenner's declaration, the Department
interviewed employees, manually searched through office files of
TLC, BTC, and OTA current and former employees, and
electronically searched for documents using key words. Facts ¶ 8.
The undisputed evidence establishes that the Department's search
III. Sufficiency of Vaughn Index
Security Financial argues that the Department's Vaughn index
lacks sufficient detail to support the claimed exemptions.
Security Financial does not identify any particular entries it
believes are insufficient. Rather, it argues the index is
conclusory and contains cookie-cutter assertions of the
deliberative process privilege. The Department counters that the
index provides detailed descriptions of each document, and to the
extent there is repetition, the repetition is logical because the
same harm would stem from disclosure of the withheld documents. A Vaughn index must adequately describe each withheld
document, state which exemption the agency claims for each
withheld document, and explain the exemption's relevance.
Johnson v. Executive Office for United States Attorneys,
310 F.3d 771, 774 (D.C. Cir. 2002). A Vaughn index must be
sufficiently detailed so the court can review the applicability
of the claimed FOIA exemptions on a document by document basis.
Judicial Watch, Inc. v. United States Postal Service,
297 F.Supp.2d 252, 270 (D.D.C. 2004). When an agency invokes the
deliberative process privilege to withhold a document, the
Vaughn index must correlate facts in or about each document
with the elements of the privilege (predecisional and
deliberative). Id. at 260. An agency may submit other materials
to supplement its Vaughn Index, such as affidavits, that give
the court enough information to determine whether the claimed
exemptions are properly applied. Id. at 257.
The court must determine whether the Department's Vaughn
index and Jenner's declarations provide the court enough
information to determine whether the withheld documents are
covered by the claimed FOIA exemptions. The Department asserts
the deliberative process privilege for each withheld document and
the attorney-client privilege for some of the withheld documents.
IV. FOIA Exemption 5 Deliberative Process Privilege
The clear purpose of FOIA is to assure that the public has
access to all government documents, subject to only nine narrowly
interpreted limitations. Coastal States Gas Corp. v. Dept. of
Energy, 617 F.2d 854, 862 (D.C. Cir. 1980). Under
5 U.S.C. § 552(b)(5) ("Exemption 5"), an agency may withhold "inter-agency
or intra-agency memorandums or letters which would not be
available by law to a party . . . in litigation with the agency."
Exemption 5 encompasses the deliberative process privilege.
Coastal States, 617 F.2d at 862. The deliberative process privilege protects confidential
intra-agency advisory opinions when disclosure would be injurious
to the consultative functions of government. Taxation with
Representation Fund v. Internal Revenue Service, 646 F.2d 666,
677 (D.C. Cir. 1981). The deliberative process privilege has a
number of purposes: it serves to assure that subordinates within
an agency will be free to provide the decision-maker with their
uninhibited opinions and recommendations without fear of later
being subject to public ridicule or criticism; to protect against
premature disclosure of proposed policies before they have been
finally formulated or adopted; and to protect against confusing
the issues and misleading the public by dissemination of
documents suggesting reasons and rationales for a course of
action that were not in fact ultimate reasons for the agency's
actions. Coastal States, 617 F.2d at 866, citing Jordan v.
U.S. Dep't of Justice, 591 F.2d 753, 772-774 (D.C. Cir. 1978).
Exemption 5 does not apply to final agency actions that
constitute statements of policy or final opinions that have the
force of law, or that explain actions an agency has already
taken. Taxation with Representation, 646 F.2d at 677. Nor does
Exemption 5 protect communications that implement an established
agency policy. Id. Documents that are covered by the privilege
are those that would inaccurately reflect or prematurely disclose
the agency views, suggesting as agency position that which is
only a personal position. Coastal States, 617 F.2d at 866. For
the deliberative process privilege to apply, a document must be
both predecisional and deliberative. Id.
A document is predecisional if it was generated before the
adoption of an agency policy. Coastal States, 617 F.2d at 866.
Documents that are prepared to assist a decision-maker in
arriving at a final decision are predecisional. Quarles v. Dep't
of Navy, 893 F.2d 390, 392 (D.C. Cir. 1990). Security Financial does not dispute that the withheld documents
were generated before the President approved the federal budgets.
Indeed, the Vaughn index and Jenner declaration establish that
the withheld documents pre-date the approved final budgets. Even
where the documents are undated, the Vaughn index explains that
they were predecisional. See, e.g., Vaughn index A1, A2, A5.
The Department has met its burden of establishing that each
withheld document is predecisional.
Security Financial argues the documents lost their
predecisional status because the recited agency positions were
adopted formally or informally when the President approved the
budget line item in the 2000 and 2001 budgets. The Department
responds the documents did not lose their predecisional status
because there is no evidence the President adopted as opposed to
merely used the withheld documents in the federal budgetmaking
process. Opposition at 8. Even if a document is predecisional at
the time it is prepared, it can lose that status if it is
adopted, formally or informally, as the agency position on an
issue or is used by the agency in its dealings with the public.
Coastal States, 617 F.2d at 866.
1. Burden of Proof
The parties dispute who carries the burden of showing that the
withheld documents were not formally or informally adopted in the
federal budget. Security Financial relies on United States v.
Philip Morris USA, 218 F.R.D. 312, 317 (D.D.C. 2003) to argue
that the Department carries the burden. The Department relies on
Trans Union LLC v. Federal Trade Comm'n, 141 F.Supp. 2d 62, 20
(D.D.C. 2001), and Renegotiation Board v. Grumman Aircraft,
421 U.S. 168, 95 S.Ct. 1491 (1975), to argue that it does not carry
In Renegotiation Board, plaintiff sought regional board
reports and recommendations suggesting how the Renegotiation
Board should resolve its cases. In each case, the Board reviewed the recommendation of the regional board before it entered a
final decision. 421 U.S. at 185-86, 95 S.Ct. at 1500-01. The
Court held the regional board reports were covered by Exemption 5
even when the Board agreed with the final conclusion of a
regional board report. Because there was no evidence "to support
the conclusion that the reasoning in the reports [was] adopted by
the Board as its reasoning, even when it agree[d] with the
conclusion of a report, [the Court] conclude[d] that the reports
[were] not final opinions and [fell] within Exemption 5."
421 U.S. at 184-85; 95 S. Ct. at 1500.
In Trans Union, plaintiff sought copies of memoranda
containing recommendations from subordinate legal advisors to the
FTC Commissioner regarding FTC responses to a legislative act.
141 F. Supp. 2d at 70. Plaintiff argued the documents should be
disclosed even if they were predecisional because the agency
failed to demonstrate they were not adopted in the final
legislative rule. Id. Plaintiff's argument was rejected. Citing
Renegotiation Board, the court held where it is unclear whether
a recommendation provided the basis for a regulation, the
recommendation is exempt from disclosure. Id. at 70-1.
Security Financial relies on Philip Morris,
218 F.R.D. at 317, to support its argument that the Department carries the
burden. Although Philip Morris stated that the government has
the burden of establishing that a privileged document has not
been adopted formally or informally, the court did not require
the government to meet that burden. Id. at 318-9. As set forth
in more detail below, the court rejected the special master's
report and recommendation insofar as it required the government
to show that certain OMB documents were not informally adopted as
the working law of the government. Id. at 321-2. Indeed, the
court held "the Government is correct that it is not required to
demonstrate as to each challenged document that it was not `used'
by a decision maker. . . . Mere `use' of predecisional, advisory materials does
not amount to adoption of those materials." Id. at 318,
citing, Renegotiation Board, 421 U.S. at 189, 95 S. Ct. 1491.
Philip Morris does not support Security Financial's argument.
Accordingly, consistent with Renegotiation Board and Trans
Union, the Department does not carry the burden of proving that
each withheld document was not adopted formally or informally by
the President. Security Financial argues the withheld documents
were either formally or informally adopted when the government
approved the final budget line item in the 2000 and 2001 federal
budgets. The Department counters that it does not know whether
the President adopted the opinions and recommendations embodied
in the withheld documents.
2. Formal/Informal Adoption
There is no evidence the withheld documents were expressly
adopted as part of the 2000 and 2001 federal budgets. See, e.g.,
American Postal Workers Union v. Office of Special Counsel,
1986 U.S. Dist. LEXIS 31018, at **9-12 (D.D.C. June 24, 1986) (summary
judgment granted for government where decision-maker did not
expressly incorporate by reference the recommendations into his
final decision). Security Financial argues the withheld documents
were informally adopted and became the working law of the
Department. Reply at 5.
Cases that have addressed whether an agency informally adopted
a predecisional document generally have focused on whether the
documents are used by an agency as secret law or working law.
See, e.g., Tax Analysts v. IRS, 294 F.3d 71, 81 (D.C. Cir.
2002); Taxation with Representation Fund v. IRS, 646 F.2d 666,
678 (D.C. Cir. 1981); Coastal States, 617 F.2d at 867-8. An
agency will not be permitted to develop a body of secret law,
used in the discharge of its regulatory duties and in its
dealings with the public, but hidden behind a veil of privilege
because it is not designated as "formal," "binding," or "final." Coastal States,
617 F.2d at 867. Documents that serve as agency working law are defined as
interpretations of established policy on which the agency relies
in discharging its regulatory responsibilities. Tax Analysts,
294 F.3d at 81. Where agency personnel rely on materials as
established policy in discharging regulatory responsibilities,
withholding those materials would serve no legitimate government
policy interest. Coastal Services, 617 F.2d at 869.
Courts consider a variety of factors to determine whether a
document constitutes the working law of an agency. The most
important factor is whether the agency staff itself treats the
document as precedential guidance. Taxation with
Representation, 646 F.2d at 683. Another factor the court must
consider is the nature of the decision-making authority vested in
the office or person issuing the disputed document. Id. at 679.
If the person or body issuing the document has final authority
over the decision, it is more likely that the document represents
a final action of the agency, and must therefore be disclosed as
agency working law. Id. at 680. A final factor for the court to
consider is whether a challenged document is sent from a
subordinate to a superior or vice versa. Philip Morris,
218 F.R.D. at 320.
Security Financial argues the withheld documents are agency
working law because they contain the assumptions and calculations
underlying the budget line item. In making this argument,
Security Financial relies almost exclusively on American Society
of Pension Actuaries v. IRS, 746 F. Supp. 188 (D.D.C. 1990). In
American Society, plaintiff brought a FOIA claim to uncover the
reasoning behind a revenue estimate contained in the President's
proposed budget for fiscal year 1990. Id. at 189. The court
entered judgment for plaintiff with respect to a limited number
of documents that contained the assumptions and calculations that
yielded the budget line item at issue. Id. at 191. Relying on
Coastal States, the court determined because the documents
"contain the analytic backup for the government estimate, they `embody the
agency's effective law and policy' and therefore are not
protected by Exemption 5." Id. The court acknowledged that
simply because an intra-agency deliberative memorandum reaches
the same conclusion as the ultimate decision-maker provides no
guarantee that the memorandum represents the views actually
adopted by the government. Id. Nevertheless, because the
government stated the budget estimate with numerical specificity,
the court held there was a minimal risk of misrepresenting the
reasoning actually motivating the final decision. Id. at 192.
The Department urges the court to reject American Society and
to follow Philip Morris, 218 F.R.D. at 321. In Philip Morris,
the court reviewed a report and recommendation from the special
master that ordered the government to produce OMB documents
consisting of emails and attachments relating to the
Administration's plan to reduce teen smoking. Id. at 317, n.
12. The court rejected the special master's informal adoption
analysis under the working law concept because OMB functioned in
an advisory role to the President. The court held the OMB
documents did not fall within the working law analysis because
OMB did not use the documents to carry out its administrative
functions. Rather, OMB is a policy office and its main role is to
advise and assist the President in his supervision and oversight
of the Executive Branch with respect to budget and management
issues. Id. at 321. The court acknowledged that the existing
cases involving informal adoption all turned on the working law
analysis.*fn9 Id. Philip Morris crafted a new analysis for
documents that did not fit the working law analysis: where the existing analysis for informal adoption is
not applicable, the [court] should focus only on
whether the documents [at issue] meet the two core
requirements of the deliberative process privilege,
that is whether they are predecisional and
deliberative. This approach is consistent with the
emphasis the courts have repeatedly placed on the
`function and significance' of disputed documents
within the context of a particular agency's decision
Id. at 322, citing, Taxation with Representation,
646 F.2d at 678.
Similarly, as set forth in Jenner's declarations, the
Department functions in an advisory role to the President with
respect to federal budget decisions. Jenner Decl. ¶¶ 13-20;
Jenner Second Decl. ¶¶ 1, 3, 5. Jenner's declarations describe
the function and significance of the withheld documents in the
context of the budgetmaking process. Like the OMB documents at
issue in Philip Morris, the withheld documents were generated
in the process of advising the President and his staff, including
OMB, on budget issues including the budget line item, Jenner's
declarations establish that the Department played an advisory
role similar to OMB in the budgetmaking process. Jenner Second
Decl. ¶ 3; Jenner Decl. ¶¶ 13-19. The court finds the reasoning
in Philip Morris persuasive under these circumstances. The
working law analysis is not meaningful as applied to the withheld
documents. Instead, the court must focus on whether the withheld
documents are predecisional and deliberative. As set forth above,
the Department has satisfied its burden of establishing that the
withheld documents are predecisional. The court must next
consider whether they are deliberative.
A document is deliberative if it reflects the "give-and-take of
the consultative process." Coastal States, 617 F.2d at 866.
Material that is factual is not protected by the deliberative
process privilege. Judicial Watch, Inc. v. United States Postal
Service, 297 F.Supp.2d 252, 259 (D.D.C. 2004). Deliberative
documents are those reflecting advisory opinions, recommendations
and deliberations comprising part of a process by which governmental
decisions and policies are formulated. Id. Recommendations,
draft documents, proposals, suggestions, and other subjective
documents that reflect the personal opinions of the writer rather
than the policy of the agency are deliberative. Coastal States,
617 F.2d at 866. Advisory opinions prepared for the President are
deliberative to the extent they contain opinions and
recommendations. Id., citing, Environmental Protection Agency v.
Mink, 410 U.S. 73, 93 S. Ct. 827 (1973).
As set forth in the Jenner declaration, the withheld documents
fall into five categories: revenue estimates (Vaughn Index Nos.
A5, A10, A16-A17, A29, A31, A33, A36-A41, and C5-C6),
drafts/draft comments (Vaughn Index Nos. A4, A6, A8, A12,
A30-A34, A43, A45, and C7-C11), emails (Vaughn Index Nos. A3,
A13, A15, A19, A31, A42), notes (Vaughn Index Nos. A1-A2, B1),
and Q&As/talking points (Vaughn Index Nos. A9, A18, A24, A28,
1. Revenue Estimates
The revised Vaughn index provides detailed descriptions of
each of these documents, setting forth the dates, authors,
recipients, and a description of the content of each document.
Jenner's declaration further describes these documents as
"preliminary revenue estimates with assumptions, draft revenue
estimate tables, possible revenue raising options with
preliminary estimates, and underlying calculations, assumptions,
and OMB's economic assumptions." Jenner Declar. ¶ 22(a). Jenner
attests these records are drafts, some of which were sent to
Department supervisors for approvals and were exchanged with OMB
as part of the budget process. Id. This undisputed evidence
establishes that the documents are deliberative. See Bureau of
Nat'l Affairs v. United States Dep't of Justice, 742 F.2d 1484,
1496 (D.C. Cir. 1985) (EPA budget recommendations to President
were predecisional and deliberative); Coastal States,
617 F.2d at 866. 2. Drafts/Draft Comments
The revised Vaughn index provides detailed descriptions for
each of these documents, setting forth the authors, recipients,
and a description of each document. Jenner's declaration further
describes these documents as "draft explanations of tax proposals
and draft legislative histories as well as comments and edits
thereto. These records were created by . . . attorneys. . . ."
Jenner Decl. ¶ 22(b). Jenner attests that the draft documents
were prepared in the course of the budgetmaking process and do
not reflect final agency action or opinion. Id. The
Department's Vaughn index and Jenner's declaration establish
that the drafts and comments are deliberative. See Hamilton Sec.
Group. Inc. v. Dep't of Housing & Urban Dev., 106 F.Supp.2d 23,
32 (D.D.C. 2000) (draft audit report that was not approved as
final agency position was deliberative).
Again, the Vaughn index provides dates, names, and
descriptions of the content of each email. Moreover, Jenner's
declaration explains that the emails reflect "Department staff's
discussions, opinions, and mental impressions about alternatives
under consideration in developing the Administration's I.R.C.
Section 419A(f)(6) proposal." Jenner Decl. ¶ 22(c). The Vaughn
Index and Jenner declaration establish that the emails contain
the Department staff members' personal opinions and impressions
about the proposed legislation rather than the agency's final
position on the proposed legislation. Based on this undisputed
evidence, the emails are deliberative. See Trans Union,
141 F. Supp. 2d at 70 (email containing author's views of proposed
legislation was deliberative). 4. Notes
The revised Vaughn Index identifies the author and describes
the contents of the notes. Jenner's declaration attests that the
documents in this category are the "personal notes either of
meetings with other federal employees related to alternative
proposals to limit the pre-funding of welfare benefit plans or of
mental impressions about the pros and cons of alternative
legislative proposals." Jenner Decl. ¶ 22(d). The Department
satisfied its burden of establishing that the personal notes are
deliberative. See, e.g., Judicial Watch v. United States Dep't
of Justice, 102 F. Supp.2d 6, 13-14 (D.D.C. 2000) (attorney
general's notes were both predecisional and deliberative).
5. Q & As/Talking Points
The revised Vaughn Index identifies the author, and provides
a description of the contents of each document in this category.
Moreover, Jenner's declaration describes these documents as "Q&As
and talking points prepared by TLC, OTA, and BTC staff that
explain and compare alternative tax proposals for the FY 2000 and
FY 2001 Budgets. Such records were used in preparing Department
officials for testimony before congressional committees." Jenner
Decl. ¶ 22 (e). Similar documents have been found to be
deliberative. See, e.g., Hunt v. United States Marine Corp.,
935 F. Supp. 46, 52 (D.D.C. 1996) (point papers used to assist
decision-makers in making their final decision were
deliberative). The undisputed evidence establishes that these
documents are deliberative because they were generated for the
purpose of comparing alternative tax proposals in the course of
considering tax legislation.
C. Substantial Need
Security Financial argues the deliberative process privilege is
qualified and it may overcome the privilege by showing a
substantial need for the withheld documents. The Department
argues the privilege is not qualified in FOIA cases. The Department is
correct. See United States Dep't of Justice v. Julian,
486 U.S. 1, 12-14, 108 S. Ct. 1606, 1613-14 (1988); Durns v. Bureau of
Prisons, 804 F.2d 701, 703-04 (D.C. Cir. 1986). Accordingly,
Security Financial's alleged need for the documents cannot
overcome the deliberative process privilege.
Security Financial provides no basis for the court to discredit
the Department's Vaughn index and Jenner's declarations. The 31
page index and declarations are sufficiently detailed to allow
the court to determine that the withheld documents are covered by
the deliberative process privilege embodied in Exemption 5.
Moreover, the Department has satisfied its burden of showing that
all segregable information has been produced. Jenner Decl. ¶ 26.
Accordingly, the Department's summary judgment motion must be
granted and Security Financial's motion must be denied.
V: Exemption 5: Attorney-Client Privilege
The Department withheld numerous documents under the
attorney-client privilege in addition to the deliberative process
privilege. See Vaughn Index Nos. A1-A2, A4, A6-A9, A12-A13,
A15, A21-A28, A30-A32, A34-A35, A42-A43. Security Financial
argues the Department has not satisfied its burden of
establishing these documents are covered by the attorney-client
privilege. Exemption 5 protects from disclosure confidential
communications between an attorney and his client. Coastal
States, 617 F.2d at 862.
The Department's revised Vaughn index lists the author and
recipient, and provides a description of the content of each
challenged document. See Department Motion, Ex. A. The revised
Vaughn index identifies each of the challenged documents as
authored by an attorney and containing attorney analysis and/or
discussion relating to the matters set forth in the documents,
with a few exceptions. The Department does not identify attorney
authors or attorney recipients for document numbers A4, A9, A12,
A21-A22, A23, A25, A30-A31 and A34-A35. However, the index
describes these documents as containing attorney analysis and/or
opinions. Moreover, Jenner's declaration attests that the
challenged documents contain the "opinions, recommendations, and
analyses of Department attorneys. . . ." Jenner Decl. ¶ 23.
Considering the revised Vaughn index, as supplemented by
Jenner's declaration, the Department has satisfied its burden of
establishing that the challenged documents contain information
protected in whole or in part by the attorney-client privilege,
and that it has produced all segregable information. Jenner Decl.
¶¶ 9, 10, 26.
VI: Exemption 3
The Department claims document B1 contains the identity of a
taxpayer. The Department claims the taxpayer's identity is exempt
from disclosure under Exemption 3.5 U.S.C. § 552(b)(3). Security
Financial agrees, but argues the document should be produced with
the name redacted. As set forth above, the Department has
satisfied its burden of showing document B1 is covered by the
deliberative process privilege. Accordingly, the Department need
not produce a redacted copy of document B1.
There are no disputed factual issues. The Department has
established it is entitled to judgment as a matter of law.
Accordingly, the Department's summary judgment motion must be
granted and Security Financial's motion must be denied.