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Sea Shepherd Conservation Society v. Internal Revenue Service

United States District Court, District of Columbia

March 31, 2015

SEA SHEPHERD CONSERVATION SOCIETY, Plaintiff,
v.
INTERNAL REVENUE SERVICE, Defendant.

MEMORANDUM OPINION

AMY BERMAN JACKSON, District Judge.

Plaintiff Sea Shepherd Conservation Society made a Freedom of Information Act ("FOIA") request to the Internal Revenue Service ("IRS"), seeking all records related to itself in IRS files dated from January 1, 2006 to May 13, 2013. In particular, plaintiff requested records related to any complaints lodged with the IRS about Sea Shepherd, and the examination of Sea Shepherd's tax-exempt status that began in January of 2013. In this lawsuit, plaintiff contends that the IRS failed to conduct an adequate search for responsive records, and that it has withheld or redacted records without justification. Defendant filed a motion for summary judgment on May 20, 2014.

The Court finds that defendant has failed to establish that it conducted an adequate search for records under FOIA, and that it has not demonstrated on this record that most of its withholdings were justified. Therefore, the Court will remand this case and direct the agency to conduct additional searches, provide more detailed descriptions of its searches and more detailed justifications for its withholdings, and release any non-exempt portions of responsive records to plaintiff.

BACKGROUND

I. Sea Shepherd Conservation Society

Sea Shepherd is a 501(c)(3) non-profit environmental organization dedicated to the preservation of oceanic habitats and wildlife, including whales. Pl.'s Mem. of P. & A. in Opp. to Def.'s Mot. for Summ. J. at 2 [Dkt. # 17] ("Pl.'s Opp.") at 2. Since 2003, plaintiff has "engaged in numerous direct confrontation campaigns" against the Institute of Cetacean Research ("Cetacean"), which plaintiff describes as an organization that hunts whales in the Southern Ocean for commercial purposes in violation of international law. Id. Plaintiff claims that Cetacean is funded, in part, by the Japanese government. Id.

Sea Shepherd maintains that, in response to its campaigns against Cetacean, the Japanese government and Cetacean have targeted Sea Shepherd diplomatically and through litigation in the United States. See id. at 4-5. Some of this litigation has been successful. See Inst. of Cetacean Research v. Sea Shepherd Conservation Soc'y, 725 F.3d 940, 944, 947 (9th Cir. 2013) (declaring that Sea Shepherd's acts amounted to piracy and granting preliminary injunction). Other matters remain pending.[1] On the diplomatic side, and as background for the instant litigation, plaintiff points to two classified cables, authored by United States government officials and published in January 2011 by the online organization Wikileaks, that reflect conversations between the United States and Japanese governments about Sea Shepherd's activities and tax-exempt status. See Ex. 1 to Rule 56(d) Decl. of Christopher Rizek [Dkt. # 17-3] at 1-2 (stating that General Machida of Japan "appreciates the [U.S. government] initiative to address [Sea Shepherd's] tax exempt status, " and that U.S. official Monica Medina "believes the [U.S. government] can demonstrate the group does not deserve tax exempt status based on their aggressive and harmful actions"); Ex. 2 to Rule 56(d) Decl. of Christopher Rizek [Dkt. # 17-3] at 2 (stating that General Yamashita of Japan "said [Sea Shepherd's] actions have kept the fleet from reaching its [whaling] quota the last few years" and that the government of Japan "would come under pressure domestically if [Sea Shepherd] harassment continues to keep Japanese whalers from filling their quota, " and noting that U.S. official Marc Wall "said the [U.S. government] is concerned about the safety of life at sea and is looking at the activity of [Sea Shepherd]").

In January 2013, Sea Shepherd became the subject of an IRS examination into its tax-exempt status for the year 2010. See Def.'s Statement of Undisputed Material Facts [Dkt. # 16-1] ("Def.'s SOF") ¶ 1; Pl.'s Statement of Genuine Issues in Opp. to Def.'s SOF [Dkt. # 17-2] ¶ 1. On October 29, 2014, the IRS notified Sea Shepherd by letter that its 2010 return would be accepted and that the investigation was closed. Attach. 1 to Pl.'s Notice of Change in Facts [Dkt. # 22-1] at 1. In addition, the IRS informed plaintiff in an addendum to its letter that, "[s]hould the courts with its [sic] authority find the Sea Shepherd in violation of laws, a subsequent examination may be initiated." Id. at 4.

II. Plaintiff's FOIA Request

Plaintiff contends that, "[b]ased on revelations in the media, Sea Shepherd's past experiences with very public attempts by both [Cetacean] and the Japanese government to shut down the organization, and the timing and nature of the audit, Sea Shepherd has reason to believe that the IRS started the audit in response to a request of the Japanese government or [Cetacean]." Pl.'s Opp. at 5. These suspicions led plaintiff to file a FOIA request with the IRS on May 13, 2013, seeking "any and all documents, from January 1, 2006, through [May 13, 2013], related to Sea Shepherd, " including documents related to "the examination of Sea Shepherd commenced by the Internal Revenue Service on or about January 4, 2013, " and any "complaint lodged with the Internal Revenue Service expressing concerns regarding Sea Shepherd's activities or qualification for tax-exempt status after January 1, 2006." Ex. A to Compl. [Dkt. # 1] at 1. Plaintiff also sought "any and all documents related to any request from any person that the Internal Revenue Service examine Sea Shepherd and any and all documents that relate to the examination of Sea Shepherd." Id. at 1-2.

Plaintiff specifically requested that the IRS search the following locations: the files of the agent who handled the examination of plaintiff's tax-exempt status, Peter Huang; the National and Area Chief Counsel Offices of the Tax-Exempt and Government Entities ("TEGE") function of the IRS; the office of the Director of the Exempt Organizations Exams in Dallas, Texas; and the office of Exempt Organizations Rulings and Agreements in the TEGE National Office. Id . at 1.

III. Procedural History

On June 17, 2013, the IRS informed plaintiff that it would not be able to respond within the twenty-day statutory period, and it extended its response date to August 2, 2013. Compl. [Dkt. # 1] ¶ 6; see also 5 U.S.C. § 552(a)(6)(A)(ii). After the IRS missed this deadline, plaintiff filed a complaint in this Court on September 19, 2013. See Compl. ¶¶ 7-9. On January 30, 2014, defendant produced over 3000 pages of records to plaintiff, and moved for an extension until March 7, 2014, to complete its response. Def.'s Mot. Proposing Production Schedule [Dkt. # 8]. The Court granted defendant's motion for an extension of the production schedule. Minute Order (Jan. 31, 2014).

On March 7, 2014, defendant produced a second set of documents to plaintiff, which it described as its "final release." Def.'s Status Report (Mar. 7, 2014) [Dkt. # 10]. On March 21, 2014, however, defendant filed another status report in which it stated that it had discovered on March 19, 2014, that its initial search was incomplete, and that it was taking steps "to expeditiously complete its search and production of IRS counsel records." Def.'s Status Report (Mar. 21, 2014) [Dkt. # 12] at 1; see also Decl. of A.M. Gulas [Dkt. # 12-1] ("1st Gulas Decl.") ¶ 6.

On May 20, 2014, the IRS filed a motion for summary judgment. Def.'s Mot. for Summ. J. [Dkt. # 16] ("Def.'s Mot."); Mem. in Supp. of Def.'s Mot. [Dkt. # 16] ("Def.'s Mem."). Among the arguments advanced by the agency was the contention that documents should be withheld because the audit of plaintiff's tax-exempt status was ongoing. See Def.'s Mem. at 12. Plaintiff filed an opposition on July 18, 2014. Pl.'s Opp. Defendant replied on August 8, 2014, Def.'s Reply Mem. in Supp. of Def.'s Mot. [Dkt. # 19] ("Def.'s Reply"), and filed an additional declaration by Kieu Ta, which corrected an exhibit filed with the motion for summary judgment. See Decl. of Kieu Ta, Attach. 1 to Def.'s Errata [Dkt. # 18-1] ("Ta Decl."). In light of the supplemental declaration, plaintiff was granted leave to file a sur-reply on August 25, 2014. Minute Order (Aug. 25, 2014); see also Pl.'s Sur-reply to Def.'s Reply [Dkt. # 21].

On November 5, 2014, plaintiff notified the Court that the IRS had concluded its investigation without consequence for plaintiff, and it took the position that this event vitiated defendant's reliance on FOIA Exemptions 7(A) and 7(D) to withhold records. Pl.'s Notice of Change in Facts [Dkt. # 22] ("Pl.'s Notice") at 1-2. The Court ordered the IRS to state whether it wished "to continue to stand on its previous withholdings and explanations, " or "to withdraw and resubmit its motion for summary judgment." Minute Order (Nov. 5, 2014). On November 12, 2014, the IRS notified the Court that it would stand on its previous pleadings. Def.'s Notice in Resp. [Dkt. # 24] ("Def.'s Resp.") ¶¶ 1-4.

On March 3, 2015, the Court ordered defendant to deliver a series of records to the Court for its in camera review: redacted and unredacted versions of the pages 003708 and 003715 in the Vaughn Index for IRS Examination Records [Dkt. # 16-3] ("Examination Vaughn Index"), and pages 012398, 012400-012401, 012404, 012467, 012533-012534, 012569-012571, 012208-012210, and 012215-012216 in the Vaughn Index for IRS Counsel Records [Dkt. # 16-5] ("Counsel Vaughn Index"). Minute Order (Mar. 3, 2015), citing Ray v. Turner, 587 F.2d 1187, 1195 (D.C. Cir. 1978). Defendant complied with this order, see Pl.'s Notice of Compliance [Dkt. # 26], and the Court has reviewed the records in connection with its consideration of defendant's motion for summary judgment.

STANDARD OF REVIEW

In a FOIA case, the district court reviews the agency's decisions de novo and "the burden is on the agency to sustain its action." 5 U.S.C. § 552(a)(4)(B); Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981). "FOIA cases are typically and appropriately decided on motions for summary judgment." Moore v. Bush, 601 F.Supp.2d 6, 12 (D.D.C. 2009).

On a motion for summary judgment, the Court "must view the evidence in the light most favorable to the nonmoving party, draw all reasonable inferences in [its] favor, and eschew making credibility determinations or weighing the evidence." Montgomery v. Chao, 546 F.3d 703, 706 (D.C. Cir. 2008); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). But where a plaintiff has neither alleged nor provided evidence that an agency acted in bad faith, "a court may award summary judgment solely on the basis of information provided by the agency in declarations." Moore, 601 F.Supp.2d at 12.

ANALYSIS

FOIA requires government agencies to release records upon request in order to "ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed." NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242 (1978). But because "legitimate governmental and private interests could be harmed by [the] release of certain types of information, " Congress provided nine specific exemptions to the disclosure requirements. FBI v. Abramson, 456 U.S. 615, 621 (1982); see also Ctr. for Nat'l Sec. Studies v. DOJ, 331 F.3d 918, 925 (D.C. Cir. 2003) ("FOIA represents a balance struck by Congress between the public's right to know and the government's legitimate interest in keeping certain information confidential."). These nine FOIA exemptions are to be construed narrowly. Abramson, 456 U.S. at 630.

To prevail in a FOIA action, an agency must, first, demonstrate that it has made "a good faith effort to conduct a search for the requested records, using methods which can be reasonably expected to produce the information requested." Oglesby v. U.S. Dep't of Army, 920 F.2d 57, 68 (D.C. Cir. 1990). Second, the agency must show that "materials that are withheld... fall within a FOIA statutory exemption." Leadership Conference on Civil Rights v. Gonzales, 404 F.Supp.2d 246, 252 (D.D.C. 2005). Any "reasonably segregable" information in a responsive record must be released, 5 U.S.C. § 552(b), unless the nonexempt portions are "inextricably intertwined with exempt portions.'" Wilderness Soc'y v. U.S. Dep't of Interior, 344 F.Supp.2d 1, 18 (D.D.C. 2004), quoting Mead Data Cent., Inc. v. U.S. Dep't of Air Force, 566 F.2d 242, 260 (D.C. Cir. 1977).

I. Defendant's declarations do not describe an adequate search for responsive records.

A. Legal Standard

"An agency fulfills its obligations under FOIA if it can demonstrate beyond material doubt that its search was reasonably calculated to uncover all relevant documents.'" Valencia-Lucena v. U.S. Coast Guard, 180 F.3d 321, 325 (D.C. Cir. 1999), quoting Truitt v. Dep't of State, 897 F.2d 540, 542 (D.C. Cir. 1990); see also Oglesby, 920 F.2d at 68; Weisberg v. DOJ, 705 F.2d 1344, 1351 (D.C. Cir. 1983). The Court finds that the IRS did not meet this burden, and will remand the case to defendant to continue its search and amend its declarations.

To demonstrate that it has performed an adequate search for documents responsive to a FOIA request, an agency must submit a reasonably detailed affidavit describing the search. Oglesby, 920 F.2d at 68 (finding summary judgment improper where agency's affidavit lacked sufficient detail); see also Defenders of Wildlife v. U.S. Border Patrol, 623 F.Supp.2d 83, 91 (D.D.C. 2009) (same). A declaration is "reasonably detailed" if it "set[s] forth the search terms and the type of search performed, and aver[s] that all files likely to contain responsive materials (if such records exist) were searched." Oglesby, 920 F.2d at 68; see also Defenders, 623 F.Supp.2d at 92 (finding declaration deficient where it failed to detail the types of files searched, the filing methods, and the search terms used). A declaration, therefore, must at least include the agency's "rationale for searching certain locations and not others." Defenders, 623 F.Supp.2d at 92; see also Nat'l Sec. Counselors v. CIA, 849 F.Supp.2d 6, 11 (D.D.C. 2012) (finding affidavit sufficient where it "outline[d] with reasonable detail the CIA's decision to limit the search" to a particular area); Hooker v. U.S. Dep't of Health & Human Servs., 887 F.Supp.2d 40, 51 (D.D.C. 2012) (finding that the agency's declaration "fail[ed] to explain... why those offices were the reasonably likely locations of the records sought"). Agency affidavits attesting to a reasonable search "are afforded a presumption of good faith" that "can be rebutted only with evidence that the agency's search was not made in good faith.'" Defenders of Wildlife v. U.S. Dep't of Interior, 314 F.Supp.2d 1, 8 (D.D.C. 2004), quoting Trans Union LLC v. FTC, 141 F.Supp.2d 62, 69 (D.D.C. 2001).

An agency's declarations "need not set forth with meticulous documentation the details of an epic search for requested records, '" Defenders, 623 F.Supp.2d at 91, quoting Perry v. Block, 684 F.2d 121, 127 (D.C. Cir. 1982), but they should "describe what records were searched, by whom, and through what processes.'" Id., quoting Steinberg v. DOJ, 23 F.3d 548, 552 (D.C. Cir. 1994). Conclusory assertions about the agency's thoroughness are not sufficient. See Morley v. CIA, 508 F.3d 1108, 1121-22 (D.C. Cir. 2007) (finding agency's "single conclusory affidavit" to be inadequate). At the same time, however, where an "affidavit could in theory be more detailed, that fact alone does not warrant denying summary judgment in favor of" a defendant. White v. DOJ, 840 F.Supp.2d 83, 89 (D.D.C. 2012).

B. Defendant's Searches and Declarations

Plaintiff's FOIA request sought three types of records: (1) records related to the IRS's audit of Sea Shepherd; (2) records related to "any complaint lodged with the [IRS] expressing concerns regarding Sea Shepherd's activities or qualification for tax-exempt status" between January 1, 2006, and May 13, 2013; and (3) "any and all documents, from January 1, 2006, through [May 13, 2013], related to" plaintiff. Ex. A to Compl. at 1. In addition, plaintiff's request identified several offices and one agent, in various branches of the IRS, that it believed might possess responsive files: the office of the Director of Exempt Organizations Examinations in Dallas, Texas; Peter Huang, the agent assigned to the examination of ...


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