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Cause of Action v. Internal Revenue Service

United States District Court, D. Columbia.

August 28, 2015

CAUSE OF ACTION, Plaintiff,
v.
INTERNAL REVENUE SERVICE, Defendant

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          For CAUSE OF ACTION, Plaintiff: Daniel Zachary Epstein, LEAD ATTORNEY, CAUSE OF ACTION, Washington, DC; Erica L. Marshall, PRO HAC VICE, CAUSE OF ACTION, Washington, DC.

         For INTERNAL REVENUE SERVICE, Defendant: Stephanie Ann Sasarak, Yonatan Gelblum, LEAD ATTORNEYS, U.S. DEPARTMENT OF JUSTICE, Tax Division, Washington, DC.

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         MEMORANDUM OPINION

         AMY BERMAN JACKSON, United States District Judge.

         This case arises out of a Freedom of Information Act request by plaintiff Cause of Action for records related to possible

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disclosures of confidential " return information" by the Internal Revenue Service (" IRS" ). Compl. [Dkt. # 1] ¶ 7. The confidentiality of that information is governed by 26 U.S.C. § 6103, and that provision of the Internal Revenue Code lies at the heart of this action. " Return information" is defined in section 6103(b)(2), and section 6103(g) governs disclosures to the President and certain other Executive Branch employees.

         On October 9, 2012, plaintiff requested eight categories of records from defendant, the first six of which are at issue in this lawsuit.[1] Ex. 1 to Compl. [Dkt. # 1-3] (" FOIA Req." ); Pl.'s Mem. of P. & A. in Opp. to Def.'s Mot. for Summ. J. & in Supp. of its Cross-Mot. for Summ. J. [Dkt. # 21-1] (" Pl.'s Mem." ) at 3. Specifically, plaintiff sought:

1) All documents, including but not limited to emails, letters, and telephone logs or other telephone records, constituting communications to and/or from any employee of the IRS concerning any FOIA request or lawsuit that relates to [26 U.S.C.] § 6103(g);
2) All documents, including notes and emails, referring or relating to any communication described in request #1;
3) Any communications by or from anyone in the Executive Office of the President constituting requests for taxpayer or " return information" within the meaning of § 6103(a) that were not made pursuant to § 6103(g);
4) All documents, including notes and emails, referring or relating to any communication described in request #3;
5) All requests for disclosure by any agency pursuant to [26 U.S.C. § ] 6103(i)(1), (i)(2), and (i)(3)(A); [and]
6) All documents, including communications not limited to notes, emails, letters, memoranda and telephone logs or other telephone records, referring or relating to records described in request #5[.]

FOIA Req. at 2. Plaintiff requested records from the time period of January 1, 2009, through the date of its FOIA request, October 9, 2012. Id. at 1.

         Defendant released 793 pages responsive to categories one and two of plaintiff's request with some redactions, citing FOIA Exemptions 5 and 6. Br. in Reply to Pl.'s Opp. to Def.'s Mot. for Summ. J. & in Opp. to Pl.'s Mot. for Summ. J. [Dkt. # 26] (" Def.'s Reply" ) at 1. Defendant did not release any records in response to items three through six of plaintiff's FOIA request on the grounds that any records related to requests for " return information" would themselves constitute " return information" that is exempt from disclosure under FOIA Exemption 3 in conjunction with section 6103. Id. ; Br. in Supp. of Def.'s Mot. for Summ. J. [Dkt. # 16-1] (" Def.'s Mem." ) at 1. The IRS also took the position that records responsive to items three through six would be shielded from disclosure by Exemption 6, and that records responsive to items five and six could also be withheld under Exemption 7(C). Def.'s Mem. at 1; Def.'s Reply at 1. Nevertheless, defendant conducted a search for records responsive to items three and four, although it did not search

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for records responsive to items five and six. Decl. of Denise Higley in Supp. of Def.'s Mot. [Dkt. # 16-3] (" Higley Decl." ) ¶ ¶ 17-24.

         After exhausting its administrative remedies, plaintiff filed a complaint in this Court on June 19, 2013. Compl. Defendant moved for summary judgment on April 14, 2014, Def.'s Mot. for Summ. J. [Dkt. # 16], and plaintiff filed a cross-motion combined with its opposition to defendant's motion on June 9, 2014. Pl.'s Cross-Mot. for Summ. J. [Dkt. # 21] (" Pl.'s Mot." ); Pl.'s Mem. Plaintiff claims that defendant failed to conduct an adequate search for responsive records and that its reliance on most of the FOIA exemptions it claims is improper. Pl.'s Mem. The IRS filed a cross-opposition combined with a reply on July 28, 2014, Def.'s Reply, and plaintiff filed a cross-reply on August 22, 2014. Reply in Supp. of Pl.'s Mot. [Dkt. # 30] (" Pl.'s Reply" ).

         The Court finds that defendant's search for records responsive to items one and two of the FOIA request was adequate, and that its withholdings under Exemption 5 were proper. But defendant has not described an adequate search for records responsive to items three and four of the request, and it will therefore be ordered to do more.

         Defendant's response to items three and four also raises the question of whether Executive Branch requests for " return information" are themselves " return information" that cannot be disclosed. The Court finds that defendant properly deemed the " tax check" records it identified as potentially responsive to items three and four to be " return information" that should be withheld under FOIA Exemption 3 and section 6103, but the Court does not agree that any other records responsive to these requests would necessarily be exempt from disclosure. In other words, it is not at all clear that all Executive Branch requests for " return information" can be characterized as " return information" that is factual in nature and shielded from disclosure by the taxpayer confidentiality statute.

         Finally, the Court finds that the failure to search for records responsive to items five and six was not justified by any FOIA exemption. Therefore, the Court will grant both parties' motions in part and deny them in part, and it will remand the case to the IRS to conduct an adequate search for records responsive to items three through six of plaintiff's FOIA request, and to release any reasonably segregable, non-exempt information to plaintiff.

         STANDARD OF REVIEW

         In a FOIA case, the district court reviews the agency's action de novo and " the burden is on the agency to sustain its action." 5 U.S.C. § 552(a)(4)(B); accord Military Audit Project v. Casey, 656 F.2d 724, 738, 211 U.S. App.D.C. 135 (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 his favor, and eschew making credibility determinations or weighing the evidence." Montgomery v. Chao, 546 F.3d 703, 706, 383 U.S. App.D.C. 290 (D.C. Cir. 2008); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). But where a plaintiff has not 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.

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         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, 98 S.Ct. 2311, 57 L.Ed.2d 159 (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, 102 S.Ct. 2054, 72 L.Ed.2d 376 (1982); see also Ctr. for Nat'l Sec. Studies v. DOJ, 331 F.3d 918, 925, 356 U.S. App.D.C. 333 (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, 287 U.S. App.D.C. 126 (D.C. Cir. 1990). And, 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), citing Weisberg v. DOJ, 705 F.2d 1344, 1351, 227 U.S. App.D.C. 253 (D.C. Cir. 1983).

         The FOIA requests in this case all reference 26 U.S.C. § 6103, the provision of the Internal Revenue Code that was enacted to preserve taxpayer privacy. See Tax Analysts v. IRS, 117 F.3d 607, 611, 326 U.S. App.D.C. 53 (D.C. Cir. 1997). Subsection (a) sets forth the general proposition that returns and return information shall be confidential, and subsection (b) defines the key terms in the statute. 26 U.S.C. § 6103(a)--(b). The provisions that follow delineate the exceptions to the confidentiality rule, including the disclosure of returns and return information to the designee of the taxpayer, 26 U.S.C. § 6103(c), certain disclosures to state government officials, id. § 6103(d), certain disclosures " to persons having a material interest," id. § 6103(e), disclosures pursuant to written requests by certain members of Congress, id. § 6103(f), and disclosures to the President, to executive officials, or to the heads of federal agencies. Id. § 6103(g).[2]

         

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         I. Defendant describes an adequate search for records responsive to items one and two of plaintiff's FOIA request, but not for records responsive to items three and four.

         " 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, 336 U.S. App.D.C. 386 (D.C. Cir. 1999), quoting Truitt v. Dep't of State, 897 F.2d 540, 542, 283 U.S. App.D.C. 86 (D.C. Cir. 1990); see also Oglesby, 920 F.2d at 68; Weisberg, 705 F.2d at 1351. To demonstrate that it has performed an adequate search for records 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 ( Defenders II ), 623 F.Supp.2d 83, 91-92 (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 II, 623 F.Supp.2d at 91-92 (finding declaration deficient where it failed to detail the types of files searched, the filing methods, and the search terms used). In addition, an affidavit should include the " rationale for searching certain locations and not others." Defenders II, 623 F.Supp.2d at 92; see also Nat'l Sec. Counselors v. CIA, 849 F.Supp.2d 6, 11 (D.D.C. 2012) (holding affidavit was sufficient where it " outline[d] with reasonable detail the CIA's decision to limit the search" to a particular area).

         An agency's declarations " need not 'set forth with meticulous documentation the details of an epic search for requested records,'" Defenders II, 623 F.Supp.2d at 91, quoting Perry v. Block, 684 F.2d 121, 127, 221 U.S. App.D.C. 347 (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, 306 U.S. App.D.C. 240 (D.C. Cir. 1994). Conclusory assertions about the agency's thoroughness are not sufficient. See Morley v. CIA, 508 F.3d 1108, 1121-22, 378 U.S. App.D.C. 411 (D.C. Cir. 2007) (finding agency's " single, conclusory affidavit" to be inadequate), quoting Perry, 684 F.2d at 128. 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). 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 ( Defenders I ), 314 F.Supp.2d 1, 8 (D.D.C. 2004), first citing SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200, 288 U.S. App.D.C. 324 (D.C. Cir. 1991), and then quoting Trans Union LLC v. FTC, 141 F.Supp.2d 62, 69 (D.D.C. 2001).

         Defendant submitted an affidavit by Denise Higley, a Tax Law Specialist assigned to the IRS's Headquarters Freedom of Information Act group, describing the agency's search for records responsive to items one through four of plaintiff's request.[3] Higley Decl. Plaintiff argues that the Higley declaration is insufficiently detailed and does not describe an adequate search.[4] Pl.'s Mem. at 29-33; Pl.'s Reply

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at 11-16. The Court finds that the Higley declaration does describe a search that was adequate with respect to items one and two of the FOIA request, but not with respect to items three and four.

         A. The search for records responsive to items one and two was adequate.

         Items one and two of plaintiff's FOIA request sought records pertaining to any FOIA requests or lawsuits relating to section 6103(g) of the Internal Revenue Code. FOIA Req. at 2. Higley explains that at the time she began searching for records, she was aware that plaintiff had previously submitted a FOIA request pertaining to section 6103(g) in March of 2012, and she determined that records related to the March 2012 request would be responsive to the October 2012 request at issue here. Higley Decl. ¶ ¶ 5, 7. Higley retrieved all records related to plaintiff's March 2012 request from the IRS's Automated Freedom of Information Act (" AFOIA" ) database, which is " the image-based document management system used by the Office of Privacy, Governmental Liaison and Disclosure to process FOIA requests." Id. ¶ ¶ 7-8.

         Higley learned that plaintiff had filed a lawsuit related to its March 2012 FOIA request in October 2012.[5] Higley Decl. ¶ 9. She worked with the attorney in the Office of Chief Counsel who was handling that lawsuit, Deborah Lambert-Dean, to conduct an additional search for records that might be responsive to items one and two of the instant request, and the two searched the AFOIA database, as well as the Electronic Disclosure Information System (" E-DIMS" ) database, the predecessor database to AFOIA. Id. ¶ ¶ 8-10 & n.1. Those databases were searched using the terms " 6103(g), White House, President of the United States, POTUS, Barack, Obama, George, and Bush" in a manner that would have returned records containing any one of those terms. Id. ¶ 10 & n.3. The only responsive records that this search revealed pertained to plaintiff's March 2012 FOIA request and the associated lawsuit. Id. ¶ 10.

         Higley reviewed those records, consulted with her colleagues, and identified the individuals who were involved with plaintiff's March 2012 FOIA request and might therefore possess responsive records. Higley Decl. ¶ 11. She directed each of

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those individuals to conduct a search for records that would be responsive to items one and two of the request at issue in this case. Id.

         Based on the records she received from those searches, and upon consultation with Lambert-Dean, Higley determined that the IRS Media Relations Office and the IRS Office of Appeals might possess responsive records. Higley Decl. ¶ 12. She sent those offices a copy of plaintiff's request and a memorandum directing them to search for records responsive to items one and two. Id. She also requested a copy of the appeal letter related to plaintiff's March 2012 FOIA request from the Office of Appeals. Id. Based on the response she received from the Media Relations Office, she sent a copy of plaintiff's request and a search memorandum to the IRS Office of Communications and Liaison. Id. Higley followed the trail of the records yielded by those searches, and she determined that specific individuals in the Office of Privacy, Governmental Liaison, and Disclosure might also possess records responsive to items one and two. Id. ¶ 13. She forwarded plaintiff's request to them and asked them to search for records responsive to items one and two. Id.

         Higley states that she received responses from everyone to whom she sent a search request, and that she determined that plaintiff's March 2012 request was the only FOIA request the IRS had received relating to section 6103(g). Id. ¶ ¶ 14-15. In total, she found 790 pages of responsive documents, made redactions to 289 pages, and identified 6 pages to be withheld in full.[6] Id. ¶ 16.

         The parties do not dispute that, " [i]n cases where documents are collected from several different offices, unit-specific descriptions are not required, and the affidavit of the officer ultimately responsible for the supervision of the FOIA search is sufficient." Trans Union, 141 F.Supp.2d at 68-69; see also Judicial Watch, Inc. v. U.S. Dep't of Health & Human Servs. ( Judicial Watch v. HHS ), 27 F.Supp.2d 240, 244 (D.D.C. 1998) (" Unit-specific descriptions are not required, at least where plaintiff has failed to raise some issue of fact necessitating rebuttal." ). Nevertheless, plaintiff argues that the Higley declaration is inadequate because it does not provide enough information about each of the individual searches that was performed and the people who performed them. Pl.'s Mem. at 30-32; Pl.'s Reply at 11-15.

         But the Higley declaration devotes five pages to describing a comprehensive search for records responsive to items one and two, including the specific terms she used to search AFOIA, the review of responsive records, and the process of identifying and issuing search memoranda to individuals and offices that were likely to possess additional records. See Higley Decl. ¶ ¶ 7-16; see alsoJudicial Watch v. HHS, 27 F.Supp.2d at 244 (" [T]he declaration's five-page overview of the search effort is adequate to support the reasonableness of the search." ). The Court finds that the description provided in the declaration is sufficient to indicate " what records were searched, by whom, and through what processes" with respect to items ...


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