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Waterman v. Internal Revenue Service

United States District Court, District of Columbia

January 24, 2018


          MEMORANDUM OPINION [DKTS. ## 18, 24]

          RICHARD J. LEON, United States District Judge

         Licensed tax attorney Bradley S. Waterman ("plaintiff or "Waterman") brings this Freedom of Information Act ("FOIA") suit against the Internal Revenue Service ("defendant" or "IRS"). As relevant here, Waterman's complaint alleges that the IRS improperly withheld information responsive to his FOIA request for all agency information related to an Office of Professional Responsibly investigation into Waterman's alleged misconduct. See generally Compl. [Dkt. # 1].

         Pursuant to a joint stipulation filed by the parties, Count I of the complaint has been dismissed. See Fed. R. Civ. P. 4l(a)(1)(A)(ii); Joint Stipulation of Dismissal of Count I with Prejudice [Dkt. #23]. That dismissal leaves only the parties' cross-motions for summary judgment on Count II pending before this Court. See Def.'s Mot. Dismiss & Mot. Summ. J. ("Def.'s Mot.") [Dkt. # 18]; Pl's Cross-Mot. Summ. J. ("Pl's Cross-Mot.") [Dkt. # 24]. Upon consideration of the pleadings, the entire record, and the relevant case law, the Court concludes that the IRS's decision to withhold the information at issue was lawful under FOIA. Therefore, the IRS's motion for summary judgment on Count II is GRANTED and plaintiffs cross-motion for summary judgment on Count II is DENIED.


         The parties agree on the basic facts giving rise to this action. Waterman is a licensed attorney who represents clients in disputes with the IRS. Declaration of PI. Bradley S. Waterman ("Waterman Decl.") ¶¶ 1, 6 tDkt- #24-2]. In one such matter, Waterman represented the New Hampshire Health and Education Facilities Authority ("the Authority") in anticipation of proceedings before the IRS's Tax-Exempt Bond office ("TEB"). According to Waterman, he assisted the Authority in resolving a dispute with TEB over the tax-exempt status of bonds that the Authority had issued.

         Apparently, the IRS suspected foul play in Waterman's representation of the Authority. In March 2014, the TEB filed a Report of Suspected Practitioner Misconduct ("Report") against Waterman with the IRS's Office of Professional Responsibility ("OPR"). OPR is the IRS entity "responsible for investigating and acting on reports (also commonly known within OPR as 'referrals') of suspected practitioner misconduct by individuals who practice before the IRS." Decl. of Keith C. Ott ("Ott Decl.") ¶ 3 [Dkt. # 18-3]. Pursuant to that responsibility, OPR opened a case file on Waterman and individuals within OPR examined the referral. Id. ¶ 6. After investigation, OPR ultimately determined that the allegations against Waterman did not warrant further inquiries or action. Id. ¶¶ 7-8. In September 2014, OPR informed Waterman of the Report, its conclusion not to take any additional disciplinary action, and of Waterman's duty to abide by IRS rules and regulations in the future. See Pl's Cross-Mot. Ex. A. [Dkt. # 24-1]. It also informed Waterman that OPR would retain the file containing the misconduct referral for twenty-five years and reserved the right to reference the file in any future OPR investigations or proceedings. Id.

         After seeking and failing to obtain all of the information related to the March 2014 Report through informal communications with the IRS, Waterman submitted the FOIA request at issue in this suit. See Def.'s Mot. Ex. A [Dkt. # 18-7]. In that January 2016 FOIA request, Waterman sought the Report as well as "all documents prepared in connection with or otherwise relating to the Report, " including all "correspondence, memoranda, notes, reports, and other documents" prepared by IRS personnel responsible for investigating and reviewing the Report. Id. at 2. Waterman's request identified OPR Attorney-Advisor Keith Ott as the point of contact for locating responsive documents. Id.

         As detailed in her declaration, IRS "Government Information Specialist" Barbara D. Herring began processing Waterman's FOIA request shortly after it was received. Decl. of Barbara D. Herring ("Herring Decl.") ¶4 [Dkt. # 18-2]. Because plaintiff does not challenge the adequacy of the IRS's search, I need not detail the ins-and-outs of that search here. Suffice it to say, however, that following a search in which the IRS checked and then double-checked its files for all relevant documents, the agency identified fifty-four pages of records that were responsive to Waterman's request, segregated and produced the non-exempt records and portions of records, and withheld the records determined to be exempt from FOIA's disclosure requirements. See Decl. of Elizabeth Rawlins ("Rawlins Decl.") ¶¶ 8-14 [Dkt. # 18-4], As in most FOIA cases, the dispute here stems from what the IRS chose not to produce. As detailed in the agency's Vaughn index, see Def.'s Mot. Attach. 5 ("Vaughn Index") [Dkt. # 18-5], and declarations of agency personnel, see generally, e.g., Rawlins Decl., the IRS withheld the following information from Waterman. First, citing FOIA Exemptions 6 and 7(c), the IRS redacted the telephone number and e-mail addresses of IRS employees from a set of one-page e-mails between IRS employees. Rawlins Decl. ¶¶ 23-24. Second, and more significantly, the IRS withheld documents and memoranda related to Waterman's representation of the Authority before the TEB, the OPR's investigation of that representation, and agency employees' evaluations of whether to pursue disciplinary action against Waterman. See Id. ¶¶ 16-21. According to the IRS, its decision to withhold that information was proper under two separate FOIA exemptions: (1) FOIA Exemption 3, which the IRS asserts in conjunction with a federal statute prohibiting disclosure of third-party tax return information; and (2) FOIA Exemption 5. Id. ¶¶ 16, 18.

         Not surprisingly, plaintiff disagrees with the IRS's decision to withhold the responsive information under the various FOIA exemptions. He sued in this Court to challenge the agency's decision, arguing that the IRS's choice to withhold the requested documents and information contravenes his FOIA rights. Currently pending before the Court are the parties' cross-motions for summary judgment on Waterman's FOIA claim.


         Both parties have moved for summary judgment on Count II of the complaint. Summary judgment may be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). FOIA cases such as this one are routinely decided on motions for summary judgment. See Brayton v. Office of U.S. Trade Rep., 641 F.3d 521, 527 (D.C. Cir. 2011).

         "FOIA requires executive branch agencies to make their records available 'to any person' upon request, 5 U.S.C. § 552(a)(3)(A), subject to nine exemptions, id. § 552(b)(1)-(9)." Newport Aeronautical Sales v. Dep't of Air Force, 684 F.3d 160, 162 (D.C. Cir. 2012). To prevail on summary judgment in a FOIA case, an agency must show that it adequately searched for records responsive to the relevant request and that any records withheld by the agency fall within one of FOIA's statutory exemptions. See id.; Weisberg v. U.S. Dep't of Justice, 705 F.2d 1344, 1351 (D.C. Cir. 1983).

         Waterman has not challenged the adequacy of the IRS's search for records. See Pl's Cross-Mot. 5 ("Defendant performed an adequate search for all documents responsive to Mr. Waterman's request."). Therefore, the only question in this case is whether the IRS has demonstrated that any responsive documents withheld by the agency fall within the asserted FOIA exemptions. In such a dispute, a court may grant summary judgment to an agency if, upon de novo review of the agency's decision to withhold responsive records, the court concludes that "the agency has sustained its burden of demonstrating" that the requested documents are "exempt from disclosure under the FOIA." Newport Aeronautical Sales, 684 F.3d at 164. A reviewing court may render that decision based solely on information provided in an agency's affidavits or declarations when those materials "describe[] the justifications for withholding the information with specific detail, demonstrate[] that the information withheld logically falls within the claimed ...

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