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Powell v. Internal Revenue Service

United States District Court, District of Columbia

July 5, 2018

WILLIAM E. POWELL, Plaintiff,
v.
INTERNAL REVENUE SERVICE Defendant. Individual/Entity Record RECORD TYPE TAXPAYER, TAX YEARS

          MEMORANDUM OPINION

          JAMES E. BOASBERG UNITED STATES DISTRICT JUDGE

         Mindful of the oft-quoted advice to uncover a scandal - “follow the money” - pro se Plaintiff William E. Powell has been on a long quest to obtain tax information related to his late father and grandfather, their trusts and estates, and two family printing businesses. Suspecting a possible breach of fiduciary duty by the trustees, he has sent countless Privacy Act and Freedom of Information Act requests to Defendant Internal Revenue Service. Although the Service contends that it has released all responsive records to which Plaintiff is entitled, he insists that it is unlawfully withholding documents in violation of the Privacy Act and FOIA. Defendant now moves to dismiss part of Powell's claims and asks for summary judgment on the remainder. Largely agreeing, the Court will grant in part and deny in part the Motion.

         I. Background

         A. Factual Background

         Plaintiff's grandfather, Andrew Powell, was a prominent printer “who parlayed a small printing business into one of the first African-American [p]rinting [c]ompanies” in Detroit. See Second Amended Complaint, ¶¶ 61-63. The Court presumes that this was the Andrew Powell Printing Company. Upon his death in 1987, Plaintiff's father - William A. Powell - inherited the business and incorporated it as the Powell Printing Company. Id., ¶¶ 59, 63-65. Plaintiff became an “[a]uthorized [i]ndividual” for the company after his father's death, and he alleges that he is the beneficiary and heir of his father's estate. Id., ¶¶ 44-45. Both father and grandfather additionally had a trust, which lists Powell as a beneficiary. For more than half a decade, Plaintiff has sought tax information on the elder Powells and their entities, believing that the trustees may have breached their fiduciary duty. See Powell v. IRS, 255 F.Supp.3d 33 (D.D.C. 2017); Powell v. IRS, No. 15-11033, 2016 WL 7473446 (E.D. Mich. Dec. 29, 2016); Powell v. IRS, No. 15-11616, 2016 WL 5539777 (E.D. Mich. Sept. 30, 2016); Powell v. IRS, No. 14-12626, 2015 WL 4617182 (E.D. Mich. July 31, 2015).

         As relevant here, in 2013, Plaintiff submitted forms to the IRS requesting the Powell Printing Company's corporate tax returns for 1989-1991. See SAC, ¶¶ 73-79, 104-06. Shortly thereafter, the Service sent him the 1990 and 1991 tax returns as well as a Business Master File Transcript-Complete, which lists all tax returns and documents filed on behalf of the company. See SAC, Exhs. J, K.

         In June and September 2017, Plaintiff submitted more Privacy Act and FOIA requests for various tax records for himself, his father and grandfather, the two printing companies, the William A. Powell Estate, the William A. Powell Trust, and the Andrew Powell Trust. See MTD, Exhs. A-H.

         B. Procedural History

         On February 13, 2017, Plaintiff filed the initial Complaint in this suit, originally seeking relief under a criminal statute and 26 U.S.C. § 6103, which mandates personal-record disclosure. See ECF No. 1. Because neither ground provides for a private right of action, Defendant moved to dismiss. See ECF No. 8. Powell swiftly responded with his First Amended Complaint, which alleged a Privacy Act violation. See ECF No. 11. On July 3, he moved for leave to file a Second Amended Complaint to add FOIA and Privacy Act claims related to his June requests, which the Court granted. See ECF No. 16; Minute Order of July 20, 2017. On October 23, he again sought supplementation, this time to tack on his September record requests to this suit, and he was again permitted to do so. See ECF No. 26; Minute Order of Oct. 30, 2017. The Court treats these latter two pleadings as supplementing, rather than superseding, the First Amended Complaint, and it will thus consider the allegations in all three as properly pled. The Government has now filed a Motion to Dismiss or for Summary Judgment, asserting that all of his claims fail because the Court lacks jurisdiction to hear them, they are moot, or they are deficient as a matter of law.

         II. Legal Standard

         In evaluating a motion to dismiss, the Court must “treat the complaint's factual allegations as true and must grant plaintiff the benefit of all inferences that can be derived from the facts alleged.” Sparrow v. United Air Lines, 216 F.3d 1111, 1113 (D.C. Cir. 2000) (citation and internal quotation marks omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court need not accept as true, however, “a legal conclusion couched as a factual allegation, ” nor an inference unsupported by the facts set forth in the Complaint. Trudeau v. Fed. Trade Comm'n, 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

         Under Federal Rule of Civil Procedure 12(b)(1), a plaintiff bears the burden of proving that the Court has subject-matter jurisdiction to hear his claims. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). A court also has an “affirmative obligation to ensure that it is acting within the scope of its jurisdictional authority.” Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F.Supp.2d 9, 13 (D.D.C. 2001). For this reason, “‘the [p]laintiff's factual allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion' than in resolving a 12(b)(6) motion for failure to state a claim.” Id. at 13-14 (quoting 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (2d ed. 1987) (alteration in original)). Additionally, unlike with a motion to dismiss under Rule 12(b)(6), the Court “may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction.” Jerome Stevens Pharm. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005); see also Venetian Casino Resort, LLC v. EEOC, 409 F.3d 359, 366 (D.C. Cir. 2005).

         Summary judgment, by contrast, 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). A genuine issue of material fact is one that would change the outcome of the litigation. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (“Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.”). In the event of conflicting evidence on a material issue, the Court is to construe the conflicting evidence in the light most favorable to the non-moving party. See Sample v. Bureau of Prisons, 466 F.3d 1086, 1087 (D.C. Cir. 2006). Factual assertions in the moving party's affidavits or declarations may be accepted as true unless the opposing party submits his own affidavits, declarations, or documentary evidence to the contrary. Neal v. Kelly, 963 F.2d 453, 456-57 (D.C. Cir. 1992).

         “FOIA cases typically and appropriately are decided on motions for summary judgment.” Defenders of Wildlife v. Border Patrol, 623 F.Supp.2d 83, 87 (D.D.C. 2009); Bigwood v. U.S. Agency for Int'l Dev., 484 F.Supp.2d 68, 73 (D.D.C. 2007). In FOIA cases, the agency bears the ultimate burden of proof to demonstrate the adequacy of its search and that it properly withheld any documents. See Def. of Wildlife v. U.S. Border Patrol, 623 F.Supp.2d 83, 91 (D.D.C. 2009). The Court may grant summary judgment based solely on information provided in an agency's affidavits or declarations when they “describe the documents and the justifications for nondisclosure with reasonably specific detail, demonstrate that the information withheld logically falls within the claimed exemption, and are not controverted by either contrary evidence in the record nor by evidence of agency bad faith.” Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981). Such affidavits or declarations are “accorded a presumption of good faith, which cannot be rebutted by ‘purely speculative claims about the existence and discoverability of other documents.'” SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991) (quoting Ground Saucer Watch, Inc. v. CIA, 692 F.2d 770, 771 (D.C. Cir. 1981)).

         III. Analysis

         For the sake of clarity, the Court divides Plaintiff's requests into two batches: those from his First Amended Complaint, which only alleges a violation of the Privacy Act, and those included in his Second Amended Complaint and Supplemental Complaint, which allege a violation of the Privacy Act and FOIA. The Government has helpfully provided a ...


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