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Crestek, Inc. & Subsidiaries v. Internal Revenue Service

United States District Court, District of Columbia

August 27, 2018

CRESTEK, INC. & SUBSIDIARIES, et al., Plaintiffs,



         Crestek, Inc. & Subsidiaries and its CEO, J. Michael Goodson (collectively, “Crestek”), challenge the Internal Revenue Service's response to their Freedom of Information Act, or FOIA, requests for 22 categories of documents related to their income tax liabilities from 2006 to 2014. See Compl. Exs. 1, 3. The IRS identified 14, 482 pages of responsive records, 12, 467 of which it produced in full. Mot. Summary J. Decl. of William V. Spatz (Spatz Decl.) ¶¶ 6-7. The IRS invoked several FOIA exemptions to withhold 920 pages in full and to redact portions of the remaining 1, 095 pages. Id. ¶ 7. During this litigation, the IRS resolved some disputes by disclosing additional materials. Reply ISO Mot. Summary J. Supplemental Decl. of William V. Spatz (Supp. Spatz Decl. I) ¶ 20; Second Supplemental Decl. of William V. Spatz (Supp. Spatz Decl. II), ECF No. 41, ¶¶ 8-9. But Crestek still challenges the adequacy of the IRS's search for responsive records. It also disputes many withholdings and redactions that the IRS made under FOIA's exemptions for documents that would not otherwise be available to private parties in litigation and for law enforcement information that could reasonably be expected to compromise a confidential source or to risk circumvention of the law by disclosing investigatory techniques and procedures. Because the search was adequate and at least one FOIA exemption justifies each withholding and redaction, the IRS's Motion for Summary Judgment will be granted.


         To prevail on a motion for summary judgment, a movant must show 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); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp v. Catrett, 477 U.S. 317, 322 (1986). FOIA requires federal agencies to “disclose information to the public upon reasonable request unless the records at issue fall within specifically delineated exemptions.” Judicial Watch, Inc. v. FBI, 522 F.3d 364, 365-66 (D.C. Cir. 2008); see also 5 U.S.C. § 552(a)(3)(A) (request must “reasonably describe[]” records sought). So, a FOIA defendant is entitled to summary judgment if it shows that there is no genuine dispute about whether “each document that falls within the class requested either has been produced, is unidentifiable or is wholly exempt from the Act's inspection requirements.” See Weisberg v. Dep't of Justice, 627 F.2d 365, 368 (D.C. Cir. 1980). Courts decide the “vast majority” of FOIA cases on motions for summary judgment. See Brayton v. Office of United States Trade Rep., 641 F.3d 521, 527 (D.C. Cir. 2011).

         To show that any unproduced documents are exempt from FOIA, an agency may file “affidavits describing the material withheld and the manner in which it falls within the exemption claimed.” King v. Dep't of Justice, 830 F.2d 210, 217 (D.C. Cir. 1987). To show that any unproduced documents are unidentifiable, a defendant must show “a good faith effort to [] search for the requested records, using methods which can be reasonably expected to produce the information requested.” Oglesby v. Dep't of the Army, 920 F.2d 57, 68 (D.C. Cir. 1990). In other words, the defendant must “demonstrate beyond material doubt that its search was reasonably calculated to uncover all relevant documents.” Nation Magazine v. Customs Serv., 71 F.3d 885, 890 (D.C. Cir. 1995). The touchstone of the analysis is the reasonableness of the search, not the records produced. See Hodge v. FBI, 703 F.3d 575, 580 (D.C. Cir. 2013) (“[T]he adequacy of a search is determined not by the fruits of the search, but by the appropriateness of [its] methods.”); Mobley v. CIA, 806 F.3d 568, 583 (D.C. Cir. 2015) (“[A] search, under FOIA, is not unreasonable simply because it fails to produce all relevant material.”).

         An agency has discretion to craft its search to meet this standard and does not have to search every system if additional searches are unlikely to produce any marginal return. See Campbell v. Dep't of Justice, 164 F.3d 20, 28 (D.C. Cir. 1998). Searching for records requires “both systemic and case-specific exercises of discretion and administrative judgment and expertise.” Schrecker v. Dep't of Justice, 349 F.3d 657, 662 (D.C. Cir. 2003). This is “hardly an area in which the courts should attempt to micro-manage the executive branch.” Id. To establish the reasonableness of its search, an agency can submit a “reasonably detailed affidavit, setting forth the search terms and the type of search performed, and averring that all files likely to contain responsive materials (if such records exist) were searched.” Oglesby, 920 F.2d at 68. Agency declarations enjoy “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, 1201 (D.C. Cir. 1991).

         II. ANALYSIS

         A. The IRS Conducted an Adequate Search

         The IRS has provided affidavits describing its search for responsive documents. Mot. Summary J. Declaration of Charlene Inman (Inman Decl.) ¶¶ 4-11; Spatz Decl. ¶¶ 4-5. It has also provided an affidavit stating that, “[t]o the best of my knowledge, there are no other files responsive to [Crestek's] FOIA requests that would be located in any other office or location.” Supp. Spatz Decl. I ¶ 13. Crestek challenges both the sufficiency of these declarations and their credibility. See Opp. to Mot. Summary J. 5-6; Sur-Reply to Mot. Summary J. 1-2.

         Crestek raises two challenges to the sufficiency of the IRS declarations. First, Crestek complains that the declarations do not say the IRS located “all responsive documents.” Opp. to Mot. Summary J. 6. But the law does not require such a representation. See Mobley, 806 F.3d at 583 (noting that a search may be adequate even if it does not identify all relevant material). If Crestek intended to point out that the original declarations did not state that the IRS searched all files likely to contain responsive materials, see Oglesby, 920 F.2d at 68, the Supplemental Spatz Declaration remedies this deficiency. See Supp. Spatz Decl. I ¶ 13.

         Second, Crestek complains that Lisa Rodriguez and Carmen Presinal-Roberts, “who actually originally gathered and identified the documents, ” did not author the declarations. Opp. to Mot. Summary J. 6. But Crestek cites no legal authority stating that the person who conducted a search must author the agency's declaration to prove the search's adequacy. See Id. Nor does it cite anything in the record to suggest that the declarants did not conduct the search as they claim. See id.; see also Inman Decl. ¶¶ 4-11 (describing steps Ms. Inman took to identify responsive records); Spatz Decl. ¶¶ 4-5 (describing steps Mr. Inman took to identify additional responsive records); Supp. Spatz Decl. I ¶¶ 9, 11-13 (same).[1] I conclude the IRS declarations are sufficient. See Assassination Archives & Research Center, Inc. v. CIA, ___F.Supp.3d ___, 2018 WL 3448229 at *3 (D.D.C. July 17, 2018) (“No statutory provision or court precedent requires affidavits from all government employees involved in the search or dictates who among them should be the affiant.”).

         Crestek has also failed to overcome the presumption of good faith accorded to the IRS declarations. See SafeCard, 926 F.2d at 1201. Crestek challenges the Inman Declaration's credibility on two grounds. First, Crestek challenges its credibility because the record does not contain independent validation of its statement that Ms. Inman left a voicemail for Crestek's attorney asking if some of Crestek's FOIA requests were satisfied by discovery that Crestek had obtained in other litigation. Opp. to Mot. Summary J. 5.[2] But Crestek offers no basis for demanding corroborating evidence. See Oglesby, 920 F.2d at 68 (holding that a court may rely on an affidavit to determine the adequacy of a FOIA search). Second, Crestek challenges the Inman Declaration's credibility because the IRS did not produce responsive documents until April 2017 even though the declaration says that the IRS gathered 2, 580 pages of records by March 2016 and another 445 pages of records by October 2016. Id. 5-6. But it offers only speculation to suggest that these facts are inconsistent. See SafeCard, 926 F.2d at 1201 (holding that speculation cannot overcome the presumption of good faith). Neither of these challenges to the Inman Declaration's credibility has merit.

         Crestek also challenges the Spatz Declaration's credibility for two reasons. First, it complains that Spatz relied on others to identify responsive records and that this was unreasonable since he identified responsive records that others did not find. Id. at 6. But the Spatz Declaration-and Crestek's observation that Mr. Spatz identified responsive records that others overlooked-shows that he did not simply rely on others. Spatz Decl. ¶¶ 4-5. Second, Crestek challenges the Supplemental Spatz Declaration's credibility because it references Ms. Inman's voicemail without explaining how he would have personal knowledge of it. Sur-Reply to Mot. Summary J. 1-2. But the Supplemental Spatz Declaration explains that Mr. Spatz's information about Ms. Inman's voicemail was based on her representations. Supp. Spatz Decl. I ¶ 8. And none of the statements that Crestek challenges are material to the adequacy of the IRS's search for responsive records. So, I conclude that the declarations provide sufficient and credible evidence that the IRS conducted an adequate search.

         B. The IRS Has Justified All Disputed Exemption 5 Redactions and Withholdings

         Exemption 5 applies to “inter-agency or intra-agency memorandums or letters that would not be available by law to a party other than an agency in litigation with the agency.” 5 U.S.C. § 552(b)(5). FOIA qualifies Exemption 5 by saying that “the deliberative process privilege shall not apply to records created 25 years or more before the date on which the records were requested.” Id. In addition to protecting documents that enjoy the deliberative process privilege, Exemption 5 protects documents subject to the attorney work-product privilege and the attorney-client ...

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