Court Opinion

ID: 4239097
Source: CourtListenerOpinion
Date Created: 2018-01-25 11:00:36.687213+00
Date Added: 2024-06-11T09:24:06.432264
License: Public Domain

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA F I L E D
JAN 2 4 2018

BRADLEY s. WATERMAN, ) _
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Plaintiff, ) ° ° C°'""'”'a
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v. ) Civil Case No. 16-1823 (RJL)
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INTERNAL REvENUE )
sERvICE, )
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Defendant. 7¥?/

MEMoRANl)UM oPINIoN
(January%zois) [Dkts. ## 18, 24]

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. # l].

Pursuant to a joint stipulation filed by the parties, Count I of the complaint has been
dismissed See Fed. R. Civ. P. 4l(a)(l)(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 ll 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

lavv, the Court concludes that the IRS’s decision to Withhold the information at issue vvas

lawful under FOIA. Therefore, the lRS’s motion for summary judgment on Count ll is

GRANTED and plaintiffs cross-motion for summary judgment on Count ll is DENIED.

BACKGROUND

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 Pl. Bradley S.
Waterman (“Waterman Decl.”) W l, 6 [Dkt. # 24-2]. ln one such matter, Waterman
represented the New Hampshire Health and Education Facilities Authority (“the
Authority”) in anticipation of proceedings before the lRS’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. ln l\/[arch 2014, the TEB filed a Report of Suspected Practitioner Misconduct
(“Report”) against Waterman with the lRS’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.”) il 3 [Dkt.
# 18-3]. Pursuant to that responsibility, OPR opened a case file on Waterman and
individuals within OPR examined the referral. Ia’. 1l 6. After investigation, OPR ultimately
determined that the allegations against Waterman did not warrant further inquiries or
action. Ia’, 1l1l7-8. ln 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 lRS rules and regulations in the future. See Pl.’s Cross-l\/[ot. Ex. A. [Dkt. # 24-1]. lt
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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,
inemoranda, 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 Gtt as the point of contact for locating responsive documents. Id.

As detailed in her declaration, IRS “Government lnforination Specialist” Barbara
D. Herring began processing Waterman’s FOIA request shortly after it was received. Decl.
of Barbara D. Herring (“Herring Decl.”) 11 4 [Dkt. # 18-2]. Because plaintiff does not
challenge the adequacy of the IRS’s search, l 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.”)

jj 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 Vauglm 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 lRS redacted the telephone number and e-inail addresses of IRS
employees from a set of one-page e-mails between lRS employees. Rawlins Decl. M 23-
24. Second, and more significantly, the IRS withheld documents and memoranda related
to W~aterman’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_ W l6-21. According to the IRS, its decision to withhold
that information was proper under two separate FOIA exemptions: (l) 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. lol. jHl l6, 18.

Not surprisingly, plaintiff disagrees with the lRS’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 lRS’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.

STANDARD OF REVIEW

Both parties have moved for summary judgment on Count ll 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.

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Civ. P. 56(a). FOlA cases such as this one are routinely decided on motions for summary
judgment See Brayton v. Office ofU.S. Tracle 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)(l)-
(9).” Newport Aeronautlcal Sales v. Dep’t ofAl`r Force, 684 F.3d 16(), 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 ofFOlA’s statutory exemptions See id.; Weisberg
v. U.S. Dep’t ofJustl`ce, 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 l\/lr. 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 ln 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
Aeronautz`cal 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 exemption,

and [are] not contradicted by contrary evidence in the record or by evidence of the agency’s

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bad faith.” Am. Civll leerll'es Um`on v. U.S. Dep’l OfDefense, 628 F.3d 612, 619 (D.C.

Cir. 2011) (internal quotation marks omitted).

ANALYSIS

In response to Waterman’s FOIA request, the lRS withheld two categories of
information and relied on two different sets of FOIA exemptions 1 address each in turn,
ultimately concluding that all of the lRS’s withholdings were permissible under FOIA.

A. Contact Information of IRS Employees

The first category of information the lRS withheld was the phone numbers and e-
inail addresses of certain lRS employees Citing FOIA Exemptions 6 and 7, the lRS
contends that its redaction of the employees’ contact information properly balanced the
employees’ privacy interests against the minimal public need for disclosure. 1 agree.

FOIA Exemption 6 protects “personnel and medical files and similar files the
disclosure of which would constitute a clearly unwarranted invasion of personal privacy.”
5 U.S.C. § 552(b)(6). “The Supreme Court has read Exemption 6 broadly,” interpreting
“similar files” to include “bits ofpersonal information, such as names and addresses the
release of which would create a palpable threat to privacy.” Juclz`cial Watch, Ine. v. Foocl
& DrugAcl/nin., 449 F.3d 141, 152-53 (D.C. Cir. 2006) (internal quotation marks omitted).
lf disclosure ofpersonnel information would threaten a substantial privacy interest by, for
example, opening up employees to “embarrassment and harassment in the conduct of their
official duties,” Clevelancl v. Unz'tea' Si‘ates, 128 F. Supp. 3d 284, 300 (D.D.C. 2015), then

a reviewing court must balance the “privacy interests involved” against the “public

interest” in “open[ing] agency action to the light of public scrutiny,” Jucliclal Watclz, lnc.,
449 F.3d at 153. Here, that balance clearly weighs in favor of the employees’ privacy.

To start, the work telephone and e-inail addresses of particular agency employees
constitute information that “can be identified as applying” to individuals Prison Legal
News v. Samuels, 787 F.3d 1142, 1147 (D.C. Cir. 2015). Contrary to plaintiffs assertions,
moreover, the lRS did not withhold entire documents because they contained telephone
numbers and e-inail addresses lnstead, the lRS redacted that information-an action even
plaintiff characterizes as “appropriate.” See Pl.’s Cross-l\/lot. 10. To justify those
redactions, the lRS explained that public disclosure of individual employees’ work
telephone numbers and e-inail addresses would constitute an “unwarranted invasion” of
those employees’ “personal privacy.” Rawlins Decl. 1111 23-24. On the other side of the
ledger, the agency noted that redaction was appropriate because the contact information’s
“utility to the public is oflittle to no value.” lel. 1[ 23.l

The lRS’s analysis was reasonable The contact information for individual
employees sheds little “light on an agency’s performance of its statutory duties,” Dep ’t of
Justz`ce v. Reporl‘ers Comm. for Freeclom 0f the Press, 489 U.S. 749, 773 (1989), yet
exposes individual employees to threatening or harassing contacts from the public.
il`herefore, as other courts examining Exemption 6 withholdings of employee contact

information have similarly held, 1 conclude that the lRS’s redaction of contact information

 

' That is especially true here, given that l\/li'. Waterman apparently “already has” the contact
information at issue. Pl.’s CrosS-l\/lot. 10.

was proper under Exemption 6. See, e.g.,Judicial Watclz, [nc., 449 F.3d at 153 (names and
addresses); Cleveland, 128 F. Supp. 3d at 300 (mobile phone number).2
B. Investigatory Materials and Memoranda Generated by Agency Personnel

The lRS withheld a second set of documents and information. Specifically, the lRS
declined to produce: l) two memoranda, dated September 2013 and Deceinber 2013, that
summarize certain facts that employees of the TEB function believed warranted
Waterman’s referral to OPR; 2) a copy of an August 26, 2014 memorandum prepared by
an OPR analyst and addressed to the manager of the lRS’s Legal Analysis Branch, as well
as portions of a four-page computer print-out from OPR’s case management system
summarizing that analysis; and 3) portions ofa September 4, 2014 e-inail from the manager
of the lRS’s Legal Analysis Branch to an OPR attorney.3

As a basis for withholding the above information, the lRS cites FOIA Exemption 5,
Exemption 5 shields from disclosure all “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). As interpreted by courts, Exemption 5 “allows agencies
to withhold information that would in the context of litigation be protected from discovery

by a recognized evidentiary or discovery privilege” including, as relevant here, the

 

2 Because l conclude that the agency’s decision to redact the phone numbers and e-mai| addresses
was proper under Exemption 6, 1 need not address the lRS’s reliance on Exemption 7.

3 In addition to Exemption‘5, the lRS also relied upon Exemption 3, in conjunction with 26 U.S.C.
§ 6103(a), in declining to produce the September 2013 and Deceinber 2013 memoranda, the August 26,
2014 memorandum copy, and the four-page print-out. As discussed below, l conclude that the IRS properly
relied upon Exemption 5 to withhold those records l thus need not address the application of Exemption
3 or Waterman’s belated submission ofa third-party authorization form. See Waterman Decl. 11 32.

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deliberative process privilege. Judl`cl'al Watch, ]nc. v. U.S. Dep’t ofDef., 847 F.3d 735,
73 8-39 (D.C. Cir. 2017) (internal quotation marks and alteration omitted).

The deliberative process privilege protects from disclosure “government documents
that are both ‘predecisional’ and ‘deliberative.”’ lcl. “Documents are ‘predecisional’ if
they are generated before the adoption of an agency policy, and ‘deliberative’ if they reflect
the give-and-take of the consultative process.” ]a’. (internal quotation marks and alteration
omitted). Examples of predecisional and deliberative records include “advisory opinions,
recommendations and deliberations comprising part of a process by which governmental
decisions and policies are formulated.” NLRB v. Sears, Roel)uck & Co., 421 U.S. 132, 150
(1995) (internal quotation marks omitted). By shielding such information from FOIA
disclosure, the deliberative process privilege “serves to assure that subordinates within an
agency will feel free to provide the decisionmaker with their uninhibited opinions and
recommendations” by guarding against “premature disclosure of proposed” decisions
“before they have been finally formulated or adopted.” Publz`c Citizen, lnc. v. Ojj‘"zce of
Mgmt. & Bua’get, 598 F.3d 865, 874 (D.C. Cir. 2010) (internal quotation marks omitted).
Applying those principles, 1 conclude that the lRS properly relied on Exemption 5.

1. September 2013 and Deceinber 2013 Memoranda Referring Waterman to OPR

l first examine the lRS’s decision to withhold the September 2013 and Deceinber
2013 memoranda. The September 2013 memorandum was authored by the lRS revenue
agent responsible for examining the tax liability of Waterman’s client, the Authority. The
memorandum, which was sent to the agent’s direct supervisor, summarized the interactions

between Waterman and “IRS personnel over a period of several months” that the revenue

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agent “believed made the referral” of Waterman to OPR “appropriate.” Rawlins Decl.
1111 17(b), l9(b). Along the same lines, the Deceinber 2013 memorandum, drafted by the
direct supervisor of the revenue agent, “sets forth part of the factual basis”_namely, facts
drawn from the supervisor’s “telephone conversation” with Waterman in his capacity as
the Authority’s representative_that the supervisor “believed made the referral” of
Waterman to OPR “appropriate.” Id. 1111 17(a), 19(a). Both memoranda were attached to
the report referring Waterman to OPR for further investigation and served as the “basis for
the referral for suspected misconduct.” la’. 1111 17(a), l7(b), 19(a), l9(b); Vaughn lndex 3.

Waterman does not appear to contest that the September and Deceinber 2014
memoranda are predecisional, and for good reason: They were drafted as part of the first
step in initiating the OPR review process by individuals without the responsibility for
making final OPR decisions Rawlins Decl. 11 19; C)tt Decl. 1111 6-7. Waterman instead
primarily argues that the deliberative process privilege does not protect the memoranda
because those memoranda contain only “factual material”_namely, the employees’
“account[s]” of Waterman’s conduct. Pl.’s Cross-Mot. 8. Unfortunately for Waterman, he
is incorrect. How so‘?

Although factual information is often outside the bounds of Exemption 5’s
protections, the line between fact and agency opinion or deliberation “is not infallible and

must not be applied mechanically.” Mapotlzer v. Dep ’t ofJustice, 3 F.3d 1533, 1537 (D.C.
Cir. 19_93). Rather, when determining whether factual material is privileged from
disclosure, courts take a “functional approach” and ask if the “selection or organization of

facts is part of an agency’s deliberative process.” Aneienl' Coz'n Collectors Guilcl v. U.S.

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Dep’t ofSlale, 641 F.3d 504, 513 (D.C. Cir. 2011); Hara'y v. Bureau ofAlcolzol, Tobacco,
Firearms & Explosives, 243 F. Supp. 3d 155, 164 (D.D.C. 2017). Under that approach to
Exemption 5, our Circuit has allowed agencies to withhold factual material that has been
selected, summarized, or organized for the purposes of assisting in a deliberative process
See, e.g., Mapolher, 3 F.3d at 1537-38 (privilege protected factual background information
gathered about individual because the “selection of the facts thought to be relevant clearly
involves the formula or exercise of policy-oriented judgment”) (internal quotation marks
and alteration omitted)); Montrose Chemical Corp. ofCal. v. Tral`n, 491 F.2d 63, 68 (D.C.
Cir. `1974) (employees’ “compilation of a summary” of materials from administrative _
record reflected their “judgment as to what record evidence” would be important to EPA
Administrator’s decision and was thus “itself a part of the internal deliberative process
which should be kept confidential and within the agency”); Ham’y, 243 F. Supp. 3d at 169-
70 (inspectors’ interview notes and summaries privileged because inspectors would have
had to “extract pertinent material from a larger universe of facts” in order to compile notes
and summaries and “thus the documents reflect an exercise ofjudginent as to what issues
seemed most relevant to these inspectors to pre-decisional findings and recommendations”
(internal quotation marks, alteration, and citation omitted)).

The principle articulated in those cases controls here. As the lRS declarant explains,
the September and Deceinber 2014 memoranda organize and summarize “part of the
factual basis” that lRS employees “believed made the referral” of Waterman to OPR
appropriate Rawlins Decl. 11 l9(a)-(b). ln other words, the particular facts included in the

memorandum were “extract[ed]” from a “1arger universe of facts” regarding Waterman’s

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representation in an “exercise ofjudginent as to what issues seemed most relevant” to the
referring employees’ decision to file an OPR Report. Harcly, 243 F. Supp. 3d at 170
(internal quotation marks and alteration omitted). Just as disclosing the agencies’
compilation of background facts, administrative record portions, or interview notes in prior
cases would have revealed the agencies’ weighing of factual material and thus their
deliberative processes, see Mapother, 3 F.3d at 1537-38; Montrose Clzeml`cal, 491 F.2d at
68; Harcly, 243 F. Supp. 3d at 168-70, requiring the lRS to reveal the particular facts its
employees thought warranted a referral of misconduct would expose the employees’
deliberative evaluation of Waterman’s conduct against lRS rules and standards Because
that is the precise result the deliberative process privilege serves to avoid, the factual
accounts contained within the September and Deceinber 2013` memoranda “fall[] squarely
within the category of factual material protected” from disclosure under our Circuit’s
Exemption 5 precedents Ancient Col`n Collectors Gul`lcl, 641 F.3d at 513-14.
2. August 26, 2014 l\/lemorandum and Redacted OPR Computer Print-Out

The lRS also withheld a copy of an August 26, 2014 memorandum drafted by an
OPR analyst and distributed to a manager of the Legal Analysis Branch. According to the
analyst, the purpose of the memorandum was to “record his analysis of the referral,
particularly to summarize the facts alleged, identify the violations alleged, and recommend
further predecisional agency actions.” Rawlins Decl. 11 19(c). That memorandum is clearly
predecisional, as it contains a preliminary, internal analysis of Waterman’s alleged
misconduct, including a discussion of whether Waterman’s actions warrant subsequent

action by the agency. lt is also deliberative To start, for the reasons just discussed in

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relation to the September and Deceinber 2013 memoranda, the agent’s selection and
evaluation of factual material in the context of a referral investigation is part and parcel of
the agency’s deliberative process l\/loreover, the portions of the memorandum containing
the analyst’s opinion and “recommendation for how OPR could further investigate the
case” are clearly deliberative for purposes of the deliberative process privilege Id. 11 17(c);
cf Hardy, 243 F. Supp. 3d at 169 (documents that include “‘recommendations’ or ‘opinions
on legal or policy matters”’ are “clearly ‘deliberative’ in nature” (quoting Vauglzn v. Rosen,
523 F.2d 1136, 1143-44 (D.C. Cir. 1975))). Therefore, the lRS properly withheld the
memorandum under Exemption 5. F rom that conclusion,- it follows that the lRS’s decision
to redact the OPR computer print-out_which merely summarizes the analysis and
recommendations contained in the August 2014 memorandum~_was also proper under
Exemption 5.
3. Redacted September 4. 2014 E-l\/lail

Finally, the lRS redacted a portion of a September 4, 2014 e-mail between an OPR
legal analysis manager and an OPR attorney. According to the lRS’s declarant, the
redacted portion of the e-inail contains a discussion between the OPR manager and her
supervisor regarding “what action OPR should take in response to the referral.” Rawlins
Decl. 11 21. The redacted information therefore recounts a “discussion that took place
before any action was taken and describes an action (but not a final agency action) to be
taken in the future.” Id. That kind of conversation involving the planning and evaluation

ofa “proposed” agency action, prior to adoption of a final agency position, is by its nature

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predecisional and deliberative Pul)lz`c Cil'z'zen, lnc., 598 F.3d at 874. The lRS was

therefore entitled to withhold it under Exemption 5.4

CONCLUSION

For the foregoing reasons, the Court GRANTS defendant’s motion for summary
judgment and DENlES plaintiffs cross-motion for summary judgment. An Order

consistent with this decision accompanies this l\/lemorandum Opinion.

fm

RICHARILJ.,LAYON
United States District Judge

 

4 Contrary to Waterman’s contentions in camera review of the documents at issue is not necessary
to sustain the lRS’s withholding decisions The lRS’s declarations provide detailed descriptions of the
withheld material as well asjustifications for the withholdings, including the names and positions of the
authors and recipients of the material; confirmation of the purposes of the withheld memoranda; and
descriptions of the context in which the withheld information was generated By providing all of that
information, the lRS, in myjudgment, has discharged its duty to provide “reasonably specific”justifications
for its positions and has demonstrated that “the information withheld logically falls within the claimed
exemption[s].” Am. Civil Ll'l)erlies Union, 628 F.3d at 619. ln such a case, in camera review “is neither
necessary nor appropriate.” Id. at 626.

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