408 F.Supp.3d 789
N.D. Tex.2019Background
- Highland Capital requested FOIA records of communications between the IRS and The Brattle Group concerning Highland’s 2008 tax examination (including Brattle’s reports).
- The IRS’s Disclosure Office and examination team (multiple custodians) conducted searches in late 2016 and produced records July 23, 2017 (initially 13,409 pages; later increased to 15,349 after discovery of missing pages).
- Highland administratively appealed; after appeal and litigation counsel assignment, DOJ/IRS counsel Valvardi conducted further searches (Dec. 2018) that produced an additional 508 documents in Feb. 2019.
- The IRS moved for summary judgment, asserting its searches were adequate and multiple FOIA exemptions justified redactions/withholdings; Highland challenged search adequacy and some privilege claims.
- The district court held the IRS’s search was adequate overall, granted some exemption claims (e.g., §6103/Exemption 3 for an EIN, numerous Exemption 7(a)/7(e)/Exemption 6 withholdings, and some deliberative-process withholdings), but denied summary judgment on other exemption claims and ordered many disputed pages submitted for in camera review.
Issues
| Issue | Highland's Argument | IRS's Argument | Held |
|---|---|---|---|
| Adequacy of search | IRS search was obstructive, incomplete, and custodians were cherry-picked; later productions show inadequacy | Multiple reasonable searches were conducted (Disclosure Office, case team, and later DOJ review/IT-assisted searches) producing many responsive records | Search found adequate overall; IRS met burden — subsequent productions consistent with good-faith search; summary judgment for adequacy granted to IRS |
| Withholding under Exemption 3 + I.R.C. §6103(a) (EIN on p.14943) | Highland did not show Brattle consent or material interest | §6103 protects taxpayer identifying information (EIN); no consent or material-interest exception shown | IRS may withhold EIN on p.14943 under Exemption 3/§6103(a) — summary judgment for IRS granted |
| Withholding under Exemption 3 + §6103(e)(7) and Exemption 7(a) (Brattle reports / investigation materials) | IRS assertions vague; production of later Brattle reports undermines claim that disclosure would seriously impair tax administration | Disclosure would reveal scope/strategy of enforcement and impair collection; documents compiled for enforcement | Court denied summary judgment for all documents claimed only under Exemption 3/§6103(e)(7) (insufficient explanation); granted 7(a) withholding for many documents but ordered numerous specific pages submitted for in camera review where Vaughn entries were conclusory |
| Exemption 5 — Attorney-client privilege (pages 369 & 545) | Privilege assertions too vague; Highland requested more detail/in camera review | Communications between Chief Counsel and agents regarding legal advice are privileged | Court denied summary judgment for privilege claims as unsupported by declarations/Vaughn detail; page 545 nonetheless covered by 7(a) so only page 369 ordered in camera |
| Exemption 5 — Deliberative process privilege (Brattle drafts, memoranda) | Redactions may obscure facts vs. deliberations; Vaughn descriptions too vague | Many withheld documents are predecisional and deliberative (drafts, internal discussions, requests for information) | Partially granted: court allowed deliberative privilege for several identified pages (including certain report drafts and internal communications) but required in camera submissions for many pages where descriptions were conclusory |
| Exemptions 6 / 7(c) and 7(e) (privacy, conference-call access) | Highland did not contest privacy claims | Disclosure of SSN fragments, signatures, personal numbers, and confidential conference-line info would invade privacy or risk eavesdropping/circumvention | Court upheld Exemption 6/7(c) redactions for identifying personal data and Exemption 7(e) for conference-line access numbers; segregability addressed and nonexempt portions released where practicable |
Key Cases Cited
- Batton v. Evers, 598 F.3d 169 (5th Cir. 2010) (agency must show adequate FOIA search and exemptions narrowly construed)
- Cooper Cameron Corp. v. U.S. Department of Labor, 280 F.3d 539 (5th Cir. 2002) (agency bears burden to sustain FOIA withholding and show search adequacy)
- Oglesby v. United States Department of the Army, 920 F.2d 57 (D.C. Cir. 1990) (adequate search uses methods reasonably likely to uncover responsive records)
- Weisberg v. United States Department of Justice, 745 F.2d 1476 (D.C. Cir. 1984) (issue is adequacy of search, not whether other documents might exist)
- Vaughn v. Rosen, 523 F.2d 1136 (D.C. Cir. 1975) (Vaughn index standard for describing withheld records)
- Department of the Air Force v. Rose, 425 U.S. 352 (U.S. 1976) (FOIA’s purpose to pierce administrative secrecy)
- Linsteadt v. Internal Revenue Service, 729 F.2d 998 (5th Cir. 1984) (§6103(e)(7) protects return information that Secretary determines would seriously impair tax administration)
- Klamath Water Users Protective Association v. Department of the Interior, 532 U.S. 1 (U.S. 2001) (deliberative-process privilege contours; contractor communications may be protected)
- Mayer Brown LLP v. Internal Revenue Service, 562 F.3d 1190 (D.C. Cir. 2009) (Exemption 7(e) requires only reasonable expectation of risk of circumvention)
- United States Department of State v. Washington Post Co., 456 U.S. 595 (U.S. 1982) (definition and scope of Exemption 6 "similar files")
- Sherman v. United States Department of the Army, 244 F.3d 357 (5th Cir. 2001) (substantial privacy interest in Social Security Numbers)