CHURCH OF SCIENTOLOGY INT'L, Plaintiff,
v.
INTERNAL REVENUE SERVICE, Defendant.
No. CV 91-1025 RSWL (Sx).
United States District Court,
C.D. California.
Aug. 26, 1993.
Church made Freedom of Information Act (FOIA) request, seeking access to
records held by Internal Revenue Service (IRS). After IRS responded to request
but withheld 468 pages in full and 76 in part, court ordered IRS to produce
Vaughn Index of all withheld records, and parties stipulated that IRS would
conduct second search. IRS filed results of that second search and
accompanying Vaughn Index, and IRS moved for summary judgment on ground
that church had received all documents to which it was entitled. The District
Court, Lew, J., held that: (1) all withheld documents were exempted from FOIA
disclosure, and (2) IRS demonstrated that it reasonably segregated all
nonexempt information from documents withheld in full.
Motion granted.
[1] RECORDS
To prevail in Freedom of Information Act (FOIA) suit, defendant agency must
prove, inter alia, that its search satisfied its duty to conduct "reasonable"
search for responsive records. 5 U.S.C.A. s 552.
[2] RECORDS
Where agency withholds records responsive to Freedom of Information Act (FOIA)
request, agency bears burden of justifying its withholdings; this burden may
be sustained by submitting affidavits that provide detailed analysis of
requested documents and reasons for invoking exemption. 5 U.S.C.A. s
552(a)(4)(B).
[3] FEDERAL CIVIL PROCEDURE
If agency affidavits providing detailed analysis of requested documents and
reasons for invoking exemption from disclosure under Freedom of Information
Act (FOIA) are clear, specific, and reasonably detailed, and describe withheld
information in factual and nonconclusory manner, summary judgment may be
granted solely on basis of those affidavits. 5 U.S.C.A. s 552(a)(4)(B).
[4] RECORDS
Under Freedom of Information Act (FOIA) Exemption 3, which permits agency to
withhold documents specifically exempted from disclosure by statute, and
Internal Revenue Service (IRS) code provision mandating that tax return
information for third parties be held confidential, IRS properly withheld tax
return information concerning six entities that, according to taxpayer who
sought that information, submitted tax return information release
authorizations permitting taxpayer access to those records; those
authorizations, which made no specific reference to this particular FOIA
action, did not satisfy terms of taxpayer's stipulation with IRS, even though
that stipulation did not expressly require reference to instant action. 5
U.S.C.A. s 552(b)(3); 26 U.S.C.A. s 6103(a).
[5] RECORDS
Under statute that exempts documents from Freedom of Information Act (FOIA)
disclosure when such disclosure would "seriously impair federal tax
administration," district court's review of Internal Revenue Service's (IRS)
determination of impairment is de novo; court must satisfy itself, on basis of
detailed and nonconclusory affidavits, that IRS is correct in finding that
disclosure would impair collection, assessment, or enforcement of tax laws.
26 U.S.C.A. s 6103(e)(7).
[6] RECORDS
Under Freedom of Information Act (FOIA) Exemption 3, which permits agency to
withhold documents that are specifically exempted from disclosure by statute,
evidence supported Internal Revenue Service's (IRS) withholding of several
documents as exempt under statute that exempts documents when their disclosure
would "seriously impair federal tax administration"; IRS offered four
affidavits in support of withholding documents, and each of those declarants
provided detailed and nonconclusory statements in support of their findings
that release of documents would impair federal tax administration. 5
U.S.C.A. s 552(b)(3); 26 U.S.C.A. s 6103(e)(7).
[7] RECORDS
For purposes of Freedom of Information Act (FOIA) Exemption 7(A), which allows
for nondisclosure of records or information compiled for law enforcement
purposes where disclosure could reasonably be expected to interfere with
enforcement proceedings, documentation of work done by Internal Revenue
Service (IRS) in preparation for investigation of church (which sought
disclosure of records) and related entities under Church Audit Procedures Act
(CAPA) constituted "investigatory records compiled for law enforcement
purposes." 5 U.S.C.A. s 552(b)(7)(A); 26 U.S.C.A. s 7611.
See publication Words and Phrases for other judicial constructions and
definitions.
[8] RECORDS
Internal Revenue Service (IRS) met its burden to prove withheld documents were
exempt from disclosure under Freedom of Information Act (FOIA) as documents
compiled during ongoing Church Audit Procedures Act (CAPA) investigation of
plaintiff church (which sought disclosure of those documents), and during IRS'
determination of tax exempt status of organizations related to church; Vaughn
Indices and supporting affidavits established required nexus between withheld
documents and IRS' inquiry, and that requested production would interfere with
that process. 5 U.S.C.A. s 552(b)(7)(A); 26 U.S.C.A. s 7611.
[9] RECORDS
In evaluating claim under Freedom of Information Act (FOIA) Exemption 7(C),
which allows for nondisclosure of documents compiled for law enforcement
purposes where disclosure could reasonably be expected to constitute
unwarranted invasion of personal privacy, court must balance privacy interests
at stake against public interest in disclosure; government agency bears burden
of establishing privacy interest, and balance tilts in favor of disclosure.
5 U.S.C.A. s 552(b)(7)(C).
[9] RECORDS
In evaluating claim under Freedom of Information Act (FOIA) Exemption 7(C),
which allows for nondisclosure of documents compiled for law enforcement
purposes where disclosure could reasonably be expected to constitute
unwarranted invasion of personal privacy, court must balance privacy interests
at stake against public interest in disclosure; government agency bears burden
of establishing privacy interest, and balance tilts in favor of disclosure.
5 U.S.C.A. s 552(b)(7)(C).
[10] RECORDS
Internal Revenue Service (IRS) properly withheld documents pursuant to Freedom
of Information Act (FOIA) Exemption 7(C), which allows for nondisclosure of
documents compiled for law enforcement purposes where nondisclosure could
reasonably be expected to constitute unwarranted invasion of personal property,
despite plaintiff's claim that it had knowledge of identities of personnel that
IRS sought to protect; those individuals did not lose their privacy interest
merely because their identities may be discovered through other means, and IRS
disclosure litigation attorney testified that IRS did not assert Exemption 7(C)
where document on its face suggested that plaintiff was aware of employee in
context of referenced activity. 5 U.S.C.A. s 552(b)(7)(C).
[11] RECORDS
Fact that individual's identity may be discovered through other means does not
mean that individual loses his privacy interest under Freedom of Information
Act (FOIA) Exemption 7(C), which allows for nondisclosure of documents
compiled for law enforcement purposes where disclosure could reasonably be
expected to constitute unwarranted invasion of personal privacy. 5
U.S.C.A. s 552(b)(7)(C).
[12] RECORDS
Internal Revenue Service (IRS) established that disclosure of requested
documents could reasonably be expected to reveal identities of confidential
information sources and, thus, IRS properly withheld documents from disclosure
under Freedom of Information Act (FOIA); IRS affidavit stated that withheld
pages were obtained from third party, that information was received during IRS'
investigation of possible harassment of IRS employees, that IRS employees
involved in procurement of information indicated that disclosure of source's
identity could put someone in jeopardy, and that release of information would
identify cooperating foreign law enforcement agencies. 5 U.S.C.A. s
552(b)(7)(D).
[13] RECORDS
Internal Revenue Service (IRS) properly withheld from disclosure to church
under Freedom of Information Act (FOIA) two pages of IRS Law Enforcement
Manual (LEM) concerning procedures for handling applications for tax exemption
and examination of church entities, and agency memorandum discussing
application of LEM techniques and procedures; these documents were compiled
for purposes of ongoing examination of church. 5 U.S.C.A. s 552(b)(2),
(b)(7)(E).
[14] RECORDS
Freedom of Information Act (FOIA) Exemption 5, which allows nondisclosure of
interagency or intra-agency memoranda or letters that would not be available by
law to party other than agency in litigation with agency, includes those
documents normally privileged in civil discovery context. 5 U.S.C.A. s
552(b)(5).
[15] RECORDS
Freedom of Information Act (FOIA) Exemption 5, which allows nondisclosure of
interagency or intra-agency memoranda or letters that would not be available by
law to party other than agency in litigation with agency, encompasses
governmental deliberative privilege, attorney-client privilege, and attorney
work-product doctrine. 5 U.S.C.A. s 552(b)(5).
[16] RECORDS
Government met its burden of showing that requested documents contained
material that fell within governmental deliberative privilege, and that
documents were thus exempted from disclosure under Freedom of Information Act
(FOIA); Internal Revenue Service's (IRS) employee's declaration established
that withheld documents were generated in five specified courses of action, and
that only predecisional deliberative material was withheld, and, whenever
possible, IRS identified related final decision in Vaughn Indices. 5
U.S.C.A. s 552(b)(5).
[17] RECORDS
In reviewing claim that record falls within governmental deliberative
privilege, and is thus exempt from disclosure under Freedom of Information Act
(FOIA), courts in Ninth Circuit focus on function of document as part of
deliberative process, rather than on contents of document. 5 U.S.C.A. s
552(b)(5).
[18] RECORDS
Internal Revenue Service (IRS) presented sufficient evidence to justify its
withholding records, based on attorney-client privilege and work product
doctrine, from disclosure under Freedom of Information Act (FOIA); IRS' Vaughn
Indices and IRS' employee's declaration established that documents were
attorney work product generated in preparation for litigation between
plaintiff (who sought disclosure) and IRS in four specified matters. 5
U.S.C.A. s 552(b)(5).
[19] RECORDS
For purposes of Freedom of Information Act (FOIA) Exemption 6, which permits
agency to withhold information in personnel and medical files and similar
files, disclosure of which would constitute clearly unwarranted invasion of
personal privacy, all information that applies to particular individual meets
threshold requirement of protection, regardless of class of file; court must
then determine whether release of information would constitute clearly
unwarranted invasion of that person's privacy. 5 U.S.C.A. s 552(b)(6).
[20] RECORDS
Internal Revenue Service (IRS) had legal justification for withholding from
disclosure under Freedom of Information Act (FOIA) information including
employee handwriting and other identifying information of third parties and IRS
employees; Vaughn Indices and IRS' employee's declaration established that
release of information contained therein would constitute invasion of personal
privacy of referenced individuals, and that information included references to
third parties' involvement in possible criminal conspiracy, third-party
correspondence critical of plaintiff who sought disclosure, and personnel
matters including performance evaluations and information about employees'
personal lives. 5 U.S.C.A. s 552(b)(6).
[21] RECORDS
Internal Revenue Service (IRS) demonstrated that it reasonably segregated all
information that was not exempt from disclosure under Freedom of Information
Act (FOIA) from documents withheld in full; IRS' Vaughn Indices and supporting
declarations provided detailed descriptions of contents of withheld documents
and specific pages affected by each exemption claim, and plaintiff did not
challenge withholding of any specified document in full. 5 U.S.C.A. s
552(b).
[22] RECORDS
Under Freedom of Information Act (FOIA), government agency bears burden to
demonstrate that nonexempt portions of documents are not "reasonably
segregable." 5 U.S.C.A. s 552(b).
[23] RECORDS
For purposes of Freedom of Information Act (FOIA) section providing that any
reasonable segregable portion of record shall be provided to any person
requesting such record after deletion of portions that are exempt, question of
segregability is completely dependent on content of documents themselves. 5
U.S.C.A. s 552(b).
[24] RECORDS
District courts need not and should not make in camera inspections of requested
documents where government has sustained its burden of proof on claimed
exemption under Freedom of Information Act (FOIA).
*717 Kendrick L. Moxon, Bowles & Moxon, Hollywood, CA, for plaintiff.
Terree A. Bowers, U.S. Atty., Mason Lewis, Asst. U.S. Atty., Chief, Tax Div.,
Los Angeles, CA, Carol C. Priest, Trial Atty., Tax Div., U.S. Dept. of Justice,
Washington, DC, for defendant.
ORDER
LEW, District Judge.
The Internal Revenue Service, Defendant in the above-captioned action,
has filed a motion for summary judgment. Plaintiff Church of Scientology
International has opposed the motion. The matter was set for hearing on the
Court's law and motion calendar, but was removed for disposition on the
submitted papers pursuant to Federal Rule of Civil Procedure 78.
Now, having carefully considered all the papers filed in support of and in
opposition to the motion, the Court hereby issues the following order:
Defendant's motion for summary judgment is GRANTED.
I. BACKGROUND
On September 16, 1990, Plaintiff Church of Scientology International ("CSI")
made a Freedom of Information Act request, pursuant to 5 U.S.C. s 552,
seeking access to records held by the Defendant Internal Revenue Service
("IRS"). In its initial search, the IRS found 692 documents responsive to
Plaintiff's request and released 224 pages in full and 76 pages in part. The
IRS withheld 468 pages in full.
On November 14, 1991, this Court ordered the IRS to produce a Vaughn Index of
all withheld records describing the records and providing statutory
justification for each *718 withholding. The IRS filed its first Vaughn
Index on January 15, 1992. The IRS later determined that the initial searches
were too restrictive. Thereafter, the parties stipulated that the IRS would
conduct a second search using additional search terms and extending the
temporal scope of the search. This stipulation was entered as a Court Order
dated February 13, 1992. On April 8, 1992, the Court denied the IRS's motion
for relief from the stipulation.
The IRS filed a partial Vaughn Index on March 13, 1992, and requested relief
from the stipulation which this Court denied. On July 27, 1992, this Court
held the IRS in contempt of the February 13, 1992, Order, imposed sanctions,
and ordered the IRS to comply with the terms of the stipulation by producing
the Vaughn Index and non-exempt documents.
On September 14, 1992, the IRS filed the results of its second search and the
accompanying Vaughn Index. An additional 11,988 pages were found to be
responsive to the Plaintiff's request. While the IRS released several boxes of
documents in full, the Vaughn Indices describe thousands of pages of withheld
documents. These results are the subject of the current motion.
The IRS now moves for summary judgment on the grounds that Plaintiff has
received all IRS documents which it is entitled to receive under law, and no
documents have been improperly withheld from Plaintiff by the IRS. Plaintiff
asserts that the IRS has failed to support its exemption claims and has
unjustifiably refused to release "tax return information" of third parties
which have submitted waivers permitting such release. Plaintiff requests that
the Court allow for in camera inspection of certain records and adjudication of
the remaining individual documents.
II. DISCUSSION
A. Standard on Summary Judgment
[1] In order to prevail in a Freedom of Information Act ("FOIA") suit,
a defendant agency must prove that "each document that falls within the class
requested either has been produced, is unidentifiable, or is wholly exempt from
the Act's inspection requirements." Zemansky v. Environmental Protection
Agency, 767 F.2d 569, 571 (9th Cir.1985). The agency must also prove that its
search satisfied its duty to conduct a "reasonable" search for responsive
records. Id.
[2][3] The adequacy of the IRS search is not at issue here. Rather, the
parties dispute the question of whether the IRS has established as a matter of
law that all withheld documents are exempt from the FOIA inspection
requirements. Where responsive records are withheld, the agency bears the
burden of justifying its withholdings, and the district court must review the
agency's exemption claims de novo. 5 U.S.C. s 552(a)(4)(B). The agency's
burden may be sustained by submitting affidavits which provide a detailed
analysis of the requested documents and the reasons for invoking the
exemption. Johnson v. U.S. Dept. of Justice, 739 F.2d 1514, 1516. Summary
judgment may be granted solely on the basis of these agency affidavits if they
are clear, specific, and reasonably detailed, and describe the withheld
information in a factual and nonconclusory manner. DiViaio v. Kelley, 571
F.2d 538, 543 (10th Cir.1978).
B. Defendant's "Categorical Approach"
As a preliminary matter, this Court must address the process of adjudicating
the more than 12,000 pages of documents at issue in this case. Plaintiff has
challenged the IRS's approach as a "categorical adjudication" of withheld
documents. Such a volume of documents demands a manageable approach to
exemption description and justification. This Court condones the IRS's
approach which has allowed for efficient arguments of law while providing
sufficiently detailed information in the Vaughn Indices [FN1] and in the
supporting factual bases provided by declarations. The IRS's briefs may
categorize the documents by legal claims to exemption, but *719 each
undisclosed document has been catalogued on a page-by-page basis in a
methodical and exhaustive manner in the twenty-seven volume, 2,683-page Vaughn
Indices.
FN1. On January 13, 1992, the IRS filed its original Vaughn Index. A
Supplemental Vaughn Index was filed on March 12, 1992. An additional
Supplemental Vaughn Index was filed on August 31, 1992. A revised Vaughn
Index was filed on September 23, 1992. All references herein to the
submitted Vaughn Indices rely on these documents as a whole.
C. Defendant's Exemption 3 Claims Pursuant to 26 U.S.C. s 6103(a)
Under 5 U.S.C. s 552(b)(3), an agency may withhold documents where they are
specifically exempted from disclosure by statute. Defendant IRS claims
Exemption 3 in conjunction with 26 U.S.C. s 6103(a), an IRS code provision
governing tax return information for third-parties. Section 6103(a)
mandates that tax return information be held confidential subject to a number
of strictly construed exemptions. Church of Scientology v. I.R.S., 484 U.S.
9, 10, 108 S.Ct. 271, 271, 98 L.Ed.2d 228 (1987).
Plaintiff does not contest the withholding of tax return information for
specified third parties. However, CSI asserts that this exemption would not
apply to six entities who have submitted tax return information release
authorizations to the IRS permitting Plaintiff access to such records.
[4] 1. Third party tax return information release authorizations: The
parties dispute whether any tax return information release authorizations have
been submitted in this case in compliance with the stipulation provision. The
IRS argues that no such waivers were filed on or before February 24, 1992, as
required by the stipulation. CSI asserts that it submitted waivers to the IRS
on behalf of six entities by letter dated February 21, 1993 [sic].
The February 11, 1992, Stipulation and Order at paragraph two states: "The
Church, no later than February 24, 1992, will provide the IRS with various
third party tax return information authorizations. Upon completion of the new
search, the IRS will newly process all of the records now in issue and will not
assert any Exemption 3 tax return information claims pursuant to s 6103(a)
with respect to the individuals and/or entities for which such authorizations
have been furnished." Plaintiff has submitted a copy of a letter dated
February 21, 1992, from CSI attorney Kendrick L. Moxon to Department of Justice
attorney, Michael J. Martineau, which represents the enclosure of executed
third party tax return information release authorizations for the following
Church entities: Church of Spiritual Technology, Religious Technology Center,
Church of Scientology of California, Celebrity Centre International,
International Hubbard Ecclesiastical League of Pastors and Scientology Missions
International. CSI submitted these waivers in a separate case being handled by
Mr. Martineau, Church of Scientology Int'l v. I.R.S., CV 91-0431 CBM
(C.D.Cal.).
This Court finds that the third party tax return information release
authorizations submitted to Mr. Martineau on February 21, 1992, do not satisfy
the terms of paragraph two of the stipulation. This provision does not
expressly require that the authorizations be submitted to the I.R.S. with
specific reference to this particular FOIA action. However, any other
interpretation would place an unmanageable burden on the I.R.S. and on the
courts. There are currently twelve pending FOIA cases that involve requests
for several tens of thousands of records. The interpretation urged by
Plaintiff would extend the scope of these cases to an unprecedented degree.
[FN2]
FN2. Plaintiff asserts that this Court found that Plaintiff had submitted
the authorizations at issue in its ruling on Defendant's Motion for Relief
from Stipulation. See Order, April 9, 1992. The Court rejects this
characterization of its prior Order. In a footnote in the April 9 Order,
the Court recognized the existence of a question of fact regarding whether
authorizations had been filed in compliance with the stipulation. Id.
at 4 n. 2. The Court merely found Plaintiff's evidence sufficient to
preclude a finding that the disputed provision was moot. This Court did
not decide the issue of whether the submitted authorizations satisfied the
requirements of the stipulation.
For these reasons, this Court finds that Plaintiff has failed to present
evidence that waivers from third parties were received from Plaintiff in this
case on or before February 24, 1992. The Government's Vaughn Indices and
supporting declarations establish that these documents contain confidential
third party tax information. This Court finds that the I.R.S. has properly
withheld these documents pursuant to Exemption 3 in conjunction with
s 6103(a).
*720 2. Plaintiff's request for sanctions: Plaintiff has requested that
the Court sanction the IRS for refusal to comply with the February 11, 1992,
Stipulation and Order. Based on the above-ruling, the IRS's assertion of
Exemption 3 to withhold these documents does not constitute failure to comply
with the Court's Order. Plaintiff's request for sanctions is denied.
D. Defendant's Exemption 3 Claims Pursuant to 26 U.S.C. s 6103(e)(7)
[5] The IRS has withheld several documents as exempt under the
provisions of 26 U.S.C. s 6103(e)(7). Section 6103(e)(7) exempts
documents when their disclosure would "seriously impair federal tax
administration." The district court's review of an IRS determination of
impairment is de novo. Long v. I.R.S., 742 F.2d 1173, 1183 (9th Cir.1984).
The court must satisfy itself, on the basis of detailed and nonconclusory
affidavits, that the IRS is correct in finding that disclosure would impair the
collection, assessment, or enforcement of the tax laws. Id.
[6] Defendant IRS offers four affidavits in support of withholding documents
based on Exemption 3 in conjunction with 26 U.S.C. s 6103(e)(7). [FN3] Each
of these declarants provides detailed and nonconclusory statements in support
of their findings that release of the documents withheld pursuant to
s 6103(e)(7) would impair federal tax administration. This Court rejects
Plaintiff's conclusory statement that the IRS assertions of impairment consist
only of generalities and opinions. The Court does not find that the
declarations contradict the Vaughn Indices. Furthermore, the Court does not
find reason to question the integrity of the Defendant's sworn testimony based
only on the alleged "history of IRS discrimination" against CSI. [FN4]
FN3. The Court here relies on the second declaration of Thomas J. Miller,
the first and second declaration of Steven D. Harris, and the declaration
of Paul Austin.
FN4. Plaintiff makes no attempt to impeach specific statements in the
affidavits of the four declarants offered in support of Defendant's motion
in this particular case. Plaintiff's generalized attack on "declarations
of IRS officials" is unpersuasive.
With regard to the documents withheld pursuant to tax treaty secrecy clauses,
this Court finds that this is an instance where deference is especially
appropriate. See Long, 742 F.2d at 1182 (according special deference to
agency's detailed affidavits in sensitive areas such as national security
cases). Declarant Paul Austin, the Internal Revenue Commissioner's delegate,
is likely to have unique insights into the concerns regarding the cooperation
of foreign governments and tax treaty partners. Based on Mr. Austin's detailed
affidavit, this Court finds that these documents are properly withheld under
Exemption 3 in conjunction with s 6103(e)(7).
In sum, Defendant has presented evidence that documents withheld pursuant to
Exemption 3 in conjunction with s 6103(e)(7) are totally exempt from
disclosure. Plaintiff has not pointed to any specific facts that create a
triable issue regarding the withholding of these documents. Therefore,
Defendant has met its burden to establish that disclosure of these documents
would seriously impair federal tax administration.
E. Defendant's Exemption 7(A) Claims
The IRS has withheld certain documents or portions thereof pursuant to
Exemption 7(A). The IRS asserts that these documents are records compiled in
connection with the investigation of Plaintiff CSI and related entities under
the Church Audit Procedures Act (CAPA), 26 U.S.C. s 7611, and for
determinations of the tax exempt status of various Scientology organizations.
Exemption 7(A) allows for nondisclosure of records or information compiled for
law enforcement purposes where disclosure could reasonably be expected to
interfere with enforcement proceedings. 5 U.S.C. s 552(b)(7)(A). In order
to sustain its burden of proof under Exemption 7(A), the IRS must establish
that it is a law enforcement agency, that the withheld documents were
investigatory records compiled for law enforcement purposes, and that
disclosure of those documents would interfere with pending *721 enforcement
proceedings. Lewis v. I.R.S., 823 F.2d 375, 379 (9th Cir.1987).
[7] 1. Documents compiled for CAPA investigation: Plaintiff does not
dispute that 26 U.S.C. s 7611 proceedings constitute a law enforcement
proceeding as that term is used in the FOIA, nor does Plaintiff dispute that
the IRS has the requisite law enforcement mandate. However, Plaintiff argues
that the "law enforcement purpose" started on April 28, 1989, when IRS made its
first document request for the s 7611 examination, and all documents created
prior to that date would fall outside such purpose.
This Court rejects Plaintiff's premise. Documentation of work done by the
agency in preparation for the s 7611 examination would also constitute
investigatory records compiled for law enforcement purposes. See 26
U.S.C. s 7611 (IRS must have "reasonable belief" that entity is not tax exempt
before formally beginning church tax inquiry).
This Court finds that the Vaughn Indices and supporting affidavits establish a
rational nexus between the IRS s 7611 examination of Plaintiff and related
third party entities and the documents for which Exemption 7(A) is claimed.
The affidavits also adequately reveal that release of these documents is likely
to interfere with the IRS's ability to perform the s 7611 examination.
Plaintiff points to no specific facts that dispute the Defendant's evidence.
[8] 2. Documents compiled for determination of tax exempt status: In light
of the recent Ninth Circuit ruling in Church of Scientology Int'l v. I.R.S.,
995 F.2d 916, 919 (9th Cir.1993), that IRS determinations of tax exempt status
constitute law enforcement purposes under Exemption 7(A). This Court finds
that the Vaughn Indices and supporting affidavits provide the required nexus
between the withheld documents and the agency's inquiry regarding the tax
exempt status of various Scientology organizations. The IRS has also
established that production would interfere with that process.
In sum, Defendant has met its burden to prove the withheld documents are
totally exempt under Exemption 7(A) as documents compiled during the on-going
CAPA investigation of Plaintiff CSI and the agency's determination of the tax
exempt status of related organizations. [FN5]
FN5. Plaintiff points to Vaughn index page 2553 as an improper withholding
because the IRS does not put forth a law enforcement purpose. However, the
IRS did not assert Exemption 7(A) to justify withholding pages 12271-
12275. Rather, it relied on Exemption 7(C) and Exemption 5.
F. Defendant's Exemption 7(C) Claims
The IRS has withheld documents pursuant to provisions of exemption 7(C). The
Government has asserted Exemption 7(C) to withhold two types of documents: (1)
those containing the names, addresses, or other identifying information of IRS
contacts or government employees, and (2) those revealing the handwriting of
IRS personnel or third parties. The Government asserts that disclosure of IRS
employees' handwriting and the identities of IRS employees could conceivably
subject them to harassment and annoyance in their private lives and in the
performance of their official duties.
[9][10][11] Exemption 7(C) allows for nondisclosure of documents compiled
for law enforcement purposes where disclosure could reasonably be expected to
constitute an unwarranted invasion of personal privacy. 5 U.S.C. s
552(b)(7)(C). In evaluating an Exemption 7(C) claim, the Court must balance
the privacy interests at stake against the public interest in disclosure. The
government agency bears the burden of establishing a privacy interest, and the
balance tilts in favor of disclosure. Congressional News Syndicate v.
Department of Justice, 438 F.Supp. 538, 542 (D.C.Cir.1977).
The parties do not dispute that the withheld documents were compiled for
law enforcement purposes. Nor does Plaintiff argue that a countervailing
public interest outweighs the asserted privacy concern. Rather, Plaintiff
challenges the Defendant's showing of a privacy interest on two grounds.
First, Plaintiff has knowledge of the identities of personnel the IRS seeks to
protect. An individual does not lose his privacy interest under 7(C) because
his identity may be *722 discovered through other means. See L & C
Marine Transport, Ltd. v. United States, 740 F.2d 919, 922 (11th
Cir.1984) (noting that even where names of agency employee witnesses are known
disclosure would tie witness to particular statements and reveal nature of each
employee witness' comments). In addition, Steven D. Harris, an IRS disclosure
litigation attorney, has testified that the IRS did not assert Exemption 7(C)
where the document on its face suggested that Plaintiff was aware of the
employee in the context of the referenced activity. For these reasons, this
Court finds that Plaintiff's assertion of prior knowledge cannot rebut the
Government's showing of a privacy interest under 7(C).
Second, Plaintiff asserts that the IRS has withheld handwritten information
that is otherwise non-exempt. CSI argues that this basis to withhold documents
is moot because Plaintiff will bear the costs of re-typing any documents
withheld solely on the basis of handwritten contents. Plaintiff has not
pointed to any facts in the record sufficient to establish that the IRS has
withheld documents solely to prevent disclosure of handwriting where the
substance of the information is not exempt. The fact that the IRS has
willingly re-typed handwritten text in hundreds of documents for release in
this case allows for the inference that the agency has not withheld non-exempt
information solely on the basis of its handwritten format. Finally, this
Court's review of the Vaughn Indices reveals that most handwriting has been
withheld through redaction.
For these reasons, this Court finds that Plaintiff has not raised a triable
issue regarding the privacy interests asserted by the IRS to establish its
Exemption 7(C) claims.
G. Defendant's Exemption 7(D) Claims
[12] The IRS has withheld documents pursuant to Exemption 7(D). The
Government asserts that disclosure of these documents would reveal sources who
were given implied promises of confidentiality by the IRS.
Exemption 7(D) allows for nondisclosure of documents compiled for law
enforcement purposes which could reasonably be expected to reveal the
identities of confidential sources. 5 U.S.C. s 552(b)(7)(D). "Where
implied promises of confidentiality are at issue, the index must state the
circumstances surrounding the receipt of information which led the [agency] to
conclude the informant would not have given the information without an implicit
assurance of confidentiality." Wiener v. F.B.I., 943 F.2d 972, 986-87 (9th
Cir.), reh'g denied, 951 F.2d 1073 (9th Cir.1991), and cert. denied, 505
U.S. 1212, 112 S.Ct. 3013, 120 L.Ed.2d 886 (1992). [FN6]
FN6. The Supreme Court has recently adopted a test embodying the approach
taken by the Ninth Circuit in Wiener. See Department of Justice v.
Landano, --- U.S. ----, ----, 113 S.Ct. 2014, 2023, 124 L.Ed.2d 84
(1993) (requiring government agency to establish narrowly defined
circumstances that allow for inference of implied confidentiality).
Plaintiff asserts that the IRS has failed to establish an implicit
assurance of confidentiality. However, Defendant has submitted a detailed
affidavit which supports such a finding. Steven D. Harris has testified to the
following material facts: (1) the withheld pages were obtained from a third
party; (2) the information was received during the IRS's investigation of
possible harassment of Service employees; (3) the IRS employees involved in
the procurement of the information have indicated that disclosure of the
source's identity could put someone in jeopardy; and (4) release of the
information would identify cooperating foreign law enforcement agencies.
Plaintiff points to no facts in the record which controvert this evidence.
For these reasons, the Court finds that the IRS has met its burden to establish
that disclosure could reasonably be expected to reveal the identities of
confidential information sources.
H. Defendant's Exemption 7(E) and Exemption 2 Claims
[13] The IRS has withheld two pages from the IRS Law Enforcement Manual
("LEM") and an internal agency memorandum pursuant to both Exemptions 7(E) and
Exemption 2. Exemption 7(E) allows for nondisclosure of records or information
compiled *723 for law enforcement purposes when production would disclose
techniques and procedures for law enforcement investigations or prosecutions or
would disclose guidelines for law enforcement investigations or prosecutions if
such disclosure could reasonably be expected to risk circumvention of the
law. 5 U.S.C. s 552(b)(7)(E).
The Vaughn Indices and the Harris declarations establish that the LEM pages
withheld concern procedures for handling applications for tax exemption and
examinations of Scientology entities. The agency memorandum discusses
application of the LEM techniques and procedures. These documents were
compiled for the purposes of the ongoing examination of CSI for tax years 1981
through 1987 pursuant to CAPA, 26 U.S.C. s 7611. Plaintiff has not pointed
to any facts to controvert Defendant's showing.
Exemption 2 exempts from disclosure records related solely to the internal
personnel rules and practices of an agency. 5 U.S.C. s 552(b)(2). Based on
the Vaughn Indices and the Harris declaration, these documents contain
information about internal law enforcement techniques, practices, and
procedures used by the IRS to coordinate the flow of information regarding
Scientology. Plaintiff has not controverted this evidence. In sum, this Court
finds as a matter of law that these documents were properly withheld pursuant
to Exemption 7(E) and Exemption 2.
I. Defendant's Exemption 5 Claims
The IRS has withheld documents pursuant to Exemption 5 on two grounds: (1)
these documents contain material that falls within the governmental
deliberative privilege, and (2) these documents contain material that falls
within the attorney-client privilege.
[14][15] Exemption 5 allows nondisclosure of inter-agency or intra-agency
memoranda or letters which would not be available by law to a party other than
an agency in litigation with the agency. 5 U.S.C. s 552(b)(5). This
exemption includes those documents normally privileged in the civil discovery
context. N.L.R.B. v. Sears, Roebuck & Co., 421 U.S. 132, 149, 95 S.Ct.
1504, 1515, 44 L.Ed.2d 29 (1975). Exemption 5 encompasses the governmental
deliberative privilege, the attorney-client privilege, and the attorney work
product doctrine. Id. at 150-55, 95 S.Ct. at 1516-18.
[16][17] 1. Deliberative process privilege: The IRS asserts Exemption
5 to withhold documents that reflect the agency's deliberative process. The
Ninth Circuit test focuses on the function of a document as part of the
deliberative process rather than on the contents of the document. National
Wildlife Fed'n v. United States Forest Service, 861 F.2d 1114, 1118-19 (9th
Cir.1988). The deliberative process privilege has been held to cover all
"recommendations, draft documents, proposals, suggestions, and other subjective
documents which reflect the personal opinions of the writer rather than the
policy of the agency," as well as documents which would "inaccurately reflect
or prematurely disclose the views of the agency." Id. at 1118.
Defendant submits the declaration of Steven D. Harris who provides the
agency's factual bases and justifications for withholding information pursuant
to Exemption 5. The Harris declaration establishes that the withheld documents
were generated in five specified courses of action. This affidavit also
establishes that only pre-decisional deliberative material was withheld.
Whenever possible, the IRS has identified the related final decision in the
Vaughn Indices. Based on this evidence in conjunction with the submitted
Vaughn Indices, this Court finds that the Government has met its burden of
establishing the existence of a genuine deliberative process.
Plaintiff has challenged the Government's assertion of the deliberative
process privilege because the Vaughn Indices describe only vague, general
decisions in relation to the withheld documents. However, this Court's review
of the examples from the Vaughn Indices that Plaintiff specifically disputes
shows that the IRS's description of the nature and purpose of the withheld
documents establish that they fall within the deliberative process category
described in National Wildlife Fed'n, 861 F.2d at 1118. Therefore, this
Court finds that Plaintiff has not raised a triable issue regarding the IRS
withholdings *724 pursuant to the deliberative process privilege.
[18] 2. Attorney-client privilege and work product doctrine: The IRS
asserts Exemption 5 to withhold documents based on attorney-client privilege
and the work product doctrine. The Vaughn Indices and the Harris declaration
establish that these documents concern confidential communications of legal
advice given by IRS and Department of Justice attorneys to IRS administrative
personnel.
Plaintiff has not challenged the agency's assertion of attorney-client
privilege in these instances. However, Plaintiff asserts that the IRS has not
established that documents withheld under the work product doctrine were
prepared in contemplation of litigation. Defendant's Vaughn Indices and the
Harris declaration establish that these documents are attorney work product
generated in preparation for litigation between Plaintiff and the IRS in four
specified matters. The descriptions of the documents at issue provided by the
index in conjunction with the specified ongoing litigation and enforcement
matters between the IRS and Plaintiff provide more than a bare assertion of the
privilege. See Senate of Puerto Rico v. Department of Justice, 823 F.2d
574, 586 (D.C.Cir.1987) (rejecting agency's affidavit as bare assertion where
declaration state only that withheld documents "were prepared by [agency]
attorneys in anticipation of litigation"). The informality or settlement
posture of these actions does not raise questions as to the accuracy of the
IRS's assertion of the work product doctrine. For these reasons, this Court
finds that the IRS has submitted uncontroverted evidence of the privileged
nature of these documents that supports its Exemption 5 claim.
J. Defendant's Exemption 6 Claims
The IRS has asserted Exemption 6 as the legal justification for
withholding information including employee handwriting and other identifying
information of third parties and IRS employees. Exemption 6 permits an agency
to withhold information in "personnel and medical files and similar files
disclosure of which would constitute a clearly unwarranted invasion of personal
privacy." 5 U.S.C. s 552(b)(6). As a threshold matter, the IRS must
establish that the material is contained in personnel, medical, or similar
files. Department of State v. Washington Post Co., 456 U.S. 595, 601-02,
102 S.Ct. 1957, 1961, 72 L.Ed.2d 358 (1982). Second, the IRS must show that
disclosure of the withheld information would violate a viable privacy interest
of the individual who is the subject of the information. See Schell v.
Department of Health & Human Serv., 843 F.2d 933, 937-38 (6th Cir.1988).
[19] Plaintiff argues that the IRS has not established that the documents at
issue constitute "personnel, medical, or similar files." However, the Supreme
Court has adopted a broad view of Exemption 6. Washington Post Co., 456
U.S. at 602, 102 S.Ct. at 1961. All information that applies to a particular
individual meets the threshold requirement of Exemption 6 protection regardless
of the class of file. Id. When disclosure of information which applies to
a particular individual is sought from Government records, courts must
determine whether release of the information would constitute a clearly
unwarranted invasion of that person's privacy. Id.
[20] The Vaughn Indices and the Harris declaration establish that the
information withheld meets this standard. Furthermore, the descriptions
therein establish that release of these documents would constitute an invasion
of the personal privacy of the referenced individual. The information includes
references to the third parties' involvement in possible criminal conspiracy;
third-party correspondence critical of Scientology; personnel matters
including performance evaluations and information about employees' personal
lives; and names, addresses, phone numbers, and other indirect identifiers of
IRS employees.
Plaintiff has also challenged the agency's Exemption 6 withholdings on the
same grounds asserted against the Exemption 7(C) claims. Plaintiff's mootness
argument against the IRS's Exemption 6 claims is rejected here for the reasons
discussed above.
In sum, the IRS has established that the documents withheld under Exemption 6
contain *725 information about particular individuals and its release would
constitute an unwarranted invasion of their personal privacy. Plaintiff has
not pointed to any facts that controvert the IRS's showing or raise a triable
issue regarding the public interest value of these documents.
K. Segregation of Non-Exempt Information
[21] Pursuant to the above-discussed exemptions, the IRS has withheld some
documents in full asserting that the documents cannot be segregated for partial
release. Plaintiff argues that the IRS has failed to demonstrate that it has
reasonably segregated all non-exempt information from the documents withheld in
full.
[22] The FOIA provides that "[a]ny reasonably segregable portion of a
record shall be provided to any person requesting such record after deletion of
the portions which are exempt under this subsection." 5 U.S.C. s 552(b).
The IRS bears the burden to demonstrate that the nonexempt portions of the
documents are not "reasonably segregable." Williamette Indus., Inc. v.
United States, 689 F.2d 865, 868 (9th Cir.1982), cert. denied, 460 U.S.
1052, 103 S.Ct. 1500, 75 L.Ed.2d 931 (1983). The question of segregability is
completely dependent on the content of the documents themselves. Mead Data
Cent., Inc. v. Department of Air Force, 566 F.2d 242, 260 (D.C.Cir.1977).
[23] This Court finds that Defendant's Vaughn Indices and supporting
declarations provide detailed descriptions of the contents of withheld
documents and the specific pages affected by each exemption claim. This
showing may be sufficient to allow the Court to determine the segregability of
non-exempt information in any particular document. However, Plaintiff does not
challenge the withholding of any specified document in full. As such, it is
impossible for this Court to evaluate the Defendant's showing of non-
segregability. For these reasons, this Court finds that Plaintiff has not
raised a triable issue of segregability.
L. Plaintiff's request for in camera inspection:
[24] Plaintiff has requested in camera review of documents withheld pursuant
to Exemption 5, Exemption 7(A), and Exemption 3 in conjunction with 26
U.S.C. s 6103(e)(7). District courts need not and should not make in camera
inspections where the government has sustained its burden of proof on the
claimed exemption. Lewis v. I.R.S., 823 F.2d 375, 378 (9th Cir.1987). For
the reasons discussed above, the IRS has met its burden to prove that the
withheld documents are totally exempt. Therefore, this Court has an adequate
factual basis to make its determination and need not examine the disputed
documents in order to determine their exempt status.
IT IS SO ORDERED.