Opinion
Civil Action No. 02-1805 (JR)
November 20, 2003
MEMORANDUM
Plaintiff brought this suit under the Freedom of Information Act, 5 U.S.C. § 552, and the Privacy Act, 5 U.S.C. § 552a, complaining of the defendants' failure to respond to his FOIA and Privacy Act requests. One of the named defendants, the IRS Inspector General for Tax Administration ("TIGTA") moved to dismiss as to the FOIA claim and for summary judgment as to the Privacy Act claim, and plaintiff conceded the motion. The IRS (for itself and all the other named defendants) moved to dismiss That motion was granted on September 30, 2003. This memorandum sets forth the reasons for that order.
Because this memorandum will be issued about 10 days before the time for an appeal expires, F.R.App.P. 4(a)(1)(E), an extension of time to appeal may be appropriate. It does not appear that such an extension can be granted sua sponte, see F.R.App.P. 4(a)(5), but a timely motion for an extension will be granted.
ANALYSIS
1. Freedom of Information Act. It is undisputed that, on August 7, 2002, Judicial Watch made a FOIA request to a number of IRS entities requesting "any and all documents and/or records that refer or relate in any way to" Richard M. Scaife, the Sarah Scaife Foundation, Inc., the Carthage Foundation, and the Allegheny Foundation. The request was signed "Richard M. Scaife by H. Yale Gutnick pursuant to power of attorney attached hereto," and was accompanied by a general power of attorney signed by R. M. Scaife; a durable power of attorney signed by Mr. Scaife; an IRS Form 8821 (tax information authorization) for taxpayer information of Richard M. Scaife in favor of Larry Klayman, signed by H. Yale Gutnick pursuant to power of attorney; Forms 8821 for taxpayer information of the three foundations, signed in the same manner as the Scaife Form 8821; and a form DOJ-361 (certification of identity) signed Richard M. Scaife by H. Yale Gutnick pursuant to power of attorney. The IRS did not respond. Plaintiff sued on September 12, 2002.The IRS argument for dismissal was that, because plaintiff's FOIA request failed to conform to published rules, it imposed no duty upon the IRS to respond. Apparently for want of a more felicitous legal label for this argument, the IRS invoked "failure to exhaust administrative remedies." Administrative remedies must indeed be exhausted prior to seeking judicial review in a FOIA case, American Federation of Government Employees v. Dept. of Commerce, 907 F.2d 203, 209 (B.C. Cir. 1990), and failure to do so may constitute grounds for dismissal, id. at 209 (citing Stebbins v. Nationwide Mut. Ins. Co., 757 F.2d 364, 365 (B.C. Cir. 1985)). In this case, IRS submits, plaintiff's failure to conform to published rules amounts to a constructive failure to exhaust (or, perhaps, a failure constructively to exhaust). IRS relies for this legalism upon Gillian v. IRS, 980 F.2d 819 (1st Cir. 1982), and Voinche v. U.S. Dept. of Air Force, 983 F.2d 667, 669 n. 5 (5th Cir. 1993), neither of which mentions constructive failure to exhaust, although Church of Scientology of California v. IRS, 792 F.2d 146, 150 (B.C. Cir. 1986), does suggest that one who does not follow published FOIA rules is not entitled to a FOIA response and has no rights under FOIA that can be vindicated by judicial review.
In any case, plaintiff did not choose that ground on which to fight. He appeared to concede that a FOIA request must be properly filed and asserted, either that he had done so, or that the IRS's positions were "hypertechnical" and out of touch with the purposes of FOIA, which was intended to promote openness in government.
a. Reasonable description. IRS first argued that plaintiff's FOIA request did not comply with the statutory requirement that it "reasonably describe" the records it sought, 5 U.S.C. § 552(a)(3)(A)(i) — that plaintiff's request for "any and all documents," without further description or "even a modicum of facts pertaining to what action (investigation, audit, revocation of tax exempt status, etc.) the agency may have taken against Mr. Scaife" did not require a response. IRS noted that all plaintiff had to do was "give[ ] the name, subject matter, location, and years at issue, of the requested records," Treas. Reg. § 601.702(c)(4)(i)(A), but pointed out the FOIA request supplied only the name. Plaintiff's only response was that the IRS Forms 8821 appended to the request contained quite specific requests for documents and that, had there been any legitimate issue concerning the scope of Mr. Scaife's request, the IRS should have informed him in an appropriate and timely manner "before filing its answer on October 11, 2002." But Judicial Watch, of all people, should have known better: a Form 8821 is a taxpayer request for information, not a FOIA request document. The Freedom of Information Act does not establish an interactive process, requiring an agency to seek clarification if it does not understand what documents are being requested. Had Judicial Watch followed up on its August 7, response with an administrative inquiry, an IRS failure to respond might well have been deemed unreasonable. It was Judicial Watch, however, that chose to place the case on a litigation footing. Having made that choice, Judicial Watch was in no position to insist on a cooperative response.
b. Fees. The second IRS argument, that plaintiff failed either to request a fee waiver or to promise to pay applicable fees, was "working to the rule" and was not a sound basis for the IRS's refusal to respond. Plaintiff had the better of the argument that, where it comes to fee waivers and fee payments, the customary practice is for agencies to notify requesters about estimated search and duplication fees before processing a request. The IRS did not do so here.
c. Authorizations. The third IRS argument, that plaintiff failed to provide any proof that he was authorized to access the confidential tax return information of three foundations, is solidly based upon IRS regulations plainly stating that a request to disclose returns and return information to a taxpayer's designee "must be in the form of a separate written document pertaining solely to the authorized disclosure," 26 C.F.R. § 301.6103(c)-IT(B)(e)(4). A power of attorney must "specifically delegate such authority." A general power of attorney will not do. Plaintiff responds that the Forms 8821 "were signed clearly and expressly in [Mr. Scaife's] capacity as Chairman of the three foundations." They were signed, in fact, by H. Yale Gutnick, pursuant to an insufficiently specific power of attorney. A Form 8821 authorizes a third party to receive return information only if the party signing the form first establishes his right to receive the records himself. The power presented with the FOIA request failed to establish that right.
The fourth IRS argument, also sound, is that the plaintiff did not provide specific authorization for the IRS to release his own tax information to a third party (Larry Klayman). Again, the durable power of attorney given to Mr. Gutnick did not specifically authorize him to receive or request Mr. Scaife's return information or to execute his name on a form requesting disclosure. And, again, it is no answer for plaintiff to complain — after it had placed the matter on a war footing — that the IRS should have helpfully asked for more specific authority.
2. Privacy Act. Count II asserted a violation of the Privacy Act based on the same allegations made in support of the FOIA claim. The IRS argument for dismissal was simply that plaintiff had failed to give the name of the system or subsystem or categories of records to which he had sought access, pursuant to 31 C.F.R. § 126(d)(1)(iii). The list or system of records maintained by IRS is published at 66 Fed. Reg. 63784 (Dec. 10, 2001). Plaintiff's feckless response, that he was unable to find any "Privacy Act issuance" published by the Office of Federal Register, was unavailing.