Vol. X, No. 1
Supreme Court to Decide Tax Analysts
In a development that could affect Freedom of Information Act operations at many federal agencies, the United States Supreme Court on January 9 agreed to decide the unprecedented FOIA issues presented in the Tax Analysts case.
The case of Tax Analysts, Inc. v. United States Department of Justice, 845 F.2d 1060 (D.C. Cir. 1988), reh'g en banc denied, No. 86-5625 (D.C. Cir. July 15, 1988), cert. granted, 109 S. Ct. 781 (1989), raises the novel question of whether the FOIA applies to court decisions (sometimes called unpublished or "slip" opinions) that are obtained by federal agencies. Such documents are maintained by numerous agencies throughout the federal government, especially agencies heavily engaged in litigation-related activities.
The controversy in this case arose in 1984 when Tax Analysts, Inc. -- the publisher of a commercial newsletter devoted to legal and regulatory developments in the field of federal taxation -- decided to try to use the FOIA as its primary means of gaining access to the decisions issued by federal district courts in tax cases around the country.
All such judicial opinions can be obtained through the clerks' offices at the federal courts, which have a legal obligation to make them available to the public. Rather than just collecting court decisions from the courts directly (as such newsletter publications regularly have done), Tax Analysts began making periodic FOIA requests for access to them at the Tax Division of the Department of Justice, which holds nationwide responsibility for litigating tax cases on behalf of the federal government.
The Tax Division, which through its litigating attorneys receives copies of literally dozens of such judicial decisions every week, pointed out to Tax Analysts that such court opinions were received and maintained by it on a decentralized basis and that the administrative burdens it would incur if required to satisfy the newsletter's needs through the FOIA would be enormous. It denied the FOIA requests on multiple jurisdictional grounds.
After Tax Analysts filed suit, the Tax Division defended its denial of these extraordinary FOIA requests in court. At the initial court level, District Court Judge Stanley S. Harris ruled in the Tax Division's favor, holding that FOIA jurisdiction was lacking because, under the circumstances, the publicly available court documents at issue were not "improperly withheld." Tax Analysts, Inc. v. United States Department of Justice, 643 F. Supp. 740, 745 (D.D.C. 1986).
On appeal, however, the D.C. Circuit Court of Appeals reversed the district court's decision and ruled in Tax Analysts' favor. It rejected both of the jurisdictional arguments made by the Tax Division -- that the documents sought were not "improperly withheld" under the FOIA and that they were not "agency records" under the Act in the first place.
In a decision written by Chief Circuit Court Judge Patricia M. Wald, the D.C. Circuit refused to treat as dispositive under the FOIA the fact that the requested court documents originated outside of federal agencies and were fully available to the public at the courts where they originated. "[I]t would be a novel interpretation of the FOIA's prohibition on 'withholding,'" Judge Wald declared, "[to] permit an agency to direct a [requester] elsewhere for the information he sought from that agency's files." 845 F.2d at 1066. Judge Wald similarly disposed of the "agency record" issue, holding that the Tax Division's maintenance and "use" of the documents rendered them "agency records" subject to the FOIA. (See FOIA Update, Spring 1988, at 7.)
In so ruling, the D.C. Circuit was not entirely unmindful of the new administrative burdens that its decision could impose upon federal agencies. But it concluded that, as Judge Wald put it, "the statute does not confer judicial discretion to balance its dictates against the administrative burdens of disclosure." 845 F.2d at 1067.
In petitioning for Supreme Court review, however, the Solicitor General forcefully advanced both of the jurisdictional grounds for nondisclosure, while at the same time emphasizing "the extreme administrative burden" that could be placed on federal agencies under the D.C. Circuit's ruling.
The Supreme Court is expected to hear oral argument in the case during late April and to issue its decision before the end of its current Term in June.
The next Freedom of Information Act case to be accepted for Supreme Court review most likely will be an unusual Exemption 7 case arising from the Second Circuit Court of Appeals.
A certiorari petition is pending before the Court in John Doe Corp. v. John Doe Agency, 850 F.2d 105 (2d Cir. 1988), reh'g en banc denied, No. 88-6098 (2d Cir. Nov. 8, 1988), petition for cert. filed, 57 U.S.L.W. 3472 (U.S. Dec. 29, 1988) (No. 88-1083), which involves an important question about Exemption 7's "law enforcement purposes" threshold requirement.
The case arose from a FOIA request filed by a defense contractor that is currently the subject of a grand jury investigation. This corporation -- which received special court permission to pursue its FOIA rights without publicly disclosing its identity -- sought access to all records pertaining to the investigation, including certain audit reports that were generated long before the investigation began. In order to prevent harm to the ongoing criminal investigation, the records were withheld under Exemption 7(A).
The Second Circuit, however, refused to allow any Exemption 7 protection for the audit documents in the investigatory file, simply because they were created for routine audit purposes before the investigation had been in prospect.
In a somewhat perfunctory analysis of the issue, the Second Circuit held that the audit documents were not "compiled for law enforcement purposes" within the meaning of Exemption 7, even though they certainly were recompiled into the files of the grand jury investigation once it commenced. Notwithstanding their present sensitivity as part of that ongoing criminal investigation, it said, they cannot be withheld from the investigation's subject under Exemption 7(A). (See FOIA Update, Summer 1988, at 15.) No other appellate court has ever issued such an Exemption 7 ruling.
The case next took an even more unusual turn. After the Second Circuit denied both panel and en banc rehearing on this issue, the Justice Department sought a stay of the decision -- a relatively routine step -- in order to permit consideration of possible Supreme Court review. However, without explanation, the three-judge panel that decided the case refused to grant a stay for this purpose.
The Solicitor General then authorized the filing of a certiorari petition on an expedited basis and, after some procedural maneuvering, once again requested the Second Circuit to issue a stay pending Supreme Court review. This time, a different three-judge panel (but containing the original panel opinion author) inexplicably denied the stay application yet again.
Consequently, the Solicitor General was forced to seek an emergency stay from Supreme Court Justice Thurgood Marshall, in his capacity as Circuit Justice for the Second Circuit, in order to prevent disclosure and keep the appeal from becoming moot. Justice Marshall immediately granted a temporary stay to permit further consideration.
On January 30, Justice Marshall issued an opinion as Circuit Justice in which he granted an unconditional stay pending the Supreme Court's consideration of the government's certiorari petition. In so doing, he necessarily concluded that the full Court likely would grant certiorari in the case (which requires the votes of four justices) and that, once the Supreme Court reviewed the merits of the Second Circuit's decision, there was "a fair prospect" that it would be reversed. John Doe Agency v. John Doe Corp., 109 S. Ct. 852 (1989) (Marshall, J., in chambers).
Therefore, there is ample reason for law enforcement agencies to be optimistic that the Second Circuit's exceptionally harsh application of Exemption 7's threshold language may be overturned. If the Supreme Court grants certiorari in the case soon, it probably will schedule it for oral argument this coming fall. Even if the grand jury investigation reaches a conclusion before then -- which is always a possibility in a case such as this and which might then moot the Exemption 7(A) issue -- the Second Circuit's decision most likely would be vacated under usual appellate procedures in that event.
The four center pages of this issue of FOIA Update contain an updated list of the principal FOIA legal and administrative contacts at federal agencies.
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