FOIA Update: Government Loses Tax Analysts Case

January 1, 1989
FOIA Update
Vol. X, No. 3

Government Loses Tax Analysts Case

Ruling on a longstanding "agency record" dispute under the Freedom of Information Act, the United States Supreme Court on June 23 handed the Government a resounding defeat in Department of Justice v. Tax Analysts, 109 S. Ct. 2841 (1989).

At issue in the case was whether the Tax Division of the Department of Justice can be required under the FOIA to make available to the public its copies of the judicial opinions that it regularly receives in tax cases adjudicated by federal district courts nationwide. The Government argued that such documents issued by the courts were not "agency records" under the FOIA and also that they were not "improperly withheld" within the intended meaning of the Act's jurisdictional language.

By a wide 8-1 majority, however, the Supreme Court rejected both of these defenses, holding that the court opinions in question were indeed "agency records" within the meaning of the FOIA and that they had in fact been "improperly withheld" in response to valid FOIA requests.

Writing for the Court, Justice Thurgood Marshall reasoned simply that the court opinions in question indisputably were within both the possession and control of the agency when requested under the FOIA and that these two factors alone are sufficient to make them "agency records" under the Act. This conclusion, he added, is essential to "the FOIA's goal of giving the public access to all nonexempted information received by an agency as it carries out its mandate." 109 S. Ct. at 2849.

Justice Marshall likewise rejected the Government's defense that the records were not "improperly withheld" under the circumstances presented in the case. He flatly dismissed the idea that an agency might properly refuse a FOIA request on the basis that the records sought are "publicly available" elsewhere, reasoning that only Congress could authorize such a result and that, in enacting the FOIA, "Congress . . . did not take such a step." 109 S. Ct. at 2852.

A single vote of dissent was cast by Justice Harry A. Blackmun, whose dissenting opinion pointed to the "commercial enterprise" character of the requester's efforts and labeled the situation as "almost a gross misuse of the FOIA." 109 S. Ct. at 2854. Justice Blackmun declared that he could not agree with the majority's ruling "because the result the Court reaches cannot be one that was within the intent of Congress when the FOIA was enacted." Id. at 2853.

Longstanding FOIA Dispute

The dispute resolved by the Supreme Court in this case traces back to 1984, when Tax Analysts, Inc., the publisher of a federal taxation newsletter, began periodically making FOIA requests to the Justice Department for copies of the "slip" opinions issued by federal district courts in tax cases nationwide. Prior to then, the various publishers of such specialized legal newsletters and reporting services invariably endeavored to obtain judicial "slip" opinions directly from the offices of the clerks of the federal courts around the country, as they were issued there.

Tax Analysts, Inc., however, decided to try to employ the FOIA as its primary means of obtaining the court opinions within its particular field of legal specialization. It was able to do so through the simple expedient of seeking them from the Justice Department's Tax Division -- which handles federal tax litigation on a centralized basis and uniquely receives copies of all federal tax decisions issued by the courts. The Tax Division, in response, vigorously resisted the use of the FOIA under such circumstances.

In prevailing in its case, Tax Analysts, Inc. has succeeded in bypassing the conventional manner by which judicial decisions are disseminated and in shifting a considerable administrative burden onto the Tax Division. See FOIA Update, Winter 1989, at 1-2.

Indeed, the Supreme Court ruled as it did in Tax Analysts despite the fact that clerks of the federal courts are required by law to make judicial opinions available to the public and regularly do so according to a specific fee schedule established by statute.

After Tax Analysts

In the wake of the Supreme Court's decision in Tax Analysts, the Tax Division is modifying its record-maintenance practices so as to comply with FOIA requests received from Tax Analysts, Inc., and it is expected that other such FOIA requests will be complied with likewise. The decision establishes that there simply is nothing in the existing statutory language of the Act sufficient to justify the denial of FOIA access to court opinions, even though they are supposed to be made available to the public directly by the courts themselves. According to the Court's decision, only a clear provision in the language of the FOIA itself -- such as, for example, a specific exception for court opinions inserted at the very outset of subsection (a)(3) of the Act -- would be sufficient to relieve agencies of any FOIA obligation for such documents.

The Tax Analysts decision marks the first time in many years that the Government has not succeeded in an effort to have the Supreme Court overturn an adverse FOIA decision issued by the D.C. Circuit Court of Appeals. During the past decade, it successfully obtained reversal of several D.C. Circuit FOIA decisions, in cases raising a wide range of FOIA issues. See FOIA Update, Spring 1985, at 1-2. The most recent such victory, Department of Justice v. Reporters Committee for Freedom of the Press, 109 S. Ct. 1468 (1989), a strong privacy-protection decision also handed down this past year, stands in marked contrast to the outcome reached in Tax Analysts. See FOIA Update, Spring 1989, at 1.

Next FOIA Case Before Supreme Court

The next FOIA case to be heard by the Supreme Court will be the Government's appeal of an adverse Exemption 7 decision issued by the Second Circuit Court of Appeals, 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), cert. granted, 109 S. Ct. 1116 (1989).

The Doe case presents a question of great importance to law enforcement agencies, involving the proper interpretation of Exemption 7's threshold "law enforcement purposes" requirement. The records at issue were admittedly compiled for a non-law enforcement purpose (routine auditing) at the time of their creation, but they subsequently were recompiled as part of an ongoing grand jury investigation of defense-contracting fraud.

The Second Circuit, in an unprecedented appellate decision, ruled that the records were disqualified from protection under Exemption 7(A) simply because they were not "compiled for law enforcement purposes" originally. The Government is asking the Supreme Court to overturn that decision and hold that any record either compiled or recompiled for law enforcement purposes can qualify for Exemption 7 protection. Oral argument in the case has been scheduled for October 2.

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