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Hodes v. Dep't of Treasury, No. 17-0219, 2018 WL 4680276 (D.D.C. Sept. 28, 2018) (Friedrich, J.)


Hodes v. Dep't of Treasury, No. 17-0219, 2018 WL 4680276 (D.D.C. Sept. 28, 2018) (Friedrich, J.)

Re:  Request for records concerning four contracts awarded to private companies to outsource debt collection for certain IRS tax liabilities

Disposition:  Granting defendant's and intervenor's motions for summary judgment; denying plaintiff's cross-motion for summary judgment; denying as moot defendant's motion to dismiss

  • Exemption 4:  The court holds that defendant properly invoked Exemption 4.  The court notes that "[t]here is no dispute that the information [plaintiff] seeks is 'commercial or financial information' that was 'obtained from a person.'"  "The question is whether the commission percentages are 'confidential' under exemption 4."  First, "the Court finds that to the extent the commission percentages are “prices” at all, they are more akin to line-item (rather than to total) prices."  "Thus, the commission percentage – the multiplier used to calculate each line-item price – is just one of several numbers used to calculate the total contract price."  The court then finds that, "[f]irst, disclosing the commission percentages would cause substantial harm to the debt collection companies' competitive positions should the IRS decide not to renew the task order contract for future option years and re-bid the contract."  Second, disclosing the commission percentages also would impair the IRS's ability to get necessary information in the future."  "[S]hould the IRS decide to expand its debt-collection program, new bidders might draw misleading inferences about their competitors' pricing approach that could cause bidders to include unrealistically low commission percentages."  The court notes that "[defendant] predicts that this could compromise a new bidder's performance and lead to increased contract administration costs."  Responding to plaintiff's argument, the court finds that "knowing the precise commission percentage discounts 'would seem to shed little if any light upon the agency's performance of its statutory duties.'"
Court Decision Topic(s)
District Court opinions
Exemption 4
Updated January 31, 2019