Smart-Tek Service Solutions Corp. v. IRS, No. 15-0452, 2017 WL 2936762 (S.D. Cal. July 10, 2017) (Moskowitz, C. J.)

Smart-Tek Service Solutions Corp. v. IRS, No. 15-0452, 2017 WL 2936762 (S.D. Cal. July 10, 2017) (Moskowitz, C. J.)

Re:  Request for certain tax records concerning plaintiff

Disposition:  Granting in part and denying in part defendant's motion for summary judgment

• Litigation Considerations, Adequacy of Search:  "[T]he Court finds the IRS has failed to carry its burden to demonstrate the adequacy of its search."  The court holds that, "in key respects, [defendant's] declaration is too conclusory to suffice."  "First, the IRS has not explained how it interpreted Plaintiff's FOIA request (as initially submitted in writing, or as subsequently clarified . . .)[.]"  "Without a description of the scope of documents the IRS determined to be responsive to the request, the Court has no context for evaluating the reasonableness of the methods it used to find them."  "Second, [defendant's] declaration fails to give sufficient information describing the IRS's review of the [responsive] documents."  "[T]he Court needs information regarding the document review to determine whether the IRS's search . . . was reasonable."
   
• Exemption 3, Exemption 6 & Procedural Requirements, Searching for Responsive Records:  "At this stage, ["until the record has been more fully developed[,]"] the Court will reserve ruling on the validity of the IRS's withholding of information under Exemptions 3 and 6, and its claim that documents were not produced because they fell outside the scope of Plaintiff's FOIA request."
   
• Exemption 5, Attorney-Client Privilege:  "[T]he Court grants the IRS's motion for summary judgment as to its determination that [confidential legal advice and case notes] contained attorney-client privileged information and were exempt from disclosure pursuant to Exemption 5."  "The Court finds [defendant's] declaration sufficiently detailed and non-conclusory to support the conclusion that the withheld information falls within the scope of the privilege, because it reflects . . . confidential communications with agency lawyers for the purpose of obtaining legal advice."
   
• Exemption 5, Deliberative Process Privilege:  "[T]he Court grants the IRS's motion for summary judgment as to its withholding of [certain emails, case notes, and case reports] on this ground."  "The Court finds [defendant's] declaration sufficient to support the IRS's privilege claim, in that the withheld documents are both predecisional and deliberative in the sense that they are actually related to the IRS's ongoing efforts to determine how to proceed with its enforcement action."
   
• Exemption 7(A):  The court holds that "the IRS's motion for summary judgment is granted as to its withholding of [certain case reports] under this exemption."  "The Court finds the IRS's evidence sufficient to show disclosure of the referenced information would interfere with its enforcement proceedings such that it was justified in withholding the information under Exemption 7(A), and further finds the IRS complied with its duty to reasonably segregate and produce all non-exempt information."
   
• Exemption 7(D):  "[T]he Court grants the IRS's motion for summary judgment as to the validity of its withholding of ["memoranda of an interview . . . conducted with a confidential source pursuant to an assurance of confidentiality"] under Exemption 7(D)."
   
• Exemption 7(E):  "[T]he Court will deny summary judgment without prejudice as to this exemption[]" because defendant's "declaration does not address whether the techniques and procedures discussed in the documents relate to 'technique[s] unknown to the general public.'"
   
• Exemption 3:  "The Court finds the IRS's evidence sufficient to show disclosure of the withheld information . . . would impair tax administration, such that it is subject to withholding under § 6103(e)(7)."  The court explains that the withheld records "'contain data . . . with respect to the determination of the existence of plaintiff's liability for tax, penalties, forfeiture, or other imposition[]'" and "'[d]isclosure of this information would allow plaintiff premature access to information' it could then use to 'undermine' or 'circumvent the Service's ongoing efforts to collect plaintiff's outstanding taxes, including efforts to seize certain property.'"