Stanco v. IRS, No. 18-00873, 2020 WL 5107623 (E.D. Cal. Aug. 31, 2020) (Nunley, J.)

Stanco v. IRS, No. 18-00873, 2020 WL 5107623 (E.D. Cal. Aug. 31, 2020) (Nunley, J.)

Re:  Request for records concerning requirement to file IRS Forms 8938 and 5471

Disposition:  Granting defendant's motion to dismiss

• Litigation Considerations, Exhaustion of Administrative Remedies:  First, the court relates that "[d]efendant also argues [plaintiffs] never submitted – and thus Defendant never received – the request that is the subject of Claim Ten."  "Plaintiffs agree that Claim Ten is not properly before the Court and should be dismissed."  "Accordingly, the Court dismisses Claim Ten without leave to amend."
   
  Second, "the Court finds Plaintiffs cannot plausibly allege that they have constructively exhausted their administrative remedies for the April 2017 requests."  The court relates that "[i]t is undisputed that Defendant did not respond within the deadlines set forth in the FOIA."  "It is also undisputed Plaintiffs did not pursue an administrative appeal of the April 2017 requests after Defendant eventually responded in November 2017."  The court holds that "[l]ooking to the purposes of exhaustion, permitting Plaintiffs to bypass administrative remedies in these circumstances would prevent Defendant from exercising its discretion and expertise on the matter, making a factual record to support its decision, and potentially correcting mistakes made at lower levels that may remove the need for judicial review altogether."
   
  Third, the court relates that "[i]n supplemental briefing, Plaintiffs argue for the first time that in January 2019, [plaintiffs] made a third round of FOIA requests expressly covering the same materials requested . . . ."  "Plaintiffs thus argue any deficiencies in exhausting remedies for the April 2017 requests was cured by the fully exhausted January 2019 requests."  The court finds that "the Complaint does not include any allegations about the January 2019 requests or appeals as they relate to exhaustion of the April 2017 requests."  "[T]he Court will not consider Plaintiffs' new allegations about the January 2019 requests or appeals because those allegations were not included in the Complaint, but Plaintiffs may amend their Complaint if they wish the Court to consider those allegations in the future."
   
  Fourth, the court relates that "Plaintiffs argue [defendant's appeal notice] advises requesters to appeal a determination that no responsive records exist but does not advise Plaintiffs they had a right to appeal the adequacy of a search that did locate responsive records."  "Plaintiffs also argue [the appeal notice] is misleading because it fails to advise Plaintiffs that Defendant would seek to dismiss any FOIA lawsuit where they had not taken an administrative appeal notwithstanding the 'deemed exhaustion' language of the FOIA."  "[T]he Court concludes that [defendant's appeal notice] was sufficient to advise Plaintiffs of their appeal rights."  The court finds that "[the notice] advised Plaintiffs of their rights to appeal within 90 days of an adverse determination, including Defendant's denial of 'access to a record in whole or in part.'"  "Despite Plaintiffs' unsupported arguments, there are no requirements that an agency must advise requesters that they have the right to appeal any particular issue or that an agency would seek to dismiss any FOIA lawsuit where they had not taken an administrative appeal notwithstanding the 'deemed exhaustion' language of the FOIA."