Waterman v. IRS, No. 21-5258, 2023 WL 2125253 (D.C. Cir. Feb. 21, 2023) (Rogers, J.)

Waterman v. IRS, No. 21-5258, 2023 WL 2125253 (D.C. Cir. Feb. 21, 2023) (Rogers, J.)

Re:  Request for records concerning IRS Office of Professional Responsibility (“OPR”) investigation into requester’s alleged misconduct

Disposition:  Affirming in part and reversing in part district court’s grant of defendant’s motion for summary judgment

• Exemption 5, Deliberative Process Privilege:  The Court of Appeals for the District of Columbia Circuit “affirms in part the district court’s grant of summary judgment to the IRS and reverses in part as to [two memorandums].”  Regarding one memorandum, the court relates that “[t]he IRS avers that [this] Memo sets forth ‘actions and statements’ by [plaintiff] in his ‘interactions with IRS personnel over a period of several months’ that [an IRS agent who authored this memorandum] ‘believed made the [OPR] referral appropriate.’”  “In camera review has revealed two passages, appearing on pages 5 and 6 of the memorandum, that reflect [the agent’s] evaluation of particular conduct he viewed as evincing [the requester’s] ‘intent to not cooperate with the disposition of the matter[ ]’ and his failure to ‘negotiate[ ] with [the] IRS in good faith,’ . . . which is punctuated with references to the IRS’s internal strategy in its audit of [the requester’s] client.”  “As to those portions, [the IRS agent] exercised his judgment to select and organize facts to support a discretionary agency decision by the OPR . . . .”  “But the remainder of the . . . Memo, which is a chronological collection of [plaintiff’s] statements over the course of the audit, falls outside the scope of Exemption 5.”  “The IRS’s affidavit provides no indication that [the agent] exercised his judgment to ‘separate[] the pertinent from the impertinent,’ . . . nor that he omitted a ‘known datum’ in creating the chronology . . . .”  “Exemption 5 does not protect such a ‘comprehensive collection of the essential facts.’”  “Because it is ‘reasonably segregable’ from [the requester’s] evaluative commentary, . . . the chronological portion of the . . . Memo is subject to disclosure.”  “That is not because [the IRS agent’s] factual summary is organized chronologically, as our dissenting colleague assumes, . . . but rather because the IRS’s submissions fail even to indicate that any factual material pertaining to [the agent’s] interactions with [the requester] has been left out, much less identify ‘the chaff’ from which ‘the wheat’ supposedly has been separated . . . .”
  
  The court holds that “[t]he entirety of [the second] Memo falls outside Exemption 5’s protection.”  “The IRS avers that the three-page memorandum of December 23, 2013, ‘summariz[es] a telephone conversation [ ][an IRS supervisor and author of the memorandum] held on that date’ with [the requester] and that ‘the memorandum sets forth part of the factual basis’ that [the supervisor] ‘believed made the referral appropriate.’”  “This bare assertion provides no indication that [the sup[ervisor] selected particular facts from the telephone conversation in support of the misconduct referral.”  “If the entirety of the telephone conversation supplied ‘part of the factual basis’ for the misconduct referral, then there was no occasion for [the supervisor] to ‘winnow down’ factual material by ‘making an evaluation of the relative significance of the facts . . . .”  “Nor does recording statements made in a telephone conversation by itself ‘call for judgment.’”  “[The court explains that its] dissenting colleague surmises from the fact that [the supervisor] ‘chose to include’ the summary that must have involved a decision to include particular facts from the telephone conversation while excluding others.”  “The IRS’s affidavits present no basis for that inference, and in camera review has revealed no hint of [the supervisor’s] ‘evaluative commentary,’ . . . or ‘editorial judgment,’ . . . .”  “‘The judicial role’ is not to fill the logical gaps in the agency’s submissions but to ‘enforce that congressionally determined balance’ embodied by FOIA’s ‘handful of specified exemptions.’”
  
  The court then considers two other documents and holds that “[b]oth are shielded from disclosure by the deliberative process privilege.”  “The IRS avers that [one] Memo [written by an OPR analyst] ‘summarize[s] the facts alleged, identif[ies] the violations alleged, and recommend[s] further predecisional agency actions.’”  “Its affidavits make sufficiently clear that [the analyst] ‘extract[ed] pertinent facts’ surrounding the alleged misconduct by [the requester] and, in view of the relevant disciplinary standard, ‘organize[d] them to suit a specific purpose’:  to make a recommendation on whether to further investigate [the requester] or institute disciplinary proceedings.”  “Such an analysis involves an ‘exercise of judgment as to what issues are most relevant,’ . . . bringing the [analyst’s] Memo within the scope of Exemption 5.”  Also, the court finds that “[b]ecause it is an abbreviated statement of [the analyst’s] analysis, the redacted portion of the [Case and Correspondence Management System] printout is also protected by Exemption 5.”
  
  “Finally, [the court relates that] in March 2018, the IRS issued an email ‘Alert’ through its newswire service that ‘highlight[ed]’ a modification in the method by which the OPR notifies tax practitioners of misconduct allegations filed against them.”  “[The requester’s] view that the Alert undermines the IRS’s reliance on Exemption 5 is unpersuasive.”  The court finds that “[the requester] takes the view that the pro-disclosure thrust of the Alert demonstrates that withholding the contested documents does not serve any legitimate purpose of Exemption 5.”  “Because the OPR would have notified him of the factual basis of the disciplinary proceedings had it chosen to pursue his case, [the requester] maintains, the authors of the documents did not have an expectation of privacy to begin with and consequently the quality of future agency decision-making would not suffer were those documents disclosed.”  “But this incorrectly assumes that disclosure of the particular documents underlying the initial disciplinary referral is the only means through which he could have been apprised of the factual basis of the disciplinary proceedings subsequently brought against him.”
  
  Circuit Judge Walker writes separately to concur in part and dissent in part.  Judge Walker states that “FOIA allows the IRS to withhold both memos because (1) their purpose was to assist in a discretionary decision (whether to further investigate [the requester]) and (2) their authors selected facts that reflected a point of view (that [the requester] should be investigated).”  Judge Walker writes that “disclosing the facts would reveal the IRS’s deliberative process.”