Cause of Action Inst. v. Internal Revenue Serv.

390 F.Supp.3d 84

CAUSE OF ACTION INSTITUTE, Plaintiff,

v.INTERNAL REVENUE SERVICE, Defendant.

No. 16-cv-2354 (KBJ)

United States District Court, District of Columbia.

Signed July 17, 2019

Ryan Patrick Mulvey, Lee A. Steven, Washington, DC, for Plaintiff.

Ryan O'Connor McMonagle, U.S. Department of Justice, Kieran O'Neill Carter, Washington, DC, for Defendant.

MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge

In June of 2016, Plaintiff Cause of Action Institute ("CoA Institute") submitted two requests to the Internal Revenue Service ("IRS") under the Freedom of Information Act ("the FOIA"), 5 U.S.C. § 552 et seq. , seeking disclosure of certain communications and records exchanged between the IRS and the United States Congress Joint Committee on Taxation ("JCT") from 2009 until the present. (See Compl., ECF No. 1, ¶¶ 7, 9). The IRS declined to produce any responsive records on the grounds that CoA Institute was requesting "non-agency Congressional records that are not subject to the FOIA." (Id. ¶ 17 (internal quotation marks and citation omitted).) CoA Institute then filed the complaint in the instant case, which alleges that the IRS has improperly withheld "agency records" and seeks a Court order requiring the agency to produce the documents that CoA Institute has requested. (See id. ¶¶ 25–34; see also id. , Relief Requested, at 8.)¹

Before this Court at present is the IRS's motion to dismiss CoA Institute's complaint pursuant to Federal Rule of Civil Procedure 12(b)(1). (See IRS's Mot. to Dismiss, ECF No. 11.) The IRS maintains that this Court lacks subject-matter jurisdiction to adjudicate CoA Institute's claim that the agency is violating federal law, because "to the extent that such records exist," they "are not ‘agency records’ subject to the FOIA's disclosure requirements." (Mem. in Supp. of IRS's Mot. to Dismiss ("Def.'s Mem."), ECF No. 11-1, at 13.) In this regard, the IRS insists that this Court cannot exercise jurisdiction over CoA Institute's improper-withholding claim under the FOIA unless the Court first determines that the requested documents qualify as "agency records" for FOIA purposes; in other words, the agency conceives of its challenge to the character of the records at issue here as one that relates to this Court's subject-matter jurisdiction. (See id. ("The Court lacks jurisdiction if the records at issue are not ‘agency records.’ ").) For the reasons explained fully below, this Court disagrees. The Court is confident that the IRS's not-agency-records challenge is one that pertains to the merits of CoA Institute's FOIA claim, rather than this Court's power to adjudicate the dispute and grant the requested relief, and the allegations of CoA Institute's complaint are more than sufficient to satisfy the minimal pleading requirements that are applicable to the initial stage of FOIA litigation. Therefore, the IRS's motion to dismiss CoA Institute's complaint under Rule 12(b)(1) for lack of jurisdiction (or otherwise) must be DENIED . A separate Order consistent with this Memorandum Opinion will follow.

I. BACKGROUND

A. The Underlying Facts²

The JCT (the oldest joint committee of Congress) is statutorily authorized to monitor and investigate "the operation and effects of the Federal system of internal revenue taxes" and "the administration of such taxes by the [IRS] or any executive department, establishment, or agency charged with their administration[.]" 26 U.S.C. § 8022(1)(A), (B). To this end, the JCT routinely corresponds with the IRS concerning various matters. (See Compl. ¶ 1.) In mid-December of 2015, the IRS introduced guidance that "requir[ed] the [agency] to treat nearly all JCT-related records as ‘congressional records’ not subject to the FOIA." (Id. ¶ 6 (internal quotation marks and citation omitted).) CoA Institute—a "non-profit strategic oversight group" (id. ¶ 4)—promptly set out to challenge this new edict, which the group believed "contradict[ed] FOIA jurisprudence relating to the definition of agency records" (id. ¶ 7).

On June 22, 2016, CoA Institute submitted to the IRS the two FOIA requests that are the subject of the instant case. (See id. ¶¶ 7, 9.) The first request specifically sought, for the period between "January 21, 2009 to present[,]"

(1) All records transmitted between the IRS and the JCT, and all communications concerning such transmissions, which do not contain a legend restricting their use or dissemination[;]

(2) All communications between IRS Privacy, Governmental Liaison, and Disclosure ("PGLD") personnel, as well as other affected IRS functions or components, and the JCT concerning any determination to disclose or withhold IRS records that were the subject of a JCT oversight inquiry[;]

(3) All records generated or maintained by the IRS in the normal course of its operations that were subsequently provided to the JCT in response to a general oversight inquiry[;]

(4) All records generated or maintained by the IRS in the normal course of its operations that were subsequently provided to the JCT as part of IRS general oversight responsibilities, but which were not provided in response to a JCT inquiry[; and]

(5) All records created by or originating at the JCT but which were provided to the IRS and are maintained by the IRS in any agency records system, including but not limited to the E-Trak Communication and Correspondence tracking system.

(Id. ¶ 7.)³ CoA Institute's second FOIA request, which also covered the period between "January 21, 2009 to the present[,]" sought "[a]ll communications between the IRS and the JCT containing any one of thirty-eight (38) specifically identified search terms." (Id. ¶ 9 (alteration in original; internal quotation marks omitted); see also FOIA Request, Ex. 3 to Compl., ECF No. 1-3, at 2.)

On August 8, 2016, the IRS categorically denied both FOIA requests, stating, inter alia , that "any records responsive to either ... request[ ], to the extent they exist, are non-agency Congressional records that are not subject to the FOIA." (Compl. ¶ 17 (alterations, internal quotation marks, and citation omitted).) CoA Institute administratively appealed the IRS's final responses, including the agency's determination that the requested records "were non-agency congressional records not subject to the FOIA" (id. ¶ 19), and the IRS Appeals Office affirmed the agency's denial of the FOIA requests on November 22, 2016 (see id. ¶ 23).

B. Procedural History

On December 1, 2016, CoA Institute filed a complaint in this Court alleging that the IRS's refusal to search for, and produce, the requested records was improper because it violated the FOIA. (See id. ¶¶ 25–34.) The IRS filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) on February 21, 2017 (see IRS's Mot. to Dismiss), and, in so doing, the agency relied on supporting declarations by Thomas Barthold, who is the JCT's Chief of Staff (see Decl. of Thomas A. Barthold, ECF No. 11-2), and Scott Landes, who is a Supervisory Management and Program Analyst with the IRS (see Decl. of Scott S. Landes, ECF No. 11-3), as well as on various other supporting materials and evidence (see Joint Comm. on Taxation Policy Manual (July 1, 2007), ECF No. 11-4; Letter from Barthold to John Koskinen (Aug. 3, 2016), ECF No. 11-5).

After the IRS's motion was fully briefed, this Court held a motion hearing, during which it became clear that the agency's subject-matter jurisdiction argument rested entirely on the issue of whether or not the records that are responsive to CoA Institute's FOIA requests qualify as "agency records" that are subject to the FOIA, or "congressional records" that are not subject to the FOIA. (See, e.g. , Hr'g Tr., ECF No. 17, at 18:8–19:22; see also Def.'s Mem. at 13–23; Mem. in Opp'n to Def.'s Mot. to Dismiss, ECF No. 12, at 10–26; Def.'s Reply in Supp. of Its Mot. to Dismiss ("Def.'s Reply"), ECF No. 13, at 6–17.) According to the IRS, this Court lacks subject-matter jurisdiction over CoA Institute's FOIA claim—and should therefore dismiss it under Rule 12(b)(1) —simply and solely because the requested records are congressional, not agency, records. (See Def.'s Mem. at 13–14.)

In response to this Court's inquiry regarding whether the IRS's motion to dismiss was properly brought under Rule 12(b)(1), as a challenge to this Court's subject-matter jurisdiction, or was, in fact, a challenge to the sufficiency of CoA Institute's complaint on the merits under Rule 12(b)(6) (see Hr'g Tr., at 18:20–19:6), the IRS requested the opportunity to submit supplemental briefing on that narrow question (see Def.'s Consent Mot. for Suppl. Briefing, ECF No. 14, at 1), which the Court allowed (see Min. Order of Aug. 28, 2017; see also IRS's Suppl. Br. in Supp. of Its Mot. to Dismiss ("Def.'s Suppl. Br."), ECF No. 15; Pl.'s Suppl. Br. in Opp'n to Def.'s Mot. to Dismiss ("Pl.'s Suppl. Br."), ECF No. 16). In its supplemental brief, the IRS continues to assert that its challenge to CoA Institute's complaint is jurisdictional per the FOIA statute, and thus that the agency's motion to dismiss should be considered under Rule 12(b)(1) and not Rule 12(b)(6). (See Def.'s Suppl. Br. at 7.) For its part, CoA Institute argues that the relevant "jurisdictional" language in the FOIA statute "refers to the power of the court to order a specific kind of remedy, not to the court's authority to hear a case in the first instance" (Pl.'s Suppl. Br. at 9), and thus, "the pending motion should be considered under Rule 12(b)(6)" (id. at 6).

II. LEGAL STANDARDS

A. Motions To Dismiss Pursuant To Rule 12(b)(1) In FOIA Cases

"Federal courts are courts of limited jurisdiction, possessing ‘only that power authorized by Constitution and statute.’ " Custis v. CIA , 118 F. Supp. 3d 252, 254 (D.D.C. 2015) (quoting Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ). Subject-matter jurisdiction defines the court's power to entertain a case at all,...