Inst. for Justice v. Internal Revenue Serv.

941 F.3d 567

INSTITUTE FOR JUSTICE, Appellant

v.INTERNAL REVENUE SERVICE, Appellee

No. 18-5316

United States Court of Appeals, District of Columbia Circuit.

Argued September 12, 2019

Decided November 1, 2019

Andrew D. Prins, Washington, DC, argued the cause for appellant. With him on the briefs was Gregory in den Berken, Washington, DC.

Douglas C. Rennie, Attorney, U.S. Department of Justice, argued the cause for appellee. With him on the brief were Richard E. Zuckerman, Principal Deputy Assistant Attorney General, Travis A. Greaves, Deputy Assistant Attorney General, Gilbert S. Rothenberg, and Michael J. Haungs, Attorneys.

Before: Pillard and Rao, Circuit Judges, and Williams, Senior Circuit Judge.

Williams, Senior Circuit Judge:

The non-profit, public interest law firm Institute for Justice seeks information kept by the Internal Revenue Service about asset forfeitures. In its request, the Institute followed a lead supplied by the IRS. The latter’s own manual repeatedly refers to the Asset Forfeiture Tracking and Retrieval System ("AFTRAK") as the "database" in which the agency compiles information about asset forfeitures. See Internal Revenue Manual, §§ 9.7.5.2, 9.7.5.4.1(1). Accordingly, the Institute submitted a Freedom of Information Act ("FOIA") request for "all records contained in" the AFTRAK database.

The IRS’s legal response, both in the district court and here, is that the Institute’s FOIA request fails from the start because AFTRAK "is not a ‘database’ " and therefore its " ‘contents’ do not qualify as ‘records’ under the FOIA." Joint Meet & Confer Statement 2, ECF No. 10. The modifier "legal" is critical in the sentence above, as the factual declaration the IRS submitted conspicuously includes no assertion that AFTRAK is not a database. More affirmatively, the IRS says that AFTRAK is (legally and factually) "a web-based application that aggregates information from various other sources within the [IRS] into a single user interface." Def.’s Mem. Supp. Summ. J. 3, ECF No. 14-1. According to the IRS, this distinction renders the Institute’s request not just imprecise, but unintelligible: "[b]ecause AFTRAK only generates reports, there was [ ] no traditional search to perform in AFTRAK." Def.’s Reply Br. Supp. Mot. Summ. J. 7, ECF No. 26. Nonetheless, after the Institute filed suit, the IRS created what it describes as the "most comprehensive standard report from the AFTRAK system, the Open/Closed Asset Report," Joint Status Report 5, ECF No. 12, saved the Report in PDF format, heavily redacted it, and provided it to the Institute. Pl.’s Br. Supp. Mot. Discovery 9–10, ECF No. 15-1. By the IRS’s telling, creating the Report was "arguably" an act of administrative grace; FOIA imposes no duty on agencies to create new records in response to FOIA requests, but here the agency created the Open/Closed Report. Appellee’s Br. 44.

Unhappy with that result, the Institute filed a cross-motion for summary judgment, but the district court awarded summary judgment in large part in favor of the IRS. The court reasoned that "there is no need to resolve the technical question of whether AFTRAK is or is not a database," because regardless of that determination, "[t]he IRS generated a comprehensive report that revealed every possible data point on seized assets in the AFTRAK system during the relevant timeframe." Institute for Justice v. IRS , 340 F. Supp. 3d 34, 41 (D.D.C. 2018). The court also granted summary judgment on the IRS’s application of FOIA Exemptions 7(A) and 7(C), 5 U.S.C. § 552(b)(7)(A), (C), and deemed the Institute to have forfeited its objection to the IRS’s redaction of Asset Description column entries under Exemption 7(F), id. § 552(b)(7)(F). Institute for Justice , 340 F. Supp. 3d at 41–45.

We reverse the district court and remand the case for further proceedings. First, whether the Open/Closed Report covers all records "contained in" AFTRAK is itself a material, genuinely disputed question of fact, and the answer in turn depends on other disputed and material facts. Second, whether AFTRAK is correctly classified as a database, a matter on which the IRS’s Manual and other official documents contradict its legal denial here, appears to be an intermediate fact with potential consequences for resolving the parties’ claims. The disputes on these matters preclude summary judgment.

* * *

We review de novo the district court’s grant of summary judgment, Nation Magazine v. U.S. Customs Serv. , 71 F.3d 885, 889 (D.C. Cir. 1995), and "must draw ‘all justifiable inferences’ in favor of the non-movant," Aguiar v. Drug Enforcement Administration , 865 F.3d 730, 735 (D.C. Cir. 2017) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ).

An agency "fulfills its obligations under FOIA ‘if it can demonstrate beyond material doubt that its search was reasonably calculated to uncover all relevant documents.’ " Ancient Coin Collectors Guild v. U.S. Dep’t of State , 641 F.3d 504, 514 (D.C. Cir. 2011) (quoting Valencia-Lucena v. U.S. Coast Guard , 180 F.3d 321, 325 (D.C. Cir. 1999) ). In the context of a request for a database, "FOIA requires agencies to disclose all non-exempt data points," National Security Counselors v. CIA , 898 F. Supp. 2d 233, 272 (D.D.C. 2012), subject, as always, to limits aimed at protecting agencies from undue burdens.

Viewing the case in this light, we are not convinced beyond a material doubt that the Open/Closed Report contains all AFTRAK records or that its delivery to the Institute could serve as a substitute for the search required by FOIA.

The key passage from the IRS’s sole declaration on the matter explains that the Open/Closed Report is "the most utilized and complete standard report available from the AFTRAK system" and "contains comprehensive data about every asset seized by [the Criminal Investigation section of the IRS] within a specified time period." Dean Martin Decl. ¶ 10 (July 10, 2017), ECF No. 14-3. But this terse statement and the Institute’s evidence to the contrary leave many unanswered questions.

First, does "comprehensive data about every asset seized" mean all the records "contained in" AFTRAK, which the Institute requested? "Comprehensive" can mean "including or dealing with all or nearly all elements or aspects of something," New Oxford American Dictionary (2d ed. 2005) (emphasis added), or being "of large content or scope," id. In short, "comprehensive" does not always mean "all." Plus, this comprehensiveness pertains to "every asset seized," but what about data not specific to individual assets or their seizure, such as statistical and reporting data? Cf. Martin Decl. ¶ 7 ("AFTRAK is also used for monitoring assets in inventory and for law enforcement statistical and reporting purposes exclusively by CI personnel.").

Second, does AFTRAK include data about assets seized by IRS sections other than Criminal Investigation? If so, why should such data not be disclosed (unless for some reason it doesn’t constitute a "record")?

Third, even if the Open/Closed Report is "the most utilized and complete standard report," that seems no reason for the IRS to withhold data absent from the Open/Closed Report but included in a non-standard report or other record.

Fourth, and perhaps most devastating to the IRS’s position: In 2014 the IRS furnished the Institute a limited dataset in response to a FOIA request; that dataset included three columns of information—"State Seized," "Forfeiture Actual Amount," and "Primary Statute Violated"—that aren’t found in the IRS’s "comprehensive" Open/Closed Report. See Appellant’s Br. 19–20 & n.10 (citing Joint Appendix ("J.A.") 112–89, 647–57).

Fifth and finally, the IRS’s counsel confirmed in an email to the Institute’s counsel, in reference to a "sample" of the Open/Closed Report, that either the Report itself, or perhaps only its sample—that remains ambiguous—does not include all "fields" of data from AFTRAK. Email from Joycelyn Peyton, Trial Attorney, U.S. Dep’t of Justice, to Andrew Prins, Partner, Latham & Watkins LLP (Mar. 21, 2017, 13:37 EDT), ECF No. 23-2; Andrew Prins Decl. ¶ 2 (Apr. 20, 2018), ECF No. 23-1. Were the missing fields simply rows of the sample to be added before delivery of the full report, or whole columns of information to be left out even from the final production?

As to the significance of AFTRAK’s constituting a "database," nearly forty years ago we treated databases as containing the modern equivalent of old-fashioned records, saying, "Although accessing information from computers may involve a somewhat different process than locating and retrieving manually-stored records, these differences may not be used to circumvent the full disclosure policies of the FOIA." Yeager v. Drug Enforcement Administration , 678 F.2d 315, 321 (D.C. Cir. 1982). See also Elliott v. Dep’t of Agriculture , 596 F.3d 842, 852 (D.C. Cir. 2010) (using the terms "filing cabinet" and "electronic database" interchangeably when addressing the adequacy of a search); Multi Ag Media LLC v. Dep’t of Agriculture , 515 F.3d 1224, 1226 (D.C. Cir. 2008) (applying standard FOIA rules to "a massive database" in agency hands); Petroleum Information Corp. v. Dep’t of Interior , 976 F.2d 1429, 1431–32 (D.C. Cir. 1992) (applying standard rules to "data elements—i.e., categories of information" in "records from a computer data bank"). The essence of our approach—treating electronic records the same as analog records—was later codified by the Electronic Freedom of Information Act Amendments of 1996, which newly defined a "record" as "any information that would be an agency record ... when maintained by an agency in any format, including an electronic format ," Pub. L. No. 104-231, § 3, 110 Stat. 3048, 3049 (1996) (codified as amended at 5 U.S.C. § 552(f)(2)(A) (emphasis added)). See also H.R. Rep. 104-795, at 22 (1996), 1996 U.S.C.C.A.N. 3448, 3465 (analogizing "[c]omputer records found in a database" to records in a "file...