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Institute for Justice v. Internal Revenue Service

United States Court of Appeals, District of Columbia Circuit

November 1, 2019

Institute For Justice, Appellant
Internal Revenue Service, Appellee

          Argued September 12, 2019

          Appeal from the United States District Court for the District of Columbia (No. 1:16-cv-02406)

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

          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, §§, 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 (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 ...

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