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Kozacky & Weitzel, P.C. v. United States

April 10, 2008


The opinion of the court was delivered by: Matthew F. Kennelly United States District Judge



Kozacky & Weitzel, P.C. (K&W) has sued the Internal Revenue Service (IRS) under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, seeking an order enjoining the agency from withholding records and directing the production of any records improperly withheld. The IRS has moved for summary judgment, asserting that it has produced to K&W all non-exempt documents responsive to K&W's FOIA request. K&W thereafter moved for an extension of time to respond to the IRS's motion for summary judgment so that it may engage in discovery, and it moved to compel the IRS to respond to K&W's discovery requests and produce of a Vaughn index. For the following reasons, the Court grants K & W's motion for a Vaughn index and grants in part its motion to compel discovery.


On November 3, 2006, the IRS issued letters to Rodney R. Kirby and Heidi M. Kirby informing them that their 2003 and 2004 tax returns had been selected for audit. On December 28, 2006, K&W, on behalf of the Kirbys, submitted a FOIA request to the IRS, requesting "[a]ll documents prepared and/or considered by the Department of the Treasury that led to the November 3, 2006 letters to Rodney R. and Heidi M Kirby . . . alleging they participated in a 'tax shelter transaction' and/or an 'abusive transaction.'" Compl. ¶ 8. On January 30, 2007, the IRS responded by producing a copy of the Kirbys' files for tax years 2003 and 2004. On February 7, 2007, K&W made a second FOIA request to the IRS for documents "that may indicate reasons why Rodney R. and Heidi M Kirby were accused of such transactions, including but not limited to documents signed by the IRS officials concerning generally the subject of the aforestated 'tax shelter transactions' and or 'abusive transactions.'" Id. ¶ 13. On March 9, 2007, the IRS informed K&W that it would be unable to respond during the statutory period of time for FOIA requests and extended its response time to March 28, 2007.

K&W filed this suit on April 24, 2007. On August 20, 2007, Gerald Role, an attorney in the Department of Justice's Tax Division, sent a letter to K&W stating that an additional ninety-five pages of documents had been located. The letter explained that the IRS was releasing ten redacted pages and two unredacted pages and was withholding the remaining pages under certain FOIA exemptions. On October 15, 2007, the IRS moved for summary judgment, attaching declarations from Margaret Keller, an IRS employee who processes FOIA requests, Melissa C. Quale, an IRS attorney who handles FOIA lawsuits, and Role. The three declarations explained the processing of K&W's FOIA request. Additionally, Quale stated in her declaration that the withheld documents fell under certain FOIA exemptions. In response to the IRS's summary judgment motion, K&W filed the present motion for extension of time and to compel production of a Vaughn index and discovery.


1. Vaughn Index

Under FOIA, the Court is authorized to "enjoin [an] agency from withholding agency records and to order the production of any agency records improperly withheld from the complainant." 5 U.S.C. § 552(a)(4)(B). FOIA reflects "a general philosophy of full agency disclosure unless information is exempted under clearly delineated statutory language." Dep't of Air Force v. Rose, 425 U.S. 352, 360-61 (1976).

The exemptions provided in FOIA are construed narrowly, to provide as much access to documents as is feasible and safe for the government to do. Id. at 823. "When the Government declines to disclose a document the burden is upon the agency to prove de novo in trial court that the information sought fits under one of the exemptions to the FOIA." Vaughn v. Rosen, 484 F.2d 820, 823 (D.C. Cir. 1973). In determining whether the agency has met its burden, the court must decide whether its declarations provide the court with "an adequate factual basis" for determining whether the documents withheld truly fall within one of FOIA's exemptions. Patterson v. IRS, 56 F.3d 832, 836 (7th Cir. 1995). Affidavits that do nothing more than categorically describe withheld information as falling into a particular exemption category are inadequate. Id.

In seeking summary judgment, the IRS argues -- relying on Quale's declaration --that the withheld documents fell under certain FOIA exemptions. K&W argues that Quale's declaration does not adequately explain her conclusions that the documents are exempt from disclosure and is therefore insufficient to permit the Court to make an informed ruling regarding the applicability of the claimed exemptions. K & W argues that the Court should require the IRS to produce a so-called Vaughn index to facilitate determination of the applicability of the claimed FOIA exemptions.

The term "Vaughn index" derives from the D.C. Circuit's decision in the Vaughn case. In Vaughn, the court expressed its concern that under then-prevailing procedures in FOIA cases, a party seeking disclosure was effectively helpless to controvert the government's assertion that information was exempt from disclosure, because it was forced to argue in the blind, often in response to conclusory governmental claims of exemption from disclosure. This, in turn, left it to the reviewing court to conduct its own investigation, a questionable procedure in a system accustomed to adversary presentations. Vaughn, 484 F.2dat 823-26.

As a result, the court developed what is now known as the Vaughn index, an itemizing and indexing system that correlates each portion of any document withheld with the government's reason for withholding it. "In preparing a Vaughn Index, an agency must list the title of the document or category of documents, the date of the document, the author and recipient(s), a detailed factual description of the document, and the statutory exemption the agency is claiming to support nondisclosure." Becker v. IRS, 34 F.3d 398, 401 n.9 (7th Cir. 1994). The Vaughn index is used with or in lieu of government affidavits supporting a claim of exemption when the affidavits lack specificity sufficient to allow the Court to determine whether withheld documents are exempt from disclosure. See Vaughn, 484 F.2d at 826-27.

There is no per se rule requiring the filing of a Vaughn index in FOIA cases; determination of whether to compel a Vaughn index requires a case-by-case analysis of the information produced by the agency in response to a FOIA request. Becker, 34 F.3d at 402. When the government's affidavits provide sufficient information for the court to evaluate the exemption claims, a Vaughn index is not required. Wright v. OSHA, 822 F.2d 642, 646-48 (7th Cir. 1987). "The agency need only provide sufficient information to allow a court to review the agency's claimed exemption." Id. at 646.

To support the withholding of parts or all of particular documents, the IRS relies on the declaration of IRS attorney Melissa Quale. Quale states that the documents numbered 578 through 683 were withheld based on FOIA exemption ...

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