Public.Resource.org v. United States Internal Revenue Service
Filing
42
ORDER DENYING DEFENDANT'S MOTION TO DISMISS by Hon. William H. Orrick denying 14 Motion to Dismiss. (jmdS, COURT STAFF) (Filed on 6/20/2014)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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PUBLIC.RESOURCE.ORG,
Case No. 13-cv-02789-WHO (WHO)
Plaintiff,
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ORDER DENYING DEFENDANT’S
MOTION TO DISMISS
v.
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UNITED STATES INTERNAL REVENUE
SERVICE,
Re: Dkt. No. 14
Defendant.
United States District Court
Northern District of California
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INTRODUCTION
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This motion to dismiss presents the question of whether the Freedom of Information Act
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(“FOIA”) is superseded by section 6104 of the Internal Revenue Code, a previously enacted
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disclosure statute concerning Form 990 filings. Public.Resource.org (“PRO”) seeks the tax return
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data of several nonprofit organizations in “machine-readable format.” The United States Internal
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Revenue Service (“IRS”) refuses because it contends that FOIA is superseded by section 6104 and
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its internal rules for releasing the requested data. Because of the breadth of FOIA’s disclosure
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requirements, which has been repeatedly upheld by the courts, and the inapplicability of the cases
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on which the IRS relies, there is no basis to conclude that FOIA is superseded by section 6104.
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The IRS’s motion is DENIED.
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BACKGROUND
On March 11, 2013, PRO submitted a request for tax return data to the IRS pursuant to
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FOIA, 5 U.S.C. § 552. PRO requested the Form 990 filings of nine tax-exempt organizations
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from 2011, specifically in Modernized e-File (MeF) format or “any other machine-readable
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format.” Complaint, Ex. F. The IRS uses the MeF format for all Forms 990 filed electronically.
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The IRS responded to PRO on March 19, 2013, indicating that data are “excluded from
disclosure in response to a written FOIA request” if such data are otherwise available through an
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established agency procedure. Compl., Ex. G at 1. The IRS directed PRO to Form 4506-A, which
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the IRS developed exclusively for requesting copies of tax-exempt organizations’ annual Form
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990 filings. Id. Form 4506-A allows the public to request digital copies of tax information on
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either CDs or DVDs, and in either “Alchemy” or “raw” format. Id. at 2–3. Discs with Alchemy-
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formatted data contain image files that are searchable in a database using Alchemy software.
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Discs with raw data contain image files in Tagged Image File (“TIF”) format.
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PRO contends that neither format satisfies its request for “machine-readable” data, and that
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Form 4506-A is therefore “inadequate” to satisfy PRO’s FOIA request. Compl., Ex. H at 1. On
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April 12, 2013, PRO’s counsel wrote to the IRS to request that it reconsider its position. In
response, the IRS stated in a letter dated May 1, 2013, that it was unable to comply with PRO’s
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United States District Court
Northern District of California
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FOIA request because Forms 990 in MeF format contain data that are protected from disclosure by
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section 6103(a) of the Internal Revenue Code, and because the existing process for releasing
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electronically filed Forms 990 is to convert MeF data into a Portable Document Format (“PDF”)
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replica of the paper form, then redact the protected information. Compl., Ex. I.
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PRO then filed this action on June 18, 2013, seeking declaratory and injunctive relief
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under both FOIA and the Administrative Procedure Act (“APA”), 5 U.S.C. § 703. Compl. ¶¶ 61–
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62, 67–68. I heard argument on the IRS’s motion to dismiss on June 18, 2014.
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LEGAL STANDARD
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Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint
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if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to
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dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its
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face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard
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requires the plaintiff to allege facts that add up to “more than a sheer possibility that a defendant
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has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While courts do not require
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“heightened fact pleading of specifics,” a plaintiff must allege facts sufficient to “raise a right to
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relief above the speculative level.” Twombly, 550 U.S. at 555.
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In deciding whether the plaintiff has stated a claim upon which relief can be granted, the
court must assume that the plaintiff’s allegations are true and must draw all reasonable inferences
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in the plaintiff’s favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987).
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However, the court is not required to accept as true “allegations that are merely conclusory,
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unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536
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F.3d 1049, 1055 (9th Cir. 2008).
DISCUSSION
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The IRS seeks dismissal of both the FOIA and the APA causes of action for failure to state
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a claim. First, the IRS contends that section 6104 of the Internal Revenue Code, 26 U.S.C. §
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6104, supersedes FOIA and precludes a FOIA claim. Def.’s Mot. to Dismiss at 7. Second, the
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IRS contends that the APA claim must be dismissed “by necessity” as the corollary of a favorable
ruling on the FOIA claim. Id. at 8.
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United States District Court
Northern District of California
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I.
THE FREEDOM OF INFORMATION ACT
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FOIA requires that a federal agency, upon receipt of a valid FOIA request, “provide the
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record in any form or format requested by the person if the record is readily reproducible by the
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agency in that form or format.” 5 U.S.C. § 552(a)(3)(B). The scope of FOIA’s disclosure
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requirements is broad, and courts have repeatedly declined to impose limits on FOIA that the
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statute itself does not expressly admit. Envtl. Prot. Agency v. Mink, 410 U.S. 73, 79–80 (1973),
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superseded by statute on other grounds; Dep’t of Interior v. Klamath Water Users Protective
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Ass’n, 532 U.S. 1, 7 (2001); Maricopa Audubon Soc. v. U.S. Forest Serv., 108 F.3d 1082, 1085
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(9th Cir. 1997). Although FOIA provides enumerated exemptions to disclosure, these exemptions
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“are ‘explicitly made exclusive,’ meaning that information not falling within any of the
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exemptions has to be disclosed.” Yonemoto v. Dep’t. of Veterans Affairs, 686 F.3d 681, 687 (9th
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Cir. 2012) (citations omitted) (quoting Mink, 410 U.S. at 79); see also 5 U.S.C. § 552(b).
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FOIA’s breadth reflects its “central purpose of exposing to public scrutiny official
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information that sheds light on an agency’s performance of its statutory duties.” U.S. Dep’t of
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Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749, 750 (1989). As this purpose
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cannot be served by a disclosure scheme relying solely on ad hoc agency consent, FOIA
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establishes a “comprehensive scheme,” U.S. Dep’t of Justice v. Tax Analysts, 492 U.S. 136, 153
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(1989), that aims to “provide a ‘workable formula’ that ‘balances and protects all interests.’”
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Mink, 410 U.S. at 80. This formula is backstopped by the courts, which provide individuals an
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opportunity to vindicate their “judicially enforceable public right to secure . . . information from
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possibly unwilling official hands.” Id.; see also 5 U.S.C. § 552(a)(4)(B).
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In its motion, the IRS does not dispute that it is an agency subject to FOIA, that the data in
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question qualify as “records” under the definition of the statute, or that the records were withheld.
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Rather, the IRS argues that FOIA has no application because the requested documents fall within
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section 6104, which provides the exclusive means by which Form 990 data are releasable. Def.’s
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Mot. to Dismiss at 1. For the reasons discussed below, I reject the IRS’s argument.
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A.
The statutory scheme of the Internal Revenue Code.
The IRS contrasts FOIA’s broad language mandating disclosure with the “comprehensive
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United States District Court
Northern District of California
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nondisclosure paradigm anchored by [s]ection 6103 of the Internal Revenue Code.” Def.’s Mot.
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to Dismiss at 4. Under section 6103, all tax returns are presumptively confidential “except as
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authorized by [title 26].” 26 U.S.C. § 6103(a). Section 6104 provides one of several exceptions to
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this general nondisclosure rule, requiring, in relevant part, that Form 990 data “be made available
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to the public at such times and in such places as the Secretary may prescribe.” 26 U.S.C. §
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6104(b). However, section 6104(b) does not “authorize the Secretary to disclose the name or
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address of any contributor to any organization or trust” required to file a Form 990. Id.
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According to the IRS, section 6103 and 6104 operate jointly as a “controlling statutory scheme”
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for the release of Form 990 data, with each imposing complementary “nondisclosure mandates” on
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the IRS. Def.’s Mot. to Dismiss at 4, 5. The IRS also notes that the Treasury has issued a
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regulation specifically governing disclosure under section 6104, which describes how the Form
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990 data may be viewed or obtained. 26 C.F.R. § 301.6104(b)-1 to (d)-1.
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B.
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The IRS argues that the specific and detailed statutory scheme governing disclosure of
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Section 6104 is distinguishable from statutes held to supersede FOIA.
Forms 990 supersedes the more general requirements of FOIA.1 Here the IRS relies on the “well
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Focusing on its argument that section 6104 preempts FOIA, the IRS does not argue that section
6104 creates a statutory exemption to FOIA under 5 U.S.C. § 552(b)(3). FOIA’s (b)(3) exemption
provides that material can be withheld from production under FOIA where a statute “requires that
the matters be withheld from the public in such a manner as to leave no discretion on the issue; or
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settled rule of statutory construction” that “a specific statute will not be controlled by a general
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statute” unless there is clear legislative intent to the contrary. Def.’s Mot. to Dismiss at 7;
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Donaldson v. U.S., 653 F.2d 414, 418 (9th Cir. 1981). The IRS points to two lines of cases
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finding FOIA’s general disclosure requirements superseded by more specific alternatives — the
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first dealing with section 6110 of the Internal Revenue Code, and the second dealing with the
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Presidential Recordings and Materials Preservation Act of 1974. Pub. L. 93–526, title I, §§ 101–
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106, 88 Stat. 1695–1698 (hereinafter “Materials Act”).
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The IRS reads both the canon and the cases too broadly. The textual touchstone for
evaluating whether a statute might supersede FOIA is not the level of precision with which the
statute defines covered records, but the comprehensiveness of its procedural scheme. See Julian v.
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United States District Court
Northern District of California
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U.S. Dep’t of Justice, 806 F.2d 1411, 1420 (9th Cir. 1986), aff’d, 486 U.S. 1, 108 (1988) (finding
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that FOIA was not superseded by a statute whose scheme lacked the “specificity or particularity
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required to displace FOIA”). Both section 6110 and the Materials Act are distinguishable from
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section 6104 in this respect.
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In Tax Analysts v. I.R.S., the District Court held that the detailed provisions of Section
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6110, enacted after FOIA as part of the Tax Reform Act of 1976, indicated that Congress intended
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to supplant FOIA disclosure with respect to requests for the IRS’s written determinations. Tax
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Analysts v. I.R.S., No. CIV.A. 96–2285, 2000 WL 689324 (D.D.C. Mar. 31, 2000), at *1. The
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Ninth Circuit similarly noted that section 6110 “replace[d] the procedures of FOIA . . . [with] a
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new set of procedures to be applicable to requests under section 6110.” Long v. U.S. I.R.S., 742
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F.2d 1173, 1178 (9th Cir. 1984). The Long court found that the wholesale displacement of FOIA
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procedures in section 6110 was indicative of Congress’s desire to displace FOIA itself. Id.
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The disclosure scheme provided by section 6104 is simply not of the same kind as that
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provided by section 6110, which sets forth detailed rules governing “[e]xemptions from
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disclosure” that plainly operate as a more limited replacement for the exemptions in FOIA itself.
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Compare 26 U.S.C. § 6110(c) (1982) with 5 U.S.C. § 552(b) (1982). Section 6110 lays out
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[] establishes particular criteria for withholding or refers to particular types of matters to be
withheld.” 5 U.S.C. § 552(b)(3)(A).
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independent administrative remedies for disclosure disputes, 26 U.S.C. § 6110(f)(2)–(3) (1982),
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independent judicial remedies, § 6110(f)(4)–(5), and a schedule for disclosure and postponement
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of disclosure. § 6110(g)(1)–(4). It also establishes a specific forum for civil suits and an
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independent scheme for damages. Compare 26 U.S.C. § 6110(i) (1982) with 5 U.S.C. §
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552(a)(4)(B)–(G) (1982). Most importantly, section 6110 expressly supersedes FOIA. 26 U.S.C.
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§ 6110(l) (1982); see also Church of Scientology of Cal. v. I.R.S., 792 F.2d 146, 149 (D.C. Cir.
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1986) (“Significantly, Congress did not leave us to speculate whether [section 6110] was
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comprehensive enough to constitute an implicit pro tanto repeal of FOIA; the last subsection
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specifies that the prescribed civil remedy in the Claims Court shall be the exclusive means of
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United States District Court
Northern District of California
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obtaining disclosure . . . .).
By contrast, section 6104 provides that Forms 990 should generally be made available for
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disclosure, with certain precise exceptions. This is manifestly different from a statute that purports
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to alter the procedural elements of FOIA and the means of judicial review. The content of section
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6104 is more consistent with the IRS’s depiction of the statute as a carefully delineated exception
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to the general nondisclosure rule from section 6103, Def.’s Mot. to Dismiss at 4, that the Ninth
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Circuit has already found insufficient to supersede FOIA. Long, 742 F.2d at 1178 (“[Congress’s]
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failure to do likewise in amending section 6103 is highly persuasive of an intent not to preempt the
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procedural provisions of FOIA as to requests under section 6103.”). Absent express language or a
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procedural scheme ostensibly displacing FOIA procedures, section 6104 — like section 6103 —
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cannot be held to supersede FOIA.
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The Materials Act case, Ricchio v. Kline, 773 F.2d 1389, 1394–95 (D.C. Cir. 1985), is
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inapposite. The Materials Act created a procedure for collecting and making public certain
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“historical materials” related to “abuses of governmental power” during the Nixon Administration.
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Pub. L. 93–526, title I, §§ 101(b), 104(a), 88 Stat. 1695–1697 (1974). The statute required the
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General Services Administration to propose public access regulations consistent with seven
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enumerated factors, including affected individuals’ right to an impartial trial, the protection of
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national security, and the private interest of President Nixon and his heirs in materials of trivial
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historical value. § 104(a), 88 Stat. 1696–1697. These regulations were then submitted to
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Congress and subject to potential disapproval. § 104(c), 88 Stat. 1697. The Act did not contain
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express language superseding FOIA.
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In considering the statute, the D.C. Circuit in Ricchio found that “Congress provided a
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comprehensive, carefully tailored and detailed procedure designed to protect both the interest of
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the public . . . and of President Nixon.” Ricchio, 773 F.2d at 1395. The court held that the
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Materials Act was intended to supplant FOIA as the exclusive method for obtaining specific
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documents of great public interest, namely “the Watergate Force’s transcripts of the tape
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recordings of President Nixon’s White House conversations.” Id.; see also Julian, 806 F.2d at
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1420. The court made clear that FOIA was superseded only with respect to this “specific,
narrowly limited material,” and not with respect to the vast remainder of presidential records to
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United States District Court
Northern District of California
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which the Materials Act disclosure scheme also applied. Ricchio, 773 F.2d at 1395; see Reporters
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Comm. for Freedom of the Press v. Sampson, 591 F.2d 944, 948 & n.12 (D.C. Cir. 1978) (“[W]e
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believe that the existence of an alternate method of access is completely compatible with
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Congress’s intent to guarantee that materials from the Nixon presidency [be] available to the
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public.”).
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The IRS asserts that section 6104 compares favorably with the Materials Act in that both
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“specif[y] categories of records that [are] subject to [their] provisions . . . and specifically
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authorize[] the promulgation of procedural rules governing their disclosure to the public.” Reply
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at 8. That much is true. However, a statute cannot be “comprehensive enough” to supersede
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FOIA simply by specifying categories of records exempt from disclosure, since this is a means of
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identifying statutory exemptions pursuant to FOIA. 5 U.S.C. § 552(b)(3)(A). If this sufficed,
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most statutory exemptions would supersede FOIA. Moreover, in the Materials Act, Congress
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authorized the creation of public disclosure regulations under specific constraints, in a unique
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context, and in a tightly controlled fashion. See §§ 102–104, 88 Stat. 1696–1698. The disclosure
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rules were to be submitted to Congress, tailored to the sensitive circumstances surrounding
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disclosure of the president’s Watergate-related records and subject to judicial review on specified
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terms. § 105, 88 Stat. 1698. Even then, the D.C. Circuit held that FOIA was only superseded with
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respect to a small, closed subset of presidential records. Ricchio, 773 F.2d at 1395. Ricchio does
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not provide persuasive guidance for this case. See Julian, 806 F.2d at 1420 (distinguishing the
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Materials Act from the procedures governing disclosure of prisoners’ presentence investigation
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reports, while also declining to adopt the reasoning in Ricchio).
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C.
Legislative history and intent indicate that FOIA applies to section 6104.
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The IRS also argues that the relationship between section 6104 and FOIA is ambiguous as
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a result of FOIA’s later date of enactment. Def.’s Mot. to Dismiss at 7 (“Because [s]ection 6104
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predates the FOIA, it is not required to include specific language as to its effect on the FOIA, and
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the Court must instead turn to traditional rules of statutory construction.”). Again the IRS stresses
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that “a precisely drawn, detailed statute preempts more general statutory remedies,” and the IRS
argues that this resolves the ambiguity between the statutes in favor of section 6104. Mot. to
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United States District Court
Northern District of California
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Dismiss at 7 (quoting Brown v. General Services Administration, 425 U.S. 820, 834–35 (1976)).
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The IRS’s argument is again overbroad. Courts will defer to the more narrowly drawn
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statute only “where there is no clear legislative intent to the contrary.” Donaldson, 653 F.2d at
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418. Although the intent of section 6104 may be ambiguous in relation to FOIA, the reverse is not
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true. Courts have consistently understood FOIA as intended for broad application, with only
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limited exceptions. Church of Scientology of Cal., 792 F.2d at 149 (“FOIA is a structural statute,
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designed to apply across-the-board to many substantive programs; it explicitly accommodates
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other laws by excluding from its disclosure requirement documents ‘specifically exempted from
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disclosure’ by other statutes, 5 U.S.C. § 552(b)(3).”); see also N.L.R.B. v. Robbins Tire & Rubber
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Co., 437 U.S. 214, 220–21 (1978).
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While I am leery of going down the path of legislative history too far, as the IRS invites
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me to do, I note my disagreement with its analysis. The IRS attempts to draw a distinction
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between pro-disclosure and nondisclosure statutes in FOIA’s legislative history. Reply at 5–6. As
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it notes, FOIA arose in response to expansive agency interpretations of the discretion previously
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afforded under section 3 of the APA to deny access to public records. Id. at 5; S. REP. NO. 89–813
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at 38–39 (“After it became apparent that section 3 of the Administration Procedure Act was being
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used as an excuse for secrecy, proposals for change began.”). The IRS contends that this
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demonstrates Congress’s intent to apply FOIA only to those documents previously subject to
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discretionary withholding under section 3 of the APA, and not to statutory schemes that provided
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disclosure by other means at the time of FOIA’s original enactment. Reply at 6. As section 6104
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predated FOIA and provided such other means, the IRS argues that section 6104 must supersede.
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This argument is unpersuasive for several reasons. First, it mistakes legislative motivation
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for legislative intent, improperly reading the purpose of the statute as limited to the set of
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circumstances that gave rise to it. Such a narrow reading yields results incompatible with the
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language of FOIA, 5 U.S.C. § 552(b)(3), and the legislative record. S. REP. NO. 89–813 at 38 (“It
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is the purpose of the present bill to eliminate [portions of section 3 of the APA], to establish a
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general philosophy of full agency disclosure unless information is exempted under clearly
delineated statutory language and to provide a court procedure by which citizens and the press
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United States District Court
Northern District of California
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may obtain information wrongfully withheld.”). FOIA is broad precisely because Congress
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sought a comprehensive solution to what it viewed as a wide-ranging problem. Mink, 410 U.S. at
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79–80. The pre-FOIA disclosure statutes will necessarily be narrower by comparison. FOIA’s
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breadth cannot be both its purpose and its undoing. As the Supreme Court has held, “the clear
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legislative intent of the FOIA [is] to assure public access to all governmental records whose
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disclosure would not significantly harm specific governmental interests.” Dep’t of Air Force v.
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Rose, 425 U.S. 352, 365 (1976) (internal parentheses omitted) (quoting Soucie v. David, 448 F.2d
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1067, 1080 (D.C. Cir. 1971)).
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Second, where genuine disputes exist as to the legislative intent of FOIA, “the recognized
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principal purpose of the FOIA requires [courts] to choose that interpretation most favoring
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disclosure.” Rose, 425 U.S. at 366; see generally Sinito v. U.S. Dep’t of Justice, 176 F.3d 512,
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514 (D.C. Cir. 1999) (discussing FOIA remedies and FOIA’s potential function as a remedial
23
statute). The IRS advances a theory by which any pre-existing disclosure statute could
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conceivably supplant FOIA, even where the pre-existing statute provides for significantly less
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disclosure than mandated by FOIA. Reply at 6. FOIA’s pro-disclosure purpose would then be
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frustrated not by earlier nondisclosure statutes, but by earlier statutes with comparable pro-
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disclosure aims. Absent clear language to that effect, I cannot accept that Congress intended
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FOIA’s “‘workable’ rules” of disclosure to turn on such an opaque distinction. F.T.C. v. Grolier
9
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Inc., 462 U.S. 19, 27 (1983) (holding, in the context of FOIA’s (b)(5) exemption, that
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“establishing a discrete category of exempt information[] implements the congressional intent to
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provide ‘workable’ rules”).
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Finally, the IRS contends that Congress, after enacting FOIA, “could have amended
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[s]ection 6104 to indicate that the FOIA would provide the scheme for the production of Forms
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990, but it declined to do so.” Def.’s Mot. to Dismiss at 7, 8. However, the IRS offers nothing to
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suggest that failing to introduce such an amendment was an affirmative act. Indeed, failure to
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amend is equally strong evidence of Congress’s expectation that FOIA already governed.
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D.
The relationship between sections 6104 and 6103 confirms that FOIA governs.
The IRS frames section 6104 as operating within a statutory scheme “anchored by
United States District Court
Northern District of California
11
[s]ection 6103,” in which adjacent subsections of section 6104 operate as pro-disclosure and
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nondisclosure mandates with respect to specific records. Def.’s Mot. to Dismiss at 4; 26 U.S.C.
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§ 6104(a), (b). The IRS notes that without section 6104, release of Forms 990 would be
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completely barred by the nondisclosure provision for tax return information in section 6103(a).
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Def.’s Mot. to Dismiss at 8. The D.C. Circuit has generally accepted such a view of the statutes’
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relationship to one another. Tax Analysts v. I.R.S., 214 F.3d 179, 183 (D.C. Cir. 2000) (“I.R.C.
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§ 6104 therefore may be characterized as an exception to the exception from the general disclosure
18
rule offered by FOIA Exemption 3 and I.R.C. § 6103.”); see also Lehrfeld v. Richardson, 132 F.3d
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1463, 1467 (D.C. Cir. 1998).
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However, it is unclear on what basis this depiction of section 6104 advances the IRS’s
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position on FOIA preemption. Indeed, the Ninth Circuit has already considered and rejected the
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FOIA preemption argument with respect to section 6103. Long, 742 F.2d at 1177–78
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(“Exemption 3 of FOIA was designed to give effect to just such explicit nondisclosure statutes as
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section 6103.”); 5 U.S.C. § 552(b)(3). The D.C. Circuit has reached the same conclusion on
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multiple occasions. Tax Analysts v. I.R.S., 117 F.3d 607, 611 (D.C. Cir. 1997) (“That § 6103 is
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the sort of nondisclosure statute contemplated by FOIA exemption 3 is beyond dispute.”);
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Maxwell v. Snow, 409 F.3d 354, 355 (D.C. Cir. 2005) (“Section 6103 thus ‘does not supersede
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FOIA but rather gives rise to an exemption under Exemption 3’ and FOIA procedures must still be
10
1
followed in applying § 6103.” (quoting Church of Scientology of Cal., 792 F.2d at 149–50)). If a
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tension exists between the pro-disclosure purposes of FOIA and the confidentiality interests of
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section 6103, FOIA itself provides the mechanism for reconciling the two. Therefore, in linking
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together sections 6103 and 6104 as “a comprehensive nondisclosure paradigm,” the IRS
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articulates an argument not for preempting FOIA, but for a statutory exemption pursuant to FOIA.
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Def.’s Mot. to Dismiss at 4. Statutes providing such an exemption are subsumed within FOIA,
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and the burden then lies with the federal agency to demonstrate that the exemption applies to the
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discrete record request at issue. Kamman v. U.S. I.R.S., 56 F.3d 46, 48 (9th Cir. 1995); 5 U.S.C. §
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552(a)(4)(B).
E.
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United States District Court
Northern District of California
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IRS regulations cannot be found to supersede FOIA absent statutory intent.
Finally, the IRS relies on the detailed access provisions contained in the regulation adopted
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to effect section 6104’s mandates. Section 6104 delegates to the Secretary of the Treasury the
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authority to promulgate certain implementing regulations. 26 U.S.C. § 6104(b) (“The information
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required to be furnished [by section 6104] . . . shall be made available to the public at such times
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and in such places as the Secretary may prescribe.”). The IRS contends that — at least as of
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November 2002 — Treasury adopted regulations that “expressly construe[] section 6104 as
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providing a comprehensive and exclusive disclosure scheme.” Reply at 4–5; see 26 C.F.R. §
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601.702(d)(3).
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However, the IRS misstates the extent of the Secretary’s power. The rulemaking power is
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only a limited grant of authority “to adopt regulations to carry into effect the will of Congress as
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expressed by the statute.” U.S. v. Larionoff, 431 U.S. 864, 873 n.12 (1977). If a dispute arises as
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to proper statutory interpretation, courts and federal agencies must defer to congressional intent.
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Lessner v. U.S. Dep't of Commerce, 827 F.2d 1333, 1335 (9th Cir. 1987). “If the intent of
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Congress is clear, that is the end of the matter.” Chevron, U.S.A., Inc. v. Natural Res. Def.
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Council, Inc., 467 U.S. 837, 842 (1984).
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As discussed, the congressional intent behind FOIA is clear, and nothing in the text,
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structure, purpose, or legislative history of either statute indicates that section 6104 should
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supersede FOIA. See Tax Analysts v. I.R.S., 350 F.3d 100, 103 (D.C. Cir. 2003) (holding that
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certain regulations implementing section 6110 were inconsistent with the statute’s meaning, as
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determined by these “traditional tools of statutory interpretation” (quoting Pharm. Research &
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Mfrs. of Am. v. Thompson, 251 F.3d 219, 224 (D.C. Cir. 2001))). The IRS cannot achieve through
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rulemaking what it was not permitted to do by Congress.
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II.
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ADMINISTRATIVE PROCEDURE ACT
As an alternative to its claims under FOIA, PRO seeks declaratory and injunctive relief
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under the APA, challenging as arbitrary and capricious the IRS’s determination that Forms 990 in
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MeF format are not required to be released under FOIA. Compl. ¶¶ 61–62. The IRS argues that
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this claim should be dismissed for the same reason as the FOIA claim — that section 6104
preempts FOIA. Def.’s Mot. to Dismiss at 8. As I have determined that section 6104 does not
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United States District Court
Northern District of California
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preempt, and as the IRS raises no additional arguments, the IRS’s motion fails with respect to the
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APA claim. While PRO will eventually have to elect its remedy, it need not do so now.
CONCLUSION
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For the reasons set forth above, Defendant’s motion to dismiss for failure to state a claim is
DENIED.
IT IS SO ORDERED.
Dated: June 20, 2014
______________________________________
WILLIAM H. ORRICK
United States District Judge
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