CHURCH OF SCIENTOLOGY INTERNATIONAL, Plaintiff-Appellee,
v.
UNITED STATES INTERNAL REVENUE SERVICE, Defendant-Appellant.
CHURCH OF SCIENTOLOGY INTL., Plaintiff-Appellee,
v.
UNITED STATES INTERNAL REVENUE SERVICE, Defendant-Appellant.
CHURCH OF SCIENTOLOGY, Plaintiff-Appellee,
v.
UNITED STATES INTERNAL REVENUE SERVICE, Defendant-Appellant.
Nos. 92-55817, 92-55828 and 92-55831.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted April 8, 1993.
Decided June 9, 1993.
Tax exempt organization brought suit challenging IRS's claims that undisclosed
documents were exempt from disclosure under Freedom of Information Act (FOIA).
The United States District Court for the Central District of California,
Consuelo Bland Marshall, J., ordered disclosure of documents and IRS appealed.
The Court of Appeals, Wiggins, Circuit Judge, held that: (1) Exempt
Organization Division of IRS had law enforcement function required under FOIA
exemption for records compiled for law enforcement purposes; (2) consent to
release of handwritten documents by individual Internal Revenue agents did not
mandate that documents be disclosed without weighing public interest; and (3)
order directing government to produce privileged documents was final appealable
order.
Reversed in part, and vacated in part, and remanded.
[1] RECORDS
When reviewing judgment or order under Freedom of Information Act (FOIA), Court
of Appeals must determine whether district court had factual basis for its
decision and reviews those decisions with adequate factual basis under clearly
erroneous standard. 5 U.S.C.A. s 552.
[2] RECORDS
Federal Freedom of Information Act (FOIA) embodies strong federal policy in
favor of full agency disclosure of government documents. 5 U.S.C.A. s 552.
[3] RECORDS
Exemptions under Federal Freedom of Information Act to full agency disclosure
of government documents are limited and must be narrowly construed with doubts
resolved in favor of disclosure. 5 U.S.C.A. s 552.
[4] RECORDS
Agency opposing disclosure of government documents bears burden of showing that
requested documents are exempt from disclosure under Freedom of Information
Act. 5 U.S.C.A. s 552.
[5] RECORDS
Exempt Organization Division of the IRS performed "law enforcement
function," as required for exemption under Freedom of Information Act for
records compiled for law enforcement purposes to apply; division enforced
provision of federal tax code relating to qualification for tax exempt
status. 5 U.S.C.A. s 552(b)(7).
See publication Words and Phrases for other judicial constructions and
definitions.
[6] RECORDS
When determining whether introduction of particular document would constitute
unwarranted invasion of personal privacy, as needed for Freedom of Information
Act exemption to apply, court must determine whether public interest in
disclosure outweighs individual privacy interests that would suffer from
disclosure. 5 U.S.C.A. s 552(b)(7)(C).
[7] RECORDS
Consent to disclosure of handwritten documents by individual internal revenue
agents did not mandate release of documents compiled by Exempt Organization
Division of IRS under Freedom of Information Act; district court was obligated
to determine public interest in disclosure and weigh that interest with
individual privacy interests. 5 U.S.C.A. s 552(b)(7)(C).
[7] RECORDS
Consent to disclosure of handwritten documents by individual internal revenue
agents did not mandate release of documents compiled by Exempt Organization
Division of IRS under Freedom of Information Act; district court was obligated
to determine public interest in disclosure and weigh that interest with
individual privacy interests. 5 U.S.C.A. s 552(b)(7)(C).
[8] RECORDS
Ruling that document to which attorney-client privilege applied was not exempt
from disclosure under Freedom of Information Act was not a final appealable
order required for appellate jurisdiction where party which possessed document
was not ordered to produce document. 5 U.S.C.A. s 552(b)(5).
*917 Jonathan S. Cohen, Gary R. Allen, Murray S. Horwitz, Asst. Attys.
Gen., Washington, DC, for defendant-appellant.
Kendrick L. Moxon, Bowles & Moxon, Hollywood, CA, for plaintiff-appellee.
Appeal from the United States District Court for the Central District of
California.
Before: HALL, WIGGINS, TROTT, Circuit Judges.
WIGGINS, Circuit Judge:
This case is a consolidation of three cases arising in the Central
District of California. In each case, the Church of Scientology International
("Church") requested that the Exempt Organization division ("EO") of the
Internal Revenue Service ("IRS") disclose certain documents pursuant to the
Freedom of Information Act ("FOIA"), 5 U.S.C. s 552 (1988). The IRS
responded to each request by disclosing some documents and claiming that others
were exempt from disclosure under 5 U.S.C. s 552(b). The Church challenged
the IRS's exemption claims in district court, and the district court ordered
the disclosure of hundreds of documents claimed to be exempt. The IRS
appeals. The district court had jurisdiction pursuant to 5 U.S.C. s
552(a)(4)(B) and 28 U.S.C. s 1331. We have jurisdiction over this timely
appeal pursuant *918 to 28 U.S.C. s 1291. We reverse in part, vacate in
part, and remand.
FACTS
This case deals with three separate requests by the Church for documents under
the FOIA. The facts surrounding each request are summarized below.
Request No. 1
On August 17, 1988, the Church submitted a FOIA request, seeking access to
information about the Church and related entities Religious Technology Center
("RTC") and Church of Spiritual Technology ("CST") located in the Los Angeles
Exempt Organization office from 1986 to "the present." By letter dated August
30, 1988, the IRS advised the Church that the request could not be processed
because the Church had not submitted a valid taxpayer authorization for release
of tax return information. On September 9, 1988, the Church responded,
supplying releases for itself, RTC, and CST. A month later, the IRS informed
the Church that its request had been sent to the National Office of Exempt
Organizations in Washington, D.C., for processing. Thereafter, the Church
modified its request to include information contained in the national office.
On April 17 and 20, 1989, the Church received form letter responses from the
IRS, indicating that some or all of the records requested would not be
released. The Church filed an administrative appeal from the IRS's decision to
withhold documents, but never received a response to its appeal from the IRS.
After the statutory time for the IRS to answer had passed, the Church filed an
action in the district court.
The IRS disclosed 79 documents in full pursuant to the request. The IRS also
identified 16,000 other documents as responsive to the request, but took the
position that these documents were exempt from disclosure. On a motion for
summary judgment, the district court ordered the release of all documents for
which the IRS claimed an exemption under 5 U.S.C. s 552(b)(7) because the
documents were not compiled for law enforcement purposes.
Requests Nos. 2 and 3
On September 16, 1990, the Church submitted a FOIA request for "a copy of all
files ... relating to or concerning [the Church], maintained in a locked three
drawer file cabinet under the control of Roderick Darling." In another letter
of the same date, the Church also requested "all files, records, documents,
[and] notes ... relating to [the Church] maintained or temporarily residing in
the office of Marvin Friedlander."
The IRS disclosed an unspecified number of documents pursuant to these
requests. As before, the IRS claimed that other responsive documents were
exempt from disclosure--the IRS withheld 219 pages of documents pursuant to the
request made of Darling and 330 pages of documents pursuant to the request made
of Friedlander. After the time had run for the IRS to respond to the Church's
requests, the Church filed actions in the district court.
In both cases, the district court ruled that the EO had no law enforcement
purpose and ordered the release of any documents compiled in connection with
the Church's application for tax exempt status. The district court determined
that the EO had no law enforcement function and that therefore the documents
were not compiled for law enforcement purposes.
The court also ordered the IRS to produce documents containing the handwriting
of seven named agents. The IRS had claimed that the documents were exempt
under 5 U.S.C. s 552(b)(7)(C). The court concluded that the IRS could not
withhold these records on privacy grounds because the individuals had indicated
that they did not object to the Church having documents containing their
handwriting. The IRS appeals.
STANDARD OF REVIEW
[1] Our review of a judgment or order under the FOIA is a two-part inquiry.
First, we must determine whether the district court had an adequate factual
basis for its decision. Bowen v. FDA, 925 F.2d 1225, 1226-27 (9th
Cir.1991); Church of Scientology v. United States Dep't of the Army, 611
F.2d 738, 742 (9th Cir.1979). If an adequate factual basis *919 supports
the district court's decision, we should review the decision under the clearly
erroneous standard. Bowen, 925 F.2d at 1227; Church, 611 F.2d at 742.
DISCUSSION
[2][3][4] The FOIA embodies a strong federal policy in favor of full agency
disclosure of government documents. See John Doe Agency v. John Doe Corp.,
493 U.S. 146, 151-52, 110 S.Ct. 471, 475, 107 L.Ed.2d 462 (1989); Bowen,
925 F.2d at 1226. Any inquiry under the Act, then, begins with a "strong
presumption in favor of disclosure." United States Dep't of State v. Ray,
502 U.S. 164, ----, 112 S.Ct. 541, 547, 116 L.Ed.2d 526 (1991). Thus, while
there are specific exemptions from disclosure set forth in the Act, these
exemptions are limited and must be narrowly construed with doubts resolved in
favor of disclosure. John Doe, 493 U.S. at 152, 110 S.Ct. at 475;
Federal Labor Relations Authority v. United States Dep't of the Navy, 958
F.2d 1490, 1494 (9th Cir.1992). The agency bears the burden of showing that
requested documents are exempt from disclosure. John Doe, 493 U.S. at 152,
110 S.Ct. at 475; Federal Labor Relations Authority, 958 F.2d at 1494;
Bowen, 925 F.2d at 1226; Lewis v. IRS, 823 F.2d 375, 378 (9th Cir.1987).
I. Exemption 7--"compiled for law enforcement purposes"
Section 552(b)(7) exempts from disclosure "records or information compiled
for law enforcement purposes, but only to the extent that" disclosure will
result in one of six enumerated harms. In determining whether exemption 7
applies, we must first decide whether the records requested by the Church were
"compiled for law enforcement purposes."
[5] This court has indicated that this determination requires "an
examination of the agency itself to determine whether the agency may exercise a
law enforcement function." Church, 611 F.2d at 748. The district court
concluded that the EO has no law enforcement function and ruled, therefore,
that the requested documents were not compiled for law enforcement purposes.
We disagree.
This court has clearly held that the IRS has the "requisite law enforcement
mandate" to qualify as a law enforcement agency. Lewis, 823 F.2d at 379.
Moreover, we are convinced that the EO performs a law enforcement function by
enforcing the provisions of the federal tax code that relate to qualification
for tax exempt status. This conclusion is consistent with Lewis and
bolstered by the decision of the D.C. Circuit in Center for Nat'l Policy
Review on Race & Urban Issues v. Weinberger, 502 F.2d 370 (D.C.Cir.1974).
[FN1] The Weinberger court "endorsed the view propounded in the legislative
history that civil as well as criminal law enforcement activities are within
the purview of the exemption." Id. at 373 (footnote omitted). The court
stated:
FN1. Weinberger was decided under an earlier version of the statute
that we consider here. We recognize that amendments to the statute have
superceded portions of the Weinberger case. See Local 30, United
Slate, Tile, and Composition Roofers v. NLRB, 408 F.Supp. 520, 524 & n. 1
(E.D.Pa.1976). However, no amendments to the statute have affected the
portion of the opinion construing the phrase "law enforcement purpose",
which we find persuasive here.
While an administrative determination of ineligibility for [a] governmental
benefit is not attended by the same safeguards and procedures as a judicial
determination in a criminal or civil proceeding, it is a governmental action
that must be accompanied by due procedure. We think it has the salient
characteristics of "law enforcement" contemplated by the wording of exemption
7....
... Where an agency, like HEW, has both voluntary compliance and formal
determination functions ... the pertinent files are "compiled for law
enforcement purposes."
Id. (footnote omitted).
The EO, like the agency in Weinberger, performs both voluntary compliance
and formal determination functions. Moreover, the EO's role in determining
eligibility for the governmental benefit of tax exempt status also "has the
salient characteristics of law enforcement." See id. Thus, we find the
reasoning of Weinberger persuasive and its *920 application appropriate
here. We hold that Lewis and Weinberger compel the conclusion that the
EO has the requisite law enforcement function for purposes of the statute.
[FN2] Accordingly, the district court's conclusion that the EO has no law
enforcement purpose is clearly erroneous, and we reverse its order that the IRS
disclose all documents or portions of documents protected only by an exemption
7 claim or compiled in connection with an application for tax exempt status.
We instruct the district court to determine whether the particular documents
withheld were compiled for law enforcement purposes [FN3] and whether the
government can establish that disclosure of the documents threatens one of the
harms specified in 5 U.S.C. s 552(b)(7)(A-F).
FN2. The Church would have us distinguish Lewis because it involved a
document request from the IRS's criminal investigation division, a division
whose law enforcement mandate is more obvious than that of the EO. We have
considered the distinction and expressly reject it on the strength of
Weinberger's rationale.
FN3. We point out that the documents need not have been gathered
originally for law enforcement purposes. The government must show only
that the records and information had been compiled for law enforcement
purposes "when the response to the FOIA request [was] made." John Doe,
493 U.S. at 155, 110 S.Ct. at 477; see also id. at 155 n. 6, 110 S.Ct.
at 477 n. 6 (suggesting that an agency cannot compile records for law
enforcement purposes so as to avoid disclosure). Thus with regard to the
IRS's argument that the documents were incorporated into Church audit
files, the district court must determine whether the government has borne
its burden of establishing a compilation for law enforcement purposes.
Id.
II. Applicability of Exemption 7(C)
The IRS also contends that the district court erred when it ordered the
production of documents containing the handwriting of various IRS agents. The
IRS claims that the documents are exempt from disclosure under 5 U.S.C. s
552(b)(7)(C).
[6] Section 552(b)(7)(C) "permits the government to withhold
documents and portions of documents 'compiled for law enforcement purposes, but
only to the extent that the production of such records would ... constitute an
unwarranted invasion of personal privacy.' " Wiener v. FBI, 943 F.2d 972,
983-84 (9th Cir.1991) (quoting 5 U.S.C. s 552(b)(7)(C) (1988)), cert.
denied, 505 U.S. 1212, 112 S.Ct. 3013, 120 L.Ed.2d 886 (1992). To determine
whether production of a particular document would constitute an unwarranted
invasion of personal privacy, a court must determine whether the public
interest in disclosure outweighs the individual privacy interests that would
suffer from disclosure. See United States Dep't of Justice v. Reporters
Comm. for Freedom of the Press, 489 U.S. 749, 762, 776, 109 S.Ct. 1468, 1476,
1483, 103 L.Ed.2d 774 (1989); Wiener, 943 F.2d at 984.
The district court concluded that all documents compiled for law enforcement
purposes and containing the handwriting of IRS agents should be exempt from
disclosure because there existed "little public interest" in the disclosure of
employee handwriting; the history of antagonism between the parties justified
protection of IRS employee identities; and the IRS had no duty to alter
information so as to make it discloseable. [FN4]
FN4. The Church offered to pay to have the withheld documents typed so as
to eliminate the risk of discovering agent identities through handwriting.
Nonetheless, the court ordered the disclosure of any documents withheld under
exemption 7(C) that contained the handwriting of seven named agents who had
indicated in depositions that they did not object to the Church having samples
of their handwriting. The court concluded that the "IRS cannot assert an
unwarranted invasion of privacy on behalf of individual employees who have no
objection to the disclosure of their handwriting." The court acknowledged that
the named employees might have claimed a privacy interest "if they knew exactly
what information would be revealed" but ordered the documents released because
the IRS objected only to the release of the agents' handwriting and not the
information in the documents. We conclude that the district court erred by
failing properly to determine whether the public interest in disclosure
outweighed privacy concerns.
*921 [7] First, we note that courts have long frowned upon the release of
government compiled documents by individual consent. See Rural Housing
Alliance v. United States Dep't of Agric., 498 F.2d 73, 82-83, opinion
supplemented by 511 F.2d 1347 (D.C.Cir.1974). Second, we find the agents'
alleged waivers of their privacy interests insufficient to compel disclosure.
The agents did not consent to the release of any specific documents or set of
documents. Instead, they simply indicated that they did not object to the
Church having documents containing their handwriting in the abstract. Given
our reluctance to compel the disclosure of government compiled documents on the
basis of individual consent, we find the agents' deposition testimony alone an
inadequate factual basis on which to conclude that the public interest in
disclosure outweighed the privacy interests. The agents' testimony may
indicate that the privacy concerns here are not particularly weighty, but it
does not relieve the court of its duty to balance the interests. See
Reporters Comm., 489 U.S. at 762, 776, 109 S.Ct. at 1476, 1483.
Finally, the district court failed to address the public interest in
disclosure of the documents containing the handwriting of the seven named
agents. Moreover, the court did not indicate the nature of any of the
documents so as to permit us to evaluate the public interest in disclosure.
Thus, it is impossible for us to determine whether the public interest
outweighs the privacy concerns in this case as the law requires. See
Reporters Comm., 489 U.S. at 762, 776, 109 S.Ct. at 1476, 1483; Wiener,
943 F.2d at 984; see also Nix v. United States, 572 F.2d 998, 1006 (4th
Cir.1978) (holding that certain documents were exempt from disclosure even
though the privacy rights implicated were minimal because the public interest
in disclosure was even less). This court has indicated that a " 'reviewing
court should not be required to speculate on the precise relationship between
each exemption claim and the contents of the specific document[s].' "
Wiener, 943 F.2d at 988 (citation omitted). However, that is exactly what
we are being asked to do in this case. Accordingly, we vacate the district
court's order to disclose the documents containing the handwriting of the seven
named agents and remand this matter with the instruction that the court apply
the balancing test outlined above to the specific documents ordered produced.
[FN5] Only then will this court be able properly to review the district
court's decision.
FN5. We note that the district court need not apply the balancing test to
each specific document if the court determines that the documents can be
considered "categorically" rather than on an ad hoc basis. See
Reporters Comm., 489 U.S. at 776-79, 109 S.Ct. at 1483-85.
III. Page 427
[8] The IRS's final claim of error involves the district court's ruling that
page 427 was not exempt from disclosure under the attorney-client privilege
contained in exemption 5. The IRS suggests, and the Church agrees, that this
order is not presently appealable because the court did not order production of
the document. The court simply ruled in conjunction with deciding the motion
for summary judgment that the document was not exempt from disclosure under
exemption 5. This court's decision in In re Steele, 799 F.2d 461, 464-65
(9th Cir.1986), supports the parties' conclusion that the order is not
appealable. The Steele court held that a final decision in a FOIA case
consists of " 'an order by the District Court requiring release of documents by
the Government to the plaintiff, or order denying the plaintiff's right to such
release.' " Id. at 464 (quoting Green v. Dep't of Commerce, 618 F.2d
836, 841 (D.C.Cir.1980)). Because the district court never ordered the
government to produce page 427, we conclude that there is no final appealable
order as required for this court to exercise jurisdiction under 28 U.S.C. s
1291.
REVERSED in part, VACATED in part, and REMANDED.