OPERATION CLAMBAKE: SCIENTOLOGY COURT FILES

Part of a public library containing court papers related to lawsuits involving Scientology in some way. Collected to help lawyers and critics of Scientology in future lawsuits from or against this cult. Please report back if this has been of help, or send new contributions to the collection. Thanks. Andreas Heldal-Lund (heldal@online.no)




             CHURCH OF SCIENTOLOGY WESTERN UNITED STATES, Plaintiff,
                                       v.
                      INTERNAL REVENUE SERVICE, Defendant.
                              No. CV-89-6370-RSWL.
                          United States District Court,
                                C.D. California.
                                  May 24, 1991.
  Church sued IRS under Freedom of Information Act (FOIA) to compel IRS to
 produce records concerning its "tax shelter litigation project."  After church
 voluntarily dismissed action on grounds that it had obtained records sought in
 complaint, it moved for award of attorney fees and expenses incurred in
 action.  The District Court, Lew, J., held that church was entitled to attorney
 fees and costs in amount of $5,040.
  So ordered.

 [1] RECORDS
 In determining whether to award attorney fees under Freedom of Information Act,
 court asks whether plaintiff is eligible for award of attorney fees and costs,
 and, if so, whether plaintiff is entitled to such award.  5 U.S.C.A. s
 552(a)(4)(E).

 [2] RECORDS
 To show that he or she has substantially prevailed in Freedom of Information
 Act suit, so as to show eligibility for award of attorney fees, plaintiff must
 present convincing evidence that the filing of action was reasonably necessary
 to obtain information, and that filing of action had substantial causative
 effect on release of information;  in deciding whether these requirements are
 satisfied, court should consider such facts as time when documents were
 released, what actually triggered documents' release, and whether plaintiff was
 entitled to documents at earlier time.  5 U.S.C.A. s 552(a)(4)(E).

 [3] RECORDS
 Church was eligible to recover attorney fees incurred in Freedom of Information
 Act (FOIA) action to compel IRS to disclose records concerning its "tax shelter
 litigation project";  church was initially denied all access to records sought
 and waited without word for approximately three months after filing its
 administrative appeal before filing its FOIA action, and requested documents
 were only released subsequent to court order requiring IRS to produce Vaughn
 Index of documents withheld.  5 U.S.C.A. s 552(a)(4)(E).

 [4] RECORDS
 Church was entitled to recover $5,040 for attorney fees it incurred in Freedom
 of Information Act (FOIA) action to compel IRS to disclose records concerning
 its "tax shelter litigation project";  release of requested documents
 benefitted public by disclosing information regarding apparently improper
 designation of religion as "tax shelter" project, there was no evidence
 suggesting that any commercial benefit was derived from disclosure, and,
 although there may have been colorable legal basis for IRS' initial withholding
 of documents, there was no apparent justification for IRS' one-year delay in
 determining those documents were subject to release under FOIA.  5
 U.S.C.A. s 552(a)(4)(E), (a)(6)(A)(ii).
  *329 Kendrick L. Moxon, Bowles & Moxon, Hollywood, Cal., for plaintiff.
  I.R.S., Washington, D.C., Timothy Mulligan, Jeffrey N. Kaplan, Mason C. Lewis,
 Asst. U.S. Attys., Los Angeles, Cal., Harry J. Giacometti, Robert K. Coulter,
 Trial Attys., Tax Div., U.S. Dept. of Justice, Washington, D.C., U.S. Atty.,
 Los Angeles, Cal., U.S. Atty. Gen., Washington, D.C., for defendant.
                                      ORDER

  LEW, District Judge.
  Plaintiff in the above captioned action has moved for attorney's fees
 and expenses.  Defendant timely opposed the motion.  The matter was set for
 oral argument on March 25, 1991 at 9:00 a.m.  After review of the papers filed,
 the Court determined that all of the issues had been adequately briefed and
 removed the matter from the Court's law and motion calendar pursuant to
 Federal Rule of Civil Procedure 78.  Now having again reviewed all of the
 papers filed in support of and in opposition to the motion, the Court hereby
 issues the following order:
  Plaintiff's motion for attorney's fees and costs is GRANTED.  Plaintiff is
 hereby awarded attorney's fees and costs incurred in filing and litigating this
 action in the amount of $5,040.00.
                                   Background
  By letter dated May 23, 1989, counsel for plaintiff Church of Scientology
 (the "Church") requested access to records of defendant Internal Revenue
 Service (the "IRS") concerning the "tax shelter litigation project" pursuant to
 the Freedom of Information Act ("FOIA"), 5 U.S.C. s 552.  The Church sought
 these documents because of its concern over the IRS' designation of the Church
 and its parishioners as part of the tax shelter litigation project.  By letter
 dated June 14, 1989, the Los Angeles Disclosure Office of the IRS responded
 that all requested documents were withheld in full on grounds that they were
 *330 exempt pursuant to FOIA subsections (b)(3) (exempt by statute) and
 (b)(5) (exempt inter-agency communications).  On August 1, 1989, the Church
 appealed the IRS' refusal to provide access to the documents.  The IRS
 acknowledged the appeal by letter dated August 30, 1989.
  On November 1, 1989, the Church filed this action to compel defendant Internal
 Revenue Service (the "IRS") to produce the records.  The IRS appeal was still
 pending at the time the action was filed.
  Subsequently, the IRS deemed twelve pages of documents responsive to the
 Church's request non-exempt from the FOIA.  On September 11, 1990, the IRS
 released the non-exempt documents.
  On March 25, 1991, the Church moved to voluntarily dismiss the action on
 grounds that the Church had obtained the records sought in the Complaint.  The
 motion for voluntary dismissal was not opposed, and the Court granted the
 Church's motion to dismiss with prejudice.
  Now, the Church seeks an award of attorney's fees and expenses incurred in the
 action pursuant to 5 U.S.C. section 552(a)(4)(E).
                      Standard for Award of Fees Under FOIA
  [1] The FOIA provides that a court "may assess against the United States
 reasonable attorney fees and other litigation costs reasonably incurred in any
 case under this section in which the complainant has substantially
 prevailed."  5 U.S.C. s 552(a)(4)(E).  This provision requires a two-step
 inquiry:  (1) whether plaintiff is eligible for an award of attorney's fees and
 costs;  and (2) if so, whether plaintiff is entitled to such an award.
 Church of Scientology v. U.S. Postal Service, 700 F.2d 486, 489 (9th
 Cir.1983) ("Postal Service").  The first step, eligibility for the award, is
 satisfied if "the facts show that the plaintiff has substantially prevailed on
 his or her FOIA action."  Id. (citations omitted).  The second step,
 entitlement to the award, "is left to the discretion of the district court."
 Id.
             The Church's Eligibility for Attorney's Fees and Costs
  The Church contends it is eligible for an award of attorney's fees and
 costs because it has substantially prevailed in the litigation.
  [2][3] In order to satisfy the eligibility requirement by showing that he or
 she has substantially prevailed in a FOIA suit, a plaintiff must present
 convincing evidence that two threshold conditions have been satisfied:  (1)
 that the filing of the action was reasonably necessary to obtain the
 information;  and (2) the filing of the action had a substantial causative
 effect on the release of the information.  Id.  In deciding whether a
 plaintiff has satisfied these threshold conditions, the district court should
 consider such facts as the time when the documents were released, what actually
 triggered the documents' release, and whether plaintiff was entitled to the
 documents at an earlier time.  Id. at 492.
  The Church argues that reasonable necessity of this action is evidenced by the
 fact that the Church was initially denied all access to the records sought and
 that, subsequently, the Church waited without word for approximately three
 months after filing its administrative appeal before filing this action despite
 the FOIA requirement that an agency respond to an appeal within twenty working
 days.  The IRS asserts that a response to the Church's appeal was delayed
 because of the heavy case load and backlog of FOIA appeals in the Disclosure
 Litigation Division of the IRS.
  Viewing the arguments presented in light of the factors set forth in Postal
 Service, the Court is satisfied that the Church is eligible for an award of
 attorney's fees and costs.  The Court finds persuasive the fact that the Church
 was required to engage in this litigation for over ten months before receiving
 documents which the Church was apparently entitled to receive in May of 1989.
 Furthermore, the requested documents were only released subsequent to this
 Court's Order of June 28, 1990 requiring the IRS to produce a Vaughn Index of
 the documents withheld. *331 In its opposition papers, IRS states that it
 released the requested records "in conjunction with" the filing of the Court-
 ordered Vaughn Index.  It is, therefore, reasonable to conclude that the
 production and filing of the Vaughn Index triggered the release of the
 requested documents.
  Thus, the Court finds the Church has substantially prevailed in the FOIA
 action and is eligible for an award of attorney's fees and costs.  The Court
 finds that the filing of the action was reasonably necessary to obtain the
 information, and the filing of the action had a substantial causative effect on
 the release of the information.
        The Cburch's Entitlement to an Award of Attorney's Fees and Costs
  [4] Having found the Church eligible for an award of attorney's fees and
 costs, the Court must exercise its discretion in determining whether the Church
 is entitled to such an award.  The Court may take into account "whatever
 factors it deems relevant" in determining whether to make such an award.
 Id. at 492 (cite omitted).  Courts considering this issue have generally
 considered four factors:  "(1) the benefit to the public, if any, deriving from
 the case;  (2) the commercial benefit to the complainant;  (3) the nature of
 the complainant's interest in the records sought;  and (4) whether the
 government's withholding of the records sought had a reasonable basis in
 law."  Id. (citations omitted).
  (1) Public Benefit
  The IRS argues that no public benefit is derived from release of the
 requested documents because the documents pertain only to the Church and its
 parishioners.  The Court disagrees.  The public clearly has an interest in
 information regarding the apparently improper designation of a religion as a
 "tax shelter" project.  Furthermore, communications between the IRS and the
 Church indicate that this litigation contributed to the IRS' decision to review
 its procedures and that resulting improvements in these procedures will enable
 better handling of over 1,000 cases involving identical legal issues.  See The
 Church's Supp.Mem. at 2.
  Thus, the Court is satisfied that public benefit was derived from disclosure
 of the documents.
  (2) Commercial Benefit to the Complainant
  The Church contends that it gained no commercial benefit from disclosure of
 the documents.  The IRS does not respond to this contention.  Furthermore,
 there is no evidence presented which suggests that any commercial benefit was
 derived from disclosure.  Accordingly, the Court finds this factor weighs in
 favor of finding the Church is entitled to an award of attorney's fees and
 costs.
  (3) Nature of the Complainant's Interest in the Records Sought
  The IRS contends that this factor weighs against an award of attorney's fees
 and costs because the Church's interest in requesting the documents was purely
 personal.  The Court agrees that the Church's request served Church's own
 interest, but the Court is not persuaded that this factor outweighs the public
 interest served by the release of the documents, as discussed above.
  (4) Government's Legal Basis for Withholding the Records
  The IRS argues that there was a reasonable basis in law for the initial
 withholding of the documents, and, therefore, this factor weighs against
 granting the Church's motion.  The IRS further argues that if the Church had
 waited to file this action until the IRS had time to consider the Church's
 arguments on appeal, the need for this lawsuit could have been obviated.
  The Court disagrees with the IRS' contentions regarding this factor.  Although
 there may have been a colorable legal basis for the IRS' initial withholding of
 the documents, there is no apparent justification for the IRS' tardiness in
 determining these documents were subject to release under the FOIA.  The FOIA
 explicitly provides *332 that determinations with respect to any appeal
 shall be made within twenty working days.  5 U.S.C. s 552(a)(6)(A)(ii).
 Here, over one year passed before the IRS complied with its statutory
 obligation in releasing the documents.  There is no apparent basis in the law
 for the IRS' failure to determine whether these documents were subject to
 release in a more timely fashion.  Thus, the Court finds this factor weighs in
 favor of finding the Church is entitled to an award of attorney's fees and
 costs.
  On balance, the circumstances of this case dictate that the Court exercise its
 discretion in favor of finding the Church is entitled to an award of attorney's
 fees and costs under the FOIA.  Accordingly, the Court grants the Church's
 motion for attorney's fees and costs.
                               Amount of the Award
  In its proposed order, the Church indicates that it seeks reasonable
 fees and costs in the amount of $5,040.  Having determined that the Church is
 eligible and entitled to an award of attorney's fees and costs under the FOIA,
 the Court now must determine if the amount sought by the Church is reasonable.
  In support of its request, the Church submits the Supplemental Declaration of
 the Church's counsel, Kendrick L. Moxon (the "Moxon Declaration").  There,
 Moxon states that his client was billed $10,040 in connection with litigating
 this matter, for 67.6 hours of work at $150 per hour.  The Moxon Declaration
 itemizes the hours spent in adequate detail, as well as adequately accounting
 for the expenses sought.  Furthermore, the Moxon Declaration states that $150
 per hour is his normal hourly rate and that this rate is substantially below
 the normal hourly rate for FOIA litigation in this community.
  The Court is satisfied with the reasonableness of the amount sought by the
 Church.  As shown by the Moxon Declaration, the Church seeks recovery for
 substantially fewer billable hours than were actually expended in this case.
 Furthermore, the Court notes that the IRS has not disputed the reasonableness
 of the hourly rate charged by Moxon.  Accordingly, the Court awards the Church
 attorney's fees and costs incurred in the filing and litigation of this matter
 in the amount of $5,040.
  IT IS SO ORDERED.

End of file...