Mertes v. Internal Revenue Service ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 EASTERN DISTRICT OF CALIFORNIA 6 7 BILLIE MERTES, CASE NO. 1:19-CV-1218 AWI SKO 8 Plaintiff ORDER ON FOR SUPPLEMENTAL 9 v. INFORMATION AND RENOTICING MOTION FOR SUMMARY JUDGMENT 10 INTERNAL REVENUE SERVICE, 11 Defendant (Doc. No. 14) 12 13 This is a 5 U.S.C. § 552 Freedom of Information Act (“FOIA”) case brought by Plaintiff 14 Billie Mertes against the United States Internal Revenue Service (“IRS”). Mertes seeks a copy of 15 a United States Gift (and Generation-Skipping Transfer) Tax Form that was used to assess gift 16 taxes against Mertes for the tax year 2012 (the “Mertes Form 709”). The assessed tax was later 17 reversed by the IRS. The IRS acknowledges that the Mertes Form 709 exists but claims that a 18 FOIA exception applies and that disclosure is improper. 19 On June 26, 2020, the Court granted a request by the IRS, over strenuous objection by 20 Mertes, to review a number of documents in camera. Those documents were the Mertes Form 21 709,1 an unredacted motion for summary judgment, an unredacted statement of undisputed 22 material facts, an unredacted supporting declaration, and a previously unfiled additional 23 supporting declaration. As part of that order, the Court explained: “Once the Court receives the 24 documents, the Court will issue any further orders that it decides are appropriate. This may 25 include, as recognized in the IRS’s reply, requiring additional information to be publicly 26 disclosed. See Montgomery v. IRS, 356 F.Supp.3d 74, 80 (D. D.C. 2019) (“By reviewing such in 27 28 1 camera materials, conversely, the Court can closely evaluate the Government’s reasoning and then 2 order as much of the materials released as is consistent with the exemption the agency has 3 invoked.”).” Doc. No. 24 (footnote omitted). The Court also stated that it would “not 4 immediately rule on the summary judgment motion without providing the parties notice and an 5 additional opportunity to be heard.” Id. 6 The IRS has submitted the above described documents to the Court, and the Court has 7 reviewed them in camera. After review, the Court reaches several conclusions. First, the IRS has 8 not adequately explained why the specific exemption relied upon by the IRS cannot be disclosed. 9 In the Court’s order permitting in camera inspection, the Court identified a non-exhaustive list of 10 cases within the Ninth Circuit that had discussed and applied in published decisions every “law 11 enforcement” FOIA exemption. Doc. No. 24 at Footnote 1 The Court understands that the IRS 12 has legitimate concerns about the exemption at issue. However, no cases have been identified in 13 which the United States was relieved from publicly identifying the exemption claimed, and the 14 briefing does not adequately explain why the IRS cannot publicly identify the particular 15 exemption at issue. Identifying the particular exemption does not defeat the exemption or disclose 16 the information that is the subjection of that exemption. Second, it is unclear why the particular 17 “mechanism” whereby the IRS obtained the Mertes Form 709 document cannot be identified. 18 Identification of the “mechanism,” the existence of which is no secret, provides context and 19 support for the particular exemption claimed. Further, merely identifying the “mechanism” does 20 not reveal any information that is the subject of the exemption being claimed. Third, it is unclear 21 why the IRS cannot, in general terms, explain the administrative sequence that led the IRS to ask 22 Plaintiff to ratify the Mertes Form 709, even though Plaintiff herself did not file the Mertes Form 23 709 and the IRS did not provide a copy of the Mertes Form 709 as part of the request to ratify. 24 Fourth, at this point, the Court otherwise agrees that disclosure of further information would likely 25 defeat the point of the particular exemption claimed. 26 In light of the above, the Court will reset the IRS’s motion for summary judgment, but will 27 order the IRS to file a supplement that contains the information described above.2 Of course, the 28 wOASS FT UV VEC LOUEAVV IO OINAS RAVUUEIOCTI ee PN Ve Hey TAY VV VIG 1 | IRS is free to include any additional information in the supplement that it deems appropriate. 2 | Plaintiff will be provided the opportunity to oppose the re-noticed and augmented summary 3 | judgment motion, and the IRS will be permitted to file a reply. The Court finds that it is highly 4 | likely that the publicly filed documents by the parties, as well as the in camera submissions of the 5 will be sufficient for the Court to issue an order without the need for a hearing. However, if 6 | the Court finds that a hearing would be helpful after reviewing the submissions of the parties, the 7 |Court will set a hearing date at that time. 8 9 ORDER 10 Accordingly, IT IS HEREBY ORDERED that: 11 Defendant’s motion for summary judgment (Doc. No. 14) is RENOTICED; 12 Within twenty-one (21) days of service of this order, the IRS shall submit a supplement (as 13 described above) to the re-noticed summary judgment motion; 14 Within fourteen (14) days of service of the IRS’s supplement, Plaintiff may file an 15 opposition; 16 Within seven (7) days of service of Plaintiff's opposition, the IRS shall file a reply; and 17 |5. If, after receiving the parties’ submissions, the Court determines that a hearing would be 18 helpful, the Court will set a hearing date at that time. 19 20 IT IS SO ORDERED. 3 | Dated: __July 24, 2020 —. 7 Sz 7 Cb Lec — SENIOR DISTRICT JUDGE 22 23 24 25 26 27 28