Mark Batton v. Internal Revenue Service

Case: 12-20401 Document: 00512281239 Page: 1 Date Filed: 06/20/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 20, 2013
No. 12-20401 Lyle W. Cayce
Clerk
MARK E. BATTON,
Plaintiff-Appellant
v.
INTERNAL REVENUE SERVICE,
Defendant-Appellee
Appeal from the United States District Court
for the Southern District of Texas
Before GARZA, SOUTHWICK, and HAYNES, Circuit Judges.
HAYNES, Circuit Judge:
Plaintiff-Appellant Mark Batton appeals the district court’s denial of his
motion for attorneys’ fees in his Freedom of Information Act (“FOIA”) suit
against the Internal Revenue Service (“IRS”). Because we conclude that Batton
was eligible to receive attorneys’ fees, we VACATE and REMAND for
proceedings consistent with this opinion.
I. BACKGROUND
We briefly recite the facts relevant to this appeal. A full recitation of the
facts of this case may be found in Batton v. Evers, 598 F.3d 169 (5th Cir. 2010).
In November 2006, after being audited, Batton filed a FOIA request with
the IRS. In response, the IRS began sending Batton near-monthly letters to
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notify him that the agency required additional time to process his request. In
September 2007, after receiving no responsive documents for almost one year,
Batton sued under FOIA. The United States Attorney was not properly served,
however, until January 2008.
On December 31, 2007, the Open Government Act (“OGA”) took effect,
amending FOIA to permit awards of attorneys’ fees to parties that “substantially
prevailed” by way of an agency’s “voluntary or unilateral change in position.”
See Pub. L. No. 110-175, § 4, 121 Stat. 2524 (codified at 5
U.S.C. § 552(a)(4)(E)(ii)(II)). On January 18, 2008, the IRS released documents
to Batton for the first time. Of the 5,318 responsive pages located, the IRS
initially released only 953 pages, and later supplemented that production with
another 249 pages. The IRS then moved for summary judgment, alleging that
certain FOIA exemptions entitled it to withhold the remaining responsive
documents. Batton moved to compel the IRS to produce a Vaughn index
identifying the documents in sufficient detail to permit him to argue against the
claimed exemptions.1 The district court denied Batton’s motion and granted
summary judgment for the IRS.
On appeal, this court reversed and remanded with instructions to order
production of a Vaughn index. Batton, 598 F.3d at 184. The district court
subsequently ordered the index’s production, and the IRS released several
thousand previously withheld pages. Ultimately, the issue of attorneys’ fees
remained unresolved, thereby prompting Batton to move for fees as the
prevailing party. The district court denied Batton’s motion, and Batton timely
appealed.
1
“A Vaughn index is a routine device through which the defendant agency describes
the responsive documents withheld or redacted and indicates why the exemptions claimed
apply to the withheld material.” Jones v. FBI, 41 F.3d 238, 241 (6th Cir. 1994) (citing Vaughn
v. Rosen, 484 F.2d 820, 826-27 (D.C. Cir. 1973)).
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II. DISCUSSION
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. § 552(a)(4)(E)(i). “This language naturally divides the attorney-fee
inquiry into two prongs[:] . . . fee eligibility and fee entitlement. The eligibility
prong asks whether a plaintiff has substantially prevailed and thus may receive
fees. If so, the court proceeds to the entitlement prong and considers a variety
of factors to determine whether the plaintiff should receive fees.” Brayton v.
Office of the U.S. Trade Representative, 641 F.3d 521, 524 (D.C. Cir. 2011)
(citations and internal quotation marks omitted). We analyze each prong in
turn.
A. Eligibility
We review a district court’s denial of attorneys’ fees for abuse of discretion,
assessing fact findings for clear error and legal conclusions de novo. Volk v.
Gonazlez, 262 F.3d 528, 534 (5th Cir. 2001). We review de novo the district
court’s legal conclusion that Batton does not enjoy the benefit of the OGA. See
Texas v. ICC, 935 F.2d 728, 730 (5th Cir. 1991) (reviewing de novo the legal
question of a state’s eligibility to recover attorneys’ fees under FOIA).
This circuit has long held that a party may demonstrate that he
“substantially prevailed” in a FOIA lawsuit in one of two ways: (1) obtaining a
court order in his favor, or (2) through the catalyst theory, which requires
“show[ing] that prosecution of the action could reasonably be regarded as
necessary to obtain the information and that the action had a substantive
causative effect on the delivery of the information.” See Lovell v. Alderete, 630
F.2d 428, 432 (5th Cir. 1980). The OGA codified the catalyst theory in FOIA
cases by defining “substantially prevail[]” as “obtain[ing] relief through . . . a
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voluntary or unilateral change in position by the agency.” See § 4, 121 Stat.
2524.
The IRS argues that applying the OGA would be giving it retroactive
effect. We disagree. Even assuming that the catalyst theory was not viable until
the OGA took effect,2 this case does not involve retroactive application. Unlike
cases that refused to apply the OGA because all of the events necessary for
liability took place before the OGA’s effective date, see, e.g., Judicial Watch, Inc.
v. Bureau of Land Mgmt., 610 F.3d 747 (D.C. Cir. 2010), here, most of the
relevant events took place after the effective date. Although Batton sued in
September 2007, the IRS was not properly served until January 2008—after the
OGA’s effective date. The IRS failed to produce a single document or take any
other action other than issuing delay letters until after it was served in January
2008. Thus, other than the original FOIA request and the filing of the lawsuit,
all relevant events took place after the OGA’s effective date. We conclude that
the OGA applies to this case.
The district court here appears to have defined “substantially prevailed”
only in terms of the first Lovell criteria—obtaining a court order. See 630 F.2d
at 432. The fact that Batton obtained no such order, in conjunction with the
district court’s conclusion that the OGA did not apply, led the court to conclude
that Batton was not a prevailing party and, therefore, was ineligible to receive
attorneys’ fees.
2
In 2001, the Supreme Court rejected the catalyst theory in the context of the Fair
Housing Amendments Act and the Americans with Disabilities Act. See Buckhannon Bd. &
Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 600-01 (2001).
Thereafter, some circuits extended Buckhannon’s reasoning to eliminate the catalyst theory
in FOIA cases. See, e.g., Oil, Chem. & Atomic Workers Int’l Union v. Dep’t of Energy, 288 F.3d
452, 456-57 (D.C. Cir. 2002). The OGA overruled these decisions. See § 4, 121 Stat. 2524.
Importantly, however, this circuit never applied Buckhannon to FOIA claims. Accordingly,
the effect of Buckhannon, if any, on the catalyst theory of FOIA attorneys’ fees recovery, as
expressed in Lovell, remained unaddressed in this circuit until Congress passed the OGA.
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Applying the OGA, however, leads us to conclude that Batton substantially
prevailed.3 See Cazalas v. DOJ, 660 F.2d 612, 623 (5th Cir. Unit A Nov. 1981)
(where district court incorrectly applied entitlement factors to eligibility
analysis, court “appli[ed] the correct standard of analysis to [the] situation,” to
find that plaintiff’s “FOIA complaint had a substantial causative impact on the
release of the documents”). Indeed, Batton filed his FOIA suit after enduring the
IRS’s continued and unexplained delays in responding to his request for almost
one year. Only after he filed and served this lawsuit did the IRS first begin to
produce a fraction of the responsive documents, with reticence to provide even
a Vaughn index. The remaining documents still were not produced for years
following further litigation. Accordingly, we conclude that Batton is eligible to
receive attorneys’ fees.
B. Entitlement
Next, we address the entitlement prong. We review the district court’s
determination that Batton is not entitled to attorneys’ fees for abuse of
discretion. See Texas v. ICC, 935 F.2d at 730, 733. District courts must consider
3
Contrary to the dissenting opinion’s analysis, it is appropriate in this case for us to
determine eligibility under our circuit’s precedents. While there may be cases where disputed
facts need to be resolved before the question of eligibility can be addressed, this case is not one
of them. In Cazalas, we examined the history of the case and determined that the plaintiff’s
lawsuit had caused the release of the documents without remanding for fact findings on this
issue. 660 F.2d at 623. We remanded only on the question of entitlement. Id. The D.C.
Circuit, upon which the dissenting opinion relies, has only required factual findings where
there are disputed facts necessary to the eligibility determination. Compare Davy v. CIA, 456
F.3d 162, 164 (D.C. Cir. 2006) (“We review whether [plaintiff] was eligible for attorney
fees—that is, whether he ‘substantially prevailed’—de novo because it rests on an
interpretation of the statutory terms that define eligibility for an award.” (some quotation
marks omitted)) (decided pre-OGA when the D.C. Circuit applied Buckhannon to FOIA), with
Union of Concerned Scientists v. U.S. Nuclear Regulatory Comm’n, 824 F.2d 1219, 1224 (D.C.
Cir. 1987) (addressing a situation where the parties made “contradictory arguments” about
the facts and the district court both stated that the litigation was premature and that it
caused the FOIA compliance). In any event, we are bound by our own precedent. Here, the
facts are much more similar to Cazalas than to the D.C. Circuit cases. Batton made requests
for over a year and received nothing; only after filing a lawsuit and engaging in protracted
litigation did he finally receive thousands of documents.
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four factors in the entitlement analysis: “(1) the benefit to the public 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 had a reasonable basis in law.” Id. at
730.
Because we conclude that Batton is eligible to receive attorneys’ fees, we
remand for the district court to assess Batton’s entitlement under each of the
aforementioned factors. Although the district court mentioned the entitlement
factors in passing, its conclusion that Batton was ineligible for attorneys’ fees did
not require the thorough consideration of the entitlement factors which is now
necessary. The entitlement assessment is a matter directed to the discretion of
the district court which should make its assessment against the backdrop of the
treble policies of the FOIA attorneys’-fees provision in (1) incentivizing private
litigants to pursue their claims by providing a means of overcoming barriers
“that government may erect in an effort to escape compliance with the law”; (2)
“deter[ring] the government from opposing justifiable requests”; and (3)
“punish[ing] the government where such opposition is unreasonable.” Cazalas
v. DOJ, 709 F.2d 1051, 1057 (5th Cir. 1983). An award of attorneys’ fees is
particularly appropriate where “‘government officials have been recalcitrant in
their opposition to a valid claim or have been otherwise engaged in obdurate
behavior.’” Id. at 1054 (quoting S. Rep. No. 93-854, at 19 (1974)).
Finally, we note that while the district court’s order denying fees relied in
part on an assumption that Batton was under criminal investigation during the
time when the documents were being withheld, the IRS conceded at oral
argument that it decided in December 2008 not to undertake any such
investigation. Abandoned criminal investigation notwithstanding, Batton still
did not receive the remainder of the responsive documents until mid-2010.
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III. CONCLUSION
Because Batton is eligible to receive attorneys’ fees, we VACATE the
district court’s order denying fees and REMAND for reconsideration in light of
this opinion.
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EMILIO M. GARZA, Circuit Judge, dissenting:
I dissent from the majority’s holding that Batton is eligible for attorneys’
fees under the OGA. While I agree with majority that the OGA applies and we
should vacate the district court’s order, I would remand to allow the district
court to assess Batton’s eligibility for attorneys’ fees under the OGA in the first
instance.
Because the district court determined the OGA did not apply, the court did
not consider whether Batton might be eligible for attorneys’ fees under the OGA.
Batton v. Evers, No. 4-07-2852, at *1 (S.D. Tex. May 14, 2012) (order denying
attorneys’ fees). A party has “substantially prevailed” and is thus eligible for an
award of attorneys’ fees where the party obtained a court order in his favor.
Lovell v. Alderete, 630 F.2d 428, 432 (5th Cir. 1980). Under the OGA a party has
also “substantially prevailed” if the party obtained relief through a voluntary or
unilateral change in position by the agency. 5 U.S.C. § 552(a)(4)(E)(ii). Because
the only court-ordered relief Batton obtained in this case—an order requiring the
IRS to produce a Vaughn index—is insufficient, without more, to make Batton
a “prevailing party,” Campaign for Responsible Transplantation v. FDA, 511
F.3d 187, 195–96 (D.C. Cir. 2007), the district court held Batton did not
“substantially prevail” through obtaining a court order in his favor. Batton v.
Evers, No. 4-07-2852, at *1 (S.D. Tex. May 14, 2012). Concluding the OGA did
not apply, the district court did not consider whether Batton obtained relief
through a voluntary or unilateral change in position by the IRS. Although the
district court did not make findings of fact on the issue, the majority holds
Batton is eligible for attorneys’ fees under the OGA. Ante, at 5. The majority
finds the IRS delayed in releasing the documents and Batton did not receive any
documents until after the IRS was served with suit, and holds Batton thus
substantially prevailed. Id. Because the district court has not yet had an
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opportunity to make findings of fact and conclusions of law regarding whether
Batton obtained relief through a voluntary or unilateral change by the IRS, I
would remand this case to allow the district court to determine in the first
instance whether Batton is eligible for attorneys’ fees under the OGA. See Union
of Concerned Scientists v. U.S. Nuclear Regulatory Comm’n, 824 F.2d 1219, 1220
(D.C. Cir. 1987) (“[F]ull findings of fact must be made to support a court’s belief
that a party has substantially prevailed in a lawsuit before a grant of attorney’s
fees can be awarded.”); Weisberg v. U.S. Dep’t of Justice, 745 F.2d 1476, 1496
(D.C. Cir. 1984) (“The question whether an FOIA litigant has substantially
prevailed is, of course, a question of fact entrusted to the District Court . . . .”).1
On this record the majority cannot determine eligibility as a matter of law, and
it is not the province of the appellate courts to make factual findings. See
Pullman-Standard v. Swint, 456 U.S. 273, 291–92 (1982) (holding where district
court failed to make finding because of erroneous view of law “court of appeals
is not relieved of the usual requirement of remanding for further proceedings to
tribunal charged with the task of factfinding in the first instance”).
Respectfully, I dissent.
1
Contrary to assertions by the majority, Ante, at 5, Cazalas v. DOJ, 660 F.2d 612, 623
(5th Cir. 1981) supports this dissent. I agree that in Cazalas the district court applied the
incorrect legal standard to the “substantially prevailed” inquiry. However, unlike here, the
district court made findings of fact sufficient for the appellate court to conclude the plaintiff
“substantially prevailed.” 660 F.2d at 619–20. Here, the district court made no findings of fact
upon which the majority may base its holding that Batton “substantially prevailed.”
9