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Case TitleHODES v. U.S. DEPARTMENT OF TREASURY et al
DistrictDistrict of Columbia
CityWashington, DC
Case Number1:2017cv00219
Date Filed2017-02-01
Date Closed2018-10-10
JudgeJudge Dabney L. Friedrich
PlaintiffSCOTT A. HODES
Case DescriptionScott Hodes submitted a FOIA request to the IRS for records concerning the request for proposal for a contract for private debt collection awarded to four separate companies and copies of the awarded contracts. The IRS disclosed the records, but withheld 25 pages in the contracts under Exemption 4 (confidential business information) and Exemption 6 (invasion of privacy). Hodes filed an administrative appeal challenging the Exemption 4 withholdings. The agency upheld its decision and Hodes filed suit.
Complaint issues: Exemption 4, Litigation - Attorney's fees, Litigation - Sanctions

DefendantU.S. DEPARTMENT OF TREASURY
DefendantINTERNAL REVENUE SERVICE
DefendantCONTINENTAL SERVICE GROUP, INC.
Documents
Docket
Complaint
Complaint attachment 1
Complaint attachment 2
Opinion/Order [25]
FOIA Project Annotation: Judge Dabney Friedrich has ruled that commission percentages contained in four contracts awarded by the IRS for debt collection represent line-item prices, which are protected under Exemption 4 (confidential business information) and do not represent the final price, which would normally be disclosable. Scott Hodes requested copies of the four contracts, including their final prices. The IRS disclosed the contracts except for the commission percentages, arguing disclosure would cause substantial competitive harm. Hodes filed an administrative appeal, which was denied. He then filed suit, arguing that the percentage commissions constituted the final price for the contracts. Friedrich, however, disagreed. She explained that "the commission percentages are multipliers used to calculate the price of four separate line items [depending on the value of the debt]. For this reason, the commission percentages more closely resemble line-item (as opposed to total) prices. Each line-item price is the commission percentage multiplied by the total dollar amount of tax debt collected within each category. And the total price is the sum of all four line-item prices. In this sense, each commission percentage is no different than a typical mark up in a contract that includes prices for various line-item goods or services." She pointed out that this interpretation was "consistent with the plain meaning of the term 'total' contract price; the aggregate amount that the government pays for goods or services " in this case taxpayer debt collection services for four separate categories of debt. Each individual commission percentage is not even a dollar price at all; rather, it is just one of several figures used to calculate the total contract price." She observed that "the commission percentage " the multiplier used to calculate each line-item price " is just one of several numbers used to calculate the total contract price." To substantiate its claim of the likelihood of substantial competitive harm, the IRS asserted that "should the IRS decide to expand its debt-collection program, new bidders might draw misleading inferences about their competitors' pricing approach that could cause bidders to include unrealistically low commission percentages." Hodes argued that because the agency would consider other aspects of a bidder's ability to perform, disclosure of the commissions agreed on with the four current debt collection services would not cause confusion. Friedrich accepted the agency's claim, noting that "it is plausible that even a small drop in a percentage rate could be perilous for a new bidder that is in weak financial condition or has an unrealistic aspiration about its profitability and ability to perform." Hodes also challenged the agency's segregability analysis. But Friedrich pointed out that "given that the commission percentages are the only part of the task order contracts that the IRS redacted and withheld under FOIA Exemption 4, the Court finds that there is no remaining nonexempt information that can be segregated and disclosed to Hodes."
Issues: Exemption 4 - Competitive harm
User-contributed Documents
 
Docket Events (Hide)
Date FiledDoc #Docket Text

2017-02-011COMPLAINT against All Defendants U.S. Department of Treasusry and IRS ( Filing fee $ 400 receipt number 0090-4826871) filed by SCOTT A. HODES. (Attachments: # 1 Civil Cover Sheet, # 2 Summons)(Hodes, Scott) (Entered: 02/01/2017)
2017-02-02Case Assigned to Judge Emmet G. Sullivan. (sb) (Entered: 02/02/2017)
2017-02-022SUMMONS (4) Issued Electronically as to INTERNAL REVENUE SERVICE, U.S. DEPARTMENT OF TREASURY, U.S. Attorney and U.S. Attorney General (Attachment: # 1 Consent Form)(sb) (Entered: 02/02/2017)
2017-02-243RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to the United States Attorney. Date of Service Upon United States Attorney on 2/10/2017. Answer due for ALL FEDERAL DEFENDANTS by 3/12/2017. (Hodes, Scott) (Entered: 02/24/2017)
2017-02-244RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed on United States Attorney General. Date of Service Upon United States Attorney General 02/13/2017. (Hodes, Scott) (Entered: 02/24/2017)
2017-02-245RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. U.S. DEPARTMENT OF TREASURY served on 2/15/2017 (Hodes, Scott) (Entered: 02/24/2017)
2017-02-246RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. INTERNAL REVENUE SERVICE served on 2/10/2017 (Hodes, Scott) (Entered: 02/24/2017)
2017-03-137ANSWER to Complaint by INTERNAL REVENUE SERVICE, U.S. DEPARTMENT OF TREASURY.(Hunsader, Joseph) (Entered: 03/13/2017)
2017-03-168FOIA STANDING ORDER. Signed by Judge Emmet G. Sullivan on 3/16/2017. (lcegs4) (Entered: 03/16/2017)
2017-03-299Joint STATUS REPORT (Joint Scheduling Report) by INTERNAL REVENUE SERVICE, U.S. DEPARTMENT OF TREASURY. (Hunsader, Joseph) (Entered: 03/29/2017)
2017-03-30MINUTE ORDER. Upon consideration of the parties' 9 joint status report, the parties are directed to comply with the following briefing schedule: The IRS shall file its motion for summary judgment combined with Treasury's motion to dismiss by no later than June 16, 2017. Hodes shall file its opposition combined with its cross-motion for summary judgment by no later than July 17, 2017. The IRS and Treasury shall file a reply motion combined with their opposition to Hodes' cross-motion by no later than August 16, 2017. Hodes shall file its reply in support of its cross-motion by no later than September 15, 2017. Signed by Judge Emmet G. Sullivan on 3/30/2017. (lcegs4) (Entered: 03/30/2017)
2017-03-31Set/Reset Deadlines: IRS Motion For Summary Judgment Combined With Treasury's Motion To Dismiss due by 6/16/2017. Hodes Opposition Combined With Its Cross-Motion For Summary Judgment due by 7/17/2017. IRS and Treasury Reply Motion Combined With Their Opposition To Hodes's Cross-Motion due by 8/16/2017. Hodes Reply In Support Of Its Cross-Motion due by 9/15/2017. (mac) (Entered: 03/31/2017)
2017-06-0710Unopposed MOTION to Intervene by CONTINENTAL SERVICE GROUP, INC. (Canni, Todd) (Entered: 06/07/2017)
2017-06-09MINUTE ORDER directing Continental Service Group, Inc. to comply with Federal Rule of Civil Procedure 24(c) and Local Civil Rule 7(j) by no later than June 12, 2017. See Fed. R. Civ. P. 24(c) (a motion to intervene must "be accompanied by a pleading that sets out the claim or defense for which intervention is sought"); Wagner v. Fed. Election Comm'n, No. 11-1841 (JEB), 2012 WL 681463, at *2 (D.D.C. Mar. 1, 2012) (failure to attach pleading to motion for intervention was "independent ground for denial" of the motion). Signed by Judge Emmet G. Sullivan on June 9, 2017. (lcegs2) (Entered: 06/09/2017)
2017-06-09MINUTE ORDER. Earlier today, an attorney from Pillsbury Winthrop Shaw & Pittman LLP left a message on Chambers' voicemail in which the attorney stated he had a question regarding the June 9, 2017 Minute Order. Parties are advised to seek clarification of Court orders, including minute orders, via motion on the docket. Signed by Judge Emmet G. Sullivan on June 9, 2017. (lcegs2) (Entered: 06/09/2017)
2017-06-1211Unopposed MOTION to Intervene by CONTINENTAL SERVICE GROUP, INC. (Attachments: # 1 Exhibit Memorandum of Points and Authorities in Support of Unopposed Motion to Intervene, # 2 Exhibit Proposed Order Granting Unopposed Motion to Intervene, # 3 Exhibit Answer, # 4 Exhibit Rule 7.1 Disclosure)(Canni, Todd) (Entered: 06/12/2017)
2017-06-13MINUTE ORDER granting 11 Continental Service Group, Inc.'s unopposed motion to intervene in this action. The parties are directed to comply with the following briefing schedule: IRS shall file its motion for summary judgment combined with Treasury's motion to dismiss by no later than June 16, 2017; ConServe shall file its motion for summary judgment by no later than July 17, 2017; Hodes shall file his opposition to defendants' and Conserve's motions combined with his cross-motion for summary judgment by no later than July 31, 2017; defendants' and Conserve shall file their replies combined with their oppositions to Hodes' cross-motion by no later than August 29, 2017; and Hodes shall file his reply in support of his cross-motion by no later than October 2, 2017. Signed by Judge Emmet G. Sullivan on June 13, 2017. (lcegs2) (Entered: 06/13/2017)
2017-06-13Set/Reset Deadlines: IRS Motion For Summary Judgment Combined With Treasury's Motion To Dismiss due by 6/16/2017. Conserve Motion For Summary Judgment due by 7/17/2017. Hodes Opposition To Defendants' And Conserve's Motions Combined With Cross-Motion For Summary Judgment due by 7/31/2017. Conserve Replies Combined With Their Opposition To Hodes Cross-Motion due by 8/29/2017. Hodes Reply In Support Of Its Cross-Motion due by 10/2/2017. (mac) (Entered: 06/13/2017)
2017-06-1612MOTION to Dismiss the Complaint as against the US Dep't of Treasury by U.S. DEPARTMENT OF TREASURY (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order)(Hunsader, Joseph) (Entered: 06/16/2017)
2017-06-1613MOTION for Summary Judgment upon Plaintiff's Freedom of Information Act ("FOIA") Complaint by INTERNAL REVENUE SERVICE (Attachments: # 1 Memorandum in Support, # 2 Statement of Facts IRS Statement of Undisputed Facts, # 3 Text of Proposed Order, # 4 Affidavit Gail Minauro Declaration, # 5 Affidavit Joe Gregory Declaration, # 6 Affidavit CBE Group Declaration, # 7 Affidavit Performant Recovery Declaration)(Hunsader, Joseph) (Entered: 06/16/2017)
2017-07-1714MOTION for Summary Judgment by CONTINENTAL SERVICE GROUP, INC. (Attachments: # 1 Exhibit Memorandum in Support of Motion for Summary Judgment, # 2 Declaration, # 3 Text of Proposed Order)(Canni, Todd) (Entered: 07/17/2017)
2017-07-3115Memorandum in opposition to re 12 MOTION to Dismiss the Complaint as against the US Dep't of Treasury filed by SCOTT A. HODES. (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order)(Hodes, Scott) (Entered: 07/31/2017)
2017-07-3116Cross MOTION for Summary Judgment by SCOTT A. HODES (Attachments: # 1 Statement of Facts, # 2 Memorandum in Support, # 3 Declaration, # 4 Text of Proposed Order)(Hodes, Scott) (Entered: 07/31/2017)
2017-07-3117Memorandum in opposition to re 14 MOTION for Summary Judgment , 13 MOTION for Summary Judgment upon Plaintiff's Freedom of Information Act ("FOIA") Complaint filed by SCOTT A. HODES. (Attachments: # 1 Statement of Facts, # 2 Declaration, # 3 Text of Proposed Order)(Hodes, Scott) (Entered: 07/31/2017)
2017-08-2318Unopposed MOTION for Extension of Time to File Response/Reply regarding summary judgment motions by INTERNAL REVENUE SERVICE, U.S. DEPARTMENT OF TREASURY (Attachments: # 1 Text of Proposed Order)(Hunsader, Joseph) (Entered: 08/23/2017)
2017-08-24MINUTE ORDER granting 18 defendants' consent motion for an extension of time. Defendants and Intervenor are directed to file their combined reply and opposition memoranda by no later than September 1, 2017. Plaintiff is directed to file his reply in support of his cross-motion by no later than October 5, 2017. Signed by Judge Emmet G. Sullivan on August 24, 2017. (lcegs2) (Entered: 08/24/2017)
2017-08-25Set/Reset Deadlines: Defendants And Intervenor Combined Reply And Opposition Memoranda due by 9/1/2017. Plaintiff Reply In Support Of Its Cross-Motion due by 10/5/2017. (mac) (Entered: 08/25/2017)
2017-08-3119REPLY to opposition to motion re 12 MOTION to Dismiss , 13 MOTION for Summary Judgment upon Plaintiff's Freedom of Information Act ("FOIA") Complaint filed by INTERNAL REVENUE SERVICE, U.S. DEPARTMENT OF TREASURY. (Attachments: # 1 Statement of Facts Opposition to Plaintiff's Statement of Additional Material Facts)(Hunsader, Joseph) Modified link on 9/1/2017 (znmw). (Entered: 08/31/2017)
2017-08-3120Memorandum in opposition to re 16 Cross MOTION for Summary Judgment filed by INTERNAL REVENUE SERVICE, U.S. DEPARTMENT OF TREASURY. (See Docket Entry 19 to view document). (znmw) (Entered: 09/01/2017)
2017-09-0121Memorandum in opposition to re 14 MOTION for Summary Judgment Reply in Support filed by CONTINENTAL SERVICE GROUP, INC.. (Canni, Todd) Modified link on 9/5/2017 (znmw). (Entered: 09/01/2017)
2017-09-0122REPLY to opposition to motion re 16 Cross MOTION for Summary Judgment filed by CONTINENTAL SERVICE GROUP, INC.. (See Docket Entry 21 to view document). (znmw) (Entered: 09/05/2017)
2017-10-0523REPLY to opposition to motion re 14 MOTION for Summary Judgment , 13 MOTION for Summary Judgment upon Plaintiff's Freedom of Information Act ("FOIA") Complaint , 12 MOTION to Dismiss the Complaint as against the US Dep't of Treasury filed by SCOTT A. HODES. (Hodes, Scott) (Entered: 10/05/2017)
2017-12-04Case directly reassigned to Judge Dabney L. Friedrich. Judge Emmet G. Sullivan is no longer assigned to the case. (ztnr) (Entered: 12/04/2017)
2018-09-2824ORDER denying as moot Department of Treasury's 12 Motion to Dismiss; granting Internal Revenue Service's 13 Motion for Summary Judgment; granting Continental Service Group, Inc.'s 14 Motion for Summary Judgment; and denying plaintiff's 16 Cross-Motion for Summary Judgment. See order for details. Signed by Judge Dabney L. Friedrich on September 28, 2018. (lcdlf1) (Entered: 09/28/2018)
2018-09-2825MEMORANDUM OPINION regarding Department of Treasury's 12 Motion to Dismiss, Internal Revenue Service's 13 Motion for Summary Judgment, Continental Service Group, Inc.'s 14 Motion for Summary Judgment, and plaintiff's 16 Cross-Motion for Summary Judgment. See order for details. Signed by Judge Dabney L. Friedrich on September 28, 2018. (lcdlf1) (Entered: 09/28/2018)
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by FOIA Project Staff
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