Case Detail

FOIA Project Annotation: A federal court in Texas has ruled that the IRS conducted an adequate search for records concerning its hiring of the Brattle Group to provide expert advice for the examination of Highland Capital Management's 2008-2009 tax returns, but it has not yet justified all of its claims made under Exemption 3 (other statutes), Exemption 5 (privileges), and Exemption 7(A) (interference with ongoing investigation or proceeding). Highland requested the records in 2016. The agency's first search located 13,409 responsive pages and the agency withheld 1,632 pages in full and 132 pages in part, a decision which was upheld on appeal. In 2018, Highland filed suit. Because some of the employees who had participated in the original search had left the agency, Christopher Valvardi, the attorney from the agency's Office of Chief Counsel who was working on Highland's request and subsequent litigation, conducted an independent review of the records, located an additional 250 pages, and concluded that 14,937 pages could be disclosed in full, and 52 pages in part, while 360 pages should be withheld entirely. As part of a third search, Valvardi located electronic files containing an additional 9,000 pages, which yielded another 508 pages. Highland challenged the adequacy of the agency's multiple searches. However, after reviewing all the searches, the court noted that "ultimately, because the court concludes that the IRS declarations show that it used reasonable search methodology, and because the court is unconvinced by Highland's arguments to the contrary, the court concludes that the IRS has satisfied its burden of showing that it conducted an adequate search." The IRS claimed that Section 6103(e)(7), which allows the agency to withhold tax-return information when the Commissioner finds disclosure will impair tax administration, in conjunction with Exemption 7(A), provided a basis for withholding Highland's tax information. The court rejected the agency's 6103(e)(7) claim, pointing out that "the IRS has done very little to explain to the court just exactly how disclosing any of these documents would seriously impair federal tax administration." However, the court agreed with the agency's 7(A) claims for almost all is proposed withholdings. The court pointed out that "if this information, including specific factual analyses contained within these reports and requests for additional information about Highland, were disclosed to Highland, the nature, scope, and strategy of the IRS's investigation into Highland would be revealed, thereby interfering with the IRS's examination." The court found that the agency's attorney-client privilege claims were not sufficiently justified, but that most, but not all, of its claims under the deliberative process privilege, including discussions with the contractor, were properly supported.
Issues: Adequacy - Search, Exemption 3 - Limited agency discretion, Exemption 7(A) - Interference with ongoing investigation

Date Filed	Doc #	Docket Text
2018-01-24	1	***DISREGARD - ATTORNEY FILED IN ERROR - WILL REFILE*** COMPLAINT against Internal Revenue Service filed by Highland Capital Management LP. (Filer fee note- Clerk to add prior fee payment info here.) Clerk to issue summonses for federal and non-federal defendants. In each Notice of Electronic Filing, the judge assignment is indicated, and a link to the Judges Copy Requirements is provided. The court reminds the filer that any required copy of this and future documents must be delivered to the judge, in the manner prescribed, within three business days of filing. Unless exempted, attorneys who are not admitted to practice in the Northern District of Texas must seek admission promptly. Forms, instructions, and exemption information may be found at www.txnd.uscourts.gov, or by clicking here: Attorney Information - Bar Membership . If admission requirements are not satisfied within 21 days, the clerk will notify the presiding judge. (Attachments: # 1 Cover Sheet) (Sharp, Joel) Modified docket text on 1/25/2018 (ajb). (Entered: 01/24/2018)
2018-01-24	2	COMPLAINT against Internal Revenue Service filed by Highland Capital Management LP. (Filing fee $400; Receipt number 0539-8942183) Clerk to issue summonses for federal and non-federal defendants. In each Notice of Electronic Filing, the judge assignment is indicated, and a link to the Judges Copy Requirements is provided. The court reminds the filer that any required copy of this and future documents must be delivered to the judge, in the manner prescribed, within three business days of filing. Unless exempted, attorneys who are not admitted to practice in the Northern District of Texas must seek admission promptly. Forms, instructions, and exemption information may be found at www.txnd.uscourts.gov, or by clicking here: Attorney Information - Bar Membership . If admission requirements are not satisfied within 21 days, the clerk will notify the presiding judge. (Attachments: # 1 Cover Sheet) (Sharp, Joel) Modified docket text on 2/1/2018 (ajb). (Entered: 01/24/2018)
2018-01-24	3	CERTIFICATE OF INTERESTED PERSONS/DISCLOSURE STATEMENT by Highland Capital Management LP. (Sharp, Joel) (Entered: 01/24/2018)
2018-01-25	4	New Case Notes: A filing fee has been paid. Pursuant to Misc. Order 6, Plaintiff is provided the Notice of Right to Consent to Proceed Before A U.S. Magistrate Judge (Judge Ramirez). Clerk to provide copy to plaintiff if not received electronically. (ajb) (Entered: 01/25/2018)
2018-01-25	5	Summons issued as to Internal Revenue Service, U.S. Attorney, and U.S. Attorney General. (ajb) (Entered: 01/25/2018)
2018-02-08	6	NOTICE of Related Case filed by Highland Capital Management LP (Allen, Katherine) (Entered: 02/08/2018)
2018-02-09	7	ORDER: The above-referenced matter is transferred to the docket of the Honorable A. Joe Fish, who has a related case. All future pleadings shall be filed under case number 3:18-CV-0181-G. (Ordered by Judge David C Godbey on 2/9/2018) (epm) (Entered: 02/13/2018)
2018-02-27	8	NOTICE of Attorney Appearance by Stephanie Sasarak on behalf of Internal Revenue Service. (Filer confirms contact info in ECF is current.) (Sasarak, Stephanie) (Entered: 02/27/2018)
2018-02-28	9	Consent Motion for Extension of Time to File Answer filed by Internal Revenue Service (Attachments: # 1 Proposed Order) (Sasarak, Stephanie) (Entered: 02/28/2018)
2018-03-05	10	ORDER: The court is advised by the clerk of court that Timothy Lee Jacobs ("counsel"), whose name appears on a pleading in this case, is not a member of the Bar of the Northern District of Texas. Accordingly, within 15 days of the date of this order, counsel shall either (1) provide to the court, and to the clerk of court, satisfactory documentation of membership or (2) apply for membership in the Bar of this court or for admission pro hac vice for this case. (Ordered by Senior Judge A. Joe Fish on 3/5/2018) (axm) (Entered: 03/05/2018)
2018-03-05	11	ORDER granting 9 Motion for Extension of Time to File Answer re 2 Complaint. Internal Revenue Service answer due 3/28/2018. (Ordered by Senior Judge A. Joe Fish on 3/5/2018) (axm) (Entered: 03/05/2018)
2018-03-07	12	Application for Admission Pro Hac Vice with Certificate of Good Standing for Attorney Timothy L. Jacobs (Filing fee $25; Receipt number 0539-9035459) filed by Highland Capital Management LP (Attachments: # 1 Certificate of Good Standing, # 2 Proposed Order) (Beran, Katherine) (Entered: 03/07/2018)
2018-03-09	13	ORDER granting 12 Application for Admission Pro Hac Vice of Timothy L. Jacobs. If not already done, Applicant must register as an ECF User within 14 days (LR 5.1(f)). (Ordered by Senior Judge A. Joe Fish on 3/9/2018) (axm) (Entered: 03/09/2018)
2018-03-28	14	ANSWER to 2 Complaint filed by Internal Revenue Service. Unless exempted, attorneys who are not admitted to practice in the Northern District of Texas must seek admission promptly. Forms and Instructions found at www.txnd.uscourts.gov, or by clicking here: Attorney Information - Bar Membership . If admission requirements are not satisfied within 21 days, the clerk will notify the presiding judge. (Sasarak, Stephanie) (Entered: 03/28/2018)
2018-03-28	15	CERTIFICATE OF INTERESTED PERSONS/DISCLOSURE STATEMENT by Internal Revenue Service. (Sasarak, Stephanie) (Entered: 03/28/2018)
2018-03-29	16	STATUS REPORT ORDER: Joint Status Report due by 4/20/2018. See order for specifics. (Ordered by Senior Judge A. Joe Fish on 3/29/2018) (lag/chmb) (Entered: 03/29/2018)
2018-04-20	17	Joint STATUS REPORT filed by Highland Capital Management LP. (Beran, Katherine) (Entered: 04/20/2018)
2018-05-10	18	ORDER: The court has reviewed the parties' joint status report (docket entry 17 ). Upon consideration thereof, it is ORDERED that the defendant shall file a motion for summary judgment no later than 7/20/2018. Briefing on that motion shall then occur as prescribed by the local rules. (Ordered by Senior Judge A. Joe Fish on 5/10/2018) (axm) (Entered: 05/10/2018)
2018-07-16	19	Consent MOTION to Extend Time to file a motion for summary judgment filed by Internal Revenue Service with Brief/Memorandum in Support. (Attachments: # 1 Proposed Order) (Sasarak, Stephanie) Modified text on 7/16/2018 (dsr). (Entered: 07/16/2018)
2018-07-18	20	ORDER granting 19 Consent Motion to Extend Time. The defendant's deadline to file a motion for summary judgment is EXTENDED to 8/10/2018. Briefing on the motion shall then occur as prescribed by the local rules. (Ordered by Senior Judge A. Joe Fish on 7/18/2018) (ran) (Entered: 07/18/2018)
2018-08-10	21	MOTION for Summary Judgment filed by Internal Revenue Service (Attachments: # 1 Proposed Order) (Sasarak, Stephanie) (Entered: 08/10/2018)
2018-08-10	22	Brief/Memorandum in Support filed by Internal Revenue Service re 21 MOTION for Summary Judgment (Sasarak, Stephanie) (Entered: 08/10/2018)
2018-08-10	23	Appendix in Support filed by Internal Revenue Service re 22 Brief/Memorandum in Support of Motion, 21 MOTION for Summary Judgment (Sasarak, Stephanie) (Entered: 08/10/2018)
2018-08-23	24	MOTION for Extension of Time to File Response/Reply to 21 MOTION for Summary Judgment filed by Highland Capital Management LP (Attachments: # 1 Proposed Order) (Sharp, Joel) (Entered: 08/23/2018)
2018-08-27	25	ORDER granting 24 Motion to Extend Time to File Response to Motion for Summary Judgment. Responses due by 10/1/2018. (Ordered by Senior Judge A. Joe Fish on 8/27/2018) (zkc) (Entered: 08/27/2018)
2018-10-01	26	RESPONSE filed by Highland Capital Management LP re: 21 MOTION for Summary Judgment (Sharp, Joel) (Entered: 10/01/2018)
2018-10-01	27	Appendix in Support filed by Highland Capital Management LP re 26 Response/Objection to Internal Revenue Service's Motion for Summary Judgment (Sharp, Joel) (Entered: 10/01/2018)
2018-10-12	28	MOTION for Extension of Time to File Response/Reply to 26 Response/Objection, 21 MOTION for Summary Judgment filed by Internal Revenue Service with Brief/Memorandum in Support. (Attachments: # 1 Proposed Order) (Sasarak, Stephanie) (Entered: 10/12/2018)
2018-10-18	29	ORDER granting 28 Consent Motion for an extension of time to file a reply in support of the defendant's 21 motion for summary judgment. Replies due by 10/29/2018. (Ordered by Senior Judge A. Joe Fish on 10/18/2018) (zkc) (Entered: 10/18/2018)
2018-10-29	30	Consent MOTION to Extend Time (), MOTION for Extension of Time to File Response/Reply to 26 Response/Objection, 21 MOTION for Summary Judgment filed by Internal Revenue Service with Brief/Memorandum in Support. (Attachments: # 1 Proposed Order) (Sasarak, Stephanie) (Entered: 10/29/2018)
2018-10-30	31	ORDER: Defendant Internal Revenue Service's consent motion for an extension of time to file a reply 30 is GRANTED. The defendant shall electronically file its reply brief in support of its motion for summary judgment no later than 1/4/2019. (Ordered by Senior Judge A. Joe Fish on 10/30/2018) (epm) (Entered: 10/31/2018)
2018-12-26	32	MOTION to Stay briefing deadlines due to lapse of appropriations filed by Internal Revenue Service with Brief/Memorandum in Support. (Sasarak, Stephanie) (Entered: 12/26/2018)
2019-01-02	33	ORDER granting 32 Motion for a stay of briefing deadlines in light of lapse of appropriations. (Ordered by Senior Judge A. Joe Fish on 1/2/2019) (aaa) (Entered: 01/02/2019)
2019-01-31	34	MOTION to Reset Deadlines filed by Internal Revenue Service with Brief/Memorandum in Support. (Attachments: # 1 Proposed Order) (Sasarak, Stephanie) (Entered: 01/31/2019)
2019-02-04	35	ORDER: The stay is LIFTED. (Ordered by Senior Judge A. Joe Fish on 2/4/2019) (zkc) (Entered: 02/04/2019)
2019-02-04	36	ORDER granting 34 Motion to Reset Deadlines. The Internal Revenue Service shall release to plaintiff any nonexempt, responsive records located during its supplemental search. Replies due by 3/4/2019. Surreplies due by 3/18/2019. (Ordered by Senior Judge A. Joe Fish on 2/4/2019) (zkc) (Entered: 02/04/2019)
2019-03-04	37	REPLY filed by Internal Revenue Service re: 21 MOTION for Summary Judgment (Sasarak, Stephanie) (Entered: 03/04/2019)
2019-03-04	38	Appendix in Support filed by Internal Revenue Service re 37 Reply (Sasarak, Stephanie) (Entered: 03/04/2019)
2019-03-18	39	Sur-reply filed by Highland Capital Management LP re: 21 MOTION for Summary Judgment (Sharp, Joel) (Entered: 03/18/2019)
2019-09-30	40	Memorandum Opinion and Order granting in part and denying in part 21 Motion for Summary Judgment. For the records on which summary judgment is denied the IRS shall, within fifteen days of this date, file those records under seal for in camera inspection by the court. (Ordered by Senior Judge A. Joe Fish on 9/30/2019) (ykp) (Entered: 09/30/2019)
2019-10-04	41	NOTICE of Compliance re: 40 Memorandum Opinion and Order, filed by Internal Revenue Service (Sasarak, Stephanie) (Entered: 10/04/2019)
2020-08-25	42	ORDER: The court concludes that summary judgment should be GRANTED in favor of the IRS with respect to the documents withheld under FOIA Exemptions 5 and 7(a). (Ordered by Senior Judge A. Joe Fish on 8/25/2020) (axm) (Entered: 08/25/2020)
2020-08-25	43	JUDGMENT entered in favor of the Internal Revenue Service. (Ordered by Senior Judge A. Joe Fish on 8/25/2020) (axm) (Entered: 08/25/2020)
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