Case Detail

FOIA Project Annotation: A federal court in California has ruled that the IRS has not yet shown that it conducted an adequate search for records concerning tax liability for Smart-Tek Services and its legal alter ego companies and has declined to rule on the agency's exemption claims under Exemption 3 (other statutes), Exemption 6 (invasion of privacy), and Exemption 7(C) (invasion of privacy concerning law enforcement records) until the court resolves a dispute over whether the agency waived the exemptions during related litigation in Florida. Smart-Tek filed five FOIA suits after the IRS determined the company was responsible for unpaid payroll taxes for a number of companies that were legally related to Smart-Tek. In searching for records, the IRS found that the agent who handled the case had commingled records about all the companies in a file consisting of 141,000 pages. The agency had disclosed more than 3,000 pages in response to one of Smart-Tek's suits and 1,800 pages in response to a second request, but had withheld identifying information about all the other companies primarily under Section 6103, prohibiting disclosure of taxpayer information with consent and the two privacy exemptions. Smart-Tek argued that it could not respond to the agency's tax liability allegations without knowing the identities of the companies the agency considered legally related to Smart-Tek and that in a case challenging the conduct of the revenue agent, Goldberg v. United States (S.D. Fla, Aug. 5, 2015), the district court had disclosed the names of all the companies involved. Although the agency had spent more than a year reviewing the records, Judge Barry Moskowitz agreed with Smart-Tek that the company could not challenge the adequacy of the search without knowing more about how the agency decided to withhold records that did not identify Smart-Tek directly. He noted that "the fact that any privilege pertaining to the identities of the alter egos may have been dispelled does not necessarily mean the identity of every entity whose files were in the 65 boxes has to be disclosed to establish the reasonableness of the IRS's search. At this stage, the record regarding the search the IRS undertook is not yet complete, and the Court will reserve ruling on the merits of Plaintiff's argument until the record is more fully developed." As a result, Moskowitz observed that "the IRS has failed to carry its burden to demonstrate the adequacy of its search." Holding off on ruling on the agency's Section 6103 claims, Moskowitz pointed to an existing conundrum. He explained that "some of these taxpayers may be the alter ego entities whose documents Plaintiff seeks. The IRS disputes whether Plaintiff can obtain tax information relating to Plaintiff's alter egos without an authorization from the alter ego. Plaintiff cannot obtain such an authorization however, without knowing which entities' records have been withheld. Although the IRS claims even the names of the alter egos are protected from disclosure, if those names have already been published, such that any related privacy interest has been lost, there would appear to be no impediment to identifying, in subsequent briefing, any alter ego taxpayers whose records were withheld."
Issues: Exemption 3 - Limited agency discretion, Adequacy - Search

FOIA Project Annotation: A federal court in California has ruled that Smart-Tek Services is not entitled to tax information about alleged alter ego companies for which the IRS had held Smart-Tek Services liable for payroll taxes. Smart-Tek Services made FOIA requests under its corporate identity as well as under corporate identities of subsidiaries asking the IRS to disclose identifying information about the alter ego companies and eventually filed five separate actions against the agency. In searching for the records, the agency quickly concluded that all potentially responsive information was in a single large file pertaining to its investigation of the various alter ego companies. But because the alter egos had separate tax identification numbers, Smart-Tek Services was never able to establish that it had a right of access under Section 6103. The court explained that "if a document contained Plaintiff's return information as well as the return information of one or more of the other FOIA requesting entities, it was marked as partially responsive to Plaintiff's FOIA request and partially responsive to each of the other FOIA requesting entities whose return information was included on the document. If a document contained Plaintiff's return information but also the return information of other taxpayers who did not submit FOIA requests, it was marked as partially responsive to Plaintiff's request only." Smart-Tek Services argued that the agency's search was inadequate because it did not mark records as responsive if they did not contain Smart-Tek Service's taxpayer information. The court disagreed, noting that "Plaintiff only requested its own administrative file and a search of [Power of Attorney] authorizations revealed that 'each taxpayer whose records were in the commingled file had not authorized its records to be disclosed to the other taxpayers.' The IRS's search in response to Plaintiff's FOIA request was adequate." The court found that because the names of the alter ego companies were now in the public domain, the IRS was required to disclose them. The court pointed out that "although the return information was not disclosed through court proceedings specifically, the identities of Plaintiff's alter-egos have been 'made a part of the public domain' through legal process and the creation of a public record. It therefore follows that the identities of the taxpayers named in the public tax lien are no longer privileged under § 6103." The court rejected Smart-Tek Service's claim that the alter-egos were one entity for purposes of the FOIA requests. Instead, the court indicated that "businesses treated as separate entities for tax assessment purposes are also separate entities for disclosure purposes."
Issues: Adequacy - Search

Date Filed	Doc #	Docket Text
2015-02-27	1	COMPLAINT Against United States Internal Revenue Service (Filing fee $ 400 receipt number 0974-7847590.), filed by Smart-Tek Services, Inc.. (Attachments: # 1 Civil Cover Sheet) The new case number is 3:15-cv-00449-L-NLS. Judge M. James Lorenz and Magistrate Judge Nita L. Stormes are assigned to the case. (Shamoun, Ronson)(nbp)(jrd) (Entered: 02/27/2015)
2015-02-27	2	Summons Issued. Counsel receiving this notice electronically should print this summons and serve it in accordance with Rule 4, Fed.R.Civ.P and LR 4.1. (nbp)(jrd) (Entered: 02/27/2015)
2015-03-03	3	SUMMONS RETURNED EXECUTED by Smart-Tek Services, Inc. re 1 Complaint, (Shamoun, Ronson) Modified to correct event on 3/4/2015 (sjt). (Entered: 03/03/2015)
2015-03-09	4	SUMMONS Returned Executed by Smart-Tek Services, Inc.. United States Internal Revenue Service served. (Shamoun, Ronson) (sjt). (Entered: 03/09/2015)
2015-03-09	5	SUMMONS Returned Executed by Smart-Tek Services, Inc.. United States Internal Revenue Service served. (Shamoun, Ronson) (sjt). (Entered: 03/09/2015)
2015-03-20	6	NOTICE OF RELATED CASE(S) by Smart-Tek Services, Inc. of case(s) 15-cv-447-BTM-JMA; 15-cv-455-H-BGS; 15-cv-453-JLS-RBB; 15-cv-0452-H-NLS re 1 Complaint, . (Shamoun, Ronson) prepared proposed low number order on 3/23/2015 (rlu). (Entered: 03/20/2015)
2015-03-20	7	NOTICE of Party With Financial Interest by Smart-Tek Services, Inc. re 1 Complaint, (Shamoun, Ronson) (rlu). (Entered: 03/20/2015)
2015-03-31	8	MOTION for Extension of Time to File Answer or other Responsive Pleading by United States Internal Revenue Service. (Attachments: # 1 Supplement Proposed Order)(Josey, Stephen)Attorney Stephen Andrew Josey added to party United States Internal Revenue Service(pty:dft) (sjt). (Entered: 03/31/2015)
2015-04-01	9	Notice of Document Discrepancies and Order Thereon by Judge M. James Lorenz Accepting re 8 MOTION for Extension of Time to File Answer or other Responsive Pleading , from Defendant United States Internal Revenue Service. Non-compliance with local rule(s), ECF 2(h): Includes a proposed order or requires judges signature, Civ. L. Rule 5.1: Document text sub-14-point font. IT IS HEREBY ORDERED: The document is accepted despite the discrepancy noted above. Any further non-compliant documents may be stricken from the record. Signed by Judge M. James Lorenz on 4/1/2015.(sjt) (Entered: 04/01/2015)
2015-04-01	10	ORDER Setting Briefing Schedule re 8 MOTION for Extension of Time to File Answer or other Responsive Pleading : Responses due by 4/2/2015 Replies due by 4/3/2015.. Signed by Judge M. James Lorenz on 4/1/2015.(sjt) (Entered: 04/01/2015)
2015-04-01	11	MOTION re 8 MOTION for Extension of Time to File Answer or other Responsive Pleading for entry of Stipulation by United States Internal Revenue Service. (Attachments: # 1 Supplement Stipulation)(Josey, Stephen) (sjt). (Entered: 04/01/2015)
2015-04-03	12	ORDER dismissing 8 Motion for Extension of Time to Answer as Moot ; granting 11 Motion for Extension of Time to Answer. The United States deadline to respond to the complaint is extended until May 4, 2015. Signed by Judge M. James Lorenz on 4/2/2015. (sjt) (Entered: 04/03/2015)
2015-05-04	13	ANSWER to 1 Complaint, by United States Internal Revenue Service.(Josey, Stephen) (sjt). (Entered: 05/04/2015)
2015-05-05	14	NOTICE AND ORDER for Telephonic Early Neutral Evaluation Conference. Telephonic Early Neutral Evaluation set for 6/4/2015 03:30 PM before Magistrate Judge Nita L. Stormes. Signed by Magistrate Judge Nita L. Stormes on 5/5/2015.(sjt) (Entered: 05/05/2015)
2015-05-11	15	ORDER OF TRANSFER PURSUANT TO LOW NUMBER RULE. Case reassigned to Judge Barry Ted Moskowitz and Magistrate Judge Jan M. Adler for all further proceedings. Judge M. James Lorenz, Magistrate Judge Nita L. Stormes no longer assigned to case. Pending hearings previously set before the original Judge(s) have been transferred to the newly assigned Judge(s). Create association to 3:15-cv-00447-BTM-JMA. The new case number is 15cv0449-BTM-JMA. Signed by Judge M. James Lorenz on 5/11/2015. Signed by Judge Barry Ted Moskowitz on 5/6/2015.(sjt) (Entered: 05/12/2015)
2015-05-13	16	NOTICE AND ORDER for Telephonic Early Neutral Evaluation will be held on 6/1/2015 at 9:30 AM before Magistrate Judge Jan M. Adler. Signed by Magistrate Judge Jan M. Adler on 5/13/2015.(rlu) (Entered: 05/13/2015)
2015-06-01	17	Minute Entry for proceedings held before Magistrate Judge Jan M. Adler: Early Neutral Evaluation Conference held on 6/1/2015. (Plaintiff Attorney Ronson Shamoun). (Defendant Attorney Stephen Josey). Case Management Conference set for 7/31/2015 09:30 AM before Magistrate Judge Jan M. Adler. Counsel shall call in for the conference using the same dial-in information previously provided. (no document attached) (cdc) (Entered: 06/01/2015)
2015-07-31	18	Minute Entry for proceedings held before Magistrate Judge Jan M. Adler: Case Management Conference held on 7/31/2015. (Plaintiff Attorney Ronson Shamoun). (Defendant Attorney Stephen Josey). Case Management Conference set for 9/15/2015 09:30 AM before Magistrate Judge Jan M. Adler. Counsel shall use the same call-in information previously provided. (no document attached) (cdc) (Entered: 07/31/2015)
2015-09-15	19	Minute Entry for proceedings held before Magistrate Judge Jan M. Adler: Case Management Conference held on 9/15/2015. (Plaintiff Attorney Ronson Shamoun). (Defendant Attorney Stephen Josey). Court to issue order. (no document attached) (cdc) (Entered: 09/15/2015)
2015-09-15	20	ORDER: The Court convened a Case Management Conference on 9/15/2015. (1) Setting Deadline to Complete Document Production and (2) Scheduling a telephonic Case Management Conference for 12/15/2015 at 9:30 AM before Magistrate Judge Jan M. Adler. Signed by Magistrate Judge Jan M. Adler on 9/15/2015.(rlu) (Entered: 09/15/2015)
2015-12-15	21	Minute Entry for proceedings held before Magistrate Judge Jan M. Adler: Case Management Conference held on 12/15/2015. (Plaintiff Attorney Ronson Shamoun). (Defendant Attorney Stephen Josey). Case Management Conference set for 1/27/2016 09:30 AM before Magistrate Judge Jan M. Adler. Counsel shall use the same call-in information previously provided. (no document attached) (cdc) (Entered: 12/15/2015)
2016-01-27	22	Minute Entry for proceedings held before Magistrate Judge Jan M. Adler: Case Management Conference held on 1/27/2016. (Plaintiff Attorney Ronson Shamoun). (Defendant Attorney Stephen Josey). Case Management Conference set for 3/2/2016 09:30 AM before Magistrate Judge Jan M. Adler. Counsel shall use the same call-in information previously provided. (no document attached) (cdc) (Entered: 01/27/2016)
2016-03-02	23	Minute Entry for proceedings held before Magistrate Judge Jan M. Adler: Case Management Conference held on 3/2/2016. (Plaintiff Attorney Ronson Shamoun). (Defendant Attorney Stephen Josey). Court to issue order. (no document attached) (cdc) (Entered: 03/02/2016)
2016-03-02	24	ORDER: (1) Setting Filing Deadline for Motions for Summary Judgment and (2) Scheduling Case Management Conference. Motions for summary judgment must be filed on or before 9/12/2016. A telephonic Case Management Conference will be held on 5/19/2016 at 9:30 AM before Magistrate Judge Jan M. Adler. Signed by Magistrate Judge Jan M. Adler on 3/2/2016.(rlu) (Entered: 03/02/2016)
2016-05-19	25	Minute Entry for proceedings held before Magistrate Judge Jan M. Adler: Case Management Conference held on 5/19/2016. (Plaintiff Attorneys Ronson Shamoun, Allison Soares, Brad Paladini). (Defendant Attorney Stephen Josey). (no document attached) (cdc) (Entered: 05/19/2016)
2016-08-24	26	Joint MOTION for Extension of Time to File Motion for Summary Judgment by United States Internal Revenue Service. (Josey, Stephen) (rlu). (Entered: 08/24/2016)
2016-08-26	27	ORDER granting 26 Motion for Extension of Time to File. The deadline to file motions for summary judgment is continued from 9/12/2016 to 10/7/2016. Signed by Magistrate Judge Jan M. Adler on 8/26/2016. (no document attached) (cdc) (Entered: 08/26/2016)
2016-10-07	28	MOTION for Summary Judgment by United States Internal Revenue Service. (Attachments: # 1 Notice of Motion, # 2 Memo of Points and Authorities, # 3 Declaration of Thomas Andrew Durrett, # 4 Declaration of Delphine Thomas)(Josey, Stephen) (acc). (Entered: 10/07/2016)
2016-10-07	29	DECLARATION re 28 MOTION for Summary Judgment of Delphine Thomas by Defendant United States Internal Revenue Service. (Josey, Stephen) (acc). (Entered: 10/07/2016)
2016-10-07	30	MOTION to Seal a Previously Filed Document by United States Internal Revenue Service. (Josey, Stephen)(acc). (Entered: 10/07/2016)
2016-10-07	31	ORDER granting 30 Motion to Seal Previously Filed Document. Signed by Judge Barry Ted Moskowitz on 10/7/2016. (kcm) (Entered: 10/07/2016)
2016-10-28	32	NOTICE of Association of Counsel by Smart-Tek Services, Inc. (Semerdjian, Dick)Attorney Dick A Semerdjian added to party Smart-Tek Services, Inc.(pty:pla) (rlu). (Entered: 10/28/2016)
2016-10-28	33	RESPONSE in Opposition re 28 MOTION for Summary Judgment filed by Smart-Tek Services, Inc.. (Attachments: # 1 Declaration Declaration of Bonar in Support of Opposition)(Semerdjian, Dick) (rlu). (Entered: 10/28/2016)
2016-11-23	34	NOTICE of Appearance and Substitution of Counsel by Ryan O. McMonagle on behalf of United States Internal Revenue Service (McMonagle, Ryan)Attorney Ryan O. McMonagle added to party United States Internal Revenue Service(pty:dft) qc email re lacking pos on 11/28/2016 (rlu). (Entered: 11/23/2016)
2016-11-29	35	CERTIFICATE OF SERVICE by United States Internal Revenue Service re 34 Notice of Appearance, (McMonagle, Ryan) (rlu). (Entered: 11/29/2016)
2017-01-13	36	REPLY to Response to Motion re 28 MOTION for Summary Judgment filed by United States Internal Revenue Service. (McMonagle, Ryan) (Entered: 01/13/2017)
2017-01-20	37	MINUTE ORDER, Motions Submitted 28 MOTION for Summary Judgment (no document attached) (rfm) (Entered: 01/20/2017)
2017-07-05	38	ORDER Denying Defendant's 28 Motion for Summary Judgment without prejudice. Signed by Judge Barry Ted Moskowitz on 7/5/2017. (rlu) (Entered: 07/05/2017)
2017-08-14	39	ORDER Scheduling Case Management Conference. Telephonic Case Management Conference set for 9/14/2017 at 9:30 AM before Magistrate Judge Jan M. Adler. Signed by Magistrate Judge Jan M. Adler on 8/14/2017.(mxn) (Entered: 08/14/2017)
2017-09-14	40	Minute Entry for proceedings held before Magistrate Judge Jan M. Adler: Case Management Conference held on 9/14/2017. (Plaintiff Attorneys Ronson Shamoun, Dick Semerdjian, Owen Praskievicz). (Defendant Attorney Ryan McMonagle). (no document attached) (cdc) (Entered: 09/14/2017)
2017-09-15	41	ORDER Setting Filing Deadline for Motions for Summary Judgment. The Court convened a Case Management Conference on 9/14/2017 at 9:30 a.m. Based on the Court's discussions with counsel, it is hereby ordered that additional cross-motions for summary judgment must be filed on or before 11/152017. Signed by Magistrate Judge Jan M. Adler on 9/15/2017.(mxn) (Entered: 09/15/2017)
2017-11-09	42	Joint MOTION for Extension of Time to File Cross-Motions for Summary Judgment by United States Internal Revenue Service. (McMonagle, Ryan)(mxn). (Entered: 11/09/2017)
2017-11-09	43	ORDER granting 42 Motion for Extension of Time to File. Cross-motions for summary judgment must be filed on or before 11/29/2017. Signed by Magistrate Judge Jan M. Adler on 11/9/2017. (no document attached) (cdc) (Entered: 11/09/2017)
2017-11-29	44	MOTION for Summary Judgment by Smart-Tek Services, Inc.. (Attachments: # 1 Memo of Points and Authorities, # 2 Declaration, # 3 Proof of Service)(Semerdjian, Dick)(mxn). (Entered: 11/29/2017)
2017-11-29	45	***DOCUMENT WITHDRAWN PER 47 NOTICE OF WITHDRAWAL*** MOTION for Summary Judgment on Remaining Issues by United States Internal Revenue Service. (Attachments: # 1 Memo of Points and Authorities, # 2 Declaration of Christopher P. Valvardi, # 3 Declaration of Delphine V. Thomas)(McMonagle, Ryan) QC email sent re: missing signature on attachment 3 (mxn). Modified to withdraw on 12/4/2017 (mxn). (Entered: 11/29/2017)
2017-11-30	46	***DOCUMENT WITHDRAWN PER 47 NOTICE OF WITHDRAWAL***NOTICE OF WITHDRAWAL OF DOCUMENT by United States Internal Revenue Service re 45 MOTION for Summary Judgment on Remaining Issues filed by United States Internal Revenue Service and Filing of Corrected Declaration . (Attachments: # 1 Declaration of Delphine V. Thomas (Corrected, Dkt. No. 45-3))(McMonagle, Ryan) QC email sent re: refiling motion for summary judgment (mxn). Modified to withdraw on 12/4/2017 (mxn). (Entered: 11/30/2017)
2017-12-01	47	NOTICE OF WITHDRAWAL OF DOCUMENT by United States Internal Revenue Service re 45 MOTION for Summary Judgment on Remaining Issues filed by United States Internal Revenue Service, 46 Notice of Withdrawal of Document, filed by United States Internal Revenue Service . (McMonagle, Ryan)(mxn). (Entered: 12/01/2017)
2017-12-01	48	MOTION for Summary Judgment (Corrected) by United States Internal Revenue Service. (Attachments: # 1 Memo of Points and Authorities, # 2 Declaration of Christopher P. Valvardi, # 3 Declaration of Delphine V. Thomas)(McMonagle, Ryan)(mxn). (Entered: 12/01/2017)
2018-01-12	49	RESPONSE in Opposition re 48 MOTION for Summary Judgment (Corrected) filed by Smart-Tek Services, Inc.. (Attachments: # 1 Proof of Service)(Praskievicz, Owen)(mxn). (Entered: 01/12/2018)
2018-01-12	50	RESPONSE in Opposition re 44 MOTION for Summary Judgment filed by United States Internal Revenue Service. (Attachments: # 1 Declaration of Ryan O. McMonagle)(McMonagle, Ryan)(mxn). (Entered: 01/12/2018)
2018-01-19	51	***DOCUMENT WITHDRAWN PER 53 NOTICE OF WITHDRAWAL*** REPLY to Response to Motion re 48 MOTION for Summary Judgment (Corrected) filed by United States Internal Revenue Service. (McMonagle, Ryan) QC email sent re: incorrect event selected (mxn). Modified to withdraw on 1/24/2018 (mxn). (Entered: 01/19/2018)
2018-01-19	52	REPLY to Response to Motion re 44 MOTION for Summary Judgment filed by Smart-Tek Services, Inc.. (Attachments: # 1 Proof of Service)(Praskievicz, Owen)(mxn). (Entered: 01/19/2018)
2018-01-23	53	NOTICE OF WITHDRAWAL OF DOCUMENT by United States Internal Revenue Service re 51 Reply to Response to Motion filed by United States Internal Revenue Service . (McMonagle, Ryan)(mxn). (Entered: 01/23/2018)
2018-01-23	54	RESPONSE in Support re 48 MOTION for Summary Judgment (Corrected) filed by United States Internal Revenue Service. (McMonagle, Ryan)(mxn). (Entered: 01/23/2018)
2018-01-26	55	MINUTE ORDER, Motions Submitted 48 MOTION for Summary Judgment (Corrected) , 44 MOTION for Summary Judgment (no document attached) (rfm) (Entered: 08/13/2018)
2018-09-25	56	ORDER Granting In Part and Denying In Part Defendant's Motion For Summary Judgment and Granting and Denying In Part Plaintiff's Motion For Summary Judgment 44 and 48 . Signed by Judge Barry Ted Moskowitz on 9/25/2018. (sjm) (Entered: 09/26/2018)
2018-09-26	57	CLERK'S JUDGMENT. IT IS SO ORDERED AND ADJUDGED that Plaintiffs and the IRSs motions for summary judgment are GRANTED in part and denied in part. Signed by Judge Barry Ted Moskowitz on 9/25/2018.(sjm) (sjt). (Entered: 09/26/2018)
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