UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
MEMORANDUM OPINION
[1] Plaintiff Tax Analysts has moved this Court for an award of attorney's fees and expenses in the total amount of $29,191.53, pursuant to 5 U.S.C. section 552(a)(4)(E). The Internal Revenue Service ("IRS"), in its Opposition, concedes the reasonableness of both the number of hours expended (87.65) by Plaintiff's counsel and the rate of compensation ($325 per hour) he seeks. It contends, however, that the fee award should be reduced by approximately one- third because Plaintiff conceded or lost significant issues on appeal and that the majority of the costs sought should be denied because they are precluded under 28 U.S.C. section 1920.
[2] Upon consideration of the Motion, the Opposition, the Reply, the applicable case law, and the entire record herein, the Court concludes that Tax Analysts' requested fee is reduced by 5% to reflect the rulings of the Court of Appeals, and that its request for costs is granted in its entirety, subject to any duplicative amounts which may have been awarded in the Court of Appeals.
I. BACKGROUND
[3] Tax Analysts brought an action under the Freedom of Information Act ("FOIA"), 5 U.S.C. section 552, to compel the IRS to disclose a category of agency documents known as "Field Service Advice Memoranda" ("FSAs"). On March 15, 1996, this Court ruled that the documents should be disclosed, and later awarded attorney's fees and expenses to Plaintiff.
[4] On July 8, 1997, the Court of Appeals issued its ruling, which the government concedes "was largely adverse to the Internal Revenue Service", Def.'s Mem. Opp'n to Pl.'s Mot. at 2, affirming the central holding of this Court's March 15, 1996 Opinion, that Field Service Advice Memoranda are subject to disclosure under FOIA. See Tax Analysts v. Internal Revenue Svc., 117 F.3d 607 (D.C. Cir. 1997). Plaintiff, Tax Analysts, now seeks $28,486.25 in legal fees and $705.38 in costs for its efforts.
II. ANALYSIS
A. LEGAL FEES
[5] The Internal Revenue Service contends that the total fee award sought should be reduced by one-third because the Plaintiff conceded or lost significant issues on appeal. The Court will deal with each of the government's contentions seriatim.
[6] 1. The IRS argues that, on appeal, Plaintiff made a major concession on the remedial issue of whether FSAs could be placed in a public reading room, pursuant to 5 U.S.C. section 552(A)(2)(b). While it is true that the Court of Appeals said that it would "treat the argument as conceded for the purposes of this case only", 117 F.3d at 609, that comment must be understood in the procedural context of the entire case.
[7] Plaintiff (See Complaint paragraph 23) never requested the remedy of placing FSAs in a public reading room, as the government claims, and therefore could not have lost or conceded the issue on appeal. Moreover, as the Court of Appeals noted, Tax Analysts did not argue the issue on appeal or cross-appeal from the Order of March 15, 1996. Id. For these reasons, the Court does not consider it appropriate to reduce Plaintiff's requested fee award by 10%, as the government requests, on an issue on which the Plaintiff did not cross-appeal, argue before the Court of Appeals, nor lose at the District Court level.
[8] 2. The IRS argues that the Court should consider that Plaintiff lost the issue of whether ANY of the FSAs in issue are subject to the attorney-client privilege.
[9] It must be remembered that the basic position advanced by IRS was that the attorney-client privilege applied to ALL FSAs, because they were written by Office of Chief Counsel "attorneys" for their IRS "clients", and were based upon confidential information relayed from the clients (the requesters) to the attorneys. 117 F.3d at 618. This position was rejected by both this Court and the Court of Appeals. Mem. Opinion of March 16, 1996 at 13-15; 117 F.3d at 618- 619. Instead, the Court of Appeals held that the attorney-client privilege could not be used to shield ALL FSAs from disclosure, but might well be invoked appropriately "with respect to particular portions of FSAs" containing confidential government information transmitted by field personnel relating to "the scope, direction, or emphasis of audit activity." 117 F.3d at 619-620.
[10] Given the broad holding of the Court of Appeals that "FOIA exemption 5 and the attorney-client privilege may not be used to protect this growing body of agency law [the FSAs] from disclosure to the public", the Court concludes that the slight narrowing of its earlier ruling by the Court of Appeals does not warrant any reduction of the requested fee award. 1
[11] 3. Finally, the IRS argues that Plaintiff's fee request should be reduced by 23%, because it lost on the significant issue of whether all docketed cases are subject to the attorney work product doctrine. This Court had held that IRS could withhold only those portions of docketed case FSAs which constituted legal analysis. The Court of Appeals broadened that ruling to apply to factual portions of the docketed case FSAs. Since 309 of these docketed case FSAs have been found exempt under the attorney work product doctrine of Exemption 5, or 23.8% of the 1300 formal FSAs at issue, the government argues that Plaintiff's fee request should be reduced by that percentage.
[12] The government, however, overlooks the fact that Tax Analysts conceded from the beginning that attorney work-product should be deleted from the 309 docketed FSAs. The issue before this Court was, at least in part, the proper definition of the term "work product". Whereas this Court had simply relied on the wording of Fed. R. Civ. P. 26(b)(3), the Court of Appeals ruled that the Rule 26(b)(3) definition was too narrow and should be broadened to include "factual materials prepared in anticipation of litigation", 117 F.2d at 620.
[13] Thus, while some number of the 309 docketed FSAs may be subject to greater redaction than provided for in this Court's March 15, 1996 ruling, it is a serious exaggeration to claim, as the government does, that Plaintiff "lost all FSAs prepared in docketed cases." At most -- and this has yet to be determined 2 -- Plaintiff "will lose" that portion of the 309 docketed case FSAs which contain "factual materials prepared in anticipation of litigation". Id. Tax Analysts never took the position, either before this Court or the Court of Appeals, that the 309 docketed case FSAs were not subject to the work product doctrine.
[14] Consequently, while plaintiff may well "lose" on some portion of this issue, it is impossible to tell what number or percentage they will "lose" and it is highly unlikely that the percentage would be the full 23% claimed. For these reasons, the 23% reduction in legal fees requested by the government is totally unwarranted.
[15] Given the uncertain nature of precisely what number of docketed case FSAs will actually be affected by the broader definition of work product doctrine adopted by the Court of Appeals and the relative insignificance of that issue when compared to the major substantive issue on which Plaintiff did prevail, the Court concludes that no fee reduction of more than 5% is warranted.
B. COSTS
[16] Plaintiff seeks the amount of $705.28 for expenses for litigating the appeal of the March 15, 1996 decision. The government argues that Plaintiff is limited to those costs provided for in 28 U.S.C. section 1920 and that a federal court has no authority to award costs of litigation beyond that specified in Section 1920. 3
[17] Kuzma v. Internal Revenue Service, 821 F.2d 930 (2nd Cir. 1987), a FOIA case, is both directly on point and directly to the contrary. 4 In a well-reasoned and thorough opinion, the Second Circuit held that "[t]he statutory language and the purposes of the relevant sections [of FOIA], as well as the legislative history and decisions of various other courts, lead us to conclude that an award of costs pursuant to section 552 is not limited to those authorized by section 1920, and permits an award . . ." 821 F.2d at 932. See also Northwest Coalition for Alternatives to Pesticides, et al., v. Browner, et al., 965 F.Supp. 59, 66 (D.D.C. 1997) (citing Kuzma, 821 F.2d 930, and holding that "[w]here attorney's fees and costs are expressly authorized by statute, recoverable litigation expenses are not limited to taxable costs, but can include . . . other miscellaneous charges.")
[18] In particular, the 2nd Circuit in Kuzma noted that "when Congress added subsection (a) to the FOIA in 1974, it intended that the phrase 'other litigation costs' would add to the scope of costs already recoverable against the government under section 1920. Were we to accept the district court's interpretation of section 552 we would, in effect, excise the words 'other litigation costs' from the statute by rendering them meaningless". 821 F.2d at 932.
[19] Moreover, the Court of Appeals also found that the congressional intent in adding subsection (a) was "to alleviate the financial burdens suffered by citizens seeking information from the government . . . This congressional purpose would be frustrated, not furthered, if we were to limit recovery under section 552 to only those items enumerated under section 1920". 821 F. 2d at 933.
[20] This Court finds the reasoning of the Second Circuit persuasive and, given the absence of any contrary law in this Circuit, will adopt its conclusion. Therefore, Plaintiff is entitled to the full amount of costs it has claimed, minus any amounts the IRS may have already paid it.
III. CONCLUSION
[21] For the reasons stated above, Plaintiff is entitled to a fee award of $27,061.94, and an award of costs of $705.28. An Order will issue with this Opinion.
Date: March 16, 1998 Gladys Kessler
United States District Judge
1 In all fairness to the government, it should be noted that the IRS does not suggest any percentage by which the fee request should be reduced in regard to this issue.
2 As Plaintiff points out, the Court of Appeals also noted that "a sufficient showing of need may overcome that protection [of Fed. R. Civ. P. 26(b)(3)] with respect to factual materials, but not with respect to deliberative materials. This does not mean that factual materials are not work product; it means only that they receive a lower degree of protection under the Federal Rules than deliberative work product." 117 F.3d at 620 n. 11. Thus, even the Plaintiff's "loss" on the factual materials aspect of the attorney work product doctrine may be limited if a sufficient showing of need can be made.
3 It is rather curious, as Plaintiff notes, that the government did not raise this argument when fees and expenses were awarded by this Court for the earlier stage of the litigation.
4 The case relied on by the government, Coats v. Penrod Drilling Corporation, 5 F.3d 877 (5th Cir. 1993) is totally inapposite. First, it is a maritime personal injury suit -- not a FOIA case. Second, the court was interpreting only the scope of 28 U.S.C. section 1920, rather than any fee-shifting statute.
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