CHURCH OF SCIENTOLOGY OF CALIFORNIA, appellant,
v.
INTERNAL REVENUE SERVICE, et al.
No. 83-1856.
United States Court of Appeals,
District of Columbia Circuit.
Argued En Banc Dec. 5, 1985.
Decided May 27, 1986.
As Amended May 27, 1986.
Church brought action under Freedom of Information Act to compel Internal
Revenue Service to disclose all documents in its possession relating to
church. The United States District Court for the District of Columbia, Norma
Holloway Johnson, J., 569 F.Supp. 1165, granted summary judgment in favor of
the Internal Revenue Service. Church appealed. The Court of Appeals,
Scalia, Circuit Judge, held that phrase "in a form" in Haskell amendment, which
exempts from Internal Revenue Code's definition of nondiscloseable "return
information" "data in a form which cannot be associated with, or otherwise
identify, directly or indirectly, a particular taxpayer," requires, in addition
to fact of nonidentification, some alteration by government of form in which
return information was originally recorded.
Order accordingly.
Silberman, Circuit Judge, concurred and filed an opinion.
Wald, Circuit Judge, dissented and filed an opinion in which Spottswood W.
Robinson, III, Chief Judge, and Mikva, Circuit Judge, joined.
[1] FEDERAL COURTS
Appellate review serves dual purpose: correction of legal error and
establishment of legal rules for future guidance.
[2] FEDERAL COURTS
En banc court's consideration effectively constitutes second-level appellate
review where law-clarifying function predominates, at least where full court
has before it full text of proposed panel opinion.
[3] INTERNAL REVENUE
Heightened protection, with regard to disclosure requirements under Freedom of
Information Act, was intended with regard to tax information, in order to
encourage full, voluntary self-assessment of taxes upon which internal revenue
system largely depends. 5 U.S.C.A. s 552(a)(2), (a)(4)(B), (b)(3).
[4] INTERNAL REVENUE
Haskell amendment, which exempts from Internal Revenue Code's definition of
nondiscloseable "return information" data in form which cannot be associated
with, or otherwise identify, directly or indirectly, a particular taxpayer,
does not exclude from definition of "return information" all nonidentifying
data. 26 U.S.C.A. s 6103(b)(2).
[5] INTERNAL REVENUE
Phrase "in a form" in Haskell amendment, which exempts from Internal Revenue
Code's definition of nondiscloseable "return information" "data in a form which
cannot be associated with, or otherwise identify, directly or indirectly, a
particular taxpayer," was meant to permit publication and distribution of
statistical studies, forecasts and surveys that are purpose of permitted
disclosures to Commerce, FTC, and Treasury, and requires, in addition to fact
of nonidentification, some alteration by government of form in which return
information was originally recorded such as statistical tabulation or some
other form in combination with other data as to produce unitary product that
disguises the origin of its components; disagreeing with Long v. IRS, 596
F.2d 362 (9th Cir.) and King v. IRS, 688 F.2d 488 (7th Cir.) and
disapproving Neufeld v. IRS, 646 F.2d 661 (D.C.Cir.). 26 U.S.C.A. s
6103(a), (b)(2).
[6] STATUTES
Legislative history is used to clarify meaning of tax, not to create
extrastatutory law.
*154 **86 Appeal from the United States District Court for the District
of Columbia (Civil Action No. 80-03239).
Robert A. Seefried, Washington, D.C., for appellant.
Jonathan Cohen, Atty., U.S. Dept. of Justice, of the Bar of the Supreme Court
of Conn., pro hac vice, by special leave of the Court, with whom Glenn L.
Archer, Jr., Asst. Atty. Gen., U.S. Dept. of Justice, Joseph E. diGenova, U.S.
Atty., and Michael L. Paup, Richard W. Perkins and Murray S. Horwitz, Attys.,
U.S. Dept. of Justice, Washington, D.C., were on brief, for appellee.
Judith E. Bendich and Stephen K. Strong, Seattle, Wash., were on brief, for
American Civil Liberties Union Foundation of Washington, amicus curiae, urging
adherence to the interpretation adopted by the panel opinion in Neufeld v. IRS.
*155 **87 David C. Vladeck and Alan B. Morrison, Washington, D.C., were
on brief, for John L. Neufeld and Freedom of Information Clearinghouse, amici
curiae, urging adherence to the interpretation adopted by the panel opinion in
Neufeld v. IRS.
Before ROBINSON, Chief Judge, and WRIGHT, WALD, MIKVA, EDWARDS, GINSBURG,
BORK, SCALIA, STARR and SILBERMAN, Circuit Judges.
Opinion of the Court filed by Circuit Judge SCALIA.
Concurring opinion filed by Circuit Judge SILBERMAN.
Dissenting opinion filed by Circuit Judge WALD, with whom Chief Judge ROBINSON
and Circuit Judge MIKVA join.
SCALIA, Circuit Judge:
This is an appeal from the District Court's grant of summary judgment in favor
of the Internal Revenue Service, in a Freedom of Information Act suit brought
by the Church of Scientology under 5 U.S.C. s 552(a)(4)(B) (1982). The only
issue addressed by this en banc opinion is the meaning of the so-called Haskell
Amendment, which excepts from the Internal Revenue Code's definition of
nondisclosable "return information" "data in a form which cannot be associated
with, or otherwise identify, directly or indirectly, a particular taxpayer."
26 U.S.C. s 6103(b)(2) (1982). Specifically, we consider whether to adhere
to a 1981 panel decision of this court which held that that provision removes
from the defined category of protected information all material which, either
in its original form or as redacted in response to a FOIA request, does not
disclose the identity of the taxpayer to whom it pertains.
I
The facts of the present case are set forth in the panel opinion issued
simultaneously with this opinion. For present purposes, it suffices to recite
that the central issue in the appeal is the adequacy of the IRS's search for
requested records; that one of the principal points bearing upon that issue is
whether certain files could reasonably be excluded from the search as
containing only "return information"; and that the latter point depends to a
considerable extent upon whether redaction (specifically, elimination of
portions of documents that would disclose the taxpayer's identity) removes the
material from the protected category.
[1][2] After the case had been briefed and argued before the assigned panel,
the court en banc, on its own motion, requested supplemental briefing and, on
December 5, 1985, heard oral argument limited to the following issue: [FN1]
FN1. Judge Wald's dissent expresses concern over "the court's recent
practice of issuing en banc opinions on legal issues, as opposed to
concrete factual scenarios, see also Foster v. United States, 783 F.2d
1082 (D.C.Cir.1986) (en banc)." Dissent at 172 n. 1. That concern must
logically extend, of course--and should indeed have heightened
application--to the court's common practice of rendering en banc decisions
on isolated legal issues without en banc rehearing, by means of a so-
called "Irons footnote" added to the panel opinion, reflecting the fact
that departure from prior law of the circuit has been approved by the full
court. See, e.g., Telecommunications Research & Action Center v. FCC,
750 F.2d 70, 75 n. 24 (D.C.Cir.1984); In re: Commodity Futures Trading
Comm'n, 738 F.2d 487, 496 n. 19 (D.C.Cir.1984); Irons v. Diamond, 670
F.2d 265, 268 n. 11 (D.C.Cir.1981). Indeed, it must logically extend to
the even more venerable practice of en banc reconsideration of issued panel
opinions limited to specific issues--a practice we indulged in only a few
weeks ago. See Northern Natural Gas Co. v. FERC, 780 F.2d 59
(D.C.Cir.1986) (order granting rehearing en banc "for the limited purpose
of deciding whether the Court should reconsider its holding in Panhandle
Eastern Pipe Line Co. v. FERC, 613 F.2d 1120 (D.C.Cir.1979)").
The practice of segregating legal issues requiring the attention of the
full court from the remainder of the case reflects the fact that appellate
review serves a dual purpose: the correction of legal error and the
establishment of legal rules for future guidance. Only the latter is
ordinarily worthy of the attention of the full court. The dissent's
perception that judges "typically" dispose of all the issues in a case, see
Dissent at 172 n. 1, is simply not true at the second appellate level,
where the law-clarifying function predominates. The Supreme Court often,
if not usually, grants certiorari only on one or more discrete points of
law, and issues its opinions (in that sense) on "legal issues, as opposed
to concrete factual scenarios." En banc consideration (or Irons
footnote disposition) effectively constitutes such second-level appellate
review--at least where, as is the case here, the full court has before it
the full text of a proposed panel opinion. It would be especially perverse
to abandon our efficient practice of limited en banc disposition just as
our caseload has steeply increased, and as the size of the court has been
expanded, magnifying the number of judge-hours devoted to each issue
handled en banc. The proposal to restrict "piecemeal" consideration would
have the effect of making it inordinately difficult to alter prior law of
the circuit or to correct panel decisions that adopt erroneous new rules.
*156 **88 Should the Court adhere to the interpretation of 26
U.S.C. s 6103(b)(2) adopted by the panel opinion in Neufeld v. IRS, 646 F.2d
661, 665 (D.C.Cir.1981), or should it adopt a different interpretation, in
particular that announced by the Seventh Circuit in King v. IRS, 688 F.2d
488, 490-94 (7th Cir.1982)?
Briefs amicus curiae were received from the American Civil Liberties Union
Foundation of Washington and from Professor John L. Neufeld and the Freedom of
Information Clearinghouse.
II
In relevant part, 26 U.S.C. s 6103(a) provides as follows:
Returns and return information shall be confidential, and except as
authorized by this title--
(1) no officer or employee of the United States,....
shall disclose any return or return information obtained by him in any manner
in connection with his service as such an officer or an employee or otherwise
or under the provisions of this section....
Willful violation of this provision is a felony. 26 U.S.C. s 7213(a)(1).
"Return information" is defined in the statute as follows:
(A) a taxpayer's identity, the nature, source, or amount of his income,
payments, receipts, deductions, exemptions, credits, assets, liabilities, net
worth, tax liability, tax withheld, deficiencies, over-assessments, or tax
payments, whether the taxpayer's return was, is being, or will be examined or
subject to other investigation or processing, or any other data, received by,
recorded by, prepared by, furnished to, or collected by the Secretary with
respect to a return or with respect to the determination of the existence, or
possible existence, of liability (or the amount thereof) of any person under
this title for any tax, penalty, interest, fine, forfeiture, or other
imposition, or offense, and
(B) any part of any written determination or any background file document
relating to such written determination (as such terms are defined in section
6110(b)) which is not open to public inspection under section 6110,
but such term does not include data in a form which cannot be associated
with, or otherwise identify, directly or indirectly, a particular taxpayer.
26 U.S.C. s 6103(b)(2) (emphasis added).
The last clause in the defining paragraph is the Haskell Amendment, so called
because it was inserted into the committee-proposed bill through a floor
amendment introduced by that Senator. On the basis of that clause, the Ninth
Circuit held in 1979 that data that do not identify a particular taxpayer
because names, identifying numbers and other similar information have been
deleted are not return information. Long v. IRS, 596 F.2d 362 (9th
Cir.1979), cert. denied, 446 U.S. 917, 100 S.Ct. 1851, 64 L.Ed.2d 271
(1980). In a later case before this court in which the IRS had not briefed the
question, the panel found it necessary to reach the issue and, without analysis
of its own, followed what was at the time the only court of appeals
precedent. Neufeld v. IRS, 646 F.2d 661, 665 (D.C.Cir.1981). In so doing,
the panel observed that "[w]hile the IRS wishes to reserve the question of the
proper statutory definition of return information for another day, it appears
to concede, for this case only, that [no harmful error occurred] if in fact
[the district court] employed the definition of return information articulated
in Long." Id. (footnote omitted). Subsequently, the Seventh Circuit
reached a conclusion different from Long, holding that the statute "protects
from disclosure all non-amalgamated items listed in subsection **89 *157
(b)(2)(A), and that the Haskell Amendment provides only for the disclosure of
statistical tabulations which are not associated with or do not identify
particular taxpayers." King v. IRS, 688 F.2d 488, 493 (7th Cir.1982). The
newly emerged circuit conflict has induced us to reconsider the position stated
in our 1981 panel decision.
The starting point of analysis, of course, is the text of the provision at
issue, which, we agree with the Seventh Circuit, is ill suited to achieve the
result pronounced in Long. It would be most peculiar to catalogue in such
detail, in subparagraph (A) of the body of the definition, the specific items
that constitute "return information" (e.g., "income, payments, receipts,
deductions, exemptions, credits, assets, liabilities, net worth, tax liability,
tax withheld, deficiencies, over-assessments, or tax payments, ... or any other
data, received by, recorded by, prepared by, furnished to, or collected by the
Secretary with respect to a return") while leaving to an afterthought the major
qualification that none of those items counts unless it identifies the
taxpayer. Such an intent would more naturally have been expressed not in an
exclusion ("but such term does not include ...") but in the body of the
definition--by stating, for example, that "the term 'return information' means
the following information that can be associated with or identify a particular
taxpayer: ...." If the intended scope of the exclusion is as broad as Long
holds, the structure of the provision is akin to defining mankind as "all
mammals in the world, but excluding those that are not relatively hairless
bipeds with the power of abstract reasoning." While such a form of definition
is conceivable, it would constitute "everyday language" (as the dissent
characterizes it, Dissent at 174) only for one of Lewis Carroll's characters,
and it hardly takes "talmudic dissection[]" or "microscopic scrutiny," id.,
to reject it as implausible.
The Long interpretation produces a similarly mindless consequence in
subparagraph (B) of the definition of return information. That subparagraph
includes within the definition of return information IRS-written determinations
and related background files that are not open to public inspection under
s 6110. The latter section excludes from the public inspection requirement
not only identifying data, s 6110(c)(1), but many other matters, such as
trade secrets, s 6110(c)(4), information prepared for the use of an agency
regulating financial institutions, s 6110(c)(6), and (with respect to most
written determinations) material relating to a taxpayer's change of annual
accounting period, s 6110(g)(5)(B)(ii). It would be absurd to incorporate
these exclusions so precisely into the body of the definition of return
information, and then, in the immediately following clause, to write all of
them back out--except the identifying data exclusion (s 6110(c)(1)), which
is not deleted by the Haskell exclusion but merely rendered entirely redundant.
We also agree with the Seventh Circuit that the formulation of the Haskell
provision itself suggests something other than merely the absence of
identifying information. It would be strange to express the latter thought by
excluding "data in a form which cannot be associated with, or otherwise
identify ... a particular taxpayer" (emphasis added). The emphasized phrase
would be superfluous for that purpose, as reading the provision without it will
demonstrate. A more natural formulation for the purposes which Long assigns
would be similar to that contained in the provision of FOIA that "an agency may
delete identifying details," 5 U.S.C. s 552(a)(2) (emphasis added); or
similar to the formulation used elsewhere in this same Subchapter of the
Internal Revenue Code, that no publication shall "permit ... information ... to
be associated with, or otherwise identify, directly or indirectly, a particular
taxpayer," 26 U.S.C. s 6108(c). Moreover, it is curious usage to describe
an item of return information (a particular taxpayer's tax "payments," for
example) as having one "form" when made public in a document that includes the
taxpayer's name, and taking a different "form" when made public in the very
same document with only the name deleted.
*158 **90 What is suggested by the language of the provision itself is
strongly confirmed by other provisions of s 6103. Subsections 6103(f)(1) &
(2) and subsection 6103(f)(4)(A) permit disclosure of return information to
certain committees of Congress, and subsection 6103(f)(4)(B) to the full Senate
or House; under all four provisions, however, unless the taxpayer consents in
writing the disclosure must be made to the pertinent committee or house
"sitting in closed executive session" when it concerns "return information
which can be associated with, or otherwise identify, directly or indirectly, a
particular taxpayer." If Long's interpretation of the Haskell Amendment is
adopted, the exception in these provisions completely consumes the rule. That
is to say, if return information consists, as Long says, of nothing but
identifying data, then whenever it is provided under these provisions the
receiving committee or house must sit in executive session. Quite plainly,
these provisions contemplate return information that is nonidentifying. [FN2]
FN2. The dissent refers to all the strange textual consequences of the
Long interpretation as "stylistic superfluity," which it equates in
character with textual imperfections that remain under our interpretation
of the amendment. Dissent at 176-. The latter, however, consist of
nothing more than repetition, in later sections, of the exemption which
(under our interpretation) the Haskell Amendment has already provided.
This cannot reasonably be compared with the Alice-in-Wonderland
definitional structure, see supra at 157, the pointless incorporation in
the definition of exceptions that have no application, see supra at 157,
and the provisions for open meetings that can never occur, see supra at
157-158, that are the consequences of Long. The dissent's
indiscriminate totaling of textual imperfections also happens to be
inaccurate. One of the "superfluities" which it attributes to our
interpretation is not that, since the section in question, s 6108(c), is
not specifically tied to the term "return information." Moreover, both of
the minor imperfections in our interpretation subsist under the Long
interpretation as well, and the dissent seems to have miscounted the
distinctive problems of Long we have discussed. The simplistic "score"
is not 5-3, as the dissent asserts, but 9-2.
In addition to clear textual indications, rejection of the Long
interpretation is suggested by assessment of plausible legislative intent. It
is of course true, as two of the amici have asserted, that there is no reason
"why Congress would have wanted to forbid the disclosure of information which
would not threaten the privacy of individual taxpayers." Brief of Neufeld and
Freedom of Information Clearinghouse at 5. But it is also true that the threat
to privacy is not entirely eliminated by agency and (ultimately) judicial
assessment that certain deletions in response to a FOIA request will suffice to
conceal the taxpayer's identity. The protection afforded by such assessment is
always problematic, not only because of the risk of human error, but also
because the assessment depends to a large extent upon uninformed estimations as
to what data the requester possesses. Consider, for example, a FOIA request
for the amounts and beneficiaries of all charitable deductions claimed by
taxpayers within a particular postal ZIP code area during a particular tax
year. That information would normally not identify the charitable gift of any
particular taxpayer; but it would do so if the requester had been told by his
neighbor that the latter made a charitable gift last year of $2,775.
[3] For most information possessed by the government, Congress has
determined that the risk of occasional unknowing disclosure of facts entitled
to be withheld under FOIA is outweighed by the benefits of openness. But it
has not made that judgment for all information. See, e.g., 50 U.S.C.A. s
431 (West Supp.1985) (exempting Central Intelligence Agency operational files
from FOIA). It is significant that FOIA's nonidentification protection has not
been considered adequate for the other major category of personal information
that the government directs all its citizens to provide: Under the same
Exemption 3 at issue here, 5 U.S.C. s 552(b)(3), all census data are
protected from disclosure, whether or not they identify the individual to whom
they pertain. See Baldridge v. Shapiro, 455 U.S. 345, 102 S.Ct. 1103, 71
L.Ed.2d 199 (1982). We think similarly heightened protection was intended with
regard to tax information, in order to encourage the full, voluntary self-
assessment *159 **91 of taxes upon which our internal revenue system
largely depends.
The intent to provide this increased assurance of confidentiality is conveyed
by the detailed provisions of s 6103 rigidly restricting the use of tax
information within the government itself, and by the severe criminal penalty
(up to five years imprisonment) for unlawful disclosure. See 26 U.S.C. s
7213(a)(1). It is particularly apparent, however--and the incompatibility of
the Long interpretation is particularly clear--from the provisions of
s 6110, which set forth procedures for public inspection of IRS written
determinations and related background files. Unlike most governmental
information obtainable under the Freedom of Information Act, which one or more
members of the public may be interested in for reasons that amount to no more
than curiosity, there is special reason for making written determinations
public, since without such a requirement agencies could develop "secret law."
Thus, FOIA requires such determinations not merely to be provided upon written
request, but to be made available in the agency's reading room, and to be
reflected in a current index that is publicly distributed. 5 U.S.C. s
552(a)(2). Yet in the case of tax information, s 6110 provides greater
protection against improper disclosure of this publicly essential information
than FOIA provides against disclosure of data in which there is no reason to
posit any public need to know. Specifically, the subject of the written
determination is given a right to prior written notice of the Secretary's
intention to disclose, an administrative remedy to prevent the disclosure, a
cause of action in the Tax Court if that remedy is unsuccessful, a right to
intervene in any action seeking disclosure, and even a cause of action for
damages in the Claims Court for improper disclosure. 26 U.S.C. s 6110(f),
(i). In the judicial proceedings to restrain disclosure or to require further
disclosure, there is no requirement similar to the provision of FOIA that "the
burden is on the agency to sustain" the withholding. See 5 U.S.C. s
552(a)(4)(B). It would be absurd to provide such guarantees against disclosure
of identifying information in the context of written determinations while
relying upon no more than the FOIA protections (through Long's
interpretation of the Haskell Amendment) when a request for less publicly
important return information is received.
The dissent criticizes our use of standard textual analysis on the ground
that, while it may be appropriate where Congress "labored arduously over each
choice of word and each comma," it is improper "when the legislative history
shows that a provision was injected into the bill at the tail end of the
process." Dissent at 174. We need not pause to consider the theoretical
deficiencies of such an approach to statutory construction, since it is in any
case not properly applicable here. The (ill-considered) Haskell Amendment was
not adopted separately and distinctly from the other provisions that we seek to
reconcile with it. As we noted earlier, it was not an amendment to a
preexisting law, but an amendment to the bill as originally presented on the
floor. Congress did not pass into law the Haskell amendment by itself, but as
part and parcel of an exceedingly detailed and complex legislative scheme, on
which it had "labored arduously over each choice of word and each comma."
Since all the provisions were enacted simultaneously, there is no plausible
justification for focusing on the hastily considered nature of one of them and
ignoring the carefully crafted character of the remainder.
In fact, far from militating in favor of the broad Long interpretation, the
last-minute and cursory manner in which the Haskell Amendment was proposed and
adopted greatly augments the implausibility of that interpretation. The
massive effect of the amendment, if Long is correct, was to change the scope
of protection from all "return information," as carefully and expansively
described in s 6103(b)(2), to merely all such information which would
identify the taxpayer. That change would not only make superficially
nonidentifying information available to FOIA requesters, and thereby frustrate
the carefully drawn *160 **92 protections against such disclosure
contained in s 6110, but it would also allow such information to be
circulated freely within the government (since the defined term "return
information" is central to both those provisions governing public disclosure
and those governing inter-agency dissemination). We are asked to believe that
this fundamental change in the committee proposal that the members of the
Senate had (presumably) studied was made by this brief proviso at the last
minute, without any statement by its sponsor that it had an effect upon
anything except statistical studies and compilations of data, see infra at 161,
without a floor vote (it was adopted by consent), without dissent from even a
single member of the Senate, and indeed without any comment by any members of
the body who might have been present except Senator Long's remark: "Mr.
President, I will be happy to take this amendment to conference. It might not
be entirely necessary, but it might serve a good purpose." 122 CONG.REC.
24,012 (1976). Rather than embrace this implausibility it would make more
sense--if one were to favor the dissent's approach of using supposed inadequacy
of consideration as a basis to ignore, rather than seeking to reconcile,
textual conflicts--to endorse the position urged by the government, to wit,
that all the befuddled Congress meant to do (never mind that the text will not
bear it, see infra at 162) was to add the tax model to the disclosure
exceptions of s 6108.
III
[4][5] It is much easier to discern what the Haskell Amendment does not
mean (viz., what Long suggests) than what it does. If, as we have
concluded, it does not exclude from the definition of return information all
nonidentifying data, what particular nonidentifying data does it exclude?
Again we think the key is the crucial phrase "in a form." It is significant
that this phrase is not contained in the provisions discussed earlier which
seek--in language otherwise almost identical to the Haskell Amendment--to
describe all identifying data. See ss 6103(f)(1) & (2); 6103(f)(4)(A) &
(B). But it is contained in two other portions of s 6103. Subsection (j),
entitled "Statistical use," permits disclosure of return information (1) to the
Secretary of Commerce "for the purpose of, but only to the extent necessary in,
the structuring of censuses and national economic accounts and conducting
related statistical activities authorized by law"; (2) to the Chairman of the
Federal Trade Commission, "for the purpose of ... administration ... of legally
authorized economic surveys of corporations"; and (3) to the Department of the
Treasury, "for the purpose of ... preparing economic or financial forecasts,
projections, analyses, and statistical studies and conducting related
activities." The last paragraph of the subsection, entitled "Anonymous form,"
concludes:
No person who receives ... return information under this subsection shall
disclose such ... return information to any person other than the taxpayer to
whom it relates except in a form which cannot be associated with, or otherwise
identify, directly or indirectly, a particular taxpayer.
s 6103(j)(4) (emphasis added). In this context, the meaning of the
emphasized phrase seems clear: It is evidently meant to permit the publication
and distribution of the statistical studies, forecasts and surveys that are the
purpose of the permitted disclosures to Commerce, the FTC and Treasury. The
phrase envisions, in other words, not merely the deletion of an identifying
name or symbol on a document that contains return information, but agency
reformulation of the return information into a statistical study or some other
composite product--presumably on the theory that such reformulation gives added
assurance that a taxpayer's identity will in fact not be disclosed.
The same meaning fits the other instance in which the phrase "in a form"
appears as a disclosure limitation in s 6103. Subsection (i)(7)(A) provides
that return information "shall be open to inspection by, or disclosure to,
officers and employees of the *161 **93 General Accounting Office" for the
purpose of conducting legally required audits. Such officers and employees are
prohibited, however, from disclosing to others "return information ... in a
form which can be associated with, or otherwise identify, directly or
indirectly, a particular taxpayer." This seems designed to assure that the
reformulations of raw return information in the audit reports prepared by GAO
officers and employees, if they are to be made public, be carefully devised to
avoid the disclosure of identifying data. Once again the phrase is associated
with a reformulation of the return information. Significantly, the phrase is
not used where the subject of the provision is not "return information" but
material that has already been reformulated. The concluding provision of
s 6108 prescribes that no publication or disclosure of the statistical
studies and compilations authorized by that section "shall in any manner permit
the statistics, study, or any information so published, furnished, or otherwise
disclosed to be associated with, or otherwise identify, directly or indirectly,
a particular taxpayer." 26 U.S.C. s 6108(c).
[6] The United States has argued in this appeal that the only type of
reformulation that the Haskell Amendment exempts is that envisioned by the last
mentioned section. The consequence of this interpretation, of course, is that
the Haskell Amendment becomes substantively superfluous, amounting to no more
than a reminder in the definition section that s 6108 permits disclosure of
statistical data. That alone may not be fatal since, as far as we can discern,
any interpretation of the amendment, including the one we adopt, creates some
redundancy. The insuperable problem, however, is that there is absolutely no
textual basis for limiting the phrase "in a form" to the precise types of
reformulation set forth in s 6108. It is not likely that such a surgically
exact result would be described by that vague term, rather than by the simple
and precise statement that return data "does not include statistical studies
and compilations prepared under authority of s 6108." To support the
suggested limitation, the government resorts to what the Seventh Circuit in
King called the "scant legislative history" of the Haskell Amendment, 688
F.2d at 492, consisting principally of the following statement by Senator
Haskell on the Senate floor:
[T]he purpose of this amendment is to insure that statistical studies and
other compilations of data now prepared by the Internal Revenue Service and
disclosed by it to outside parties will continue to be subject to disclosure to
the extent allowed under present law. Thus the Internal Revenue Service can
continue to release for research purposes statistical studies and compilations
of data, such as the tax model, which do not identify individual taxpayers.
The definition of "return information" was intended to neither enhance nor
diminish access now obtainable under the Freedom of Information Act to
statistical studies and compilations of data by the Internal Revenue Service.
Thus, the addition by the Internal Revenue Service of easily deletable
identifying information to the type of statistical study or compilation of data
which, under its current practice, has been subject to disclosure, will not
prevent disclosure of such study or compilation under the newly amended
section 6103. In such an instance, the identifying information would be
deleted and disclosure of the statistical study or compilation of data be made.
688 F.2d at 493 (quoting 122 CONG. REC. 24,012 (1976)). As King
noted, this statement was made in response to a question whether the IRS could
avoid disclosing statistical studies simply by adding identifying information,
and thus was not necessarily intended as a comprehensive expression of the
purpose of the amendment (though it assuredly adds no support to the textually
implausible Long interpretation). Even disregarding that limitation,
however, the statement simply does not support the government's narrow
construction. It refers not only to "statistical studies" but
**94 *162 also to "compilations of data, such as the tax model." The
latter is not a statistical tabulation. At the time the Haskell Amendment was
adopted, it appears to have been an actual return with identifying details
eliminated. Several years later, perhaps out of recognition that the 1976
legislation no longer permitted such redacted material to be made public, it
was altered to consist of a reformulated return, with substitution of new
figures for certain items-a partly factual, partly fictional return, so to
speak. [FN3] There is no way that the tax model can be brought within the
publication exemptions of s 6108. Even if the provision of s 6108(b)
which permits preparation and disclosure of "special statistical studies and
compilations" is interpreted in such fashion that the adjective "statistical"
does not modify "compilations" (which seems to us strained), the tax model--
which the Secretary had prepared and made public for years before the Haskell
Amendment and has continued to prepare and make public since--could not
possibly come within that provision, since it is by no stretch of the
imagination a "special" compilation prepared "upon written request by any party
or parties," as s 6108(b) requires. [FN4]
FN3. The three sentences preceding this footnote sign did not appear in
our original opinion, as issued in slip form. There the corresponding
passage read as follows:
The latter is not a statistical tabulation but a sample return, derived
from an actual return but reformulated to substitute new figures for
certain items-a partly actual, partly fictional return, so to speak.
The revision was made to correct a factual inaccuracy brought to our
attention by a post-decision motion of amicus American Civil Liberties
Union of Washington, which noted that the description of the tax model
presented to us by the government in oral argument and reflected in the
foregoing passage was accurate for the period beginning about 1980, but was
not accurate as of 1976, when the model was an actual return with
identifying details eliminated.
The dissent's suggestion, Dissent at 176 n. 7, that our decision turned
upon this mistaken factual assumption is demonstrably wrong. Our rejection
of Long, set forth in Part II of this opinion, was made and continues to
be made without any reference to this snippet of legislative history. And
the only reason for raising it in this Part III of our opinion is to refute
the government's position, which relies upon it. The factual inaccuracy in
the case as originally presented to us shows the wisdom of relying upon
the text and structure of the statute rather than this statement by a
single senator as a means of ascertaining the Congress's intent. We have no
way of knowing whether Senator Haskell's understanding of the tax model-
much less that of his colleagues, if any of them relied upon his remark-
comported with our original understanding or rather with what we now know.
The mere term "Tax Model" assuredly does not suggest a redacted actual
return.
FN4. The absence of any textual basis in s 6108 for publication of the
tax model seems to us a complete response to the concurring opinion's
contention that Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), requires us
to defer to the agency's interpretation of the statute. There is some
question, to begin with, whether an interpretive theory put forth only by
agency counsel in litigation, which explains agency action that could be
explained on different theories, constitutes an "agency position" for
purposes of Chevron. Even granting that principle, however, it cannot
possibly have application where counsel's interpretation in fact does not
explain agency action but is, to the contrary, incompatible with the
agency's settled course of conduct. That is the situation here, since the
IRS has regularly released, and plans to continue to release, the tax
model. Nor does it suffice to appeal to Senator Haskell's explicit
reference to the tax model as the agency's justification for this singular
departure from its (supposed) s 6108 theory. Legislative history is
used to clarify the meaning of a text, not to create extra-statutory law.
If it can ever be the basis for plainly departing from the text, it
assuredly cannot be so when an interpretation that honors both the text and
the history is available.
The concurrence claims that agency counsel did not take the position that
the Haskell Amendment referred exclusively to s 6108, but rather
maintained that the phrase "data in a form" in s 6103 referred
exclusively to the statistical studies covered by s 6108 and to the tax
model. Concurrence at 171. The oral argument contained the following
exchange:
[COUNSEL]: ... [I]t is certainly arguable that the Haskell Amendment is
redundant in light of 6108.
....
QUESTION: ... Your interpretation of the Haskell Amendment is s 6108?
[COUNSEL]: That's right and that is why Senator Long didn't think it was
all that necessary....
Corrected Tr. of Oral Argument at 28 (Dec. 5, 1985). This concession was
not, as the concurrence contends, a matter of government counsel's "hav
[ing] been momentarily caught off guard by the court's vigorous
questioning." Concurrence at 171 n. 10. To the contrary, what prompted
the concession (and what prompted the questioning) was the carefully
considered and frequently repeated assertion in the IRS's brief to the full
court that the Haskell Amendment covered only "information ... amalgamated
into statistical data," Supp.Brief for Appellees at 4, 6, and information
"likely rendered anonymous by amalgamation into general statistics," id.
at 9; and that the purpose of the Amendment was "to permit the Internal
Revenue Service to continue its collection and release of general
statistics," id. at 11, and "to permit the release of historically
provided statistical data compiled from return information," id. at 20.
These expressions are subject to no interpretation other than that the
Haskell Amendment excludes from the definition of "return information" only
the statistical studies and compilations already covered by s 6108.
The problem counsel faced at oral argument was reconciling this theory with
the embarrassing fact (first brought to the IRS's attention, evidently, by
the Appellant's Supplemental Brief, filed simultaneously with its own) that
the tax model is not a statistical study or compilation. We thought, in
light of the above-quoted concession at oral argument, that counsel was
seeking to mend his hold by adhering to the IRS's original theory of
equivalence between the Haskell Amendment and s 6108, but explaining the
tax model as a legislative-history-prescribed expansion of what the word
"statistics" includes. The concurrence chooses to interpret the discussion
as utterly abandoning the position that "data in a form" means statistics
only (s 6108) and embracing instead the view that it means statistics
plus (exclusively) the tax model. This merely substitutes for the vice of
nontextual amendment to s 6108 the vice of nontextual amendment to
s 6103, since in no way can the crucial words "data in a form" be
categorically limited to statistical studies, the tax model, and nothing
else. (Nor is there any apparent reason why Congress should assume that,
of all conceivable nonstatistical amalgamations, only the tax model would
be sufficiently helpful and would sufficiently secure anonymity to justify
publication.) Whatever position counsel was taking, one thing is clear:
it is impossible to find here the sort of clear and consistent agency view
(even as purportedly expressed by counsel) that must be given deference.
*163 **95 We may add that, for similar reasons, we find no support in
text or legislative history for the Seventh Circuit's statement in King
that "the Haskell Amendment provides only for the disclosure of statistical
tabulations which are not associated with or do not identify particular
taxpayers." 688 F.2d at 493 (emphasis added). We hold, more broadly than
King, that as used in s 6103(b)(2) the phrase "data in a form which
cannot be associated with, or otherwise identify, directly or indirectly, a
particular taxpayer" requires--in addition to the fact of nonidentification--
some alteration by the government of the form in which the return information
was originally recorded. That reformulation will typically consist of
statistical tabulation or of some other form of combination with other data so
as to produce a unitary product that disguises the origin of its components (as
in the tax model). We need not define, for purposes of the present appeal, all
other manners of reformulation that may be included. [FN5] It suffices to say
that the mere deletion of the taxpayer's name or other identifying data is not
enough, since that would render the reformulation requirement entirely
duplicative of the nonidentification requirement.
FN5. Given the purpose of the reformulation requirement, however--to wit,
the increased assurance of anonymity--we can readily opine that it does not
include the dissent's example of copying the same data "onto a fresh piece
of paper, perhaps in narrative style." Dissent at 175.
We do not pretend that the interpretation we have given the Haskell Amendment
causes it to fit with perfect consistency into the body of Chapter 61 or even,
less ambitiously, s 6103. It causes the provisions of s 6103(j)(4) and
s 6103(i)(7)(A), discussed above, to be superfluous. But that superfluity
is nothing beside the textual and policy absurdities produced by the
interpretation in Long--and exceeds the superfluity produced by the
government's interpretation only because the latter inexplicably limits its
"statistical" restriction to the statistics referred to in s 6108. As we
have construed the Haskell Amendment, it creates no more disruption of the
carefully drawn statutory scheme than is commonly produced by the dread genre
of floor amendment; indeed, with a scheme as detailed as this it is remarkable
that the dislocations are not greater. We are persuaded, in any case, that the
meaning we have assigned is the meaning most faithful to the text, most
compatible with the remainder of the legislation, and most supportable by a
plausible legislative intent.
* * *
Application of our holding to the facts of the present case, and the other
issues presented by the instant appeal, are left to the disposition of the
panel, whose opinion is issued simultaneously with this.
So ordered.
*164 **96 SILBERMAN, Circuit Judge, concurring:
The court confronts in this case a difficult issue of statutory
interpretation. The puzzle begins with 26 U.S.C. s 6103 (1982), which
provides generally for nondisclosure of "return information" in the interest of
taxpayer confidentiality. All sides agree that the heart of this controversy
is the proper interpretation of the Haskell amendment, which authorizes the
agency to release material that otherwise could not be released because it
would be (but for the Haskell amendment) "return information." In other words,
what does the phrase "data in a form which cannot be associated with or
otherwise identify, directly or indirectly, a particular taxpayer" mean? But I
believe there is another question presented of equal importance: Did Congress
intend that the IRS's interpretation of what constitutes such "data in a
form ..." be given deference by the judiciary?
I think it must be conceded that Section 6103 is, at the very least,
ambiguous as to the issue now before the court. Nothing in the language of the
statute itself yields a decisive understanding as to whether Neufeld or
King is a more faithful rendering of the statute's purpose. The legislative
history is sparse and inconclusive on the Neufeld/King question. Against the
backdrop of this ambiguity the parties argue for divergent interpretations of
this provision. The agency argues that the Haskell amendment means that data
must be amalgamated or combined in a different form (Appellee's Supp.Br. at 5
n. 4) and specifically points to data "rendered anonymous by amalgamation into
general statistics" as satisfying that test (Id. at 9). [FN1] The agency
relies heavily on the adoption of this interpretation by the Seventh Circuit
in King and further argues that a broader definition--such as that adopted
by the majority--apart from creating certain anomalies and inconsistencies in
the statutory scheme, presents troublesome administrative problems. The
Secretary, we are told, has grave difficulty in determining the ability of one
who requests information to "correlate facially nonidentifying data with
specific taxpayers." Appellees' Supp.Br. at 13. The Church, on the other
hand, argues that any document in the IRS files that contains return
information must be disclosed provided that identifying information is first
redacted. Through the majority opinion, this court rejects as excessively
narrow the agency's construction of the statute and offers yet another
construction. It concludes that the Haskell amendment exempts from the general
rule of nondisclosure nonidentifying return information that has also
undergone "agency reformulation ... into a statistical study or some other
composite product...." Maj.Op. at 160 (emphasis in original). Each of these
interpretations is, in my view, a reasonable construction of a difficult
statute, but I disagree with the majority's decision to treat its own
construction as authoritative. I believe the majority's approach oversteps the
limitations on the court's proper role as defined in Chevron U.S.A. Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81
L.Ed.2d 694 (1984).
FN1. The agency's brief did not contend that such statistical information
was necessarily limited to the statistical compilations described in
Section 6108, nor do I. And at oral argument agency counsel reiterated
that the tax model would be included within the agency's construction of
the Haskell amendment, as the King court had concluded in 1982. King
treated the tax model as a statistical tabulation. 688 F.2d at 493. In
light of the King discussion I fail to understand the majority's
"surprise" theory. Maj.Op. at 162 n. 3.
The message of Chevron is emphatic. A court's duty in matters of statutory
construction is to give effect to congressional intent. If that intent is not
precisely apparent, however,
the court does not simply impose its own construction on the statute, as
would be necessary in the absence of an administrative interpretation. Rather,
if the statute is silent or ambiguous with respect to the specific issue, the
question for the court is whether the agency's answer is based on a permissible
construction of the statute.
Id. at 843 (footnote omitted). Beyond this we cannot go.
I believe Chevron's instruction applies to the issue of statutory
construction now before the court. Section 6103(b)(2), set out in full in
the majority opinion at page 5, defines return information by enumerating
several different categories of information, but qualifying the enumeration
with the words of the Haskell amendment "but such **97 *165 term does not
include data in a form which cannot be associated with, or otherwise identify,
directly or indirectly, a particular taxpayer." 26 U.S.C. s
6103(b)(2) (1982). The words of the Haskell amendment seem to me to cry out
for application of the doctrine of deference expounded in Chevron. No one,
it would seem, is better qualified than the Secretary to decide whether certain
classes of information may be released in compliance with the Haskell
amendment.
I
Before proceeding, I must address a question that the majority raises without
answering--"whether an interpretive theory put forth only by agency counsel in
litigation, which explains agency action that could be explained on different
theories, constitutes an 'agency position' for purposes of Chevron."
Maj.Op. at 162 n. 3. I think it is much too late to question whether the
construction of Section 6103(b)(2) urged by agency counsel in this case
really represents the IRS's position. We know that the IRS has been advancing
its interpretation in courts throughout the country at least since 1982, when
it persuaded the Seventh Circuit in King to adopt its position, and perhaps
even before then. To suggest in these circumstances that the King analysis
is not an "agency position" is to imply that IRS counsel are mavericks,
disembodied from the agency that they represent. I reject that supposition.
See Ashland Oil, Inc. v. FTC, 548 F.2d 977, 984-85
(D.C.Cir.1976) (MacKinnon, J., dissenting).
The precept that the agency's rationale must be stated by the agency itself
stems from proper respect for the separation of powers among the branches of
government. In the seminal case of SEC v. Chenery Corp., 318 U.S. 80, 63
S.Ct. 454, 87 L.Ed. 626 (1943), the Court explained that "a judicial judgment
cannot be made to do service for an administrative judgment." Id. at 88, 63
S.Ct. at 459. Similarly, in Investment Co. Inst. v. Camp, 401 U.S. 617, 91
S.Ct. 1091, 28 L.Ed.2d 367 (1971), the Court declined to defer to agency
counsel's interpretation, noting that "Congress has delegated to the
administrative official and not to appellate counsel the responsibility for
elaborating and enforcing statutory commands." Id. at 628, 91 S.Ct. at
1097. In these cases, the Supreme Court declined "to substitute [its own] or
counsel's discretion for that of the [agency]" because to do so would be
"incompatible with the orderly functioning of the process of judicial review.
This is not to deprecate, but to vindicate ... the administrative process, for
the purpose of the rule is to avoid 'propel[ling] the court into the domain
which Congress has set aside exclusively for the administrative agency.' "
Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 169, 83 S.Ct.
239, 246, 9 L.Ed.2d 207 (1962) (quoting SEC v. Chenery Corp., 332 U.S.
194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995 (1947) (citation omitted)
(Chenery II)). In other words, the doctrine developed as a manifestation of
judicial restraint. If courts were to accept an agency counsel's position that
significantly differed from the agency's position, they would in effect
substitute a judicial interpretation for the agency's.
The doctrine has been applied in a variety of cases. Courts have rejected as
inadequate agency counsel's articulation of a statutory interpretation when
that interpretation has been inconsistent with a prior administrative
construction, see Securities Indus. Ass'n v. Board of Governors of the Fed.
Reserve Sys., 468 U.S. 137, 104 S.Ct. 2979, 2983-84, 82 L.Ed.2d 107 (1984);
Pitzak v. OPM, 710 F.2d 1476, 1479 n. 2 (10th Cir.1983); when the record
evidence before the court demonstrates no link between counsel's interpretation
and administrative practice, Alaniz v. OPM, 728 F.2d 1460, 1465
(Fed.Cir.1984); or when agency counsel's interpretation is revealed as no more
than a "current litigating position." Ames v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 567 F.2d 1174, 1177 n. 3 (2d Cir.1977); see McMillan &
Peterson, "The Permissible Scope of Hearings, Discovery, and Additional
Factfinding During Judicial Review of Informal Agency Action," 1982 Duke
L.J. 333, 363 n. 163. [FN2] And in Investment Co. Inst. v. Camp, the
Supreme Court declined *166 **98 to credit agency counsel's statutory
interpretation, offered in support of an agency regulation, where the
Comptroller had "adopted no expressly articulated position at the
administrative level as to the meaning and impact" of the relevant statutory
provisions. 401 U.S. at 627, 91 S.Ct. at 1097. Those circumstances are not
present in this case, however. The construction of the Haskell amendment was
not even a central issue in this case in its administrative phase before the
agency. There was no need then for the agency to set forth its position on
that issue. It was not until the case came before the district court that the
issue arose in any form. There the Church argued that in light of Neufeld,
which had been decided during the district court litigation, the IRS could not
tenably maintain that it need not even search files known to contain return
information. The IRS, bound, of course, by the Neufeld court's construction
of the Haskell amendment, argued to the district court that since the Church's
request identified the taxpayer, "no information could be released by the
Service that would be anonymous." Defendants' Memorandum in Reply to
Plaintiff's Statement of Points and Authorities in Opposition to Defendants'
Motion for Summary Judgment at 3. On appeal before the D.C. Circuit panel, the
IRS acknowledged that it was bound by Neufeld, but urged the court to
reconsider Neufeld in light of King. Thus, at the first moment in the
case when it was appropriate and relevant for the IRS to articulate its
construction of the statute, it did so. En banc consideration of the issue
ensued.
FN2. The notion that deference should not be accorded if the agency's
interpretation appears to be no more than a "current litigation position"
suggests a slightly different but related variation on the original
doctrine. But the IRS has, as far as I can tell, always sincerely asserted
the King interpretation whenever it was appropriate to do so.
What is clear from all this is that the King analysis is in no way
inconsistent with the basis for the agency's decision in the administrative
appeal. See Appellee's Panel Br. at 24 n. 11. This is not a case like
Investment Co. Inst. v. Camp. In that case, the Comptroller of the
Currency, to whom Congress had only recently reassigned regulatory
responsibility for national banks' trust activities, adopted, three decades
after enactment of the Glass-Steagall Act, a regulation that departed from a
long-settled interpretation of the statute. See 401 U.S. at 621-22, 91
S.Ct. 1094-95. The Comptroller plainly neglected to furnish an appropriate
rationale for his actions at a stage in the proceedings where there was a
compelling need to articulate a link between the statutory provisions and the
new regulation. The time to provide a statutory interpretation that underpins
a newly promulgated rule that sweeps away earlier interpretations of the
statute is obviously at the time of the rulemaking. In informal administrative
adjudicative proceedings that evolve into federal court litigation, by
contrast, the issues may well be shaped and sharpened throughout the
proceedings. I think it is enough that the agency, through its counsel, set
forth its interpretation of the statute at the first moment when it was
appropriate and relevant to do so.
Were the rule to be otherwise--were the courts to withhold deference unless an
agency asserted its interpretation of a statute in a formal adjudication or
agency rulemaking--we would be creating a strong incentive for government
agencies and departments to undertake their business strictly through formal
procedures. Although judicial review of administrative action has seemed in
recent times to push in that direction, I doubt that much good can come of this
trend or, more importantly, that it is justified by congressional direction.
See Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council,
Inc., 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978). We should take care
that a doctrine developed to restrain the judiciary not be transformed to serve
as a justification for excessive judicial intervention.
In any event, if this court rejects King on the unwarranted assumption
that King is not the IRS's "true" interpretation of the Haskell amendment,
the agency presumably could undercut the court's holding merely by taking some
more formal step to adopt King as the Commissioner's interpretation of the
statute. This strikes me as an unseemly institutional pas de deux. [FN3]
FN3. If the agency were formally to adopt the King position, let us say
through a regulation or interpretive rule, it would surely be entitled to
deference before other circuits that have not as yet faced the need to
interpret the Haskell amendment. But I really see no inherent reason why
it would not be entitled to deference in this court in a new proceeding as
well. That prospect suggests that if the majority is uncertain as to
whether the King analysis is actually the IRS's position, it should
order the case remanded to the agency to allow what it regards as an
adequate demonstration to that effect.
*167 **99 II
FOIA's general policy favors disclosure, but the statute also recognizes nine
categories of exemptions from the general rule of disclosure. One of the
exemptions, found at Section 552(b)(3), provides that
(b) This section does not apply to matters that are ...
(3) specifically exempted from disclosure by statute (other than section 552b
of this title) provided that such statute (A) requires that the matters be
withheld from the public in such a manner as to leave no discretion on the
issue, or (B) establishes particular criteria for withholding or refers to
particular types of matters to be withheld;
5 U.S.C. s 552(b)(3) (1982).
Thus, the language of Section 552 exempts statutes such as Section 6103
[FN4] from "[t]his section," which I take to mean the entire Section 552 in
the absence of any other plausible reference. But Section 552 contains not
only the disclosure requirements; it also contains the provision for de novo
judicial review. While it is obvious that materials covered by exemption 3 are
exempted from the disclosure requirement of Section 552, mere assertion that
requested documents are covered by an exemption 3 statute will not serve to
immunize items from disclosure. The de novo review section of FOIA requires
courts to examine withheld documents to determine whether they are in fact
covered by an exemption 3 statute. But that cannot possibly mean that the law
applied in those proceedings is other than that embodied in the exemption 3
statute. That is to say, the definition or scope of "matters" covered by the
exemption 3 statute must derive from the exemption 3 statute. It could come
from nowhere else. [FN5]
FN4. We have held that Section 6103 is an exemption 3 statute; that
is, it meets the criteria set out in subsection (b)(3). Moody v. IRS,
654 F.2d 795, 797 & n. 4 (D.C.Cir.1981); see Chamberlain v. Kurtz, 589
F.2d 827 (5th Cir.), cert. denied, 444 U.S. 842, 100 S.Ct. 82, 62
L.Ed.2d 54 (1979); Fruehauf Corp. v. IRS, 566 F.2d 574 (6th Cir.1977);
see also Zale Corp. v. IRS, 481 F.Supp. 486, 490 n. 13 (D.D.C.1979).
FN5. My reading of Section 6103 and FOIA nevertheless differs from the
reasoning of Zale Corp. v. IRS, 481 F.Supp. 486 (D.D.C.1979), relied
upon by King. The Zale court held that Section 6103 was a self-
contained provision not subject at all to judicial review under FOIA.
Id. at 489-90. The court held that Section 6103 contained its own
standard governing disclosure or nondisclosure of tax return information
and that decisions not to disclose were subject to review only under the
Administrative Procedure Act. Id. In my view, this analysis goes too
far. Section 6103 and FOIA are easily construed together without the
need to ignore either provision.
I have found nothing in the legislative history of FOIA or its subsequent
amendments that contradicts this analysis. The House Report accompanying S.
1160, the bill whose provisions were eventually codified as amended at 5
U.S.C. s 552, explained that "[t]he proceedings are to be de novo so that the
court can consider the propriety of the withholding instead of being restricted
to judicial sanctioning of agency discretion." H.R.Rep. No. 1497, 89th Cong.,
2d Sess. 9 (1966), U.S.Code Cong. & Admin.News 1966, p. 2418. The Senate
Report stated: "That the proceeding must be do novo is essential in order that
the ultimate decision as to the propriety of the agency's action is made by the
court and prevent [sic] it from becoming meaningless judicial sanctioning of
agency discretion." S.Rep. No. 813, 89th Cong., 1st Sess. 8 (1965). [FN6]
FN6. In 1974 and 1976 Congress amended FOIA to clarify the meaning of de
novo review and to tighten the focus of certain exemption provisions. To
do this Congress explicitly overruled judicial precedents that it viewed as
obstacles to fulfilling FOIA's pro-disclosure policy. In the 1974
amendments to FOIA, for example, Congress overruled the Supreme Court's
decision in EPA v. Mink, 410 U.S. 73, 93 S.Ct. 827, 35 L.Ed.2d 119
(1973). Congress viewed the Court's holding as having interpreted
exemption (b)(1), relating to national security and foreign policy matters,
too broadly. Congress clarified in the 1974 amendments that district court
judges could conduct in camera inspection of classified documents and need
not defer to the agency's decision to label a document classified. See
S.Rep. No. 1200, 93d Cong., 2d Sess. 9, 12 (1974), U.S.Code Cong. &
Admin.News 1974, p. 6267 (stating intent to overrule Mink). Similarly,
in 1976, Congress overruled FAA v. Robertson, 422 U.S. 255, 95 S.Ct.
2140, 45 L.Ed.2d 164 (1975), which had interpreted exemption (b)(3) to
embrace a statute (and by implication a class of statutes) that Congress
had not intended to include among those excusing disclosure. See H.R.Rep.
No. 1441, 94th Cong., 2d Sess. 25 (1976), U.S.Code Cong. & Admin.News 1976,
p. 2183 (stating intent to overrule Robertson).
The legislative history of the 1974 and 1976 amendments to FOIA does not
discuss the term "de novo review" in any directly relevant respect. But
the legislative history of the 1974 amendments does discuss the term in
connection with new statutory language that narrowed the scope of
exemption (b)(1) and clarified that a district court may order, as part of
its de novo review of an agency's withholding determination, in camera
review of classified documents. S.Rep. No. 1200, 93d Cong., 2d Sess. 8-9,
11-12 (1974). The Conference Report states that in camera inspection
should not be automatically undertaken; that the agency should first
receive an opportunity to demonstrate the correctness of its classification
decision (the predicate for withholding documents under exemption 1) by
means of affidavits. In deference to executive agencies' expertise in
national security and foreign policy matters, the conferees stated their
intent that courts should "accord substantial weight to an agency's
affidavit concerning the details of the classified status of the disputed
record." Id. at 12, U.S.Code Cong. & Admin.News 1974, p. 6290. Thus,
Congress recognized that even within the de novo review that it directed
courts to conduct under FOIA, there was room for deference to the agency on
factual issues relating to the availability of an exemption in a particular
case within the agency's delegated area of responsibility.
*168 **100 But does de novo review mean more than an independent
examination of the facts in light of applicable law; [FN7] is it inconsistent
with deference to an agency's reasonable construction of a statute it
administers? In other words, must Chevron give way whenever a court is
charged with de novo review?
FN7. The term de novo review, as it is used in the general judicial review
provision of the Administrative Procedure Act, 5 U.S.C. s 706(2)(F), is
limited to an independent review of the relevant facts. Section 706
requires the reviewing court to "hold unlawful and set aside agency action,
findings, and conclusions found to be-- ... (F) unwarranted by the facts to
the extent that the facts are subject to trial de novo by the reviewing
court." See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S.
402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971) (Section 706(2)(F)
authorizes de novo review in two circumstances only: (1) for adjudicatory
agency action, if agency factfinding procedures inadequate; (2) in
proceedings for enforcement of nonadjudicatory agency action, court may
undertake independent factfinding as to issues not raised before agency).
I have concluded that Chevron does apply in such circumstances. The rule
of Chevron is not a rule of judicial administration for courts to apply in
reviewing administrative decisionmaking. It is an articulation of the
fundamental principle that when Congress intends to delegate authority to an
agency, that purpose demands recognition by the courts. I reason as follows.
In entrusting administration of a statute to an agency, Congress typically
delegates to the agency concomitant authority to "fill any gap" that Congress
has left. Morton v. Ruiz, 415 U.S. 199, 231, 94 S.Ct. 1055, 1072, 39
L.Ed.2d 270 (1974). Part of the legislative purpose with respect to a
particular statute, then, is Congress' intent that the agency will exercise its
delegated authority in fulfillment of the statute's purpose. Courts
appropriately defer to an agency's reasonable interpretation of a statute that
the agency administers, then, not simply out of recognition of the agency's
expertise, but primarily out of respect for congressional intent.
In Sims v. CIA, 642 F.2d 562 (D.C.Cir.1980), this court took an approach
contrary to my analysis and treated the issue of statutory construction of an
exemption 3 statute as a question of law "reserved ultimately to our
determination." Id. at 568. In that case, the CIA declined to disclose
documents that revealed the names of individuals and institutions that had
participated in a controversial research program. The agency argued that the
documents were "specifically exempted by statute" from disclosure within the
meaning of Section 552(b)(3). The exemption 3 statute upon which the CIA
relied was 50 U.S.C. s 403(d)(3) (1982), which authorizes the Director to
protect "intelligence sources and methods from unauthorized disclosure."
Appellants argued that the institutions and *169 **101 individuals did not
constitute "intelligence sources" within the meaning of the statute. Thus, the
issue in the Sims case, as in this case, turned on construction of a term in
the exemption 3 statute. On appeal, this court devised a definition of the
term "intelligence sources" after reviewing the statute and its legislative
history. The court stated that FOIA authorized the judiciary "to undertake de
novo review" not only of "agency determinations that particular records fall
within exemption classifications," but also of "agency constructions of
applicable statutes." 642 F.2d at 566 (citation and footnote omitted). The
court acknowledged that "[b]ecause the term 'intelligence ... sources' appears
in the text of the National Security Act, it is appropriate for us to begin our
analysis with the construction proposed by the CIA, an agency chartered by that
statute and charged with major responsibility for its administration." 642
F.2d at 568 (citations omitted). The court continued, "But we must not shrink
from the responsibility vested in us by Congress. The question presented is
one of law reserved ultimately to our determination." Id.
The Sims court's observations as to the state of the law on deference to
administrative agencies' determinations in 1980 were, in my view, overbroad and
erroneous. It has always been true that statutory interpretation is a question
of law but it is equally true that an agency's construction of its governing
statute traditionally has been viewed as entitled to deference in certain
contexts. As this court recognized in a case decided after Sims, although
the "APA appears to require de novo review of all questions of law ... courts
almost always accord some deference to an agency's statutory construction."
[FN8] Office of Communication of the United Church of Christ v. FCC, 707
F.2d 1413, 1422-23 n. 12 (D.C.Cir.1983); see Red Lion Broadcasting Co. v.
FCC, 395 U.S. 367, 381, 89 S.Ct. 1794, 1801-02, 23 L.Ed.2d 371 (1969);
Unemployment Comp. Comm'n v. Aragon, 329 U.S. 143, 153-54, 67 S.Ct. 245,
250-51, 91 L.Ed. 136 (1946); McLaren v. Fleischer, 256 U.S. 477, 480-81, 41
S.Ct. 577, 577-78, 65 L.Ed. 1052 (1921); Webster v. Luther, 163 U.S. 331,
342, 16 S.Ct. 963, 967, 41 L.Ed. 179 (1896). Chevron has put a new gloss on
these old truisms. Chevron tells us that if congressional intent respecting
a statutory provision is not clear, we must not treat the issue of statutory
construction as we would treat any other garden variety question of law. We
must defer to another institution's determination--that of the agency charged
to administer the law--provided, of course, that the agency's determination is
reasonable. In this sense, I believe that Chevron supersedes the Sims
court's overbroad analysis.
FN8. The Office of Communications court used the term "de novo" as
shorthand for the introductory language in Section 706 that instructs
courts reviewing agency action to "decide all relevant questions of law."
5 U.S.C. s 706 (1982). But as the quotation in text makes plain,
Office of Communications did not purport to hold that such "de novo"
determinations were to be made without deference to the agency's statutory
interpretation.
My view is further reinforced by the Supreme Court's treatment of the
definitional issue when Sims came before that Court. [FN9] CIA v. Sims,
--- U.S. ----, 105 S.Ct. 1881, 85 L.Ed.2d 173 (1985). Dismissing the
court of appeals' definition of "intelligence sources" as too narrow, the Court
stated:
FN9. The court of appeals' decision reported at 642 F.2d 562 (1980)
(Sims I ) set out a definition of the term "intelligence sources" and
remanded the case for the district court to apply that definition. After
the district court's decision on remand, the case again came before the
court of appeals. Sims v. CIA, 709 F.2d 95 (D.C.Cir.1983) (Sims
II ). This court determined that the district court had not properly
applied the definition set forth in Sims I and reversed and remanded the
case. Id. at 100-01. The Supreme Court heard the case on the parties'
cross-petitions for certiorari.
For a discussion of the Sims Court's "implicit view of a limited role
for the judiciary" in reviewing agency claims of FOIA exemption 3, see
Comment, CIA v. Sims: Supreme Court Deference to Agency Interpretation
of FOIA Exemption 3, 35 Cath.U.L.Rev. 279 (1985).
The plain meaning of the statutory language, as well as the legislative
history *170 **102 of the National Security Act, ... indicates that
Congress vested in the Director of Central Intelligence very broad authority to
protect all sources of intelligence information from disclosure. The Court of
Appeals' narrowing of this authority not only contravenes the express intention
of Congress, but also overlooks the practical necessities of modern
intelligence gathering--the very reason Congress entrusted this Agency with
sweeping power to protect its "intelligence sources and methods."
Id., 105 S.Ct. at 1887-88. This approach is consistent with Chevron
insofar as it first undertakes an inquiry as to the clarity of the legislative
intent. Having found clear indications of congressional intent in the language
of the statute and its legislative history, the Court had no need to move to
the next step of the analysis that Chevron directs--determining whether the
administrative agency had advanced a reasonable interpretation of the statute
to which the judiciary should defer. But the Court's recognition of the
"practical necessities of modern intelligence gathering" that compelled
Congress to delegate to the CIA "sweeping power" to protect "intelligence
sources and methods" indicates that the Court's conclusion as to legislative
purpose was buttressed by its understanding of the agency's delegated authority
and practiced expertise. Similarly, here Congress has delegated to the
Secretary of the Treasury authority to administer the federal income tax laws.
And Section 6103 is an integral part of the mosaic of those tax laws because
it directs the Secretary to protect return information from disclosure.
Congress realized that the confidentiality of return information, which
taxpayers usually provide voluntarily, is crucial to efficient administration
of the tax laws. S.Rep. No. 938, 94th Cong., 2d Sess. 316-19 (1976), U.S.Code
Cong. & Admin.News 1976, p. 2897. Naturally, the Secretary, like the Director
of Central Intelligence in Sims, is better situated than the courts to
determine when disclosure of information is likely to inhibit the collection of
that information in the future. For that reason, Congress quite understandably
delegated to the Secretary some responsibility for further refining the meaning
of "data in a form which cannot be associated with, or otherwise identify,
directly or indirectly, a particular taxpayer."
III
Applying the traditional principle of deference, as refined by Chevron, to
this case, I conclude that we should defer to the agency's interpretation of
Section 6103. As noted above, the agency's interpretation of Section
6103 is not an inevitable one but that is not the test. The Chevron Court
indicated, rather, that when congressional intent is not clear
a court may not substitute its own construction of a statutory provision for
a reasonable interpretation made by the administrator of an agency.
467 U.S. at 844, 104 S.Ct. at 2782 (footnote omitted). Congress' implicit
delegation of authority to the agency to refine the definition of "return
information" is buttressed by the broad discretion conferred upon the Secretary
in another portion of the statute to disclose return information if he
determines that such disclosures would not seriously impair administration of
the tax system. See 26 U.S.C. s 6103(e)(7) (1982) (release of return
information to persons having material interest). This instance of
statutorily-conferred discretion to disclose, albeit to a limited class of
requesters, even information sensitive enough to be categorized as return
information suggests that the prior determination of what constitutes
nondisclosable return information ought to be informed by the agency's
expertise.
The majority refuses to defer to the agency's interpretation because it
asserts that the agency's practice is inconsistent with its interpretation of
the statutory text. Specifically the majority focuses on the government's
continued release of the tax model as fatal to its interpretation of the
Haskell amendment. However, the majority does not contend that the tax model
cannot fit easily within the general phrase "data in a form which cannot be
associated *171 **103 with, or otherwise identify, directly or indirectly,
a particular taxpayer." 26 U.S.C. s 6103(b). That argument would, in any
event, be tenuous in light of the explicit statement Senator Haskell made from
the floor. He said that the amendment was intended to permit "the Internal
Revenue Service [to] continue to release for research purposes statistical
studies and compilations of data, such as the tax model, which do not identify
individual taxpayers." 122 Cong.Rec. 24,012 (1976) (remarks of Sen.
Haskell).
Instead, the majority raises what I view as an artificial textual barrier by
ascribing to the government an argument not presented in its brief, and not
necessary to its position, [FN10] that the Haskell amendment is identical in
its scope of disclosure authority to Section 6108 and that Section 6108's
text provides no authority to release the tax model. The agency, however, as I
understand its position, maintains that the Haskell amendment was intended to
authorize disclosure of statistical compilations such as those referred to in
Section 6108 and disclosure of the tax model, which disclosure is apparently
not otherwise authorized by the statute. The legislative history of the
Haskell amendment amply supports the government's position that it was designed
to authorize the continued release of data the government had released prior to
its passage.
FN10. The majority opinion reproduces a portion of the colloquy at oral
argument which it asserts establishes the IRS's position to be that
Section 6103 permits release only of the statistical studies referred to
in Section 6108. I do not believe that the colloquy, in context,
establishes the IRS's position as such.
THE COURT: Your reading of Section 6103 makes 6108 superfluous.
COUNSEL: Not entirely, but it's certainly arguable that the Haskell
amendment is redundant in the light of 6108.
THE COURT: I don't understand that. Why the two if that is what Congress
intended to do? ... As I read it over and over again, it's exactly the
same. Your interpretation of the Haskell Amendment is 6108.
COUNSEL: That is right. And that's why Senator Long said he didn't think
it was really all that necessary....
Transcript of Oral Argument at 28-29 (Dec. 5, 1985) (conformed to tape
recording of oral argument).
Counsel's apparent concession is not all it seems, however. Government
counsel appears to have been momentarily caught off guard by the court's
vigorous questioning, for counsel made it abundantly clear in his
immediately subsequent exchanges with the court that the IRS's position was
not confined to its understanding of Section 6108.
THE COURT: There is no congressional intention to support that view
anywhere.
COUNSEL: ... I'm sorry, I can't agree with that.
THE COURT: Well, where is it?
COUNSEL: It seems very clear that Haskell was worried that the sweeping
language of 6103(b)(2), that maybe legitimate scholarly use, state and
local government use of the tax model which had been going on since 1960,
would be choked off. "Oh, my God, they've gone too far in defining return
information." Well, 6108 was there, to be sure, but Haskell, perhaps not
satisfied that one bite would be enough, thought that maybe he ought to
have two, and he suggested that under those circumstances, in order to
continue to make available for legitimate scholarly use the tax model and
similar studies it would be important to say, that, well, data in a form
that ... [the court interrupted].
Id. at 29 (conformed to tape recording of oral argument) (emphasis
added).
This elaboration is consistent with IRS counsel's earlier statement that
"[W]e submit it is very clear that the Haskell amendment was meant to
permit the release of the tax model and similar statistical studies that
were in an amalgamation form...." Id. at 25 (emphasis added). It is
clear that the IRS never strictly limited its interpretation of the Haskell
amendment to the terms of Section 6108. It viewed the Haskell amendment
as permitting disclosure of the tax model and "similar statistical
studies." This clearly leaves open the possibility of the creation of
other statistical studies, outside the scope of Section 6108, whose
release would be permitted under the Haskell amendment. I do not contend
otherwise, contrary to the majority's suggestion. See Maj. Op. at 162
n.3. There may or may not be any statistical studies in existence or
contemplated by the IRS that are outside of Section 6108; I do not
know, nor did Congress--which, of course, is why (in addition to its
authorization of the release of the tax model) the Haskell amendment is not
redundant.
To be sure, there may not be a great deal of difference between the agency's
interpretation of the Haskell amendment, adopted by the Seventh Circuit in
King, and the majority's rendition. But the rule of Chevron requires us
not to reason our *172 **104 own way to an interpretation, even if it were
one that the agency might find consistent with its own. Rather, Chevron
requires us to defer to agency interpretations, such as the one at issue here,
that merit deference. I am reinforced in my conviction that deference is the
appropriate course in this case by the majority's unwillingness to specify the
outer boundaries of its own interpretation, Maj.Op. at 163, thus presenting
this court with a heightened prospect of further litigation focused on the
exploration of those boundaries.
On the basis of the foregoing, I concur in the majority's opinion insofar as
it overrules Neufeld. But I cannot join the opinion insofar as it rejects
the agency's interpretation of the statute in favor of the majority's own.
WALD, Circuit Judge, dissenting, with whom SPOTTSWOOD W. ROBINSON, III, Chief
Judge, and MIKVA, Circuit Judge, join:
I.
I dissent from the court's newly adopted interpretation [FN1] of 26
U.S.C. s 6103(b)(2) saying that the IRS may never disclose data listed in the
section even if there is no risk of identification, unless it has been
"reformulated." The court reaches that interpretation based on its reading of
the text of the Haskell Amendment, inferences it draws from the relationship
between that Amendment and other sections of the Code, and its understanding of
plausible legislative intent. I believe that these very same factors support a
reaffirmance, rather than a rejection, of the interpretation of s 6103(b)(2)
previously adopted by this court in Neufeld v. IRS, 646 F.2d 661
(D.C.Cir.1981).
FN1. Since the en banc court has considered only this discrete legal
issue, and has left to the panel the application of its "holding to the
facts of the present case," maj. op. at 163, my dissent must similarly
focus on the legal issue of s 6103(b)(2)'s general meaning. I am
concerned, however, that the court's recent practice of issuing en banc
opinions on legal issues, as opposed to concrete factual scenarios, see
also United States v. Foster, 783 F.2d 1082 (D.C.Cir.1986) (en banc),
poses problems. Judges typically do not issue advisory opinions on
abstract legal issues because of the case or controversy requirement of
Article III. While our practice here does not, of course, technically
implicate those provisions, it does, in my opinion, raise some of the
dangers that the case or controversy requirement protects against. For
example, it is conceivable that a majority of the en banc court might think
that this controversy could be disposed of on some narrower, factual ground
than a wholesale repudiation of our old definition of s 6103(b)(2). Yet
the contours of the issue that was heard en banc practically prevent such
an alternative. Unlike Supreme Court review, where the justices review the
entire record before deciding whether to hear a specific issue, our
practice isolates the legal issue from its factual moorings altogether. I
hope that, in the future, the court will be cautious in adopting this kind
of piecemeal approach to en banc hearings. "The establishment of legal
rules for future guidance," maj. op. at 155 n.1, best emerges out of
fullfledged, fact-based adversarial proceedings, not judicial rulemaking.
I find nothing in the statutory text or structure to support the notion that
wholly nonidentifying information [FN2] may not be disclosed unless it has been
put in a different "form." Such an extreme and curious requirement is at odds
with the majority's own recognition that "there is no reason 'why Congress
would have wanted to forbid the disclosure of information which would not
threaten the privacy of individual taxpayers.' " Maj. op. at 158 (quoting
Brief of Neufeld and Freedom of Information Clearinghouse at 5). The
Neufeld approach, in my view, comports best with Congress' balancing of the
strong interest in taxpayer privacy and the equally strong interest in
disclosure under the Freedom of Information Act whenever taxpayers' privacy
rights are not implicated.
FN2. It is essential to note that the disclosability of actual tax returns
and other information filed by the taxpayer is not at issue here. Such
items are covered by s 6103(b)(1), are not subject to the Haskell
Amendment, and are thus wholly immune from disclosure under FOIA's
exemption 3.
The interpretation adopted in Neufeld adequately safeguards the privacy
concerns that the majority and I share. The court in Neufeld explicitly
held that "mere deletion *173 **105 of names and addresses" does not
automatically open the door for disclosure of items listed in s 6103
(b)(2). Neufeld, 646 F.2d at 665. Rather, the court remanded the case to
the District Court for determination of "what information, other than name and
address, poses a risk of identifying a taxpayer," id., with the
understanding that the nature of certain documents may render them entirely
nondisclosable. Id. at 666. See also Moody v. IRS, 654 F.2d 795
(D.C.Cir.1981); Long v. IRS, 596 F.2d 362 (9th Cir.1979), cert. denied,
446 U.S. 917, 100 S.Ct. 1851, 64 L.Ed.2d 271 (1980).
I agree that the IRS faces a difficult task in determining just when enough
information has been deleted to make the taxpayer unidentifiable. This task is
no different, however, from the situation agencies often face under the
redaction requirement of the Freedom of Information Act, 5 U.S.C. s 552(b),
a requirement that applies even with regard to matters otherwise "specifically
exempted from disclosure by statute" under FOIA's exemption 3. 5 U.S.C. s
552(b)(3). While I would grant considerable deference to the agency's
expertise in determining when even seemingly anonymous tax data might lead the
informed requester to identify a taxpayer, I believe that this determination is
for the Service to carry out on a case-by-case or, at times, a document class-
by-class basis, in the same fashion that the panel opinion accompanying the en
banc decision requires the IRS to proceed with respect to documents not listed
in s 6103. See Church of Scientology v. Internal Revenue Service
(hereinafter "Panel op."), 792 F.2d 146, 152-153 (D.C.Cir. 1986).
In changing course so fundamentally, the court must beware of the effect that
its decision will have on others who seek to review tax information in pursuit
of varied goals. The plaintiff in Neufeld, for example, was a professor
doing research into the practice of members of Congress, White House staff
members, and other high government officials interceding on behalf of taxpayers
in ongoing IRS proceedings. Neufeld "specifically disclaim[ed] any interest in
information that would directly or indirectly identify individual taxpayers."
Neufeld, 646 F.2d at 662. See also Tax Reform Research Group v. IRS, 419
F.Supp. 415 (D.D.C.1976) (public interest group researching Nixon
Administration's actions pressuring IRS with respect to persons perceived as
either "friends" or "enemies"). Yet, under the majority's holding today, the
IRS is forbidden from disclosing s 6103(b)(2) data in its present form for
research purposes to Neufeld, the Tax Reform Research Group, and countless
other legitimate groups and scholars, even if the Service is wholly confident
that there is no risk of disclosure whatsoever. Since the majority has failed
to carry its burden in demonstrating that Congress intended to establish a
distinct, statutory requirement of reformulation, I dissent.
II.
The majority's major premise is that the language of the Haskell Amendment,
i.e., "return information ... does not include data in a form which cannot be
associated with, or otherwise identify, directly or indirectly, a particular
taxpayer," 26 U.S.C. s 6103(b)(2) (emphasis added), means Congress
established a "reformulation" requirement. No data listed in s 6103(b)(2)
can ever be released unless it is physically put into a different document from
that in which the information presently appears in the IRS files. Deletion of
any and all identifying material will never be enough. [FN3] *174
**106 Otherwise, the majority urges, the term "in a form" is made
superfluous, "as reading the provision without it will demonstrate." Maj. op.
at 157. In my view, however, the term "in a form" is far more easily
understood as saying that the substantive types of information listed in
s 6103(b)(2) are not "return information" if they can be disclosed in a
manner that cannot identify a taxpayer. Thus, Congress meant to say no more
than return information does not include data that, by itself or even in
conjunction with other information, cannot be used to identify a particular
taxpayer.
FN3. Because it holds that s 6103(b)(2) requires both anonymity and
reformulation, the effect of the majority's holding is not to require any
redaction pursuant to FOIA, since that statute has been held not to require
an agency to create new documents. See Renegotiation Board v. Grumman
Aircraft Engineering Corp., 421 U.S. 168, 192, 95 S.Ct. 1491, 1504, 44
L.Ed.2d 57 (1975); Krohn v. Dep't of Justice, 628 F.2d 195, 197-98
(D.C.Cir.1980). My approach, by contrast, reads s 6103(b)(2) as not
precluding disclosure of data so long as the disclosed data cannot identify
the taxpayer. Deletion of identifying information can, under this
approach, take certain data out of the "return information" definition, and
is thus mandated by the segregation requirement of FOIA. See Neufeld,
646 F.2d at 665-66.
Of course, my disagreement with the majority goes far beyond the
applicability of the segregation requirement of FOIA. Because of its
"reformulation" requirement, the majority forbids disclosure of any return
information in its original state, even if the information, without the
need for any redaction, is absolutely nonidentifying.
One can, of course, make talmudic dissections of everyday language to find
hidden and profound implications. Unless statutory language is so clear that
it compels a specific result, however, our task in statutory construction is
to "ascertain the congressional intent and give effect to the legislative
will." Philbrook v. Glodgett, 421 U.S. 707, 713, 95 S.Ct. 1893, 1898, 44
L.Ed.2d 525 (1975). See generally id. (" 'In expounding a statute, we must
not be guided by a single sentence or member of a sentence, but look to the
provisions of the whole law, and to its object and policy.' ") (quoting
United States v. Heirs of Boisdore, 49 U.S. (8 How.) 113, 122, 12 L.Ed.
1009 (1849)); United States v. American Trucking Associations, Inc., 310
U.S. 534, 542, 60 S.Ct. 1059, 1063, 84 L.Ed. 1345 (1940) (cardinal principle of
statutory interpretation is "to give effect to the intent of Congress"). If
the history of a statute's enactment reveals that Congress indeed labored
arduously over each choice of word and each comma, then it is likewise proper
for us to analyze each word and comma with precision. But when the legislative
history shows that a provision was injected into the bill at the tail end of
the process, and that Congress made no apparent effort to remove every phrase
the new amendment may have rendered superfluous, we only frustrate Congress'
goals by holding its words up to microscopic scrutiny. Judge Posner has
pointed out that overemphasis on construing all statutes so as to avoid
surplusage "rests on the unrealistic premise that [they] are drafted with
complete economy of language.... There is 'useless surplusage' in contracts as
in statutes, J.C. Penney Co. v. Commissioner of Internal Revenue, 312 F.2d
65, 72 (2d Cir.1962), and in neither context should a court give effect to
it." White v. Roughton, 689 F.2d 118, 120 (7th Cir.1982), cert. den.,
460 U.S. 1070, 103 S.Ct. 1524, 75 L.Ed.2d 947 (1983). There comes a point
when a court must be realistic in deciding whether the drafter was using
everyday expressions in the manner that we all do, or was instead creating a
technical, statutory requirement. Cf. American Radio Relay League v. FCC,
617 F.2d 875, 879 (D.C.Cir.1980) ("courts will not give independent meaning to
a word 'where it is apparent from the context of the act that the word is
surplusage' ") (quoting 2A Sutherland Statutory Construction s 47.37, at 167
(4th ed. C. Sands 1973)); see generally 2A Sutherland Statutory Construction s
47.37, at 258 (4th ed. C. Sands 1984) (discussing rule that words in statute
can be disregarded if context indicates that they were not intended as adding
meaning).
The Haskell Amendment was introduced on the floor of the Senate in the closing
days of deliberation on a major tax reform act. See 122 Cong.Rec. 24,012
(July 27, 1976). The Amendment engendered absolutely no debate. [FN4] Given
this history, [FN5] or lack thereof, I cannot agree that the three little
words "in a form" evince a clear intent of Congress that data otherwise
disclosable under the Haskell Amendment because it is nonidentifying, cannot be
disclosed unless it is somehow "reformulated." The fact is that most
information governed by the Haskell Amendment is already likely to be in a form
different from that originally submitted to the Service since the actual return
submitted by the taxpayer is exempt from disclosure, without regard to
identifiability. See supra *175 **107 note 2. Conceding as it does that
aggregation is not essential to fulfill the reformulation requirement, the
majority has adopted a wooden test that turns on physical form, and in so doing
has attributed an absurd intent to Congress. Under the majority's test, the
IRS may only disclose nonidentifying information if it copies it onto a fresh
piece of paper, perhaps in narrative style. Yet, there is certainly no
evidence that such recopying accomplishes anything that redaction would not.
FN4. As the majority points out, the only substantive comment made was
Senator Haskell's remark about what effect the amendment would have on tax
research. See maj. op. at 161.
FN5. The House passed no like provision, and the Conference Committee
report states only that
The Senate amendment provides that returns and return information are
confidential and not subject to disclosure except as specifically provided
by statute.... Under the amendment, data in a form that cannot be
associated with or otherwise identify a particular taxpayer will not
constitute return information.
S.Rep. No. 1236, 94th Cong., 2d Sess. at 476-77 (1976).
The majority concludes that Congress would not have used the "in the form"
language had it not wanted to create a reformulation requirement. I, on the
other hand, believe Congress would have used much clearer language had it
wanted to create such an arbitrary and novel reshaping requirement, without a
word of explanation on the floor or in the Conference Report. Given its own
emphasis on dissecting the statutory language, and avoiding Alice in Wonderland
definitional structures, maj. op. at 158 n. 2, I am startled by the apparent
ease with which the majority is able to read the Haskell Amendment as creating
two separate definitional elements. Nothing in the structure of the single
sentence Amendment supports such a reading, only the majority's insistence on
removing any trace of redundancy. Since nothing in the main body of
s 6103(b)(2) discusses the "form" that the information is in, I cannot
understand how the Haskell Amendment's use of the term "form" can be understood
as allowing disclosure only where the information is in a different form from
what it was originally in. As an Amicus points out, "Congress could hardly
have embarked on a more oblique route if its goal was to create such a separate
requirement." Brief of Amici Curiae Professor John L. Neufeld and The Freedom
of Information Clearinghouse at 4.
I do not accept the majority's characterization of our choice here as one
between construing a statutory phrase as a meaningful requirement or ignoring
the same words as meaningless surplusage. Rather, I see the choice as one
between attributing weighty legal significance to a common and inherently
vague [FN6] term that could be just as meaningfully viewed in context simply as
a linguistic aide to the Amendment's main requirement of anonymity, and
recognizing it for what it is, a transitional technique of drafting. Under
either reading, the words make literal sense, and, functionally, the reading
adopted in Neufeld and Long is far less eccentric. Thus, unless other
indicia compel the result, the language itself does not, in my view, support
the imposition of a distinct statutory requirement of reformulation.
FN6. Indeed, even the majority is unable to set forth a general test for
when information is in a different form. Maj. op. at 160-163. All it is
sure of is that deletion is not sufficient and aggregation is not
necessary. Yet, somehow, the majority is able to "readily opine" from the
purpose of its reformulation test, that mere copying in different language
and style is not sufficient. Maj. op. at 163 n.4. The glaring deficiency
with the majority's "reformulation" test is that it never specifies from
what original form the reformulation must be done and just what satisfies
the reformulation requirement. The majority refers to "some alteration by
the government of the form in which the return information was originally
recorded." Id. at 163. Yet the IRS obviously has information in its
files in hundreds of different developmental stages. For example, notes of
an investigation, abstracts of an investigation, list of investigations
done in a week, etc. ... To say that there must be "reformulation" does
not at all answer the question of what is an original form to begin with.
But even if Congress did intend to create a reformulation requirement, I am at
a loss to understand why the majority so conclusorily assumes that deletion of
identifying information does not satisfy this requirement. Why is it a
"curious usage" to say that a document takes a different form once deletions of
key information have been made? In its original, it is in a form that
identifies; once the necessary deletions are made, it is in a form that does
not identify. In my view, the common understanding of keeping documents in
anonymous form is satisfied once deletions of possibly identifying materials
are made. Nothing in the statute indicates that Congress intended the word
"form" to mean any more than this. [FN7]
FN7. The fact that Senator Haskell specifically intended to allow
disclosure of items such as the tax model strongly supports the Neufeld
position that redaction is enough to take a document out of the "return
information" classification. In reaching its original decision in this
case, the majority erroneously assumed that the tax model was a "partly
actual, partly fictional return," and thus met its novel "reformulation
requirement." Maj. op. at 163 (prior to amendment). Through a helpful post-
decision motion filed by the American Civil Liberties Union of Washington,
it has now come to light that, at the time of the Haskell Amendment, the
tax model was in fact only "an actual return with identifying details
eliminated." Maj. op., 792 F.2d at 162 (as amended). See Motion of
Amicus Curiae to Amend Opinion (filed June 10, 1986). Given this
acknowledgement of its mistaken factual assumption, I am amazed that the
majority continues to claim that redaction is insufficient under the
Haskell Amendment. After having relied in the original opinion on the tax
model to refute the government's suggestion that aggregation is required,
the majority stubbornly refuses now to examine the effect that the newly
discovered definition of the then existing tax model has on its own
standard of reformulation. The correct description of the tax model at the
time of passage definitively demonstrates that both the interpretations
advanced by the government and the majority are wrong, and that all that
the framers of the Amendment thought necessary under s 6103 was
effective redaction.
**108 *176 The majority also argues that it "would be most peculiar to
catalogue in such detail, in subparagraph (A) of the body of the definition,
the specific items that constitute 'return information' ... while leaving to an
afterthought the major qualification that none of those items counts unless it
identifies the taxpayer." Maj. op. at 157. Were the entire statute drafted at
one time, there might be some merit in this argument. But, as I already
pointed out and as the majority concedes, the Haskell Amendment was indeed an
afterthought. It is certainly not unusual that a floor amendment makes a major
change in the meaning of an original provision. The majority's insistence on
stylistic congruity ignores the reality of the legislative process. Moreover,
the panel opinion itself provides the justification for the list of specific
kinds of material to be described as "return information," since it holds that
items that do not appear in the list are to be treated no differently than any
other item requested under FOIA.
The majority's efforts to show that the reading adopted by this court in
Neufeld v. IRS, 646 F.2d 661 (D.C.Cir.1981), and by the Ninth Circuit in
Long v. IRS, 596 F.2d 362 (9th Cir.1979), cert. denied, 446 U.S. 917, 100
S.Ct. 1851, 64 L.Ed.2d 271 (1980), creates pockets of superfluity is similarly
unpersuasive. The tension described is actually created by the majority's
insistence that the Haskell Amendment cannot be interpreted as making a few
provisions of a large and complex statute internally redundant, although still
functionally meaningful and consistent. The futility of relying so heavily on
the minor redundancies the Haskell Amendment effects in neighboring provisions
that mention "return information" is demonstrated by the fact that even the
majority's reading makes three such provisions superfluous. See
s 6103(j)(4) ("return information" not to be released "except in a form
which cannot be associated with, or otherwise identify ...);
s 6103(i)(7)(A) (same); s 6108(c) (no disclosure shall be such as can
be "associated with ..."). Recognizing the redundancy of these provisions, the
majority finds it "remarkable that the dislocations are not greater," maj. op.
at 163, and concludes that the superfluity inquiry demonstrates the propriety
of its approach because the superfluity it causes is much less than that
produced by the interpretation in Long. Id. Quantitatively, the majority
is correct. Its approach wins 5-3. But qualitatively, the superfluity created
by both readings of the Haskell Amendment are alike. [FN8] Neither affects any
substantive, practical matter.
FN8. The majority argues that the score is in fact 9-2. Maj. op. at 158
n. 2. It supports this by counting s 6103 four separate times, by
counting s 6103 twice, by discounting the relevance of s 6108(c), and
by arguing that the phrase "in a form" is a flaw to be counted against the
circuit's former construction, but not against its own construction.
Leaving these accounting issues aside, the fact remains that under either
tabulation, neither construction fits snugly with the rest of the statutory
scheme.
Given the unavoidable stylistic superfluity under either construction, I do
not see how the redundancy issue can be used to carry the day for either side
of the debate. Once it is recognized that any interpretation of the Haskell
Amendment "dislocates" some provisions by making them technically unnecessary,
I think it useless to award victory to the interpretation that affects the
fewer number. The unavoidable conclusion to be drawn from the superfluity
created by either construction is that Congress did not concern itself with the
fact that some of the other provisions **109 *177 were being made
stylistically inelegant. Once that conclusion is reached, minor differences in
how many provisions each construction affects become irrelevant.
III.
Aside from its textual arguments, the majority urges that its reading is
consistent with plausible legislative intent since any case-by-case assessment
that data will not identify a taxpayer is problematic because it "depends to a
large extent upon uninformed estimations as to what data the requester
[already] possesses." Maj. op. at 158.
The problem of identification by an informed requester is not at all unique to
the Internal Revenue Service. Exemption 4 of the FOIA, for example, exempts
from disclosure material containing confidential, commercial information. 5
U.S.C. s 552(b)(4). Exemption 6 exempts "personnel and medical files and
similar files the disclosure of which would constitute a clearly unwarranted
invasion of personal privacy." 5 U.S.C. s 552(b)(6). Exemption 7 deals
with law-enforcement investigatory information to the extent that it would
"constitute an unwarranted invasion of personal privacy." 5 U.S.C. s
552(b)(7)(c). All of these exemptions clearly implicate the "informed
requester" problem, but the Act nonetheless provides that "[a]ny reasonable
segregable portion of a record shall be provided to any person requesting such
record after deletion of the portions which are exempt under this
subsection." 5 U.S.C. s 552(b). Courts have developed standards and
procedures to deal with agency assertions that any disclosure might lead to the
substantive harm described by FOIA, taking into account the informed requester
issue. See Dept. of Air Force v. Rose, 425 U.S. 352, 380, 96 S.Ct. 1592,
1608, 48 L.Ed.2d 11 (1976) ("what constitutes identifying information regarding
a subject cadet must be weighed not only from the viewpoint of the public, but
also from the vantage of those who would have been familiar, as fellow cadets
or Academy Staff, with other aspects of his career at the Academy");
Halperin v. Central Intelligence Agency, 629 F.2d 144, 150
(D.C.Cir.1980) (concluding that CIA was justified in not disclosing information
since "[w]e must take into account ... that each individual piece of
intelligence information, much like a piece of jigsaw puzzle, may aid in
piecing together other bits of information even when the individual piece is
not of obvious importance in itself") (quoted approvingly in S.Rep. No. 221,
98th Cong., 1st Sess. 27-28 (1983)); Schonberger v. National Transportation
Safety Board, 508 F.Supp. 941, 945 (D.D.C.1981) ("the material cannot be
redacted in a manner that would protect the identity of the individual whose
privacy interest is at stake").
As the panel points out in describing the procedure for evaluating the
disclosability of information which does not meet the definition of "return
information," courts can, when appropriate, accept affidavits about classes of
documents and information, as opposed to requiring document by document
searches and Vaughn Indexes. Panel op. at 160-161. Of course, that approach
entails some administrative effort, but administrative inconvenience alone has
never been considered a sufficient reason for cutting back on FOIA. See
Long, 596 F.2d at 367 (discussing amounts that some FOIA searches have cost
but pointing out that Congress recognized that statute was an expensive one).
The majority argues, however, that while Congress was willing to tolerate the
"risk of occasional unknowing disclosure" for FOIA disclosures in general, it
was not willing to tolerate that risk for certain classes of information. Maj.
op. at 158 (citing Central Intelligence Files). The CIA exemption teaches
though, that Congress clearly know how to exclude certain classes of
information from FOIA altogether when it wanted to. In the Central
Intelligence File context it provided that "[o]perational files of the Central
Intelligence Agency may be exempted by the Director of Central Intelligence
from the provisions of [FOIA] which require publication or disclosure, or
search or review in connection therewith." 50 U.S.C. s 431.
Indeed, the majority's conclusion that Congress sought to guard broadly
against the "informed requester" phenomenon is undercut by the fact that, with
regard to IRS written determinations (rulings, determination letters, or
technical advice memoranda) and background files relating to written
determinations, Congress explicitly provides for public inspection of the
documents *178 **110 after deletion of the specific exempted data that is
not to be disclosed. 26 U.S.C. s 6110. Section 6110 operates
independently of FOIA, sets out its own exemptions and procedures, and is in
many respects stricter. Yet Congress mandated disclosure after deletion of the
nondisclosable material. Written determinations such as private letter rulings
that describe the underlying facts of a case surely carry with them the same
risk of taxpayer identification, yet Congress was satisfied with deletion.
[FN9] There is, so far as I can tell, nothing to indicate that Congress wanted
the informed requester problem treated differently when it comes to return
information. [FN10]
FN9. The majority argues that the error of the Long construction is
made "particularly clear" when compared with the detailed provisions set
out in s 6110 for disclosure of written interpretation documents in
which the public has an even stronger interest. The majority's point,
however, applies equally to its own analysis of s 6103. Why, under its
construction of s 6103 would Congress have permitted disclosure of
reformulated, nonidentifying information without any of the safeguards of
s 6110 (which itself applies to nonidentifying, and assumedly
reformulated, information)? We all agree that s 6103, unlike s 6110,
operates within the confines of FOIA, and does not provide for the extra
safeguards listed in s 6110. See Panel op. at 148-150. The presence of
a separate statutory scheme in s 6110 does not then help the majority at
all in showing that Congress was not satisfied with FOIA-type redaction
under s 6103.
FN10. In the course of the 1981 amendments to s 6103, Congress evinced
an understanding of the scope of the Haskell Amendment, identical to the
one adopted in Long and Neufeld. The Conference Report stated that:
Present law restricts the disclosure of tax returns and return
information. However, information that cannot identify any particular
taxpayer is not protected under the disclosure restrictions.
H.R.Rep. No. 215, 97th Cong., 1st Sess. 264, reprinted in [1981] U.S. Code
Cong. & Admin. News 105, 353 (emphasis added). While such subsequent
legislative history is, of course, not dispositive, it shows minimally that
this reading is not contrary to the intent of Congress.
Given my conclusion that items listed in s 6103(b)(2) that can be disclosed
in a manner that does not identify a taxpayer are not "return information," and
are therefore not wholly immune from FOIA disclosure, [FN11] I would subject
such items to the same procedures as the panel provides for items not
specifically listed in s 6103. See Panel op. at 153. If the Service
determines that disclosure cannot be made without risk of identification, that
factual assessment, of course, deserves considerable deference, dependent as it
is on the agency's expertise in the area. See Halperin v. Central
Intelligence Agency, 629 F.2d 144, 148 (D.C.Cir.1980).
FN11. Even information disclosable under s 6103 is, of course, still
subject to possible exemption under one or more of the nine FOIA
exemptions. 5 U.S.C. s 552(b).
The court today overreads an everyday casual phrase of no certain content to
impose an important new and comprehensive restriction on disclosure of items
listed in s 6103(b)(2), a requirement that does nothing in itself to advance
the cause of taxpayer privacy. The majority adopts a "reformulation" test
which Congress never intended, and which the majority itself is unable to
define. In so doing, the court has misread the thrust of the Haskell Amendment
and effectively emasculated its application. The court has, in the most
classic sense, elevated "form" over substance.
I respectfully dissent.