[00:00:01] Speaker 00:
Case number 17-5225, Latronic Privacy Information Center Appellate versus Internal Revenue Service.

[00:01:08] Speaker 00:
Good morning.

[00:01:09] Speaker 02:
Good morning.

[00:01:09] Speaker 02:
May it please the court, John Davison, for the appellant epic.

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With me at council table are Mark Ruttenberg and Alan Butler.

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I'd like to reserve one minute of my time, please, for rebuttal.

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Your honors, in February of 2016, the future president of the United States went on national television and stated repeatedly that the IRS targets him for audits on the basis of his political views and his religious affiliation.

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The IRS swiftly denied that the agency would ever do such a thing, but the accusation was never withdrawn.

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In January of 2017, the President-elect went on Twitter and told tens of millions of followers that he had no sources of Russian income and no financial entanglements with Russia.

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This claim was swiftly refuted by his own attorneys, who explained after reviewing his returns that indeed the President had Russian sources of incomes.

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These apparent misstatements of the fact by the President of the United States impugn the credibility of the IRS and call into doubt the ability of the agency to fairly administer the tax code, yet the President has never corrected the record.

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The IRS has the ability to correct that record, and it may do so under 6103K3 of the Internal Revenue Code.

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EPIC's FOIA request seeks exactly this type of record and seeks the IRS to use exactly this type of disclosure power.

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Because Epic has perfected its request, a request that conforms in every respect with the published FOIA regulations, and because Epic has set forth extensive facts justifying the use of this K-3 disclosure power, the IRS is obligated to issue a determination on that request and to sustain that request in de novo judicial review.

[00:02:48] Speaker 02:
If ever there were a situation that justified the use of K-3, this is it.

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And we ask the court to reverse the decision of the district court and remand for further proceedings so that the IRS can fulfill its FOIA processing obligations.

[00:03:01] Speaker 01:
I had thought your position here was narrower than that.

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And that is that they treated your FOIA request as not perfected and just refused to process it.

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And so really the only thing before us is whether

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this was, you've argued, is that true that it made it a perfected FOIA request and then they had to bear the burden of coming forward and showing that they have an Exemption 3 statute, which they just haven't yet done.

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Do we have to even get

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to that latter question, whether exemption three would or would not properly be invoked here, notwithstanding the K-3 provision, because they didn't seem to go that far, did they?

[00:03:43] Speaker 02:
No, Your Honor, in fact, and that's precisely the concern that we raise in this appeal, is that the IRS did not even begin the FOIA process.

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It is required

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to make that determination.

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So you're correct.

[00:03:51] Speaker 01:
Well, I mean, by beginning, they may not, if they, if they, if they persuade that 6103 is an Exemption 3 statute, which in many ways it is, it's just we have to figure out what to do with K3, then they don't have to search for records or do any of that kind of stuff.

[00:04:09] Speaker 01:
The question is just who had the burden of showing that K3 is, does or does not take them out of Exemption 3.

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Isn't that the only thing before us?

[00:04:19] Speaker 02:
Well, yes, but to push back slightly, it is an Exemption 3 statute, 6103, we agree, but it is a statute that includes not only a general presumption of confidentiality, but also a number of different exceptions that permit disclosure.

[00:04:34] Speaker 01:
But all of the other exceptions are to other governmental entities for governmental purposes.

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Am I correct?

[00:04:41] Speaker 02:
No, that's not correct, Your Honor.

[00:04:43] Speaker 01:
And then to a taxpayer.

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There are a number of other exceptions.

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What other ones are you pointing to?

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Well, 6103E lists a number of different circumstances under which a records concerning a taxpayer can be disclosed.

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to a person with a material interest in those records.

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So, for example, 6103E3 talks about disclosure to the executor of an estate.

[00:05:08] Speaker 01:
Right, so those are all people who have legal claims to that same taxpayer's information.

[00:05:12] Speaker 01:
I'm talking about either to the taxpayer or the legal surrogate.

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or to governmental entities for state or federal, for public purposes.

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Is there anything in 6103 that otherwise, other than your arguments about K-3, that allows disclosure to the general public?

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I can point to three provisions.

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One is 6103K1 that requires the disclosure of accepted offers and compromise to the public at large.

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6103M1, which contemplates disclosure of certain information about a taxpayer to the media, where there are unclean funds that the taxpayer has paid to the IRS and the IRS isn't able to locate that person.

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And then in the very next section of the Internal Revenue Code, 6104,

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the the tax return information certain tax return information Concerning tax exempt organizations is also subject to mandatory disclosure So there are in fact numerous circumstances in the tax code where disclosure is possible to a third party Even though there has not been a proof of consent Can I ask you something that's outside the record, but it occurred to me in preparing for this case?

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Are the financial disclosure

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forms that the executive branch has to fill out, just like we do, and ours are a matter of public record.

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Are they not, or do you know?

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Are they a matter of public record?

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Yes.

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I mean, can't you get some of this information from the financial disclosure forms that were required to... I don't believe... I don't know the answer for certain.

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I don't believe the particular sources and amounts of income that would be reflected on an income tax return are necessarily available for financial disclosures.

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Then they're a lot different from ours, but that you may be right about that.

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I admit I don't know, Your Honor.

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I'm not familiar with that statute.

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I'd like to turn first to the fact that the, to describe in more detail why it is that Epic perfected its FOIA request and why the agency must therefore issue a determination.

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We have complied with all of the published rules that would apply to a K-3 FOIA request.

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And the one published rule that the IRS has pointed to and argued that bars processing of a request

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requires proof of consent as appropriate.

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And this rule does not operate as a bar to the processing efforts request for three reasons.

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The first is what the agency says on page 25 of its brief, and that is that this provision implements 6103C.

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This is not a request for the disclosure of records under 6103C.

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The agency has no authority to apply this regulation implementing a different disclosure provision to this particular disclosure, this particular request.

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The second point is that even if that regulation could be said to apply to this request, it only requires proof of consent as appropriate.

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And the words as appropriate, as this Court has made clear in Consumer Federation VHHS, when they are included in a statute or a regulation, they mean something.

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They mean only to the extent appropriate.

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So it would be definitively not appropriate to require proof of consent where that proof of consent will have no bearing on the agency's determination of whether the records are exempt or will be released.

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And that is the case here in K3.

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And that would be the case, as I indicated earlier, for a number of different disclosure provisions, including 6103E, which permits disclosure based on demonstration of a material interest but does not require proof of consent, 6103K1, 6103M1, 6104, and so forth.

[00:08:38] Speaker 00:
Can I ask you about something in your addendum on page 41?

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Apparently, this is the only thing in the record that indicates when the IRS used K3.

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And it was back in 2000.

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Yes.

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And K3, because leaving aside who can seek the disclosure,

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I'm wondering about to whom the disclosure is made.

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And on that one instance, 10 disclosures were made to federal agencies.

[00:09:16] Speaker 02:
Yes, Your Honor.

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Under K-3.

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It's not entirely clear from the record, I think, whether the disclosures were made for federal agencies or on behalf of federal agencies.

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There's also two.

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In other words, I read disclosure two or four to mean those are the entities to which the IRS discloses something under K-3.

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But I think the presence of the word four suggests that it might be also to whom the agency

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for whom the agency made the disclosure.

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So if there were, federal agencies could be the IRS defending itself by making K-3 disclosures, which is directly the core purpose of K-3.

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And then there are other ones that go to prospective jurors and so forth.

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But looking just at K-3, it looks as if the record indicates that

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the 10 times that the IRS used K3, it was never to disclose it to the public.

[00:10:20] Speaker 02:
Unfortunately, because of the imprecision of this document, I don't know for sure to whom or for whom the record disclosure was made.

[00:10:28] Speaker 02:
Well, it says federal agencies.

[00:10:29] Speaker 02:
But that could also, as I said, it could mean for federal agencies.

[00:10:32] Speaker 02:
It could mean for the IRS.

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And I'll explain, to provide some context,

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We don't know the exact circumstances of those disclosures.

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We attempted to obtain records about them.

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The timing suggests that they were related to the concerns raised by Commissioner Richardson in 1998, that there were false statements being made about the IRS's treatment of certain tax-exempt organizations.

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And it appears that there was a report that came out from the Joint Committee on Taxation in the year 2000 that analyzed those questions.

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And then these disclosures came in 2000.

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So it's our belief that they were probably connected.

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We don't have definitive proof of that.

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Again, we've tried to obtain it.

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As a second point, the court, once the IRS makes a determination on EPIC's request, would have power to review and, in fact, would be required to review that determination in de novo FOIA review.

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The IRS has suggested otherwise and has put that forward as a basis for why processing would not even be required.

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But the court was clear in Church of Scientology that determinations made under 6103 as an Exemption 3 statute are reviewable.

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de novo by the court, and that includes something like 6103C.

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That was the provision at issue in Church of Scientology.

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That is also a discretionary disclosure provision like K-3, and yet the court was clear that the district court on remand would have to review that in de novo for a review.

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Another point, the IRS has suggested that Exemption 3 categorically bars these records, the availability of these records to EPIC.

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The problem is, as I indicated earlier, the IRS hasn't finished applying the criteria of 6103.

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There is indeed a presumption of confidentiality in 6103A, but there are also relevant

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exceptions and K3 being the one that EPIC has relied on here.

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The K3 criteria, the agency has been clear that it's never actually applied those criteria to the requested records or even to the requested categories of records that EPIC seeks.

[00:12:33] Speaker 02:
It states that on page 56 of its brief.

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It hasn't made a discretionary determination.

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It hasn't made the factual determinations that would enter into a discretionary determination.

[00:12:42] Speaker 01:
Well, isn't there the first legal question, just a question as a matter of law, whether 6103K3 is an, I hate to say it, but an exemption to the exemption, right?

[00:12:54] Speaker 01:
You have the Exemption 3 statute, 6103.

[00:12:57] Speaker 02:
Yes.

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Presumption, pretty strong.

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Pretty strong one.

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We agree.

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Certainly as to public release.

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And then your theory is that K3 takes some of the air out of that.

[00:13:10] Speaker 00:
Yes.

[00:13:11] Speaker 01:
And that's, is that something that

[00:13:15] Speaker 01:
falls within their burden to demonstrate in the first instance?

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Or since you said it's de novo review, do we just decide now, whether you're right or they're right, that K-3 creates a right to public disclosure of records?

[00:13:30] Speaker 01:
Is that just a question of law we're supposed to decide right now?

[00:13:34] Speaker 01:
Or do we, given their perfection, really need to remand for them to take a position on K-3 in the first instance?

[00:13:40] Speaker 02:
Your Honor, we believe remand is appropriate here because in the IRS, it is the IRS that has tried to push forward this issue of whether exemption three actually applies and whether K-3 actually applies.

[00:13:52] Speaker 02:
But the court does not have to reach that issue today.

[00:13:54] Speaker 01:
Well, you just said it's de novo review.

[00:13:56] Speaker 01:
So I'm trying to reconcile your two positions.

[00:13:59] Speaker 02:
So the court explained in Railroad Workers that it is for the agency in the first instance to make an exemption through determination, and that it is for the court to review it.

[00:14:07] Speaker 02:
And Church of Scientology indicates that in the 6103 context, that review would be de novo.

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So the agency has an obligation that it is not yet fulfilled, and then it must sustain any determination that it makes and any withholdings that it asserts on the basis of an affidavit, which it has not provided here.

[00:14:24] Speaker 02:
And then that would be submitted to the court for de novo review.

[00:14:27] Speaker 01:
It didn't have to be an affidavit.

[00:14:28] Speaker 01:
We have their determination letters.

[00:14:30] Speaker 01:
That could be enough, could it not?

[00:14:31] Speaker 02:
Well, Your Honor, they have been clear.

[00:14:34] Speaker 02:
They say in the Michael Young declaration from the district court proceedings that that's not a determination.

[00:14:38] Speaker 02:
It's a letter that rejects processing of the request, but it is not a determination letter.

[00:14:43] Speaker 01:
They have not identified... Well, they have a line that says K-3 doesn't create rights.

[00:14:48] Speaker 02:
They do, yes.

[00:14:49] Speaker 01:
In the second, the appeal letter, I guess, that says K-3 doesn't create rights.

[00:14:52] Speaker 01:
Is that a determination of the meaning of the statute?

[00:14:56] Speaker 01:
You're saying it's not?

[00:14:57] Speaker 01:
That's what I'm trying to wrestle with.

[00:14:58] Speaker 02:
Well, I think that represents an attempt by the agency to categorically remove K3 from the reach of a FOIA request.

[00:15:07] Speaker 01:
That would be a legal determination as to what 603K means.

[00:15:13] Speaker 02:
I think it would not meet the requirements of a determination because it does not assess whether the criteria of K3 had been met.

[00:15:20] Speaker 02:
It simply says the provision is not accessible.

[00:15:24] Speaker 01:
Your position is that the only way K-3 cannot apply is if they march through the criteria.

[00:15:31] Speaker 01:
Yes.

[00:15:31] Speaker 01:
As I take it from that one little line in the appeal letter, but it's not much elaboration, they read K-3 as, it's not for you.

[00:15:43] Speaker 01:
There's nothing here that says the public has a right to information.

[00:15:47] Speaker 01:
This is a right for the secretary to make a decision.

[00:15:50] Speaker 01:
But there's no public right here, so it doesn't

[00:15:54] Speaker 01:
take anything out of the overarching 6103 Exemption 3 status.

[00:16:00] Speaker 01:
We could have a different discussion if you came under K-1 or M-1, but that's not where we are.

[00:16:05] Speaker 01:
And K-3 doesn't undo the Exemption 3 status that generally governs tax returns under 6103.

[00:16:15] Speaker 01:
I think that's their position from that line in the letter, but they'll tell me if I'm wrong.

[00:16:19] Speaker 01:
So we don't need to go through steps.

[00:16:21] Speaker 01:
These aren't your steps.

[00:16:23] Speaker 01:
these steps don't give the public a right to information.

[00:16:26] Speaker 02:
So I would push back on that on several fronts.

[00:16:29] Speaker 02:
I would say, I see my time has expired, but if I may, I would say that the

[00:16:34] Speaker 02:
First of all, the Court and Church of Scientology discussed at length how FOIA and 6103 are interlocking statutes.

[00:16:41] Speaker 02:
FOIA creates the procedures that the agency must follow when it receives a conforming request.

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6103 establishes the substantive criteria for withholding a disclosure.

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So when a FOIA requester seeks records under the FOIA, the agency must sustain any determination made under 6103 in de novo FOIA review.

[00:16:59] Speaker 02:
The second point is that the court, in reaching that holding, actually singled out K-3 as one of the provisions in the statute that concerns disclosure to the public at large.

[00:17:08] Speaker 02:
So it is true that the K-3 provision does protect the interests of the IRS, but it does that by assuring that in the right circumstances the public will have access to accurate information to correct damaging misstatements of fact made about the IRS.

[00:17:22] Speaker 02:
So I think I would disagree fully with the characterization that it is not accessible to a FOIA request or to Epic in this request.

[00:17:32] Speaker 02:
The IRS has suggested that if the agency, I should say, if the court were to find favorably for EPIC, that it would create an administrative burden for them.

[00:17:44] Speaker 02:
But I would say that there is nothing on the record to support this conclusion.

[00:17:48] Speaker 02:
There is no evidence.

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As we know, the K-3 provision has only been discussed a small handful of times by the agency.

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And as we are aware of no FOIA request that has invoked this provision prior to today,

[00:18:02] Speaker 02:
There is nothing to suggest that the K3 power would be invoked by a flood of FOIA requesters.

[00:18:10] Speaker 02:
And indeed, if the IRS is concerned about such a eventuality, it has the power, as it has had for 40 years,

[00:18:19] Speaker 02:
to implement K3 through appropriate FOIA regulations.

[00:18:22] Speaker 02:
It hasn't done that, and it cannot deny processing of EPIC's request on the basis of a rule that is not published, that would be unreasonable as applied to this request, and that it has essentially made up on the fly.

[00:18:34] Speaker 02:
All right.

[00:18:35] Speaker 02:
If there are no further questions.

[00:18:37] Speaker 00:
Thanks.

[00:18:38] Speaker 00:
Mr. Murray.

[00:18:58] Speaker 03:
Good morning, Your Honors, and may it please the Court, Michael Murray for the United States.

[00:19:02] Speaker 03:
The district court properly dismissed EPIC's complaint in this case.

[00:19:06] Speaker 03:
EPIC did not perfect its FOIA request and thus did not exhaust its administrative remedies because it did not show entitlement to the records that it requested as required by IRS regulations.

[00:19:16] Speaker 03:
It did not provide the taxpayers' consent, and its invocation of 6103K3 is unavailing for three reasons.

[00:19:23] Speaker 03:
First, 6103K3 does not establish a right to disclosure.

[00:19:27] Speaker 03:
It can be triggered by private parties.

[00:19:30] Speaker 01:
Second, it is not— Where did the agency decide that?

[00:19:32] Speaker 03:
Say again?

[00:19:33] Speaker 01:
Where did the agency decide that?

[00:19:36] Speaker 03:
In the sentence that you referred to in the second request when EPIC raised 610K3 for the first time.

[00:19:45] Speaker 03:
So reading that sentence in combination with the sentence that follows it, which discusses how the requester must establish his right to the information, it is clear that the IRS concluded that EPIC did not have a right to the information under either C or K3.

[00:20:03] Speaker 01:
The difficulty is, and it's right where you started with

[00:20:07] Speaker 01:
the reasoning which completely surrounds that one sentence, that this was not a perfected FOIA request.

[00:20:14] Speaker 01:
And what difficulty is, it seems like the IRS is collapsing the requirements for a perfected FOIA request with winning, establishing on the merits their position on exemption three.

[00:20:31] Speaker 01:
And that seems to shift the burden, it's not,

[00:20:35] Speaker 01:
There's no Exemption 3 problem, provide the consent, prove us on K-3, rather than the one thing we've said time and time again is that 6103 goes to the same FOIA property statute.

[00:20:51] Speaker 01:
And so when you get a FOIA request that says I would like documents, the answer isn't show us why you're not in Exemption 3,

[00:21:02] Speaker 01:
If everything else is fine with the four-way press, the burden is then on the government to say, no, exemption three applies.

[00:21:08] Speaker 01:
And that didn't seem to happen here.

[00:21:11] Speaker 03:
I'm not sure that's exactly right, Your Honor.

[00:21:13] Speaker 03:
It seems quite reasonable for the IRS and the Treasury Department to establish, as a regulation under FOIA, that in order to perfect a FOIA request, an individual has to establish some sort of right to the information before the IRS is going to go out and search for records determined.

[00:21:28] Speaker 01:
FOIA is the source of the right to information unless an exemption applies.

[00:21:34] Speaker 01:
They don't need another source of a right.

[00:21:36] Speaker 01:
FOIA is the source unless an exemption applies.

[00:21:40] Speaker 01:
That's what FOIA says.

[00:21:41] Speaker 01:
And then the burden to show the exemption is on the government.

[00:21:45] Speaker 01:
So you can't make them show that they are outside an exemption.

[00:21:51] Speaker 01:
They say, I like documents, and then the burden's on the government to say an exemption applies.

[00:21:55] Speaker 01:
This seems to have inverted that.

[00:21:56] Speaker 01:
That's all.

[00:21:56] Speaker 01:
It's just a procedural problem.

[00:21:59] Speaker 03:
I agree with you that there's a procedural issue here, Your Honor, and I think the way to look at it is that FOIA also requires requesters to comply with the agency's reasonable rate procedural regulations.

[00:22:09] Speaker 03:
And it is quite reasonable for IRS to require that an individual establish their right to the information before requiring IRS to go.

[00:22:17] Speaker 01:
What do you mean by their right to the information?

[00:22:20] Speaker 01:
Do they have to show

[00:22:22] Speaker 01:
that this particular request is one of the exceptions to the bar and disclosure that was identified in Church of Scientology?

[00:22:36] Speaker 01:
Or do they have to do more?

[00:22:38] Speaker 01:
Do they have to establish their legal position is correct on their view of what that exemption is, how that exemption works?

[00:22:45] Speaker 03:
So maybe the best example is the 6103C context.

[00:22:49] Speaker 03:
So if that were the source of the particular plaintiff's right to the particular information at issue, they would need to attach some sort of consent authorization from the relevant taxpayer, and that would be part of their FOIA request.

[00:23:05] Speaker 01:
And then... Right, and you're trying to apply that here, but there's no requirement for consent of a taxpayer under K3.

[00:23:14] Speaker 01:
And it would be ludicrous to require consent of the taxpayer under K-3.

[00:23:18] Speaker 01:
It's not in the statute.

[00:23:19] Speaker 01:
It would make no sense since the whole point is for the secretary to be able to disclose information when some taxpayer is, or even a third party, is causing problems out there with their false statements.

[00:23:31] Speaker 01:
So there can't be a consent requirement for K-3.

[00:23:34] Speaker 03:
Sure.

[00:23:34] Speaker 03:
So let's take a different example so we don't get confused here between C and K3.

[00:23:38] Speaker 03:
Let's take M, for example, which is the media exemption for lost taxpayers.

[00:23:43] Speaker 03:
In the Aronson case, what the First Circuit required was the individual to establish that they were, in fact, a member of the media, that they were not in that case.

[00:23:51] Speaker 03:
And so the First Circuit decided that the IRS did not need to process the, did not need to do anything with the FOIA request tonight to search for the records, produce the records in any way, decide whether the records existed.

[00:24:01] Speaker 03:
possibly redact or segregate the remnants.

[00:24:03] Speaker 03:
It was able to cut it off as a legal determination.

[00:24:05] Speaker 01:
I get that.

[00:24:06] Speaker 01:
But our circuit has been quite clear about that ordinary FOIA processing is what applies even under 6103.

[00:24:12] Speaker 01:
So I'm trying to understand how you can see, conceptualize their burden under K3.

[00:24:21] Speaker 01:
If they don't, what they don't have to do is show that the Exemption 3 doesn't apply.

[00:24:25] Speaker 01:
You would agree with that.

[00:24:27] Speaker 01:
Under FOIA, people can ask for records and they don't have to include in their request, Exemption 1 doesn't apply, Exemption 2 doesn't apply, Exemption 3 doesn't apply.

[00:24:34] Speaker 01:
They don't have to do that.

[00:24:35] Speaker 01:
They just say, I'd like these documents.

[00:24:39] Speaker 01:
Correct?

[00:24:40] Speaker 01:
That's a perfected FOIA request.

[00:24:41] Speaker 01:
I'd like these documents.

[00:24:43] Speaker 03:
Generally speaking, although not in this context, because the agency has established a reasonable regulation requiring the plaintiff to establish some right, which makes a lot of sense.

[00:24:55] Speaker 01:
Well, reasonable regulation may be for C3.

[00:24:57] Speaker 01:
I don't know.

[00:24:57] Speaker 01:
What reasonable regulation do you have that governs K3?

[00:25:01] Speaker 03:
The same, there's an across the board regulation that requires the FOIA request to establish his right to the information.

[00:25:08] Speaker 03:
And that's 706.

[00:25:09] Speaker 01:
Well, then that's the very problem here, right?

[00:25:12] Speaker 01:
Have we held that that regulation is reasonable in the FOIA context?

[00:25:17] Speaker 03:
I'm not aware.

[00:25:18] Speaker 03:
I don't think it's been cited.

[00:25:19] Speaker 03:
It's been held in a particular case, although I could be wrong, and I'll check that.

[00:25:25] Speaker 03:
But the question as to whether it is a reasonable regulation, I think the answer to that is yes.

[00:25:29] Speaker 03:
It is quite reasonable.

[00:25:30] Speaker 01:
Well, if you dropped a regulation, which, by the way, this is nowhere in the determination letter, right?

[00:25:36] Speaker 01:
No, Your Honor.

[00:25:36] Speaker 01:
This regulation applies to K-3?

[00:25:38] Speaker 03:
Your Honor, the letter, the second letter, which talks about K-3, also cites the regulations saying that a person needs to establish their right to the information.

[00:25:49] Speaker 01:
So if you, and if they say my right's under FOIA.

[00:25:53] Speaker 03:
I'm sorry, I don't understand.

[00:25:54] Speaker 01:
They say my right, this information is FOIA.

[00:25:56] Speaker 01:
FOIA gives me a right to request information from the government.

[00:25:59] Speaker 01:
Unless the government shows it's exempted.

[00:26:02] Speaker 03:
That would not be correct because FOIA does not just give them a general right to the information because FOIA Exemption 3 says that FOIA disclosure's requirement is not applicable when the material is forbidden from disclosure by another statute.

[00:26:15] Speaker 01:
And who has the burden of showing that?

[00:26:16] Speaker 01:
Who has the burden of showing that material is forbidden to be disclosed?

[00:26:21] Speaker 01:
Your Honor, in Aronson, the Court... Who under the statute has the burden of showing?

[00:26:26] Speaker 01:
And who under Church of Scientology has the burden of showing that Exemption 3 applies?

[00:26:31] Speaker 03:
First of all, Your Honor, I think in this case it doesn't matter because it's a legal issue.

[00:26:36] Speaker 03:
But regardless, what the courts have held in the district court, saying Goldstein or the court in Aronson held that it is the plaintiff who has the burden of showing that the particular information that he is seeking is eligible for exemption, excuse me, eligible for release, and the plaintiff has not shown that here.

[00:26:55] Speaker 01:
Would you – so if your FOIA regulation said anybody who requests to have a perfected FOIA request, you must show not only that you're seeking records that fall within the definition under FOIA, but you must also disprove the application of an Exemption 3 statute.

[00:27:12] Speaker 01:
That would be perfectly fine?

[00:27:14] Speaker 03:
Your Honor, there's probably a limit to what can be a reasonable regulation, but the idea that an individual needs to establish some right to the information I think is quite reasonable.

[00:27:22] Speaker 01:
What you're saying, the problem is you're saying the way they didn't show their right is they did not disprove Exemption 3.

[00:27:30] Speaker 01:
That's what your regulation, as you're telling me now, says.

[00:27:33] Speaker 01:
The reason they didn't have a perfected FOIA request is they did not disprove that Exemption 3 applies.

[00:27:41] Speaker 03:
That is true in some sense, Your Honor, but... That's true exactly.

[00:27:44] Speaker 01:
That's exactly what your argument is.

[00:27:46] Speaker 03:
But I don't see what the problem with that is.

[00:27:48] Speaker 01:
That is a reasonable regulation under FOIA to prevent the agency from... To say that you have to disprove as part of your FOIA request that Exemption 3 applies.

[00:27:55] Speaker 01:
I think it's quite reasonable for the agency to do what it did here, which is to require some... If my question is, if the regulation said, in addition to establishing that the records for the request fall within the parameters of FOIA, you must disprove that Exemption 3 applies, would that regulation be permissible?

[00:28:15] Speaker 03:
I'm not sure exactly what that... I don't want to pass a regulation that I have not read or reviewed or does not exist, Your Honor.

[00:28:21] Speaker 03:
But what I can say is that no court has ever held that this particular regulation is not reasonable.

[00:28:26] Speaker 01:
I don't know why you're resisting it so much.

[00:28:27] Speaker 01:
I think it's pretty settled FOIA law that Exemption 3 has to be approved by the agency.

[00:28:32] Speaker 01:
That's pretty settled FOIA law.

[00:28:33] Speaker 03:
Yes, Your Honor.

[00:28:35] Speaker 03:
And maybe what we're having is a miscommunication here as to whether what the IRS did was make some sort of Exemption 3 determination.

[00:28:41] Speaker 01:
I would give you a hypothetical.

[00:28:43] Speaker 03:
Yes, but it's important for me to understand the hypothetical.

[00:28:46] Speaker 01:
The hypothetical is the regulation that I said, the FOIA requestor must disprove the application of Exemption 3.

[00:28:53] Speaker 03:
That would not be, that's not the regulation that we have here.

[00:28:55] Speaker 03:
So I suspect that the answer might be, as Your Honor suggests, to that particular hypothetical.

[00:29:01] Speaker 03:
The regulation we have here doesn't say anything about that.

[00:29:03] Speaker 01:
So if this regulation, if you had a regulation that said that in tax cases they must disprove

[00:29:10] Speaker 01:
the application of 6103 is an Exemption 3 statute.

[00:29:14] Speaker 01:
That makes a difference?

[00:29:16] Speaker 03:
Well, I think maybe I'm misunderstanding.

[00:29:18] Speaker 01:
I think the regulation here is quite reasonable and requires the agency... The question is, if this regulation said, as part of your FOIA request, you must disprove the application of Exemption 3,

[00:29:33] Speaker 01:
The application of 6103 is an Exemption 3 statute.

[00:29:36] Speaker 01:
You must disprove the applicability of 6103 as an Exemption 3 statute as part of your FOIA request.

[00:29:43] Speaker 03:
Well, I'm not sure that's what this regulation says.

[00:29:44] Speaker 01:
I'm just asking the question.

[00:29:47] Speaker 03:
So if, in general, FOIA regulation statutes do not say that a particular requestor must say that Exemption 7 or Exemption 5 does not apply, but it is quite reasonable for an agency to have a regulation that requires the individual to identify the records that it's trying to request that allows the agency to search for them.

[00:30:10] Speaker 03:
should it need to do so, and establishes that it is not just a person filing a request to file a paper.

[00:30:17] Speaker 03:
And so I think that's all quite reasonable, which is exactly what IRS has here.

[00:30:22] Speaker 03:
It has a regulation that requires an individual to show its rights to relief.

[00:30:29] Speaker 01:
To show that Exemption 3 doesn't apply.

[00:30:31] Speaker 03:
So let me take a step back, Your Honor.

[00:30:34] Speaker 03:
I think the Learfield case is a good example, as is Hall and Aronson.

[00:30:39] Speaker 03:
That's why, though this is a very important question, I think, that you're asking, it's a little bit, as our brief pointed out, academic in this case, because there really is no dispute that K-3 is not satisfied.

[00:30:50] Speaker 03:
And so the individuals do not have a right to the information.

[00:30:53] Speaker 01:
So whether we call this exhaustion or whether we just make this a merit... How is there not a... What do you mean, there's no dispute that K-3 is not satisfied?

[00:31:00] Speaker 03:
There's no joint committee authorization in this case.

[00:31:03] Speaker 03:
And so that's a condition.

[00:31:05] Speaker 01:
But they very much dispute the ordering here.

[00:31:07] Speaker 01:
I'm sorry.

[00:31:07] Speaker 01:
We just haven't gotten to that.

[00:31:08] Speaker 01:
You didn't get to that in your determination letters.

[00:31:11] Speaker 01:
They haven't gotten.

[00:31:11] Speaker 01:
I think they very much do dispute where K-3 would apply here.

[00:31:15] Speaker 01:
It's just a question of ordering.

[00:31:17] Speaker 03:
Like who goes to the... Well, I don't think they've ever argued that the joint committee has an authorization.

[00:31:22] Speaker 03:
Right.

[00:31:22] Speaker 03:
And so there really can't be any dispute that all of the conditions in K-3 have been satisfied.

[00:31:27] Speaker 01:
I get that, but they say because you haven't processed it.

[00:31:29] Speaker 01:
That's why.

[00:31:30] Speaker 03:
Well, they've never provided any indication that the Joint Committee has provided an authorization.

[00:31:35] Speaker 01:
So if this Court is concerned about the exhaustion issue that you're talking about... So if they did come with a letter from the Joint Committee, what would happen then?

[00:31:44] Speaker 01:
So if the FOIA request was the exact same as it was here and attached was a copy of a letter from the Joint Committee, what would happen then?

[00:31:51] Speaker 03:
So, in that circumstance, we'd have to focus on whether K-3 provided a right that could be triggered by private parties.

[00:31:59] Speaker 03:
That is, whether the Secretary could be forced to do something under K-3, which I think is what Judge Henderson was asking my colleague on the other side.

[00:32:06] Speaker 03:
We don't really have to focus on that question here.

[00:32:08] Speaker 03:
We don't have to decide that issue, and that's why Judge Boasberg didn't really address some of these very important but detailed questions.

[00:32:16] Speaker 03:
The easiest way to resolve this case is to say K-3 simply is not satisfied because there's no joint committee authorization.

[00:32:22] Speaker 03:
And so there's no entitlement to the records.

[00:32:26] Speaker 03:
And whether we do that as a matter of exhaustion, as our brief suggests, or whether we do it just as sort of a matter of law and the merits, as this court did in Learfield, or as the 10th Circuit did in Hull, where it converted an exhaustion issue to a sort of merits issue, is really an academic point, although an important academic point.

[00:32:46] Speaker 00:
Thank you.

[00:32:49] Speaker 00:
Does Mr. Davison have any time left?

[00:32:52] Speaker 00:
All right, why don't you take a minute.

[00:32:57] Speaker 02:
Thank you, Your Honor.

[00:32:57] Speaker 02:
Just a few quick points.

[00:32:59] Speaker 02:
I think, Your Honor, Judge Malat, you are correct exactly that this regulation has the effect of shifting the burden to the FOIA requester, of proving that there is no exemption that could possibly apply.

[00:33:09] Speaker 02:
And that is, per se, unreasonable FOIA regulation of the type that is not permitted by this court's precedence.

[00:33:16] Speaker 02:
My colleague on the other side has suggested that this is a reasonable regulation.

[00:33:22] Speaker 02:
Again, it is not a reasonable regulation because it is an unwarranted burden that provides a requirement

[00:33:29] Speaker 02:
of proof of consent, where in fact there is no requirement for consent in the K-3 provision.

[00:33:34] Speaker 02:
The terms right of access was discussed in the FOIA regulations.

[00:33:39] Speaker 02:
I just want to clarify that those terms don't mean that the requester has to demonstrate an absolute unqualified right of access to the records at the outset of the FOIA process.

[00:33:48] Speaker 02:
They simply mean that if the agency makes a disclosure, the requester is the type of party that can receive those records.

[00:33:55] Speaker 02:
It has a right to access them under 6103.

[00:33:58] Speaker 02:
I want to underscore here that even if there were some limit to the reach of FOIA to the K-3, the unique facts of this case, uniquely damaging the statements made by a person who occupies the highest office in the land would certainly qualify to place K-3 within the reach of FOIA.

[00:34:17] Speaker 02:
And finally, we argue vociferously that K-3 applies to the records at issue.

[00:34:22] Speaker 02:
And, of course, we've articulated in our brief why the Joint Committee Approval Clause is unconstitutional.

[00:34:27] Speaker 02:
But we have not reached that stage of the proceedings, so we ask the court to remand so that the IRS can do what the FOIA requires.

[00:34:34] Speaker 02:
Thank you.