                      UNITED STATES DISTRICT COURT
                      FOR THE DISTRICT OF COLUMBIA
____________________________________
JUDICIAL WATCH, INC.,                )
                                     )
      Plaintiff,                     )
                                     )
      v.                             ) Civil Action No. 06-2034 (RCL)
                                     )
SOCIAL SECURITY ADMIN.,              )
                                     )
      Defendant.                     )
____________________________________)


                                 MEMORANDUM OPINION

I.     INTRODUCTION

       Is an employer a taxpayer? That deceptively simple question is the conundrum before the

Court today. Plaintiff Judicial Watch, Inc. (“JW”) is suing the Social Security Administration

(“SSA”), requesting a list of the names and addresses of employers who received the most “no-

match” letters during a five-year time period. A “no-match” letter occurs when the SSA detects

a mismatch between an employee’s name and social security number. The SSA refuses to

divulge this information, citing Freedom of Information Act (“FOIA”) Exemption 3 as the basis

for its refusal. The case is before the Court on the parties’ cross-motions for summary judgment.

Having reviewed the motions, the oppositions, the replies, the entire record in the case, and the

applicable law at length, the Court grants the SSA’s motion for summary judgment and denies

JW’s cross-motion for summary judgment for the reasons that follow.

II.    BACKGROUND

       A.      Statutory Framework

       FOIA allows the public to gain access to records from a federal administrative agency,

Valencia-Lucena v. U.S. Coast Guard, 180 F.3d 321, 325 (D.C. Cir. 1999), and represents a
strong Congressional commitment to transparency in government through the disclosure of

government information. Dep’t of the Air Force v. Rose, 425 U.S. 352 (1976). FOIA strikes a

balance between “ensur[ing] an informed citizenry, vital to the functioning of a democratic

society,” and “legitimate governmental and private interests [that] could be harmed by [the]

release of certain types of information.” Critical Mass Energy Project v. Nuclear Regulatory

Comm’n, 975 F.2d 871, 872 (D.C. Cir. 1992).

       Although FOIA embodies a policy of disclosure, full disclosure cannot always be

achieved. 5 U.S.C. § 552(b)(1)–(9) (2006). There are nine exemptions that allow an agency to

withhold all or parts of a document. Id. While these exemptions allow agencies to withhold

information, FOIA requires that “any reasonably 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. § 552(b)(1). FOIA Exemption 3 is in play in this case—it allows an

agency to withhold documents that have been specifically exempted from disclosure by another

statute, “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. § 552(b)(3).

       The relevant statute at issue here is 26 U.S.C. § 6103, which grants an agency the

authority to withhold a document in its entirety simply because it pertains to a confidential tax

return or “return information.” 26 U.S.C. § 6103(a). The Supreme Court and the District of

Columbia Circuit Court of Appeals have held that § 6103 qualifies as a FOIA Exemption 3

statute. See Church of Scientology of Cal. v. IRS, 484 U.S. 9, 11 (1987) (“If § 6103 forbids the

disclosure of material, it may not be produced in response to a request under FOIA”); see also




                                                  2
Tax Analysts v. IRS, 117 F.3d 607, 611 (D.C. Cir. 1997) (“That § 6103 is the sort of

nondisclosure statute contemplated by FOIA Exemption 3 is beyond dispute”).

        Section 6103(b) excludes from the category of return information “data in a form which

cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer.” 26

U.S.C. § 6103(b)(2). Known as the Haskell Amendment, this provision allows the IRS to

“release for research purposes statistical studies and compilations of data, such as the tax model,

which do not identify individual taxpayers.” Church of Scientology, 484 U.S. at 16. In Church

of Scientology, the Supreme Court clarified that the Haskell Amendment only applies to

information that has been “reformulated” into “a statistical study or some other composite

product.” Id. at 13–18. Thus, the Haskell Amendment does not apply to information that an

agency simply transfers from one document to another. Id. at 13.

        B.       Factual and Procedural History

        On June 6, 2006, JW submitted a FOIA request to the SSA for a list of the top fifty or top

one hundred U.S. employers who received “the highest number of Social Security number

mismatches.” Def.’s Mot. Summ. J. 3, Apr. 18, 2007, ECF No. 9 (“Def.’s Mot.”). JW sought

these records for a five-year time period beginning on January 1, 2001 and extending to 2006.

Liptz Declaration 4, Ex. B to Def.’s Mot., Apr. 18, 2007, ECF No. 9-2 (“Liptz Decl.”). An

employer receives a “no-match” letter from the SSA when a mismatch occurs between an

employee’s name and the social security number on her filed W-2 form. Def.’s Mot. 3; Liptz

Decl. 2. The SSA determines which employers will receive “no-match” letters using the W-2

forms that employers file.1 Def.’s Mot. 4.




        1
          The SSA collects the following information from W-2 forms: the employer’s name and identification
number; the employee’s name, address, and social security number; and the amount of wages paid. Liptz Decl. 2.


                                                       3
         The SSA denied JW’s FOIA request by a letter dated June 29, 2006, explaining that “no-

match” letters are considered tax return information and are exempt from disclosure. Id. at 6.

Willie J. Polk, the SSA Freedom of Information Officer assigned to handle JW’s request,

determined that 26 U.S.C. § 6103 prohibited the disclosure of such a list because the SSA

generated this list from tax returns filed with the Internal Revenue Service (“IRS”).2 Id. Polk

included instructions detailing the procedure for an administrative appeal if JW did not agree

with the SSA’s assessment of its FOIA request. Letter from SSA to JW 13, Ex. A to Def.’s

Mot., Apr. 18, 2007, ECF No. 9-1 (incorporated as Exhibit 2 to Exhibit A) (“SSA Response 1”).

JW administratively appealed the SSA’s decision, by a letter dated August 2, 2006. Def.’s Mot.

4. The SSA again denied JW’s request on October 16, 2006, citing 26 U.S.C. § 6103 as the basis

for its refusal. Id. at 5. The letter explained that “any information on the tax return, including

whether or not a tax return was even filed, is considered . . . tax return information.” Social

Security Letter 1, Ex. A to Def.’s Mot., Apr. 18, 2007, ECF No. 9-1 (incorporated as Exhibit 4 to

Exhibit A) (“SSA Response 2”). The letter concluded by acknowledging that JW could seek

review of the SSA’s decision in district court. Id.

         Seeking that review, JW filed a civil action in this Court on November 29, 2006. The

SSA filed a motion for summary judgment, Def.’s Mot. 1, arguing that regardless of any

arguments to the contrary, an employer list qualifies as “return information.” Id. at 6–10. In

response, JW filed an opposition to the SSA’s motion and cross-moved for summary judgment.

Pl.’s Cross-Mot. Summ. J. & Opp’n Def.’s Mot. Summ. J. 1, May 8, 2007, ECF No. 12 (“Pl.’s

Cross-Mot.”). JW relied on the faulty assumption that employers are not taxpayers to present its

main argument: that an employer list qualifies as a “statistical compilation of data,” precluding it


         2
             The SSA processes W-2 forms for the IRS pursuant to an agreement between the two agencies. 42 U.S.C.
§ 432.


                                                         4
from the definition of “return information.” 3 Id. at 4–14. The Court will resolve this matter by

addressing the principal issue, as resolution of JW’s secondary arguments are dependent on the

determination of whether an employer is a taxpayer. Having fully reviewed the record and the

parties’ evidence, the Court now turns to the merits of the motions.

III.    LEGAL STANDARD

        Summary judgment should be granted when the “materials in the record, including

depositions, documents, electronically stored information, affidavits or declarations, stipulations,

. . . admissions, interrogatory answers, or other materials” show “that there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a)–(c). This standard requires more than the mere existence of some factual dispute between

the parties; “the requirement is that there be no genuine issue of material fact.” Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). “A fact is ‘material’ if a dispute over it might

affect the outcome of a suit under the governing law.” Holcomb v. Powell, 433 F.3d 889, 895

(D.C. Cir. 2006). “An issue is ‘genuine’ if the evidence is such that a reasonable jury could

return a verdict for the non-moving party.” Doe v. IRS, 706 F. Supp. 2d 1, 5 (D.D.C. 2009)

(citing Anderson, 477 U.S. at 248).

        This Court reviews a motion for summary judgment arising from an agency’s decision to

withhold or disclose documents under FOIA de novo. Mead Data Ctr., Inc. v. Dep’t of Air

Force, 566 F.2d 242, 251 (D.C. Cir. 1977). The agency must demonstrate that it “conducted a

search reasonably calculated to uncover all relevant documents” and that any withheld material

falls within a statutory exemption. Weisberg v. Dep’t of Justice, 705 F.2d 1344, 1351 (D.C. Cir.

1983). To determine whether material falls within a statutory exemption, the agency may submit


        3
          This case was subsequently transferred by consent from Judge Roberts to Chief Judge Lamberth on May
5, 2011. Reassigned Case 1, May 5, 2011, ECF No. 27.


                                                      5
“affidavits or declarations that describe the withheld material in reasonable detail and explain

why it falls within the claimed FOIA exemptions.” Judicial Watch v. U.S. Postal Serv., 297 F.

Supp. 2d 252, 256 (D.D.C. 2004). It must prove that information was not withheld due to

agency bad faith. Military Audit Project v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981). FOIA

exemptions must be “narrowly construed,” FBI v. Abramson, 456 U.S. 615, 630 (1982), and if

records are improperly withheld, the Court may order their production. 5 U.S.C. § 552(a)(4)(B).

IV.    ANALYSIS

       A.      FOIA Protects the Information JW Seeks Because Employers are Taxpayers

       The SSA is not obligated to disclose the requested employer list because employers are

protected under FOIA Exemption 3. JW presents three arguments to the contrary. The first two

arguments contend that an employer list does not qualify as return information because 1) it does

not contain “information regarding a specific, individual taxpayer,” and 2) JW is merely

requesting a list of employers, not actual tax information. Pl.’s Cross-Mot. 9–11. Third, it

argues that even if the information is considered “return information,” the Haskell Amendment

removes the list from the purview of FOIA Exemption 3 because the list qualifies as a “statistical

compilation.” Id. at 5–6, 10–11. As explained below, JW’s arguments are fatally flawed

because they each rely on the faulty assumption that employers are not taxpayers. Since

employers are taxpayers—and identifying these taxpayers, by releasing their names and

addresses, would violate § 6103—the SSA has no duty to disclose or produce documents under

Exemption 3.

       To better understand why this list constitutes “return information,” one must understand

how the list is created. JW argues that the information it seeks is not “return information”

because it is not seeking a copy of a completed W-2 form. Id. at 9–10. JW’s request, however,

asks the SSA to use the information gathered from W-2 forms to create a list of employers who


                                                 6
receive the most “no-match” letters. Def.’s Mot. 3. Employers receive “no-match” letters when

a mismatch occurs between the social security number that appears on SSA records and an

employee’s W-2 form. Id. at 4. The SSA processes these W-2 forms for the IRS pursuant to an

agreement between the two agencies. 42 U.S.C. § 432. The SSA uses the information gathered

from the W-2 form to determine which employers will receive “no-match” letters. Def.’s Mot. 4.

Regardless of the fact that JW does not seek a copy of an individualized W-2 form, the question

before the Court is whether a list generated from the information on W-2 forms constitutes

“return information” as defined by § 6103. If such a list qualifies as “return information,” then

the SSA has no duty to disclose or produce it under Exemption 3.

        Section 6103 of the Internal Revenue Code prohibits the disclosure of “return

information,” which is defined as:

        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, overassessments, 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…

26 USC § 6103(b)(2). The definition of “return information” in this case hinges on a

determination of who qualifies as a “taxpayer.”4 Since the Internal Revenue Code defines a

“taxpayer” as “any person subject to an internal revenue tax,” an employer qualifies as a

“taxpayer” if it meets the statutory definition of a “person.” § 7701(a)(14). A “person” is defined

as an “individual, trust, estate, partnership, association, company or corporation.” § 7701(a)(1).

Given that JW’s employer list is undoubtedly comprised of companies, corporations, and

associations—which constitute “persons” under § 7701—the SSA is prohibited from releasing


        4
          Section 7701 of the Internal Revenue Code provides the relevant statutory definitions for § 6103. 26
U.S.C. § 7701(a) (2006).


                                                         7
this list because employers are “taxpayers” and revealing their identity would violate § 6103.

See Thompson Publ’g Grp., Inc. v. Health Care Fin. Admin., 1994 U.S. Dist. LEXIS 3285, at *6

(D.D.C. Mar. 15, 1994) (holding that § 6103 prohibited a publishing group, which did not seek

specific information regarding an employee’s identity, from obtaining a list of employers who

employ medicare beneficiaries); see also Davis, Cowell & Bowe, LLP v. Social Sec. Admin., No.

C 01-4021, 2002 U.S. Dist. LEXIS 9548, at *23 (N.D. Cal. May 17, 2002) (explaining that

“deleting the employees’ name or social security numbers would not change the fact that the

requested records are derived from specific return information filed by individual taxpayers”).

        The Haskell Amendment allows an agency to release, for statistical purposes,

compilations of data, which do not identify a “particular taxpayer.” 26 U.S.C. § 6103(b)(2). As

discussed above, JW’s request identifies a “particular taxpayer” by seeking an employer list—

comprised of companies, corporations and associations—that reveals the identity of employer

taxpayers. Therefore, JW cannot use the Haskell Amendment as a vehicle to gain access to

confidential tax return information when it is expressly prohibited from doing so under § 6103.

        B.       The SSA Did Not Violate Statutory Requirements in Responding to JW’s
                 Request

        JW’s secondary arguments fail in light of the fact that its main premise—that employers

are not taxpayers—does not withstand close scrutiny. Although JW argues that the search SSA

conducted was insufficient, Pl.’s Cross-Mot. 6–9, the SSA acknowledged the existence of one

potentially responsive document.5 Def.’s Mot. 6. Because this document contains information

that identifies a “person,” 6 the Court agrees with the SSA that it does not need to produce tax


        5
          Charles Liptz, an SSA employee and Chief of the Wage Reporting and Relations Staff, created a
document for an investigation the Treasury Department conducted during the 1999 and 2000 tax years to determine
whether to impose penalties on employers who received the most “no-match” letters. Id. at 7.
        6
          Liptz stated that the document he created in response to the Treasury Department’s request contained “the
names and addresses of the employer, their EIN’s (employer identification numbers), the total number of bad social


                                                         8
information. 26 U.S.C. § 7701(a)(1). Once the SSA determined that the information in question

constituted return information, it properly withheld it. Furthermore, the SSA is not obligated to

create new records for JW. See Krohn v. Dep’t of Justice, 628 F.2d 195, 197–98 (D.C. Cir.

1980) (explaining that “FOIA…only requires disclosure of certain documents which the law

requires the agency to prepare or which the agency has decided for its own reasons to create”)

(quoting Sterling Drug, Inc. v. FTC, 450 F.2d 698 (1971)). Since neither of the criteria above

applies to JW’s request, the SSA has no duty to create a new, responsive document.

V.      CONCLUSION

        For the reasons set forth above, the Court grants the SSA’s request for summary

judgment and denies JW’s cross-motion. A separate Order memorializing this Opinion will issue

this day.

        Signed by Royce C. Lamberth, Chief Judge, on August 1, 2011.




security numbers per employer and the percentage the bad social security numbers constituted of each employer’s
total reported social security numbers.” Def.’s Mot. 7.


                                                        9
