Shell Oil Co. v. Internal Revenue Service

772 F. Supp. 202, 1991 U.S. Dist. LEXIS 10767
CourtDistrict Court, D. Delaware
DecidedAugust 2, 1991
DocketCiv. A. 89-468-JRR
StatusPublished
Cited by14 cases

This text of 772 F. Supp. 202 (Shell Oil Co. v. Internal Revenue Service) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shell Oil Co. v. Internal Revenue Service, 772 F. Supp. 202, 1991 U.S. Dist. LEXIS 10767 (D. Del. 1991).

Opinion

OPINION

ROTH, Circuit Judge. *

Plaintiff Shell Oil Company brought this action as part of its effort to learn the contents of certain Internal Revenue Service documents. These documents were requested by Shell under the Freedom of Information Act, but were withheld as privileged by defendants Internal Revenue Service and the Department of the Treasury. Shell has moved for partial summary judgment regarding a single document. The defendants, who shall be referred to in the remainder of this opinion as “the government,” maintain that they are entitled to withhold this document because it falls within the ambit of the “deliberative pro *204 cess” privilege that is available under the Freedom of Information Act. Shell, however, contends that the government waived any possible privilege when an Internal Revenue Service official read a definition of “tar sands” to a January 25, 1990, meeting of government and oil industry officials. Shell asserts that the government must disclose the agency records comprising the definition of “tar sands” as that definition is employed in regulation project files LR-226-81 and PS-226-81. After full briefing, the parties were heard at oral argument, and the issue is ripe for decision. For the reasons that follow, we shall grant Shell’s motion for partial summary judgment as it applies to the definition of “tar sands” read at the January 25, 1990, meeting.

I. FACTS

This litigation stems from Shell’s desire to obtain a definition of the term “tar sands” as it is employed in the Crude Oil Windfall Profit Tax Act of 1980 (“the Crude Oil Act”). Section 29 of the Internal Revenue Code, which embodies part of the Crude Oil Act, provides a tax credit for oil produced from “tar sands,” but does not define the term. In fact, from 1980 to 1989 no official definition was available. 1 Acting on its suspicion that the Service during these years had been using a “secret” or “working” definition that restricted the tax credit to oil produced through certain extraction methods, Shell resolved to obtain more information. In December 1988, Shell submitted two Freedom of Information Act (“FOIA”) requests to the Service and one to the Department of the Treasury (“Treasury”). These requests sought, among other things, all documents related to (a) any agency consideration of the adoption of a definition in Treasury Regulations of the term “tar sands” (including regulation projects) and (b) interpretive guidance offered in connection with either § 29 or the Crude Oil Act. Shell also sought all documents concerning (a) promulgation of Treasury Regulation 1.48-9 and (b) any possible issuance in connection with that Regulation of any Revenue Ruling or other interpretive guidance concerning both the definition of “oil or gas substance” and the question of whether “tar sands” constitute an “alternative substance” under the Act.

In response to these requests, the government supplied certain documents but withheld others in reliance on the “deliberative process” privilege encompassed within the Freedom of Information Act. 2 After exhausting its administrative remedies, Shell sought judicial review of the propriety of the withholding by filing the instant complaint. The complaint sought a declaration that the withholding violated the FOIA, the Administrative Procedure Act, and the Service’s own regulations; an injunction against continued improper withholding; an order to produce the withheld records; and reasonable attorneys fees and litigation costs.

The event that precipitated the present motion occurred nearly five months after Shell filed the complaint. At a January 25, 1990, meeting of federal government and oil industry representatives, a Service employee named Joseph Makurath twice read aloud a definition of “tar sands” from a draft notice of proposed rulemaking. The government acknowledges that the definition was read verbatim. The document from which Makurath read was not physically distributed or released to those in attendance.

As we discuss below, the parties have different views of the import of what occurred at the meeting. There is no debate, however, about Shell’s reaction to this public reading. The company soon filed two additional FOIA requests that were directed to obtaining, among other things, the *205 document from which Makurath read. To Shell’s dismay, the government did not supply this document. After exhausting administrative appeals from this and other withholdings, Shell amended its complaint in this Court to reflect its dissatisfaction with more recent developments.

Through its motion for partial summary judgment, Shell now asks us to resolve a narrow issue: Did Makurath’s public reading of at least a portion of the withheld document amount to a waiver of the government’s right to assert the “deliberative process” privilege under the FOIA? We hold that at least to the extent that the document was read aloud, the government did waive that right and that it must turn over to Shell that portion of the disputed document.

II. DISCUSSION

A. Applicable Law

1. FOIA and the Deliberative Process Privilege to Withhold Documents from Disclosure

The FOIA was enacted in 1966 to grant broad public access to government records. North Dakota v. Andrus, 581 F.2d 177, 179 (8th Cir.1978). It is designed, in other words, to guarantee the right of persons to know about the business of their government, Durns v. Bureau of Prisons, 804 F.2d 701, 703 (D.C.Cir.1986) (quoting House Report), vacated on other grounds, 486 U.S. 1029, 108 S.Ct. 2010, 100 L.Ed.2d 598 (1988), including particular agency actions. See United States Dep’t of Justice v. Reporters Committee for Freedom of the Press, 489 U.S. 749, 771-73, 109 S.Ct. 1468, 1481, 103 L.Ed.2d 774 (1989). Therefore, in pursuit of the laudable goal of ensuring an informed citizenry, agencies must adhere to a general philosophy of full disclosure. United States Dep’t of Justice v. Tax Analysts, 492 U.S. 136, 141-43, 109 S.Ct. 2841, 2846, 106 L.Ed.2d 112 (1989); Department of the Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 1599, 48 L.Ed.2d 11 (1976).

The broad access to public records that is provided by the FOIA is not, however, unlimited. Because “public disclosure is not always in the public interest,” Baldrige v. Shapiro, 455 U.S. 345, 352, 102 S.Ct. 1103, 1108, 71 L.Ed.2d 199 (1982), Congress created nine specific exemptions from disclosure. These exemptions are explicitly made exclusive and must be narrowly construed. 5 U.S.C.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Williams v. City Of Chicago
N.D. Illinois, 2023
Stevens v. Sullum
M.D. Pennsylvania, 2023
Commonwealth v. McClure
172 A.3d 668 (Superior Court of Pennsylvania, 2017)
100reporters LLC v. United States Department of Justice
248 F. Supp. 3d 115 (District of Columbia, 2017)
Patterson v. Burge
451 F. Supp. 2d 947 (N.D. Illinois, 2006)
Hobley v. Burge
445 F. Supp. 2d 990 (N.D. Illinois, 2006)
Building Industry Ass'n v. Department of Labor & Industries
98 P.3d 537 (Court of Appeals of Washington, 2004)
Dipace v. Goord
218 F.R.D. 399 (S.D. New York, 2003)
Sherman v. United States Department of the Army
244 F.3d 357 (Fifth Circuit, 2001)
Oregonian Publishing Co. v. Portland School District No. 1J
952 P.2d 66 (Court of Appeals of Oregon, 1998)
Globe Newspaper Co. v. Police Commissioner
419 Mass. 852 (Massachusetts Supreme Judicial Court, 1995)

Cite This Page — Counsel Stack

Bluebook (online)
772 F. Supp. 202, 1991 U.S. Dist. LEXIS 10767, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shell-oil-co-v-internal-revenue-service-ded-1991.