Facebook Motion for Native Format ESI from IRS Denied
Facebook, Inc. et. al. v. Internal Revenue Service, Case No. 16-05884 (N.D. Cali., June 19, 2017) is a Freedom of Information Act (FOIA) case arising from an IRS audit of Facebook’s 2008-2010 tax years. After the audit, the IRS issued a notice of deficiency, asserting that Facebook understated its income by nearly $85 million in 2010. Facebook disagreed and challenged the determination in Tax Court. Separately, Facebook requested the audit documents through two FOIA requests. The IRS requested a FOIA response deadline extension, and Facebook sued the IRS to compel production of the documents. The IRS response was that “thousands of pages” of documents had been produced since the start of the litigaiton. Facebook then moved to compel production of electronic documents in native format with metadata. The IRS moved for partial summary judgment on the request, arguing that Facebook’s FOIA requests did not seek native format ESI and therefore Facebook failed to exhaust its administrative remedies.
In its motion for native format production, Facebook specifically sought spreadsheets, Word documents, and PowerPoint presentations. Additionally, it sought emails in the format in which they are normally maintained, accompanied by a standard load file with typical metadata.
The court held that because Facebook did not seek native format ESI in its FOIA requests, it could not grant the Motion to Compel. FOIA and IRS regulations require that requests for records must “reasonably describe” the records. The court found it could not “impose an electronic copy obligation on a federal agency” when such records were not specifically requested. The court held that judicial intervention in a FOIA request at this stage would “deprive the IRS the opportunity to exercise its discretion and analyze” the request for ESI. Facebook was free to amend its FOIA request, as IRS indicated a willingness to comply if it did so.