Tax Analysts v. Matthew Irby, West Virginia State Tax Commissioner

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

January 2024 Term FILED
_______________
March 15, 2024
No. 22-0491 released at 3:00 p.m.
C. CASEY FORBES, CLERK
_______________ SUPREME COURT OF APPEALS
OF WEST VIRGINIA

TAX ANALYSTS,
Petitioner,

v.

MATTHEW IRBY,
West Virginia State Tax Commissioner,
Respondent.

____________________________________________________________

Appeal from the Circuit Court of Kanawha County
The Honorable Tera Salango, Judge
Civil Action No. 22-P-80

REVERSED AND REMANDED WITH DIRECTIONS
____________________________________________________________

Submitted: February 6, 2024
Filed: March 15, 2024

Zachary J. Rosencrance, Esq. Patrick Morrissey, Esq.
Bowles Rice, LLP Attorney General
Charleston, West Virginia Katherine A. Schultz, Esq.
Cornish F. Hitchcock, Esq. Senior Deputy Attorney General
Hitchcock Law Firm, PLLC Sean M. Whelan, Esq.
Washington, D.C. Deputy Attorney General
Counsel for Petitioner Charleston, West Virginia
Counsel for Respondent

CHIEF JUSTICE ARMSTEAD delivered the Opinion of the Court.
 SYLLABUS BY THE COURT

1. “Appellate review of a circuit court’s order granting a motion to

dismiss a complaint is de novo.” Syllabus Point 2, State ex rel. McGraw v. Scott Runyan

Pontiac-Buick, Inc., 194 W. Va. 770, 461 S.E.2d 516 (1995).

2. “‘“Where the issue on an appeal from the circuit court is clearly a

question of law or involving an interpretation of a statute, we apply a de novo standard of

review.” Syllabus Point 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415

(1995).’ Syllabus Point 1, State v. Paynter, 206 W.Va. 521, 526 S.E.2d 43 (1999).”

Syllabus Point 1, In re Charleston Gazette FOIA Request, 222 W. Va. 771, 671 S.E.2d 776

(2008).

3. “‘The disclosure provisions of this State’s Freedom of Information

Act, W. Va. Code, 29B-1-1 et seq., as amended, are to be liberally construed, and the

exemptions to such Act are to be strictly construed. W. Va. Code, 29B-1-1 [1977].’ Syl. Pt.

4, Hechler v. Casey, 175 W.Va. 434 S.E.2d 799 (1985).” Syllabus Point 3, Charleston

Gazette v. Smithers, 232 W. Va. 449 S.E.2d 603, 607 (2013).

4. “‘The party claiming the exemption from the general disclosure

requirement under West Virginia Code § 29B-1-4 has the burden of showing the express

applicability of such exemption to the material requested.’ Syllabus Point 7, Queen v. W.

i
Va. Univ. Hosps., Inc., 179 W.Va. 95, 365 S.E.2d 375 (1987).” Syllabus Point 4,

Charleston Gazette v. Smithers, 232 W. Va. 449, 752 S.E.2d 603 (2013).

5. “When a public body asserts that certain documents or portions of

documents in its possession are exempt from disclosure under any of the exemptions

contained in W. Va.[]Code, 29B-1-4 (2002 Repl. Vol.) (2003 Supp.), the public body must

produce a Vaughn index named for Vaughn v. Rosen, 484 F.2d 820 (D.C.Cir.1973), cert.

denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974). The Vaughn index must

provide a relatively detailed justification as to why each document is exempt, specifically

identifying the reason(s) why an exemption under W. Va.[]Code, 29B-1-4 is relevant and

correlating the claimed exemption with the particular part of the withheld document to

which the claimed exemption applies. The Vaughn index need not be so detailed that it

compromises the privilege claimed. The public body must also submit an affidavit,

indicating why disclosure of the documents would be harmful and why such documents

should be exempt. Syllabus point 3 of Daily Gazette Co., Inc. v. West Virginia Development

Office, 198 W.Va. 563, 482 S.E.2d 180 (1996), is hereby expressly modified.” Syllabus

Point 6, Farley v. Worley, 215 W. Va. 412, 599 S.E.2d 835 (2004).

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ARMSTEAD, Chief Justice:

Petitioner, Tax Analysts (“Tax Analysts”), is a nonprofit organization that

publishes periodicals throughout the country, including in West Virginia, to provide

updates on developments affecting the tax laws and policies in various states. Tax Analysts

requested copies of field audit and audit training manuals from the Respondent, West

Virginia State Tax Department (“Department”), pursuant to the West Virginia Freedom of

Information Act (“FOIA”). See W. Va. Code §§ 29B-1-1 through 7. The Department

denied the request, citing a statutory exemption to disclosure under FOIA outlined in West

Virginia Code § 11-10-5d(b)(5)(B) (2018).

Tax Analysts filed a declaratory judgment action in the Circuit Court of

Kanawha County seeking to enjoin the Department from withholding the requested

documents. Without requiring the Department to justify or establish the applicability of

the statutory exemption as it relates to the documents or information contained within them,

the circuit court accepted the Department’s position that disclosure was not required.

Accordingly, the circuit court granted the Department’s motion to dismiss pursuant to Rule

12(b)(6) of the West Virginia Rules of Civil Procedure on the basis that the documents

were statutorily protected by the asserted FOIA disclosure exemption.

After review, we find that the circuit court erred by granting the

Department’s motion to dismiss without requiring the Department to follow the established

procedure to determine whether the documents, or portions of the documents, were subject

to disclosure.

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 Therefore, we reverse the circuit court’s order granting the Department’s

motion to dismiss and remand with instructions for the circuit court to enter an order

requiring the Department to file a Vaughn index and an affidavit indicating why disclosure

of the documents would be harmful and why they should be exempt. 1

I. FACTUAL AND PROCEDURAL BACKGROUND

On July 29, 2021, Tax Analysts sent a letter to the Department requesting

that the Department produce, pursuant to its obligations under FOIA, current field audit

manuals, audit training manuals, training materials, and continuing education materials.

The Department denied the request in its entirety, citing West Virginia Code § 11-10-

5d(b)(5)(B), which exempts documents that disclose the standards used “for the selection

of [tax] returns for examination or data used or to be used for determining such standards.”

The Department asserted that disclosure of the information contained in the requested

documents could educate potential tax evaders on how to violate state tax laws.

Tax Analysts filed a complaint in the Circuit Court of Kanawha County on

March 3, 2022, seeking a declaration that the Department improperly withheld the

requested information, and a permanent injunction to prevent the Department from

1
When a public body claims that certain documents or portions of documents in its
possession are exempt from disclosure pursuant to a FOIA exemption, the public body
must produce a Vaughn index, named for Vaughn v. Rosen, 484 F.2d 820 (D.C.Cir.1973),
cert. denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974). See Syl. Pt. 6, in part,
Farley v. Worley, 215 W. Va. 412, 599 S.E.2d 835 (2004). The public body must also
submit an affidavit indicating why disclosure of the documents or portions of the
documents would be harmful and why they should be exempt. Id.

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continuing to withhold the requested information. The Department filed a motion to

dismiss, arguing that the requested information was exempt from FOIA disclosure under

W. Va. Code § 11-10-5d(b)(5)(B). The circuit court agreed with the Department and

granted the motion to dismiss. Thereafter, Tax Analysts filed the instant appeal.

II. STANDARD OF REVIEW

“Appellate review of a circuit court’s order granting a motion to dismiss a

complaint is de novo.” Syl. Pt. 2, State ex rel. McGraw v. Scott Runyan Pontiac-Buick,

Inc., 194 W. Va. 770, 461 S.E.2d 516 (1995). Similarly,

“‘[w]here the issue on an appeal from the circuit court is clearly
a question of law or involving an interpretation of a statute, we
apply a de novo standard of review.’ Syllabus Point 1, Chrystal
R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995).”
Syllabus Point 1, State v. Paynter, 206 W.Va. 521, 526 S.E.2d
43 (1999).

Syl. Pt. 1, In re Charleston Gazette FOIA Request, 222 W. Va. 771, 671 S.E.2d 776 (2008).

III. ANALYSIS

The question before this Court is whether the circuit court erred when it

determined that West Virginia Code § 11-10-5d(b)(5)(B) permitted the Department to deny

Tax Analysts’s FOIA request, thereby preventing Tax Analysts from establishing any set

of facts that would entitle it to the relief requested. See John W. Lodge Distrib. Co. v.

Texaco, Inc., 161 W. Va. 603, 245 S.E.2d 157 (1978) (“Because a Rule 12(b)(6) motion is

designed to weed out unfounded suits, the ultimate test under Rule 12(b)(6) is whether the

plaintiff can prove any set of facts that would entitle him or her to the relief requested.”).

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 For the reasons detailed below, we find that dismissal of Tax Analysts’s

complaint was in error and the circuit court should have required the Department to

produce an index and affidavit to demonstrate to the court its basis for withholding the

requested information. 2

At the initial pleadings stage of a FOIA dispute, the disputed materials are

generally unknown to both the court and the opposing party. This fact renders dismissal

of an action challenging refusal to disclose requested documents pursuant to Rule 12(b)

disfavored except in limited circumstances. Indeed, except where it is clear from the

complaint that the requested documents fall within a specific exemption, a FOIA challenge

is more appropriately considered at the summary judgment stage, after the parties have

conducted discovery, to ensure fair resolution. See Farley, 215 W. Va. at 418, 599 S.E.2d

at 841 (quoting Evans v. Office of Personnel Mgt., 276 F.Supp.2d 34, 37 (D.D.C.2003)).

Although this Court has previously affirmed an order granting a motion to dismiss a FOIA

2
Tax Analysts argues that the circuit court “never mentioned [the motion to dismiss]
standard or attempted to explain why Tax Analysts’ complaint failed to satisfy [the]
minimal [12(b)(6)] requirement.” However, the circuit court reiterated the 12(b)(6)
standard in its order granting the motion to dismiss. The circuit court explained the purpose
of a Rule 12(b)(6) motion and reiterated the ultimate test: whether the plaintiff can prove
any set of facts that would entitle it to relief. See id. Tax Analysts also asserts that the
court erred by granting the motion because it has already acquired similar records from
forty other state tax departments, generally with few or no redactions, and some state tax
departments publish comparable manuals online. These facts are unpersuasive, as the
circuit court’s order relied on West Virginia’s FOIA statute, including its disclosure
exemptions. Other states’ disclosure of similar requested material does not control in this
matter.

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action, in that case the documents requested fell “squarely within” the exemption to justify

withholding the documents without further inquiry into their contents. Appalachian

Mountain Advocs. v. W. Va. Univ. No. 19-0266, 2020 WL 3407760 (W. Va. June 18, 2020)

(memorandum decision). Here, where the requested documents were not disclosed, it is

impossible to determine if the manuals and other materials requested by Tax Analysts fall

squarely within the West Virginia Code § 11-10-5d(b)(5)(B) exemption provision. The

exemption is limited to “standards used or to be used for the selection of returns for

examination or data used or to be used for determining such standards.” Absent additional

information, the circuit court could not determine whether disclosure of the requested

documents would reveal exempted information.

When a requesting party challenges a decision by an agency to withhold

requested documents, such challenge must be evaluated by first looking to the text of the

West Virginia FOIA statute. Both the express text of the FOIA statute, as well as this

Court’s interpretation of that statute, make clear that, except where the requested

documents fall within an express exemption, the public policy of West Virginia favors full

and free disclosure. It is the public policy of West Virginia, as established by the West

Virginia Legislature, that the provisions of the FOIA are to be liberally construed to

accomplish the principle that

“all persons are, unless otherwise expressly provided by law,
entitled to full and complete information regarding the affairs
of government and the official acts of those who represent them
as public officials and employees. The people, in delegating
authority, do not give their public servants the right to decide
what is good for the people to know and what is not good for
them to know. The people insist on remaining informed so that

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 they may retain control over the instruments of government
they have created.”

W. Va. Code § 29B-1-1 (1977).

Although the established public policy of our state ensures public access to

information regarding the operation of our government, the Legislature has identified

specific exemptions that permit agencies to withhold documents from disclosure in limited

circumstances. However, we have cautioned that

“[t]he disclosure provisions of this State’s Freedom of
Information Act, W. Va. Code, 29B-1-1 et seq., as amended,
are to be liberally construed, and the exemptions to such Act
are to be strictly construed. W. Va. Code, 29B-1-1 [1977].” Syl.
Pt. 4, Hechler v. Casey, 175 W.Va. 434 S.E.2d 799 (1985).

Syl. Pt. 3, Charleston Gazette v. Smithers, 232 W. Va. 449 S.E.2d 603, 607 (2013).

Accordingly, when a party claims that requested documents fall within a statutory

exemption, “[t]he party claiming the exemption from the general disclosure requirement

under West Virginia Code § 29B-1-4 has the burden of showing the express applicability

of such exemption to the material requested.” Syl. Pt. 4, Smithers, 232 W. Va. 449, 752

S.E.2d 603 (quoting Syl. Pt. 7, Queen v. W. Va. Univ. Hosps., Inc., 179 W.Va. 95, 365

S.E.2d 375 (1987)); see also W. Va. Code § 29B-1-5(2) (1977) (“In any suit filed under

subsection one of this section, the court has jurisdiction to enjoin the custodian or public

body from withholding records and to order the production of any records improperly

withheld from the person seeking disclosure. The court shall determine the matter de novo

and the burden is on the public body to sustain its action.”). Here, it is clear that the circuit

6
court merely adopted the Department’s characterization of the withheld documents as

falling within the exemption provided for in West Virginia Code § 11-10-5d(b)(5)(B). 3

Of particular note, the circuit court found that the Department “has

reasonably interpreted” the exemption to apply to Tax Analysts’s request because

the methodologies by which it selects returns for auditing is
within the same category of information as the methodologies
by which the Tax Department carries out its audits (i.e., the
requested audit manuals) – and therefore [the exemption]
protects from disclosure all documents related to the Tax
Department’s auditing processes, including those requested by
[Tax Analysts].

(Emphasis added). The circuit court’s deference to the Department’s interpretation of the

statute is erroneous for three reasons. First, this broad reading of West Virginia Code

§ 11-10-5d(b)(5)(B) to include “all documents related to the Tax Department’s auditing

processes” is inconsistent with this Court’s long-standing principle that exemptions to

FOIA are to be construed narrowly. See Syl. Pt. 3, Smithers, 232 W. Va. 449, 752 S.E.2d

603. The language of the exemption at issue in this case protects from disclosure only

those “standards used or to be used for the selection of returns for examination or data used

or to be used for determining such standards.” W. Va. Code § 11-10-5d(b)(5)(B) (emphasis

added). The Department, and indeed the circuit court, expanded this exemption to include

“all documents related to the Tax Department’s auditing processes.”

3
West Virginia Code § 29B-1-4(a) lists exemptions to disclosure requirements
under the FOIA, including “[i]nformation specifically exempted from disclosure by
statute.” Id. § 29B-1-4(a)(5). The Department contends that the requested documents are
exempt under § 11-10-5d(b)(5)(B).

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 Second, in light of its broad interpretation of the exemption contained in

West Virginia Code § 11-10-5d(b)(5)(B), the Department simply declined to produce any

of the requested material. Therefore, the circuit court was unable to assess whether the

“documents” contain “information” that is not exempted from disclosure.

Finally, the circuit court misconstrued the deference owed to the

Department’s interpretation of § 11-10-5d(b)(5)(B). See Appalachian Power Co. v. State

Tax Dep’t of W. Va., 195 W. Va. 573, 582, 466 S.E.2d 424, 433 (1995) (discussing judicial

review of and deference to an agency’s construction of a statute through rulemaking). It is

true that “[i]nterpretations of statutes by bodies charged with their administration are given

great weight unless clearly erroneous.” Syl. Pt. 4, Sec. Nat. Bank & Tr. Co. v. First W. Va.

Bancorp., Inc., 166 W. Va. 775 277 S.E.2d 613 (1981). However, this policy “does

not . . . ‘extend to ad hoc representations on behalf of an agency, such as litigation

arguments.’” Pool v. Greater Harrison Cnty. Pub. Serv. Dist., 241 W. Va. 233, 239 n.7,

821 S.E.2d 14, 20 n.7 (2018) (quoting Petition of Snuffer, 193 W. Va. 412, 417, 456 S.E.2d

493, 498 (1995) (Cleckley, J., concurring); see also W. Va. Health Care Cost Review Auth.

v. Boone Mem’l Hosp., 196 W. Va. 326, 334, 472 S.E.2d 411, 419 (1996) (“[C]ourts

customarily withhold . . . deference from agencies litigating positions.”). Indeed, the

FOIA statute is not one that the Department is uniquely charged with administering. Unlike

a statute that deals specifically with tax policy, the FOIA statute is not a statute that falls

within the sole expertise or purview of the Department to interpret, but instead applies to

all public agencies.

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 Accordingly, the Department has failed to meet its “burden of showing the

express applicability of such exemption to the material requested.” Syl. Pt. 4, Smithers,

232 W. Va. 449, 752 S.E.2d 603. The mechanism by which a public body generally makes

this showing of applicability is by producing a Vaughn index, which must detail why the

requested information is exempt from disclosure and identify which exemption applies. In

this context, we have held:

When a public body asserts that certain documents or
portions of documents in its possession are exempt from
disclosure under any of the exemptions contained in W.
Va.[]Code, 29B-1-4 (2002 Repl.Vol.) (2003 Supp.), the public
body must produce a Vaughn index named for Vaughn v.
Rosen, 484 F.2d 820 (D.C.Cir.1973), cert. denied, 415 U.S.
977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974). The Vaughn index
must provide a relatively detailed justification as to why each
document is exempt, specifically identifying the reason(s) why
an exemption under W. Va.[]Code, 29B–1–4 is relevant and
correlating the claimed exemption with the particular part of
the withheld document to which the claimed exemption
applies. The Vaughn index need not be so detailed that it
compromises the privilege claimed. The public body must also
submit an affidavit, indicating why disclosure of the
documents would be harmful and why such documents should
be exempt. Syllabus point 3 of Daily Gazette Co., Inc. v. West
Virginia Development Office, 198 W.Va. 563, 482 S.E.2d 180
(1996), is hereby expressly modified.

Syl. Pt. 6, Farley, 215 W. Va. at 412, 599 S.E.2d at 835.

Instead of justifying its refusal to disclose the requested documents through

submission of a Vaughn index, the Department simply did not disclose any of the

documents and claimed generally that they fit within the exemption set forth in West

Virginia Code § 11-10-5d(b)(5)(B). The Department refused to provide the documents

9
despite this Court’s disapproval of such generalized claims of exemption from disclosure.

We have previously warned that:

“‘[A]n entire document is not exempt merely because an
isolated portion need not be disclosed. Thus the agency may
not sweep a document under a general allegation of exemption,
even if that general allegation is correct with regard to part of
the information.’” Moreover, “‘[e]ven if the requester does not
raise the issue of segregability at the administrative level or
before the court . . . . an agency must adequately demonstrate
to the court that all reasonably segregable, non-exempt
information . . . was disclosed.’” Id. (Citations omitted).
Furthermore, “a public body cannot simply state in a
conclusory or cursory manner that redaction would be
unreasonably burdensome or costly.” Id. at 423, 599 S.E.2d at
846. Equally important, as we explained in Daily Gazette Co.
I[nc.], 198 W.Va. 563, 573, 482 S.E.2d 180, 190 (1996), FOIA
“imposes upon the government agency ‘the burden of showing
the express applicability of [the claimed] exemption to the
material requested.’” (Citations omitted).

Smith v. Bradley, 223 W. Va. 286, 291, 673 S.E.2d 500, 505 (2007).

The Department’s general assertion that § 11-10-5d(b)(5)(B) exempts the

requested documents in their entirety lacks the specificity required by Smithers, Farley,

and Smith. To establish a valid exemption from the duty to disclose under

§ 11-10-5d(b)(5)(B), the Department should have produced a Vaughn index to justify

withholding the documents, or portions thereof, plus an affidavit justifying the exemption

and explaining why disclosure of the requested documents would be harmful. See Syl. Pt.

6, in part, Farley, 215 W. Va. at 412, 599 S.E.2d at 835. The only way the circuit court

could have reasonably determined whether the requested documents would disclose

information exempted by statute, or whether the documents also included information that

10
did not fall within § 11-10-5d(b)(5)(B), would have been to review a Vaughn index and

affidavit filed by the Department, and, if necessary, to review the disputed records in

camera. 4

The Department, therefore, failed to sufficiently justify its refusal to disclose

the requested documents or to establish that all of the requested material fell within the

statutory exemption asserted by the Department. The circuit court, likewise, erred by

adopting the Department’s position that the documents requested by Tax Analysts were

protected from disclosure under § 11-10-5d(b)(5)(B) without requiring adequate

justification from the Department. The court’s conclusion required factual determinations

about the undisclosed documents that could only be made after the Department produced

a Vaughn index and proper affidavit.

4
We note that the Department’s “duty to redact or segregate is not necessarily
absolute.” Farley, 215 W. Va. at 422, 599 S.E.2d at 845. The courts may absolve a public
body from its duty to redact or segregate requested documents when the process would
impose an unreasonably high burden or expense. See Syl. Pt. 9, Highland Min. Co. v. W.
Va. Univ. School of Med., 235 W. Va. 370, 774 S.E.2d 36, 42 (2015). Tax Analysts has
never disputed the Department’s right to redact and withhold statutorily exempt portions
of the requested documents. Similarly, the Department has never established that redaction
would impose an undue burden upon it. See Farley, 215 W. Va. at 422 n.14, 599 S.E.2d
at 845 n.14 (emphasizing that FOIA requests must be reasonable out of “concern that
information requests not become mechanisms to paralyze other necessary government
functions”). Indeed, because the Department has withheld the documents from disclosure,
and has failed to provide a Vaughn index, it would be difficult for the circuit court, or this
Court, to make such determination at this stage of the proceedings.

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 IV. CONCLUSION

Accordingly, for the reasons stated above, we find that the circuit court erred

by granting the Respondent’s motion to dismiss. We therefore reverse the circuit court’s

dismissal order and remand this case for further proceedings consistent with this Opinion.

Reversed and Remanded with Directions.

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