In pursuing Freedom of Information Law requests to the New York State Department of Taxation and Finance, some taxpayers and representatives may be unaware that the Public Officers Law permits a court to award “reasonable attorney’s fees” where the requesting party “substantially prevails” in appealing a wrongful denial of access to records. A recent court decision, while not dispositive of the issue, serves as a reminder of this potentially important tool. Matter of Richard T. Saxton, et al. v. N.Y.S. Dep’t of Taxation & Fin., et al., Memorandum & Order, Case No. 520128 (3d Dep’t, July 9, 2015).

Public Officers Law § 89.4(c) provides that a court may assess against an agency “reasonable attorney’s fees and other litigation costs reasonably incurred . . . in any [Freedom of Information Law] case . . . in which such person has substantially prevailed.” The case stemmed from a criminal State tax proceeding against an individual. The individual, along with his counsel’s employee, filed a Freedom of Information Law (“FOIL”) request with the Department seeking various records relating to the Department’s criminal investigation of the individual. After a long delay, the Department provided numerous records, and the Records Appeals Officer certified that there were no other records responsive to the request.

The individual brought an Article 78 appeal, after which the Department acknowledged that there were approximately 135 additional records that had not been disclosed, despite the certification. An Albany County Supreme Court judge concluded that the individual had “substantially prevailed” and ordered the Department to pay him $25,000 in counsel fees, out of a request for nearly $135,000 in counsel fees.

The individual appealed that award, contending that the judge’s decision to limit attorney fees was an abuse of discretion. The Third Department acknowledged that the judge had the discretion not only to determine whether counsel fees should be awarded, but also in calculating the reasonable amount of any reward, and noted that such awards generally will not be disturbed on appeal absent an abuse of discretion by the court. The court concluded that the judge had failed to explain how he applied the various relevant factors for determining the award of legal fees. It therefore reversed the award of attorney fees, and remitted the matter back to the judge for a more detailed disposition.

Additional Insights

The ability to recover attorney’s fees in a FOIL appeal in which the requesting party “substantially prevails” in the courts is an important protection against the Department withholding documents where it had no reasonable basis to do so. Unlike the recovery of litigation costs under Tax Law § 3030—which applies in tax cases at the administrative or judicial level— the award of legal fees under FOIL is not limited to prevailing parties that fall below a threshold net worth amount or that are businesses with not more than 500 employees. This case illustrates the importance of adequately documenting those legal fees that are incurred by reason of the Department’s wrongful refusal to disclose.