4 F.3d 369 (5th Cir. 1993), 91-2763, Johnson v. Sawyer

Docket Nº:91-2763.
Citation:4 F.3d 369
Party Name:Elvis E. JOHNSON, Plaintiff-Appellee, v. Robert SAWYER, et al., Defendants, United States of America, Defendant-Appellant.
Case Date:October 14, 1993
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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4 F.3d 369 (5th Cir. 1993)

Elvis E. JOHNSON, Plaintiff-Appellee,

v.

Robert SAWYER, et al., Defendants,

United States of America, Defendant-Appellant.

No. 91-2763.

United States Court of Appeals, Fifth Circuit

October 14, 1993

Order Granting Rehearing En Banc .

Rehearing Denied as Moot Oct. 19, 1993.

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Ronald G. Woods, U.S. Atty., Houston, TX, Michael J. Salem, Tax Div., Jonathan S. Cohen, Gary R. Allen, Chief, Joy L. Pritts, Atty., Appellate Section, Tax Div., and Robert S. Greenspan, Asst. Director, and Jacob M. Lewis, Atty., Appellate Staff, Dept. of Justice, Washington, DC, for defendant-appellant.

Larry A. Campagna and Robert I. White, Chamberlain, Hrdlicka, White, Williams & Martin, Houston, TX, for Elvis E. Johnson.

Appeal from the United States District Court for the Southern District of Texas.

Before GARWOOD, JOHNSON, and WIENER, Circuit Judges.

WIENER, Circuit Judge:

Supplemental and Amending Panel Opinion 1

In this suit for damages under the Federal Torts Claims Act (FTCA or the Act), 2 the United States as Defendant-Appellant appeals the district court's judgment in favor of Plaintiff-Appellee Elvis E. Johnson. His FTCA action arises from the public dissemination of private taxpayer information about Johnson by agents of the Internal Revenue Service of the United States Department of the Treasury (IRS). Although we now disagree with some of the central reasoning of the district court's decision--reasons approbated in our original opinion, we still find no reversible error on the issue of liability, and therefore reaffirm that part of the judgment of the district court as well as the issue of special damages, albeit with the same modification of the pension loss element as rendered in our original opinion. We also confirm our earlier partial reversal and remand to the district court to permit its further explanation or re-calculation of the quantum of damages awarded for Johnson's emotional distress and mental anguish injuries.

I

FACTS AND PROCEEDINGS

The facts of this case are reported in considerable detail in the published opinions of the district court 3 and in our previous panel opinion. 4 We therefore repeat only those facts required to give necessary perspective to the issues of continuing significance presented by the instant appeal.

After the IRS issued two press releases concerning Johnson's conviction and plea bargain, he sued several of the IRS officials involved in the press release, claiming that the release of disclosed tax information violated 26 U.S.C. Sec. 6103. Johnson subsequently amended his complaint to include an FTCA claim against the United States. His FTCA claim was based on the state law torts of (1) negligence and (2) invasion of privacy committed by publicly disclosing embarrassing private facts about the plaintiff. The FTCA claim was severed from those against the individual defendants and tried to the court without a jury. At the conclusion of the bench trial, the court refused to find for Johnson on the public disclosure cause of action. The court believed (mistakenly) that it could not find that the matter publicized was not a matter of public concern. On Johnson's negligence cause of action, however, the court granted him a judgment against the United States in the amount of $10,902,117. The United States timely appealed that judgment.

II

BACKGROUND LAW

A. The Federal Tort Claims Act

The FTCA constitutes a general but not unlimited waiver of the federal government's

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sovereign immunity from tort claims. 5 Under the Act, suits against the United States are authorized

for injury or loss of property, or personal injury or death caused by negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred. 6

The Act also provides that the United States will be liable in tort "in the same manner and to the same extent as a private individual under like circumstances." 7

To recover under the FTCA, Johnson must have been able to succeed against the government in a state law tort cause of action. Johnson argued two state law tort causes of action that are relevant to the instant appeal. First, he argued that the government invaded his privacy by publicly disclosing embarrassing private facts about him. Second, he argued that the government was negligent per se in publicizing that information. Both are recognized theories of tort liability in Texas.

B. 26 U.S.C. Sec. 6103

Relevant to both claims of Johnson's state law causes of action is the statutory provision found at 26 U.S.C. Sec. 6103. It expressly prohibits the public release of federal tax returns and return information disclosed to the IRS by taxpayers. That prohibition is subject to but a handful of narrow exceptions. Section 6103 provides:

(a) General rule.

Returns and return information shall be confidential, and except as authorized by this title--

(1) no officer or employee of the United States ... shall disclose any return or return information obtained by him in any manner in connection with his service as such an officer or employee or otherwise or under the provisions of this section.

"Return information" is defined as "a taxpayer's identity, the nature, source, or amount of his income, ... deficiencies, ... whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing." 8 And "taxpayer identity" is defined as the name, mailing address, taxpayer identifying number, or any combination thereof. 9

III

UNDERLYING STATE TORTS

A. Invasion of Privacy

  1. Background

    Texas recognizes an invasion of privacy cause of action for public disclosure of private facts, the elements of which are:

    1) Publicity was given to matters concerning the plaintiff's private life;

    2) The publication of these matters would be highly offensive to a reasonable person of ordinary sensitivities; and

    3) The matter publicized is not of a legitimate public concern. 10

    The Texas Supreme Court has articulated at least five factors to be considered in a public disclosure cause of action. First, this tort requires more than mere "publication" (as distinguished from "publicity") of the private information. " 'Publicity ' requires communication to more than a small group of persons; the matter must be communicated to the public at large, such that the matter becomes one of public knowledge." 11

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    Second, Texas will not protect an individual's privacy interest in private facts if those facts are a matter of public record. 12 This rule appears to be an expansion of the rule announced by the United States Supreme Court in Cox Broadcasting Co. v. Cohn. 13 In Cox Broadcasting, the Supreme Court held that the press could not be held liable for publishing information contained in public records. 14 It seems that Texas interprets the Cox Broadcasting holding broadly, extending its protection to anyone who publicizes such information. "The Court [in Cox Broadcasting ] thus held that the State may not protect an individual's privacy interests by recognizing a cause of action in tort for giving publicity to highly private facts if those facts are a matter of public record." 15

    Third, determination whether a given matter is one of legitimate public concern must be made in the factual context of each particular case. One factor to be considered in this determination is whether the government itself has statutorily recognized that the individual's privacy interest in the matters under scrutiny outweighs the public's interest in disclosure. 16

    Fourth, an individual does not automatically waive his privacy interest in information merely because he discloses that information to a government agency; "the voluntariness of the disclosure should be viewed in light of the circumstances under which the disclosure is made." 17

    Finally, Texas presumes that the information is not of legitimate concern to the public if it contains highly intimate or embarrassing facts the publication of which a reasonable person would find objectionable; the burden is on the publicizing party to show otherwise. 18

  2. The Invasion of Johnson's Privacy

    The record demonstrates that Johnson not only had a viable public disclosure cause of action, but also that he introduced sufficient evidence at trial to prevail on that claim. First, the IRS clearly gave "publicity" to matters concerning Johnson's private life. As noted, the publicity element of this cause of action requires more than mere publication, and the IRS did considerably more than merely publish the information; it caused two IRS press releases to be published in at least twenty-one newspapers of general circulation. 19 It is also unquestionable that a person's income tax return is private information. The comments to Sec. 652D of the Restatement (Second) of Torts use income tax returns as an example of records in which one retains a privacy interest. 20

    Johnson presented sufficient evidence to support a finding that the information publicized by the IRS would have highly offended a reasonable person of ordinary sensibilities. Section 6103 becomes relevant in reference to this element of a public disclosure cause of action. Section 6103 embodies a congressional determination that return information is confidential. Congress did not seek to protect solely the financial aspect of return information but the personal...

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