665 F.2d 327 (11th Cir. 1982), 80-9070, Fitzpatrick v. I.R.S.

Docket Nº80-9070.
Citation665 F.2d 327
Party NameDonald M. FITZPATRICK, Plaintiff-Appellant, v. The INTERNAL REVENUE SERVICE, Defendant-Appellee.
Case DateJanuary 07, 1982
CourtUnited States Courts of Appeals, Court of Appeals for the Eleventh Circuit

Page 327

665 F.2d 327 (11th Cir. 1982)

Donald M. FITZPATRICK, Plaintiff-Appellant,

v.

The INTERNAL REVENUE SERVICE, Defendant-Appellee.

No. 80-9070.

United States Court of Appeals, Eleventh Circuit

January 7, 1982

Page 328

William L. Harper, U. S. Atty., Atlanta, Ga., Michael J. Salem, Trial Atty., Tax Div., U. S. Dept. of Justice, Washington, D. C., Joyce F. Glucksman, Steven P. Flig, Lawrence K. G. Poole, William W. Harness, Atlanta, Ga., for plaintiff-appellant.

M. Carr Ferguson, Asst. Atty. Gen., John F. Murray, Acting Asst. Atty. Gen., Tax Div., Dept. of Justice, Washington, D. C., Michael L. Paup, Chief Appellate Section, Richard W. Perkins, Helen M. Marinak, Attys., Tax Div., Dept. of Justice, Washington, D. C., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before MORGAN, HILL and KRAVITCH, Circuit Judges.

KRAVITCH, Circuit Judge:

Appellant Donald M. Fitzpatrick appeals from a district court judgment granting him the statutory minimum $1,000 damages for injuries from violations of the Privacy Act, 5 U.S.C. § 552a, and awarding $3,000 of a requested $19,700 in attorneys' fees. Appellant contends that the district court erred in not granting him damages for proven mental injuries resulting from illegal disclosures of personal information, and abused its discretion in reducing his requested attorneys' fees without adequate explanation. Because we hold that damages under the Privacy Act are recoverable only for proven out-of-pocket losses, we affirm that part of the judgment granting appellant the statutory minimum $1,000 in damages. We agree with appellant, however, that the trial court failed to adequately explain the reduction of the requested attorneys' fees and therefore we remand the case to the district court for a more thorough explanation.

I. Background

Appellant Fitzpatrick brought suit under the Privacy Act for unlawful disclosures concerning his disability discharge from the Internal Revenue Service. As part of his application for disability benefits, appellant completed an IRS form indicating he had been suffering from mental distress. The trial court found that appellant's supervisor was guilty of four acts of willfully disclosing appellant's mental condition in violation of the Act, 1 rendering the IRS liable for damages. These findings are uncontested.

To prove damages, appellant introduced the uncontradicted testimony of a psychiatrist that the disclosures had caused appellant to become paranoid about acquaintances knowing that he had retired because of a mental disability. The psychiatrist further testified that the disclosures had

Page 329

resulted in appellant becoming deeply depressed and withdrawing from social activities. Appellant also introduced evidence that he had intended to open a tax consulting service after retiring from the IRS, but the disclosures had ruined his ability to attract and deal with clients. The trial court found that the evidence of damages was too speculative to warrant recovery, 2 and awarded appellant the statutory minimum $1,000 damages, plus costs and reasonable attorneys' fees as provided for in the Act. Subsequently, appellant's attorneys submitted detailed affidavits requesting $1,295.46 in litigation expenses and $19,700 in attorneys' fees (394 hours at $50 per hour). Finding the requested fees excessive, the court reduced the award to $3,000, and also disallowed several expense items. This appeal followed.

II. Damages Under the Privacy Act

The Privacy Act, 5 U.S.C. § 552a(g)(4) states:

In any suit brought under the provisions of subsection (g)(1)(C) or (D) of this section in which the court determines that the agency acted in a manner which was intentional or willful, the United States shall be liable to the individual in an amount equal to the sum of-

(A) actual damages sustained by the individual as a result of the refusal or failure, but in no case shall a person entitled to recovery receive less than the sum of $1,000; and

(B) the costs of the action together with reasonable attorney fees as determined by the court.

Appellant does not contest the trial court's finding that the evidence as to his future tax consulting service was too speculative to sustain a damage award. Rather, appellant vigorously argues that his evidence of mental injuries was uncontested and that he therefore suffered damages compensable under the Act. 3 The key issue, therefore, is the meaning of "actual damages" in subsection (g)(4)(A) of the Act. Appellant asserts that "actual damages" is synonymous with general or compensatory damages at common law and that he is entitled to recover for his proven mental injuries. The government, on the other hand, contends that "actual damages" refers to out-of-pocket or pecuniary loss, and because appellant proved no pecuniary losses he is entitled only to the $1,000 statutory minimum damages.

This issue is one of first impression. Ordinarily, our first step in construing a statute is to interpret the statutory language in accordance with its "plain meaning." E. g., United States v. Yeatts, 639 F.2d 1186, 1189 (5th Cir. 1981). 4 Both parties argue that the court decisions interpreting "actual damages" in other contexts support their interpretation in the context of the Privacy Act. Unlike general, special, and compensatory damages, however, "actual damages" has no consistent legal interpretation. A review of the cases cited by each party indicates only that courts have used "actual damages" in a variety of circumstances, with the interpretation varying with the context of use. E. g., compare Morvant v. Lumberman's Mutual Casualty Co., 429 F.2d 495, 496 (5th Cir. 1970) (using "actual damages" to refer to medical expenses and lost wages) with Skipper v. South Central Bell Telephone Co., 334 So.2d 863, 866 (Ala.1976) ("actual damages" is synonymous with compensatory damages and encompasses all elements of damages except punitive damages).

Because "actual damages" has no "plain meaning" in legal lexicon, we must turn to the legislative history and attempt to discern Congressional intent on this issue.

Page 330

See United States v. Noe, 634 F.2d 860, 861 (5th Cir. 1981). Again both parties vigorously assert that the legislative history supports their position. Our independent review of this history, however, has revealed several points which we find militate in favor of the government's interpretation of "actual damages."

First and most important, the evolution and structure of the damage provisions indicate Congressional intent to restrict damage liability to a maximum consistent with private enforcement of the Act. Throughout the Privacy Act debate, a central concern was the scope of potential government liability for damages. In the House this concern was so strong that the House version of the bill not only limited recovery to "actual damages" but required as a predicate to recovery that the plaintiff prove a disclosure was "willful, arbitrary or capricious." H.R. 16373, 93d Cong., 1st Sess. § 3(g)(3) (1974) reprinted in Joint Committee on Government Operations, The Legislative History of the Privacy Act of 1974: Sourcebook on Privacy 288 (Joint Comm. Print 1976) (hereinafter cited as Sourcebook ). The Senate, on the other hand, initially was far more generous: the original version of S. 3418 provided for punitive damages if appropriate and predicated recovery upon a showing of only negligence. S. 3418, 93d Cong., 2d Sess., § 303(C) (1974) reprinted in Sourcebook at 27. After much debate, the "punitive damages" language was deleted in favor of a provision for "actual and general damages." Sourcebook at 371. The final version of the Act was a compromise between the House and Senate bills; it reduced the standard of proof from "willful, arbitrary, or capricious" to "willful or intentional," but in an obvious quid pro quo dropped the general damages provision of the Senate bill. To avoid a situation in which persons suffering injury had no provable damages and hence no incentive to sue, a $1,000 damage floor was added, and costs and attorneys' fees were included as additional elements of recovery.

The evolution and structure of the Privacy Act damages provisions, therefore, indicate that Congress expressly rejected liability for general damages in favor of the more restrictive "actual damages." Viewed in this light, "actual damages" as used in the Act cannot be synonymous with common law general damages, and must refer to pecuniary loss. This conclusion is strongly supported by the...

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78 practice notes
  • 867 F.2d 1311 (11th Cir. 1989), 88-3141, Steele v. Offshore Shipbuilding, Inc.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Eleventh Circuit
    • March 15, 1989
    ...why an award of these hours would be improper. Hill v. Seaboard Coast Line R. Co., 767 F.2d 771, 775 (11th Cir.1985); Fitzpatrick v. IRS, 665 F.2d 327, 332-33 (11th Cir.1982). Norman, 836 F.2d at 1304. We find that the district court order does not "allow meaningful review." Accor......
  • 700 F.2d 971 (5th Cir. 1983), 81-1501, Johnson v. Department of Treasury, I.R.S.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Fifth Circuit
    • March 21, 1983
    ...of compensation for the intangible injury of mental anguish from a fourth amendment perspective only. [15] See Fitzpatrick v. IRS, 665 F.2d 327, 330 (11th Cir.1982); see also Houston v. U.S. Dept. of Treasury, 494 F.Supp. 24, 30 (D.D.C.1979) (Congress was "concerned about the drain on ......
  • 613 F.Supp. 1404 (D.Wyo. 1985), C84-0459, Andrews v. Veterans Admin. of United States
    • United States
    • Federal Cases United States District Courts 10th Circuit District of Wyoming
    • July 17, 1985
    ...181 (D.C.Cir. 1984); Johnson v. Department of Treasury, I.R.S., 700 F.2d 971 (5th Cir. 1983); Fitzpatrick v. Internal Revenue Service, 665 F.2d 327 (11th Cir. Although there is some authority stating that a plaintiff may not recover actual damages for such injury under the Privacy Act, plai......
  • 909 F.Supp. 1562 (N.D.Ga. 1995), Civ. A. 1 94-CV-234, Abernethy v. I.R.S.
    • United States
    • Federal Cases United States District Courts 11th Circuit Northern District of Georgia
    • September 20, 1995
    ...713 F.2d 422, 424 (8th Cir.1983); Edison v. Dept. of the Army, 672 F.2d 840, 846 (11th Cir.1982); Fitzpatrick v. Internal Revenue Service, 665 F.2d 327, 330-31 (11th Cir.1982); Hass v. United States Air Force, 848 F.Supp. 926, 932 (D.Kan.1994). Therefore, on any of these grounds, the Defend......
  • Request a trial to view additional results
77 cases
  • 867 F.2d 1311 (11th Cir. 1989), 88-3141, Steele v. Offshore Shipbuilding, Inc.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Eleventh Circuit
    • March 15, 1989
    ...why an award of these hours would be improper. Hill v. Seaboard Coast Line R. Co., 767 F.2d 771, 775 (11th Cir.1985); Fitzpatrick v. IRS, 665 F.2d 327, 332-33 (11th Cir.1982). Norman, 836 F.2d at 1304. We find that the district court order does not "allow meaningful review." Accor......
  • 700 F.2d 971 (5th Cir. 1983), 81-1501, Johnson v. Department of Treasury, I.R.S.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Fifth Circuit
    • March 21, 1983
    ...of compensation for the intangible injury of mental anguish from a fourth amendment perspective only. [15] See Fitzpatrick v. IRS, 665 F.2d 327, 330 (11th Cir.1982); see also Houston v. U.S. Dept. of Treasury, 494 F.Supp. 24, 30 (D.D.C.1979) (Congress was "concerned about the drain on ......
  • 613 F.Supp. 1404 (D.Wyo. 1985), C84-0459, Andrews v. Veterans Admin. of United States
    • United States
    • Federal Cases United States District Courts 10th Circuit District of Wyoming
    • July 17, 1985
    ...181 (D.C.Cir. 1984); Johnson v. Department of Treasury, I.R.S., 700 F.2d 971 (5th Cir. 1983); Fitzpatrick v. Internal Revenue Service, 665 F.2d 327 (11th Cir. Although there is some authority stating that a plaintiff may not recover actual damages for such injury under the Privacy Act, plai......
  • 909 F.Supp. 1562 (N.D.Ga. 1995), Civ. A. 1 94-CV-234, Abernethy v. I.R.S.
    • United States
    • Federal Cases United States District Courts 11th Circuit Northern District of Georgia
    • September 20, 1995
    ...713 F.2d 422, 424 (8th Cir.1983); Edison v. Dept. of the Army, 672 F.2d 840, 846 (11th Cir.1982); Fitzpatrick v. Internal Revenue Service, 665 F.2d 327, 330-31 (11th Cir.1982); Hass v. United States Air Force, 848 F.Supp. 926, 932 (D.Kan.1994). Therefore, on any of these grounds, the Defend......
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1 books & journal articles
  • Damages under the Privacy Act: sovereign immunity and a call for legislative reform.
    • United States
    • Harvard Journal of Law & Public Policy Vol. 34 Nbr. 2, March 2011
    • March 22, 2011
    ...recovery for 'mental injuries, loss of reputation, embarrassment or other nonquantifiable injuries'"), and Fitzpatrick v. IRS, 665 F.2d 327, 328 (11th Cir. 1982) (holding that "damages under the Privacy Act are recoverable only for proven out-of-pocket losses"), with Johnson,......