Harper v. United States, Civ. A. No. 76-252.

• Decision Date: 01 June 1976
• Docket Number: Civ. A. No. 76-252.
• Citation: 423 F. Supp. 192
• Court: U.S. District Court — District of South Carolina
• Parties: Robert William HARPER, Petitioner, v. UNITED STATES of America et al., Respondents.

423 F. Supp. 192

Robert William HARPER, Petitioner, v. UNITED STATES of America et al., Respondents.

Civ. A. No. 76-252.

United States District Court, D. South Carolina, Greenville Division.

June 1, 1976.

R. Wayne Byrd, of Dobson & Dobson, P. A., Greenville, S. C., for petitioner.

Mark W. Buyck, Jr., U. S. Atty., District of South Carolina, Columbia, S. C., J. D. McCoy, III, Asst. U. S. Atty., Greenville, S. C., John J. McCarthy, Jr., Tax Division, Dept. of Justice, Washington, D. C., for respondents.

ORDER ON DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S COMPLAINT

HEMPHILL, District Judge.

Defendants' motion to dismiss the complaint, filed May 6, 1976, seeks relief on the following grounds:

(1) The court has no jurisdiction of plaintiff's action;

(2) Plaintiff has failed to state a claim upon which an action can be based;¹

(3) Plaintiff lacks standing (4) Plaintiff has failed to properly serve certain defendants in their individual capacities.²

Plaintiff's motion for a temporary injunction, previously noticed, was not pressed at the hearing.

This is an action, filed February 11, 1976, by a taxpayer, who, at the time of filing, was the object of a criminal fraud investigation; he seeks injunctive relief and/or damages by virtue of the alleged violation, by the defendants, or the United States of America which the individuals collectively represent, of "the Privacy Act of 1974."³ The complaint originally alleged that the circulation of two letters by respondents Stockell and McDermott, to Joe H. Venable and Clifton G. Cooper violated the privacy act.⁴

For the purpose of the record it was admitted that on December 11, 1975, Stockell and McDermott mailed a letter to Venable, and another letter to Cooper, which advised that the Regional Office of the Internal Revenue Service, Atlanta, Georgia, had forwarded the file on the plaintiff, then under investigation for criminal fraud⁵ to the Justice Department (suggesting criminal prosecution). It is claimed that such letters contained information concerning matters personal to the records of petitioner, Robert William Harper, as maintained by the office of Regional Counsel for Internal Revenue Service, Southeastern Region. It is admitted that Harper, Venable and Cooper were all being investigated in connection with related facts, and counsel for each of them, and possibly in their presence, had discussed criminal investigation at the district level of the Office of Internal Revenue. Plaintiff complains that the letter tells Venable and Cooper that the Regional Counsel had recommended criminal prosecution and the file had been sent to the Department of Justice for criminal activity. Plaintiff contends that the problem is that after Venable and Cooper were informed, plaintiff had no way of knowing who else received the information that plaintiff was under investigation and that his case was in the hands of the Department of Justice in Washington for possible criminal prosecution. The only issue remaining is the issue of damages, and the question is whether or not plaintiff can proceed.⁶

STATEMENT OF FACTS

Plaintiff is engaged in aspects of the electrical contracting business. On the basis of an investigation begun in 1974, defendants came to suspect that plaintiff had failed to report certain income from this business in his federal income tax return, and that certain actions of Venable and Cooper, with whom plaintiff did business, may have borne relation to this possible violation of the tax laws by plaintiff. While defendants' investigation concerned not only plaintiff but also Venable and Cooper, the administrative case was captioned, in accordance with then current administrative routines, only with the name of plaintiff and his wife and with plaintiff's address. In its entirety, this case caption is as follows:

In re: Robert William Harper, et ux 4648-A Fillmore Drive Wilmington, N. C. 28401

As a result of its investigation, the Columbia, South Carolina District of the Internal Revenue Service determined to refer plaintiff's case to the Regional Counsel of the Southeast Region for consideration of certain further possible administrative action. It is the practice of the Regional Counsel to provide notice of referral to persons who are the subject of such referrals; to offer them the opportunity for a conference regarding their case; and to inform them of their right to counsel. By letters dated, respectively, June 16, 1975, June 16, 1975, and Dec. 11, 1975 (2), the Regional Counsel, defendant Henry C. Stockell, through Assistant Regional Counsel, defendant Jerry K. McDermott, provided this notification to plaintiff, to Venable and to Cooper. The June letters contain no discussion or evaluation of the facts or status of plaintiff's case with respect to plaintiff himself or with respect to Venable or Cooper. Rather, the entire substantive content of the June letters is as follows:

(1) the administrative case caption cited above;

(2) the above-mentioned notification of referral;

(3) the offer of an administrative conference;

(4) notification of right to representation by counsel.

As a result of these letters, administrative conferences were held on August 7, 1975 between defendants and attorneys representing plaintiff, Venable and Cooper. All of these attorneys were from the same firm, and this firm also represents plaintiff in the present action. At the conferences, defendants notified attorneys, in accordance with standard administrative practice, that they would inform them of the further disposition of their clients' case. In keeping with this assurance, defendants, by letters dated December 11, 1975, notified plaintiff, Venable and Cooper of the referral of their case to the Department of Justice. These letters, consisting of a single brief sentence, were signed by defendant Stockell. As with the June, 1975 letters, the December letters contained no discussion or evaluation of any aspect of plaintiff's case.

CONCLUSIONS OF LAW

Plaintiff bases his action upon the Privacy Act, 5 U.S.C. Section 552a(g)(1)(D), which provides jurisdiction in the federal courts against an agency which —

(D) fails to comply with any . . . provision other than those already indicated in subsections (A), (B) and (C) of section 552a(g)(1), which subsections are not here relevant of this section, or any rule promulgated thereunder, in such a way as to have an adverse effect on an individual.

Plaintiff alleges violation by defendants of Privacy Act, 5 U.S.C. Section 552a(b), which provides that —

No agency shall disclose any record which is contained in a system of records by any means of communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains unless this disclosure is within one or more of the exceptions to section 552a(b) set forth in subsections (1) to (11) of that section . . ..

Plaintiff seeks to ground his claim for damages in this action upon Privacy Act, 5 U.S.C. Section 552a(g)(4), which provides as follows —

(4) 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.

Defendants contend that plaintiff's complaint should be dismissed in its entirety and that he should be granted none of the relief which he seeks.

Because an evaluation of the factual content of the December 1975 letters must importantly affect any specific legal argument regarding those letters, it appears proper to consider that content before taking up particular legal contentions. Defendants insist that analysis of the letters shows that they can by no stretch of the imagination have resulted in significant disclosure of information about plaintiff to Venable or Cooper or in any significant harm to plaintiff.

The substantive content of the December letters consists, in its entirety, of the following two items: (1) an administrative case caption consisting of plaintiff's name and address; and (2) a notification of the referral of the case of Venable and Cooper to the Justice Department. As with the June 1975 letters, defendants contend that the mere mention of plaintiff's name in a case caption in the December 1975 letters cannot reasonably be anticipated to result in adverse inferences about plaintiff or in damage to him. The referral notifications to Venable and Cooper did not once mention the status of plaintiff with respect to referral. Thus, as with the June 1975 letters, it is wholly implausible that the December 1975 letters can have caused plaintiff harm.

In order to obtain jurisdiction for an injunction or for damages under the Privacy Act, a plaintiff must in effect allege that the disclosures of which he complains have caused him "an adverse effect." 5 U.S.C. Section 552a(g)(1)(D).

Furthermore, it is axiomatic that defendants in an action under the Federal Rules of Civil Procedure are entitled to ". . . fair notice of actual wrong, openly stated on the basis of facts asserted . . ." Spiegler v. Wills, 60 F.R.D. 681 (S.D.N.Y.1973). Neither the court nor defendants should be required to speculate as to the actions and injuries of which the plaintiff complains. Roe v. Wade, 410 U.S. 113, 128, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973). Cf. Peyton v. Railway Express Agency, 316 U.S. 350, 62 S.Ct. 1171, 86 L.Ed. 1525 (1942); Eickhof Construction Co. v. Great Northern Railway, 291 F.Supp. 44 (D.Minn.1968); McIntosh v. Garofalo, 367 F.Supp. 501, 506 (M.D.Pa.1973). These principles are no...