Jacobs v. National Drug Intelligence Center
| Decision Date | 25 August 2005 |
| Docket Number | No. 04-40466.,04-40466. |
| Citation | 423 F.3d 512 |
| Parties | Gary JACOBS, Plaintiff-Appellant, v. NATIONAL DRUG INTELLIGENCE CENTER, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Harry P. Susman (argued), Susman Godfrey, Marc S. Jacobs, Wilson, Trevino, Freed, Valls & Trevino, Houston, TX, Kenneth A. Valls, Wilson, Trevino, Freed, Valls & Trevino, Laredo, TX, Drew D. Hansen, Susman Godfrey, Seattle, WA, for Jacobs.
Mark Bernard Stern, Michael S. Raab (argued), Tara Leigh Grove, U.S. Dept. of Justice, Civ. Div., Washington, DC, for Defendants-Appellees.
Appeal from the United States District Court for the Southern District of Texas.
Before REAVLEY, JOLLY and PRADO, Circuit Judges.
This case involves the disclosure provision of the Privacy Act of 1974. The district court granted summary judgment for the National Drug Intelligence Center, holding that the information in the disclosed document is not a "record" within the meaning of the Act. We disagree and now reverse.
Plaintiff-Appellant Gary Jacobs is the President and CEO of Laredo National Bank, which conducts business in the United States and Mexico. Jacobs has been the President-CEO of the bank for 25 years. He claims that the National Drug Intelligence Center ("NDIC") violated the Privacy Act by leaking part of an internal analytical document, the "White Tiger Report" ("the Report"), to the press. The Report alleged that Jacobs was involved in a Mexican money-laundering and drug-trafficking organization.
The NDIC is part of the Department of Justice. Its function is to coordinate and consolidate drug intelligence from national-security and law-enforcement agencies. Specifically, the NDIC analyzes the structure, membership, finances, and activities of drug-trafficking organizations.
In 1997, the FBI and the DEA asked the NDIC to conduct a strategic assessment of a Mexican criminal organization that was allegedly involved in money laundering and drug trafficking in the United States, Mexico, and several other countries. As a result, the "White Tiger Project" was born: NDIC analysts collected and reviewed pertinent information from thousands of agency records, including records from the DEA, FBI, U.S. Customs Service, and the U.S. Attorney's Office. The analysts placed these records in the NDIC's "RetrievalWare" database. RetrievalWare is the NDIC's electronic-document system.
RetrievalWare is located within the NDIC's computer system—"Justice/NDIC-001." The "Main Network System" of Justice/NDIC-001 contains RetrievalWare and two other component parts, the "unit group" and the "unit home" directories, both of which store Microsoft Word documents.
The White Tiger Report contained several different sections. The section at issue in this case is the "Executive Summary," which summarized the entire Report. Neither the Report nor the Executive Summary were stored in RetrievalWare, but rather in one of the other component parts of the Main Network System (unit group or unit home).
In March 1999, NDIC supervisor Daniel Huffman mailed a draft version of the Executive Summary to Donald E. Schultz, a professor at the U.S. Army War College. However, neither NDIC management nor the agencies participating in the White Tiger Project had reviewed this version of the Executive Summary yet. The Office of the Inspector General of the Justice Department conducted an investigation into the leak and concluded that Huffman's disclosure of the document to Schultz was unauthorized and recommended "significant discipline." Then-Attorney General Janet Reno also acknowledged that "the release of the draft NDIC report ... was not authorized by either the NDIC or the Department of Justice."
In May 1999, Donald Schultz sent the Executive Summary to Dolia Estevez, a reporter for the Mexican newspaper, El Financiero. Later that month, El Financiero published a front-page article entitled, "The Hanks, in the Gun Sight of U.S. Drug Enforcement; They Constitute a Threat, It is Warned" (translated from Spanish). The article purported to rely heavily on an "unpublished official document" from the NDIC and contained allegations of wrongdoing against Jacobs. Specifically, the article discussed the activities of a family referred to as the Hank Group and reported that the family laundered money through Jacobs's bank, stating,
The analysis states that Hank Rhon uses "front men" or "men of straw" to acquire interests in the United States. One of these characters, it says, is Gary Jacobs, the president of the Laredo National Bank, who, according to the NDIC, lacks personal resources sufficient to acquire the shares he owns in the Bank.
In May 2001, Jacobs filed suit against the NDIC in the Southern District of Texas, claiming that by leaking the Executive Summary, the NDIC violated the Privacy Act by disclosing "records" maintained in a "system of records." Specifically, Jacobs alleged that the Executive Summary was derived from items of information (records) that the NDIC analysts retrieved from RetrievalWare (the system of records).
The NDIC has not provided Jacobs with either the information about him in RetrievalWare or a copy of the Executive Summary. However, Jacobs believes that a confidential Customs Service report from November 1997 was included in the RetrievalWare records that formed the basis of the Executive Summary's information on Jacobs. Jacobs believes this for three reasons: first, such reports were generally scanned into RetrievalWare; second, El Financiero stated that the Executive Summary relied on 19 Customs Service cases; and third, the language of the El Financiero article, which purports to quote the Executive Summary, is similar to the language of the Customs report.1 Jacobs provided the following comparison in his brief:
------------------------------------------------------
November 1997 El Financiero Article
Customs Report
------------------------------------------------------
"An in depth analysis of "The analysis states
the finances of Jacobs that Hank Rhon uses
indicates that he is just `front men' or `men of
a front man for Carlos straw' to acquire interests
Hank-Rhon and the in the United
Hank family in many States. One of these
enterprises of the characters, it says
United States. A is Gary Jacobs, the
source has indicated president of the
that Jacobs would never Laredo National
have been able to obtain Bank, who, according
those enormous earnings to the NDIC, lacks
by himself. This is personal resources
an example of how the sufficient to acquire
Hank family is obtaining the shars he owns in
a solid foothold on the Bank."
the economy of the
United States."
-----------------------------------------------------
Jacobs claims that as a result of the accusations against him published in El Financiero, his reputation has been significantly damaged and he has lost substantial business opportunities in both the United States and Mexico.
In September 2002, the NDIC moved to dismiss Jacobs's complaint or, alternatively, for summary judgment. Jacobs also cross-moved for partial summary judgment against the NDIC on the issue of liability.
The district court heard oral argument on the motions in December 2002, granting the NDIC's and denying Jacobs's. The district court did not issue written reasons for its decision, but did make the following statement at the summary judgment hearing:
I'm going to grant the Motion to Dismiss and/or for Summary Judgment of the NDIC here and that I don't think that the records here are maintaining a system of records under the Privacy Act, section 552-A(a), where it defines "record" and "system of records" and I don't — both on the Motion to Dismiss and/or the Summary Judgment Motion I think it's clear that they don't, and that this is not a Privacy Act matter.
Jacobs filed a motion to reconsider, which the district court denied. Judgment was entered in April 2004. This appeal followed.2 The only issue before the court is whether the information about Jacobs in the Executive Summary constitutes a "record" contained in a "system of records" within the meaning of the Privacy Act.
This court reviews a grant of summary judgment de novo, applying the same standard as the district court. Bettersworth v. FDIC, 248 F.3d 386, 391 (5th Cir.2001).
The Privacy Act of 1974, 5 U.S.C. § 552a (1996), "safeguards the public from unwarranted collection, maintenance, use and dissemination of personal information contained in agency records ... by allowing an individual to participate in ensuring that his records are accurate and properly used." Henke v. U.S. Dep't of Commerce, 83 F.3d 1453, 1456 (D.C.Cir.1996) (ellipsis in original) (quoting Bartel v. FAA, 725 F.2d 1403, 1407 (D.C.Cir.1984)). The Act provides four causes of action: (1) for an agency's failure to amend an individual's record pursuant to his request;3 (2) for an agency's denial of access to an individual's records;4 (3) for an agency's failure to maintain an individual's records with "accuracy, relevance, timeliness, and completeness";5 and (4) for an agency's failure to comply with other Privacy Act provisions, which has an "adverse effect" on the individual.6 See Gowan v. U.S. Dep't of the Air Force, 148 F.3d 1182, 1187 (10th Cir.1998) (). The remedy available to a successful plaintiff depends on which cause of action he pursues. For the first two causes of action, a successful plaintiff is entitled to injunctive relief, and, if the plaintiff has "substantially prevailed," the court may also award attorney's fees and costs. Id. at 1187 (citing 5 U.S.C. § 552a(g)(2), (g)(3)). For the latter two, a successful plaintiff may recover damages, attorney's fees, and costs, but only if he proves that the governmental agency acted willfully. Id. at 1187-88 (ci...
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