Multnomah County Medical Soc. v. Scott

• Decision Date: 26 August 1987
• Docket Number: No. 86-3599,86-3599
• Citation: 825 F.2d 1410
• Parties: Medicare&Medicaid Gu 36,611 MULTNOMAH COUNTY MEDICAL SOCIETY, Plaintiff-Appellee, v. James SCOTT, Deputy Administrator, Health Care Financing Administration; Caroline Davis, Administrator, Health Care Financing Administration; Health Care Financing Administration, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1410

825 F.2d 1410

Medicare&Medicaid Gu 36,611

MULTNOMAH COUNTY MEDICAL SOCIETY, Plaintiff-Appellee, v. James SCOTT, Deputy Administrator, Health Care Financing Administration; Caroline Davis, Administrator, Health Care Financing Administration; Health Care Financing Administration, Defendants-Appellants.

No. 86-3599.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 8, 1987.

Decided Aug. 26, 1987.

Al J. Daniel, Jr., Washington, D.C., for defendants-appellants.

Gregory G. Moore, Portland, Or., for plaintiff-appellee.

Appeal from the United States District Court for the District of Oregon.

Before GOODWIN and THOMPSON, Circuit Judges, and CURTIS, District Judge. ^*

GOODWIN, Circuit Judge:

The deputy administrator of the Health Care Financing Administration appeals a court order requiring him to turn over to the plaintiff society the names and addresses of all the Medicare beneficiaries in the Portland, Oregon, metropolitan area. We reverse.

The Multnomah County Medical Society is a nonprofit professional organization comprised of 1,700 doctors, representing about 75 percent of the physicians in the Portland metropolitan area. The Medical Society filed this action under the Freedom of Information Act, 5 U.S.C. Sec. 552 (1982) (FOIA), to compel James Scott--the deputy administrator of the Health Care Financing Administration charged with administering the Medicare program (HCFA)--to disclose the names and addresses of the area's Medicare beneficiaries. The district court granted summary judgment in favor of the Medical Society.

The background of this case involves Congress's attempt to reduce expenditures by amending the Medicare laws as part of the Deficit Reduction Act of 1984. The amendments were codified at 42 U.S.C.A. Sec. 1395u(b)(4)(A)-(E), (h) (West Supp.1987). Congress froze the fees doctors could charge Medicare beneficiaries for a 15-month period beginning July 1, 1984. 42 U.S.C.A. Sec. 1395u(b)(4)(A)(i). Congress also provided that, beginning in 1984, doctors could elect to become "participating physicians" if they agreed to accept Medicare's approved charge as full payment on all claims, less any deductible. 42 U.S.C.A. Sec. 1395u(h)(1). By contrast, "nonparticipating physicians" decide whether to accept Medicare's approved charge on a case-by-case basis, and therefore can charge patients more than the approved charge reimbursable from Medicare. The incentives offered to induce doctors to become "participating physicians" are: direct payment from Medicare; ¹ dissemination of participating physicians' names through directories and toll-free telephone information lines, 42 U.S.C.A. Sec. 1395u(h); and rates potentially higher than for most nonparticipating doctors after the freeze period, 42 U.S.C.A. Sec. 1395u(b)(4)(D); American Medical Ass'n. v. Heckler, 606 F.Supp. 1422, 1427 (S.D.Ind.1985).

The statute directed that the government oversee publication of the annual directory of participating physicians' names, addresses and practice specialties for each geographic area. 42 U.S.C.A. Sec. 1395u(h)(4), (7). All Medicare beneficiaries were to receive notice of such directories through the mail; with copies available for direct purchase or for examination at branch offices of the Social Security Administration, insurance companies, senior citizen organizations and hospitals. 42 U.S.C.A. Sec. 1395u(h)(5), (6). In addition to the directory of participating physicians, the health care administration at the time of the FOIA request in this matter also was under a duty to publish a list of participating and nonparticipating doctors indicating the percentage of Medicare claims each doctor took on a case-by-case basis. 42 U.S.C.A. Secs. 1395u(i)(1) (1984), repealed by Pub. L. No. 99-272, Title IX, Sec. 9301(c)(3)(A), 100 Stat. 187 (April 7, 1986).

The directory for the Portland area was published in compliance with the statute in 1984. Shortly thereafter, the Medical Society filed a Freedom of Information Act (FOIA) request with the HCFA seeking a list of all Medicare beneficiaries in the Portland metropolitan area. The Medical Society stated in its FOIA request that it wanted to send the beneficiaries a copy of its newsletter explaining the recent changes in the Medicare law along with a list of both participating and nonparticipating physicians. On November 28, 1984, the HCFA regional administrator indicated that the information was protected by the FOIA privacy exemption (5 U.S.C. Sec. 552(b)(6) (1982)), but stated that the ultimate decision would be made by the agency's FOIA officers. On December 12, 1984, the agency's FOIA officer relied on the privacy exemption and denied the Medical Society's request. Defendant Scott then denied the Medical Society's administrative appeal on May 10, 1985.

The district court balanced the public interest in disclosure against the invasion of the beneficiaries' privacy interests and concluded that the privacy exemption of FOIA did not protect the beneficiaries' names and home addresses from disclosure.

In reviewing judgments on FOIA demands, we must determine (1) whether the district court had an adequate factual basis for its decision, and, if so, (2) whether the legal decision was erroneous. Dirksen v. United States Dept. of Health & Human Services, 803 F.2d 1456, 1458 (9th Cir.1986); Van Bourg, Allen, Weinberg & Roger v. N.L.R.B., 728 F.2d 1270, 1272 (9th Cir.1984). The parties do not dispute that the district court had an adequate factual basis for its decision. Additionally, the parties do not dispute the basic facts on appeal. We therefore review on purely legal grounds the judgment on cross-motions for summary judgment. See Fed.R.Civ.P. 56(c); Friedlander v. United States, 718 F.2d 294, 295 (9th Cir.1983).

Disclosure, not secrecy, is the policy objective of FOIA. Department of Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 1599, 48 L.Ed.2d 11 (1976). An agency may deny disclosure only if the information falls within one of the nine statutory exemptions to the disclosure requirement under 5 U.S.C. Sec. 552(b). Van Bourg, 728 F.2d at 1272. The government has the burden of establishing that one of the exemptions applies. Id.

FOIA's privacy exemption applies to "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." 5 U.S.C. Sec. 552(b)(6). The parties do not dispute that the requested information falls within the scope of the privacy exemption. The issue, therefore, is whether the release of the Medicare beneficiaries' names and addresses would be a clearly unwarranted invasion of personal privacy. United States Dep't of State v. Washington Post Co., 456 U.S. 595, 602, 102 S.Ct. 1957, 1962, 72 L.Ed.2d 358 (1982).

To determine whether an invasion of privacy is clearly unwarranted we balance four factors: (1) the plaintiff's interest in disclosure; (2) the public interest in disclosure; (3) the degree of the invasion of personal privacy; and (4) the availability of any alternative means of obtaining the requested information. Minnis v. United States Department of Agriculture, 737 F.2d 784, 786 (9th Cir.1984), cert. denied, 471 U.S. 1053, 105 S.Ct. 2112, 85 L.Ed.2d 477 (1985).

1. The Medical Society's Interest in Disclosure

Commercial interest does not warrant disclosure of otherwise private information, such as a name and address list, under FOIA. Minnis, 737 F.2d at 787 (commercial interest of owner of lodge on scenic river did not outweigh privacy interests of applicants for permits to travel on the river where lodge owner sought names and addresses of permit applicants under FOIA); see also Wine Hobby U.S.A., Inc. v. United States Internal Revenue Service, 502 F.2d 133, 137 (3rd Cir.1974) (request by distributor of amateur wine-making equipment to obtain names and addresses of all persons who registered with the United States Bureau of Alcohol, Tobacco and Firearms for a permit to produce wine for household use was for a commercial purpose and not subject to disclosure under FOIA).

The Medical Society argued that its interest in acquiring the names and addresses of Medicare beneficiaries was purely educational; the government contended that the motivation was purely commercial. The district court concluded that the Medical Society's true motivation lay somewhere between the two extremes, that the society's commercial/promotional interest was primary to the society's secondary interest in educating and assisting Medicare beneficiaries.

The court's finding that the Medical Society had a partly altruistic reason for wanting the name and address list is not clearly erroneous. The society's publication admittedly corrected some inaccuracies in the government's publication--principally that doctors geographically distant from the Portland area were included in the directory, and that some physicians were omitted or placed in wrong categories. (The government, however, itself issued a corrected and more complete directory in January 1985.) The Medical Society also performed an educational service by directly mailing the directory to Medicare beneficiaries, and by using larger print which made the society's directory easier to read than the government's.

Despite these factors, the actual content of the society's directory demonstrates that the society's motivation is overwhelmingly commercial, which does not weigh favorably in the balance toward disclosure. Minnis, 737 F.2d at 787. The Medical Society's publication adds little or no information to that contained in the government-sponsored directory. Congress intended the directory to be an incentive to doctors to become "participating physicians," and hence, listed only participating physicians in the government directory. The Medical Society's publication lumps all the doctors together, failing to distinguish which doctors are "participating" or "nonparticipating." It also fails...