Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-01299/USCOURTS-ca10-94-01299-0/pdf.json

Parties Involved:
James Robert Bailey
Appellant
James Feldewerth
Appellee
Food and Nutrition Service, Denver Field Office
Appellee
Mark Hopko
Appellee
Inspector General of U.S. Department of Agriculture
Appellee
United States Department of Agriculture
Appellee

Document Text:

Patrick Fisher 

Clerk 

UNITED STATES COURT OF APPEALS 

Office of the Clerk 

Byron White United States Courthouse 

1823 Stout Street 

Denver, CO 80257 

July 11, 1995 

Elisabeth Shumaker 

Chief Deputy Clerk 

TO: ALL RECIPIENTS OF THE CAPTIONED ORDER AND JUDGMENT 

RE: 94-1299, Bailey v. u.s. Department of Agriculture 

Filed June 21, 1995 by Judge Barrett 

Please be advised that the court has granted 

appellee's motion to publish the captioned decision. 

Attached is a published version. 

Attachment 

Very truly yours, 

Patrick Fisher, 

Clerk 

By: ~U~.rc,_/ ~jJ:~~(£~t-/ Barbara Schermerhorn 

Deputy Clerk 

Appellate Case: 94-1299 Document: 01019279872 Date Filed: 06/21/1995 Page: 1 
PUBLISH 

FILED 

United States Court of Appeals 

Tenth Circuit 

UNITED STATES COURT OF APPEALS JUN 211995 

TENTH CIRCUIT 

JAMES ROBERT BAILEY, 

Plaintiff-Appellant 

v. 

UNITED STATES DEPARTMENT OF 

AGRICULTURE; INSPECTOR 

GENERAL OF U.S. DEPARTMENT OF 

AGRICULTURE; FOOD AND NUTRITION 

SERVICE, DENVER FIELD OFFICE; 

JAMES FELDEWERTH; MARK HOPKO, 

Defendants-Appellees. 

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PATRICK FISHER 

Clerk 

No. 94-1299 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 92-F-849) 

Submitted on the briefs: 

James Robert Bailey, pro se. 

Henry L. Solano, United States .Attorney, Michael E. Hegarty, 

Assistant United States Attorney, District of Colorado, Denver, 

Colorado, for Defendants-Appellees. 

Before EBEL and BARRETT, Circuit Judges, and KANE,* District 

Judge. 

*Honorable John L. Kane, Jr., Senior District Judge, United States 

District Court for the District of Colorado, sitting by 

designation. 

Appellate Case: 94-1299 Document: 01019279872 Date Filed: 06/21/1995 Page: 2 
BARRETT, Senior Circuit Judge. 

Plaintiff filed suit in the United States District Court for 

the District of Colorado alleging various injuries stemming from 

his arrest and prosecution on charges of food stamp fraud. For 

purposes of this appeal, plaintiff argues only that the United 

States magistrate judge was without authority to recommend 

dismissal of his case and that the district court improperly 

granted summary judgment to defendants on plaintiff's claim under 

the Right to Financial Privacy Act, 12 U.S.C. §§ 3401-3422 (RFPA 

or Act) . Because we find no merit in either of plaintiff's 

contentions, we affirm.l 

In July 1989, an employee of Metro National Bank in Denver 

noticed that plaintiff and another person authorized to redeem 

food stamps were depositing large amounts of coupons in their 

account and immediately withdrawing a corresponding amount of 

cash. This behavior was unlike that of any of the bank's other 

food stamp customers. Acting on these suspicions, the employee 

contacted the United States Department of Agriculture (USDA), the 

agency charged with administering the food stamp program. An 

agent of the USDA Office of Inspector General-Investigations 

interviewed the employee and was told the names of both depositors 

and the monetary value of the food stamps involved. The bank 

1 After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); lOth Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

2 

Appellate Case: 94-1299 Document: 01019279872 Date Filed: 06/21/1995 Page: 3 
employee also showed the USDA agent the redeemed food stamps and 

the log of the bank's daily food stamp redemptions.2 Plaintiff 

and his acquaintance were eventually arrested and prosecuted for 

food stamp fraud. 

Plaintiff first argues that the United States magistrate 

judge assigned to his case lacked the jurisdiction to render 

findings and a recommendation. Plaintiff's contention is 

meritless. It is clear that the magistrate judge had authority 

under 28 U.S.C. § 636(b) (1) (B) and Local Rule 603 of the United 

States District Court for the District of Colorado to submit 

proposed findings of fact and a recommendation regarding the 

various motions at issue in this case. We are free to affirm a 

judgment of the district court on any grounds fairly supported by 

the record. United States v. Sandoval, 29 F.3d 537, 542 n.6 (lOth 

Cir. 1994). The fact that the magistrate judge referenced Rule 

605 in his report instead of Rule 603 does not provide grounds for 

reversal. 

Plaintiff's second contention on appeal is that the district 

court erred in granting summary judgment on his claim under the 

Right to Financial Privacy Act. The RFPA forbids a financial 

institution from releasing the financial records of a customer 

"until the Gover~ent authority seeking such records certifies in 

writing to the financial institution that it has complied with the 

applicable provisions" of the Act. 12 U.S.C. § 3403(b). Those 

2 The 

agent. 

evidence 

opposing 

revealed 

parties dispute whether the log was actually shown to the 

For purposes of summary judgment, however, we view the 

in the light most favorable to plaintiff, as the party 

the motion, and assume that the log was, in fact, 

without plaintiff's authorization. 

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Appellate Case: 94-1299 Document: 01019279872 Date Filed: 06/21/1995 Page: 4 
provisions include notice to the customer of the existence of a 

summons or subpoena and the nature of the government inquiry. 

Donovan v. National Bank of Alaska, 696 F.2d 678, 683 (9th Cir. 

1983). Plaintiff asserts that he was never notified of the 

investigation and that defendants improperly obtained access to 

his financial records in derogation of the Act. Specifically, 

plaintiff argues that the unresolved factual dispute regarding. 

whether the bank employee allowed the USDA agent to see the food 

stamp log precludes the district court's grant of summary judgment 

to defendants on his RFPA claim. We disagree. Even assuming that 

such record was disclosed without plaintiff's authorization, 

plaintiff's case presents no disputed issue of material fact, and 

defendants are entitled to a judgment that, as a matter of law, no 

violation of the RFPA has occurred. 

"The [Right to Financial Privacy] Act was intended to protect 

the customers of financial institutions from unwarranted intrusion 

into their records while at the same time permitting legitimate 

law enforcement activity." The balance sought is that 

"between the customers' right of privacy and the need of law 

enforcement agencies to obtain financial records pursuant to 

legitimate investigations." Section 3403(c) of the Act 

provides, in relevant part: 

Nothing in this chapter shall preclude any 

financial institution, or any officer, employee, or 

agent of a financial institution, from notifying a 

Government authority that such institution, or officer, 

employee, or agent has information which may be relevant 

to a possible violation of any statute or regulation. 

Such information may include only the name or other 

identifying information concerning any individual, 

4 

Appellate Case: 94-1299 Document: 01019279872 Date Filed: 06/21/1995 Page: 5 
corporation, or account involved in and the nature of 

any suspected illegal activity. 

12 U.S.C. § 3403(c). 

We agree with the district court that information contained 

in the bank's food stamp log relating the amount of certain cash 

withdrawals to contemporaneous coupon deposits could rightfully be 

disclosed as part of the bank's authority to reveal "the nature of 

[the] suspected activity" under§ 3403(c). As the district court 

correctly observed, "the key fact that aroused [the bank's] 

suspicion was not the deposits of fairly large sums of food 

coupons, but that amounts roughly equal to the food coupon 

deposits were withdrawn almost contemporaneously. Reporting these 

withdrawals was [revealing only] the essence of the suspected 

illegal activity in this case." Supp. App. at 44. Defendants 

were surely authorized to receive the information that the bank 

was free under the Act to give them. 

The judgment of the United States District Court for the 

District of Colorado is AFFIRMED. 

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Appellate Case: 94-1299 Document: 01019279872 Date Filed: 06/21/1995 Page: 6