Opinion ID: 457611
Heading Depth: 2
Heading Rank: 1

Heading: Definition of a Customer

Text: 8 The government contends that the district court erred in holding that a corporation can be a customer under section 3415. In pertinent part this section provides: 9 [A] Government authority shall pay to the financial institution assembling or providing financial records pertaining to a customer and in accordance with procedures established by this chapter a fee for reimbursement for such costs as are reasonably necessary and which have been directly incurred in searching for, reproducing, or transporting books, papers, records, or other data required or requested to be produced. 10 12 U.S.C. Sec. 3415 (1982) (emphasis added). Section 3415 was enacted as part of the Right to Financial Privacy Act, 12 U.S.C. Secs. 3401-3422 (1982) (the Act). Generally, the Act was intended to protect the customers of financial institutions from unwarranted intrusion into their records while at the same time accommodating legitimate law enforcement activities. H.R.Rep. No. 1383, 95th Cong., 2nd Sess. 33, reprinted in 1978 U.S.Code Cong. & Ad.News 9273, 9305. 11 A customer is defined under the Act as any person or authorized representative of that person who utilized or is utilizing any service of a financial institution .... 12 U.S.C. Sec. 3401(5). A person is defined as an individual or a partnership of five or fewer individuals. 12 U.S.C. Sec. 3401(4) (1982). 12 Thus, the statutory language unambiguously points to a conclusion contrary to that reached by the district court. By its terms, the Act pertains only to the financial records of individuals and small partnerships. Only those entities are customers as defined by section 3401(5). It follows that a corporation is not a customer within the scope of the Act. Notably, at least two other courts of appeals have declined to expand the Act's coverage to include other entities, finding the limited definition of a customer to be dispositive. See Spa Flying Service, Inc. v. United States, 724 F.2d 95, 96 (8th Cir.1984) (corporation not a customer; therefore, Act's authorization requirements inapplicable to corporate entities); Donovan v. National Bank, 696 F.2d 678, 683 (9th Cir.1983) (Act does not apply to financial records of employee benefit plan). 13 PNB does not dispute that the primary purpose of the Act is to protect the privacy rights of individuals and small partnerships. It further concedes that because corporations do not enjoy a similar expectation of privacy, the Act was drafted to limit applicability of its procedural protections to individual customers. PNB argues, however, that the reimbursement provision, section 1115(a) of the Act, was intended to serve an entirely different function. Its purpose, PNB contends, is to protect financial institutions from the expense of complying with government information requests and to curb government fishing expeditions by holding the agency which seeks access to the institution's records fully accountable for the costs of obtaining them. Limiting reimbursement to costs incurred in the production of an individual customer's records would largely undercut this purpose. Hence, PNB maintains that the term customer as used in section 3415 must be construed broadly to effectuate Congressional intent. 14 The position urged by PNB represents, in our view, an unprecedented departure from traditional rules of statutory construction. PNB has cited no authority for the proposition that a particular word, specifically defined in one section of an act, can have an entirely different meaning under another section of the same act. To the contrary,  '[a] definition which declares what a term 'means' ... excludes any meaning that is not stated.'  Colautti v. Franklin, 439 U.S. 379, 392 n. 10, 99 S.Ct. 675, 684 n. 10, 58 L.Ed.2d 596 (1979) (quoting 2A C. Sands, Sutherland Statutory Construction Sec. 47.07 (4th ed. Supp.1978)). 15 PNB cites a number of cases which suggest that a court may exercise some flexibility in construing a statute where the literal or usual meaning of its words  'would thwart the obvious purpose of the statute.'  Commissioner v. Brown, 380 U.S. 563, 571, 85 S.Ct. 1162, 1166, 14 L.Ed.2d 75 (1965) (quotingHelvering v. Hammel, 311 U.S. 504, 511, 61 S.Ct. 368, 371, 85 L.Ed. 303 (1941)). However, the Supreme Court has stressed that it is a rare case[ ] where the literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters, and those intentions must be controlling. Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 3250, 73 L.Ed.2d 973 (1982). Indeed, as the Court recently reiterated: 16 We begin with the familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive. 17 Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980). 18 We have examined the legislative history of the Act and have found no express indication that Congress intended to shift the financial burden of producing corporate records to the government. Supplying information in connection with a criminal investigation is considered a public duty. Thus, the cost of complying with a grand jury subpoena has traditionally been placed upon the subpoenaed party. See Hurtado v. United States, 410 U.S. 578, 589, 93 S.Ct. 1157, 1164, 35 L.Ed.2d 508 (1973). Section 3415 provides a limited statutory exception to this general rule. Moreover, since the overriding purpose of the Act is to protect the privacy rights of individuals and small partnerships, Congress conceivably could have limited reimbursement to the costs of producing the financial records of those particular entities in order to curb fishing expeditions against them. Because we find no clearly expressed legislative intention to the contrary, Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. at 108, 100 S.Ct. at 2056, the statutory definition of a customer is controlling. Accordingly, we hold that a corporation is not a customer for the purpose of determining PNB's eligibility for reimbursement of the costs of producing certain corporate records. 19