Opinion ID: 2967837
Heading Depth: 5
Heading Rank: 2

Heading: the costs of the action.

Text: 26 U.S.C. § 7217(c) (Supp. 1981) (emphasis added), repealed 1982. While somewhat more complex than § 552a(g)(4), this statute poses essentially the same question of interpretation presented by this case, 28 namely, is a plaintiff entitled to recovery someone who has sustained actual damages or is he simply someone to whom the defendant shall be liable in a specified sum. Congress gave its answer in the statute's legislative history, explaining its creation of a statutory damages remedy for unlawful disclosure of tax return information as follows: Because of the difficulty in establishing in monetary terms the damages sustained by a taxpayer as the result of the invasion of his privacy caused by an unlawful disclosure of his returns or return information, the amendment provides that these damages would, in no event, be less than liquidated damages of $1,000 for each disclosure. S. Rep. No. 94-938, at 348 (1976), reprinted in 1976 U.S.C.C.A.N. 2897, 3778. Not surprisingly, courts uniformly interpreted § 7217(c) to allow recovery of statutory damages without requiring proof of actual damages. See, e.g., Johnson v. Sawyer, 120 F.3d 1307, 1313 (5th Cir. 1997) (stating that under § 7217 a plaintiff is entitled to his actual damages sustained as a result of an unauthorized disclosure . . . or to liquidated damages of $1,000 per such disclosure); Rorex v. Traynor, 771 F.2d 383, 387-88 (8th Cir. 1985) (holding that plaintiffs were entitled to minimum statutory damages under § 7217(c) despite their failure to prove any actual damages). Section 7217 was repealed in 1982 and replaced by 26 U.S.C. § 7431(c), which has also been read to authorize the award of statutory damages without requiring the plaintiff to prove actual damages. See, e.g., Chandler v. United States, 687 F. Supp. 1515, 1521 (D. Utah 1988).6 ____________________________________________________________ 6 The Secretary argues that § 7431(c) does not help the Does' case because that section more clearly expresses Congress's intent to allow recovery of statutory damages without proof of statutory damages than does § 552(g)(4)(A). Section 7431(c) provides that the defendant shall be liable to the plaintiff in an amount equal to the sum of — (1) the greater of — (A) $1,000 for each act of unauthorized disclosure of a return or return information with respect to which such defendant is found liable, or 29 Congress passed another provision with language similar to § 552a(g)(4)(A) as part of the Electronic Communications Privacy Act of 1986 (ECPA). Pub. L. No. 99-508, 100 Stat. 1848. The ECPA creates a civil damages remedy for persons aggrieved by knowing or intentional violations of the Act: The court may assess as damages in a civil action under this section the sum of the actual damages suffered by the plaintiff and any profits made by the violator as a result of the violation, but in no case shall a person entitled to recover receive less than the sum of $1,000. 18 U.S.C. § 2707(c) (emphasis added). As with the statutory damages provisions in the tax code and the Privacy Act, it could be argued that the placement of the phrase person entitled to recover identifies ____________________________________________________________ (B) the sum of— (i) the actual damages sustained by the plaintiff as a result of such unauthorized disclosure, plus (ii) in the case of a willful disclosure or disclosure which is the result of gross negligence, punitive damages, plus (2) the costs of the action. This section contains exactly the sort of language that the majority regards as adequate to authorize the award of statutory damages without proof of actual damages. See ante at 8. The majority fails to recognize, however, that both Congress and the courts apparently regard the language in the new § 7431 as interchangeable with that of its predecessor. Section 7217 was replaced by § 7431 as part of a comprehensive tax reform bill in 1982, see Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. No. 97-248, 96 Stat. 324, and the legislative history provides no indication that the new section was meant to change the operation of the statutory damages remedy. Courts have treated the two statutes interchangeably, see, e.g., Flippo v. United States, 670 F. Supp. 638, 642 (W.D.N.C. 1987) (using committee report regarding § 7217 to interpret § 7431), and have uniformly interpreted both versions of the statute to award minimum statutory damages without proof of actual damages. 30 such a person as one who has suffered actual damages. Yet Congress explained that appropriate remedies under this section include damages . . . including the sum of actual damages suffered by the plaintiff and any profits made by the violator as the result of the violation . . . with minimum statutory damages of $1,000. S. Rep. No. 99-541, at 43 (1986), reprinted in 1986 U.S.C.C.A.N. 3555, 3597. And, as with the tax statute and (with a few exceptions) the Privacy Act, this language has not led courts to condition the recovery of minimum statutory damages on proof of actual damages. See, e.g., United Laboratories, Inc. v. Rukin, 1999 WL 608712, at  (N.D. Ill. 1999) (stating that under § 2707(c) a plaintiff is entitled to the greater of actual damages or $1,000 because of the difficulty in proving actual damages caused by any particular [violation of the Act].). Indeed, one district court in this circuit has drawn an analogy between the statutory damages provisions in the Privacy Act and the ECPA. See Dawson v. Leewood Nursing Home, Inc., 14 F. Supp. 2d 828, 832 (E.D. Va. 1998) (describing both acts as rewarding plaintiffs with minimum statutory damages when they achieve symbolic victories by proving that the defendant violated the statute.). The statutory damages provisions in the Internal Revenue Code and the ECPA confirm that it is not unusual for Congress to use entitled to recovery language to identify those plaintiffs who are entitled to minimum statutory damages. Nor is it unusual for Congress to do so in the very same sentence authorizing recovery of actual damages. What is unusual is the majority's decision to treat this language as conditioning recovery of statutory damages upon proof of actual damages.7 ____________________________________________________________ 7 The majority criticizes my use of the legislative history of the statutory provisions in the Internal Revenue Code and the ECPA to illuminate the meaning of § 552a(g)(4)(A). According to the majority, see ante at 8 n.2, our decision in Sigmon Coal Co. v. Apfel, 226 F.3d 291, 308 n.7 (4th Cir. 2001), indicates that it is dubious to rely on Congress's intent in enacting one statute to discover the intent of another Congress in enacting a separate, unrelated statute. This observation made sense in the context of Sigmon, but it has little bite here. In Sigmon we rejected an argument that unambiguous language in one provision of the Coal Act should be interpreted in a manner consistent with our earlier interpretation of a differently worded provision in the Comprehensive Environ31 In sum, the case for my reading of the phrase person entitled to recovery is a simple one. First, the ordinary meaning of the word recovery suggests that any person to whom the United States shall be liable in specified amounts is a person entitled to recovery. Second, Congress and other courts have indicated that they understand the language of this statute and others like it to mean exactly what I believe it means.