Court Opinion

ID: 2963941
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:17:47.136336+00
Date Added: 2024-06-11T11:42:48.862265
License: Public Domain

USCA1 Opinion

	

        February 22, 1996       [NOT FOR PUBLICATION]
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                 ____________________

        No. 95-1604

                                  RICHARD NATHANSON,

                                Plaintiff, Appellant,

                                          v.

                        FEDERAL DEPOSIT INSURANCE CORPORATION,

                                 Defendant, Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. Nancy J. Gertner, U.S. District Judge]

                                 ____________________

                                        Before

                                Selya, Stahl and Lynch,
                                   Circuit Judges.
                                   ______________

                                 ____________________

            Richard Nathanson on brief pro se.
            _________________
            Ann S. DuRoss, Assistant General Counsel, Robert D.  McGillicuddy,
            _____________                             _______________________
        Senior  Counsel,  and Barbara  S.  Woodall,  Counsel, Federal  Deposit
                              ____________________
        Insurance Corporation, on brief for appellee.

                                 ____________________

                                 ____________________

               Per  Curiam.   In  March 1992,  plaintiff Richard  Nathanson
               ___________

          served as head of  the loan workout department at  Rockland Trust

          Company ("Rockland") and was in line for promotion to senior vice

          president.   During that period, James Moore, a bank examiner for

          the  Federal   Deposit   Insurance  Corporation   ("FDIC"),   was

          conducting a supervisory examination of Rockland.  Moore received

          the impression,  during several  discussions of problem  loans in

          the department, that plaintiff was being less than cooperative--a

          concern  that   he  voiced  to  Rockland   executives.    Shortly

          thereafter, Moore learned that plaintiff had been the subject  of

          an Apparent Crime Report ("ACR"),  filed by another bank, arising

          out of  a line of  credit in  excess of  $3 million  that he  had

          guaranteed.    See 12  C.F.R.    353  (prescribing  ACR reporting
                         ___

          requirements).  Plaintiff had earlier disclosed this debt to both

          Rockland and the FDIC--a fact of  which Moore was unaware.  In an

          ensuing discussion with  Rockland's president, Moore  recommended

          that  an  inquiry   be  conducted   into  plaintiff's   financial

          obligations;  when pressed for  further information,  he revealed

          that the  ACR had been filed  but did not disclose  its contents.

          Moore  explained   that  he   was   not  requesting   plaintiff's

          termination.   Plaintiff was nonetheless fired  from his position

          shortly thereafter. 

               Plaintiff responded by filing the instant action against the

          FDIC for  damages under the Privacy Act, claiming that disclosure

          of the ACR had been unlawful.  See 5 U.S.C.    552a(g)(1)(D).  On
                                         ___

          the basis  of the  undisputed facts recited  above, the  district

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          court  ended up  granting summary judgment  for defendant  on two

          independent grounds.  First,  it held that disclosure of  the ACR

          fell within the Act's "routine use" exception.  Id.   552a(b)(3);
                                                          ___

          see 53 Fed.  Reg. 7396,  7398 (1988) (FDIC  "routine use"  notice
          ___

          permitting  disclosure  of  ACRs  to, inter  alia,  "a  financial
                                                ___________

          institution  affected  by   enforcement  activities  or  reported

          criminal activities"); see, e.g., FLRA v. Department of Navy, 941
                                 ___  ____  ____    __________________

          F.2d 49, 52-53,  58 (1st Cir. 1991) (discussing  requirements for

          applying routine  use exception).  Alternatively,  it ruled that,

          even  if the  Act had  been violated,  no damages  were available

          inasmuch  as  Moore's  conduct   had  not  been  "intentional  or

          willful,"  as required by  the Act.   See 5 U.S.C.    552a(g)(4).
                                                ___

          This appeal ensued.

               We  affirm on the  latter ground alone.   As  to the former,

          plaintiff  contends on appeal that  the court erred  in two basic

          respects:  in finding (1) that  disclosure of the  ACR was within

          the scope  of the  published exception (i.e.,  that Rockland  was

          "affected"  by the  report),  and (2)  that  such disclosure  was

          compatible  with  the  purposes  for  which  the  ACR  had   been

          collected.   It is difficult to fault either of these conclusions

          based  on the arguments before  the court.   What complicates the

          issue is a matter  that the parties inexplicably failed  to raise

          below  (but that plaintiff  has emphasized  on appeal):  the fact

          that  the  FDIC  has  elsewhere  specifically  indicated  to  the

          contrary.    See  58 Fed.  Reg.  28772,  28773 (1993)  (rejecting
                       ___

          proposal  that  ACRs   be  made  available  to  banks   that  are

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          considering   employing  or   doing  business   with  individuals

          mentioned therein,  on ground that "privacy  restrictions prevent

          FDIC  from sharing information in reports  of apparent crime with

          anyone   other   than   appropriate   federal   law   enforcement

          authorities").  The FDIC concedes that such commentary, published

          in connection with a 1993 revision to 12 C.F.R.    353, conflicts

          with the routine use notice at issue here.  And  while it insists

          that  the matter can be ignored because of plaintiff's failure to

          mention  it below, we think the agency is equally responsible for

          failing to alert  the court to  obviously relevant commentary  of

          its own  making.  If the appeal hinged on this question, we would

          deem it  appropriate to remand  for consideration thereof  by the

          district court in the first instance.

               Yet  such commentary, published  in 1993, has  no bearing on

          whether Moore acted in an intentional or willful fashion in 1992.

          And on the basis of the evidence presented, we agree that summary

          judgment  for  defendant is  warranted on  this  ground.   As the

          parties agree, the intentional or willful standard is a stringent

          one which is viewed as "somewhat greater than gross  negligence."

          Britt  v. Naval  Investig. Service,  886 F.2d  544, 551  (3d Cir.
          _____     ________________________

          1989)  (quoting legislative  history); accord,  e.g.,  Wilborn v.
                                                 ______   ____   _______

          Department of HHS, 49 F.3d 597, 602 (9th Cir. 1995).   In typical
          _________________

          formulations,  courts  have held  that  an  agency violates  this

          standard by  "committing the act without grounds for believing it

          to be lawful, or by flagrantly  disregarding others' rights under

          the Act," Albright v. United States, 732 F.2d 181, 189 (D.C. Cir.
                    ________    _____________

                                         -4-

          1984), or by  committing a violation  "so patently egregious  and

          unlawful that anyone undertaking the conduct should have known it

          unlawful,"  Laningham v. United States Navy,  813 F.2d 1236, 1242
                      _________    __________________

          (D.C.  Cir.  1987)  (internal  quotations  omitted);  see,  e.g.,
                                                                ___   ____

          Andrews v.  Veterans  Admin., 838  F.2d 418,  424-25 (10th  Cir.)
          _______     ________________

          (reviewing caselaw), cert. denied, 488 U.S. 817 (1988).
                               ____________

               Even with the record  construed in the light  most favorable

          to plaintiff, there is nothing to suggest that Moore acted in any

          such fashion.  The 1986 routine use notice, permitting disclosure

          of  an  ACR to  an  "affected"  institution, afforded  reasonable

          grounds for believing that his conduct was lawful.  Moore himself

          so  averred, stating  that  it was  his  understanding of  agency

          policy  to  bring   information  concerning  potential   criminal

          activity to the attention of bank officials "in order for them to

          be alerted to or correct potential problems."  And his failure to

          uncover the fact  that plaintiff had  earlier disclosed his  loan

          obligations--even   if  negligent--fell   well  short   of  being

          "somewhat greater than gross negligence." 

               In this regard, plaintiff voices two procedural  complaints:

          that  the court  resolved the  willfulness issue  (1) only  after

          earlier  announcing  that  it would  not  do  so  at the  summary

          judgment  stage, and (2) without  addressing his request that any

          such ruling be deferred pending further discovery.  Yet plaintiff

          acknowledged  below  that  defendant's  motion   to  dismiss  was

          properly converted into  one for  summary judgment.   He  himself

          filed a motion for partial summary judgment.  While he now claims

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          to have been  caught by surprise by the  court's ruling, he filed

          no motion for reconsideration  below.  And on appeal, he does not

          seek to vacate the judgment  on this basis.  Instead, he  pursues

          quite a  different route--arguing,  in the alternative,  that the

          evidence is  sufficient  for him  to prevail  on the  willfulness

          issue or,  at a minimum,  that a genuine  issue of fact  has been

          demonstrated in this regard.   We disagree in both respects.   We

          therefore find no error.

               Affirmed. 
               _________

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