Court Opinion

ID: 1003037
Source: CourtListenerOpinion
Date Created: 2013-07-04 18:20:14.259003+00
Date Added: 2024-06-11T13:20:28.775304
License: Public Domain

CORRECTED OPINION
                         UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

STUART M. SELDOWITZ,                  
               Plaintiff-Appellant,
                 v.
                                                  No. 00-1142
THE OFFICE OF THE INSPECTOR
GENERAL, U. S. Department of State,
                Defendant-Appellee.
                                      
           Appeal from the United States District Court
        for the Eastern District of Virginia, at Alexandria.
                 Gerald Bruce Lee, District Judge.
                         (CA-99-1031-A)

                      Argued: September 25, 2000

                      Decided: November 13, 2000

           Corrected Opinion Filed: November 27, 2000

    Before MICHAEL, MOTZ, and TRAXLER, Circuit Judges.

Affirmed in part, reversed in part, and remanded by unpublished per
curiam opinion.

                             COUNSEL

ARGUED: Andrew Grosso, Washington, D.C., for Appellant. Jeri
Kaylene Somers, Assistant United States Attorney, Alexandria, Vir-
ginia, for Appellee. ON BRIEF: William M. Palmer, Washington,
2           SELDOWITZ v. OFFICE OF THE INSPECTOR GENERAL
D.C., for Appellant. Helen F. Fahey, United States Attorney, Alexan-
dria, Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

PER CURIAM:

   Stuart M. Seldowitz appeals the district court’s order dismissing as
barred by the statute of limitations Counts One and Two of his Pri-
vacy Act claim, and the district court’s order granting summary judg-
ment to the government on Count Three. We affirm in part, reverse
in part, and remand.

                                  I.

   The facts, viewed in the light most favorable to Seldowitz, are as
follows. Seldowitz, a career foreign service officer, was assigned in
1989 to the Office of Strategic Nuclear Policy. In this capacity, Sel-
dowitz served on the United States delegation to the Nuclear Space
Talks in Geneva, Switzerland. Seldowitz’s wife, Rosalinda, also trav-
eled to Geneva, serving as the secretary to a deputy negotiator. Sel-
dowitz received per diem paid by the Bureau of Political/Military
Affairs, and his wife received per diem paid by the Arms Control
Agency.

   The Seldowitzes rented a private apartment in Geneva, and each
obtained a separate receipt from the landlady. Because the receipts
reflected the entire amount of rent, Seldowitz crossed out the number
of Swiss Francs paid and wrote in half the amount. After submitting
the receipts, Seldowitz was told by an administrator in the Bureau of
Political/Military Affairs not to annotate the receipts because the per
diem amount was not contingent on how much Seldowitz paid for
lodging. After this conversation, Seldowitz did not annotate future
            SELDOWITZ v. OFFICE OF THE INSPECTOR GENERAL              3
receipts. However, Seldowitz does not dispute that the entire amount
of the rental appeared on the travel voucher which he signed.1

   In 1990, the Office of Audits of the State Department’s Inspector
General reviewed the travel vouchers of the Geneva delegation. Based
on this audit, the Office of the Inspector General (OIG) investigated
Seldowitz for submitting a false claim against the United States as a
result of amounts claimed on his travel voucher. The findings of the
investigation were turned over to the United States Attorney’s Office
for the Eastern District of Virginia. In 1995, the United States Attor-
ney informed Seldowitz that he was contemplating a civil prosecution
under the False Claims Act, see 31 U.S.C.A. §§ 3729-33 (West 1983
& Supp. 2000), based on a report prepared by the OIG.

   Seldowitz then met with officials from the State Department, the
OIG, and the United States Attorney’s Office to discuss the possible
civil prosecution. During the meeting Seldowitz mentioned that he
had annotated the first housing receipts to show only half of the hous-
ing expenses, and an AUSA then showed him allegedly the same
receipts from the OIG’s files which did not reflect any annotation.
Shortly thereafter, Seldowitz entered into a settlement agreement with
the government in which he agreed to pay restitution of $15,000.

   Seldowitz later requested copies of his travel vouchers from the
National Finance Center and he received the copies in October 1995.
Included in the packet from the National Finance Center were anno-
tated receipts showing half the amount of rent. Seldowitz also
requested in the fall of 1995 that his attorney obtain copies of the OIG
voucher documents, including the receipts showing no annotations.
Seldowitz received these materials on April 17, 1996, and for the first
time made a side-by-side comparison of the annotated and unan-
notated receipts.

  In March 1998, Seldowitz requested pursuant to the Privacy Act,
see 5 U.S.C.A. § 552a (West 1996 & Supp. 2000), that the State
Department’s records "be amended in order to accurately reflect that
  1
   Based on the record before us, it is unclear whether Seldowitz was on
a strict per diem or whether the amount he received was contingent on
his expenses.
4           SELDOWITZ v. OFFICE OF THE INSPECTOR GENERAL
Mr. Seldowitz properly followed all Department procedures when
submitting his voucher requests." J.A. 218. The Office of Information
Resources Management responded that it would be improper to con-
sider amending records because the Integrity Committee of the Presi-
dent’s Council on Integrity and Efficiency was investigating a
complaint filed by Seldowitz regarding the OIG investigation. Sel-
dowitz appealed this decision, and an appeals officer affirmed that the
proper course was to suspend action pending completion of the Integ-
rity Committee’s investigation.

   On April 9, 1998, Seldowitz filed a complaint in the United States
District Court for the District of Columbia, and amended the com-
plaint on August 13, 1998. The case was transferred to the United
States District Court for the Eastern District of Virginia on June 30,
1999. Count One alleged that the State Department failed to maintain
accurate records in violation of 5 U.S.C.A. § 552a(g)(1)(C), (4).
Count Two alleged that the State Department wrongfully threatened
a False Claims Act prosecution and coerced a settlement in violation
of 5 U.S.C.A. § 552a(g)(1)(D), (4). Count Three alleged improper
refusal to amend records in violation of 5 U.S.C.A. § 552a(g)(1)(A).
The district court dismissed Counts One and Two on statute of limita-
tions grounds, and later granted summary judgment in favor of the
government on Count Three. Seldowitz appeals.

                                   II.

   Seldowitz challenges the district court’s dismissal of Counts One
and Two of the complaint as time barred. Under Counts One and Two
Seldowitz alleged that the government violated provisions of the Pri-
vacy Act, which require agencies to keep accurate records "necessary
to assure fairness in any determination relating to the qualifications,
character, rights, or opportunities of, or benefits to the individual that
may be made on the basis of such record." 5 U.S.C.A.
§ 552a(g)(1)(C). Suit must be brought "within two years from the date
on which the cause of action arises, except that where an agency has
materially and willfully misrepresented any information required
under this section to be disclosed to an individual." 5 U.S.C.A.
§ 552a(g)(5). Seldowitz acknowledges that on June 15, 1995, an
AUSA showed him two unannotated receipts relating to the May
1990 voucher, and that he received copies of his annotated vouchers
            SELDOWITZ v. OFFICE OF THE INSPECTOR GENERAL                5
from the National Finance Center on October 5, 1995. However, Sel-
dowitz did not file his original complaint until April 9, 1998—more
than two and one half years after he had been shown the unannotated
receipts during the meeting with the AUSA.

   Seldowitz argues that the misrepresentation exception applies
because he did not obtain a copy of the unannotated receipts shown
to him by the AUSA until April 17, 1996, when his attorney for-
warded copies to him. In support of his position, Seldowitz points the
court to Tijerina v. Walters, 821 F.2d 789 (D.C. Cir. 1987). In
Tijerina, the Veteran’s Administration Office of the Inspector General
on July 19, 1982, disclosed to the Texas Board of Bar Examiners that
Tijerina had falsified a loan application but that he had not been pros-
ecuted because the government had not sustained a loss. See id. at
792. Tijerina did not discover the OIG disclosure until October 1983,
and he disputed the OIG’s reason for failing to prosecute him.
Tijerina filed suit against the OIG under the Privacy Act on July 30,
1984, but the district court dismissed the claim because the statute of
limitations, according to the district court, began to run on July 19,
1982—the date of the communication to the bar examiners. The Dis-
trict of Columbia Circuit reversed, holding that the statute of limita-
tions did not begin to run until Tijerina knew or should have known
of the OIG’s July 1982 letter, which was October 1983. See id. at 798.

   We believe that Tijerina supports the district court’s statute of limi-
tations analysis. In the present case, Seldowitz was aware of the
alleged inaccuracies when the AUSA showed him the unannotated
receipts on June 15, 1995. At that point, consistent with Tijerina, the
statute of limitations began to run. Seldowitz had actual knowledge
of the alleged error, and the fact that he did not make a physical com-
parison of the two sets of receipts until April 17, 1996, makes no dif-
ference. See Bowyer v. United States Dep’t of Air Force, 875 F.2d
632, 637 n.4 (7th Cir. 1989) (rejecting the argument that a plaintiff
must have actual possession of all relevant documents before the limi-
tations period begins to run). Accordingly, the district court correctly
concluded that Counts One and Two are barred by the statute of limi-
tations.

                                   III.

  Under the Privacy Act, an individual alleging inaccuracies in
agency records may "request amendment of a record pertaining to
6               SELDOWITZ v. OFFICE OF THE INSPECTOR GENERAL
him." 5 U.S.C.A. § 552a(d)(2). However, the statute contains general
and specific exemptions. The general exemption provision provides
that "an agency or component thereof which performs as its principal
function any activity pertaining to the enforcement of criminal laws"
may adopt rules exempting records from the § 552a(d) access and
amendment provisions. 5 U.S.C.A. § 552a(j)(2). The specific exemp-
tion provision provides that an agency may issue rules exempting "in-
vestigatory material compiled for law enforcement purposes, other
than material within the scope of subsection (j)(2)." 5 U.S.C.A.
§ 552a(k)(2). Under both the general and specific exemptions, the
promulgated rules must state "why the system of records is to be
exempted." 5 U.S.C.A. § 552a(j), (k); see also Ryan v. Department of
Justice, 595 F.2d 954, 957 (4th Cir. 1979) (explaining what proce-
dures an agency must take to exempt records under the Privacy Act).

   The first set of records Seldowitz seeks changes to under Count
Three of the complaint are the OIG records compiled while OIG was
investigating Seldowitz for a possible False Claims Act violation. The
OIG believed that Seldowitz and his wife "submitted duplicate and
altered receipts for lodging expenses and thus acted with reckless dis-
regard for the truth or falsity of the information they were providing
to the United States." J.A. 121. Although an AUSA later made a deci-
sion to pursue a civil prosecution, it appears clear that the OIG inves-
tigators contemplated a possible criminal prosecution. Seldowitz does
not dispute that the OIG’s principal function is law enforcement or
that the OIG’s records in question were related to the False Claims
Act investigation. Pointing to 22 C.F.R. § 171.32(h) (2000), Sel-
dowitz argues that records of investigations are no longer exempted
after "completion of the investigative and judicial processes."2 And
    2
     Section 171.32(h) exempts the following:
        Records originated by another agency when that agency has
        determined that the record is exempt under [5 U.S.C. § 552a(j)].
        Also, pursuant to Section (j)(2) of the Act, records compiled by
        the Special Assignment Staff, the Command Center, and the
        Passport and Visa Fraud Branch of the Office of Security and by
        the [I]nspector General may be exempted from the requirements
        of any part of the Act except subsections (b), (c)(1) and (2),
        (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and (i) to
        the extent necessary to assure the effective completion of the
        investigative and judicial processes.
            SELDOWITZ v. OFFICE OF THE INSPECTOR GENERAL             7
because his case has long been closed, Seldowitz believes that the
records in question are no longer shielded from the Privacy Act. We
disagree.

   Section 171.32(h) applies only to "[r]ecords originated by another
agency when that agency has determined that the record is exempt"
under 5 U.S.C. § 552a. Accordingly, the language of § 171.32(h)
making reference to the completion of the investigative and judicial
process is inapplicable. The proper section in this case is 22 C.F.R.
§ 171.32(i), which provides that "[r]ecords of the Inspector General"
"are exempted under 5 U.S.C. § 552a(j) to the extent authorized and
determined by the agency." The OIG records fall squarely within the
general exemption which permits exclusion of records "pertaining to
the enforcement of criminal laws," 5 U.S.C.A. § 552a(j)(2), and the
OIG has properly exempted the investigatory records. Consequently,
the district court did not err in granting summary judgment to the OIG
as to its records of the False Claims Act investigation.

   The second set of records Seldowitz seeks amendments to are the
records compiled by the OIG Office of Audits. These records were
compiled in Geneva, and, as a result of the audit, thirty-two cases of
suspected travel voucher fraud were referred to OIG investigators for
further review. Seldowitz describes these records as compiled for
administrative and fiscal purposes, and argues that they are not cov-
ered by either the general or specific exemptions of 5 U.S.C.A.
§ 552a. Again, we disagree.

   Even if we assume that Seldowitz is correct that the principal func-
tion of the audit department does not "pertain[ ] to the enforcement
of criminal laws," and therefore the general exemption does not
apply, Seldowitz cannot escape § 552a(k)(2) which permits exemp-
tion of "investigatory material compiled for law enforcement pur-
poses, other than material within the scope of subsection (j)(2)." 5
U.S.C.A. § 552a(k)(2); see also Strang v. United States Arms Control
& Disarmament Agency, 864 F.2d 859, 862 (D.C. Cir. 1989) (giving
broad construction to term "law enforcement" as used in
§ 552a(k)(2)). Without question, the audit records were compiled with
an eye towards possible prosecutions of travel voucher fraud, and
OIG officers eventually opened ten investigations. As required, 22
C.F.R. § 171.32(b) makes specific mention of "[i]nvesitgatory mate-
8           SELDOWITZ v. OFFICE OF THE INSPECTOR GENERAL
rial compiled for law enforcement purposes[ ] other than material
within the scope of 5 U.S.C. 552a(j)(2)," and we can discern no limi-
tation in the regulations on this exemption. Hence, the district court
did not err in granting summary judgment as to the audit records.

   The final set of records Seldowitz seeks changes to are the OIG
internal review records responding to allegations of OIG misconduct
regarding its investigation of the Geneva delegation’s travel vouchers.
The internal review was not undertaken "to assess the guilt or inno-
cence" of the employees who had complained about the OIG’s han-
dling of the voucher investigation, J.A. 133, but rather was
commenced to determine whether the OIG’s investigators should
adopt additional procedures to ensure impartiality. The result of the
internal review was a number of recommendations ranging from con-
tinuing education for investigators to delinking career advancement
with prosecutorial results.

   Unlike the other two sets of records considered, the internal review
records have no connection to law enforcement purposes. The internal
review was simply meant to streamline procedures and to reform
investigative techniques which had led to much hostility between OIG
officials and members of the arms control delegation. Accordingly,
neither the general or specific exemption is applicable.

   The exemptions aside, the government argues that the internal
review records are not retrievable by name, and therefore are not cov-
ered by the Privacy Act. See 5 U.S.C.A. § 552a(a)(4), (5) (specifying
that records covered by the Privacy Act must be retrievable by some
"identifying particular assigned to the individual"). In support of this
contention, the government offers two affidavits from OIG officials.
At appellate argument, the government suggested that these affidavits
were presumptively correct and that Seldowitz was not entitled to dis-
covery. In fact, the government instructed its witnesses not to appear
for depositions which would have addressed this issue. We cannot
agree with the government that Seldowitz was not entitled to discov-
ery on this matter and that summary judgment was properly decided
based upon the affidavits.

   Federal Rule of Civil Procedure 26(b)(1), in pertinent part, pro-
vides that "[p]arties may obtain discovery regarding any matter, not
            SELDOWITZ v. OFFICE OF THE INSPECTOR GENERAL                 9
privileged, which is relevant to the subject matter involved in the
pending action." See also Ralston Purina Co. v. McFarland, 550 F.2d
967, 973 (4th Cir. 1977) (noting that "[t]he broad scope of discovery
is evident in Rule 26(b)(1)"). Discovery concerning the records in
question will likely resolve whether the records are retrievable within
the meaning of the Privacy Act. Seldowitz should not be forced in a
situation like this to accept from a government official an affidavit
stating that the records have no identifying particular assigned to Sel-
dowitz.3 Hence, the district court erred in granting summary judgment
as to the internal review records.4

                                   IV.

   For the foregoing reasons, we affirm the district court’s dismissal
of Counts One and Two. We also affirm the grant of summary judg-
ment as to the audit records and the records of the investigation. How-
ever, we reverse the grant of summary judgment on the internal
records and remand for discovery.

                        AFFIRMED IN PART, REVERSED IN PART,
                                            AND REMANDED

  3
    The government at appellate argument also represented that the inter-
nal review records sought by Seldowitz were destroyed in January 1998.
Again, this is a matter for discovery, and Seldowitz is not required to
simply accept an affidavit from a government official stating that the
records no longer exist.
  4
    Seldowitz also argues that the exemptions must be asserted at the
administrative level and may not be asserted in the course of judicial pro-
ceedings. We reject this argument. In similar cases we have held that an
agency does not waive exemptions "by not raising them during the
administrative process." Young v. CIA, 972 F.2d 536, 538 (4th Cir. 1992)
(dealing with FOIA exemptions).