CIVIL REMEDIES

D. Other Damages Lawsuits

"Whenever any agency . . . fails to comply with any other provision of this section, or any rule promulgated thereunder, in such a way as to have an adverse effect on an individual [the individual may bring a civil action]." 5 U.S.C. § 552a(g)(1)(D).

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A complaint is subject to dismissal, for failure to state a subsection (g)(1)(D) damages claim, if no "adverse effect" is alleged. See, e.g., Quinn v. Stone, 978 F.2d 126, 135 (3d Cir. 1992) ("[T]he adverse effect requirement of (g)(1)(D) is, in effect, a standing requirement."); Doe v. Herman, No. 2:97CV00043, 1999 U.S. Dist. LEXIS 17302, at *38 (W.D. Va. Oct. 29, 1999) (magistrate's recommendation); Hass v. United States Air Force, 848 F. Supp. 926, 932 (D. Kan. 1994); Swenson v. United States Postal Serv., No. S-87-1282, 1994 U.S. Dist. LEXIS 16524, at *30 (E.D. Cal. Mar. 10, 1994); Green v. United States Postal Serv., No. 88-0539, 1989 U.S. Dist. LEXIS 6846, at **6-8 (S.D.N.Y. June 19, 1989); Tracy v. Social Sec. Admin., No. 88-C-570-S, slip op. at 4-5 (W.D. Wis. Sept. 23, 1988); Bryant v. Department of the Air Force, No. 85-4096, slip op. at 5 (D.D.C. Mar. 31, 1986); Harper v. United States, 423 F. Supp. 192, 196-97 (D.S.C. 1976); see also Crichton v. Community Servs. Admin., 567 F. Supp. 322, 324 (S.D.N.Y. 1983) (mere maintenance of allegedly "secret file" insufficient to warrant damages where no showing of adverse effect); Church v. United States, 2 Gov't Disclosure Serv. (P-H) ¶ 81,350, at 81,911 (D. Md. Jan. 5, 1981) (no adverse effect from failure to provide subsection (e)(3) notice).

An "adverse effect" includes not only monetary damages, but also nonpecuniary and nonphysical harm, such as mental distress, embarrassment, or emotional trauma. See Quinn, 978 F.2d at 135-36; Albright v. United States, 732 F.2d 181, 186 (D.C. Cir. 1984); Usher v. Secretary of HHS, 721 F.2d 854, 856 (1st Cir. 1983); Parks v. IRS, 618 F.2d 677, 682-83 & n.2 (10th Cir. 1980); Doe v. Herman, No. 2:97CV00043, 1999 U.S. Dist. LEXIS 17302, at *38; Romero-Vargas v. Shalala, 907 F. Supp. 1128, 1134 (N.D. Ohio 1995); see also Englerius v. VA, 837 F.2d 895, 897 (9th Cir. 1988).

For a novel interpretation of "adverse effect," see Bagwell v. Brannon, No. 82-8711, slip op. at 5-6 (11th Cir. Feb. 22, 1984), in which the Court of Appeals for the Eleventh Circuit found that no "adverse effect" was caused by the government's disclosure of an employee's personnel file (during cross-examination) while defending against the employee's tort lawsuit, because the "employee created the risk that pertinent but embarrassing aspects of his work record would be publicized" and "disclosure was consistent with the purpose for which the information was originally collected."

The threshold showing of "adverse effect," which typically is not difficult for a plaintiff to satisfy, should carefully be distinguished from the conceptually separate requirement of "actual damages," discussed below.

A showing of causation--that the violation caused an adverse effect, and that the violation caused "actual damages," as discussed below--is also required. See, e.g., Quinn, 978 F.2d at 135; Hewitt v. Grabicki, 794 F.2d 1373, 1379 (9th Cir. 1986); Albright, 732 F.2d at 186-87; Edison v. Department of the Army, 672 F.2d 840, 842, 845 (11th Cir. 1982); Harmer v. Perry, No. 95-4197, 1998 WL 229637, at *3 (E.D. Pa. Apr. 28, 1998), aff'd, No. 98-1532 (3d Cir. Jan. 29, 1999); Swenson, No. S-87-1282, 1994 U.S. Dist. LEXIS 16524, at *30 (E.D. Cal. Mar. 10, 1994); Connelly v. Comptroller of the Currency, No. H-84-3783, slip op. at 4 (S.D. Tex. June 3, 1991); Rodgers v. Department of the Army, 676 F. Supp. 858, 862 (N.D. Ill. 1988); Tuesburg v. HUD, 652 F. Supp. 1044, 1048 (E.D. Mo. 1987); Ely v. Department of Justice, 610 F. Supp. 942, 946 (N.D. Ill. 1985), aff'd, 792 F.2d 142 (7th Cir. 1986) (unpublished table decision). But see Rickles v. Marsh, No. 3:88-100, slip op. at 8-9 (N.D. Ga. Jan. 10, 1990) (aberrational decision awarding minimum damages even in absence of causation).

In addition, an agency must be found to have acted in an "intentional or willful" manner in order for a damages action to succeed. See 5 U.S.C. § 552a(g)(4). This standard is discussed below under "Intentional/Willful Standard and Actual Damages in Accuracy and Other Damages Lawsuits."

Several district courts have held that various sections of the Internal Revenue Code prevent their exercise of subject matter jurisdiction over Privacy Act claims brought under subsection (g)(1)(D). See Gardner v. United States, No. 96-1467, 1999 U.S. Dist. LEXIS 2195, at **14-17 (D.D.C. Jan. 29, 1999) (discussing Sinicki, infra, but ruling that 26 U.S.C. § 6103 "is the exclusive remedy for alleged wrongful disclosures of returns and return information"), summary affirmance granted on other grounds, No. 99-5089, 1999 WL 728359 (D.C. Cir. Aug. 4, 1999); Berridge v. Heiser, 993 F. Supp. 1136, 1144-45 (S.D. Ohio 1997) (holding that 26 U.S.C. § 7431(a)(1), which provides mechanism for award of civil damages for unauthorized disclosure of tax return information (as defined in 26 U.S.C. § 6103), is "exclusive remedy by which [plaintiff] may bring a cause of action for improper disclosure of return information," and that 26 U.S.C. § 7852(e) prevented it from exercising jurisdiction over plaintiff's Privacy Act claims under subsections (e)(2), (5), and (6) related to tax liability); Government Nat'l Mortgage, Ass'n v. Lunsford, No. 95-273, 1996 U.S. Dist. LEXIS 1591, at *8 (E.D. Ky. Feb. 2, 1996) (dismissing Privacy Act claim for wrongful disclosure (presumably brought under (g)(1)(D)) and stating that "26 U.S.C. § 7852(e) precludes the maintenance of Privacy Act damages remedies in matters concerning federal tax liabilities"); Estate of Myers v. United States, 842 F. Supp. 1297, 1302-04 (E.D. Wash. 1993) (dismissing Privacy Act (g)(1)(D) damages claim and applying § 7852(e)'s jurisdictional bar to preclude Privacy Act applicability to determination of foreign tax liability); cf. Smilde v. Richardson, Commissioner, No. 97-568, 1997 U.S. Dist. LEXIS 15050, at **6-7 (D. Minn. Aug. 28, 1997) (relying on limitation of Privacy Act applicability pursuant to sections 6103 and 7852(e) and finding that "Privacy Act does not support subject matter jurisdiction" to enjoin IRS from contracting out processing of tax returns), aff'd per curiam, 141 F.3d 1170 (8th Cir. 1998) (unpublished table decision); Trimble v. United States, No. 92-74219, 1993 WL 288295, at *1 (E.D. Mich. May 18, 1993) (citing 26 U.S.C. § 7852(e) for Privacy Act's inapplicability and dismissing unspecified Privacy Act claim), aff'd, 28 F.3d 1214 (6th Cir. 1994) (unpublished table decision).

The Court of Appeals for the Fifth Circuit has held that "[26 U.S.C.] § 6103 is a more detailed statute that should preempt the more general remedies of the Privacy Act, at least where . . . those remedies are in conflict." Hobbs v. United States, 209 F.3d 408, 412 (5th Cir. 2000) (finding § 6103 and Privacy Act to be "in conflict" where disclosure fell within one of exceptions in § 6103 and holding that "[t]o the extent that the Privacy Act would recognize a cause of action for unauthorized disclosure of tax return information even where § 6103 would provide an exception for the particular disclosure, § 6103 trumps the Privacy Act").

Nevertheless, one district court has specifically considered the issue and arrived at the conclusion that the Privacy Act's remedies are available for the wrongful disclosure of tax return information, see Sinicki v. United States Dep't of Treasury, No. 97 CIV. 0901, 1998 WL 80188, at **3-5 (S.D.N.Y. Feb. 24, 1998) (denying motion to dismiss Privacy Act wrongful disclosure claim and stating that "the language, structure, purpose and legislative history of Section 6103 do not make manifest and clear a legislative intent to repeal the Privacy Act as it applies to tax return information"). In addition, at least two courts of appeals, as well as the United States Tax Court, have readily applied the Privacy Act as well as the provisions of the tax code to disclosures of tax return information, see Scrimgeour v. Internal Revenue, 149 F.3d 318, 325-26 (4th Cir. 1998); Taylor v. United States, 106 F.3d 833, 835-37 (8th Cir. 1997); Stone v. Commissioner, No. 3812-97, 1998 WL 547043 (T.C. Aug. 31, 1998).

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