February 22, 1996 [NOT FOR PUBLICATION]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.
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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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