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McCREADY v. PRINCIPI

December 31, 2003.

SHEILA A. McCREADY, et al., Plaintiff,
v.
ANTHONY J. PRINCIPI, in his capacity as Secretary of the United States Department of Veterans Affairs, Defendant



The opinion of the court was delivered by: ROSEMARY COLLYER, District Judge

MEMORANDUM OPINION

Sheila Clarke McCready served as Principal Deputy Assistant Secretary ("PDAS") for the Office of Congressional Affairs ("OCA") in the Department of Veterans Affairs ("VA") from July 1998 to October 1999. As a result of a confidential complaint on the hotline maintained by VA's Office of Inspector General ("OIG"), the OIG performed an audit of OCA and issued a "blistering" report that blamed Ms. McCready for overspending OCA's budget and other kinds of mismanagement. See Affidavit of Sheila Clarke McCready, Exh. 3 ("McCready Aff"). Before the Court is a suit under the Privacy Act of 1 974, 5 U.S.C. § 552a et seq., brought by Ms. McCready and her husband Robert E. McCready, charging that the VA and VA OIG improperly maintained, disclosed, refused access to, and/or refused to amend, five documents that pertain to that audit. Anthony J. Principi is sued in his capacity as Secretary of the VA.

The government has filed a motion for summary judgment to which the McCreadys have filed an opposition. Following submission of the government's reply, the McCreadys filed a motion for leave to file a surreply. That motion is granted and the surreply has been considered by the Court. At the Court's request, the parties also filed supplemental briefs addressing the VA website and the VA Electronic Data Management System. After a careful review of the pleadings, briefs, and the extensive documentary record, the motion for summary judgment will be granted.

  Background Facts

  OIG received a confidential complaint about management in OCA on its hotline on June 7, 1999. It performed an audit and, on October 29, 1999, issued a draft audit report entitled, "Audit of Allegations Concerning the VA Office of Congressional Affairs" ("Draft Audit Report"). Thereafter, a final audit report was issued on January 7, 2000, titled, "Audit of Allegations Concerning the VA Office of Congressional Affairs (OCA)," Report No. 99-00055-12 ("Final Audit Report"). OIG then performed an audit and analysis of Ms. McCready's leave record and issued "Addendum Report: Audit of Allegations Concerning the VA Office of Congressional Affairs," Report No. 99-00055-047, on March 22, 2000 ("Addendum Report"). These three reports are at the heart of the McCreadys' complaint.

  Two other documents are also challenged in this suit. Edward A. Powell, Jr., Assistant Secretary for Financial Management, sent an "Information Memorandum to the Secretary of Veterans Affairs" on January 19, 2000 ("Powell Memo"). This memo concerned Ms. McCready's management of OCA's budget and Mr. Powell's recommendation to former VA Secretary Togo West for Ms. McCready's performance review. Lastly, the McCreadys challenge a July 17, 2000, memorandum prepared by VA's Office of General Counsel and VA's Office of Human Resources and Administration for former Secretary West. Titled, "Subject: Analysis of OIG Audit of Congressional Affairs — Executive Summary" ("OGC Review"), this document has been provided to Ms. McCready only in redacted form. Ms. McCready responded to the Final Audit Report on March 17, 2000. Through counsel, she has requested that VA amend the Final Audit Report and/or include her response with it, but OIG has refused to do so. Ms. McCready responded to the Addendum Report on March 23, 2000. OIG has refused her requests to amend the Addendum Report or include her response with it. Ms. McCready also requested the Office of the Secretary, the Office of the Assistant Secretary for Management, the Office of Assistant Secretary for Human Resources and Administration, and OIG to expunge the Powell Memorandum, or correct it, or attach Ms. McCready's responses to it and provide anyone who possesses a copy of the Powell Memorandum with a copy of Ms. McCready's responses. OIG agreed to place Ms. McCready's responses in its file and to consider releasing her response with the Powell Memorandum if OIG received any request for the memorandum under the Freedom of Information Act ("FOIA")*fn1, see Surreply, Exh. 9; no such request has been received. The other offices informed Ms. McCready that the Powell Memorandum was an official part of their files and would not be expunged. The Office of General Counsel, which had two copies of the Powell Memorandum, returned those copies to the Information Management Service Office, where they were destroyed. See Surreply, Exh. 10. On July 20, 2000, Secretary West responded to Ms. McCready in a memo that stated, "After reviewing your point-by-point response to the subject OIG audit, I have concluded that no disciplinary action is warranted. The matter is closed." Pltfs.' Opp., Affidavit of Joseph E. Cosby, Exh. 4.

  Ms. McCready remains at the VA. She is now employed as Special Assistant, GS-301, grade SES-6, VA-DoD Liaison, Office of the Chief of Staff, Office of the Under Secretary for Health, in the Veterans Health Administration ("VHA"). Her grade as a member of the Senior Executive Service level 6 is the highest career level available to the federal civilian workforce. Ms. McCready obtained her career SES appointment from Secretary West when she joined VA as PDAS in charge of OCA and her grade level has not changed. On or about October 14, 1999, Ms. McCready was detailed to the Office of the Secretary by order of former Secretary West. She was detailed to VHA on November 22, 1999. However, she asserts that VHA does not give her meaningful jobs and that she is not assigned any management responsibility commensurate with her grade. In her affidavit, Ms. McCready states that, in early 2000, when she first joined VHA, she was told that she was "too hot to touch" and, in August 2000, she was told that she was "broken pottery" and could not have any congressional role because it would be "dead on arrival." McCready Affidavit at ¶¶ 16-17. She complains that "[t]he OIG Reports and the Powell Memorandum have completely damaged my reputation for professionalism, competence and integrity." Id. at ¶ 19.

  It appears from the surreply that Ms. McCready has charged the VA with "extreme harassment" (1) based on her gender and her husband's physical disability; (2) in reprisal for prior EEO activity; and (3) for her opposition to alleged discriminatory practices at VA. As part of that procedure, Ms. McCready obtained an affidavit from Robert J. Clayton, Special Assistant to the Deputy Assistant Secretary for Human Resources Management, and from Thomas J. McKeever, Jr., Deputy Assistant General Counsel. Messrs. Clayton and McKeever were the authors of the OGC Review. Mr. Clayton states that upon review of the Final Audit Report and the Addendum Report,
We thought there were a number of findings that would support that there were a number of performance deficiencies, but since [Ms. McCready] had not been given an official performance plan, we were not able to assess how those deficiencies might have affected her performance rating. In the nature of conduct, we felt there were some things that had potential and could be serious breaches of conduct. For example, there were general assertions in the OIG report, but they did not take signed sworn statements. . . . The quality of evidence was less than that which we felt could be relied upon in taking actions. . . . We looked at this, and decided the then-Secretary could pursue further investigation. . . . Our recommendations were presented to Secretary West, in the form of options for what action he wanted us to take, such as did he want more evidence gathered, or want more inquiry.
Surreply, Exh. 1, Affidavit of Robert J. Clayton at ¶ 9. Mr. McKeever's statement is similar:
In terms of disciplinary actions, our findings were that while there was some information in the audit, from the raw findings, that could form the basis for disciplinary action on a number of issues. [sic] We determined that further development would be necessary to withstand third party review of any significant disciplinary action. Generally, the OIG collected insufficient information, to hold [Ms. McCready] culpable for her actions.
Surreply, Exh. 2, Affidavit of Thomas McKeever at ¶ 9.

  This lawsuit asks the Court to require OIG to amend the five documents in question, to notify all recipients (including Congress) that the documents have been amended, and to notify all recipients (including Congress) that VA will take no disciplinary action against Ms. McCready. The suit also seeks actual damages, to be proven at trial, as well as attorney's fees and costs. No specific remedy is sought for Mr. McCready.

  Complaint Allegations

  The McCreadys have filed a 47-page, 152-paragraph amended complaint that asserts twelve separate counts against the defendant. For ease of reference, the Court adopts the description of these counts provided by the defendant:
• "Count 1 alleges that the Final Audit Report, Addendum Report and Powell Memorandum were inaccurate, unfair and incomplete records, and seeks amendment of those records under sections 552a(d) and 552a(g);
• "Count II alleges that VA OIG violated section 552a(d)(1) by refusing to allow former PDAS McCready to inspect or copy records;
• "Count III alleges that VA violated sections 552a(d) by failing to provide former PDAS McCready with an `unedited' copy of the OGC Review; • "Count IV alleges that VA and VA OIG violated sections 552a(e)(1) by retaining the Addendum Report and the Powell Memorandum `in flagrant disregard for' plaintiffs' rights and without grounds for believing that defendant could lawfully retain copies of the report;
• "Count V alleges that VA and VA OIG failed to maintain the Draft Audit Report, Final Audit Report, Addendum Report and Powell Memorandum with accuracy, relevance, timeliness and completeness in violation of section 552a(e)(5);
• "Count VI alleges that VA violated section 552a(b) by maintaining the Powell Memorandum in the Electronic Data Management System (EDMS) and giving it to the press;
• "Count VII alleges that VA and VA OIG disseminated the Draft Audit Report, Final Audit Report, Addendum Report and Powell Memorandum to persons other than another federal agency, and that prior to disclosing these documents, VA and VA OIG failed to assure the documents were accurate, complete, timely and relevant in violation of 552a(e)(6);
• "Count VIII alleges that VA and/or VA OIG willfully and intentionally failed to maintain the Draft Audit Report, Final Audit Report, and/or the Powell Memorandum with the necessary accuracy, relevance, timeliness and completeness to insure fairness in any determination about former PDAS McCready's qualifications, character, rights, opportunities, and/or benefits and consequently violated section 552a(g)(1)(C) and that, as a result, she was adversely affected;
• "Count IX alleges that VA violated section 552a(e)(10) by failing to establish appropriate administrative, technical, and physical safeguards to prevent the publication and other safeguards regarding the OIG Reports and the Powell Memorandum;
• "Count X alleges that VA and VA OIG violated section 552a(c) by failing to track disclosures;
• "Count XI alleges that VA and/or VA OIG violated section 552a(e)(4) by failing to identify the EDMS system and the OIG website as Privacy Act systems of records; and
• "Count XII alleges that VA OIG violated section 552a(e)(2) by failing to collect information from plaintiffs to the greatest extent practicable."
Memorandum in Support of Defendant's Motion for Summary Judgment at 2-4 ("Def. Memo"). Legal Standard

  Summary judgment is appropriate when the record shows that no genuine issue exists as to any material fact and the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is not a "disfavored legal shortcut[;]" rather, it is a reasoned and careful way to resolve cases fairly and expeditiously. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). In determining whether a genuine issue of material fact exists, the court must view all facts and reasonable inferences in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio, 475 U.S. 574, 587 (1986); Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). Any factual dispute must be capable of affecting the substantive outcome of the case to be "material" and "genuine." See Anderson, 477 U.S. at 247-48; Laningham v. United States Navy, 813 F.2d 1236, 1242-43 (D.C. Cir. 1987). A party opposing summary judgment "may not rest upon the mere allegations or denials of his pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 248.

  Privacy Act Provisions

  The Privacy Act "`safeguards the public from unwanted collection, maintenance, use and dissemination of personal information contained in agency records . . . by allowing an individual to participate in ensuring that his records are accurate and properly used.'" Henke v. Dep't of Commerce, 83 F.3d 1453, 1456 (D.C. Cir. 1996) (citations omitted). "To that end, the Act requires any agency which maintains a `system of records' to publish at least annually a statement in the Federal Register describing that system." Id.; 5 U.S.C. § 552a(e)(4)(A)-(I). "[T]he determination that a system of records exists triggers virtually all of the other substantive provisions of the Privacy Act, such as an individual's right to receive copies and to request amendment of her records." Henke, 83 F.3d at 1459.

  Not every identifiable document about an individual that is in a government file is subject to the Privacy Act. See Baker v. Dep't of Navy, 814 F.2d 1381, 1384-85 (9th Cir. 1987) ("[A]n individual's ability to obtain access to a record under [FOIA] or because of personal knowledge of its existence in a certain file, will not provide that individual with access to the record or to any remedies under the Privacy Act" unless the record is contained in a system of records). For almost all circumstances, the Act extends only to those records that are in a "system of records" which is a specific term of art. The Privacy Act defines "system of records" as a

 
group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.
5 U.S.C. § 552a(a)(5) (emphasis added). "This qualifying language in the statute reflects a statutory compromise between affording individuals access to those records relating directly to them and protecting federal agencies from the burdensome task of searching through agency records for mere mention of an individual's name." Bettersworth v. FDIC, 248 F.3d 386, 391 (5th Cir.), cert. denied, 534 U.S. 1021 (2001). Only when "there is actual retrieval of records keyed to individuals" in some way does the Privacy Act apply. Henke, 83 F.3d at 1460 (retrieval capability not sufficient; agency must in practice retrieve information using identifier); 5 U.S.C. § 552a(a)(5) (identifying number, symbol or other particular); § 552a(a)(4) (finger or voice print or photograph); see also, e.g., Betters-worth, 248 F.3d at 392 (records maintained in files referencing banks with which plaintiff associated, not plaintiff personally, were not subject to Privacy Act); Gowan v. United States Dep't of the Air Force, 148 F.3d 1182, 1191 (10th Cir. 1998) (file marked "ethics" not a surrogate identifier for plaintiff; records not available under Privacy Act); Springman v. United States Dep't of State, No. 93-1238, slip. op. at 9 n.2 (D.D.C. Apr. 21, 1997) ("Plaintiff is not entitled to access to this information under the Privacy Act because it was neither indexed nor maintained under plaintiff's name, and thus was not maintained in a `system of records' as defined by the Privacy Act").

  Subsection (g) of the Act, 5 U.S.C. § 552a(g), waives the government's immunity from a damages suit for four kinds of claims. Subsection (g)(1)(A) waives immunity where any agency "makes a determination under subsection (d)(3) of this section not to amend an individual's record in accordance with his request. . . ." 5 U.S.C. § 552a(g)(1)(A). Subsection (d)(3), 5 U.S.C. § 552a(d)(3), is tied to subsections (d)(1) and (d)(2), which specify that all three subsections apply only when an agency "maintains a system of records." 5 U.S.C. § 552a(d)(1). Through this statutory scheme, any suit asserting a right to require an agency to amend an individual's record must first demonstrate that the record in question is kept in a "system of records." Henke, 83 F.3d at 1459 ("[T]he determination that a system of records exists triggers virtually all of the other substantive provisions of the Privacy Act, such as an individual's right to receive copies [subsection (d)(1)] and to request amendment [subsection (d)(2)] of her record."); Baker, 814 F.2d at 1384-85 ("The statutory language therefore suggests that the scope of accessibility and the scope of amendment are coextensive. The Privacy Commission corroborates that the statutory language requires this conclusion.").

  Subsection (g)(1)(B) of the Act, 5 U.S.C. § 552a(g)(1)(B), waives immunity from suit where an agency "refuses to comply with an individual request under subsection (d)(1) of this section" to gain access to his record or other information pertaining to him in a system of records. By its reference back to subsection (d)(1), 5 U.S.C. § 552a(d)(1), the Act makes it clear that any suit under this subsection must also demonstrate that the record is kept in a "system of records." Kalmin v. Dep't of the Navy, 605 F. Supp. 1492, 1495 (D.D.C. 1985) ("Under the Privacy Act, records, to be producible, must be contained in a `system of records.'").

  Subsection (g)(1)(C) waives sovereign immunity for claims arising from circumstances where an agency

 
fails to maintain any record concerning any individual with such accuracy, relevance, timeliness, and completeness as is 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, and consequently a determination is made which is adverse to the individual.
5 U.S.C. § 552a(g)(1)(C). As with the subsections previously discussed, it has been found that claims under subsection (g)(1)(C) must meet the "system of records" requirement. Hubbard v. EPA, 809 F.2d 1, 6 n.8 (D.C. Cir. 1987) (referencing in dicta the need for record to be within a "system of records" but dismissing § 552a(g)(1)(C) claim on other grounds); Wren v. Heckler, 744 F.2d 86, 90 (10th Cir. 1984) (dismissing (g)(1)(C) claim because records not maintained in a system of records). Dickson v. Office of Pers. Mgmt., 828 F.2d 32, 39 (D.C. Cir. 1987), does not require a different conclusion. The question in Dickson, answered in the affirmative, was whether OPM, which conducted a pre-hire investigation and maintained a personnel file containing erroneous facts, could be sued even though the adverse decision made in reliance on the investigation was made by another agency. The D.C. Circuit held that OPM was liable because "[i]t is inconsistent with the expansive wording of section (g)(1)(C) in particular, which creates a civil remedy action whenever 'any agency" fails to maintain `any record' in such manner as 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. . . ." Id. at 39. Because the record in Dickson was indisputably contained in a "system of records," the Circuit Court did not address this requirement. It would be contrary to the balance of the statute to extract the Dickson language from its context and to find that the government has waived its immunity for literally "any record concerning any individual" that may be inaccurate. The Court finds that a civil claim under subsection (g)(1)(C) must rest on a record contained in a system of records. See Bettersworth, 248 F.3d at 391 (Privacy Act "protect[s] federal agencies from the burdensome task of searching through agency records for mere mention of an individual's name.").

  Subsection (g)(1)(D) waives sovereign immunity for claims arising from circumstances where an 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." This provision has also been interpreted and applied to require a "system of records." See e.g., Quinn v. ...


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