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Rice v. United States

August 27, 2007


The opinion of the court was delivered by: James Robertson United States District Judge


The plaintiffs in this class action are ranchers who submitted personal financial information to the U.S. Forest Service in connection with their permits for grazing on public lands and later discovered that the information had been released to a conservation group in response to a Freedom of Information Act (FOIA) request. They assert claims for violation of the Privacy Act, 5 U.S.C. § 552a, and seek relief in the form of statutory damages of $1,000 for each class member and a declaratory judgment that the U.S. Forest Service willfully or intentionally violated the Privacy Act. The government moves for summary judgment, asserting that plaintiffs lack standing, that they cannot demonstrate that the government is liable, and that they have suffered no "actual damages." Plaintiffs cross-move for partial summary judgment on liability only. For the reasons set forth below, the government's motion will be granted as to the named plaintiffs, plaintiffs' motion will be denied, and the class will be decertified.


Holders of Forest Service grazing permits may use their permits as supplemental collateral for bank loans and mortgages. When a permit is used in this way, the permit holder must give the Forest Service an "escrow waiver" that lists the names of the permit holder and the lender, the date and terms of the grazing permit, and the terms of the mortgage.*fn1

Beginning in July 1998, the Forest Guardians, a conservation group that opposes grazing on public lands, filed separate FOIA requests in six Forest Service regional offices seeking copies of escrow waiver forms. Each office processed these requests separately and without notifying the permit holders. Some regions released lists of permit holders, while others provided redacted versions of the waivers. The Forest Service has acknowledged that these redactions were not conducted in a consistent manner - information contained in the forms was released in various combinations and included the names of the permit holders, descriptions of their property, the identity of lenders, and the due dates of loans. According to the plaintiffs, the Forest Guardians have published some of the information on their website and may use the information in the future to attempt to drive the permit holders out of business.

The nine named plaintiffs filed suit on December 11, 2000, and on November 27, 2002, I denied the government's motion for judgment on the pleadings and certified the class. Rice v. United States, 211 F.R.D. 10 (D.D.C. 2002).


The Privacy Act forbids agency disclosure of "any record...contained in a system of records" without the written consent of the "individual to whom the record pertains." 5 U.S.C. § 552a(b). Although there is an exception to this rule if disclosure of the record is required by FOIA, 5 U.S.C. § 552a(b)(2), FOIA Exemption Six provides that its disclosure requirements do not apply to "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." 5 U.S.C. § 552(b)(6).*fn2

A cause of action arises under the Privacy Act when an agency violates the Act "in such a way as to have an adverse effect on an individual." 5 U.S.C. § 552a(g)(1)(D). If the court determines that the agency "acted in a manner which was intentional or willful," the United States is liable for "actual damages sustained by the individual as a result of the refusal or failure, but in no case shall a person entitled to recovery receive less than the sum of $1,000," as well as costs and attorneys fees. Id. § 552a(g)(4)

The government argues that these plaintiffs do not have standing to sue under the Privacy Act,*fn3 because the records released to the Forest Guardians are business records, because the Privacy Act only applies to "individuals," and not to businesses, corporations, or sole proprietorships. See Nat'l Parks and Conservation Ass'n v. Kleppe, 547 F.2d 673, 685 n.44 (D.C. Cir. 1976). See also St. Michael's Convalescent Hospital v. California, 643 F.2d 1369, 1373 (9th Cir. 1981); Dresser Industries, Inc. v. United States, 596 F.2d 1231, 1237-38 (5th Cir. 1979). The government contends that some plaintiffs, among them lead plaintiff Gary Rice, base their suit on the release of an escrow waiver that was issued to a corporation, rather than to an individual, and that other plaintiffs lack standing because the information released by the agency involves the operation of ranching businesses.

This standing argument is rejected. All of the plaintiffs sue in their individual capacities. They complain about the release of business and financial information that pertains to them as individuals. As several other courts have observed, the line between personal and business information is blurred for farmers, ranchers, and other family-owned businesses, and a strict adherence to the requirement that only "individuals" have standing would deny them any rights under the Privacy Act or FOIA Exemption Six. See Campaign for Family Farms v. Glickman, 200 F.3d 1180, 1189 (8th Cir. 2000)("An overly technical distinction between individuals acting in a purely private capacity and those acting in an entrepreneurial capacity fails to serve the exemption's purpose of protecting the privacy of individuals."); Multi AG Media LLC v. Dep. of Agriculture, 2006 WL 2320941, *2 (D.D.C. 2006)(Kennedy, J.)("[B]usinesses and corporations generally do not have a protectible privacy interest" under Exemption Six, but "an exception is usually made for family-owned or closely held businesses whose financial interests are identical to the financial interests of one or a few individuals."); Doe v. Veneman, 230 F.Supp.2d 739, 749 (W.D. Tex. 2002)(the Department of Agriculture erroneously labeled individual ranchers as businesses based on either the number of livestock they owned or the fact that they had a name for their ranch), rev'd in part on other grounds, 380 F.3d 807 (5th Cir. 2004).

The government next argues that plaintiffs lack standing because they have not demonstrated that they suffered an "adverse effect" as required under the Privacy Act. 5 U.S.C. § 552a(g)(1)(D). Plaintiffs' assertions of emotional injury were sufficient to survive the government's motion for judgment on the pleadings, see Rice, 211 F.R.D. at 13 (citing Albright v. United States, 732 F.2d 181, 184, 186 (D.C. Cir. 1984)("[E]motional trauma alone is sufficient to qualify as an adverse effect.")), but in order to survive a motion for summary judgment, those assertions require evidentiary support. Lewis v. Casey, 518 U.S. 343, 357-58 (1996)(noting that although general factual allegations of injury are sufficient "at the pleading stage," in response to a summary judgment motion, "the plaintiff can no longer rest on such mere allegations, but must set forth by affidavit or other evidence specific facts, which for purposes of the summary judgment motion will be taken to be true.")(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

Plaintiffs have satisfied this burden - at the last moment - by submitting declarations with their reply brief [#95] in which named plaintiffs claim to have suffered "anger, dismay, anxiety, and fear about what has occurred and what could happen." See, e.g., Decl. of Gary Rice at ¶ 7; Decl. of Hugh McKeen at ¶ 7 [#95-2]. The government does not dispute the veracity of those declarations, and they are sufficient to establish plaintiffs' standing under the Privacy Act.

A closer question, however, is whether those same declarations provide sufficient evidence of "actual damages" to entitle plaintiffs to recover under the Act. Proof of adverse effect alone does not entitle plaintiffs to recovery under the Privacy Act without a further showing of "actual damages." Doe v. Chao, 540 U.S. 614, 625 (2004)("[A]n individual subjected to an adverse effect has injury enough to open the courthouse door, but without more has no cause of action for damages under the Privacy Act."). See also Rice v. United States, 211 F.R.D. at *14 ("Plaintiffs will have to prove 'actual damages' in order to prevail in this ...

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