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Randolph S. Koch v. Mary L. Schapiro

April 13, 2011

RANDOLPH S. KOCH, PLAINTIFF,
v.
MARY L. SCHAPIRO, CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Paul L. Friedman United States District Judge

OPINION

This matter is before the Court on defendants' motion to dismiss or, in the alternative, for summary judgment. On March 31, 2011, the Court issued an Order granting in part and denying in part the defendants' motion. This Opinion explains the reasoning underlying that Order and is accompanied by an Amended Order.*fn1

I. BACKGROUND

Plaintiff Randolph S. Koch has been employed by the Securities and Exchange Commission ("SEC") since 1991. Am. Compl. ¶ 11. Mr. Koch describes himself as sixty-two years old, white, and Jewish, and alleges that he "suffers from several medical conditions," including, among others, cardiovascular disease, obstructive sleep apnea, thrombophelia or hypercoagualable state, and gout. Id. at 6. Based on his various protected statuses, Mr. Koch has filed numerous lawsuits against the SEC, many of which have been or currently are before this Court, alleging violations of Title VII of the Civil Right Act of 1964, as amended, 42 U.S.C. §§ 2000e et seq., the Rehabilitation Act, 29 U.S.C. §§ 791, 794, and the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. See Am. Compl. ¶ 7; Koch v. Schapiro, 699 F. Supp. 2d 3, 7 (D.D.C. 2010).

The matter now before the Court relates to a request made by Mr. Koch to the SEC in December 2007 for an accommodation, seeking schedule flexibility so that he could continue a cardiac rehabilitation program with minimum use of leave. See Am. Compl. ¶ 21. Mr. Koch alleges that the SEC did not respond to his request, id. ¶ 25, and he eventually filed an EEO complaint. Id. ¶ 28. As Mr. Koch describes it, after filing his EEO complaint, he "was informed by the SEC EEO office that his case would be investigated by a contract investigator, Daniel Jewell." Id. ¶ 29. Mr. Koch became concerned over the possibility that his medical records, which had been submitted to the [SEC] in connection with his accommodation request and counseling on a confidential basis and under certain safeguards, would be turned over to the contracting company, Delaney, Siegel, Zorn, and Associates ["DSZA"], and its subcontractor [Mr.] Jewell.

Id. ¶ 30. Mr. Koch then expressed his concern to SEC officials, see id. ¶¶ 30, 31, and began asking questions "about the protections and safeguards that would apply to the confidential medical information that would likely be turned over to [Mr.] Jewell." Id. ¶ 30.

Mr. Koch alleges that he was eventually informed by the SEC that its disclosures to Mr. Jewell would not be covered by 48 C.F.R. pt. 24, Am. Compl. ¶ 31, a set of federal regulations governing the protection of individual privacy with respect to the Federal Acquisition Regulations Systems. See 48 C.F.R. pt. 24. Upon his own review of the contract between the SEC and DSZA (the "DSZA Contract"), as well as the DSZA's subcontract with Mr. Jewell, Mr. Koch concluded that neither the DSZA Contract nor the subcontract included Privacy Act language referenced in 48 C.F.R. pt. 24, Am. Compl. ¶ 32, specifically: "The clause at 52.224-1, Privacy Act Notification[; and] (b) The clause at 52.224-2, Privacy Act." 48 C.F.R. § 24.104; see also 48 C.F.R. §§ 52.224-1 & 52.224-2. Mr. Koch further concluded that "the conduct of the investigation could result in [the] release to non-government contractors . . . [of] personal and confidential medical information which would no longer be protected under the Privacy Act." Id. ¶ 32.

Thus, Mr. Koch alleges that he "stated his strong objection to the SEC EEO office, and requested that the SEC either arrange an investigation with a contract having the required protections, or else conduct the investigation internally with government personnel." Am. Compl. ¶ 33. According to Mr. Koch, "the SEC did not cooperate," and therefore Mr. Koch exercised what was in his view the only remaining option - "to not participate in the investigation." Id. ¶ 33 (emphasis added). In response, the SEC dismissed Mr. Koch's EEO complaint, id. ¶ 35, pursuant to 29 C.F.R. § 1614.107, which provides that an agency shall dismiss an entire complaint . . . . [w]here the agency has provided the complainant with a written request to provide relevant information or otherwise proceed with the complaint, and the complainant has failed to respond to the request within 15 days of its receipt or the complainant's response does not address the agency's request . . . 29 C.F.R. § 1614.107(a)(7). Mr. Koch filed a timely appeal to the Equal Employment Opportunity Commission ("EEOC"), which affirmed the SEC's decision and found that Mr. Koch "proffered nothing in the record to justify not cooperating with the agency's investigation . . . ." Opp., Ex. B, EEOC Decision at 2, Mar. 31, 2009.

Mr. Koch filed his complaint in this Court on July 1, 2009 against Mary L. Schapiro, the Chairman of the SEC. Mr. Koch filed an amended complaint on January 28, 2010, naming both Chairman Schapiro and the SEC as defendants. His amended complaint states six claims against the defendants. First, Mr. Koch alleges that the defendants "violated the Rehabilitation Act by failing to engage in an interactive process, . . . fail[ing] to respond promptly to [Mr. Koch's] accommodation request," Am. Compl. ¶ 37, and attempting to engage in an illegal investigation that did not comply with 48 C.F.R. pt. 24. Am. Compl. ¶ 39. Second, Mr. Koch alleges that defendants acted in an arbitrary and capricious manner in violation of the Administrative Procedure Act ("APA") by failing "to include specific contractual language pertaining to the Privacy Act in its contract with [DSZA] . . . ." Id. ¶ 41. Third, Mr. Koch alleges that "[b]y refusing to accede to [his] request that his EEO investigation be conducted in accordance with 48 C.F.R. Pt. 24 and the Privacy Act, the SEC failed to accord [him] meaningful due process and denied him the full administrative rights that EEO complainants must be provided before their complaint is adjudicated." Id. ¶ 45. Fourth, Mr. Koch alleges that defendants "willfully and intentionally provided copies of [Mr. Koch's] records protected by the Privacy Act to [DSZA] and/or [Mr.] Jewell" in violation of the Privacy Act. Id. ¶ 48. Fifth, Mr. Koch alleges that defendants failed to establish appropriate rules of conduct and instructions for their employees with respect to the Privacy Act. Id. ¶ 50. And sixth, Mr. Koch alleges that defendants failed to establish appropriate administrative safeguards, also in violation of the Privacy Act. Id. ¶ 53.

On March 1, 2010, defendants filed a motion to dismiss or, in the alternative, for summary judgment. Defendants argue that Mr. Koch's "refusal to cooperate in the agency's investigation of his complaint constitutes a failure by him to exhaust his administrative remedies, which under the Rehabilitation Act is jurisdictional." Mot. at 1. Defendants further argue that Mr. Koch's claims under the APA, the Due Process Clause, and the Privacy Act are legally and factually without merit. Id.

In preparing his opposition to defendants' motion, Mr. Koch learned that the DSZA Contract did in fact include by reference the Privacy Act language he had insisted upon, specifically 48 C.F.R. §§ 52.224-1 and 52.224-2. See Opp. at 1-2. According to Mr. Koch, this discovery "fundamentally changes the nature of this case." Id. at 2. Thus, in his opposition papers, Mr. Koch stated that he "formally withdraws" Counts Four and Six of his amended complaint, conceding that the DSZA Contract "was per se in compliance with the Privacy Act," id. (emphasis in original), and that the defendants did in fact establish appropriate administrative safeguards. Id. at 3.*fn2 Then, Mr. Koch addressed defendants' substantive arguments in light of his discovery, while requesting that the Court interpret the relevant portions of his amended complaint broadly. Id. at 2.

In reply, defendants argue that Mr. Koch's discovery should not alter the Court's analysis. See Reply at 1-2. Defendants assert: "[T]he EEO Office was correct when it informed Mr. Koch that the [Privacy Act] provisions were not applicable to the DSZA Contract (even though it was later discovered that the contract incorporated them by reference)." Reply at 2.

II. DISCUSSION

A. Count I - ...


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