Bavido, Gerald W. v. Apfel, Kenneth ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 98-4046
GERALD W. BAVIDO,
Plaintiff-Appellant,
v.
KENNETH S. APFEL, Commissioner
of Social Security,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of Illinois.
No. 98 C 2079--David G. Bernthal, Magistrate Judge.
Argued January 21, 2000--Decided June 13, 2000
Before BAUER, RIPPLE and KANNE, Circuit Judges.
RIPPLE, Circuit Judge. Gerald Bavido wants the
Social Security Administration ("SSA") to let him
see his medical records. He wants, moreover,
direct access to the records and does not want to
name a physician or other individual to receive
them on his behalf, as SSA regulations require.
Mr. Bavido declined to designate a representative
and subsequently filed this action raising claims
cognizable under the Privacy Act. The district
court concluded that it lacked subject matter
jurisdiction because Mr. Bavido had failed to
exhaust his administrative remedies.
We believe that the district court had
jurisdiction because, under the circumstances
here, Mr. Bavido was not required to exhaust
administrative regulations. We also conclude, in
agreement with the Court of Appeals for the
District of Columbia Circuit, that the current
regulations are incompatible with the clear
mandate of the statute. Accordingly, we reverse
the judgment of the district court and remand the
case for proceedings consistent with this
opinion.
I
BACKGROUND
In early 1997, Mr. Bavido began submitting
written requests to SSA, asking that copies of
his medical records be released directly to him.
He claimed that the agency had compiled these
records in connection with his application for
disability benefits. The agency denied his
requests because Mr. Bavido refused to comply
with its regulatory requirement that he designate
a representative to receive the records.
According to assertions made by Mr. Bavido in the
district court (the record does not contain any
of the correspondence from SSA denying the
requests), the agency imposed this requirement
because it had determined that direct disclosure
of the records to Mr. Bavido would adversely
affect him. Mr. Bavido’s subsequent inquiries to
the agency produced no further response.
In early 1998, Mr. Bavido, proceeding pro se,
submitted a form application to the district
court to proceed in forma pauperis ("IFP")
against SSA. In addition to providing details
about his salary history and assets, Mr. Bavido
specified that the nature of the action he
intended to bring was that "Social Security won’t
give me an updated copy of my file" despite his
efforts to obtain it "for over a year." After the
court granted him IFP status, Mr. Bavido filed a
self-prepared version of a form complaint
alleging that SSA had denied him disability
benefits. The single-page form complaint provided
little detail, but stated that Mr. Bavido sought
judicial review under 42 U.S.C. sec. 405(g) of an
adverse decision of the Commissioner of Social
Security and that this decision involved his
"claim for Social Security file." The preprinted
complaint designated the Commissioner of Social
Security as the defendant. According to a docket
entry in the record, return of service was
promptly executed on "defendant CSS."
A hearing was held at which an assistant United
States attorney appeared on behalf of the agency.
According to the docket entry for the hearing,
Mr. Bavido reiterated that he "simply wants his
file." Shortly thereafter, SSA moved to dismiss
Mr. Bavido’s complaint for lack of subject matter
jurisdiction. See Fed. R. Civ. P. 12(b)(1). SSA
argued that dismissal was warranted because Mr.
Bavido, by failing to designate a medical
representative, had not followed agency
procedures for requesting records and thus had
not exhausted his administrative remedies. Mr.
Bavido responded to the motion by challenging the
requirement that he designate a representative.
He stated that it would "degrade him[ ] to let
someone else read his private information."
Emphasizing that he "always handled my own
business," he asserted that "I don’t miss house
payments, light bills, gas bills, so I don’t need
anyone else telling me whether I can read my
file." Moreover, he insisted, the records in his
file had nothing to do with anyone but himself:
"No court, no one else for me to have to rely on.
Just me."
The magistrate judge, presiding with the consent
of the parties, dismissed the action for lack of
subject matter jurisdiction. The judge explained
that Mr. Bavido failed to exhaust his
administrative remedies by refusing to follow
agency regulations and to designate a
representative. According to the court, Mr.
Bavido had chosen the "wrong way" to obtain his
records and consequently had ended up at a "dead
end." Mr. Bavido filed a timely notice of appeal,
and we appointed counsel to represent him.
II
DISCUSSION
Although Mr. Bavido’s complaint and the district
court’s order assert jurisdiction under 42 U.S.C.
sec. 405(g), jurisdiction is based properly on
the Privacy Act, 5 U.S.C. sec. 552a(g)(1)./1 The
Act authorizes individuals to bring suit in the
district court to challenge an agency’s refusal
to disclose records pertaining to them. It
fosters "the principle that an individual should
to the greatest extent possible be in control of
information about him which is given to the
government." Darst v. Social Sec. Admin., 172
F.3d 1065, 1067 (8th Cir. 1999) (citation and
internal quotation marks omitted); cf. Haynes v.
Alfred A. Knopf, Inc., 8 F.3d 1222, 1229 (7th
Cir. 1993) ("The desire for privacy . . . is a
mysterious but deep fact about human personality.
It deserves and in our society receives legal
protection."). Appellate jurisdiction is based
upon 28 U.S.C. sec. 1291.
A.
At the outset, we note that Kenneth Apfel, in
his capacity as SSA Commissioner, is not a proper
party defendant in this Privacy Act action. The
Privacy Act authorizes suit only against an
agency, and not an individual. See 5 U.S.C. sec.
552a(g)(1). Several courts, including our own,
have held that individual officers of federal
agencies are not proper parties to a Privacy Act
action./2
Improper denomination of defendants may be
waived by the government. See Scruggs v. United
States, 929 F.2d 305, 305-06 (7th Cir. 1991)
(defendant in Privacy Act action improperly
designated as "United States"); see also Smith v.
United States Dist. Court Officers, 203 F.3d 440,
442 (7th Cir. 2000) (defendants in access-to-
judicial-records suit designated as "unnamed
officers of the district court"). At oral
argument, SSA admitted that it had received
proper notice in this case and that it did not
dispute its designation as defendant. It,
moreover, had fully defended the action from its
inception. Accordingly, SSA has waived any
objection as to the naming of the proper party
defendant./3
B.
SSA has predicated most of its arguments in this
case on the proposition that Mr. Bavido has
failed to exhaust his administrative remedies
because he did not make a proper Privacy Act
request. The district court accepted the agency’s
position and insisted on exhaustion. It concluded
that Mr. Bavido failed to exhaust his
administrative remedies because his request under
the Privacy Act did not comport with SSA’s
procedural requirements for access to medical
records. Specifically, the court held that Mr.
Bavido had not met the requirements of 20 C.F.R.
sec. 401.55(b)(ii), which requires the requesting
individual to designate a representative, who can
be a "physician, other health professional, or
other responsible individual," to receive those
records. A representative "must" be named before
the agency will consider a request. See id. In
addition, the court continued, Mr. Bavido’s
refusal to designate a representative prevented
him from exhausting his appellate remedies within
the agency. Under the regulations, a requesting
individual who declines to name a representative
may not administratively appeal SSA’s refusal to
provide access:
If we refuse to release a medical record because
you did not designate a representative (sec.
401.55) to receive the material, that refusal is
not a formal denial of access and, therefore, may
not be appealed to the Commissioner.
20 C.F.R. sec. 401.70(c) (emphasis added).
Mr. Bavido thus finds himself trapped. He cannot
exhaust internal agency remedies unless he
formally designates a representative to receive
his records. To name such a representative would
amount to conceding his case. As the Supreme
Court has noted, exhaustion is unnecessary "where
the challenge is to the adequacy of the agency
procedure itself, such that ’the question of the
adequacy of the administrative remedy . . . [is]
for all practical purposes identical with the
merits of [the plaintiff’s] lawsuit.’" McCarthy
v. Madigan, 503 U.S. 140, 148 (1992) (citation
and quotation marks omitted). See also Taylor v.
United States Treasury Dep’t, 127 F.3d 470, 477
(5th Cir. 1997); Benavides v. United States
Bureau of Prisons, 995 F.2d 269, 271 & n.1 (D.C.
Cir. 1993). Here, SSA’s administrative remedies
do not allow Mr. Bavido to challenge the agency’s
procedure governing access to records. Exhaustion
therefore is not required.
C.
Mr. Bavido argues that the Social Security
regulations governing access to medical records
violate the "letter, spirit, and intent" of the
Privacy Act. This statute, he contends, requires
governmental agencies to establish a procedure
for disclosing records to an individual. SSA
regulations, however, condition access (and the
right to administrative appeal) on designation of
a representative who has complete discretion
regarding disclosure of the records. See 20
C.F.R. sec.sec. 401.55(b)(1), 401.70(c).
The agency asserts that Mr. Bavido did not
address this issue before the district court and
that, therefore, it is waived. Contrary to the
agency’s contention, however, Mr. Bavido’s pro se
pleadings in the district court, construed
liberally, preserve the claim. His single-page
form complaint referred to a "final" decision
concerning his Social Security file that
"adversely affects" him and stated that he had
"exhausted his administrative remedies."
Moreover, his response to the agency’s motion to
dismiss emphasized his desire to have direct
access to his file, complained that the
representative requirement was degrading and
improper, insisted that he had exhausted his
remedies by making proper requests, and argued
that SSA’s failure to release his records in a
timely manner violated the Act. Finally, we note
that the district court’s order characterized,
albeit without discussion, the regulations as
"valid."
Having rejected the agency’s assertion of
waiver, we turn to the merits and next consider
whether SSA’s regulations conflict with the
Privacy Act. The Privacy Act was intended to help
individuals gain access to government records
about themselves and to correct erroneous
information in those records. See Blazy v. Tenet,
194 F.3d 90, 95-96 (D.C. Cir. 1999). The Act
permits individuals to make a written request for
such records for review and copying. The Act also
authorizes agencies to promulgate rules
administering the process by which individuals
may request records; subsection 552a(f)(3), the
subsection before us in this case, requires
agencies to establish a "special procedure . . .
for the disclosure to an individual of medical
records, including psychological records,
pertaining to him." 5 U.S.C. sec. 552a(f)(3)
(emphasis added).
Mr. Bavido’s claim requires that we determine
the validity of the SSA’s "special procedure"
regulation implementing sec. 552a(f)(3). This
regulation governs the manner in which SSA
discloses records:
(b) Medical records procedures--
(1) Notification of or access to medical records.
(i) You may request notification of or access
to a medical record pertaining to you. . . .
[Y]ou must make a request for a medical record in
accordance with [these regulations].
(ii) When you request medical information about
yourself, you must also name a representative in
writing. The representative may be a physician,
other health professional, or other responsible
individual who would be willing to review the
record and inform you of its contents at your
representative’s discretion. If you do not
designate a representative, we may decline to
release the requested information. In some cases,
it may be possible to release information
directly to you rather than to your
representative.
20 C.F.R. sec. 401.55(b)(1). According to the
regulations, the agency determines whether an
individual will be given direct access to the
records or whether access will be provided only
indirectly, through that individual’s designated
representative:
(2) Utilization of the designated
representative.
You will be granted direct access to your medical
record if we can determine that direct access is
not likely to have an adverse effect on you. If
we believe that we are not qualified to
determine, or if we do determine, that direct
access to you is likely to have an adverse
effect, the record will be sent to the designated
representative. We will inform you in writing
that the record has been sent [to the designated
representative].
20 C.F.R. sec. 401.55(b)(2).
Mr. Bavido argues that sec. 401.55 is an
impermissible interpretation of the Privacy Act’s
special procedure provision, sec. 552a(f)(3).
That provision’s plain language, he asserts,
mandates the disclosure of records to the
requesting individual; it does not contemplate
that an agency can comply with this mandate by
creating a "special procedure" that results only
in disclosure to a designated representative.
The Court of Appeals for the District of
Columbia Circuit considered an analogous
regulatory scheme in Benavides v. United States
Bureau of Prisons, 995 F.2d 269 (D.C. Cir. 1993).
In that case, the Justice Department had
promulgated a regulation that purported to be a
"special procedure" under sec. 552a(f)(3). Under
the regulation, the Justice Department required,
as a condition of disclosing medical records,
that the requesting individual designate a
physician who had discretion to determine which
records should or should not be disclosed. See
id. at 271-72. Thus, like SSA’s "special
procedure," the Justice Department’s regulation
envisioned certain circumstances in which a
requesting individual would never obtain his
records. The court concluded that such a
regulation was not a permissible interpretation
of sec. 552a(f)(3). Nothing in sec. 552a(f)(3),
the court observed, suggested that disclosure to
a third party satisfied the government’s
obligation under the Act: "A regulation that
expressly contemplates that the requesting
individual may never see certain medical records
is simply not a special procedure for disclosure
to that person." Id. at 272.
The Privacy Act clearly directs agencies to
devise special procedures for disclosure of
medical records in cases in which direct
transmission could adversely affect a requesting
individual. But, under the plain wording of the
statute, these procedures eventually must lead to
disclosure of the records to the requesting
individual. Like the invalidated regulation in
Benavides, sec. 401.55(b) exacts too much by
requiring the designation of a representative who
ultimately has complete discretion to disclose or
to withhold the requested information. SSA’s
regulations effectively negate Mr. Bavido’s
request for direct access and, consequently, do
not constitute a "special procedure . . . for . .
. disclosure to [that] individual." 5 U.S.C. sec.
552a(f)(3). We conclude, as did the District of
Columbia Circuit in Benavides, that such
regulations do not comply with the Privacy Act.
Although we hold that SSA’s regulations are
unlawful, we must also recognize that, by virtue
of the plain language of the statute authorizing
special procedures, a requesting individual is
not entitled to "undiluted" direct access to his
records. See Benavides, 995 F.2d at 273. As long
as an agency assures the ultimate disclosure of
the records to the requesting individual, it may
impose a special procedure to limit the possible
harm that could result from unfettered access to
medical and psychological records. SSA is
entitled to revise its "special procedures" to
conform to the Privacy Act as we have interpreted
it here. In the present case, however, we also
must recognize that Mr. Bavido has been seeking
his medical records for three years. Like our
colleagues on the District of Columbia Circuit in
Benavides, we do not believe that the plaintiff
should have to wait until the agency finishes the
time-consuming process of promulgating a new rule
before receiving his records. See id. Rather, on
remand, the district court should allow access to
the records under the court’s supervision. See
id. In fashioning such a remedy, the district
court ought to give great weight to the views of
the SSA on how this task can be most effectively
accomplished within the framework of the agency’s
contemplated approach to new regulations
conforming to our decision. See id.
Conclusion
Because we conclude that Mr. Bavido was not
required to exhaust his administrative remedies
and that 20 C.F.R. sec. 401.55 is inconsistent
with the Privacy Act, we reverse the district
court’s judgment dismissing the case and remand
for further proceedings consistent with this
opinion.
REVERSED and REMANDED
/1 The statute states in pertinent part:
(g)(1) Civil remedies.--Whenever any agency
(A) makes a determination under subsection
(d)(3) of this section not to amend an
individual’s record in accordance with his
request, or fails to make such review in
conformity with that subsection;
(B) refuses to comply with an individual request
under subsection (d)(1) of this section;
(C) 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; or
(D) 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 against
the agency, and the district courts of the United
States shall have jurisdiction in the matters
under the provisions of this subsection.
5 U.S.C. sec. 552a.
/2 See, e.g., Brown-Bey v. United States, 720 F.2d
467, 469 (7th Cir. 1983); accord Petrus v. Bowen,
833 F.2d 581, 583 (5th Cir. 1987); Wren v.
Harris, 675 F.2d 1144, 1148 n.8 (10th Cir. 1982);
Bruce v. United States, 621 F.2d 914, 916 n.2
(8th Cir. 1980); but see Hewitt v. Grabicki, 794
F.2d 1373, 1377 n.2 (9th Cir. 1986) (citing
countervailing authority holding that "heads of
agencies in their official capacity are proper
party defendants in Privacy Act cases [because]
such individuals have the final authority in the
agency and ultimate responsibility for custody of
records").
/3 In any event, Mr. Bavido’s complaint may be
amended to add SSA as a defendant. See Swan v.
Clinton, 100 F.3d 973, 980 & n.3 (D.C. Cir. 1996)
(amending the complaint to allow the plaintiff to
sue the government officials in their official
capacity; not to allow amendment "would elevate
form over substance"). See also Fed. R. Civ. P.
21 (stating that new parties "may be . . . added
by order of the court on . . . its own initiative
at any stage of the action and on such terms as
are just"); Mullaney v. Anderson, 342 U.S. 415,
417 (1952) (noting that "Rule 21 will rarely come
into play at this stage of a litigation" but
granting the petitioner’s motion to add parties
on the ground that "[t]o dismiss the present
petition and require the new plaintiffs to start
over in the District Court would entail needless
waste"); cf. 28 U.S.C. sec. 1653 (stating that
"[d]efective allegations of jurisdiction may be
amended, upon terms, in the trial or appellate
courts").
At oral argument SSA conceded that, because the
head of the agency was sued in his official
capacity, the agency has been on notice of the
action and fully defended it throughout the
litigation; we therefore need not be concerned
that the agency might suffer prejudice by being
added as a defendant at this point in the
proceedings. See Fed. R. Civ. P. 15(c) (stating
that an amendment changing a party relates back
to the date of the original pleading if the party
being added is a federal agency and process was
timely served on the United States Attorney (or
designee), the Attorney General, or an "agency or
officer who would have been a proper defendant if
named"); Delgado-Brunet v. Clark, 93 F.3d 339,
344 (7th Cir. 1996) (observing that the
government notice provision of Rule 15(c) renders
"[m]istakes in naming parties . . . far less
likely to have drastic consequences in official
rather than individual capacity actions"); Paulk
v. Department of Air Force, 830 F.2d 79, 82 (7th
Cir. 1987) (noting that a plaintiff who served
timely process on the U.S. Attorney should have
been allowed to amend the complaint under Rule
15(c) to rename the mistakenly-identified federal
defendant); accord Reyes v. Supervisor of Drug
Enforcement Admin., 834 F.2d 1093, 1097 (1st Cir.
1987) (stating that "[i]t seems clear [in this
Privacy Act action] . . . that the [U.S.
Attorney’s Office] was on notice that it was the
proper party defendant, in which case the
amendment would relate back to the time of the
original complaint"); Barvick v. Cisneros, 941 F.
Supp. 1015, 1017-18 n.2 (D. Kan. 1996) (holding
that, although the employee improperly named the
Secretary of Housing and Urban Development rather
than the agency, in a Freedom of Information Act
suit, "HUD, the proper party defendant, [ ] had
notice of the action and ha[d] participated in
its defense[, and thus the employee’s] complaint
[would be] deemed amended to name HUD as the
proper defendant"). We are mindful, too, of the
pro se nature of Mr. Bavido’s complaint, which
must be held to less stringent standards than
formal pleadings drafted by attorneys. See Haines
v. Kerner, 404 U.S. 519, 520 (1972).