LARRY O. ANDERSON, Lieutenant Colonel (Retired); ALBERTA ANDERSON, Plaintiffs-Appellants, v. LA JUNTA STATE BANK, Defendant-Appellee.
No. 96-1352
UNITED STATES COURT OF APPEALS TENTH CIRCUIT
MAY 28 1997
Before PORFILIO and LOGAN, Circuit Judges, and BURRAGE, District Judge.*
PUBLISH. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO (D.C. No. 95-WY-3273-CB). PATRICK FISHER Clerk.
Alison Ruttenberg, Denver, Colorado, and Denis H. Mark and William C. Waller, Jr. of Waller and Mark, P.C., Denver, Colorado, for Plaintiffs-Appellants.
Gregory B. Kanan and Jennifer C. Robinson of Rothgerber, Appel, Powers & Johnson LLP, Denver, Colorado, for Defendant-Appellee.
* Honorable Michael Burrage, Chief Judge, United States District Court for the Eastern District of Oklahoma, sitting by designation.
Plaintiffs Larry O. Anderson and his wife, Alberta, appeal from an order of the district court granting La Junta State Bank’s motion for summary judgment.1 Plaintiffs brought this action pursuant to
In 1993, the Air Force began an investigation of Mr. Anderson, then an active duty lieutenant colonel in the Air Force, for violations of various provisions of the Uniform Code of Military Justice, including theft of nonappropriated funds. An investigating agent met with the Bank’s senior vice president and asked him to produce plaintiffs’ bank records. The vice president pulled up the information on his computer screen and, without permitting the investigator to view the screen, informed him that plaintiffs’ records contained nothing relevant to the investigation as only Mr. Anderson’s military pay check was being deposited into their account. The investigators later subpoenaed plaintiffs’ bank records.
The RFPA was enacted in response to a pattern of government abuse in the area of individual privacy and was intended “to protect the customers of financial institutions from unwarranted intrusion into their records while at the same time permitting legitimate law enforcement activity by requiring federal agencies to follow” established procedures when seeking a customer’s financial records. Neece v. IRS, 922 F.2d 573, 575 (10th Cir. 1990) (quotation omitted). However, “[t]he most salient feature of the [RFPA] is the narrow scope of the entitlements it creates” by limiting the kinds of customers to whom the RFPA applies and the types of records it protects. SEC v. Jerry T. O‘Brien, Inc., 467 U.S. 735, 745 (1984). Thus, the RFPA seeks to strike a balance between the customers’ right of
Under the RFPA, the government3 may have access to, or obtain copies of, information contained in a customer’s financial records from a financial institution only if the customer authorizes the disclosure, the government obtains an administrative or judicial subpoena or summons, or the records are sought pursuant to a search warrant or formal written request. See
The RFPA also restricts disclosure of customers’ financial records by financial institutions themselves. Financial institutions may not provide “any Government authority access to or copies of, or the information contained in, the financial records of any customer . . . .”
The issue in this case is one we have not previously addressed. We must determine whether an oral request by a government investigator which is orally responded to, without permitting visual inspection of the customer’s records, violates the RFPA, absent compliance by the Government authority with the §§ 3402, 3403 requirements. See Neece v. IRS, 96 F.3d 460, 464 n.1 (10th Cir. 1996).
The district court held, and the bank argues, that such a disclosure does not run afoul of the RFPA. The district court held that our decision in Bailey v. USDA, 59 F.3d 141 (10th Cir. 1995), permitted the Bank to orally disclose the information provided. We disagree.
In Bailey, the bank suspected two of its customers were engaging in questionable banking practices relating to the deposit of food stamps and the immediate withdrawal of a corresponding amount of cash. See id. at 142. The bank notified the government. A government investigator went to the bank and interviewed a bank employee who told the investigator the customers’ names and the monetary value of the transactions and showed him a log of the transactions. We held this disclosure did not violate § 3403(c) as only the “essence of the suspected illegal activity” was revealed by the disclosure. Id. at 143.
The district court held that the disclosure in this case was also valid as the bank revealed even less information than had been revealed in Bailey. However, the issue here is not how much information was provided, but who initiated the contact. The Bank did not suspect plaintiffs of any wrongdoing. Rather, the government initiated the contact based on suspicions arising from information obtained from sources outside of plaintiffs’ bank records. We agree with the district court that had the Bank suspected plaintiffs of wrongdoing and initiated contact with the government investigators, the information disclosed would not have violated the RFPA. However, the Bank could not respond to the government’s inquiry and release information to the government investigator unless the government had properly complied with the procedures set forth in the RFPA. Cf. Duncan v. Belcher, 813 F.2d 1335, 1339 (4th Cir. 1987) (RFPA does not insulate private accounts from government investigation, but “merely establishes summary procedures for government investigators to follow”). Thus, the Bank violated the RFPA.
The Bank also argues that the RFPA permits oral disclosure of information absent compliance with RFPA procedures. The RFPA prohibits the release of “financial records” unless set procedures are followed. “Financial records” are
We need not consider whether plaintiffs suffered any damages as a result of the disclosure. If the government or a financial institution violates the RFPA, the customer whose financial records were disclosed is entitled to $100, regardless of the volume of records involved.