Bavido, Gerald W. v. Apfel, Kenneth

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).