Appendix — Flowers v. United States Army, 25th Infantry Division, (2006) (No. 819)
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APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 04-16143
D.C. Nos. CV-99-00335-SPK and
CV-01-00412-SPK
MARSHALL KENNETH FLOWERS et al.,
Plaintiffs - Appellants,
¥.
UNITED STATES ARMY, 25" Infantry
Division, et al.,
Defendants - Appellees.
ORDER
Before: THOMPSON and CALLAHAN, Circuit Judges, and
MILLER, District Judge’
The appellants’ petition for panel rehearing and petition
for rehearing en banc are hereby DENIED.
* The Honorable Jeffrey T. Miller, United States District Judge
for the Southern District of California, sitting by designation.
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APPENDIX B
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 04-16153
D.C. Nos. CV-99-00335-SPK
[Filed May 3, 2006]
MARSHALL KENNETH FLOWERS;
ANNA FLOWERS,
Plaintiffs - Appellants,
¥.
UNITED STATES ARMY, 25th Infantry
Division; FORT JACKSON FEDERAL
CREDiT UNION; FIRST HAWAIIAN
BANK; UNITED STATES OF AMERICA;
THOMAS E. WHITE, Secretary of the
Army; JOHN OHL WEILER, Major,
Defendants - Appellees.
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Appeal from the United States District Court
for the District of Hawaii
Samuel P. King, Senior Judge, Presiding
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MEMORANDUM’
Submitted April 7, 2006"
San Francisco, California
Before: THOMPSON and CALLAHAN, Circuit Judges, and
MILLER, District Judge™
Husband and wife Marshall and Anna Flowers appeal pro
se the district court’s dismissal of their claims against the
United States Army and the individual Army defendants
(“federal defendants”), and grant of summary judgment in
favor of Fort Jackson Federal Credit Union and First
Hawaiian Bank. The Flowers also challenge various discovery
and other procedural rulings made by the district court. We
affirm the challenged rulings and deny the Flowers’ two
pending motions.
1. The Flowers argue that the district court erred in
dismissing their claims brought pursuant to the Right to
Financial Privacy Act (“RFPA”), 12 U.S.C. §§ 3401 et seq.,
against the federal defendants. The district court based its
dismissal on the doctrine enunciated in Feres v. United States,
340 U.S. 135, 146, 71 S. Ct. 153, 95 L. Ed. 152 (1950),
which held that service members cannot sue the government
* This disposition is not appropriate for publication and may not
be cited to or by the courts of this circuit except as provided by 9th
Cir. R. 36-3.
™ This panel unanimously finds this case suitable for decision
without oral argument. See FED. R. APP. P. 34(a){2).
“ The Honorable Jeffrey T. Miller, United States District
Judge for the Southern District of California, sitting by designation.
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for injuries that “arise out of or are in the course of activity
incident to service.” We must determine whether the district
court had subject-matter jurisdiction over the Flowers’ RFPA
claims against the federal defendants. See Dreier v. United
States, 106 F.3d 844, 847 (9th Cir. 1997) (“A motion to
dismiss pursuant to the Feres doctrine is properly treated as
a Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of
subject matter jurisdiction{.]”). We review de novo whether
the Feres doctrine applies to the facts in the record. Wilkins
v. United States, 279 F.3d 782, 785 (9th Cir. 2002).
The district court concluded that the Supreme Court’s
decision in Feres bars the Flowers’ claims against the federal
defendants because those claims would require a civilian court
to examine decisions regarding management, discipline,
supervision, and control of members of the armed forces of
the United States. This conclusion is in accord with our case
law, which “broadly construes” Feres “to immunize the
United States and members of the military from any suit
which may intrude in military affairs, second-guess[] military
decisions, or impair{] military discipline.” Zaputil v. Cowgill,
335 F.3d 885, 887 (9th Cir. 2003) (internal quotation marks
omitted) (emphasis and alterations in original). Accordingly,
the district court properly dismissed the Flowers’ RFPA
claims against the federal defendants because those claims
implicate the concerns that lie at the heart of the Feres
doctrine.' Feres, 340 U.S. at 146; see also United States v.
Johnson, 481 U.S. 681, 691, 107 S. Ct. 2063, 95 L. Ed. 2d
648 (1987) (“[A] suit based upon service-related activity
Our determination that Feres forecloses subject-matter
jurisdiction over the RFPA claims directed at the federal defendants
renders moot the Flowers’ challenge to the district court’s denial of
their request for additional discovery from Army officials.
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necessarily implicates the military judgments and decisions
that are inextricably intertwined with the conduct of the
military mission.”).
2. The Flowers also argue that the district court erred in
granting summary judgment to the bank and credit union. We
review a grant of summary judgment de novo and may affirm
on any basis presented in the record, construing the evidence
in the light most favorable to the nonmoving party. Lopez v.
Smith, 203 F.3d 1122, 1131 (9th Cir. 2000) (en banc). A
grant of summary judgment is appropriate only where the
moving party has demonstrated that there is no genuine issue
of material fact. Jd.; FED. R. CIV. P. 56(c). Once the
moving party demonstrates the absence of a genuine issue of
material fact, the nonmoving party that bears the ultimate
burden at trial must show that there is evidence creating a
genuine issue of material fact. Celotex Corp. v. Catrett, 477
U.S. 317, 323-25, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).
The record shows that the Flowers failed to produce or
cite any evidence to establish a genuine issue of material fact
sufficient to overcome summary judgment. The record
establishes that the credit union is not liable under the RFPA
because the subpoena issued to the credit union satisfies an
exception to liability under 12 U.S.C. § 3413(e).’ There is
also no indication that the Flowers are entitled to
compensatory or punitive damages as the record evidence
provides no connection between the conduct of the bank or
the credit union and the Flowers’ claimed damages, and
> The protections of the RFPA do not “apply when financial
records are sought by a Government authority under the Federal
Rules of Civil or Criminal Procedure or comparable rules of other
courts in connection with litigation to which the Government
authority and the customer are parties.” 12 U.S.C. § 3413(e).
6a
nothing suggests that the bank or the credit union acted
wilifully or intentionally to violate the Flowers’ rights under
the RFPA. 12 U.S.C. § 3417(a)(3). Furthermore, the
Flowers’ tort claims against the credit union lack any
evidentiary support in the record. We must therefore conclude
that the district court did not err in granting summary
judgment to the bank and the credit union.
3. The Flowers next contend that the district court abused
its discretion in denying their Rule 59(e) motion for
reconsideration and in making various discovery and
procedural rulings. The district court did not abuse its
discretion because the motion failed to set forth any of the
allowable grounds for reconsideration. See FED. R. CIV. P.
59(e). As to the Flowers’ argument that the district court
should have permitted them to amend their complaint a third
time in order to add a claim challenging the military’s search
of their residence under the Fourth Amendment, we agree
with the district court that such an amendment would have,
been futile because the proposed claim appears to be barred
by the Feres doctrine based on the same rationale precluding
subject-matter jurisdiction over the Flowers’ other claims
against the federal defendants. See Newland v. Dalton, 81
F.3d 904, 907 (9th Cir. 1996) (holding that “district courts
need not accommodate futile amendments”). Further, the
Flowers’ objection to the withdrawal of their counsel,
attorney Brown, is in vain because the record reveals that the
Flowers fired Brown. We have considered the Flowers’
remaining miscellaneous contentions -- including the Flowers’
assertion that the district court improperly considered exhibits
that the bank submitted in support of its summary-judgment
motion and the Flowers’ challenge to a number of the district
court’s discovery rulings -- and we conclude that they are also
without merit.
—_—_—
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4. Finally, we deny the Flowers’ motions to strike the
federal defendants’ answering brief and to compel government
counsel’s compliance with the Federal Rules of Appellate
Procedure. The first motion is founded on the false premise
that the Department of Justice is not permitted to represent the
federal defendants on appeal. While the second motion notes
an apparent failure by government counsel to comply with
certain procedural rules for serving documents on opposing
parties, the Flowers have not demonstrated any injury or
prejudice resulting therefrom.
For all of the foregoing reasons, the district court’s
decisions are AFFIRMED and the pending motions are
DENIED.
8a
APPENDIX C
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
[Filed May 11, 2004]
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs,
V.
FIRST HAWAIIAN BANK,
Defendant.
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UNITED STATES ARMY,
25" INFANTRY DIVISION (L);
and FORT JACKSON FEDERAL
CREDIT UNION,
Defendants.
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ORDER ADOPTING IN PART AND MODIFYING IN
PART REPORT OF SPECIAL MASTER ON
PLAINTIFFS’ MOTION FOR ATTORNEY FEES AND
NON-TABLE COST (sic)
On March 19, 2004, United States Magistrate Judge
Kevin Chang, acting as special master pursuant to L.R. 53.1,
issued a special master report recommending that Plaintiffs
Marshall and Anna Flowers (“Plaintiffs”) be awarded
attorneys’ fees of $13,500.82 and costs of $3,524.45 against
Defendant First Hawaiian Bank (“First Hawaiian”). Plaintiff's
filed a motion for reconsideration with Judge Chang, which
he denied on April 13, 2004.
Plaintiffs and First Hawaiian have both filed objections
pursuant to Fed. R. Civ. P. 53(g)(2) (2003).
Plaintiffs seek additional fees, contending that the fee
award was too low. In addition to objecting to the amount of
reductions, they also contend that they are prevailing parties
not only as to claims against First Hawaiian, but also as to
Defendants Fort Jackson Federal Credit Union (“Fort Jackson
FCU”) and the United States Army. Marshall Flowers also
seeks fees for representing his wife.
First Hawaiian also objects, contending that the fee award
was too high. It contends that many of Plaintiffs’ submissions
were inadequately documented, pertained to work against the
United States Army, or should not be awarded because of
limited si ccess (in April of 2003, First Hawaiian and the
Army appropriately admitted liability for a technical violation
of the Right to Financial Privacy, leaving the primary issue as
Plaintiffs’ damages -- an issue upon which First Hawaiian
substantially prevailed as the Court ultimately awarded only
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$200 in statutory damages and nothing for actual or punitive
damages).
The Court reviews factual findings and legal conclusions
of a special master de novo. See Fed. R. Civ. P. 53(g)(3) &
(4). Procedural matters are reviewed for an abuse of
discretion. See Fed. R. Civ. P. 53(g)(5).
I.
The Court OVERRULES Plaintiffs’ objections. Marshall
Flowers is not an attorney and is not entitled to attorneys’
fees, either for himself or for his wife, even if he was allowed
for administrative reasons to speak in limited circumstances
on behalf of his wife. See Kay v. Ehrler, 499 U.S. 432, 435
(1991).
Plaintiffs are not entitled to fees incurred by attorneys for
work strictly against Fort Jackson FCU or the Army. Fort
Jackson FCU and the Army prevailed on claims brought by
Plaintiffs. Plaintiffs recovered no damages against them and
achieved no equitable relief. Plaintiffs cannot be considered
prevailing parties as to claims against Fort Jackson FCU and
the Ariny. Although the litigation against all three defendants
was interrelated and there necessarily was some overlap in
fees incurred against all three, upon de novo review, the
Court is satisfied that Judge Chang made appropriate
reductions in allocations for work against Fort Jackson FCU
and the Army, as well as for work that was inadequately
documented or was excessive. Indeed, Judge Chang appears
to have been quite generous to Plaintiffs in making his fee
award, considering the limited extent of relief ($200 in
statutory damages) obtained against First Hawaiian.
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The Court also OVERRULES First Hawaiian’s objections
regarding the amount of fees. Upon de novo review, the
Court is satisfied that Judge Chang made appropriate
reductions to reflect limited success and because of
inadequately documented or excessive work. Given the nature
of the financial disclosures, some work, even for claims
against the Army, was sufficiently intertwined with claims
against First Hawaiian. And even if some of the fees were
apparently incurred after April 9, 2003 (when Defendant First
Hawaiian and the Army admitted liability for technical RFPA
violations), Plaintiffs are entitled to a limited portion of those
fees incurred in “prevailing” against First Hawaiian. “Success
in a lawsuit is not always measured by the formal relief
obtained.” Clark v. City of Los Angeles, 803 F.2d 987, 990
(9th Cir.1986) (citing Maher v. Gagne, 448 U.S. 122, 129
(1980)). There need not be a perfect relatiouship between
relief sought and relief obtained. See e.g., Hensley v.
Eckerhart, 461 U.S. 424 (1983) (“There is no precise rule or
formula for making these determinations. The district court
may attempt to identify specific hours that should be
eliminated, or it may simply reduce the award to account for
the limited success. The court necessarily has discretion in
making this equitable judgment.”).
Il.
The Court, however, SUSTAINS First Hawaiian’s
objections to the award of costs to Plaintiffs, insofar as First
Hawaiian relies upon its offer of judgment under Fed. R. Civ.
P. 68. First Hawaiian made a formal offer of judgment under
Rule 68 on April 21, 2003, after it formally admitted to
violations of the RFPA. The offer was to allow a total sum of
$30,000 to be taken against it inclusive of fees and costs.
12a
Plaintiffs rejected the offer. Plaintiffs ultimately recovered
much less than $30,000 ($200 in statutory damages, plus
about $14,000 in attorney fees and costs).
Rule 68 provides, in pertinent part that “If the judgment
finally obtained by the offeree [Plaintiffs] is not more
favorable than the offer [by First Hawaiian], the offeree
[Plaintiffs] must pay the costs incurred after the making of the
offer.” Importantly, the Ninth Circuit (and other circuits)
have stressed that “The award [of costs] is mandatory; Rule
68 leaves no room for the court’s discretion.” United States
v. Trident Seafoods Corp., 92 F.3d 855, 859 (9th Cir. 1996)
(citation omitted); see also Jordan v. Time, Inc., 111 F.3d
102, 105 (11th Cir. 1997).' Under Rule 68, because
Plaintiffs did not ultimately obtain a higher judgment than
$30,000, they are not entitled to any of their costs as a
prevailing party incurred after April 21, 2003. See Herrington
v. County of Sonoma, 12 F.3d 901, 907 (9th Cir. 1993)
(“Rule 68 precluded the [prevailing party] from recovering
' The Court has also considered reducing the attorneys’ fees
under Rule 68. If the statute allowing for attorneys’ fees (in this
case, 12 U.S.C. § 3417(a)(4)) defines “costs” as to include
attorneys’ fees, then the attorneys’ fees would be subject to a
similar reduction. See e.g., Marek v. Chesney, 473 U.S. 1, 9
(1985) (“Since Congress expressly included attorney’s fees as
‘costs’ available to a plaintiff in a § 1983 suit, such fees are subject
to the cost-shifting provision of Rule 68”). The RFPA, however,
does not include attorney's fees as costs. See Haworth v. State of
Nevada, 56 F.3d 1048, 1051 (9th Cir. 1995) (“unlike attorney fees
in a section 1983 action, attorney fees in an FLSA action [like in
the RFPA] are not automatically shifted by Rule 68”). Thus,
attorney fees claimed by Plaintiffs incurred after April 2003 are not
subject to Rule 68's reductions.
13a
that portion of their costs and fees related to work performed
after the date of the [Defendant’s better] offer”).
Similarly, even if the Court were to consider Plaintiffs’
“supplemental bill of costs” filed (late) on March 26, 2004,
all those costs were incurred after April 2003 and would not
be recoverable.
The Court therefore REDUCES the award of costs.
Plaintiffs may not recover $1299.49 for the October 29, 2003
and November 20, 2003 deposition charges (invoices for
depositions of Leanne Nakasone and Von Deli Waiwaiole-
Cabos), $108.33 for tape transcription and binders (incurred
on August 26, 2003), and $1604.20 for copying charges. (The
Court calculates the charges by reducing for 16042 copies
from August 2003 to January 2004, as reflected in Plaintiffs
form AO 133 submitted on January 29, 2004, multiplied by
10 cents per copy).
Plaintiffs had claimed a total of 26131 copies on their AO
133. Reducing for 16042 copies leaves 10089 copies.
Multiplying 10089 by 10 cents results in a charge of $1008.90
for copies. The Court concludes that this amount should be
reduced by 2/3rds because Plaintiffs prevailed against only
one of three defendants. This leaves a charge of $336.30 for
copies necessarily incurred against First Hawaiian.
2 Under Rule 68, Plaintiffs might also have been assessed First
Hawaiian’s post offer costs as well. See Haworth, 56 F.3d at 1052
(“Because [defendant] made valid Rule 68 offers of judgment and
the final judgment against it was less than the amount offered, the
plaintiffs must bear their own costs of suit, as well as [defendant’s]
costs, incurred after the Rule 68 offers were made.”). No request
for costs was filed by First Hawaiian.
14a
The cost award is $150 for clerk fees and $336.30 for
copies, totaling $486.30.
CONCLUSION
The March 19, 2004, report of the special master is
adopted in part and modified in part. Plaintiffs are awarded
attorneys’ fees of $13,500.82 and costs of $486.30. An
amended judgment shall issue in favor of Plaintiffs and
against First Hawaiian Bank to reflect the award of fees and
costs, as well as statutory damages of $200.
IT IS SO ORDERED.
Dated: Honolulu, Hawaii, May 11, 2004.
/s/
SAMUEL P. KING
UNITED STATES DISTRICT JUDGE
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APPENDIX D
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAITI
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
[Filed April 13, 2004]
MARSHALL KENNETH FLOWERS,
Plaintiff,
v.
UNITED STATES DEPARTMENT
OF THE ARMY; and
FIRST HAWAIIAN BANK,
Defendants.
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and ANNA FLOWERS,
Plaintiffs,
Vv.
DEPARTMENT OF THE ARMY,
25" INFANTRY DIVISION (L);
and FORT JACKSON FEDERAL
CREDIT UNION,
Defendants.
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ORDER DENYING PLAINTIFFS MARSHALL K.
FLOWERS AND ANNA FLOWERS’ MOTION FOR
RECONSIDERATION
On March 26, 2004, Plaintiffs Marshall K. Flowers and
Anna Flowers (“Plaintiffs”) filed “Plaintiffs Marshall K.
Flowers and Anna Flowers’ Motion for Reconsideration of
the US Magistrate Judge’s Report of the Special Master on
Plaintiffs’ Motion for Attorney Fees and Non-Taxable Cost”
(“Motion”), a Supplemental Bill of Cost and Plaintiffs (sic)
Marshall K. Flowers Supplemental Memorandum in Support
of Attorney Fees Incurred by Plaintiffs Marshall K. Flowers
and Anna Flowers. On April 6, 2004, Defendant First
Hawaiian Bank (“Defendant First Hawaiian”) filed its
Memorandum in Opposition to the Motion and its objections
to Plaintiffs’ Supplemental Bill of Costs. Plaintiffs seek the
reconsideration of the attorneys’ fees award in the amount of
$13,500.82 and the taxable costs allowed of $3,524.45.
DISCUSSION
The disposition of a motion for reconsideration is within
the discretion of the district court and will not be reversed
absent an abuse of discretion. See Plotkin v. Pacific Tel. &
Tel. Co., 688 F.2d 1291, 1292 (9th Cir. 1982). There is a
“compelling interest in the finality of judgments which should
not be lightly disregarded.” Rodgers v. Watt, 722 F.2d 456,
459 (9th Cir. 1983).
It is well settled in the Ninth Circuit that a successful
motion for reconsideration must accomplish two goals. First,
a motion for reconsideration must demonstrate reasons why |
the court should reconsider its prior decision. Second, a
motion for reconsideration must set forth facts or law of a
strongly convincing nature to induce the court to reverse its
17a
prior decision. See Great Hawaiian Fin. Corp. v. Aiu, 116
F.R.D. 612, 616(D. Haw. 1987) (citations omitted), rev’d on
other grounds, 863 F.2d 617 (9th Cir. 1988). Courts have
established three grounds justifying reconsideration: (1) an
intervening change in controlling law; (2) the discovery of
new evidence not previously available; and (3) the need to
correct clear or manifest error in law or fact, to prevent
manifest injustice. See id., and Rule 60.1 of the Local Rules
of Practice for the District of Hawaii (“L.R.”).
Mere disagreement with a previous order is an insufficient
basis for reconsideration. See Leong v. Hilton Hotels Corp.,
689 F. Supp. 1572 (D. Haw. 1988). A party moving for
reconsideration cannot merely reargue facts and legal
arguments that were previously submitted to the court. See,
e.g., Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir.
1988). Furthermore, reconsideration may not be based on
evidence and legal arguments that could have been presented
at the time of the challenged decision. See All Hawaii Tours,
Corp. v. Polynesian Cultural Ctr., 116 F.R.D. 645, 649-50
(D. Haw. 1987), rev’d on other grounds, 863 F.2d 617 (9th
Cir. 1988).
Plaintiffs make several arguments for reconsideration,
however none of the arguments cite any authority or raise
anything which satisfy the requirements for reconsideration of
the Report of the Special Master. Plaintiffs do not point to an
intervening change in controlling law relevant to the issues
addressed in the Report of the Special Master and to the
discovery of new evidence that was not previously available.
Plaintiffs provide the September 2003 detailed billing
statements and a Supplemental Bill of Costs to support their
request for reconsideration, but Plaintiffs fail to explain why
this information was not or could not have been presented as
part of their original motion. Also, with regard to the Court’s
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denial of the cost incurred by Plaintiff to produce tape
recorded transcript of proceedings based on Plaintiffs’ failure
to attach an invoice, Plaintiffs argue that such information
will be provided. Plaintiffs should have produced the subject
invoice at the time of the filing of their original Motion for
Attorney’s Fees.
Plaintiffs argue about or against the fees awarded to
Attorney Charles Brown and Attorney Rory Toomey. It is
unclear whether Plaintiffs are arguing that the fees should be
more or less than the amount awarded. In some instances,
Plaintiffs argue that the amount should be increased; in other
instances, Plaintiffs argue that the fees are excessive.’ For
example, Plaintiffs argue that the reduction of fees by 95
hours for work in the unsuccessful claim against Fort Jackson
Federal Credit Union is incorrect. They cite to the Ninth
Circuit decision in Flowers v. First Hawatian Bank, 295 F.3d
975 (9" Cir. 2002) saying that the Ninth Circuit allowed the
amendment. However, while the Ninth Circuit allowed the
amendment of the Complaint, Plaintiffs still did not prevail on
their claims against Fort Jackson Federal Credit Union. See
Judgment entered by Judge Samuel P. King on December 8,
2003. Thus, because Plaintiffs are not a prevailing party with
regards to Fort Jackson Federal Credit Union, Plaintiffs are
not entitled to recover fees related to their claims against Fort
Jackson Federal Credit Union.
Also, Plaintiffs have not established the need for
reconsideration or to correct clear or manifest error in law or
fact, to prevent manifest injustice. Plaintiffs allege that “the
Plaintiffs state that “[they] suspect the attorney [Charles
Brown] fabricated billings and cooperated with defendant to
excessively overcharge.” Motion at page 11.
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‘good ole boy’ system precludes Black Americans from
competent legal representation” and because of this
discrimination, he should be awarded attorney’s fees for work
done on the case as pro se plaintiffs to “act as a deterrent to
discrimination.”? See Motion at page 7. Plaintiffs’ allegations
is without merit.
Moreover, the Supreme Court has held that pro se
litigants are not entitled to recover fees incurred by them for
work done as pro se plaintiffs. See Kay v. Ehrler, 499 U.S.
432, 435 (1991).
Additionally, Plaintiffs argue that, “when the Court fails
to award costs and reasonable attorneys fees in this case, it
lets Defendants (sic) conduct replace the Right to Financial
Privacy Act with the cynic’s Golden Rule: ‘He who has the
gold rules.’” See Motion at page 14. This argument is also
meritless.
Section 3417(a) of the Right to Financial Privacy Act, 12
U.S.C. § 3417(a), allows recovery of “reasonable attorney’s
fees as determined by the court.” The Court, after carefully
considering the file and the record presented, granted
Plaintiffs’ an award of $13,500.82 in reasonable attorneys’
fees and taxable costs of $3,524.45. Plaintiffs have failed to
show manifest error in law or fact to warrant reconsideration
or correction of the court’s prior ruling.
> Plaintiff also argues that his right to equal protection has been
violated. The court is unclear on how this argument relates to the
present Motion.
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Again, Plaintiffs’ displeasure or disagreement with this
Court’s previous Order is an _ insufficient basis for
reconsideration. See Leong, 689 F. Supp. at 1572.
CONCLUSION
Based on the foregoing, the Court finds and concludes that
Plaintiffs have failed to meet their burden as set out in Great
Hawaiian Fin. Corp v. Aiu, 116 F.R.D. 612 (D. Haw. 1987)
and L.R. 60.1. Therefore, the Court DENIES Plaintiffs
Marshall K. Flowers and Anna Flowers (sic) Motion for
Reconsideration of the US Magistrate Judge’s Report of the
Special Master on Plaintiffs’ Motion for Attorney Fees and
Non-Taxable Cost.
IT IS SO ORDERED.
Dated: Honolulu, Hawaii, APR 14 2004.
/s/
KEVIN S.C. CHANG
UNITED STATES MAGISTRATE JUDGE
APPENDIX E
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
{Filed March 19, 2004]
MARSHALL KENNETH FLOWERS,
Plaintiff,
Vv.
UNITED STATES DEPARTMENT
OF THE ARMY; and
FIRST HAWAIIAN BANK,
Defendants.
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs,
v.
DEPARTMENT OF THE ARMY,
25" INFANTRY DIVISION (L):
and FORT JACKSON FEDERAL
CREDIT UNION,
Defendants.
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22a
REPORT OF THE SPECIAL MASTER ON
PLAINTIFFS’ MOTION FOR ATTORNEY FEES AND
NON-TABLE (sic) COST
On December 17, 2003, Plaintiffs Marshall K. Flowers
and Anna Flowers (collectively, “Plaintiffs”) filed a Motion
for Attorney Fees and Non-Table (sic) Cost Pursuant to the
Final Judgment Order Against First Hawaiian Bank in Civil
Case 99-00335 SPK (“Motion”). Also on December 17,
2003, Plaintiff Anna Flowers filed a Substantive Joinder in
the Motion. United States District Judge Samuel P. King
referred the Motion to this Court pursuant to 28 U.S.C.
§ 636(b)(1)(B) and Rule 72.4, Local Rules of Practice for the
United States District Court for the District of Hawaii (“LR”)
on December 18, 2003.
Defendant First Hawaiian Bank (“Defendant First
Hawaiian”) filed a Memorandum in Opposition on January
12, 2004. Plaintiffs filed their Response Memorandum on
January 19, 2004. On January 27, 2004, Attorney Arthur E.
Ross filed a Memorandum in Support of the Motion and filed
a Supplemental Memorandum on February 6, 2004.
The Motion came on for hearing on January 31, 2004.
Plaintiff Marshall Kenneth Flowers appeared pro se; Attorney
Patsy Kirio appeared for Defendant First Hawaiian; Assistant
United States Attorney Theodore Meeker appeared for
Defendant United States Department of the Army.
After careful consideration of the Motion and supporting
and opposing memoranda, the Court FINDS that Plaintiffs are
entitled to reasonable attorneys’ fees in the amount of
$13,500.82 and costs in the amount of $3,524.45.
Accordingly, the Court RECOMMENDS that Plaintiffs’
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Motion for Attorney be GRANTED IN PART AND DENIED
IN PART.
BACKGROUND
Plaintiffs brought these two suits under the Right to
Financial Privacy Act, 12 U.S.C. 01673401 et seq.
(“RFPA”). The first suit was filed against the United States
Army and Defendant First Hawaiian; the second action was
against the United States Army and Defendant Fort Jackson
Federal Credit Union. Both actions arose after Defendant
First Hawaiian and Fort Jackson Federal Credit Union
provided bank or financial records to the United States Army
after receiving military subpoenas related to a Article 32
investigation.
Initially, Plaintiffs’ suit against Defendant First Hawaiian
was dismissed. The Ninth Circuit Court of Appeals reversed
that decision and remanded the action to the District Court for
further proceedings.
Following remand, Plaintiffs’ actions were consolidated.
On December 5, 2003, Judge Samuel P. King issued an
Order Granting in Part and Denying in Part Motions for
Summary Judgment and Ruling on Other Pending Matters. In
pertinent part, the Order entered judgment in favor of
Plaintiffs and against Defendant First Hawaiian in the amount
of two hundred dollars.
DISCUSSION
Plaintiffs seek recovery of their attorney’s fees and costs
pursuant to the Right to Financial Privacy Act section
3417(a).
24a
I. Entitlement to Attorneys’ Fees
Plaintiffs seek attorneys’ fees pursuant to section 3417(a)
of the Right Privacy Act which states, in pertinent part,
Any agency or department of the United States or
financial institution obtaining or disclosing financial
records or information contained therein in violation
of this chapter is liable to the customer to who such
records relate. . .
(4) in the case of any successful action to enforce
liability under this section, the costs of the action
together with reasonable attorney’s fees as determined
by the court.
Defendant First Hawaiian argues that no fees should be
allowed after March 31, 2003, when Defendant First
Hawaiian admitted liability for purposes of trial. Defendant
First Hawaiian argues any fees incurred after that date are not
recoverable under section 3417(a) because Plaintiffs cannot be
said to have been successful in enforcing liability.
Defendant First Hawaiian’s argument is interesting.
However, the argument is not compelling because the plain
language of the statute does not specify a cut-off point in
determining attorney’s fees. The statute allows recovery of
attorney's fees and costs in the case of “any successful action
to enforce liability.” Defendant First Hawaiian was found
liable to Plaintiffs for the disclosure of financial information.
Judgment was entered pursuant to Judge King’s Order in
favor of Plaintiffs and against Defendant First Hawaiian for
two hundred dollars.
25a
Therefore, the Court determines that under the Right to
Financial Privacy Act section 3417(a), Plaintiffs are allowed
reasonable attorney’s fees and costs of the action.
II. Calculation of Reasonable Attorneys’ Fees
In determining reasonable attorneys’ fees, the district
court must follow the “lodestar” approach adopted by the
United States Supreme Court in Hensley v. Eckerhart, 461
U.S. 424 (1983). The Supreme court instructs that the most
useful starting point to determine a reasonable fee is “the
number of hours reasonably expended multiplied by a
reasonable hourly rate.” Hensley, 461 U.S. at 433. Once
calculated, the lodestar is presumptively reasonable. See
Pennsylvania v. Delaware Valley Citizen's Council, 483 U.S.
711,728 (1987): see also Cunningham v. County of Los
Angeles, 879 F.2d 481 (9" Cir. 1989), cert. denied, 493 U.S.
1035 (1990).
In calculating the lodestar amount, the court should also
take into account any of the relevant factors set forth in
Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5"
Cir. 1974), and adopted by the 9" Circuit in Kerr v. Screen
Extras Guild, 526 F.2d 67, 70 (9" Cir. 1975), cert. denied,
425 U.S. 951 (1976). These factors are:
(1) the time and labor required;
(2) the novelty and difficulty of the questions
involved:
(3) the skill requisite to perform the legal service
properly;
(4) the preclusion of other employment by the
attorney due to acceptance of the case;
(5) the customary fee;
(6) whether the fee is fixed or contingent;
26a
(7) time limitations imposed by the client or the
circumstances;
(8) the amount involved and the resulis obtained;
(9) the experience, reputation, and ability of the
attorneys;
(10) the “undesirability” of the case;
(11) the nature and length of the professional
relationship with the client, and;
(12) awards in similar cases.
A reasonable hourly rate is “calculated according to the
prevailing market rates in the relevant community.” Blum v.
Stenson, 465 U.S. 886, 895 (1984). In determining a
reasonable hourly rate, the district court must consider “‘the
experience, skill, and reputation of the attorney requesting
fees.’” D’Emanuele v. Montgomery Ward & Co., 904 F.2d
1379, 1384 (9" Cir. 1990)(quoting Chalmers v. City of Los
Angeles, 796 F.2d 1205, 1210 (1985), amended, 808 F.2d
1373 (9" Cir. 1987)). The district court should be “guided by
the rate prevailing in the community for similar services of
lawyers of reasonably comparable skill and reputation, it “is
deemed to be reasonable.” Jordan v. Multnomah County, 815
F.2d 1258, 1263 (9" Cir. 1987). The party “opposing the fee
application has a burden of rebuttal that requires submission
of evidence to the district court challenging the accuracy and
the reasonableness of the hours charged or the facts asserted
by the prevailing party in its submitted affidavits.” Gates v.
Deukmejian, 987 F.2d 1392, 1397-98 (9" Cir. 1993)(citing
Blum, 465 U.S. at 892 n.5).
Plaintiffs request payment of attorney’s fees for the
following: (1) the work done by them as pro se plaintiffs;
(2) fees paid and allegedly owed to Charles Brown, Esq.; and
(3) fees paid to Arthur Ross, Esq. The total amount sought by
Plaintiffs is not stated in the Motion.
27a
A. Fees as Pro Se Litigants
The Court, initially addresses the fees sought by Plaintiffs
for work done on the case as pro se plaintiffs. Pursuant to
Judge King’s Order and applicable case law, Plaintiffs are not
entitled to recover fees incurred for work done by them as
prose plaintiffs. See Kay v. Ehrler, 499 U.S. 432, 435 (1991).
Therefore, the Court does not award any fees requested by
Plaintiffs for their work as pro se plaintiffs.
B. Fees of Charles R. Brown
Plaintiffs also seek attorneys fees and costs for the work
done by Attorney Charles R. Brown. Plaintiffs attach to the
Motion billing statements from Attorney Brown. Again,
Plaintiffs fail to state the exact amount sought. The Court, in
its discretion, will calculate the total amount of the five billing
invoices submitted by Plaintiffs and use that amount as the
total fee requested.
Billing Statement Date Hours x Rate Amount
March 12, 2003 64.00 x 125.00 $8,000.00
April 21, 2003 48.52 x 125.00 $6,065.00
June 25, 2003 139.37 x 125.00 $17,421.25
July 18, 2003 74.52 x 125.00 $9,315.00
September 23, 2003 79.44 x 125.00 $9,930.00
TOTAL 405.85 hours $50,731.25
28a
Based on the foregoing, the Court deems $50,731.25 as
being the total amount of Attorney Brown’s fees requested by
Plaintiffs.
First, the Court will reduce the hours expended for work
done in CV 01-00412 SPK-KSC because Plaintiffs were not
successful in establishing or enforcing liability against Fort
Jackson Federal Credit Union. Therefore, the Court will
initially reduce the requested total number of hours by ninety-
five (95) hours.
1. Hourly rates
In determining a reasonable hourly rate, the district court
must consider “the experience, skill, and reputation of the
attorney requesting fees.” D’Emanuele v. Montgomery Ward
& Co., Inc., 904 F.2d 1379, 1384 (9" Cir. 1990) (internal
quotations and citations omitted). The Court finds that
$125.00 per hour is a reasonable hourly rate charged by
Attorney Brown.
2. Hours reasonably expended
Beyond establishing a reasonable hourly rate, a prevailing
party seeking attorney’s fees bears the burden of proving that
the fees and costs taxed are associated with the relief
requested and are reasonably necessary to achieve the results
obtained. See Tirona v. State Farm Mut. Auto Ins. Co., 821
F. Supp. 632 (D. Haw. 1993) (citations omitted). The court
must also guard against awarding fees and costs which are
excessive, and must assess the extent to which fees and costs
are self-imposed and could have been avoided. /d. at 637
(citing INVST Financial Group v. Chem-Nuclear Sys., 815
F.2d 391, 404 (6" Cir. 1987), cert. denied, 484 U.S. 927
(1988). Moreover, the party secking the fee “bears the burden
29a
of documenting the appropriate hours expended in the
litigation and must submit evidence in support of those hours
worked.” Gates v. Deukmejian, 977 F.2d 1300, 1305 (9" Cir.
1992).
First, the Court will delete the hours for the September
23, 2003 billing because there is no summary or adequate
description of the billings attached for September 23, 2003.
While the summary of billings attached for the other months
requested may be incomplete, Plaintiffs submit absolutely no
billing summary for the dates set forth in the September 23,
2003 billings. Therefore, the Court will not allow any
recovery for amounts sought in the September 23, 2003
invoice and reduce the total hours expended by 79.44 hours.
Second, the Court reduces the hours expended for work
done that the Court deems excessive or non-billable items.
For example, the description entry for 3/13/03, states that
work done was “Re: Meeting w/billing Age”; another
example is the entry for 4/24/03 which states “Re: Case
Management”. These vague entries appear to be clerical or
other work which is not recoverable as attorneys’ fees for
professional services rendered. An example of excessive
billing can be found in the 4/19/03 entry, “Re: Subpeona (sic)
for Depo.”, counsel bills for 1.75 hours. The Court finds
1.75 hours for preparation of deposition subpoenas, without
further explanation, is excessive. Based on the foregoing, the
following hours are stricken:
Invoice Hours Reduced
March 13, 2003 15 hours
April 21, 2003 15 hours
June 25, 2003 20 hours
July 18, 2003 15 hours
30a
Therefore, after the reduction of the aforementioned
hours, the total hours for invoices March, 2003, April, 2003,
June, 2003, July, 2003 are 146.41 hours. Thus, the adjusted
lodestar is as follows:
Total Hours requested 405.85
(minus 95.00) - 95.00
Subtotal 310.85
(minus 79.44) - 79.44
Subtotal 231.41
(minus 65.00) - 65.00
Hourly Rate
Total 166.41 x $125.00
= Adjusted Lodestar
$20,801.25
In addition, the Court will reduce the adjusted lodestar
amount for failure to detail the work performed. L. R. 54.3
sets forth the contents and requirements for Motion for
Attorneys’ Fees and related non-taxable expenses. Section (c)
of L. R. 54.3, in pertinent part, states “[a] motion for
attorneys’ fees and related non-taxable expenses shall specify
. . . the amount of attorneys’ fees and related non-taxable
expenses sought.” This section goes on to say, “[i]n addition,
the moving party shall file a memorandum in support and an
affidavit of counsel.” Plaintiffs have failed to meet the
requirements of Section (c). In addition, Plaintiffs’ Motion
fails to adequately describe the services provided. Under L.R.
54.3 (d)(2), the court gives examples of information necessary
for adequate descriptions of services rendered. The rule
states, for example entries for research “must include an
identification of the specific issue researched and, if possible,
should identify the pleading or document for which the
research was necessary.” L.R. 54.3(d)(2) goes on further to
say, “[i]f the time descriptions are incomplete, or if such
3la
descriptions fail to describe adequately the services rendered,
the court may reduce the award accordingly.”
Mr. Brown’s entries fail to sufficiently detail the services
provided. For example, the entry for February 20, 2003 states
“re: research”. This entry fails to detail the specific issue
researched or the document for which the research was
conducted. Another example of inadequate description of
services provided is the 4/24/03 entry, “Re: Pleadings
Review”. The entry fails to specify which pleadings were
being reviewed and for what purpose. Therefore, the Court,
in accordance with L.R. 54(d)(3)(2), reduces the adjusted
lodestar by twenty percent (20%).
In addition, the Court reduces the adjusted lodestar by
twenty-five percent (25%) for work coriducted on claims that
Plaintiffs were unsuccessful, i.e. punitive damages and
tortious interference with prospective economic advantage.
This Court finds the following lodestar to be reasonable
for Attorney Brown’s fees:
HOURS RATE LODESTAR
166.41 $125.00 $20,801.25
(minus 20%) - 4,160.25
Subtotal $16,641.00
(minus 25%) - 4 {60.25
Subtotal $12,480.75
(4.167% tax) + 520.07
Attorney Brown’s Total Lodestar $13,000.82
32a
C. Fees of Arthur E. Ross
Second, Attorney Arthur E. Ross seeks the recovery of
fees incurred in defending Defendant First Hawaiian’s motion
to dismiss complaint. On January 27, 2004, Attorney Arthur
E. Ross submitted a Memorandum in Support of Attorney
Fees Incurred and Billed to Marshall Flowers in Defending
Claim against Fort Jackson Federal Credit Union in
November 1999. On February 6, 2004, Mr. Ross filed a
Supplemental Memorandum in Support of Attorneys Fees
Incurred in Defending Claim of Marshall K. Flowers Against
First Hawaii Bank October 1999. Mr. Ross’ declarations state
that he retained Attorney Rory Toomey to assist him in
preparing an opposition to Defendant First Hawaiian’s motion
to dismiss complaint and Defendant Fort Jackson’s motion to
dismiss. Mr. Ross’ declaration stated that he agreed to pay
Mr. Toomey the hourly rate of one hundred dollars. Mr.
Toomey’s declaration states that he spent twenty-three hours
working on the opposition to Defendant Fort Jackson’s motion
to dismiss and five hours on the opposition to Defendant First
Hawaiian’s motion to dismiss.
The Court finds that one hundred dollars is a reasonable
hourly rate for Mr. Toomey. The Court further finds that five
(5) hours is reasonable amount of time expended for
researching and drafting an opposition to a motion to dismiss.
Thus, five hundred dollars is a reasonable lodestar. The Court
disallows any amounts sought for work with regards to
Defendant Fort Jackson because Plaintiffs are not the
prevailing party with regards to Defendant Fort Jackson.
Therefore, based on the foregoing, this Court finds that
Plaintiffs have established the appropriateness of an award of
attorneys’ fees as follows:
33a
Attorney Brown $13,000.82
Attorney Toomey $ 500.00
TOTAL LODESTAR — $13,500.82
Ill.BILL OF COSTS
Plaintiffs’ Motion also requests costs incurred in this
action.
Fed. R. Civ. P. 54(d) provides that “costs shall be
allowed as of course to the prevailing party unless the court
otherwise directs.” Fed. R. Civ. P. 54(d); Trans Container
Services (Basel) A.G. v. Security Forwarders, Inc. , 752 F.2d
483, 488 (9" Cir. 1985). These costs are submitted to and
taxed by the Clerk of the Court. /d. Any objections by the
losing party must be “on motion served within 5 days
thereafter.” /d.
The Supreme Court has held that “28 U.S.C. § 1920
embodies Congress’ considered choice as to the kinds of
expenses that a federal court may tax as costs against the
losing party.” Crawford Fitting Co. v. J.T. Gibbons, Inc.,
482 U.S. 437, 482 (1987). Therefore, Petitioners are entitled
to an award of those costs that are included within the
definitions provided by 28 U.S.C. § 1920.
While courts do not have discretion to tax costs not
included within the definitions provided by § 1920, courts do
have discretion to interpret the meaning of phrases used in
§ 1920 in determining whether a requested cost falls within
those definitions. See Alflex Corp. v. Underwriters Labs, Inc.,
914 F.2d 175, 177 (9" Cir. 1990). Costs defined in § 1920
include the following:
34a
(1) Fees of the clerk and marshal;
(2) Fees of the court reporter for all or any part of the
stenographic transcript necessarily obtained for
use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and copies of papers
necessarily obtained for use in the case;
(5) Docket fees under section 1923 of the title;
(6) Compensation of court appointed experts,
compensation of interpreters, and salaries, fees,
expenses, and costs of special interpretation
services under section 1828 of this title.
28 U.S.C. §1920.
Courts also have the discretion to deny costs. See Zenith
Ins. Co. v. Breslaw, 108 F.3d 205, 207 (9" Cir. 1997). There
is a strong presumption in favor of costs to the prevailing
party, the unsuccessful litigant must point to some
“impropriety on the part of the prevailing party that would
justify denial of costs.” National Info. Servs., Inc. v. TRW,
Inc., 51 F.3d 1470, 1471-1472 (9" Cir. 1995). A court must
specify reasons for its refusal to award costs. See Assoc. of
Mexican-American Educators v. Cal. , 231 F.3d 572, 591 (9"
Cir. 2000) citing Subscription Televisions, Inc. v. Southern
Cal. Theatre Owners Assoc., 576 P.2d 230, 234 (9" Cir.
1978).
For the purposes of awarding costs under Fed. R. Civ. P.
54(d), the prevailing party is generally one in whose favor
judgment is rendered by the court. See Amarel v. Connell,
102 F.3d 1494, 1523 (9" Cir. 1997) (quoting d’Hedouville v.
Pioneer Hotel Co. , 552 F.2d 886 (9" Cir. 1977)). However,
should each party be awarded partial judgment, the court has
discretion to require each party to bear its own costs. See id.
35a
(citing Testa v. Village of Mundelein, 89 F.3d 443 (7" Cir.
1996)).
On December 5, 2003, Judge Samuel P. King issued an
Order Granting in Part and Denying in Part Motions for
Summary Judgment and Ruling on Other Pending Matters.
Judgment was entered in favor of Plaintiffs and against
Defendant First Hawaiian in the amount of two hundred
dollars.
In Plaintiffs’ Motion, Plaintiffs seek as costs all the items
listed in Exhibit D. Also, on January 29, 2004, Plaintiffs filed
a Bill of Costs, Form AO 133, requesting a total of $4,594.04
in costs. Under L.R. 54.2, any request for costs are to be
made “within thirty (30) days of the entry of judgment” and
“noncompliance with this time limit shall be deemed a waiver
of costs.” Defendant First Hawaiian argues that the Form AO
133 filed January 29, 2004 is untimely and thus Plaintiffs
have waived any recovery of cost. However, since Plaintiffs
did request costs in their Motion for Attorneys’ fees, the
Court will treat the Form AO 133, Bill of Costs as an
amended request for costs.
The Court finds that the costs requested in Exhibit D of
the Motion are not recoverable under 28 U.S.C. § 1920.
Therefore, Plaintiffs are not entitled to any costs sought in
Exhibit D. As to the amounts requests in AO Form 133,
Plaintiffs seek the following:
36a
Fees of the Clerk $ 150.00
Fees of the court reporter $2,002.61
Photocopies $2,313.10
Video Tape Duplication $ 128.83
$4,594.54!
The Court denies $20.00 for tape transcript and tape
because Plaintifis have failed to attach an invoice for this
amount sought.
A. \'ees of the Court Reporter
Plaintiffs seek $2,002.61 in court reporter fees.
Fees incurred obtaining deposition transcripts may be
recovered under 28 U.S.C. §1920(2). See Evanow v. M/V
Neptune, 163 F.3d 1108, 1118 (9" Cir. 1998); Association of
Flight Attendants, AFL-CIO v. Horizon Air Industries, Inc.
976 F.2d 541, 551 (9 Cir. 1992). Such costs are recoverable
only if necessarily obtained for use in the case. Denial of cost
for deposition transcripts, solely because they were not used
at trial, is within the district court’s discretion. See
Washington State Dept. of Transp. v. Washington Natural
Gas Co., 59 F.3d 793, 806 (9" Cir. 1995). Conversely, the
court may grant the cost of deposition transcripts not used at
trial or in conjunction with summary judgment provided the
transcripts were “necessarily obtained.” See Smith v. Hughes
Aircraft Co., 22 F.3d 1432, 1439 (9" Cir. 1993)(internal
quotation omitted).
rr SSP LIS
' ‘This total represents the correct amount of the costs
requested. Plaintiffs’ total of $4,594.04 was a miscalculation.
37a
The Court denies video conference charges of $351.56
and $351.56, included in the requested fees of the court
reporter, because these charges are not recoverable under 28
U.S.C. § 1920.
The Court will allow $1,299.49 in fees of the court
reporter.
B. Photocopies
Plaintiffs request photocopying costs in the amount of
$2,313.10.
28 U.S.C. § 1920(4) permits taxation for the copies of
papers “necessarily obtained for use in the case” and does not
require that the copied document be introduced into the
record. Haagen-Dazs Company, Inc. v. Double Rainbow
Gourmet Ice Creams, Inc., 920 F.2d 587, 588 (9" Cir. 1990).
The practice of this Court is to award $0.15 per page for
copies necessarily obtained for use in the case.
The Court finds that some of the photocopying costs were
probably used in the litigation with Defendant Fort Jackson,
therefore, the Court reduces the amount requested for
photocopying by fifteen (15%) percent. Thus, Plaintiffs may
recover $1,966.13 in photocopy charges.
Based on the foregoing, Court allows taxation of costs ta
the following amounts:
Fees of the Clerk $ 150.00
Fees of the court reporter $1,299.49
Photocopies $1,966.13
Video Tape Duplication .. $408.83--
38a
TOTAL COSTS AWARDED — $3,524.45
CONCLUSION
Based on the foregoing, the Court RECOMMENDS that
the Motion be GRANTED IN PART AND DENIED IN
PART and that Plaintiffs be awarded attorneys’ fees in the
amount of $13,500.82 and that the Clerk of the Court tax
costs in the amount of $3,524.45.
IT IS SO FOUND AND RECOMMENDED.
Dated: Honolulu, Hawaii, MAR 19 2004
/s/
KEVIN S.C. CHANG
UNITED STATES MAGISTRATE JUDGE
39a
APPENDIX F
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAITI
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
[Filed March 1, 2004]
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs,
¥.
FIRST HAWATIAN BANK,
Defendant.
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs,
V.
UNITED STATES ARMY,
25" INFANTRY DIVISION ({L):
and FORT JACKSON FEDERAL
CREDIT UNION,
Defendants.
Net wee eee ee ie i oe ie le’ ~~”
40a
ORDER ADOPTING FINDINGS AND
RECOMMENDATION REGARDING DEFENDANT
FORT JACKSON FEDERAL CREDIT UNION’S BILL
OF COSTS
The Court has reviewed the February 9, 2004, Findings
and Recommendation (“F&R”) of United States Magistrate
Judge Kevin Chang to deny Plaintiffs’ objections to Defendant
Fort Jackson Federal Credit Union’s (“Fort Jackson FCU”)
Bill of Costs, and to tax costs of $4,901.23 against Plaintiffs
and for Fort Jackson FCU. The Court has also reviewed
Plaintiffs’ February 13, 2004, Motion for Review of Judge
Chang’s F&R and Fort Jackson FCU’s Memorandum in
Opposition.
After such review, the Court now ADOPTS the Findings
and Recommendation to tax costs of $4,901.23 against
Plaintiffs and for Fort Jackson FCU. The Court agrees with
Judge Chang that Fort Jackson FCU was a prevailing party as
to Plaintiffs’ claims against Fort Jackson FCU. The Court
also agrees that, under 28 U.S.C. § 1920, the requested costs
were “actually and necessarily incurred” to defend the action.
The February 9, 2004 Report of the Special Master on
Defendant Fort Jackson Federal Credit Union’s Bill of Costs
is ADOPTED.
IT iS SO ORDERED.
Dated: Honolulu, Hawaii, 1 March, 2004.
/s/
SAMUEL P. KING —
UNITED STATES DISTRICT JUDGE
4la
APPENDIX G
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAITI
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
[Filed February 9, 2004]
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs,
¥.
UNITED STATES DEPARTMENT
OF THE ARMY; and
FIRST HAWAIIAN BANK,
Defendants.
MARSHALL KENNETH FLOWERS
Plaintiffs,
Vi
DEPARTMENT OF THE ARMY,
25" INFANTRY DIVISION (L)
and FORT JACKSON FEDERAL
CREDIT UNION,
Defendants.
Ne Ne ee ee ee ee ee ee ’ Se”
42a
REPORT OF THE SPECIAL MASTER ON
DEFENDANT FORT JACKSON FEDERAL CREDIT
UNION’S BILL OF COSTS
On January 7, 2004 Defendant Fort Jackson Federal
Credit Union (“Defendant Fort Jackson”) filed its Bill of
Costs. An Amended Bill of Costs was filed on January 8,
2004.' Plaintiffs Marshall K. Flowers and Anna Flowers
(collectively, “Plaintiffs”) filed their opposition to the Bill of
Costs on January 14, 2004. United States District Judge
Samuel P. King referred the Bill of Costs to this Court
pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule (“LR”)
72.4 on December 18, 2003. This Court finds this matter
suitable without a hearing, pursuant to Local Rules of Practice
for the United States District Court for the District of Hawaii
(“LR”) 7.2(d).
BACKGROUND
Plaintiffs brought these two suits under the Right to
Financial Privacy Act, 12 U.S.C. 01673401 et seq.
(“RFPA”). The first filed case was against the United States
Army and First Hawaiian Bank; the second action was against
the United States Army and Fort Jackson Federal Credit
Union. Both actions arose after First Hawaiian Bank and
Defendant Fort Jackson provided bank or financial records to
the United States Army after receiving military subpoenas
related to an Article 32 investigation.
Initially, the suit against Defendant First Hawaiian was
dismissed. The Ninth Circuit Court of Appeals reversed the
' The Amended Bill of Costs did not change any amounits, but
merely used the Court’s form Bill of Costs.
43a
decision and remanded the action to the District Court for
further proceedings.
After the remand, both actions were consolidated.
On December 5, 2003, Judge King issued an Order
Granting in Part and Denying in Part Motions for Summary
Judgment and Ruling on Other Pending Matters. In pertinent
part, this Order entered Judgment in favor of Defendant Fort
Jackson and against Plaintiffs. A judgment was entered on
December 8, 2003.
Thereafter, Defendant Fort Jackson filed its Bill of Costs.
DISCUSSION
In pertinent part, Rule 54(d) provides that “costs shall be
allowed as of course to the prevailing party unless the court
otherwise directs.” Fed. R. Civ. P. 54(d); Trans Container
Services (Basel) A.G. v. Security Forwarders, Inc., 752 F.2d
483, 488 (9" Cir. 1985). These costs are submitted to and
taxed by the Clerk of the Court. Jd. Any objections by the
losing party must be “on motion served within 5 days
thereafter.” Id.
The Supreme Court has held that “28 U.S.C. § 1920
embodies Congress’ considered choice as to the kinds of
expenses that a federal court may tax as costs against the
losing party.” Crawford Fitting Co. v. J.T. Gibbons Inc. , 482
U.S. 437, 482 (1987). Therefore, petitioners are entitled to an
award of those costs that are included within the definitions
provided by 28 U.S.C. § 1920.
While courts do not have discretion to tax costs not
included within the definitions provided by § 1920, courts do
44a
have discretion to interpret the meaning of phrases used in
§ 1920 in determining whether a requested items of costs falls
within those definitions. See Alflex Corp, v. Underwriters
Labs, Inc., 914 F.2d 175, 177 (9" Cir. 1990). Costs defined
in § 1920 include the following:
1. Fees of the clerk and marshal;
2. Fees of the court reporter for all or any part of the
stenographic transcript necessarily obtained for
use in the case;
Fees and disbursements for printing and witnesses;
4. Fees for exemplification and copies of papers
necessarily obtained for use in the case;
Docket fees under section 1923 of the title;
6. Compensation of court appointed experts,
compensation of interpreters, and salaries, fees,
expenses, and costs of special interpretation
services under section 1828 of this title.
WwW
WN
28 U.S.C. § 1920.
Courts also have the discretion to deny costs. See Zenith
Ins. Co. v. Breslaw, 108 F.3d 205, 207 (9" Cir. 1997). There
is a strong presumption in favor of costs to the prevailing
party and the unsuccessful litigant must point to some
“impropriety on the part of the prevailing party that would
justify denial of costs.”
National Info. Servs., Inc. v. TRW, Inc. , 51 F.3d 1470, 1471-
1472 (9" Cir. 1995). A court must specify reasons for its
refusal to award costs. See Assoc. of Mexican-American
Educators v. Cal., 231 F.3d 572, 591 (9" Cir. 2000) citing
Subscription Televisions, Inc. v. Southern Cal. Theatre
Owners Assoc., 576 P.2d 230, 234 (9" Cir. 1978).
45a
Defendant Fort Jackson seeks the following in costs:
Fees of the court reporter $3,076.31
Photocopies $1,770.23
Video Tape Duplication $ 54.69
$4,901.23
Plaintiffs object to Defendant Fort Jackson’s Bill of Costs
as being untimely. Plaintiffs’ objection is without merit.
The Court finds that Defendant Fort Jackson’s Bill of
Costs has been timely filed. Rule 54.2(b) of the Local Rules
of Practice for the District of Hawaii, allows for the filing of
a Bill of Cost within 30 days from the entry of judgmert,
unless otherwise ordered by the Court. Judgment was entered
on December 8, 2003. Defendant Fort Jackson’s Bill of Cost
was timely filed on January 7, 2004.
Plaintiffs further argue in objection to the Bill of Costs
that Defendant Fort Jackson is not a prevailing party. This
objection is also without merit. It is clear that Defendant Fort
Jackson is the prevailing party. For the purposes of awarding
costs under Rule 54(d), the prevailing party is generally one
in whose favor judgment is rendered by the court. See Amarel
v. Connell, 102 F.3d 1494, 1523 (9" Cir. 1997) (quoting
d’Hedouville v. Pioneer Hotel Co., 552 F.2d 886 (9" Cir.
1977)). Judge King’s order specifically directs that Judgment
should be entered against Plaintiffs in favor of Defendant Fort
Jackson. Judgment was entered as such. Thus, Defendant Fort
Jackson is the prevailing party in this action and is entitled to
costs under Rule 54(d).
Plaintiffs, more specifically, objects to costs associated
with the depositions of Plaintiffs, Velma Jones, Kenneth
Credicos, Major John N. Ohlweiler and Major Randall
46a
Bagwell. Defendant Fort Jackson seeks court reporter fees of
$3,076.31 for deposition transcripts.
Fees incurred in obtaining deposition transcripts may be
recoverable under 28 U.S.C. § 1920(2). See Association of
Flight Attendants v. Horizon Air Indus. Inc., 976 F.2d 541,
551 (9" Cir. 1992). Deposition costs are recoverable only if
necessarily obtained for use in the case. See Alflex, 914 F.2d
at 177-78. In this case, Defendant Fort Jackson used the
above-referenced deposition transcripts in support of its
Motions for Summary Judgment. The deposition transcripts
were reasonably and necessarily obtained for use in this case.
Accordingly, the court finds that the court reporter fees
requested by Defendant Fort Jackson are permissible under 28
U.S.C. § 1920(2).
Defendant Fort Jackson seeks photocopy charges of
$1,770.23.
28 U.S.C. § 1920(4) permits taxation for the copies of
papers “necessarily obtained for use in the case” and does not
require that the copied document be introduced into the
record. Haagen-Dazs Company, Inc. v. Rainbow Gourmet Ice
Creams, Inc. , 920 F.2d 587, 588 (9 Cir. 1990). The practice
of this court is to award $.15 per page for copies made in-
house’ that were necessarily obtained for use in the case. This
court generally awards copying costs as charged by
commercial copiers and/or courts. Thus, the Court allows the
costs sought for photocopying in the amount of $1,770.23.
? Defendant Fort Jackson seeks in-house copying charges of
$.10.
47a
Having carefully reviewed Defendant Fort Jackson’s Bill
of Costs, Amended Bill of Costs, the attached exhibits, and
counsel’s affidavit verifying that the costs were actually and
necessarily incurred in the action, the Court finds that
Defendant Fort Jackson is entitled to recover all of its costs
claimed.
CONCLUSION
Based on the foregoing, the Court RECOMMENDS that
Plaintiffs’ objections to the Bill of Costs be DENIED and that
costs be taxed against Plaintiffs Marshall Kenneth Flowers
and Anna Flowers and for Defendant Fort Jackson in the
amount of $4,901.23.
IT IS SO FOUND AND RECOMMENDED.
Dated: Honolulu, Hawaii, FEB 09 2004
/s/
KEVIN S.C. CHANG
UNITED STATES MAGISTRATE JUDGE
48a
APPENDIX H
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
[Filed January 26, 2004]
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs,
Ve
FIRST HAWATIAN BANK,
Defendant.
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs,
V.
UNITED STATES ARMY,
25" INFANTRY DIVISION (L);
and FORT JACKSON FEDERAL
CREDIT UNION,
Defendants.
49a
ORDER DISMISSING CROSS-CLAIMS AND
GRANTING MOTION TO EXTEND DEADLINE TO
FILE NOTICE OF APPEAL
Plaintiffs have filed a Motion to Extend Deadline to File
a Notice of Appeal Pursuant to Rule 58 of the Federal Rules
of Civil Procedure. Under Local Rule 7.2(d), the Court finds
the matter suitable for decision without an oral hearing. For
the reasons set forth, the Court DISMISSES any remaining
cross-claims and GRANTS Plaintiffs’ motion to extend the
time for appeal.
DISCUSSION
Final Judgment in these consolidated cases was entered on
December 8, 2003.' Because the United States is a party, the
time to appeal -- absent a properly-filed tolling motion under
Fed. R. App. P. 4(a)(4) -- expires 60 days from entry of
judgment. See Fed. R. App. P. 4(a)(1)(B). Plaintiffs filed a
' To the extent the pendency of cross-claims for contribution
or indemnity would affect the finality of judgment, the Court
DISMISSES the cross-claims. The cross-claim by Defendant Fort
Jackson Federal Credit Union against the United States of America
is DISMISSED without prejudice as MOOT because the Court has
earlier dismissed Plaintiffs’ claims against Fort Jackson FCU; if
Fort Jackson FCU is not liable, then it need not seek contribution
or indemnity.
Likewise, the cross-claim by Defendant First Hawaiian Bank
against the United States is DISMISSED because, as set forth in the
Court’s earlier order, the United States is protected from liability
for damages under the Feres doctrine. See Stencel Aero Engineering
Corp. v. United States, 431 U.S. 666, 673 (1977) (holding that
third-party indemnity against the government is limited by the
rationale of Feres where the injured party is a service person).
50a
Fed. R. Civ. P. 60 motion for reconsideration (a tolling
motion under Fed. R. App. P. 4(a)(4)(vi)) on December 15,
2003, which this Court denied on January 5, 2004. Without
more, the time for appeal would presumably expire 60 days
thereafter (on or about March 5, 2004).
Meanwhile, Plaintiffs filed a Motion for Attorneys Fees
and Non-taxable Costs on December 22, 2003. Those
proceedings are ongoing and could conceivably extend
beyond March 5, 2004 (a hearing is presently set for January
30, 2004 before Judge Chang sitting as a special master).
Ordinarily, attorneys fees matters are collateral to the merits
of a case and any appeal to a circuit court from a final
decision on attorneys fees would require a separate notice of
appeal. See Fed. R. Civ. P. 58(c)(1); Budinich v. Becton
Dickinson & Co., 486 U.S. 196 (1988).
However, Fed. R. App. P. 4(a)(4) provides in pertinent
part:
(A) If a party timely files in the district court any of
the following motions under the Federal Rules of Civil
Procedure, the time to file an appeal runs for all
parties from the entry of the order disposing of the last
such remaining motion:
(iii) for attorney’s fees under Rule 54 if the district
court extends the time to appeal under Rule 58
(emphasis added).
In turn, Fed. R. Civ. P. 58 provides in pertinent part:
(c) Cost or Fee Awards.
Sia
(1) Entry of judgment may not be delayed, nor the
time for appeal extended, in order to tax costs or
award fees, except as provided in Rule 58(c)(2).
(2) When a timely motion for attorney fees is made
under Rule 54(d)(2), the court may act before a notice
of appeal has been filed and has become effective to
order that the motion have the same effect under
Federal Rule of Appellate Procedure 4(a)(4) as a
timely motion under Rule 59.
By the instant motion, Plaintiffs apparently seek under
Fed. R. App. P. 4(a)(4)(iii) and Fed. R. Civ. P. 58 to treat
the motion for attorneys fees as a tolling motion for purposes
of appeals from final judgment and rulings on attorneys fees.
Commentary to the 1993 amendments to Rule 58 indicates
that
in many cases it may be more efficient to decide fee
questions before an appeal is taken so that appeals
relating to the fee award can be heard atthe same time = -
as appeals relating to the merits of the case. [Fed. R.
App. P. 4(a)(4)(iii)] permits, but does not require, the
court to delay the finality of the judgment for appellate
purposes under revised Fed. R. App. P. 4(a) until the
fee dispute is decided. To accomplish this result
requires entry of an order by the district court before
the time a notice of appeal becomes effective for
appellate purposes. If the order is entered, the motion
for attorney’s fees is treated in the same manner as a
timely motion under Rule 59.
Given the lengthy proceedings in these cases, the Court
concludes that it would be more efficient to resolve questions
of attorneys fees before an appeal is taken so that any appeal
52a
relating to any fee award (or lack thereof) can be heard at the
same time as any appeals regarding the merits of these
consolidated cases.
CONCLUSION
Therefore, under Fed. R. Civ. P. 58(c)(2), Plaintiffs’
motion for attorneys fees is to be treated in the same manner
as a timely motion under Fed. R. Civ. P. 59. Plaintiffs seek
an extension of 30 days in the time to appeal. Accordingly,
the time for appeal shall be 30 days from the final district
court decision on the Plaintiffs’ motion for attorneys fees.
So as not to affect the finality of judgment, the Court also
DISMISSES any remaining cross-claims between Defendants.
IT IS SO ORDERED.
Dated: Honolulu, Hawaii, January 26, 2004.
/sf
SAMUEL P. KING
UNITED STATES DISTRICT JUDGE
53a
APPENDIX I
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
[Filed January 5, 2004]
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs,
¥.
FIRST HAWAIIAN BANK,
Defendant.
oe ee were ee
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiffs, ©
¥,
UNITED STATES ARMY,
25" INFANTRY DIVISION (L);
and FORT JACKSON FEDERAL
CREDIT UNION,
Defendants.
Net Neem pet amet Nee Nee Nee Nee Smee? ree Neue Nee? Sue? Nee? Stu See) Seu” See Se” Sete”
54a
ORDER AMENDING ORDER OF DECEMBER 5, 2003
AND DENYING MOTION FOR RECONSIDERATION
The Court’s Order of December 5, 2003 is amended as
follows: On page 13, line 1, replace “will” with “with” so the
sentence reads “Flowers presumably then retired with full
military benefits.”
The Court has reviewed Plaintiffs’ Motion for
Reconsideration of the December 5, 2003, Order and the
oppositions of the Defendants. A motion for reconsideration
must demonstrate either (a) discovery of new material facts
not previously available; (b) intervening change in law; or
(c) manifest error of law or fact. LR 60.1. Applied here, the
new evidence cited was not material and does not change the
Court’s conclusions. There has been no intervening change in
law nor any manifest error of law or fact. The motion for
reconsideration is DENIED.
IT IS SO ORDERED.
Dated: Honolulu, Hawaii, January 5, 2004.
/s/
SAMUEL P. KING
UNITED STATES DISTRICT JUDGE
55a
APPENDIX J
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIV. NO. 99-00335SPK/KSC
[Filed December 8, 2003]
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiff(s),
FIRST HAWAIIAN BANK,
)
)
)
)
V. )
)
)
Defendant(s). )
)
JUDGMENT IN A CIVIL CASE
Decision by Court. This action came for hearing before the
Court. The issues have been heard and a decision has been
rendered.
IT IS ORDERED AND ADJUDGED that pursuant to the,
“Order Granting in Part And Denying In Part Motions For ~
Summary Judgment And Ruling On Other Pending Matters”,
by the Honorable Senior U.S. District Judge Samuel P. King,
filed December 5, 2003, Judgment is entered in favor of
56a
Plaintiffs and against Defendant First Hawaiian Bank in the
amount of two hundred dollars ($200.00).
December 8, 2003 WALTER A.Y.H. CHINN
Date Clerk
/s/
(By) Deputy Clerk
57a
APPENDIX K
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIV. NO. 01-412SPK/BMK
[Filed December 8, 2003]
MARSHALL KENNETH FLOWERS
and ANNA FLOWERS,
Plaintiff(s),
Vv.
UNITED STATES ARMY,
25" INFANTRY DIVISION (L);
and FORT JACKSON FEDERAL
CREDIT UNION,
)
)
)
)
)
)
)
)
)
)
Defendant(s). )
)
Decision by Court. This action came for hearing before the
Court. The issues have been heard and a decision has been
rendered.
IT IS ORDERED AND ADJUDGED that pursuant to the,
“Order Granting in Part And Denying in Part Motions for
Summary Judgment and Ruling on Other Pending Matters”,
by the Honorable Senior U.S. District Judge Samuel P. King,
58a
filed December 5, 2003, Judgment is entered against Plaintiffs
and in favor of Defendant Fort Jackson FCU.
December 8, 2003. WALTER A.Y.H. CHINN
Date Clerk
/s/
(By) Deputy Clerk
59a
APPENDIX L
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
[Filed December 5, 2003]
MARSHALL KENNETH FLOWERS and
ANNA FLOWERS,
Plaintiffs,
V.
FIRST HAWATIAN BANK,
Defendant.
MARSHALL KENNETH FLOWERS and
ANNA FLOWERS,
Plaintiffs,
Vv.
UNITED STATES ARMY, 25th INFANTRY
DIVISION (L); and FORT JACKSON FEDERAL
CREDIT UNION,
Defendants.
ee Nee eee i ie ie i es
60a
JUDGES: SAMUEL P. KING, UNITED STATES
DISTRICT JUDGE.
ORDER GRANTING IN PART AND DENYING IN
PART MOTIONS FOR § » «MARY JUDGMENT AND
RULING ON OTHE. “ENDING MATTERS
OVERVIEW
In the latest set of motions in this case, the “Bank
Defendants” (First Hawaiian Bank and Fort Jackson Federal
Credit Union) have filed several motions for summary
judgment on various aspects of the remaining claims.
Plaintiffs Marshall and Anna Flowers have also filed a motion
for summary judgment on liability under their claim under the
Right to Financial Privacy Act, 12 U.S.C. § 3401, et seq.
They have also filed a motion under Fed. R. Civ. P. 56(f) to
postpone summary judgment proceedings for further
discovery, which the Court will consider as part of the
Plaintiffs’ opposition to the various motions.
The motions at issue are: (1) Fort Jackson FCU’s Motion
for Partial Summary Judgment Re. RFPA Claims; (2) Fort
Jackson FCU’s Motion for Partial Summary Judgment Re.
Punitive Damages (substantive joinder by First Hawaiian
Bank); (3) Fort Jackson FCU’s Motion for Partial Summary
Judgment Re. Tortious Interference with Prospective
Economic Advantage (substantive joinder by First Hawaiian
Bank); (4) First Hawaiian Bank’s Motion for Partial Summary
Judgment On Claims for Attorneys’ Fees; (5) First Hawatian
Bank’s Motion for Summary Judgment as to all Claims for
Compensatory Damages (substantive joinder by Fort Jackson
FCU); and (6) Plaintiffs’ Motion for Partial Summary
Judgment.
61a
For the reasons to follow, the Court GRANTS motions 1,
2, 3 and 5. The Court GRANTS in part and DENIES in part
motions 4 and 6. The Court DENIES Plaintiffs’ request for a
continuance under Rule 56(f) because the issues involved are
primarily questions of law on undisputed facts, because there
has been ample time for discovery, and because there has
been no showing that further discovery could lead to a
different conclusion. Therefore, there being no triable issues
of fact, judgment shall enter against Plaintiffs and in favor of
Defendant Fort Jackson FCU. Judgment shall enter in favor
of Plaintiffs and against Defendant First Hawaiian Bank in the
amount of two hundred dollars ($200.00).
BACKGROUND
The basic factual and procedural background of this case
is set forth in this Court’s order at Flowers v. First Hawaiian
Bank, 85 F. Supp. 2d 993 (D. Haw. 2000), in the Ninth
Circuit’s opinion at Flowers v. First Hawaiian Bank, 295
F.3d 966 (9th Cir. 2002), and in this Court’s recent decision
in Flowers v. First Hawaiian Bank, 289 F. Supp. 2d 1213,
2003 U.S. Dist. LEXIS 20101, 2003 WL 22533140 (D. Haw.
Oct 31, 2003). Plaintiff Marshall Flowers brought these suits
primarily under the Right to Financial Privacy Act, 12 U.S.C.
§ 3401 et seq. (“RFPA”), after Defendants First Hawaiian
Bank and Fort Jackson Federal Credit Union provided bank
records to the United States Army after receiving military
subpoenas during Article 32 investigatory proceedings against
then-Sergeant-Major Flowers. This Court dismissed the suit
against First Hawaiian Bank, but the Ninth Circuit remanded
to this Court after determining that an Article 32 subpoena
was invalid and that litigation and grand jury exemptions
under 12 U.S.C. §§ 3413(e) and 3413(i) did not apply. See
Flowers, 295 F.3d at 970-77.
62a
After remand, this Court consolidated the First Hawaiian
Bank matter (Civ. No. 99-00335) with a similar matter
involving Fort Jackson FCU (Civ. No. 01-412). Fort Jackson
FCU consented to personal jurisdiction in Hawaii and the
cases were consolidated upon Fort Jackson FCU’s motion to
consolidate. Subsequently, in recent orders, this Court
dismissed constitutional claims and claims by Anna Flowers
against Fort Jackson FCU. This Court also dismissed claims
for damages against the United States based upon Feres v.
United States, 340 U.S. 135, 146, 95 L. Ed. 152, 71 S. Ct.
153 (1950) and its progeny. See Flowers, 289 F. Supp. 2d at
1217, 2003 U.S. Dist. LEXIS 20101, 2003 WL 22533140, at
*8. The instant order addresses remaining claims.
The Army’s underlying Article 32 proceedings are
collateral to the RFPA claims at issue in the case. The Court’s
role here is not to resolve or even to address the validity of
the past larceny charges against Marshall Flowers. It has
become apparent, however, that those charges and
proceedings, although collateral, are nevertheless relevant to
the primary remaining issues (causation and damages) in this
suit. Plaintiffs and Defendants have provided much of the
evidence or procedural history of those military proceedings
as part of this RFPA case. Marshall Flowers spends much
effort discussing those allegations and attempting to refute
some of the evidence. He contends that the Bank Defendants’
financial disclosures -- not the underlying military
proceedings -- caused him damages, to wit, his leaving the
Army two years short of his goal of 30 years of service. The
Court therefore sets forth some of the relevant background of
the charges and the underlying procedural history as
necessary to explain why the financial disclosures, even if
either Bank Defendant violated the terms of the RFPA,
nevertheless are not responsible for Plaintiffs’ alleged
damages.
63a
The evidence in the record provides, among other things,
as follows:'
In December of 1997, SGM Marshall Flowers was
apprehended for alleged shoplifting at the military Post
Exchange at Schofield Barracks, Hawaii, after he was
observed apparently shoplifting on a security video. [See
Plank Decl.; Hollis Decl; Exhibits C, F, and L to Concise
Statement of Facts in Support of Defendant First Hawaiian
Bank’s Motion for Summary Judgment as to all Claims for
Compensatory Damages (“Motion 5 CSF”)}.
Prior to December of 1997, the Army had been
investigating Flowers because he had returned duplicate items
on multiple occasions to Army and Navy Exchanges, often
without receipts, in exchange for cash. [Motion 5 CSF, Exh.
F, G]. From December 1997 until March 1998, a military
Criminal Investigation Division (“CID”) investigated the
conduct of both Marshall and Anna Flowers. [/d. Exh. K].
The evidence obtained by the CID appears to be substantial,
although there apparently is or was some question about some
of its admissibility in a subsequent criminal trial. [/d. at 16].
Among other evidence, a search of his residence found
numerous duplicate and unopened electronic, computer, and
other high-value items. Also found were multiple refund
receipts and what is described as “homemade” refund receipts
on his computer. [/d., Exhs. K & O}.
In April of 1998, the Army filed 42 charges of larceny
against Flowers. [/d. Exh. M]. An Article 32 investigation
' Although Plaintiffs attempt to dispute some of the details, the
evidence is uncontradicted in any pertinent part. Any disputes of
fact are not material to the issues now before the court.
64a
was begun but proceedings were postponed at the request of
defense counsel until June of 1998. [/d. Exh. N].
On June 19, 1998, a DD Form 453 subpoena was issued
by the United States Army to First Hawaiian Bank requesting
“all bank records, # 25478010, to include all deposits and
withdrawals.” This account belonged to Marshall and Anna
Flowers. It stated that it was issued for an “Article 32
hearing” and cites Section 847 of the Uniform Code of
Military Justice regarding punishment for failure to comply
with the subpoena as well as a “Manual for Courts-Martial
R.C.M. 703(e)(2)(G).” [/d. Exh. S].
First Hawaiian Bank notified Marshall Flowers of the
subpoena by letter dated July 1, 1998, although it did not do
sO pursuant to the RFPA nor did it otherwise comply with the
RFPA. [Moriki Decl.; Nakasone Decl; Motion 5 CSF,
Exhibits F and JJ]. The notification appears to have been done
as a matter of courtesy. First Hawaiian Bank did not actually -
produce documents to the Army until August 12, 1998.
[Nakasone Decl.; Motion 5 CSF, Exhibits G and H].
On June 24, 1998, a DD Form 453 subpoena was issued
by the United States Army to Fort Jackson FCU in South
Carolina requesting “all bank account information since | Jan
97, to include # 582593.” It also cited Section 847 of the
Uniform Code of Military Justice regarding punishment for
failure to comply with the subpoena as well as a “Manual for
Courts-Martial R.C.M. 703(e)(2)(G).” [Exh. B to Concise
Statement of Facts in Support of Fort Jackson FCU’s Motion
for Partial Summary Judgment Re. RFPA Claims (“Motion
1 CSF”)j. The subpoena differed on its face from the
subpoena issued to First Hawaiian Bank because it stated that
the documents were for “a General court-martial of the
“United States ... appointed by MG James T. Hill to provide
65a
evidence in the matter of United States v. SGM Marshall
Flowers.” [/d.| In contrast, the subpoena issued to First
Hawaiian Bank was stated to be for “an Article 32 hearing,”
which is preliminary to-a court-martial proceeding. [/d. Exh.
C}.
There appears to be no dispute that when the Fort Jackson
FCU subpoena was issued there was not as yet any actual
General Court-Martial proceeding ongoing (except perhaps to
the extent an Article 32 could be considered as a necessary
prerequisite to -- and therefore part of -- a court-martial).
Perhaps the Army only intended to use the documents if the
proceedings reached the court-martial stage, or perhaps the
subpoena was wrong. The deposition testimony of Major
Ohlweiler, the officer who signed both subpoenas, indicates
the Fort Jackson FCU subpoena contained erroneous
language. [/d. Exh. D (“The paralegal typed it out and I
signed it, and he or she, and I don’t remember who it was,
wrote General Court-Martial rather than Article 32")]. In any
event, there is no evidence that anyone from Fort Jackson
FCU knew (or had reason to know) that the documents were,
at that point anyway, for an Article 32 hearing rather than for
a General Court-Martial. A cover letter from Ohlweiler to
Fort Jackson FCU accompanying the subpoena stated that
“SGM Flowers is currently facing a Court-Martial for 42
specifications of larceny.” [Supplemental CSF in Support of
Fort Jackson FCU’s Reply Memorandum re: Punitive
Damages and RFPA Claims, Exh. B]. Fort Jackson FCU
complied with the subpoena by mailing credit union account
statements to the Army on July 2, 1998. [/d. Exh. A].
An Article 32 hearing was conducted from June 25 to
June 26, 1998. On July 16, 1998, the Army investigating
officer issued a report reviewing the evidence and
recommended that the charges against SGM Flowers be
66a
adjudicated in a trial by General Court-Martial. [Motion 5
CSF, Exh. O]. The report does not mention financial records,
and all evidence indicates that the financial records were not
used (or even received by the Army) in that Article 32
proceeding. [See, e.g., id., Exh. D (deposition testimony of
General James Hill); Exh. F at 72-74, 92-93 (deposition
testimony of Major Ohlweiler)].
_ Marshall Flowers was represented at the Article 32
hearing by military lawyers and civilian lawyer Charles
Gittins. Mr. Gittens specializes in military defense cases and
is known for handling “high profile” cases involving charges
against, among others, the former Sergeant-Major of the
Army and the Navy Commander in the U.S.S. Greenville
submarine incident with the Japanese fishing vessel Ehime
Maru. [/d., Exh. F, at 81-82].
After the Article 32 hearing, Mr. Gittens contacted then-
Capt. Ohlweiler or Capt. Bagwell, the Army’s prosecutors for
the proceeding, about “cutting a deal.” Gittens told the Army
that he was interested in “saving Sergeant Major Flowers’
retirement, and that was his top priority, and ... wanted to
propose that [the Army] would dismiss the charges and that
Sergeant Major Flowers would accept punishment under
Article 15, and would immediately submit his retirement.”
[/d., at 82}. Gittins prepared a “Memorandum of Agreement
for Alternative Disposition of Charges,” under which the
Army would withdraw the charges and Flowers would accept
non-judicial punishment under Article 15 of the UCMJ and
make an immediate request for retirement with leave to begin
on September 1, 1998. [/d., Exh. B]. Flowers signed the
agreement on June 26, 1998; the Army signed it on August 4,
1998. [/d.]
- 67a
At some point thereafter, Flowers chose instead to
proceed with the court-martial. This was against the advice of
his lawyers. Army defense counsel told Flowers, after
consultation with other military lawyers and Mr. Gittins, that
“disposition by Article 15 is a real victory for the defense”
and that “Given the videotape evidence against you, it is very
unlikely that you will be completely acquitted.” [/d. Exh. P]
Counsel advised “I can find no reason for you to demand trial
by court-martial in this case. As your legal advisor, |
genuinely believe demanding a trial by court-martial is
irresponsible and totally unsound ... I urge you to reconsider
and accept the article 15 offered to you in this case.” [/d.]
Although it is not exactly clear from the present record, it
appears that Flowers accepted the advice. In any event, a
second “Memorandum of Agreement for Alternative
Disposition of Charges” was signed by Flowers and his
lawyer, Charles Gittins, on August 22, 1998 and by the Army
' on August 28, 1998. [/d. Exh. Y].
An Article 15 hearing was then held on August 28, 1998.
The proceedings allow an accused to present matters in
defense of the charges or to mitigate punishment. Flowers and
military defense counsel attended, but apparently did not
present any defense or evidence. [Exh. C at 184, F at 98-
100]. Flowers was found to have committed several acts in
violation of Article 121 (larceny) of the UCMJ, and
punishment was imposed in the form of forfeiting $1,788 per
month for two months and receiving a formal letter of
reprimand. {Exh. W]. The records released by First Hawaiian
Bank and Fort Jackson FCU that are the subject of this action
were not presented in the Article 15 proceeding. [Exh. F at
98-100].
Flowers appealed the Article 15 punishment. [Exh. Y].
(As part of the appeal, Flowers treats the financial
68a
information as exculpatory as he argued: “Documents were
subpoenaed referencing my bank account. The withholding of
these documents at the Article 32 investigation prejudiced the
outcome of this case.”) [Exh. Y, at 3]. The appeal was denied
by General Hill. [Exh. D at 51, 60].
Marshall Flowers did not immediately submit retirement
papers as set forth in the Memorandum of Agreement.
According to an affidavit of Marshall Flowers, the Article 15
punishment was “withdrawn” and, on November 13, 1998,
the charges were re-preferred. [Affidavit of Marshall K.
Flowers “in Opposition to Defendant First Hawaiian Bank
[sic] Motion for Summary [sic] Re. All Claims,” at 5-6]. A
second Article 32 hearing was eventually held on March 18
and 19, 1999. The result of the second hearing appears to
have been favorable to Flowers. [/d. at 6]. The
recommendation apparently was for “administrative
separation” or “administrative disposition” although General
Hill and military prosecutors had apparently decided to
proceed with a General Court-Martial anyway. [Motion 5
CSF, Exh. D at 68].
At this point, Flowers’ term of service expired on May
13, 1999. As an enlisted soldier, to remain in the service, he
needed to reenlist. On April 27, 1999, Flowers’ immediate
supervisor imposed a formal “bar to re-enlistment,”
effectively ending his military career at 28 years. {Motion 5
CSF, at Exh. D, Exh. Z]. The bar to re-enlistment cited the
previous non-judicial punishment (the Article 15 proceedings
and findings of violations of Article 121). The commanding
officer indicated that he “only recently learned that a bar had
not been imposed previously, as would have been
appropriate.” [/d. Exh. Z]. General Hill approved the bar and
testified that such a bar should have been imposed long before
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as a matter of course once charges were preferred. [/d. Exh.
D at 73}.
On May 27, 1999, military counsel on behalf of Flowers
appealed the bar to re-enlistment through Army channels. [/d.
Exh. AA]. The appeal was denied on June 21, 1999. [/d.
Exh. BB]. General Hill then directed that Flowers had 14
days to submit his retirement. [/d. Exh. CC]. Flowers
presumably then retired will full military benefits. He has
claimed on several occasions that he was forced to retire with
28 years of service when his goal was 30 years.
ANALYSIS
1. Fort Jackson FCU’s Motion for Partial Summary
Judgment Re. RFPA Claims.
Fort Jackson FCU moves for partial summary judgment
on claims brought under the RFPA, contending that the
subpoena issued to Fort Jackson FCU falls within a “litigation
exception” to the RFPA under 12 U.S.C. § 3413(e). Section
3413(e) provides:
Disclosure pursuant to Federal Rules of Criminal
Procedure of comparable rules of other courts.
Nothing in this chapter shall apply when financial
records are sought by a Government authority under
the Federal Rules of Civil or Criminal Procedure or
comparable rules of other courts in connection with
litigation to which the Government authority and the
customer are partics.
This exception was litigated in the prior proceedings. The
Court applied it to bar the RFPA claim against First Hawaiian
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Bank but the Ninth Circuit held that an Article 32 subpoena,
although it fulfilled all other elements of the exception, was
not issued “under ... comparable rules of other courts”
because the UCMJ does not authorize subpoenas in Article 32
proceedings to civilian parties. Flowers, 295 F.3d at 972-73.
To protect itself, the Ninth Circuit reasoned, First Hawaiian
Bank could have obtained a certificate of compliance from the
Army pursuant to the RFPA. /d. at 975.
Fort Jackson FCU, however, points out that the subpoena
issued to it by the Army -- unlike the subpoena issued to First
Hawaiian Bank -- was a General Court Martial subpoena.
Indeed, the Ninth Circuit indicated that this might make a
difference because the UCMJ does specifically authorize
subpoenas in court-martials. See id. at 972 (“Our conclusion
might be otherwise if the subpoena were issued in connection
with a pending court-martial proceeding ... The UCM,
however, specifically authorizes the issuance of a subpoena in
court-martial proceedings. No such authority exists for the
issuance of a supoena in an Article 32 proceeding.”).
Fort Jackson FCU argues that this distinguishes the Ninth
Circuit Flowers opinion. Even after Flowers, a General
Court-Martial subpoena still falls within the “litigation
exception” to the RFPA. The only complication is that
apparently this was NOT yet a General Court-Martial; the
Fort Jackson FCU subpoena appears to have been wrong.
Facially, however, the subpoena was one that fits within an
exception. There was no way Fort Jackson FCU would have,
or even should have, known that the underlying proceeding
had not yet reached courtmartial stage. As stated earlier, the
Army in the subpoena’s cover letter reiterated that the
information was needed for a General Court Martial. Even if
the Army incorrectly listed the subpoena, perhaps
prematurely, as being for a General Court Martial, this is not
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Fort Jackson FCU’s fault. See Roberts v. Sabine State Bank
& Trust Co., 226 F.3d 374, 376 (Sth Cir. 2000) (applying
section 3413(e) and finding bank not liable under the RFPA
for disclosures made during a General Court Martial even if
the Army violated its own regulations).
Despite the Plaintiffs’ arguments to the contrary, there is
absolutely no evidence that the Fort Jackson FCU subpoena
was “manufactured” or otherwise fraudulently created after
the Ninth Circuit’s opinion in Flowers so as to fit within the
language of the opinion. All the evidence indicates that the
subpoena in the record is the subpoena issued on June 24,
1998 that led to the financial disclosures at issue in this
action. Because the subpoena facially met the requirements
under section 3413(e) and because there is absolutely no
indication that Fort Jackson FCU had reason to know that the
subpoena might have been improper, the Court GRANTS
Fort Jackson FCU’s motion for partial summary judgment.
The subpoena fits squarely within the “litigation exception”
to the RFPA under 12 U.S.C. § 3413(e).
2. Fort Jackson FCU’s Motion for Partial Summary
Judgment Re. Punitive Damages (Substantive Joinder
by First Hawaiian Bank).
Both Bank Defendants ask the Court to dismiss the
punitive damage claims under 12 U.S.C. § 3417(a)(3) because
there is no evidence of “willfulness.” The Court agrees.
Section 3417(a) provides:
(a) Liability of agencies or departments of United
States or financial institutions
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Any agency or department of the United States or
financial institution obtaining or disclosing financial
records or information contained therein in violation
of this chapter is liable to the customer to whom such
records relate in an amount equal to the sum of-
(1) $100 without regard to the volume of records
involved;
(2) any actual damages sustained by the customer
as a result of the disclosure;
(3) such punitive damages as the court may allow,
where the violation is found to have been willful
or intentional [emphasis added]; and
(4) in the case of any successful action to enforce
liability under this section, the costs of the action
together with reasonable attorney’s fees as
determined by the court.
“Willfulness” for purposes of punitive damages under the
RFPA requires actions that are “more than gross negligence”
and “so patently egregious and unlawful that anyone
undertaking the conduct should have known it unlawful.”
Taylor v. Dep't of the Air Force, 18 F. Supp. 2d 1184, 1192
(D. Colo. 1998) (citing Andrews v. Veterans Admin., 838
F.2d 418, 425 (10th Cir. 1988)).
On the present record, there is no evidence coming close
to this standard. Every indication was, prior to the Ninth
Circuit’s opinion, that it was proper for financial institutions
to comply with military subpoenas without fear of violating
the RFPA. See, e.g., Russell v. Department of the Air Force,
915 F. Supp. 1108 (D. Colo. 1996) (addressing use under
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RFPA of financial records obtained during Article 32
proceedings and appearing to treat such subpoenas as proper).
Even this Court agreed with the interpretation that an Article
32 subpoena fell within the exception. Although the Ninth
Circuit has clarified the law in this area, the Bank Defendants
cannot be held to have “willfully” violated the RFPA by
relying on facially valid military subpoenas. Indeed, First
Hawaiian Bank did not release any information until after it
sent notification to the Plaintiffs by letter. With either the
“Article 32 subpoena” or the General Court Martial Subpoena
at issue here, there was no indication that the subpoenas were
improper.
Moreover, if the section 3413(e) exception applied, there
was no reason to obtain a certificate of compliance under 12
U.S.C. § 3411 because “nothing in [the RFPA] shall apply
where records are sought” in litigation between the
Government and the customer under section 3413(e). That is,
the certificate of compliance sections of the RFPA did not
apply. The Bank Defendants were faced with subpoenas
directing that failure to comply is a crime against the United
States and is punishable by a fine of not more than $500 or
imprisonment for six months. Good faith compliance with the
subpoenas by the Bank Defendants was certainly prudent and
not reason to impose punitive damages.
The only question is whether to allow the Plaintiffs more
time for discovery under Rule 56(f) to seek evidence of
willfulness. But there has been no showing of any possibility
of such evidence. The relevant discovery has occurred.
Plaintiffs have obtained depositions or documents, or had an
opportunity to discover such evidence, from all the First
Hawaiian Bank and Fort Jackson FCU employees who had
contact or responsibility with compliance with the particular
subpoenas at issue. Further discovery in this regard from the
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Army witnesses would not be relevant to the state of mind of
the Bank Defendants. At best, Plaintiffs have some hope that
evidence of egregiousness will develop and this is not enough.
See Continental Maritime of San Francisco, Inc. v. Pac.
Coast Metal Trades Dist. Council, 817 F.2d 1391, 1395 (9th
Cir. 1987) (“The mere hope that further evidence may
develop ... is an insufficient basis for a continuance under
Fed. R. Civ. P. 56(f)”); Terrell v. Brewer, 935 F.2d 1015,
1018 (9th Cir. 1991) (reasoning that the party opposing
summary judgment bears burden of showing that evidence
sought actually exists and that a denial of a Rule 56(f)
application is proper where the evidence sought is almost
certainly nonexistent and the object of pure speculation). The
Rule 56(f) request is DENIED.
3. Fort Jackson FCU’s Motion for Partial Summary
Judgment Re. Tortious Interference with Prospective
Economic Advantage (Substantive Joinder by First
Hawaiian Bank).
The Bank Defendants ask the Court to dismiss the TIPEA
claim. According to the operative complaint’s allegations, this
claim was directed only at the federal defendants (who were
dismissed a few weeks ago under Feres). This is true, and the
cause of action fails on this basis alone. Even if not, this tort
claim appears to be barred by the RFPA’s exclusivity of
remedies provision. See 12 U.S.C. § 3417(d) (“The remedies
and sanctions described in this chapter shall be the only
authorized judicial remedies and sanctions for violations of
this chapter”).?
* This provision also bars any remaining state tort claim for
intentional or negligent infliction of emotional distress.
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In any event, the TIPEA claim fails. The theory would be
that Defendants tortiously interfered with Flowers’ last two
years of military service (i.e., the additional two years that he
says he could have obtained if he retired at 30 years rather
than 28 years of service). But nothing the Defendants did in
releasing financial records, even assuming a wrongful release,
caused Flowers to have to retire early. The early retirement
was caused by the larceny charges or other actions of the
Army (e.g., the bar to re-enlistment). Flowers has even
argued that there was nothing wrong with his financial
records and nothing in them to support the larceny charges.
That is, he essentially argues that the financial records were
helpful to defending himself against the Army’s charges. The
TIPEA claims fail for lack of causation.
4. First Hawaiian Bank’s Motion for Partial Summary
Judgment On Claims for Attorneys’ Fees.
First Hawatian Bank seeks a ruling that Plaintiff is not
entitled to attorneys’ fees as part of his damages. This is a
valid argument. Because Flowers is pro se, U.S. Supreme
Court case law indicates that he cannot recover attorneys’ fees
as a prevailing party under 12 U.S.C. § 3417 (a)(4). See Kay
v. Ehrler, 499 U.S. 432, 435, 113 L. Ed. 2d 486, 111 S. Ct.
1435 (1991) (reasoning that “a pro se litigant who is not a
lawyer is not entitled to attorney's fees” in civil rights cases
and finding that fees are not appropriate even if the litigant is
an attorney).
First Hawaiian Bank also seeks a ruling that even the
attorneys fees (if any) incurred when Plaintiffs had an
attorney should be limited to the period before March 31,
2003, when First Hawaiian offered to admit to a violation of
the RFPA. (First Hawaiian and the Army have filed a
stipulation that there was a violation of the RFPA; It was
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signed by Judge Chang as a judicial admission.) Any fees for
after March 31, 2003 would be unreasonable because fees
could not have been incurred to prove liability for an RFPA
violation.
This argument is premature. There is no indication that an
attorney (such as the prior attorney Charles Brown) has
actually sought such fees. Although the argument may have
merit, whether attorneys may seek fees under section
3417(a)(4) for any success achieved in this action is not ripe.
If such an application is made by an attorney, it can be
addressed on a full record.
Therefore, the motion is GRANTED insofar as the Court
declares it will follow existing precedent in deciding that pro
se litigants are not entitled to attorneys fees as prevailing
parties. The motion is DENIED without prejudice as to the
remaining relief sought regarding other attorneys fees.
5. First Hawaiian Bank’s Motion for Summary Judgment as
to all Claims for Compensatory Damages (Substantive
joinder by Fort Jackson FCU).
The Bank Defendants seek summary judgment on the
Flowers’ claims for damages (other than the statutory
damages of $100 against First Hawaiian Bank). The
substantive joinder by Fort Jackson FCU is now moot because
the Court has already found that Fort Jackson FCU has no
RFPA liability.
First Hawaiian Bank contends that there is no evidence
that either Plaintiff (i.e., either Anna or Marshall Flowers)
suffered any actual damages. Plaintiffs can point to no
evidence of consequential damages from an unauthorized
financial disclosure (such as, for example, identity theft or
T7a
other tangible adverse financial or tax problems caused by the
disclosures). This argument is valid.
Marshall Flowers cannot prove that his allegedly forced
retirement had anything to do with the disclosures. The
records disclosed appear to be nothing more than bank
statements. True, bank statements contain personal
information. However, the undisputed evidence is that the
Army did not even have the records at the time of the first
Article 32 hearing. The information in the records had
nothing to do with the decision to prosecute Flowers, to
pursue an Article 32, to cause the Army to impose a bar to re-
enlistment, or otherwise to cause Flowers to retire early. The
Army’s determination to begin Article 32 proceedings against
Marshall Flowers preceded the release of financial records.
The Army’s recommendation to proceed with a General
Court-Martial had nothing to do with the release of records.
[See CSF 5, Exh. F at 72-74, 92-93; Exh. D, at 97.] Any
subsequent discipline the Army imposed had nothing to do
with the release of financial records. [See, Id. Exh. F at 98-
100, Exh. D at 79, 86]. There simply is no evidence that any
alleged damages could have been caused by First Hawaiian
Bank’s (or, for that matter, Fort Jackson FCU’s) release of
financial information. (If anything, the financial information
helped him or could have helped him if it is true that there
was nothing incriminating in the records as Flowers has
argued.)
Similarly, even if the Court accepts for purposes of this
motion that Anna or Marshall Flowers suffered emotional
distress over the events described here, the undisputed
evidence is that any emotional distress type damages would be
caused by the prosecution of his claims -- i.c., by the Army’s
decision to investigate and prosecute violations of the UCMJ
or to impose a bar to re-enlistment -- not by First Hawaiian
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Bank’s release of financial records. Litigation stress is not
recoverable as damages. E.g., Stoleson v. United States, 708
F.2d 1217, 1223 (7th Cir. 1983); Picogna v. Bd. of Ed., 143
N.J. 391, 671 A.2d 1035, 1038 (N.Y. 1996) (“the majority
of courts addressing litigation-induced stress have treated it as
a non-compensable component of damages”).
For similar reasons as discussed above, there is no reason
to postpone proceedings under Fed. R. Civ. P. 56(f) for
further discovery into causation. The Court can conceive of
no evidence that would create a genuine issue of fact that the
financial disclosures by First Hawaiian Bank would have
caused the Army to impose a bar to re-enlistment for SGM
Flowers, and there is nothing in the present record to indicate
as such. There is every indication that the Army’s decision to
end SGM Flowers’ career was independent of the technical
RFPA violations. There being no genuine issue of material
fact, the Court GRANTS First Hawaiian Bank’s Motion for
Summary Judgment, insofar as it seeks a finding that
Plaintiffs are not entitled to any damages under the RFPA in
excess of the statutory damages.
6. Plaintiffs’ Motion for Partial Summary Judgment.
Plaintiffs have also filed a summary judgment motion
seeking a determination that the Defendants are liable under
the RFPA. This motion has merit as to First Hawaiian Bank
but not as to Fort Jackson FCU as the Court has already
determined that Fort Jackson FCU is protected by the
litigation exception in 12 U.S.C. § 3413(e).
After the Ninth Circuit’s opinion, First Hawaiian Bank
filed a stipulation on April 9, 2003 (which the Court has
treated as a judicial admission) that it committed a violation
of the RFPA. Indeed, First Hawaiian Bank’s violation was
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mandated by the Ninth Circuit in its Flowers opinion. First
Hawaiian Bank, however, objects to any entry of judgment in
excess of $200, which would represent $100 in favor of each
Plaintiff.
The Court therefore GRANTS Plaintiff's motion for
partial summary judgment to the extent it asks the Court for
a finding of tiability on an issue that First Hawaiian Bank has
already admitted. There is no issue of fact that First Hawaiian
Bank is liable by statute towards Plaintiffs under 12 U.S.C.
§ 3417(a)(1).? The Court therefore GRANTS summary
judgment in favor of Plaintiffs and awards damages in the
amount of $200 ($100 to each Plaintiff).*
CONCLUSION
For the foregoing reasons, judgment shall enter against
Piaintiffs and in favor of Defendant Fort Jackson FCU.
> Again, Section 3417(a) provides in pertinent part:
(a) Liability of ... financial institutions
Any ... financial institution obtaining or disclosing financial
records or information contained therein in violation of this
chapter is liable to the customer to whom such records
relate in an amount equal to the sum of--
(1) $100 without regard to the volume of records
involved[.]
* Although the Court finds that Fort Jackson FCU is protected
by section 3417(a), if this finding was incorrect, Plaintiff Marshall
Flowers would be entitled to $100 from Fort Jackson FCU. As set
forth in an earlier order, Anna Flowers was not an account holder
with Fort Jackson FCU.
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Judgment shall enter in favor of Plaintiffs and against
Defendant First Hawaiian Bank in the amount of two hundred
dollars ($200.00).
All other pending matters are DENIED or are MOOT.
Because final judgment will enter, Plaintiffs’ motion to file an
interlocutory appeal (and corresponding ex parte motion to
shorten time) is not necessary. Plaintiffs’ November 22,
2003, appeal from a September 19, 2003 order of United
States Magistrate Judge Chang regarding filing a third
amended complaint and to enlarge the time for filing
dispositive motions is DENIED. The September 19, 2003
order was neither clearly erroneous nor contrary to law.
IT IS SO ORDERED.
Dated: Honolulu, Hawaii, December 5, 2003.
/s/
SAMUEL P. KING
UNITED STATES DISTRICT JUDGE
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APPENDIX M
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIV. NO. 99-00335SPK/KSC
CIV. NO. 01-412SPK/BMK
[Filed October 31, 2003]
MARSHALL KENNETH FLOWERS and
ANNA FLOWERS,
Plaintiffs,
¥.
FIRST HAWAIIAN BANK,
Defendant.
MARSHALL KENNETH FLOWERS and
ANNA FLOWERS,
Plaintiffs,
We
UNITED STATES ARMY, 25th INFANTRY
DIVISION (L); and FORT JACKSON
FEDERAL CREDIT UNION,
Defendants.
ee ee ee eee eee ii ie iw awe eS
82a
JUDGES: SAMUEL P. KING, UNITED STATES
DISTRICT JUDGE.
ORDER GRANTING FEDERAL DEFENDANTS’
MOTIONS TO DISMISS, AND AFFIRMING IN PART
AND REVERSING IN PART THE SEPTEMBER 11,
2003 DISCOVERY ORDER
The federal defendants -- the United States Army and, to
the extent they remain in any capacity as named defendants,
former Captain (now Major) John Ohlweiler, and Secretary
of the Army Thomas White (hereinafter “the government”) --
move to dismiss the Second Amended Complaint.
Also at issue are two appeals (one from the government
and one from Plaintiffs) under LR 74.1 from the same order
of U.S. Magistrate Judge Chang.' The appeals essentially
become moot as to the government witnesses if the case
against the government is dismissed.
The matter was heard on October 31, 2003. For the
reasons set forth, the government’s motions to dismiss are
GRANTED. As to the government’s discovery appeal,
although the matter appears to be moot, Judge Chang’s order
' On September 11, 2003, Judge Chang issued an order
allowing Marshall Flowers to reconvene depositions of five
persons, including Major Ohlweiler and General Hill, upon certain
conditions. The witnesses were deposed earlier, but Marshall
Flowers apparently instructed his then-attorney not to attend. Now
that he is again proceeding pro se, Marshall Flowers wants to
proceed with the depositions. The government objects primarily to
allowing another deposition of a four-star General; Flowers objects
to the conditions imposed, which include a time limit and allowance
of depositions by video or telephone.
83a
is REVERSED to the extent it allows re-deposition of the
three Army witnesses. Otherwise, the discovery order is
AFFIRMED.
I.
The basic factual background of this case is set forth in
this Court’s order at Flowers v. First Hawaiian Bank, 85 F.
Supp. 2d 993 (D. Haw. 2000) and in the Ninth Circuit’s
opinion at Flowers v. First Hawaiian Bank, 295 F.3d 966 (9th
Cir. 2002). Plaintiff Marshall Flowers brought these suits
primarily under the Right to Financial Privacy Act, 12 U.S.C.
§ 3401 et seq. (“RFPA”), after Defendants First Hawaiian
Bank and Fort Jackson Federal Credit Union provided bank
records to the United States Army after receiving a military
subpoena during Article 32 investigatory proceedings against
then-Sergeant Major Flowers. This Court dismissed the suit
against First Hawaiian Bank, but the Ninth Circuit remanded
after determining that the Article 32 subpoenas were invalid
and that litigation and grand jury exemptions did not apply.
See Flowers, 295 F.3d at 970-77. After remand, this Court
consolidated the First Hawaiian Bank matter (Civ. No. 99-
00335) with a similar matter involving Fort Jackson Federal
Credit Union (Civ. No. 01-412).’
The government first contends that the Plaintiffs’ claims
for damages against the government are barred by the Feres
doctrine. See, e.g., Hodge v. Dalton, 107 F.3d 705, 710 (9th
Cir. 1997) (“The Government is not liable under the Federal
Tort Claims Act for injuries to servicemen where the injuries
* Fort Jackson FCU consented to personal jurisdiction in Hawaii
and the cases were consolidated upon Fort Jackson's motion to
consolidate.
84a
arise out of or are in the course of activity incident to
service.” ) (quoting Feres v. United States, 340 U.S. 135, 146,
95 L. Ed. 152, 71 S. Ct. 153 (1950) (emphasis in original)).
After due consideration, the Court concludes that Feres
requires this Court to dismiss the Plaintiffs’ claims against the
government.°
1. “Incident to Service.”
Marshall Flowers cannot dispute that his (and his wife’s)
claims “arise out of or are in the course of activity incident to
service.” /d. Assuming the truth of the operative complaint’s
allegations and considering the undisputed evidence in the
record, Marshall Flowers was an active duty Sergeant Major
in the Army when the financial disclosures took place. That
is, he was on active duty when the alleged violations of the
RFPA occurred. The relevant disclosures of bank records
occurred in the course of, and because of, a military Article 32
proceeding against him investigating charges against him of
42 counts of larceny at military exchanges.
Marshall Flowers retired or resigned from the Army in
lieu of facing a general court martial. He filed this civil action
after leaving the Army. However, even though he is no
longer in the railkary, Feres still applies to the claims that
arose while he was on active duty. See, e.g., Jackson v.
Brigle, 17 F.3d 280, 281 (9th Cir. 1994) (barring action
brought by former Air Force officer).
> At present, RFPA claims against First Hawaiian and Fort
Jackson remain.
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2. Right to Financial Privacy Act.
The closer question is whether the Feres doctrine should
be extended from the Federal Tort Claims Act to bar
Marshall’s (and his wife’s) claims for damages under the
RFPA. This appears to be an issue of first impression.
Originally, Feres barred negligence claims by military
personnel against the government under the FTCA, even
though the FTCA is not, by its terms, limited only to
civilians. 340 U.S. at 146. Although the doctrine has been
criticized, see, e.g., United States v. Johnson, 481 U.S. 681,
703, 95 L. Ed. 2d 648, 107 S. Ct. 2063 (Scalia, J.,
dissenting), the doctrine’s logic and rationale have been
extended from the FTCA to many other contexts. “Practically
any suit that ‘implicates the military judgment and decisions’
runs the risk of colliding with Feres.” Persons v. United
States, 925 F.2d 292, 295 (9th Cir. 1991) (quoting United
States v. Johnson, 481 U.S. 681, 691, 95 L. Ed. 2d 648, 107
S. Ct. 2063 (1987)). Feres is a doctine of “intramilitary
immunity.” Hodge, 107 F.3d 705, 710 (9th Cir. 1997).
The Feres doctrine now bars not only claims of
negligence, but also intentional torts as well. See, e.g.,
Mollnow v. Carlton, 716 F.2d 627, 628 (9th Cir. 1983).
It bars claims not only against the government, but also
claims against individuals. See Lutz v. Secretary of the Air
Force, 944 F.2d 1477, 1480-81 (9th Cir. 1991) (recognizing
intramilitary immunity for suits between military members
based on injuries sustained incident to service).
It bars claims not only against military supervisors, but
also against all claims for damages that were “incident to
service.” United States v. Stanley, 483 U.S. 669, 680-81, 97
86a
L. Ed. 2d 550, 107 S. Ct. 3054 (1987). This includes claims
against military doctors for medical malpractice. See, e.g.,
Atkinson v. United States, 825 F.2d 202 (9th Cir. 1987).
It bars civil rights claims against federal individuals
brought under Bivens v. Six Unknown Named Agents, 403
U.S. 388,-29 L. Ed. 2d 619, 91 S. Ct. 1999 (1971). See
Chappell v. Wallace, 462 U.S. 296, 76 L. Ed. 2d 586, 103 S.
Ct. 2362 (1983).
Likewise, it bars 42 U.S.C. § 1983 civil rights claims by
national guard personnel against state officers. See Bowen v.
Oistead, 125 F.3d 800, 803 n.2 (9th Cir. 1997)
It bars Title VII-type discrimination in employment claims
under 42 U.S.C. § 2000e-16. See Hodge, 107 F.3d at 710
(reasoning that the Feres doctrine, as well as the language of
section 2000e-16 regarding prohibited employment
discrimination against employees of “military departments,”
bars statutory claims by members of the armed forces).
It bars claims by military members for civil rights
conspiracy claims under 42 U.S.C. § 1985(1). See Mollnow,
716 F.2d at 631. And it bars similar civil rights claims under
42 U.S.C. § 1985(3). See Trerice v. Pedersen, 769 F.2d
1398, 1402 (9th Cir. 1985); Bois v. Marsh, 801 F.2d 462,
469, 255 U.S. App. D.C. 248 (D.C. Cir. 1986).
It bars suits under the Public Vessels Act, 46 U.S.C.
§§ 781-790. See Charland v. United States, 615 F.2d 508,
509 (9th Cir. 1980).
Further, an intramilitary immunity rationale applies to bar
claims by military members under the Americans with
Disabilities Act, Age Discrimination in Employment Act, and
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the Rehabilitation Act. See Baldwin v. United States Army,
223 F.3d 100 (2d Cir. 2000) (barring ADA claims); Spain v.
Ball, 928 F.2d 61 (2d Cir. 1991) (ADEA); Coffman v.
Michigan, 120 F.3d 57 (6th Cir. 1997) (Rehabilitation Act).
Given the range of case law, the Court concludes
thatFeres bars the Flowers’ claims for damages here under the
RFPA.
Case law provides three justifications for the Feres bar.
See Johnson, 481 U.S. at 688-89. First, “the relationship
between the Government and members of its armed forces is
distinctively federal in character.” Jd. (citations and internal
quotations omitted). “Where a service member is injured
incident to service -- that is, because of his military
relationship -- it makes no sense to permit the fortuity of the
situs of the alleged negligence to affect the liability of the
Government to the serviceman.” /d. (citations and internal
quotations omitted). In other words, Congress could not have
intended with the FTCA to subject the armed forces to
vagaries of local tort law.
Second, the existence of “generous statutory disability and
death benefits is an independent reason why the Feres
doctrine bars suit for service-related injuries.” Jd. That is,
benefits under the Veterans’ Benefits Act essentially preclude
additional remedies under the FTCA.
Third, suits by service members against the government
for injuries incurred incident to service “if generally
permitted, would involve the judiciary in sensitive military
affairs at the expense of military discipline and effectiveness.”
United States v. Shearer, 473 U.S. 52, 59, 87 L. Ed. 2d 38,
105 S. Ct. 3039 (1985). This third rationale -- involvement in
military discipline -- is most important for the question
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involved here. It makes the Feres doctrine applicable
“whenever a legal action would require a civilian court to
examine decisions regarding management, discipline,
supervision, and control of members of the armed forces.”
Zaputil v. Cowgill, 335 F.3d 885, 887 (9th Cir. 2003)
(citations and internal quotations omitted). “The test has been
broadly construed to immunize the United States and member
of the military from any suit which may intrude in military
affairs, second-guess military decisions, or impair military
discipline.” /d. (citations and internal editorial marks omitted).
Marshall Flowers’ entire RFPA claim is based upon a
subpoena or subpoenas issued to two financial institutions
during an Article 32 proceeding investigating charges against
him of 42 counts of larceny. Although, after the Ninth
Circuit’s decision remanding this case -- Flowers v. First
Hawaiian Bank, 295 F.3d 966, 973 (9th Cir. 2002) -- an
Article 32 investigating officer does not have true “subpoena”
power over third-parties, the proceeding is certainly an
integral part of the military disciplinary process.
Moreover, given that the Ninth Circuit has all but directed
a finding that the First Hawaiian Bank account records were
disclosed without following the RFPA’s procedures, and
given the Ninth Circuit’s decision that no exemption applies,
essentially the only question now remaining on remand Is one
of damages. The statute allows damages of $100 per
disclosure plus actual damages and punitive damages for
“willful or intentional” violations. 12 U.S.C. § 3417(a). But,
in order to assess any possible damages (which could not have
been anything related to Marshall Flowers’ allegedly “forced”
retirement, which was independent of the financial
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disclosures‘), the Court could be required to examine the
nature of the disciplinary investigation, the need for an Article
32 proceeding, the motives and state-of-mind of the
investigating authorities in issuing the subpoenas to First
Hawaiian Bank and Fort Jackson FCU, and other particulars
of the process. The Court would be examining “management,
discipline, supervision, and control of members of the armed
forces” and certainly might “intrude in military affairs,
second-guess military decisions, or impair military
discipline.” Zaputil, 335 F.3d at 887.
This involvement in military affairs and discipline is only
exemplified by the pending discovery matters, which include
whether Marshall Flowers should be allowed to reopen a civil
deposition of General James T. Hill, a four-star General who
is currently commander of the Southern Command during a
time of military conflict in Afghanistan and Iraq. (He seeks,
among other things, to increase deposition time to several
hours and to compel General Hill’s attendance in Hawaii.)
* Stated differently, such alleged “damages” were, at best,
caused by allegedly improper larceny charges, not by any disclosure
of bank records. The disclosures were a result of the investigation,
not a cause of his retirement. The disclosure of account information
did not cause him to lose his military position. In this regard,
Marshall Flowers (and his wife) would be hard pressed to find any
actual damages caused by the disclosure. Moreover, given the
ambiguities in the state of the law before the Ninth Circuit's
decision in Flowers regarding the treatment of Article 32
“subpoenas” it appears unlikely that the disclosure could have been
“willful” for purposes of assessing punitive damages. See, e.g.,
Russell v. Department of the Air Force, 915 F. Supp. 1108 (D.
Colo. 1996) (addressing use under RFPA of financial records
obtained during Article 32 proceedings and appearing to treat such
subpoenas as proper).
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General Hill was the leader of the 25th Infantry Division
when the proceedings were ongoing against then-Sergeant
Major Flowers. His testimony to date includes reasons for the
Article 32, the subsequent recommendation for seeking a
general court-martial against Flowers, and some of the
reasons for the agreement between Flowers and the Army for
Flowers to accept non-judicial punishment (an Article 15) and
to seek immediate retirement in lieu of the Army’s proceeding
with a general court-martial.
In short, Feres appears particularly applicable here, where
all indications are that Marshall Flowers is entitled to, at
most, $100 in damages for each disclosure.
Although no reported case has applied Feres to bar a
claim for damages under the RFPA, the U.S. Court of
Appeals for the District of Columbia Circuit in a 2-1 decision
has determined that Feres does not bar a claim under the
Privacy Act, 5 U.S.C. § 552a(b). See Cummings v.
Department of the Navy, 350 U.S. App. D.C. 68, 279 F.3d
1051 (D.C. Cir. 2002) (finding Feres does not bar a Privacy
Act claim for damages by a Navy officer alleging unlawful
disclosure of a negative flight evaluation).
Cummings, however, relied heavily on specific language
of the Privacy Act that “demonstrated that the Congress
unambiguously intended to establish a duty that runs from a
‘military department’ (like the Navy) to military personnel
(like |plaintiff]) not to ‘disclose any record which is contained
in a system of records’.” /d. at 1054 (referring to 5 U.S.C.
§§ 552(f), 552a(g)(1), 552a(k)(5)and 552a(k)(7)). Given this
“clear congressional mandate,” the D.C. Circuit held that
Feres “does not extend to Privacy Act lawsuits brought by
military personnel against the military departments.” /d. at
1058. Cummings is inconsistent with a decision of the Eighth
9la
Circuit affirming a district court decision that found that the
Feres doctrine does bar, among other things, a Privacy Act
claim against the military. See Uhl v. Swanstrom, 79 F.3d
751, 756 (8th Cir. 1995) (affirming Uhl v. Swanstrom, 876 F.
Supp. 1545 (N.D. Iowa 1995)).
In contrast to the Privacy Act, the RFPA itself does not
appear to contain such explicit protections for military
personnel. At most, a military branch falls within the RFPA’s
definition of a “government authority.” See 12 U.S.C.
§ 3401(3) (defining “Government authority” as “any agency
or department of the United States, or any officer, employee,
or agent thereof”). There are no other terms in the RFPA
specifically mentioning armed services personnel. Moreover,
the purpose of the RFPA is different than the Privacy Act.
“{Tjhe focus of the Privacy Act is on the actions of
government agencies in disclosing personal information
maintained by them ... In contrast, the RFPA, 12 U.S.C.
§ 3401 et seq. prohibits financial institutions from providing
the government with information[.]” Russell, 915 F. Supp. at
1115-16 (emphasis in original).
Cummings is also distinguishable because it did not
involve military disciplinary proceedings to the extent this
case does. Rather, in Cummings, the suit was based upon the
military releasing personnel records (allegedly negative flight
evaluations of plaintiff who was a military female pilot) to an
author writing about training of fighter pilots. As mentioned,
the instant case involves an integral part of the military
disciplinary process.
Ruling in favor of the government here does not mean
military personnel have no right to financial privacy. The
question is whether they should have a right to sue for
damages for violations if the violations occurred “incident to
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service.” A finding against Marshall Flowers does not bar a
member of the armed services from an action for violations of
the RFPA if the disclosure occurred in other circumstances.
It also would not bar claims for damages against private
financial institutions such as First Hawaiian Bank or Fort
Jackson FCU.
Indeed, the Ninth Circuit did state that the RFPA does
apply in general to military personnel. See Flowers, 295 F.3d
at 971 (“It is not disputed that Sergeant Major Flowers, as a
member of the armed services when the circumstances in this
case occurred, is protected by the RFPA”) (citing United
States v. Dowty, 48 M.J. 102, 109 (1998)). However, even if
the RFPA “protects” Flowers, this does not necessarily mean
he should be entitled to damages from the Army. Military
members can still seek injunctive relief under the RFPA.° See
also McDonough v. Widnall, 891 F. Supp. 1439 (D. Col.
1995) (enjoining under the RFPA the Air Force’s use of
financial records in court martial proceedings, where records
were obtained without following notice provisions of RFPA,
but stating that “the questions whether and what [plaintiff]
may recover under the provisions of § 3417(a) remain for
another day”).
In Flowers the Ninth Circuit did not reach whether Feres
bars damages claims. The government had not even raised the
issue until now, and this delay does not waive the Feres
defense. See Stauber v. Cline, 837 F.2d 395, 397-98 (9th Cir.
1988) (reasoning that the Feres doctrine is viewed as a
* Flowers does not seek any injunctive relief such as precluding
the Army from using financial records against him in the Article 32
proceedings or in court martial proceedings. Those charges have
been settled; Marshall Flowers retired.
93a
limitation on subject matter jurisdiction and the defense was
not waived by failure to raise it until after trial).
Finally, the government also asserts that Marshall
Flowers’ wife Anna Flowers, even if she is a civilian, is also
barred by Feres from damages claims against the government
under the RFPA. This position has merit. Her claims are
entirely derivative of his claims. They are based on the exact
same disclosures. A spouse may not seek derivative damages
from the government if those damages result from actions of
the military against a service member. See, e.g., Monaco v.
United States, 661 F.2d 129, 133-34 (9th Cir. 1981)
(rejecting claim of non-military plaintiff seeking recovery for
independent injuries stemming from allegedly negligent acts
against military personnel). If Marshall Flowers’ claims are
barred by Feres, so are his wife’s.
3. Other grounds.
Besides raising the Feres issue, the government also seeks
dismissal of any claims sounding in tort (e.g., negligent
infliction of emotional distress, tortious interference with
prospective advantage,° violation of a right to privacy) that
could be construed as being brought under the Federal Tort
Claims Act. The government points out that Flowers has not
exhausted administrative remedies for claims under the FTCA
as required by 28 U.S.C. § 2675 and § 2401(b). Exhaustion
is a jurisdictional prerequisite. Because neither Marshall nor
Anna Flowers has exhausted administrative remedies, the
ba]
A claim for interference with contract would be further
independently barred under 28 U.S.C. § 2680(h) (excluding from
the FTCA, among other claims, any claim arising out of
“interference with contract rights”).
94a
Court lacks jurisdiction over claims sounding in tort against
the government under the FTCA. United States v. Kubrick,
444 U.S. 111, 62 L. Ed. 2d 259, 100 S. Ct. 352 (1979).
Thus, even if the claims were not barred by Feres, all claims
besides the RFPA claim are also barred by the failure to
exhaust.
Moreover, any claim besides an RFPA claim against
Major Ohlweiler and Secretary of the Army Thomas E.
White, to the extent they are brought against them in their
official capacities, are barred by sovereign immunity. See
Brown v. General Serv. Administration, 425 U.S. 820, 827,
48 L. Ed. 2d 402, 96 S. Ct. 1961 (1976). Similarly, even
assuming there were a constitutional right to privacy in bank
records,’ no claim for damages would exist against the
individual federal defendants under Bivens. Libas, Ltd. v.
Carillo, 329 F.3d 1128, 1130 (9th Cir. 2003) (“Bivens claims
may be expressly precluded ‘when Congress has provided an
alternative remedy [such as the RFPA] which it explicitly
declares to be a substitute for recovery directly under the
Constitution and views as equally effective.’”).
The government also points out that there can be no
independent state law claim for a violation of privacy in bank
records under the Hawaii State Constitution. See State v.
Klattenhoff, 71 Haw. 598, 801 P.2d 548, 552 (Haw. 1990)
(“we adopt the rule set forth in United States v. Miller, and
follow the majority of states in finding no reasonable
expectation of privacy in personal bank records”).
’ In an earlier order, the Court has dismissed constitutional
right to privacy claims based upon United States v. Miller, 425
U.S. 435, 440-43, 48 L. Ed. 2d 71, 96S. Ct. 1619 (1976) (finding
no reasonable expectation of privacy in bank records).
95a
Lastly, the government raises the three-year statute of
limitations in 12 U.S.C. § 3416 as to claims by both Marshall
and Anna Flowers against Major Ohlweiler. Apparently,
Major Ohlweiler was only added as a party in the Second
Amended Complaint on March 28, 2003. One question would
be whether claims against him, if they exist, would relate
back to when the complaint was filed originally in 1999. The
length of time also includes the time that this matter was on
appeal to the Ninth Circuit. This issue need not be decided
because there can be no claims against Ohlweiler even if the
claims did relate back. The statute of limitations issue is
moot.
il.
Also at issue is an order of Judge Chang allowing
Plaintiffs a renewed opportunity to depose five witnesses, two
from Fort Jackson FCU (Velma Jones and Kenneth Creticos)
and three from the U.S. Army (General Hill, Major
Ohlweiler and Major Bagwell). The order allows Plaintiffs to
retake their depositions (which have already been taken by
other parties) subject to the following conditions: (1) they
must be taken in their respective cities (i.e., not in Hawaii);
(2) they must be taken by November 30, 2003; (3) they are
limited to two hours; (4) Plaintiffs must reimburse Defendants
one-half of costs incurred (including travel costs) in the
renewed depositions; and (5) they may be taken by telephone
or videoconference.
The Government appeals, contending that Flowers has
already had the opportunity to depose the witnesses. Further,
especially as to General Hill, the Government contends that
Floweis should not be allowed to continue to waste the time
of a four-star General. On the other hand, Flowers appeals
the conditions placed on the depositions; he seeks more time
96a
to conduct the depositions, to extend the deadline, to remove
the reimbursement condition, and to compel witnesses’
presence in Hawaii (they are in South Carolina, Washington
D.C., and Florida).
Flowers contends that he was not allowed to participate,
or he did not allow his lawyer, Mr. Brown, to participate, in
the prior depositions because of disputes he was having with
Mr. Brown. He has claimed he was “indisposed” previously.
Nevertheless, the record reflects that much effort was made
to accommodate Mr. Brown in scheduling the depositions and
that Marshall Flowers later instructed Mr. Brown not to
participate. Mr. Brown told Flowers of the dangers of not
participating. Flowers, through his attorney, certainly had a
prior opportunity to depose these individuals.
Initially, the appeals appear to be moot as to the
government’s witnesses. Testimony of the government
witnesses would be irrelevant to the only real issue remaining
-- that of possible damages to Flowers. Fort Jackson FCU has
filed a substantive joinder in the government’s appeal. Fort
Jackson FCU reiterates the procedural history of how the
depositions were scheduled and how Flowers chose not to
participate by ordering his attorney not to participate. The
Fort Jackson FCU employees presumably are those who had
some involvement with receiving the Army subpoenas and
disclosing the account information. The only possible
relevancy of their testimony would be for punitive damages,
if there were some basis to suppose that the disclose was
willful and meant to harm Flowers. Nevertheless, the
conditions imposed by Judge Chang are reasonable, given that
Flowers has had a chance to depose these witnesses
previously.
97a
The Court therefore DENIES the appeal of the Plaintiffs
objecting to the conditions imposed on any renewed
depositions of Fort Jackson FCU employees. The Court
GRANTS the government’s appeal as to the three Army
witnesses. Especially given the dismissal of the government,
the testimony of the Army witnesses is irrelevant.
Il.
For the foregoing reasons, the Federal Defendants’
Motion to Dismiss is GRANTED. The Federal Defendants’
appeal of the September 11, 2003 discovery order is
GRANTED and the discovery order is REVERSED to the
extent it allows redeposition of the three Army members.
Plaintiffs’ appeal of the September 11, 2003 discovery order
is DENIED and the discovery order is AFFIRMED as to the
conditions imposed on any further depositions of Fort Jackson
FCU employees.
IT IS SO ORDERED.
Dated: Honolulu, Hawaii, October 31, 2003.
/s/
SAMUEL P. KING
UNITED STATES DISTRICT JUDGE
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APPENDIX N
TITLE 12. BANKS AND BANKING
CHAPTER 35. RIGHT TO FINANCIAL PRIVACY
12 USC § 3401. Definitions
For the purpose of this title, the term--
(1) “financial institution”, means any office of a bank,
savings bank, card issuer as defined in section 1602(n) of this
title 15, industrial loan company, trust company, savings
association, building and loan, or homestead association
(including cooperative banks), credit union, or consumer
finance institution, located in any State or territory of the
United States, the District of Columbia, Puerto Rico, Guam,
American Samoa, or the Virgin Islands;
(2) “financial record” means an original of, a copy of, or
information known to have been derived from, any record
held by a financial institution pertaining to a customer’s
relationship with the financial institution;
(3) “Government authority” means any agency or
department of the United States, or any officer, employee, or
agent thereof;
(4) “person” means an individual or a partnership of five
or fewer individuals;
(5) “customer” means any person or authorized
representative of that person who utilized or is utilizing any
service of a financial institution, or for whom a financial
institution is acting or has acted as a fiduciary, in relation to
an account maintained in the person’s name;
(6) “holding company” means--
99a
(A)any bank holding company (as defined in section
1841 of this title);
(B) any company described in section 1843(f)(1) of
this title; and
(C) any savings and loan holding company (as defined
in the Home Owners’ Loan Act {12 USCS
§§ 1461 et seq.]);”.
(7) “supervisory agency” means with respect to any
particular financial institution, holding company, or any
subsidiary of a financial institution or holding company, any
of the following which has statutory authority to examine the
financial condition, business operations, or records or
transactions of that institution, holding company, or
subsidiary--
(A) the Federal Deposit Insurance Corporation;
(B) [the] Director, Office of Thrift Supervision;
(C) the National Credit Union Administration;
(D) the Board of Governors of the Federal Reserve
System;
(E) the Comptroller of the Currency;
(F) the Securities and Exchange Commission;
(G) the Commodity Futures Trading Commission;
(H) the Secretary of the Treasury, with respect to the
Bank Secrecy Act [12 USCS §§ 1951 et seq.] and the
Currency and Foreign Transactions Reporting Act [31 USCS
§§ 5311 et seq.] ( Public Law 91-508, title I and If); or
(1) any State banking or securities department or
agency; and
(8) “law enforcement inquiry” means a_ lawful
investigation or official proceeding inquiring into a violation
of, or failure to comply with, any criminal or civil statute or
any regulation, rule, or order issued pursuant thereto.
100a
12 USC § 3402. Access to financial records by
Government authorities prohibited; exceptions
Except as provided by section 3403(c), (d), 3413, or 3414
of this title, no Government authority may have access to or
obtain copies of, or the information contained in the financial
records of any customer from a financial institution unless the
financial records are reasonably described and--
(1) such customer has authorized such disclosure in
accordance with section 3404 of this title;
(2) such financial records are disclosed in response to an
administrative subpena or summons which meets the
requirements of section 3405 of this title;
(3) such financial records are disclosed in response to a
search warrant which meets the requirements of section 3406
of this title;
(4) such financial records are disclosed in response to a
judicial subpena which meets the requirements of section 3407
of this title; or
(5) such financial records are disclosed in response to a
formal written request which meets the requirements of
section 3408 of this title.
12 USC § 3403. Confidentiality of records; financial
institutions
(a) Release of records by financial institutions prohibited.
No financial institution, or officer, employees, or agent of
a financial institution, may provide to any Government
authority access to or copies of, or the information contained
in, the financial records of any customer except in accordance
with the provisions of this title.
10la
(b) Release of records upon certification of compliance with
chapter.
A financial institution shall not release the financial
records of a customer until the Government authority seeking
such records certifies in writing to the financial institution that
it has complied with the applicable provisions of this chapter.
(c) Notification to Government authority of existence of
relevant information in records.
Nothing in this chapter shall preclude any financial
institution, or any officer, employee, or agent of a financial
institution, from notifying a Government authority that such
institution, or officer, employee, or agent has information
which may be relevant to a possible violation of any statute or
regulation. Such information may include only the name or
other identifying information concerning any individual,
corporation or account involved in and the nature of any
suspected illegal activity. Such information may be disclosed
notwithstanding any constitution, law, or regulation of any
State or political subdivision thereof to the contrary. Any
financial institution, or officer, employee, or agent thereof,
making a disclosure of information pursuant to this
subsection, shall not be liable to the customer under any law
or regulation of the United States or any constitution, law, or
regulation of any State or political subdivision thereof, for
such disclosure or for any failure to notify the customer of
such disclosure.
(d) Release of records as incident to perfection of security
interest, proving a claim in bankruptcy, collecting a debt,
or processing an application with regard to a Government
loan, loan guarantee, etc.
102a
(1) Nothing in this title shall preclude a financial
institution, as an incident to perfecting a security interest,
proving a claim in bankruptcy, or otherwise collecting on a
debt owing either to the financial institution itself or in its role
as a fiduciary, from providing copies of any financial record
to any court or Government authority.
(2) Nothing in this title shall preclude a financial
institution, as an incident to processing an application for
assistance to a customer in the form of a Government loan,
loan guaranty, or loan insurance agreement, or as an incident
to processing a default on, or administering, a Government
guaranteed or insured loan, from initiating contact with an
appropriate Government authority for the purpose of
providing any financial record necessary to permit such
authority to carry out its responsibilities under a loan, loan
guaranty, or loan insurance agreement.
12 USC § 3404. Customer authorizations
(a) Statement furnished by customer to financial institution
and Government authority; contents.
A customer may authorize disclosure under section
3402(1) of this title if he furnishes to the financial institution
and to the Government authority seeking to obtain such
disclosure a signed and dated statement which--
(1) authorizes such disclosure for a period not in excess of
three months;
(2) states that the customer may revoke such authorization
at any time before the financial records are disclosed;
(3) identifies the financial records which are authorized to
be disclosed;
(4) specifies the purposes for which, and the Government
authority to which, such records may be disclosed; and
103a
(5) states the customer’s rights under this title.
(b) Authorization as condition of doing business prohibited.
No such authorization shall be required as a condition of
doing business with any financial institution.
(c) Right of customer to access to financial institution’s
record of disclosures.
The customer has the right, unless the Government
authority obtains a court order as provided in section 3409 of
this title, to obtain a copy of the record which the financial
institution shall keep of all instances in which the customer’s
record is disclosed to a Government authority pursuant to this
section, including the identity of the Government authority to
which such disclosure is made.
12 USC § 3407. Judicial subpena
A Government authority may obtain financial records under
section 3402(4) of this title pursuant to judicial subpena only
if--
(1) such subpena is authorized by law and there is reason
to believe that the records sought are relevant to a legitimate
law enforcement inquiry;
(2) a copy of the subpena has been served upon the
customer or mailed to his last known address on or before the
date on which the subpena was served on the financial
institution together with the following notice which shall state
with reasonable specificity the nature of the law enforcement
inquiry:
Records or information concerning your transactions
which are held by the financial institution named in the
104a
attached subpena are being sought by this (agency or
department or authority) in accordance with the Right to
Financial Privacy Act of 1978 [12 U.S.C. 3401 et seq.] for
the following purpose: If you desire that such records or
information not be made available, you must:
1. Fill out the accompanying motion paper and sworn
statement or write one of your own, stating that you are the
customer whose records are being requested by the
Government and either giving the reasons you believe that the
records are not relevant to the legitimate law enforcement
inquiry stated in this notice or any other legal basis for
objecting to the release of the records.
2. File the motion and statement by mailing or
delivering them to the clerk of the Court.
3. Serve the Government authority requesting the
records by mailing or delivering a copy of your motion and
statement to.
4. Be prepared to come to court and present your
position in further detail.
5. You do not need to have a lawyer, although you
may wish to employ one to represent you and protect your
rights.
If you do not follow the above procedures, upon the
expiration of ten days from the date of service or fourteen
days from the date of mailing of this notice, the records or
information requested therein will be made available. These
records may be transferred to other government authorities
for legitimate law enforcement inquiries, in which event you
will be notified after the transfer; and
(3) ten days have expired from the date of service or
fourteen days from the date of mailing of the notice to the
customer and within such time period the customer has not
filed a sworn statement and motion to quash in an appropriate
105a
court, or the customer challenge provisions of section 3410 of
this title have been complied with.
12 USC § 3408. Formal written request
A Government authority may request financial records under
section 3402(5) of this title pursuant to a formal written
request only if--
(1) no administrative summons or subpena authority
reasonably appears to be available to that Government
authority to obtain financial records for the purpose for which
such records are sought;
(2) the request is authorized by regulations promulgated
by the head of the agency or department;
(3) there is reason to believe that the records sought are
relevant to a legitimate law enforcement inquiry; and
(4) (A) a copy of the request has been served upon the
customer or mailed to his last known address on or before the
date on which the request was made to the financial institution
together with the following notice which shall state with
reasonable specificity the nature of the law enforcement
inquiry:
Records or information concerning your transactions held
by the financial institution named in the attached request are
being sought by this (agency or department) in accordance
with the Right to Financial Privacy Act of 1978 for the
following purpose:
If you desire that such records or information not be made
available, you must:
1. Fill out the accompanying motion paper and
sworn statement or write one of your own, stating that you
are the customer whose records are being requested by the
Government and either giving the reasons you believe that the
106a
records are not relevant to the legitimate law enforcement
inquiry stated in this notice or any other legal basis for
objecting to the release of the records.
2. File the motion and statement by mailing or
delivering them to the clerk of any one of the following
United States District Courts:.
3. Serve the Government authority requesting the
records by mailing or delivering a copy of your motion and
statement to.
4. Be prepared to come to court and present your
position in further detail.
5. You do not need to have a lawyer, although you
may wish to employ one to represent you and protect your
rights.
If you do not follow the above procedures, upon the
expiration of ten days from the date of service or fourteen
days from the date of mailing of this notice, the records or
information requested therein may be made available. These
records may be transferred to other Government authorities
for legitimate law enforcement inquiries, in which event you
will be notified after the transfer;” and
(B) ten days have expired from the date of service or
fourteen days from the date of mailing of the notice by the
customer and within such time period the customer has not
filed a sworn statement and an application to enjoin the
Government authority in an appropriate court, or the
customer challenge provisions of section 1110 [12 USCS §
3410] have been complied with.
107a
12 USC § 3410. Customer challenges
(a) Filing of motion to quash or application to enjoin; proper
court; contents.
Within ten days of service or within fourteen days of
mailing of a subpena, summons, or formal written request, a
customer may file a motion to quash an administrative
summons or judicial subpena, or an application to enjoin a
Government authority from obtaining financial records
pursuant to a formal written request, with copies served upon
the Government authority. A motion to quash a judicial
subpena shall be filed in the court which issued the subpena.
A motion to quash an administrative summons or an
application to enjoin a Government authority from obtaining
records pursuant to a formal written request shall be filed in
the appropriate United States district court. Such motion or
application shall contain an affidavit or sworn statement--
(1) stating that the applicant is a customer of the financial
institution from which financial records pertaining to him
have been sought; and
(2) stating the applicant’s reasons for believing that the
financial records sought are not relevant to the legitimate law
enforcement inquiry stated by the Government authority in its
notice, or that there has not been substantial compliance with
the provisions of this chapter.
Service shall be made under this section upon a Government
authority by delivering or mailing by registered or certified
mail a copy of the papers to the person, office, or department
specified in the notice which the customer has received
pursuant to this chapter. For the purposes of this section,
“delivery” has the meaning stated in rule 5(b) of the Federal
Rules of Civil Procedure.
108a
(b) Filing of response; additional proceedings.
If the court finds that the customer has complied with
subsection (a), it shall order the Government authority to file
a sworn response, which may be filed in camera if the
Government includes in its response the reasons which make
in camera review appropriate. If the court is unable to
determine the motion or application on the basis of the
parties’ initial allegations and response, the court may conduct
such additional proceedings as it deems appropriate. All such
proceedings shall be completed and the motion or application
decided within seven calendar days of the filing of the
Government’s response.
(c) Decision of court.
If the court finds that the applicant is not the customer to
whom the financial records sought by the Government
authority pertain, or that there is a demonstrable reason to
believe that the law enforcement inquiry is legitimate and a
reasonable belief that the records sought are relevant to that
inquiry, it shall deny the motion or application, and, in the
case of an administrative summons or court order other than
a search warrant, order such process enforced. If the court
finds that the applicant is the customer to whom the records
sought by the Government authority pertain, and that there is
not a demonstrable reason to believe that the law enforcement
inquiry is legitimate and a reasonable belief that the records
sought are relevant to that inquiry, or that there has not been
substantial compliance with the provisions of this title, it shall
order the process quashed or shall enjoin the Government
authority’s formal written request.
109a
(d) Appeals.
A court ruling denying a motion or application under this
section shall not be deemed a final order and no interlocutory
appeal may be taken therefrom by the customer. An appeal of
a ruling denying a motion or application under this section
may be taken by the customer (1) within such period of time
as provided by law as part of any appeal from a final order in
any legal proceeding initiated against him arising out of or
based upon the financial records, or (2) within thirty days
after a notification that no legal proceeding is contemplated
against him. The Government authority obtaining the financial .
records shall promptly notify a customer when a
determination has been made that no legal proceeding against
him is contemplated. After one hundred and eighty days from
the denial of the motion or application, if the Government
authority obtaining the records has not initiated such a
proceeding, a supervisory official of the Government
authority shall certify to the appropriate court that no such
determination has been made. The court may require that such
certifications be made, at reasonable intervals thereafter, until
either notification to the customer has occurred or a legal
proceeding is initiated as described in clause (A).
(e) Sole judicial remedy available to customer.
The challenge procedures of this chapter constitute the
sole judicial remedy available to a customer to oppose
disclosure of financial records pursuant to this chapter.
(f) Affect on challenges by financial institutions.
Nothing in this title shall enlarge or restrict any rights of
a financial institution to challenge requests for records made
by a Government authority under existing law. Nothing tn this
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chapter shall entitle a customer to assert the rights of a
financial institution.
12 USC § 3413. Exceptions
(a) Disclosure of financial records not identified with
particular customers.
Nothing in this title prohibits the disclosure of any
financial records or information which is not identified with
or identifiable as being derived from the financial records of
a particular customer.
(b) Disclosure to, or examination by, supervisory agency
pursuant to exercise of supervisory, regulatory, or
monetary functions with respect to financial institutions,
holding companies, subsidiaries, institution-affiliated
parties, or other persons.
This chapter shall not apply to the examination by or
disclosure to any supervisory agency of financial records or
information in the exercise of its supervisory, regulatory, or
monetary functions, including conservatorship or receivership
functions, with respect to any financial institution, holding
company, subsidiary of a financial institution or holding
company, institution-affiliated party (within the meaning of
section 1813(u) of this title) with respect to a financial
institution, holding company, or subsidiary, or other person
participating in the conduct of the affairs thereof.
(c) Disclosure pursuant to Title 26.
Nothing in this title prohibits the disclosure of financial
records in accordance with procedures authorized by title 26.
llla
(d) Disclosure pursuant to Federal statute or rule promulgated
thereunder.
Nothing in this title shall authorize the withholding of
financial records or information required to be reported in
accordance with any Federal statute or rule promulgated
thereunder.
(e) Disclosure pursuant to Federal Rules of Criminal
Procedure or comparable rules of other courts.
Nothing in this title shall apply when financial records are
sought by a Government authority under the Federal Rules of
Civil or Criminal Procedure or comparable rules of other
courts in connection with litigation to which the Government
authority and the customer are parties.
12 USC § 3416. Jurisdiction
An action to enforce any provision of this title may be
brought in any appropriate United States district court without
regard to the amount in controversy within three years from
the date on which the violation occurs or the date of discovery
of such violation, whichever is later.
12 USC § 3417. Civil penalties
(a) Liability of agencies or departments of United States or
financial institutions.
Any agency or department of the United States or
financial institution obtaining or disclosing financial records
or information contained therein in violation of this title is
liable to the customer to whom such records relate in an
amount equal to the sum of--
112a
(1) $100 without regard to the volume of records
involved;
(2) any actual damages sustained by the customer as a
result of the disclosure;
(3) such punitive damages as the court may allow, where
the violation is found to have been willful or
intentional; and
(4) in the case of any successful action to enforce liability
under this section, the costs of the action together with
reasonable attorney’s fees as determined by the court.
(b) Disciplinary action for willful or intentional violation of
chapter by agents or employees of department or agency.
Whenever the court determines that any agency or
department of the United States has violated any provision of
this title and the court finds that the circumstances
surrounding the violation raise questions of whether an officer
or employee of the department or agency acted willfully or
intentionally with respect to the violation, the Director of the
Office of Personnel Management shall promptly initiate a
proceeding to determine whether disciplinary action is
warranted against the agent or employee who was primarily
responsible for the violation. The Director after investigation
and consideration of the evidence submitted, shall submit its
findings and recommendations to the administrative authority
of the agency concerned and shall send copies of the findings
and recommendations to the officer or employee or his
representative. The administrative authority shall take the
corrective action that the Director recommends.
(c) Good faith defense.
Any financial institution or agent or employee thereof
making a disclosure of financial records pursuant to this
113a
chapter in good-faith reliance upon a certificate by any
Government authority or pursuant to the provisions of section
3413(1) of this title shall not be liable to the customer for such
disclosure under this title, the constitution of any State, or any
law or regulation of any State or any political subdivision of
any State.
(d) Exclusive judicial remedies and sanctions.
The remedies and sanctions described in this title shall be
the only authorized judicial remedies and sanctions for
violations of this chapter.
Li4a
APPENDIX O
FEDERAL REGULATIONS INVOLVED
PART 275—OBTAINING INFORMATION FROM
FINANCIAL INSTITUTIONS: RIGHTS TO
FINANCIAL PRIVACY ACT OF 1978
AUTHORITY: 92 Stat. 3697 et seq. (12 U.S.C. 3401, et
seq.)
SOURCE: 45 FR 17576, Mar. 19, 1980, unless otherwise
noted. Redesignated at 56 FR 57984, Nov. 15, 1991.
§275.1 Purpose.
This part implements Title 12, U.S.C. section 3401, et
seq., Pub. L. 95-630, “Right to Financial Privacy Act of
1978,” and prescribes the procedures for the Department of
Defense to use to gain access to financial records maintained
by financial institutions.
§ 275.2 Applicability and scope.
(a) The provisions of this part apply to the Office of the
Secretary of Defense, the Military Departments, the Defense
Investigative Service, and the National Security Agency
(hereafter referred to as the “DoD Components”).
(b) Its provisions apply only to financial records
maintained by financial institutions as defined in § 275.6(a).
115a
[45 FR 17576, Mar. 19, 1980. Redesignated and amended at
56 FR 57984, Nov. 15, 1991]
§ 275.3 Policy.
(a) It is the policy of the Department of Defense when
obtaining financial records from a financial institution to seek
the consent of the customer to whom the record pertains,
unless doing so compromises or harmfully delays a legitimate
law enforcement inquiry. If the person declines to consent to
disclosure, the alternative means of obtaining the records
authorized by this part shall be utilized.
(b) The provisions of 12 U.S.C. 3401 et seq. do n
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