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Hills v. Liberty Mutual Insurance

United States District Court, W.D. New York

March 18, 2015

JAMES D. HILLS, Plaintiff,


WILLIAM M. SKRETNY, Senior District Judge.


The present action stems from alleged improprieties by Defendants during discovery in a separate personal injury lawsuit being prosecuted in New York State Supreme Court, Erie County. The Second Amended Complaint asserts claims under the Privacy Act of 1974, 5 U.S.C. § 552a; Title 18, the federal criminal code; the Health Insurance Portability and Accountability Act of 1996("H.I.P.P.A."), 42 U.S.C. § 1320d; and 42 U.S.C. § 1983. Plaintiff also asserts state law claims of negligence and unjust enrichment. Presently before this Court are Defendants' motions to dismiss the Second Amended Complaint. The Court finds the motions fully briefed and oral argument unnecessary. For the reasons that follow, Defendants' motions are granted and the Second Amended Complaint is dismissed.


Defendants contend that the Second Amended Complaint must be dismissed because this Court lacks subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) over several of Plaintiff's claims based on statutory violations, and because Plaintiff has failed to otherwise state a claim for which relief can be granted. "A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Id.

In considering a motion to dismiss for failure to state a claim pursuant to Rule 12 (b)(6), a court must accept all factual allegations in the complaint as true and make all reasonable inferences in a plaintiffs' favor. ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). In order to survive such a motion, a complaint must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)); ATSI Commc'ns, Inc., 493 F.3d at 98. This assumption of truth applies only to factual allegations and is inapplicable to legal conclusions. Iqbal, 556 U.S. at 678. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678.

Further, "[i]t is well established that the submissions of a pro se litigant must be construed liberally and interpreted to raise the strongest arguments that they suggest. '" Triestman v. Federal Bur. of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (emphasis in original) (quoting Pabon v. Wright, 459 F.3d 241, 248 (2d Cir. 2006)). This leniency, however, does not relieve a pro se plaintiff of the duty to satisfy basic pleading requirements. Vega v. Artus, 610 F.Supp.2d 185, 196 (N.D.N.Y. 2009) (citing Prezzi v. Schelter, 469 F.2d 691, 692 (2d Cir. 1972), cert denied 411 U.S. 935 (1973)).

A. Claims under the Privacy Act

Plaintiff alleges that the Liberty Defendants, the Keais Defendants, [1] and the Social Security Administration Defendants[2] violated various provisions of the Privacy Act of 1974. As stated by Plaintiff, "[t]his [c]laim deals primarily with the Liberty Defendants accessing the Plaintiff's Social Security file." (Sec Am Compl ¶ 24.)

The Privacy Act was enacted by Congress in response to concerns with the federal government's accumulation of personal information, and provides rules and procedures intended to safeguard individual privacy. Stoianoff v. Comm'r of Motor Vehicles, 107 F.Supp.2d 439, 442 (S.D.N.Y. 2000), aff'd 12 F.Appx. 33 (2d Cir. 2001), cert denied 534 U.S. 954 (2001). This Act therefore provides a private right of action against agencies of the United States Government - and only such agencies - for violations of those rules and procedures. See 5 U.S.C. § 552a(g)(1) ("[w]henever any agency " fails to comply with any provision of the statute, "the individual may bring a civil action against the agency " (emphasis added)); see Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 124 (2d Cir. 2008) (rejecting argument that contract with federal government was sufficient to establish third-party corporation should be considered an agency for purpose of Privacy Act civil claim). Further, although § 552a(i) references violations by an agency officer or employee, this subsection defines criminal penalties and does not create a private right of action against individuals, a fact which Plaintiff concedes in his pleading. (Sec Am Compl ¶ 32.) In the absence of a private right of action against the individual and private corporate Defendants, there is no basis for judicial review and these claims are properly dismissed for lack of subject matter jurisdiction. Shahid v. Brooklyn Legal Servs. Corp., 114 F.Appx. 35, 36 (2d Cir. 2004); see Barbara v. New York Stock Exch., Inc., 99 F.3d 49, 54 (2d Cir.1996); Barroga-Hayes v. Susan D. Settenbrino, P.C., No. 10 Civ. 5298, 2012 WL 1118194, *6 (E.D.N.Y. Mar. 30, 2012).

Plaintiff can only potentially state a Privacy Act claim against the Social Security Administration ("SSA"). As this agency argues, Plaintiff has failed to do so. Section 552a(g)(1) provides for an individual's private right of action where, as relevant here, a federal agency "fails to comply with any other provision of this section, or any rule promulgated thereunder, in such a way as to have an adverse effect on an individual." Thus, "[t]o state a Privacy Act claim a plaintiff must show that: 1) the information at issue is a record contained within a system of records; 2) the agency violated the Act with respect to that record; 3) the disclosure had an adverse effect on the plaintiff; and 4) the violation was willful or intentional." Int'l Union, Sec., Police, and Fire Prof'ls of Am. (SPFPA) v. U.S. Marshal's Serv., 350 F.Supp.2d 522, 528 (S.D.N.Y. 2004) (mere administrative error is insufficient).

The SSA correctly asserts that Plaintiff's allegations undermine the conclusion that any violation based on disclosure was willful or intentional, a standard which is " somewhat greater than gross negligence.'" Tarullo v. Defense Contract Audit Agency, 600 F.Supp.2d 352, 361 (D. Conn. 2009) (quoting Dowd v. I.R.S., 776 F.2d 1083, 1084 (2d Cir. 1985)). Plaintiff asserts that the SSA released records beyond the scope of his authorizations because of the intentional actions of the other Defendants, including the illegal altering of authorizations, use of misleading cover letters to obfuscate the limited scope of Plaintiff's consent, and the use of an "unlawful subpoena." (See Sec Am Compl ¶¶ 49-64.) Accordingly, to the extent, if any, that Plaintiff asserts that SSA employees should have discerned the true limited scope of the consent before disclosing Plaintiff's information, this allegation amounts to at best mere negligence or administrative error, which is insufficient to state a claim under the Privacy Act. Dowd, 776 F.2d at 1084; (see Sec Am Compl ¶ 25 (alleging that "to some extent" the SSA was a "victim' of the fraudulent scheme perpetrated by the Liberty Defendants").)

Further, as the SSA argues, although Plaintiff alleges additional violations of the Privacy Act, such as the alleged failure to maintain an accounting of disclosures and the refusal to provide Plaintiff with a certified copy of his SSA records, he has not alleged any adverse effect causally connected to these violations. see Ely v. Department of Justice, 610 F.Supp. 942, 946 (D. Ill. 1985), aff'd 792 F.2d 142 (7th Cir. 1986); see also Roberts v. U.S. Dept. of Transp., No. 02-CV-4414 (CBA), 2006 WL 842401, *7 (E.D.N.Y. Mar. 28, 2006). The adverse effects Plaintiff does allege (the sufficiency of which this Court need not review ...

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