From Wests Business Law: on Chapter 4 Constitutional Authority to Regulate

Business

Case 4-7: Problem

To protect the privacy of individuals identified in information systems maintained by

federal agencies, the Privacy Act of 1974 regulates the use of the information. The
statute provides for a minimum award of $1,000 for "actual damages sustained" caused
by "intentional or willful actions" to the "person entitled to recovery." Buck Doe filed for
certain disability benefits with an office of the U.S. Department of Labor (DOL). The
application form asked for Doe's Social Security number, which the DOL used to identify
his claim on documents sent to groups of claimants, their employers, and the lawyers
involved in their cases. This disclosed Doe's Social Security number beyond the limits
set by the Privacy Act. Doe filed a suit in a federal district court against the DOL,
alleging that he was "torn * * * all to pieces" and "greatly concerned and worried"
because of the disclosure of his Social Security number and its potentially "devastating"
consequences. He did not offer any proof of actual injury, however. Should damages be
awarded in such circumstances solely on the basis of the agency's conduct, or should
proof of some actual injury be required? Why? [ Doe v. Chao, 540 U.S. 614, 124 S.Ct.
1204, 157 L.Ed.2d 1122 (2004)]

Case 4-7: Answer

This case involves the privacy rights of an individual. As noted in the chapter, the U.S.
Constitution protects, by inference, individual privacy rights. In addition, both state and
federal statutes, as well as most state constitutions, protect privacy. Here, statutory law
applies, and the relevant statute is the Privacy Act of 1974. That act was designed to
protect individuals against the disclosure of private information collected about them by
the government. The key, then, to answering this question lies in the statutory language
of the 1974 act, as quoted in the case problem. Essentially, you need to ask two
questions. First, did the plaintiff (Doe) sustain any "actual damages"? Second, were the
damages sustained caused by the government's "intentional and willful actions"? The
answer to the first question is contained in the text of the case problem itself, which
reveals that Doe did not offer any proof of actual injury. Because Doe suffered no actual
injury, there could be no actual damages-and therefore the second question need not be
explored. Ultimately, the United States Supreme Court reached this conclusion. The
Court held that the Privacy Act provides limited recovery only on a showing of actual
damages caused by willful and intentional actions of a government agency. Doe
received no award, because he had not proved even the first requirement for recovery-
that he had sustained actual damages.