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Media Alerts - Tankersley v. Almand, et al. -- Fourth Circuit
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November 7, 2016
  Tankersley v. Almand, et al. -- Fourth Circuit
Fourth Circuit Upholds Maryland Court of Appeals Suspension of Attorney for Refusal to Disclose Social Security Number

Areas of Law: Privacy Act, Attorney Discipline

Issue Presented: Whether the Maryland Court of Appeals' suspension of an attorney's law license for refusal to provide his social security number to the Client Protection Fund of the Bar of Maryland violates Section 7(a)(1) of the Privacy Act.

Brief Summary: The Maryland Court of Appeals suspended an attorney for refusing to submit his social security number to the Client Protection Fund. The attorney sued claiming the suspension was a violation of Section 7(a)(1) of the federal Privacy Act. The Maryland defendants claimed they had the power to compel the attorney to disclose his social security number under two federal acts, the Welfare Reform Act or the Tax Reform Act. The Fourth Circuit agreed. It held the Tax Reform Act gives states and their agents, including Maryland's Client Protection Fund, the power to collect social security numbers in order to administer taxes. As such, suspending the attorney for his refusal to submit his social security number was not a violation of Section 7(a)(1) of the Privacy act.

Extended Summary: The Maryland Court of Appeals is required by state statute, Md. Code Ann., Bus. Occ. & Prof. § 10-311, to set up a Client Protection Fund (the Fund). The Fund is used to "maintain the integrity of the legal profession" and "to reimburse losses caused by defalcations of lawyers." The Fund must provide to the Maryland Comptroller a list of all lawyers who have paid the annual fee to the Fund. This allows the Comptroller to determine if each lawyer has paid taxes. The Maryland Court of Appeals promulgated rules to comply and cited Section 405 of the federal Tax Reform Act in doing so. The Maryland General Assembly also enacted statutes to comply with the federal Welfare Reform Act. One of these, Md. Code Ann., Fam. Law § 10-119.3(e)(1), requires Maryland licensing authorities to collect applicant's social security numbers.

In accordance with the above laws and regulations, in 2009, then-Chief Judge Robert M. Bell of the Maryland Court of Appeals requested that all members of the Maryland Bar disclose their social security numbers to the Fund. About nine thousand attorneys did not comply and the Maryland General Assembly threatened the court with a large budget cut if it did not take action against the nine thousand. As a result, the Maryland Court of Appeals promulgated Maryland Rule 16-811.5(a)(1) (now rule 19-605(a)(1)), which requires Maryland attorneys to provide their social security numbers to the Fund or face suspension of their law licenses.

Michael Tankersley is a Virginia resident practicing law in the District of Columbia. He has maintained District of Columbia and Maryland bar memberships since 1986 and 1987, respectively. In 2013, the Fund asked Mr. Tankersley to provide his social security number. Mr. Tankersley declined citing identity theft concerns. Thereafter, the Maryland Court of Appeals suspended his law license. He had no prior disciplinary incidents.

Mr. Tankersley filed a lawsuit against James Almand (the Chair of the Fund), the other trustees of the Fund, and the judges and clerk of the Maryland Court of Appeals under Section 7(a)(1) of the Privacy Act. He claimed that Maryland Rule 16-811.5(a)(1) violates Section 7(a)(1) of the Privacy Act. Section 7(a)(1) of the Privacy Act provides that: "t shall be unlawful for any Federal, State or local government agency to deny to any individual any right, benefit, or privilege provided by law because of such individual's refusal to disclose his social security account number" except when required by other federal statute. Mr. Tankersley moved for summary judgment and the defendants cross-moved to dismiss or for summary judgment. The United States District Court for the District of Maryland dismissed Mr. Tankersley's complaint finding that the Welfare Reform Act and the Tax Reform Act supersede the Privacy Act. Mr. Tankersley appealed. The Fourth Circuit affirmed.

On appeal, the Fourth Circuit was tasked with answering the following questions: First, does either the Welfare Reform Act or the Tax Reform Act allow the Fund to compel Tankersley to disclose his social security number? Second, if neither act does so, does the Privacy Act create a Section 1983 private right of action? The second question would have been a question of first impression. However, the majority did not reach that question because it found the Tax Reform Act supersedes the Privacy Act.

The majority first found the Welfare Reform Act could not be used as the basis for compelling Tankersley's social security number. It explained that Section 666 of the Welfare Reform Act requires states to collect social security numbers from applicants for professional licenses and not those already licensed. Tankersley was a licensed attorney and not an applicant.

The majority next found the Tax Reform Act was expansive enough to empower the Fund to collect social security numbers. Section 405 of the Tax Reform Act allows any state, political subdivision or agency responsible for tax administration to collect social security numbers if it is done: 1) for administration of a tax; and 2) from individuals who appear to be affected by the state's tax laws. Mr. Tankersley argued that Section 405 of the Tax Reform Act did not allow the Fund to collect his social security number for three reasons: 1) the statutory requirement that the Fund provide the social security numbers to the Maryland Comptroller does not constitute the administration of a tax; 2) the Fund is not an entity responsible for administrating taxes; and 3) he did not appear to be affected by Maryland tax laws. The majority disagreed.

First, the Fund was collecting the social security numbers for the administration of a tax. That the Fund passed the numbers to the Comptroller was enough. Because Congress had not defined "administration of a tax," the court used the ordinary meaning of the words - "manag[ing] the operation" of something or putting something "into effect." The Court further stated that this expansive plain meaning definition was consistent with how "tax administration" was applied elsewhere in the comprehensive act as well as the meaning of these same words in the Internal Revenue Code.

Second, the Fund is "an entity that has administrative responsibility for taxes." The majority explained that the statute gave states the power to collect the social security numbers, but the states could only act through their agents. The Maryland Court of Appeals, an agent of Maryland, delegated authority to the Fund to collect the social security numbers.

Finally, the court found that Mr. Tankersley appeared to be affected by Maryland tax law. Although he lived in Virginia and worked in the District of Columbia, Mr. Tankersley appeared to be affected by Maryland tax law because his Maryland bar license gave him the ability to earn income in Maryland.

Judge Davis, in his partial dissent, disagreed with the majority's interpretation of the Tax Reform Act. He also reached the issue of whether the Privacy Act created a Section 1983 right.

Judge Davis explained that Section 405 of the Tax Reform Act should not be interpreted so expansively as to include the Fund's collection of attorney's social security numbers. First, Judge Davis explained that the Fund's collection of social security numbers was not for the purpose of administering a tax, as the Fund was not created for the purpose of administering tax law. Second, the Fund is not an entity that can collect social security numbers because it is not "an agency having administrative responsibility of the law involved." Judge Davis interpreted this language as referring to tax related agencies. Judge Davis also rejected the majority's agency argument stating that the Fund is an agent of the Maryland Court of Appeals not the state. Finally, Judge Davis found that Mr. Tankersley did not appear to be affected by Maryland tax law because he lives in Virginia and practices law in the District of Columbia.

Thus, Judge Davis reached the question of first impression: whether Section 7 of the Privacy Act creates a Section 1983 private right of action. He noted that the Ninth and Eleventh Circuits are split on this issue. Judge Davis found that Tankersley could bring a Section 1983 claim under the Privacy Act. Though the Act does not explicitly confer a private right of action and focuses on what states may not do, it states that individuals have the right not to disclose their social security numbers to government entities. This shows that the Act was intended to benefit people like Mr. Tankersley. Judge Davis found that this right was not too "vague and amorphous" for courts to enforce. Finally, he wrote that nowhere in the Act did Congress foreclose a Section 1983 suit. Thus, Mr. Tankersley had the right to bring a Section 1983 action under the Privacy Act.

The tension between the majority and dissent reflects competing concerns - the government's ability to administer its tax laws against citizen's concerns over the ability of the government to secure their data.

To read the full opinion click here.

Panel:
Circuit Judges Diaz and King, and Senior Circuit Judge Davis

Argument Date:
05/12/2016

Date of Issued Opinion: 09/13/2016

Docket Number: No. 15-1081

Decided:
Affirmed by published opinion

Case Alert Author:
Laura Tallerico, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Scott Matthew Michelman, PUBLIC CITIZEN LITIGATION GROUP, Washington, D.C., for Appellant. Michele J. McDonald, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellees. ON BRIEF: Julie A. Murray, PUBLIC CITIZEN LITIGATION GROUP, Washington, D.C., for Appellant. Brian E. Frosh, Attorney General, Alexis Rohde, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellees.

Author of Opinion:
Circuit Judge Diaz (Majority), Senior Circuit Judge Davis (Concurring in Part, Dissenting in Part)

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/07/2016 04:22 PM     4th Circuit  

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