Phelps v. Social Security Administration, Office of the Inspector General, No. 3:2008cv02092 - Document 5 (S.D. Cal. 2009)
Court Description: ORDER Granting 4 Respondent's Motion for Leave to File Opposition to Motion to Quash and Supporting Declaration In Camera; Directing the Clerk of Court to File the Opposition and declaration Under Seal; and Denying 1 Movant's Motion to Quash. Signed by Magistrate Judge Barbara Lynn Major on 3/26/2009. (All non-registered users served via U.S. Mail Service).(mjj)(kaj).
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Phelps v. Social Security Administration, Office of the Inspector General Doc. 5 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 13 14 15 16 17 18 RICKY PHELPS, ) ) Movant, ) v. ) ) SOCIAL SECURITY ADMINISTRATION, ) OFFICE OF THE INSPECTOR ) GENERAL, ) ) Respondent. ) ) ) ) ) ) Case No. 08cv2092-L (BLM) ORDER (1) GRANTING RESPONDENT’S APPLICATION TO FILE OPPOSITION TO MOTION TO QUASH AND SUPPORTING DECLARATION IN CAMERA, (2) DIRECTING THE CLERK OF COURT TO FILE THE OPPOSITION AND DECLARATION UNDER SEAL, AND (3) DENYING MOVANT’S MOTION TO QUASH [Doc. Nos. 1 & 4] 19 Ricky Phelps, who is proceeding pro se, seeks to quash a Social 20 Security Administration subpoena directed to Washington Mutual Bank, 21 which requests documents from four of his bank accounts. 22 By order dated March 10, 2009, the district judge ordered Respondent to 23 file a sworn response to Mr. Phelps’ motion [Doc. No. 2] and Respondent 24 did so on March 24, 2009 [see Doc. No. 4]. Doc. No. 1. 25 Having considered the arguments presented and all supporting 26 documents submitted, and for the reasons set forth below, Respondent’s 27 application [Doc. No. 4] is GRANTED and Mr. Phelps’ motion to quash 28 [Doc. No. 1] is DENIED. 08cv2092-L (BLM) Dockets.Justia.com 1 LEGAL STANDARD 2 Under the Right to Financial Privacy Act (“RFPA”), 12 U.S.C. § 3401 3 et seq. (1978), a financial institution may disclose a customer’s 4 financial 5 governmental 6 subpoena. 7 disclosure of his financial records, he must file a motion to quash the 8 summons or subpoena and timely serve the government entity with the 9 motion. 12 U.S.C. § 3410(a); see also S.E.C. v. Jerry T. O’Brien, Inc., 10 467 U.S. 735, 745 (1984) (noting that “[a] customer’s ability to 11 challenge a subpoena [under the RFPA] is cabined by strict procedural 12 requirements”). The motion must contain an affidavit or sworn statement 13 confirming that the applicant is a customer of the financial institution 14 and “stating the applicant’s reasons for believing that the financial 15 records sought are not relevant to the legitimate law enforcement 16 inquiry stated by the Government authority in its notice, or that there 17 has not been substantial compliance with the provisions of [chapter 35 18 of title 12].” 19 orders the government authority to reply to the motion to quash, the 20 government authority must file a sworn response. records if authority such via records an are properly administrative 12 U.S.C. § 3402(2) & (4). 12 U.S.C. § 3410(a)1. requested summons or by a judicial If the customer objects to the If, as in this case, the Court Id. at 3410(b). 21 In ruling on the motion, the court relies on the parties’ sworn 22 statements and any additional proceedings the court finds appropriate. 23 Id. 24 applicant 25 requested or “there is a demonstrable reason to believe that the law The RFPA directs the court to deny the motion if either the is not the customer whose financial records are being 26 27 28 1 The RFPA makes clear that this procedure “constitute[s] the sole judicial remedy available to a customer to oppose disclosure of financial records” under this Act. 12 U.S.C. § 3410(e). 2 08cv2092-L (BLM) 1 enforcement inquiry is legitimate and a reasonable belief that the 2 records sought are relevant to that inquiry.” Id. at 3410(c); Rodriguez 3 v. Fed. Sav. and Loan Ins. Corp., 712 F.Supp. 159, 162 (N.D. Cal. 1989). 4 “The ultimate burden of showing that the records sought are relevant to 5 a legitimate law enforcement inquiry is on the government.” 6 Blunden, 896 F.Supp. 996, 999 (C.D. Cal. 1995) (quoting Collins v. 7 Commodity Futures Trading Comm., 737 F.Supp. 1467, 1480 (N.D. Ill. 8 1990)). 9 relevancy is a broad one.” Sandsend Fin. Consultants, Ltd. v. Fed. Home 10 Loan Bank Bd., 878 F.2d 875, 882 (5th Cir. 1989); S.E.C. v. Nicita, 2007 11 WL 1704585, *3 n.4 (S.D. Cal. June 13, 2007). 12 with statutory authority to engage in investigative and accusatory 13 duties may “investigate merely on suspicion that the law is being 14 violated, or even just because it wants assurance that it is not.” U.S. 15 v. Morton Salt Co., 338 U.S. 632, 642-43 (1950). In re “For purposes of an administrative subpoena, the notion of 16 An administrative agency DISCUSSION 17 On or about November 2, 2008, the Social Security Administration, 18 Office of the Inspector General, Office of Investigations (“SSA”) sent 19 Mr. Phelps a certified letter informing him that it intended to subpoena 20 his financial records from Washington Mutual Bank. 21 Mr. Phelps timely moved to quash the subpoena on November 12, 2008. See 22 12 U.S.C. § 3410(a) (requiring a motion to quash an administrative 23 subpoena or summons to be filed within ten days of service or fourteen 24 days of mailing). 25 presently is a customer of Washington Mutual Bank and is the customer 26 whose records are being requested by the SSA. 27 12 U.S.C. § 3410(a). He argues that the records sought are not relevant 28 to a legitimate law enforcement inquiry because (a) he has not engaged Pet. to Quash at 4. In his sworn statement, Mr. Phelps confirms that he 3 Pet. to Quash at 1, 3; 08cv2092-L (BLM) 1 in illegal activity and (b) the SSA already has taken money out of his 2 “SSI check” and cut off his “SSA check” completely. 3 2-3. 4 information, that he does not authorize anyone to access his financial 5 records, and that he is merely saving money to improve his education and 6 living standards. Pet. to Quash at He also states that he has a privacy right in his financial Id. 7 On March 24, 2009, the SSA filed an application for leave to file 8 its opposition to Mr. Phelps’ motion to quash, and a supporting 9 declaration, in camera pursuant to 12 U.S.C. § 3410(b).2 Doc. No. 4. 10 For purposes of ruling on Mr. Phelps’ motion to quash, the Court has 11 reviewed in camera all of the submitted documents. 12 Turning to the merits of Mr. Phelps’ motion, the Court must 13 determine whether (1) Mr. Phelps is the customer whose financial records 14 are being requested, (2) the law enforcement inquiry is legitimate, and 15 (3) the records sought are relevant to the law enforcement inquiry. 16 U.S.C. § 3410(c); Rodriguez, 712 F.Supp. at 162. 17 this test is satisfied because Mr. Phelps admits in his sworn statement 18 that he is a customer of Washington Mutual Bank and is the holder of the 19 four bank accounts in question. 20 12 The first prong of Mot. to Quash at 1, 3. The next question is whether the SSA’s law enforcement inquiry is 21 legitimate. 22 investigation or official proceeding inquiring into a violation of, or 23 failure to comply with, any criminal or civil statute or any regulation, 24 rule, or order issued pursuant thereto.” The RFPA defines a law enforcement inquiry as “a lawful 12 U.S.C. § 3401(8). In this 25 26 2 27 28 The SSA concurrently lodged with Chambers the opposition and declaration to be considered in camera. After reviewing the SSA’s application and the documents lodged with Chambers, the Court GRANTS the SSA’s application and ORDERS that the Clerk of Court file the opposition and supporting declaration under seal. 4 08cv2092-L (BLM) 1 case, the inquiry is lawful because the Inspector General Act of 1978, 2 as amended, authorizes the Office of the Inspector General (a) to 3 initiate any investigations necessary to further proper administration 4 of Social Security programs and (b) to serve subpoenas for records and 5 other account information in furtherance of this goal. 6 3 § 6(a)(2), (4) (2008); see also 42 U.S.C.A. § 902(e) (1996) (providing 7 for 8 Administration in accordance with the Inspector General Act of 1978). 9 Because the instant investigation relates to “the possible fraudulent 10 or otherwise improper receipt and/or use of Social Security benefits” 11 (Mot. to Quash at 5), the Court finds that the investigation falls 12 squarely within SSA’s statutory authority to investigate potential 13 violations of the laws governing administration of Social Security 14 programs. 15 Washington Mutual Bank is part of a legitimate law enforcement inquiry. 16 12 U.S.C. § 3410(c); Rodriguez, 712 F.Supp. at 162. appointment of an Inspector General of the 5 U.S.C. app. Social Security The Court, therefore, concludes that the subpoena issued to 17 In regard to whether or not the subpoenaed records are relevant to 18 the law enforcement inquiry, see 12 U.S.C. § 3410(c), the burden is on 19 the SSA to make a sufficient showing, see In re Blunden, 896 F.Supp. at 20 999. 21 to Quash Inspector General Subpoena and a declaration signed under 22 penalty of perjury by Special Agent Sarah Miller. 23 camera the SSA’s opposition and declaration, the Court concludes that 24 the SSA has met its burden of demonstrating its basis for suspecting 25 that Mr. Phelps has violated one or more laws and/or failed to comply 26 with an applicable criminal or civil statute, regulation or order, see 27 Morton Salt Co., 338 U.S. at 642, as well as a reasonable basis for 28 believing that the subpoenaed records are relevant to determining To satisfy this burden, the SSA submitted an Opposition to Motion 5 Having reviewed in 08cv2092-L (BLM) 1 whether such violations have, in fact, occurred. 2 In sum, the Court concludes that the SSA’s subpoena for Mr. Phelps’ 3 account records, held by Washington Mutual Bank, was issued as part of 4 a legitimate law enforcement inquiry and seeks records that are relevant 5 to that inquiry. 6 7 8 9 10 CONCLUSION For the foregoing reasons, the Court DENIES Mr. Phelps’ motion to quash. IT IS SO ORDERED. DATED: March 26, 2009 11 12 BARBARA L. MAJOR United States Magistrate Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 08cv2092-L (BLM)
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