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Orduno v. Pietrzak

United States District Court, D. Minnesota

September 29, 2017

Samantha Orduno, Plaintiff,
v.
Richard Pietrzak, in his individual capacity as the Chief of Police of the City of Dayton; City of Dayton; John and Jane Does 1-120, acting in their individual capacity as supervisors in the City of Dayton, Defendants.

          Sonia L. Miller-Van Oort, Esq., Jonathan A. Strauss, Esq., Lorenz F. Fett, Jr., Esq., and Robin M. Wolpert, Esq., Sapientia Law Group, PLLC, Minneapolis, MN; and Susan M. Holden, Esq., Jeffrey M. Montpetit, Esq., and Marcia K. Miller, Esq., SiebenCarey, Minneapolis, MN on behalf of Plaintiff.

          Stephanie A. Angolkar, Esq., Jon K. Iverson, Esq., and Susan M. Tindal, Esq., Iverson Reuvers Condon, Bloomington, MN, on behalf of Defendants Richard Pietrzak and City of Dayton.

          MEMORANDUM OPINION AND ORDER

          ANN D. MONTGOMERY U.S. DISTRICT JUDGE

         I. INTRODUCTION

         This matter is before the undersigned United States District Judge for a ruling on Plaintiff Samantha Orduno's (“Orduno”) Amended Motion to Amend Judgment Under Rule 59(e) and Rule 60(a) [Docket No. 259], Motion for a New Trial Under Rule 59(a) [Docket No. 265], and Motion for an Award of Reasonable Attorneys' Fees and Costs Under 18 U.S.C. § 2724 [Docket No. 233]. Also before the Court are Defendants City of Dayton (“City of Dayton” or “City”) and Richard Pietrzak's (“Pietrzak”) (collectively, “Defendants”) Motion to Strike Untimely Motion for New Trial, Untimely “Amended Motion” to Amend Judgment and Untimely Motion for Attorneys' Fees [Docket No. 269], and City of Dayton's Renewed Motion for Judgment as a Matter of Law [Docket No. 247]. For the reasons set forth below, the Amended Motion to Amend Judgment is granted, the Motion for a New Trial is denied, the Motion for Attorneys' Fees and Costs is granted in part and denied in part, the Motion to Strike is denied, and the Renewed Motion for Judgment as a Matter of Law is denied.

         II. BACKGROUND

         This case began as a putative class action under the Driver's Privacy Protection Act, 18 U.S.C. § 2721, et seq. (“DPPA” or the “Act”). Compl. [Docket No. 1] ¶¶ 227-254. The DPPA prohibits “any person” from “knowingly . . . obtain[ing] or disclos[ing] personal information, from a motor vehicle record, for any use not permitted under Section 2721(b) of this title.” 18 U.S.C. § 2722. The Act lists numerous permitted uses, including “use by any government agency, including any court or law enforcement agency, in carrying out its functions . . . .” 18 U.S.C. § 2721(b)(1).

         Orduno, the former Dayton City Administrator, alleged that former Dayton Police Chief Pietrzak violated the DPPA by accessing her personal information[1] and that of at least 850 other individuals from the Minnesota Driver and Vehicle Services database (the “DVS Database”) for an impermissible purpose. Compl. ¶¶ 42-53. Orduno further alleged that the City knew of Pietrzak's unlawful accesses, and that the City and its supervisors failed to monitor and prevent the accesses. Id. ¶¶ 54-55, 69-76.

         A. Events Giving Rise to Lawsuit

         On November 9, 2012, a photocopy of Orduno's paycheck receipt was found in the copy machine in the City's main office while Orduno was on vacation. First Miller Aff., June 22, 2015 [Docket No. 37] Ex. A (“Bankes Report”) at ¶ 245. The photocopy exposed only the corners of the paycheck receipt, and the visible data that appeared in those corners was public data. Id. at ¶ 245, D259. Orduno perceived the finding of the photocopy as evidence of a possible data practices violation. She contacted the City Administrator from White Bear Lake, Minnesota to inquire whether White Bear Lake Police Chief Lynne T. Bankes (“Bankes”) would conduct a criminal investigation of the incident. Second Miller Aff., Sept. 11, 2015 [Docket No. 49] Ex. 1 (“Bankes Dep.”) at 19-21; Orduno Decl., Sept. 11, 2015 [Docket No. 50] ¶¶ 13-14. Orduno and Bankes knew each other from their previous employment with the City of Fridley. Bankes Dep. at 20; First Angolkar Aff., Aug. 5, 2015 [Docket No. 46] Ex. 7 at 1. Bankes was assigned to the investigation, and Orduno provided Bankes with a written account of what she believed had happened. Bankes Report at ¶ 245; Bankes Dep. at 19-20, 76-77.

         As part of her investigation, Bankes interviewed several City employees. Bankes Report at ¶ 246-52. Pietrzak declined to speak with Bankes without an attorney, but contacted his union attorney to arrange for a meeting with Bankes. Id. at ¶ 249. The union attorney left a message for Bankes on December 13, 2012, stating that Pietrzak would be available to speak with Bankes after the first of the year. Id. Bankes did not follow up with Pietrzak or his attorney before concluding her investigation. See id. at ¶ 255.

         During the investigation of the photocopied paycheck receipt, Orduno informed Bankes “that there was an honesty and integrity issue with some City staff, ” and that she was “concerned that her private personal data was released.” Id. at ¶ 252. Orduno told Bankes that Pietrzak was her “primary suspect” because he had access to City Hall at any time of the day or night. Id. Orduno also conveyed to Bankes that she felt Pietrzak was “out to get her.” Bankes Dep. at 78.

         Based on Orduno's concerns and suspicions, Bankes contacted the Minnesota Department of Motor Vehicle Services (“DVS”) to determine whether Orduno's driver's license or license plate number had been accessed in the DVS Database by any law enforcement officer in Minnesota. Bankes Report at ¶ 252. DVS provided Bankes with a printout showing that Orduno's name had been accessed in the DVS Database 14 times between January 19, 2010 and October 4, 2012. Id. at ¶ 252, Ex. A. Seven of the accesses were made by Pietrzak. Id.[2] The accesses were not made by entering Orduno's motor vehicle information, which led Bankes to conclude that “the reason for the entry into DVS was not due to a traffic stop violation, but for another reason.” Id. at ¶ 252. Orduno informed Bankes that she had not been stopped for a traffic violation during that time period and could not think of any reason that officers would have been required to search her name in the DVS Database. Id. Bankes concluded that the accesses were unauthorized and that Pietrzak had violated the DPPA and other statutes. Id. at ¶ 253; Bankes Dep. at 59.

         Bankes then contacted DVS to request all access data by Pietrzak for the past six months “to see if Chief Pietrzak was only illegally accessing [Orduno's] name and data or if this practice was pervasive.” Bankes Report at ¶ 253. In response, a DVS support services supervisor sent Bankes an email requesting to deactivate Pietrzak's access because their review of the inquiry was “so disturbing” that DVS planned to discontinue his access. Id. Bankes requested that the access remain open during her investigation. Id. DVS then provided Bankes with a list showing that Pietrzak had accessed information for more than 850 people during the six month period covered by the report. Id.

         Upon reviewing the list of accesses, Bankes became “immediately concerned” because the list included “numerous” accesses for Pietrzak's family members, City of Dayton's police officers, and the City's police secretary. Id. at ¶ 253-54. Pietrzak had also accessed the DVS Database for the Hennepin County sheriff, police chiefs from three other cities, most of Dayton's City Council, members of the City of Dayton's staff, the City of Dayton's past and future mayor, two individuals close to the mayor, a public safety commissioner, and persons from nearby communities who were running or had run for public office. Id. “Many” of those accessed were female. Id. at ¶ 254. Additionally, “very few” of the entries on the DVS report were preceded by a license plate entry, indicating the accesses were not likely to have been the result of a traffic stop. Id.

         Bankes did not compare the list to an incident report or report of service calls for the City of Dayton police department, nor did she contact any individuals on the list, review the personnel files of the City of Dayton employees on the list, or speak to Pietrzak about the reasons for the accesses. Bankes Dep. at 62, 82-83. Nevertheless, Bankes concluded from her review of the list that “there could reasonably be hundreds of counts of a violation of the law.” Bankes Report at ¶ 254.

         Bankes prepared a report documenting the results of her investigation concerning the photocopied paycheck receipt. See generally Bankes Report. The report concludes that the photocopied data was public data, and that there was “little evidence to criminally charge anyone” with violating Orduno's privacy based on the photocopied paycheck receipt. Id. at ¶ 254. However, the report also finds that the “bigger issue [was] the absolute disregard of the law by the Police Chief, ” and that there was “more than sufficient evidence” to bring charges against Pietrzak based on his “illegal” accesses to the DVS Database. Id.

         B. Case Commenced

         On May 2, 2014, Orduno filed this lawsuit alleging that Pietrzak violated the DPPA when he accessed her personal information and that of approximately 850 other persons for an impermissible purpose, and that the City, through its supervisors, knew of Pietrzak's unlawful accesses and failed to monitor and prevent the accesses. Compl. ¶¶ 42-55, 69-76. Orduno's requested relief included punitive damages for Defendants' “willful or reckless disregard of the law.” 18 U.S.C. § 2724.

         Pietrzak initially denied the allegations and argued that he accessed Orduno's private data for the permissible law enforcement purpose of investigating whether she was using an alias to hide her true name. First Angolkar Aff. Ex. 4 (Pietrzak Answer Interrogs.) at 8-9.

         C. Time-Barred Accesses Dismissed

         On October 28, 2014, the Court granted in part a Motion to Dismiss by Defendants, holding that Orduno's claims for accesses occurring before May 2, 2010 were barred by the four year statute of limitations under the DPPA. Mem. Op. & Order, October 28, 2014 [Docket No. 24]. Pietrzak accessed Orduno's personal information on sixteen different dates, ten of which occurred between September 7, 2005 and May 12, 2009. See Pl.'s Resp. Defs.' Objs. [Docket No. 94] at 4-5. Therefore, accesses made by Pietrzak on six occasions on or after May 2, 2010 remained in the case. Those accesses occurred on August 19, 2010; April 26, 2011; May 19, 2011; November 3, 2011; May 16, 2012; and October 4, 2012. Id.; Compl. Ex. A.

         D. Class Certification Denied

         On November 10, 2015, the Court denied Orduno's Motion to Certify Class Action. See Mem. Op. & Order, Nov. 10, 2015 [Docket No. 54]. The Court concluded that Orduno failed to satisfy the predominance standard under Federal Rule of Civil Procedure 23(b) because common questions of fact or law did not predominate over individualized questions. Specifically, common evidence could not suffice to make a prima facie case for the class because each access would need to be individually examined to determine whether Pietrzak obtained the information for a permissible purpose such as a law enforcement function. In December 2015, the Eighth Circuit denied a petition by Orduno to appeal the denial of class certification. See Notice USCA J. [Docket No. 56]; Notice USCA Mandate [Docket No. 57].

         E. Answer Amended

         In February 2017, the Court issued a Jury Trial Notice [Docket No. 132] that trial would begin on May 22, 2017. On April 27, 2017, Defendants filed an Amended Answer [Docket No. 155] which admitted that Pietrzak had accessed Orduno's private information for an impermissible purpose after May 2, 2010, but denied the direct and vicarious liability claims against the City of Dayton. Compare Compl. ¶¶ 207-16, 223 with Am. Answer ¶¶ 65-70, 73.

         F. Pretrial Rulings

         On May 15, 2017, the Court held a pretrial conference to address motions in limine [Docket Nos. 163, 165, 171, 173, 181, 184, 186] filed by Defendants. See Min. Entry [Docket No. 218]. During the conference, the Court made the following rulings which were implemented at trial. First, the direct liability claim against the City was dismissed because there was no evidence that the City gave Pietrzak access for an impermissible purpose. Second, there were six obtainments of Orduno's personal information because Pietrzak had accessed Orduno's information on six dates, and the viewing of multiple information categories during a given access session would be counted as a single obtainment. Third, each of the six obtainments carried a minimum of $2, 500 in statutory damages under § 2724(b)(1), for a total minimum of $15, 000. Fourth, time-barred accesses and accesses of non-party data were inadmissable on relevancy grounds and because the value of the evidence was more prejudicial than probative. Relatedly, the Bankes investigation was admissible only to document accesses of Orduno's data. Fifth, the City's actions following the Bankes Report, including whether the City took action to investigate the accesses or to discipline Pietrzak for them, was inadmissible on relevancy grounds. Sixth, any reference to the damages provision of DPPA entitling a plaintiff to no less than $2, 500 for a violation of the statute would be excluded at trial, because liquidated damages would be addressed as a post-judgment issue in post-trial motions. Finally, Orduno would not be allowed to seek damages against the City under a theory of direct liability because the direct liability claim against the City had been dismissed, but the City could be held vicariously liable for damages awarded against Pietrzak, including punitive damages.

         G. Trial

         On May 22, 2017, the Court commenced a trial on the issue of damages for Pietrzak's admitted violations of the DPPA. At the close of Orduno's case in chief, the City moved for judgment as a matter of law on Orduno's vicarious liability claim. The Court denied the motion without prejudice, concluding that the City can be held vicariously liable under the DPPA based on Pietrzak's admission of liability. After three days of trial, the case was submitted to the jury on the afternoon of May 24, 2017. Because the direct liability claim against the City had been dismissed, the damage-related questions on the Special Verdict Form were directed to Pietrzak's improper conduct and did not include a question about the City's misconduct. See Verdict [Docket No. 228].

         On May 25, 2017, the jury awarded actual damages of $0 and punitive damages of $85, 000 against Pietrzak. Id. Judgment reflecting the jury's verdict was dated and filed on May 25, 2017, and was entered by the clerk on May 26, 2017. See Judgment [Docket No. 229]; First Miller-Van Oort Aff., June 30, 2017 [Docket No. 277] Exs. 1, 2. Following the jury verdict and the entry of judgment, the parties filed these post-trial motions.

         III. DISCUSSION

         A. Defendants' Motion to Strike Untimely Motions

         Defendants argue that Orduno's Amended Motion to Amend Judgment, Motion for New Trial, and Motion for Attorneys' Fees must be stricken as untimely because they were filed one day late. The Motion to Strike fails because it is based on Defendants' erroneous contention that Judgment was entered May 25, 2017.

         Under Federal Rule of Civil Procedure 58(c)(1), entry of a judgment occurs “when the judgment is entered in the civil docket under Rule 79(a).” In turn, Rule 78(a)(3), requires that a docket entry for a judgment include the judgment's “date of entry.” Here, the Judgment is listed in Docket Entry 229. Although Docket Entry 229 is dated May 25, 2017, it expressly states that the Judgment was “Entered: 05/26/2017.” Additionally, the District Court's automated electronic filing notification system states that the Judgment “was entered on 5/26/2017 at 7:47 AM CDT and filed on 5/25/2017.” First Miller-Van Oort Aff. Ex. 1 (emphasis added). Thus, the case docket unequivocally shows that Judgment was entered on May 26, 2017. See Jones v. Gann, 703 F.2d 513, 514 (11th Cir. 1983) (“The time for filing a notice of appeal begins to run not on the date that the judgment is filed but on the date the judgment is actually entered on the docket.”).

         Because the Judgment was entered on May 26, 2017, Orduno's Amended Motion to Amend Judgment, Motion for New Trial, and Motion for Attorneys' Fees are timely and Defendants' Motion to Strike is denied.[3]

         B. City of Dayton's Renewed Motion for Judgment as a Matter of Law

         The City of Dayton argues that it is entitled to judgment as a matter of law on Orduno's claim against the City for vicarious liability because vicarious liability does not apply to the DPPA or to the circumstances of this case.

         Rule 50(b) of the Federal Rules of Civil Procedure governs renewed motions for judgment as a matter of law. Under Rule 50, the court may allow judgment on the verdict, order a new trial, or direct the entry of judgment as a matter of law. Fed.R.Civ.P. 50(b)(1-3). The standard of review for granting a Rule 50(b) motion is whether sufficient evidence exists to support the jury verdict. A motion for judgment as a matter of law should only be granted when “all the evidence points one way and is susceptible of no reasonable inferences sustaining the position of the nonmoving party.” Washburn v. Kan. City Life Ins. Co., 831 F.2d 1404, 1407 (8th Cir. 1987) (citation omitted). In deciding a motion for judgment as a matter of law, the court must view the evidence in the light most favorable to the party who prevailed before the jury, making all reasonable inferences in that party's favor. Id. (citation omitted).

         The DPPA is silent on the issue of vicarious liability. No Circuit Court has yet addressed whether vicarious liability applies to DPPA claims. Although cases within this district have reached differing conclusions on the issue, most hold that the DPPA imposes vicarious liability upon municipalities for the actions of their employees. See, e.g., Myers v. Aitkin Cty., No. 14-473, 2017 WL 1198536, at *8 (D. Minn. Mar. 27, 2017) (holding vicarious liability is available under the DPPA); Mallak v. City of Brainerd, No. 13-2119, 2017 WL 440249, at *15 (D. Minn. Feb. 1, 2017) (same); Karasov v. Caplan Law Firm, No. 14-1503, 2016 WL 6836930, at *10 (D. Minn. Nov. 18, 2016) (same); Rollins v. City of Albert Lea, No. 14-299, 2016 WL 6818940, at *12 (D. Minn. Nov. 17, 2016) (same); Potocnik v. Carlson, No. 13-2093, 2016 WL 3919950, *6 (D. Minn. July 15, 2016) (“In American law, vicarious liability is the rule, not the exception, and the Court can discern no reason why DPPA cases should be exempt from the general rule.”); but see Jessen v. Blue Earth Cty., No. 14-1065, 2014 WL 5106870, at *4 n.4 (D. Minn. Oct. 10, 2014) (holding vicarious liability does not apply to DPPA because statute's plain language requires that defendant itself must have acted to be liable); Weitgenant v. Patten, No. 14-255, 2016 WL 1449572, at *7 (D. Minn. Apr. 12, 2016) (declining to apply vicarious liability based on the circumstances of the case). At least three district courts from other federal jurisdictions have also held that the DPPA imposes vicarious liability upon municipalities for the actions of their employees. See Margan v. Niles, 250 F.Supp.2d 63, 72-76 (N.D.N.Y. 2003); Schierts v. City of Brookfield, 868 F.Supp.2d 818, 821-22 (E.D. Wis. 2012); Menghi v. Hart, 745 F.Supp.2d 89, 99 (E.D.N.Y. 2010).

         In determining that vicarious liability applies to municipalities under the DPPA, courts recognize the general principle that “[w]hen Congress creates a tort action, it legislates against a legal background of ordinary tort-related vicarious liability rules and consequently intends its legislation to incorporate those rules.” See Margan, 250 F.Supp.2d at 74 (quoting Meyer v. Holley, 537 U.S. 280, 285 (2003)); Schierts, 868 F.Supp.2d at 822 (same). Under this principle, traditional vicarious liability rules will be applied if they are consistent with the federal statute's provisions and Congress' intent. Jones v. Federated Fin'l Reserve Corp., 144 F.3d 961, 965-66 (6th Cir. 1998).

         Federal tort-related vicarious liability rules include the doctrine of apparent authority, which provides that a principal is liable for the torts of its agents when the agents act with apparent authority. Am. Soc'y of Mech. Eng'rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 567 (1982). In Hydrolevel, the Supreme Court applied the doctrine of apparent authority to antitrust statutes after finding that vicarious liability was consistent with Congress' intent to encourage competition. Id. at 570-76. The Supreme Court reasoned that if an organization is liable for the antitrust violations of its agents acting with apparent authority,

it is much more likely that similar antitrust violations will not occur in the future. Pressure will be brought on the organization to see that its agents abide by the law. Only [the organization] can take systematic steps to make improper conduct on the part of all its agents unlikely, and the possibility of civil liability will inevitably be a powerful incentive for [the organization] to take those steps.

Id. at 572-73 (internal quotations, citation, and alterations omitted).

         Courts applying vicarious liability to municipalities under the DPPA have similarly concluded that the municipalities are in the best position to prevent DPPA violations by their employees, and that the threat of vicarious liability encourages municipalities to adopt appropriate policies, procedures, and training to prevent the misuse of motor vehicle data. See Mallak, 2017 WL 440249, at *17; Potocnik, 2016 WL 3919950, at *7; Margan, 250 F.Supp.2d at 74-75. Moreover, “once a law-enforcement officer has exceeded the broad bounds of the government-function exception [under § 2721(b)(1) of the DPPA], shielding his employer from vicarious liability serves no purpose other than to weaken the municipality's incentive to prevent future violations.” Potocnik, 2016 WL 3919950, at *7. Id. Thus, this Court holds vicarious liability may apply to a municipality whose employees violate the DPPA.

         The City argues that it should not be held vicariously liable for Pietrzak's unlawful accesses because he was acting outside the scope of his employment. However, under the federal rule of apparent authority, liability is premised on the agent's position in facilitating the wrongdoing. Hydrolevel Corp., 456 U.S. at 566. Thus, an agent acting outside the scope of their employment will be liable if the agent “was aided in accomplishing the tort by the existence of the agency relation.” Restatement (Second) of Agency § 219(2)(d) (1958). Here, Pietrzak's position as the City's Chief of Police facilitated the alleged wrongdoing because he had access to the DVS Database as a result of his position. Trial Tr. Vol. II [Docket No. 290] at 128:21-129:25. Therefore, vicarious liability applies.[4]

         The City insists that the policy argument for applying the aided-in-agency relation theory to the DPPA-namely, that entities will be motivated to perform routine monitoring and training to ensure that private records are accessed only for permissible purposes-is not met in this case because Orduno was Pietrzak's supervisor at the time of Pietrzak's improper accesses and failed to monitor his computer usage. The City argues that Orduno should not be rewarded for failing to discover Pietrzak's unlawful conduct. However, ...


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