Maracich v. Spears, Case No. 12-25, 570 U.S. ________, 2013 LEXIS 4546 (JUNE 17, 2013)
There are very few cases interpreting the Driver’s Privacy Protection Act, 18 U.S.C. § 2721, et seq.  The DPPA protects the disclosure of personal information (this even includes the individual’s name) contained in driving records and vehicle registration records maintained by the States.  Section 2721(b) contains fourteen exceptions/permissible purposes that allow disclosure of personal information found in these records.   Recently the Supreme Court had the issue before it of how broad was permissible purpose No. 4:

“For use in connection of any civil, criminal administrative, or arbitral proceeding in any Federal, State or local court or agency or before any self-regulatory body, including the service of process, investigation in anticipation of litigation, and the execution or enforcement of judgments and orders, or pursuant to an Order of a Federal, State, or local court.”

The Defendants in the case were attorneys who had requested the names of owners of vehicles in South Carolina.  The lawyers were planning and did sue numerous car dealers for violating certain state consumer protection laws relating to charging “administrative” or “closing” fees when they sold cars. The Defendants used the DMV records to contact vehicle owners to see if they had paid such illegal fees and also asked them if they would like to join the lawsuit.  The attorneys obtained the records in bulk directly from the DMV and not through a CRA.  The issue before the Court was how “connected” does an activity have to be to fall within the exception/permissible purpose:  “For use in connection with any civil . . . proceeding . . .”

The Court ruled 5 to 4 that solicitation of clients was not covered within this purpose.  It would appear that that purpose is better covered in purpose No. 12:

“For bulk distribution for surveys, marketing or solicitations if the State has obtained the express consent of the person to whom such personal information pertains.” [This is only an “opt in” permissible purpose under the DPPA.]

However, few consumers opt in to allow release; so this not really available.

The dissent provided a strong argument that since in this case there were real lawsuits, the inquiries and questions did fall within purpose No. 4, because the information was connected to the anticipated and actual lawsuit filed by those attorneys.

Bottom line: Many CRA’s do not sell to lawyers or private detectives because they can have a mixed use for information, and that decision is fine, but not required.  However, if you do sell driving records to lawyers or private investigators who state they intend to use information in connection with a civil proceeding, you should inquire further.  It would be best practice to have in your client agreement and in  client files a provision specifically stating that this use prohibits the solicitation of individuals to participate in planned or pending litigation.  Your “affidavit of intended use” should state that purpose No. 4 does not permit solicitation of parties to participate in a lawsuit.  The majority of the Court seemed to find one-half of the solicitation by the lawyers okay which was seeking information on the Defendant car dealer’s operations, but the second part of the questionnaire asking if the consumer wanted to join the lawsuit was not connected and thus not allowed.  The Court stated that when there is a mixed reason for a request the Court must determine the predominant motive for the request.  Therefore, the case was remanded to the lower courts to make such a determination.

As a side note, the majority and the dissent both seemed to believe that the $2500.00 liquidated damage amount per violation provided in the DPPA was excessive when presented in the context of a class action and suggested ways a court could limit such damage.

Another result of this litigation may be that this further highlights for plaintiff lawyers additional claims that could be brought against consumer reporting agencies.  Therefore, if you are engaged in selling driving records or vehicle registration records, make sure that your documentation and ongoing audit of use discloses that your consumers are using the information in accordance with their representation/certification/affidavit of intended use.

Source: CRAHelpDesk.com

Stephen White
Steve is the co-founder and CEO of Fidelis Screening Solutions which provides resident screening and pre-employment screening to businesses and municipalities. Outside of the office, he can be found enjoying the outdoors and coaching his son's ice hockey team.
Stephen White
Stephen White