Summary:
Through requests submitted to the South Carolina Department of Motor Vehicles (DMV) under the state Freedom of Information Act, S.C. Code Ann. §§ 30-4-10 to -165 (FOIA), Michael E. Spears, Esq., Gedney M. Howe, III, Esq., Richard A. Harpootlian, Esq., and A. Camden Lewis, Esq. (“the Lawyers”) obtained "personal information", viz., the names, addresses, telephone numbers, and car purchase information of thousands of car buyers, from which they identified potential named plaintiffs in the Dealers Act group action, mailing more than 21,000 solicitations to potential clients for participation in lawsuits pending against numerous South Carolina car dealerships. The personal information obtained is protected by the Driver’s Privacy Protection Act of 1994 (DPPA), 18 U.S.C. §§ 2721-2725, which "regulates the disclosure of personal information contained in the records of state motor vehicle departments." Several Buyers, both individually and on behalf of a putative class of all others similarly situated, sued the alleging the Lawyers violated the DPPA when they obtained and used the Buyers’ personal information without their consent in connection with the Dealers Act litigation.
The DPPA does generally prohibit use of DMV information, but 18 U.S.C. § 2721 (b)(12) allows bulk solicitations, only “ if the State has obtained the express consent of the person to whom such personal information pertains.” Reversing the District Court, the 4th Circuit held that the Lawyer’s letters to potential clients were, in fact, solicitations for legal representation.
That notwithstanding, the Court of Appeals rejected the argument by the Buyers that if the use of personal information was impermissible under any section of 18 U.S.C. § 2721 (b), then its use was impermissible even if a different section allowed it. Here both the District Court and the Court of Appeals held that the use of the personal information was permissible under the state action and litigation exceptions in 18 U.S.C. §§ 2721(b)(1) and (b)(4).
Because the Lawyer’s intended use of the personal information was either imminent or ongoing litigation, with which solicitation was “inextricably intertwined”, the solicitation was not fatal. The Court of Appeal contrasted this with Pichler v. UNITE, 542 F.3d 380 (3d Cir. 2008), which had involved the disingenuous attempt “to marry an unpermitted use with a permitted one.”
Commentary:
The Supreme Court has granted certiori for this case.
Since certain financial institutions are nearly always “subprime lenders”, providing loans for borrowers with spotty credit and at interest rates well in excess of the Till rate, it is not inconceivable that DMV records could be obtained for lists of potential bankruptcy clients. While called the “litigation exception”, it would not be necessary to characterize bankruptcy as “litigation” (even though it is), since 18 U.S.C. § 2721(b)(4) allows “use in connection with 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.” (Emphasis added.)
For a copy of the opinion, please see:
Marachich v. Spears- Use of DMV Information for Solicitation of Potential Clients.pdf
For a copy of the Driver’s Privacy Protection Act of 1994, please see:
http://www.law.cornell.edu/uscode/text/18/2721
For a copy of the North Carolina Public Records Act, please see:
http://www.ncga.state.nc.us/gascripts/statutes/StatutesTOC.pl?Chapter=0132
Category
Blog comments