May an attorney obtain an individual's personal information from a state's department of motor vehicles to find plaintiffs for a lawsuit that has already started?
In 2006, several individuals who had bought cars contacted a group of lawyers in South Carolina claiming various car dealerships overcharged them. To investigate this claim, the lawyers requested from the state department of motor vehicles the disclosure of the personal information of thousands of people who had bought from dealerships in Spartanburg County. Under the Driver's Privacy Protection Act ("DPPA"), this information is normally protected from disclosure. The Fourth Circuit Court of Appeals found that although the lawyers engaged in mass solicitation without the consent of the person whose information was disclosed, the litigation exception of the DPPA nonetheless protected the lawyers' activity. Petitioner Maracich argues that the DPPA provision requiring the consent of individuals to disclose their personal information imposes a consent requirement onto requests to solicit potential clients for the purpose of litigation. In contrast, Respondent Spears argues that the DPPA exception for litigation waives the consent requirement for solicitation specifically related to litigation. The Supreme Court accepted certiorari on September 25, 2012 to examine the merits of the Fourth Circuit's decision. The outcome of this case may help determine how far lawyers can go to obtain personal information and how far Congress can go to reach into an area traditionally regulated by the States.
Questions as Framed for the Court by the Parties
The Driver's Privacy Protection Act of 1994 ("DPPA" or "Act"), 18 U.S.C. §§ 2721- 2725, prohibits the obtainment, use, or disclosure of "personal information" maintained in state motor vehicle department ("DMV") databases, unless the use of such information falls within one of several discrete enumerated exceptions.
This case presents an opportunity for this Court to resolve a conflict among the circuits and even state courts as to the circumstances under which the litigation exception to the Act permits lawyers special rights of access to DPPA protected information.
In this case, the Fourth Circuit became the first court to hold that the acquisition and use by lawyers of confidential information from a DPPA-protected database solely for the purpose of soliciting clients, as opposed to searching for evidence or witnesses, qualified as a use "in connection with" litigation, pursuant to 18 U.S.C. § 2721(b)(4).
The Eleventh Circuit, the Third Circuit, and the District of Columbia Court of Appeals, on the other hand, have held that the litigation exception does not permit lawyers to obtain or use DPPA-protected information to find or solicit clients. Instead, these courts have made clear that the litigation exception permits use of private information only when the information is relevant or likely to lead to discovery of evidence or witnesses. The Fourth Circuit has crossed that line, thereby inserting into the DPPA what amounts to a "for use by lawyers" exception, as opposed to a "for use in litigation" exception, and further muddling an already confusing and conflicted area of the law.
This petition asks the Court to consider two questions:
1. Whether the Fourth Circuit erred in holding, contrary to every other court heretofore to have considered the issue, that lawyers who obtain, disclose, or use personal information solely to find clients to represent in an incipient lawsuit—as opposed to evidence for use in existing or potential litigation—may seek solace under the litigation exception of the Act.
2. Whether the Fourth Circuit erred in reaching the conclusion (in conflict with prior precedent) that a lawyer who files an action that effectively amounts to a "place holder" lawsuit may thereafter use DPPA-protected personal information to solicit plaintiffs for that action through a direct mail advertising campaign on the grounds that such use is "inextricably intertwined" with "use in litigation."
In 2006, a few consumers contacted a group of attorneys ("the Lawyers") claiming that various car dealerships had overcharged them for their vehicle purchases. As the Lawyers began to investigate these purchases, they obtained the contact information of buyers by filing requests under the Freedom of Information Act ("FOIA") to the department of motor vehicles ("DMV") for information on people who bought vehicles during specific weeks of 2006 in Spartanburg County, South Carolina. According to the Fourth Circuit Court, the Driver’s Privacy Protection Act of 1994 ("DPPA") typically protects this kind of information from public access. However, the Fourth Circuit also explained that the DPPA allows for disclosure if the reason for access is related to a lawsuit or in anticipation of litigation. Additionally, the Fourth Circuit noted that the DPPA allows disclosure for the purpose of solicitation if the person consents to disclosing his or her information to the State.
The Lawyers made their first two FOIA requests to the DMV before starting any lawsuit, but, promptly after the second request, the Lawyers sued several car dealers under the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act (Dealers Act). According to the Fourth Circuit, the Dealers Act prohibits car dealers from violating public policy. The Lawyers claim that various car dealers unfairly padded their bills with administrative fees and thus misled consumers into thinking that these fees were mandatory and not open to negotiation. The Lawyers argued that the fees should be repaid to the buyers and the dealers additionally penalized for unfair business practices.
After two more FOIA requests, the number of defendant dealerships expanded to 328 although the number of plaintiffs was only eight. Thus, many of the defendant dealerships began filing motions to dismiss for lack of standing. In early 2007, to address this problem, the Lawyers mailed out another notice to all names obtained through the FOIA requests. The Lawyers continued to do this for several more months. It was during this time that some of the defendant dealerships asserted that the Lawyers violated state law prohibiting solicitations from agencies. In their defense, the Lawyers claimed that the DPPA made an exception for solicitations connected to litigation. In October 2007, the trial court dismissed the claims against all of the defendant dealerships that lacked a corresponding plaintiff.
Three years later, recipients (the Buyers) of the Lawyers’ mailings and who bought cars from the defendant dealers sued the Lawyers with a putative class action suit. The Buyers claimed that the Lawyers illegally obtained their personal information from the DMV for the prohibited purpose of solicitation under the DPPA. The United States District Court for South Carolina, Spartanburg Division, ultimately ruled in favor of the Lawyers, stating that the Lawyers qualified for the litigation exception to the DPPA. The Buyers then appealed to the United States Court of Appeals for the Fourth Circuit. Although the Fourth Circuit Court found that the Lawyers’ mailings were prohibited solicitations under the DPPA, it nonetheless found that they validly met the litigation exception. The U.S. Supreme Court agreed to hear the case on September 25, 2012.
The Supreme Court’s ruling will resolve a circuit split that has developed when the Fourth Circuit upheld the right of lawyers to solicit potential clients using information obtained under the “litigation exception” to the Driver’s Privacy Protection Act of 1994 ("DPPA"). This ruling contradicted decisions by the Eleventh, Third, and D.C. Circuits. The Supreme Court will rule to resolve the conflict on how the “litigation exception” should be interpreted and applied. The Petitioners, Maracich and others who had their personal information obtained, and the Respondents, Spears and other attorneys who obtained the information, argue over the proper way to interpret the litigation exception under the DPPA.
Petitioners Argue that Solicitation Provision Controls the Litigation Exception
According to Maracich, the “solicitation exception” of the DPPA allows a state’s department of motor vehicles ("DMV") to release personal information for bulk solicitations only with the express consent of the people whose information was requested. Maracich argues that since this is the only section of the law that specifically mentions solicitations, it is a specific rule. Maracich then cites the Morales case for the principle that more specific provisions govern the interpretation of more general provisions. Maracich argues that this principle preserves specific limitations, such as the required express consent in the DPPA, despite the more general provisions. Maracich notes that in a case called RadLAX, the Supreme Court articulated this principle of privileging specificity over generality when a law grants authority both broadly and specifically. According to Maracich, any type of solicitation, including the DPPA exception for litigation, must fit the specific express-consent rules of the exception for solicitation.
Once Maracich has established his argument regarding specific provisions governing broader ones, he then argues that the litigation exception therefore cannot eliminate the express consent requirement for lawyers. Maracich claims that because the general purpose of the DPPA is to stop the improper distribution of personal information, any exception, including the litigation exception here, should be read narrowly. Maracich’s theory is that an exception should not be read too broadly to go beyond what Congress intended and chip away at the intent of the overall law. Maracich argues the Fourth Circuit wrongly emphasized phrases like “in connection with” litigation or “in anticipation of” litigation to justify its overly broad interpretation of the litigation exception. While these phrases in isolation may allow for a broader interpretation of the litigation exception, Maracich points to a legal principle that warns against focusing too closely on any specific part and losing sight of the meaning and purpose of the statute as a whole. Additionally, Maracich claims that the format of the statute and the placement of the litigation exception among other exceptions demonstrate that Congress intended to exclude only a specific kind of activity from the privacy protections of the DPPA.
Lastly, Maracich challenges the conclusion of the Fourth Circuit that because the solicitations in this case were “inextricably intertwined” with conduct that satisfied the litigation exception the solicitations should be protected despite lacking consent of the individuals. Maracich argues against this conclusion on two grounds: first, solicitations being intertwined with litigation does not legally exempt law firms from the express-consent requirement, and second, the solicitations were not actually intertwined with permissible use under the litigation exception. Maracich claims this “inextricably intertwined” argument has no basis in the law. He argues that nothing in the DPPA says that consent is not required for a solicitation that is “inextricably intertwined” with another exception. Furthermore, even if the Supreme Court decided to adopt this “inextricably intertwined” argument, Maracich argues that the Lawyers (represented by Respondent Spears) did not need to solicit anyone to achieve their stated purposes; it is likely that the only purpose for gathering this information was to solicit and obtain clients. Thus, Maracich argues the solicitations were not intertwined with a valid exception under the litigation exception rule.
Respondents Argue that Litigation Exception Protects Their Conduct
Respondents, led by Spears, argue that their conduct was entirely within the litigation exception to the DPPA and the solicitation exception does not trump this provision. Spears argues that the information gathered was in connection with a civil proceeding, as they were trying determine the scope of the actions and the size of the group of plaintiffs they were going to represent. Therefore, Spears argues that the plain language of the DPPA shows that their actions fall within the litigation exception because they gathered the sensitive information “in anticipation of” a lawsuit they were soon going to file. Additionally, Spears argues that the solicitation or bulk distribution exception does not trump this exception, because both exceptions are equally specific. Spears argues that Maracich’s use of the principle of specificity is misplaced, as both the litigation and solicitation exceptions can be equally broad.
Spears claims that the text, structure, and purpose, of the statute all show that these exceptions are meant to be overlapping and are meant to coexist, rather than exist within a hierarchy. Rather than a blanket rule against solicitation, Spears argues that the solicitation exception is just one of a number of exceptions for accessing personal information under the DPPA rules. To Spears, one of these is solicitation with express consent, while another provision is the litigation exception for actions in relation to litigation. In this way, Spears argues that Congress may have very well intended to treat solicitation in connection with litigation differently than regular solicitations. Reading these provisions as equal and overlapping, Spears claims that Maracich’s argument for a blanket ban on solicitation is unfounded. Additionally, Spears argues that even if the solicitation exception is more specific, applying the principle that specific rules guides general rules would actually undermine the rationale for specificity in this case. Spears claims this situation is different than in the RadLAX case that Maracich cites, because in that case applying the general rule over the specific would have eliminated the specific rule completely. In contrast, applying the litigation rule over the solicitation rule in this particular case still leaves the solicitation rule intact in non-litigation situations.
Finally, Spears claims that federalism concerns prevent reading a specificity principle into the DPPA exceptions. Since the DPPA preempts state law, Spears argues that these exceptions were put in place by Congress so as not to infringe too far on the states’ rights. Spears invokes the importance of lawyers as officers of the court to illustrate that courts traditionally find a strong state interest in regulating their own members of the Bar in that state. Spears claims applying the express consent rule of bulk distribution to lawyers would be an unlawful infringement of federal power into the state’s authority to regulate lawyers. Moreover, Spears argues that the litigation provision of the DPPA does not implicitly exclude solicitation. Spears rests this argument on the constitutional balance of federalism, claiming that the litigation provision and other provisions allowing certain use of information need to be construed broadly in order to limit the intrusion of the federal government into the authority of the states. Spears argues that the litigation provision of the DPPA does not implicitly exclude solicitation.
The dispute in this case centers on whether a lawyer may obtain the personal information of an individual from a state’s department of motor vehicles ("DMV") for the purpose of solicitation. According to Respondent Spears, the Driver's Privacy Protection Act of 1994 ("DPPA") allows disclosure of personal information by the DMV in connection with or in anticipation to litigation. In contrast, Petitioner Maracich argues that another exception, which allows disclosure for bulk solicitations when consented to by the affected individual, forecloses this possibility.
The Electronic Privacy Information Center ("EPIC") filed a brief on behalf of Maracich, arguing that the DPPA should be construed narrowly so as to protect sensitive information. In fact, EPIC notes that Congress passed the DPPA after it was discovered that states were selling personal information to third parties. EPIC argues that narrowly interpreting privacy statutes like these is essential to prevent identify theft and fundamental to privacy rights. The Electronic Frontier Foundation adds that individuals whose information has been requested are in the best position to know what their privacy interests are, and a consent requirement would allow the individuals themselves protect these interests better than would other measures.
Spears responds by noting that the DPPA provisions allowing for the disclosure of personal information are directed at individuals who are already subject to substantial oversight. Spears notes, for example, that the exceptions target classes of people like law enforcement personnel or attorneys. In contrast, as Spears further notes, Congress passed the DPPA after a state DMV sold the personal information of an actress to a fan who used the information to stalk her. Spears argues that the legitimate purpose of advancing a lawsuit is not a criminal activity that the DPPA guards against; instead, the Lawyers’ solicitation strengthened the integrity of the lawsuit by attempting to remedy a technical standing problem. According to Spears, adding a consent requirement into the exception would disrupt the protections of privacy that Congress balanced with legitimate professional and business interests.
Spears argues that the provisions of the DPPA must be broadly construed so as to maintain the balance of power between the states and the federal government. According to Spears, because the DPPA already intrudes on state power over their agencies, courts should not advance interpretations of the DPPA that expands this intrusion without the approval of Congress. Spears argues that the Lawyers have satisfied a permissible-use provision, holding them liable nonetheless for violating another provision would overextend the power of the federal government to regulate commerce between the states under the commerce clause in the U.S. Constitution. To Spears, because states traditionally have regulated the legal profession and lawyers, the court would be curtailing state power by expanding federal power under the DPPA.
Maracich responds that the DPPA is a comprehensive scheme with very specific solutions to very specific problems; thus, the act should be read with that kind of specificity in mind. According to Maracich, the targeted language of the solicitation exception controls that of the general language in the litigation exception. In addition, Maracich argues that Congress intended to curtail state power because of widespread disapproval of actions by states to sell the personal information in DMV databases to businesses and other third parties. To Maracich, Congress intended that the solicitation provision guide the proper interpretation of the litigation exception.
The outcome of this case will most strongly affect privacy concerns. While for the everyday individual the only effect may be an additional mailing here or there, how the Supreme Court reads the DPPA will be an important litmus test for the value our government assigns to privacy interests.
The Supreme Court’s decision will determine whether lawyers may obtain personal information of individuals from a state's department of motor vehicles in the pursuit of finding additional plaintiffs once the initial litigation has been filed. The decision will turn on whether the Supreme Court finds the exceptions in the Driver’s Privacy Protection Act to be mutually exclusive—that is, whether violating one, and satisfying another, nonetheless establishes liability. The outcome of the case will affect how deeply the right of privacy extends and additionally how far the federal government can intrude into an area traditionally regulated by the states.
- Thomson Reuters: Supreme Court to decide if driver info is fair game for lawyers (Sep. 25, 2012)
- Electronic Privacy Information Center: Maracich v. Spears, Concerning the Scope of the ‘Litigation’ Exception to the Drivers' Privacy Protection Act