SHARON TAYLOR JAMES DOUGLAS BOOKER LOWRY BRILEY TWILAH BROWN JAMES CLARY ET AL v. ACXIOM CORPORATION CHOICEPOINT PUBLIC RECORDS DATABASE TECH INC CHOICEPOINT PUBLIC RECORDS INC CHOICEPOINT INC CHOICEPOINT SERVICES INC SEISINT INC LEXISNEXIS REED ELSEVIER INC CHEX SYSTEMS INC

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United States Court of Appeals, Fifth Circuit.

SHARON TAYLOR;  JAMES DOUGLAS BOOKER;  LOWRY BRILEY;  TWILAH BROWN;  JAMES D CLARY;  ET AL Plaintiffs-Appellants v. ACXIOM CORPORATION;  CHOICEPOINT PUBLIC RECORDS DATABASE TECH INC;  CHOICEPOINT PUBLIC RECORDS, INC;  CHOICEPOINT, INC;  CHOICEPOINT SERVICES, INC;  SEISINT, INC;  LEXISNEXIS REED ELSEVIER, INC;  CHEX SYSTEMS, INC, a Minnesota Corporation Defendants-Appellees

SHARON TAYLOR, on Behalf of Themselves and all others Similarly Situated;  ET AL Plaintiffs-Appellants v. ACS STATE & LOCAL SOLUTIONS, INC, a New York Corporation;  GLOBAL 360 BGS, INC, a Texas Corporation;  GILA CORPORATION, a Texas Corporation;  AMERICAN ELECTRIC POWER SERVICE CORPORATION, a New York Corporation;  SOUTHWESTERN BELL TELEPHONE LP, a Texas Limited Partnership, doing business as Southwestern Bell Telephone Company;  AMERICAN MUNICIPAL SERVICES CORPORATION;  EUGENE R BUCCIARELLI;  MICHAEL DINAPOLI Defendants-Appellees

SHARON TAYLOR, on Behalf of Themselves and all others Similarly Situated;  ET AL Plaintiffs-Appellants v. TEXAS FARM BUREAU MUTUAL INSURANCE COMPANY, a Texas Insurance Company;  INSURANCE TECHNOLOGIES CORPORATION, a Texas Corporation;  SOFTECH INTERNATIONAL, INC, a Florida Corporation;  GLOBE LIFE & ACCIDENT INSURANCE COMPANY, a Deleware Insurance Company;  HAWKEYE INSURANCE SERVICES, INC, a Texas Corporation;  ISO CLAIMS SERVICES, INC, a Delaware Corporation, doing business as Insurance Information Exchange;  UNITED TEACHER ASSOCIATES INSURANCE COMPANY, a Texas Insurance Company;  SPARTAN INSURANCE COMPANY Defendants-Appellees

SHARON TAYLOR, on Behalf of Themselves and all others Similarly Situated;  ET AL Plaintiffs-Appellants v. SAFEWAY, INC, a Deleware Corporation;  HEB GROCERY COMPANY, LP, a Texas Limited Partnership;  THE HEARST CORPORATION, a Delaware Corporation, doing business as Houston Chronicle;  SAFETY-USA INSTITUTE, LLC, a Texas Limited Liability Company;  U S INTERACTIVE, INC, a Texas Corporation;  THE TALBOT GROUP, INC, a Texas Corporation;  BACKGROUND INFORMATION SYSTEMS, INC, a Texas Corporation;  CARFAX, INC, a Pennsylvania Corporation;  IMPACTINFO, INC, a Texas Corporation;  WISHLIST, LLC, Represented by Carolyn Lehamnn, Member ABC DATA;  AMERICAN STUDENT LIST CO, INC;  ARISTOTLE INTERNATIONAL, INC;  DONALD R BERLINER, JR;  CONTINUEDED.COM, LLC;  DENSPRI, LLC;  DRIVER TRAINING ASSOCIATES, INC;  FEDERATED RETAIL HOLDINGS, INC;  HOUSEHOLD DRIVERS REPORT, INC;  LEE FARISH COMPUTER SERVICES, INC;  PARADISE DEVELOPMENT, INC;  D B STRINGFELLOW, JR;  TENANT TRACKER, INC Defendants-Appellees

SHARON TAYLOR, on Behalf of Themselves and all others Similarly Situated;  ET AL Plaintiffs-Appellants v. Defendants-Appellees

Plaintiffs-Appellants v. Defendants-Appellees

No. 08-41083

-- July 14, 2010

Before GARWOOD, DAVIS, and DENNIS, Circuit Judges.

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GARWOOD, Circuit Judge:FN1. We note that although JI Speciality Services, Inc. is listed in the caption as a party defendant-appellee, heretofore, on July 9, 2010, said JI Speciality Services, Inc., only, was dismissed from these appeals under 5th Cir. R. . 42(b) pursuant to the stipulation of plaintiffs-appellants and said JI Specialty Services, Inc.FN2. Specifically, the proposed class definition included:Each and every individual in the State of Texas whose name, address, driver identification number, race and/or date of birth and/or sex are contained in motor vehicle records obtained by Defendants from the State of Texas's Department of Public Safety, without the express consent of such individuals, from June 1, 2000, through the date of judgment herein.Excluded from the class are persons who have expressly authorized the State of Texas's Department of Public of Public Safety to provide third parties with their “personal information” for any purpose;  those persons whose information was obtained for a permissible purpose defined by the DPPA;  all employees, including, but not limited to, Judges, Magistrate Judges, clerks and court staff and personnel of the United States District Courts of the Eastern District of Texas, the United States Court of Appeals for the Fifth Circuit and the United States Supreme Court;  their spouses and any minor children living in their households and other persons within a third degree of relationship to any such Federal Judge;  and finally, the entire jury venire called to for jury service in relation to this lawsuit.FN3. Section 521.050(a) provides:“(a) In addition to the provisions of this subchapter relating to the disclosure of driver's license information on an individual, the department [Department of Public Safety] may provide a purchaser with a magnetic tape of the names, addresses, and dates of birth of all license holders that are contained in the department's basic driver's license record file if the purchaser certifies in writing that the purchaser is eligible to receive the information under Chapter 730.”Section 730.002 of the Tex. Transp.  CodeE provides that:“The purpose of this chapter [Chapterr 730] is to implement 18 U.S.C. Chapter 123 [the DPPA] and to protect the interest of an individual in the individual's personal privacy by prohibiting the disclosure and use of personal information contained in motor vehicle records, except as authorized by the individual or by law.”Under § 730.007 the requesting party is to provide assurances to the Department of Public Safety (DPS) that the information furnished will be used only for purposes that are lawful under the DPPA. Permitted disclosures under § 730.007 extend only to name, address, date of birth and driver's license number. § 730.007(b).  The requestor must represent that use of personal information “will be strictly limited” to listed uses permitted under the DPPA (excluding marketing, solicitations and surveys or uses based on individual consent), including“(C) use in the normal course of business by a legitimate business or an authorized agent of the business, but only:(i) to verify the accuracy of personal information submitted by the individual to the business or the agent of the business;  and(ii) if the information is not correct, to obtain the correct information, for the sole purpose of preventing fraud by, pursuing a legal remedy against, or recovering on a debt or security interest against the individual.” § 730.007(a)(2)(C).DPS regulations (37 Tex. Admin.  Code § 15.142) require a detailed form of agreement by the requestor, specifying, inter alia, each authorized purpose for which the records are requested and the like.Plaintiffs allege that defendants acquired the challenged information in bulk from the Texas DPS. There is no allegation that such acquisition was other than in compliance with Texas law.FN4. Ala. Admin.  Code r. 810-5-1.485(6)(c)(1);  Alaska Admin.  CodeE tit. 2, § 92.200(c), available at http:// www.legis.state.ak.us/basis/folioproxy.asp?url=http://wwwjnu01.legis.state.ak.us/cgi-bin/folioisa.dll/aac/query=[JUMP:'2+aac+92!2E200']/doc/ § @1Œ? firsthit;  Ariz. Rev. Stat Ann. § 28-455(E);  Colo.Rev.Stat. § 42-1-206(3.7)(a) (West 2004);   Del.Code Ann. tit. 21, § 305(f)(2) (2005);   Ga. Comp. R. & Regs. 375-3-8.03(10)(a) (2009);  625 Ill. Comp. Stat. 5/2-123(a) (West 2008);  Mich. Comp. Laws § 28.300(2), (3) (West 2004);  N.H.Code. Admin.   R. Ann. Saf-C 5202-08(a) (2009);  N.Y. Veh. & Traf. Law § 202(4)(a)(b) (McKinney 2009);  W. Va.Code § 91-8-7.14 (2009).FN5. Section 2722(b) provides:“(b) False representation.It shall be unlawful for any person to make false representation to obtain any personal information from an individual's motor vehicle record.”Section 2723 provides:“ § 2723.  Penalties(a) Criminal fine.A person who knowingly violates this chapter shall be fined under this title.(b) Violations by State department of motor vehicles.Any State department of motor vehicles that has a policy or practice of substantial noncompliance with this chapter shall be subject to a civil penalty imposed by the Attorney General of not more than $5,000 a day for each day of substantial noncompliance.”We also note in passing that as § 2723(a) makes knowing violation of the DPPA a crime, and accordingly to the extent that violation of the DPPA is at issue in even a civil case, to the extent of ultimate ambiguity in the statute's meaning it must be construed under the rule of lenity.   See U.S. v. Thompson/Center Arms Co., 112 S.Ct. 2102, 2110 (1992) (plurality opinion);  Crandon v. U.S., 110 S.Ct. 997, 1001-1102 (1990).FN6. Section 2724(b) provides:“(b) Remedies.The court may award(1) actual damages, but not less than liquidated damagesin the amount of $2,500;(2) punitive damages upon proof of willful orreckless disregard of the law;(3) reasonable attorneys' fees and other litigation costsreasonably incurred;  and(4) such other preliminary and equitable relief as thecourt determines to be appropriate.”FN7. Section 2721(c) concludes by stating:  “Any authorized recipient (except a recipient under subsection (b)(11)) that resells or rediscloses personal information covered by this chapter must keep for a period of 5 years records identifying each person or entity that receives information and the permitted purpose for which the information will be used and must make such records available to the motor vehicle department upon request.”   See also Tex. Transp.  CodeE § 7303.013:“(a) An authorized recipient of personal information may not resell or redisclose the personal information in the identical or a substantially identical format the personal information was disclosed to the recipient by the applicable agency.(b) An authorized recipient of personal information may resell or redisclose the information only for a use permitted under Section 730.007.(c) Any authorized recipient who resells or rediscloses personal information obtained from any agency shall be required by that agency to:(1) maintain for a period of not less than five years records as to any person or entity receiving that information and the permitted use for which it was obtained;  and(2) provide copies of those records to the agency on request.(d) A person commits an offense if the person violates this section.   An offense under this subsection is a misdemeanor punishable by a fine not to exceed $25,000.”Similar requirements are stated in the recipient's agreement with the DPS. See 37 Tex. Admin.  Code § 15.143.FN8. Other than 2721(b)(11) and (b)(12), the list of permissible uses does not refer to bulk or individual records.   The statute does say, however, that “[p]ersonal information ․ may be disclosed as follows:” before listing the permissible uses.  18 U.S.C. § 2721(b).  Section 2725(3) states:“(3) ‘personal information’ means information that identifies an individual, including an individual's photograph, social security number, driver identification number, name, address( but not the 5-digit zip code), telephone number, and medical or disability information, but does not include information on vehicular accidents, driving violations, and driver's status.”Congress sets forth rules of construction that explain, unless context indicates otherwise, “words importing the singular include and apply to several persons, parties, or things.”  1 U.S.C. § 1. It seems well established, however, that this particular cannon is rarely applied and only when doing so necessarily carries out the evident intent of Congress.  United States v. Hayes, 129 S.Ct. 1079, 1085 n.5 (2009) (refusing to apply the rule because it conflicts with congressional intent).FN9. E.g., The Driver's Privacy Protection Act of 1993:  Hearing on H.R. 3365 Before the Subcomm. on Civil & Constitutional Rights of the H. Comm. on the Judiciary, 103rd Cong. (1994) (Statement of Rep. Moran), 1994 WL 212698 (listing examples of violence committed after obtaining DMV records).   None of these instances involved bulk distribution of DMV data.FN10. The “opt out” provisions of the original legislation with respect to bulk distribution for the purpose of use in surveys, marketing or solicitations in § 2721(b)(12) (and the similar “opt out” provisions of § 2721(b)(11)) were changed to the “opt in” provisions now in § 2721(b)(11) and (12) by the October 1999 amendments to the DPPA. Public Law 106-69.113 Stat. 986 (October 9, 1999).Congressman Moran's February 4, 1994 statement also explains the reason for restrictions on direct marketing use, viz:“Most states sell DMV information in list form with personal identifiers (name, address, and/or social security number) to direct marketers for commercial purposes, but only five have a working “opt-out” system (a system allowing licensees to restrict the sale of their personal information)․․While the release of this information to direct marketers does not pose any inherent safety risks to people, it does present, to some people, an invasion of privacy.   If you review the way in which people are classified by direct marketers based on DMV information you can see why some individuals might object to their personal information being sold.”  Id. at 2.FN11. The plaintiffs suggest that Congress intended the states to perform a gate-keeping function and distributing in bulk hinders the states' ability to keep track of these records.   See Locate.Plus.com v. Iowa Dep't of Transp., 650 N.W.2d 609, 617 (Iowa 2002).   The statute, however, expressly contemplates resale of the information once distributed. § 2721(c).  Further, it creates a private right of action. § 2724.   Resale makes it more difficult for the states to monitor use of the information.   The individual right of action allows persons other than the state to check use of these records.   The Locate opinion's “gate-keeping” theory is not persuasive of a congressional intent to preclude bulk distribution where actual use permitted under § 2721(b) is intended and no actual use not permitted under § 2721(b) is intended.FN12. In fact, solid reasons exist why Congress likely intended bulk distribution to resellers.   Congress intended persons use these records for purposes such as preventing fraud when cashing checks.   E.g., 18 U.S.C. § 2721(b)(3).   These are such uses that practically could not be performed individually, not only from the perspective of private companies but from the perspective of the states.   For example, a credit card company may approve more than nineteen million credit card applications per year.   Personal Information Acquired by the Government Information Resellers:  Is There Need for Improvement?, J. Hearing Before the Subcomm. on Commercial and Admin.   Law and the Subcomm. on the Constitution of the Comm. on the Judiciary H.R., 109th Cong. 6566 (2006).   Ninety thousand applications are processed daily.  Id. That alone may be 90,000 requests that a state would have to individually verify every day.FN13. In argument, plaintiff also relies on two cases.   See Locate.Plus.Com, Inc. v. Iowa Dep't of Transp., 650 N.W.2d 609 (Iowa 2002);  Roberts v. The Source for Pub. Data, No. 08-4167-CV-C-NKL, 2008 WL 5234675 (W.D.Mo. Dec. 12, 2008) (unpublished op.).   Neither are binding precedent.  Locate.Plus.Com observed that each permissible use exception listed a user and a specific use for the information.  Locate.Plus.Com., Inc., 650 N.W.2d at 617.   It reasoned, therefore, Congress intended dissemination only to a “permissible user.”  Id. Just because the statute allows only certain types of people to use the information does not mean that the statute limits possession to those same individuals.   The text of the statute contemplates uses and users in the list of exceptions;  it contemplates resellers in a different subsection.  18 U.S.C. § 2721(b), (c).  Roberts, on the other hand, makes a statutory construction argument that practically writes the reseller provision out of statute.   See Roberts, 2008 WL 5234675, at *4 (reasoning that section 2722 prohibits obtaining information for any purpose other than a permissible use listed in 2721(b) would make no sense if a reseller can obtain information for a purpose other than one listed in 2721(b) to resell information).   Moreover, reselling to an authorized actual user is not itself an actual use.FN14. We further note that the 1998 Department of Justice opinion is inconsistent with any notion that bulk distribution is itself necessarily prohibited by the DPPA, and thus likewise fully supports the position of the defendants non-resellers.FN15. See also James v. City of Dallas, 254 F.3d 551, 562 n.9 (5th Cir.2001) (“In cases in which statutory standing is involved, we may address statutory standing before Article III standing.”).Assuming, arguendo, that we also need to address Article III standing, that too is present.   It is undisputed that the DPPA protects from certain uses or disclosures personal information of plaintiffs and creates a federal cause of action for same, and that such personal information of plaintiffs was actually included in the challenged bulk distributions by Texas DPS. Moreover, plaintiffs' claim that such bulk distributions (including the personal information of these plaintiffs) are prohibited, and constitute a disclosure or use made illegal, by the DPPA which affords plaintiffs a federal cause of action for such disclosure or use of their personal information, though clearly without merit, is nevertheless not wholly insubstantial and frivolous, and hence gives the district court jurisdiction to decide whether or not the DPPA does preclude such distributions or uses.   See Bell v. Hood, 66 S.Ct. 773, 776-77 (1946).

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