If a lawyer is looking for potential plaintiffs to sue car dealerships over illegal fees, can the lawyer just ask the Department of Motor Vehicles for your name, address, telephone number, and recent car buying history? When consumers give their personal information to the DMV – as they must if they wish to continue driving – is the information protected from lawyers looking to solicit clients, if the consumer does not consent to its release?
The United States Supreme Court will consider these and other questions during its October 2012 term in the case of Maracich v. Spears. This case concerns when a lawyer may obtain, use, or disclose consumers’ personal information under the Drivers’ Privacy Protection Act (DPPA), a federal privacy law. Congress enacted the DPPA to try to prevent crimes from occurring as a result of a DMV’s release of information to people with criminal intent.
The Maracich case arose out of state court litigation in South Carolina. A group of lawyers sued numerous car dealerships, alleging they had charged illegal fees. Prior to and after filing their action, the plaintiffs’ lawyers made a series of public records requests to the DMV, seeking the personal information of recent car purchasers. Having received the information, the lawyers then sent letters to thousands of consumers, advising them that they may have been charged illegal fees. The letters also stated: “[w]e would like the opportunity [to] discuss your rights and options with you in a free consultation. If you are interested in participating in the case or in a free consultation, please mail the enclosed postage paid card . . . .”
Not everyone contacted was happy to receive the letter. Some of these consumers filed their own lawsuit against the plaintiffs’ lawyers in federal court, alleging the lawyers had violated the DPPA.
The DPPA generally limits disclosure of consumers’ personal information, but it contains many exceptions, or “permissible uses.” The lawyer-defendants in Maracich successfully argued to the federal trial court and the Fourth Circuit Court of Appeals that they qualified for the so-called “litigation” exception. This exception permits the DMV to disclose personal information for use in connection with civil court proceedings, “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 DPPA also contains an exception for “bulk distribution for surveys, marketing or solicitations.” This exception requires the State to obtain the written consent of the individual before disclosing their information, however.
The Fourth Circuit held the litigation exception applied to “solicitation” that was “integral to, and inextricably intertwined with,” permitted uses. Under this rule, conduct that normally would constitute “solicitation” (requiring consent) cannot serve as a basis for a DPPA lawsuit if it is “inextricably intertwined” with conduct that falls within the litigation exception. The Fourth Circuit found the lawyers used the DMV information for their investigation in anticipation of, and in connection with, the state court lawsuit, and therefore qualified for the litigation exception. The Fourth Circuit reasoned that the lawyers were “looking to build and bolster a case against the dealerships if their initial information from consumers proved the existence of a plausibly systemic violation of [state law].”
On appeal, the Supreme Court will be asked to decide whether the Fourth Circuit erred in holding that the litigation exception applied to conduct that would otherwise amount to solicitation, and whether the “inextricably intertwined” test was appropriate. The stakes are high for the lawyers. If their interpretation of the DPPA turns out to be wrong, and the case against them is allowed to go forward, they potentially could have to pay $2,500 or more per violation, plus the opposing parties’ attorneys’ fees and costs. The DPPA also authorizes courts to award punitive damages for willful or reckless disregard of the law.
The appeal probably will be heard and decided in 2013. We’ll post updates as the case develops.