Taylor v. Acxiom Corp. , 612 F.3d 325 ( 2010 )

Case: 08-41083 Document: 00511173310 Page: 1 Date Filed: 07/14/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 14, 2010
No. 08-41083 Lyle W. Cayce
Clerk
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
Case: 08-41083 Document: 00511173310 Page: 2 Date Filed: 07/14/2010
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
2
Case: 08-41083 Document: 00511173310 Page: 3 Date Filed: 07/14/2010
Defendants - Appellees
_________________________________________________________
SHARON TAYLOR, on Behalf of Themselves and all others Similarly
Situated; ET AL
Plaintiffs - Appellants
v.
BIOMETRIC ACCESS COMPANY; CETEGY CHECK SERVICES, INC;
EMAGINENET TECHNOLOGIES, INC; REI DATA, INC, doing business as
Landata Information Services, Inc; LML PAYMENT SYSTEMS
CORPORATION; TELECHECK SERVICES, INC; ALLIED
RESIDENT/EMPLOYEE SCREENING SERVICE, INC; U S INTERACTIVE,
INC; ACXIOM RISK MITIGATION, INC; ADP SCREENING AND
SELECTION SERVICES, INC; AMERICAN DRIVING RECORDS, INC; COE
INFORMATION PUBLISHERS, INC; EXPLORE INFORMATION
SERVICES LLC; FEDCHEX LLC; JON LATORELLA; MARSHALL
SYSTEMS TECHNOLOGY, INC; REALTIME-ID LP; SOURCE DATA, INC,
Leslie Hanson for Deft; URAPI; PROPERTYINFO CORPORATION
Defendants - Appellees
__________________________________________________________
SHARON TAYLOR, on Behalf of Themselves and all others Similarly
Situated; ET AL
Plaintiffs - Appellants
v.
FREEMAN PUBLISHERS, INC; BAYOUNET.COM, INC; CUSTOMER
CONTACT, INC; DEFENSIVEDRIVING.COM; CROSS-SELL, INC;
INFONATIONS, INC; REALTY COMPUTER SOLUTIONS, INC, doing
business as Real-Comp; THE SERVICE BUREAU; LIST MANAGEMENT
SYSTEMS; JUST TEXAS; DOMININ ENTERPRISES; DATA BANK USA;
JOE WINKLEN CONSULTING; NATIONAL STATISTICAL SERVICE
CORPROATION; WARRANTY USA; RELIANT ENERGY, INC; TXU
BUSINESS; DALLAS COMPUTER ASSOCIATES
Defendants - Appellees
3
Case: 08-41083 Document: 00511173310 Page: 4 Date Filed: 07/14/2010
Appeal from the United States District Court
for the Eastern District of Texas
Before GARWOOD, DAVIS, and DENNIS, Circuit Judges.
GARWOOD, Circuit Judge:
Today, we decide whether the Driver’s Privacy Protection Act (DPPA), 18
U.S.C., Chapter 123, §§ 2721-2725, allows states to turn over their entire drivers
motor vehicle (DMV) database at the request of certain private entities. This
case involves a class action seeking vast potential liquidated damages. For
reasons stated below, we affirm the district court’s dismissal of the action and
hold that the DPPA affords states discretion to disburse DMV records for a
permissible purpose under the statute.
This case began when the plaintiff-appellants, Sharon Taylor, et. al., filed
six putative class action suits alleging violations of the DPPA against more than
seventy-five defendants. The district court consolidated the six suits into the
instant case. Most defendants joined in filing a Consolidated Motion to Dismiss
pursuant to F ED. R. C IV. P. 12(b)(6) (failure to state a claim), and 12(b)(1) (lack
of subject-matter jurisdiction). The district court granted the motion and
entered judgment dismissing plaintiff’s suit with prejudice (including the sua
sponte dismissal of the action as against defendants who had not joined the
motion). The plaintiffs now appeal.1
STANDARD OF REVIEW
This court reviews de novo the grant of a motion to dismiss for failure to
state a claim. Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 839
1
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.
4
Case: 08-41083 Document: 00511173310 Page: 5 Date Filed: 07/14/2010
(5th Cir. 2004). Plaintiffs must plead enough facts to state a claim to relief that
is plausible on its face. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007).
We take the facts the plaintiff pleads as true. Id. at 1965. See also Ashcroft v.
Iqbal, 129 S.Ct. 1937, 1949-50 (2009). The court evaluates a 12(b)(1) motion de
novo as well. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).
BACKGROUND
Plaintiffs bring this class action against various defendants alleging
misuse of DMV records in violations of the DPPA. 18 U.S.C. § 2721–2725. The
plaintiffs represent a putative class of individuals with drivers licenses issued
in the State of Texas.2 Upon certification of a lawful purpose, Texas allows
individuals and companies to buy magnetic tapes of drivers licence records. T EX.
T RANSP. C ODE . § 521.050.3 The DPPA regulates driver’s license records that
2
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.
3
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
5
Case: 08-41083 Document: 00511173310 Page: 6 Date Filed: 07/14/2010
contain “personal information” defined to include the names, photographs, social
security numbers, drivers license numbers, addresses, telephone numbers, and
medical and disability information of individuals. 18 U.S.C. § 2725(3). Plaintiffs
allege that once a person certifies that they have a lawful purpose, the State of
Texas provides magnetic tapes with its entire database of driver’s license records
information on all holders of a Texas driver’s license. Like Texas, statutes (or
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 . CODE 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 . ADM IN . 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.
6
Case: 08-41083 Document: 00511173310 Page: 7 Date Filed: 07/14/2010
regulations) in at least eleven other states expressly allow this type of bulk
distribution.4
Plaintiffs argue that obtaining personal information in this manner
violates the DPPA. Section 2722(a) provides:
“(a) Procurement for unlawful purposes.—It shall be
unlawful for any person knowingly to obtain or disclose personal
information, from a motor vehicle record, for any use not permitted
under section 2721(b) of this title.” 5
The DPPA also provides a civil action against a “person who knowingly obtains,
discloses or uses personal information from a motor vehicle record for a purpose
4
ALA . ADM IN . CODE r. 810-5-1.485(6)(c)(1); ALASKA ADM IN . CODE 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/{@1}?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 . COM P . 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).
5
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:
Ҥ 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).
7
Case: 08-41083 Document: 00511173310 Page: 8 Date Filed: 07/14/2010
not permitted under this chapter.” 18 U.S.C. § 2724(a).6 To that end, the DPPA
lists several permissible uses in section 2721(b):
(1) For use by any government agency, including any court or law
enforcement agency, in carrying out its functions, or any private
person or entity acting on behalf of a Federal, State, or local agency
in carrying out its functions.
(2) For use in connection with matters of motor vehicle or driver
safety and theft; motor vehicle emissions; motor vehicle product
alterations, recalls, or advisories; performance monitoring of motor
vehicles, motor vehicle parts and dealers; motor vehicle market
research activities, including survey research; and removal of
non-owner records from the original owner records of motor vehicle
manufacturers.
(3) For use in the normal course of business by a legitimate business
or its agents, employees, or contractors, but only—
(A) to verify the accuracy of personal information submitted by
the individual to the business or its agents, employees, or
contractors; and
(B) if such information as so submitted is not correct or is no
longer correct, to obtain the correct information, but only for
the purposes of preventing fraud by, pursuing legal remedies
against, or recovering on a debt or security interest against,
the individual.
(4) For use in connection with any civil, criminal, administrative, or
arbitral proceeding in any Federal, State, or local court or agency or
6
Section 2724(b) provides:
“(b) Remedies.— The court may award—
(1) actual damages, but not less than liquidated damages
in the amount of $2,500;
(2) punitive damages upon proof of willful or
reckless disregard of the law;
(3) reasonable attorneys’ fees and other litigation costs
reasonably incurred; and
(4) such other preliminary and equitable relief as the
court determines to be appropriate.”
8
Case: 08-41083 Document: 00511173310 Page: 9 Date Filed: 07/14/2010
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.
(5) For use in research activities, and for use in producing statistical
reports, so long as the personal information is not published,
redisclosed, or used to contact individuals.
(6) For use by any insurer or insurance support organization, or by
a self-insured entity, or its agents, employees, or contractors, in
connection with claims investigation activities, antifraud activities,
rating or underwriting.
(7) For use in providing notice to the owners of towed or impounded
vehicles.
(8) For use by any licensed private investigative agency or licensed
security service for any purpose permitted under this subsection.
(9) For use by an employer or its agent or insurer to obtain or verify
information relating to a holder of a commercial driver's license that
is required under chapter 313 of title 49.
(10) For use in connection with the operation of private toll
transportation facilities.
(11) For any other use in response to requests for individual motor
vehicle records if the State has obtained the express consent of the
person to whom such personal information pertains.
(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.
(13) For use by any requester, if the requester demonstrates it has
obtained the written consent of the individual to whom the
information pertains.
(14) For any other use specifically authorized under the law of the
State that holds the record, if such use is related to the operation of
a motor vehicle or public safety.
Section 2721 goes on to provide:
“(c) Resale or redisclosure.—an authorized recipient of
personal information (except a recipient under subsection (b)(11) or
9
Case: 08-41083 Document: 00511173310 Page: 10 Date Filed: 07/14/2010
(12)) may resell or redisclose the information only for a use permitted
under subsection (b) (but not for uses under subsection (b)(11) or
(12)). An authorized recipient under subsection (b)(11) may resell or
redisclose personal information for any purpose. An authorized
recipient under subsection (b)(12) may resell or redisclose personal
information pursuant to subsection (b)(12).”7
Plaintiffs complain that the defendants in the instant case, pursuant to the
Texas statute, buy DMV records in bulk from the Texas DPS. These defendants
do not use all of the records immediately. They maintain databases or resell the
information. They potentially could use any record in the normal course of their
business for a permissible purpose under the DPPA. Plaintiffs do not complain
that the defendants actually used any of the records for a purpose other than the
ones listed in the DPPA. Instead, the plaintiffs complain that maintaining
records not actually used for the defendants’ stated purpose is itself an
impermissible purpose under the statute. Stated another way, plaintiffs assert
7
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 . CODE § 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 .
ADM IN . CODE § 15.143.
10
Case: 08-41083 Document: 00511173310 Page: 11 Date Filed: 07/14/2010
that buying the records in bulk with an expectation and purpose of valid potential
use is not a permissible use under the DPPA.
The plaintiffs characterize their suit as being against two types of
defendants: resellers and non-resellers of the drivers license records. Plaintiffs
argue that the DPPA requires resellers to have themselves made some
permissible use of the information before they may resell the information. Here,
the resellers took the personal information and sold it to third parties without
using the information themselves. The plaintiffs do not allege that the third
parties used the personal information for a purpose not permitted under the
DPPA. And, the plaintiffs argue that the non-resellers violated the act by
obtaining the personal information for purposes of “convenience and cost saving,”
and for continued future use, and these purposes are not permissible uses under
the DPPA. They argue that a permissible purpose is required by the DPPA for
each item of personal information contained in the entire bulk database obtained.
ANALYSIS
I. Failure to State a Claim
The DPPA creates liability when three elements are met: (1) the defendant
knowingly obtains, discloses or uses personal information; (2) from a motor
vehicle record; and (3) for a purpose not permitted. 18 U.S.C. § 2724(a); Thomas
v. George, Hartz, Lundeen, Fulmer, Johnstone, King, and Stevens, P.A., 525 F.3d
1107, 1111 (11th Cir. 2008).”The plain meaning of the third factor is that it is
only satisfied if shown that obtainment, disclosure, or use was not for a purpose
enumerated under § 2721(b).” Id. (emphasis added). See also Reno v. Condon,
120 S.Ct. 666, 670 (2000) (The section 2724 cause of action is for knowlingly
obtaining, disclosing, or using the information “for a use other than those
specifically permitted by the DPPA”).
11
Case: 08-41083 Document: 00511173310 Page: 12 Date Filed: 07/14/2010
A. Non-Resellers
We first address whether the non-resellers obtained personal information
for a purpose not permitted under the DPPA. The non-resellers buy DMV records
in bulk. Soon thereafter, they may use some of the records for a purpose
permitted under the DPPA. The plaintiffs argue that as to the remaining records
the non-resellers do not use them for a permissible purpose. In other words, the
question is whether the statute allows bulk distribution of the records.
We hold that this type of bulk obtainment does not violate the DPPA. In
interpreting statutes, this Court begins with the text of the statute. Phillips v.
Marine Concrete Structures, 895 F.2d 1033, 1035 (5th Cir. 1990). Of the fourteen
expressly listed permissible uses, only once does Congress limit a permissible use
to individual motor records. 18 U.S.C. § 2721(b)(11) (“For any other use in
response to requests for individual motor vehicle records if the State has obtained
the express consent of the person to whom such personal information pertains.”).
And of these fourteen permissible uses, only once does Congress limit a
permissible use to bulk distribution. 18 U.S.C. § 2721(b)(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.”). For
the remaining twelve permissible uses, the statute seems to have more than one
reasonable interpretation: individual release, bulk release, or both.8 See in re
8
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
12
Case: 08-41083 Document: 00511173310 Page: 13 Date Filed: 07/14/2010
Rogers, 513 F.3d 212, 226 (5th Cir. 2008) (an ambiguous statute is susceptible to
more than one reasonable interpretation).
It does not make sense that Congress would expressly limit states to
individual distribution with one permissible use if Congress intended to limit all
of the permissible uses to individual distribution. If Congress intended only
individual distribution, one would expect either Congress to expressly limit all
uses or, at least, to remain silent on the matter. Likewise, if Congress intended
only bulk distribution, it makes no sense to expressly limit one of the fourteen
uses to bulk distribution and not the others. The text of the statute strongly
indicates that it allows both individual and bulk distribution. Bulk distribution
is limited in only the instance of use for surveys, marketing or soliciations
(plaintiffs do not allege such use here). The plain inference is that Congress
allowed bulk distribution for other uses permitted by section 2721(b). Arif v.
Mukasey, 509 F.3d 677, 681 (5th Cir. 2007) (“Where Congress includes particular
language in one section of a statute but omits it in another section of the same
Act, it is generally presumed that Congress acts intentionally and purposely in
the disparate inclusion or exclusion.”).
The purpose of the statute supports the conclusion that Congress intended
bulk distribution. Representatives originally proposed the DPPA as a crime
fighting measure. 139 C ONG. R EC. S15745-01, S15762 (1993) (Statement of Rep.
Boxer). Congress originally passed it (as an amendment to the Crime Control
and Law Enforcement Act of 1994) in response to the murder of actress Rebecca
Schaeffer at the hands of a stalker. 140 C ONG. R EC. H2518-01, H2526 (1994)
(Statement of Rep. Goss). This stalker used DMV records to find Schaeffer’s
unlisted home address. Id. The legislative history reflects the concern for
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).
13
Case: 08-41083 Document: 00511173310 Page: 14 Date Filed: 07/14/2010
victims of crimes committed using DMV records.9 The totality of the legislative
history clearly reflects that Congress did not intend to suppress legitimate
business uses of motor vehicle records. Thus, Congressman James P. Moran,
Eighth District of Virginia, the sponsor of the DPPA in the House, in his
February 4, 1994 statement on the DPPA before the House Judiciary Committee
Subcommittee on Civil and Constitutional Rights, explained:
“Careful consideration was given to the common uses now made of
this information and great efforts were made to ensure that those
uses were allowed under this bill. Among those who will continue to
have unfettered access are federal and state governments and their
contractors, for use in auto recalls, by businesses (such as an
insurance company) to verify the accuracy of personal information
submitted by a licensee, for use in any civil or criminal proceeding,
in research activities, and in marketing activities as long as the
individual has been given the opportunity to opt out. The bill would
allow DMVs to continue to sell DMV information in bulk as long as
every driver in that state had been given the opportunity to restrict
the sale of their name for marketing purposes.” (emphasis added).
1994 WL 212698 (F.D.C.H.) at 4.10
9
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.
10
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
14
Case: 08-41083 Document: 00511173310 Page: 15 Date Filed: 07/14/2010
Statements on the DPPA along the same lines were made by Congressman
Moran and Congressman Gross on April 20, 1994 before the House. 140 Cong.
Rec. H 2518-01, 1994 WL 140035 at 14, 15, 24.
Plaintiffs’ reading of the DPPA leads to essentially absurd results. At a
checkout line at a grocery store or similar establishment, when a customer wishes
to pay by (or cash) a check, and presents a driver’s license as identification, it is
obviously wholly impractical to require the merchant for each such customer to
submit a separate individual request to the state motor vehicle department to
verify the accuracy of the personal information submitted by the customer, under
section 2721(b)(3). Any such process would obviously take way too long to be of
any use to either the customer or the merchant, and would moreover flood the
state department with more requests than it could possibly handle. So, the
merchant buys the state department’s entire data base and from it extracts on
that occasion that particular customer’s information, and later performs the same
task as to the next such customer in the line. Plaintiffs would have us hold that
the merchant violates the DPPA by acquiring the data base even though every
single actual use made of it is an authorized use under section 2721(b), so long
as there is at least one name in the data base as to which no actual use is made.
We reject that contention.
As the State of Texas points out in its amicus brief, under the plaintiffs
approach, an attorney who buys a set legal reporters does not do so for the
purpose of use for legal research unless that attorney plans on reading every
opinion in every volume of those reporters. A lawyer will never read all the
opinions in all 1,000 volumes of Federal Second (and may likely never read
anything in at least a few of the volumes). But he or she still buys the reporter
set for the purpose of legal research. We hold that the text and legislative history
marketers based on DMV information you can see why some individuals might
object to their personal information being sold.” Id. at 2.
15
Case: 08-41083 Document: 00511173310 Page: 16 Date Filed: 07/14/2010
dictate that when a person obtains motor vehicle records in bulk for one of the
permissible uses listed in 18 U.S.C. § 2721(b), and does not actually use, or intend
to use, any of the information in a manner prohibited by section 2721(b), then
that person does not obtain the records for a purpose not permitted under
Chapter 123 of Title 18.11
B. Resellers
We now address the plaintiffs’ claims against the resellers. The plaintiffs
alleged that reseller defendants must first have themselves made a permissible
use for the DMV records before they could resell to others under 18 U.S.C. §
2721(c). In their briefs and at oral argument, the plaintiffs could not articulate,
and we could not find, any reason why Congress would require resellers to
actually use the records before selling the records.12 Instead, plaintiffs simply
relied on their reading of the text to produce that result. But cf. Waggoner v.
Gonzales, 488 F.3d 632, 638 (5th Cir. 2007) (“We are mindful of the common
mandate of statutory construction to avoid absurd results.”). Not convinced, the
11
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.
12
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. 65–66 (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.
16
Case: 08-41083 Document: 00511173310 Page: 17 Date Filed: 07/14/2010
district court held that plaintiffs had no obtainment claim against the reseller
defendants under the DPPA based on the reasoning in Russell v. Choicepoint
Servs. Inc., 300 F. Supp. 2d 450, 454–61 (E.D. La. 2004). It observed that section
2721(c) allowed “authorized recipients” to resell information. Id. This section did
not require “authorized recipients” to also be authorized users under 18 U.S.C.
§ 2721(b). Therefore, authorized recipients did not need an authorized use before
they could resell the information to those who did have a permissible use.
The plaintiffs counter authorized recipients must have an authorized use
because the statute expressly refers to certain authorized recipients as being
recipients “under” a permissible use. For example:
“An authorized recipient . . . (except a recipient under subsection
(b)(11) or (12)) . . .
An authorized recipient under subsection (b)(11) . . .
An authorized recipient under subsection (b)(12) . . .”
18 U.S.C. § 2721(c). Like the district court, we hold that the only reasonable
construction of “authorized recipient” requires no actual use. Instead, an
authorized recipient is authorized to resell to individuals for one or more of the
specific purposes under section 2721(b). See Russell v. Choicepoint Servs., Inc.,
300 F. Supp. 2d 450, 455–57 (E.D. La. 2004) (The court goes into great detail in
its careful analysis of “authorized recipient.”).
Our construction of the statute alleviates the concerns the plaintiffs believe
exist.13 This construction allows “authorized recipient” to mean something
13
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
17
Case: 08-41083 Document: 00511173310 Page: 18 Date Filed: 07/14/2010
different than one who has a permissible actual use. See Corley v. United States,
129 S. Ct. 1558, 1566 (2009) (a court should give each word effect). It also gives
meaning to the language of section 2721(c) that refers to recipients “under”
subsection (b). 18 U.S.C. § 2721(c). An authorized recipient would be “under
subsection (b)(12),” for example, if the State gives him the data for the purpose
of reselling it to a person who uses it for marketing in conformity with (b)(12).
There is no allegation that any of the defendants is not an authorized recipient
under Texas law, which plainly provides for such resellers in a manner consistent
with the DPPA. Moreover, the DPPA’s criminal and civil sanctions police
unauthorized recipients and users without a permissible actual use. 18 U.S.C.
§§ 2723, 2724.
The Department of Justice issued an advisory opinion that supports this
conclusion. On October 9, 1998, the Special Counsel to the Assistant Attorney
General, in the Civil Division, issued an advisory letter opinion responding to the
question of whether Massachusetts may release personal information to a
commercial distributor who disseminates the information only to other
authorized recipients or entities that use the information solely for authorized
purposes. Unpublished Letter from Robert C. McFetridge, Special Counsel to the
Assistant Attorney General, to Peter Sacks, Office of the Attorney General for the
Commonwealth of Massachusetts (on file with this Court and as a part of the
record below). This advisory opinion concluded that the DPPA allowed for such
releases. Id. Because the Attorney General is expressly charged with imposing
civil sanctions against States having a policy or practice of substantial
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.
18
Case: 08-41083 Document: 00511173310 Page: 19 Date Filed: 07/14/2010
noncompliance with the DPPA, this advisory opinion serves as persuasive
support for the conclusion that a reseller may obtain DMV records and sell them
without first itself actually using or intending to use those records. See 18 U.S.C.
§ 2723(b), note 4 supra. Moreover, since that Department of Justice opinion the
statute has been amended (in October 1999) without any change which would
alter that result.14
II. Standing
We need not address the statutory standing issue because we have affirmed
the district court’s dismissal under Rule 12(b)(6). Verizon Commc’n Inc. v. Law
offices of Curtis V. Trinko, LLP, 124 S.Ct. 872, 883 n.5 (2004) (citing Steel Co. v.
citizens for a Better Environment, 118 S.Ct. 1003, 1013 n.2 (1998)).15 While the
district court did dismiss sua sponte some defendants who did not join the motion
to dismiss, there is no prejudice to the plaintiffs in affirming the judgment in its
entirety because the plaintiffs make the same allegations against all defendants.
14
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.
15
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).
19
Case: 08-41083 Document: 00511173310 Page: 20 Date Filed: 07/14/2010
CONCLUSION
We affirm the judgment of the district court. We hold that a person who
buys DMV records in bulk does so for the purpose of making permissible actual
use of information therein under 18 U.S.C. § 2721(b), even if that person does not
actually use every single item of information therein. We also hold that the plain
language of 18 U.S.C. § 2721 allows resale of DMV records to one who is
authorized and proposes to make actual use thereof as permitted under section
2721(b) notwithstanding that the seller does not actually use or intend to use the
records before resale.
AFFIRMED
20
Case: 08-41083 Document: 00511173310 Page: 21 Date Filed: 07/14/2010
DENNIS, Circuit Judge, concurring:
I fully agree with the majority’s analysis of the Driver’s Privacy
Protection Act and its conclusion that the plaintiffs have failed to state a claim
upon which relief can be granted. However, I believe that Steel Co. v. Citizens
for a Better Environment, 523 U.S. 83, 93-101 (1998), requires us to decide
whether the plaintiffs have Article III standing. “In [Steel Co.], [the Supreme]
Court adhered to the rule that a federal court may not hypothesize
subject-matter jurisdiction for the purpose of deciding the merits.” Ruhrgas
AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999). See also, e.g., United States
v. Tex. Tech Univ., 171 F.3d 279, 287 (5th Cir. 1999); 13 Charles Alan Wright
et al., Federal Practice and Procedure: Jurisdiction and Related Matters §
3522, at 142 (3d ed. 2008).
The plaintiffs in this case have Article III standing for the reason stated
in footnote 15 of the majority opinion: they allege that the defendants have
used their personal information in a manner that is prohibited by the DPPA.
Thus, their allegations fulfill the three requirements of the “irreducible
constitutional minimum of standing”: an injury in fact (i.e., the invasion of an
interest which the plaintiffs argue is legally protected), which was caused by
the defendants and which would be redressed by a judgment against the
defendants. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
“It is firmly established . . . that the absence of a valid (as opposed to arguable)
cause of action does not implicate subject-matter jurisdiction.” Steel Co., 523
U.S. at 89. Thus, our holding that the plaintiffs have failed to state a valid
claim under the DPPA does not alter the fact that the plaintiffs have Article
III standing.
21