Attorneys prevail in consumer protection suit

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A group of North Carolina personal injury attorneys prevailed in a consumer protection suit after the court found the plaintiffs failed to preserve the argument that the reports accessed by the attorneys were a “motor vehicle record.”

The ruling, handed down by the 4th U.S. Circuit Court of Appeals, affirmed a decision from the lower court that ruled in the defendants’ favor.

U.S. Circuit Judge Diana Gribbon Motz authored the opinion in Garey v. James S. Farrin, P.C. (VLW 022-2-135). U.S. Circuit Judges J. Harvie Wilkinson III and Stephanie Thacker also heard the case.

Background

The defendant personal injury lawyers obtained car accident reports from North Carolina law enforcement agencies and private data brokers. These reports included identifying information of the persons involved in those accidents, including names and addresses.

Upon receiving this information, the attorneys used it to mail unsolicited advertising materials to some of the drivers.

Two groups of drivers who received the advertising mailings filed suit, alleging the attorneys violated the Driver’s Privacy Protection Act, or DPPA, which permits a private cause of action against someone “who knowingly obtains, discloses or uses personal information, from a motor vehicle record” for an impermissible purpose.

While the plaintiffs had standing to sue for damages, the lower court rejected their claims on the merits. Summary judgment was granted to the attorneys.

The lower court determined that the DPPA “applies only to persons who obtain personal information directly from a state [Department of Motor Vehicles].”

“Because the Defendants never obtained records from a DMV, the court concluded that their ‘conduct thus falls outside the ambit of the DPPA, and they are entitled to judgment as a matter of law,’” Motz wrote, summarizing the lower court’s ruling.

Analysis

Citing recent court decisions — including TransUnion LLC v. Ramirez from the U.S. Supreme Court — Motz said the plaintiffs had Article III standing to bring a suit.

In TransUnion, the Supreme Court held that plaintiffs proceeding under a statutory cause of action can establish an injury by “identif[ying] a close historical or common-law analogue for their asserted injury” that courts have traditionally provided a remedy for.”

In the Garey case, the plaintiffs were found to have standing by the district court because of alleged harms related to the invasion of privacy, “which has long provided a basis for recovery at common law.”

However, the 4th Circuit agreed with the district court decision to reject the plaintiffs’ request for injunctive relief because they did not adequately allege the defendants were currently obtaining their information.

“Under the theory of the case, the obtaining of their personal information is a fait accompli; the Garey Plaintiffs were already in car accidents, and the Defendants already obtained the relevant accident reports,” Motz wrote.

The judge added that this information could be procured in the future if a plaintiff were involved in another car accident, if another accident report was created by North Carolina law enforcement and if a defendant obtained this report.

“The legislative history clarifies the plain text: the DPPA imposes civil liability only on a defendant who obtains personal information from a motor vehicle record, but not on a defendant who merely obtains personal information that can be linked back to such a record.”

— Judge Diana Gribbon Motz

“But that mere possibility is hardly the kind of non-speculative, imminent danger that can support injunctive relief,” she noted.

As for the merits, Motz wrote that “the parties seek to present several complex questions of first impression in this Circuit,” including if a driver’s license is a “motor vehicle record” and if the DPPA applies to records outside of a state DMV.

“But those questions must be answered another day,” Motz wrote, “for we affirm the district court on… much narrower ground.”

The judge said the plaintiffs “do not allege that the Defendants obtained any of the Plaintiff’s personal information ‘from’ any of the sources that they argue constitute ‘motor vehicle record[s].’”

Under the DPPA, a defendant must have obtained personal information “from a motor vehicle record” to be civilly liable under the act.

The DPPA defines a “motor vehicle record” as “any record that pertains to a motor vehicle operator’s permit, motor vehicle title, motor vehicle registration, or identification card issued by a department of motor vehicles.”

The plaintiffs contended that, since the crash report’s address field indicates whether the address matches the one on the driver’s license, the information appeared in a motor vehicle record.

But Motz disagreed.

“[T]he legislative history clarifies the plain text: the DPPA imposes civil liability only on a defendant who obtains personal information from a motor vehicle record, but not on a defendant who merely obtains personal information that can be linked back to such a record,” she explained.

Motz pointed out there was no assertion that the attorneys accessed a DMV database, as the accident reports are not records kept by the state DMV. Rather, the attorneys obtained the reports either from local law enforcement agencies or private data brokers.

The judge said the plaintiffs failed to preserve their argument that the accident report itself was a “record that pertains to a motor vehicle operator’s permit.” As such, it was not considered.

This specific issue is “a difficult question” with split decisions across the courts, Motz noted, adding that, at the district court, the plaintiffs “not only failed to preserve this argument, but affirmatively disavowed it before the district court.”

“Considering arguments in a civil case for the first time on appeal requires an extraordinarily compelling reason to do so,” Motz wrote. “Here, the procedural history provides extraordinarily compelling reasons not to do so.”

The judge concluded that the district court “correctly held that the Plaintiffs have standing to seek damages, but not prospective relief” and that, on the merits, the court must affirm the district court’s decision in favor of the defendants.

“The Defendants obtained the Plaintiffs’ personal information from accident reports — but the Plaintiffs failed to preserve the argument that those accident reports are ‘motor vehicle record[s],’” Motz said.