The Supreme Court has refused to hear TransUnion LLC's arguments that sale of consumer information generated from credit data is protected by the First Amendment. The decision marks the end of the decade-long fight between the Federal Trade Commission and the Chicago-based information service bureau over interpretation of the Fair Credit Reporting Act (FCRA).
TransUnion has not used data from its credit files to generate marketing lists in more than a year, and so the decision will not materially affect its current operations. But the decision by the court not to hear the case could pave the way for several class-action lawsuits filed on behalf of consumers, and sets the stage for further inquiry into free-speech protections.
The court did not give a reason for declining to hear the case. Based on an earlier Supreme Court decision, a 1994 Appeals Court ruling held that Dun & Bradstreet reports did not qualify as free speech because those reports contained false information.
“It is questionable whether this precedent has any place in the context of truthful, non-defamatory speech,” Justice Anthony M. Kennedy wrote. Neither the FTC nor the lower courts gave any indication that there was any incorrect information in TransUnion's lists. Justice Sandra Day O'Connor also joined the dissent.
Kennedy called the FTC's decision to ban target marketing lists under the FCRA “nonsensical” because lists suitable for credit and insurance offers involving prescreening are acceptable. Prescreened offers, wrote Kennedy, entail “the disclosure of detailed credit performance information.”
He continued, “Release of this information is far more invasive of consumer privacy than release of the names and addresses contained in [TransUnion's] target marketing lists.”
By refusing to hear the case, the Supreme Court allowed a 2001 appeals court decision against TransUnion to stand.
Kennedy noted that if the 2001 ruling is accepted by other courts, TransUnion could face statutory damage liability of up to $190 billion in the pending class-action lawsuits, based on the FCRA's provision allowing between $100 and $1,000 for each willful violation.
Most courts have discretion to accept the Appeals Court decision and to preclude further argument, or to allow TransUnion to fight the class-action suits on a court-by-court basis.
“I don't think any [of the class-action lawsuits] have been certified,” said TransUnion spokesman Clark Walter. If any are, he said, “We will defend ourselves vigorously.”
“We've been out of the business of using individual-level credit data for more than a year, but we still felt it was important for us to pursue this case as long as possible,” said TransUnion executive vice president Jan Davis.
Beyond TransUnion's fortunes, others see the decision as having a chilling effect on commercial free speech.
“To decide that information of this kind — people's names and public facts — gets no First Amendment protection reduces the reach of free speech in a way that undermines the marketplace of ideas,” said Lawrence H. Tribe, a constitutional law professor at Harvard University who served as counsel for TransUnion's petition to the Supreme Court.
