Marketers’ First Amendment Rights Central to TU Decision

Industry observers saw the decision restricting Trans Union Corp.’s sale of credit-based lists as either the rejection of an argument for corporate First Amendment rights or another anti-data marketing ruling.

On Friday, a three-judge panel within the U.S. Court of Appeals for the District of Columbia refused to consider Chicago-based Trans Union’s challenge to restrictions on the sale of its consumer report data as marketing lists. The decision was hailed as a victory by privacy advocates.

“[Marketing lists having First Amendment protection] persuaded the FTC staff for a while,” said Robert Ellis Smith, publisher of Providence, RI-based Privacy Journal. “That the court set that aside puts to rest that rhetorical claim by direct marketing and credit businesses.”

Smith noted that the refusal marked the second significant limitation on list access, the first being the 2000 Shelby Amendment to the Driver’s Privacy Protection Act, which mandated that states provide an opt-in mechanism for drivers wishing to have their motor vehicle department registration information shared with third parties.

“It kicks the legs out of the industry argument that somehow well structured privacy laws butt up against First Amendment rights,” said Evan Hendricks, editor and publisher of Privacy Times, Washington, DC. “It shows that Congress has the authority to enact privacy laws based on the heart of privacy principals, which is the purpose test. Information collected for one purpose can only be used for specified purposes.”

Part of the reason privacy advocates noted the First Amendment aspects of the Trans Union case was a setback they were dealt last year. In a court case between telecommunications firm US West and the Federal Communications Commission, the 10th Circuit Court ruled that the FCC had not adequately considered the First Amendment aspects of preventing a telecommunications firm from sharing customer information within its departments, according to Joel Reidenberg, a professor of law at Fordham University.

But not everyone was ready to celebrate Friday’s ruling. Marty Abrams, of Atlanta-based law firm Hunton & Williams’ Center for Information Policy and Leadership, said that including commercial free speech under the First Amendment “protects the marketer’s ability to use information to communicate with the consumer.”

“The continual train of decisions [determining] that commercial speech is due less protections is very problematic for marketers,” Abrams said.

Abrams also noted that access to age, name, and address data is “systematically disappearing.”

Fred Cate, a professor of law at Indiana University feels that the panel’s statement that consumer credit information is solely of interest to Trans Union and its business customers, and is of no public concern, and therefore that TU is not entitled to commercial free speech protection, is wrong.

“There is no evidence that the statement is accurate that there is no public interest in the list that TU generates or that there is a legal requirement that makes First Amendment protection hinge on public interest,” Cate said. “Even corporate first amendment protection. The court just made this up from whole cloth.”

Both a spokesperson for Trans Union and lead counsel Roger L. Longtin declined comment.