Back in 2006, some South Carolina lawyers filed a putative class action lawsuit on behalf of four car purchasers against hundreds of state car dealerships.  They alleged that the dealers had charged unlawful fees in violation of a state consumer protection statute.  In the course of the case, the lawyers obtained from the South Carolina Department of Motor Vehicles the names and contact information of thousands of other state residents who had also paid the challenged fee.  They then wrote to the consumers, offering to talk to them about potentially joining the lawsuit.

Perhaps believing that two can play this game, one of the lawyers for the car dealers rounded up some consumer clients of his own and sued the original attorneys for more than $200 million, alleging that the solicitations violated the federal Driver’s Privacy Protection Act (DPPA).

On Wednesday, January 9, the Court will hear oral argument in Maracich v. Spears to decide whether that turnabout is fair play or, instead, is barred by the DPPA’s “litigation exception.”  The DPPA plaintiffs will be represented by Phillip N. Elbert, of the Tennessee firm Neal & Harwell PLC.  The defendants are represented by Paul Clement of Bancroft PLLC.

Background

The DPPA generally prohibits a state motor vehicle department (DMV) from disclosing information from its databases of state drivers, including drivers’ names and contact information.  It also generally prohibits the use of any such information that is obtained from the DMV.

However, the statute has a list of exemptions, two of which are relevant in this case.  The first is the so-called “litigation exception,” which permits use of driver data “in connection with any civil . . . proceeding in any Federal, State, or local court . . . including . . . investigation in anticipation of litigation.”  The second exemption is the “solicitation” provision, which allows use of the information “[f]or bulk distribution for surveys, marketing or solicitations” but only “if the State has obtained the express consent of the person to whom such personal information pertains.”

The DPPA plaintiffs allege that their rights under the statute were violated when the lawyers in the original consumer suit used information from the South Carolina DMV to send out solicitations to join the suit against the car dealerships.

(A side note for those interested in professional responsibility issues: the lawyer who started the DPPA litigation subsequently handed the case off to others after being accused of having a conflict of interest, since his DPPA clients were potentially members of the putative class of consumers who were also suing his car dealer clients.)

Everyone agrees that the solicitation exemption did not apply because South Carolina did not have the drivers’ express consent to distribute their contact information for the purpose of legal solicitations.  But the DPPA defendants (the lawyers in the original consumer suit) argue that they fall within the litigation exception.

The Fourth Circuit agreed and ordered the suit dismissed.  The Supreme Court then granted certiorari.

The arguments

The DPPA plaintiffs make two basic arguments.  First, they argue that legal solicitations are governed solely by the solicitation provision, rendering the litigation exception irrelevant.  They invoke the canon of construction that the specific governs over the general, arguing that the solicitation provision is more specific than the litigation exception and therefore should control.  They point out that the solicitation provision applies only if the consumer has consented to the state giving out private information for that purpose, while the litigation exception has no such restriction.  They argue that Congress would not have intended the litigation exception to effectively carve out a special rule for lawyer solicitations, allowing lawyers alone to solicit without prior consent.  (One might call this the “soliciting solicitors’ special solicitude” argument.)

Second, the DPPA plaintiffs argue that even if the litigation exception could apply, it does not extend to this case.  That is because the purpose of the communication was not to investigate the facts of the case or obtain evidence for a trial, but instead to sign up clients.  They insist that the litigation exception should be construed narrowly because it is one of only a handful of exceptions that apply even to the disclosure of the most sensitive information in state DMV databases (including, for example, Social Security numbers).  Congress would not have wanted lawyers to have access to such private information for the purpose of soliciting clients.  After all, lawyers in cases not involving drivers or car dealerships are routinely required to find their clients without access to such information.

The DPPA defendants dispute both arguments.  First, they say that the specific-general canon has no application here because the solicitation provision is no more specific than the litigation exception – they are both specific, but deal with different topics.  The fact that they overlap in the context of this case does not mean that the Court should read one narrowly to avoid the overlap.  Instead, the overlap means that defendants are entitled to immunity if they satisfy either of the two exceptions.

Second, the defendants argue that their conduct easily falls within the broad terms of the litigation exception because their solicitations were obviously “in connection with” their lawsuits – indeed, they sought out additional clients only because the car dealers had argued that they were required to have a customer of each and every dealership as a named plaintiff for the representative action to proceed.    And rather than construe the exception narrowly, the Court should construe it broadly to minimize the degree to which the DPPA interferes with states’ traditional prerogatives to decide for themselves how to run their own motor vehicle departments and regulate the legal profession.  That result would not leave drivers’ privacy at the mercy of the bar – it would simply leave the question of whether to permit such disclosures to each particular state, consistent with our general expectations in a federal system.’

Analysis

In many ways, this case presents a run-of-the-mill question of statutory interpretation of the sort that frequently make their way to the Supreme Court – the text of the statute is ambiguous and different tools of statutory construction point in opposite directions.  In the end, the case may come down to which aspect of the DPPA and consumer class actions a majority of the Justices like the least.  On the one hand, the plaintiffs are highlighting the reality that many consumer class actions are lawyer-driven, with attorneys going to lengths to turn what are often small individual claims (for what many Justices may view as trivial violations) into huge lawsuits worth millions of dollars.  A narrow construction of the DPPA’s litigation exemption would make some of those lawsuits more difficult, and could have a certain disapproving symbolism.  (Although, ironically, it would also make consumer class actions under this particular statute easier to bring.)  The defendants seek to focus the Court on another aspect of the DPPA that many Justices may find equally disturbing – the fact that the statute as a whole amounts to a significant intrusion into the operation of state agencies and state regulation of the bar.   Defendants are hoping that conservative Justices will dislike that offense to federalism more than they dislike entrepreneurial class action lawyers and therefore will construe the statute’s exemptions broadly (and, thereby, the DPPA narrowly).

Posted in Maracich v. Spears, Featured, Merits Cases

Recommended Citation: Kevin Russell, Argument preview: Is turnabout fair play under the Driver’s Privacy Protection Act?, SCOTUSblog (Jan. 3, 2013, 1:30 PM), http://www.scotusblog.com/2013/01/argument-preview-is-turnabout-fair-play-under-the-drivers-privacy-protection-act/