In another example showing the primacy of privacy rights in the 21st century, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit rejected constitutional challenges to provisions of the Fair Credit Reporting Act.

     Trans Union Corp. sells lists of names and addresses to commercial marketers.  The company sells so-called “target marketing” products that contain lists of individuals who meet certain criteria.  Marketers purchase these lists and then contact the individuals to sell them various goods and services.

     The Federal Trade Commission determined that Trans Union’s target marketing was not an authorized use of “consumer reports” under the Fair Credit Reporting Act of 1970, 15 U.S.C. Secs. 1681(a) - 1681(u).  The FTC then determined that Trans Union’s target marketing products did indeed constitute consumer reports.  In re Trans Union Corp., 118 F.T.C. 821 (1994).

     Trans Union petitioned for review.  In 1996, the D.C. Circuit agreed that selling consumer reports for target marketing violates the Act.  Trans Union Corp. v. FTC, 81 F.3d 228 (D.C. Cir. 1996).  However, the appeals court determined that the FTC failed to show that Trans Union’s lists of names were used to determine credit eligibility.

     The case was remanded back to the Commission.  Over a period of several years, the parties engaged in extensive discovery regarding whether Trans Union’s marketing lists contain information that creditors use to deny or grant credit.

     In February 2000, the Commission determined that the company’s lists were consumer reports that could not be sold for target marketing purposes.  The Commission ordered Trans Union to “cease and desist from distributing or selling consumer reports, including those in the form of target marketing lists, to any person unless [the company] has reason to believe that such person intends to use the consumer report for purposes authorized” under the Fair Credit Reporting Act.  In re Trans Union Corp., Final Order, No. 9255 (Feb. 10, 2000).

     For example, Sec. 1681(b) of the Fair Credit Reporting Act allows the furnishing of consumer reports to a “person which it has reason to believe intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer.”

     Trans Union again appealed the FTC’s findings to the D.C. Circuit.  Among its arguments, Trans Union contended that the restrictions violated its First Amendment right to convey truthful information.

     In its April 2001 opinion, the D.C. Circuit cited the U.S. Supreme Court’s 1985 opinion in Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749 (1985), for the principle that “a consumer reporting agency’s credit report warranted reduced constitutional protection because it concerned ‘no public issue.’”  The appeals court noted that Trans Union’s marketing lists were entitled to reduced constitutional protection because they were “solely of interest to the company and its business customers and relate[] to no matter of public concern.”  Trans Union Corp. v. FTC, 245 F.3d 809 (D.C. Cir. 2001).

     Trans Union filed a petition for rehearing.  In October 2001, the three-judge panel reached the same conclusion.  “The important point is that here, as in Dun & Bradstreet, the targeted speech solely interests the speaker (Trans Union) and its ‘specific business audience,’” the panel wrote in Trans Union Corp. v. FTC, 267 F.3d 1138 (D.C. Cir. 2001).

     Trans Union argued that the Fair Credit Reporting Act imposes a content-based restriction on speech and must be subject to the highest form of judicial review, or strict scrutiny.  The company argued that the law was content based because it allows the sale of consumer reports to facilitate guaranteed offers of credit, yet disallows the sale of similar information for target marketing purposes.

     The appeals court responded by first noting that “Trans Union’s target marketing lists are private speech warranting only qualified constitutional protection.”  The court then continued: “It is sufficient to note that given the Supreme Court’s commercial speech doctrine, which creates a category of speech defined by content but afforded only qualified protection, the fact that a restriction is content-based cannot alone trigger strict scrutiny.”

     Applying intermediate scrutiny, the appeals court determined that the law was narrowly drawn.  The statute “sweeps only as broadly as necessary to accomplish its goal: protecting the privacy of financial information.”

     The court concluded: “Congress apparently believes that people are more willing to reveal personal information in return for guaranteed offers of credit than for catalogs and sales pitches.  Given the nature of intermediate scrutiny, it can hardly be said that the First Amendment prohibits Congress from balancing privacy interests differently in these different circumstances -- particularly since the FCRA’s express purpose is to facilitate credit, not target marketing.”

     Trans Union filed a petition for certiorari to the Supreme Court on Jan. 18, 2002.  Trans Union LLC v. Federal Trade Commission, 01-1080.