Pintos v. Pac. Creditors Ass'n

• Decision Date: 30 April 2009
• Docket Number: 04-17558.,No. 04-17485,04-17485
• Citation: 605 F.3d 665
• Parties: Maria E. PINTOS, Plaintiff-Appellant,v.PACIFIC CREDITORS ASSOCIATION; Experian Information Solutions, Inc., Defendants-Appellees.Maria E. Pintos, Plaintiff-Appellee,v.Pacific Creditors Association, Defendant,andExperian Information Solutions, Inc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

605 F.3d 665

Maria E. PINTOS, Plaintiff-Appellant,

v.PACIFIC CREDITORS ASSOCIATION; Experian Information Solutions, Inc., Defendants-Appellees.

Maria E. Pintos, Plaintiff-Appellee,

v.Pacific Creditors Association, Defendant,andExperian Information Solutions, Inc., Defendant-Appellant.

Nos. 04-17485, 04-17558.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 9, 2007.

Filed April 30, 2009.

Amended May 21, 2010.

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Andrew J. Ogilvie (argued), Kemnitzer, Anderson, Barron, Ogilvie & Brewer, LLP, San Francisco, CA, for appellant/cross-appellee Maria E. Pintos.

Daniel J. McLoon (argued), Jones Day, Los Angeles, CA, Adam R. Sand and Marc S. Carlson, Jones Day, San Francisco, CA, for appellee/cross-appellant Experian Information Solutions, Inc.

Andrew M. Steinheimer (argued) and Mark E. Ellis, Ellis Coleman Poirier LaVoie & Steinheimer, LLP, Sacramento, CA, for appellee Pacific Creditors Association.

Appeal from the United States District Court for the Northern District of California, Claudia Wilken, District Judge, Presiding. D.C. No. CV-03-05471-CW.

Before MARY M. SCHROEDER, RICHARD R. CLIFTON, and CARLOS T. BEA, Circuit Judges.^*

Dissent to Order by Chief Judge KOZINSKI; Dissent to Order by Judge GOULD; Opinion by Judge CLIFTON; Dissent by Judge BEA.

ORDER

This court's opinion, filed April 30, 2009, is amended by adding additional language to footnote 2 (565 F.3d at 1114). The existing text in footnote 2 will become the first paragraph of the footnote and the new language follows, such that the entire footnote reads:

In this appeal of a summary judgment, PCA and Experian argued only that § 1681b(a)(3)(A) authorized PCA to obtain Pintos's credit report. Thus, we need not determine whether PCA had a permissible purpose under any other § 1681b subsection. On remand, Defendants may argue that PCA was authorized to obtain Pintos's report under a different subsection.

In the briefs on the merits, oral argument, petitions for rehearing, and response to petitions for rehearing, there was no argument based on 15 U.S.C. §§ 1681a(m) and 1681b(c). The parties did not appear to view those provisions to be relevant to this case. During our court's consideration of the petitions for rehearing en banc, it was suggested that these provisions, though drafted at a different time and aimed at a different situation, might shed light on the meaning of the relevant statute, § 1681b(a)(3)(A), so we requested supplemental briefs on that subject. The supplemental briefs have not persuaded us to change our opinion.

Those other provisions, §§ 1681a(m) and 1681b(c), were added in 1996 to permit lenders and insurance companies to solicit for business by purchasing lists and limited information about customers who match certain criteria (such as zip code and credit score) from credit reporting agencies. The “prescreened” customers could then be sent, for example, a “pre-approved” credit card solicitation. Pintos did not authorize the reporting agency to supply her report and the transaction did not consist of “a firm offer of credit or insurance,” under § 1681b(c). Nobody contends otherwise.

At the same time, it should be clear that we do not opine on the meaning or scope of 15 U.S.C. §§ 1681a(m) and 1681b(c) or on the practice of obtaining information from credit reporting agencies to permit the extension of offers to prescreened customers, which the parties to our case agree is authorized by those statutes. A case presenting those questions is not before us.

A judge of the court called for a vote on the petitions for rehearing en banc. A vote was taken, and a majority of the active judges of the court failed to vote for en banc rehearing. Fed. R.App. P. 35.

The petitions for rehearing en banc are DENIED. No further petitions for rehearing may be filed.

Chief Judge KOZINSKI, with whom Judges O'SCANNLAIN, KLEINFELD, GOULD, TALLMAN, CALLAHAN and BEA join, dissenting from the denial of rehearing en banc:

Judge Bea's dissent persuasively explains why the majority opinion conflicts with Ninth Circuit precedent, and I would join it if I could. Pintos v. Pac. Creditors Ass'n, 565 F.3d 1106, 1117-18 (9th Cir.2009) (Bea, J., dissenting). I write separately to point out another problem with the opinion: Its interpretation of the Fair Credit Reporting Act (FCRA) is foreclosed by the plain language of the statute.

The issue is whether Pacific Creditors Association (PCA) had a permissible purpose for seeking Maria Pintos's credit report. Id. at 1110 (maj.op.). PCA argued it had one under 15 U.S.C. § 1681b(a)(3)(A), which allows a consumer reporting agency to give a report to a person 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.” The majority disagreed, holding that a person isn't “involved” in a credit transaction unless he “initiates” the transaction. Pintos, 565 F.3d at 1112-13. Because Pintos didn't ask to have her car towed, she didn't initiate her debt and there was no permissible purpose. Id. at 1113.

The majority's interpretation can't be squared with 15 U.S.C. § 1681b(c). This section provides that “[a] consumer reporting agency may furnish a consumer report relating to any consumer pursuant to subparagraph (A) ... of subsection (a)(3) [section 1681b(a)(3)(A) ] of this section in connection with any credit ... transaction that is not initiated by the consumer only if” certain conditions are met. (Emphasis added.) Section 1681b(c) restricts the permissible purpose established in section 1681b(a)(3)(A) when transactions aren't consumer-initiated. And by limiting access to reports under section 1681b(a)(3)(A) in situations where the consumer didn't initiate the transaction, section 1681b(c) clues us in on the fact that section 1681b(a)(3)(A) doesn't itself require that consumers initiate anything.

Moreover, debt collectors like PCA don't even need to meet section 1681b(c)'s special conditions. Title 15 U.S.C. § 1681a(m) defines “credit ... transaction that is not initiated by the consumer,” and it specifically excludes “the use of a consumer report by a person with which the consumer has an account ... for purposes of ... collecting the account” from the definition of non-consumer-initiated transactions. 15 U.S.C. § 1681a(m). And “collection of a debt is considered to be the ‘collection of an account.’ ” Hasbun v. County of Los Angeles, 323 F.3d 801, 803 (9th Cir.2003). Because PCA was collecting Pintos's debt, the transaction here isn't one “not initiated by the consumer” that has to meet section 1681b(c)' s conditions. Indeed, independent of the conflict with section 1681b(a)(3)(A), the majority's decision can't be reconciled with section 1681a(m): The majority holds that there was no permissible purpose because Pintos didn't initiate the transaction, but under section 1681a(m), Pintos did initiate the transaction by owing the debt.

Putting sections 1681b(a)(3)(A), 1681b(c) and 1681a(m) together, then, it's clear that: (1) Consumers can be “involved” in credit transactions under section 1681b(a)(3)(A) that they didn't initiate; (2) section 1681b(c) provides certain restrictions on access to reports under section 1681b(a)(3)(A) when the consumer didn't initiate the transaction; and (3) those limitations don't apply here because section 1681a(m) says that Pintos initiated the transaction.

The majority must have read these provisions, yet still disagrees. Its mistake is plain. If subparagraph A of a statute said “all fruit shall be inspected before it can be put into a dessert,” and subparagraph B said “in the case of tomatoes inspected under subparagraph A, authorities shall perform extra special inspections,” we'd know that subparagraph A covers tomatoes. Section 1681b(c) provides special limits on access to credit reports sought under section 1681b(a)(3)(A) when transactions aren't initiated by consumers. We therefore know that section 1681b(a)(3)(A) covers transactions not initiated by consumers. And if a statute expressly excluded golf from its definition of “fun sports,” we couldn't hold that golf is a fun sport. Section 1681a(m) expressly excludes debt-collection transactions from its definition of non-consumer-initiated transactions. We therefore can't say that a debt-collection transaction was non-consumer-initiated. In holding otherwise, the majority flunks Statutory Interpretation 101.

GOULD, Circuit Judge, dissenting from denial of rehearing en banc:

I also dissent from denial of rehearing en banc. With Chief Judge Kozinski, I agree with the reasoning of Judge Bea in his panel dissent. I also agree with the reasoning of the Chief Judge in his dissent from denial of rehearing en banc. I add this idea: Uniformity of treatment of creditors is useful and likely leads to lower credit enforcement costs to the benefit ultimately of consumers. I don't see a virtue in distinguishing Hasbun and establishing different categories of creditors, some of whom can gain access to a credit report and some of whom can't. Use of credit reports expedites collections, reducing collection costs, and because such costs may be shifted to consumers, permitting the credit reports to be relied upon by creditors may decrease costs to citizens who are so unfortunate as to leave their unregistered cars parked on the street and subject to towing. If a collection agency standing in the shoes of the towing company is not allowed to request and see a credit report, then the costs of collection are going to increase, then correspondingly the costs of towing are going to increase, and finally the scope of fines for violators would likely be increased. In my view, permitting credit reports to go to creditors, whether they have a judgment or not, will be less expensive for...