Maracich v. Spears
| Citation | 186 L.Ed.2d 275,133 S.Ct. 2191,570 U.S. 48 |
| Decision Date | 17 June 2013 |
| Docket Number | No. 12–25.,12–25. |
| Parties | Edward F. MARACICH, et al., Petitioners v. Michael Eugene SPEARS et al. |
| Court | United States Supreme Court |
Joseph R. Guerra, Washington, DC, for Petitioners.
Paul D. Clement, Washington, DC, for Petitioners.
Joseph R. Guerra, Peter D. Keisler, Eric D. McArthur, Ryan C. Morris, Christopher A. Bates, Sidley Austin LLP, Washington, DC, Philip N. Elbert, James G. Thomas, Elizabeth S. Tipping, Neal & Harwell, PLC, Nashville, TN, Gary L. Compton, Spartanburg, SC, for Petitioners.
M. Dawes Cooke, John William Fletcher, Barnwell Whaley, Patterson & Helms, LLC, Charleston, SC, Paul D. Clement, Counsel of Record, Erin E. Murphy, Bancroft PLLC, Washington, DC, for Respondents.
Curtis W. Dowling, Matthew G. Gerrald, Barnes, Alford, Stork & Johnson, LLP, Columbia, SC, for Respondents Michael Eugene Spears and Michael Spears, P.A.
Concerned that personal information collected by States in the licensing of motor vehicle drivers was being released—even sold—with resulting loss of privacy for many persons, Congress provided federal statutory protection. It enacted the Driver's Privacy Protection Act of 1994, referred to here as the DPPA. See 18 U.S.C. §§ 2721 – 2725.
The DPPA regulates the disclosure of personal information contained in the records of state motor vehicle departments (DMVs). Disclosure of personal information is prohibited unless for a purpose permitted by an exception listed in 1 of 14 statutory subsections. See §§ 2721(b)(1)-(14). This case involves the interpretation of one of those exceptions, subsection (b)(4). The exception in (b)(4) permits obtaining personal information from a state DMV for use "in connection with" judicial and administrative proceedings, including "investigation in anticipation of litigation."
§ 2721(b)(4). The question presented is whether an attorney's solicitation of clients for a lawsuit falls within the scope of (b)(4).
Respondents are trial lawyers licensed to practice in South Carolina. They obtained names and addresses of thousands of individuals from the South Carolina DMV in order to send letters to find plaintiffs for a lawsuit they had filed against car dealers for violations of South Carolina law. Petitioners, South Carolina residents whose information was obtained and used without their consent, sued respondents for violating the DPPA. Respondents claimed the solicitation letters were permitted under subsection (b)(4). In light of the text, structure, and purpose of the DPPA, the Court now holds that an attorney's solicitation of clients is not a permissible purpose covered by the (b)(4) litigation exception.
The State of South Carolina, to protect purchasers of motor vehicles, enacted the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act (MDDA). In June 2006, respondent attorneys were approached by car purchasers who complained about administrative fees charged by car dealerships in certain South Carolina counties, allegedly in violation of the MDDA. The state statute prohibits motor vehicle dealers from engaging in "any action which is arbitrary, in bad faith, or unconscionable and which causes damage to any of the parties or to the public." S.C.Code Ann. § 56–15–40(1) (2006). The MDDA provides that "one or more may sue for the benefit of the whole" where an action is "one of common or general interest to many persons or when the parties are numerous and it is impracticable to bring them all before the court." § 56–15–110(2).
On June 23, 2006, one of the respondent attorneys submitted a state Freedom of Information Act (FOIA) request to the South Carolina DMV to determine if charging illegal administrative fees was a common practice so that a lawsuit could be brought as a representative action under the MDDA. The attorney's letter to the DMV requested information regarding "[p]rivate purchases of new or used automobiles in Spartanburg County during the week of May 1–7, 2006, including the name, address, and telephone number of the buyer, dealership where purchased, type of vehicle purchased, and date of purchase." App. 57. The letter explained that the request was made "in anticipation of litigation ... pursuant to the exception in 18 USC § 2721(b)(4) of the Driver's Privacy Protection Act." Ibid. The South Carolina DMV provided the requested information. On August 24, 2006, respondents submitted a second FOIA request to the DMV, also asserting that it was made "in anticipation of litigation ... pursuant to the exception in 18 USC § 2721(b)(4)," for car purchasers in five additional counties during the same week. Id ., at 67.
On August 29, 2006, respondents filed suit in South Carolina state court on behalf of four of the consumers who originally contacted them. The case is referred to here, and by the parties, as the Herron suit. The complaint in the Herron suit named 51 dealers as defendants and invoked the MDDA's " group action" provision to assert claims "for the benefit of all South Carolina car buyers wh[o] paid administrative fees," id ., at 128, to those dealers during the same time period.
Some of the dealer defendants in the Herron suit filed motions to dismiss for lack of standing because none of the named plaintiffs purchased cars from them. On October 26, 2006, while the motions to dismiss were pending, respondents submitted a new FOIA request to the South Carolina DMV. That request, again citing subsection (b)(4) of the DPPA, sought to locate additional car buyers who could serve as plaintiffs against the dealers who had moved to dismiss. On October 31, 2006, respondents filed an amended complaint, which added four named plaintiffs and increased the number of defendant dealers from 51 to 324. As before, defendant dealerships that had not engaged in transactions with any of the now eight named plaintiffs filed motions to dismiss for lack of standing.
On January 3, 2007, using the personal information they had obtained from the South Carolina DMV, respondents sent a mass mailing to find car buyers to serve as additional plaintiffs in the litigation against the dealers. Later in January, respondents made three more FOIA requests to the South Carolina DMV seeking personal information concerning people who had purchased cars from an additional 31 dealerships, again citing the (b)(4) exception. The South Carolina DMV granted all the requests. On January 23, respondents mailed a second round of letters to car buyers whose personal information had been disclosed by the DMV. Respondents sent additional rounds of letters on March 1, March 5, and May 8. Each of the five separate mailings was sent to different recipients. In total, respondents used the information obtained through their FOIA requests to send letters to over 34,000 car purchasers in South Carolina. This opinion refers to the communications sent by respondents simply as the "letters."
The letters, all essentially the same, had the heading "ADVERTISING MATERIAL." The letters explained the lawsuit against the South Carolina dealers and asked recipients to contact the respondent-lawyers if interested in participating in the case. Attached to the letter was a reply card that asked a few questions about the recipient's contact information and car purchase and ended with the sentence "I am interested in participating" followed by a signature line. The text of the letter and reply are set out in full in the Appendix, infra .
In accordance with South Carolina Rule of Professional Conduct 7.3 (2012), which regulates the solicitation of prospective clients, respondents filed a copy of the letter and a list of recipients' names and addresses with the South Carolina Office of Disciplinary Counsel.
In June 2007, respondents sought to amend their complaint to add 247 plaintiffs. The court denied leave to amend and held the named plaintiffs had standing to sue only those dealerships from which they had purchased automobiles and any alleged co-conspirators. In September 2007, respondents filed two new lawsuits on behalf of the additional car buyers. Those subsequent cases were consolidated with the Herron suit. All claims against dealerships without a corresponding plaintiff-purchaser were dropped.
In the case now before the Court, petitioners are South Carolina residents whose personal information was obtained by respondents from the South Carolina DMV and used without their consent to send solicitation letters asking them to join the lawsuits against the car dealerships. Petitioner Edward Maracich received one of the letters in March 2007. While his personal information had been disclosed to respondents because he was one of many buyers from a particular dealership, Maracich also happened to be the dealership's director of sales and marketing. Petitioners Martha Weeks and John Tannerreceived letters from respondents in May 2007. In response to the letter, Tanner called Richard Harpootlian, one of the respondent attorneys listed on the letter. According to Tanner, Harpootlian made an aggressive sales pitch to sign Tanner as a client for the lawsuit without asking about the circumstances of his purchase.
In 2009, petitioners filed the instant putative class-action lawsuit in the United States District Court for the District of South Carolina. The complaint alleged that respondents had violated the DPPA by obtaining, disclosing, and using personal information from motor vehicle records for bulk solicitation without the express consent of petitioners and the other class members.
Respondents moved to dismiss. The information, they contended, was subject to disclosure because it falls within two statutory exceptions in the DPPA: (b)(1), pertaining to governmental functions, and (b)(4), pertaining to litigation. On cross-motions for summary judgment, the District Court held as a matter of law that respondents' letters were not solicitations and that the use of...
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