Gelman v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 05 October 2009
• Docket Number: No. 07-3665.,07-3665.
• Citation: 583 F.3d 187
• Parties: Bruce GELMAN, Esquire, On Behalf of Himself and All others similarly situated v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Bruce Gelman, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

583 F.3d 187

Bruce GELMAN, Esquire, On Behalf of Himself and All others similarly situated v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Bruce Gelman, Appellant.

No. 07-3665.

United States Court of Appeals, Third Circuit.

Argued: September 9, 2008.

Opinion filed: October 5, 2009.

Patrick J. Loughren, Esq. (Argued), Loughren, Loughren & Loughren, P.C., Pittsburgh, PA, Daniel C. Levin, Esq., Levin, Fishbein, Sedran & Berman, Philadelphia, PA, Christopher G. Hayes, Esq., The Law Office of Christopher G. Hayes, West Chester, PA, for Appellant.

James T. Moughan, Esq., Britt, Hankins & Moughan, Philadelphia, PA, Michael P. Kenny, Esq., Cari K. Dawson, Esq. (Argued), Derin B. Dickerson, Esq., Alston & Bird LLP, Atlanta, GA, for Appellee.

Thomas W. Curvin, Esq., Valerie S. Sanders, Esq., Drew D. Dropkin, Esq., Sutherland Asbill & Brennan LLP, N.E. Atlanta, GA, for Amicus Curiae, Property Casualty Insurers Association of America, in support of Appellees.

Before: SCIRICA, Chief Circuit Judge, McKEE and SMITH, Circuit Judges.

OPINION

McKEE, Circuit Judge.

Bruce Gelman appeals the district court's Rule 12(b)(6) dismissal of the claims he filed under the Fair Credit Reporting Act that arose from an allegedly improper disclosure of his credit report and a subsequent mailer from an insurance company that arose from that disclosure. For the reasons that follow, we will affirm the district court.

I. FACTUAL BACKGROUND¹

On or about November 18, 2004, State Farm Mutual Automobile Insurance Company requested and obtained Gelman's consumer credit report from Experian, a consumer reporting agency, without Gelman's consent or authorization. Gelman alleges that he did not discover that State Farm had obtained his consumer credit report until April 5, 2006, when he received a copy of his consumer credit report from Experian. His consumer credit report noted that State Farm had obtained his credit report for a "permissible purpose." Gelman sued State Farm after the latter obtained a copy of his credit report from a credit reporting agency and used it to select Gelman to receive materials pertaining to insurance products that he might qualify for and/or be interested in.

The mailer that was sent claims that State Farm has been the "No. 1 auto insurer since 1942."² In a paragraph set off by a border, the mailer says it is a "prescreened offer." It also states in bold, enlarged font: "Call ... for a quote or return the attached card today. I could save you up to $356!*." The mailer also claims: "[a]s your agent, I'll help you find the right level of coverage at the right price for your needs. By getting to know you personally, I can offer: Competitive rates that can save you up to $356 or more.*" A footnote to the asterisk states: "Actual average annual savings were $356.58 per household. This amount is based on a January 2005 survey of new policyholders who reported savings through State Farm as compared to their previous carriers' rates."

An attached card further describes the auto insurance "offering." Its caption reads: "Learn more about auto insurance at statefarm.com." The line underneath the caption and next to a checkmarked box reads: "Yes! I'd like more insurance information on State Farm auto insurance." The attached card asks for the recipient's phone number, best time to call, name of current car insurance carrier and renewal date of car insurance. That card also gives the recipient the opportunity to request more information regarding homeowners insurance, flexible payment options, life insurance or "other."

In addition, the mailer contains the following opt-out notice in a paragraph set off by a border: "You can choose to stop receiving `prescreened' offers of insurance from this and other companies by calling toll-free. ... See `PRESCREEN & OPT-OUT NOTICE' on the other side for more information about prescreened offers." The other side of the mailer that is referenced contains the following information:

PRESCREEN & OPT-OUT NOTICE: This "prescreened" offer of insurance is based on the information in your consumer reports, including your credit report, indicating that you meet certain eligibility criteria. This offer is not guaranteed if you do not meet our criteria at the time of application and expires 60 days after you receive it. If you wish to omit your name from future State Farm mailings, please contact me at: State Farm Customer Mail Response Center at: State Farm Insurance Company-Customer Mail Response Center — P.O. Box 1800 — Aurora, ILL 60507-9863. If you do not want to receive prescreened offers of insurance from this and other companies, contact the consumer reporting agencies listed below or call toll-free. ...

Gelman contends that State Farm's mailer is an invitation to call State Farm to find out about the various insurance products that State Farm might attempt to sell. Put another way, Gelman contends that the State Farm mailing is nothing more than promotional material soliciting him to contact State Farm regarding its various insurance products and that it is therefore not the kind of firm offer of insurance that would legitimize State Farm's access to his credit report under federal law.

II. DISTRICT COURT PROCEEDINGS

On November 22, 2006, Gelman filed a putative class action complaint against State Farm asserting four substantive and two procedural claims arising under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. Specifically, Gelman asserted that: (1) State Farm obtained his credit report from a credit reporting agency under false pretenses in knowing and willful violation of § 1681 q ("false pretenses claim"); (2) State Farm willfully violated § 1681b(f) without a permissible purpose ("permissible purpose claim"); (3) State Farm's offer of insurance did not contain the "clear and conspicuous" disclosures required by § 1681m ("the disclosure claim"); and (4) State Farm negligently violated each of the foregoing statutory provisions in violation of § 1681o. Gelman also sought declaratory and injunctive relief.

State Farm responded by filing a motion to dismiss for failure to state a cause of action pursuant to Fed.R.Civ.P. 12(b)(6), and the district court granted that motion as to all of Gelman's claims. Gelman v. State Farm Mut. Auto. Ins. Co., 2007 WL 2306578 (E.D.Pa. Aug.9, 2007). The district court held that Gelman failed to state a claim for his false pretenses and permissible purpose claims because State Farm's mailer constituted an offer of insurance under the FCRA, and that was a "permissible purpose" for disclosing Gelman's credit report. Id. at *4-8. It further held that the FCRA does not provide for a private right of action to recover for disclosures that are contrary to provisions of the FCRA. Id. at *8. The district court also held that the FCRA does not provide private litigants declaratory and injunctive relief. Id. at *9. This appeal followed.³

III. STANDARD OF REVIEW

We exercise plenary review of the district court's order granting a motion to dismiss for failure to state a claim. Santiago v. GMAC Mortgage Corp., 417 F.3d 384, 386 (3d Cir.2005). In determining whether a district court's dismissal of a complaint under Fed.R.Civ.P. 12(b)(6) was proper, we must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine, whether under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). At this stage, "a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.' A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009)<sup>4</sup> (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged — but it has not `show[n]' — that the `pleader is entitled to relief.'" Iqbal, 129 S.Ct. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).

In addition, because Gelman attached a copy of State Farm's mailer to his complaint, the mailer may be considered for purposes of ruling upon the Rule 12(b)(6) motion. See Pension Benefit Guar. Corp. v. White Consl. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993).

IV. LEGAL BACKGROUND

"Congress enacted the FCRA in 1970 to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." Safeco Ins. Co. of America v. Burr, 551 U.S. 47, 127 S.Ct. 2201, 2205, 167 L.Ed.2d 1045 (2007). In doing so, Congress sought to preserve the consumer's privacy in the information maintained by consumer reporting agencies. Cole v. U.S. Capital, Inc., 389 F.3d 719, 725 (7th Cir. 2004).⁵ A "consumer reporting agency" is defined as: "any person which, for monetary fees, dues, or a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports." 15 U.S.C. § 1681a(f).

The Act explains: "There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer." 15 U.S.C. § 1681(a)(4). Accordingly, Congress prohibited credit agencies from releasing consumer credit reports⁶ "unless the release occurs for one of the permissible purposes set forth in 15 U.S.C. § 1681b(a)." Cole, 389 F.3d at 725. Section 1681 provides for release of consumer...