Herring v. Retail Credit Co., 20199

• Decision Date: 31 March 1976
• Docket Number: No. 20199,20199
• Citation: 224 S.E.2d 663,266 S.C. 455
• Parties: James Melvin HERRING, Respondent, v. RETAIL CREDIT CO., Appellant.
• Court: South Carolina Supreme Court

Page 663

224 S.E.2d 663

266 S.C. 455

James Melvin HERRING, Respondent, v. RETAIL CREDIT CO., Appellant.

No. 20199.

Supreme Court of South Carolina.

March 31, 1976.

E. Ellison Walker, of McKay, Sherrill, Walker, Townsend & Wilkins, Columbia, for appellant.

Thomas C. Mann, Columbia, for respondent.

GREGORY, Justice:

Appellant, Retail Credit Company, a consumer reporting agency, seeks reversal of the order of the lower court requiring it to delete from its records any reference to respondent's guilty plea to gambling conspiracy in Federal District Court and the sentence imposed and served.

Respondent plead guilty to the charge of participating in a statewide gambling conspiracy on April 29, 1971. he was sentenced on August 20, 1971 and subsequently served time in the Federal Prison Camp in Montgomery, Alabama. All of these facts are public records in the office of the Clerk of the United States District Court at Columbia, South Carolina.

Respondent sought an ex parte order in the Richland County Court requiring Retail Credit Company to remove from its records this information concerning his guilty plea and sentence. On March 21, 1973 such order was issued by that court. Appellant moved to vacate the order.

At respondent's criminal trial, a question as to the propriety of a government wire tap arose as to him and his co-conspirators. This question was appealed to the United States Court of Appeals, and although Herring had been sentenced and served time for the offense, it was stipulated by the parties to the original criminal proceeding that Herring's conviction would be governed by the appeal perfected by his co-conspirators in an action entitled United States v. Bobo, Gray, et al. On July 2, 1973 the Richland County Court issued an order continuing the order then in effect, pending the outcome of the appeal to the Court of Appeals.

The United States Court of Appeals for the Fourth Circuit affirmed the conviction of Bobo, Gray, et al., and thereby the conviction of Herring. On July 6, 1973 Retail Credit then filed a notice of motion and petition for review to vacate the original order based on the Fourth Circuit decision. On January 9, 1975 the lower court issued an order making the March 21 order permanent, thereby requiring Retail Credit to permanently delete from its records any reference to Herring's guilty plea on the conspiracy charge or to the fact that he served time in a federal prison.

In the January 9, 1975 order the court noted that 'this type of information should not be made available either to the public or the people with whom the respondent does business, since it prejudices the rights of the respondent in securing employment and insurance.' The lower court judge also believed that engaging in a conspiracy to violate the federal gambling law was not of sufficient importance to warrant Retail Credit carrying the information in their files.

The first question presented is whether the order of the lower court sweeps too broadly and is violative of 15 U.S.C.A. § 1681 of the Fair Credit Reporting Act and of public policy.

Section 1681c(a) provides that:

'no consumer reporting agency may make any consumer report containing any of the following items of information:

(5) Records of arrest, indictment, or conviction of crime which from date of disposition, release, or parole, antedate the report by more than seven years.'

Subsection (b) provides that this restriction does not apply to consumer credit reports used in connection with a credit transaction involving Fifty Thousand ($50,000) Dollars or more, life insurance underwriting which may involve Fifty Thousand ($50,000) Dollars or more, or employment at an annual salary which may reasonably be expected to equal Twenty Thousand ($20,000) Dollars or more.

It is clear that the above sections of the Fair Credit Reporting Act contemplate and implicitly permit the reporting of records of arrest, indictments, and convictions in consumer credit reports. In the instant case, there is no dispute as to the accuracy of the information which appellant desires to keep on file, nor is there an issue with respect to the criminal records being reported in violation of the seven year statute of limitations imposed in the act. The order, therefore, violates § 1681c(a). It is also violative of § 1681c(b) as it requires appellant to delete any reference of respondent's crime from its records and, thus, those extending credit or underwriting life insurance involving Fifty Thousand ($50,000) Dollars or more, or employment involving a salary of Twenty Thousand ($20,000) Dollars or more are denied full disclosure implicitly permitted by Subsection (b).

We further find that the lower court's order requiring appellant's credit reporting agency to delete any references to respondent's guilty plea or prison term in violation of public policy.

As stated in the congressional statement of purpose and findings, 15 U.S.C.A. § 1681, consumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers. In its enactment of the Fair Credit Reporting Act, 15 U.S.C.A. 1681 et seq., Congress recognized the need for quick access to information relevant to a determination of extending credit, employment, insurance or relevant to other...