Klonsky v. RLI Ins. Co.
| Decision Date | 04 December 2011 |
| Docket Number | Case No. 2:11-CV-250 |
| Court | U.S. District Court — District of Vermont |
| Parties | KACEY KLONSKY, on behalf of herself and all others similarly situated, v. RLI INSURANCE COMPANY, Defendant. |
Plaintiff Kacey Klonsky filed suit on behalf of herself and all others similarly situated, who have had their rights under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, violated by Defendant RLI Insurance Company ("RLI"). RLI has moved to dismiss Klonsky's claim on two grounds: "(i) the motor vehicle report ("MVR") pertaining to Kacey Klonsky is not a 'consumer report' within the meaning of the FCRA . . . and (ii) Kacey Klonsky's FCRA claim against RLI is barred by the release provisions of settlement documents entered into in connection with a prior action" between RLI and her parents." Def.'s Mem. 1, ECF No. 7.
For the reasons that follow, RLI's motion to dismiss is DENIED.
The following facts were gleaned from the Class Action Complaint ("Complaint"), and from the MVR. In November 2008 Arthur Klonsky struck a pedestrian with his automobile, causing the pedestrian serious injury. Arthur's wife, Jane Klonsky, was a passenger in the car at the time.
Before the accident, RLI had issued Arthur Klonsky a personal umbrella liability policy that included automobile liability coverage. As a result of the accident, the pedestrian presented a claim against Arthur and Jane Klonsky to RLI. This claim eventually resulted in litigation between RLI and Arthur and Jane Klonsky. That litigation was settled pursuant to a confidential agreement.
Arthur and Jane Klonsky have a daughter, Kacey Klonsky. At the time of the issuance of her father's RLI policy, Klonsky was a resident of the household of her parents, and was insured under the policy. However, because she was not involved in the accident, no claim related to the accident was ever presented against her. Moreover, she was in no way involved in the litigation between her parents and RLI.
Nonetheless, as part of the investigation of the claim against Klonsky's parents, in February 2009, RLI obtained an MVR for Klonsky from a consumer report vendor. Klonsky alleges that RLI engaged in a practice to always check the driving records ofall insured drivers on an insurance policy when a claim was submitted against one or more insureds. Klonsky further alleges that the insureds are not informed that the records will be obtained and do not provide consent.
The MVR at issue here contains some of Klonsky's basic identifying information, such as her name, date of birth, and driver's license number. It also contains a section entitled "Driving Record History," which indicates that Klonsky has a "clear record." Klonsky did not consent to RLI obtaining this report. Moreover, she alleges that "RLI certified to [the consumer report vendor] that it was obtaining the driving record solely for underwriting purposes," but in fact obtained the report in an attempt to determine if misrepresentations were made on the application for her father's umbrella policy. (Complaint ¶¶ 25, 27, 29.) In sum, Klonsky alleges that RLI obtained her MVR and the MVRs of others similarly situated for an impermissible purpose, in violation of the FCRA.
"The FCRA regulates access to individuals' consumer reports," and "[a]n entity may gain access to an individual's consumer report only with the written consent of the individual, unless the consumer report is to be used for certain permissiblepurposes." Dixon v. Shamrock Fin. Corp., 522 F.3d 76, 77-78 (1st Cir. 2008) (citing 15 U.S.C. § 1681b) (internal quotation marks omitted). Klonsky has alleged that RLI obtained her MVR for an impermissible purpose, and thus violated the FCRA. RLI argues that Klonsky's MVR is not a "consumer report" within the meaning of the FCRA, and thus, that she has no claim under the FCRA.
15 U.S.C. § 1681a(d)(1). Thus, to qualify as a consumer report, Klonsky's MVR must "'bear on' at least one of seven factors and . . . be used, expected to be used, or collected for one of three types of purposes." Trans Union Corp. v. FTC, 81 F.3d 228, 231 (D.C. Cir. 1996).
RLI concedes that "Klonsky's Complaint alleges facts that arguably satisfy the [second] half of the definition." Def.'s Mem. 8 (citing Complaint ¶¶ 25-26.). That is, Klonsky alleges that RLI certified that it was collecting her MVR forunderwriting purposes, and thus that her MVR was "used, expected to be used, or collected for" one of the three permissible purposes. The question becomes, then, whether Klonsky's MVR "bear[s] on [her] credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living."
As this Court has observed, "MVRs are considered to be consumer reports when they are sold by state motor vehicle departments for insurance underwriting purposes and contain information bearing on a consumer's 'personal characteristics,' such as arrest information." RLI Ins. Co. v. Klonsky, 771 F. Supp. 2d 314, 333 (D. Vt. 2011) (citing 16 C.F.R. Pt. 600, App. § 603(d)(4)(C)); Hodge v. Texaco, Inc. , 975 F.2d 1093, 1095 (5th Cir. 1992) (). While the FTC's interpretation of the FCRA does not have the force of law, it should be viewed in light of the fact that the Supreme Court has "long recognized that considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer." Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 844 (1984). Based on the FTC's interpretation of the FCRA, and on a plain-language reading of the statute, Klonsky's MVR qualifies as a consumer report.
Klonsky's MVR provides her date of birth, driver's license number, license "class," and license expiration date. It also provides Klonsky's "driving record history" and states that she has a "clear record." The information that Klonsky has a clear driving record bears directly on her "personal characteristics." Specifically, it speaks to her competence and responsibility as a driver. Thus, it is a consumer report under the FCRA.
In support of its argument that Klonsky's MVR is not a consumer report, RLI cites to cases that hold that reports containing only basic identifying information (such as name, date of birth, address, and social security number) are not consumer reports within the meaning of the FCRA. See (RLI Ins. Co.'s Mem. of Law in Support of its Mot. to Dismiss 12.) (citing Smith v. Waverly Partners, LLC, 2011 WL 3564427, *5 (W.D.N.C. Aug. 12, 2011); Individual Reference Svcs. Grp., Inc. v. Fed. Trade Comm. , 145 F. Supp. 2d 6, 17 (D.D.C. 2001)). Those cases are inapposite because the MVR at issue here contains information beyond basic identifying information—it contains information about Klonsky's driving history.
Additionally, RLI argues that Klonsky's MVR is not a consumer report because it lacks "arrest information or other information warranting an analogous level of societal disapproval." (RLI Ins. Co.'s Mem. of Law in Supp. of its Mot. to Dismiss 12.) (quoting Manso v. Santamarina & Assocs. , 2005 WL975854, at *8 (S.D.N.Y. Apr. 26,...
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