Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-00-01141/USCOURTS-caDC-00-01141-1/pdf.json

Parties Involved:
Federal Trade Commission
Respondent
Trans Union Corporation
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed October 23, 2001

No. 00-1141

Trans Union Corporation,

Petitioner

v.

Federal Trade Commission,

Respondent

On Petition for Rehearing

---------

Before: Ginsburg, Chief Judge, Edwards and Tatel,

Circuit Judges.

Opinion for the court filed by Circuit Judge Tatel.

Tatel, Circuit Judge: In its petition for rehearing, Trans

Union argues that we incorrectly applied Dun & Bradstreet,

Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 759-60 (1985),

when we decided that target marketing lists merit only

intermediate scrutiny. In Dun & Bradstreet, the Supreme

Court held that a consumer reporting agency's wholly false

credit report warranted only qualified constitutional protecUSCA Case #00-1141 Document #633894 Filed: 10/23/2001 Page 1 of 9
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tion because the report "concern[ed] no public issue." Id. at

762. In reaching that conclusion, the Court noted that the

report constituted "speech solely in the individual interest of

the speaker and its specific business audience," and that the

report reached only "five subscribers, who, under the terms

of the subscription agreement, could not distribute it further."

Id. The same is true here: Trans Union's target marketing

lists interest only Trans Union and its target marketing

customers, and Trans Union sells its lists for one-time use,

prohibiting purchasers from disseminating the data.

To be sure, Trans Union's lists are not "wholly false," as

was the Dun & Bradstreet credit report, nor is the Fair

Credit Reporting Act ("FCRA"), 15 U.S.C. ss 1681, 1681a1681u, an "incidental state regulation," as Dun & Bradstreet

termed the state defamation law challenged in that case. 472

U.S. at 762. Nothing in Dun & Bradstreet, however, suggests that these two factors were critical to the Court's

decision. The important point is that here, as in Dun &

Bradstreet, the targeted speech solely interests the speaker

(Trans Union) and its "specific business audience" (its customers). Id.

One additional consideration, absent in Dun & Bradstreet,

supports our conclusion that Trans Union's target marketing

lists comprise speech of purely private concern. The lists

contain names of private individuals, not incorporated businesses like the respondent in Dun & Bradstreet. We do not

suggest that corporations lack privacy interests, nor that all

corporate speech is somehow inherently public. But the

particular information at issue in this case--people's names,

addresses, and financial circumstances--is less public than

the same information about companies whose articles of incorporation and financial statements are generally available for

inspection. Cf. Cox Broad. Corp. v. Cohn, 420 U.S. 469, 495

(1975) ("By placing the information in the public domain ... ,

the State must be presumed to have concluded that the public

interest was thereby being served.").

In support of its argument that the FCRA's target marketing limitation merits strict scrutiny, Trans Union cites cases

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in which the Supreme Court "struck down privacy-based

restrictions on the publication of truthful information." Pet.

at 5-6. Unlike this case, however, most of the cited cases

involve speech on matters of public concern. E.g., Bartnicki

v. Vopper, 121 S.Ct. 1753, 1765 (2001) (concluding that privacy

concerns raised by disclosure of contents of private cellular

telephone call "give way when balanced against the interest in

publishing matters of public importance"); Florida Star v.

B.J.F., 491 U.S. 524, 536 (1989) (holding that state may not

punish publication of " 'lawfully obtain[ed] truthful information about a matter of public significance' " (citing Smith v.

Daily Mail Publ'g Co., 443 U.S. 97, 103 (1979))); NAACP v.

Claiborne Hardware Co., 458 U.S. 886, 913 (1982) (concluding

that disclosure of names of civil rights boycott violators is

"expression on public issues" and rests on "highest rung of

the hierarchy of First Amendment values") (citations omitted); Landmark Communications, Inc. v. Virginia, 435 U.S.

829, 839 (1978) (deciding that state may not punish press for

disclosing confidential judicial proceedings, in part because a

"responsible press has always been regarded as the handmaiden of effective judicial administration") (citations omitted);

Cox Broad. Corp., 420 U.S. at 491-92 (noting that "[w]ith

respect to judicial proceedings ... the press serves to guarantee the fairness of trials and to bring to bear the beneficial

effects of public scrutiny upon the administration of justice").

Another cited case involves speech addressed to a large,

public audience. Martin v. Struthers, 319 U.S. 141, 146-47

(1943) (recognizing leafleting as central to public discourse

because the "[f]reedom to distribute information to every

citizen ... is ... clearly vital to the preservation of a free

society"). Finally, two cases concern commercial speech

that--like the speech at issue here--merits only intermediate

scrutiny. Shapero v. Kentucky Bar Ass'n, 486 U.S. 466

(1988) (lawyer advertising); Bolger v. Youngs Drug Prods.

Corp., 463 U.S. 60 (1983) (pamphlets about contraceptives).

Trans Union's reliance on these last two cases is particularly

misplaced, for they stand not for the principle that speech

rights "prevail" over privacy rights "virtually without excepUSCA Case #00-1141 Document #633894 Filed: 10/23/2001 Page 3 of 9
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tion," Pet. at 5, but instead for the principle that speech of

largely private concern may warrant only qualified protection.

Trans Union next argues that by permitting the sale of

consumer reports to facilitate guaranteed offers of credit or

insurance (prescreening), but prohibiting the sale of similar

information to facilitate offers of other goods or services

(target marketing), the FCRA makes a content-based distinction deserving strict scrutiny. The notion that content-based

speech restrictions warrant strict scrutiny, however, derives

from cases involving fully protected speech. See, e.g., Arkansas Writers' Project, Inc. v. Ragland, 481 U.S. 221 (1987)

(striking down content-based sales tax on print media); FCC

v. League of Women Voters, 468 U.S. 364 (1984) (striking

down content-based law that forbade noncommercial educational broadcasting stations from editorializing). Trans

Union's target marketing lists are private speech warranting

only qualified constitutional protection. We need not now

decide whether content-based restrictions of private speech

might sometimes merit strict scrutiny. It is sufficient to note

that given the Supreme Court's commercial speech doctrine,

which creates a category of speech defined by content but

afforded only qualified protection, the fact that a restriction is

content-based cannot alone trigger strict scrutiny. See, e.g.,

City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410

(1993) (applying intermediate scrutiny to determine constitutionality of Cincinnati rule banning handbill racks--but not

newspaper racks--on public property).

In the alternative, Trans Union argues that the FCRA's

target marketing restriction fails even intermediate scrutiny.

Again, the cases the company cites are distinguishable. In

Edenfield v. Fane, for example, the Supreme Court struck

down a state rule prohibiting certified public accountants

from personally soliciting new clients, partly because the

state failed to establish that the rule would directly promote

the state's interest in reducing fraud. 507 U.S. 761 (1993).

Here, by contrast, the government cannot promote its interest (protection of personal financial data) except by regulating

speech because the speech itself (dissemination of financial

data) causes the very harm the government seeks to prevent.

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Thus, the FCRA unquestionably advances the identified state

interest. For the same reason, unlike in Greater New Orleans Broadcasting Ass'n, Inc. v. United States, where the

Court struck down a ban on casino advertising, in part

because "practical and nonspeech-related forms of regulation

... could more directly and effectively" advance the government's interest in reducing casino gambling, 527 U.S. 173, 192

(1999), here there is no possibility that some less-restrictive

or nonspeech-related regulation could achieve the identified

state interest. See also Rubin v. Coors Brewing Co., 514 U.S.

476 (1995) (striking down prohibition on beer labels that

identify alcohol content, in part because government interest

in preventing brewers from competing on basis of alcohol

content could be advanced through less-restrictive regulations); 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484,

507 (1996) (invalidating Rhode Island's ban on advertising of

retail prices of alcoholic beverages because "alternative forms

of regulation that would not involve any restriction on speech

... would be more likely to achieve the State's goal of

promoting temperance"). Finally, also unlike in Greater New

Orleans Broadcasting Ass'n, where the challenged statute

was "pierced by exemptions and inconsistencies," 527 U.S. at

190, here we confront a law with just one exception: the

permissive standard applied to information sold for prescreening.

Nothing in Lorillard Tobacco Co. v. Reilly, 121 S.Ct. 2404

(2001), issued after publication of our opinion, requires a

different result. In that case, the Supreme Court struck

down Massachusetts regulations governing advertising of various tobacco products, largely because the sheer breadth of

the regulations raised questions about the fit between the

regulations' means (restricting advertising) and ends (preventing underage tobacco use). Id. at 2425. Lorillard noted

several ways in which the "breadth and scope of the regulations" evidenced that Massachusetts had not performed "a

careful calculation of the speech interests involved." Id. For

example, the regulations failed to target "advertising and

promotion practices that appeal to youth," encompassing instead all forms of communication, and even restricting a

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retailer's ability to "answer inquiries [from adults] about its

tobacco products." Id. at 2426. No similar problem exists

here. Aiming directly at its intended target, supra at 4, the

FCRA has neither indirect nor unintended effects on speech.

The statute therefore sweeps only as broadly as necessary to

accomplish its goal: protecting the privacy of personal financial information. A narrower restriction would immediately

lead to increased disclosure of such information. The

FCRA's means and ends are thus one, leaving no possibility

of a careless or imperfect "fit."

As for Trans Union's suggestion that Congress should have

adopted an opt-out scheme, we note that Congress considered

such a scheme, S. Rep. 104-185, at 36-38 (1995); H.R. Rep.

102-692, at 25-27 (1992), but settled on an opt-in scheme

instead, 15 U.S.C. s 1681b(a)(2). As enacted, therefore, the

statute permits Trans Union to sell a consumer's private

information as long as the consumer consents. Although the

opt-in scheme may limit more Trans Union speech than would

the opt-out scheme the company prefers, intermediate scrutiny does not obligate courts to invalidate a "remedial scheme

because some alternative solution is marginally less intrusive

on a speaker's First Amendment interests." Turner Broad.

System, Inc. v. FCC, 520 U.S. 180, 217-18 (1997) (citations

omitted). "So long as the means chosen are not substantially

broader than necessary to achieve the government's interest,

... [a] regulation [is] not ... invalid simply because a court

concludes that the government's interest could be adequately

served by some less-speech-restrictive alternative." Id. at

218.

Trans Union also argues that the FCRA's permissive treatment of information sold for prescreening "illustrate[s] ...

[t]he [statute's] lack of narrow tailoring." Trans Union's

Supp. Br. at 4. On the contrary, the statute's differential

treatment of information sold for prescreening and that sold

for target marketing recognizes that individuals' privacy interests in personal information are not absolute: Such interests are defined not only by the content of the information,

but also by the identity of the audience and the use to which

the information may be put. For example, people who fierceUSCA Case #00-1141 Document #633894 Filed: 10/23/2001 Page 6 of 9
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ly protect the privacy of personal medical information may

nevertheless disclose such information on job or medical

insurance applications. People who protect the privacy of

their salaries may nevertheless reveal how much they make

to qualify for a mortgage. So too, here. Congress apparently believes that people are more willing to reveal personal

information in return for guaranteed offers of credit than for

catalogs and sales pitches. Given the nature of intermediate

scrutiny, it can hardly be said that the First Amendment

prohibits Congress from balancing privacy interests differently in these different circumstances--particularly since the

FCRA's express purpose is to facilitate credit, not target

marketing.

Nor does the FCRA's permissive treatment of information

sold for prescreening demonstrate, as Trans Union argues,

that the statute is unconstitutionally underinclusive. " '[A]

regulation is not fatally underinclusive simply because an

alternative regulation, which would restrict more speech or

the speech of more people, could be more effective.' " Trans

Union v. FTC, 245 F.3d 809, 819 (2001) (citing Blount v. SEC,

61 F.3d 938, 946 (D.C. Cir. 1995)). Underinclusiveness analysis "ensure[s] that the proffered state interest actually underlies the law, [so] a rule is struck for underinclusiveness only if

it cannot fairly be said to advance any genuinely substantial

governmental interest." Blount, 61 F.3d at 946 (citations

omitted). To survive a First Amendment underinclusiveness

challenge, therefore, "neither a perfect nor even the best

available fit between means and ends is required." Id. The

FCRA satisfies this standard.

Finally, Trans Union argues that we erred by declining to

consider its statutory interpretation and arbitrary and capricious claims. We explained, however, that Trans Union's

briefs fell far short of this Circuit's requirements for presenting issues for decision. Trans Union v. FTC, 245 F.3d at

814. To be sure, the briefs attempted statutory claims, id.

(discussing petitioner's briefs), and we had discretion to consider them. Cf. Public Citizen Health Research Group v.

FDA, 185 F.3d 898, 903 n.* (D.C. Cir. 1999). But because of

the utter incoherence of Trans Union's briefs, and because we

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discerned no substantial constitutional issue, cf. DeBartolo

Corp. v. Florida Gulf Coast Building & Constr. Trades

Council, 485 U.S. 568, 574-77 (1988) ("[W]here an otherwise

acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to

avoid such problems unless such construction is plainly contrary to the intent of Congress."), we chose not to address

those claims. Since Trans Union's petition for rehearing

merely clarifies arguments the company's briefs had muddied,

instead of restating arguments claimed to have been overlooked or misunderstood, the petition comes too late.

The petition for rehearing is denied.

So ordered.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

---------

No. 00-1141

Filed On: October 23, 2001

Trans Union Corporation,

Petitioner

v.

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Federal Trade Commission,

Respondent

---------

On Petition for Review of an Order of the

Federal Trade Commission

---------

Before: Ginsburg, Chief Judge, Edwards and Tatel,

Circuit Judges.

ORDER

Upon consideration of Petitioner's petition for rehearing

filed May 25, 2001, and of the opposition thereto, it is

ORDERED that the petition be denied, as is more fully set

forth in the opinion of the court filed herein this date.

Per Curiam

FOR THE COURT:

Mark J. Langer, Clerk

BY:

Deputy Clerk

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