Opinion ID: 2191418
Heading Depth: 1
Heading Rank: 11

Heading: II-C-2 The Attack on Section 1321.

Text: The Superior Court Justice decided that Section 1321 as it read in the original and amended [Maine] [A]cts [is] . . . unconstitutional as violative of the First Amendment. The original version of Section 1321 contained, among others, the following categories of prohibited information: uncorroborated hearsay, personal life style, and philosophy. [11] The 1978 amendment deleted these categories. It also made changes pertinent to our present inquiry in other parts of Section 1321, as follows: in the Section 1321(1) prohibition of information not reasonably relevant to the purpose for which it is sought; in the Section 1321(2) prohibition against a consumer reporting agency's or a merchant's collection, evaluation, preparation, use or reporting of information which is obsolete, or which either the agency or the merchant has reason to know is inaccurate or irrelevant; and in the Section 1321(3) requirement that consumer reporting agencies and merchants follow procedures to exclude inaccurate and irrelevant information. [12] Defendant Attorney General makes no contention on appeal that the Superior Court Justice committed error by deciding that parts of the original version of Section 1321 unduly restricted constitutionally protected commercial speech. Regardless of whether this omission may suggest a concession by defendant on that specific issue (and in all reasonable likelihood it does not), [13] we will nevertheless evaluate the correctness of the Justice's conclusions regarding those now repealed categories. We are induced to do this by the nature of plaintiffs' constitutional challenge and the kinds of interests involved in this case. Plaintiffs contend that on their face the repealed parts of Section 1321 transgressed the constitutional protections afforded speech, as having restricted or chilled the compilation and reporting of information and also as having subjected consumer reporting agencies to potential civil liability and criminal penalties in the event they might have reported prohibited information at any time after the Maine Act went into effect on October 24, 1977. It may well be that as to the first ground of this facial attack, plaintiffs are no longer subject to the direct restrictions, or any chilling effects, arising from the repealed categories of prohibited information. Yet, as to the second ground, under Sections 1322 and 1323 of the Maine Act, which condition civil liability upon a failure to comply with the Act, plaintiffs could be subjected to future suits based upon their having previously reported information prohibited by the repealed categories. [14] Since plaintiffs' challenge is facial in nature and pertains to portions of the statutes under which, despite their having been repealed, plaintiffs may still be subject to suit, and since we must in any event adjudicate the general validity of large portions of the statute that closely resemble the repealed sections in form and substance, we think we have responsibility to review the Superior Court Justice's decision in all of the respects that he found unconstitutional abridgments of commercial speech. The text of Section 1321 makes evident that the bulk of its regulation is directed to the content of speech which, even as commercial speech, is constitutionally protected insofar as it is speech that is far more likely to be informative than deceptive. Section 1321(1)(A) and Section 1321(1)(B) forbid the inclusion of certain types of information, such as race, political affiliation, criminal record, regardless of their truth or falsity; Section 1321(4) likewise prohibits the reporting of truthful, accurate public record information. Potentially, too, if not plainly so, the provisions in Sections 1321(2) and 1321(3) regarding the exclusion of irrelevant information may infringe upon constitutionally protected commercial speech, since the irrelevance of information does not inevitably, or with strong likelihood, cause it to be deceptive or misleading. On the other hand, to the extent that portions of Section 1321 require information to be accurate, as in Sections 1321(2) and 1321(3), and verified, as in Section 1321(3), those provisions in terms pertain to the State's interest that commercial speech be neither deceptive nor misleading. Thus, without need for further discussion of these portions of Sections 1321(2) and 1321(3) concerned with the accuracy and truthfulness of information, we decide that, within the commercial speech framework in which our judicial review is proceeding, those provisions are valid regulations, as being precisely directed to such commercial speech as is excluded from constitutional protection. Central Hudson, supra. To answer the question whether other particular restrictions in Section 1321 should also be upheld, on the ground that they regulate commercial speech that is excluded from constitutional protection as relating to illegal activity, Central Hudson, supra, we must analyze more closely both the particular categories of prohibited information delineated in Section 1321(1)(A) and the scope and meaning of unlawful or illegal activity. Except for several categories of prohibited information in Section 1321(1)(A), all the other types of information that current Section 1321 prohibits consumer reporting agencies from including in their reports the current Maine Act nonetheless permits the users of reports to take into account in making their decisions about consumers in particular transactions. However, as the defendant Attorney General points out, reliance by certain users (decision makers) upon certain categories of information is made independently illegal by other statutes. For example, the Maine Human Rights Act prohibits discrimination based solely upon age, sex, race, religion, color, physical or mental handicap, ancestry, or national origin in the specific areas of credit extension, employment, housing and public accommodations. The contention is, therefore, that the communication of information prohibited by Section 1321(1)(A) is a regulation of commercial speech lacking constitutional protection because it relates to illegal activity insofar as users to whom the speech is directed may use the information communicated as a basis for illegal discrimination. We reject any such rationale to justify the suppression of commercial speech effectuated by Section 1321(1)(A). We reach this conclusion through analysis of Pittsburgh Press Company v. Pittsburgh Commission on Human Relations, 413 U.S. 376, 93 S.Ct. 2553, 37 L.Ed.2d 669 (1973), (hereinafter Press I), as it was distinguished by the Pennsylvania Supreme Court in Commonwealth of Pennsylvania v. Pittsburgh Press Company, 483 Pa. 314, 396 A.2d 1187 (1979), cert. den. 442 U.S. 942, 99 S.Ct. 2885, 61 L.Ed.2d 312 (1979), hereinafter Press II). In Press I the Supreme Court of the United States decided that because sex discrimination in employment was an illegal commercial activity, as defined by an independent section of the City of Pittsburgh's Human Relation Ordinance, the newspaper could be constitutionally prohibited from publishing an advertisement placed by an employer seeking applications for employment by reference to gender. In Press II the Pennsylvania Human Relations Commission challenged the publication by the Pittsburgh Press of situation wanted advertisements in which job-seekers stated their qualities in hopes of securing employment. These advertisements occasionally contained references to the race, color, religion, age and sex of the person seeking employment. The Commission argued that since discrimination on the basis of race, color, creed, ancestry, age, sex, or national origin was unlawful under the Pennsylvania Human Relations Act, the publication of situation wanted advertisements containing the above information was illegal activity, as violative of a provision of the Human Relations Act forbidding the aiding and abetting of unlawful discrimination. In support of this argument, the Commission cited Press I. The Pennsylvania Supreme Court rejected the Commission's contention. That court saw a critical distinction between Press I and Press II. In Press I the newspaper was placing the prospective employer's advertisements in columns segregated by gender, whereas in Press II the newspaper published the prospective employee's advertisements. Thus, in Press I the newspaper advertising, as placed by the employer, was directly involved in the employer's illegal activity of hiring by reference to gender. In Press II, however, the newspaper's publishing of advertising placed by job-seekers could be deemed an aiding and abetting of illegally discriminatory hiring by an employer only if it be assumed that the mere existence of such advertising by job-seekers tended to cause employers to make illegally discriminatory hiring decisions and, therefore, that prohibiting such advertising would reduce unlawful discrimination in hiring. The Pennsylvania Supreme Court concluded that this assumption was too speculative to justify [the] direct restriction on the advertiser's freedom of expression. Id., at 1190. [15] We think the analysis in Press II is correct and that its reasoning should control the case at bar. We are not persuaded that there is a distinction, here, because evidence shows that users of reports meet periodically with Equifax to discuss the general informational content of consumer reports. Such connection between Equifax and the users of its reports does not approach the symbiotic relation between the newspaper and the advertising employers in Press I, where the employer in every instance dictated to the newspaper the content of the advertisement. In the present case, the evidence reveals that users are consulted only occasionally by Equifax's marketing department regarding the general scope of the information desired. Unlike the situation in Press I, nothing suggests here that users have specifically requested information falling with the narrow limits of the independently established criteria of illegal discrimination. The user's feedback relates, as far as can be discerned from the record, to general categories tailored closely to the purpose for which the report is sought. For example, life insurers request standardized types of information relating to occupation, financial status, health, and general stability; automobile insurers expect information relating to users of the automobile, driving record and habits and so forth; employers desire information relevant to the applicant's previous work experience, reliability, and so forth. Moreover, under its own internal policies, Equifax prohibits the inclusion in any report of information falling within two of the unlawful criteria, i. e., race and religion, except in those extremely rare circumstances where that information may have legitimate bearing on the decision to be made by a user. We therefore conclude that the provisions in Section 1321(1)(A) cannot be sustained on the ground that the commercial speech it suppresses is excluded from constitutional protection as commercial speech relating to illegal activity. In itself, the act of reporting the information is not illegal. Moreover, that a user merely becomes aware of the factors addressed by Section 1321(1)(A) is not illegal. It is only when the user bases a discriminatory decision on such factors that illegal activity occurs, and nothing in evidence shows that users are generally susceptible to improper influence merely by becoming aware of them. Hence, there is no fair basis for the presumption the defendant Attorney General seems to advocate, that a user's awareness of the factors delineated in Section 1321(1)(A) as the criteria for prohibiting a flow of information is the equivalent of illegal decision-making by the user. We turn, then, to the other three steps in the Central Hudson four-part analysis: whether the governmental interests asserted in support of the prohibition of constitutionally protected commercial speech required by Section 1321 are substantial, and, if so, whether the prohibitions directly advance the asserted state interests without being more extensive than necessary to serve them. For purposes of convenience and brevity, we discuss in essentially a unitary way these analytically separate inquiries that in the present context are closely interwoven. The regulatory approach in Section 1321 manifests a governmental conception that in order to prevent intrusions upon privacy by unlawful discrimination and improperly influenced decision-making it is necessary to exclude entirely various items of information from the consideration of users and, therefore, to require the purging of such data from consumer agency reports. The record in this case fails to demonstrate that such blanket exclusion from consumer agency reports of the kinds of information under scrutiny will directly advance the asserted state interests. Except for those classes of information that other statutes make it independently illegal for users to rely upon in reaching particular kinds of decisions, Section 1321(1)(A) requires the exclusion from consumer reports of information users can lawfully make the basis of their decisions. [16] It would seem, too, that despite the prohibitions of Section 1321(1)(A), users can readily obtain such information through sources other than consumer agency reports. [17] Even on the assumption that recipient users may have no other ready access to the prohibited information, we cannot presume that their acquiring it from consumer reporting agencies would inevitably, or most likely, cause them to be prejudiced in their making of decisions. The evidence in the record before us is to the contrary. [18] In this connection, we do not overlook that Section 1321(4)(A) is substantially identical to a corresponding provision in the Federal Act. We therefore look to what appears in the Congressional legislative history as potential support for the constitutional validity of Section 1321(4)(A). From that investigation we discern that even though Section 1321(4)(A) may further governmental interests that may be deemed to be substantial, two factors lead to the conclusion that Section 1321(4)(A) unduly abridges constitutionally protected commercial speech. The first factor is that Congress enacted the Federal Act in the early part of the 1970's, at a time when commercial speech was afforded no constitutional protection whatever. Virginia Pharmacy Board, supra, the first case bringing commercial speech within the protection of the First-Fourteenth Amendments, was not decided until 1976. In particular, consumer reports were then characterized as commercial speech and, therefore, as commercial speech they were held to lack constitutional protection. Now that it has been established that the fact alone that speech may be commercial does not strip away constitutional protection, Section 1321(4)(A) of the Maine Act, and its Federal Act counterpart (15 U.S.C. § 1681c), must be evaluated anew in accordance with different controlling principles. In this reassessment, requiring closer scrutiny of the governmental restraints imposed on commercial speech, we find that the Congressional legislative history fails to provide support for the pivotal proposition underlying Section 1321(4)(A)  the assumption that inevitably, or most probably, users of consumer reports will be improperly influenced if such reports communicate to them the type of information that Section 1321(4)(A) prohibits from inclusion in consumer reports. The constitutional infirmity of Section 1321(4) arises, essentially, from its unduly broad sweep in going so far as to prohibit the communication of truthful, accurate facts, even those in public records, as a means of seeking to assure that decision making by users will have a proper, not an improper, basis. This governmental interest could have been adequately served had the legislature intruded less extensively upon constitutionally protected commercial speech by focusing on the decision-making process itself. For example, the Maine Act could have made it illegal for users to base their decisions on particular kinds of information, or it could have required users to provide specific justification for decisional action involving any type of information deemed suspect. The resort to a blanket restriction, or prohibition, of constitutionally protected commercial speech thus violates the Central Hudson mandate that the regulatory scheme directly advance the asserted state interests and be no more extensive than is necessary to serve them. We now address specifically those portions of the original and amended Section 1321 that purport to make relevancy the criterion of a category of prohibited information. We have under consideration those parts of Section 1321 we previously mentioned at p. 201 and p. 203 of this opinion, as well as the portion of amended Section 1323(2) providing for additional damages for each reported item of information that the agency has reason to believe was not relevant to the purpose for which it was sought. The determination of what information is relevant in a particular instance may not be easy, or indeed possible, until all facts from all sources have been assembled and analyzed. Insurance underwriters who testified in the instant proceeding, for example, recognized that the determination of relevancy in particular circumstances may be a delicate or difficult determination. A fortiori, consumer reporting agencies, which only collect and report information, are even less able to differentiate in a large percentage of cases the relevant from the irrelevant information. Even the qualification added by the 1978 amendment  that the consumer reporting agency must have reason to believe that the information is not relevant before it will be held accountable for including it in a consumer report-is insufficient to overcome the unwarranted intrusion these provisions effectuate against constitutionally protected commercial speech. Although the chilling effect of the pre-1978 version has been relieved somewhat by the amendment, the statute's provision still sweeps broadly by use of a generalized standard which, in the context in which it is to operate, is difficult to apply. That a consumer agency may have reason to believe that an item of information might not be relevant does not establish that there is irrelevance. Moreover, even if the information may be actually irrelevant, a consumer report otherwise constitutionally protected as speech cannot be made to lose constitutional protection solely because some of the information in it may be irrelevant for the purposes at hand. The foundational premise upon which such a purported suppression of speech could be warranted is that users who receive irrelevant information must be deemed incapable of dealing with it or of avoiding being adversely predisposed toward a consumer applicant because of it. The record before us does not permit such an assumption. Irrelevant information does not equate with false, or misleading, information. Neither can a presumption be supportable that the irrelevance of information makes it highly likely to be misleading, or even negative. Thus, the regulation in Section 1321 that requires a reporting agency to exclude from its reports information it has reason to believe is not relevant to the purpose for which it was sought infringes too sweepingly upon constitutionally protected commercial speech. Finally, we comment specifically upon one aspect of the repealed version of Section 1321 that we have not yet discussed. Under the Maine Act as originally enacted Section 1321 prohibited consumer reporting agencies from making and selling reports containing expressly identified categories of prohibited information, and it also prohibited users from using reports containing such information: Neither a consumer reporting agency nor a merchant shall collect, evaluate, prepare, use or report . . . information based on uncorroborated hearsay, or information about a consumer's . . personal life style, philosophy . . .. 10 M.R.S.A. § 1321(1) (Supp.1977-78) [19] (repealed). Thus, the prohibition of speech by the consumer reporting agency was closely tailored to the prohibition against the use of certain criteria by merchants. Such type of regulation tends to go far beyond, if it touches at all, any of those zones of privacy that, as we discussed earlier, government may have a substantial interest in protecting. Information about a consumer's personal life style or about a consumer's philosophy relates to matters tending to be publicly known, as the definition of investigative consumer report confirms by referring to the sources of such information as being neighbors, friends, . . . associates. . . or . . . others with whom [the consumer] is acquainted or who may have knowledge concerning any such items of information . . .. In short, the regulation is not narrowly drawn to ferret out only those parts that directly bear upon such particular areas of privacy fairly deemed to make a claim for governmental protection that is substantial, as illustrated by the protections afforded constitutionally or by the law of torts. We conclude, therefore, that the original version of Section 1321 is unconstitutional as an impermissible restriction upon commercial speech protected under the First-Fourteenth Amendments. In summary, our decision is that the Superior Court Justice correctly adjudicated that the following provisions of the Maine Act transgress the protections afforded commercial speech by the First-Fourteenth Amendments: original, and amended, Sections 1314(1) and 1321(1); those particular provisions in original, and amended, Sections 1321(2) and (3) prohibiting the inclusion in a consumer agency report, or retention in its file, of information the reporting agency has . . . reason to believe is not relevant to the purpose for which it is sought; original and amended, Section 1321(4)(A). We order added to these the part of amended Section 1323(2) which allows for the imposition of additional damages for each irrelevant item that the consumer reporting agency supplies.