FC: Appeals court says TransUnion's marketing info *not* free speech

From: Declan McCullagh (declanat_private)
Date: Mon Apr 16 2001 - 09:28:52 PDT

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    The DC Circuit Court of Appeals has ruled against TransUnion, a leading 
    credit reporting firm. A three-judge panel composed of Edwards, Ginsburg, 
    and Tatel last Friday said that marketing lists are *not* protected by the 
    First Amendment.
    
    This lawsuit had little to do with TransUnion's detailed credit reports, 
    but instead dealt with marketing lists -- names and addresses of people who 
    meet certain criteria -- in company's "MasterFile," a subset of its much 
    larger credit reporting database. Direct marketers pay for MasterFile names 
    that match specifications, such as anyone in a certain area code or zip 
    code who has a mortgage and a credit card with a $10,000 limit.
    
    The FTC has authority under the 1970 Fair Credit Reporting Act to regulate 
    credit reporting, and the agency in 1994 decided the MasterFile reports 
    were credit reports covered by the law that could not be sold for target 
    marketing purposes. Legal wrangling ensued, with another trip down to the 
    district court, and TransUnion citing the First Amendment in saying the act 
    suffers from "serious constitutional questions."
    
    The appeals court described the company's MasterFile products:
    >Trans Union's "Master File/Selects" product line, which allows marketers 
    >to request lists based on any of five categories of information: (1) 
    >credit limits (e.g., consumers with credit cards with credit limits over 
    >$10,000), (2) open dates of loans (e.g., consumers who took out loans in 
    >the last six months), (3) number of tradelines, (4) type of tradeline 
    >(e.g., auto loan or mortgage), and (5) existence of a tradeline
    
    In its opinion, the court divided its time between discussing whether 
    MasterFile was covered by the FCRA ("yes") and whether the First Amendment 
    covered it ("no"). Note the judges believe the First Amendment applies only 
    to matters of "public concern" -- any obscure hobbyist publication, look 
    out! (Who needs all those Knight Rider and A-Team websites devoted to 
    long-dead-no-public-concern '80s shows anyway?) :)
    
    Excerpt:
    >Trans Union's First Amendment challenge fares no better. Banning the sale 
    >of target marketing lists, the company says, amounts to a restriction on 
    >its speech subject to strict scrutiny. Again, Trans Union misunderstands 
    >our standard of review... The information about individual con- sumers and 
    >their credit performance communicated by Trans Union target marketing 
    >lists is solely of interest to the company and its business customers and 
    >relates to no matter of public concern. Trans Union target marketing lists 
    >thus warrant "reduced constitutional protection."
    
    The complete opinion is here:
    http://pacer.cadc.uscourts.gov/common/opinions/200104/00-1141a.txt
    
    -Declan
    
    
    
    
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