Troutman Sanders LLP: Supreme Court Holds That Plaintiffs’ Lawyers May Not Use DMV Records to Solicit Potential Clients in Consumer Auto Class Action

Troutman Sanders LLP: Supreme Court Holds That Plaintiffs’ Lawyers May Not Use DMV Records to Solicit Potential Clients in Consumer Auto Class Action

By David N. Anthony, Alan D. Wingfield, Nicholas R. Klaiber, Paige S. Fitzgerald

In Maracich v. Spears the United States Supreme Court addressed whether class action plaintiffs’ lawyers may mine state Department of Motor Vehicles (DMV) records for potential clients and putative class members under an exception to the Driver’s Privacy Protection Act, 18 U.S.C. § 2721 et seq. (the DPPA”). The DPPA was enacted in 1994 in response to concerns over (1) several high profile incidents where criminals located their victims by acquiring personal information from state DMVs, and (2) the common practice of state DMVs selling personal information to businesses. The Court’s opinion in Maracich v. Spears is available here [enhanced version available to subscribers].

The plaintiffs’ attorneys in Maracich used DMV records to obtain names and addresses of thousands of potential clients for a lawsuit pending against several South Carolina dealerships for violation of state consumer protection laws. In a 5-4 decision that reversed the Fourth Circuit, the Court concluded that the DPPA’s exception for information requests made “in connection with any civil, criminal, administrative, or arbitral proceeding” did not permit such activity.

The Court began its analysis by acknowledging that “[i]f considered in isolation, and without reference to the structure and purpose of the DPPA,” the exception “is susceptible to a broad interpretation” to permit the conduct at issue. But the Court also explained that “the phrase ‘in connection with’ provides little guidance without a limiting principle consistent with the structure of the statute and its other provisions.” Turning to this structure, the Court noted that the respondent plaintiffs’ lawyers reading of the exception “would undermine in a substantial way the DPPA’s purpose of protecting an individual’s right to privacy in his or her motor vehicle records.”

The Court also relied on the statutory text of the DPPA, using examples of the exception in the statute, including investigation in anticipation of litigation and service of process. These activities, where an attorney acts as an officer of a court, are fundamentally different from an “attorney’s solicitation of new clients,” during which attorneys act as self-employed businessmen that “may even create special problems of conflict of interest.”

A dissent authored by Justice Ginsburg noted that the ruling could render plaintiffs’ attorneys liable for “astronomical liquidated damages” and even criminal penalties, which she contended is “scarcely what Congress ordered in enacting the DPPA.”

This ruling may have broader implications for businesses that use state DMV records. Whether any particular use is a “permissible purpose” under the DPPA will need to be reevaluated in light of the Court’s focus on the overarching framework of the statute.

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