I’m not sure if the majority of my readers would consider this bad news or good news, but a group of South Carolina lawyers may be potentially liable for $200 million in damages based on their alleged violation of a federal law called the Driver’s Privacy Protection Act. Depends on who’s reading I guess.
The United States Supreme Court handed down the decision near the end of its term. And the decision closes a big loophole in the law. Not exactly as big a deal as the gay marriage or voting rights cases, but I suspect the South Carolina lawyers consider it pretty momentous.
Congress passed the DPPA several years ago, in reaction to the murder of a California actress by a deranged fan. The fan hired a private detective who was able to locate the home address of the actress from her California DMV information. The DPPA essentially puts DMV information off limits to stalkers, but also to most commercial entities that want to use the information to solicit business.
Enter the lawyers. The South Carolina lawyers were pursuing a potential class action on behalf of South Carolina car purchasers who were charged administrative fees by car dealers. The lawyers made a freedom of information act request to the South Carolina DMV, and got 34,000 names and addresses. They in turn sent letters to that group inviting them to join the lawsuit.
Unfortunately for the lawyers, one of the recipients of the letter worked for a car dealer. He turned the tables and filed his own class action on behalf of his 33,999 new co-plaintiffs who got the letters, alleging that the lawyers breached the DPPA.
Now, the DPPA sounds simple enough, but let’s not forget, we are dealing with Congress. The law contains 14 exceptions that allow for disclosure of the otherwise private information. (Remember how the deranged fan used a private detective to get the DMV information? Guess who's entitled to disclosure under one of the 14 exceptions? Private detectives. I am not making this up.) One of those exceptions is a provision that allows the use of the information “in connection with any civil, criminal, administrative, or arbitral proceeding.” The lawyers argued that their letters were "in connection with" the class action lawsuit.
But the Supreme Court wasn’t buying. According to the court, attorneys traditionally operate in three capacities: as businesses, as agents of their clients, and as officers of the court. The “litigation exception” permits the use of the DMV information for activities such as service of process, “investigation in anticipation of litigation,” and execution of judgments and court orders.
The court noted that these actions “involve an attorney's conduct when acting in the capacity as an officer of the court, not as a commercial actor.” But, according to the court, “[a] logical and necessary conclusion is that an attorney's solicitation of prospective clients falls outside of” the litigation exception.
So the Supreme Court closed a loophole – good news for privacy, but really bad news for some South Carolina plaintiff lawyers.