Taylor, et al v. Acxiom Corp, et al

Filing

08-41180

Taylor, et al v. Acxiom Corp, et al

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REVISED AUGUST 4, 2010 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
July 14, 2010 N o . 08-41083 Lyle W. Cayce Clerk

S H A R O N TAYLOR; JAMES DOUGLAS BOOKER; LOWRY BRILEY; T W I L A H BROWN; JAMES D CLARY; ET AL Plaintiffs - Appellants v. A C X I O M CORPORATION; CHOICEPOINT PUBLIC RECORDS DATABASE T E C H INC; CHOICEPOINT PUBLIC RECORDS, INC; CHOICEPOINT, I N C ; CHOICEPOINT SERVICES, INC; SEISINT, INC; LEXISNEXIS REED E L S E V I E R , INC; CHEX SYSTEMS, INC, a Minnesota Corporation Defendants - Appellees ____________________________________________________________ S H A R O N TAYLOR, on Behalf of Themselves and all others Similarly S it u a te d ; ET AL Plaintiffs - Appellants v. A C S STATE & LOCAL SOLUTIONS, INC, a New York Corporation; G L O B A L 360 BGS, INC, a Texas Corporation; GILA CORPORATION, a T e x a s Corporation; AMERICAN ELECTRIC POWER SERVICE C O R P O R A T I O N , a New York Corporation; SOUTHWESTERN BELL T E L E P H O N E LP, a Texas Limited Partnership, doing business as S o u th w e s te r n Bell Telephone Company; AMERICAN MUNICIPAL S E R V I C E S CORPORATION; EUGENE R BUCCIARELLI; MICHAEL D IN A P O L I Defendants - Appellees

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___________________________________________________________ S H A R O N TAYLOR, on Behalf of Themselves and all others Similarly S it u a te d ; ET AL Plaintiffs - Appellants v. T E X A S FARM BUREAU MUTUAL INSURANCE COMPANY, a Texas I n s u r a n c e Company; INSURANCE TECHNOLOGIES CORPORATION, a T e x a s Corporation; JI SPECIALTY SERVICES, INC, a Texas Corporation; S O F T E C H INTERNATIONAL, INC, a Florida Corporation; GLOBE LIFE & A C C I D E N T INSURANCE COMPANY, a Deleware Insurance Company; H A W K E Y E INSURANCE SERVICES, INC, a Texas Corporation; ISO C L A I M S SERVICES, INC, a Delaware Corporation, doing business as I n s u r a n c e Information Exchange; UNITED TEACHER ASSOCIATES I N S U R A N C E COMPANY, a Texas Insurance Company; SPARTAN I N S U R A N C E COMPANY Defendants - Appellees ___________________________________________________________ S H A R O N TAYLOR, on Behalf of Themselves and all others Similarly S it u a te d ; ET AL Plaintiffs - Appellants v. S A F E W A Y , INC, a Deleware Corporation; HEB GROCERY COMPANY, LP, a Texas Limited Partnership; THE HEARST CORPORATION, a Delaware C o r p o r a t io n , doing business as Houston Chronicle; SAFETY-USA I N S T I T U T E , LLC, a Texas Limited Liability Company; U S INTERACTIVE, I N C , a Texas Corporation; THE TALBOT GROUP, INC, a Texas Corporation; B A C K G R O U N D INFORMATION SYSTEMS, INC, a Texas Corporation; C A R F A X , INC, a Pennsylvania Corporation; IMPACTINFO, INC, a Texas C o r p o r a t io n ; WISHLIST, LLC, Represented by Carolyn Lehamnn, Member A B C DATA; AMERICAN STUDENT LIST CO, INC; ARISTOTLE I N T E R N A T I O N A L , INC; DONALD R BERLINER, JR; C O N T I N U E D E D .C O M , LLC; DENSPRI, LLC; DRIVER TRAINING A S S O C I A T E S , INC; FEDERATED RETAIL HOLDINGS, INC; H O U S E H O L D DRIVERS REPORT, INC; LEE FARISH COMPUTER

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SERVICES, INC; PARADISE DEVELOPMENT, INC; D B STRINGFELLOW, J R ; TENANT TRACKER, INC Defendants - Appellees _________________________________________________________ S H A R O N TAYLOR, on Behalf of Themselves and all others Similarly S it u a te d ; ET AL Plaintiffs - Appellants v. B I O M E T R I C ACCESS COMPANY; CETEGY CHECK SERVICES, INC; E M A G I N E N E T TECHNOLOGIES, INC; REI DATA, INC, doing business as L a n d a ta Information Services, Inc; LML PAYMENT SYSTEMS C O R P O R A T I O N ; TELECHECK SERVICES, INC; ALLIED R E S I D E N T /E M P L O Y E E SCREENING SERVICE, INC; U S INTERACTIVE, I N C ; ACXIOM RISK MITIGATION, INC; ADP SCREENING AND S E L E C T I O N SERVICES, INC; AMERICAN DRIVING RECORDS, INC; COE I N F O R M A T I O N PUBLISHERS, INC; EXPLORE INFORMATION S E R V I C E S LLC; FEDCHEX LLC; JON LATORELLA; MARSHALL S Y S T E M S TECHNOLOGY, INC; REALTIME-ID LP; SOURCE DATA, INC, L e s lie Hanson for Deft; URAPI; PROPERTYINFO CORPORATION Defendants - Appellees __________________________________________________________ S H A R O N TAYLOR, on Behalf of Themselves and all others Similarly S it u a te d ; ET AL Plaintiffs - Appellants v. F R E E M A N PUBLISHERS, INC; BAYOUNET.COM, INC; CUSTOMER C O N T A C T , INC; DEFENSIVEDRIVING.COM; CROSS-SELL, INC; I N F O N A T I O N S , INC; REALTY COMPUTER SOLUTIONS, INC, doing b u s in e s s as Real-Comp; THE SERVICE BUREAU; LIST MANAGEMENT S Y S T E M S ; JUST TEXAS; DOMININ ENTERPRISES; DATA BANK USA; J O E WINKLEN CONSULTING; NATIONAL STATISTICAL SERVICE C O R P R O A T I O N ; WARRANTY USA; RELIANT ENERGY, INC; TXU B U S I N E S S ; DALLAS COMPUTER ASSOCIATES

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Defendants - Appellees

A p p e a l from the United States District Court for the Eastern District of Texas

B e fo r e GARWOOD, DAVIS, and DENNIS, Circuit Judges. G A R W O O D , Circuit Judge: T o d a y , we decide whether the Driver's Privacy Protection Act (DPPA), 18 U .S .C ., Chapter 123, §§ 2721-2725, allows states to turn over their entire drivers m o t o r vehicle (DMV) database at the request of certain private entities. This c a s e involves a class action seeking vast potential liquidated damages. For r e a s o n s stated below, we affirm the district court's dismissal of the action and h o ld that the DPPA affords states discretion to disburse DMV records for a p e r m is s ib le purpose under the statute. T h is case began when the plaintiff-appellants, Sharon Taylor, et. al., filed s ix putative class action suits alleging violations of the DPPA against more than s e v e n t y -fiv e defendants. The district court consolidated the six suits into the in s t a n t case. Most defendants joined in filing a Consolidated Motion to Dismiss p u r s u a n t to FED. R. CIV. P. 12(b)(6) (failure to state a claim), and 12(b)(1) (lack o f subject-matter jurisdiction). The district court granted the motion and

e n te r e d judgment dismissing plaintiff's suit with prejudice (including the sua s p o n te dismissal of the action as against defendants who had not joined the m o t io n ). The plaintiffs now appeal.1 S T A N D A R D OF REVIEW

We note that although JI Speciality Services, Inc. is listed in the caption as a party defendant-appellee, heretofore, on July 9, 2010, said JI Speciality Services, Inc., only, was dismissed from these appeals under 5TH CIR. R. 42(b) pursuant to the stipulation of plaintiffsappellants and said JI Specialty Services, Inc.

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This court reviews de novo the grant of a motion to dismiss for failure to s t a t e a claim. Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 839 (5 t h Cir. 2004). Plaintiffs must plead enough facts to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007). We take the facts the plaintiff pleads as true. Id. at 1965. See also Ashcroft v. I q b a l, 129 S.Ct. 1937, 1949-50 (2009). The court evaluates a 12(b)(1) motion de n o v o as well. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). BACKGROUND P la in t iffs bring this class action against various defendants alleging m is u s e of DMV records in violations of the DPPA. 18 U.S.C. § 2721­2725. The p la in t iffs represent a putative class of individuals with drivers licenses issued i n the State of Texas.2 Upon certification of a lawful purpose, Texas allows in d iv id u a ls and companies to buy magnetic tapes of drivers licence records. TEX. T RANSP. CODE. § 521.050.3 The DPPA regulates driver's license records that
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Specifically, the proposed class definition included:

Each and every individual in the State of Texas whose name, address, driver identification number, race and/or date of birth and/or sex are contained in motor vehicle records obtained by Defendants from the State of Texas's Department of Public Safety, without the express consent of such individuals, from June 1, 2000, through the date of judgment herein. Excluded from the class are persons who have expressly authorized the State of Texas's Department of Public of Public Safety to provide third parties with their "personal information" for any purpose; those persons whose information was obtained for a permissible purpose defined by the DPPA; all employees, including, but not limited to, Judges, Magistrate Judges, clerks and court staff and personnel of the United States District Courts of the Eastern District of Texas, the United States Court of Appeals for the Fifth Circuit and the United States Supreme Court; their spouses and any minor children living in their households and other persons within a third degree of relationship to any such Federal Judge; and finally, the entire jury venire called to for jury service in relation to this lawsuit.
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Section 521.050(a) provides: "(a) In addition to the provisions of this subchapter relating to the

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contain "personal information" defined to include the names, photographs, social s e c u r it y numbers, drivers license numbers, addresses, telephone numbers, and m e d ic a l and disability information of individuals. 18 U.S.C. § 2725(3). Plaintiffs a lle g e that once a person certifies that they have a lawful purpose, the State of T e x a s provides magnetic tapes with its entire database of driver's license records in fo r m a t io n on all holders of a Texas driver's license. Like Texas, statutes (or
disclosure of driver's license information on an individual, the department [Department of Public Safety] may provide a purchaser with a magnetic tape of the names, addresses, and dates of birth of all license holders that are contained in the department's basic driver's license record file if the purchaser certifies in writing that the purchaser is eligible to receive the information under Chapter 730." Section 730.002 of the TEX. TRANSP. CODE provides that: "The purpose of this chapter [Chapterr 730] is to implement 18 U.S.C. Chapter 123 [the DPPA] and to protect the interest of an individual in the individual's personal privacy by prohibiting the disclosure and use of personal information contained in motor vehicle records, except as authorized by the individual or by law." Under § 730.007 the requesting party is to provide assurances to the Department of Public Safety (DPS) that the information furnished will be used only for purposes that are lawful under the DPPA. Permitted disclosures under § 730.007 extend only to name, address, date of birth and driver's license number. § 730.007(b). The requestor must represent that use of personal information "will be strictly limited" to listed uses permitted under the DPPA (excluding marketing, solicitations and surveys or uses based on individual consent), including "(C) use in the normal course of business by a legitimate business or an authorized agent of the business, but only: (i) to verify the accuracy of personal information submitted by the individual to the business or the agent of the business; and (ii) if the information is not correct, to obtain the correct information, for the sole purpose of preventing fraud by, pursuing a legal remedy against, or recovering on a debt or security interest against the individual." § 730.007(a)(2)(C). DPS regulations (37 TEX. ADMIN. CODE § 15.142) require a detailed form of agreement by the requestor, specifying, inter alia, each authorized purpose for which the records are requested and the like. Plaintiffs allege that defendants acquired the challenged information in bulk from the Texas DPS. There is no allegation that such acquisition was other than in compliance with Texas law.

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regulations) in at least eleven other states expressly allow this type of bulk d is t r ib u t io n .4 P la i n t iffs argue that obtaining personal information in this manner v io la t e s the DPPA. Section 2722(a) provides: " (a ) Procurement for unlawful purposes.--It shall be u n la w fu l for any person knowingly to obtain or disclose personal in fo r m a t io n , from a motor vehicle record, for any use not permitted u n d e r section 2721(b) of this title." 5 T h e DPPA also provides a civil action against a "person who knowingly obtains, d is c lo s e s or uses personal information from a motor vehicle record for a purpose

ALA. ADMIN. CODE r. 810-5-1.485(6)(c)(1); ALASKA ADMIN. CODE tit. 2, § 92.200(c), available at http://www.legis.state.ak.us/basis/folioproxy.asp?url=http://wwwjnu01.legis.state. ak.us/cgi-bin/folioisa.dll/aac/query=[JUMP:'2+aac+92!2E200']/doc/{@1}?firsthit; ARIZ. REV. ST A T ANN. § 28-455(E); COLO. REV. STAT. § 42-1-206(3.7)(a) (West 2004); DEL. CODE ANN. tit. 21, § 305(f)(2) (2005); GA. COMP. R. & REGS. 375-3-8.03(10)(a) (2009); 625 Ill. Comp. Stat. 5/2123(a) (West 2008); Mich. Comp. Laws § 28.300(2), (3) (West 2004); N.H. Code. Admin. R. Ann. Saf-C 5202-08(a) (2009); N.Y. Veh. & Traf. Law § 202(4)(a)­(b) (McKinney 2009); W. VA. CO D E § 91-8-7.14 (2009).
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Section 2722(b) provides: "(b) False representation.--It shall be unlawful for any person to make false representation to obtain any personal information from an individual's motor vehicle record." Section 2723 provides: "§ 2723. Penalties (a) Criminal fine.--A person who knowingly violates this chapter shall be fined under this title. (b) Violations by State department of motor vehicles.-- Any State department of motor vehicles that has a policy or practice of substantial noncompliance with this chapter shall be subject to a civil penalty imposed by the Attorney General of not more than $5,000 a day for each day of substantial noncompliance." We also note in passing that as § 2723(a) makes knowing violation of the DPPA a crime, and accordingly to the extent that violation of the DPPA is at issue in even a civil case, to the extent of ultimate ambiguity in the statute's meaning it must be construed under the rule of lenity. See U.S. v. Thompson/Center Arms Co., 112 S.Ct. 2102, 2110 (1992) (plurality opinion); Crandon v. U.S., 110 S.Ct. 997, 1001-1102 (1990).

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not permitted under this chapter." 18 U.S.C. § 2724(a).6 To that end, the DPPA lis t s several permissible uses in section 2721(b): (1 ) For use by any government agency, including any court or law e n fo r c e m e n t agency, in carrying out its functions, or any private p e r s o n or entity acting on behalf of a Federal, State, or local agency in carrying out its functions. (2 ) For use in connection with matters of motor vehicle or driver s a fe t y and theft; motor vehicle emissions; motor vehicle product a lt e r a t io n s , recalls, or advisories; performance monitoring of motor v e h ic le s , motor vehicle parts and dealers; motor vehicle market r e s e a r c h activities, including survey research; and removal of n o n -o w n e r records from the original owner records of motor vehicle m a n u fa c tu re r s. (3 ) For use in the normal course of business by a legitimate business o r its agents, employees, or contractors, but only-- (A ) to verify the accuracy of personal information submitted by t h e individual to the business or its agents, employees, or c o n t r a c t o r s ; and (B ) if such information as so submitted is not correct or is no l o n g e r correct, to obtain the correct information, but only for t h e purposes of preventing fraud by, pursuing legal remedies a g a in s t , or recovering on a debt or security interest against, t h e individual. (4 ) For use in connection with any civil, criminal, administrative, or a r b it r a l proceeding in any Federal, State, or local court or agency or

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Section 2724(b) provides: "(b) Remedies.--The court may award-- (1) actual damages, but not less than liquidated damages in the amount of $2,500; (2) punitive damages upon proof of willful or reckless disregard of the law; (3) reasonable attorneys' fees and other litigation costs reasonably incurred; and (4) such other preliminary and equitable relief as the court determines to be appropriate."

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before any self-regulatory body, including the service of process, in v e s t ig a t io n in anticipation of litigation, and the execution or e n fo r c e m e n t of judgments and orders, or pursuant to an order of a F e d e r a l, State, or local court. (5 ) For use in research activities, and for use in producing statistical r e p o r t s , so long as the personal information is not published, r e d is c lo s e d , or used to contact individuals. (6 ) For use by any insurer or insurance support organization, or by a self-insured entity, or its agents, employees, or contractors, in c o n n e c t io n with claims investigation activities, antifraud activities, r a t in g or underwriting. (7 ) For use in providing notice to the owners of towed or impounded v e h ic le s . (8 ) For use by any licensed private investigative agency or licensed s e c u r it y service for any purpose permitted under this subsection. (9 ) For use by an employer or its agent or insurer to obtain or verify in fo r m a t io n relating to a holder of a commercial driver's license that is required under chapter 313 of title 49. (1 0 ) For use in connection with the operation of private toll t r a n s p o r t a t io n facilities. (1 1 ) For any other use in response to requests for individual motor v e h ic le records if the State has obtained the express consent of the p e r s o n to whom such personal information pertains. (1 2 ) For bulk distribution for surveys, marketing or solicitations if t h e State has obtained the express consent of the person to whom s u c h personal information pertains. (1 3 ) For use by any requester, if the requester demonstrates it has o b t a in e d the written consent of the individual to whom the in fo r m a t io n pertains. (1 4 ) For any other use specifically authorized under the law of the S t a t e that holds the record, if such use is related to the operation of a motor vehicle or public safety. Section 2721 goes on to provide: " (c ) Resale or redisclosure.--an authorized recipient of p e r s o n a l information (except a recipient under subsection (b)(11) or

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(12)) may resell or redisclose the information only for a use permitted u n d e r subsection (b) (but not for uses under subsection (b)(11) or (1 2 )). An authorized recipient under subsection (b)(11) may resell or r e d is c lo s e personal information for any purpose. An authorized r e c ip ie n t under subsection (b)(12) may resell or redisclose personal in fo r m a t io n pursuant to subsection (b)(12)."7 P la in t iffs complain that the defendants in the instant case, pursuant to the T e x a s statute, buy DMV records in bulk from the Texas DPS. These defendants d o not use all of the records immediately. They maintain databases or resell the in fo r m a t io n . They potentially could use any record in the normal course of their b u s in e s s for a permissible purpose under the DPPA. Plaintiffs do not complain t h a t the defendants actually used any of the records for a purpose other than the o n e s listed in the DPPA. Instead, the plaintiffs complain that maintaining r e c o r d s not actually used for the defendants' stated purpose is itself an im p e r m is s ib le purpose under the statute. Stated another way, plaintiffs assert

Section 2721(c) concludes by stating: "Any authorized recipient (except a recipient under subsection (b)(11)) that resells or rediscloses personal information covered by this chapter must keep for a period of 5 years records identifying each person or entity that receives information and the permitted purpose for which the information will be used and must make such records available to the motor vehicle department upon request." See also TE X . TRANSP. CODE § 7303.013: "(a) An authorized recipient of personal information may not resell or redisclose the personal information in the identical or a substantially identical format the personal information was disclosed to the recipient by the applicable agency. (b) An authorized recipient of personal information may resell or redisclose the information only for a use permitted under Section 730.007. (c) Any authorized recipient who resells or rediscloses personal information obtained from any agency shall be required by that agency to: (1) maintain for a period of not less than five years records as to any person or entity receiving that information and the permitted use for which it was obtained; and (2) provide copies of those records to the agency on request. (d) A person commits an offense if the person violates this section. An offense under this subsection is a misdemeanor punishable by a fine not to exceed $25,000." Similar requirements are stated in the recipient's agreement with the DPS. See 37 TEX. AD M I N . CODE § 15.143.

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that buying the records in bulk with an expectation and purpose of valid potential u s e is not a permissible use under the DPPA. T h e plaintiffs characterize their suit as being against two types of d e fe n d a n t s : resellers and non-resellers of the drivers license records. Plaintiffs a r g u e that the DPPA requires resellers to have themselves made some p e r m is s ib le use of the information before they may resell the information. Here, t h e resellers took the personal information and sold it to third parties without u s in g the information themselves. The plaintiffs do not allege that the third p a r t ie s used the personal information for a purpose not permitted under the DPPA. And, the plaintiffs argue that the non-resellers violated the act by

o b t a in in g the personal information for purposes of "convenience and cost saving," a n d for continued future use, and these purposes are not permissible uses under t h e DPPA. They argue that a permissible purpose is required by the DPPA for e a c h item of personal information contained in the entire bulk database obtained. A N A L Y S IS I . Failure to State a Claim T h e DPPA creates liability when three elements are met: (1) the defendant k n o w i n g l y obtains, discloses or uses personal information; (2) from a motor v e h ic le record; and (3) for a purpose not permitted. 18 U.S.C. § 2724(a); Thomas v . George, Hartz, Lundeen, Fulmer, Johnstone, King, and Stevens, P.A., 525 F.3d 1 1 0 7 , 1111 (11th Cir. 2008)."The plain meaning of the third factor is that it is o n ly satisfied if shown that obtainment, disclosure, or use was not for a purpose e n u m e r a t e d under § 2721(b)." Id. (emphasis added). See also Reno v. Condon, 1 2 0 S.Ct. 666, 670 (2000) (The section 2724 cause of action is for knowlingly obtaining, disclosing, or using the information "for a use other than those s p e c ific a lly permitted by the DPPA").

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A. Non-Resellers W e first address whether the non-resellers obtained personal information fo r a purpose not permitted under the DPPA. The non-resellers buy DMV records in bulk. Soon thereafter, they may use some of the records for a purpose

p e r m it te d under the DPPA. The plaintiffs argue that as to the remaining records t h e non-resellers do not use them for a permissible purpose. In other words, the q u e s t io n is whether the statute allows bulk distribution of the records. We hold that this type of bulk obtainment does not violate the DPPA. In in t e r p r e t in g statutes, this Court begins with the text of the statute. Phillips v. M a r in e Concrete Structures, 895 F.2d 1033, 1035 (5th Cir. 1990). Of the fourteen e x p r e s s ly listed permissible uses, only once does Congress limit a permissible use t o individual motor records. 18 U.S.C. § 2721(b)(11) ("For any other use in r e s p o n s e to requests for individual motor vehicle records if the State has obtained t h e express consent of the person to whom such personal information pertains."). And of these fourteen permissible uses, only once does Congress limit a p e r m is s ib le use to bulk distribution. 18 U.S.C. § 2721(b)(12) ("For bulk

d is t r ib u t io n for surveys, marketing or solicitations if the State has obtained the e x p r e s s consent of the person to whom such personal information pertains."). For t h e remaining twelve permissible uses, the statute seems to have more than one r e a s o n a b le interpretation: individual release, bulk release, or both.8 See in re

Other than 2721(b)(11) and (b)(12), the list of permissible uses does not refer to bulk or individual records. The statute does say, however, that "[p]ersonal information . . . may be disclosed as follows:" before listing the permissible uses. 18 U.S.C. § 2721(b). Section 2725(3) states: "(3) `personal information' means information that identifies an individual, including an individual's photograph, social security number, driver identification number, name, address (but not the 5-digit zip code), telephone number, and medical or disability information, but does not include information on vehicular accidents, driving violations, and driver's status." Congress sets forth rules of construction that explain, unless context indicates otherwise, "words importing the singular include and apply to several persons, parties, or things." 1 U.S.C. § 1. It seems well established, however, that this particular cannon is rarely applied

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Rogers, 513 F.3d 212, 226 (5th Cir. 2008) (an ambiguous statute is susceptible to m o r e than one reasonable interpretation). It does not make sense that Congress would expressly limit states to in d iv id u a l distribution with one permissible use if Congress intended to limit all o f the permissible uses to individual distribution. If Congress intended only in d iv id u a l distribution, one would expect either Congress to expressly limit all u s e s or, at least, to remain silent on the matter. Likewise, if Congress intended o n ly bulk distribution, it makes no sense to expressly limit one of the fourteen u s e s to bulk distribution and not the others. The text of the statute strongly in d ic a t e s that it allows both individual and bulk distribution. Bulk distribution is limited in only the instance of use for surveys, marketing or soliciations (p la in t iffs do not allege such use here). The plain inference is that Congress a llo w e d bulk distribution for other uses permitted by section 2721(b). Arif v. M u k a s e y , 509 F.3d 677, 681 (5th Cir. 2007) ("Where Congress includes particular la n g u a g e in one section of a statute but omits it in another section of the same A c t , it is generally presumed that Congress acts intentionally and purposely in t h e disparate inclusion or exclusion."). T h e purpose of the statute supports the conclusion that Congress intended b u lk distribution. Representatives originally proposed the DPPA as a crime fig h t in g measure. 139 CONG. REC. S15745-01, S15762 (1993) (Statement of Rep. B o x e r ). Congress originally passed it (as an amendment to the Crime Control a n d Law Enforcement Act of 1994) in response to the murder of actress Rebecca S c h a e ffe r at the hands of a stalker. 140 CONG. REC. H2518-01, H2526 (1994) (S ta t e m e n t of Rep. Goss). This stalker used DMV records to find Schaeffer's u n lis t e d home address. Id. The legislative history reflects the concern for

and only when doing so necessarily carries out the evident intent of Congress. United States v. Hayes, 129 S. Ct. 1079, 1085 n.5 (2009) (refusing to apply the rule because it conflicts with congressional intent).

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victims of crimes committed using DMV records.9 The totality of the legislative h is t o r y clearly reflects that Congress did not intend to suppress legitimate b u s in e s s uses of motor vehicle records. Thus, Congressman James P. Moran, E ig h t h District of Virginia, the sponsor of the DPPA in the House, in his F e b r u a r y 4, 1994 statement on the DPPA before the House Judiciary Committee S u b c o m m itt e e on Civil and Constitutional Rights, explained: " C a r e fu l consideration was given to the common uses now made of th is information and great efforts were made to ensure that those u s e s were allowed under this bill. Among those who will continue to h a v e unfettered access are federal and state governments and their c o n t r a c t o r s , for use in auto recalls, by businesses (such as an in s u r a n c e company) to verify the accuracy of personal information s u b m it t e d by a licensee, for use in any civil or criminal proceeding, in research activities, and in marketing activities as long as the in d iv id u a l has been given the opportunity to opt out. The bill would a llo w DMVs to continue to sell DMV information in bulk as long as e v e r y driver in that state had been given the opportunity to restrict t h e sale of their name for marketing purposes." (emphasis added). 1994 WL 212698 (F.D.C.H.) at 4.1 0

E.g., The Driver's Privacy Protection Act of 1993: Hearing on H.R. 3365 Before the Subcomm. on Civil & Constitutional Rights of the H. Comm. on the Judiciary, 103rd Cong. (1994) (Statement of Rep. Moran), 1994 WL 212698 (listing examples of violence committed after obtaining DMV records). None of these instances involved bulk distribution of DMV data. The "opt out" provisions of the original legislation with respect to bulk distribution for the purpose of use in surveys, marketing or solicitations in § 2721(b)(12) (and the similar "opt out" provisions of § 2721(b)(11)) were changed to the "opt in" provisions now in § 2721(b)(11) and (12) by the October 1999 amendments to the DPPA. Public Law 106-69.113 Stat. 986 (October 9, 1999). Congressman Moran's February 4, 1994 statement also explains the reason for restrictions on direct marketing use, viz: "Most states sell DMV information in list form with personal identifiers (name, address, and/or social security number) to direct marketers for commercial purposes, but only five have a working "opt-out" system (a system allowing licensees to restrict the sale of their personal information). . . . ... While the release of this information to direct marketers does not pose any inherent safety risks to people, it does present, to some people, an invasion of privacy. If you review the way in which people are classified by direct
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Statements on the DPPA along the same lines were made by Congressman M o r a n and Congressman Gross on April 20, 1994 before the House. 140 Cong. R e c . H 2518-01, 1994 WL 140035 at 14, 15, 24. P la in t iffs ' reading of the DPPA leads to essentially absurd results. At a c h e c k o u t line at a grocery store or similar establishment, when a customer wishes t o pay by (or cash) a check, and presents a driver's license as identification, it is o b v io u s ly wholly impractical to require the merchant for each such customer to s u b m it a separate individual request to the state motor vehicle department to v e r ify the accuracy of the personal information submitted by the customer, under s e c tio n 2721(b)(3). Any such process would obviously take way too long to be of a n y use to either the customer or the merchant, and would moreover flood the s t a te department with more requests than it could possibly handle. So, the m e r c h a n t buys the state department's entire data base and from it extracts on th a t occasion that particular customer's information, and later performs the same t a s k as to the next such customer in the line. Plaintiffs would have us hold that t h e merchant violates the DPPA by acquiring the data base even though every s in g le actual use made of it is an authorized use under section 2721(b), so long a s there is at least one name in the data base as to which no actual use is made. We reject that contention. A s the State of Texas points out in its amicus brief, under the plaintiffs a p p r o a c h , an attorney who buys a set legal reporters does not do so for the p u r p o s e of use for legal research unless that attorney plans on reading every o p in i o n in every volume of those reporters. A lawyer will never read all the o p in io n s in all 1,000 volumes of Federal Second (and may likely never read a n y t h in g in at least a few of the volumes). But he or she still buys the reporter s e t for the purpose of legal research. We hold that the text and legislative history
marketers based on DMV information you can see why some individuals might object to their personal information being sold." Id. at 2.

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dictate that when a person obtains motor vehicle records in bulk for one of the p e r m is s ib le uses listed in 18 U.S.C. § 2721(b), and does not actually use, or intend t o use, any of the information in a manner prohibited by section 2721(b), then t h a t person does not obtain the records for a purpose not permitted under C h a p t e r 123 of Title 18.1 1 B . Resellers W e now address the plaintiffs' claims against the resellers. The plaintiffs a lle g e d that reseller defendants must first have themselves made a permissible u s e for the DMV records before they could resell to others under 18 U.S.C. § 2 7 2 1 (c ). In their briefs and at oral argument, the plaintiffs could not articulate, a n d we could not find, any reason why Congress would require resellers to a c t u a lly use the records before selling the records.1 2 Instead, plaintiffs simply r e lie d on their reading of the text to produce that result. But cf. Waggoner v. G o n z a le s , 488 F.3d 632, 638 (5th Cir. 2007) ("We are mindful of the common m a n d a t e of statutory construction to avoid absurd results."). Not convinced, the

The plaintiffs suggest that Congress intended the states to perform a gate-keeping function and distributing in bulk hinders the states' ability to keep track of these records. See Locate.Plus.com v. Iowa Dep't of Transp., 650 N.W.2d 609, 617 (Iowa 2002). The statute, however, expressly contemplates resale of the information once distributed. § 2721(c). Further, it creates a private right of action. § 2724. Resale makes it more difficult for the states to monitor use of the information. The individual right of action allows persons other than the state to check use of these records. The Locate opinion's "gate-keeping" theory is not persuasive of a congressional intent to preclude bulk distribution where actual use permitted under § 2721(b) is intended and no actual use not permitted under § 2721(b) is intended. In fact, solid reasons exist why Congress likely intended bulk distribution to resellers. Congress intended persons use these records for purposes such as preventing fraud when cashing checks. E.g., 18 U.S.C. § 2721(b)(3). These are such uses that practically could not be performed individually, not only from the perspective of private companies but from the perspective of the states. For example, a credit card company may approve more than nineteen million credit card applications per year. Personal Information Acquired by the Government Information Resellers: Is There Need for Improvement?, J. Hearing Before the Subcomm. on Commercial and Admin. Law and the Subcomm. on the Constitution of the Comm. on the Judiciary H.R., 109th Cong. 65­66 (2006). Ninety thousand applications are processed daily. Id. That alone may be 90,000 requests that a state would have to individually verify every day.
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district court held that plaintiffs had no obtainment claim against the reseller d e fe n d a n t s under the DPPA based on the reasoning in Russell v. Choicepoint S e r v s . Inc., 300 F. Supp. 2d 450, 454­61 (E.D. La. 2004). It observed that section 2 7 2 1 (c ) allowed "authorized recipients" to resell information. Id. This section did n o t require "authorized recipients" to also be authorized users under 18 U.S.C. § 2721(b). Therefore, authorized recipients did not need an authorized use before t h e y could resell the information to those who did have a permissible use. T h e plaintiffs counter that authorized recipients must have an authorized u s e because the statute expressly refers to certain authorized recipients as being r e c ip ie n t s "under" a permissible use. For example: " A n authorized recipient . . . (except a recipient under subsection (b )(1 1 ) or (12)) . . . A n authorized recipient under subsection (b)(11) . . . A n authorized recipient under subsection (b)(12) . . ." 1 8 U.S.C. § 2721(c). Like the district court, we hold that the only reasonable Instead, an

c o n s t r u c t i o n of "authorized recipient" requires no actual use.

a u t h o r iz e d recipient is authorized to resell to individuals for one or more of the s p e c ific purposes under section 2721(b). See Russell v. Choicepoint Servs., Inc., 3 0 0 F. Supp. 2d 450, 455­57 (E.D. La. 2004) (The court goes into great detail in it s careful analysis of "authorized recipient."). Our construction of the statute alleviates the concerns the plaintiffs believe e x is t .1 3 This construction allows "authorized recipient" to mean something

In argument, plaintiff also relies on two cases. See Locate.Plus.Com, Inc. v. Iowa Dep't of Transp., 650 N.W.2d 609 (Iowa 2002); Roberts v. The Source for Pub. Data, No. 084167-CV-C-NKL, 2008 WL 5234675 (W.D. Mo. Dec. 12, 2008) (unpublished op.). Neither are binding precedent. Locate.Plus.Com observed that each permissible use exception listed a user and a specific use for the information. Locate.Plus.Com., Inc., 650 N.W.2d at 617. It reasoned, therefore, Congress intended dissemination only to a "permissible user." Id. Just because the statute allows only certain types of people to use the information does not mean that the statute limits possession to those same individuals. The text of the statute contemplates uses and users in the list of exceptions; it contemplates resellers in a different subsection. 18

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different than one who has a permissible actual use. See Corley v. United States, 1 2 9 S. Ct. 1558, 1566 (2009) (a court should give each word effect). It also gives m e a n i n g to the language of section 2721(c) that refers to recipients "under" s u b s e c t io n (b). 18 U.S.C. § 2721(c). An authorized recipient would be "under s u b s e c t io n (b)(12)," for example, if the State gives him the data for the purpose o f reselling it to a person who uses it for marketing in conformity with (b)(12). There is no allegation that any of the defendants is not an authorized recipient u n d e r Texas law, which plainly provides for such resellers in a manner consistent w it h the DPPA. Moreover, the DPPA's criminal and civil sanctions police u n a u t h o r iz e d recipients and users without a permissible actual use. 18 U.S.C. § § 2723, 2724. The Department of Justice issued an advisory opinion that supports this c o n c lu s io n . On October 9, 1998, the Special Counsel to the Assistant Attorney G e n e r a l, in the Civil Division, issued an advisory letter opinion responding to the q u e s t io n of whether Massachusetts may release personal information to a c o m m e r c ia l distributor who disseminates the information only to other a u t h o r iz e d recipients or entities that use the information solely for authorized p u r p o s e s . Unpublished Letter from Robert C. McFetridge, Special Counsel to the A s s is t a n t Attorney General, to Peter Sacks, Office of the Attorney General for the C o m m o n w e a lt h of Massachusetts (on file with this Court and as a part of the r e c o r d below). This advisory opinion concluded that the DPPA allowed for such r e le a s e s . Id. Because the Attorney General is expressly charged with imposing c iv il sanctions against States having a policy or practice of substantial

U.S.C. § 2721(b), (c). Roberts, on the other hand, makes a statutory construction argument that practically writes the reseller provision out of statute. See Roberts, 2008 WL 5234675, at *4 (reasoning that section 2722 prohibits obtaining information for any purpose other than a permissible use listed in 2721(b) would make no sense if a reseller can obtain information for a purpose other than one listed in 2721(b) -- to resell information). Moreover, reselling to an authorized actual user is not itself an actual use.

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noncompliance with the DPPA, this advisory opinion serves as persuasive s u p p o r t for the conclusion that a reseller may obtain DMV records and sell them w it h o u t first itself actually using or intending to use those records. See 18 U.S.C. § 2723(b), note 4 supra. Moreover, since that Department of Justice opinion the s t a tu te has been amended (in October 1999) without any change which would a lt e r that result.1 4 I I . Standing W e need not address the statutory standing issue because we have affirmed t h e district court's dismissal under Rule 12(b)(6). Verizon Commc'n Inc. v. Law o ffic e s of Curtis V. Trinko, LLP, 124 S.Ct. 872, 883 n.5 (2004) (citing Steel Co. v. c itiz e n s for a Better Environment, 118 S.Ct. 1003, 1013 n.2 (1998)).1 5 While the d is t r ic t court did dismiss sua sponte some defendants who did not join the motion t o dismiss, there is no prejudice to the plaintiffs in affirming the judgment in its e n t ir e t y because the plaintiffs make the same allegations against all defendants.

We further note that the 1998 Department of Justice opinion is inconsistent with any notion that bulk distribution is itself necessarily prohibited by the DPPA, and thus likewise fully supports the position of the defendants non-resellers. See also James v. City of Dallas, 254 F.3d 551, 562 n.9 (5th Cir. 2001) ("In cases in which statutory standing is involved, we may address statutory standing before Article III standing."). Assuming, arguendo, that we also need to address Article III standing, that too is present. It is undisputed that the DPPA protects from certain uses or disclosures personal information of plaintiffs and creates a federal cause of action for same, and that such personal information of plaintiffs was actually included in the challenged bulk distributions by Texas DPS. Moreover, plaintiffs' claim that such bulk distributions (including the personal information of these plaintiffs) are prohibited, and constitute a disclosure or use made illegal, by the DPPA which affords plaintiffs a federal cause of action for such disclosure or use of their personal information, though clearly without merit, is nevertheless not wholly insubstantial and frivolous, and hence gives the district court jurisdiction to decide whether or not the DPPA does preclude such distributions or uses. See Bell v. Hood, 66 S.Ct. 773, 77677 (1946).
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CONCLUSION W e affirm the judgment of the district court. We hold that a person who b u y s DMV records in bulk does so for the purpose of making permissible actual u s e of information therein under 18 U.S.C. § 2721(b), even if that person does not a c t u a lly use every single item of information therein. We also hold that the plain la n g u a g e of 18 U.S.C. § 2721 allows resale of DMV records to one who is a u t h o r iz e d and proposes to make actual use thereof as permitted under section 2 7 2 1 (b ) notwithstanding that the seller does not actually use or intend to use the r e c o r d s before resale. AFFIRMED

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DENNIS, Circuit Judge, concurring: I fully agree with the majority's analysis of the Driver's Privacy Protection A c t and its conclusion that the plaintiffs have failed to state a claim upon which r e lie f can be granted. However, I believe that Steel Co. v. Citizens for a Better E n v ir o n m e n t, 523 U.S. 83, 93-101 (1998), requires us to decide whether the p la in t iffs have Article III standing. "In [Steel Co.], [the Supreme] Court adhered t o the rule that a federal court may not hypothesize subject-matter jurisdiction fo r the purpose of deciding the merits." Ruhrgas AG v. Marathon Oil Co., 526 U .S . 574, 577 (1999). See also, e.g., United States v. Tex. Tech Univ., 171 F.3d 2 7 9 , 287 (5th Cir. 1999); 13 Charles Alan Wright et al., Federal Practice and P r o c e d u r e : Jurisdiction and Related Matters § 3522, at 142 (3d ed. 2008). T h e plaintiffs in this case have Article III standing for the reason stated in fo o t n o t e 15 of the majority opinion: they allege that the defendants have used t h e ir personal information in a manner that is prohibited by the DPPA. Thus, t h e ir allegations fulfill the three requirements of the "irreducible constitutional m in im u m of standing": an injury in fact (i.e., the invasion of an interest which the p la in t iffs argue is legally protected), which was caused by the defendants and w h ic h would be redressed by a judgment against the defendants. See Lujan v. D e f e n d e r s of Wildlife, 504 U.S. 555, 560-61 (1992). "It is firmly established . . . t h a t the absence of a valid (as opposed to arguable) cause of action does not im p lic a t e subject-matter jurisdiction." Steel Co., 523 U.S. at 89. Thus, our h o ld in g that the plaintiffs have failed to state a valid claim under the DPPA does n o t alter the fact that the plaintiffs have Article III standing.

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