Taylor et al v. Acxiom Corporation et al
Filing
72
MOTION to Dismiss on Common Issues and Response to Plaintiffs' Statement of Violations by ACS State & Local Solutions, Inc., Global 360 BGS, Inc.,, Gila Corporation, American Electric Power Service Corporation, Industrial Foundation of America, Southwestern Bell Telephone, LP, Texas Farm Bureau Mutual Insurance Company, Insurance Technologies Corporation, JI Specialty Services, Inc., Softech International Inc., Globe Life and Accident Insurance Company, Hawkeye Insurance Services, Inc.,, ISO Claims Services, Inc., United Teacher Associates Insurance Company, Spartan Insurance Company, Safeway, Inc.,, HEB Grocery Company, LP, The Hearst Corporation, Safety-USA Institute, LLC, U.S. Interactive, Inc., The Talbot Group, Inc., Background Information Systems, Inc., Academy, LTD, CarFax, Inc, ABC Data, American Student List Co., Inc., Aristotle International, Inc.,, Continueded.com, LLC, Driver Training Associates, Inc., Federated Retail Holdings, Inc., Household Drivers Report, Inc., Lee Farish Computer Services, Inc., Paradise Development, Inc., RealPage, Inc., D. B. Stringfellow, Jr, Biometric Access Company, Emaginenet Technologies, Inc., LML Payment Systems Corp, Telecheck Services, Inc., Acxiom Corporation, Zebec Data Systems, Inc., Allied Resident/Employee Screening Service, Inc., ADP Screening and Selection Services, Inc., American Driving Records, Inc., FEDCHEX. LLC., Jon Latorella, Marshall Systems Technology, Inc., Source Data, Inc., URAPI, PropertyInfo Corporation, Tenant Tracker, Inc., Defensivedriving.com, Cross-Sell, Inc., InfoNations, Inc., Realty Computer Solutions, Inc., Urapi, Inc., National Statistical Service Corporation, Reliant Energy, Inc., Texas Motor Transportation Association, AMERICAN MUNICIPAL SERVICES CORPORATION, Acxiom Risk Mitigation, Inc.. (Attachments: # 1 Exhibit Affidavit of Thomas Corea# 2 Text of Proposed Order Order)(John, Philip)
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Taylor et al v. Acxiom Corporation et al
Doc. 72
Case 2:07-cv-00001
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION
SHARON TAYLOR, ET AL.
v.
CIVIL ACTION NO. 2:07cvOOI JUDGE DONALD E. WALTER
ACXIOM CORPORATION, ET AL. SHAON TAYLOR, ET AL.
v.
CIVIL ACTION NO. 2:07cv0013 JUDGE DONALD E. WALTER
ACS STATE & LOCAL SOLUTIONS, INC., ET AL. SHAON TAYLOR, ET AL.
v.
CIVIL ACTION NO. 2:07cv0014 JUDGE DONALD E. WALTER
TEXAS FAR BUREAU MUTUAL INSURANCE
COMPANY, ET AL. SHARON TAYLOR, ET AL.
v.
CIVIL ACTION NO. 2:07cv0017 JUDGE DONALD E. WALTER CIVIL ACTION NO. 2:07cv0018 JUDGE DONALD E. WALTER
CIVIL ACTION NO. 2:07cv041O JUDGE DONALD E. WALTER
SAFEW A Y, INC., ET AL.
SHAON T A ŻLOR, ET AL.
v.
BIOMETRIC ACCESS COMPANY, ET AL. SHARON TAYLOR, ET AL.
v.
FREEMAN PUBLISHING COMPANY, ET AL.
CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT OF VIOLATIONS FILED ON BEHALF OF AMERICAN DRIVING RECORDS D/B/A FIRST ADVANTAGE ADR
AIA AGENCY RECORDS INC., SOUTHWESTERN BELL TELEPHONE, L.P. D/B/A SOUTHWESTERN BELL
TELEPHONE COMPANY, A TEXAS LIMITED PARTNERSHIP, SAFEWAY INC., ACADEMY, LTD., BACKGROUND INFORMTION SYSTEMS, INC., HEB GROCERY COMPANY, LP, REALPAGE, INC.,
FEDCHEX, LLC., LML PAYMENT SYSTEMS, CORP., D.B. STRIGFELLOW, URAPI, THE HEARST CORPORATION D/B/A HOUSTON CHRONICLE, TEXAS MOTOR TRANSPORTATION ASSOCIATION,
EMAGINENET TECHNOLOGIES, INC., TEXAS FARM BUREAU MUTUAL INSURANCE COMPANY,
HOUSEHOLD DRIVERS REPORT, INC. D/B/A HDR, INC., SPARTAN INSURANCE COMPANY, ACS STATE & LOCAL SOLUTIONS, INC., INSURANCE TECHNOLOGIES CORPORATION, AMERICAN STUDENT LIST, LLC, GILA CORPORATION D/B/A MUNICIPAL SERVICES BUREAU, HAWKEYE INSURNCE SERVICES, RELIANT ENERGY, INC., SOURCE DATA, INC., DRIVER TRAINING ASSOCIATES, INC. D/B/A TlCKETSCHOOL.COM,
JON LATORELLA, D/B/A LOCATEPLUS HOLDINGS CORPORATION, AMERICAN ELECTRIC POWER SERVICE CORPORATION, TENANT TRACKER, INC., JI SPECIALTY SERVICES, INC., LEE FARISH
COMPUTER SERVICES, INC., NATIONAL STATISTICAL SERVICES CORPORATION, AMERICAN MUNICIPAL SERVICES, LTD., GLOBE LIFE AND ACCIDENT INSURANCE COMPANY, ADP SCREENING AND SELECTION SERVICES, INC., SOFTECH INTERNATIONAL, INC., TALBOT GROUP, INC., PARADISE DEVELOPMENT, INC. D/B/A DRIVESAFE DEFENSIVE DRIVING, SAFETY-USA INSTITUTE, LLC, ARISTOTLE INTERNATIONAL, INC., DEFENSIVE DRIVER ONLINE, LTD., GLOBAL 360 BGS, INC., ABC DATA, Inc. d/b/a UNICARD SYSTEMS, INC., BIOMETRIC ACCESS COMPANY, CONTINUEDED.COM LLC, D/B/A IDRIVESAFELY.COM, ZEBEC DATA SYSTEMS, INC., INFONA TlON, INC., ALLIED RESIDENT/EMPLOYEE SCREENING SERVICE, INC., UNITED TEACHER ASSOCIATES INSURANCE COMPANY, FEDERATED RETAIL HOLDINGS, INC. F/KA THE MAY DEPARTMENT STORES COMPANY D/B/A FOLEY'S, CROSS-SELL, INC., INDUSTRIAL FOUNDATION OF
AMERICA, PROPERTYINFO CORPORA TION, MARSHALL SYSTEMS TECHNOLOGY, INC., U.S.
INTERACTIVE, INC., DALLAS COMPUTER INFORMTION SYSTEMS, REALTY COMPUTER SOLUTIONS,
INC. d/b/a REAL-COMP, ACXIOM RISK MITIGATION, INC., ACXIOM CORPORATION, TELECHECK
SERVICES, INC., ISO CLAIMS SERVICE, INC. D/B/A INSURNCE INFORMATION EXCHANGE, AND CARFAX, INC.
HOU02:1l36284.l0
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TABLE OF CONTENTS
I. INTRODUCTION .............................................................................................................. 2
II. BACKGROUND........ ........................................................................................................ 3
III. STATEMENT OF ISSUES TO BE DECIDED ............................................... .................. 6
IV . STANDARD OF REVIEW................................................................................................ 6
1. Federal Rule of Civil Procedure 12(b )(6) ........................................................................... 6
2. Federal Rule of Procedure 12(b)(1) .................................................................................... 7
V. ARGUMENT AND AUTHORITIES ................................................................................. 8
1. Plaintiffs have failed to state a claim under the DPP A. ...................................................... 8
(a) Plaintiffs' claims should be dismissed because Plaintiffs have failed to plead facts
supporting a claim based on the plain language of
the statute.......................................... 10
(b) Plaintiffs' claims should be dismissed because Plaintiffs have failed to plead facts
supporting a claim based on the applicable case law........................................................ 11
(i) Plaintiffs' claims against the non-reseller Defendants should be dismissed because
Plaintiffs fail to plead facts to support an obtainment claim under the DPP A. ................ 11
(ii) Plaintiffs' claims against the reseller Defendants should be dismissed because Plaintiffs
fail to plead facts to support a reselling claim under the DPP A. ...................................... 15
(c) Plaintiffs' claims should be dismissed because legislative history supports companies'
rights to purchase motor vehicle information in bulk for permissible uses. ..................... 18
(d) Plaintiffs' claims should be dismissed because the State of
Texas has recognized and authorized companies' rights to purchase motor vehicle information in bulk for
permissible uses. ............................................................................................................... 19
2. Plaintiffs do not have standing under the DPPA. ............................................................. 19
VI. CONCLUSION ..... ....................... ..................................... ................................................ 23
CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT
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TABLE OF AUTHORITIES
CASES
Assoc. Builders, Inc. v. Ala. Power Co., 505 F .2d 97 (5th Cir. 1974) ...... ........ ........ ......... ............................. ..................... ................7
Bell At!. Corp. v. Twombly,
127 S. Ct. 1955 (2007)...........................................................................................6, 7, 8, 10
Boudreau v. United States, 53 F.3d 81 (5th Cir. 1995) ...............................................................................................7,8
Carpenters Dist. Council v. Dilard Dep't Stores,
15 F.3d 1275 (5th Cir. 1994) .............................................................................................16
Custom Rail Employer Welfare Trust Fund v. Geeslin, 491 F .3d 23 3 (5th Cir. 2007) ............................................................................................. 1 6
Elk Grove Unifed Sch. Dist. v. Newdow, 542 U.S. 111, 124 S. Ct. 2301 (2004)..................................................................................8
Guidry v. Bank 0/ LaPlace, 954 F.2d 278 (5th Cir. 1 992) ...............................................................................................7
Howard v. Hooters 0/ Houston, Cause No. 4:07-CV-03399 (S.D. Tex. Apr. 5,2008) ........................................................21
INS v. Phinpathya,
464 U.S. 183 (1984)..... ........................ ....... .......................... ....... ................................. .....16
Kardules v. City o/Columbus,
95 F.3d 1335 (6th Cir. 1996) .............................................................................................22
Kehoe v. Fidelity Fed Bank & Trust, 421 F.3d 1209 (lIth Cir. 2005) ...................................................................................21, 22
Lewis v. Knutson, 699 F.2d 230 (5th Cir. 1983) .............................................................................................20
Locate.Plus.Com, Inc. v. Iowa Dep't o/Transp., 650 N.W.2d 609 (Iowa 2002) ...................................................................................... 16, 17
Lujan v. De/enders o/Wildlif,
504 U.S. 555 (1992)........ ................ .............. ........................................................ ....... 19, 22
CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT
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MDPhysicians & Assocs., Inc. v. State Bd of
Ins., 957 F.2d 178 (5th Cir. 1 992) ...............................................................................................7
Mayfield v. Texas, 206 F. Supp. 2d 820 (RD. Tex. 2001) ...............................................................................20
Parus v. Cator,
No. 05-C-0063-C, 2005 WL 2240955 (W.D. Wis. Sept. 14,2005) ............................13, 14
Ramming v. United States, 281 F.3d 158 (5th Cir. 2001) ...........................................................................................7, 8
Rivera v. Wyeth-Ayerst Labs.,
283 F .3d 315 (5th Cir. 2002) .................. .......... ....... .................. ................ .................. ......22
Russell v. ChoicePoint Servs., Inc., 300 F. Supp. 2d 450 (E.D. La. 2004)...............................................................13, 16, 17, 18
Russell v. Choicepoint Servs., Inc., 302 F. Supp. 2d 654 (E.D. La. 2004)...............................................................13, 16, 17,20
Tuchman v. DSC Commc'ns. Corp., 14 F .3d 106 1 (5th Cir. 1994) ................... ......... .............. ............................... ............ .......... 7
United States v. Meeks, 69 F.3d 742 (5th Cir. 1995) ...............................................................................................16
United States v. Valencia, 394 F.3d 352 (5th Cir. 2004) .............................................................................................16
Vulcan Material Co. v. City of
Tehuacana, 238 F.3d 382 (5th Cir. 2001) ...............................................................................................7
Ward v. Resolution Trust Corp.,
796 F. Supp. 256 (S.D. Tex. 1992) ....................................................................................20
Warth v. Seldin, 422 U.S. 490 (1975)............................................................................................................. 8
Xerox Corp. v. Genmoora Corp., 888 F.2d 345 (5th Cir. 1989) .......................................................................................19, 20
CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT
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STATUTES AND RULES
Federal Rule of Civil Procedure 1 2(b)(l) ............. ........................ ....... .................................. 7, 8, 19
Federal Rule of Civil Procedure 1 2(b)( 6) ........ ................. ....................................... .......... ..............6
Texas Administrative Code § 15.141............ ................ ..................... ............................... ............. 1 9
Texas Transportation Code § § 730.001 -730.0 1 6.......... ...... ............... ......... ...................... .............19
18 U.S.C. § 2721 ............................................................................................................3, 10, 12, 15
18 U.S.C. § 2722.... ...... ...................... .... ........... ............... ................ ..... ........................ ... .... .......... ..8
1 8 U. S. C. § 2724.................................................................................................................. 5, 1 0, 1 3
MISCELLANEOUS
13 9 Congo Rec. S 1 5745-01, S5 1 5763 (l993) ......... ...... .............. ....... ........ ....................................19
140 Congo Rec. H25 1 8-0 1, H2526 (l994)........ ............................... ......................... ........ .............18
Transcript of House Subcommittee Hearing on H.R. 3365 ............ ..... ...................... ....................18
CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT
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DEFENDANTS' CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT OF VIOLATIONS
Defendants American Driving Records, Inc., d/b/a First Advantage ADR, a/a Agency
Records, Inc., Southwestern Bell Telephone, L.P. d//a Southwestern Bell Telephone Company,
a Texas Limited Parnership, Safeway Inc., Academy, Ltd., Background Information Systems,
Inc., HEB Grocery Company, LP, RealPage, Inc., FedChex, L.L.C, LML Payment Systems
Corp., D.B. Stringfellow, URAPI, The Hearst Corporation d/b/a Houston Chronicle, Texas
Motor Transportation Association, EmagineNet Technologies, Inc., Texas Far Bureau Mutual
Insurance Company, Household Drivers Report, Inc. d/b/a HDR, Inc., Sparan Insurance
Company, Insurance Technologies Corporation, ACS State & Local Solutions, Inc., Gila Corp.
d//a Municipal Services Bureau, Hawkeye Insurance Services, Reliant Energy, Inc., American
Student List, LLC, Source Data, Inc., Driver Training Associates, Inc. d/b/a TicketSchool.com,
Jon Latorella, d//a LocatePlus Holdings Corporation, American Electric Power Service
Corporation, Tenant Tracker, Inc., JI Specialty Services, Inc., Lee Farish Computer Services,
Inc., National Statistical Services Corporation, American Municipal Services, Ltd., Globe Life
Accident And Insurance Company, ADP Screening and Selection Services, Inc., Softech
International, Inc., Talbot Group, Inc., Safety-USA Institute, LLC, Paradise Development, Inc.
d//a Drivesafe Defensive Driving, Aristotle International, Inc., Defensive Driver Online, Ltd.,
Global 360 BGS, Inc., ABC Data, Inc. d//a Unicard Systems, Inc., Biometric Access Company,
ContinuedEd.com D/B/A Idrivesafely.com, Zebec Data Systems, Inc., InfoNation, Inc., Alled
Resident/mployee Screening Service, Inc., United Teacher Associates Insurance Company,
Federated Retail Holdings, Inc., f/k/a Th e May Department Stores Company d/b/a Foley's,
Cross-Sell, Inc., Industrial Foundation of America, PropertyInfo Corporation, Marshall Systems
Technology, Inc., U.S. Interactive, Inc., Dallas Computer Information Systems, Realty Computer
CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT
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Solutions, Inc. d//a Real-Comp, Acxiom Risk Mitigation, Inc. and Acxiom Corporation,
TeleCheck Services, Inc., Carfax, Inc., and ISO Claims Service, Inc. d//a Insurance Information
Exchange (collectively "these Defendants") file this Consolidated Motion to Dismiss on
Common Issues under Federal Rules of Civil Procedure 12(b)(6) and 12(b)(I) and Response to
Plaintiffs' Statement of Violations. Because Plaintiffs' Statement mimics their Complaint, these
Defendants re-urge and incorporate by reference in this Consolidated Motion to Dismiss the
grounds included in Defendants' previously fied motions to dismiss. This Motion is intended to
supplement, rather than supplant, the.
earlier-fied motions. i
I. INTRODUCTION
Plaintiffs have sued two types of Defendants in this case: (i) those who resell information
obtained from the State of Texas, and (ii) those who obtain information directly from the State of
Texas for their own use ("non-resellers"). Plaintiffs have committed to their theory of the case as
to both types of these Defendants. The entire basis for Plaintiffs' claims under the Driver's
Privacy Protection Act ("DPP A") is that (i) the non-reseller Defendants were required to
immediately use the data obtained from the State for the obtainment of that data to be
"permissible," and (ii) the reseller Defendants obtained the data from the State to resell it. See
Plaintiffs' Statement of Violations of the Drivers' Privacy Protection Act ("the Statement")
(regarding non-resellers: "(b lased on the lack of any relationship, business or otherwise, between
the above-referenced Plaintiffs and this Defendant, the above-referenced Plaintiffs assert that this
Defendant had no permissible purose for obtaining their personal information. . . . Anv purpose
this Defendant had for obtaining the above-referenced Plaintif' 'personal information' other
than an immediately contemplated use of the information for one of the DP P A 's authorized uses
1 Some Defendants wil fie separate Supplemental Motions to Dismiss in instances where a legal point exists that is
unique to that defendant. Other Defendants previously have fied Motions to Dismiss where a legal point exists that
is unique to that defendant and, therefore, re-urge the arguments made in those Motions to Dismiss.
CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT
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constitutes a violation of the DP P A.,,2 (emphasis supplied); regarding resellers: "(r lesale of data
is not a proper purpose for obtaining plaintiffs' personal information and obtainment of
this data
merely to resell violates the express terms of
the DPPA."\ Plaintiffs' theory does not support a
Defendant and Plaintiffs' claims should be dismissed.
viable DPP A claim against either type of
II. BACKGROUND
In early 2006, Plaintiffs' counsel began an investigation in hopes of bringing a class
action under the DPPA. See Affidavit of Thomas Corea (Plaintiffs' lead counsel) at p. 2,
attached as Ex. A. In January 2007, twenty-five plaintiffs fied five separate, but virtually
identical, putative class action lawsuits in the Eastern District of Texas.4 This Cour
subsequently consolidated these five cases for limited puroses. In each of these cases, Plaintiffs
claim that each of the 100+ defendants -- including companes as diverse as grocery stores,
utility companies, sporting goods stores, check services, insurers, trade associations, and driver's
education programs -- violated the DPPA. See 18 U.S.C. § 2721, et seq. In September 2007,
Plaintiffs brought a sixth nearly-identical action against yet another set of twenty-four
defendants.
Almost all defendants in the five live original actions fied motions to dismiss Plaintiffs'
ComplaintS based on Plaintiffs' failure to plead adequately a specific violation of the DPP A,
much less a violation committed by each defendant. On March 3, 2008, the paries appeared
before the Cour for a status conference. At that conference, these Defendants advised the Cour
that they had pending Motions to Dismiss based on Plaintiffs' failure to state a viable claim
2 See e.g., Plaintiffs' Statement at 2. 3 See e.g., Plaintiffs' Statement at 7.
4 Judge Ward stayed one of those cases, Sharon Taylor, et. at. v. Acxiom Corp., et. al., Cause Number 2:07-cv00001.
5 See 2:07-cv-00013: (Dkt. No.7), 2:07-cv-00014: (Dkt. No.5), 2:07-cv-00017: (Dkt. No.3), 2:07-cv-00018: (Dkt.
No.3), 2:07-00410: (Dkt. No.1) (collectively, the "Complaint").
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under the DPPA. On March 4,2008, the Cour issued an Order stating that "(wlithin thirty (30)
days, plaintiffs shall file a statement with the Court as to each individual plaintiff stating
specifically the basis for their claims against each individual defendant stating the alleged
obtainment, disclosure or use of that plaintiffs information from the Texas state motor vehicle
records for a purose not permitted under the DPPA." Mar. 4, 2008 Order at 2 (2:07-cv-00013:
Dkt. No. 78, 2:07-cv-00014: Dkt. No. 98, 2:07-cv-00017: Dkt. No. 166, 2:07-cv-00018: Dkt. No.
193).
The Cour also gave Plaintiffs leave to ask each Defendant by interrogatory "that
defendant's reason for obtaining the information at issue." Mar. 4, 2008 Order at 3 (2:07-cv-
00013: Dkt. No. 78, 2:07-cv-00014: Dkt. No. 98, 2:07-cv-00017: Dkt. No. 166, 2:07-cv-00018:
Dkt. No. 193). On or before March 28, 2008 - one week before the deadline for Plaintiffs to
fie their Statement - Defendants timely responded to Plaintiffs' interrogatory, providing
Plaintiffs with the information outlined in this Cour's Order explaining why these Defendants
obtained the data.
On April 3, 2008, Plaintiffs filed the Statement, which essentially supplements Plaintiffs'
Complaint.6 (2:07-cv-0000l: Dkt. No. 62). As predicted at the March 3, 2008 status conference,
Plaintiffs' Statement adds nothing new. Despite the Cour's affording Plaintiffs another chance
to allege facts sufficient to state a claim, the Statement merely reiterates on a defendant-bydefendant basis, the same allegations Plaintiffs made in their Complaint. After setting forth the
same legal theory, first in their Complaint,
and again in cut-and-paste fashion throughout their
121-page Statement, Plaintiffs are now committed to their claim. Plaintiffs bring this action
against over 100 Defendants asking that they pay two trilion dollars in damages for data
6 Because this is a Motion to Dismiss, these Defendants wil address the allegations in the Statement as if they were
tre despite numerous egregious misstatements throughout that document.
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obtained for a permissible purose because these Defendants did not immediately use the data.
This is not the situation that the DPP A was intended to correct and is not actionable under the
DPPA. Furthermore, Plaintiffs' attempt to add an immediate-use requirement is not supported
by the DPP A or by any authority interpreting the DPP A.
The DPP A states that "a person who knowingly obtains, discloses or uses personal
information, from a motor vehicle record, for a purose not permitted under this chapter shall be
liable to the individual to whom the information pertains." 18 U.S.C. § 2724(a). Based on
Plaintiffs' Complaint and Statement, Plaintiffs have not alleged any facts to support a claim that
Defendants obtained the data for a purose not permitted under the DPPA, disclosed the data for
a purose not permitted under the DPPA, or used the data for a purose not permitted under the
DPPA. In fact, Plaintiffs do not challenge Defendants' interrogatory responses. Instead,
Plaintiffs allege that these Defendants purchased the entire State of Texas database7 and
speculate that these Defendants could not have a permissible purpose for purchasing all of the
data. This allegation is contrary to the statute, legislative history, and caselaw.
Over two years have elapsed since Plaintiffs' counsel began their investigation in
preparation for bringing suit under the DPP A. Over one year has passed since Plaintiffs first
filed suit. In addition, Plaintiffs have had the opportity to review discovery responses from
these Defendants describing how they used the motor vehicle record data. Notwithstanding the
amount of time and information Plaintiffs have been given, Plaintiffs have failed to allege facts
sufficient to establish a claim under the DPP A. To maintain a cause of action against these
Defendants, Plaintiffs must: (a) plead facts to support a claim that each of these Defendants
obtained Plaintiffs' data for an impermissible purose under the DPPA or allege that each of
7 Plaintiffs' theory only addresses Defendants who purchased the entire database. Contrary to Plaintiffs' assertion,
some Defendants did not purchase the entire database. Because this is a Motion to Dismiss, however, Defendants
wil ignore this inaccuracy and treat this allegation as if it was tre.
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these Defendants misused Plaintiffs' data after obtaining it; and (b) plead facts to support a claim
that Plaintiffs were injured by each of these Defendant's improper obtainment or misuse.
Plaintiffs have failed to do so. Instead, they have invented a legal theory and superficially
pleaded a set of facts that are not actionable under the DPP A. Plaintiffs' theory is entirely
contradicted by: (l) the plain language of the statute; (2) caselaw interpreting the statute; (3) the
legislative history regarding the statute; and (4) the State of Texas's statute governing Motor
Vehicle Records.
Plaintiffs' claims should be dismissed (i) for failure to state a claim under 12(b)(6), and
(ii) for lack of
standing under 12(b)(l).
III. STATEMENT OF ISSUES TO BE DECIDED
Pursuant to Local Rule CV -7, these Defendants present the following issues to be decided
by the Cour:
1. Whether Plaintiffs' Drivers' Privacy Protection Act claims should be dismissed for
failure to state a claim upon which relief can be granted.
2. Whether Plaintiffs' Drivers' Privacy Protection Act claims should be dismissed for lack of standing because:
(a) Plaintiffs have not pleaded, nor can they prove, an injury-in-fact; and
(b) Plaintiffs have not pleaded, nor can they prove, that they have suffered an injury
caused by any of
these Defendants or that a favorable decision wil redress any injury.
IV. STANDARDOFREVIEW
1. Federal Rule of Civil Procedure 12(b)(6)
Rule 12(b)(6) authorizes the dismissal of a complaint for "failure to state a claim upon
which relief can be granted." FED. R. CiV. P. 12(b)(6). A complaint must be dismissed pursuant
to Federal Rule of Civil Procedure 12(b )(6) if it does not allege "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).
CONSOLIDATED MOTION TO DISMISS ON COMMON ISSUES AND RESPONSE TO PLAINTIFFS' STATEMENT
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The factual allegations in Plaintiffs' complaint "must be enough to raise a right to relief above
the speculative level, on the assumption that all the allegations in the complaint are true (even if
doubtful in fact)." Id. at 1964-65 (internal citations omitted). Further, to avoid dismissal under
Rule 12(b)(6), a plaintiff must allege all of the elements of a right to recover against the
defendant. Tuchman v. DSC Commc'ns Corp., 14 F.3d 1061, 1067 (5th Cir. 1994). A plaintiff
may not state a claim by merely paroting the terms of the statute or reciting the elements of a
claim. See Vulcan Material Co. v. City of
Tehuacana, 238 F.3d 382,387 (5th Cir. 2001). Thus,
conclusory allegations and speculative or unwarranted deductions of fact are not assumed to be
true. Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992) (quoting Assoc. Builders,
Inc. v. Ala. Power Co., 505 F.2d 97, 100 (5th Cir. 1974).
2. Federal Rule of
Procedure 12(b)(1)
Under Rule 12(b)(l), a part may challenge a court's subject matter jurisdiction. FED. R.
CiV. P. 12(b)(l); Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). In evaluating a
Rule 12(b)(l) motion, a court may consider: "(1) the complaint alone; (2) the complaint
supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by
undisputed facts plus the court's resolution of disputed facts." Ramming, 281 F.3d at 161;
MDPhysicians & Assocs., Inc. v. State Bd of
Ins., 957 F.2d 178, 181 n.2 (5th Cir. 1992). "Since
a motion to dismiss for lack of subject matter jurisdiction under (Rule 12(b)(l)l concerns (al
cour's 'very power to hear the case. . . the trial cour is free to weigh the evidence and satisfy
itself as to the existence of
its power to hear the case.'" MDPhysicians & Assocs., Inc., 957 F.2d
at 180-181 (quoting Wiliamson v. Tucker, 645 F.2d 404,413 (5th Cir. May 1981)).
The burden of establishing jurisdiction rests on the pary seeking to invoke the
jurisdiction of
the court. Ramming, 281 F.3d at 161; Boudreau v. United States, 53 F.3d 81, 82
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(5th Cir. 1995). "When a Rule 1 2(b)(1) motion is fied in conjunction with other Rule 12
motions, (al court should consider the Rule 12(b)(l) jurisdictional attack before addressing any
attack on the merits." Ramming, 281 F.3d at 161.
One component of subject matter jurisdiction is standing. A basic prerequisite to the
pursuit of any federal lawsuit is that the plaintiff must establish standing to prosecute the action,
including an injury-in-fact and a redressable wrong. "In essence the question of standing is
whether the litigant is entitled to have the court decide the merits of the dispute or of particular
issues." Elk Grove Unifed Sch. Dist. v. Newdow, 542 U.S. 111, 124 S. Ct. 2301, 2308 (2004)
(quoting Warth v. Seldin, 422 U.S. 490, 498 (l975)).
V. ARGUMENT AND AUTHORITIES
1. Plaintiffs have failed to state a claim under the DPP A.
Plaintiffs' factual allegations are that Defendants obtained data for a permissible purose
under the DPP A, but did not immediately use that data. These factual allegations do not give
rise to a plausible right to relief
under the DPPA. See Twombly, 127 S. Ct. at 1964-65.
The DPP A provides that "it shall be unlawfl for any person knowingly to obtain or
disclose personal information, from a motor vehicle record, for any use not permitted under
section 2721 (b) of
this title." 18 U.S.C. § 2722(a). The following are permissible uses under the
the DPPA:
curent version of
(1) For use by any governent agency, including any cour or law enforcement
agency, in carying out its fuctions, or any private person or entity acting on
behalf of a Federal, State, or local agency in carrying out its fuctions.
(2) For use in connection with matters of motor vehicle or driver safety and theft; motor vehicle emissions; motor vehicle product alterations, recalls, or advisories; performance monitoring of motor vehicles, motor vehicle pars and dealers; motor vehicle market research activities, including surey research; and removal of nonowner records from the original owner records of motor vehicle manufacturers.
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business by a legitimate business or its agents, (3) For use in the normal course of employees, or contractors, but only-(A) to verify the accuracy of personal information submitted by the
individual to the business or its agents, employees, or contractors; and
(B) if such information as so submitted is not correct or is no longer
correct, to obtain the correct information, but only for the purposes of preventing fraud by, pursuing legal remedies against, or recovering on a debt or security
interest against, the individuaL.
(4) For use in connection with any civil, criminal, administrative, or arbitral
proceeding in any Federal, State, or local court or agency or before any selfregulatory body, including the service of process, investigation in anticipation of litigation, and the execution or enforcement of judgments and orders, or pursuant to an order of a Federal, State, or local cour.
(5) For use in research activities, and for use in producing statistical reports, so
long as the personal information is not published, redisclosed, 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 connection with claims
investigation activities, antifraud activities, rating or underwiting.
(7) For use in providing notice to the owners of
towed or impounded vehicles.
(8) For use by any licensed private investigative agency or licensed security service for any purpose permitted under this subsection.
(9) For use by an employer or its agent or insurer to obtain or verify information relating to a holder of a commercial driver's license that is required under chapter 313 of title 49.
(10) For use in connection with the operation of private toll transportation
facilities.
(11) For any other use in response to requests for individual motor vehicle records the State has obtained the express consent of the person to whom such personal information pertains.
if
(12) For bulk distribution for sureys, marketing or solicitations if the State has
obtained the express consent of the person to whom such personal information pertains.
(13) For use by any requester, if the requester demonstrates it has obtained the
written consent of the individual to whom the information pertains.
(14) For any other use specifically authorized under the law ofthe State that holds the record, if such use is related to the operation of a motor vehicle or public safety.
(c) Resale or redisclosure.--An authorized recipient of personal information (except a recipient under subsection (b)(ll) or (l2)) may resell or redisclose the information only
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for a use permitted under subsection (b) (but not for uses under subsection (b) (l 1) or (l2)). An authorized recipient under subsection (b)(ll) may resell or redisclose personal information for any purose. An authorized recipient under subsection (b)(12) may resell or redisclose personal information pursuant to subsection (b)(l2).
18 U.S.C. § 2721(b)-(c).
(a) Plaintiffs' claims should be dismissed because Plaintiffs have failed to plead facts supporting a claim based on the plain language of the statute.
Under the applicable section of
the DPPA, a private actor may be liable for civil damages
if it "knowingly obtains, discloses, or uses personal information, from a motor vehicle record,
for
a purpose not permitted under this chapter." 18 U.S.C. § 2724(a) (emphasis supplied).
Defendants are liable only if they obtain or use private information for an impermissible
purpose.
Plaintiffs must plead facts that show that these Defendants obtained private information
for a purpose not permitted under the Act and specify that purpose. Plaintiffs have failed to do
so. Instead, Plaintiffs have asserted that, because these Defendants did not immediately use all
of the data they obtained, their purpose is not "permissible" under the DPP A. Under the plain
language of the statute, these allegations do not state a plausible claim under the DPP A. See
Twombly, 127 S. Ct. at 1964-65. The DPPA does not require that a company immediately use
the data. See 18 U.S.C. § 2721.
(b) Plaintiffs' claims should be dismissed because Plaintiffs have failed to plead facts supporting a claim based on the applicable case law.
In their Statement,8 Plaintiffs essentially divide the Defendants into two groups: (l) those
that obtained data for their own use ("non-resellers") and (2) those that obtained the data to sell
to others ("resellers").
8 For purposes of
this Motion, these Defendants address the allegations in Plaintiffs' Statement as if each allegation
was tre, despite errors in the description of numerous Defendants' business practices and use of data. Further,
Defendants assume that any reference in the middle of a description of one Defendant to a second unrelated
Defendant was merely a result of Plaintiffs' erroneous copying and pasting of descriptions from one Defendant to
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(i) Plaintiffs' claims against the non-reseller Defendants should be dismissed because Plaintiffs fail to plead facts to support an obtainment claim under the DPP A.
Plaintiffs' claims against the non-resellers should be dismissed. Plaintiffs have failed to
plead facts alleging that the non-resellers (or any Defendant) obtained the data for a purose not
permitted under the DPPA or used the data for a purose not permitted under the DPPA, other
than Plaintiffs' legally flawed claim that the non-resellers are liable to some Plaintiffs because
9
these Defendants allegedly did not immediately use some of the records obtained from the State.
Plaintiffs' Statement at 2,4,6,8-11, 13- 22, 24, 26-29, 31-36, 39-42, 44-49, 51-52, 54-57, 59-60,
63-66, 68, 70, 72, 74, 76, 78-81, 83, 85, 87, 89-90, 92-95, 97-100, 102, 104-106, 108-113, and
115_11810 ("Based on the lack of any relationship, business or otherwise, between the above-
referenced Plaintiffs and this Defendant, the above-referenced Plaintiffs assert that this
Defendant had no permissible purose for obtaining their personal information. . . . Any purose
this Defendant had for obtaining the above-referenced Plaintiffs' personal information other than
an immediately contemplated use of that information for one of the DPPA's authorized uses
constitutes a violation of the DPPA."). Each Defendant, in responding to discovery, provided
Plaintiffs with its reason(s) for obtaining information, each of
which are contained in the DPPA's
list of permissible uses. Plaintiffs' statement does not assert that any Defendant lacked one of
the permissible puroses in the DPPA's list, but instead assert that the non-resellers should be
liable under the DPP A because they did not use, or did not immediately use, some ofthe data.
another. See e.g., Description related to LML Payment. As a result, Defendants are ignoring those copying and
pasting errors, but treating the other allegations as tre.
9 Some Plaintiffs concede that as to paricular Defendants, "Plaintiffs are aware of relationships between
themselves and this particular defendant. . . (but they) reserve the right to explore through discovery, whether
this Defendant indeed had a permissible purpose for obtaining their particular data." Plaintiffs' Statement at 2,4-5,
7,9, 11, 13-16, 18,20-21,23-24,26,27,29-30,32,34,36-37,39,41- 43, 45, 48-50,52,54-55,57-58,60,62,64,
66,68-73,75,77,79,81,83,85-88,90-91,93,95,96, 98,100-06,108-12,114,116, and 117.
10 These numerous cites exist because Plaintiffs recite the identical argument for numerous defendants.
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Plaintiffs cite no authority to support this additional requirement that a company that
obtains motor vehicle records obtain the data for an "immediately contemplated" use. Nowhere
in the DPPA or the cases interpreting the DPPA does such a requirement exist. See 18 U.S.C. §
2721. For instance, none of the purposes contained in the DPP A laundry list provide that the
data must be obtained "for immediate use."
Indeed, adding such a requirement to the DPP A would lead to absurd results. Take, for
example, the permissible purose "(fJor use in providing notice to the owners of towed or
impounded vehicles." 18 U.S.C. § 2721(b)(7). Under Plaintiffs' theory, a towing service is not
entitled to obtain information from the State of Texas "for use in providing notice to the owners
of
towed or impounded vehicles." Instead, according to Plaintiffs, the purpose is not permissible
unless it is "for (immediatel use in providing notice to (anl owner of (al towed or impounded
vehicle()." The towing service must wait until it has towed a vehicle to fill out a form seeking
information from the State, and can only seek information as to the paricular vehicle that has
been towed. The towing service must hold the vehicle and wait to receive the information from
the State. Only after the State provides the information for the single vehicle can the towing
service send notice to the owner. This canot be the result intended by Congress when it carved
out "use in providing notice to the owners of towed or impounded vehicles" as a permissible
purose.
Plaintiffs' contention that they have a claim fails because the DPPA does not prohibit the
nonuse of data obtained for a permissible purose, immediate or otherwise. See 18 U.S.C. §
2721. When a company obtains data for a permissible purpose, neither the DPPA nor the cases
that interpret it impose a requirement that the data be put to use at any point in the future.
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In cases with similar facts to the instant cases, the Eastern District of Louisiana dismissed
plaintiffs' DPPA claims under Rule 12(b)(6) for failure to plead the specifics of improper use.
See Russell v. ChoicePoint Servs., Inc., 300 F. Supp. 2d 450 (E.D. La. 2004) ("Russell l');
Russell v. Choicepoint Servs., Inc., 302 F. Supp. 2d 654,664 ("Russell Il').
In Russell I, ChoicePoint fied a motion to dismiss plaintiffs' claim under 12(b)(I) and
12(b)(6). ChoicePoint purchased motor vehicle records from the State of Louisiana and resold
those records to other businesses. The cour, dismissing the case under 12(b)(l) and 12(b)(6),
explained that it "agrees with defendant ChoicePoint that plaintiff may not maintain a DPPA
claim for improper obtainment under 18 U.S.C. § 2724(a) without alleging an accompanying
impermissible use." Russell 1,300 F. Supp. 2d at 455. Notably, the cour in Russell I went so far
as to require that the plaintiff properly plead an alleged impermissible use to prevail on an
improper obtainment claim. Id
The court in Russell II engaged in the same analysis when evaluating defendant Reed
Elsevier's motion to dismiss. Russell II, 302 F. Supp. 2d at 664. In that opinion, the court held
that "the plain language of the DPP A permits entities like Reed Elsevier to obtain drivers'
personal information from DMVs and subsequently resell that information to third paries with a
permissible use." Id.
Despite this authority-directly on point and from this Circuit-Plaintiffs rely on Parus
v. Cator, an uneported opinion from the Western District of Wisconsin, to support their
argument for their improper obtainment claims. In that factually dissimilar case, the cour
considered the question of whether sumary judgment was proper on the plaintiffs improper
obtainment claim. No. 05-C-0063-C, 2005 WL 2240955 (W.D. Wis. Sept. 14,2005). In Parus,
the plaintiff offered proof that the defendant had obtained the data to determine whether the
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plaintiff was a "local guy," which plaintiffs argued was not a permissible predicate for
obtainment under the DPPA. Id at * 1-2. The cour held that sumary judgment was not proper
because it was a fact issue for the jury to determine whether the defendant was caring out a law
enforcement fuction (a permissible purose) when he obtained the plaintiffs records. Id at * 5.
In the instant cases, Plaintiffs fail to plead either impermissible obtainment (other than
their invented and unviable immediate-contemplated-purose theory) or a subsequent
impermissible use. Plaintiffs have not alleged facts constituting an impermissible purpose for
obtaining the data for any Defendant but merely speculate that these Defendants could not
possibly have a permissible purpose for obtaining the entire database and should be held liable
for obtaining, but not immediately using, some of
the data: See Plaintiffs' ComplaintII; see also
Plaintiffs' StatementI2 ("Although Defendants may have a permissible use under the DPP A for
obtaining 'personal information' for some of the people in the database, they do not have a
permissible purose to obtain all twenty milion names in Texas' database."). Plaintiffs in this
case have failed to plead facts constituting the impermissible purpose for which these Defendants
obtained the data. Thus, Parus v. Cator is inapplicable to Plaintiffs' case.
In these cases, like Russell I and Russell II, Plaintiffs have not suffciently pleaded facts
alleging that these Defendants obtained data for an impermissible purose or subsequently used
data for an impermissible purpose. Instead, Plaintiffs have sued every company that allegedly
purchased the State of Texas database and asserted that these Defendants violated the DPPA
when they obtained data for a permissible purose, but did not immediately use some of that
11 at (2:07-cv-00013: Dkt. No.7 at ir 51, 2:07-cv-00014: Dkt. No. 47 at ir 47, 2:07-cv-00017: Dkt. No.3, ir 73, 2:07-
12 at 2, 4,6,8,9-1011, 13, 14, 15-16, 17, 18-19,20,21,22,24,26,27-28,29,31,32-33,34,35-36, 39, 40, 41, 42, 44,45-46,46-47,48,49,51,52,54,55-56,57,59,60, 63, 64-65, 66, 68, 70, 72, 74, 76, 78, 79-80, 81, 83, 85, 87, 89,90,92,93-94,95,97,98-99,100,102,104,105,106,108, 109, 110-111, 112, 113, 115, 116-117, and 118.
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data. The DPPA does not require that a company immediately use the data. 18 U.S.C. § 2721.
Thus, Plaintiffs do not have a claim under the DPPA.
To state a claim, Plaintiffs would have to plead facts supporting allegations that each of
these Defendants obtained or used the data of each Plaintiff for a purpose not permitted under the
statute. Because Plaintiffs' factual allegations do not show an impermissible purose for
obtaining or using the data, Plaintiffs have not pleaded a plausible claim under the DPP A.
Accordingly, Plaintiffs' complaint should be dismissed.
(ii) Plaintiffs' claims against the reseller Defendants should be dismissed because Plaintiffs fail to plead facts to support a resellng claim under the DPP A.
Plaintiffs do not plead facts supporting a claim that any of the reseller Defendants re-sold
data to a company that used the data for an impermissible purose. Rather, Plaintiffs would have
the Cour believe that simply obtaining data to resell it is prohibited under the DPP A. See
Plaintiffs' Statement at 11,17-19,40,51,56,60,65,70-71,74,76,78,80,81,84,85, 89, 90, 92,
95, 98-99, 102-03, 104, 105, 107, 11, 112, 113, and 118 ("Resale of data is not a proper purose
for obtaining plaintiffs' personal information and obtainment of
this data merely to resell violates
the express terms of
the DPPA.") The statute and the caselaw directly addressing this issue rebut
Plaintiffs' statement.
The clear and unambiguous language of the DPP A expressly authorizes the re-sale of
information:
An authorized recipient of personal information (except a recipient under subsection (b)(l1) or (12)) may resell or redisclose the information only for a use permitted under
subsection (b) (but not for uses under subsection (b) (11) or
(12)). An authorized recipient under subsection (b)(l1) may resell or redisclose personal information for any purpose. An
authorized recipient under subsection (b )(12) may resell or redisclose personal information pursuant to subsection (b )(12).
18 U.S.C. § 2721(c).
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A court's interpretation of a statute must begin with the plain meaning of the statutory
words. See Custom Rail Employer Welfare Trust Fund v. Geeslin, 491 F.3d 233, 236 (5th Cir.
2007) (holding that "in all cases involving statutory construction, our staring point must be the
language employed by Congress, ... and we assume that the legislative purose is expressed by
the ordinary meaning of the words used" (quoting INS v. Phinpathya, 464 U.S. 183 (l984))).
Where the Congressional language is clear and unambiguous, the Cour's inquiry ends. See
United States v. Meeks, 69 F.3d 742, 744 (5th Cir. 1995) ("(W)hen the language of a statute is
clear and unambiguous, judicial inquiry into its meaning is unecessary.
"); Carpenters Dist.
Council v. Dilard Dep't Stores, 15 F.3d 1275, 1282-83 (5th Cir. 1994) ("If the (statutoryl
language is clear and unambiguous, then the court may end its inquiry.
"). The Cour is required
to give Congress' chosen words their plain meaning. See United States v. Valencia, 394 F.3d
352, 355 (5th Cir. 2004) ("In construing the United States Code our task must begin with the
words provided by Congress and the plain meaning of those words. . . . In so doing, we give
effect to the intent of Congress. . . . ") (internal citations omitted).
Further, in the only cases directly addressing the issue of companies resellng data under
the DPP A, the Cour dismissed cases against resellers at the Motion to Dismiss stage. Russell I,
300 F. Supp. 2d at 455-56; Russell 11,302 F. Supp. 2d at 664. In the Russell cases, the court held
that under the plain language of the DPP A, a company could obtain data "strictly to redistribute
it to persons with permissible uses." Russell I, 300 F. Supp. 2d. at 456; Russell II, 302 F. Supp.
2d at 664 (same).
Plaintiffs cite only one case, an Iowa state court case, which was decided before the
Russell decisions and was expressly rejected by the Russell court, in an attempt to support their
argument that a Defendant can be held liable for reselling data. See Locate.
Plus. Com, Inc. v.
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Iowa Dep't ofTransp., 650 N.W.2d 609 (Iowa 2002); but see Russell 1,300 F. Supp. 2d. at 460
("Plaintiffs' reliance on (Locate.Plus.Coml is misplaced. That decision is both factually and
procedurally distinguishable from the case at hand. Furthermore, Locate.Pius.Com neglects to
provide a meaningful analysis of the DPP A's statutory language and corresponding
congressional intent, especially as they relate to the common definitions of key DPP A terms
and to other federal privacy acts.") (emphasis supplied); Russell II (same).
Notably, the Locate.Plus.Com case was not one in which plaintiffs were suing for
damages under the DPP A. Id. Rather, it was one in which a company sued the State to compel
access to personal information from the State's motor vehicle records. Id The cour denied the
company's request to receive data from the Iowa Deparment of Transportation. Id at 618-19.
As the Cour in Russell I and Russell II recognized, the Iowa court erred in its interpretation of
the DPPA. See Russell 1,300 F. Supp. 2d. at 460; Russell 11,302 F. Supp. 2d at 668. The Iowa
court failed to consider that the plain language of the statute and clear Congressional intent "to
permit resale by recipients authorized by the state or its DMV." Russell 1, 300 F. Supp. 2d. at
460; Russell II, 302 F. Supp. 2d at 668. Finally, the Iowa Department of Transportation had
determined that it did not wish to provide data to at least one particular reseller. The Plaintiffs
did not plead that the State of Texas has made the same determination as to any of these
Defendants.
(c) Plaintiffs' claims should be dismissed because legislative history supports companies' rights to purchase motor vehicle information in bulk for permissible
uses.
Legislative history confirms that the DPPA was not enacted to prevent businesses from
obtaining and using motor vehicle records for permissible uses. As explained by Plaintiffs in
their Complaint, "(tlhe DPP A was included as par of omnibus crime legislation passed by
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Congress in 1993, known as the Violent Crime Control and Law Enforcement Act of 1993." See
Plaintiffs' Complaint in 2:07-cv-00013 at 15. Furher, Senator Boxer "described several wellpublicized incidents in which criminals used publicly available motor vehicle records to identify
and stalk their victims." Id; see also Russell 1,300 F. Supp. 2d at 452 (recognizing that Congress
enacted the DPP A "largely in response to mounting public concerns over stalkers' and other
criminals' access to the personal information maintained in state DMV records").
Moreover, Congress was fully informed about the sale of motor vehicle records in bulk
for permissible business uses. Representative Moran explained to Congress that "( c lareful
consideration was given to the common uses now made of this information and great efforts
were made to ensure that those uses were allowed under this bil." See Transcript of House
Subcommittee Hearing on H.R. 3365 held Februar 3, 1994; see also Russell 1,300 F. Supp. 2d
at 456 ("in enacting the DPPA, Congress intended to strike 'a critical balance between legitimate
governental and business needs for this information, and the fudamental right of our people to
privacy and safety."') (quoting 139 Congo Rec. SI5745-01, S515763 (l993) (statement of
Senator Boxer)). Further, Representative Goss explained that Congress intended the statute to
prohibit the release of personal information to a "narrow group of people that lack legitimate
business (purosesl." See 140 Congo Rec. H2518-01, H2526 (1994) (statement of Rep. Goss)
(emphasis supplied). As a result, Congress enumerated foureen permissible uses of the motor
vehicle records. Congress clearly intended to allow (and certainly did not prohibit) companies to
purchase data by bulk for legitimate business puroses.
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(d) Plaintiffs' claims should be dismissed because the State of
Texas has recognized and authorized companies' rights to purchase motor vehicle information in bulk for permissible uses.
The State of Texas has concluded that, under the DPP A, companies may purchase motor
vehicle information in bulk for permissible uses.I3 The State of Texas enacted legislation
mirroring the DPPA. See TEX. TRANSP. CODE ANN. §§ 730.001-730.016. That statute expressly
allows the sale of driver information for permissible puroses. In addition, the Texas legislatue
authorized the Texas Deparment of Public Safety ("DPS") to "adopt rules to implement and
administer this chapter." Id. at 730.014. Pursuant to that authority, the Texas DPS has
determined that it may sell driver information in bulk to purchasers that certify a permissible
intended use. See TEX. ADMIN. CODE § 15.141-"Bulk Requests for Driver Record
Information" .
2. Plaintiffs do not have standing under the DPP A.
Rule 12(b)(l) mandates dismissal for lack of
subject matter jurisdiction because Plaintiffs
lack standing to invoke the DPP A Claims. Plaintiffs have not alleged or plausibly pleaded that
they were injured by these Defendants' alleged use of
the personal data. Accordingly, this action
should be dismissed.
Standing "is an essential and unchanging par of the case-or-controversy requirement of
Aricle III." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Where a plaintiff does
not have standing, it is proper for the cour to dismiss under 12(b)(l). See Xerox Corp. v.
Genmoora Corp., 888 F.2d 345, 350 (5th Cir. 1989) ("Under the Federal Rules of Civil
13 The United States Deparent of Justice has concurred with the Congressional intent and the State of Texas'
interpretation of the DPPA. The United States Departent of Justice ("DOJ") approved the sale of bulk data for
authorized purposes in response to an inquir by the Massachusetts Registr of Motor Vehicles ("RM"). In the letter, the DOJ explained that the RM could sell bulk data to a commercial distributor if the distributor "disseminates the information only to other authorized recipients or entities that use the information solely for
authorized purposes."
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Procedure, standing challenges are dealt with by motion under Fed. R. Civ. P. 12(b)(l) or on the
cour's own motion."); Mayfield v. Texas, 206 F. Supp. 2d 820, 823 (RD. Tex. 2001) (dismissing
case under 12(b)(l) for lack of standing); Ward v. Resolution Trust Corp., 796 F. Supp. 256,259
(S.D. Tex. 1992) ("Therefore, the Cour finds that Plaintiff lacks standing to bring this action and
dismissal is proper pursuant to Rule 12(b)(I).").
The Supreme Cour has explained that to satisfy standing, plaintiffs must prove that: (l)
Plaintiffs have suffered an "injury in fact," which is concrete and particularized and actual or
imminent; (2) a causal connection must exist between the injury and the conduct about which the
Plaintiff complains; and (3) it must be likely that the injur wil be redressed by a favorable
decision. Id. It is well settled that "(al failure to allege an injury on the face of a complaint
deprives the plaintiff of standing which is needed to satisfy Article Ill's case or controversy
requirement." Xerox Corp., 888 F.2d at 350; see also Lewis v. Knutson, 699 F.2d 230, 237 (5th
Cir. 1983) (dismissing plaintiffs claims and holding that the constitutional limitations of Aricle
III arise when plaintiff fails to allege a personal injur).
In Russell II, the Cour applied the Fifth Circuit's "injur-in-fact" analysis, and dismissed
plaintiffs' claims, parly because plaintiffs did not show that they had suffered an "injury in
fact." Russell 11,302 F. Supp. 2d at 670. In Russell II, the cour concluded that the plaintiffs had
no evidence that their personal information was used or resold by defendants in violation of the
DPPA. Id Because no evidence existed that the data had been used for an impermissible
purose, the Cour dismissed the plaintiffs' claims.I4 Id
Likewise, in a recent Southern District of Texas opinion, the cour dismissed a putative
class action where the plaintiffs alleged that their privacy had been violated and that they were
14 The Cour refused to allow Plaintiffs to conduct discovery to support a claim that Plaintiffs' data was used for an
impermissible purose. I d at 670-71.
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exposed to an increased risk of credit fraud and identity theft because the defendant printed sales
receipts that included certain information regarding credit transactions prohibited by F ACTA,
including the expiration date on the plaintiffs credit card. See Howard v. Hooters of Houston,
Cause No. 4:07-CV-03399, slip op. at 1 (S.D. Tex. Apr. 5,2008). Plaintiffs made no allegation
of injury and no claim that anyone used their data. Id. Finding that the plaintiffs were not
injured and dismissing the case, the Cour stated that the lead plaintiff "sues for himself and
everyone else who has been similarly not victimized. . . . (The lead Plaintiff) insists that many
other customers were similarly exposed. If so, they too were not injured." Id Here, Plaintiffs
have been "similarly not victimized."
Plaintiffs in this case have the same problem as the Russell and Howard plaintiffs. They
have failed to allege or plausibly plead facts showing that they were harmed by any alleged
impermissible obtainment or impermissible use of their data. To have standing, Plaintiffs would
have to plead facts showing that each of these Defendants obtained for an impermissible use or
impermissibly used personal data for each Plaintiff. But Plaintiffs have not done so.
Apparently conceding they have not pleaded actual har, Plaintiffs rely upon the
Eleventh Circuit decision in Kehoe to support their argument that they do not have to show har
to bring a cause of action. Kehoe, however, simply stands for the proposition that where a statute
provides for liquidated damages, a plaintiff does not have to prove actual damages. Kehoe v.
Fidelity Fed Bank & Trust, 421 F.3d 1209 (11th Cir. 2005). The Kehoe cour never addressed
the issue of
har or standing. Id.
In fact, in Kehoe, the plaintiffs allege the har they suffered with paricularity, stating
that the single defendant, Fidelity Federal Ban and Trust, purchased their personal information
and retained a third-par mass mailng service provider to mail solicitations to them regarding
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refinancing their motor vehicle loans. Id at 121 1. The Kehoe plaintiffs cited a specific instance
in which the defendant impermissibly invaded their privacy: they each received a letter
advertising defendant's refinancing services. Id The Kehoe plaintiffs already had pleaded and
proven the threshold issue that they were hared. The court, therefore, needed only to make the
determination of whether actual damages must be proven where a statute provides for liquidated
damages. In the
case at hand, however, Plaintiffs never allege facts showing that these
Defendants hared them. Sharon Taylor does not allege that she received a mailing from any of
these Defendants, nor do any of the other Plaintiffs. In fact, neither Sharon Taylor, nor any of
the other twenty-four plaintiffs, plead that any of
these Defendants misused their data.
Furher, in addition to the requirement that Plaintiffs plead an injury in fact, Plaintiffs
also have failed to plead the necessary causal connection between Plaintiffs' unspecified alleged
injury and each of these separate Defendants' action. "Standing requires 'a causal connection
between the injury and the conduct complained of the injur has to be fairly traceable to the
challenged action of the defendant, and not the result of the independent action of some third
par not before the court." Rivera v. Wyeth-Ayerst Labs., 283 F.3d 315, 319 (5th Cir. 2002)
(quoting Lujan, 504 U.S. at 560). Because Plaintiffs have not pleaded, nor can they prove, any
improper use or obtainment of their personal information, Plaintiffs canot establish the
necessary causal connection.
Moreover, because Plaintiffs cannot prove injur-in-fact or causation, they canot
demonstrate redressabilty. See Kardules v. City of Columbus, 95 F.3d 1335, 1355 (6th Cir.
1996) (Because Plaintiff canot establish causation, "(ilt follows that the redressability element
of standing also is lacking."). Because Plaintiffs canot establish the redressabilty requirement
for standing, their Complaint should be dismissed for lack of subject matter jurisdiction.
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VI. CONCLUSION
Despite the additional time and the opportunity to review Defendants' discovery
responses, Plaintiffs have failed to state a claim against any of these Defendants upon which
relief may be granted. Instead, Plaintiffs have asserted that these Defendants should be held
liable under the DPP A because they were required to immediately use the data for the
obtainment of the data to be permissible, or because they obtained the data to resell it as
expressly allowed by the statute and case law. These factual allegations do not establish a claim
under the DPP A.
Furher, Plaintiffs have not properly pleaded that they have standing to bring actions
against each of these Defendants under the DPP A. These Defendants respectfully request that
this Cour enter an order dismissing this action.
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Respectfully submitted,
BAKER BOTTS L.L.P.
By /s/ Philp 1. John
Philip J. John State Bar No. 10672000 E-mail: philip.john~bakerbotts.com One Shell Plaza 910 Louisiana
Houston, Texas 77002
(713) 229-1234
(713) 229-1522 (Facsimile)
Chad M. Pinson State Bar No. 24007849 E-mail: chad.pinson~bakerbotts.com 2001 Ross Avenue Dallas, Texas 75201-2980 (214) 953-6500
(214) 953-6503 (Facsimile)
Elizabeth E. Baker State Bar No. 24045437 E-mail: elizabeth.baker~bakerbotts.com One Shell Plaza 910 Louisiana
Houston, Texas 77002
(713) 229-1234
(713) 229-1522 (Facsimile)
JASON R. SEARCY & ASSOCIATES, P.C.
Jason R. Searcy
State Bar No.1 7953500 Amy Bates Ames State Bar No. 24025243
Joshua P. Searcy
State Bar No. 24053468 P. O. Box 3929 Longview, Texas 75606
Telephone: (903) 757-3399
Facsimile: (903) 757-9559
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ATTORNEYS FOR AMERICAN DRIVING RECORDS, INC., D/B/A FIRST ADV ANT AGE ADR, A/K! A AGENCY RECORDS, INC., SOUTHWESTERN BELL TELEPHONE, L.P. D/B/A SOUTHWESTERN BELL TELEPHONE COMPANY, A TEXAS LIMITED PARTNERSHIP, SAFEW A Y INC.
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