High court won't hear credit agency's free-speech case

By The Associated Press

06.10.02

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WASHINGTON — One of the nation's largest credit-reporting firms had its free-speech claim turned away today when the U.S. Supreme Court declined to hear the company's appeal.

The case testing limits on how credit agencies can use information — and the rights of consumers to keep some details private — was an appeal by Trans Union LLC, one of the nation's three largest credit-reporting firms. The company claims its free-speech rights are violated by the Federal Trade Commission's interpretation of a federal law limiting some sale of consumer information.

Trans Union lost a 10-year battle with the FTC over the issue, culminating in a federal appeals court decision against the company. Trans Union appealed to the Supreme Court.

Justices Sandra Day O'Connor and Anthony M. Kennedy issued a written dissent in the court's decision not to hear the case, saying they would have taken it on because of the implications for Trans Union — which could face bankruptcy from a tide of lawsuits over the release of consumer information.

"The company's demise will have adverse effects on both the national economy and (Trans Union's) thousands of employees," Kennedy wrote for the pair. "The case is of national importance, and the court of appeals have adopted a novel approach to commercial speech."

Trans Union had sought freedom to sell what it calls target marketing lists, which are lists of names and addresses of selected consumers. Trans Union can tailor these lists to the audience its client seeks, such as people who make a certain amount of money, have certain kinds of credit cards or certain kinds of bank loans.

Trans Union has sold the lists to banks offering home equity loans or credit card offers, insurance companies prospecting for health insurance customers, the United Way and the Republican National Committee, which wanted to solicit campaign donations.

A 1970 law, the Fair Credit Reporting Act, limits who may see or buy consumer credit information compiled by credit reporting agencies. As the FTC has interpreted the law, a bank considering whether to lend money could see it, but most advertisers, catalog retailers and the like could not. There is an exception if the consumer explicitly agrees to receive such solicitations.

Trans Union claims that the lists are "speech" that deserves some constitutional protection. A federal appeals court found otherwise last year, ruling that such speech "relates to no matter of public concern."

The case is Trans Union LLC v. Federal Trade Commission, 01-1080.