holding that any 1 “business transaction” under the permissible purpose “must relate to one of the other specifically 2 enumerated transactions”—“i.e., credit, insurance eligibility, employment, or licensing”
How later courts described this case
- holding that any 1 “business transaction” under the permissible purpose “must relate to one of the other specifically 2 enumerated transactions”—“i.e., credit, insurance eligibility, employment, or licensing”
- finding no FCRA violation when there was no indication "that [defendant] desired a report on [plaintiff] for a purpose encompassed within the statutory definition of an investigative consumer report"
- finding that, where defendant was requesting a report for claims processing purposes, the defendant was not requesting an investigative consumer report under FCRA
- holding, as a matter of law, that user who disclosed impermissible purpose was not guilty of obtaining information through false pretenses
Written by the judges who cited it.
The opinion
SLOVITER, Circuit Judge,
concurring.
I join in all of the majority’s opinion with the exception of Part V but fully concur with the conclusion reached in that part that an insurance claim report is not included within the “business transaction” language of section 1681b(3)(E).
To recapitulate briefly, Houghton, who was injured in an accident with NJMI’s insured, contends that the report NJMI requested and received from Equifax in order to evaluate the validity of Houghton’s claim was a “consumer report”. “Consumer report” is defined in § 1681a(d) as certain information collected to establish “the consumer’s eligibility for (1) credit or insurance to be used primarily for personal, family, or household purposes, or (2) employment purposes, or (3) other purposes authorized under section 1681b of this ti- *1151 tie.” It is the interaction of subsection (3) with § 1681b, the section to which it refers, that raises the issue here.
There is not a neat fit between them. Section 1681b, which is set forth in the margin, 1 is directed to the circumstances under which a consumer reporting agency may furnish a consumer report. The most plausible construction of the language is to read “the other purposes” language of § 1681a(d) as incorporating the “purposes” set forth in § 1681b(3), so that a consumer report is defined, inter alia, as a report to be used for the purposes enumerated in § 1681(b)(3). This subsection permits a consumer reporting agency to furnish a consumer report to persons which it has reason to believe intend to use the information in connection with five designated purposes: (A) a personal credit transaction; (B) employment purposes; (C) the underwriting of insurance involving the consumer; (D) licensing or similar benefit; or (E) to a person who “otherwise has a legitimate business need for the information in connection with a business transaction involving the consumer.”
The majority gives subsection (E) an extremely limited construction when it states, “We believe that any § 1681b(3)(E) business transaction must relate to one of the other specifically enumerated transactions in §§ 1681a(d) and b(3), i.e., credit, insurance eligibility, employment or licensing.” Majority at 1149. I hesitate to join the majority’s construction for the following reasons:
1. I am concerned that if § 1681b(3)(E) is given such a limited construction when that subsection is considered in connection with the definition of consumer report, it may be given a similar construction when considered in the context of the section in which it appears. That section, § 1681b, provides that “a consumer reporting agency may furnish a consumer report under the following circumstances and no other” (emphasis added). The majority’s language could be read to suggest that a consumer reporting agency may furnish a consumer report only in connection with a credit transaction, the underwriting of insurance, employment, or licensing. Although no consumer reporting agency is a defendant here, the majority’s stress of the specificity of §§ 1681b(3)(A) through (D) to support its construction for purposes of defining a consumer report is not easily separable from construction of the same section in the context of the permissible distribution by a consumer reporting agency.
2. The construction the majority applies is inconsistent with the established canon it refers to that “a statute should be interpreted so as to give effect to every phrase and not render any part superfluous.” Majority at 1150. The majority’s construction renders subsection (E) superfluous. If (E) is limited to the four preceding subsections, there was no reason for Congress to have written it into the statute. Furthermore, if Congress did not intend that § 1681b(3)(E) be broader than the preceding subsections (A) through (D), it would not have introduced subsection (E) with the words “oth *1152 erwise has a legitímate business need ...” (emphasis added).
3. I also would adopt the reasoning in Cochran v. Metropolitan Life Insurance Co., 472 F.Supp. 827 (N.D.Ga.1979), but I do not read that case as compelling the majority's construction. In Cochran , the court limited its discussion to the issue of whether an investigative report prepared in connection with a medical disability claim could be considered a “consumer report”. The court reasoned that because elsewhere in the same statute Congress expressed its definition of consumer reports for insurance purposes, see §§ 1681a(d)(l), 1681b(3)(C), the courts could not expand the definition to include information gathered to substantiate insurance claims. Id. at 831. I believe that reasoning provides ample basis for the conclusion that the relationship between Houghton and NJMI was not the type of business transaction encompassed by § 1681b(3)(E).
4. If we were compelled to make a definitive construction of § 1681b(3)(E), and I think we are not, I would prefer the reading of the statute suggested in the majority’s opinion, but not adopted by it. The majority notes that “when general words follow an enumeration of specific terms the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words.” Majority at 1150. Thus, subsection (E) encompasses the types of business transactions similar to those set forth in subsections (A) through (D), but is not strictly limited to them. Although I cannot anticipate all of the types of business transactions to which subsection (E) would apply under my construction, I believe the section should be read to permit a consumer reporting agency to provide information in connection with a legitimate business transaction not specified in (A) through (D).
In sum, rather than extending the analysis in this case to implicate issues not before us, I would limit the statutory construction of § 1681b(3)(E) in this case to the holding that an insurance claim report is not a business transaction within that section. This construction is consistent with the Federal Trade Commission’s administrative interpretation of the Act, 2 and suffices for purposes of deciding the case before us.
. 15 U.S.C. § 1681b provides:
A consumer reporting agency may furnish a consumer report under the following circumstances and no other:
(1) In response to the order of a court having jurisdiction to issue such an order.
(2) In accordance with the written instructions of the consumer to whom it relates.
(3) To a person which it has reason to believe—
(A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer; or
(B) intends to use the information for employment purposes; or
(C) intends to use the information in connection with the underwriting of insurance involving the consumer; or
(D) intends to use the information in connection with a determination of the consumer’s eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant’s financial responsibility or status; or
(E) otherwise has a legitimate business need for the information in connection with a business transaction involving the consumer.
. For example, in an FTC pamphlet on the FCRA, the following appears:
2. Question: Are "CLAIMS REPORTS”, “ADJUSTMENT REPORTS” or other reports obtained by an insurer in connection with an insurance claim a consumer report?
Answer: No, not at the time obtained. A report on a consumer obtained by an insurance company in connection with a claim against it, is not used to determine a consumer's "eligibility" for insurance (Section 603(d)(1)), or in connection with the “underwriting of insurance involving the consumer” (Section 604(3)(C)). Further, such a report is not obtained in connection with “a business transaction involving the consumer” (Section 604(3)(E)), at the time it is obtained. Accordingly, such a claims report is not a "consumer report".
5 Consumer Credit Guide (CCH) 11,307 at 59,-828 (1977) (footnote omitted).